Ador Welding the welding consumable and equipment major has registered 3% growth in standalone sales to Rs 128.64 crore. Higher sales together with 50 bps expansion in OPM to 8.4% has facilitated 9% growth in operating profit to Rs 10.75 crore. But a 38% fall in other income to Rs 3.11 crore has dragged the PBIDT down by 7% to Rs 13.86 crore. The PBT was down by 12% to Rs 9.04 crore after accounting for lower interest and higher depreciation (as proportion to sales). With taxation being a write back of Rs 1.20 crore against a provision of Rs 3.56 crore, the PAT jumped up by 52% to Rs 10.24 crore.
- Upside in revenue was largely due to consumables. The segment revenue of consumables was up by 5% to Rs 99.93 crore (or 78% of sales). However the segment revenue of equipment was lower by 3% to Rs 28.88 crore with the country witnessing capex down-cycle.
- EBIT was down by 19% to Rs 12.06 crore hit largely by loss registered by equipment business. The segment profit of consumables was up by strong 20% to Rs 17.76 crore despite mid-single digit growth in revenue and that is largely due to strong 220 bps expansion in segment margin to 17.8%. On the other hand the equipment business registered a segment loss of Rs 5.70 crore against a segment profit of Rs 0.08 crore in the corresponding previous period.
Consolidated sales was up by 3% to Rs 128.86 crore and with 30 bps expansion in OPM to 8.4%, the operating profit was up by 7% to Rs 10.88 crore. But the PBT was down by 13% to Rs 9.14 crore hit by lower OI and higher depreciation. Eventually the PAT was up by 49% to Rs 10.39 crore gained by lower tax, a swing of Rs 4.81 crore to a write back of Rs 1.25 crore.
Pursuant to the announcement made by the Finance Ministry of the Government of India on 20 September 2019, the company, basis theircurrent assessment, is expected to opt for a lower corporate tax rate as per section 115BAA of the Income Tax Act, 1961 as introduced bytheTaxation Laws (Amendment) Ordinance, 2019 from financial year 2019-20 onwards. Accordingly, the company has recognised Provision forIncome Tax for the half year ended 30 September 2019 and re-measured the Deferred Tax Liability basis the revised lowertax rate. The impactof the same has been recognised in the period ended 30 September 2019.
Half yearly performance
Standalone sales was up by 13% to Rs 258.24 crore and that together with 10 bps expansion in OPM to 7.7%, the operating profit was up by 15% to Rs 19.96 crore. After accounting for lower OI, higher interest and higher depreciation, the PBT was up by 3% to Rs 16.49 crore. The PAT was eventually higher by 34% to Rs 14.55 crore after accounting for 62% fall in taxation to Rs 1.94 crore.
Consolidated sales was up by 13% to Rs 258.73 crore and its PAT was up by 32% to Rs 14.87 crore.
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