Salasar Techno Engineering Q2 Results: PAT Jumps 20% On Healthy Revenue

Salasar Techno Engineering Limited (STEL), which was founded in 2006, specialises in the engineering, designing, procurement, fabrication, galvanization, and strengthening of large and heavy steel structures. It also offers customised steel structures and EPC solutions to a variety of industries, such as telecom, railways, electricity transmission & distribution, and renewables. All of these services are provided under one roof. The company has released its quarterly financial results.

The company has reported a 20.50 per cent rise in consolidated net profit for the September quarter of 2023-24, totalling Rs 9 crore, as opposed to Rs 7.51 crore in the same time last year and PAT margins increased by 39 bps and 41 bps to 3.29% in Q2 FY23 and to 3.57% in H1 FY24, the company said in a regulatory statement on Tuesday.

From Rs 258.78 crore in the same period last year to Rs 275.66 crore this quarter, total income climbed. Expenses for the quarter were Rs 263.32 crore as opposed to Rs 248.17 crore in the year-ago quarter According to the company, its revenue from operations in Q2FY24 was Rs 275.35 Cr, up 6.42% YoY from Rs 258.73 Cr in Q2FY23."This robust growth was led by rise in domestic demand of our customised steel structures, EPC services, and efficient execution of order book," said Salasar Techno Engineering in a stock exchange filing.

The company said its EBITDA stood at Rs 24.91 Cr during the quarter under review up by 18.63% YoY from Rs 21 Cr posted in the year-ago quarter. Due to improved capacity utilisation and effective resource utilisation, EBITDA margins grew by 93 basis points from 8.12% in Q2 FY23 to 9.05% in Q2 FY24 and by 96 basis points from 8.07% in H1 FY23 to 9.03% in H1 FY24.

"In this quarter, we added a significant project in our order book reflecting our growing presence in the infrastructure and engineering sector. We secured a monumental EPC contract from Energy Development Corporation Limited valued at USD 9.40 Mn (Rs. 752.38 Mn). Our scope of work includes providing end-to-end EPC solution including designing, supplying, and installation of a 110kv transmission line in the African region of Rwinkwavu-Kirehe, Gabiro-Nyagatare, and Rulindo-Gicumb.

The 110kV transmission line project is a specialized endeavour that demands a deep understanding of power transmission, engineering, and project management. Winning this order is a testament to our engineering prowess and our ability to execute complex projects on a global scale. It not only opens up new avenues for growth but also enhances our reputation as a trusted partner in the international market. This project bolstered our order book to Rs. 14,400 Mn as at 30th September 2023," the management team of STEL said.

"Moreover, in line with our commitment to expand our manufacturing capabilities and to meet the growing demand of our products, we are thrilled to announce the commencement of operations of our new zinc galvanization plant in Uttar Pradesh. This state-of-the-art facility boasts of latest and most advanced galvanization technology having an impressive annual production capacity of 96,000 MT. The facility is geared to manufacture high quality galvanized products such as transmission line monopoles of up to 3 meter diameter in size, up from current capacity to produce 1.6 meter diameter monopoles.

These higher meter diameter poles will be used in high KVA transmission lines offering us better revenue prospects. Moreover, this expansion enables us to manufacture large sized structures in sectors such as infrastructure, construction, automotive, and more. This strategic investment not only enhances our production capacity but also positions us as a prominent player in providing high-quality galvanized products to meet the ever evolving needs of our customers," the management of STEL commented.

"As we look to the future, we anticipate that our strong performance will remain resilient, underpinned by robust demand and the exceptional performance exhibited in the nation. On the energy front, the Central Electricity Authority (CEA) initially projected a peak power demand of 230 GW for the 2023-24 period however, the actual demand surged to an unprecedented 240 GW, prompting an upward revision for the next year, now estimated at 256.6 GW. This surge in power demand will drive the need for infrastructure development, generating significant demand for our products and giving us good revenue visibility for us," the management further stated.

"In the telecommunications industry, we are currently witnessing a pivotal moment marked by significant potential, driven by the deployment of 5G technology and the government's increasing commitment to bolster the nationwide 4G infrastructure. In line with this, the two leading operators of India has already introduced 5G services in over 3,500 cities and towns, with comprehensive urban coverage expected to be achieved within this year. Remarkably, approximately 2,75,000 5G base transceiver stations (BTS) have been deployed by these operators across the country, exemplifying the nation's progress in the telecommunications sector. This robust growth and unwavering commitment exhibited by the telecom industry presents us with a significant opportunity to manufacture and supply the towers needed to meet the increasing demand," the management team of Salasar Techno Engineering said.

"Moreover, India is presently undergoing a notable upswing in the demand for steel, largely propelled by the construction sector and ongoing infrastructure initiatives. We expect this surge in steel demand to intensify with the commencement of new projects in upcoming years providing us good revenue visibility. Lastly, We remain focused on our core mission of delivering exceptional engineering and construction solutions to our customers while driving sustainable growth to our stakeholders. We will continue to invest in our network and technology, while also exploring new opportunities for growth and innovation. We would like to conclude by thanking our whole team who have stood tall with us in every situation," they further added.