Key Highlights

The company manufactures vacuum products, evaporators, effluent treatment plants and entire air solution products in engineering segment. It's a niche market which is largely dependent on general capex and industrial production.

Power industry which accounted for around 70% of order book in the 2013 is now around 10-12%. The company is receiving orders from sectors like Agro industry, food processing industry, edible oil, pharma etc. Enquiries are high from speciality chemicals, FMCG etc.

The BS upgradation norms for refineries will give good orders to the company. But it will take time, initially the orders go to EIL and from there the vaccum plants and other solution orders come to the company.

Order pipeline is strong. Order book is around Rs 75 crore as on date which is highest in past 5 years. Normally company has around Rs 50-55 crore at this time every year.

Exports are doing well for the company. Predominately to USA market. The company has not hedged its positions and rupee is aiding better realisation.

Overall management is cautiously optimistic as compared to cautious outlook last year.

Scale benefits has yet to come as the execution has yet not reached that stage. Whatever margin benefits that the company expects in FY 19 will be due to better orders, higher exports.

Peak margin for engineering sector is around 25-27% and for food business is around 18-20%.

Of the total sales, engineering is around 85% while rest is from food business. Of the total exports of 30% of total sales, engineering is around 15% and rest is from food business.

No expansion for engineering segment despite the company having sufficient land and building. The company can achieve a turnover of around Rs 150 crore in engineering segment from the existing unit itself.

The company has introduced new products and removed some product categories in food business. Overall the response is very strong and so is the demand. Essence, food colours continue to dominate this segment while chutney, instant drinks are picking up well.

High raw material prices and some additional marketing expense led to some margin pressure in this segment. But forex is helping and the company will be able to get back to the margins.

The company is expanding in food business and has got good response from some of products from the market. The new capacity will give volumes and higher reach for the segment. Capex planned is around Rs 10 crore which will be operational by FY 20.

Company has around Rs 60 crore of funds parked in debt oriented mutual funds.