GNA Axles Has ‘No Hope’ For Recovery For Another Two Or Three Quarters
GNA Axles’ revenue fell 13% year-on-year in the December quarter as exports to North America declined.
Shares of GNA Axles Ltd. fell the most in more than three years as the auto parts maker expects the impact of India’s worst-ever auto slowdown to linger for a few more quarters.
“As far as the top line is concerned, we have no hope on any improvement in the next two-three quarters because all segments from domestic to Europe to the U.S., are down,” Ranbir Singh, president and chief executive officer at GNA Axles, told BloombergQuint in an interview.
The company’s revenue declined 13 percent year-on-year in the quarter ended December as exports to North America—the one market that was supporting its sales amid the domestic auto slowdown—took a beating. Its exports had jumped 58 percent in the first half of ongoing financial year due to spot orders, but the “North American market has not supported us” in the third quarter, Singh said.
Also Read: Bosch to Cut Thousands of Jobs in India as Auto Sales Slump
Singh had in an earlier interview with BloombergQuint said exports to North America, Europe, Asia and South America together contribute half of the company’s revenue.
GNA Axles’ profit also fell 57.5 percent year-on-year in the third quarter as operating margin contracted.
Its shares tumbled as much as 14.2 percent, the most since November 2016, compared to a 0.13 percent drop in the benchmark Nifty 50 Index.
GNA Axles Q3 Results 2019-20: Key Highlights (YoY)
- Revenue fell 13 percent to Rs 214.14 crore
- Net profit dropped 57.5 percent to Rs 7.63 crore
- Ebitda down 38.6 percent at Rs 23.89 crore
- Margin stood at 11.16 percent against 15.8 percent
Watch | GNA Axles’ Ranbir Singh’s Take On The Company’s Q3 Results