ZF Commercial Vehicle Control Systems shares fell to a day low of Rs 2,260 on the NSE, after Q1 profit dropped 14.6% despite higher revenue.

The company posted a net profit of Rs 104.5 crore for the June quarter, down from Rs 122.4 crore a year earlier.

Revenue from operations actually grew 9.3% to Rs 1,066.2 crore from Rs 975.6 crore, so the drop in profit came down to costs rather than weak sales.

Operating profit told a similar story. EBITDA rose 4.8% to Rs 137.9 crore from Rs 131.6 crore, but the margin narrowed to 12.9% from 13.5% a year ago, showing that costs grew faster than the top line.

ZF Commercial makes automotive components and related services, and runs this as its only business segment.

Alongside the results, the board approved Rakesh Mishra as the company’s next Chief Financial Officer, effective 1 September.

This follows a bonus share issue in the ratio of 5:1 that the company completed in late June, which added to its equity base and should improve liquidity in the stock. The June quarter numbers are also a step down from the previous one.

In the March quarter, ZF Commercial had reported profit growth of 15.5% to Rs 146.3 crore, on revenue of Rs 1,155.2 crore, with an EBITDA margin of 16.4%.

The board had also announced a dividend of Rs 4 per share at the time. Even after today’s fall, the stock remains well above its 52 week low of Rs 2,050.33, though it is now some distance from its high of Rs 3,044 touched in June.

ZF Commercial Vehicle Control Systems shares closed at Rs 2,320.60 on the NSE, down 1.91% for the day.

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