Welspun Living (WELSPUNLIV) Q4 04/05 earnings summary

Executive summary

• FY 2004-05 included the amalgamation of Glofame Cotspin effective April 1, 2004; reported full-year comparisons are therefore not directly comparable with FY 2003-04.

• Consolidated net sales were Rs.4,695.80 mn, PBT Rs.617.52 mn and reported PAT Rs.394.68 mn; the auditor noted AS-22 non-compliance affecting reported tax expense, PAT and EPS.

• Capacity expansion at Anjar added towel and spinning capacity and introduced bed linen production, positioning the business to pursue global home-textile growth after quota removal.

Financial highlights

• Consolidated net sales Rs.4,695.80 mn; export benefits Rs.239.95 mn; other income Rs.84.00 mn for FY 2004-05.

• Consolidated PBT Rs.617.52 mn and reported PAT Rs.394.68 mn; auditor-adjusted PAT would be Rs.194.26 mn after the required deferred-tax reversal.

• Reported consolidated basic and diluted EPS Rs.5.85; auditor-adjusted EPS would be Rs.2.47 after the AS-22 adjustment.

• Standalone sales excluding export benefits were Rs.4,531.10 mn and PBIDTA Rs.1,149.23 mn; comparisons with FY 2003-04 are affected by the merger.

Outlook and guidance

• FY 2005-06 outlook was positive, with new towel capacity ramping up and bed-sheet lines commissioned; full bed-linen production was scheduled by September 2005.

• Bed linen was expected to contribute to revenue and profits in FY 2005-06 and subsequent years; initial samples received positive customer feedback and order commitments.

• Priorities included deeper penetration in Europe, Japan, Australia, New Zealand and India, stronger brand exposure, premium products and closer customer relationships.