Management Interviews – TTK Prestige, Prabhat Dairy, Atul Auto, Tata Chemicals, Ashok Leyland, Manappuram Finance

TTK Prestige – TT Jagannathan

  • Dont give revenue projections but domestic rev growth of 14.5% can be repeated in FY19
  • There is good growth across the board
  • We will have to pass on cost increases to market for increase in aluminium prices
  • Looking for 150 crores capex this year for prestige brand
  • Revenues from cleaning solution business – little below our projection of 30 crs – Projecting 60 crs in this FY
  • Major growth is coming from online and rural
  • Export outlook is good this year with 2 new clients, expect more than 100% growth this year

Full Interview:

https://twitter.com/CNBCTV18News/status/998496641983250432?s=08

 

Prabhat Dairy, Vivek Nirmal, Joint MD

  • B2C contributes 30% of our revenue, intend it to take to 50% in next 2 years
  • 70% largely comes from premium dairy ingredients
  • Gross margins are higher from B2C vs B2B. However due to higher spend on distribution, Ebitda margins from B2B and B2C are at pretty same levels
  • We expect a double digit margins post 2020 after distribution and sales efficiency kicks in
  • Milk procurement prices are stable at 23₹/ltr
  • Largely we are Maharashtra focused brand, cover more than 40,000 outlets in Maharashtra
  • Ice cream is still a small product, its not more than 10 crores – still in test launch phase – will move towards 100 crore category in next few years
  • Promoters have increased stake in company last year, will be looking to increase at the right price

Full Interview:

https://twitter.com/CNBCTV18News/status/998493459701948416?s=08

 

Atul Auto – Jitendra Adhia

  • Will be doing double digit growth in next fiscal as well
  • We find demand is reviving from rural and semi urban side
  • In medium term i.e. 3–5 years our export contribution shall be sizeable at 20-25% vs 7% as of now
  • We expect capacity utilization above 80% in next fiscal
  • We were going to take price hike but waiting for right time
  • Our network is around 320 touch points and will keep on increasing 20-25% yoy

Full Interview :

https://twitter.com/CNBCTV18News/status/998463672300158976?s=08

 

Tata Chemicals – R Mukandan 

  • We have completely exited fertilizer which led to some erosion of numbers
  • Focus is shifted from consumer product business to modern trade
  • Sharpest change have come from pulses from having a long supply chain to having a short supply chain, improved margins but impacted revenue numbers
  • Margins depends on market condition which has been favorable to us, will stick by 18% margins
  • Europe operations are doing well, main product sales were not impacted but what they earned additionally by selling electricity to customers were impacted
  • We have soda ash and salt business there. Salt is rock steady. Additional power sales were impacted due to disturbances in turbine which is fixed now
  • PAT nos. include one time sale of fertilizer business which have to be factored in
  • We have de-risked the Rallis business even if monsoon is impacted slightly
  • Rains in Colombo is good and it should be hitting Kerala any time
  • Targeted 5000 crores mark in revenue coming 3-4 years
  • We are in basic pulses, launched organic pulses, launched besan and now khichdi, chilla mixes and a range of products still coming out
  • Also building the spices portfolio

Full Interview:

https://twitter.com/CNBCTV18News/status/998427918219919361?s=08

 

Ashok Leyland – Gopal Mahadevan, CFO

  • Net cash is around 3000 crores
  • Have seen market shifting from smaller tonnage to heavier tonnages
  • In full year seen a rise of 12-14% in industry volumes
  • We do not sell on credit
  • Industry is consistently discounting and we have been consistently raising prices
  • As RM price is going up we have no choice but to raise prices
  • In last 7 years we have moved from 300 touch points to roughly around 3000 touch points today
  • We were able to grab huge market growth in North and also in Central India in FY 17-18
  • Rising crude prices – Freight cost rise will not be in consideration for infrastructure projects to happen

Full Interview :

https://youtu.be/O09a_Polgfc

 

Manappuram Finance – Mr Nandakumar

  • Last 2 quarters we are doing well, collections have been improving in micro finance and other businesses
  • Targeting 10-15% growth in gold loan, good recovery in micro finance, CV business has stabilized, Home finance there was some stress
  • Asset quality will remain good in gold loan buinsess
  • Online gold loan – volumes are high and risks are low
  • Average loan to value in gold loan is below 70%
  • Efforts are in full steam for digitization
  • Security cost has gone up by 130-140 crores, looking to bring down this cost by electronic technology and new storage models
  • 25% is non gold book – it will move upto 30% in current year

Full Interview:

https://youtu.be/mR2u3jCs2EU

Management Interviews – Aarti Industries, Hester Bio, KEC International, Godrej Agrovet, JBM Auto, Suven Life

Aarti Industries – Rajendra Gogri, MD

 

  • Demerging Home & Personal care business as it is relatively small and customer base and manufacturing facilities are completely different, so once hived off – separate focus can be given
  • Merging manufacturing business of Nascent chemicals (Subsidiary of Co.), which will be strategically good for company and JV partner have also shown willingness
  • We had 9% volume growth for the quarter and substantial improvement in pharma
  • 9-10 crores impact was because of forex for this quarter
  • FY 19 – expecting substantial growth in volumes as capex already done
  • FY 19 – Looking at 15% volume growth and bottomline growth of 20%
  • 18-20% cagr in bottomline is possible for next 3-4 years

Full Interview :

https://www.youtube.com/watch?v=2MJ4fxMaHHU

 

Hester Bio Sciences – Rajiv Gandhi, MD

 

  • Capacity of poultry vaccines have just commissioned
  • Expecting good tender business for PPR vaccines
  • Looking at 15-20% growth in this F.Y.
  • Creating infrastructure in Africa and expecting atleast 100% growth as far as exports are concerned
  • 2 large animal vaccines are in the pipeline and 1 poultry vaccine besides a few diagnostic kits
  • Commissioned a new capacity in poultry vaccines, will increase our capacity by 35-40%.
  • Need not put any new capacities for large animal vaccines and still can increase business by 100-150% with current capacity
  • No expansion needed in Nepal for PPR vaccines
  • Expanding in Africa and building project in Tanzania to manufacture for African specific animal diseases

Full interview:

https://www.youtube.com/watch?v=xVdaJCFQThw

 

KEC International – Rajiv Agarwal, CFO

 

  • Margins at 10.1% vs 9.3% for year as a whole, Q4 margins at 10.1% vs 10.4% yoy
  • Revenue growth from railways is significant, margins are still catching up there
  • Next year expecting topline growth of 15% and margins of close to about 10%
  • Closing order book of 17,300 crores
  • On international front order intake is not so great, faced many headwinds
  • Railway order book is around 5000 crores, expect revenue to double in current financial year from 850 cr to 1500-1600 cr

Full Interview:

https://www.youtube.com/watch?v=rEXFFptB524

 

Godrej Agrovet – Balram Yadav, MD

 

  • Had a PAT growth of 6%, if we remove exceptional gains in last year
  • Agrochemical business had 13% growth
  • Oil Palm Plantation had 15% growth
  • Astec growth 18.5%
  • Dairy buinsess 14.5% growth
  • Bangladesh business 12.5% growth
  • Animal feed business 8% volume growth annually and 18.5% in Q4
  • All businesses are planned for mid-teen growth
  • Last year we launched rice herbicide based on bispyribac sodium and snatched some market share because it is getting lot of acceptance among farmers
  • No. of sprays in agro chemicals have to be reduced, so planning to launch combinations
  • Have launched flavoured milk, will launch UHT Milk, UHT Lassi, Buttermilk, Yogurts in dairy segment
  • If commodity prices go down, it is good for us as animal feeds raw material cost will go down
  • Oil prices are protected by import duty
  • Something needs to be done for pro active export policy so that domestic price can be stabalised

Full Interview :

https://www.youtube.com/watch?v=Nhp9JDay9vA

 

JBM Auto – Nishant Arya, ED

 

  • 9% topline growth on annual basis and 15% growth in this quarter
  • In coming years we will be growing at 20-25% minimum
  • Invested in designing and R&D capabilities
  • FY18 – 85 crs topline in tool room division and rest from component division
  • Focus on electric buses will contribute significantly in FY19
  • Collectively for all the business put together we are targeting 2500 crores of revenue
  • In few weeks will be announcing orders bagged in bus division
  • Last quarter is generally the best quarter for the year
  • Will try and target to take margins to 14% mark
  • Merging subsidiaries and JV’s to JBM Auto

Full Interview:

https://twitter.com/CNBCTV18News/status/996312597275201536

 

Suven life sciences – Venkat Jasti, CEO

 

  • Specialty chemicals business have come down while CRAMS have gone up
  • One of the item in phase III has moved to ANDA submission which have given good jump on topline and bottomline
  • R&D spend would be in 10 mn $ range for pre clinical development upto phase I
  • Suven 502 is in final stages of enrollment whose study results will be out in 2nd qtr of next year
  • Suven 3031 will be entering into phase II
  • CRAMS – Order book cant come until progress of molecules goes into next stage
  • Formulations business are ANDA based activities, only when it matures into operations then only it can be monetized which will happen in 2019-20
  • Core CRAMS expectations – 10-15% growth YoY basis

Full Interview :

https://twitter.com/CNBCTV18News/status/996303470318706694

Concall Notes Q4FY18 – Hikal Ltd, ITD Cementation, Welspun Enterprises

Hikal Ltd. Q4FY18 Concall update

Compiled by Dhruv Nawab

  • Pharmaceutical division contributes 60% of the revenue and the balance 40% is contributed by crop protection division.

Crop Protection

  • Company partner with crop protection companies for custom synthesis and custom manufacturing of intermediates and active ingredients.
  • Have their own product portfolio for specialty chemical and biocide industry.
  • Contract manufacturing contributes 70% to total revenue of crop protection division and balance from their own product portfolio. Majority of their business is export oriented.
  • 10-11 products in contract manufacturing and 5-6 own products.
  • In specialty chemical business company offers biocides, anti microbial additives. These products are used in industries like leather, paints, paper, water treatment, personal care, and textile.

Pharmaceutical

  • Leading custom manufacturer of APIs partnering with global pharmaceutical company for contract manufacturing and development.
  • 50% of the business comes by contract manufacturing and 50% is generic by nature.
  • 5-6 products in contract manufacturing and 8-9 products in generic portfolio.
  • Majority of pharmaceutical business is export oriented with 55% of sales coming from US, 30% from Europe and remaining from rest of the world.
  • Plans to file 4-5 DMFs every year.
  • Business is gaining traction in new geographies like Russia, Latin America.
  • In pharma business 40% of the customers are repeat client.

 

  • Company long term credit rating upgraded from BBB+ to A- and short term credit rating from A2 to A2+. Expecting another upgrade in credit rating this year.
  • Company is expected to grow at 15-20% for next 2-3 years.
  • Likely to maintain current margin profile for both the division.
  • Company revenue grew 25% in this quarter y-o-y.
  • Crop protection business grew 28% and pharma division grew by 21% in this quarter y-o-y
  • Revenue for the year ended 31st march 2018 increased 26%
  • Cash PAT growth for the year ended 31st march 2018 increased 16% from 140crores to 163 crores.
  • Working capital days improved from 160 days last year to 150 days in current year.
  • Crop protection downturn completed in 2016-17 and now demand has started to increase. Crop protection cycle is usually of 6-7 years.
  • Major growth in crop protection business came from increasing demand of existing molecules and also from introduction of new products done for their innovator client.
  • Problems faced by Chinese chemical industry have shifted large business to India which will be beneficial for the company. 15-20% growth expected in Crop protection business driven by launch of new molecules.
  • In custom manufacturing business all the price increase in raw materials are passed on to customers.
  • Company received 2 environmental clearances for expansion of their plant.
  • 250 crores CAPEX plan in next 2 years.
  • EBITDA growth would be in line with sales growth.
  • Company will continue to spend 3-4% of the revenue on R&D.
  • In crop protection company is developing more on-patent products.
  • Biocide business to grow significantly because of troubles faced by Chinese companies. Barriers to entry are high in biocide business.
  • It takes 3-4 years for DMF filing to commercialise.
  • New products add approximately 5% to the revenue.
  • D/E ratio will be maintained under 1 during expansion.
  • Company will reduce its dependency on China for its raw materials by being backward integrated.
  • Margins of pharmaceutical business are likely to improve because of the new products being higher margin product.
  • Both the divisions have 70% capacity utilisation.
  • Competitors in crop protection – PI Industries, in pharma – Divi’s, dishman.
  • In pharma opportunity is more on generic side.

 

ITD Cementation Q4FY18 Concall update :

Compiled by Manish Mall

  • Part of mumbai underground metro completed 2 km before time
  • in pune and nagpur project too ahead of time
  • 1900 cr for marine projects in completion
  • nuclear power project first time project
  • for road 3 HAM jobs, on own — each one in excess of 1000 cr
  • China harbour tie-up for bridge over ganga
  • L1 in Andaman 300 cr
  • port of Singapore looking fwd too — will keep looking for international projects
  • patna & Bangalore airport in pipeline
  • hydel tunnel in north east
  • school building in kolkatta
  • marine projects margins better than elevated metro
  • mumbai metro project no investment by company totally funded by client
  • Bangalore elevated metro is a big project – going bit slow than planned
  • 126 – 329 cr debtors gone up — delhi metro — claim will clear that in time to come
  • project is completed , billing is left ; so debtors will be cleared
  • last year total 3500cr of projects are in final stages
  • udhan gudi order received now after 3 yrs — work to be started in May itself
  • 1800 cr of project has been cancelled —
  • will be participating in many projects all over india many projects coming up ( repeated many times , good amount of work orders by govt mainly )
  • itd cem india jv — bangalore metro and kolkatta projects
  • interest cost have gone down in the projects — net debts 155 cr
  • royalty payment of 0.5 % is very helpful — we get many projects against royalty payment
  • bidding for 10000 cr of orders in pipeline in next few months
  • mumbai ahmedabad bullet train project is a huge project — looking fwd to it
  • 7 packages 15k cr each — japanese or indian JV
  • station / elevated / underground — will be looking for Elevated on own, no JV
  • qip used to paid off debt — mutual fund investment
  • receivable days 45 days ; working capital is comfortable
  • cochin shipyard marine lost marginally by 2% against L&T, we have good competitive adv
  • Mumbai coastal road project will be bidding for it — no JV reqd
  • capex 60-70 cr — for renewal of assets — last qtr was 30 cr
  • tunnel boring machine is with JV partner

 

Welspun Enterprises Q4FY18 Concall Update :-

Compiled by Manish Mall

  • Order flow of 7000 cr in pipeline
  • 2000 cr order recd now lately for tamil nadu HAM projects
  • 5500 – 6000 cr EPC business order book
  • delhi meerut 14 months ahead of completion — annuity bonus expected– 34 cr expected
  • 50% bonus to be shared with subcontract
  • yumuna nagar order project to start soon — will be completed  ahead of schedule
  • CGARG project execution in full swing
  • over water bridge project financial closure done Q1fy 19 should start
  • currently 4 large projects going stong 2 projects started giving revenue other 2 to give revenue in next month
  • devas water project execution begun — epc business not HAM
  • stood L1 for tamilnadu HAM project 55 km , should get award letter soon
  • oil n gas Jv Adani welspun – Mumbai / gujarat / kutch 2 blocks
  • rigs are enroute to start soon — Mumbai block recd from Ongc D9 is own project
  • revenue to start in q3-q4 of FY 19-20
  • Palej block is on hold from Govt side , should start in next 5-6 months
  • NHAI 45 bids about 45000 cr in pipeline — to bid for 2/3rd of projects
  • expecting 5000 cr order in future other than orders recd
  • Good visibility for next 2 years –
  • To double up revenues in 2 years purely by Infra projects to be 4000 cr
  • NET DEBT IS NEGATIVE — CASH SURPLUS – FIXED ASSETS ARE Healthy
  • invested 369 cr equity in HAM projects
  • will like to maintain 600 cr of cash surplus for next few qtrs no equity dilution
  • by Q2 will bid for water projects — 1000 cr expected orders
  • Receivables are 2 kinds — service concession receivable ( short term ) —
  • trade receivable are the debtors or work in progress
  • ebidta margin is 10.9% — on a stable basis should be 12% other than other income
  • asset light and depreciation will always be low
  • Capex 200 -250 fresh equity will be reqd for HAM projects over next 2 yrs
  • if win more projects this may go up in future by Fy 2020
  • EPC order backlog of 6000 cr which to be completed in next 2-3 years
  • vision: – to complete projects ahead of schedules with quality completion
  • started 3 projects in this qtr – invested 300 cr in this projects on HAM projects
  • will not be monetizing mumbai blocks — D9 is close by so completing the projects with ONGC projects — additional well drilling to be done — revenue by 2021-22 around 5 billion over time
  • not related to welspun steel business
  • cash on books to be deployed to business projects later on
  • NHAI started rating Developers , which is good for Us as built good goodwill
  • EPC business has easy entry business so will stay asset light : – will like to complete projects with the partnership of subcontractor and not complete self going ahead.

 

 

Management Interviews – Arvind, JSPL, MAS Financial, Welspun Enterprises

Arvind – Kulin Lalbhai, ED

  • We are going to invest 500 crores every year in textile business for
  1. Will put up Garment capacities, Today we covert 10% of our fabrics to garments, will take it to 30%
  2. Investing in technical textiles
  3. Investing in new line such as ‘Performance’ and ‘Smart’
  4. Investing in branding business of Arvind
  • With ₹ depreciation happening , exports will see benefit in 2 nd half of this fiscal
  • We are present in 250 towns and have 20 different brand and retail formats, usually end up adding 150 new stores every year to our network
  • One would see demerger in quarter 2 and actual listing process  sometime in October

Full Interview :

https://www.youtube.com/watch?v=uxnczuh1Hu4

 

JSPL – NA Ansari, CEO

  • Oman business – Ebitda in this quarter is close to 71 mn $, 120% more YoY
  • Increased production in Oman, Rolling mill is producing more than 100,000 per month, costs have come down substantially
  • Improved product mix, selling more value added rounds and less of normal square billets
  • Not only working in Oman and UAE but also export to Saudi and Europe
  • Angul ramp up doing well – targeting more than 200,000 tonnes of steel to come
  • Power business is struggling as coal is not available at pricing which are manageable
  • PLF for plants is just at 42-43%.
  • Situation can only improve if coal is made available at viable prices and PPA’s go up
  • Expecting production nos. of 9 mn plus in next year between Oman (2mn) and India (7mn)
  • Capex requirement in next year should be around 400-500 crores max
  • Current net debt is at 42000 crores, expecting to come down by 4000 crores in this FY purely by Ebitda generation
  • Spread between RM basket and finished products have gone up by 42-43% in last FY, resulting in ebitda per tonne in this quarter at 12800 rs vs 9800 rs
  • Not expecting 12800 rs margin to grow substantially higher, but we can maintain such margins next year

Full Interview:

https://www.youtube.com/watch?v=g8zrKPE7xZQ

 

MAS Financial – Kamlesh Gandhi, MD

  • We target to have 5200-5300 crores of AUM by FY19 including housing porfolio
  • 80-85% will come from MSME and SME and Rest from 2 wheeler, commercial and housing.
  • As long as we maintain the AUM quality we expect to grow in range of 25-30%
  • GNPA going forward will stay in range of 1-1.3% and NNPA will hover around 1%
  • NIM will be 7.7-7.% vs 8% last year as there is some pressure in interest rates
  • Grew housing business at 15-16% last year , looking forward to grow more 1000 crores from current levels in 3 years
  • Rural housing NPA is around 0.27% vs 0.36% last year

Full Interview :

https://www.youtube.com/watch?v=biU8J8mnzLY

 

Welspun Enterprises – Sandeep Garg , MD

  • Results are good because Delhi Meerut project which was scheduled for 30 months is getting completed in 16 months which led to faster turnover recognition
  • Order book stands at 5500 crores including L1 of 2000 crores; current backlog at 3000 odd crores
  • We expect to book 7000 crores in this year, last year we booked 4000 crores
  • Order backlog at the end of the year to be around 8000-8500 crores
  • Revenue growth should double up every year for next 2 years, profit growth should also continue
  • Ebitda margins are at 15%, expect similar numbers in next year
  • In infra projects, profit margins are at 11-12%, expect to continue in same range going forward
  • Debt is majority at SPV level in Delhi Meerut project, parent company is debt free
  • As the order book will grow, 50% of order will be through debt in various SPV’s which we operate

Full Interview :

https://www.youtube.com/watch?v=M_pPUPszZSE

Management Interviews – Nalco, KRBL, Auto Axles, Varun Beverages, Wonderla Holidays, Kalyani Steels

Nalco – Management Interview – 09-05-2018

  • There is a shortage of 2-2.5 lac tonne of alumina in a month
  • China has started exporting alumina but there is a concern on chemical mix and environmental problems in china
  • Alumina supply issues shall continue till the Brazilian elections are over i.e. in December
  • Around 4-5% is the normal demand growth in alumina coupled with shortage in supply, the alumina market will remain tight
  • Last shipment was made at 582$ vs 670$ vs 718$ which shows that prices have come down from the high levels after relief in Rusal sanctions
  • Aluminium prices will remain in range of 2150-2250$/tonne
  • Caustic soda prices have moved from 41k to 45k (7-8% increase) which shall moderate with moderating demand of alumina
  • Alumina prices above 450 results in good ebitda margins for the company, so results shall remain good till in Q1 and Q2 of FY 2019

Full Interview:

https://www.youtube.com/watch?v=AGjurpgIsxw

KRBL – Anil Mittal, MD on US Sanctions 

  • Sanctions always have some relaxations
  • On past experience we have seen that essential commodities are always out of the sanctions like food items and medicals
  • Around 4-5% of total turnover we export to Iran
  • Payment problems and bank position are concerned they will become more tighter
  • We dont give any credit to Iran, We do 100% against 10% advance or LC
  • We are progressing in the business very well, in basmati 2nd competitor is nowhere close to us

Full interview:

https://www.youtube.com/watch?v=TG-fniW34nk

Auto axles – Dr N. Muthukumar – President

  • Growth in CV segment for the company is double than market growth rate
  • New product development, penetration has helped us achieving the growth rate
  • RM cost is increasing which will only lead customers to pay more
  • Higher tonnage vehicle (more than 35 tonnes) have really grown well given the new projects in infra space

Full Interview:

https://www.youtube.com/watch?v=-mJp1evaP3M

 

Varun Beverages  – Ravi Kant Jaipuria

  • Q1 – Volumes have grown at 20% and Revenues have grown at 25%
  • Organic growth has been around 10% and India growth is around 12%
  • Rural is 30% and Semi Urban and Urban is about 70% of volumes, but rural if growing at much faster rate
  • We have 40% market share in our territory and for weaker / new territory we are aiming to get them at 40%
  • Have launched 6-7 variants in slice which are fizzy drinks. Trying out just in Delhi and UP
  • April to June is our main quarter which is about 45% of our turnover which is looking good
  • New country Zimbabwe is doing well and Nepal we have started 1 week back
  • New products and distribution strategy will help us gain volumes
  • Sales mix (Volumes) is 75% from carbonated, 6% form juice and 19% from packaged water

Full interview:

https://www.youtube.com/watch?v=hYZsRpLfcqg

 

Wonderla Holidays – Arun K. Chittilappilly, MD

  • Increase in footfalls seen in Kochi and Hyderabad, Bangalore is not growing much
  • Prices have become attractive (down by 10%) due to GST cuts which came in from February
  • Average ticket prices for this quarter have remained flat or low single digit growth
  • Kochi have revived its growth and Hyderabad being 2 year old park is showing double digit growth
  • Work for Park in Chennai is halted as there is confusion regarding LBT tax on amusement park which is at 10%, Govt is re-looking at the issue
  • No plans to monetize land at existing parks as Co. will need the land in future. It will not be operationally beneficial for the co,

Full Interview:

https://www.youtube.com/watch?v=yoGK8zAq4Pw

Kalyani Steels – RK Goyal, MD

  • Price of steel have gone up but cost of coking coal, iron ore, ferro alloys have also significantly gone up
  • As far as we are concerned we are manufacturing engineering steels, we cannot ask our customers for price increase now and then, already got price increase from 1st April, now it will be after 3-6 months
  • We have to absorb if there is any increase in RM cost
  • Price increase from 1st April was not fully met but a good portion of cost was taken care of, will be able to protect the margins that was there last year
  • We are fully booked, whatever quantity is available with us, we are able to sell it comfortably
  • Volumes will be on a similar basis as of last year, we have operated at 100% capacity in last year

Full Interview:

https://www.youtube.com/watch?v=vEoTT6Fmhig

 

Concall Notes Q4FY18 – IEX, SKF India, GHCL, Welcorp

IEX Q4FY18 Concall Update

  • Expecting demand growth of more than 6% in this year vs 5.3% last year
  • In 17-18 there was increase in buying by distribution companies, increase in buy bids by almost 20%
  • There was reduction in sell bid due to coal supply shortage
  • Prices started increasing from month of august, price increase was 35% higher than last year i.e. 3.26 Rs
  • Coal production has increased in march qtr, if trend continues, coal supply issues will be resolved
  • Imported coal prices have reduced from feb month (22% in last 45 days), if trend continues, will be good on supply side
  • Reduction in operating expenses was possible due to acquisition of technology
  • Will be saving 12-14 crores rs in income tax due to 25% bracket
  • Open access volumes decreased by 38%, 24 bu to 14.8 bu
  • Distribution companies volume increased by 91%, 15.78 bu to 30.14 bu
  • No. of active clients have gone down due to increase in clearing prices
  • Solar and Wind trading has started
  • Share of distribution companies was almost 67% vs 40%
  • In case of discoms top 10 buyers accounted for 86% vs 77%, Gujarat was one of the biggest buyers
  • Last year we added 225 participants in electricity portfolio and total 460 overall (electricity and REC)
  • There were lot of deactivations ~900 which reduced the active no. of clients leading to loss of annual income from such clients
  • We are in discussions with different stakeholders for gas transmission exchange
  • Dividend payout at 60% vs 80% yoy; future payout ratios will depend on oppotunities; will try and maintain 50% payout

 

SKF India – Q4FY18 Concall Update

  • New MD joined from 1st April
  • Annually sales up 4.5% and PBT up 28%
  • Quarterly sales up 11% (Adj GST) and PBT up 28%
  • Growth in Car segment was flattish, truck grew by 19%, Tractor grew by 28%, After market vehcle grew at 13%, 2 Wheeler grew at 25%
  • Expect to see traction in wind business from July quarter
  • Hub 3 project is delayed as the customer is facing quality issue on field, it has gone for re validation of design and awaiting approval in japan
  • Hub 3 has capacity of 500,000 pieces and can be increased to 700,000 pieces with minimal capex
  • No greenfield expansion, but will invest 100-150 crores per annum for next 2 years in brownfield expansion
  • Capex will be for mix of new products and existing products
  • Traded goods were 38% vs 41% last quarter and manufactured goods were 62% vs 59% last quarter
  • Out of 23% revenues which comes from industrial products – 6% comes from Railways, 1% from Energy and Balance 16% from other industry
  • Inspite of increase in steel prices, have managed to control raw material cost to sales ratio
  • Price increases are hard to get with major OEM’s though we are fairly compensated
  • Service business is just 2% of total revenue but we provide a bundled offering which helps us to build an image of entire solution provider
  • Market share have remained stable at 27-28%
  • Revenue mix is 50 % from Auto OEM (29% Auto OE, 12% After Market, 10% exports)and 50 % from Industrial OEM (25% from Indutrial OE and 25% aftermarket)
  • No forex hedging is done, majorly imports and exports are in Euros
  • Asset T/O as it is a capex heayv industry is around 1.5-2 times

 

GHCL Q4FY18 Concall Update

  • Company aims at maintaining margins of FY18 despite of rising input cost.
  • 31% of company’s revenue comes from inorganic segment and 58% of the revenue from textile segment.
  • Textile business is facing headwinds and the improvement is expected in FY19 as according to management revenue and margins seems to be bottomed out. Though revenue fell EBITDA margins improved from 0.6% in previous quarter to 5.7% in Q4.
  • Company launched a new concept REKOOP- blending cotton with recycled polyester from PET which is considered environment friendly and would be beneficial in US market
  • Brownfield expansion of 1.25 lacs MT of soda ash facility to be completed in 2 years which would then result in volume growth. Volume growth in FY19 is expected to be around 4% as plants are already running 97% utilisation. It is difficult to increase utilisation level from here.
  • Overall EBITDA margins up by 280bps to 25.2% in Q4 as compared to 22.4% in previous quarter.
  • Company reduced its debt by 117 crores bring debt to equity ratio to 0.79. It is further expected to reduce to 0.65
  • Company’s D/E won’t cross 1:1 given its expansion plans
  • ROCE stands at 17% and ROE is 22%.
  • Shutting down facilities of soda ash in China over environmental concerns. China exported over 2mn MT to the global market which would now considerably decrease and would be advantageous for other global players. Even capacity shifting in China is beneficial for other players.
  • Turkey coming up with additional 2mn MT capacity of soda ash. No other big capacity coming up.
  • CAPEX done by the company:

FY18 – 281crores

FY19E – 330crores on soda ash and 85crores on textile.

FY20E – 300crores on soda ash and 80 crores on textile.

  • Greenfield expansion of inorganic segment to be executed in FY22. Acquisition of land is expected to be completed this year. This expansion will be funded from combination of debt and equity. 1000-1200 crores will be funded through internal accrual.
  • In textile business company continue to face competition from Pakistan and Bangladesh.
  • Doubling of sodium bicarbonate capacity. Benefit of this will be seen in FY19. Soda ash is a raw material for producing sodium bicarbonate
  • Will consider demerger of textile and inorganic division at right time.

 

Welcorp Q4FY18 Concall update

  • Low volumes in Q4 was due to Higher base in Q4FY17
  • Profitability will be higher in 1st half and weak in 2nd half
  • Cash conversion cycle
  • Gross debt reduced by 400 crores in FY18
  • Net debt at 739 crores down by 685 crores in FY18
  • Capex will only be for replacement, CFO will be used to bring down debt
  • Order book – 1.6 million tonnes valued at ~10000 crores – some of which are deliverable in FY 2020
  • Bid book – 3.9 million tonnes – 2-2.5 million tonnes is in North America
  • America seeing early signs of revival
  • Domestic market is competitive, strong demand in Irrigation and river linking. City gas distribution, North east connectivity and oil and gas segment will see strong traction
  • Ebitda / tonne – Dropped from 7600-7700 / tonne to 6000-6200 rs
  • HSAW is predominant portion of orderbook
  • Every new order has better margins than past orders from Jan onwards
  • Looking to cross 1 million tonnes volume this year also
  • Water segment in saudi is api apipes but histrocally it has been non api pipes
  • In terms of Raw materials, we are hedged for immediate requirements but not for 2 years down the line
  • Finance cost on working capital side will be higher as steel prices are higher
  • Working capital cycle expected to be in range of 40-45 days
  • Our debt repayment will be around 200 crores on global basis

 

 

 

Management Interviews – Manpasand beverages, Bombay Dyeing

Manpasand Beverages – Abhishek Singh, Director

  • Currently our distribution outlets is limited to 4,00,000, after getting access to 4 million outlets (tie-up with Parle) in the country, jump in revenue will be phenomenal
  • Vadodra facory has started manufacturing, Varanasi will start in this month, Sricity and Eastern unit will start in next 4 months
  • We are aiming to capture 15-16% market share from 10%
  • Recently we have launched Jeera flavoured drink in modern trade outlet which will scaling up shortly
  • 8-10% revenues comes from modern trade outlets and 20% comes from railways but as we are focusing on distribution with parle, retail share will increase

Full Interview:

http://btvi.in/videos/watch/26651/aiming-20–market-share-in-fy19–manpasand-beverages

 

Bombay Dyeing – Aloke Banerjee, CEO

  •  With rising prices of cotton, there is escalation in prices of yarn and grey fabric – facing pressure on margins – absorbing rising costs
  • Coming out with a campaign on digital printed bedsheets, we have 100 new designs going into the market
  • We are offering – Customize your own bedsheets – one of its kind – at a cost of ₹1999/-
  • On MRP baiss we are doing 600 crores of turnover from retail, this year we are looking for 30-35% jump in turnover
  • We have presence at 3500-4000 MBO’s – Plan to open 100 new franchise stores this year in addition to 200 stores at present
  • We are targeting 1000 crore revenue on MRP basis by FY2020 – Expecting 750-800 crores in this FY
  • We do around 15% of sales through digital these days

 

Full Interview :

http://btvi.in/videos/watch/26648/eyeing-rs-1-000-cr-revenue-by-2020–bombay-dyeing%09

Insider Trading Disclosures – Chambal,Man Infra, Chembond Chemicals etc

Some of the interesting Insider Trading Disclosures from 1st Jan to 31st March 2018.

Insider Trading Dislcosures Analyse India 

We keep looking at Insider Trading/Bulk Deals for looking at interesting action and not necessarily buy or sell because of Insider Trading.

Although Insiders buying in a bear market has helped us pick interesting names a few years back.

Disclosure – No views on any of the stocks above and no recommendation. Please do your own research.

 

Management Interviews – GNA Axles, GNFC

GNA Axles, Kulween Sheera, ED

  • Demand outlook is good for Exports as well as domestic, Off-road as well as commercial vehicles
  • Off-highway (Tractors) domestic market can see growth at 7-8% in coming year
  • Order flows – 70-75crs per month overall (Exports + Domestic)
  • Our sales consists of 50% off highway and 50% CV’s
  • Margins will be impacted in short term due to increase in steel prices
  • Once prices are stabilized we can expect 15-16% margins
  • Market share in tractors is 50-55%, we are increasing some capacity and once machines are in place we can cater to more clients
  • 50% of our sales is from exports, expect growth of 10-15% in exports
  • Expect 15-20% overall growth for FY 19, mainly lead by volume growth
  • Right now total capacity is 4 million components and utilization is 80-85%
  • In 18-19 there will be addition of 500,000 components in existing setup and In 19-20 more 500,000 components in new setup

Full Interview :

https://www.youtube.com/watch?v=mGrTwE40Fak

 

GNFC – Rajiv Gupta, MD

  • TDI demand is very steady, we have 5000 tonnes of export backlog of TDI
  • TDI prices are hovering around 4000-4200 $ except a few erratic price offerings by some companies
  • We have improved our capacity utilizations from 73% to 93% (FY18) and this year our target is 110%
  • Squared off debt of 880 crs this fiscal
  • Brought down working capital from 1700 crs 3 years back to level of 225 crs, our target is to make it zero
  • Some of the plants have done very well like Aniline, Formic acid, Technical grade urea and Ehyl Acetate
  • Our company should not be evaluated only in terms of TDI business, in last 3 years we have registered a growth of 90% in non TDI business
  • Non TDI segment is also doing well
  • Board has authorized capex in Acetic acid and Formic acid
  • We have made our self completely insulated as far as any water crisis are concerned

Full interview:

https://www.youtube.com/watch?v=4u656NIIeY0