Vardhman Textiles (502986) Q4 98/99 earnings summary

Executive summary

• FY99 turnover rose 6.85% to Rs. 66,145.84 lakh, while net profit fell 7.96% to Rs. 4,970.80 lakh amid recession, weak demand and higher raw-material costs.

• Exports increased to Rs. 20,855.26 lakh; the board recommended a 40% equity dividend, or Rs. 4 per share.

Financial highlights

• Turnover was Rs. 66,145.84 lakh versus Rs. 61,904.17 lakh in FY98; profit before depreciation and tax was Rs. 8,894.26 lakh versus Rs. 8,904.18 lakh.

• Profit before tax was Rs. 5,920.80 lakh; net profit was Rs. 4,970.80 lakh versus Rs. 5,400.95 lakh, down 7.96% YoY.

• Depreciation rose to Rs. 2,973.46 lakh from Rs. 2,668.23 lakh; tax provision increased to Rs. 950 lakh from Rs. 835 lakh.

• Balance available for appropriation was Rs. 6,495.86 lakh, including prior-year balance, prior-year tax adjustment and Investment Allowance Reserve write-back.

Outlook and guidance

• FY00 was expected to improve overall through value addition and operating-cost controls, although textile weakness was expected to persist; cotton yarn prices were hoped to firm modestly.

• Full-year contribution was expected from the 25,000-spindle Mandideep expansion; steel prospects were expected to improve with industry capacity closures.

• Acrylic Fibre subsidiary losses were expected in FY00, with possible funding support; acrylic-market prospects were expected to improve in 2000-01 after seasonal price recovery.

• Hoshiarpur Gassed Mercerised Dyed Yarn capacity was planned to rise to 5 tonnes/day, with additional power-generation capacity also planned.