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.

December 2017 quarter results

For the quarter ended December 2017, net sales grew 17% to Rs 186.66 crore. OPM improved 170 basis points to 10.7% which saw OP jump 39% to Rs 20.00 crore.

Other income grew 3% to Rs 2.27 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 9% to Rs 7.46 crore, PBT soared 52% to Rs 14.81 crore.

EO loss (due to VRS write-off) stood at Rs 4.74 against NIL. Thus PBT after EO grew just 3% to 10.07 crore.

As tax jumped from just Rs 27 lakh to Rs 3.2 crore (tax incidence jumped from 2.9% to 37.9%) PAT fell 3% to Rs 6.25 crore..

Six months results

For the six months, net sales grew 18% to Rs 367.80 crore. OPM improved 280 basis points to 10.9% which saw OP jump 59% to Rs 40.07 crore.

Other income grew 7% to Rs 4.25 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 9% to Rs 14.65 crore, PBT soared 87% to Rs 29.67 crore.

EO loss stood at Rs 4.74 against NIL. Thus PBT after EO grew 57% to 24.93 crore.

As tax jumped from just Rs 1.5 crore to Rs 8.69 crore (tax incidence jumped from 9.8% to 34.9%) PAT grew 14% to Rs 16.24 crore..

Segment results

For the quarter, sales from the Machine Tools division stood at Rs 24.80 crore and accounted for 13% of sales. PBIT from the same stood at a profit of Rs 2.35 crore against a loss of Rs 31 lakh and accounted for -4% of total.

For the quarter, sales from the Hard Metals and Hard Metals Products stood at Rs 161.86 crore and accounted for 87% of sales. PBIT from the same grew 16% to Rs 20.03 crore and accounted for 89% of total.

For the six months, sales from the Machine Tools division stood at Rs 45.90 crore and accounted for 12% of sales. PBIT from the same grew from Rs 8 lakh to Rs 1.57 crore and accounted for 4% of total.

For six months, sales from the Hard Metals and Hard Metals Products stood at Rs 321.90 crore and accounted for 88% of sales. PBIT from the same grew 48% to Rs 42.77 crore and accounted for 96% 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 likely to do well.

Other segments like steel, capital investments in manufacturing (including greenfield activities), Oil & Gas Energy and Mining are also picking up.

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 around Rs 781.