Saturday, November 26, 2022

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Honda India Power jumps 45% in 1 month on strong operating income

Honda India: In intraday trading on Friday, shares of Honda India Power Products reached a record high of Rs 2,357.05, up 9% on the BSE. The S&P BSE Sensex, in contrast, was down 0.26% at 61,588 at 10:13 AM.

The industrial equipment company’s stock has increased by 45% over the past month after it posted strong earnings for the quarter that ended in September 2022 (Q2FY23), outpacing the Sensex’s 4.5% gain.

The company’s profit after tax (PAT) increased by 167% year over year (YoY) to Rs 42.42 crore in Q2FY23 thanks to strong operating income. In Q2FY22, it reported PAT of Rs 15.90 crore, up from Rs 4.91 crore the quarter before (Q1FY23).

At Rs 394 crore for the quarter, operating revenue increased by 70.5 percent year over year and 97% sequentially. The ebitda margin, which measures earnings before interest, taxes, depreciation, and amortisation, increased 564 bps year over year to 14.29%. In Q1FY23, the Ebitda margin was 2.82 percent.

Honda India Power Products specialises on the production and distribution of tillers, lawnmowers, brush cutters, portable gensets, and water pumps. The business serves both domestic and foreign markets.

Although there have been modifications to composition, disbursement, and qualities, State and Union Government continue to give funds and offer support to the infrastructure and agriculture sectors as envisaged.

Programs and investments in horticulture and oil seeds, as well as improved levels of mechanisation, are all leading signs of greater farm incomes, and the sector’s returns on investment were positive at all levels.

“Construction mechanization, through portable engines run applications and Farm mechanization products such as engines, water pumps, riding on increasing rural incomes, expected continuity in Government support, together with high cost and scarcity of manual labour, will provide much needed demand for our product portfolio and offerings,” the management said.

The company is working to create a multi-channel structure that will assist Original Equipment Manufacturers (OEMs) in the nation in developing products and equipment for a variety of application-related markets. The company noted that partnering with such small, medium, and specialised quality producers is projected to create another crucial ecosystem of affordable and application-specific products and services.

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