Tube Investments of India (TIINDIA) Q4 05/06 earnings summary

Executive summary

• FY05/06 operating profit rose 20% YoY despite difficult bicycle-market conditions; engineering and metal-formed products advanced, while cycles weakened.

• Net sales and processing charges were Rs.1,460.94 Cr versus Rs.1,449.74 Cr; reported PBT rose to Rs.245.63 Cr, including Rs.110.50 Cr profit on asset and investment sales.

Financial highlights

• PAT was Rs.182.93 Cr versus Rs.98.55 Cr; EPS Rs.49.50 versus Rs.26.67.

• Reported PBT increased to Rs.245.63 Cr from Rs.126.18 Cr; profit on sale of long-term investments, land and buildings was Rs.110.50 Cr versus Rs.6.45 Cr.

• Cash from operations increased to Rs.200.53 Cr from Rs.135.09 Cr; net operating cash flow was Rs.146.35 Cr versus Rs.97.36 Cr.

Outlook and guidance

• Ambitious FY06/07 investment plans target continued growth; engineering capacity additions delayed by statutory approvals are expected to start delivering results from FY06/07.

• Export mix target is 25% of sales, up from 11%; priorities include ASEAN and European tube markets and review of the US distribution strategy.

• A greenfield precision-tube plant in Suzhou, China, is planned through a wholly owned subsidiary at an estimated US$6.5 million cost.

• A 1.2 million-tonne steel plant proposal in Orissa remained under evaluation.