Wendt (India) (505412) Q4 05/06 earnings summary

Executive summary

• FY06 sales rose 10% to Rs 4,163 lacs; PBT fell 8% and PAT fell 7%, reflecting a lower-contribution product mix and customer price pressure from low-cost imports.

• Strategy broadened from super-abrasive manufacturing to products and services for sizing, forming and surface improvement; domestic customer additions and new products supported growth.

Financial highlights

• Sales increased to Rs 4,163 lacs from Rs 3,784 lacs; domestic sales rose 13% to Rs 2,801 lacs and exports rose 5% to Rs 1,362 lacs.

• PBT was Rs 1,079 lacs versus Rs 1,176 lacs; PAT was Rs 716 lacs versus Rs 773 lacs; EPS declined to Rs 35.78 from Rs 38.66.

• Consolidated revenue was Rs 4,231 lacs, PBT Rs 1,040 lacs and PAT Rs 674 lacs; first-year consolidation had no comparative figures.

Outlook and guidance

• Domestic market share growth targeted through value-added services and niche products; broader product/service positioning intended to open new markets.

• Thailand operations were expected to expand ASEAN reach; profiling services and trading began billing in April 2006, with manufacturing planned for a later phase.

• SAP ERP implementation with HCL Technologies was expected to be completed in FY07.