Rs 309.43 crore. Eventually, net profit increased II % to Rs 125 crore. The strong consolidated show ofPunj Lloyd was largely due to improvement in its overseas subsidiary as standalone net profit tumbled 18% to Rs 68.72 crore even as sales rose 23% to Rs 1924.53 crore.
Amidst intense competition, Crompton Greaves managed to grow its consolidated sales 8% to Rs 2197.52 crore on a higher base. The strong bottom line growth on a modest revenue rise was facilitated by strong operating performance with oPM expanding 100 bps to 11.3%, thus powering oP's 18% rise to Rs 247.64 crore. Net profit rose 31 %, helped by higher other income and lower interest and tax.
On the flip side, players such as ABB, Siemens, and Bharat Bijlee witnessed pressure on oPM despite decent revenue growth on healthy order book. Siemen's sales were up 5% to Rs 1917.66 crore and net profit 99% to Rs 337.01 crore. Given the 120-bp contraction in margin, the surge in the bottom line was due to extraordinary (EO) gain of Rs 210.61 crore. But ABB saw a sharp fall in both its revenue (down 7%) as well as earning (down 37%), with its core power systems/products as well as automation systems/ products business turning a tepid performance in the quarter ended Jun 2009.
Revenue of BEML jumped 62% and at the OP level the company returned to profit by netting an OP of Rs I 1.61 crore compared with a loss of Rs 27.77 crore in the corresponding previous-years period, which was marred by higher provision towards wage revision and slow and non-moving inventory. Eventually, net profit was higher at Rs 5.30 crore compared with a loss ofRs 17.43 crare.
On the other hand, players who were catering to the manufacturing industry or the private sector continued to languish given the slowdown in execution.
Outlook
The capital goods sector has been a major victim of the slowdown in private investment on economic slowdown. Now, there are signs of improvement in most key sectors although certain industrial segments continue to face stiff challenges in driving demand. With crude-oil prices showing signs of hardening, renewed interest is expected in oil exploration and production not only in the country but also in the Gulf, pushing for renewal of infrastructure building in that region. The Indian capital goods sector, with presence in building infrastructure in the Middle East countries, is expected to gain if that happens.
The election process had hindered the fmalisation of public-sector and government orders. The orders are to resume in the second half of the current fiscal, thereby replenishing the order book of industry players. A new stable government in place has also lent confidence to private players to invest especially in infrastructure development such as roads and power. Though the short-term outlook is cloudy, the long-term outlook for the sector is good, with renewal of private investment to back up public sector spending in the country as well as infrastructure buildup in the overseas markets. _
Amidst intense competition, Crompton Greaves managed to grow its consolidated sales 8% to Rs 2197.52 crore on a higher base. The strong bottom line growth on a modest revenue rise was facilitated by strong operating performance with oPM expanding 100 bps to 11.3%, thus powering oP's 18% rise to Rs 247.64 crore. Net profit rose 31 %, helped by higher other income and lower interest and tax.
On the flip side, players such as ABB, Siemens, and Bharat Bijlee witnessed pressure on oPM despite decent revenue growth on healthy order book. Siemen's sales were up 5% to Rs 1917.66 crore and net profit 99% to Rs 337.01 crore. Given the 120-bp contraction in margin, the surge in the bottom line was due to extraordinary (EO) gain of Rs 210.61 crore. But ABB saw a sharp fall in both its revenue (down 7%) as well as earning (down 37%), with its core power systems/products as well as automation systems/ products business turning a tepid performance in the quarter ended Jun 2009.
Revenue of BEML jumped 62% and at the OP level the company returned to profit by netting an OP of Rs I 1.61 crore compared with a loss of Rs 27.77 crore in the corresponding previous-years period, which was marred by higher provision towards wage revision and slow and non-moving inventory. Eventually, net profit was higher at Rs 5.30 crore compared with a loss ofRs 17.43 crare.
On the other hand, players who were catering to the manufacturing industry or the private sector continued to languish given the slowdown in execution.
Outlook
The capital goods sector has been a major victim of the slowdown in private investment on economic slowdown. Now, there are signs of improvement in most key sectors although certain industrial segments continue to face stiff challenges in driving demand. With crude-oil prices showing signs of hardening, renewed interest is expected in oil exploration and production not only in the country but also in the Gulf, pushing for renewal of infrastructure building in that region. The Indian capital goods sector, with presence in building infrastructure in the Middle East countries, is expected to gain if that happens.
The election process had hindered the fmalisation of public-sector and government orders. The orders are to resume in the second half of the current fiscal, thereby replenishing the order book of industry players. A new stable government in place has also lent confidence to private players to invest especially in infrastructure development such as roads and power. Though the short-term outlook is cloudy, the long-term outlook for the sector is good, with renewal of private investment to back up public sector spending in the country as well as infrastructure buildup in the overseas markets. _
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