SRF (SRF) Q4 04/05 earnings summary

Executive summary

• FY05 net sales rose 28.66% to Rs. 1,055.24 crore; PBDIT increased 11.41% to Rs. 161.89 crore and PAT rose 44.32% to Rs. 60.05 crore.

• Higher raw-material costs and losses in new businesses pressured margins, while capacity additions and productivity initiatives supported plans for faster growth.

• Four Industrial Synthetics manufacturing units won the Deming Application Prize, the first tyre-cord producer outside Japan to receive the award.

Financial highlights

• Gross sales increased 23.88% to Rs. 1,158.54 crore; net sales grew 28.66% to Rs. 1,055.24 crore, and total income rose 29.11% to Rs. 1,077.94 crore.

• PBDIT was Rs. 161.89 crore vs. Rs. 145.31 crore; PBT rose 16.29% to Rs. 84.31 crore and PAT increased 44.32% to Rs. 60.05 crore.

• EPS increased to Rs. 9.31 from Rs. 6.45; proposed dividend was 25%, or Rs. 2.50 per equity share.

• Operating cash flow was Rs. 75.55 crore; investing outflow was Rs. 305.30 crore, mainly reflecting fixed-asset purchases of Rs. 314.46 crore.

Outlook and guidance

• Management expected expanded capacities and further productivity and efficiency gains to drive revenue and profit growth over the next few years.

• Planned FY06–FY07 investments included 13,300 TPA of fibre, 6,000 TPA of dipping, 7,000 TPA of fabric and a new 14,600 TPA Nylon-6 fibre plant.

• HFC-32 capacity was expected to be ready for commercial production by Q4 FY06, with process flexibility for HFC-134a.

• Belting-fabric exports were identified as a growth driver; packaging films strategy prioritized cost efficiency, value-added products and stronger customer engagement.