BEML

BEML (formerly Bharat Earth Movers), the PSU earthmoving equipment and engineering major has registered 20% fall in its earnings (to Rs 40.07 crore) for the quarter ended December 2011 on a sales of Rs 574.50 crore, which was lower by 13%. Sales for the quarter though was lower by 13%, the 150 basis points expansion in operating margin aided the operating profit to grew marginally by 1% to Rs 64.58 crore. However dragged down by lower other income, higher interest, lower depreciation and lower EO income, the net profit eventually stood lower by 20%. But for lower tax incidence the de-growth in PAT would have been much higher.

BEML manufactures wide range of Heavy Earthmoving products, defence products and railway products. Heavy Earthmoving Equipment and Parts catering to the core sector of the Industry - Mining, Irrigation, Projects, Steel/Cement Plants and Infrastructure segment accounts for little over 53% of the total turnover of the company. Defence Equipment and Aggregates caters to the Defence Forces. The company holds major share of supplies for ground support equipment to the defence forces and this segment accounts around 46% of the total turnover. The company is also into Railway Rolling Stocks primarily for Indian Railways. The company has three interdependent plants one each located at Bangalore, Mysore and KGF. The company has also commissioned its fourth manufacturing complex in Pallakkad, Kerala last year.

Quarterly results

Even though sales (net of excise and consortium supply) was lower by 13% to Rs 574.50 crore, the value of production for the quarter was higher by 22% to 825.46 crore. The inventory built up is expected to get liquidated in fourth quarter boosting revenue for that period.

The operating profit for the quarter was higher by 1%, gained by 150 bps expansion in operating margin to 11.2%. Material cost as proportion to sales (net of stocks) was lower by 10 bps (to 55.9%) and that of staff cost was lower by 160 bps (to 20.7%). The other expense was higher by 350 bps to 15.2%.

The other income was lower by 35% to Rs 15.22 crore. The interest cost was higher by 60% to Rs 22.87 crore and depreciation was higher by 26% to Rs 10.18 crore. Thus the PBT (before EO) was lower by 28% to Rs 46.75 crore.

EO Income for the quarter was lower by 94% to Rs 0.24 crore. On an inflated base the PBT (after EO) was lower by 32% to Rs 46.99 crore. The taxation was at Rs 6.92 crore, a fall of 62% in absolute terms and the tax incidence was lower at 14.7% compared to 26.7% in the corresponding previous period. Facilitated by lower tax incidence, the de-growth in PAT was moderated to 20% to Rs 40.07 crore.

Nine month performance

Sales was higher by 13% to Rs 1920.88 crore and with operating margin expand by 70 bps to 6.2% the operating profit was higher by 27% to Rs 119.09 crore. However undone by 34% fall in other income, 50% and 27% jump in interest cost and depreciation has resulted in 25% fall in PBT to Rs 74.57 crore. However aided by 252% jump in EO income to Rs 13.48 crore, the fall in PBT (after EO) was cut short to 15% to Rs 88.05 crore. Further gained by lower tax incidence the fall in net profit was limited to 10% to Rs 71.24 crore.

Other developments

Order book as on Dec 20, 2011 was about Rs 6000 crore.

The company targets to achieve a turnover of Rs 4300 crore for current fiscal.

The share price hovers around Rs 527.60.

BEML: Results