Tuesday, January 15, 2013




ELECTROSTEEL CASTINGS  has declared its results for the third quarter ending December, 2012.

Net Sales   for q3 FY 13 amounts to Rs.472.68 Cr; compared to Rs.479.06 Cr  in Q2 FY 13 (-1.33%); and  Rs.443.77 Cr in Q3 FY 12 (+6.51%)

Total Expenditure for q3 FY 13 amounts to Rs.446.08 Cr; compared to Rs.425.95  Cr  in Q2 FY 13 (4.73%); and  Rs.487.12 Cr in Q3 FY 12 (-8.43%)

Profit before Intt, Dep. & Taxes for q3 FY 13 amounts to Rs.26.61 Cr; compared to Rs.53.11 Cr  in Q2 FY 13 (-49.91%); and  Rs.(-)43.35 Cr in Q3 FY 12 (161.38%). Because of control over expenditure, there is significant improvement in profit YoY.

Net Profit  for q3 FY 13 amounts to Rs.33.09 Cr; compared to Rs.37.03 Cr  in Q2 FY 13 (-10.66%); and  Rs.(-)10.78 Cr in Q3 FY 12 (407.02%). Net profit  has risen impressively Yoy though QoQ, there is a slight fall.

Diluted EPS for q3 FY 13 amounts to Rs.1.01 ; compared to Rs.1.13 in Q2 FY 12; and Rs(-)0.33 in Q3 FY 2012.

Total Income for q3 FY 13 amounts to Rs.479.59 Cr; compared to Rs.493.90 Cr  in Q2 FY 13 (-2.9%);

Changes in inventories of FG, WIP and SIT for q3 FY 13 amounts to Rs.10.48 Cr; compared to Rs.(-)807.11 Cr  in Q2 FY 13 and  Rs.(-)0.35 Cr in Q3 FY 12 .

Cost of materials  for q3 FY 13 amounts to Rs.304.48 Cr; compared to Rs.315.93 Cr  in Q2 FY 13 (-3.62%); and  Rs.304.91 Cr in Q3 FY 12 (-0.14%)

Purchases of stock-in-trade for q3 FY 13 amounts to Rs.12.92 Cr; compared to Rs.15.13 Cr  in Q2 FY 13 (      -14.57%); and  Rs.43.95 Cr in Q3 FY 12 (-70.6%)

Employee benefits expense for q3 FY 13 amounts to Rs.35.26 Cr; compared to Rs.35.15 Cr  in Q2 FY 13 (0.33%); and  Rs.31.48 Cr in Q3 FY 12 (+12.03%)

Depreciation  for q3 FY 13 amounts to Rs.13.29 Cr; compared to Rs.13.50 Cr  in Q2 FY 13 (-1.56%); and  Rs.13.40 Cr in Q3 FY 12 (-0.81%)

Other expenses for q3 FY 13 amounts to Rs.69.64 Cr; compared to Rs.54.32 Cr  in Q2 FY 13 (28.22%); and  Rs.93.72 Cr in Q3 FY 12 (-25.7%)

Total expenses  for q3 FY 13 amounts to Rs.446.08 Cr; compared to Rs.425.95 Cr  in Q2 FY 13 (4.73%); and  Rs.487.12 Cr in Q3 FY 12 (-8.43%)

Profit before tax for q3 FY 13 amounts to Rs.44.26 Cr; compared to Rs.44.11 Cr  in Q2 FY 13 (0.32%); and  Rs.(-)18.04 Cr in Q3 FY 12 (-345.34%)

Tax Expenses for q3 FY 13 amounts to Rs.11.17 Cr; compared to Rs.7.08 Cr  in Q2 FY 13 (57.82%); and  Rs.(-)7.26 Cr in Q3 FY 12 (-253.81%)

Net Profit for q3 FY 13 amounts to Rs.33.09 Cr; compared to Rs.37.03 Cr  in Q2 FY 13 (-10.66%); and  Rs.-10.78 Cr in Q3 FY 12 (407.02%); From Net loss to a good Net profit in YOY is a good improvement.

Face Value of the share is Rs.1.

Paid-up Equity Share Capital stands at Rs.32.68 Cr.

Basic EPS  for  Q3 FY 13 amounts to Rs.1.01;compared to Rs.1.13 in Q2 FY 12 ; and Rs(-)0.33 in Q3 FY 12. On a FV of Rs.1, this EPS level is impressive, if the company continues to maintain this EPS level every quarter.

Public holding (%)for q3 FY 13 amounts to 50.56%.

The company has thus improved its performance quite well in the quarter.

M K Jalan, Director of the company has told that margins were still under pressure. He says - Through selective order booking we have maintained the revenue levels.
He said - current order booking was worth six months’ production. Around 60 per cent of the company’s revenues come from exports, mainly to Europe and the Gulf region. Electrosteel has presence in UK, France, Spain, Italy, Germany, Jebel Ali, Qatar, Morocco and South Africa.

 Milestones in the Histroy of Electrosteel Castings :

·        1994: Set up 60000 TPA Ductile Iron Pipe Plant at Khardah near Kolkata, first in India
·        1995: Accredited with ISO 9002 for our ductile Iron pipes.
·        1996: obtained Kitemark license from British Standard Institute (BSI) for its Dl pipes. Commissioned its own mini-blast furnace with matching capacity for better quality control.
·        1999: Received the ISO-9002 accreditation from BSI for Dl pipes and fittings.
·        2000: increased its capacity to 120,000 TPA for Dl pipes. Obtained Kitemark license from BSI, UK for Dl fittings made at its facilities in Elavur, Chennai .
·        2001: Scaled its Dl pipe capacity from 120,000 TPA to 150,000 TPA. Mini Blast Furnace capacity increased from 1,09,000 TPA to 2,00,000 TPA.
·        2002: Acquired 46% stake in Lanco Industries Limited in March 2002, which is involved in manufacturing of DI Pipes, Pig Iron, Cement and Castings.
·        2003: Increased its Dl pipe manufacturing capacity from 1,50,000 TPA to 200,000 TPA.   Also received BSI Kitemark license for Dl Fittings at Khardah works, West Bengal.
·        2005: Raised USD 40 Million through the issue of (GDRs) in October  2005 and become the first Indian Company to be listed on Professional Securities Market (PSM) of the London Stock Exchange + first Company to issue GDRs on the PSM.  Was accorded Three Star Export House by the JDGFT, Ministry of Commerce and Industry of  GOI.
·        2006: Increased its Dl pipe manufacturing capacity from 2,00,000 TPA to 2,50,000 TPA and commissioned Coke Oven Plant at Haldia. Commissioned 12 MW Power Plant & 30,000 TPA second Kiln Sponge Iron Plant at  Haldia. Mini Blast Furnace capacity increased from 2,00,000 TPA to 2,35,000 TPA. Commissioned Pulverized Coal Injection System in Blast Furnace and Stamp. Charging System in Coke Oven Plant at Haldia, which enhanced operational efficiency. We have been allotted an Iron ore mine at Kodolibad, Jharkhand and a non coking coal mine in joint venture at North Dhadhu.
·        2007: Implemented SAP ERP system hosted in state of the art 1000 square feet Data center connecting all manufacturing plants and sales offices across Indian Geography supporting 350 user base to enable supply chain of the Company.
·        2008: Tied up US$ 77.50 mn through ECB, commissioned 360,000 TPA sinter plant at Khardah and commissioned a 75,000 TPA coke oven battery at Haldia.
·      2009: Commissioned fourth coke oven battery resulting in additional capacity of 70,000 TPA of coke, taking the total capacity enhanced to 280,000 TPA and 250,000 TPA respectively

Directors Report for the Year Ended : Mar '12 :

 Financial Results  ( Rs. in Crs)
 Sl.no.   Particulars                          FY2012     FY2011
 i.       Revenue from operation    : 1916.66   :: 1709.53
 ii.      Other Income       ::                 70.77  ::    101.75
 iii.     Total Revenue     ::               1987.43   ::  1811.28
 iv.      Profit before Taxation ::         22.58  ::      214.89
 v.       Tax including Deferred Tax ::(19.80)   ::  60.25
 vi.      Profit after Taxation   ::          42.38     ::  154.64 
  Dividend : Rs 0.50 per share

 Operations :  

 F.Y. 2011-12 was a challenging year with a moderate growth of business  due to turbulent economic environment. There was a slowdown in global  economy activities across major part of the world and India was also  affected to a larger extent coupled with domestic factors such as  inflation, decelerating growth and widening current account deficit.  Despite these constraints and the challenging environment, the Company  performed reasonably well and sustained its production and sales in  quantitative terms. The Company''s Revenue from operation has increased  from Rs. 1709.53 crores in 2010-11 to Rs. 1916.66 crores in 2011-12  representing an increase of 12.12 %. Export sales showed an increase  from Rs. 566.33 crores to Rs. 822.69 crores, an increase of 45.27 % due  to higher proportion of sales in the export market. The Company''s  profit was Rs. 42.38 crores as against Rs. 154.64  crores.  The decline was due to steep rise in raw materials prices  mainly of iron ore & coal and sharp depreciation of INR against dollar.

 During the year D.I.pipes production was 2,70,168 MT as against  2,70,327 MT in the previous year, showing marginally decreases.  This  year more product varieties have been added in the said production to  satisfy our customers. Production of D.I.fittings was higher by 23.34%  over the previous year (from 5,038 MT to 6,214 MT).

 The production of C.I. pipes at Elavur was 19,177 MT as against 30,199  MT in the previous year due to the customer''s preference for DI Pipes  over CI Pipes.

 Future Prospects

 Government''s thrust on the infrastructure facilities is already showing  continuous increasing demand for D. I. pipes in the domestic market.  However, additional capacity installed by new entrants and peer group  companies may intensify the competition in the domestic market. There  is constant endeavor by your Company for increasing the share in  existing foreign markets and enter new countries. Your Company has  opened a new office in Italy with two stockyards.  There are plans to  set up an office and stockyard in Germany this fiscal. A branch office  is also being opened shortly in Morocco to service the West African  market where we have already started getting projects. Approvals have  been obtained in Brazil and other South American markets and initial  businesses obtained. In short, we see an exciting year ahead.

 As on March 31 2012, your Company has the following Subsidiaries, Joint  Ventures and Associate Companies. 

 S. No. Name of the Company      :: STATUS
 1.  Electrosteel Castings (UK) Limited          Subsidiary
  2.  Electrosteel Europe S.A.                         Subsidiary
  3.  Electrosteel Algerie SPA                         Subsidiary
  4.  Singardo International Pte Limited         Subsidiary
  5.  Electrosteel USA, LLC                            Subsidiary
  6.  Mahadev Vyapaar Private Limited         Subsidiary
  7.  Electrosteel Trading S.A, Spain             Subsidiary
  8.  WaterFab LLC                                       Subsidiary
  9.  North Dhadhu Mining Company Pvt Ltd     Joint Venture
  10. Domco Private Limited                         Joint Venture
  11. Lanco Industries Limited                      Associate
  12. Electrosteel Steels Limited                   Associate
  13. Electrosteel Thermal Power Limited     Associate

 Greenfield Project by an Associate Company, M/s Electrosteel Steels  Limited (ESL)

  ESL is setting up a 2.2 MTPA integrated steel &  Ductile Iron (DI) Pipe project, at Siyaljori village, in Bokaro  District, in Jharkhand,  about 22 kms from Bokaro  in Jharkhand. 

 During the project implementation process, some modifications were  suggested by the technical experts to meet the technical superiority  and efficiency improvement of the plant. Hence, for better balancing of  the product with optimized product mix and better value addition, ESL  is contemplating to enhance the plant capacity from 2.2 MTPA to 2.51  MTPA. 

 The ESL plant is at its advance stage of completion and its operations  are currently in a nascent stage. Due to a variety of technical  reasons, the plant has undergone improvements and changes, which will  in turn benefit the operations in the long run.
Shri  P. K. Khaitan is the Chairman of the company 

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