• Strong demand for plastic pipes continues to have favourable impact on the demand for the pipe extrusion machinery. Consequently the sales of the company were higher by 35% to Rs 23.78 crore.
• The company managed to expand the operating margin despite strong upward cost push from material cost on the back of firm prices of commodity metals. While the material cost as a proportion to sales net of stocks was higher by 55 basis points, the impact of it was more than cushioned by lower staff cost (down by 88 bps to 7.8%) and lower other expenses (down 66 bps to 11.2%). Consequent to higher sales and expansion in OPM the operating profit stood increased by 57% to Rs 1.79 crore.
• Other income was lower by 4% to Rs 52 lakh. Restricted by lower other income the PBIDT stood at Rs 2.31 crore, a rise of 38%. The interest cost was higher by Rs 8 lakh to Rs 12 lakh and Depreciation cost was higher by Rs 10 lakh to Rs 44 lakh. As result the PBT was higher by 35% to Rs 1.75 crore.
• With extra-ordinary expenses being nil during quarter ended Jun ’06 as well as corresponding previous quarter and similarly taxation being nil, the net profit stood increased by 35% to Rs 1.75 crore.

Kabra Extrusion Technik is one of the leading manufacturers of plastic extrusion machinery specializing in manufacture of plants to produce wide range of plastic pipes. The company commands 65% market share in the pipe extrusion machinery. The company with more than significant export presence there by diversifying geographical risk earns about 38% of its sales coming from exports in FY ’06.

FY ’06 performance

Sales for the fiscal ended Mar ’06 was higher by 43% to Rs 100.51 crore. As operating margin expands by 80 bps to 6.8% the operating profit was higher by 60% to Rs 6.79 crore. Other income was lower by 12% to Rs 3.37 crore. Interest cost was higher by Rs 26 lakh to Rs 38 lakh and depreciation was higher by 14% to Rs 1.51 crore. PBT was higher by 25% to Rs 8.27 crore. With taxation including deferred tax being lower by 5% to Rs 1.95 crore the PAT was higher by 38% to Rs 6.32 crore. Prior period adjustments being nil during the fiscal as against and write back of Rs 27 lakh in the corresponding previous period. Consequently on a marginally inflated higher base the net-profit stood restricted to 30% to Rs 6.32 crore.

Inks fresh Technology collaboration agreement

KETL which has tied up with Battenfeld Extrusion Technik GmbH, Germany for the technology of single & twin screw extruders for a period of 7 years running till April 2007 has entered into a fresh technical collaboration agreement after terminating the existing one on mutual consent. Under the new technology collaboration agreement signed between the two players on April 5, 2006 KETL will have full access to the technology for manufacturer of single/ twin/ conical extrusion machineries, cast filter lines, sheet lines, composite pipe lines etc covering wider range of extrusion lines/ machinery of the German partner. The agreement will be valid for a period of 10 years.

Similarly the company has also inked an agreement with American Maplan Corporation of USA for know how for manufacture of plants to manufacture of plants to produce wood composites including application for decking, fencing, siding. The above products are very much used in abroad and India there by resulting in strong demand for capital machinery. The technical collaborator has accepted the lump sum payment towards consideration for supply of such know-how and does not involves royalty based on annual sales.

KETL that has raised Rs 10.61 crore by way of preferential allotment of 1116580 shares @ Rs 95 per share in May ’06 to two of its technical collaborator has paid an amount of Rs 6.61 crore towards lump sum payment for technical know how. The company proposes to use the balance amount for its working capital requirement.

Kabra Extrusion Technik which is a market leader in Pipe extrusion machinery is all likely to sustain the strong revenue growth in future given the 15-17% anticipated growth in polymer consumption in the country there by translating into atleast 20% or more demand growth for machinery and capital equipment catering to this sector.

With fresh technical collaboration inked with Battenfield of Germany and American Maplan Corp of USA for a period of 10 years from April 2006, the company will have seamless access to the latest technology from the fold of its technology partner. The company that enjoy cost competitiveness of about 40% compared to players in developed market can now bring cutting edge technology to customers there by warding of the challenge of the global players on technology front.

Given the fact of 50% of the PVC resin business in unorganized sector and efforts of moving up the ladder by the players likely to translate strong demand for KETL.

Considering its leadership, large potential in domestic as well as export market and continuous technological innovation, the company is all likely to sustain strong revenue growth.