Patanjali Foods (PATANJALI) Q4 05/06 earnings summary

Executive summary

• Six group entities were amalgamated and the soya processing, vegetable oils, fats and food business of Anik Industries was acquired on a slump-sale basis, creating a larger food and edible-oil platform with 12 production facilities.

• FY06 results include the amalgamated businesses; prior-year figures are not directly comparable.

• Management cited operational synergies, resource optimization and stronger distribution as merger benefits, with plans to deepen branded retail and pursue biofuels and oilseed plantation.

Financial highlights

• FY06 sales, service charges and other income rose 91.85% to Rs 7,555.87 crore; total expenditure was Rs 7,322.11 crore.

• Operating PBDIT was Rs 233.76 crore, up 117.96%; PBT before exceptional items was Rs 125.01 crore, up 97.11%.

• Reported PAT increased 90% to Rs 82.82 crore; a Rs 5.37 crore exceptional charge reduced PBT to Rs 119.64 crore.

• Exports rose to Rs 919.53 crore from Rs 429.93 crore; FY06 sales of edible oils were Rs 4,855.56 crore and seed extractions Rs 1,666.82 crore.

Outlook and guidance

• Priorities include expanding branded, packed edible oils through retail and multi-channel distribution, strengthening rural participation and launching more economical health-focused products.

• Biofuel production, oilseed plantation, backward integration and related acquisitions were identified as growth opportunities; biofuels were viewed as a potential higher-margin use of refining capacity.

• Management expected gradual improvement in combined profitability, productivity and efficiency from consolidation, logistics and scale benefits.