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Axiscades Engineering Technologies Ltd announces robust results driven by strong operating performance

Posted On: 2020-11-18 06:48:26


AXISCADES, a technology Company focusing on Product Engineering Solutions, serving Global OEMs announced its Q2 FY21 financial results. The company has posted a robust performance reflected in a 34.6% growth in Revenues primarily on the back of a strong performance in the strategic technology business. Despite a challenging macro environment in which the Company's largest vertical; aerospace continues to be under pressure, the AXISCADES leveraged its established capabilities and continuing thrust on cost rationalisation to significantly enhance its EBITDA margins and cashflow generation on both a corresponding and sequential quarter basis.

Performance Highlights:

Q2 FY21 vs Q1 FY21

- Q2 FY21 revenues are INR 1,431 Mn against Q1 FY21 revenue of INR 1,063 Mn, reflecting a growth of 35% in INR terms primarily driven by performance in strategic technology business.

- EBITDA Margins: 310 bps improvement in EBITDA margins to 14.8%

- Profit before taxes and before exceptional items for Q2FY21 stands at Rs 87Mn

H1 FY21 vs H1 FY20

- H1 FY21 revenue at INR 2,495 Mn against H1 FY20 revenue of INR 3,122 Mn a decline of 20% in INR terms primarily on account of the ongoing pandemic

- Despite decline in revenues, EBITDA margins improved by 162bps to 13.5% owing to cost rationalization measures undertaken over the last few months

- Cash in hand at a historical high of INR 866 Mn owing to substantial cash flow generation

- Recognized INR 440 Mn as goodwill impairment on the investment in Mistral and a gain of INR 230 Mn on the contingent consideration payable resulting in a net impact of INR 210 Mn

Business Updates

- Onboarded four new customers in Heavy Engineering and Transportation vertical

- Received new Purchase Orders from defence OEMs, despite the current market conditions.

- Launched three new products - Elevated Skin Temperature Sensor, Social Distancing Application and Remote Operations Desk, from the recently established Digital Lab aimed to provide comprehensive solution to Clients in the prevalent conditions.

- The first product is 'WecareEST' - an Elevated Skin Temperature Sensor, a nontouch skin temperature measuring device with Web and Mobile Applications. The second product is a Social Distancing Application, a video analysis-based application that indicates any violation of specified social distance. And the third product is a Remote Operations Desk which enables the monitoring and control of operations of a factory environment from remotely located Desktop. The products are undergoing Beta test and will be available for deployment soon.

- Exploring new opportunities arising out of the pandemic specifically in the transportation and healthcare sectors

- Expanding the sales footprint to take advantage of prospects opening up in new service lines.

- Forged partnerships with niche companies to address upcoming opportunities in Strategic technologies.

Commenting on the results and outlook, Mr. David Bradley, Chairman of AXISCADES said: "Given the market scenario, our teams have done well to cushion the group from the impact Covid-19 has had across the industry. We are in a good position to capitalize on the opportunities that are ahead of us. We have expanded our portfolio of services to be closer to market needs and our clients are fully appreciative of the support we have been extending through the pandemic."

Operations By Region H1 FY21 vs H1 FY20

- Europe (36% of revenues) declined by 5%, primarily due the slowdown in the aerospace industry

- North America revenues (40% of revenues) increased by 1%

- Asia-Pacific region (contributing 17% of Group revenues) increased by 2%

Operations By Business

Aerospace - Lockdowns and consequent travel restrictions have severely impacted the sector, thereby leading to cancellation of new orders. Manufacturing plants too are either shut down for a few days in a week or are operating at lower capacity utilisation. Despite the turbulence in the sector, AXISCADES registered a revenue of INR 287 Mn though this was an overall decline of 9.6% compared to Q1 FY21.

Strategic Technology Solutions - During the quarter Strategic Technology solutions registered a revenue of INR 507 Mn and accounted for 35% of the revenues.

Heavy Engineering - Despite the pandemic, this business segment during Q2FY21 maintained its revenues at similar levels compared to the immediately previous quarter.

In alignment with its vison of being a leading technology solutions provider, the Company changed its name from AXISCADES ENGINEERING TECHNOLOGIES LIMITED to AXISCADES TECHNOLOGIES LIMITED effective November 10, 2020.

Shares of AXISCADES Engineering Technologies Ltd was last trading in BSE at Rs.48.55 as compared to the previous close of Rs. 44.15. The total number of shares traded during the day was 25376 in over 444 trades.

The stock hit an intraday high of Rs. 48.55 and intraday low of 43.05. The net turnover during the day was Rs. 1186407.


Source: Equity Bulls

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