Rajoo Enginers, a company engaged in manufacture of plastic extrusion plant and machinery has registered sharp 45% rise in net profit to Rs 0.90 crore for the quarter ended June 2015 even while its sales was lower by 2% to Rs 19.82 crore. Sharp bottom-line growth despite lower sales is largely on account of strong 390 bps expansion in operating profit margin.

• The value of production for the quarter was down by 4% to Rs 19.38 crore even while the sales (excluding other operating income) was down by 5% to Rs 19.25 crore. Sales lower than value of production was largely on account of build up in inventory or delay in despatch, which get liquidated/despatched in coming quarters. While operating income was down by 5%, the other operating income was up by 722% to Rs 0.57 crore. Thus the total operating income was down by 2% to Rs 19.82 crore.
• Operating profit margin expanded by 390 bps to 10.4% and that is due to sharp fall in material cost. Material cost as proportion to sales net of stocks was down by 760 bps to 61.8%. But that of staff cost and OE was higher by 230 bps (to 10.5%) and 160 bps (to 17.3%).
• Other income was nil compared to Rs 0.13 crore in the corresponding previous period. The interest cost was nil for the quarter and corresponding previous quarter. The depreciation was higher by 37% to Rs 0.72 crore. Thus the PBT was up by 45% to Rs 1.34 crore.
• Taxation was up by 45% to Rs 0.43 crore but the tax rate being flat at 32.4, the PAT was up by 45% to Rs 0.90 crore.

Yearly performance

Standalone sales were higher by 15% to Rs 116.93 crore. But with operating margin expand by 160 bps the operating profit stood higher at Rs 10.54 crore, a rise of 40%. After accounting for lower other income, lower interest and higher depreciation the PBT was higher by 50% to Rs 7.74 crore. Taxation in absolute term was higher by 47% to Rs 2.50 crore but the tax rate was lower at 32.3% compared to 32.9% in the corresponding previous period. The PAT thus was higher by 52% to Rs 5.24 crore.

Other developments

To pay dividend of Rs 0.25 per equity share of Rs 1 face value each for 2014-15.

The stock hovers around Rs 17.15.