Vardhman Textiles (502986) Q4 00/01 earnings summary

Executive summary

• FY2000-01 turnover was Rs. 76,772.70 lac, down 0.69% YoY; PAT rose 2.19% to Rs. 5,864.45 lac.

• Profit before depreciation and tax was Rs. 10,311.38 lac, down 0.73%; EPS was Rs. 22.77 versus Rs. 22.30.

• Recessionary textile markets, lower yarn and fabric prices, and high cotton costs pressured margins; management expected pressure to persist in FY2001-02.

Financial highlights

• Revenue from sales was Rs. 76,772.70 lac versus Rs. 77,305.89 lac; other income rose to Rs. 1,301.09 lac from Rs. 770.42 lac.

• PBDIT was Rs. 14,846.00 lac versus Rs. 14,987.33 lac; interest and financial charges declined to Rs. 4,534.62 lac from Rs. 4,599.62 lac.

• PBT was Rs. 6,764.45 lac versus Rs. 6,988.65 lac; tax provision fell to Rs. 900 lac from Rs. 1,250 lac, supporting higher PAT.

• Recommended dividend was 42% of paid-up equity capital.

Outlook and guidance

• Yarn and fabric price declines were expected to continue in FY2001-02, keeping margins under pressure and adversely affecting financial results.

• No major expansion was planned for FY2001-02; long-term industry prospects were viewed as favorable if fiscal and non-fiscal reforms improved competitiveness.

• Acrylic-fibre margins were expected to remain pressured unless import tariffs and competition from Nepal imports were addressed.