Welspun Living (WELSPUNLIV) Q4 96/97 earnings summary

Executive summary

• FY1996-97 sales and services rose to Rs. 15,029.35 lakh from Rs. 14,536.60 lakh, while profit after tax fell to Rs. 731.53 lakh from Rs. 1,237.22 lakh, amid higher finance costs and a shift in product focus.

• Operations were refocused on cotton yarn and terry towels after the polyester yarn division was leased from 1 October 1996; exports exceeded Rs. 110 crore.

Financial highlights

• Profit before tax was Rs. 763.53 lakh versus Rs. 1,237.22 lakh; profit after tax was Rs. 731.53 lakh versus Rs. 1,237.22 lakh.

• Finance expenses increased to Rs. 1,980.50 lakh from Rs. 802.94 lakh; depreciation rose to Rs. 1,002.14 lakh from Rs. 695.60 lakh.

• Gross profit before depreciation and finance expenses was Rs. 3,746.17 lakh versus Rs. 2,735.77 lakh.

• Net cash from operating activities was Rs. 7,354.05 lakh; cash used in investing was Rs. 10,288.04 lakh, and cash and equivalents closed at Rs. 364.11 lakh versus Rs. 778.49 lakh.

Outlook and guidance

• Expansion completion was targeted for the current year; planned installed capacity would reach 6,000 MTPA for terry towels, 34,080 spindles and 2,592 rotors.

• Management expected expansion, export partnerships, Export Trading House recognition and ISO 9002 certification to support future performance, particularly exports.

• The revised expansion project cost was Rs. 235 crore; institutional and bank term loans were tied up, with capital-raising arrangements being finalised.