Gabriel India (505714) Q4 96/97 earnings summary

Executive summary

• FY97 sales rose 31% to Rs. 207.50 crore and profit after tax rose 18% to Rs. 13.94 crore; profit before tax was Rs. 16.03 crore.

• Domestic sales were Rs. 193.04 crore and export sales Rs. 14.46 crore, versus Rs. 148.57 crore and Rs. 9.32 crore, respectively, in FY96.

• Production expansion, new vehicle programs, export growth and the Stallion Shox acquisition broadened capacity and market reach, while higher interest costs weighed on profitability.

Financial highlights

• Sales were Rs. 207.50 crore versus Rs. 157.89 crore; profit before interest and depreciation was Rs. 35.70 crore versus Rs. 25.43 crore.

• Profit before tax was Rs. 16.03 crore versus Rs. 14.38 crore; profit after tax was Rs. 13.94 crore versus Rs. 11.83 crore.

• Proposed dividend was 50% on enhanced capital, or Rs. 2.78 crore, versus Rs. 2.23 crore in FY96.

• Net interest in the financial highlights rose to Rs. 14.92 crore from Rs. 7.21 crore; depreciation increased to Rs. 4.75 crore from Rs. 3.84 crore.

Outlook and guidance

• Hosur production was expected to begin by September 1997; Stallion Shox expected commercial production by September 1997, following its restart preparations.

• Pune supplies for the Ford Escort CE 14 were expected from June 1997; the Pune plant targets OE demand for new-generation vehicles and exports.

• The Chakan R&D and Product Validation Centre was expected to be fully operational by March 1998.

• Future development priorities include shock absorbers, McPherson struts, cartridges and bearings for domestic and export markets, including new car manufacturers’ current and future models.