Titagarh Rail Systems (TITAGARH) Q4 09/10 earnings summary

Executive summary

• FY10 standalone PAT edged up to Rs 6,537.05 lakh from Rs 6,478.38 lakh despite lower turnover; results include Titagarh Steels and Titagarh Biotec after their merger, limiting year-on-year comparability.

• Wagons remained the main revenue and operating-income contributor; Indian Railways deliveries, new EMU production and expansion into overseas markets supported the growth agenda.

Financial highlights

• Standalone net sales were Rs 55,422.32 lakh vs Rs 68,587.66 lakh; PBT was Rs 9,883.72 lakh vs Rs 9,782.44 lakh, and PAT was Rs 6,537.05 lakh vs Rs 6,478.38 lakh.

• Standalone EPS was Rs 34.75 vs Rs 35.21; consolidated net profit after minority interest was Rs 6,018.24 lakh vs Rs 6,412.48 lakh, with consolidated EPS of Rs 32.00 vs Rs 34.86.

• Standalone interest expense rose to Rs 715.55 lakh from Rs 550.10 lakh; depreciation and amortisation was Rs 443.58 lakh vs Rs 286.65 lakh.

• Standalone net cash from operating activities was Rs 5,800.36 lakh; cash and bank balances were Rs 10,604.92 lakh at March 31, 2010.

Outlook and guidance

• Indian Railways wagon demand was expected to remain firm, while delays in releasing orders and the absence of an improved Wagon Investment Scheme remained concerns for private-sector demand.

• The 2010-11 Railway Budget planned acquisition of 18,000 wagons and higher metro-project spending; dedicated freight corridors and PPP projects were expected to support future demand.

• EMU capacity was initially targeted at two nine-coach rakes per month; planned metro and passenger-rail investment was expected to support EMU, DMU, MEMU and metro-coach demand.

• Foundry capacity upgrades, cost optimisation and product diversification were intended to support future performance; no quantified earnings guidance was stated.