Rane Holdings reports strong profit growth in Q2 and H1 FY25

Rane Holdings Limited, the holding company of the Rane Group, has announced its financial performance for the second quarter (Q2FY25) and the half-year period (H1FY25) ending September 30, 2024.

For the second quarter of FY25, Rane Holdings reported a total revenue of ₹920.0 crore, a slight decrease of 1.1% compared to ₹930.5 crore in Q2 FY24. Despite the decline in revenue, the company’s EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) increased by 16.6%, reaching ₹84.7 crore in Q2 FY25, up from ₹72.7 crore in the same period last year. As a result, the EBITDA margin improved to 9.2%, compared to 7.8% in Q2 FY24.

The company also reported a significant increase in its profit after tax (PAT), which stood at ₹185.4 crore for Q2 FY25, marking a 263.0% growth from ₹51.1 crore in Q2 FY24.

For the first half of FY25, Rane Holdings reported total revenue of ₹1,757.5 crore, a decrease of 3.9% compared to ₹1,828.2 crore in H1 FY24. The company’s EBITDA for H1 FY25 was ₹164.6 crore, reflecting a 7.1% increase from ₹153.6 crore in the first half of FY24. The EBITDA margin improved to 9.4% in H1 FY25, compared to 8.4% in H1 FY24.

Profit after tax (PAT) for the half-year period was ₹204.9 crore, a notable increase of 224.4% compared to ₹63.2 crore in H1 FY24.

In terms of operations, revenue from Indian Original Equipment (OE) customers declined by 3% in Q2 FY25, primarily due to lower offtake from the Farm Tractor (FT) and Commercial Vehicle (CV) segments. Revenue from international customers decreased by 10%, largely due to the divestment of the LMCA (Light Metal Castings and Assemblies) business. On an organic basis, international revenues declined by 2%.

However, the revenue from the Indian aftermarket segment showed a 5% increase in Q2 FY25.

The company’s EBITDA margin improved by 140 basis points, driven by various cost-saving initiatives across its operations.

The company also reported exceptional items, which mainly consisted of an amount received by Rane Steering Systems (P) Ltd (RSSL, formerly known as Rane NSK Steering Systems Pvt. Ltd.) from NSK Ltd. (Japan). This settlement was related to various claims, as well as a gain arising from the remeasurement of the existing stake in RSSL at fair value.

Rane Holdings' performance for Q2 and H1 FY25 highlights the company's continued focus on operational efficiency and cost management. Despite some declines in revenue from certain segments, the significant growth in profitability and EBITDA margin reflects the positive impact of cost-saving initiatives and strategic actions taken during the period.