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In the quarter ended Sep 2010, L.G. Balakrishnan & Bros' standalone net profit grew by robust 42% to Rs 11.23 crore on supportive non operating performance and fall in effective tax rate. The operating income grew by healthy 34% to Rs 183.65 crore backed by growth across all the segments. Decline in OPM by 270 bps limited the growth in operating profit to 10% to Rs 22.72 crore. Nevertheless, crash in interest cost and effective tax rate coupled with marginal depreciation cost boosted the net profit by 42%.
On consolidated basis, the operating income was Rs 185.32 crore in Sep 2010 quarter. With OPM of 12.6%, the operating profit stood at Rs 23.38 crore. The net profit stood at Rs 11.62 crore.
Consolidated results of company include recently acquired subsidiary M/s BCW V Tech India w.e.f 15th Feb 2010. As it is the first time the company has posted consolidated results for quarter ended and half year ended Sep 2010, there is no previous corresponding consolidated results.
Quarter Performance
The company's standalone topline grew by healthy 34% to Rs 183.65 crore in Sep 2010 quarter backed by growth across all segments especially Transmission. Transmission sales, that contribute 64% to total, grew by 36% to Rs 117.79 crore. Similarly, the metal forming sales increased by 24% to Rs 38.81 crore while the sales of Others rose by 40% to Rs 27.05 crore. Decline in OPM by 270 bps to 12.4% due to high raw material costs limited the growth in operating profit to 10% to Rs 22.72 crore.
Segmentwise, the PBIT margin of transmission fell by 310 bps to 9% resulting in flat PBIT of Rs 10.41 crore (against Rs 10.40 crore in Sep 2009 quarter). Also the metal forming's PBIT margin reduced by 150 bps to 10% limiting its PBIT growth to 8% to Rs 3.75 crore. Further, Others' PBIT margin declined by 30 bps to 12% constraining its PBIT growth to 37% to Rs 3.20 crore.
The company's PBT grew by healthy 36% to Rs 13.87 crore due to fall in interest cost and marginal growth in depreciation cost. The interest cost crashed by 42% to Rs 3.50 crore while the depreciation cost grew only by 13% to Rs 6.08 crore. The other income slipped by 18% to Rs 0.72 crore. Decline in effective tax rate by 380 bps boosted the net profit by robust 42% to Rs 11.23 crore.
On consolidated basis, the operating income was Rs 185.32 crore in Sep 2010 quarter. With OPM of 12.6%, the operating profit stood at Rs 23.38 crore. The net profit stood at Rs 11.62 crore.
Performance for Half year ended Sep 2010
The company's topline grew by 33% to Rs 340.77 crore in half year ended Sep 2010 driven by growth across all segments. The transmission sales grew by 33% to Rs 215.66 crore while the metal forming sales grew by 30% to Rs 74.30 crore. The sales of Others rose by notable 38% to Rs 50.81 crore. Fall in OPM by 220 bps to 12.2% limited the growth in operating profit to 13% to Rs 41.65 crore. Segmentwise, the transmission PBIT margin declined by 290 bps to 10% restricting the growth in its PBIT to flat 2% to Rs 20.60 crore. Also the PBIT margin of metal forming fell by 60 bps to 10% constraining the growth in PBIT to 23% to Rs 7.37 crore. The PBIT margin of Others fell by 310 bps to 6% lowering its PBIT by 10% to Rs 2.97 crore.
The company's PBT improved by 34% to Rs 23.93 crore due to crash in interest cost and marginal growth in depreciation cost. Further with 1300 bps fall in effective tax rate, the net profit was boosted by impressive 59% to Rs 19.76 crore.
On consolidated basis, the company's topline was Rs 343.35 crore in H1 FY 10. With OPM of 12.4%, the operating profit stood at Rs 42.48 crore. The net profit was Rs 20.18 crore.
The promoters' share in the total shareholding has reduced to 45.55% in Sep 2010 quarter from 45.59% in June 2010 quarter. The promoters' have pledged ‘nil' shares of the company.
Currently the scrip is trading at Rs 331 on BSE.
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