Mukand to focus on speciality steel

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Our Bureau

Mumbai, May 20

Mukand Ltd would focus on both its speciality steel as well as industrial machinery businesses during the current fiscal.

Although speciality steel business accounts for around 80 per cent of the company's turnover, the industrial machinery business is also providing the momentum for its growth.

"We expect to take industrial machinery business turnover to Rs 450 crore from the current level of Rs 150 crore," Mr Rajesh Shah, Managing Director, Mukand, said.

This would be done over two to three years, he said. "Our strength in the industrial machinery business is our design capability and reliability of our products,'' Mr Shah said.

In this segment, the company's order book at the current juncture stands at Rs 202 crore.

Q4 net up 51%

The company has reported a 50.92 per cent increase in its fourth quarter profit after tax at Rs 27.3 crore against Rs 18.09 crore in the year-ago period.

Cost reduction efforts and better product mix helped the company's profitable growth, Mr Shah said.

The company, which is into speciality and alloy steel, reported marginally lower net sales of Rs 413.29 crore against Rs 418.04 crore.

Full year profit

For the full year, the company reported a profit after tax of Rs 103.42 crore against Rs 184.78 crore. However, the profit after tax before exceptional items and tax jumped up by 538 per cent to at Rs 86.03 crore (Rs 13.48 crore).

EBIDTA improved by 58 per cent to Rs 249 crore compared to Rs 157 crore in the previous year.

This was on account of concentrated efforts to maximise the margins by higher production of value-added heat treated steels and bright bars and improved performance by industrial machinery division.

Demand for the company's speciality steel business continues to be robust. Much of its demand comes from the automobile industry.

Steel unit turnover

The turnover of the steel division increased by seven per cent to Rs 1,524 crore from Rs 1,424 crore on account of higher sales of alloy steels to the automotive sector.

Revenues from industrial machinery division also went up by 58 per cent to Rs 146 crore as an outcome of rapid expansion and investments for additional capacities in the engineering and steel sectors.

The company has an ongoing capital expenditure programme of Rs 275-300 crore for capacity additions.

(This article was published in the Business Line print edition dated May 21, 2006)
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