However, the dip in margins by 290 bps YoY to 9.1% at operating level led to 15% fall in operating profit to Rs 26.22 crore. But the sharp growth in other income (749%) arrested the PBIDT decline to 1% YoY to Rs 31.13 crore. However, the higher interest cost (522%) and increase in depreciation (6%) led to 28% fall in net profit to 28% YoY Rs 13.63 crore despite decline in the effective tax rate during the quarter.

Consolidated Quarterly Performance:

Net sales grew by the 10% YoY to Rs 281.34 crore for the quarter ended September 2012 primarily driven by the sharp 49% growth in Services to Rs 107 crore. However, its core products business declined by 5% YoY to Rs 176 crore contributing 62% to sales. Also, Revenues from Unified Communication was at Rs 108 crore and Services at Rs 107 crore contributing 38% each to the sales. Further, the revenues from the Network Integration at Rs 43 crore and ISS&SS at Rs 25 crore for the same period.

Notably, Operating profit margins fell by over 290 bps YoY to 9.1% on the back of sharp rise in staff cost (450 bps YoY) and increase in service charge (180 bps YoY) and other expenditure (210 bps YoY) despite the sharp fall in consumption cost by (570 bps YoY) as percentage to sales and net of stock adjustments. Accordingly, operating profit fell by 15% YoY to Rs 26.22 crore. But the sharp 749% growth in other income to Rs 4.91 crore restricted the fall in PBIDT to mere 1% YoY to Rs 31.13 crore.

However, with the sharp 522% jump in interest cost to Rs 10.61 crore and marginal 6% increase in depreciation to Rs 3.06 crore, PBT fell by 35% YoY to Rs 17.47 crore. After adjusting to the EO loss Rs 2.02 crore in the corresponding previous quarter, PBT fall arrested to 30% to Rs 17.47 crore. Further, with the decline in effective tax rate by 170 bps YoY to 21.9% restricted the net profit fall to 28% YoY to Rs 13.63 crore.

Consolidated Half Yearly Performance:

Total revenues grew by 17% YoY to Rs 534.43 crore, including the other operating income Rs 7.74 crore (up by 112%) for the half-year ended September 2012. Also, the margins bettered by 70 bps YoY to 8.7% and after this operating profit grew by 28% YoY to Rs 46.27 crore. Further, the sharp 618% jump in other income to Rs 8.55 crore boosted the PBIDT growth to 46% YoY to Rs 54.83 crore. However, the sharp 629% rise in interest cost to Rs 15.37 crore and 16% increase in depreciation to Rs 6.10 crore restricted the PBT before EO growth to 11% to Rs 33.36 crore. After adjusting to the EO loss Rs 2.02 crore in the corresponding previous period, PBT grew by 19% YoY to Rs 33.36 crore. But the fall in effective tax rate by whopping 1860 bps YoY to 5.2% boosted the net profit growth to 48% YoY to Rs 31.61 crore.

Other Information:

• Other consolidated operating income for the quarter ended 30 September, 2012 includes write back of provisions/liabilities aggregating to Rs. 2.92 crore and six months ended 30 September, 2012 Rs. 5.80 crore, no longer required.
• Employee benefit expenses includes Rs.4.54crore and other expenses includes Rs.2.89 crore of expenses aggregating to Rs.7.43 crore incurred by AGC Networks Inc. USA towards expenses for setting up office in USA.

Declares 1:1 bonus

The Board recommended for approval of members, the issuance of Bonus shares in the proportion of 1 (One) new equity bonus share of Rs. 10/- each for every 1 existing equity share of Rs. 10/- each fully paid-up by capitalization of reserve (Bonus Ratio 1:1).