Companies

Rane (Madras) Q2 net plunges 80% on sluggish demand

Our Bureau Chennai | Updated on October 21, 2019 Published on October 21, 2019

L. Ganesh, Chairman, Rane Group, during an interaction with Business Line in Chennai. (file photo)   -  Bijoy Ghosh

 

Auto-parts maker Rane (Madras) Ltd reported an 80 per cent fall in its standalone net profit at ₹2.7 crore for the quarter ended September 30, compared with ₹13.8 crore in the year-ago period, on the back of sluggish demand in the domestic auto industry.

The company saw a 31 per cent drop in its sales to Indian OE customers. Sales to international customers also declined 14 per cent, driven by a drop in volume for die-casting products. Volumes to after-market customers declined 16 per cent.

Total net revenue stood at ₹282 crore (₹356 crore), a decline of 21 per cent. EBITDA stood at ₹24.2 crore (₹40.5 crore), while EBITDA margin was lower at 8.6 per cent when compared with 11.4 per cent.

Lower volume and unfavourable mix resulted in 282 bps drop in the EBITDA margin, according to a company statement.

“The volume drop in the domestic market resulted in significant challenges to the India operations. We expect the sluggish demand environment to continue for a few quarters. The management is working on various cost reduction projects to partially mitigate the impact of volume drop,” said L Ganesh, Chairman, Rane Group.

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Published on October 21, 2019
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