Olectra Greentech (532439) Q4 06/07 earnings summary

Executive summary

• FY07 earnings declined sharply as lower telecom and BPO activity and reduced other income outweighed growth in polymer insulators; consolidated net profit was Rs 279.22 lakh versus Rs 648.04 lakh YoY.

• Strategy shifted toward polymer insulators, pipeline products and proposed real-estate and infrastructure activities, alongside reduced exposure to IT/ITES services.

Financial highlights

• Consolidated net sales after excise duty were Rs 2,831.51 lakh versus Rs 3,258.95 lakh YoY; total income was Rs 2,912.80 lakh versus Rs 4,003.63 lakh.

• Consolidated PBT fell to Rs 363.10 lakh from Rs 849.58 lakh; net profit after prior-period adjustments and minority interest was Rs 279.22 lakh versus Rs 648.04 lakh.

• Standalone net sales/income from operations were Rs 2,676.91 lakh versus Rs 2,958.60 lakh; standalone PAT was Rs 263.18 lakh versus Rs 659.79 lakh.

• Consolidated operating cash flow was Rs 1,612.22 lakh, compared with an outflow of Rs 878.09 lakh in FY06.

Outlook and guidance

• Polymer-insulator sales were expected to grow by more than 100% in FY08, supported by market acceptance of composite products over ceramic alternatives.

• Planned production of heat-shrinkable sleeves for oil and gas pipeline joints; telecom cable jointing kits were expected to remain near current levels and fall below 10% of revenue mix.

• Higher turnover and cost controls were expected to improve FY08 profitability; real-estate activities were also planned.