Solitaire Machine Tools manufactures ‘Centreless Grinder’
machines for use in the automobile, textile, steel, bearings and precision
engineering industries.
Management believes there is opportunity to increase sales
on the back of manufacturers looking to outsource auto ancillary products from
India.
The company reported stable operating profits on reasonably
stable revenues – reporting just under 3cr of operating profits on revenues of
about 14cr in the last twelve months. It
operated with no net debt as at 31st March, 2012.
The company sold 37 machines in FY 2011 as compared 24 in
the previous year – but this figure is likely to come under pressure in the
near future as the business is adversely impacted by a high interest-rate
environment (such as currently), which dampens customers’ capital investment
plans.
The company is also heavily influenced by government
policies- particularly in the areas of import/export and incentives for
investments, which can affect demand and competition for the company’s
products.
The business is exposed to increases in raw material pricing
and/or lack of its availability.
Management plans to boost revenue via exports to Europe may
have to take a back seat for the time being as a result of the demand slowdown
there.
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