Pitti Engineering (513519) Q4 04/05 earnings summary

Executive summary

• FY05 sales volume reached a record 6,521 MT, exceeding the 6,000 MT installed capacity at 109% utilization; turnover rose to Rs.5,516.25 lakh and PBT nearly doubled to Rs.757.28 lakh.

• Performance reflected higher operating levels, lower finance costs and improved working-capital management; supplies to GE (USA) began during the year.

Financial highlights

• Sales and services revenue was Rs.5,458.59 lakh vs Rs.4,531.96 lakh; total income was Rs.5,739.92 lakh vs Rs.4,519.23 lakh.

• PBT was Rs.757.28 lakh vs Rs.379.35 lakh; PAT was Rs.502.55 lakh vs Rs.403.18 lakh, with current tax provision of Rs.198.52 lakh.

• Finance charges fell to Rs.67.86 lakh from Rs.89.41 lakh; depreciation was Rs.78.01 lakh vs Rs.79.89 lakh.

• Cash profit after tax was Rs.582.62 lakh vs Rs.490.38 lakh; net worth at 31 March 2005 was Rs.1,101.58 lakh.

• Interim dividend of 10% was paid and a 5% final dividend recommended; total proposed FY05 dividend was 15%, with Rs.106.20 lakh payout including dividend tax.

Outlook and guidance

• FY06 sales target was 10,000 MT, with exports expected at 2,500 MT; management cited strong domestic and overseas demand and expected higher GE volumes.

• A second-phase expansion and modernization was planned to add 15,000 MT capacity, upgrade Plant I and expand tool-room facilities; completion was targeted for April 2006.

• The FY06 target represented envisaged growth of 64%, supported by a new plant with 4,000 MT annual capacity that began commercial operations on 13 April 2005.