Quarterly performance

Net sales declined by 3% to Rs 68.87 crore. However, as operating margins improved by 70 bps to 20.5%, operating profit reported a marginal increase at Rs 14.12 crore as compared to Rs 14.05 crore in the corresponding previous quarter. Employee cost and other expenditure increased by 70 bps to 8.5% and other expenditure was up by 355 bps to 19.4% of sales, net of stock adjustment. However, operating margins got protection and expansion as consumption cost, consisting of raw-material cost and cost of traded goods, fell by 490 bps to 50.6% of sales, net of stock adjustment.

Other income declined by a whopping 92% to Rs 0.06 crore. As interest cost doubled to Rs 0.55 crore and depreciation also rose by 79% to Rs 2.83 crore, PBT before EO observed degrowth of 16% at Rs 10.80 crore. EO income was nil in the quarter under review as against Rs 0.50 crore in the corresponding previous quarter. Resultantly, PBT after EO posted a decline of 20% at Rs 10.80 crore. Effective tax rate for the quarter was reported at 19.63%, an increase of 80 bps on a y-o-y basis. And post PPA item, net profit was reported at Rs 8.77 crore, degrowth of 24% over the corresponding previous quarter.

Six-month period ended Sep’07

Net sales were marginally up by 1% at Rs 114.71 crore. However, an improvement of 190 bps in operating margins at 17.7% helped the operating profit to post a growth of 13% at Rs 20.33 crore. However, as other income declined by 36%, interest cost zoomed by 113% and depreciation was higher by 65%, the Company reported a decline at the PBT before EO level of 6% at Rs 15.45 crore. Post EO item, PBT declined by 9%. Effective tax rate was 19.48% for the period under review and post PPA item; the bottomline recorded a reduction of 11% to Rs 12.50 crore.

Quarterly Segment Result:

• Consumables: Net sales increased by 3% to Rs 48.66 crore. PBIT margin expanded by 445 bps to 22.8% and this resulted in PBIT zooming by 28% to Rs 11.10 crore. The segment accounted for 71% of Company’s sales and 77% of PBIT.

• Equipment & Project Engineering: Net sales recorded degrowth of 15% and was at Rs 20.21 crore. PBIT margin suffered a heavy erosion of 1080 bps and fell to 16.8%. This resulted in segment’s PBIT reporting a decline of 48% at Rs 3.40 crore. The segment accounted for 29% of Company’s sales and 23% of Company’s PBIT for the quarter ended Sep’07.

Other information:

• Promoters’ shareholding was at 55.90% as on 30^th Sep’07 as against 55.91% as on 30^th Sep’06.
• The scrip closed at Rs 217.90, as on 2^nd Nov. 07, on BSE.