Highlights of the meet:

Ador Welding is India's largest company in the welding business and has globally accepted products & services.

It has 300 plus distributors in India.

The company has International Business Division (IBD) located in Sharjah (UAE) which handles business in over 40 countries. The IBD has over 24 distributors across the globe.

The company provides automation solutions & consumables for automobile companies and its ancillaries.

For the quarter ended December 2016, Ador Welding registered a 21% rise in sales to Rs 112.36 crore. OPM fell 260 basis points to 7.3% (from 9.9%) which saw OP fall 11% to Rs 8.204 crore.

PBT fell 6% to Rs 7.04 crore. EO loss was NIL against Rs 5 lakh. Thus PBT after EO was down 6% to Rs 7.04 crore. Net profit fell 11% to Rs 4.51 crore.

For the nine months ended December 2016, Ador Welding registered a 10% rise in sales to Rs 309.49 crore. OPM fell 260 basis points to 6.8% (from 9.3%) which saw OP fall 21% to Rs 20.90 crore.

EO loss was NIL against Rs 1.60 crore. Thus PBT after EO fell 14% to Rs 16.90 crore.

Net profit fell 21% to Rs 11.09 crore.

PAT margins during the quarter fell by 170 basis points from 6.1% to 4.4% y-o-y. This was largely due to increase in cost of raw materials from 62.8% to 68.0% during the same period. Raw material cost jumped 34% to Rs 70 crore. The company is trying to contain raw material cost.

Employee cost grew from 9.2 crore to Rs 9.9 crore but as a % to sales the company managed to bring it down from 11% to 10%.

The Government is taking lead in reviving the investment cycle but there is hesitation from the private sector to undertake capital expenditure.

Technologically advanced products and Customer specific solutions remained its key focus in this scenario.

The company will focus on R & D to develop new products and solutions in order to get new opportunities.

Manufacturing facilities are streamlined to address market demand.

Liquidity continues to remain a key concern.

As investments pick up, the situation will improve.

Government's focus on Infrastructure development, Make in India, localization of defense products, investments in railways will drive the related Industrial production.

Debt equity ratio grew from 32% to 37% during the quarter.

RoNW fell from 2.3% to 2.0% and RoCE fell from 4.6% to 4.2% during the quarter.

For the remaining part of FY 2017 and in FY 2018 the company will focus on increasing market share for higher growth.

Continued focus on nationwide market penetration by enhancing strong distributor network is enabling the company reach out to more number of end users

The company is continuously working towards improving margins through sale of high value electrodes, focusing on Project Engineering Business and through strategic sourcing.

Venturing into new geographies will be one of the priorities.

The company hopes to increase manufacturing effectiveness by reducing process loss and increasing productivity.

In FY 2018 the company will focus on expanding capabilities of its project engineering business. This will help the company in addressing new products and new clients.

GST will help the welding industry in general and the company in particular as the organized market hopes to eat into unorganized market business to some extent. .

To reduce expenses the company is taking various initiatives at Plants like lean manufacturing, line balancing, etc.

The company had secured new order worth Rs 108 crore for its Project Engineering (Consumable) business to be completed by April –May 2017. Up to 30% of Rs 108 crore order is expected in FY 2017. This order will have less than normal margin.

Going forward the company will bid only for large orders with better margins. It has already bid for few large orders and the status of which will be known by March 2017.