Indo Asian Fusegear Limited announces higher earnings for the first half of FY2007

New Delhi; October 31, 2006: Indo Asian Fusegear Limited (IAFL), India’s leading manufacturer of Electrical Switchgears and Compact Fluorescent Lamps recorded sales of Rs 100.06 crore for the first half of FY 2007 and Rs 55.23 crore for Q2 for the quarter ended September 30, 2006. This represents a growth of 48.41% over the sales of Rs 67.42 crore reported for the corresponding first half of last fiscal. Sales and net profit for the second quarter of the current FY stands at Rs 55.23 crore and Rs 4.34 crore, higher by 52.06% and 4.33% respectively over the corresponding quarter of the previous year.

Commenting on the results, Mr. V.P. Mahendru, CMD, IAFL said, "The management expects the current fiscal to be robust on account of capacity enhancement and commissioning of new units to manufacture CFLs, FTLs and Wires in tax free zone of Haridwar, Uttaranchal. The switchgear business has been extremely encouraging. We are confident of achieving significantly higher margins in this business in the current year. The revenues from the switchgear business in H1FY07 were Rs 83.78 crore as against Rs 55.32 crore for corresponding period of FY 06. The exports of the division were up at Rs 9.89 crore as against Rs 5.39 crore in the corresponding period of the previous year, an increase of 83.48 %. The company is continuously investing in global market development and R&D."

Q2FY2007 performance overview
IAFL recorded Sales for the Q2FY07 at Rs 55.23 crore representing a growth of 52.06% over the sales of Rs 36.32 crore reported for the corresponding quarter of the last fiscal. Export Turnover for the quarter grew by 73.87% to Rs 7.44 crore.

"Q2 was a good quarter for IAFL, the sustained profitable growth is a testimony to the success of the initiatives that Indo Asian has embarked upon to optimize operational efficiencies and cost reduction. Steady increases in sales and aggressive expansion in international markets have paid dividends, stated Mr. V.P. Mahendru, CMD, IAFL.

Mr. Mahendru added, "The higher sales are a result of continuous R&D by IAFL and developing new version of products which are energy efficient and user friendly. We have been able to maintain consistent rise in profits as a result of the operational effectiveness despite general rise in the cost of raw material and power and fuel. While short-term market conditions remain challenging, we continue to make outstanding progress towards our objective which is to bring down the consumption of energy in the city by providing effective and economic ways to consumers to encourage energy savings. For the same we have taken an initiative and tied up with BSES to supply CFLs at competitive rates.

The lighting business recorded revenues of Rs 16.48 crore in Q2FY07 as against Rs 12.42 crore in the corresponding quarter of the previous year.

Highlights of the performance for the first half of the FY07 and Q2FY07
Setting up latest state of the art plants for the manufacture of Energy Efficient Lighting Products (CFL & FTL) and Wires in the tax free zone of Haridwar, Uttaranchal

Secured an order valued at Rs. 21 crore for the export of electrical equipments, used in the manufacture of lighting products, from Saudi National Lamps and Electrical Limited, Saudi Arabia. This is the first time when such a large volume of export contract for the export of electrical equipment has been received by Indo Asian Fusegear Ltd.

Joint Venture with M/s. Simon Holdings, Spain for setting up a Rs. 30 crore (Euro 6 million)) project in India in which Indo Asian would hold 51% of the equity while M/s. Simon would hold 49%. The Joint Venture will manufacture and market state of the art wiring Accessories including intelligent building & home automation products.

Outlook for the current fiscal
Overall, the outlook for Indo Asian is very optimistic given the growth of power sector, strategic thrust on growth of power by the Government of India, and the various initiatives taken up by the Company such as:

Setting up new plants in Uttaranchal which are three large units for the manufacture of world class switchgears, energy efficient lighting products and wires in the tax free zone in Haridwar, Uttaranchal.

Expansion of existing facilities for Export Production:

Setting up of Joint Venture for the manufacture of world class Wiring Accessories in the tax free zone in Haridwar, Uttaranchal.

Expansion in overseas countries in Middle East and setting up a new electrical lighting equipment facility in Riyadh, Saudi Arabia in joint venture with a leading Saudi company.

Forward-Looking Statements:- This report contains forward - looking statements, which may be identified by their use of words like ‘plans’, ‘expects’, ‘will’, ‘anticipates’, ‘believes’, ‘intends’, ‘projects’, ‘estimates’ or other words of similar meaning. All statements that address expectations or projections about the future, including but not limited to statements about the company’s strategy for growth, market position, expenditures, and financial results, are forward - looking statements. Forward -looking statements are based on certain assumptions and expectations of future events. The company cannot guarantee that these assumptions and expectations are accurate or will be realized. The company’s actual results, performance or achievements could thus differ materially from those projected in any such forward - looking statements. The company assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent developments, information or events.

Source : Equity Bulls

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