Eimco Elecon (India), the mining machinery major has clocked 29% rise in sales for the quarter ended Sep '09. However the operating profit fell by 15% to Rs 5 crore as the operating margin crash by 650 bps to 12.8% on high base. But the de-growth at net profit level was arrested to 13% to Rs 2.18 crore as gained by lower tax incidence and higher EO income.
- Sales was lower by 29% to Rs 39.12 crore, but the value of production was higher by 30% to Rs 37.89 crore, which is 3.14% lower than the sales. It seems the company has booked revenue from earlier quarter works significantly.
- The contraction in margin for the quarter is on account of higher material cost as % to sales. Material cost as proportion to sales net of stocks was higher at 40.5% compared to 19.4% in the corresponding previous period. The distributor compensation (DC) too was higher for the quarter at 12.9%, up 50 bps. However the traded goods purchase, staff cost and other expenses were lower by 774 bps, 102 bps and 341 bps respectively to 17.6%, 4.0% and 12.7%. The distributor compensation (DC) too was lower for the quarter at 12%, down 200 bps. Though the other cost apart from material cost was lower that could not fully cushion the rise in material cost affecting the margin. Consequently the operating profit declined by 15% to Rs 5.0 crore.
- As other income was down by 60% to Rs 6lakh, the PBIDT was lower by 16% to Rs 5.06 crore. The interest cost was higher by 73% to Rs 19 lakh and depreciation cost was lower by 9% to Rs 1.76 crore. As result the PBT before EO was lower by 21% to Rs 3.11 crore. EO income (gross of tax) was Rs 10 lakh as against nil in the corresponding previous period. PBT after EO was lower by 19% to Rs 3.21 crore.
- Net-profit finally stood lower by 13% to Rs 2.18 crore benefiting out of lower tax incidence. Taxation for the quarter was lower by 29% to Rs 1.03 crore.
Eimco Elecon (India) (Eimco Elecon) was incorporated in 1974 and is a joint venture between Tamrock OY, Finland (25% equity stake) and Elecon Engineering Company, India, and its associates (47%). It produces a wide range of underground mining machinery. The range of products includes Electro hydraulic side dump loaders, load haul dumpers, air powered rocker showel loaders and low profile dump trucks. It also manufactures blasthole drills, hydraulic cylinders and air motors.
Eimco Elecon's major clients are the subsidiaries of Coal India Limited Viz. Bharat Cooking Coal. Eastern Coalfield etc. Other clients include Singanery Collieries Co. Uranium Corporation of India. Bharat Gold Mines, Hindustan Copper, Hindustan Zinc, Larsen & Toubro. Ferro Alloys Corporation etc.
Half yearly performance
The sales for the half year were up by 14% to Rs 67.11 crore. The operating profit was lower by 20% to Rs 10.58 crore as the OPM contract by 750 bps to 15.8%. Other income was lower by 65% to Rs 9 lakh. The interest cost was higher by 67% to Rs 45 lakh, the depreciation was lower by 8% to Rs 3.46 crore. The PBT before EO was lower by 28% to Rs 6.76 crore. EO income (gross of tax) was Rs 10 lakh as against nil in the corresponding previous period. PBT after EO was lower by 27% to Rs 6.86 crore. Taxation was lower by 33% to Rs 2.23 crore. Thus the net profit was lower by 4.63 crore.
Valuation
The stock quotes around Rs 240.
|