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International Combustion for the quarter ended December 08 has posted dry results mainly on the back of de growth in its Mineral & Material Processing Handling Equipment by 9%. OPM was under pressure and fell by whooping 1040 bps to 12.9% on the back of dip in segmental margins of both Mineral and Material Processing Handling segment, and Geared Motors & Gear Box segment. Thus profit at the operating levels has slipped further by 49%. Further with increase in interest rate and effective tax rate by 92% and 250 bps, Net Profit of the company has tumbled down by 60%.
International combustion is a manufacturing company which serves all major core industries with a specialized range of products. Its product portfolio includes Geared motors, Gear boxes, Vibrating Screens & Feeders, Bulk material handling equipment, Rubber/Polyurethane screens Decks and Liners, Raymond Grinding Mills, Air Classifiers and Flash Drying System.
Performance for quarter ended December 08
For the quarter ended December 08, Net sales of the company have declined by 8% to Rs 21.67 crore. This is mainly due to de growth of 9% observed in its major Mineral and Material Processing Handling segment (MMPH) to Rs 15.85 crore (73% of the total revenues). The Geared Motor & Geared Box (GMGB) has also declined by 3% to Rs 5.82 crore (27% to the total sales). The de growth on the sales along with the decline in the segmental margins of MMPH segment by 650 bps to 26.4% and GMGB by 920 bps to 6.9% has pressurized OPM to contract by whooping 1040 bps to 12.9%. On the other hand, all the expenditure heads as% of sales observed spike in their costs.
The PBIT level segmental profits of MMPH segment declined by 27% to Rs 4.18 crore (91% of the total) and GMGB declined by 9% to Rs 0.40 crore (9% of total). Thus profits at the operating level were observed fall of 49% to Rs 2.80 crore.
Further, the other income improved by 46% to Rs 0.19 crore and interest cost zoomed by 92% to Rs 0.23 crore. The marginal increase in depreciation by 4% pulled down PBT by 58% to Rs 1.95 crore. Added to this, increase in the effective tax rate by 250 bps to 36.4% resulted, Net Profit to report fall of 60% to Rs 1.24 crore
Performance for Nine months ended December 08
The performance for the half year ended December 08 was also dull with Net profit reporting fall by 21% on the back of marginal increase in the top line by 8% to Rs 72 crore. Segment wise, revenues from GMGB has improved by 33% and contributed 27% of the total. However, MMPH segment registered flat growth by 1% and contributed 73% of total sales. OPM fell by 450 bps to 17.2% and pulled down operating profits by 14% to Rs 12.37 crore. The dip in OPM is due to spike in employee cost by 160 bps to 14.2% of sales, consumption cost by 170 bps to 54.2% and other expenditure by 110 bps to 15.0%.
Other income decreased by 17% to Rs 0.54 crore in the nine months ended December 08. The interest cost and depreciation have increased by 12% and 7% respectively and led PBT to Rs 10.60 crore (down by 12%). The MMPH segmental margins fell by 370 bps to 30.1% and constituted 90% of total PBIT. However, GMGB margins, which constitutes the other 10% of the total, improved by whooping 150 bps to 9.7%. As the effective tax rate increased by 130 bps to 35.6%, Net profit was down by 21% to Rs 6.54 crore.
Other Information:
- The scrip was hovering at Rs 126.00 as on 30 January 09.
- The promoter's shareholding % was constant at 53% as on quarter ended September 08.
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