Ambika Cotton Mills (AMBIKCO) Q4 04/05 earnings summary

Executive summary

• FY ended 31 Mar 2005 total income fell 3.53% YoY to Rs 8,839.44 lakh, while gross profit rose 7.54% to Rs 1,877.52 lakh.

• Operations ran at full capacity; lower cotton prices reduced yarn selling prices, while a shift toward higher-count yarn and domestic high-end markets affected volumes and export mix.

Financial highlights

• Sales were Rs 8,610.61 lakh vs Rs 8,942.79 lakh; net sales declined 3.40% YoY.

• PBT rose to Rs 1,323.07 lakh from Rs 1,269.68 lakh; PAT was Rs 1,268.07 lakh vs Rs 1,231.18 lakh, up 3.01% YoY.

• Gross profit reached Rs 1,877.52 lakh vs Rs 1,745.93 lakh; manufacturing, administrative and other expenses declined to Rs 1,429.26 lakh from Rs 1,884.55 lakh.

• Proposed dividend was 20% on equity shares; transfer to general reserve remained Rs 1,100 lakh.

Outlook and guidance

• Additional facility for compact yarn, initially 14,112 spindles, was nearing commissioning; capacity is designed for 24,192 spindles, with a further 10,080-spindle installation planned afterward.

• Management expected sustained demand from the US following quota removal and saw opportunity from expanding weaving capacity and demand for high-quality yarn.

• Expansion and 4 MW wind-energy project estimated at Rs 71 crore; commissioning was expected shortly.