Over the years, KPCL has developed various sophisticated and high-tech products in the above categories to cater to the demands of various industrial sectors. KPCL has also established a number of joint ventures and technology partnerships with leading global companies. It has earned the distinction of developing a host of advanced products to suit Indian conditions and has been continuously updating them to maintain the highest standards of quality and reliability.

Broadly it has two major business segments viz. Compressor Systems Division and Transmission Products.

December 2013 quarter performance

Sales for the quarter ended December 2013 crashed 25% to Rs 91.58 crore.

OPM also crashed from 12.6% to 5.1% which saw OPM too crashing 69% to Rs 4.69 crore.

Other income fell 28% to Rs 1.07 crore and interest cost reduced 86% to Rs 6 lakh.

As deprecation fell 3% to Rs 3.26 crore, PBT went down 81% to Rs 2.44 crore.

Provision for taxation was down 89% to Rs 56 lakh. Finally PAT dived 76% to Rs 1.88 crore.

Nine month performance

Sales for the nine month ended December 2013 fell 13% to Rs 351.84 crore.

OPM fell from 13.5% to 10.8% which took OP down 30% to Rs 38.10 crore.

Other income rose 15% to Rs 5.99 crore and interest cost reduced 76% to Rs 26 lakh.

As deprecation stagnated at Rs 9.56 crore, PBT went down 30% to Rs 34.27 crore.

Provision for taxation was down 25% to Rs 11.95 crore. Finally PAT was lower by 30% to Rs 22.32 crore.

Sales and profitability of both the divisions fell during the quarter

Sales from the Compression Systems division fell 17% to Rs 79.97 crore during the quarter ended December 2013. PBIT fell 33% to Rs 12.79 crore.

Sales from the Transmission Products division crashed 64% to Rs 8.82 crore during the quarter ended December 2013. PBIT also crashed and it reported loss of Rs 3.68 crore against a profit of Rs 2.17 crore at the PBIT level.

Not just a manufacturing company

The company is not just a manufacturing company and gets about 60% of the revenue from projects business and balance from equipment supply. Moreover the company is focused on specialised or hitech products and not of mass production kind. Hitech products form about 80% and the normal products accounts for 20%. The company is technology driven and has pioneered CNG Systems, Coal Gasification compression systems etc in the country. The company has supplied refrigeration system for all refineries in the country.

Sound prospects

The manufacturing sector witnessed a decline in the last couple of years. There are indications that the business sentiment is improving and the company is meticulously keeping track of the developments. While this will definitely help in order booking, it will help in the company's revenues from 2014-15 onwards.

The company has taken up exports of Hydrocarbon Refrigeration and Compression Systems as a key growth area and in this context, the company has now been approved by many Oil & Gas Companies in the Middle-East and South-East Asia as a supplier of these systems. These will help in growing revenues in the coming years.

Valuation

The share price closed down 1.42% at Rs 366 the day its results were announced.