• Downside in revenue was largely due to lower revenue for Hard Metal and Hand Metal Products (HMHM Products). The segment revenue of HMHM Products was down by 30% to Rs 144 crore (or 76% of total sales). However the segment revenue of Machine solutions was up by 59% to Rs 45.70 crore (or 24% of sales).
• The EBIT was down by 40% to Rs 24.80 crore dragged by lower profit from HMHM Products. The segment profit of machine solutions more than doubled (up 105% to Rs 11.70 crore) facilitated by higher sales and higher margin (up 580 bps to 25.6%). On the other hand hit by lower sales and 810 bps erosion in segment margin to 9.1%, the segment profit of HMHM Products was down by 63% to Rs 13.10 crore.

Half year ended performance

Sales was lower by 16% to RS 387.60 crore and that together with 320 bps erosion in OPM to 14.5% dragged the OP down by 31% to Rs 56.20 crore. After accounting for higher OI, higher interest and depreciation the PBT was down by 36% to Rs 45.60 crore. The PBT after EO was down by 40% with EO expense stand higher by Rs 2.50 crore against nil in the corresponding previous period. With taxation stand down by 60% to Rs 11.30 crore, the PAT was down by 27% to Rs 31.80 crore. With PPT stand lower by 93% to Rs 0.80 crore, the net profit was lower y 41% to RS 32.60 crore.

Segment profit of HMHM was down by 52% to Rs 35 crore with its sales down by 26% to Rs 296.50 crore. However the segment profit of machine solutions was up by 99% to Rs 23.10 crore with its sales was up by 54% to Rs 91.10 crore.

Other developments

The Company has elected to exercise the option permitted under section 115BAA of the Income Tax Act, 1961 as introduced by the taxation laws (Amendment)' Ordinance, 2019. Accordingly the Company has recognised provision for income tax for the Quarter and six month ended December 2019 and re-measured its deferred tax liabilities (net) basis the rate prescribed in the said section. The full impact of these changes has been recognised in the statement of standalone profit and loss for the quarter ended Dec 2019.