Tube Investments of India (TIINDIA) Q4 02/03 earnings summary

Executive summary

• FY02-03 gross sales including excise rose 12% to Rs 1,197.13 cr; profit after tax (PAT) increased 26.5% to Rs 45.89 cr despite steel cost inflation above 60% and a 13.4% contraction in cycle-industry demand.

• Consolidated PAT was Rs 47.22 cr and EPS Rs 20.03; prior-year consolidated figures are not directly comparable because of changes in consolidation scope.

Financial highlights

• Standalone PBT rose to Rs 62.45 cr from Rs 55.34 cr; net sales including processing charges increased to Rs 1,086.57 cr from Rs 988.29 cr.

• Standalone EPS was Rs 19.46 versus Rs 14.73; the Board recommended a 90% dividend, or Rs 9 per share, versus 55% in FY01-02.

• Average cost of funds fell to 6.8% from 9.7%; net working capital turnover improved to 6.2 times from 5.2 times.

Outlook and guidance

• FY03-04 outlook cited significant export growth, steel prices stabilising at a higher level, a better monsoon supporting cycle demand, lower interest costs from debt reduction, and growth in value-added products.

• Engineering exports were expected to accelerate; cycle exports were targeted to double in FY03-04, while the insurance venture aimed to benefit from Japanese and Korean business through Mitsui Sumitomo.