Tube Investments of India (TIINDIA) Q4 01/02 earnings summary

Executive summary

• FY01-02 sales were Rs 1,074.47 cr; PBT rose 8.7% YoY to Rs 55.34 cr and PAT reached Rs 36.27 cr.

• Performance came amid 5.5% GDP growth, manufacturing growth slowing to 3.3% from 5.3%, and a decline in the bicycle market.

• Cost reduction, quality and productivity improvements, lower inventory and finance charges supported profitability.

Financial highlights

• Sales and processing charges fell to Rs 1,074.47 cr from Rs 1,090.02 cr; PBT increased to Rs 55.34 cr from Rs 50.91 cr.

• PAT was Rs 36.27 cr versus Rs 36.16 cr; basic and diluted EPS was Rs 14.73 versus Rs 14.69.

• Interest expense declined to Rs 15.39 cr from Rs 19.59 cr, while depreciation fell to Rs 27.81 cr from Rs 33.59 cr.

• Proposed dividend rose to 55% (Rs 5.50 per share) from 50%; dividend tax provision was Rs 1.26 cr.

Outlook and guidance

• Cycles priorities for 2002-03: expand local vendor sourcing while protecting quality, and focus on outsourcing, supply-chain management, distribution and brand management.

• Tubes, strips and metal forming priorities: develop products and markets, introduce automotive value-added products, reduce costs, and improve quality and productivity.

• The business model was set to move further from conventional manufacturing toward product development, branding and marketing, with outsourcing expected to increase in 2002-03.