Vardhman Textiles (502986) Q4 96/97 earnings summary

Executive summary

• FY97 turnover rose 16.61% YoY to Rs. 58,197.80 lakh; net profit increased 84.95% to Rs. 3,744.92 lakh.

• Performance benefited from lower cotton and polyester prices, firmer relative yarn prices, Malerkotla spindle expansion, value-added products and improved current-asset management.

Financial highlights

• Turnover was Rs. 58,197.80 lakh vs. Rs. 49,905.07 lakh in FY96; other income was Rs. 618.51 lakh.

• Profit before tax was Rs. 4,399.92 lakh vs. Rs. 2,160.72 lakh; net profit was Rs. 3,744.92 lakh vs. Rs. 2,024.81 lakh.

• Profit before tax and depreciation was Rs. 6,882.24 lakh vs. Rs. 4,214.68 lakh; depreciation was Rs. 2,482.32 lakh.

• Operating cash flow was Rs. 5,465.97 lakh; investing activities used Rs. 5,648.76 lakh, and cash and equivalents fell to Rs. 1,447.04 lakh from Rs. 2,109.47 lakh.

Outlook and guidance

• FY98 prospects were described as reasonably good; cotton needs were covered for H1 and export growth remained a priority.

• Polyester spun-thread excise duty fell from 23% to 17.25%; improved sewing-thread margins were expected in FY98.

• Barbour Vardhman Threads domestic sales of Rs. 575 lakh in FY97 were expected to reach Rs. 1,500 lakh by FY2000, as the market developed.