Samkrg Piston and Rings(SAMKRG)reported 3% rise in net profit to Rs 20.15crore on 6% rise in net sales at Rs 267.17crore for the year ended FY 18. But the company witnessed dropin margin during the year. The bottomline growth came from the rise in other income during the year.

SAMKRG manufactures and markets a wide array of engineered Pistons, Piston Pins, Piston Rings & Circlips for the automotive markets. The company has grown in strong markets and maintained profitability in economic downturns making its business units better leaders in their niche markets. The company's clientele includes Honda, Bajaj Auto, Tata Motors, Piaggio etc.

Quarter Performance

For the fourth quarter ended March 2018, the company's net profit dropped 14% to Rs 4.02 crore. Net sales rose 3% to Rs 67.21 crore. Higher tax provision was mainly responsible for the dropin profit during the quarter. At the PBT level, profits rose 11%.

The OPM during the quarter ended Mar 18 fell 70bps at 13.7%. Margins dropped due to rise in employeeand othercost. Raw material cost (as a % to sales, net of stock) dropped 540 bps at 39.3%. Power and fuel cost (as a % to sales net of stock) fell 170 bps to 6.9%. Stores and spares consumption (% of sales net of stock) fell 150bps to 10.3%. Employee expenses rose a huge 710bps to 19.9%. Other cost rose 180bps to 16.1%.

Thus the operating profit fell 2% to Rs 9.23crore. Other income rose 8% to Rs 1.07 crore. Thereafter PBIDT fell 1% at Rs 10.3crore. After 41% drop in interest cost to Rs 40 lakh, and 15% drop in depreciation charges at Rs 2.85 crore, PBTbefore EO rose 11% at Rs 7.05 crore. After EO expense of Rs 11 lakh vis a vis Rs 8 lakh in previous year, PBT after EO rose 11% at Rs 6.94crore. After86% rise in tax provision at Rs 2.92 crore (63 bps drop in tax rate), net profit stood at Rs 4.02crore against profit of Rs 4.68 crore in previous corresponding quarter, a drop of 14%.

Full YearPerformance

Sales for full year ended March 2018 sales rose 6% to Rs 267.17 crore.

OPM forFY18 dropped by 40 bps to 15.7% leading to 4% rise in operating profit to Rs 41.9crore. Raw material cost (as a % to sales, net of stock) for FY 18rose 140 bps at 35.5%. Stores and spares consumption (% of sales net of stock) fell 60 bps to 10.07%. Employee expenses rose 70bps to 20.8%. Other cost fell 75bps to 18%.

Other income for FY18 rose 73% to Rs 2.07 crore. Thereafter PBIDT rose 6% at Rs44 crore. After interest cost of Rs 1.29 crore (25% drop), and 1% rise in depreciation charges at Rs 13.05 crore, PBT before EO rose 10% at Rs 29.65crore. After EO expense of Rs 37 lakh vis a vis Rs 31 lakh in previous year, PBT after EO rose 10% at Rs 29.28crore. After26% riseintax provision at Rs 9.13 crore, net profit stood at Rs 20.15 crore against profit of Rs 19.47crore in previous corresponding nine months, a rise of 3%.

Shares of Samkrg Piston and Rings are currently trading 1.6% higher around Rs 277 at BSE.

Samkrg Piston and Rings: Results