|
Ingersoll Rand (India) registered a sharp 30% fall in sales to Rs 134.59 crore for the quarter ended March 2020. Lower sales together with 120 bps fall in operating profit margin to 11.6% has dragged the operating profit down by 37% to Rs 15.56 crore. Contraction in OPM was largely due to higher staff cost which was up by 370 bps to 19.4% and more than offset the lower material cost (up 220 bps to 57.2%) and marginally lower OE (down 10 bps to 12%). As other income more than double to Rs 15.62 crore (up 110%) the fall in PBIDT was restricted at 2% to Rs 31.18 crore. Interest cost was up by 135% to Rs 0.87 crore and depreciation was up by 48% to Rs 4.24 crore. Thus hurt the PBT was down by 9% to Rs 26.07 crore. The taxation was down by 42% to Rs 6.85 crore and the PAT was down by 14% to Rs 19.22 crore.
Yearly performance
Sales for the period was down by 5% to Rs 705.62 crore. But with OPM contract by 30 bps to 14.0% the operating profit was down by 6% to Rs 98.76 crore. After accounting for lower other income, higher interest and higher depreciation, the PBT was down by 11% to Rs 114.03 crore. With taxation stand lower by 37% to Rs 29.44 crore, the PAT was up by 5% to Rs 84.59 crore.
Other developments
Ingersoll Rand Industrial U.S. Inc acquired 23360000 equity shares of the company from Ingersoll Rand Company, USA on 20 November 2019. Consequently, Ingersoll Rand Industrial U.S Inc., is now classified as Promoter of the company.
Gardner Denver Holdings Inc. completed the merger with Industrial segment of Ingersoll Rand plc (erstwhile ultimate holding company) at the end of the day on 29 February 2020, thereby it became the parent company of Ingersoll Rand Industrial US. Inc. The combined group globally is now named as Ingersoll Rand Inc (current Ultimate Holding Company).
Ingersoll Rand Inc. along with Ingersoll Rand U.S. Holdco Inc. and Ingersoll Rand Industrial U.S. Inc. has made an offer of Rs 642.63 per equity share to the public shareholders of the company to acquire upto 8207680 fully paid up equity shares, constituting 26% of the fully diluted voting equity share capital of the company. This Offer is mandatory in compliance with Regulations 3(1), 4 and 5(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011. The Letter of Offer has been electronically dispatched to all the public shareholders of the company holding equity shares as on identified date and who have registered their names registered with Depositories/Company. There would be no physical dispatch of the Letter of Offer in accordance with Relaxation Circular issued by SEBI. The period for tendering of equity shares has commenced on June 22, 2020 and will close on July 3, 2020.
Post Covid lockdown revival of demand may be asymmetric
The outbreak of COVID-19 pandemic and consequent lockdown 19 announced across India effective March 25, 2020, had resulted in Company's manufacturing plant at Naroda, Ahmedabad operating to a limited extent only to meet the requirements of its customers who cater to essential services.
Manufacturing operations of the Company at Naroda, Ahmedabad resumed from June 2020 onwards. The plant continues to follow the highest standards of safety as per company policies and government regulations. Due to the restrictions on the number of employees at manufacturing facilities while following safety norms, the partial manufacturing activities have started.
Post the imposition of Iock-down effective March 25, 2020, there was a disruption of manufacturing activity. Revenues and profitability of the Company for the period Apr 20 to Jun 20 will be impacted as the operations were shut for the period during lockdown. As the COVID-19 situation is still evolving and changing dynamically, future impact of COVID-19 on the overall operations and financials of the company cannot be estimated with certainty.
Company is closely tracking end market conditions and believes that revival of demand may be asymmetric as some sectors may revive sooner than other. Company estimates that demand in near term will remain soft considering disruptions in supply chain as well as closure of customer operations.
The Company has postponed/deferred capex after assessing business needs and sustainability.
|