Bajaj Electricals (500031) Q4 03/04 earnings summary

Executive summary

• Turnaround delivered in FY 2003-04: net sales rose to Rs.503.17 crore from Rs.433.41 crore, while profit after tax reached Rs.11.36 crore versus a prior-year loss of Rs.9.80 crore.

• Profitability recovery reflected higher volumes, new products, cost controls, working-capital improvements and financial restructuring; land development-rights sale contributed a one-time Rs.11.70 crore gain.

• Business units shifted to an SBU structure, with shared corporate services and a continued focus on profitable growth.

Financial highlights

• Net sales were Rs.503.17 crore, up over 16% YoY; sales and other income totaled Rs.521.93 crore, up 18.5% YoY.

• Reported PBT was Rs.16.72 crore versus a Rs.13.48 crore loss; excluding the Rs.11.70 crore land-rights gain, operating profit was Rs.6.13 crore versus a Rs.11.64 crore loss.

• PAT was Rs.11.36 crore versus a Rs.9.80 crore loss; after prior-period expenses and preference dividend, Rs.10.31 crore was available for appropriation.

• Basic and diluted EPS was Rs.17.17 versus negative Rs.24.94; proposed equity dividend was 10% (Re.1/share), alongside preference dividend of Rs.1.10 crore.

Outlook and guidance

• FY 2004-05 focus remains profitable growth; management expressed optimism on prospects following the FY 2003-04 turnaround.

• Ranjangaon was expected to turn profitable in FY 2004-05, supported by higher utilization, a strong order book and improved pricing.

• Growth priorities include affordable products, premium appliances and fans, CFLs, domestic fittings, luminaires and infrastructure-related towers and poles.

• Strategy emphasizes distribution and brand strength, new products, operating-margin improvement, working-capital reduction and global business alliances.