Consolidated net sales (including other operating income) of Salzer Electronics for the quarter ended Jun 2022 has increased 55.87% to Rs 237.9 crore.  Growth was on account of higher demand for switchgear as well as cables divisions. There is also a strong order inflow for Three Phase Dry Type transformers. Operating profit margin has declined from 9.7% to 8.7%, leading to 39.23% rise in operating profit to Rs 20.69 crore.  Raw material cost as a % of total sales (net of stock adjustments) increased from 78.12% to 80.50%.   Employee cost decreased from 4.51% to 3.63%. Other expenses fell from 8.41% to 7.61%.  Fall in margin is  mainly due to the higher raw material prices, coupled with freight, sales promotion, and other costs.

Other income rose 434.78% to Rs 1.23 crore.  PBIDT rose 45.26% to Rs 21.92 crore.  Provision for interest rose 9.34% to Rs 5.62 crore.  PBDT rose 63.82% to Rs 16.3 crore.  Provision for depreciation fell 0.49% to Rs 4.03 crore.  Profit before tax grew 107.97% to Rs 12.27 crore.  Share of profit/loss were nil in both the periods.  Provision for tax was expense of Rs 2.63 crore, compared to Rs 1.94 crore.  Effective tax rate was 21.43% compared to 32.88%. PAT up 143% to Rs 9.64 crore. Minority interest was Rs 1.53 crore against nil.   Net profit attributable to owners of the company increased 104.80% to Rs 8.11 crore.  

Management comment

Commenting on this, Mr. Rajesh Doraiswamy, Joint Managing Director, Salzer Electronics Ltd said: “I am happy to say that the new fiscal year has begun on a strong note, with Q1 FY23 performance being in line with our expectations. As the domestic and export markets continue to open up and resume momentum, we are witnessing substantially higher demand, across all our businesses of industrial switchgears, wire & cable and building electrical divisions. During the first quarter of the financial year, we registered a revenue of Rs. 233.06 crores with EBITDA (excluding other income) and PAT of Rs. 19.62 crore and Rs. 8.78 crore, respectively. This growth came in primarily from industrial switchgear products as well as wire & cables especially in LAN cables. We are also witnessing a strong demand for our 3-phase dry type transformers, particularly from the renewable energy sector. Raw material prices, higher freight and sales promotion costs has offset our price hikes and impacted margins. However, raw material prices have begun to stabilize and we are seeing the benefits of our price hikes in the form of better margins quarter on quarter. In the previous quarter we recently received two patents – one for integrated cam operated rotary switches, which is a legacy product contributing substantially to our top line, and another for MPCB. Such developments help protect our intellectual property and boost our efforts in R&D and product development. Going ahead, we expect to maintain our growth trajectory with our strong product offerings and brand position in the market. Based on domestic and export outlook, we are optimistic about the overall business performance. I thank all our stakeholders for their continued support and faith in our Company and wish everyone good health.”