Godfrey Phillips India (500163) Q4 97/98 earnings summary

Executive summary

• FY97-98 gross turnover reached a record Rs1,014.60 crore, up 15.7%; profit after tax rose 47.7% to Rs38.85 crore; proposed dividend increased to Rs10/share from Rs7.

• Tobacco remained the main investment focus, with manufacturing upgrades, stronger distribution and brand investment; Tea City turnover grew 24%.

Financial highlights

• Gross revenue was Rs102,355.41 lakh, including excise duty of Rs55,996.07 lakh; sales were Rs101,460.22 lakh.

• Profit before tax was Rs5,934.92 lakh versus Rs4,500.10 lakh; profit after tax was Rs3,884.92 lakh versus Rs2,631.10 lakh.

• Export earnings were Rs31.79 crore, up 11% YoY; foreign-exchange earnings from exports and other income totaled Rs31.81 crore.

• Retained earnings were Rs2,741 lakh versus Rs1,475 lakh; proposed dividend was Rs10/share, with total dividend and tax outflow of Rs1,143.87 lakh.

Outlook and guidance

• Directors expected reasonably positive performance in the current year despite industry headwinds.

• Upgraded facilities, aggressive marketing and distribution were expected to support substantial improvements in turnover and profitability.

• Cigarette and tea divisions planned multiple new product launches; tea management expected continued growth and market-share gains despite packet-tea excise competition.