Capitaline

Results 16-Nov-21

Analysis

ISGEC Heavy Engineering

Sales growth restricted to marginal 2% as EPC and Sugar play truant

Consolidated net sales (including other operating income) of ISGEC Heavy Engineering for the quarter ended Sep 2021 has increased 2% to Rs 1376.11 crore. Operating profit margin has declined from 10.4% to 3.4%, leading to 67% decline in operating profit to Rs 46.45 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 17.05% to 18.28%. Purchase of finished goods cost rose from 40.23% to 43.16%. Employee cost increased from 7.42% to 8.16%. Other expenses rose from 24.05% to 26.76%. Other direct service cost rose from 11.66% to 13.03%. Other income fell 56% to Rs 3.09 crore. PBIDT fell 66% to Rs 49.54 crore. Provision for interest fell 17% to Rs 11.51 crore. PBDT fell 72% to Rs 38.03 crore. Provision for depreciation fell 8% to Rs 24.35 crore. Profit before tax down 87% to Rs 13.68 crore. Provision for tax was expense of Rs 3.57 crore, compared to Rs 29.35 crore. Effective tax rate was 26.17% compared to 27.39%. Net profit attributable to owners of the company decreased 86% to Rs 10.52 crore after accounting for 153% fall in MI (share of loss) of Rs 0.45 crore.

Upside in revenue was largely due to Machinery & Equipment manufacturing (MEM) and EPC that registered higher revenue. While revenue of MEM was up 29% to Rs 396.32 crore (or 28% of sales) that of EPC was up by marginal 1% to Rs 880.87 crore. However the revenue of Sugar was down 23% to Rs 167.85 crore and that of Ethanol was negative 13.28 crore against positive Rs 7.96 crore. The revenue of others/unallocated was negative Rs 1.13 crore.

EBIT was lower by 79% to Rs 25.54 crore with profit of all MEM, EPC and Sugar stand lower. While segment profit of MEM was down 53% to RS 21 crore (82% of EBIT) that of EPC was down 71% to Rs 13.49 crore. The segment profit of sugar was down 26% to Rs 22.58 crore. The Ethanol reported a loss of Rs 17.34 crore against a profit of Rs 3.15 crore in the corresponding previous period.

Half-yearly performance

Net sales (including other operating income) of ISGEC Heavy Engineering has increased 3.82% to Rs 2507.61 crore. Operating profit margin has declined from 9.63% to 3.90%, leading to 57.98% decline in operating profit to Rs 97.77 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 22.41% to 22.56%. Purchase of finished goods cost rose from 36.83% to 39.73%. Employee cost increased from 8.17% to 8.41%. Other expenses rose from 22.41% to 25.29%. Other direct service cost rose from 9.78% to 11.44%. Other income fell 53.71% to Rs 5.11 crore. PBIDT fell 57.79% to Rs 102.88 crore. Provision for interest fell 14.98% to Rs 22.71 crore. PBDT fell 63.06% to Rs 80.17 crore. Provision for depreciation fell 9.87% to Rs 48.2 crore. Profit before tax down 80.45% to Rs 31.97 crore. Share of profit/loss was 93.33% lower at Rs 0.01 crore. Provision for tax was expense of Rs 8.14 crore, compared to Rs 44.02 crore. Effective tax rate was 25.45% compared to 26.89%. Net profit attributable to owners of the company decreased 79.57% to Rs 24.15 crore.

Equity capital stood at Rs 7.35 crore as of 30 September 2021 to Rs 7.35 crore as of 30 September 2020. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 62.43% as of 30 September 2021, compared to 62.39% as of 30 September 2020.

ISGEC Heavy Engineering: Consolidated Results
	2109 (3)	2009 (3)	Var. (%)	2109 (6)	2009 (6)	Var. (%)	2103 (12)	2003 (12)	Var. (%)
Sales	1376.11	1344.59	2	2507.61	2415.41	4	5425.57	5882.06	-8
OPM (%)	3.4	10.4		3.9	9.6		8.4	5.5
OP	46.45	140.41	-67	97.77	232.69	-58	454.97	324.59	40
Other inc.	3.09	7.01	-56	5.11	11.04	-54	51.76	32.09	61
PBIDT	49.54	147.42	-66	102.88	243.73	-58	506.73	356.68	42
Interest	11.51	13.86	-17	22.71	26.71	-15	50.24	41.14	22
PBDT	38.03	133.56	-72	80.17	217.02	-63	456.49	315.54	45
Dep.	24.35	26.48	-8	48.20	53.48	-10	100.86	101.19	0
PBT	13.68	107.08	-87	31.97	163.54	-80	355.63	214.35	66
Share of Profit from Associates	-0.04	0.08	-150	0.01	0.15		0.18	0.10	80
PBT before EO	13.64	107.16	-87	31.98	163.69	-80	355.81	214.45	66
EO Exp	0.00	0.00		0.00	0.00		0.00	0.00
PBT after EO	13.64	107.16	-87	31.98	163.69	-80	355.81	214.45	66
Taxation	3.57	29.35	-88	8.14	44.02	-82	102.74	65.32	57
PAT	10.07	77.81	-87	23.84	119.67	-80	253.07	149.13	70
Minority Interest (MI)/Loss from Discontinued operations	-0.45	0.85	-153	-0.31	1.49	999	5.22	4.62	13
PAT after MI	10.52	76.96	-86	24.15	118.18	-80	247.85	144.51	72
EPS (Rs)*	#	#		#	#		33.7	19.7
* EPS is on current equity of Rs 7.35 crore, Face value of Rs 1
# EPS is not annualised due to seasonality of business
** Variance could not be calculated as no previous period figures
Figures in Rs crore
Source: Capitaline Corporate Database

Segment	% to total	2109 (3)	2009 (3)	Var.(%)	% to total	2109 (6)	2009 (6)	Var.(%)	% to total	2103 (12)	Var.(%)
Sales
Machinery & Equipment - Mfg	28	396.32	308.31	29	28	732.23	649.60	13	27	1562.84	-3
EPC	62	880.87	873.50	1	60	1566.93	1475.27	6	59	3457.71	-12
Sugar	12	167.85	218.73	-23	12	324.61	405.78	-20	14	785.60	34
Ethanol	-1	-13.28	7.96	PL	-1	-15.26	12.99	PL	0	10.81
Others/ Unallocated	0	-1.13	-0.09	1156	0	-0.17	0.53	-132	0	1.12	-73
Total Sales	100	1430.63	1408.41	2	100	2608.34	2544.17	3	100	5818.08	-5
Inter Segment Revenue		54.52	63.82	-15		100.73	128.76			392.51	58
Net sales		1376.11	1344.59	2		2507.61	2415.41			5425.57	-8

PBIT
Machinery & Equipment - Mfg	82	21.00	44.61	-53	69	37.93	66.01	-43	41	164.47	95
EPC	53	13.49	45.83	-71	42	23.37	74.37	-69	43	172.37	14
Sugar	88	22.58	30.40	-26	62	34.14	52.15	-35	26	102.59	112
Ethanol	-68	-17.34	3.15	PL	-43	-23.78	3.43	PL	-2	-8.70	-118
Others/ Unallocated	-56	-14.19	-3.46	310	-30	-16.48	-6.34	160	-7	-29.11	57
Total PBIT	100	25.54	120.53	-79	100	55.18	189.62	-71	100	401.62	28
LESS: Interest expenes		11.00	13.01			21.55	25.23			44.22
Other income & unallocable expenses		0.90	0.36			1.65	0.70			1.59
PBT		13.64	107.16	-87		31.98	163.69	-80		355.81	35
Note: Figures in Rs crore

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