Pitti Engineering Limited

The promoters of PEL have been in the Stampings and Lamination (S&L) business for more than three decades. The company is headed by Mr. Sharad B Pitti, who is the Chairman and Managing Director, the business operations of the company have benefited from his long-established track record in the S&L segment and the vast industry network developed over the years. This has enabled the company to expand its size and scale of operation. The overall management and the day-to-day affairs are

The financial performance of the company improved with PEL registering a total operating income (TOI) of Rs. 537.69 crore in FY21 as against Rs. 527.49 crore in FY20 backed by healthy demand and receiving of Industrial incentives and benefits amounting to Rs. 16.54 crore in Q4FY21 under package scheme of incentives for company’s facility at Aurangabad. In line with TOI, PBILDT levels also increased by 23.73% to Rs. 99.17 crore and margin improved by 325 bps to 18.44% in FY21 as against

The capacity utilization of the company continues to remain at satisfactory level of around 60% during FY21 (59% in FY20) and 61% during Q1FY22. The company, also, has been taking steps to optimize the operations and improve the capacity utilization of its plants. The installed capacity was increased to 39,600 MTPA for total laminations capacity during FY21 as against 36,0 00 MTPA during FY20. The company was able to fetch higher sales realizations because of increase in prices, product mix back

The company has successfully expanded its presence and capabilities to service new value added businesses. The company has added dedicated manufacturing lines/units for new applications segments which include railway undercarriages, components for EV (Electric Vehicle) motors, drivetrain systems, gear cases, unique engineered product solutions for wind turbine applicatio ns, and medium and heavy fabricated machined components. PEL exports its products to 12 countries deriving a revenue of around

PEL is an established player for stamping and lamination segments in both domestic as well as overseas market and its clientele comprises renowned names in the industrial motor manufacturing industry such as Wabtec Corporation (WC), General Electric (GE), Siemens Limited, ABB India Limited among others from whom the company garners repeated orders. Revenue contribution form top five clients increased to 81% of the total net sales in FY21 as against 73% in FY20. However, the risk of

The capital structure of the company continues to remain leveraged owing to elevated debt levels. Capital structure as represented by overall gearing of the company deteriorated marginally to 1.45x as on March 31, 2021 as against 1.33x as on March 31, 2020 due to rise in the debt levels of the company. Nevertheless, the interest coverage ratio of the company represented by PBILDT/interest improved to 3.43x during FY21 as against 2.37x during FY20 due to increase in PBILDT levels

PEL’s nature of business and operations results in extended operating cycle of 136 days during FY21 as against 114 days during FY20. This is primarily because of elongated inventory days as the company had to maintain inventory levels based on the targeted sales for the subsequent quarter coupled with increase in raw material prices. Average inventory days also appears elongated at 121 days in FY21 (94 days in FY20) because higher steel prices during the period. Furthermore, it takes around 2 -

PEL had commenced the construction of manufacturing unit at the mega plant at Aurangabad in 2017. The mega plant at Aurangabad is proposed to be completed in two phases- Phase 1 and Phase 2. Phase 1 has been successfully completed with a total cost of Rs. 226.00 crore. PEL is eligible for receiving a re-imbursement in the form of subsidy from Government of Maharashtra for its Aurangabad plant for investment towards Phase 1 over a period of 7 years and has received Rs. 16.54 crore

The business operation of PEL involves significant exports (about 37% of the net sales in FY21) and some imports. This exposes the company to risk associated with volatility in foreign exchange rates which nevertheless is partially mitigated by the natural hedge on account of both import and export activities coupled with forward contracts which PEL enters to hedge its residual forex risk. The company incurred forex gain of Rs. 2.17 crore in FY21 as against a forex loss of Rs.2.64 crore in FY20.