TVS Holdings (520056) Q4 97/98 earnings summary

Executive summary

• Sales and other income were Rs 139.37 crore and profit after tax was Rs 9.76 crore for the 10 months ended 31 March 1998; the period is not comparable with the prior 12-month year.

• Weaker commercial-vehicle demand weighed on brake and automotive-ancillary activity; cost control, productivity and value engineering were priorities.

Financial highlights

• Sales were Rs 130.00 crore versus Rs 210.66 crore; profit before tax was Rs 12.64 crore versus Rs 33.17 crore, comparing 10 months with the prior 12 months.

• PAT was Rs 9.76 crore versus Rs 19.47 crore; tax provision was Rs 2.88 crore versus Rs 13.70 crore for the respective periods.

• Net interest was Rs 0.35 crore versus Rs 2.22 crore; depreciation was Rs 4.10 crore versus Rs 5.87 crore.

• Operating cash flow was Rs 16.31 crore; investing cash outflow was Rs 11.09 crore and financing cash outflow Rs 6.79 crore, reducing cash by Rs 1.57 crore to Rs 2.05 crore.

• A 20% dividend was recommended for the 10-month period, absorbing Rs 3.79 crore.

Outlook and guidance

• Commercial-vehicle stagnation was expected to continue in FY98/99; recovery in heavy and medium vehicles could lag an economic upturn by at least nine months.

• Cost control through value engineering, productivity improvements and cellular manufacturing was ongoing.

• Foundry production at Belagondapalli, Hosur, with 1,100-tonne annual capacity was expected to begin in August 1998.