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.

March 2017 quarter results

For the quarter ended March 2017, sales grew 15% to Rs 165.56 crore. OPM improved 120 basis points from 7.1% to 9.2% which saw OP grow 32% to Rs 15.32 crore.

Other income grew 19% to Rs 1.86 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 24% to Rs 7.43 crore, PBT grew 35% to Rs 9.75 crore. As provision for taxation fell 60% to Rs 85 lakh, PAT rose 76% to Rs 8.90 crore.

Nine months results

For the nine months ended March 2017, sales grew 15% to Rs 476.94 crore. OPM improved 100 basis points from 7.5% to 8.5% which saw OP grow 29% to Rs 40.38 crore.

Other income grew 7% to Rs 5.82 crore. Interest cost was nil as the company is a debt free company. As depreciation grew 16% to Rs 20.83 crore, PBT grew 35% to Rs 25.37 crore. As provision for taxation fell 23% to Rs 4.05 crore, PAT jumped 57% to Rs 21.32 crore.

Quarter Segment results

For the quarter, sales from the Machine Tools division grew 8% to Rs 30.13 crore and accounted for 18% of sales. PBIT from the same soared 258% to Rs 6.48 crore and accounted for 38% of total.

For the quarter, sales from the Hard Metals and Hard Metals Products grew 17% to Rs 135.53 crore and accounted for 82% of sales. PBIT from the same fell 7% to Rs 10.75 crore and accounted for 62% of total.

For the nine months, sales from the Machine Tools division fell 6% to Rs 67.94 crore and accounted for 14% of sales. PBIT from the same jumped 90% to Rs 6.56 crore and accounted for 15% of total.

For the nine months, sales from the Hard Metals and Hard Metals Products grew 19% to Rs 409.00 crore and accounted for 86% of sales. PBIT from the same grew 22% to Rs 38.55 crore and accounted for 85% of total.

Market condition

The company serves markets like Automobile (2W, PV, LCV and MHCV), tractors which have been performing well. Aerospace, Defence and railways are also doing 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 686.