Himadri Speciality Chemical (500184) Q4 05/06 earnings summary

Executive summary

• FY06 turnover rose 44.1% to Rs. 20,698.08 lakh and PAT rose 318.11% to Rs. 2,404.05 lakh, supported by expansion, higher realisations and cost efficiencies.

• Coal tar distillation capacity reached 169,000 MTPA, including 118,300 MTPA of coal tar pitch capacity; domestic pitch market share was about 70%.

• Growth plans centred on further capacity additions, higher-value by-products, international expansion and development of advanced carbon materials for lithium-ion batteries.

Financial highlights

• Gross turnover increased 44.10% to Rs. 20,698.08 lakh from Rs. 14,363.40 lakh; total income was Rs. 20,894.24 lakh.

• Operating profit was Rs. 4,090.93 lakh; PBT was Rs. 3,085.65 lakh and PAT was Rs. 2,404.05 lakh, versus Rs. 574.98 lakh in FY05.

• EPS rose to Rs. 9.42 from Rs. 2.25; the Board recommended a dividend of Re. 1 per Rs. 10 share, up from 50 paise.

• Sales volume of coal tar pitch and other products increased 42.15% to 99,746 tonnes; coal tar tape sales increased 569% to 757,877 sq. metres.

Outlook and guidance

• FY07 Indian coal tar pitch market share was expected to exceed 75%; Visakhapatnam and Korba units were targeted for commercial commissioning during the year.

• A new Visakhapatnam coal tar distillation plant was expected to begin commercial production by December 2006; another plant was planned at Korba.

• Management expected higher profits from capacity additions, a full year of by-product operations, improved product mix and realisations.

• Longer-term plans included increasing Indian capacity by more than 120% by 2010 and establishing a manufacturing base in China.

• A windmill was trial-commissioned in Maharashtra in May 2006; advanced carbon materials and downstream carbon products remained development priorities.