Titagarh Rail Systems (TITAGARH) Q4 07/08 earnings summary

Executive summary

• FY08 marked a strong expansion year: turnover rose 101% YoY, PBT 107%, and operating profit about 87%; all segments contributed, with wagons remaining the mainstay.

• Growth reflected higher production and sales, improved productivity, private-sector customer additions, and a larger order pipeline; IPO funding was earmarked for capacity and product expansion.

Financial highlights

• Net sales were Rs. 55,963.47 lakh vs Rs. 28,163.98 lakh; PBT was Rs. 9,255.73 lakh vs Rs. 4,480.27 lakh, and PAT was Rs. 6,056.53 lakh vs Rs. 2,918.69 lakh.

• Basic/diluted EPS was Rs. 40.46 vs Rs. 19.89; net interest income was Rs. 682.90 lakh, compared with net interest expense of Rs. 30.75 lakh in FY07.

• Recommended dividend was 50% on the expanded equity base, with proposed dividend of Rs. 922.11 lakh and dividend tax of Rs. 156.71 lakh.

• Operating cash flow was negative Rs. 1,730.01 lakh, while financing cash flow was Rs. 19,693.89 lakh, including IPO proceeds; closing cash and equivalents were Rs. 11,412.22 lakh.

Outlook and guidance

• FY09 outlook was described as bright, supported by expected infrastructure-led demand, capacity additions, a wider customer base, and wagon innovations including Wheels on Wagons and Cars on Rails.

• Uttarpara EMU facility was planned at Rs. 1,874 lakh, targeting two nine-coach rakes per month; wheelset assembly and axle machining facility was planned at Rs. 1,293 lakh.

• Modernization budgets were Rs. 1,008 lakh for Titagarh and Rs. 876 lakh for Uttarpara; a Kolkata corporate office and R&D centre was contemplated at Rs. 700 lakh.

• Steel foundry capacity was planned to expand from 5,000 MT to 12,000 MT through a 10-tonne furnace and automatic moulding plant.