Cholamandalam Financial Holdings (CHOLAHLDNG) Q4 12/13 earnings summary

Executive summary

• Standalone net sales were ₹3,390 Cr in FY13 vs ₹3,464 Cr; PAT fell to ₹104 Cr from ₹180 Cr amid weaker demand, lower volumes and higher costs.

• Consolidated revenue rose to ₹7,622 Cr from ₹6,456 Cr and net profit to ₹288.51 Cr from ₹268.91 Cr, supported by financial services, insurance and the Shanthi Gears acquisition.

• FY13 was framed as a year of capability-building, with acquisition, capacity additions, new products and efficiency initiatives supporting longer-term growth plans.

Financial highlights

• Standalone gross product sales were ₹3,642.25 Cr vs ₹3,664.77 Cr; net product sales after excise were ₹3,390.37 Cr vs ₹3,464.42 Cr.

• Standalone EBITDA was ₹334.95 Cr vs ₹397.74 Cr; PBT before exceptional items ₹151.02 Cr vs ₹245.10 Cr; reported PBT ₹147.21 Cr vs ₹245.10 Cr.

• Standalone finance costs rose to ₹104.16 Cr from ₹76.56 Cr; tax expense was ₹43.25 Cr vs ₹65.01 Cr, and PAT was ₹103.96 Cr vs ₹180.09 Cr.

• Consolidated total revenue was ₹7,621.69 Cr vs ₹6,456.36 Cr; EBITDA ₹913.97 Cr vs ₹685.46 Cr; PBT ₹673.94 Cr vs ₹535.90 Cr.

• Consolidated net profit was ₹288.51 Cr vs ₹268.91 Cr; diluted EPS was ₹15.43 vs ₹14.42.

Outlook and guidance

• Anticipated auto-industry revival in the latter part of FY14 was expected to support improved performance; planned initiatives targeted cost, working capital and operating efficiency.

• The large-diameter cold-drawn welded tube greenfield facility was expected to begin commercial production in Q1 FY15, expanding reach into non-auto industries.

• Capacity additions, new product lines, automation and process improvements were positioned to support growth over the medium to long term.

• Electric scooters were not expected to improve in the near term; resources were to be conserved rather than pursuing the product line aggressively.