@Ysr
WPIL’s numbers were a mixed bag. The Operating margins took a major hit with raw material (Cost of goods sold) cost going up from about 40% in corresponding Q2 last year to 60% of Sales in current Q2. To put things in perspective, it was 45% in the preceding qtr (June Q1) & 43.6% for the whole year 2021-22. Perhaps, there may have been some one time cost incurred, though the Co. would have done well to explain this anomaly. To me this seems to be a one off.
Other than this, the numbers were very good, with Sales at 404 crs, growing at 40% over Q2 last year & 35% sequentially over Q1. Sales for the first half of the year at 703 crs has grown over 37% over the same period last year. For a Co. to reach the next level, it needs to grow its sales as there is only so much belt tightening that is possible with little or no growth in Sales. If the Co. can revert to earlier profitability margins, it could potentially lead to a huge increase in profits, but we need to first ensure that the fall in margins was more a one off.
The Projects division has done exceptionally well & now constitutes over 50% of Sales. This division is not impacted as much by raw materials prices & has grown well. The pain lies in the products (pumps) division.
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