Godfrey Phillips India (500163) Q4 01/02 earnings summary

Executive summary

• FY 2001-02 net profit reached a record Rs. 47.80 crore, up from Rs. 46.56 crore; the board recommended a record dividend of Rs. 18.50 per share.

• Customer-focused product investment, cost actions and brand-building supported improved market share, while management expected reasonable volume and share growth in FY 2002-03, subject to unforeseen conditions.

Financial highlights

• Sales turnover fell 2.66% YoY; gross profit rose to Rs. 8,006.41 lakh from Rs. 7,995.12 lakh, while PBT was Rs. 7,183.84 lakh versus Rs. 7,236.98 lakh.

• Net profit was Rs. 4,779.55 lakh versus Rs. 4,655.98 lakh; EPS rose to Rs. 45.96 from Rs. 44.77.

• Gross profit margin improved to 31.7% from 27%; discontinuing Hyderabad contract manufacturing saved ~Rs. 1.4 crore.

Outlook and guidance

• Major cigarette brands showed an upward trend; management expected reasonable volume and market-share growth in FY 2002-03, while higher technology and brand investments could weigh on net profit.

• FY 2002-03 exports were projected at Rs. 45 crore, including Rs. 28 crore from tobacco exports.

• Tea strategy targeted business breakeven in FY 2002-03; Q1 sales were Rs. 7.2 crore versus Rs. 9 crore, but marginal contribution rose 19% to Rs. 198 lakh.