Alok Industries (ALOKINDS) Q4 05/06 earnings summary

Executive summary

• FY 2005-06 sales rose 16.02% to Rs. 1,420.70 crore, exports increased 28.71% to Rs. 394.55 crore, and PAT grew 22.36% to Rs. 109.21 crore.

• Growth reflected value-added products, backward integration and efficiency gains; all divisions grew, led by Home Textiles.

Financial highlights

• EBITDA increased 23.09% to Rs. 301.26 crore; EBITDA margin improved to 21.21% from 19.99%.

• PBT rose 24.69% to Rs. 154.00 crore; PAT margin improved to 7.69% from 7.29%.

• Local sales grew 11.78% to Rs. 1,026.15 crore; export sales, including incentives, rose 28.71% to Rs. 394.55 crore.

• Operating cash flow was Rs. 287.56 crore; Rs. 1,092.91 crore was invested in fixed assets, while cash and equivalents ended at Rs. 531.78 crore.

Outlook and guidance

• Phase III expansion of Rs. 1,100 crore was scheduled for completion by March 2008; management expected benefits from completed expansion projects to accrue over the next two years.

• Planned capacity additions include 15,000 tpa ring spinning, apparel weaving to 82.5 million metres p.a., home-textile processing to 82.5 million metres p.a. and garments to 15 million pieces p.a.

• Management expected lower raw-material costs when spinning and POY operations begin; a 50 MW captive power plant was planned to reduce reliance on external power.

• Domestic clothing, apparel-fabric and home-textile market growth was forecast to accelerate from ~8% to 10–12%.