GNA Axles Q3 Review - Sales Growth Below Estimates; Outlook Steady: IDBI Capital
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IDBI Capital Report
GNA Axles Ltd.'s Q3 FY22 performance was below our estimates primarily on account of weakness in domestic business. Sales grew by 9% YoY to Rs 3013 million. Ebitda margin declined by 467 basis points to 12.8% primarily on account of gross margin decline.
We believe NA class 8 truck markets to grow by in double digit in CY22/CY23 and domestic medium and heavy commercial vehicle truck market to grow at double digit in FY22 and FY23 on the back of multi-year low base and economic recovery.
The government strong infra push is likely to create sustainable demand for tippers and trucks for construction activity going forward.
To factor in improving business environment, we have revised GNA Axles' profit after tax estimates upwards by 2.3% and 15.6% for FY23 and FY24 respectively.
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