Deepak Nitrite (DEEPAKNTR) Q4 05/06 earnings summary

Executive summary

• FY06 net sales rose 8% YoY to ₹347.29 crore; PBT increased 37% to ₹20.45 crore, supported by export growth and stronger organic intermediates performance.

• Export turnover grew 23% to ₹170.27 crore; EPS increased to ₹23.63 from ₹16.81, and a 40% dividend was recommended.

Financial highlights

• Net sales ₹347.29 crore vs ₹321.27 crore YoY; sales and other income ₹353.81 crore vs ₹327.50 crore.

• PBT ₹20.45 crore vs ₹14.87 crore; net profit after tax ₹14.14 crore vs ₹10.06 crore.

• Export turnover ₹170.27 crore vs ₹138.57 crore; domestic turnover ₹182.30 crore vs ₹187.05 crore.

• Recommended dividend ₹4 per share, or 40%, on 8,973,093 shares post-rights issue; dividend plus tax to absorb ₹4.09 crore.

Outlook and guidance

• Continued focus on knowledge-intensive, higher-value fine chemicals and intermediates, supported by R&D and pilot-plant expansion to improve lead conversion and response time.

• Plans to begin custom research and manufacture; relocation and capacity rationalisation intended to control costs and improve operating efficiency.

• Full relocation of Sahyadri facilities was expected by the end of Q1 FY07; ERP implementation was expected to go live in Q3 2006.