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Isgec Heavy Engineering has a history of 80 years and is a diversified heavy engineering company with interests in Process Equipment, EPC Power Plants, Boilers, Sugar Plants & Machinery, Mechanical & Hydraulic Presses, Castings, Contract Manufacturing, and Trading.
In FY 2011 the company changed its name from Saraswati Industrial Syndicate Ltd. to Isgec Heavy Engineering Ltd. All businesses were consolidated and now marketed under a common brand name – Isgec.
September 2014 quarter results
Sales for the quarter ended September 2014 grew 20% to Rs 874.65 crore. OPM improved 170 basis points from 7.0% to 9.7% which saw OP growing 49% to Rs 75.85 crore.
Other income fell 47% to Rs 8.79 crore. Interest cost dived 48% to Rs 3.11 crore. As deprecation grew 34% to Rs 19.10 crore, PBT rose 32% to Rs 62.43 crore.
Provision for taxation was up 58% to Rs 21.18 crore. Finally PAT grew 22% to Rs 41.25 crore.
Six months results
Sales for the six months ended September 2014 grew 22% to Rs 1577.41 crore. OPM improved 180 basis points from 6.1% to 7.9% which saw OP growing 60% to Rs 125.14 crore.
Other income fell 34% to Rs 20.44 crore. Interest cost fell 20% to Rs 9.58 crore. As deprecation grew 25% to Rs 35.39 crore, PBT rose 45% to Rs 100.61 crore.
As per the requirement of the schedule II of the Companies Act, w.e.f 1st April 2014, the company has charged depreciation based on revised remaining useful life of assets. Due to this depreciation charge for quarter is higher by Rs 4.57 crore and for six months is higher by Rs 7.03 crore.
Provision for taxation was up 64% to Rs 34.16 crore. Finally PAT grew 37% to Rs 66.45 crore.
Present in various fields of engineering business
The company has good share in the domestic and overseas markets in Boilers. In recent years it had embarked on supplying turnkey power plants. In addition to the Boiler, it also supplies the Turbo set and balance of plant. This business has come of age. In some cases, it is also doing civil works.
The company has emerged as a leading Sugar Machinery and Sugar Boiler manufacturer both in domestic as well as international markets. It also received a number of orders for export and the Company is striving to become a world leader in this business in the next few years.
Its Process Equipment Division books orders for large Pressure Vessels and Heat Exchangers. It has capacities in Yamunanagar as well as Dahej. The Division also books orders for critical equipment used in Fertilizer sector like Transfer Line, CO2 Absorber, LP/HP Flash Drum.
American Society of Mechanical Engineers (ASME) has approved the Process Equipment Division of the company for manufacturer of equipments for Nuclear Plants and the Company has been awarded the 'N' and 'NPT' stamps.
With a view to broadening its portfolio, the company has ventured into new products, like Feed Water Heaters, Surface Condensers, Breech Lock Heat Exchangers and Electrostatic Precipitators, Castings for Pumps and Valves.
Due to year to year fluctuations in the automobile sector, the Machine Building Division of the company is making efforts to book orders for Presses from other sectors such as Defence, White Goods and Forgings. Exports are also being given a lot of thrust.
The company also manufactures heavier and more complex castings in the Steel Casting Unit of the company. This offers heavier and more complex castings to the market including P-91 and Duplex Stainless Steel Castings. P-91 is an alloy which is used for making castings to be used under very high temperature and pressure, such as Super critical grade steam turbine castings. Duplex grade of stainless steel is used for making castings for special Pumps in order to increase corrosive resistance.
Valuation
The share price trades at Rs 3193.
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