Navkar Corporation Limited Earnings Summary — Q3 FY2018
Navkar Corporation Reports Revenue Growth Amidst Tightening Operating Margins and Lower Sequential Profits
Quarterly Business Intelligence
AI Quarterly Scorecard™
Computed deterministically from the last 10 reported quarters.
Quarterly Business Momentum
- Revenue declined 1.2% sequentially in Q3 FY2018.
- Revenue of ₹106 Cr is 16.2% higher year-on-year.
- Revenue has compounded at 12.2% annualised over the last 10 quarters.
- Net profit of ₹23 Cr is 20.6% above the same quarter last year.
- Profit growth is outpacing revenue growth, pointing to positive operating leverage.
- Net profit has compounded at 16.4% annualised across the period.
- Operating margin stands at 35.3% in Q3 FY2018.
- Operating margin compressed by 71 bps year-on-year.
- Over the last two years operating margin has contracted by 7 bps.
- PBT margin is 29.4%.
- Expenses grew 17.5% against revenue growth of 16.2%.
- Operating profit of ₹38 Cr is 13.9% higher year-on-year.
- Operating leverage has been under pressure recently.
- 6 of the last 6 measured quarters delivered year-on-year revenue growth.
- Overall quarterly business momentum scores 74/100 (Strong) on the latest 10 quarters.
- Business momentum remains positive heading into the next quarter.
Quarterly Financials
Last 10 Reported Quarters • All figures in ₹ Crore • Margins in %
| Metric | Trend | Latest Q3 FY2018 | Q2 FY2018 | Q1 FY2018 | Q4 FY2017 | Q3 FY2017 | Q2 FY2017 | Q1 FY2017 | Q3 FY2016 | Q2 FY2016 | Q1 FY2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | Stable | 106 | 108 | 99 | 99 | 92 | 90 | 90 | 88 | 86 | 82 |
| Expenses | Improving | 69 | 67 | 60 | 64 | 59 | 56 | 55 | 54 | 55 | 51 |
| Operating Profit | Stable | 38 | 40 | 39 | 35 | 33 | 34 | 35 | 34 | 30 | 31 |
| Operating Margin | Stable | 35.3% | 37.5% | 39.5% | 35.3% | 36.0% | 37.8% | 39.3% | 39.0% | 35.4% | 38.0% |
| Other Income | Volatile | 0 | 0 | 1 | 3 | 2 | 3 | 4 | 10 | 4 | 3 |
| Interest | Declining | 1 | 5 | 7 | 8 | 9 | 7 | 8 | 8 | 8 | 10 |
| Depreciation | Stable | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 5 |
| Profit Before Tax | Improving | 31 | 30 | 28 | 26 | 22 | 26 | 26 | 32 | 22 | 19 |
| Tax | Volatile | 8 | 5 | 6 | 6 | 2 | 3 | 3 | 5 | 2 | 2 |
| Net Profit | Improving | 23 | 25 | 22 | 20 | 19 | 22 | 24 | 27 | 20 | 17 |
| Net Margin | Stable | 22.1% | 23.0% | 22.0% | 20.4% | 21.3% | 24.9% | 26.1% | 30.3% | 23.3% | 20.3% |
Key Takeaways
- Revenue grew 15.2% year-on-year to ₹106 crore, though sales softened slightly on a sequential basis compared to Q2.
- Operating Profit Margin (OPM) contracted to 35%, the lowest level seen in the current fiscal year, down from 39% in Q1.
- Net profit saw a healthy 21% year-on-year increase, though it declined 8% from the preceding quarter's high of ₹25 crore.
- Interest expenses saw a significant reduction to ₹1 crore in the latest quarter, down from ₹8-9 crore levels in previous years.
- The company continues to hold substantial Capital Work in Progress (CWIP) of ₹585 crore, reflecting ongoing heavy asset investment.
- Tax expense as a percentage of PBT rose to 25% in Q3, impacting the bottom-line conversion compared to prior quarters.
- Despite accounting profitability, free cash flow remains pressured by high capital expenditure requirements.
Management Guidance
Management remains focused on volume growth within the EXIM segment and maximizing utilization of rail terminals, despite headwinds in the agro-commodity export sector.
Sentiment Shift
Stable
While YoY metrics show growth, sequential softening in margins and sales suggests a plateauing of the recent growth spurt.
Outlook
The outlook is cautious but stable; the completion of ongoing infrastructure projects (CWIP) will be critical to improving asset turnover and long-term capital efficiency which is currently below its cost of capital.
From the Annual Report (Key Quotes)
“The business quality is characterized by high operating margins but low capital efficiency (ROCE under 7%).”
“Management execution is focused on volume growth in the EXIM segment and increasing rail terminal utilization.”
“Consistent lack of dividend payouts despite reporting accounting profits for over a decade suggests a conservative capital return policy.”
Official Quarterly Documents
This summary is AI-generated from Navkar Corporation Limited's latest quarterly filing and earnings call. For informational purposes only — not investment advice.