Swaraj Engines surges 8% on strong March quarter results, dividend bounty

The company announced a total dividend of Rs 69 per share for the financial year 2020-21, including a special dividend of Rs 19 per share

Shares of Swaraj Engines rallied 8 per cent to Rs 1,471 on the BSE in the intra-day trade on Thursday after the company reported a strong performance in March quarter (Q4FY21) by achieving its highest-ever quarterly profit of Rs 32.56 crore, up 105.6 per cent over the previous year quarter.

The company achieved its best-ever Q4 engine sales of 33,831 units, up 62 per cent year on year (YoY) and 8 per cent quarter on quarter (QoQ). While the net operating revenue grew 74 per cent YoY at Rs 305 crore, earnings before interest, taxes, depreciation, and amortization (Ebitda) jumped 97.5 per cent YoY at Rs 46.20 crore and Ebitda margins improved 179 basis points to 15.1 per cent. The margins for the quarter were supported by improvement in gross margins as well as operating leverage benefits.

The company said the impressive growth witnessed in the tractor industry and resultant higher engine demand emerged during Q4 of fiscal 2021 which helped it to post a strong quarterly financial performance.

Besides, Swaraj Engines also announced a total dividend of Rs 69 per share for the financial year 2020-21 (FY21), including a special dividend of Rs 19 per share, implying dividend payout of around 90 per cent, with EPS for FY21 at Rs 76.2 per share.

Swaraj Engines is primarily in the business of supplying engines to the Swaraj division of Mahindra & Mahindra (M&M). At 10:05 am, the stock was trading 6 per cent higher at Rs 1,439 on the BSE, as compared to a 0.56 per cent decline in the S&P BSE Sensex. A combined 71,000 equity shares had changed hands on the counter on the NSE and BSE till the time of writing of this report.