HBL Engineering (517271) Q4 05/06 earnings summary

Executive summary

• FY05-06 net sales rose 30% to Rs 36,798 lakh, driven by higher VRLA telecom battery volumes and Nicad exports.

• Sustained demand prompted capacity expansion, new factories and planned capital expenditure of Rs 260 crore for Apr 2006-Mar 2008.

Financial highlights

• Net sales were Rs 36,798 lakh vs Rs 28,380 lakh; operating profit before interest, depreciation and extraordinary items was Rs 5,847 lakh vs Rs 4,262 lakh.

• Net profit rose to Rs 2,625 lakh from Rs 1,845 lakh; profit before tax was Rs 3,854 lakh vs Rs 2,589 lakh.

• Finance cost increased to Rs 1,324 lakh from Rs 969 lakh; extraordinary losses/non-recurring costs were Rs 136 lakh.

• Dividend recommended at Rs 1.50 per share, or 15%; proposed payout including dividend tax was Rs 377.51 lakh, subject to approval.

Outlook and guidance

• FY06-07 sales were expected to reach Rs 500 crore, following FY05-06 actual sales of Rs 368 crore versus prior guidance of Rs 380-400 crore.

• Vizianagaram and VSEZ factories were expected to start production in Dec 2006; five further locations were planned for completion by Oct 2008.

• Capital expenditure of Rs 260 crore was planned for Apr 2006-Mar 2008; the national service network was targeted to reach 100 stations by Oct 2008.