Voltas' Q1 sales up by 33 per cent; operating profit up by 28 per cent; net profit up by 31 per cent
July 31, 2006

The board of directors of Voltas, a global air conditioning and engineering services provider of the Tata Group, has today announced the unaudited financial results, including the segment report, for the quarter ended June 30, 2006.

Highlights for the quarter ended June 30, 2006

• Sales/income from operations at Rs 599.29 crore, up by 33 per cent year-on-year
• Operating profit at Rs 32.80 crore, up by 28 per cent year-on-year
• Profit after tax at Rs 21.75 crore, up by 31 per cent year-on-year
• EPS at Rs 6.57
• Total order-book at Rs 2131 crore, up by 73 per cent
  

Quarter ended 30th June, 2006

The company’s sales/income from operations rose by 33 per cent to Rs 599.29 crore, as against Rs 450.54 crore in the same period last year. Profit after tax rose by 31 per cent to Rs 21.75 crore, as compared to Rs 16.55 crore in the same period last year, despite much higher tax charge of Rs11 crore (previous year – Rs 2 crore) as the company has moved from Minimum Alternate Tax to Normal Tax rate.

Operating profit (profit before tax and exceptional items) rose by 28 per cent to Rs 32.80 crore as against Rs 25.65 crore in the same period last year, despite a 40.63 per cent increase in staff cost. The company has done a comprehensive review of provisions for all employee benefits arising from which, a one-time provision of Rs 5 crore approximately has been made. This has also impacted the segment results.

Announcing the results, Mr M M Miyajiwala, executive vice president (finance) and the CFO of the company, said, "There has been growth in all businesses, driven by the strong economic uptrend in India, with increase in capital formation, rising disposable incomes of the middle class, and growing need for comfortable and clean air environments, as well as growth in construction activity both domestically and internationally. With a healthy and robust order book position, the company will be able to sustain the growth trend."

The company’s electro-mechanical projects and services segment's revenues grew by 15 per cent. The domestic air conditioning and refrigeration business, which has been the major contributor to revenues in this segment, has grown by 82 per cent. Since some large-value international projects are in their initial phase of execution, their revenues have not yet been realised, and results of the international business for the quarter have consequently been affected. The order book of this segment stands at Rs 1923 crore representing a growth of 74 per cent over the corresponding period in the previous year.

The engineering products and services segment registered a revenue growth of 89 per cent. Textile machinery business achieved 49 per cent growth in sales, while materials handling business achieved 99 per cent growth in sales. Mining and construction equipment business achieved 132 per cent growth in sales.

The Unitary cooling products for comfort and commercial use segment registered a revenue growth of 42 per cent growth including 37 per cent growth in the air conditioner business, while water coolers and dispensers grew by 44 per cent. This was largely the outcome of increased penetration into rural India, through a multi-pronged strategy encompassing promotion and retail expansion. Additionally, the ongoing restructuring and relocation of the manufacturing unit has resulted in increased margins in this segment.