Pakka (516030) Q4 2004 earnings summary

Executive summary

• FY2004 revenue rose 8.1% to Rs 2,584.31 lacs and post-tax profit increased 81.3% to Rs 158.62 lacs, despite slightly lower sales volumes.

• Strategy centered on specialized, application-specific kraft grades made primarily from agricultural residues; the business reported a 50% share in low-grammage unbleached kraft paper.

Financial highlights

• Net sales were Rs 2,584.31 lacs versus Rs 2,390.38 lacs; operating profit rose to Rs 451.19 lacs from Rs 308.57 lacs.

• Pre-tax profit increased 121.8% to Rs 266.18 lacs; post-tax profit rose 81.3% to Rs 158.62 lacs, the highest in eight years.

• Gross turnover increased 7.05% to Rs 2,868.91 lacs; production was 14,762 MT and sales were 14,548 MT, down from 14,795 MT and 14,878 MT.

• Average realization increased 10.58% to Rs 17.76/kg from Rs 16.06/kg; exports were 1,735 MT, or 11.93% of sales tonnage.

• Operating margin reached 17.5% from 13%; net margin was 6.2% versus 3.2%, while EBITDA margin rose to 18.6% from 14.6%.

Outlook and guidance

• Proposed Rs 8,500 lacs expansion would add MG poster paper capacity of 23,100 TPA and raise total capacity from 16,000 MT to about 39,000 MT.

• FY2005 plans included launching application-based products; medium-term goals included niche leadership, stronger export positioning and improved realizations.

• Industry growth of 6–7% annually was expected; kraft demand was forecast to grow at 8% CAGR through 2008-09.