• Moderate growth in Sales: Total revenues (includes other operating income Rs 1.65 crore) grew moderate 7% YoY (decline by 10% QoQ) to Rs 133.70 crore but the value of the production grew by mere 2% YoY to Rs 133.37 crore.
• Margins improve: Operating profit margins improve by over 100 bps YoY to 12.7% on the back of fall in material cost (over 200 bps YoY) and other expenses (decline by 90 bps YoY) despite the rise in staff cost (140 bps YoY) as percentage to sales and net of stock adjustments. As a result, there was 17% growth in operating profit to Rs 16.99 crore.
• Sharp fall in other income and higher tax rate impacts bottom line: The EBIDTA was declined by 1% YoY to Rs 18.78 crore on the back of sharp 59% fall in other income to Rs 1.79 crore. Also, with meager interest cost ( Rs 0.39 crore vis-à-vis Rs 0.34 crore) coupled with 6% increase in depreciation to Rs 3.15 crore, PBT was down by 3% YoY to Rs 15.24 crore. But net profit fell by 7% YoY to Rs 10.86 crore after sharp rise in effective tax rate by 340 bps YoY to 28.7%.
• Segment Performance: Revenues from dominant Compression systems business (82% of net sales) grew by 6% YoY to Rs 108.49 crore for the quarter ended September 2012. At segment level, margins fell by 230 bps YoY to 17.2% and accordingly there was 22% growth in segment profit to Rs 18.65 crore. Also, Revenues from Transmission products business grew by 9% YoY to Rs 23.56 crore for the same period. At segment level, with the sharp 780 bps rise in segment margins to 8.7% segment profit jump by 925% YoY to Rs 2.05 crore.

Half Yearly Performance:

Net sales fell by 17% YoY to Rs 280.31 crore for the half-year ended September 2012 on the back of 20%fall in sales from the core compression systems business to Rs 233.97 crore. Also, margins fell by over 230 bps YoY to 13.9% and accordingly there was 28% fall in operating profit to Rs 39.34 crore. Despite the 32% fall other income to Rs 3.71 crore PBIDT fell by 29% YoY to Rs 43.05 crore. After the 15% decline in interest cost to Rs 0.64 crore and 7% increase in depreciation to Rs 6.20 crore there was 33% fall in PBT to Rs 36.21 crore. Further, after the marginal 20 bps increase in effective tax rate to 30.1% net profit fell by 33% YoY to Rs 25.30 crore.

Other Information:

• The scrip was up by 0.10% to Rs 481.00 at BSE, India on 17^th October 2012.
• The long term borrowings declined to Rs 3.13 crore as on 30^th September 2012 compared to Rs 9.25 crore as on 30^th September 2011. Further, the Cash and Cash equivalents were almost at same levels at Rs 18.07 crore as on 30^th September 2012 compared to Rs 18.14 crore as on 30^th September 2011.