Bosch Home Comfort India (523398) Q4 2006 earnings summary

Executive summary

• FY06 returned to stronger profitability, with operating profit before depreciation, interest and tax of Rs 230.26 million and net profit of Rs 148.55 million.

• Strategy broadened from air-conditioning solutions to home and life products, with refrigerators and washing machines launched in October 2005.

• FY07 priorities included higher-range residential and commercial ACs, profitable growth in exports, and development of the new appliance categories.

Financial highlights

• Income from operations was Rs 2,927.43 million for FY06 versus Rs 2,669.71 million in FY05; total income was Rs 2,646.87 million versus Rs 2,425.83 million.

• Operating profit before depreciation, interest and tax was Rs 230.26 million, up 84% YoY from Rs 125.16 million.

• Profit before tax was Rs 156.98 million versus Rs 56.94 million; net profit was Rs 148.56 million versus Rs 56.94 million.

• Exports were Rs 870.29 million; the export share fell to below 7% of volume from approximately 20%, a decline of more than 65% as management prioritized margins.

• No equity dividend was proposed, citing accumulated losses.

Outlook and guidance

• Residential and commercial AC markets were expected to grow more than 15–20%; focus remained on Split ACs, Ductables and Chiller Systems to support margins and reduce seasonality.

• Frost-free refrigerators and fully automatic washing machines were expected to grow more than 20%; initial customer response to the launches was positive.

• Management expected technical support from the parent-company merger to strengthen commercial AC capabilities, particularly in Ductables and Chillers.