Auto parts maker Rane (Madras) has reported a standalone net loss of nearly Rs 196 crore for the fourth quarter of the fiscal year 2022-23. The result includes an impairment of Rs 223 crore. In comparison, the company had posted a net profit of Rs 16.7 crore in the same period last year. Despite the loss, the company’s total standalone revenue for the quarter was Rs 567 crore, up 24% from Rs 457 crore in the year-ago period. The company’s EBITDA stood at just over Rs 63 crore, up 32.4% compared to the nearly Rs 48 crore it had clocked in Q4FY22. The EBITDA margin at 11.1% was higher than the 10.4% reported in the same period last year.
According to the standalone operating highlights, sales to Indian original equipment customers increased by 18% in Q4 supported by strong demand across vehicle segments. Export sales of Rane grew by 45% driven by strong off-take for steering products. Sales to Indian aftermarket customers also increased by 11%. The company’s EBITDA margin improved by 71 basis points due to better operational leverage, favourable mix, and forex, partially offset by the increase in administration expenses.
The demand environment in the US remained challenging with multiple customers reducing schedules, according to the consolidated operating highlights. The company said, “The investments made in/loans and guarantees given to the subsidiary companies are evaluated for impairment periodically based on the estimated sales volumes and cash flow projections of the subsidiary. Based on the valuation as per the current projections, an impairment of Rs 223 crore is recognized during the fiscal year 2022-23 in standalone results.”
Regarding the consolidated FY23 financials, the company posted a net profit of Rs 9.5 crore compared to a net loss of Rs 2.5 crore in the same period last year. The total revenue at Rs 630 crore was up 23.5% over Rs 510.3 crore in Q4FY22. The EBITDA stood at Rs 64 crore compared to just under Rs 32 crore in Q4FY22, an increase of 102%. The EBITDA margin at 10.2% for Q4FY23 was substantially higher than the 6.2% reported in Q4FY22.
Rane Group’s Chairman, L Ganesh, said, “RML posted strong revenue growth supported by a robust demand environment in India and strong off-take from international customers. Though we see slowdown in major global economies, the growth momentum across vehicle segments in India continues to remain strong. We navigate this macro environment scenario cautiously prioritizing operational improvement and cost reduction measures. The turnaround planned in the US subsidiary had a setback due to poor offtake in the new business developed and even existing business. The board is closely monitoring the situation and will review the best decision regarding the future of this business considering the long term interests of the company.”
