Kirloskar Electric Co shareholders have overwhelmingly approved the proposed salary increase for Director (Finance) and Chief Financial Officer Sanjeev Kumar Shivappa, with the postal ballot receiving 99.97% votes in favor. The company announced the voting results on December 23, following the conclusion of the e-voting process.

Voting Results and Approval

The special resolution to revise Mr. Shivappa's remuneration from ₹65.00 lakh to ₹75.00 lakh annually received exceptional shareholder support. The voting details are as follows:

The scrutinizer's report, prepared by Chandra Sekhar Kandukoori, Practicing Company Secretary, confirmed the validity of the voting process conducted through Central Depository Services (India) Limited's e-voting platform.

Remuneration Progression

The approved salary increase represents a continued upward trajectory in the CFO's compensation, reflecting the company's performance-based approach to executive remuneration:

Voting Process Timeline

The postal ballot process was conducted in accordance with regulatory requirements, with key milestones completed as scheduled:

Regulatory Compliance

The company fulfilled all regulatory obligations under Section 108 and 110 of the Companies Act, 2013, and Regulation 44 of SEBI Listing Regulations. The process was overseen by independent scrutinizer K.C. Sekhar and Associates, ensuring transparency and compliance with corporate governance norms.

The overwhelming shareholder approval reflects confidence in the company's leadership and compensation strategy. The revised remuneration structure demonstrates the board's commitment to retaining key executive talent through competitive compensation packages.

Kirloskar Electric Co , a prominent player in the Indian electrical equipment sector, has reported a remarkable improvement in its financial performance for the second quarter, despite facing a decline in revenue. The company has also announced significant changes in its senior management structure.

Key Financial Highlights

EBITDA Performance

The most striking aspect of Kirloskar Electric's Q2 results is the substantial growth in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization). The company reported an EBITDA of ₹64.00 million, a significant increase from ₹0.60 million in the same quarter last year. This remarkable growth indicates a strong improvement in the company's operational efficiency and cost management strategies.

Profitability Improvement

The EBITDA margin saw a substantial enhancement, rising to 4.53% from 0.04% in the previous year. This 4.49 percentage point increase reflects the company's ability to generate higher profits from its operations, despite the challenging revenue environment.

Revenue Challenges

While Kirloskar Electric demonstrated impressive profitability gains, it faced headwinds in terms of revenue. The company's Q2 revenue declined to ₹1.40 billion from ₹1.62 billion in the corresponding period last year, representing a 13.58% decrease. This decline suggests potential challenges in market demand or competitive pressures in the electrical equipment sector.

Net Profit Growth

Despite the revenue contraction, Kirloskar Electric managed to increase its net profit to ₹63.00 million, up from ₹52.00 million in the same quarter of the previous year. This 21.15% growth in net profit, coupled with the significant EBITDA improvement, indicates effective cost control measures and possibly a more favorable product mix.

Management Reorganization

In a significant development, Kirloskar Electric has implemented changes in its senior management due to internal reorganization, effective immediately. The reorganization affects multiple senior positions including Vice Presidents across various divisions such as Human Resources, Information Technology, Legal & Secretarial, and different business units like HT Machines, LT Transformers, Cast Resin Transformers, Oil Filled Transformers, Switchgear, and Sales & Marketing divisions.

Financial Results Approval

The company's Board of Directors, led by Executive Chairman Vijay Ravindra Kirloskar, approved the unaudited standalone and consolidated financial results for the quarter and six months ended September 30, 2023, at their meeting on November 11, 2023. These results were subject to limited review by statutory auditors and approved by the Audit Committee.

Looking Ahead

The company's ability to substantially improve its EBITDA and net profit in the face of revenue challenges demonstrates resilience and effective management. However, the decline in revenue warrants attention and may require strategic initiatives to stimulate growth in the coming quarters.

Investors and market observers will likely keep a close watch on Kirloskar Electric's future performance, particularly its ability to maintain profitability improvements while addressing the revenue decline. The company's strategies for market expansion, product innovation, and cost optimization, along with the impact of the recent management reorganization, will be crucial in shaping its financial trajectory in the competitive electrical equipment market.