Ambika Cotton Mills (AMBIKCO) Q4 97/98 earnings summary

Executive summary

• FY98 total income was Rs 37.31 crore and profit after tax Rs 3.42 crore; higher cotton and input costs, weak yarn demand and currency volatility reduced earnings versus expectations.

• Exports rose to 52.74% of turnover from 6.61% in FY97, while a separate 12,096-spindle unit was planned at an estimated cost of Rs 15 crore.

Financial highlights

• Sales and other income Rs 37.31 crore vs Rs 37.91 crore in FY97; gross profit Rs 4.75 crore vs Rs 5.87 crore.

• Profit before tax Rs 3.62 crore vs Rs 4.98 crore; profit after tax Rs 3.42 crore vs Rs 4.38 crore.

• Actual PBT Rs 3.62 crore and PAT Rs 3.42 crore, compared with offer-document projections of Rs 7.46 crore and Rs 6.31 crore, respectively.

• Proposed dividend was 18% on equity shares; Rs 90 lakh dividend and Rs 9 lakh dividend tax were provided.

Outlook and guidance

• Expansion plan: add 12,096 spindles in a nearby separate unit, with estimated project cost of Rs 15 crore.

• Planned project funding: Rs 2 crore redeemable preference shares, Rs 8 crore secured NCDs through IDBI Bank and Rs 5 crore from internal accruals.

• Shareholder approval was sought to raise authorised capital to Rs 7 crore and increase the overall borrowing limit to Rs 50 crore from Rs 20 crore.