• Early double digit fall in sales (down 14%) was largely due to lower volume as well as realization. While the sales volume for the period was down by 12% to 19797 numbers, the per unit realization was down by 2% to Rs 85907. Lower volume was largely due to continued weak demand from end user industry i.e. tractors in Q3FY20.

• OPM contracted sharply by 220 bps to 11.6% largely due to higher material and staff cost. The material cost as proportion of sales net of stocks was up by 150 bps to 77.2% and that of staff cost was up by 120 bps to 6.2%. However the OE was down by marginal 10 bps to 5.1%. Thus hit by lower sales and lower margin, the OP was down by 25% to Rs 30 crore.

• With OI stand lower by 32% to Rs 2.76 crore, the de-growth at PBIDT was 29% to Rs 22.45 crore. And with interest cost nil for the quarter as well as corresponding previous period, the depreciation was higher by 8% to Rs 5.12 crore. Thus hit by lower OI and higher depreciation the PBT was down by 35% to Rs 17.33 crore.

• With taxation (net of deferred tax) for the period down by sharp 53% to Rs 4.44 crore the fall at PAT was 26% to Rs 12.89 crore.

• Sharp fall in taxation was largely as the company has opted to exercise the option permitted under section 115BAA of the Income-Tax Act, 1961 as introduced by the Taxation Laws (Amendment) Ordinance, 2019.

Nine month performance  

Sales for the period was down by 12% to Rs 598.17 crore. But with OPM contract by 240 bps that together with lower sales resulted in 26% fall in operating profit to Rs 77.05 crore. The other income was down by 16% to Rs 9.82 crore and thus the PBIDT was down by 25% to Rs 86.87 crore. With interest stand lower by 88% to Rs 0.01 crore and depreciation up by 7% to Rs 15.22 crore, the PBT was down by 30% to Rs 71.64 crore. With taxation down by 54% to Rs 16.44 crore, the fall at net profit was eventually restricted at 16% to Rs 55.20 crore.