Shares of a leading manufacturer of Automotive Sealing Systems, and Interior & Exterior Automotive parts in India hit a 20 percent upper circuit on BSE at Rs. 222 on Monday, after the company reported a rise in net profit by 2760 percent QoQ and 430 percent YoY in Q2 FY25.
With a market cap of Rs. 312.7 crores, the shares of PPAP Automotive Limited opened in the green at Rs. 194, up by nearly 5 percent, as compared to its previous closing price of Rs. 185.
What’s the news:
The fluctuations in the share prices were observed after PPAP Automotive Limited announced the financial results for Q2 FY25, through the latest filings with the stock exchanges on Friday post-market hours.
For Q2 FY25, PPAP Automotive Limited reported consolidated revenue from operations of Rs. 144.86 crores, reflecting a significant growth of around 18 percent QoQ from Rs. 122.7 crores in Q1 FY25, but declined marginally by about 2.4 percent YoY from Rs. 148.4 crores in Q2 FY24.
The company’s net profit for Q2 FY25 grew to Rs. 2.86 crores, representing a rise of around 2760 percent QoQ from Rs. 0.1 crores in Q1 FY25, and a year-on-year growth of nearly 430 percent from Rs. 0.54 crores in Q2 FY24.
Additional Highlights:
In Q2 FY25, Maruti Suzuki and SMG were the largest customers of PPAP, accounting for a combined 52 percent of the company’s total revenue. The company also began supplying parts for Maruti’s New Swift Dzire model.
Other key customers contributing to the revenue in Q2 FY25 include Tata (9%), Toyota (6%), Honda (12%), and Hyundai (3%). The remaining 18% of revenue came from other customers.
On a standalone basis, the company reported a 45.5 percent year-on-year growth in EBITDA, reaching Rs. 30 crores.
Further, EBITDA margins also saw a significant increase, rising from 8.2 percent in H1 FY24 to 11.5 percent in H1 FY25, marking an improvement of 230 basis points. This margin growth was driven by better asset utilization and a decline in raw material costs.
The company’s profitability surged 6.5 times, rising to Rs. 7.1 crore in H1 FY25, compared to Rs. 1.1 crore in the same period of the previous year.
The company expects to finish FY25 with projected revenues between Rs. 550 crore and Rs. 575 crore and aims to maintain EBITDA margins in the range of 11-12 percent.
The Board of Directors has announced an interim dividend of Re. 1 per share, as a token of appreciation for the ongoing trust and support of the company’s shareholders.
Shareholding Pattern:
As per the September 2024 shareholding pattern, the Promoters hold a 64.6 percent stake in the company, while Retail Investors hold a 29.64 percent stake, and Foreign Institutional Investors (FII) hold a 5.76 percent stake in PPAP Automotive.
Stock Performance:
The stock has delivered negative returns of nearly 15.2 percent in one year, while around 17.6 percent of positive returns in the last six months. So far in 2024, the shares of PPAP Automotive have given negative returns of about 7 percent.
About the company:
Established in 1978, PPAP Automotive Limited is engaged in the business/operates in custom-made extrusion products, plastic and rubber-based extrusions, and plastic injection mouldings, with a focus on the automotive sector.
Written by Shivani Singh
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