Pitti Engineering (513519) Q4 05/06 earnings summary

Executive summary

• FY06 sales reached a record 10,035 MT, up 54% YoY; capacity utilization exceeded 100% for the second consecutive year.

• Net worth rose to Rs.3,007.65 lacs at 31 March 2006 from Rs.1,101.58 lacs a year earlier.

Financial highlights

• Sales and services were Rs.9,497.53 lacs vs Rs.5,458.59 lacs in FY05; reported income including other income was Rs.9,508.73 lacs vs Rs.5,516.25 lacs.

• Profit before tax was Rs.1,071.85 lacs, up 41.54% YoY; net profit was Rs.689.46 lacs vs Rs.502.55 lacs.

• Cash profit after tax was Rs.807.50 lacs vs Rs.574.21 lacs; net cash from operating activities was negative Rs.504.07 lacs.

• Interim dividend of 10% was paid; a final dividend of 10% was proposed on 82.5 lakh shares, with total outlay of Rs.94.01 lacs including dividend tax.

Outlook and guidance

• FY07 sales target: 15,000 MT, including exports of 4,500 MT; management cited strong domestic and overseas demand.

• Expansion-cum-modernisation commissioning shifted from April to 30 June 2006 due to machinery arrival and related civil-work delays; some machinery was already in use.

• Forward integration into stator-body fabrication and machining, alongside core dropping, was expected to add value and improve margins; estimated project cost was Rs.30 crores.

• Post-expansion installed capacity was expected to reach 25,000 MT per annum.