Triveni Engineering and Industries today reported 67% dip in net profit to Rs 23.92 crore for the quarter ended December 31 against Rs 72.94 crore in the year-ago period due to squeezed margins in sugar business.
Net sales, however, rose to Rs 591.74 crore during the first quarter of this fiscal from Rs 487.24 crore a year-ago.
The company, which also makes steam turbine and gears among others follows October-September period as accounting year in line with the sugar season, its mainstay.
"Sales in both the sugar and engineering businesses have gone up during the quarter. But, our net profit has declined as the realisation from sugar was higher in the first quarter of last fiscal," Triveni's Executive Director Nikhil Swanhey said.
The average realisation during the first quarter of the current fiscal has dropped to Rs 28 per kg from Rs 31 per kg in the corresponding period of the last year, he added.
"All the three engineering businesses continue to show consistent growth both in terms of turnover and profitability. Strong outstanding order book in all these businesses gives us confidence in terms of their future growth," Swahney said.
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On the outlook of sugar business, he said the estimated balanced demand-supply scenario during the current year might bring about much-needed stable pricing in the coming quarters.
India is estimated to produce 24.5-25 million tonnes of sugar during the current year against the annual demand of 23 million tonnes.
"The recoveries are fortunately higher than last year and it will result in lower cost of production. In view of the increased volume of crush, increase in sugar production and a stable pricing situation for the allied products such as power and alcohol, the overall business sentiment on sugar seems to be positive," he added.
Swanhey said the company expects to produce 520-540,000 tonnes sugar in the current year recording over 25% increase in cane crushing.
Regarding the demerger of the turbine business, he said the legal process for the demerger was currently in progress and the court's sanction might come in the second quarter of the year.
"This will enable initiation of proceedings to list the company in which this business will be vested with," he added.