Kabra Extrusiontechnik Limited, India’s largest manufacturer and exporter of plastic extrusion machinery, today announced results for the quarter and year ended March 31, 2008.

Financial Highlights
– Quarter ended March 31, 2008
· Sales increased by 23% to Rs. 48.69 cr.
· Domestic sales increased by 13% to Rs. 28.19 cr. and contributed 58% to sales
· Exports increased by 40% to Rs. 20.51 cr. and contributed 42% to sales
· Other income includes profit on sale of investments of Rs. 1.92 cr.
· Net Profit increased by 177% to Rs. 8.94 cr.

– Year ended March 31, 2008

· Sales increased by 15% to Rs. 145.79 cr.

· Domestic sales increased by 22% to Rs. 90.84 cr. and contributed 62% to sales

· Exports increased by 5% to Rs. 54.95 cr. and contributed 38% to sales

· Other income includes profit on sale of investments of Rs. 2.74 cr.

· Net Profit increased by 100% to Rs. 14.51 cr.

· EPS is Rs. 18.19

· Dividend has been increased from 45% to 60%

Commenting on the performance, Mr. S. V. Kabra, Chairman and Managing Director said, “Focus on high margin products coupled with several cost control initiatives has enabled us to record robust growth in net profit. We remain confident about business prospects.”

Operational Highlights for the Year Ended March 31, 2008

· Overall market share of around 20%

· Market share of 65% in Pipes, the fastest growing segment

· New product introductions with many firsts –

– 65 mm high output HM-HDPE Monolayer Film Plant

– 200 kg high speed PVC Compounding Mixer Cooler

– 55 mm 3 layer Film Plant for Lamination

– PVC Pipe Extruder with highest output of 1 tonne/hour

– 4 Pipe Extruder with high output of 700 kgs/hour in all grades of HDPE

– Cost effective bimetallic twin screws with twice the life of traditional nitrided

screws

· Encouraging response during the first time participation as an exhibitor in K-2007, the

world’s No. 1 Trade Fair for Plastics held in Germany.

· Total installed base of around 6700 plants including 1200 overseas

Domestic Market

Indian plastic industry is worth about Rs. 55,000 cr. with exports of Rs. 13,000 cr. Plastic has recorded consistent growth over the last decade and also substituted some scarce natural resources. The average growth of plastics is twice the GDP growth in emerging markets.

The extrusion machinery industry, being linked to plastic consumption, has significant growth potential. The domestic production of extrusion machinery is around Rs. 700 cr. It consists of plants for making pipes (Rs. 150 cr.), films (Rs. 150 cr.), tapes (Rs. 125 cr.), sheet lines, profiles, pelletising, etc. (Rs. 275 cr.). Demand is growing in double digit, driven by thrust on agriculture, water management, construction, telecom, packaging applications, organized retailing, etc.

PVC pipes consumption has been recording high double digit volume growth. Traditionally, pipes were used in agriculture and irrigation but are now increasingly used for drinking water and sewage applications. The boom in housing, construction and infrastructure sectors would ensure growth momentum for PVC pipes.

HDPE pipes segment is an upcoming growth area with applications in telecom ducting, water supply, irrigation, fuel gas distribution, etc. The company has been manufacturing hi-tech HDPE pipe plants with a maximum pipe diameter of 630 mm. Its collaborator is the undisputed global leader in HDPE pipe plants with pipe diameter of up to 2 metres holding market share of over 70% and this product has significant growth potential in India.

Flexible packaging industry has been growing at around 18% with focus on multi-layer blown films (MLF). Applications in lamination, milk and edible oil packing currently contribute 85% of the total market and the boom in organized retailing coupled with rural market penetration is fuelling the demand for MLF.

User industries are increasing capacities and upgrading technology, which would be beneficial to the state of the art extrusion machinery manufacturers such as Kabra Extrusiontechnik.

Exports

The plastic industry continues to outperform the world GDP growth, benefiting the plastic machinery manufacturers. More than 55% of all plastic materials are processed on extruders. Global extrusion machinery industry is worth over US $ 3 billion.

Exports from India are over Rs. 125 cr. India has the potential to become an outsourcing hub due to its low cost, strong manufacturing base, strategic location and intellectual capabilities. The company already exports its products to 55 countries and entry into new markets would drive growth. The Engineering Export Promotion Council, India has awarded the prestigious certificate of Export Excellence for the 6th time to the company.

Business Outlook

Kabra Extrusiontechnik is the largest manufacturer and exporter of plastic extrusion machinery from India. The company plans to garner higher share of domestic market through new product introductions in existing and new segments. It continues to be the most efficient player in the industry with sharp focus on costs and quality.

The company plans to introduce the entire range of plastic extrusion machinery including single, twin, conical extrusion plants, cast filter lines, sheet lines, composite pipe lines, wood composite plants, etc manufactured by the collaborators.

The company scores over its peers in financial parameters like profitability, cash flow and strength of balance sheet. Considering its leadership, large market potential, technological innovation and foreign collaboration, Kabra Extrusiontechnik is optimistic about its performance going forward.

Sourced From: Equicorp

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