M M Forgings (522241) Q4 96/97 earnings summary

Executive summary

• FY97 sales rose 47% YoY to Rs 4,974.17 lakh and profit after tax rose 23% to Rs 382.34 lakh; a 35% dividend was recommended.

• Export growth, higher production and the Tokai technology collaboration supported performance, while domestic demand weakened amid an economic slowdown.

Financial highlights

• Sales increased to Rs 4,974.17 lakh from Rs 3,387.60 lakh; profit before and after tax was Rs 382.34 lakh, versus Rs 311.28 lakh and Rs 311.28 lakh, respectively.

• Other income fell to Rs 1.73 lakh from Rs 14.79 lakh; FY96 included Rs 12.22 lakh profit on sale of an asset.

• Interest expense increased to Rs 372.56 lakh from Rs 266.48 lakh; depreciation was Rs 121.69 lakh versus Rs 107.37 lakh.

• Profit available for appropriation was Rs 383.59 lakh; Rs 266 lakh was transferred to general reserve and a Rs 105.62 lakh dividend was proposed.

Outlook and guidance

• Domestic recession and economic slowdown were expected to weigh on current-year sales; rising export-customer demand was expected to offset the shortfall and lift exports relative to domestic sales.

• Debottlenecking was expected to add 3,000 TPA from FY99, raising expected production capacity utilization to 13,000 TPA from a projected plateau of 10,000 TPA without the project.