Veljan Denison Limited , a leading manufacturer of hydraulic products, has announced robust financial results for the first quarter ended June 30, along with several key corporate updates.

Financial Performance

The company reported a significant increase in both revenue and profit for Q1:

Compared to the same quarter last year, Veljan Denison's standalone revenue from operations grew by 14.4% from Rs. 3,366.65 lakhs to Rs. 3,853.05 lakhs. The consolidated revenue saw a 15.5% increase from Rs. 3,690.07 lakhs to Rs. 4,262.22 lakhs.

The company's profitability also showed substantial improvement. Standalone profit after tax surged by 42% from Rs. 500.71 lakhs to Rs. 710.96 lakhs, while consolidated profit after tax rose by 44.2% from Rs. 508.73 lakhs to Rs. 733.37 lakhs.

Corporate Updates

The Board of Directors, in their meeting held on August 2, made several key decisions:

1. Annual General Meeting: The 51st Annual General Meeting (AGM) is scheduled for August 29, at 3:00 PM at the company's registered office in Hyderabad.

2. Dividend Record Date: The record date for dividend eligibility is set as August 22. The share transfer books will remain closed from August 23 to August 29.

3. Cost Auditor Re-appointment: M/s. SRK & Co., Cost Accountants, have been re-appointed as the Cost Auditor for the financial year, subject to ratification by the members.

4. Director Re-appointment: The board recommended the re-appointment of Mrs. Umadevi Uppaluri as a director, who retires by rotation and is eligible for re-appointment.

5. Related Party Transactions: The board approved material related party transactions with Veljan Hydrair Limited, Suxus Systems Limited, and ECMAT Limited, subject to shareholder approval at the upcoming AGM.

6. E-voting: The company has appointed M/s. Chakravarthy & Associates, Practicing Company Secretary, as the scrutinizer for evaluating the voting process for the 51st AGM.

Veljan Denison's strong financial performance and proactive corporate governance measures indicate the company's commitment to growth and transparency. Shareholders and potential investors will be keenly watching the upcoming AGM for further insights into the company's future strategies and dividend announcements.

Veljan Denison Limited (VDL), a leading manufacturer of precision hydraulic components and systems, has received a credit rating upgrade from CARE Ratings Limited for its bank facilities totaling Rs 43.00 crore. The rating agency has assigned a CARE BBB+ rating with a stable outlook for the company's long-term facilities worth Rs 30.00 crore and a CARE A2 rating for its short-term facilities of Rs 10.00 crore.

Strong Financial Performance

The ratings reaffirmation is based on VDL's improved financial performance. The company reported a total operating income of Rs 156.00 crore, marking a robust 13% growth compared to the previous year. VDL's profitability remained healthy, with a PBILDT (Profit Before Interest, Lease rentals, Depreciation and Taxation) margin of 23.70%.

Comfortable Capital Structure

VDL's financial position is characterized by a comfortable capital structure, with a low gearing ratio of 0.05x as of March 31. This indicates the company's prudent approach to debt management and its strong equity base.

Key Strengths and Challenges

CARE Ratings highlighted several strengths that contributed to VDL's positive rating:

1. Experienced management with a long track record of operations
2. Diverse customer base and established relationships
3. Comfortable capital structure and healthy debt coverage indicators
4. Stable industry outlook

However, the rating agency also noted some challenges:

1. Moderate scale of operations despite improvement
2. Highly competitive industry dynamics
3. Susceptibility to raw material price volatility
4. Working capital intensive operations with a 233-day operating cycle

Liquidity and Financial Indicators

VDL demonstrated strong liquidity with a current ratio of 4.82x and an impressive interest coverage ratio of 57.83x. The company's gross cash accruals stood at Rs 30.89 crore, with no repayment obligations and free liquid investments of Rs 37.02 crore as of March 31.

Industry Outlook

The Indian hydraulic equipment market, valued at US$ 1.40 billion in 2024, is expected to reach US$ 1.90 billion by 2033, growing at a CAGR of 3.64% from 2025 to 2033. Government initiatives such as the Pradhan Mantri Gati Shakti program and Smart Cities Mission are driving demand for hydraulic equipment in construction, agriculture, and material handling sectors.

Conclusion

CARE Ratings' stable outlook for Veljan Denison Limited reflects expectations of sustained financial performance, supported by stable demand in the hydraulic equipment sector and the management's extensive experience. As VDL continues to navigate challenges such as raw material price volatility and working capital intensity, its strong market position and financial prudence are likely to support its growth trajectory in the coming years.