VST Industries (509966) Q4 97/98 earnings summary

Executive summary

• FY98 sales were ₹645.27 crore and PAT ₹6.50 crore; PAT declined from ₹7.56 crore in FY97 amid excise and state-tax pressure and higher interest costs.

• Marketing actions arrested the market-share decline; CHARMS volumes grew over 10%, while tobacco and cigarette exports advanced.

• Modernisation and workforce changes lifted productivity 37% YoY; the hard-link project and high-speed wrappers were completed.

Financial highlights

• Sales ₹645.27 crore vs ₹567.79 crore in FY97; gross income ₹648.28 crore vs ₹576.81 crore.

• PBT ₹7.27 crore vs ₹8.83 crore; PAT ₹6.50 crore vs ₹7.56 crore.

• Customs and excise duties rose to ₹403.52 crore from ₹323.97 crore; net interest expense increased to ₹20.56 crore from ₹8.26 crore.

• Recommended dividend remained ₹1.00/share; EPS was ₹4.21 and dividend rate 10%.

Outlook and guidance

• Brand launches and line extensions, alongside cost-management initiatives, were identified as priorities for strengthening future revenue and cash flows.

• VST Natural Products planned to raise turnover through higher-contribution products, expanded overseas bottled-product supply, and greater use of dehydration and oleoresin capacity.

• Maharashtra’s state tax rose from 5% to 8% from April 1, 1998, with additional impact expected in FY99.

• Afforestation programmes aimed for self-sufficiency by 2000 through farmer fuelwood supply integration.