SKF India (500472) Q4 96/97 earnings summary

Executive summary

• FY1996-97 turnover rose 7% to Rs. 412 crore; profit increased 18% despite slower automotive-sector growth in H2. Proposed dividend rose to 40% from 35%.

• Production restructuring, higher raw-material indigenisation and financial-cost controls supported profit growth; productivity agreements improved output at Pune and Bangalore.

Financial highlights

• Net sales were Rs. 399.53 crore versus Rs. 372.26 crore; gross sales were Rs. 479.77 crore versus Rs. 444.94 crore.

• Operating profit was Rs. 81.84 crore; PBT Rs. 58.65 crore versus Rs. 48.25 crore; PAT Rs. 29.15 crore versus Rs. 23.25 crore.

• Net profit, including prior-year tax provision excess, was Rs. 29.28 crore versus Rs. 24.49 crore; EPS was Rs. 115.91 and proposed dividend 40%.

Outlook and guidance

• Management expected quality upgrades and aggressive pricing to retain and gain market share in the current year.

• Export growth was a priority over the next few years, supported by production rationalisation across Asia-Pacific operations to achieve scale economies.

• The 1997 budget’s corporate tax-rate reduction was expected to benefit the high-tax-paying business in the coming year.