• Sales of the company posted a double-digit growth of 14% for the quarter ended Mar’07. Most of the upside in % terms has come from Construction Technologies & Compact Vehicle Technologies (CT & CVT) continuing business. Segment revenue of CT & CVT continuing business grew by 38% to Rs 67.25 crore (or 45% of total sales). Whereas the segment revenue of Air Solutions registered a growth of 7% to Rs 77.42 crore (or 51% of total sales). The CT & CVT (discontinued business) that does the toll manufacturing of drilling equipments under the divestment agreement between the company and Atlas Copco posted a segment revenue of Rs 6 crore, down by 40%, accounting 4% share in total sales. With the divestment of Climate Control business to Thermo King effective July 1, ’06 the contribution from this segment was Nil as against Rs 1.30 crore in the corresponding previous period. Growth in revenues of air solutions and CT&CVT continued business is largely on account of greater focus post restructuring and strong investment in industrial and infrastructure development happening in the country.
• Operating profit margin on year on year basis eroded by 300 basis points to 5.7%, owing to a spurt in input costs. The segment margin of CT & CVT Continued business has dropped marginally to 15.3% as against 15.5% in the corresponding previous quarter. The segment margin of Air Solutions was almost flat at 10.7%. As proportion to sales net of stocks the material cost sprang up by 483 bps to 74.9% and staff costs by 104 bps to 12.2%. However, Other expenses decreased to 7.8% (from 9.8%).
• Most of the upside at operating profit level (in % terms) has come from CT & CVT continuing business segment with its segment profit growing by 37% to Rs 10.32 crore (or 58% of total PBIT). The segment profit of Air solutions was higher by 6% to Rs 8.29 crore (or 47% of total sales). Whereas that of CT & CVT discontinued business continue to bleed with a loss of Rs 0.81 crore compared to a loss of Rs 1.02 crore in the corresponding previous period.
• Other income was higher by 75% to Rs 10.29 crore thus resulting in a profit growth of 9% at PBIDT level to Rs 18.89 crore. The interest cost was lower by 66% to Rs 11 lakh and depreciation was lower by 1% to Rs 1.49 crore. The PBT was thus higher by 11% to Rs 17.29 crore.
• With tax incidence at Rs 8.41 crore (including fringe benefit tax and deferred tax) the PAT finally stood at Rs 8.88 crore, registering a de-growth of 7%.

Performance for the year ended Mar’07

Net Sales for the year ended Mar’07 was higher by 25% to Rs 593.78 crore. As OPM expands to 8.2% from 5.4%, the operating profit surged to Rs 48.72 crore, a rise of 89%. Other income was flat at Rs 32.67 crore. The interest cost was lower by 38% at Rs 0.91 crore and depreciation cost was flat at Rs 6.27 crore, thereby lifting the PBT before EO by 47% to Rs 74.21 crore. EO income for the period stood at Rs 0.72 crore as against an EO expense of Rs 0.71 crore in the corresponding previous period. Therefore, the PBT after EO stood increased by 50% at Rs 74.93 crore. After accounting for taxation of Rs 28.45 crore as against Rs 18.96 crore, the PAT was higher by 50% to Rs 46.48 crore.

Segment profit of Air-solution segment for the period was higher by 15% to Rs 36.98 crore (or 56% of total PBIDT) on segment revenue of Rs 305.47 crore (a rise of 17% and 51% of total sales). Whereas that of CT & CVT Continuing business posted a segment profit growth of 120% to Rs 36.02 crore (or 54% of total PBIDT) on a segment sale of Rs 251.32 crore (a rise of 48% and with a share of 42% of total sales). The revenue and results of CT & CVT Continuing business for the period includes revenue of Rs 162.90 crore and profit of Rs 20.30 crore from Road Development Business.

The shareholders of the company have given their approval as per Section 293 (1) (a) of the companies Act, 1956 for the sale of the company’s Road Development Business to Volvo India Private Limited. The effective date of completion of the sale of Road Development Business to Volvo India Private Limited will be announced by the Board shortly.

Valuation

The paid up equity share capital of the company is Rs 31.57 crore and face value is Rs 10. The EPS for fiscal ended Mar ‘07 stands at Rs 14.6. The stock currently quotes at Rs 285.35.