Amara Raja Energy & Mobility (500008) Q4 02/03 earnings summary

Executive summary

• FY2002-03 brought higher sales, production and sales volumes, led by automotive batteries and exports, but lower industrial-battery realizations and expansion costs reduced profit.

• Automotive OEM wins, growth of the Amaron network and the Quanta UPS launch broadened the business mix amid telecom-sector volatility.

Financial highlights

• Sales were Rs. 1,987.35 million, up 6% YoY; profit before tax was Rs. 117.34 million versus Rs. 247.35 million, and profit after tax was Rs. 74.01 million versus Rs. 182.23 million.

• Net profit after tax included Rs. 14.77 million deferred-tax provision; other income included Rs. 14.25 million of Keyman insurance maturity proceeds.

• Proposed dividend was Rs. 1.50 per share (15%), absorbing Rs. 19.27 million including dividend tax.

• Production reached 735,754 batteries versus 604,949; sales volume was 709,957 versus 580,369.

Outlook and guidance

• Industrial-battery realizations were expected to recover gradually from a low base, though telecom-sector change and weak demand could persist in the short to medium term.

• Automotive volumes and exports were expected to support growth; full returns from automotive assets, brand and network investments were anticipated in the medium term.

• Cost-control measures were underway, with their effects expected from the latter part of FY2003-04; near-term profitability growth remained challenging.