Timken India (522113) Q4 2005 earnings summary

Executive summary

• FY05 marked faster growth through expanded product offerings, stronger sales and marketing, capacity additions, and improved capacity utilization despite rising steel and fuel costs.

• Net sales including other income rose 11% to Rs 309 crore; export sales rose 18% to Rs 130 crore, while PBT increased only slightly to Rs 53 crore.

• PAT reached Rs 34.88 crore and EPS Rs 5.47; net-level profit margin eased to 17% from 18%, partly due to one-time structural and preventive costs.

Financial highlights

• Net sales including other income were Rs 309.11 crore in FY05 versus Rs 277.76 crore in FY04; product sales net of excise duty were Rs 290.71 crore versus Rs 266.93 crore.

• EBIT was Rs 53.91 crore versus Rs 51.79 crore; PBT was Rs 52.95 crore versus Rs 50.89 crore, including Rs 0.10 crore of prior-period income in FY05.

• PAT was Rs 34.88 crore versus Rs 32.99 crore; EPS was Rs 5.47 versus Rs 5.18.

• Gross profit was Rs 62.57 crore versus Rs 60.07 crore; FY05 included one-time costs for staff, repairs, process obsolescence and write-offs, described as unlikely to recur.

Outlook and guidance

• FY06 demand was expected to rise with economic growth, small-car manufacturing, the two-wheeler segment, infrastructure investment, and growth in core sectors such as steel and power.

• Growth priorities included customer focus, new products and services, aggressive marketing, faster delivery, cost reduction and quality improvement.

• The regional strategic target was consolidated Asian sales turnover of US$1 billion by 2008; export demand indications for 2006 were described as encouraging.