Standalone sales for the quarter ended March 2016 was up by 8% to Rs 189.54 crore but with 520 bps contraction in operating profit margin, the operating profit was down by 16% to Rs 35.40 crore. Hurt further by lower other income, higher interest cost and nearly flat effective tax rate, the net profit was down by 32% to Rs 15.54 crore.

On deducting standalone financials from consolidated financials the sales of subsidiaries was down by 22% to Rs 225.16 crore. But with OPM expand by 280 bps the de-growth at operating profit level moderated to 7% to Rs 39.10 crore. The PBT was lower by 5% to Rs 17.2 crore. But spurred by tax write back of Rs 5.86 crore compared to a provision of Rs 1.3 crore in the corresponding previous period, the PAT was eventually higher by strong 38% to Rs 23.10 crore.

Yearly results

Consolidated sale was down by 3% to Rs 870.65 crore. Lower sales together with 110 bps contraction in OPM to 11.7% dragged operating profit down by 12% to Rs 150.01 crore. Other income was up by 118% to Rs 36.15 crore. Sharp jump in other income is largely due to one off income of Rs 21.36 crore (on account of loss on sale of land amounting Rs 21.63 crore and sale of equity share of Elecon Properties amounting Rs 0.27 crore) for the quarter compared to nil in the corresponding previous period. Interest cost was down by 8% to Rs 74.73 crore and depreciation was down by 8% to Rs 66.14 crore. Thus the PBT was up by 33% to Rs 45.29 crore. With taxation stand lower by 23% (to Rs 12.95 crore) the PAT was up by 89% to Rs 32.34 crore.

Profit from associate was nil (against RS 0.20 crore in last year) and minority interest was a loss of Rs 5.88 crore compared to a profit of Rs 1 crore. After accounting for minority interest the net profit more than doubled (up 134%) to Rs 38.22 crore.

Management comment

Prayasvin Patel, CMD commenting on the performance of the company has said, "We had a sequential improvement in the margins of gear business as a result of a better product mix and efficiencies in manufacturing. The quarter was very eventful for the company as we booked two large scale orders in the naval defence space. Despite the headwinds in the economy, these orders will add momentum to our business as we enter the new fiscal. In the material handling business, while we grapple with macro-economic challenges, we have been able to improve consolidated financial position on a quarter on quarter basis. Going forward, we will strive to ensure that we continue excelling in our technology and execution such that our reputation continues to enhance in the market place."

Other Developments

The Board of Directors (BoD) at their meeting on April 27, 2016 approved the scheme of amalgamation of Elecon EPC Projects with Elecon Engineering Company subject to necessary approvals. The appointed date of the said scheme is March 30, 2015. Shareholders of Elecon EPC (except Elecon) will receive 37 equity shares of Rs 2 face value of Elecon Engineering for every 2 equity shares of Elecon EPC held by them. No Shares will be issued by Elecon towards shares held by it in Elecon EPC and all those shares would be cancelled as part of the scheme. Under this arrangement the promoters share holding in Elecon will increase from 57.34% to 58.58%.

To pay a dividend of Rs 1.10 per share (or 55% ) for 2015-16.

Stock hovers around Rs 63.85.