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Subros meets expectations

April 30, 2008

For 4QFY2008, Subros Limited clocked 2.4% growth in Net Sales to Rs187.8cr, which was largely in line with our expectation of Rs188.1cr. Sales growth came on the back of volume growth of 7.6% while average realisations declined 4.8% yoy. Subros sold 1,43,717 AC units in 4QFY2008 as against 1,33,581 sold in 3QFY2008. The company’s Bottom-line, which increased 9.8% yoy to Rs8.9cr was also in line with our expectation of Rs8.7cr. Margins were however, marginally above our expectations primarily due to lower raw material costs.

During 4QFY2008, Subros witnessed a 115bp yoy increase in EBITDA Margins owing to lower Raw Material cost, which declined by almost 210bp yoy. Raw Material costs accounted for over 68.8% of Sales (70.9% in 4QFY2007). Subros reported a 9.8% jump in Net Profit wherein Net
Profit Margins improved by 30bp.

For FY2008, Subros clocked 2.4% growth in Net Sales to Rs662.7cr driven by around 8.3% yoy growth in volume while realisations declined by 5.4% yoy. Expect Subros to report an EPS of Rs 5.75 for FY2009.

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