Shanthi Gears Limited announces financial results for period ended March 31, 2020

The Board of Directors of Shanthi Gears Limited (SGL) a subsidiary of Tube Investments of India Limited (TII), met today and approved the financial results for the quarter and year ended 31st March 2020.

Highlights

The Company continues to focus on 4 key priorities of Revenue growth, Profitability, ROCE and Free Cash Flow (FCF). SGL delivered strong performance on all these 4 priorities:

- Revenue of Rs. 41.6 Crores in the quarter with a 31% degrowth over Q4 of previous year. Revenue of Rs. 242.3 Crores in the financial year with a 0.3% growth of over previous year.

- The Profit before tax % to Sales was 1% for Q4 and 13% for the financial year ended Mar-20. The Profit before tax for the year ended Mar-20 was down by 23% to Rs. 32.7 Crores against the previous year.

- Profitability and lower capital employed enabled the Return on average Capital Employed (ROCE) to 19% from 21% of the previous year.

- The Company generated cumulative operating free cash flow of Rs. 62 Crores during the year. Cumulative Free cash flow to PAT is 254%

During the quarter the Company booked orders for Rs. 70 Crores (against Rs. 72 Crores for corresponding quarter of the previous year). During the year the Company had booked orders for Rs. 254 Crores (against Rs. 288 Crores for the previous year). This is on account of sluggish demand from almost all major user industries due to continued industrial slow down and lockdown on account of COVID-19.

Pending orderbook as on 31st March 2020 was Rs. 155 Crores against Rs. 168 Crores in the previous year. The Company made good strides in the service and replacement market. The outbreak of COVID-19 pandemic and the resulting lockdown enforced from 23rd March 2020 has affected the Company's regular operations. Accordingly, the Company has considered the possible effects that may result from the pandemic on the carrying amounts of property, plant and equipment, investments, inventories, receivables and other current assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial results has used internal and external information which are relevant in determining the expected future performance of the Company. The Company has evaluated its liquidity position, recoverability of such assets and based on current estimates expects the carrying amount of these assets will be recovered. The impact of COVID-19 on the Company's financial results may differ from that estimated as at the date of approval of these financial results.

Shares of SHANTHI GEARS LTD. was last trading in BSE at Rs.78.9 as compared to the previous close of Rs. 79.9. The total number of shares traded during the day was 5774 in over 129 trades.

The stock hit an intraday high of Rs. 82.4 and intraday low of 78.2. The net turnover during the day was Rs. 468021.

Source : Equity Bulls

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