Walchand Inds

This 109 years old company has been in the limelight ever since the defence sector was opened up as the main focus of this heavy engineering company is defence. And companies which depend on orders from government, surely face a lot of ups and downs, depending on the vagaries of the Govt orders. In FY14, the company had set itself a target of Rs.1000 crore turnover by FY17. That is surely not happening, at least in this current fiscal.

The company has had a dismal Q3FY17 with reverse turnaround, which in simple parlance means it has posted a loss vis-à-vis the profit in previous Q3. Net loss for the quarter was at Rs.17 crore v/s profit of Rs.4 crore (YoY). It had a loss of Rs.14 crore in Q2. A 22% (YOY) drop in total income at Rs.100 crore and a huge interest outgo – 20% of income earned and up 25% sequentially is what did it in. Though the company managed to bring down costs by 11%, it did not help much – EBITDA was down 68% at Rs.9 crore.

The company, supplying components for nuclear submarine, missiles and other defence equipment is on the radar of many punters for the past couple of months.  The company has created a niche for itself, having ventured into making components of nuclear ships, especially nuclear gearboxes with 24,000-horse power. The company has partnered with Nuclear Power Corporation and DRDO to make nuclear shields and nuclear rings. Business through nuclear power comprises 12-14% of the company.

The hope in the company is that in the coming months it could see many orders coming its way. But for this optimism, given the consistent losses, it does not hold much steed. Equity capital is small at Rs.7.61 crore and promoters stake is at 55%.