GNA Axles trades 7% higher after Q4 net profit zooms 88%

GNA Axles trades 7% higher as Q4 PAT jumps 88%

The GNA Axles share price gained 7 percent intraday on May 4 after the company announced strong financials for the quarter ended March 2023.

The auto components manufacture reported an 88 percent jump in net profit at Rs 34 crore as against Rs 18 crore reported in March 2022. Net Sales stood at Rs 384 crore, up 28 percent from Rs. 300 crore reported in corresponding previous quarter.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at Rs 60 crore in the March 2023 quarter, increasing 51 percent from Rs 40 crore in March 2022.

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“Reported performance in Q4FY2023 was in line with estimates, while EBITDA margin at 15.4 percent came close to our estimate of 15.5 percent, and RPAT came at Rs 34 crore as against our estimate of Rs 34.5 crore,” said brokerage firm Sharekhan who has maintained its buy rating at a revised Target price of Rs 946.

Despite the lack of gross margin expansion and weakness in the North American market, GNA has reported operating performance and PAT in line with estimates, it said.

“We believe that the company is benefitting from a correction in freight costs as its other expenses came down sharply in Q4FY23. In the future, while the company has scheduled a capex of Rs 250 crore over the next three years, it indicated a near term weakness in North American market. Further, GNA shared a stable outlook for European markets,” it added.

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The company is looking at an 8-9 percent revenue growth in FY24 and aiming to sustain EBITDA Margin in the range of 14.5-15 percent.

The market capitalisation of the company has increased 59 percent in the last one year and 17 percent in the last six months.

At 12.33pm, the scrip was trading 2.97 percent higher on the NSE at Rs 781.60 with the benchmark Nifty trading 0.44 percent up at 18,168.80 points.

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