Other income stagnated at Rs 1.49 crore. Interest cost crashed 76% to Rs 10 lakh.

As deprecation fell 14% to Rs 2.91 crore, PBT jumped 123% to Rs 6.53 crore.

EO loss was Rs 1.55 crore against a gain of Rs 26.18 crore. Thus PBT after EO fell 83% to Rs 4.98 crore.

Provision for taxation went down 82% to Rs 1.63 crore after which PAT ended at Rs 3.35 crore, down 83%.

Six months results

Sales six months ended September 2015 rose 6% to Rs 172.11 crore. OPM rose 650 basis points to 10.3% which saw OP growing 191% to Rs 17.68 crore.

Other income fell 21% to Rs 2.16 crore. Interest cost crashed 74% to Rs 15 lakh.

As deprecation grew 9% to Rs 5.96 crore, PBT jumped 394% to Rs 13.73 crore.

EO loss was Rs 1.55 crore against a gain of Rs 29.00 crore. Thus PBT after EO fell 62% to Rs 31.78 crore.

Provision for taxation went down 63% to Rs 3.23 crore after which PAT fell 61% to Rs 8.95 crore.

Segment results

For the quarter, sales from the Consumables segment grew 10% to Rs 67.03 crore and accounted for 73% of sales. PBIT from the same jumped 41% to Rs 7.80 crore and accounted for 92% of total.

For the quarter, sales from the Equipments & Project Engineering division fell 7% to Rs 24.81 crore and accounted for 27% of sales. PBIT from the same stood at Rs 67 lakh against a loss of Rs 24 lakh and accounted for 8% of total.

For the six months, sales from the Consumables segment grew 1% to Rs 119.98 crore and accounted for 70% of sales. PBIT from the same grew 15% to Rs 12.10 crore and accounted for 62% of total.

For the six months, sales from the Equipments & Project Engineering division went up 22% to Rs 52.13 crore and accounted for 30% of sales. PBIT from the same stood at Rs 7.27 crore against a loss of Rs 4.11 crore and accounted for 38% of total.

PBIT margin of Equipments & Project Engineering Segment soars

For the quarter, PBIT margin of Equipments & Project Engineering segment grew from 9.1% to 11.6% while that of the Consumables Segment improved from -0.9% to 2.7%.

For the six months, PBIT margin of Equipments & Project Engineering segment grew from 8.8% to 10.1% while that of the Consumables Segment improved from -9.6% to 13.9%.

FY 2015 Segment results

In FY 2015, sales from the Consumables segment fell 1% to Rs 271.81 crore and accounted for 71% of sales. PBIT from the same fell 20% to Rs 24.53 crore and accounted for 78% of total.

In FY 2015, sales from the Equipments & Project Engineering division grew 22% to Rs 113.13 crore and accounted for 29% of sales. PBIT from the same fell 34% to Rs 6.82 crore, accounted for 22% of total.

Capex

For FY 2015-16, the CAPEX has been budgeted at Rs12.50 crore, mainly for –

(a) Automation at Consumables and Equipment Plants.

(b) Production Equipments to balance lines for achieving capacity levels.

(c) Production related Equipment to improve "in process quality and deviation control" towards six-sigma levels.

(d) Analytical Instruments for R&D

Outlook

Welding industry and in turn AWL will grow as investment cycle picks up in future. Welding industry caters to wide range of industrial segments such as transportation (auto and ship building), oil and gas (pipelines, platforms and rigs), fabrication of structures for power station / railways / mines / irrigation and such other basic industries. Hence pick up in industrial activity and investment cycle in any of these segments will help AWL.

The smart economic pick-up is expected to be largely on the back of the robust manufacturing sector performance and a surge in public expenditure.

In these conditions, the company's market share strategy will be pursued aggressively for continuing its growth plan. New products developed for new applications, will enable its customers to reduce their operating costs, and will help it grow business.

Its new range of products, like CNC machines, Stainless Steel & MSGP electrodes for the Bottom of the Pyramid segment, special electrodes for Power, Process plants, Oil & Gas, Shipbuilding will help the company grow its market share. Its offering of total automation solution, especially for auto components shall open a new market opportunity.

Its investment in R&D & technical support should enable it grow as a true total solution provider for Customers, rather than a mere hardware supplier, which will act as a key strategic differentiator.

Valuation

The share price trades at Rs 278.