Triveni Engineering & Industries (TRIVENI) Q4 04/05 earnings summary

Executive summary

• FY2004-05 gross sales rose 60% to Rs.10.21bn; reported PAT reached Rs.995.2mn, up 460%, with higher sugar realizations driving nearly 80% of the PAT increase.

• Growth across sugar, turbines, gears and water treatment reflected the diversified business mix; sugar was the largest contributor to turnover and earnings.

Financial highlights

• Gross sales Rs.10,210.18mn vs Rs.6,379.17mn; net operating income Rs.9,607.76mn vs Rs.5,910.98mn.

• Operating profit rose 166% to Rs.1,717.61mn; operating profit/net turnover improved to 18% from 11%.

• PBT Rs.1,241.06mn vs Rs.255.18mn; PAT Rs.995.20mn vs Rs.177.58mn; EPS Rs.11.94 vs Rs.2.07 per Re.1 share.

• Deoband cogeneration contributed Rs.183.3mn turnover after starting operations in Dec. 2004.

Outlook and guidance

• Sugar outlook was viewed as stable through 2007; forecast closing stocks below 30% of consumption through Sep. 2007 supported expectations that prices would keep pace with inflation and cane costs.

• Turbine order book was Rs.2.97bn at Mar. 31, 2005; 2005-06 wattage delivery was projected above 400 MW vs 218 MW in 2004-05.

• Plans included Khatauli sugar capacity expansion to 16,000 tcd, three new 5,000–7,000 tcd sugar units, and a 23 MW Khatauli cogeneration plant.

• Turbine manufacturing capacity was planned to double by Mar. 2006; gear investment of Rs.250mn over 2004-05 to 2006-07 aimed to treble output.

• Water-treatment order book exceeded full-year 2004-05 billings within the first two months of the following year; new stores were also planned for 2005-06.