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Indal: Record performance

Apr 24, 2001

Indian Aluminium Company Ltd. (Indal), part of the Aditya Birla Group, has reported its best performance in 62 years of operations in terms of sales, profits and exports. The increased sales are mainly due to better realisations, higher capacity utilisation and improved product mix.

(Rs m) FY00 FY01 Change
Sales 10,497 12,834 22.3%
Other Income 65 43 -34.9%
Expenditure 8,531 10,217 19.8%
Operating Profit (EBDIT) 1,966 2,617 33.1%
Operating Profit Margin (%) 18.7% 20.4%
Interest 373 365 -2.2%
Depreciation 565 630 11.5%
Profit before Tax 1,093 1,665 52.2%
Extraordinary items (113) (140) 23.5%
Tax 141 365 158.9%
Profit after Tax/(Loss) 839 1,160 38.2%
Net profit margin (%) 8.0% 9.0%
No. of Shares (eoy) 71 71
Earnings per share 47.2 65.3
P/E Ratio 5.7

The growth in sales and bottomline was mainly driven by downstream higher value added products. The aluminium sheets, extrusions and speciality alumina recorded impressive growth for the fiscal ended March '01. A significant part of the growth was led by export volumes. Exports for FY01 increased by 46%.

The operating profits of the company have increased significantly. This could be driven by higher sales and improved margins. The OPM has risen by 170 basis points. Realisations for the company were better as aluminium prices continued to rule firm for most part of the previous fiscal.

The company has implemented an enterprise resource planning (ERP) package, which could have helped improve operating efficiencies. Consequently, working capital requirements have been reduced. The working capital to sales has declined from 29% to 25%. With dependence on short term funds for meeting working capital requirements reducing the interest burden for the company has dropped marginally.

Extraordinary items is towards payment under the VRS, writing off long-term investments in Annapurna Foils Ltd. and Orissa Extrusions Ltd. The company has also accounted for irrecoverable receivables from Orissa Extrusions Ltd. The effective tax of the company has increased significantly from 13% to 22%.

At Rs 93.5 the company trades on a multiple valuation of 5.7x FY01 earnings.

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