• Value of production for the quarter was up by 18% to Rs 391.50 crore while the revenue for the period was up by 10% to Rs 369.90 crore. Sales for the period and corresponding previous period was 0.94 time and 1.01 times of respective value of production. Sale lower than value of production for the period reflects inventory built-up which will get liquidated in coming months.
• Upside in revenue was largely due to early single digit growth in revenue of pumps as well as growth in mid twenties in case of valves. Sales of pumps was up by 7% to Rs 300.50 crore (or 81% of sales) and that of valves was higher by strong 25% to Rs 69.60 crore (or 19% of sales).
• PBIT was up by 63% to Rs 61.70 crore and the upside was largely due to higher profit from both pumps and valves segment. The segment profit of pumps was up by sharp 57% to Rs 55 crore facilitated by higher sales as well as 580 bps expansion in segment margin to 18.3%. The segment profit of valves was up by 148% to Rs 6.70 crore powered by both higher sales and 480 bps expansion in segment margin to 9.6%.
• Sharp 306% jump in taxation was largely as the company recognize a provision towards settlement of disputed income tax liability amounting Rs 19.038 crore as well as

Yearly performance

Sales was down by 7% to Rs 1208.10 crore. But with OPM expand by 220 bps to 13.9%, the OP was up by 11% to Rs 167.80 crore. After accounting for higher other income, lower interest and lower depreciation, the PBT was up by 24% to Rs 151.70 crore. EO was nil for the period compared to RS 12.70 crore in the corresponding previous period. Thus the PBT after EO was up by 12% to Rs 151.70 crore. With taxation stand higher by 59% to Rs 63.20 crore the PAT was down by 7% to Rs 88.50 crore. With SOP from associates was down by 2% to Rs 5.30 crore, the net profit was down by 7% to Rs 93.80 crore.

The pumps registered an EBIT of Rs 124.30 crore (up 19%) largely on higher margin with its sales down by 7% to Rs 1008.20 crore. Similarly the EBIT of Valves was up by 7% to Rs 11.50 crore gained by higher margin as its sales was down by 3% to Rs 201 crore.

In accordance with the recent amendments in sections 10(34) and 115-O of the Income-tax Act, 1961, Dividend Distribution Tax (DDT) would not be payable by companies in respect of dividends declared, distributed or paid after March 31, 2020 and similarly tax exemption under section 10(34) to recipient has been withdrawn with effect from April 1, 2020. Accordingly, the Group remeasured the deferred tax liability on Unremitted earnings of associate considering tax rate applicable to Group and the impact of INR 50.66 million was recognised as a tax expense for the year ended December 31, 2020

The Government of India has introduced 'Direct Tax Vivad Se Vishwas Act, 2020' which allows the assesses to settle the ongoing Income-tax litigations at various Adjudicating authorities. In this regard, the Management has decided to exercise the option as given under the said Act and to settle all the ongoing Income-tax litigations at various Adjudicating authorities pertaining to Assessment years from 2009-10 to 2016-17. Pursuant to this, complete waiver of interest liability and immunity from penalty will be achieved for the abovementioned assessment years. Accordingly, the Company has filed an application with the Income-tax authorities for exercising this option. Based on the Management assessment, it is estimated that the Company will need to pay the Income-tax of INR 114.40 million towards the settlement of disputed Income-tax liability of INR 198.89 million, after adjusting of the refunds due to the extent of INR 84.49 million. The Company has recognized provision of INR 190.38 million in the current year in this regard.