Rico Auto announces acquisition and interim dividend

Rico Auto Industries Ltd. (RAIL) and its step-down subsidiary, Rasa Autocom Ltd. (RAL) are set to acquire the equity shares in the 50:50 joint venture (JV) company named Magna Powertrain GMBH. 

Upon acquisition, the JV company will become a subsidiary of the company. Furthermore, RAIL and RAL will hold the entire share capital of the JV company. 

The board also gave the green signal to set up a new manufacturing plant at Halol in Gujarat for the manufacture of components for two-wheelers and four-wheelers. This plant is projected to become operational from May 2019. The company will be required to make an initial investment of Rs. 1.1 crore and the same will be met by means of internal accruals. 

Moreover, the board declared an interim dividend of 40 per cent for FY2019. This amounts to Rs. 0.40 per share on face value of Re. 1 each. 

The company’s consolidated financial performance stands as follows. It reported net revenue of Rs. 338.8 crore in Q3FY19 as against Rs. 308.8 crore, posting a growth of 9.71 per cent. EBITDA stood at Rs. 36.5 crore in Q3FY19 in comparison to Rs. 30.9 crore in Q3FY18, registering a growth of 18.12 per cent. Net profit tumbled to Rs. 10.9 crore in Q3FY19 in comparison to Rs. 13.3 crore in  Q3FY18, a decrease of 18.04 per cent. EBITDA margin was reported at 10.9 per cent in Q3FY19 while the net profit margin stood at 3.2 per cent in Q3FY19. The company reported EPS of Rs. 0.80 in Q3FY19 as against Rs. 0.98 in Q3FY18. 

Moving forward, the company is focusing on new clutch and CVT development, while also tapping more customers for the EV parts. 

On Tuesday, the shares of Rico opened at Rs. 59.25, and hit a high and low of Rs. 61.80 and Rs. 57.20, respectively. The stock closed at Rs. 60.80, up 0.58 per cent.