PRAKASH INDUSTRIES = FIRST QUARTER =Q1 FY 2011 RESULTS = VERY GOOD = FUTURE LOOKS BRIGHT

Prakash Industries Limited

NSE Symbol PRAKASH

Q1 FY 2011 PERFORMANCE REVIEW

Prakash Industries has performed well in the first quarter.

Net Sales is at Rs.464.48 Cr is equal to previous quarter of Q4 FY10 (Rs.464.34 Cr) – but is up by 27.3% from corresponding qtr of Q1 FY10 (Rs.364.79Cr) – and proportionately (Q1 FY11 x 4) up by 18.6% from FY2010 (Rs.1566.91Cr).

Raw Materials consumption has increased more than proportionately  by 7.8% to Rs.279.92 Cr from previous qtr (Rs.259.72) – and by 29% compared to corresponding qtr (Rs.   216.92 Cr)  - and proportionately by 25.1% from FY 2010 (Rs.895.10 Cr).

Profit from operations        is therefore Rs.75.35 Cr – down by 7.3% from previous qtr (Rs.81.27Cr) – but up by 13.8% compared to corresponding qtr (Rs.66.19 Cr)  - and up proportionately by 1.3% from FY2010 (Rs.297.62 Cr).

Tax expense is Rs.3.84 cr – up by a huge 168.5% from previous qtr (Rs.1.43 Cr) – and also proportionately up by 116 % from previous year.

Net Profit  is Rs.69.69 Cr – down by 5.5% from previous qtr (Rs.73.74 cr) – but up by a reasonable 18.9%  from corresponding qtr (Rs.58.59Cr) – and up by 4.7% proportionately from FY2010 (Rs.266.16 Cr).

Basic EPS in the Q1 FY11 is Rs.5.64 – compared to Rs.6.31 in previous qtr –Rs.5.07 in corresponding qtr – and Rs.22.99 in FY2010. There has been a marginal growth in equity in the period.

At current Market price of Rs.174, and the estimated annual EPS (5.64 x 4) of around Rs.23-25, the PE Ratio is around 7.6.

The news from the company says –

·         The wire rod division witnessed strong volumes and achieved highest-ever production contributing significantly to the bottom line.

·         The ferro alloys division also showed marked improvement with strong volumes, higher selling prices and better margins.

·         Production volumes in steel increased by more than 25 per cent compared to the corresponding period in the previous year.

The integrated Steel plant of the company is located at Champa , Distt Janjgir, Champa State of Chhattisgarh. For ensuring uninterrupted supply of consistent quality of Iron ore for the Sponge Iron Kilns , it has set up a Crushing and Screening plant at Koira , Distt- Sundargarh in the state of Orissa

FUTURE OUTLOOK (FROM ANNUAL REPORT)

The company’s ambitious plans to foray in the power sector in a big way are progressing at a fast pace and it plans to add 625 MW in its captive power generation capacity in the next 3 years. The first phase is expected to be commissioned in the current year and thereafter subsequent phases shall come up in a phased manner in the next three years.

PIL already has a coal mine allotted to it for this project. The Company is poised to be a major player in the merchant power business in the coming years.

The company has also taken up expansion in its steel making capacities to make the entire operations fully integrated, this plan is expected to be completed in the next two years.

The efforts of the company in past so many years to become self reliant in iron ore bore fruit and it is expected that the company’s Iron Ore mines both in Chhattisgarh and Orissa will be operational in the current year which shall give a substantial boost to the company‘s bottom line.

RESULTS IN FIGURES:

PRAKASH INDUSTRIES	Jun-10	Mar-10	dif%1	Jun-09	dif%2	FY10 NC	dif%3
Net Sales	46448	46434	0	36479	27.3	156691	18.6
SIT & WIP	423	572	-26	-113	-474	-524	-422.9
Raw Materials	27992	25972	7.8	21692	29	89510	25.1
Employees Cost	1827	2219	-17.7	1362	34.1	6807	7.4
Depreciation	1685	1710	-1.5	1284	31.2	5679	18.7
Other Expen	6986	7834	-10.8	5635	24	25457	9.8
Total Expen	38913	38307	1.6	29860	30.3	126929	22.6
Proft.operations	7535	8127	-7.3	6619	13.8	29762	1.3
Other Income	176	154	14.3	34	417.6	305	130.8
P B I & EI	7711	8281	-6.9	6653	15.9	30067	2.6
Interest	358	571	-37.3	794	-54.9	2549	-43.8
P A I B B EI	7353	7710	-4.6	5859	25.5	27518	6.9
P B T	7353	7710	-4.6	5859	25.5	27518	6.9
Tax expense	384	143	168.5	-		709	116.6
P A T	6969	7567	-7.9	5859	18.9	26809	4
Extrao. Items	-	193		-		193
Net Profit	6969	7374	-5.5	5859	18.9	26616	4.7
Dividend (%)	-	-		-		-
Face Value.Rs	10	10	0	10	0	10
Paid Up Equity	12449	12169	2.3	11547	7.8	12169
Reserves	-	-		-		107970
Basic EPS A EI	5.64	6.31	-10.6	5.07	11.2	22.99	-1.9
Diluted EPS A EI	5.64	6.15	-8.3	5.07	11.2	22.82	-1.1
Basic EPS B EI	5.64	6.31	-10.6	5.07	11.2	22.99	-1.9
Diluted EPS B EI	5.64	6.15	-8.3	5.07	11.2	22.82	-1.1
Public holding.%	48.93	48.21	1.5	44.99	8.8	48.21	306

ANNOUNCEMENTS

TO THE EXCHANGE

28-05-2010          Prakash Industries Limited has informed the Exchange regarding a press release dated May 28, 2010, titled "Net Profits Grows 30% to Rs.266 Crore".

18-05-2010          Prakash Industries Limited has informed the Exchange that the Company has received notice from FCCB holder for conversion of 13 Nos. bonds (US$ 1,00,000 each) in to 3,56,200 Nos. equity shares of Rs.10/- each of the Company. Accordingly, the FCCB Conversion Committee of the Board of Directors of the Company in its meeting held on May 15, 2010 has allotted 3,56,200 equity shares pursuant to conversion of 13 Nos. bonds.

29-04-2010          Prakash Industries Limited has informed the Exchange that "Prakash Industries Limited (the "Company") on 29th April 2010 has successfully priced the Foreign Currency Convertible Bonds ("FCCB") issuance for an amount of USD 60 million. The FCCBs having a maturity of 5 years and 1 day are convertible at an initial conversion price of Rs.235 per share (adjusted from time to time, as may be applicable). The FCCBs are proposed to be listed on the Singapore Exchange Securities Trading Ltd., subject to their approval. The issue of FCCBs is subject to customary closing conditions. Elara Capital PLC, London was the Lead Manager, Global Coordinator and Book runner to the Issue". -

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