Vinati Organics (524200) Q4 04/05 earnings summary

Executive summary

• FY05 turnover rose to Rs5,637.12 lakh from Rs3,918.81 lakh; net profit increased to Rs319.42 lakh from Rs23.02 lakh, driven mainly by improved IBB realizations and ATBS market acceptance.

• ATBS production was accepted in export markets, with more than 90% of output exported; the product also generated Rs1,518.43 lakh turnover in Q1 FY06.

Financial highlights

• Sales and other income were Rs5,695.33 lakh vs Rs4,007.99 lakh; profit before interest, depreciation and taxes was Rs728.54 lakh vs Rs269.26 lakh.

• PBT rose to Rs468.70 lakh from Rs9.23 lakh; net profit was Rs319.42 lakh vs Rs23.02 lakh.

• Net sales after excise duty were Rs4,851.27 lakh vs Rs3,427.52 lakh; raw materials consumed increased to Rs3,437.46 lakh from Rs2,382.56 lakh.

• Recommended dividend was 10%, or Rs1 per equity share; total dividend outgo including tax was Rs75.06 lakh.

Outlook and guidance

• IBB volume grew ~20% in FY05; regular annual business growth of 5–6% was expected.

• ATBS had long-term supply contracts with several acrylic-fibre manufacturers; further contracts were under negotiation, with a new water-soluble-polymer application also approved.

• Modified SMAS plant was expected to restart by end-August 2005, improving capacity and quality while reducing operating costs.

• ATBS demand was picking up, with expectations of gaining market share and increasing profitability.