Rain Industries (RAIN) Q4 98/99 earnings summary

Executive summary

• FY99 turnover was Rs16,517 lakh and net profit after tax was Rs644 lakh; both were below FY98 levels of Rs19,406 lakh and Rs1,333 lakh, respectively.

• Production and sales remained above installed capacity, while strategic expansion plans included acquiring NCC Cement and adding ready-mix concrete plants.

Financial highlights

• Revenue was Rs16,517 lakh in FY99 versus Rs19,406 lakh in FY98; profit before tax was Rs1,004 lakh versus Rs2,223 lakh.

• Net profit after tax was Rs644 lakh versus Rs1,333 lakh; depreciation was Rs378 lakh versus Rs323 lakh, and interest and finance charges were Rs462 lakh versus Rs500 lakh.

• The proposed dividend was 10% for FY99; Rs100 lakh was transferred to general reserve, compared with Rs500 lakh in FY98.

Outlook and guidance

• Infrastructure and housing activity was expected to support cement demand; annual demand growth was forecast at ~9%, with improved profitability expected in FY00.

• The acquired cement unit’s capacity was planned to increase from 700 to 1,400 MT per day by June 1999, with Rs12 crore of capital outlay.

• Two ready-mix concrete plants near Hyderabad, costing Rs8 crore, were expected to start operations in September and November 1999.

• Y2K compliance work was targeted for completion by 30 September 1999 at an estimated cost of Rs25 lakh.