Srikalahasthi Pipes

Formerly known as Lanco Industries, was bought by the Electrosteel group of Kolkata. The company has posted excellent numbers for Q3Fy15. Its net sales for the quarter rose 20% (YoY) at Rs.308 crore and it ended with a net profit of Rs.21 crore, up 2.3 times or 133%. Raw material as a percentage of sales fell from 90% to 86%. EBITDA for the quarter was up 48% at Rs.49 crore and margins rose from 12.84% to 15.91%. The company’s interest cost has come down 23% though tax outgo rose 10 times.

The good news here  - its 9MFY15 net profit of Rs.52 crore is almost double already of FY14 net profit of Rs.39 crore. Obviously, it will end current fiscal on a bumper note. The company has undertaken expansion program  of Rs.100 crore for creating balancing facilities and it is as per schedule, to go on stream by March 2015. This is expected to increase company’s ductile iron pipe production by 50000MT. The company is also working on reducing costs and the effect of this and increased capacity is expected to help the company post better numbers for FY16. The company, which produces ductile iron pipes mainly used for transporting water, is currently on the lookout to form a joint venture that would use the “surplus liquid metal” which is its manufacturing residue.