Solar Industries India (SOLARINDS) Q4 05/06 earnings summary

Executive summary

• Consolidated turnover rose 25.26% YoY to Rs 16,946.38 lakh; EBITDA increased 51.23% and PAT rose 47.82% to Rs 2,216.04 lakh. EPS was Rs 18.22.

• Larger Coal India Limited (CIL) orders, export growth and new bulk-explosives plants supported expansion; management cited possible short-term margin pressure from lowest-bid tender allocation.

Financial highlights

• Consolidated net sales were Rs 14,936.65 lakh, up from Rs 11,689.52 lakh; total revenue including other income was Rs 15,229.41 lakh.

• Consolidated profit before interest, depreciation and tax was Rs 3,670.64 lakh versus Rs 2,427.13 lakh; PAT was Rs 2,216.04 lakh versus Rs 1,499.15 lakh.

• Standalone turnover was Rs 10,025.52 lakh and PAT Rs 885.98 lakh; both rose YoY, by 19% and 23%, respectively.

Outlook and guidance

• CIL awarded 61,282.50 MT of bulk explosives and 10,265 MT of permitted explosives for FY06/07; combined orders were valued at Rs 148.31 crore.

• The CIL order represents ~25% of its bulk-explosives needs and 50% of permitted-explosives requirements; lower-bid allocation may pressure margins in the short term.

• Management planned an offshore production unit to serve export demand and was exploring mining-related activities and profitable synergies.