Mumbai: Tata Group firm Voltas Ltd plans to focus on enhancing efficiency of its processes and systems, besides consolidating its presence in existing divisions to retain market share, a senior company official said.
“We have not planned investments in expanding capacity. We will be investing in IT systems and in energising our processes,” Voltas Executive Vice-President, Finance & CFO, M M Miyajiwala, told PTI here.
The company’s strategy this fiscal will be to consolidate business of its three divisions - electro-mechanical projects and services, engineering products and services and unitary cooling products for comfort and commercial use, he said.
“Being a cash-surplus company, we have no plans for any fund-raising programme this fiscal,” he added.
The company, which has clocked a 140% vault in net profit in the first quarter ended 30 June at Rs52.16 crore on a turnover of Rs833.69 crore, is upbeat about its performance this fiscal.
The recent interest rate hikes have not affected the company so far, Miyajiwala said, adding “going forward, I don’t see them impacting our performance adversely as they seem to have peaked. I don’t think this is a factor that we need to be very worried about.”
All the three business divisions have fared well in Q1 FY08, he said, adding the enhanced focus given to improving efficiencies was beginning to pay dividends.
Voltas’ electro-mechanical projects and services division witnessed a healthy rise in margins at 9% from 5.5% in the corresponding quarter of the last fiscal.
This was because execution of a few international orders for large projects booked early last year began after a time-lag of some months with the result that margins did not flow in for 2-3 quarters. “Now they are flowing in and this has got reflected in our results,” Miyajiwala observed.
“Besides, we also changed some of the processes in this division and this too has contributed to enhanced margins.”The order-book of this division stands at Rs2,007 crore.
For the unitary products division, which produces cooling products for comfort and commercial use, the first quarter was always the peak season with about 45% of the annual turnover of the division earned during this period, he said.
“There is a dip in the second and third quarters due to the monsoon and winter seasons before there is a pick-up in the last quarter,” Miyajiwala said, adding that not only were margins up but also the division’s PBDIT has jumped from Rs3.5 crore to Rs22 crore.
This division’s revenue grew 29%, including a 46% volume growth in air-conditioners.
The engineering products and services division’s turnover has shot up to Rs115 crore in Q1 FY08 as against Rs80 crore in the year-ago period with healthy margins achieved here as well, Miyajiwala noted.