A good quarter for Precision Camshafts with decent revenue growth and year-on-year margin improvement in the second quarter of FY22.
There seems to be a fair amount of interest in the stock. On Monday, the stock saw a bit of a drop of almost 11 percent. But on Tuesday morning it is locked in the upper circuit. At a longer-term stock price move, it has moved almost 150 percent from the start of this year.
Yatin Shah, Chairman, Managing Director and Promoter at Precision Camshafts, spoke to CNBC-TV18 with their earnings fineprint.
Shah said, “What is primarily happening is we have been able to show some exciting avenues in the EV sector that we are in, plus the parent company business has been pretty stable and I think it is the recognition of the last few quarters where we have been consistently posting good results.
On revenues, he said, "If you look at the run rate that we are having on the revenues, it is Rs 420 crore for the first two quarters, I think if we extrapolate this, we should be in that band which we should exceed last year definitely, for sure.”
On margins, he said there has been a bit of an oscillation and attributed several factors to that. "Margins would remain pretty stable as we move forward in the band that we are right now in,” he added.
“On a consolidated level basis, we would be roughly around the range of 14 to 15 percent EBITDA and the profit after tax (PAT) margins would be in the range of what we have done right now between 5 to 8 percent. So that is where we look at on a consolidated level basis. On the standalone basis obviously, we are above 20 percent or 22 percent EBITDA and about exceeding 12 percent on PAT level basis.”
On guidance for the last two quarter, Shah said that there are a lot of uncertainties.
“We have COVID coming up again in Europe, there are large amounts of uncertainty. Again, there is uncertainty regarding semiconductors, which is still not shaping up the way it is. So with all these uncertainties, it wouldn't be very difficult to comment on whether the last two quarters would remain in the same margin as we are. But we are extremely hopeful because the market has pent-up demand and there is a lot of requirement coming up.”
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