Auto components manufacturer Samvardhana Motherson Ltd. reported a substantial rise in its net debt for the September quarter as it utilised funds for its acquisitions, capex and payment of dividends.
The company's net debt at the end of the September quarter stood at ₹13,416 crore, compared to ₹8,311 crore in the June quarter.
Pankaj Mittal, the company's COO told
CNBC-TV18 in an interaction that
Samvardhana Motherson had made 15 acquisitions, most of which have already closed, while some are on the verge of closing. He also said that once the new acquisitions start reflecting in the company's income statements, the debt levels would decline.
"We have a very healthy level of the times to EBITDA, so we have a target that we should not go beyond 2.5x. We are at the moment around 1.9x. We see that as these new acquisitions come in, and they start to get more benefits in Q3 Q4, which is normally stronger than Q1, Q2, then it should remain at this level, or even come down below 1.9,” Mittal said.
For the September quarter, Samvardhana Motherson reported revenue growth of 28% from last year to ₹23,474 crore, while EBITDA went up by 34% year-on-year. EBITDA margin also expanded by 80 basis points from last year.
18% of that revenue growth came from organic channels, while the rest came from the completed M&A transactions like SAS, Ichikoh, Saddles, and
Rollon.CFO Pankaj Mittal told
CNBC-TV18 that the revenue from most of the other acquisitions is yet to kick in. "“The kind of growth and the acquisitions, we have not, in this
quarter not all the complete months have been taken, for some acquisitions only two months of revenues have come in," he said.
Mittal further said that acquisitions worth a billion dollars of topline are yet to be closed. "Apart from that with this organic growth we see a very healthy topline growth in the coming quarters of the year. I can't give a number as such," he said.
Malani further said that the company is growing much rapidly in India. Therefore, the number of new facilities in India have been increased to ten from the six announced earlier.
Samvardhana Motherson's excess inventory has now dropped below ₹2,000 crore and is likely to fall further.
Shares of Samvardhana Motherson ended 1.6% lower on Friday at ₹88.55. The stock has risen 17% so far in 2023.
(Edited by : Hormaz Fatakia)