Esab India:

© Esab India, 55.56% subsidiary of Charter Plc, UK (hiked stake from 37.3% thru open offer at Rs 505/- share), is into welding consumables to equipments to automated solutions for engineering, automotive, shipbuilding, transport, energy, petrochemicals, construction, repair & maintenance, infrastructure, fabrication shops, etc., all of which have been growing at high rates.

© Technology backup from parent provides competitive edge and also be able to address growing area of oil & gas pipelines.

© Welding industry growth is directly linked to steel consumption and infrastructure, both of which are growing, auguring well for company.

© With increasing demand potential for its products on back of buoyant prospects of user industries, introduction of high value high margin products and strong backing of the parent company, Esab is on a firm growth path. Company expects to grow sales at CAGR of 20%+ for next 3 years with improvement in profitability.

© Pursuant to an open offer to the shareholders, promoters have increased its shareholding in company from 37.3% to 55.56%. As a result of this, there is now unrestricted technology transfer in a more transparent manner for launching new sophisticated products from basket of the parent.

© Newly introduced Flux Cored Wired plant at Irungattukottai has started commercial production during 2007. Equipment plant at Irungattukottai also had full year of operation in 2007. Besides, company is undertaking expansion of capacities at Nagpur and Khardah plants for Wires and Electrodes. It is planning to incur Capex of Rs 30 crore over CY 08 and CY 09.

During Q1 CY 2008, Net Sales grew @ 24% to Rs 100.65 crore [20.3% increase in Consumables business (71% of Net Sales) to Rs 71.45 crore. Equipment business (29% of Net Sales) grew @ 34% to Rs.29.2 crore]. Equipment plant at Irungattukottai, which had full year of operation, has also enabled increase in volumes and better profitability for equipment division. OPM% declined slightly to 23.9% due to increase in staff cost to 7.8% of Net Sales (6.9%). Raw Material cost as a % of Net Sales remained almost constant despite steep rise in steel prices as company was able to pass on steel price increase to its customers. Consequently, PBT rose by 25.2% to Rs 23.53 crore and PAT was up by 25.1% to Rs.15.41 crore.