- AET had an uptick in the consolidated sales, up 9% to 986 million vs 904 million in Q2 FY’17.
- Consolidated EBITDA for Q2 FY’18 stands at 414 million as against 487 million in Q2 FY ’17, down 15%.
- The net profit in FY ’18was 387 million in the first half as compared to 569 million in the first half of FY’17.
- EBITDA margin is about 40% in H1 FY’18 as against 52% in H1 FY ’17.
Business and Operational Update
- AET also had the acquisition of Evoxx Technologies in the first half.
- 10-15% growth rate is expected during the entire year.
- Gross margins in Q2FY18 were only 75% compared to 1stQuarter of FY '18 gross margins of 80%.
- The gross margin is up by 65% Y-o-Y, where other expenses are also up by 65% in 1st quarter and employee cost was up 24% in 1st quarter.
- Average EBITDA margin last year was above 47-48% across the 4 quarters, whereas for this year the average EBITDA is around 40%.
- In first-half there was negative 6% growth.
- Evoxx has been a negative contribution to EBITDA of about 2 crores.
- Excluding Evoxx, Revenue growth from geographical perspective for Q1 and Q2 have been 3%.
- Overall EBITDA growth rate from Europe would be forecasted around 8% to 10%.
- India Business of AET has grown and the Revenue coming from India will grow comparing Q2 FY17 to FY18
- On Y-o-Y basis, the top client contribution remained similar, 27 crores.
- The gross profit (Net sales minus raw material cost) is showing a year on year decline.
- Decline in gross margin is due to mix effect instead of top customer. It is related to currency loss of 4.1%.
- Acquisition or setting up a subsidiary in palm in Malaysia to establish itself as a global player and to establish its office in the south-east Asian market.
- 10% to 15% annual guidance in the next 2 quarters will increase margins.
- The U.S. business has been driven by top-end customer.
- Established technical support team in the Malaysian office, hiring 5-10 hard core technological people for the same.
- Approximate topline guidance for Q3FY18 quarter is 380 to 400.
- Projected full year margin will be in the range of 40-45%.
- Target achievement is difficult to predict, as the year sales target is 380 Crores to 400 crores FY18, but till now AET has covered only 172 Crores, so the remaining 210 crores has to be covered in the next 2 quarters.