Premier Ltd

This is a Walchandnagar group company, turned around in Q2Fy16 with a net profit of Rs.73 lakhs v/s loss of Rs.20 crore in previous Q2. But sequentially, it has slipped drastically from Rs.32 crore net profit. It has two segments – engineering and automotive and both have posted losses at EBIT level. This ‘turnaround’ was possible only on account of the exceptional income of Rs.28 crore or else this quarter would have ended in the red. Inadequacy of working capital high absenteeism of labour, and slower than forecast offtake of orders, especially from its windmills segment adversely affected the performance of the company. The company seems optimistic about the future – it has said that it has received orders for Metro bogey chasis from Hyundai, Alstom and BEML and are to be executed from Q4 onwards.

The company has blamed it poor performance also on the delay in receiving Rs.128 crore compensation from the Indian Railways by nearly 18 months (now expected by Jan / Feb ‘16), while in the same period substantial loan repayments to banks and other short term liabilities became due. The company has said that had this payment been received in time, this situation would not have occurred. Its lenders have approved a ‘Corrective Action Plan’ to provide the company long term working capital to rectify this fund mismatch. Its order book is stated to be at Rs.525 crore. The company is actively working to monetizing its non-core assets, such as surplus land in order to resolve this mismatch and reduce the company’s overall debt.

This is the same company which was earlier known as Premier Automobiles Ltd and used to make Fait and the Premier Padmini. Since then, all has changed in the sector and the company. The Engineering segment has two activities - CNC Machine Division and Engineering while the Automotive segment consists of LUVs – Roadstar and Sigma and assembly of SUVs – mainly RiO from its facility at Chinchwad, Pune. Promoters stake stands at 44.95% of which 28.46% is pledged. LIC holds 5.99% stake.