• Operational income excluding other operating income was up by 10% to Rs 199.16 crore. The upside in revenue has come from Material Handling/construction equipment business and Tractors with that of core Cranes registering a near flat revenue growth of 1% to Rs 129.80 crore. On the other hand the segment revenue of MH/Construction equipment was up by 59% to Rs 32.20 crore and that of tractors were up by 15% to Rs 37.15 crore. The Value of production for the quarter was up by just 7% to Rs 198.43 crore with benefit of liquidation of earlier period inventory kicking in this quarter to some extent.
• Contraction in operating margin is function of two factors change in product/revenue mix as well as inflationary trend in material and other costs. While material cost was up by 80 bps to 75.2% that of staff and OE was up by 90 bps (to 5.5%) and 180 bps (to 7.1%) respectively. But the manufacturing expenses were lower by 110 bps to 5.8%. Cranes the core business of the company and where it is market leader has registered near flat growth and thus its contribution to top line has declined to 65% from about 71%. On the other hand the share of MH equipment was up to 16% (from 11%) and 19 %( from 18%) respectively.
• On operating/PBIT level, the downside is largely on account of cranes business. The segment profit of crane was down by 35% to Rs 8.79 crore with its segment margin crashing to 6.8% from 10.5% in corresponding previous period. Segment profit MH/construction equipment was down by 56% to Rs 0.83 crore inspite of higher sales as segment margin contract by 680 bps. The segment profit of tractors was up by 53% to Rs 3.51 crore largely on the back of expansion in segment margin by 240 bps to 9.5%.
• Other income was down by 73% to Rs 0.43 crore. The interest cost was up by 100% to Rs 2.26 crore and depreciation was up 57% to Rs 3.07 crore. Thus the PBT was down by 47% to Rs 7.97 crore.
• The taxation (including deferred tax) was down by 45% to Rs 2.45 crore but the tax incidence was higher at 30.8% compared to 29.4% in the corresponding previous period. Thus limited further the PAT was down by 48% to Rs 5.52 crore.

Nine month performance

Sales was up by 36% to Rs 638 crore but the operating profit grew by just 10% as the margin contract by 180 bps to 7.2%. Eventually the net profit was down by 2% to Rs 27.15 crore.

Other developments

Separate meetings of the Equity Shareholders & Unsecured Creditors of Action Construction Equipment Ltd be convened to be held on February 18, 2012 for the purpose of considering, and if thought fit, approving, with or without modification(s), the Scheme of Amalgamation of ACE Steelfab Private with Action Construction Equipment and their respective members and creditors. This meeting is convened as per the direction of the Hon'ble High Court.

The stock hovers around Rs 36.