EPL (500135) Q4 96/97 earnings summary

Executive summary

• FY1996-97 described as a year of progress, with stronger financial results and improved asset productivity despite new global entrants and intensifying competition.

• Strategy focused on defending Indian and subcontinent leadership while building overseas operations, developing new products and improving customer service and inventory management.

Financial highlights

• Sales and services were Rs 152.68 crore vs Rs 113.57 crore in FY1995-96; profit before tax was Rs 26.59 crore vs Rs 21.14 crore.

• Profit after tax was Rs 20.84 crore vs Rs 20.44 crore; gross income in the directors’ results was Rs 153.72 crore vs Rs 117.52 crore.

• Total dividend was 45% or Rs 4.50 per share, including the 15% interim dividend, vs Rs 3.20 per share in the prior year.

Outlook and guidance

• Management expected tougher market conditions as India opened further to global competition; it remained confident that recent operating initiatives would support continued growth.

• Seamless tube operations were expected to become profitable by FY1997-98; the cosmetic segment was growing over 35% annually from a small base.

• Management targeted ISO 9002 qualification for the Vasind plant by Q2 1997 and the other two locations by March 1998.

• Strategic growth priorities included new products and markets, overseas ventures and international sales; India’s toothpaste consumption was expected to at least double over five years.