Welspun Living (WELSPUNLIV) Q4 02/03 earnings summary

Executive summary

• FY03 sales and production expanded, with profit before extraordinary items rising to Rs. 2,711.14 lakh; cotton cost pressure and competition weighed on margins.

• Capacity expansion, direct US marketing and new customer relationships supported growth plans; no dividend was recommended as funds were earmarked for expansion.

Financial highlights

• Sales and services were Rs. 30,103.30 lakh vs Rs. 25,995.79 lakh; reported growth was 16%.

• Profit before extraordinary items was Rs. 2,711.14 lakh; extraordinary charges of Rs. 362.16 lakh brought PBT to Rs. 2,348.98 lakh and PAT to Rs. 1,877.41 lakh, vs Rs. 1,146.96 lakh a year earlier.

• EPS was Rs. 3.52 vs Rs. 1.83; no dividend was recommended.

• Operating cash flow was Rs. 4,602.45 lakh; investing cash use was Rs. 1,653.48 lakh and financing cash use was Rs. 2,782.34 lakh.

Outlook and guidance

• A Rs. 35 crore expansion adding 20 looms was underway; 11 looms had been installed and started production, targeting capacity growth from 7,800 to 10,800 MTPA.

• Welspun USA targeted USD 6 million turnover in FY04; direct marketing and customer relationships were central to its business improvement plans.

• A strong FY04 order book was reported; management expected the end of textile quotas in 2005 to expand sourcing opportunities for India.