Value of production for the quarter was up by 40% to Rs 214.07 crore and the income from operation was up by 42% to Rs 218.87 crore. The company's operational income continues to outperform the industry growth.

Upside in revenue was driven by all three business of the company. The revenue of cranes registers a growth of 39% to Rs 158.46 crore. While the revenue of MH/Construction equipment increased by sharp 75% to Rs 26.53 crore and that of tractor was up by 31% to Rs 26.75 crore.

Contraction in operating margin is largely on account of rise in operating cost especially material cost and manufacturing expenses. While material cost was up by 110 bps to 76% that of manufacturing expenses was up by 10 bps to 6.1%. The staff and OE was down by 10 bps (to 4.8%) and 20bps (to 5.4%) respectively.

On operating/PBIT level the segment profit of crane was up by 15% to Rs 13.82 crore and that of MH/construction equipment was down by 4% to Rs 2.35 crore. The segment profit of tractors was Rs 1.54 crore compared to a loss of Rs 36 lakh in the corresponding previous period.

While the segment margin of cranes and MH/construction equipment come down by 180 bps (to 8.7%) and 580 bps (to 7%) respectively that of tractors was 5.8% compared to -1.8% in the corresponding previous period.

Other income was up by 36% to Rs 2.10 crore. The interest cost was up by 83% to Rs 1.80 crore and depreciation was up 66% to Rs 2.50 crore. Thus the PBT was up 18% to Rs 14.48 crore.

The taxation (including deferred tax) was up by 22% to Rs 4.01 crore and the tax incidence was higher at 27.7% compared to 26.6% in the corresponding previous period. Thus limited the PAT was up 16% to Rs 10.48 crore.

Other developments

Action Construction Equipment's BoD has approved the merger with ACE Steelfab Pvt. Ltd to ensure a smooth raw material supply & reduced cost of production. The manufacturing business of Action Construction Equipment mandates excessive fabrication operations as they are vital to the production/manufacturing of the equipments.

Further the Board recommended an exchange ratio of 24:22 shares of Rs. 2 each fully paid up for every 1 equity share of Rs. 10 each held by shareholders of ACE Steelfab Pvt. Ltd. The company will issue 60, 55, 000 new shares.

Management comment

Commenting on the performance Sorab Agarwal, Executive Director said, "I am pleased to announce second quarter results for FY12. Despite the negative sentiment that prevailed around the infrastructure sector, our revenues grew at 42 % over the last quarter. We will continue to grow organically and inorganically at a healthy rate, maintaining current margins. Our acquisitions in China and India will strengthen our dominance in Indian markets. "

The stock hovers around Rs 37.95.