It is reported that BEML, formerly Bharat Earth Movers Limited, the PSU earthmoving equipment and engineering major, has registered strong operating performance for the quarter ended September 2011.
Its revenue for the quarter was up strong 56% to INR 792.47 crore and the operating profit more than doubled (up 140%) to INR 32.90 crore with 150 bps expansion in operating margin to 4.2%. However the net profit eventually closed higher by modest 4% to INR 15.30 crore. Just a modest growth in bottom line in spite of strong operating performance was largely on account of lower other income, higher interest & depreciation cost as well as higher tax provision.
Strong revenue growth for the quarter in an empirically a weak quarter seems largely on account of burnout of strong order book especially in railways and defense. While the sales were higher by 56% to INR 792.47 crore, the value of production was higher by 40% to INR 925.07 crore. It seems good show by the Railway & metro business of the company for the quarter with higher delivery in the wake of imminent launch of Bangalore Metro as well as flagging off of first batch of new products such as stainless steel wagon EMU etc, which has boosted the value of production as well as sales for the quarter.
However the good work at operating level has been trimmed to large extent by lower other income, which was lower by 23% to INR 16.95 crore. The interest cost was higher by sharp 57% to INR 23.15 crore and depreciation was higher by 36% to INR 10.48 crore. Thus the growth at PBT (before EO) was limited to 21% to INR 16.22 crore. The EO income for the quarter was INR 3.45 crore compared to nil in the corresponding previous period. Thus the PBT after EO was up by 47% to INR 19.67 crore, but only to be dragged down by higher taxation.
Taxation was a provision of INR 4.37 crore for the quarter compared to a write back of INR 1.34 crore in the corresponding previous period. Thus, the growth in net profit was just 4% to INR 15.30 crore.
Half yearly performance
Sales was higher by 30% to INR 1346.38 crore and the operating profit was higher by 83% to INR 54.51 crore with 110 bps expansion in OPM to 4%. However the growth at net profit was limited to 7% to INR 31.17 crore impacted by lower other income, higher interest & depreciation and higher tax incidence.
Other developments
BEML has forayed into design, construction and delivery of Dredgers and in this regard it has signed Memorandum of Agreement with globally renowned Dredging company viz, M/s Vosta LMG, Netherlands on October 11th 2011. Under this MoA, Vosta LMG will transfer technology and BEML will ensure manufacture and marketing of dredgers for inland and south East Asian regions. The company expects this business stream to bring in an additional volume of around INR 220 crore in the next two years.
In October 20, 2011, the company has flagged off Stainless Steel Electrical Multiple Unit (EMU) and 100 ton stainless steel wagon indigenously designed and manufactured by the company. The company has also developed and rolled out from its factory, the 8 wheel OHE car, deployable on rail tracks for repair of overhead electric lines.
FY12 Revenue target
The company has set itself a revenue target of INR 4300 crore for FY12 with an opening order book of over INR 5000 crore. As of September 23rd 2011, the order book position of the company stand at INR 4712 crore.
(Sourced from www.indiainfoline.com)
