• Downside in revenue was largely due to lower revenue from lighting and wires & cables business. The sales of metering were up by 9% to Rs 130.82 crore. Similarly the sales of switchgears were higher by 2% to Rs 55.11 crore. The revenue of lighting was down by 17% to Rs 34.66 crore and that of wires and cables were down by sharp 44% to Rs 22.96 crore.
• Contribution of metering and switchgear to total sales increased from 47% and 21% respectively in June 2018 to 54% and 23% in quarter ended June 2019. Contrarily the share of lighting and wires declined to 14% (from 16%) and 9% (from 16%) respectively in Jun 2019.
• EBIT was up by 8% to Rs 32.21 crore and the upside was largely due to strong show by metering and switchgears. Segment profit of metering was up by strong 32% to Rs 17.46 crore driven by higher sales as well as 230 bps in segment margin to 13.4%. The segment profit of switchgears was up by 2% to Rs 10.32 crore largely by higher sales as its segment margin expanded by marginal 10 bps to 18.7%. However the segment profit of both lighting and wires declined sharply hurt by lower sale as well as lower segment margin. Segment profit of lighting was down by 28% to Rs 3.51 crore with its segment margin decline by 160 bps to 10.1%. The segment margin of wires & cables was down by 20 bps to 4% and that coupled with lower sales dragged down its segment profit by 46% to Rs 0.92 crore.
• Operating profit margin expanded by 230 bps to 11.6% and that was largely due to increased contribution from high margin metering and switchgear business compared to corresponding previous period. While the material cost as % to sales was down by 530 bps to 66%, the staff cost and OE was up by 110 bps (to 12.8%) and 150 bps (to 10.3%) respectively.

Consolidated sales was down by 5% to Rs 248.18 crore and with OPM expand by 170 bps to 12.2% the operating profit was up by 11% to Rs 30.24 crore. With OI up by 18% to Rs 1.37 crore, the PBIDT was up by 11% to Rs 31.60 crore. After accounting for higher interest and depreciation cost, the PBT was down by 8% to Rs 7.29 crore. With taxation stand lower by 2% to Rs 2.23 crore, the PAT was down by 10% to Rs 5.06 crore. After accounting for lower non controlling interest (down 85% to Rs 0.01 crore) the net attributable to owners was down by 10% to Rs 5.05 crore.

The segment revenue and profit of switchgears, lighting and wires&cables segments mirrors the standalone business with metering being the exception. The segment profit of metering was up by 15% (to Rs 19.07 crore) on a segment sale of Rs 135.45 crore (up 10%). On deducting the standalone segment revenue and profit of metering from respective consolidated figures, the segment profit of metering at subsidiary level was down by 52% to Rs 1.61 crore (sales up 29% to Rs 4.63 crore). The projects business registered a loss of Rs 0.01 crore on nil sales.

Management Comment

Gautam Seth, Joint Managing Director said, "During the quarter, we reported resilient financial performance along with an improvement in operating profitability, despite being faced with weak industry demand and a challenging economic environment. Our metering business continued to post robust growth backed by timely execution of orders. On the product innovation front, we recently launched new innovative range of products in the lighting segment "The seven wonders" and new "TechnoN MCBs& DBs" in Switchgears. Both these product ranges have received very good dealer response. We also continued our focus on brand building by undertaking various marketing initiatives. Building upon our successful campaign with the Delhi Capitals Team in IPL, we have now tied-up with the "Haryana Steelers Pro Kabbadi Team". He further added, "We believe this gives us an effective platform to create strong brand visibility in the Tier 2 & 3 cities and rural areas enabling us to drive aggressive growth in these regions. Going forward, we expect our lighting and metering segments to see strong growth on a sequential basis in Q2. We are also optimistic of seeing good traction across our business segments in the second half of this year as the economic conditions gradually improve. Further, the company is fully geared up to meet the Govt's ambitious target of smart meters which can truly be a game changer providing enormous growth potential."