Raw material cost fell 21% to Rs 47.55 crore. As a % of sales it fell from 69.6% to 57.0%.

Other income grew 4% to Rs 1.03 crore. Interest cost fell 32% to Rs 17 lakh.

As deprecation fell 3% to Rs 2.84 crore, PBT jumped 338% to Rs 7.49 crore.

EO loss was Rs 5 lakh against NIL. Thus PBT after EO jumped 335% to Rs 7.44 crore.

Provision for taxation jumped 119% to Rs 2.37 crore after which PAT ended at Rs 5.07 crore, up 705%.

Nine months results

Sales nine months ended December 2015 rose 3% to Rs 255.47 crore. OPM rose 660 basis points to 10.6% which saw OP growing 172% to Rs 27.15 crore.

Other income fell 15% to Rs 3.19 crore. Interest cost crashed 61% to Rs 32 lakh.

As deprecation grew 5% to Rs 8.80 crore, PBT jumped 373% to Rs 21.22 crore.

EO loss was Rs 1.60 crore against a gain of Rs 29.00 crore. Thus PBT after EO fell 41% to Rs 19.62 crore.

Provision for taxation went down 43% to Rs 5.60 crore after which PAT fell 41% to Rs 14.02 crore.

Segment results

For the quarter, sales from the Consumables segment fell 6% to Rs 65.29 crore and accounted for 78% of sales. PBIT from the same jumped 60% to Rs 9.35 crore and accounted for 91% of total.

For the quarter, sales from the Equipments & Project Engineering division grew 2% to Rs 18.07 crore and accounted for 22% of sales. PBIT from the same stood at Rs 90 lakh against a loss of Rs 1.01 crore and accounted for 9% of total.

For the nine months, sales from the Consumables segment fell 2% to Rs 185.27 crore and accounted for 73% of sales. PBIT from the same grew 31% to Rs 21.45 crore and accounted for 72% of total.

For the nine months, sales from the Equipments & Project Engineering division went up 16% to Rs 70.20 crore and accounted for 27% of sales. PBIT from the same stood at Rs 8.17 crore against a loss of Rs 5.12 crore and accounted for 28% of total.

PBIT margin of Equipments & Project Engineering Segment soars

For the quarter, PBIT margin of Equipments & Project Engineering segment grew from 8.4% to 14.3% while that of the Consumables Segment improved from -5.7% to 5.0%.

For the nine months, PBIT margin of Equipments & Project Engineering segment grew from 8.7% to 11.6% while that of the Consumables Segment improved from -8.5% to 11.6%.

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.

Valuation

The share price trades at Rs 277.