The Hindu Business Line : Elgi Equipments net rises 32.6%

Coimbatore April 29 Elgi Equipments Ltd has registered a 21 per cent rise in net sales and a 32.6 per cent increase in net profit for the fiscal ended March 31, 2007.

According to the audited results of the company, its net sales increased to Rs 378.58 crore from 312.06 crore in the previous fiscal.

The profit before tax rose marginally to Rs 34.9 crore (Rs 32.12 crore) and the net profit before extraordinary item was up at Rs 23.87 crore (Rs 22.87 crore). But a sharp fall in VRS compensation provisioning led to a jump in net profit to Rs 23.4 crore (Rs 17.67 crore).

The total expenditure, including raw material and salary expenditure, was Rs 346.84 crore (Rs 285.89 crore).

The basic EPS (share face value Re 1) moved to Rs 3.73 in 2006-07 compared with Rs 2.82 in the earlier year.

The company's net sales in the fourth quarter of 2006-07 were Rs 118.01 crore (Rs 101.31 crore) and the net profit after extraordinary item was Rs 5.82 crore (Rs 4.4 crore).

In a press release, the company said that the profit has grown at a lower pace since a significant portion of sales came from screw compressors that had high import content. The compressor sales rose by 179 per cent that helped the company to increase its market share to 29 per centfrom 20 per cent in 2005-06.

The company said it had also got a breakthrough order from the Indian Navy for such compressors.The engine division has seen erosion in revenue and has sustained loss. The company has signed an agreement with an Indian entity for selling this division. This decision reflected the company's strategy to focus on "core business and to gain further market share in the compressor business". The manufacturing engineering division had seen an increase in revenue by about 300 per cent and it held good growth prospects.

With the economy poised to grow by 8 per cent in the current year, the company was confident of growing by about 20 per cent.