• The value of production for the quarter was higher by 16% to Rs 95.33 crore even as the operating income (excluding other operating income) was up by marginal 1% to Rs 89.85 crore. Sale for the quarter was 5.7% lower than value of production. However the sale was 7.9% higher than its respective value of production in the corresponding previous period. Thus the just a marginal growth is largely due to relatively higher base. The inventory built-up for the quarter will get liquidated in coming quarters.
• Sale including other operating income was higher by 1% to Rs 90.92 crore. Upside in revenue for the period was largely due to strong growth in revenue of Copper and building products with the revenue from industrial switchgear stand flat. However the segment revenue of energy management business (EM) stood lower as the revenue is largely from invoicing of O&M of the large project.
• Sale of industrial switchgear business was flat at Rs 43.8 crore. The revenue of copper was up by 25% to Rs 41.2 crore and that of building products was up by 24% to Rs 5.1 crore. Contrarily the segment revenue of EM was down by 93% to Rs 0.7 crore.
• Operating profit margin contracted by 50 bps to 10.6% given change in revenue mix with increased contribution to top-line from low margin copper business as well as inability of the company to pass on the incremental cost due to copper price increase in recent times in switchgear business. Material cost as proportion to sales net of stocks was up by 370 bps to 73.7%. But the staff cost and OE was lower by 30 bps (to 4.9%) and 140 bps (to 11.4%) respectively.
• Other income jumped to Rs 2.40 crore from mere Rs 0.16 crore in the corresponding previous period. The interest cost and depreciation was higher by 17% (to Rs 3.63 crore) and 17% (to Rs 2.52 crore). Thus the PBT was up by 20% to Rs 5.87 crore.
• Taxation in absolute terms was up by 31% to Rs 1.89 crore. And the tax rate too stood higher at 32.2% compared to 29.4% in corresponding previous quarter. Thus the growth at PAT was 15% to Rs 3.98 crore.

Nine month performance

Standalone sales were higher by 4% to Rs 272.10 crore. But with operating margin contract by 100 bps the operating profit was down by 4% to Rs 31.80 crore. After accounting for higher other income, higher interest and depreciation, the PBT was higher by 3% to Rs 18.50 crore. Taxation was lower by 2% to Rs 4.97 crore and thus the PAT was up by 3% to Rs 13.53 crore.

Management comment

R Doraiswamy, Joint Managing Director of the company commenting on the results said, "We have witnessed a flat growth this quarter. Despite the challenging conditions in the industry we have been able to show slight growth. Our Wires and Cables business and Building Segment business have shown robust growth. We are continuing to focus on more value added products in these segments. The Industrial Switch gear side of our business has been flat primarily because of the tepid demand. Also, the margins were impacted in this quarter because of the unexpected sudden rise in the commodity prices. This however will be offset by the increase in pricing from January onwards. Though the market conditions in India as well as USA/EUROPE was very challenging, we have been able to sustain with minimal growth due to our association with large OEM's Going forward we see a pickup in demand especially because of our association with companies like GE & Schneider. In our Energy Management Business revenues have come in purely from Operations & Maintenance. This business has a higher margin as compared to other business segments and will continue to give us Operations & Maintenance revenues in the coming quarters. We have also received an LOI of Rs. 18.7 crs from EESL for this segment. Going forward, we will continue to focus on adding new, niche and high margin products, enter new geography and offer total and customised electrical solutions to our existing and new customers."

The stock hovers around Rs 196.