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Kennametal India produces mining tools, metal castings, fixtures and jigs, forming, machines for special purposes, and products made of hard metals registered 30% growth in net sales to Rs 117.38 crore mainly driven by 35% growth in revenues of its core business vertical hard metal and hard metal products (89% of total sales) to Rs 104.67 crore. Operating profit margins expanded by 130 basis points to 27% resulting operating profit to increase by 37% to Rs31.72 crore. Other income increased by 27% to Rs 3.38 crore.
Quarterly Performance:
Total income from operations increased by 30% to Rs 117.45 crore, which include other operating income (up by 40%) Rs 0.07 crore. At gross level, the growth in sales mainly driven by 35% growth in revenues of its core business vertical hard metal and hard metal products (89% of total sales) to Rs 104.67 crore. In addition, revenues from machine tools business increased by 3% to Rs 12.78 crore. Operating profit margins expanded by 130 basis points to 27% on the back of decrease in other expenditure by 540 basis points as percentage to sales and net of stock adjustments. In addition, employee cost decreased by 90 basis points. However consumption cost increased by 590 basis points. Thus, operating profit increase by 37% to Rs 31.72 crore. Other income increased by 27% to Rs 3.38 crore.
At PBIT level, its core business hard metal and hard metal products margins improved by 140 basis ponts to 29.3% resulting 41% increase in profit to Rs 30.68 crore. Where as margins from machine tools expanded by 280 basis points to 16.7% resulting 23% increase in profit to Rs 2.14 crore.
With no interest cost during the quarter and increase in depreciation by 19% to Rs 5.96 crore, PBT was up by 40% to Rs 29.14 crore. Decrease in tax rate by 100 basis points to 31.4% facilitated the net profit to increase by 42% to Rs 19.98 crore.
Nine Months Performance:
Net sales increased by 37% to Rs 226.94 crore and other operating income increased by 36% to Rs 0.19 crore for the nine months ended December 2010. Operating profit margins expanded by 380 basis points to 27.6% resulting operating profit to increase by 58% to Rs 62.65 crore. Other income increased by 6% to Rs 5.6 crore.
With decrease in interest cost by 50% to Rs 0.01 crore and increase in depreciation by 21% to Rs 12.22 crore, PBT was up by 61% to Rs 56.02 crore. Decrease in tax rate by 270 basis points to 29.4% facilitated the net profit to increase by 68% to Rs 39.53 crore.
Other Information:
- The scrip is hovering on BSE at Rs 571 on 27th January 2010.
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