It seeks to provide a competitive edge to its customers through a wide variety of standard high quality products as well as items customized to their requirements such as special purpose machines, metalworking tools, customized tooling solutions and engineered products.

September 2016 quarter results

For the quarter ended September 2016, sales jumped 19% to Rs 151.32 crore. OPM improved 80 basis points from 6.4% to 7.2% which saw OP grow 33% to Rs 10.85 crore.

Other income fell 23% to Rs 1.75 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 10% to Rs 6.54 crore, PBT grew 36% to Rs 6.06 crore.

As provision for taxation grew 41% to Rs 1.37 crore, PAT rose 35% to Rs 4.69 crore.

FY 2016 results

For the FY 2016, sales stagnated at Rs 570.29 crore. OPM fell 250 basis points from 10.5% to 8.1% which saw OP fall 24% to Rs 45.92 crore. Other income grew 61% to Rs 8.90 crore.

As depreciation fell 6% to Rs 24.11 crore, PBT fell 23% to Rs 30.71 crore. EO profit was NIL against Rs 6.47 crore. Thus PBT after EO was down 34% to Rs 30.71 crore. Provision for taxation fell 23% to Rs 9.97 crore after which PAT fell 38% to Rs 20.74 crore.

Quarter Segment results

For the quarter, sales from the Machine Tools grew 5% to Rs 17.35 crore and accounted for 11% of sales. PBIT from the same stood at a profit of Rs 39 lakh against a loss of Rs 1.20 crore and accounted for 3% of total.

For the quarter, sales from the Hard Metals and Hard Metals Products grew 21% to Rs 133.97 crore and accounted for 89% of sales. PBIT from the same grew 6% to Rs 11.11 crore and accounted for 97% of total.

For the FY, sales from the Machine Tools fell 10% to Rs 93.11 crore and accounted for 16% of total. PBIT from the same crashed 60% to Rs 7.87 crore and accounted for 15% of total.

For the FY, sales from the Hard Metals and Hard Metals Products grew 2% to Rs 477.18 crore and accounted for 84% of sales. PBIT from the same grew 4% to Rs 43.21 crore and accounted for 85% of total.

Market condition

The company serves markets like Automobile (2W, PV, LCV and MHCV), tractors which has been performing well. Aerospace, Defence and railways also did well.

However other segments like steel, capital investments in manufacturing (including greenfield activities), Oil & Gas Energy and Mining which were laggards.

Strategy

Going forward the company hopes to consolidate and grow its core business and enhance its market reach by expanding distribution channel.

It also plans to diversify and has increased focus in aerospace, defence, railways segments.

It is also exploring exports of its Machining Solutions Group (MSG) products.

The company has taken special initiatives to grow the WIDIA business.

It will continue to modernize and upgrade its manufacturing facilities.

Valuation

The share price trades at Rs 615.