Himadri Speciality Chemical (500184) Q4 07/08 earnings summary

Executive summary

• FY 2007-08 delivered higher revenue and profits, with operating efficiencies, improved yields and cost control lifting margins; expansion into advanced carbon materials broadened the product mix.

• Net profit rose 34.69% to Rs. 8,293.01 lacs on net sales growth of 11.43% to Rs. 36,325.69 lacs.

Financial highlights

• Gross turnover rose 10.06% to Rs. 43,001.33 lacs; total income was Rs. 43,546.83 lacs, including other income of Rs. 545.50 lacs.

• Operating profit increased 25.70% to Rs. 13,026.45 lacs; PBT rose 29.96% to Rs. 10,597.14 lacs and PAT grew 34.69% to Rs. 8,293.01 lacs.

• Cash profit increased 31.27% to Rs. 10,417.01 lacs; exports rose 463.88% to Rs. 4,568.25 lacs and made up 10.62% of sales.

• Total costs increased 5.94% to Rs. 25,879.90 lacs; raw-material cost rose to Rs. 22,050.84 lacs while power and fuel cost edged up to Rs. 1,055.95 lacs.

Outlook and guidance

• Management expected turnover and profits to rise in 2008-09 and beyond, supported by integration, cost leadership, in-house technology and production efficiencies.

• Advanced carbon capacity was to be scaled in 2008-09; the China coal-tar distillation plant was targeted for commissioning in 2009-10.

• The 50,000-MT carbon black plant and 12-MW waste-heat power plant were expected to start by the end of Q3 FY 2008-09; superplasticizer and other derivative projects were also planned.

• Longer-term plans included expanding distillation capacity, adding customer-adjacent pitch-melting facilities and pursuing a top-three global coal-tar-pitch producer position.