Rane (Madras) Limited — Important, 30-01-2025: Financial Result Updates

Total revenue for Q3 FY25 was ₹523.71 crore, reflecting a slight increase of 0.2% compared to ₹522.42 crore in Q3 FY24. This growth can be attributed to a 14% rise in sales to the Indian aftermarket, offset by a 4% decline in sales to Indian OEM customers, mainly due to lower demand from the commercial vehicle (CV) and farm tractor (FT) segments.

Net profit for the quarter was ₹0.41 crore, down from ₹12.88 crore in Q3 FY24, signaling an 82% decrease in profitability year-over-year. The decrease in profit was influenced by higher operational costs, including provisions for obsolete inventory, premium freight, and foreign exchange losses associated with overseas investments. Reported earnings per share (EPS) was (₹0.14) for the quarter.

Cost of materials consumed rose slightly, contributing to a total expense of ₹523.19 crore, which is higher than ₹509.54 crore in the corresponding quarter last year. The combination of revenue stagnation and rising costs led to an EBITDA margin contraction to 7.5% from 9.3% in Q3 FY24.

The outlook for Rane (Madras) Limited indicates a need for strategic focus on cost management and improving operational efficiency, especially to address the decline in profit margins and net profitability. Given the current performance metrics and cost pressures, a cautious approach is warranted, suggesting a hold position for investors at this time.