• Sales was higher by 29% to Rs 20.94 crore and value of production was higher by 32% to Rs 24.82 crore, which is 18% higher than the sales.

• The company could not fully capitalize on higher sales into profits as the operating profit margin; erode by 120 bps to 25.9%. Consequently the operating profit got restricted marginally to 23% to Rs 5.43 crore. Erosion in OPM could be explained by higher material cost, which as a proportion to sales was higher by 830 bps to 50.1%. Though other cost heads registered decline that could not fully cushion the higher material cost leaving OPM erode significantly. The staff cost was lower by 18 bps to 4.3%, distributor compensation was lower by 100 bps to 13.7% and other expenses was lower by 566 bps to 10%.

• As other income was down by 44% to Rs 46 lakh, the PBIDT was higher by 25% to Rs 5.89 crore. The interest cost was higher by 27% to Rs 75 lakh and depreciation cost was higher by 23% to Rs 1.88 crore. As result the PBT was higher by 25% to Rs 3.26 crore.

• Net-profit finally stood higher by 67% to Rs 2.86 crore benefiting out of lower tax incidence. Taxation for the quarter was lower by 55% to Rs 40 lakhs.

Eimco Elecon (India) (Eimco Elecon) was incorporated in 1974 and is a joint venture between Tamrock OY, Finland (25% equity stake) and Elecon Engineering Company, India, and its associates (47%). It produces a wide range of underground mining machinery. The range of products includes Electro hydraulic side dump loaders, load haul dumpers, air powered rocker showel loaders and low profile dump trucks. It also manufactures blasthole drills, hydraulic cylinders and air motors.

Eimco Elecon's major clients are the subsidiaries of Coal India Limited Viz. Bharat Cooking Coal. Eastern Coalfield etc. Other clients include Singanery Collieries Co.. Uranium Corporation of India. Bharat Gold Mines, Hindustan Copper, Hindustan Zinc, Larsen & Toubro. Ferro Alloys Corporation etc.

Full year results

Sales for the fiscal ended Mar ‘06 was down by 6% to Rs 91.17 crore. Operating profit was up by modest 6% to Rs 19.87 crore with OPM up by 250 bps to 21.8%. Other income was lower by 44% to Rs 2.0 crore and interest was higher by 13% to Rs 6.70 crore. Depreciation was higher by 13% to Rs 6.70 crore. Thus PBT was down by 11% to Rs 12.43 crore. After providing for taxation (down 20% to Rs 4.18 crore) the net profit was down by 1% to Rs 8.25 crore.

Valuation

On equity paid-up of Rs 5.77 crore (face value of 10), the EPS for FY ’06 works out to Rs 14.3. The stock quotes around Rs 255.