Tata Elxsi (TATAELXSI) Q4 05/06 earnings summary

Executive summary

• FY06 total income rose 26% to Rs. 236.31 crore; profit after tax increased 31% to Rs. 34.33 crore.

• Growth was led by Software Development & Services, while Systems Integration & Support also expanded; investment in delivery capacity and R&D supported future growth.

Financial highlights

• Sales and services were Rs. 235.63 crore versus Rs. 185.77 crore; reported growth 27%.

• Profit before tax was Rs. 40.40 crore versus Rs. 31.73 crore; profit after tax was Rs. 34.33 crore versus Rs. 26.29 crore.

• Operating expenses rose 26% to Rs. 195.91 crore; personnel costs increased 29% to Rs. 119.74 crore, reflecting higher headcount, overseas deployment and salary revisions.

• Dividend recommended at 65% (Rs. 6.50 per share), up from 55% (Rs. 5.50); proposed dividend outgo Rs. 20.24 crore.

Outlook and guidance

• Recruitment and capacity expansion were expected to continue; Phase 3 of the Bangalore centre was planned to add 400 seats during the following year.

• Digital TV, portable entertainment, multimedia and wireless markets were expected to support demand; internally developed IP was expected to contribute future licensing and integration revenue.

• Video and broadcast solutions expansion through global alliances targeted opportunities from channel and studio growth and rising demand for content creation and delivery.