Views on Goodyear 3QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Goodyear 3QFY2016 result:

Top-Line below expectation, margins improve on YoY basis

"For 3QFY2016, Goodyear reported a disappointing set of numbers. The top-line witnessed a decline of 5.0% on the yoy basis to INR 382 cr which is below our estimate of INR 412 cr. Poor tractor sales coupled with declining realizations on account of lower raw material prices have resulted in subdued top-line. The raw material cost declined by 495bp YoY to 63.4% of sales while employee and other expense increased by 193bp YoY and 100bp YoY to 7.7% and 16.9% of sales respectively. As a result, EBITDA margin expanded by 202bp YoY to 11.9%. On the back of lower raw material cost, the net profit for the quarter increased by 15.2% YoY to INR 29 cr. In the near term, we believe that poor tractor sales are likely to curb top-line growth for the company (which is evident in the past three quarter where the growth has been disappointing). However the company is looking to enter newer segments and is also focusing on increasing its presence in passenger car OEM and aftermarket segment. We maintain our ACCUMULATE rating on the stock."

Shares of GOODYEAR INDIA LTD. was last trading in BSE at Rs.560 as compared to the previous close of Rs. 572.5. The total number of shares traded during the day was 25699 in over 823 trades.

The stock hit an intraday high of Rs. 584 and intraday low of 553. The net turnover during the day was Rs. 14699145.

Source : Equity Bulls

Keywords