Rajratan Global Wire (517522) Q4 05/06 earnings summary

Executive summary

• FY06 sales rose 10.04% to ₹114.17 crore; profit after tax increased 31% to ₹5.96 crore, supported by improved sales and cost savings.

• Tyre bead wire capacity expanded from 25,000 MT to 30,000 MT; management continued to prioritize growth in bead wire and exports.

Financial highlights

• Sales ₹114.17 crore vs ₹103.74 crore; gross profit before depreciation and tax ₹10.98 crore vs ₹8.90 crore.

• Profit before tax ₹8.70 crore vs ₹7.20 crore; profit after tax ₹5.96 crore vs ₹4.56 crore.

• Raw material consumption to sales fell to 64%, attributed to more value-added products and lower wastage.

Outlook and guidance

• Management expected growth opportunities from automobile and tyre demand, exports, and road infrastructure development; no numerical earnings guidance was stated.

• Capacity and technical capabilities, including possible overseas facilities, were identified as important to serving global tyre makers across multiple locations.

• A decision on the PC wire business was deferred to FY07; slowing it could reduce revenue but was expected to benefit the bottom line through sharper focus on bead wire.