Sterling Tools Q4 Review - Revenue Beat, Margin Miss: Dolat Capital
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Dolat Capital Report
Sterling Tools Ltd. reported decent operating performance in Q4 FY21.
Net revenue grew 14% QoQ to Rs 1.26 billion, led by recovery in demand across original equipment manufacturer segments.
Despite better product mix, Ebitda margin suppressed by 400 basis points QoQ to 16.9% led by higher other expenses.
We expect margin pressure to continue in the coming quarter due to sharp increase in raw material prices, along with high logistic and power and fuel cost.
The company’s addition of Hyundai to its new customer list will lead to incremental revenues from FY22.
In addition, increasing contribution to commercial vehicles and special fasteners is likely to boost revenue and profitability in the medium term.
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