Havells India Limited (HAVELLS) Q4 05/06 earnings summary

Executive summary

• FY06 net sales reached Rs.100,368.73 lakh and net profit Rs.6,320.72 lakh; reported turnover rose 67.47% and profit more than doubled, with Crabtree merger results included, limiting comparability.

• Broader product range, new Haridwar capacity, export expansion and a central R&D facility supported growth and planned further investment.

Financial highlights

• Sales and operating income were Rs.111,513.64 lakh versus Rs.66,588.40 lakh; other income was Rs.354.87 lakh versus Rs.289.27 lakh.

• PBT was Rs.7,848.60 lakh versus Rs.4,322.70 lakh; net profit was Rs.6,320.72 lakh versus Rs.3,052.64 lakh.

• Proposed final dividend was Rs.2.50 per Rs.5 share, or 50%; total payout including dividend tax was Rs.769 lakh, equal to 12.17% of net profit.

• Operating cash flow was Rs.14,263.45 lakh versus an outflow of Rs.714.29 lakh; investing outflow was Rs.6,257.98 lakh and financing outflow Rs.7,994.61 lakh.

Outlook and guidance

• Export sales were targeted to grow almost 100% in FY07, supported by new overseas offices, tie-ups, joint ventures and expanded international sales capacity.

• FY07 capex of Rs.133 crore was planned for existing and new-product plants and acquisitions, following Rs.63 crore invested in FY06.

• Outlook was described as promising, with infrastructure, construction and housing activity expected to support demand for switchgear, cables, lighting and fans.

• The board expressed an intention, subject to profits and cash resources, to recommend dividends of at least 50% on the enlarged equity capital after the proposed bonus issue; this was explicitly not a forecast.