• OPM contracted by 80 bps to 7.6% and that is largely due to higher material cost. Material cost as proportion to sales net of stocks was up by 890 bps to 56.9%. However the cost of traded goods was down by 110 bps (to 16%), staff cost were down by 330 bps (to 11.9%) and OE was down by 290 bps (to 7.7%). Thus facilitated by higher sales (up 37% to Rs 1421.36 crore), the operating profit was up by 25% to Rs 108.54 crore.

• Upside in revenue was largely driven by electro mechanical projects (EMP). The segment revenue of EMP leaped by 62% to Rs 901.48 crore on execution of strong quality order book. The segment revenue of engineering products & services (EPS) was up by 9% to Rs 72.86 crore. And the segment revenue of Unitary cooling products (UCP) was up by 8% to Rs 441.01 crore.

• EBIT for the quarter was up by 22% to Rs 132.66 crore with upside coming largely from electro mechanical projects (EMP). The segment profit of Unitary cooling products was down by 45% to Rs 27.75 crore hit by challenging market condition where the rising material cost could not be passed on to the customer due to high channel inventory and discounting to liquidate the unusual high stock in the channel by industry players. The segment margin of UCP was down by 610 bps to 6.3%. The segment profit of EPS was up by 5% to Rs 28.99 crore largely due to higher sales as its segment margin was down by 150 bps to 39.8%. However with the company focus on profitable orders, the segment profit of EMP jumped up by 150% to Rs 75.92 crore with its segment margin expand by 300 bps to 8.4%.

Half yearly performance

Sales was up by 20% to Rs 3569.45 crore and the operating profit was up by 19% to Rs 351.73 crore with OPM flat at 9.9%. After accounting for lower OI, higher interest and lower depreciation, the PBT before share of profit from associate was up by 5% to Rs 405.01 crore. The share of loss from associate was Rs 1.71 crore compared to a profit of Rs 1.92 crore in the corresponding previous period. Thus the PBT after share of profit from associate was Rs 403.30 crore, a growth of just 4%. The EO Income was nil for the period as against Rs 2 crore in the corresponding previous period. Thus PBT after EO was down by 3% to Rs 403.30 crore. With tax rate stand at 27.1% compared to 27.5% in corresponding previous period, the PAT was up by 4% to Rs 294.06 crore.

After accounting for higher minority interest (up 123% to Rs 6.68 crore) and a swing of Rs 110.9 crore in other comprehensive expense to Rs 19.32 crore, the total comprehensive income attributable to owners was down by 28% to Rs 268.06 crore.