NRB Bearings (NRBBEARING) Q4 96/97 earnings summary

Executive summary

• FY97 net sales rose 24% to Rs. 11,510.42 lakh; profit after tax reached Rs. 1,894.80 lakh, up from Rs. 1,206.79 lakh.

• Profit margins improved with higher sales volumes and a better product mix; a 45% aggregate dividend was recommended for the year.

Financial highlights

• Net sales were Rs. 11,510.42 lakh versus Rs. 9,290.04 lakh in FY96; the reported increase was 24%.

• Operating profit was Rs. 3,470.34 lakh; profit before tax was Rs. 2,979.80 lakh versus Rs. 1,961.79 lakh, and profit after tax was Rs. 1,894.80 lakh versus Rs. 1,206.79 lakh.

• Depreciation was Rs. 490.54 lakh versus Rs. 418.55 lakh; taxation provision was Rs. 1,085 lakh versus Rs. 755 lakh.

• Interim dividend of 20% was paid; a 25% final dividend was recommended, taking the FY dividend to 45%.

Outlook and guidance

• Management expected improved margins to be maintained, citing continued cost reduction and no indication of major increases in material input costs.

• Benefits from the substantially completed needle bearings expansion were expected during FY98; enhanced general bearings capacity was being finalized for anticipated demand.

• The industrial slowdown was expected to correct during H2 FY98 as liberalisation continued.

• The NRB-Torrington recovery plan for FY98 targeted an operating surplus, with additional exports and new domestic industrial products among the planned measures.