• Fall in sales come on a record high base. Q3FY12 net sales (excluding other operating income) of Rs 181.48 was the highest ever quarterly sales achieved by the company since Q41998. Sales (excluding other operating income) were lower by 9% to Rs 164.68 crore with the revenue of air solutions business was down by 11% to Rs 157.46 crore. But the revenue of others, which largely comprise of contract manufacturing for associate companies and construction equipment for divested construction equipment business was higher by strong 69% to Rs 7.22 crore. The value of production for the quarter was down by 6% to Rs 139.90 crore.
• Operating margin for the quarter contracted by strong 320 bps to 9.8% on year on year basis but it was higher by 10 bps on sequential basis. Contraction in OPM on year on year basis is largely on account of higher staff and other expenses. The material cost as proportion to sales net of stocks was lower by 200 bps to 64.7%, but with staff cost was up by 140 bps to 9.6% and Other Exp was up by 390 bps to 15.5%, the gains of low material cost was more than offset leading to contraction in OPM. Hit thus by both lower sales and lower margin on yoy basis, the operating profit was down by 31%yoy to Rs 16.37 crore.
• Other income was lower by 17% to Rs 15.88 crore and the interest cost was lower by 42% to Rs 0.07 crore. The depreciation was up by 22% to Rs 1.24 crore. Thus the PBT before EO was higher by 26% to Rs 30.94 crore. EO for the quarter as well as corresponding previous period was nil.
• The taxation in absolute terms was lower by 23% to Rs 10.59 crore and the tax rate was higher at 34.2% compared to 33.2% in the corresponding previous period. Thus strained further, the PAT was lower by 27% to Rs 20.35 crore.

YTD performance

Sales were lower by 1% to Rs 450.51 crore. But lower sales together with marginally lower operating margin (down 10 bps to 10.2%), the operating profit was lower by 2% to Rs 45.82 crore. But dragged further by higher tax incidence the net profit was eventually lower by 4% to Rs 59.64 crore.

The stock was hovering around Rs 417.90.