ASK Automotive Q1FY24 net profit grows
Autocar Professional, 30 Jul '24
Auto component maker ASK Automotive on July 29th posted a 63% growth in its net profit for the first quarter of the current financial year on a year-on-year basis.
Net profit grew on robust improvement in all three businesses. Profitability also improved to double digits on the back of volumes and cost optimisation.
The company makes brake shoes and advanced braking systems for two-wheelers. The company also provides aluminium light weighting precision solutions and safety control cables. Its customers include Honda Motorcycles, Hero MotoCorp, Royal Enfield, Ampere and Ather. It also exports components to companies such as Polaris and Aptiv.
Ask Automotive's net profit for the three months ended June 30th came in at Rs. 570 million (US$ 6.8 million), up from Rs. 350 million in the year-ago period. Revenue from operations rose 31% on year to Rs. 8.6 billion.
The company noted that it sustained its market leadership position in the advanced braking system business with 26% growth while the aluminium light weighting precision solutions and safety control revenues rose by 39% and +33%, respectively.
"During Q1 FY25, we delivered a strong performance in our business and recorded significant growth of +31% in revenue, +59% in EBITDA and +63% in PAT on a year-on-year basis. This is the highest-ever absolute revenue and EBITDA earned by us in any quarter in the past. Also, we have yet again outperformed the 2W industry vehicle production growth in Q1 FY25," Chairman and Managing Director Kuldip Singh Rathee said.
EBITDA, or operating profit, increased around 59% on year to Rs. 1 billion while the EBITDA margin expanded to 11.9% from 9.8% in the year-ago period. The margin improvement reflects better economies of scale due to higher volumes, benefit from production ramp-up at the new Karoli manufacturing facility and focus on cost optimisation initiatives.
"Now our aim is to sustain this level of EBITDA margins and improve gradually in the subsequent quarters. This reflects the result of our continued focus on expanding value-added businesses, improving utilisation of production capacities and bringing cost efficiencies," Rathee further added.
