Coimbatore, 27 October 2014: The Board of Shanthi Gears Ltd.,(SGL) a subsidiary of the Chennai-based Tube Investments of India Ltd, (TII) of the Murugappa Group met today to discuss the unaudited financial results for the quarter ended 30th September, 2014. The turnover for the quarter was Rs 36.77 crores against 40.64 crores in the same quarter last year. The net profit for the quarter was 2.27 crores against 6.73 crores in the previous year. The profit for the half year ended 30th September was 4.12 crores against 10.09 crores in the previous year. Sales came down due to poor execution of orders as a result of long lead times in design and approvals by customers and consequently procurement of raw materials. This situation is being corrected through actions to clear the backlog. The profitability drop is due to Shanthi’s forays into new customers and segments and also re-enter past customers in order to build a reference base in the emerging segments. Further, tougher market conditions and competitive pressures also added to the challenge.
During the quarter, the Company built its order book by 54.6 crores (PY 33.7 Cr) under difficult market conditions. The increase in the orders booked during the quarter represents a growth of 62% over the previous year. The Company’s order book currently stands at Rs. 92 crores. The Company has made a strong comeback in the market place and is once again recognised as a key player in the gear industry. Most of the key user segments in the domestic market remained flat during the quarter just ended.
The Company continues to remain focused on expanding its customer base, enhancing the distribution and service network and on improving its speed of execution. The Company has been undertaking various cost management initiatives over the last few months together with a thrust on operating efficiencies.
About Murugappa Group
Founded in 1900, the INR 243 Billion Murugappa Group is one of India’s leading business conglomerates. The Group has 28 businesses including ten listed Companies traded in NSE & BSE. Headquartered in Chennai, the major Companies of the Group include Carborundum Universal Ltd., Cholamandalam Investment and Finance Company Ltd., Cholamandalam MS General Insurance Company Ltd., Coromandel International Ltd., Coromandel Engineering Company Ltd., E.I.D. Parry (India) Ltd., Parry Agro Industries Ltd., Sabero Organics Ltd., Shanthi Gears Ltd., Tube Investments of India Ltd., and Wendt (India) Ltd. MEDIA RELEASE | Shanthi Gears Ltd – Q2 FY 2014-15 Page 2
Market leaders in served segments including Abrasives, Auto Components, Transmission systems, Cycles, Sugar, Farm Inputs, Fertilisers, Plantations, Bio-products and Nutraceuticals, the Group has forged strong alliances with leading international companies like Groupe Chimique Tunisien, Foskor, Mitsui Sumitomo, Morgan Advanced Materials, Sociedad Química y Minera de Chile (SQM), Yanmar & Co. and and Compagnie Des Phosphat De Gafsa (CPG). The Group has a wide geographical presence all over India and spanning 6 continents.
Renowned brands like BSA, Hercules, Ballmaster, Ajax, Parry’s, Chola, Gromor, Shanthi Gears and Paramfos are from the Murugappa stable. The organization fosters an environment of professionalism and has a workforce of over 32,000 employees.