Usha Martin (517146) Q4 05/06 earnings summary

Executive summary

• Standalone net sales rose 3.8% to Rs 12,352 Mn; PBT increased 72.8% to Rs 1,007 Mn and PAT rose 58.9% to Rs 650 Mn.

• Consolidated net sales grew 16.2% to Rs 18,020 Mn; PBT increased 78.9% to Rs 1,265 Mn and PAT after minority interest rose 68.4% to Rs 843 Mn.

• Five-year ambitions included 1 million tonnes of speciality steel, global wire-rope leadership, Indian telecom-cable leadership and more than doubling consolidated revenue.

Financial highlights

• Standalone gross profit reached Rs 2,499 Mn, up 25.6%; gross margin expanded to 20.2% from 16.7%.

• Consolidated net sales and other income totaled Rs 18,127 Mn; profit after tax before minority interest was Rs 854 Mn.

• Standalone basic EPS was Rs 16.20 versus Rs 11.04; diluted EPS was Rs 16.06 versus Rs 11.04.

• Consolidated basic EPS rose to Rs 21.03 from Rs 13.53; diluted EPS was Rs 20.85 versus Rs 13.53.

• Proposed dividend was 55% of face value, or Rs 2.75 per share; total including dividend tax, surcharge and cess was Rs 139 Mn.

Outlook and guidance

• Planned five-year scale: 1 million tonnes of speciality steel, global wire-rope leadership, Indian telecom-cable leadership and consolidated revenue more than double.

• Captive iron-ore supplies were expected to cover full requirements in FY06-07; coal-mining activity was expected by the end of Q4 FY06-07.

• Brunton Shaw Americas was expected to begin production in FY06-07; planned steel projects included a second mini blast furnace, bar mill, 30 MW captive power plant and bloom caster.

• Planned product development included bearing and speciality steel grades, forging-quality steel and higher-value wire-rope products.