KSB, the pumps major has registered a sales growth of sharp 48% to Rs 381.60 crore. Higher sales together with 920 bps expansion in operating profit margin to 16.2% has powered the operating profit up by 244% to Rs 62 crore. The other income was down by 44% to Rs 7.20 crore and thus the PBIDT was up by 125% to Rs 69.20 crore. The interest cost was up by 13% to Rs 0.90 crore and the depreciation was up by 9% to Rs 10.80 crore. Thus the PBT was up by 186% to Rs 57.50 crore. The taxation was up by 58% to Rs 15.50 crore and thus, the PAT was up by 308% to Rs 42 crore. With share of profit from associate up by 217% to Rs 1.90 crore, the net profit was up by 303% to Rs 43.90 crore.
- Value of production for the quarter was up by 37% to Rs 388 crore while the revenue for the period was up by 10% to Rs 369.90 crore. Sales for the period and corresponding previous period was 0.98 time and 0.90 times of respective value of production. Sale lower than value of production for the period reflects inventory built-up which will get liquidated in coming months.
- Upside in revenue was largely due to strong growth in revenue of pumps as well as growth. Sales of pumps was up by 47% to Rs 317.70 crore (or 83% of sales) and that of valves was higher by strong 57% to Rs 64.10 crore (or 17% of sales).
- PBIT was up by 227% to Rs 53.90 crore and the upside was largely due to higher profit from both pumps and valves segment. The segment profit of pumps was up by sharp 191% to Rs 46.80 crore facilitated by higher sales as well as 730 bps expansion in segment margin to 14.7%. The segment profit of valves zoomed up by whopping 1675% to Rs 7.10 crore powered by both higher sales and 1010 bps expansion in segment margin to 11.1%.
In accordance with the recent amendments in sections 10(34) and 115-O of the Income-tax Act, 1961, Dividend Distribution Tax (DDT) would not be payable by companies in respect of dividends declared, distributed or paid after March 31, 2020 and similarly tax exemption under section 10(34) to recipient has been withdrawn with effect from April 1, 2020. Accordingly, the Group remeasured the deferred tax liability on Unremitted earnings of associate considering tax rate applicable to Group and the impact of Rs 5.066 crore was recognised as a tax expense for the quarter ended March 31, 2020.
The Government of India has introduced 'Direct Tax Vivad Se Vishwas Act, 2020' which allows the assesses to settle the ongoing Income-tax litigations at various Adjudicating authorities. In this regard, the Company found it commercially expedient to put an end to continuous prolonged litigation and to get complete waiver of interest liability and immunity from penalty. Accordingly, the Company filed an application with the Income-tax authorities to avail the option as given under the said Act and to settle all the ongoing Income-tax litigations at various Adjudicating authorities pertaining to Assessment years from 2009-10 to 2016-17. The said application has been accepted by the Income-tax authorities. Subsequent to the quarter ended March 31, 2021, the Company has paid Rs 11.394 crore towards the settlement of disputed Income-tax liability of Rs 19.889 crore, after adjusting of the refunds due, to the extent of Rs 8.495 crore. In this regard, the Company had recognized the provision of RS 19.038 crore in the quarter and year ended December 31, 2020 in addition to the existing provision of Rs 0.851 crore.
Yearly performance
Sales was down by 7% to Rs 1208.10 crore. But with OPM expand by 220 bps to 13.9%, the OP was up by 11% to Rs 167.80 crore. After accounting for higher other income, lower interest and lower depreciation, the PBT was up by 24% to Rs 151.70 crore. EO was nil for the period compared to RS 12.70 crore in the corresponding previous period. Thus the PBT after EO was up by 12% to Rs 151.70 crore. With taxation stand higher by 59% to Rs 63.20 crore the PAT was down by 7% to Rs 88.50 crore. With SOP from associates was down by 2% to Rs 5.30 crore, the net profit was down by 7% to Rs 93.80 crore.
The pumps registered an EBIT of Rs 124.30 crore (up 19%) largely on higher margin with its sales down by 7% to Rs 1008.20 crore. Similarly the EBIT of Valves was up by 7% to Rs 11.50 crore gained by higher margin as its sales was down by 3% to Rs 201 crore.
Other developments
Most of the Company's manufacturing facilities and offices at various locations are under temporary shutdown from April 23, 2021 up to May 1, 2021 in line with the advisories, orders and directions issued by the respective local Government Authorities, to prevent and contain the spread of Novel Coronavirus (COVID-19) outbreak. The duration of temporary shutdown may change depending on the further directives of the respective Government Authorities.
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