Tube Investments of India (TIINDIA) Q4 04/05 earnings summary

Executive summary

• FY05 revenue rose 24% to Rs.1,563.39 cr and PAT reached Rs.98.55 cr; growth reflected stronger Engineering performance and TIDC’s amalgamation.

• The portfolio shift toward Engineering and Metal Formed Products supported growth despite falling bicycle demand; these businesses generated about 70% of revenue and 86% of operating PBIT.

• Value-added products, customer service, productivity initiatives and exports were central to the strategy; new products contributed 30% of revenue.

Financial highlights

• Revenue including excise duty rose 24% YoY to Rs.1,563.39 cr; net sales after excise were Rs.1,450.55 cr.

• PBT was Rs.126.18 cr, up 57% excluding the prior-year Rs.24.76 cr non-recurring item; reported prior-year PBT was Rs.105.30 cr.

• PAT increased to Rs.98.55 cr from Rs.82.49 cr; EPS was Rs.26.67 versus Rs.22.32.

• Operating profit before tax rose 57% YoY; profit before depreciation, interest and tax was Rs.180.05 cr versus Rs.122.63 cr.

Outlook and guidance

• Engineering outlook was robust on domestic and global demand; priorities include consistent quality, delivery commitments and new product development.

• Strategic ambition is to derive at least 25% of turnover from exports to brand-enhancing customers and explore acquisitions of facilities abroad.

• Tube-making capacity expansion was underway to serve rising domestic and export demand; the EOU plant’s capacity increased by over 50% to 14,400 tonnes.

• Cycles initiatives target volume and profitability through cost reduction, quality improvement, new models, spares and health products.