HBL Engineering (517271) Q4 03/04 earnings summary

Executive summary

• FY04 gross sales Rs 192.38 crore and net sales Rs 169.02 crore; net sales fell 3.9% YoY amid delayed defence and major-customer orders, while exports rose to Rs 30.47 crore from Rs 18.37 crore.

• Profit before tax fell 15.74% YoY; higher material costs and price competition outweighed lower finance costs and export growth.

• FY05 outlook called for at least 50% net-sales growth to Rs 250 crore, supported by a good order book, stronger defence sales and expansion in industrial batteries and exports.

Financial highlights

• Net sales Rs 169.02 crore vs Rs 175.99 crore; other income Rs 2.09 crore vs Rs 1.64 crore; operating profit before interest and depreciation Rs 23.40 crore vs Rs 29.53 crore.

• PBT Rs 1,246.82 lakh vs Rs 1,381.92 lakh; net profit Rs 866.08 lakh vs Rs 1,029.42 lakh; EPS Rs 4.31 vs Rs 5.13.

• Extraordinary costs Rs 361.52 lakh, including VRS payments Rs 278.61 lakh, investment-sale loss Rs 80.79 lakh and investment write-off Rs 2.12 lakh.

• Finance cost fell to Rs 677.05 lakh from Rs 889.46 lakh; depreciation rose to Rs 495.66 lakh from Rs 425.27 lakh.

• Consolidated net sales were Rs 171.57 crore and consolidated profit after tax was Rs 798.61 lakh; consolidated prior-year comparisons include overseas subsidiaries.

Outlook and guidance

• FY05 net sales targeted at Rs 250 crore, at least 50% growth from Rs 169 crore; exports forecast to increase from Rs 30 crore to Rs 40 crore.

• Q1 FY05 turnover was Rs 47.64 crore vs Rs 31.14 crore and PBT Rs 2.45 crore vs Rs 0.81 crore; the annual report cited this as evidence of a sharp current-year improvement.

• Planned capital investment of Rs 25 crore to support growth; a Rs 12 crore State Bank of Indore corporate loan was availed in June 2004 to part-finance capex.