• Sales excluding other operating income was up by 5% to Rs 138.34 crore and the upside is attributable to compression systems, whose revenue was higher by 7% to Rs 116.60 crore (or 84% of sales). On the other hand the segment revenue of transmission products was lower by 8% to Rs 21.74 crore (or 16% of sales).
• Pressure at operating margin is largely on account of higher staff cost and other expenses as the material cost was lower on the back of softening trend in commodity prices. Material cost as proportion to sales net of stocks was lower by 90 bps to 53%. However as staff cost and other expenses stand higher by 30 bps (to 15%) and 110 bps (to 20%) respectively the OPM contracted by 60 bps to 12.1%. On a modest sales growth and lower OPM, the operating profit stands lower by 1% to Rs 16.78 crore. The other income was lower by 47% to Rs 0.95 crore.
• Even as the PBIT of transmission was lower by 23% to Rs 1.57 crore hurt by both lower sales and lower profit margin, the 16% growth at PBIT level was largely due to 20% growth in PBIT of compression systems to Rs 22.34 crore which gained by higher sales and margin expansion.
• With interest cost stand lower by 82% to Rs 7 lakh and depreciation higher by 2% to Rs 3.22 crore, the de-growth at PBT accelerated to 5% to Rs 14.44 crore.
• The taxation was higher by 32% to Rs 5.79 crore and the effective tax rate for the quarter was 40.1% compared to 28.7% in the corresponding previous period. Thus hurt by higher tax incidence the net profit was eventually down by 20% to Rs 8.65 crore.

Half year performance

The sales for the period was lower by 8% to Rs 260.26 crore and with 110 bps contraction in OPM the operating profit was lower by 15% to Rs 33.41 crore. The other income was higher by 33% to Rs 4.92 crore. The interest was lower by 69% and the depreciation was higher by 2% to Rs 20 lakh and Rs 6.30 crore respectively. Thus the PBT was lower by 12% to Rs 31.83 crore. Hurt further by higher tax (up 4% to Rs 11.39 crore) the net profit was lower by 19% to Rs 20.44 crore.

The stock hovers around Rs 375.25.