Bharat Electronics (500049) Q4 98/99 earnings summary

Executive summary

• FY99 sales were Rs. 11,991.6 million and production Rs. 12,169.9 million, marginally below FY98 despite US restrictions and passive sanctions from some European countries.

• Profit after tax was Rs. 536.3 million versus Rs. 534.0 million; direct exports reached Rs. 311 million, reported 24% above the prior year.

• Orders on hand were Rs. 17,630 million, with letters of intent for a further Rs. 1,630 million; the FY00 MoU turnover target is Rs. 14,500 million.

Financial highlights

• Sales and services fell to Rs. 11,991.6 million from Rs. 12,613.0 million; value of production was Rs. 12,169.9 million versus Rs. 12,555.8 million.

• PBT declined to Rs. 702.1 million from Rs. 1,023.4 million; PAT increased to Rs. 536.3 million from Rs. 534.0 million.

• PBT included an estimated Rs. 293.8 million provision for employee salary and wage arrears; lower tax expense helped sustain PAT.

• Direct exports were Rs. 311 million versus Rs. 250 million; deemed exports added Rs. 18.3 million.

Outlook and guidance

• FY00 MoU targets turnover of Rs. 14,500 million; management expected to exceed the target with the record executable order position, barring unforeseen circumstances.

• Telecom business was expected to grow with supplies of SDH MUX and point-to-multipoint equipment; orders for telecom products were increasing.

• New IT and Satcom products, including PC motherboards, VSAT terminals and a Ku-band satellite news-gathering hub, were areas of diversification for FY00.