Goodyear India 4QFY2016 Results: Angel Broking

Views of Mr. Milan Desai (Research Analyst - Mid Caps, Angel Broking) on Goodyear India 4QFY2016 Results:

Top-line below expectation, margins improve YoY

"Goodyear's numbers for 4QFY2016 have come in lower than our estimates. The top-line witnessed a marginal growth of 1.7% YoY to INR 366cr, which is below our estimate of INR 397cr. Sales continue to be impacted on account of softness in demand for farm tyres owing to erratic rainfall and only a moderate increase in MSPs. The demand from OEMs has been unimpressive as tractor sales grew just ~3% YoY during the Oct-Dec 2015 period that too was on a lower base. Declining realizations also contributed towards a subdued top-line growth. On the operating front, the EBITDA grew by 27.7% YoY to INR 39cr and the EBITDA margin improved by 214bp YoY to INR 10.5%. Aided by the operating performance and higher other income, the net profit for the quarter grew by 37.5% YoY to INR 26cr, still lower than our estimate of INR 33cr.

The near term future for Goodyear looks to be improving on account on expectation of a normal monsoon and good growth coming from the passenger vehicle space. We maintain our positive view on the stock."

Shares of GOODYEAR INDIA LTD. was last trading in BSE at Rs.497.2 as compared to the previous close of Rs. 480.9. The total number of shares traded during the day was 24291 in over 684 trades.

The stock hit an intraday high of Rs. 509 and intraday low of 480. The net turnover during the day was Rs. 12095907.

Source : Equity Bulls

Keywords