HBL Engineering (517271) Q4 98/99 earnings summary

Executive summary

• FY1998-99 revenue was Rs 65.68 crore and net profit Rs 9.58 crore; results exceeded initial projections, supported by new SMR production, in-house R&D and tax benefits for a backward-area facility.

• A proposed merger with HBL Limited and Pinaki Technologies Limited aimed to combine complementary battery, power-electronics and composite-material businesses, with shareholder and court approvals still required.

Financial highlights

• Revenue was Rs 65.68 crore versus Rs 31.49 crore in FY1997-98; the FY1998-99 figure includes excise duty and sales tax, with prior-year figures regrouped on the same basis.

• Operating profit was Rs 14.46 crore versus Rs 6.14 crore; profit before tax was Rs 11.62 crore versus Rs 4.70 crore.

• Net profit was Rs 9.58 crore versus Rs 3.25 crore; income-tax provision was Rs 2.00 crore, with an additional Rs 0.04 crore adjustment for earlier years.

• Export sales rose to Rs 5.83 crore from Rs 3.67 crore; domestic sales were Rs 59.43 crore versus Rs 27.67 crore.

Outlook and guidance

• FY1999-2000 was expected to be less rewarding than FY1998-99 due to price cuts, firmer raw-material costs, rupee depreciation and uncertainty over government spending; performance was still expected to exceed FY1996-98 levels.

• New high-margin products were in final development stages for commercialization in 2000-01; export growth and increased HBL defence sales were expected to support future earnings.

• Planned FY1999-2000 investment was Rs 10 crore for the battery and power-systems business, alongside HBL's planned Rs 30 crore investment in capacity, facilities, overseas sales, new products and R&D.