Titagarh Rail Systems (TITAGARH) Q4 08/09 earnings summary

Executive summary

• FY08-09 gross sales rose to Rs. 75,760.77 lakh from Rs. 64,030.95 lakh; PAT increased 6.97% to Rs. 6,478.38 lakh despite global economic turbulence.

• Wagons remained the mainstay; growth initiatives included EMU production, capacity upgrades, strategic partnerships and expansion into adjacent rail products.

Financial highlights

• Net sales were Rs. 68,587.66 lakh and other income Rs. 1,904.63 lakh; PBT was Rs. 9,782.44 lakh versus Rs. 9,255.73 lakh in FY07-08.

• Raw materials and components consumed rose to Rs. 49,810.29 lakh from Rs. 42,608.74 lakh; manufacturing expenses increased to Rs. 5,922.19 lakh from Rs. 4,481.34 lakh.

• PAT was Rs. 6,478.38 lakh; EPS fell to Rs. 35.21 from Rs. 40.46 after the IPO increased paid-up shares to 18.44 million.

• Consolidated net profit after minority interest was Rs. 6,412.48 lakh and consolidated EPS was Rs. 34.86, versus Rs. 6,056.53 lakh and Rs. 40.46 in FY07-08.

• Standalone operating cash flow turned positive at Rs. 1,860.26 lakh from a Rs. 1,730.02 lakh outflow; investing cash outflow was Rs. 7,050.94 lakh.

Outlook and guidance

• Wagon outlook was encouraging, supported by expected buoyant Indian Railways procurement, higher freight capacity and dedicated freight corridor investment plans.

• EMU facility was commissioned and its prototype 3-car AC/EMU unit delivered in March 2009; five AC/EMU rakes were planned for H1 FY09-10.

• Foundry capacity was planned to rise from 5,000 MT to 12,000 MT through a 10-tonne furnace and new moulding equipment; technical upgrades were expected to complete in H2 FY09-10.

• Titagarh Unit upgrades, HEMM facility revamp and a Kolkata corporate/R&D centre estimated at Rs. 700 lakh were progressing, with benefits expected in FY09-10 for the facility upgrades.

• Demand for EMUs, DMUs, MEMUs and metro coaches was expected to benefit from urban transit projects; plans also included aluminium rail cars and diesel locomotives.