Quarter ended Sep’07

Net sales were reported at Rs 22.84 crore, an increase of 13% over the corresponding previous quarter. OPM also dipped by 140 bps to 17.2% and this resulted in operating profit posting a growth of 4% only at Rs 3.92 crore. Employee cost and other expenditure declined by 170 bps to 12.1% and 520 bps to 13.9% of sales, net of stock adjustment, respectively. However, margin came under pressure as raw-material cost increased by a whopping 1080 bps to 57.4% of sales, net of stock adjustment.

Other income increased by 70% to Rs 0.51 crore. Interest cost doubled to 0.14 crore as compared to Rs 0.07 in the corresponding previous quarter. And an increase of 15% in depreciation to Rs 0.76 crore restricted the PBT growth to 5%. However, effective tax rate declined by 150 bps to 33.71%. This helped the Company to close the quarter with a bottomline of Rs 2.34 crore, an increase of 8% on a y-o-y basis.

Six-month ended Sep’07

Net sales recorded a growth of 19% to Rs 43.05 crore. An expansion of 270 bps in OPM to 20.4% led the operating profit to report growth of 37%, on a y-o-y basis, to Rs 8.78 crore. OI increased by 72% to Rs 0.74 crore. As interest cost was up by 50% and depreciation also was high by 20%, PBT grew by 43% only to Rs 7.86 crore. Effective tax rate was reported at 34.61%, a decline of 90 bps on a y-o-y basis and bottomline spurted by 45% to Rs 5.14 crore.

Segment Result:

(a) Mineral processing and material handling equipment:

For the quarter ended Sep’ 07, this division’s sales increased by 24% to Rs 18.56 crore. However, a decline of 40 bps in PBIT margin to 30.2% restricted the segment’s PBIT growth at 22% to Rs 5.60 crore. The segment accounted for 80% of Company’s sales and 97% of the total PBIT.

For the six-month period ended Sep’07, sales of this division increased 21% to Rs 35.01 crore. PBIT margin increased by an impressive 295 bps to 34% and resultantly, PBIT rose by 33% to Rs 11.92 crore. This division accounted for 81% of the total sales and 98% of total PBIT for the period under review.

(b) Geared Motor & Gear Box division:

For the quarter ended Sep’07, this division witnessed a slump in the net sales as topline decreased by 16% to Rs 4.61 crore contributing 20% of the total sales. The margins in this segment declined by a whopping 1970 bps to 3.7% resulting in PBIT recording degrowth of 87% to Rs 0.17 crore. With this, the segment contributed 3% of the Company’s PBIT.

For the six-month period ended Sep’07, net sales increased by 11% to Rs 8.42 crore contributing 19% of the sales. A fall of 1055 bps in PBIT margin to 2.6% resulted in segment’s PBIT posting degrowth of 78% at Rs 0.22 crore. The segment contributed 2% of the company’s PBIT for the six-month period ended Sep’07.

Other information:

• Promoters’ shareholding increased to 53% as on 30^th Sep’07 as against 51% as on 30^th Sep’06.
• The scrip closed at Rs 702.35/- as on 2^nd Nov’ 07.