Ambika Cotton Mills (AMBIKCO) Q4 06/07 earnings summary

Executive summary

• FY07 total income rose 34.29% YoY to Rs 14,357 lakh; gross profit increased 21.33% to Rs 3,532 lakh, while PAT fell after deferred-tax provisions.

• Expansion of Unit III was completed; construction and phased commissioning of Unit IV were underway, with total installed spindle capacity projected to reach 1.10 lakh.

Financial highlights

• Net sales reached Rs 14,049.61 lakh, up 33.93% YoY; PBT was Rs 2,389.55 lakh versus Rs 2,058.69 lakh.

• PAT was Rs 1,733.03 lakh versus Rs 1,897.26 lakh; excluding deferred tax, net profit was Rs 2,272.44 lakh, up 19.78% YoY.

• EPS was Rs 29.50 versus Rs 33.06; proposed dividend was 25%, with Rs 146.88 lakh dividend outflow.

• Direct exports rose 45% to Rs 6,345 lakh and were 45.16% of net sales, versus 41.71% a year earlier.

Outlook and guidance

• Unit IV’s new plant was expected to become operational from June 2007, with capacity coming on stream in phases.

• On completion of Unit IV and planned additions, installed capacity was projected at 1.10 lakh spindles, including 0.83 lakh compact spindles.

• Management expected performance to improve as industry headwinds changed over time; demand for compact cotton yarn was described as good in domestic and international markets.