ASK Automotive’s Q3 consol profit up 71% YoY; Board okays Rs 219 crore for new facility

Robust traction in its aluminum lightweight precision solutions and safety control cable businesses, on the top of turnaround in ASK FRAS-LE joint venture business, boosted the profit.

By Kiran Murali calendar 05 Feb 2024 Views icon6254 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
ASK Automotive’s Q3 consol profit up 71% YoY; Board okays Rs 219 crore for new facility

ASK Automotive Ltd today reported a 71% growth in its consolidated net profit for the October-December quarter on a year-on-year basis, while the company’s board approved a capital expenditure of Rs 219 crore for a new plant in Karnataka.

The third quarter profit was driven by the robust traction in its aluminum lightweighting precision solutions and safety control cable businesses. The turnaround in the ASK FRAS-LE joint venture business also boosted the profit further.

The New Delhi-based auto component maker’s consolidated profit after tax came in at Rs 49.94 crore , against Rs 29.15 crore in the year-ago period. The company’s revenue from operations rose around 20% on year to Rs 761.66 lakh.

ASK Automotive makes brake shoes and advanced braking systems for two-wheelers in India and has a market share of around 50% market share. The company also provides aluminum lightweighting precision solutions and safety control cables.

Its customers include Honda Motorcycles, Hero MotoCorp, Royal Enfield, Ampere and Ather. It also exports components to companies such as Polaris and Aptiv.

The advanced braking system segment business delivered sustained performance while the revenue growth was driven by aluminum lightweight precision solutions and safety control cable businesses, the company said. “In addition, higher business traction was recorded by delivering significant revenue growth in the electric vehicle channel,” it added.

On the profitability front, ASK Automotive said its earnings before interest, taxes, depreciation and amortization (EBITDA) rose 39% to Rs 81.58 crore. EBITDA margins, or operating profit margin improved by 150 basis points to 10.7% from the year-ago period. “Higher EBITDA was mainly driven by better economies of scale due to increased volume and better customer mix,” the company noted.

The rate of increase in the expenses was lower than the revenue growth. Total expenses during the quarter were at Rs 708.06 crore, up around 18% on year. The cost of materials consumed rose to Rs 502.45 crore from Rs 430.39 crore in the year-ago quarter.

The company recorded Rs 10.48 crore as the share of profit from its joint venture operations in the three months, against a loss of Rs 1.54 crore in the same quarter the previous year. The profit comes on the back of a turnaround of ASK FRAS-LE joint venture business, in which ASK Automotive has a 49% share. The joint venture with Fras-le S.A. makes brake pads and linings for commercial vehicles.

Meanwhile, the company is in the process of setting up a new manufacturing plant in Karnataka with an investment of Rs 219 crore. Its board today approved the capital expenditure, and the plant is expected to start operations in the fourth quarter of the next financial year. 

Currently, ASK Automotive has 17 manufacturing plants, including one under its joint venture company. The company’s shares started trading on the National Stock Exchange and the BSE in November 2023.

RELATED ARTICLES
Sterling Tools wants 40% sales from EV biz by FY25

auther Autocar Pro News Desk calendar14 Apr 2024

This boost is expected from the EV business mix, a part of the company’s strategy to diversify its operations.

Driving EV business with agility and flexibility

auther Autocar Pro News Desk calendar14 Apr 2024

CEOs from the EV startup ecosystem met in Bengaluru and Pune to discuss the challenges and business opportunities.

'E-3wheelers not aspirational, but make money': Amit Singh, head, 3W division, Altigreen Propulsion Labs

auther Autocar Pro News Desk calendar14 Apr 2024

The challenges are more ground-driven in terms of the availability of electricity, and how to make it more economical, a...