• The value of production for the quarter was higher by 7% to Rs 35.21 crore. But the operating income (excluding other operating income) was up by 3% to Rs 37.34 crore. With operating income higher than value of production there seems liquidation of earlier period inventory. Other operating income was up by 9% to Rs 0.75 crore and thus the total sales were up by modest 3% to Rs 38.09 crore.
• Upside in sales for the quarter was can be attributed to increase in sales of both engineering and foods division. The segment sale of engineering division was up by modest 2% to Rs 34.35 crore (or 90% of sales). But the segment sale of food division was up by 23% to Rs 3.74 crore. Contribution of relatively higher margin food division to top line has increased from 8% in corresponding previous quarter to 10% in quarter ended Dec 2015. Share of engineering division to sales stood at 90% for the quarter compared to 92% in corresponding previous period.
• Facilitated by modest increase in sales and modest 50 bps expansion in segment margin, the segment profit of engineering was up by 4% (to Rs 8.09 crore). Spurred by higher sales as well as positive margin (to 29.9% against negative 9.4% in Q3FY15) the segment profit of foods division was Rs 1.12 crore compared to a loss of Rs 0.29 crore in the corresponding previous period.
• Operating profit margin expanded by 310 bps to 18.3% and this can be explained by lower other expenses. Material cost as proportion to sales net of stocks was higher by 30 bps to 51.2%. Similarly the job charges were up by 200 bps to 9.6% and that of staff cost was up by 120 bps to 9.8%. But the OE was lower by 510 bps (to 10%).
• Other income (net of expenses) was an expense of Rs 0.14 crore compared to an expense of Rs 0.06 crore in the corresponding previous period. Interest cost was up by 66% to Rs 0.22 crore. But the depreciation was lower by 7% to Rs 0.54 crore. Thus the PBT was up by 17% to Rs 6.07 crore. EO for the quarter was nil compared to an income of Rs 0.01 crore in the corresponding previous period. Thus the PBT after EO was up by 17% to RS 6.07 crore.
• Taxation in absolute terms was higher by 24% to Rs 2.10 crore and the tax rate stood higher at 34.6% compared to 32.5% in corresponding previous quarter. Thus the growth at PAT level moderated to about 13% to Rs 3.97 crore.

Nine month performance

Standalone sales were higher by 6% to Rs 90.53 crore. But with operating margin expand by 250 bps the operating profit was at Rs 15.15 crore, a rise of 25%. After accounting for higher other income, higher interest and lower depreciation the PBT was higher by 27% to Rs 13.80 crore. EO expenses for the period were nil compared to an income of Rs 0.01 crore in the corresponding previous period. Thus the PBT after EO was up by 27% to Rs 13.80 crore. Taxation was higher by 36% to Rs 4.80 crore and thus the PAT was higher by 22% to Rs 9.0 crore.

The stock hovers around Rs 325.