Raymond (RAYMOND) Q4 04/05 earnings summary

Executive summary

• FY05 gross turnover, net of returns and discounts, rose 6.1% to ₹1,140.28 crore; profit before tax, prior-period adjustments and exceptional items fell to ₹116.50 crore from ₹183.13 crore.

• Net profit after exceptional items, prior-year adjustments and tax was ₹83.15 crore, including a ₹25.29 crore VRS write-off; proposed equity dividend was 40%, down from 55%.

• Exports strengthened across textiles, denim and files; aggregate exports rose 30.1% to ₹299.50 crore, or 26.27% of turnover versus 21.41%.

Financial highlights

• Turnover net of returns and discounts reached ₹1,140.28 crore, up 6.1%; PBT before prior-period adjustments and exceptional items was ₹116.50 crore versus ₹183.13 crore.

• Standalone PAT was ₹76.82 crore versus ₹131.84 crore; reported EPS including exceptional items was ₹13.55 versus ₹21.55, while EPS excluding exceptional items, net of tax, was ₹16.19 versus ₹21.10.

• Consolidated revenue was ₹1,440.09 crore and PAT ₹88.19 crore; consolidated EPS including exceptional items was ₹14.82 versus ₹22.43.

• Standalone other income declined to ₹82.56 crore from ₹144.29 crore, mainly reflecting lower investment income as interest rates rose.

Outlook and guidance

• Post-quota opportunities were expected to support textile and apparel exports; strategy emphasized integration through garmenting, upgraded facilities, scale, product design and shorter delivery lead times.

• Textile capacity was being expanded by 3 million metres annually; denim capacity was raised from 20 million to 30 million metres, with plans to reach 40 million metres using the rope-dyeing plant.

• Denim exports were targeted to exceed 60% of volume; premium products in Korea and Japan and rope varieties for the US were identified as growth areas.

• Files & Tools expected continued margin pressure from steel costs, cheaper imports and possible DEPB reductions; cost reduction, product rationalization and productivity measures were underway.