• Even while the net sales was up by 26% to Rs 439.05 crore, the value of production has grown by 17% to Rs 397.97 crore. Given value of production was almost 9.3% lower than sales for the quarter, the company seems to have the benefit of liquidation of earlier period stocks.
• On product/segmental terms, the strong revenue growth is largely on account of good show by Material handling equipment (MHE) segment, whose revenue was up by 48% to Rs 295.48 crore. On the other hand the segment revenue of transmission equipment (TE) was down by 1% to Rs 154.15 crore.
• Share of MHE to topline stood at 66% for the quarter compared to 56% in the corresponding previous period. But that of TE came down to 34% from 44% in the corresponding previous period. Similarly at EBIT level the share of MHE stood higher at 62% compared to 52% in the corresponding previous period. That of TE was lower at 38% compared to 48% in the corresponding previous period.
• Contraction in operating margin to the extent of 90 bps is largely on account of change in revenue mix, with increased contribution to topline coming from relatively low margin MHE segment. Segment margin of MHE was lower by 50 pbs to 13.3% and that of TE was lower by 40 bps to 15.8%. On basis of cost overhead as proportion to net of stocks, the material and staff cost were higher by 130 bps and 100 bps respectively even while other expenses were lower by 230 bps leading marginal comppression in operating margin.
• On EBIT level, the segment profit of MHE, facilitated by higher sales, was up by 42% to Rs 39.18 crore. That of TE was lower by 4% to Rs 24.38 crore hurt by both lower sales and margin erosion.
• Other income was lower by 56% to Rs 1.45 crore. The interest and depreciation cost was higher by 8% (to Rs 15.01 crore) and 6% (to Rs 11.04 crore) respectively. As result the PBT (before EO) was higher by 19% to Rs 39.31 crore. EO income for the quarter was nil compared to Rs 0.15 crore in the corresponding previous period. As taxation being higher by 59% to Rs 15.42 crore, the growth at net profit stood restricted to 1% to Rs 23.89 crore.

Elecon Engineering is into manufacture of bulk material handling equipment and industrial gears. Its one of the largest industrial gear box manufacturer in the country, with the widest range of products namely worm, helical, spiral, bevel helical, planetary, high speed and marine gears along with various kinds of couplings. In material handling front its product range includes design, engineering manufacture, supply, erection and commission of conveying equipment, wagon tipplers & dust trapping equipment, Reduction gears & geared motors, wagon marshalling equipment, EOT cranes & goliath cranes and specialised conveying equipment, stacker reclaimers, blender reclaimers, rotary disc loaders etc.

Standalone annual results

Sales for fiscal ended Mar '12 was up by 13% to Rs 1331.67 crore and the operating profit was up by 12% to Rs 202.75 crore. On a inflated based on account of profit on sale of investment of Rs 20.7 crore, the PAT was eventually lower by 21% to Rs 69.60 crore.

Consolidated annual results

Consolidated sales for the fiscal was up 26% to Rs 1613.22 crore and the operating profit was higher by 11% with OPM stand contracted by 180 bps to 12.9%. On an inflated base on account of profit on sale of investments the PAT was lower by 32% to Rs 60.54 crore. After accounting for minority interest (nil for both years) and share of profit from associate (down 56%) the net profit was lower by 32% to Rs 61.10 crore. On excluding the profit on sale of investmetnof Rs 20.7 crore in FY11 financials, the PBT was up 1% and the PAT (after MI) was lower by 12%.

On deducting consolidated financials with that of standalone the sales was up by 155% to Rs 281.55 crore benefited partly by full year figures of BR Group for FY12 unlike just for 4 months in FY11. At PAT level it was a loss of Rs 9.06 crore comapred to a profit of Rs 0.7 crore in the corresponding previous period. The loss is largely on account of one off expenses of Rs 6.5 crore toward shifting of premises in relation to carving out standard products biz out of David Brown.

Other Developments

Capitalized about Rs 87 crore as Fixed assets in FY12 out of which about Rs 56 crore pertains to MHE and Rs 31 crore towards Gears.

To pay a dividend of Rs 1.80 per equity share of Rs 2 face value or 90% for the fiscal 2011-12.

The Company has an unexecuted order book of Rs 1212 crore as on March 31, 2012 and of which MHE order backlog is Rs 913 crore and that of Gears is Rs 299 crore. Order backlog as end of May 11, 2012 was Rs 1522 crore.

The stock hovers around Rs 53.55.