GKN Driveline FY24 Results: Hidden Risks Behind their Impressive Financial Results
GKN Driveline Limited, which primarily manufactures driveshafts for OEMs in the automobile industry, recently announced its FY24 results. Let’s take a look at the performance…
The company’s revenue grew by 6.8%, increasing from ₹984.5 crore to ₹1,051 crore, driven by higher sales. Along with this revenue growth, profits also saw an 11.1% increase, with PAT rising from ₹77 crore to ₹86 crore. The EPS also grew by 11.1%, going up from ₹61 to ₹67.
GKN Driveline Unlisted Share is available at a P/E of 23, which is fairly valued compared to its peers. However, the promoters hold around 97% of the company. In FY23, the promoters took a decision where the company distributed more in dividends than it earned in profits for the year. Now in FY24, it's being decided to distribute a dividend of ₹64 per share, which amounts to approximately ₹82 crore, while the total profit is around ₹86 crore. So, the company isn’t really expanding its profits, and the majority of the benefits are going to the promoters.
On the surface, GKN Driveline Pre IPO looks good, but there’s more to it beneath the surface. For now, we recommend selling this stock.
About GKN Driveline Limited:
GKN Driveline (India) Limited is a part of GKN Group, which is primarily in the business of manufacturing and sale of driveshafts to original equipment manufacturers in the automobile industry. It offers drive axle assembly and related products.
GKN parent group company is GKN PLC. It has registered offices in the United Kingdom. GKN PLC is a global partner to the automotive industry. More than 50% of the 80 million new cars sold every year contains GKN Automotive technology.
The company is also receiving support and guidance from GKN Group, which helps the company to remain competitive and further step-up its overall business performance.
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