HBL Engineering (517271) Q4 97/98 earnings summary

Executive summary

• FY1997-98 turnover reached Rs. 2,667.75 lakh, with operating profit of Rs. 613.73 lakh and net profit of Rs. 324.90 lakh; the board recommended a 10% dividend.

• Strong growth was led by batteries and power electronics, especially switch mode rectifiers; plans included a new undertaking at Kothur and a proposed preferential warrant issue to fund expansion.

Financial highlights

• Sales and service income was Rs. 2,667.75 lakh vs Rs. 1,957.61 lakh in FY1996-97; total income including other income was Rs. 2,720.29 lakh vs Rs. 1,982.20 lakh.

• Operating profit was Rs. 613.73 lakh vs Rs. 294.07 lakh; operating profit as a share of turnover rose to 23% from 15%.

• Profit before tax was Rs. 469.75 lakh vs Rs. 123.13 lakh; net profit after tax was Rs. 324.90 lakh vs Rs. 60.95 lakh.

• Tax provision was Rs. 140 lakh, with an additional Rs. 4.84 lakh adjustment relating to earlier years; EPS was Rs. 5.05.

Outlook and guidance

• Directors expected further improvement in performance; markets for batteries and power electronics were considered promising in domestic and export markets.

• A new undertaking for switch mode rectifier production was established at Kothur in FY1998-99; rented premises were being used while the company planned to build its own facilities.

• Expansion required substantial immediate working capital; the Kothur site was described as eligible for sales tax, income tax and other incentives as a notified backward area.