Salzer manufactures Load Break Switches, Wiring Ducts, Terminal Connectors, Selector Switches, Ammeter Switches, Voltmeter Switches, DC Disconnectors, Electro Magnetic Relays and Magnetic Wires besides Modular Wiring Accessories and Allied Specialty Products.

March 2018 quarter

In pursuance or above business acquisition effective March 8,2018 the financials results of the company includes 24 days financial operations of the business acquired SMW in audited Fourth quarter as well as FY 2018 results. Hence the Financial results for the Fourth quarter as wail as FY 2018 is not comparable to that extent.

During the 24 days of operations after acquisition, business generated the revenue of Rs. 9.79 crore and made PAT or Rs.7 83 lakh:

In March 2018 quarter net sales rose 14% to Rs 126.75 crore. OPM grew 290 basis points to 12.9% which saw OP rise 46% to Rs 16.41 crore.

Other income stood at a loss of Rs 87 lakh against a profit of Rs 1.86 crore and interest cost went down 5% to Rs 3.8 crore. After providing for depreciation (up 28% to Rs 2.95 crore), PBT grew 30% to Rs 8.74 crore.

As taxation jumped 58% to Rs 3.89 crore (tax incidence jumped from 36.5% to 44.5%), PAT grew 13% to Rs 4.85 crore.

FY 2018 results

In FY 2018 sales rose 14% to Rs 442.77 crore. OPM improved 60 basis points to 12.0% which saw OP grow 21% to Rs 53.28 crore.

Other income fell 43% to Rs 3.10 crore and interest cost went up 2% to Rs 14.91 crore. After providing for depreciation (up 18% to Rs 10.54 crore), PBT grew 19% to Rs 30.94 crore.

As taxation grew 25% to Rs 10.92 crore (tax incidence grew from 33.6% to 35.3%), PAT grew 15% to Rs 20.02 crore.

Acquisition of Salzer Magnet Wires

During the year, the company acquired the whole or business undertaking of Salzer Magnet Wires on a slump sale basis as a porno concern in terms of the Business Transfer Agreement dated March 08 2018 for lump sum consideration or Rs 20.29 crore which was discharged by means or allotment of 5,00,000 Equity share of rs 10 each at an issue Price of Rs 197/- per snares and 5,30,000 Non cumulative 5% Convertible Preference share of Rs 10 each at an issue Price of Rs 197 per share on preferential basis. Accordingly all the assets and liabilities or SMW have been transferred and vested upon in the books of the Company effective March 08, 2013 without any further obligations.

Salzer Magnet Wires offers wide range of enamel coated Copper wires suitable for winding application in Transformers, Motors, Alternators, Contactors, Relays and Auto electrical.

This acquisition will enable it to better leverage on pricing with suppliers, it will also bring in operational synergies helping it grow profitably. This will also expand customer base and will be able to offer total and complete electrical solutions to a wider set of customers that will enable the company to increase and strengthen its market penetration in India and over time, target offering new products globally as well.

Valuation

The stock trades at Rs 198.