Encouraging growth continues

For the quarter ended September 2017, it registered an 18% jump in sales to Rs 13.26 crore. OPM improved 720 basis points to 14.4% which saw OP soar 137% to Rs 1.90 crore.

The government of India introduced GST with effect from 1 July 2017. Accordingly, sales for the quarter ended September 2017 are net of GST and revenues for earlier period are net of excise duty. Sales for the 6 months are net of GST and excise duty.

Other income grew from Rs 4 lakh to Rs 21 lakh and interest cost fell 26% to Rs 27 lakh. As depreciation grew 10% to Rs 45 lakh, PBT jumped from Rs 6 lakh to Rs 1.39 crore.

Tax jumped 611% to Rs 34 lakh, after which PAT grew from Rs 2 lakh to Rs 1.06 crore.

For the six months, it registered a 22% jump in sales to Rs 28.05 crore. OPM improved 630 basis points to 14.3% which saw OP soar 118% to Rs 4.00 crore.

Other income grew from Rs 8 lakh to Rs 33 lakh and interest cost fell 27% to Rs 54 lakh. As depreciation grew 11% to Rs 91 lakh, PBT jumped from Rs 36 lakh to Rs 2.88 crore.

Tax jumped 363% to Rs 69 lakh, after which PAT grew from Rs 21 lakh to Rs 2.19 crore.

The company has responded to the challenges by enhancing Customer focus and expanded its business by procuring the profitable orders by building the efficient sales and prompt delivery.

In FY 2017 it procured some profitable orders from Indian Railways, BHEL, BEML and other heavy industries and is expected to continue with the same going forward

In FY 2017, the company has procured some profitable orders from Indian Railways, BHEL, BEML and other heavy industries and the management expects the same to continue going forward.

In the emerging competitive scenario, the management feels that there is it a compelling need to improve the global competitiveness of the various businesses to handle competition and to secure the customer base.

Hence apart from others, the company is emphasizing on stringent quality control measure to accelerate continuous growth in supply orders of the company's product.

The management is taking pro-active steps to further expand the forging division by expanding its product base

The company is expanding both its divisions to cater to the rising demand from its customers.

For its Forging division, the company has already set up the forging plant at Rania and the management is taking pro-active steps to further expand the forging division by expanding its product base.

The company has also installed the Electric induction Furnaces at Rania which in turn helps to reduce burning loss varying between 3 to 5%.

Approval of screw coupling, knuckle pins with washer, yoke pin and knuckle thrower have been obtained from Research Design & Standard Organization (R.D.S.O) in addition to Draft gear Forging, Hanger and Hanger Block.

The company in the process to install new machineries such as 1200 MT. PRESS, VMC and 6 MT. hammer which would be used to manufacture products of heavy industries.

Coil Springs division to manufacture springs for Link-Hofmann Busch (LHB) coaches which is an import substation and could raise the company's turnover and profits manifold

The company's Coil Springs division would be the first one to receive orders for manufacturing of springs for Link-Hofmann Busch (LHB) coaches which were being imported till date.

This would lead to Import Substitution and increase in the Gross Domestic Product of the country.

Presently LHB Coaches are used in Super Fast trains such as Shatabdi & Rajdhani Express.

The execution of such kind of orders would increase the turnover and profits manifold.

The company has also bought new Load testing Machine from China for Testing of above springs and also setting up a new powder coating plant at Rania.

Outlook

After performing encouragingly in FY 2017 the management is confident that barring unforeseen circumstances, the company should report even better results during FY 2018.

Valuations

The share price trades at Rs 205.