Automotive Axles, a leading automotive components manufacturer, saw its shares plummet by 5.27% to reach an intraday low of ₹1,746.40 on Thursday, following disappointing second-quarter earnings for FY25. This is a concerning development for those who carry out share market investments.
Financial performance takes a hit
The company reported a significant 20% year-on-year decline in net profit, falling to ₹36 crore from ₹45 crore in Q2FY24. Revenue from operations also witnessed a substantial decrease of 15.4%, dropping to ₹494.6 crore compared to ₹584.4 crore in the corresponding quarter of the previous fiscal year.
Operational metrics show strain
The company's operational performance reflected broader challenges, with EBITDA declining 23% annually to ₹51 crore in Q2FY25 from ₹66 crore in the previous year. The EBITDA margin contracted by 100 basis points year-on-year, settling at 10.3% compared to 11.3% in Q2FY24, indicating pressure on operational efficiency and profitability.
Company profile and market position
Automotive Axles, established in 1981 as a joint venture between the Kalyani Group and Meritor Inc. (USA), has carved out a significant position in the automotive components sector. As India's largest independent axle manufacturer and second-largest brake manufacturer, the company serves diverse vehicle segments including LCV, MCV, HCV, military, and off-highway vehicles. Its impressive client roster features industry giants such as Ashok Leyland, Daimler India, Mahindra & Mahindra, Tata Motors, and Volvo Eicher.
Market response and trading activity
The company, with a market capitalization of ₹2,747.38 crore, is classified under the BSE SmallCap category. By afternoon trading at 1:30 PM, the stock had recovered somewhat from its early losses, trading at ₹1,818.25 per share, down 1.38%, while the broader market as represented by the BSE Sensex was trading 0.65% lower at 79,423.73. The market reaction reflects investor concerns about the company's near-term performance outlook, despite its strong industry position and diversified product portfolio that includes drive axles, front steer axles, off-highway axles, and braking solutions.
Operational metrics show strain
The company's operational performance reflected broader challenges, with EBITDA declining 23% annually to ₹51 crore in Q2FY25 from ₹66 crore in the previous year. The EBITDA margin contracted by 100 basis points year-on-year, settling at 10.3% compared to 11.3% in Q2FY24, indicating pressure on operational efficiency and profitability.
Company profile and market position
Automotive Axles, established in 1981 as a joint venture between the Kalyani Group and Meritor Inc. (USA), has carved out a significant position in the automotive components sector. As India's largest independent axle manufacturer and second-largest brake manufacturer, the company serves diverse vehicle segments including LCV, MCV, HCV, military, and off-highway vehicles. Its impressive client roster features industry giants such as Ashok Leyland, Daimler India, Mahindra & Mahindra, Tata Motors, and Volvo Eicher.
Market response and trading activity
The company, with a market capitalization of ₹2,747.38 crore, is classified under the BSE SmallCap category. By afternoon trading at 1:30 PM, the stock had recovered somewhat from its early losses, trading at ₹1,818.25 per share, down 1.38%, while the broader market as represented by the BSE Sensex was trading 0.65% lower at 79,423.73. The market reaction reflects investor concerns about the company's near-term performance outlook, despite its strong industry position and diversified product portfolio that includes drive axles, front steer axles, off-highway axles, and braking solutions.
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