Bajaj Electricals (500031) Q4 01/02 earnings summary

Executive summary

• Revenue from sales and other income rose 6% YoY to Rs. 417.14 crore; profit after tax was Rs. 23.98 lakh, after a Rs. 325 lakh non-compete fee and provisions.

• Sluggish demand, import competition and escalating input costs pressured margins; organizational restructuring shifted operations to five autonomous business units focused on profitable growth.

Financial highlights

• Sales were Rs. 402.75 crore vs. Rs. 386.43 crore; other income plus extraordinary items was Rs. 17.65 crore vs. Rs. 7.31 crore.

• Profit before depreciation and interest was Rs. 25.21 crore vs. Rs. 21.42 crore; net interest rose to Rs. 18.88 crore from Rs. 14.54 crore.

• Reported profit before tax and provisions was Rs. 48.51 lakh, including the Rs. 325 lakh non-compete fee; profit after tax was Rs. 23.98 lakh vs. Rs. 254.72 lakh.

• No equity dividend was recommended; Rs. 110 lakh interim dividend on 11% cumulative preference shares was paid and recommended as final.

• Operating cash flow was Rs. 2881.12 lakh vs. an outflow of Rs. 540.60 lakh in the prior year.

Outlook and guidance

• Ranjangaon plant was expected to operate at 80% capacity in FY02-03, supported by a strong opening order book; management expected the unit to break even within two years.

• Management expected an economic recovery in H1 FY02-03 and higher infrastructure spending to support consumer products, Luminaires, and Engineering & Projects.

• New products, wider distribution and brand-building initiatives were expected to support profitable growth; management anticipated gains from the restructuring over coming years.