Axles India Growth

In FY21, the revenue of the company reduced by 23.64% year-on-year (y-o-y) due to vehicle production disruption because of covid related issues in the first half of the year, excess capacity of medium duty and heavy duty trucks created from upward enhancement of axle load norms by 15% and bus segment which was affected from restrictions on people movement and seating restrictions. Although, they should some improvement in construction related dump trucks and truck trailer bulk carriers for petroleum products, cement, steel, etc. in routes where they have advantage over railways it was not enough to offset the decrease in revenues due to vehicle production disruption.

In FY21, the net profit growth of the company reduced by 75.67% y-o-y as the revenue of the company decreased by 23.64% y-o-y. Moreover, the employee benefit expense increased marginally by 0.75% y-o-y, as the company did not layoff its employees even during covid restrictions which contributed to more decrease in net profit of the company.

EPS of the company has showed similar reduction as with net income reduction. There were no changes made in the number of shares in the company.

Book value of the company has witnessed reduction of 0.76%. This decrease is explained by reduction in profit of the company by 75.67% which is reflected in the reserves and surplus of the company.

EBITDA growth of the company has reduced by 49.10% in FY21 from FY20. the decline is primarily attributable to the slow realization of inventory on account of restriction imposed by COVID-19. 

In FY21, the company's fixed assets decreased by 9.93% y-o-y, which has lead to lower depreciation expense. Moreover, the margins were negatively influenced by fall in revenue on account of disruption in sales of vehicles and excess capacity of medium duty and heavy duty trucks created from upward enhancement of axle load norms by 15% and bus segment which was affected from restrictions on people movement and seating restrictions. 

In FY21, the total assets of the company has increased by 31.98% y-o-y  mostly attributable to increase in current assets by 48% y-o-y. Current assets increased due to increase in total receivables by 58.54% y-o-y and increase in total inventory by 91.12% y-o-y. Based on the current orders in hand, the expected surge in demand for company’s products and the historical / expected gross margins, the company is of the view that there is no significant negative impact due to the COVID 19 pandemic on the carrying value of the inventory.

In FY21, the cash flow from operations turned negative to Rs. -32.75 crores from Rs. 71.70 crores as the company reported less profit before tax of Rs. 4.04 crores from Rs. 13.97 crores. Also, the company recorded increase in trade receivables of Rs. 53.68 crores as compared to decrease in trade receivables of Rs. 52.21 crores which shows the company did not receive payments in cash for its sales in FY21. Moreover, the company increased its inventories to Rs. 44.03 crores from decrease in inventories of Rs. -23.09 crores which shows the company expects the sales to pick up in FY22.