Escorts Kubota (ESCORTS) Q4 99/00 earnings summary

Executive summary

• FY ended Mar. 31, 2000 total income rose 19% to Rs. 1,570.01 crore; net profit increased 33% to Rs. 112.35 crore. Restructuring sharpened focus on agriculture, telecom, IT and healthcare.

• Strategy emphasized product technology, export growth, telecom and IT expansion, liquidity improvement, debt reduction and stronger focus on core businesses.

Financial highlights

• Total income was Rs. 1,570.01 crore versus Rs. 1,319.70 crore; profit before tax Rs. 142.35 crore versus Rs. 110.17 crore; PAT Rs. 112.35 crore versus Rs. 84.17 crore.

• EPS rose to Rs. 15.55 from Rs. 11.65; interest expense fell to Rs. 52.54 crore from Rs. 58.10 crore.

• Sales and business income reached Rs. 1,474.49 crore versus Rs. 1,236.30 crore; other income was Rs. 95.52 crore versus Rs. 83.40 crore.

• Total borrowings were Rs. 743.28 crore at Mar. 31, 2000, versus Rs. 651.07 crore a year earlier; shareholders’ funds rose to Rs. 983.28 crore from Rs. 929.71 crore.

Outlook and guidance

• Tractor industry sales were down over 20% in the first two months of FY2000-01; a good monsoon was expected to support a second-half recovery, with only moderate full-year growth anticipated.

• Long-term tractor industry growth projection was about 8% annually; exports were targeted to double during the current fiscal year, with export leadership sought by the next year.

• Planned investment of nearly Rs. 250 crore in core-business equity, predominantly cellular services and IT; Rs. 60 crore earmarked for tractor product development and R&D.

• Telecom plans included adding two to three operating circles, expanding subscribers toward two million and progressing toward full-service operations by 2003.