- 14 Nov 2022
- ICICIdirect Research
Shaily Engineering reports mixed bag performance in Q2FY23
SHAILY - 1055 Change: 30.45 (2.97 %)News:
Shaily's revenues came in at ~Rs 160 crore, up ~10.5% YoY on a high base. Volume growth came in at 14% YoY in Q2FY23. Improved traction across segments aided the volume growth in Q2FY23. On a three-year basis, revenue grew at a CAGR of 22.3% led by 15% volume growth. Gross margin declined 228 bps YoY (up 250 bps QoQ) mainly due to high raw material cost. However, better operating leverage helped EBITDA margin remain flat YoY at 15.2% (up 378 bps QoQ). PAT declined ~10.5% YoY to ~Rs 9.4 crore due to sharp increase in depreciation and higher interest outgo
View:
Shaily reported a mixed bag performance in Q2FY23 wherein topline growth and EBITDA margin improved but profitability remained impacted. We believe that strong demand across segments aided the topline growth. QoQ improvement of margins is on the back of passing of price hikes as well as savings in operating expenses. While we maintain our positive stance on the stock, we await management commentary on future demand outlook and sustainability of EBITDA margin, going forward
Impact:
Positive