It seeks to provide a competitive edge to its customers through a wide variety of standard high quality products as well as items customized to their requirements such as special purpose machines, metalworking tools, customized tooling solutions and engineered products.

March 2018 quarter results

For the quarter ended March 2018, net sales grew 19% to Rs 197.05 crore. OPM improved 630 basis points to 15.6% which saw OP jump 101% to Rs 30.66 crore.

Other income grew 29% to Rs 2.38 crore. Interest cost was nil as the company is a debt free company.

As depreciation fell 14% to Rs 6.41 crore, PBT soared 175% to Rs 26.63 crore.

Even as tax jumped 197% to Rs 10.32 crore (tax incidence jumped from 17.9% to 38.8%) PAT soared 101% to Rs 16.31 crore..

Nine months results

For the nine months, net sales grew 19% to Rs 546.85 crore. OPM improved 400 basis points to 12.5% which saw OP jump 74% to Rs 70.73 crore.

Other income grew 14% to Rs 6.63 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 1% to Rs 21.06 crore, PBT soared 121% to Rs 56.30 crore.

EO loss stood at Rs 4.74 against NIL. Thus PBT after EO grew 102% to 51.56 crore.

As tax jumped 480% to Rs 19.01 crore (tax incidence jumped from 12.9% to 36.9%) PAT grew 46% to Rs 32.55 crore..

Segment results

For the quarter, sales from the Machine Tools division stood at Rs 25.45 crore and accounted for 13% of sales. PBIT from the same fell 49% to Rs 3.13 crore and accounted for 11% of total.

For the quarter, sales from the Hard Metals and Hard Metals Products stood at Rs 171.60 crore and accounted for 87% of sales. PBIT from the same grew 190% to Rs 26.38 crore and accounted for 89% of total.

For the nine months, sales from the Machine Tools division stood at Rs 71.35 crore and accounted for 13% of sales. PBIT from the same fell 24% to Rs 4.70 crore and accounted for 6% of total.

For nine months, sales from the Hard Metals and Hard Metals Products stood at Rs 493.50 crore and accounted for 87% of sales. PBIT from the same grew 82% to Rs 69.15 crore and accounted for 94% of total.

Market condition

The company serves markets like Automobile (2W, PV, LCV and MHCV), tractors which have been performing well. Aerospace, Defence and railways likely to do well.

Other segments like steel, capital investments in manufacturing (including greenfield activities), Oil & Gas Energy and Mining are also picking up.

Strategy

Going forward the company hopes to consolidate and grow its core business and enhance its market reach by expanding distribution channel.

It also plans to diversify and has increased focus in aerospace, defence, railways segments.

It is also exploring exports of its Machining Solutions Group (MSG) products.

The company has taken special initiatives to grow the WIDIA business.

It will continue to modernize and upgrade its manufacturing facilities.

Valuation

The scrip trades around Rs 850.