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Rico Auto
Result: Q2FY11
Comment: Interest cost – a drag
Highlights of Q2FY11 results
Consolidated Performance
Rico Auto’s Q2FY11 consolidated numbers have come in lower than estimates with revenue growth of 21%yoy and
3% qoq to Rs3.09bn (estimates of Rs3.2bn), EBITDA of Rs303m (estimates of Rs309m) and net loss of Rs6m as against
estimated PAT of Rs37m
The growth has come in slower on account of slower than expected growth in the domestic business as also continued
concern in the US market
Rico, like most other auto component players, has witnessed pressure on input costs. Material cost to sales ratio has
increased sharply to 63% in Q2FY11 as against 61.9% in Q2FY10 and 60.3% in Q1FY11
However, large part of material cost pressure is offset by substantial savings in other expenditure and power and fuel
– down from Rs581m in Q1FY11 to Rs498m in Q2FY11. This has helped Rico report 60bp of qoq improvement in
EBITDA margins to 9.8% (estimates of 9.5%)
While operating profits have come in line with our estimates, interest cost has risen sharply to Rs144m (from Rs112m
in Q1FY11). Debt in the consolidated books stood at Rs4.65bn as on Sept 2010 (Rs4.4bn in FY10).
Board has approved conversion of 6.4m pending warrants at Rs17.5 per share
