The Q4FY2009 performance of Sanghvi Movers Ltd (SML) was bang in line with our estimates on both the revenue and the profitability front.
The company’s net income from operations grew by 18.5% to Rs94.4 crore on account of better utilization and higher yields.
The operating profit margin (OPM) came in at 80% as against 70% in Q3FY2009, a significant improvement year on year (y-o-y) on the back of a sharp decline in costs.
On a sequential basis, the margin improved by 462 basis points during the quarter. The operating cost as a percentage of revenue declined the most (down 471 basis points y-o-y) to 12.8%.
The depreciation charge rose by 41.7% to Rs18.9 crore. The interest cost too was up by 74.4% to Rs14.5 crore. The tar rate for the quarter stood at 39.5%.
A higher depreciation cost and tax rate limited the profit growth to 8% in spite of a sharp improvement in the OPM. The net profit for the quarter came in at Rs25.6 crore as against our estimate of Rs25.7 crore.
For FY2009, SML has reported a robust 40.6% increase in its top line to Rs357.5 crore. The OPM stood at 76.6%, an improvement of 344 basis points over FY2008. The profit at Rs101.1 crore rose by 38.9% over the last year.
We will revisit our estimates for the company after a conference call with the management to understand their outlook on the business. However, we maintain a BUY recommendation on the stock.