SWARAJ ENGINES
Swaraj Engines did very well on Friday following a robust Q4 and FY13 performance and more importantly, the market was thrilled with the Rs.33 per share dividend declared on the Rs.10 face value stock. The generous dividend payout, apart from the good performance is also thanks to the cash of Rs.80 crore on the books of the company as at 31st March 2013. In terms of performance, for Q4FY13 was very flat. Topline at Rs.113 crore was down 8% sequentially and 3% YoY. Thanks to the lowering of operating expenses and a higher other income component, and also keeping the tax outgo constant, net profit for the quarter came is flat at Rs.13.94 crore v/s Rs/13.76 crore (QoQ). The company, during Q4, sold 13,686 engine units as against 14,274 units (YoY) and this, the company, in its Press Release, attributed to the “subdued tractor industry scenario”. For FY13, the net revenue rose 7% at Rs.474 crore and net profit was at Rs.55 crore, up 4%.
Mahindra & Mahindra holds 33.22% stake and Kirloskar Industries holds 17.39%. The company, apart from supplying engines to Swaraj division of Mahindra & Mahindra also supplies hi-tech engine components to SML Isuzu. A debt free company, it funded its recent capacity expansion via internal accruals. Its reserves at end of FY13 stood at Rs.181 crore. The fortunes of the company are directly linked with that of the agriculture sector, which is for tractors. Thus if the harvest is good, the company could have a much better fiscal.