Management Comments – Wipro, M&M Financial Services, SKF India

Wipro on where the next leg of growth is coming from?
  • The management sees automation as a key lever to drive margins going forward.
  • It sees good momentum in its business led by steady performance in banking and financial services and consumer businesses Within BFSI, Wipro is seeing good growth in cloud migration and enterprise renovation segments on the Banking side and automation & operations transformation on the capital markets side
  • The management sees revival in the energy and utility business.
  • It has also seen an uptick in communication business driven by core enterprise spend as well as the new edge areas like 5G.
  • Health segment continues to see challenges, driven by the uncertainty around the ACA which continues to persist
Source : Q2FY19 Concall
M&M Financial Services on geographical performance
  • Among the states, the state of Maharashtra is showing slower performance, while other states of North East, UP and Bihar etc are aggressive on growth front and Kerala is bouncing back after floods
  • Large part of NPAs of rural housing finance subsidiary are from Maharashtra state, the company expects the NPAs of rural housing finance subsidiary to decline in Maharashtra in H2FY2019

Source : Q2FY19 Concall

SKF India on Revenue mix, Segmental breakup, Capex and Wind energy
  • Revenue mix : Of the total sales, automotive accounts for around 43%, industrials around 50% and exports which are largely towards auto account for the rest 7%.
  • Within Automotive, aftermarket would be 13% and 87% would be OE. Within industrials, the aftermarket and OE are 50% each. Within industrials,  Strong traction seen from passenger wagon side.
  • Capex :  Company will incur a capex of upwards of Rs 150 crore as compared to around Rs 50 crore
  • Wind : While the prices of bearings for wind energy has stabilized but still no significant demand seen towards wind energy. However investments picking up in turbine side manufacturing and demand will eventually pick up

Source : Q2FY19 Concall

 

 

Management Comments – ICICI Lombard General Insurance, Ultratech Cement, Inox Leisure, JSW Energy

ICICI Lomabard General Insurance

On retail side of business, SME and Retail health indemnity continued to grow faster and remain areas of focus

Company continues to remain cautious in case of government business segment in view of aggressive pricing strategies adopted by some market players

The general insurance industry witnessed significant disruption in the state of Kerala which was triggered by excessive floods. Overall economic losses incurred by state is estimated to be 250 Billion rupees. The gross incurred losses for industry are estimated to be 20 billion rupees.

The regulator has made it mandatory for all new private cars and two wheelers for long term third party cover. This is positive development as it will address the problem of non renewal of motor insurance in case of older vehicles. Insurers have been permitted to price the policies in line with their current approach for pricing.

Source : Q2FY19 Concall

 

Ultratech Cement

Sector update : Demand continues to remain healthy and grew 10 to 11%. Capacity utilisationin Q2 was 65% versus 61%. Capacity addition is expected yo be 15 to 17 mtpa for next 3 years compared with incremental demand of 25 to 27 MTPA.

Cost structure : logistics cost account for 31%, energy cost account for 30%, raw material cost accounts of 14%

Capacity utilization : 80-85% in east; 75-77% in north; 55-60% in central; 65-70% in west; 65-70% in south.

Petcoke prices have declined to 108$ per tonne vs 114$ per tonne. Road freight cost can decline 7% due to revision in the axle load limit and road freight accounts for close to 75% of sales. There will be some cost increase due to higher diesel prices

Source : Q2FY19 Concall

 

Inox Leisure

We are looking for aggressive growth — both organic and inorganic — and are always open for acquisitions. Inox is not in talks with Cinepolis, or any other player, but if owners of any large cinema chains decide to sell, Inox will evaluate.

Our new properties in places like Gwalior, Jaipur, Hyderabad, Delhi NCR, Mumbai and Bengaluru are getting great response from cinema goers. While we have added the highest number of new screens this year, I am seeing new properties coming up faster hereon. This year, we will end up adding 80 screens, while my target for next fiscal is 100

Inox operates 542 screens across 133 multiplexes in 67 cities and the company has 815 more screens in the pipeline.

Source : https://bit.ly/2DJQ2hG

 

JSW Energy

Power sector will be profitable again in two years as no fresh capacity is being added to cater to the rising demand

Power demand grew 6.1% last year and during second quarter this year it was close to 7%. I feel the trend now will be 6.5%- 7.5%. Lots of investments were committed in the sector earlier due to which 123 GW of capacity came up as against 88 GW. That excess capacity of close to 35 GW and lower demand created a problem in the power sector. As no new investments are taking place, a balance will be created in 2-3 years. You will see fresh investments in four years and we feel a lot of consolidation is going to happen

As and when assets go to the NCLT and even outside, we will be interested. We are looking at assets based on domestic coal and the logistics cost is minimum and where we can do projects at low cost so that cost of power is low.

The problems of power purchase agreement (PPA) and coal can be resolved over time and these delays can be factored in with proper capital structure

Source : https://bit.ly/2r6LbQe

Management Interviews – IEX, Sobha Developers, Bata India, Sandhar Technologies, V-Mart

IEX

  • Q2 volume growth driven by increased demand in Gujarat, Maharashtra, Bihar, WB, Telangana, J&K
  • Reason in increase of pricing was due to hydro and wind generation going down in September and shortage of coal
  • Our transaction fees is not dependant on price of power but on volumes transacted
  • Load shedding is the last thing that distributors engage in, hence demand for power will continue
  • Any variation of fees in future shall be first approved by a regulatory approval, earlier exchanges were free to vary.

Link : https://youtu.be/q7RLg1wgg2g

Sobha Developers

  • Revenue can be recognized only on completion basis as per New AS
  • There are few private sector NBFC where we have seen they have not disbursed loans and they have assured that max delay is for 2-3 weeks
  • Aiming topline of 1200 crs in this FY. Order book of 2300 cr on hand for contract manufacturing, will grow this business at double digit
  • 1st time buyers have been buying early in their age
  • 2018 will be better than 2017
  • Kerela is a great market for us, sentiment will revive when NRI returns in december season
  • Gurgaon and NCR is genuinely growth oriented market in North
  • Bangalore we have good land bank

Link : https://youtu.be/wmnWoRioGyg

Bata India

  • SSGR is 9%+ and premium segment is 30%+
  • Turnover growth was 15% where 16% growth in retail and 4% in non retail
  • Portion of premium products will go to 35% from 30% at present
  • Passing entire benefit of GST to customers
  • Margins have improved by 1%
  • All new launches will be mix of premium and retail

Link : https://youtu.be/JqT3gLPC4gM

Sandhar Technologies

  • Margins pressure is due to commodity prices and increase in power and fuel cost
  • Our new units are operating at negative operating leverage and as time passes will see much better margins from new units
  • Industry segment grew at 13%, we grew at 20%
  • PV segment grew at 5.1%, we grew at 7.9%
  • CV segment grew at 37%, we grew at 35%
  • Off highway grew ta 22%, we grew at 75%
  • Diversification program has paid off well for us
  • Just 3% of overall revenue is exports
  • 50% of our foreign currency exposure is always hedged

Link : https://youtu.be/Q57YeC6j64g

V-Mart

  • Festival demand has shifted from Q2 to Q3 which is the reason of SSGR coming down
  • Expenses are growing and SSGR is flattish resulting in Ebitda loss in quarter
  • Witnessing good festival season – will meet our expected nos. by year end
  • Our stores are in Tier2 Tier3 cities and people buy only when they need and when there is festival. So during festival they come out and buy large quantities. Seeing demand rise in winter wear products from North India. Kids wear is growing more than other items
  • 19 new store opening in H1, focussing on north and east states
  • We approach clustered approach by opening new store which is 100-150 kms from our other stores

 

 

 

 

Management Interviews – Welspun India, Welspun Corp, Bajaj Electricals, Castrol India, Escorts, BEL

Welspun India

  • After a long time entered in to double digit growth trajectory
  • SPACES grown 20% in Q2
  • Launched W brand towels in domestic market
  • Christy sales via e commerce platform have gone up by 140%
  • Expecting 1800 crs revenue from Welspun flooring in 2-3 years time (2x of capex)
  • Double digit growth guidance for revenue and ebitda margin next year will improve substantially as current year hedges expire
  • Capex will be 900 crs – 700 crs for flooring. No new spending on spinning and weaving.

Link : https://youtu.be/mSHvcIzKTDk

 

Welspun Corp

  • 7% growth on YoY basis and 9% growth on QoQ basis
  • Ebitda is 239 crs at sales of 269 MT
  • Order book of 1.7 mn tonnes valued at 2 bn $ (highest ever in history of co.)
  • 850k tonnes from Saudi, 500k tonnes from US and 300k tonnes from India
  • Growth mostly coming from US mkt
  • Made a provision of 28 crs rs for ILFS and other bonds.

Link : https://youtu.be/zoF1df0buTE

 

Bajaj Electricals

  • Sales at 1598 crs vs 935 crs YoY , 71% growth
  • PAT gone up to 34 crs from 18 crs, 79.6% growth
  • Consumer product business growing by 25%
  • EPC is growing by 127% because of orders from UP projects
  • Consumer products margins are less as RM prices have gone up and Co. has not taken increase in prices, it will be taken in 3rd qtr
  • EPC margins – UP order margins are on lower side than other EPC projects
  • Total order book for EPC is 7300 crs
  • EPC topline by year end will be 4000 crs, 60% growth
  • Consumer products topline will be around 3000 crs
  • CP margins we expect to improve by 100 bps, EPC margins will be in same range

Link : https://youtu.be/G4yE78X8p_4

 

Castrol India

  • Current quarter volumes increased 4%
  • T/O increased 8% after putting in 3 prices increases in market
  • Profitability was maintained despite 115crs increase in cost of goods
  • ReLaunched some products with differentiated technology
  • We have recovered 80% of cost of goods increase in 9 months
  • No price hikes in this quarter unless huge change
  • Reached 150k retail outlets and signed alliance with M&M
  • Saw uptick in industrial volumes in Q3, 4% growth
  • Synthetic products is a small part of turnover % in India as market is still evolving
  • Lubricant demand depends on how much the vehicle moves and how many vehices are there in system and not so much on vehicles sales. Other thing that impacts is technology change. Replacement of lubricants are getting longer which means vehicles require lesser lubricants but they’ll require other synthetic products in which castrol is well positioned
  • Long term volume growth of 5-6%

Link : https://youtu.be/tuW3Dq-Nabw

 

Escorts

  • Diwali and Navratri are generally strong periods
  • Already taken price increase two times, will be looking again for 1% increase after festive season is over
  • In construction business, H1 is lower and H2 is better, guidance of 13% growth on full year basis
  • Railways – Order book – 400 crs+ which will be executed within next 12-13 months – Guidance of 25-30% growth on full year basis
  • Lowered margins in railways compared to previous quarters as we are entering new product segment. On a full year basis margins will be better by 200-300 bps
  • In tractors we are able to pass the cost increases to customers but in construction we are facing difficulties
  • Price realisations were better due to price hike taken
  • Overall macro for rural is looking positive for next 2-3 quarters

Link : https://youtu.be/eOr_jKPHk3I

 

BEL

  • Revenue growth of 20% for half year
  • PAT depends on mix of services provided during particular period
  • Ebitda guidance for full year around 17-18%
  • Order book of company at all time high touching 50,000 crs
  • Executable order per year will allow us to grow at 12% CAGR
  • Will complete deliveries at 11200 crs in this year
  • Expect order flow of 10000-13000 crs in FY 20

Link : https://youtu.be/xufvb85MJys

Management Interviews – Globus Spirits, Prataap Snacks, Berger Paints, Ceat

Globus Spirits

  • Investing 25-30 crs into premium IMFL business every year. Sales is small now but it’s a high growth business
  • Economy brand business growing at about 8-10% every year
  • Rajasthan is a biggest state, followed by Haryana and then West Bengal
  • Bihar Distillary – Is for ethanol policy – Large part of capacity will go to OMCs – Will start in next 2 months – Will add about 100 crs of revenue to our business on annual basis – Margins will be north of 20%
  • Have taken price increase and that lead to increase in margins
  • Margin increase due to ethanol is not yet played out
  • 12% margins can be safely assumed this year and will increase once ethanol is played out
  • Rajasthan is over 30% of our revenues and most profitable state, don’t see much change in buiness due to elections
  • There will be some capex in Bihar and Haryana for ethanol

 

Link :

https://twitter.com/CNBCTV18News/status/1032528096128262144

 

Prataap Snacks

  • Will not take debt for acquisition of Avadh snacks, already have cash on books of about 140 crs and cash reqd is 145 crs
  • Avadh snacks revenue is 140 crs; Ebitda margins are 7.5-8.5%; No.4 in Gujarat Category
  • They have small debt of 2-3 crs Rs
  • Gujarat is 4-5% of India’s population – they consume around 12-14% of Indian snacks
  • Revenues of Prataap snacks from Gujarat is just 12-25 crs in a year
  • Will take our holding from 80% to 100% in next 4-5 years; until then Avadh promoters will run the business for us
  • We have a growth target of 18-20% and margins of 7.5%
  • Will target revenues of 1250 crs this year

 

Link :

https://twitter.com/CNBCTV18News/status/1032522272576159745

 

Berger Paints

  • RM Prices – Moderation in some and some gone up
  • Re devaluation will impact us as 25-30% of RM is imported
  • We will take a price increase of 1-1.5% in September
  • Ebitda margins will be static or some drop if we are unable to take price increase
  • Saboo coating acquisition – Speciality products – Glass coating, Plastic coating – Earlier it was a Noth Indian company – We are planning it to take to different geographies
  • Volume growth was at 17% in Q1 due to base effect; In Q2 it might not be 17% but can expect a good volume growth
  • Market share – 19% in decorative business
  • Capacity utilization – 70-72% in normal months and 90-92% in seasonal months
  • Going to set up a plant near Lucknow in UP which will come up in 2020

 

Link :

https://twitter.com/CNBCTV18News/status/1032517987985580032

 

Ceat

  • Our physical rubber inventory will be around 3-4 weeks
  • We have a mix of rubber sourcing i.e. imports and local
  • We are facing some supply issues from Kerela in last 2-3 weeks leading to production stoppage
  • Local rubber prices have moved up from 125/kg to 133/kg (Kerela). As far as international prices are concerned – they are rangebound around 1450 $
  • Availability of carbon black have improved in last 2 months.
  • Re depreciation has also impacted delivery costs in terms of imports
  • 2 Wheller demand is good in last 2-3 months; also seen growth in both OEM and Replacement market
  • We are working for additional capacity addition based on our long term capex plan
  • Likely to incur 1000 cr capex in Halol for TBR – Will be commissione din Q3 of this FY
  • Setting up greenfield plant in Southern india for Passenger Vehicles – Est capex is 2000 crs
  • Capex spend will be in phases ; funded through internal accruals (1/3rd) and debt (2/3rd) – Debt to Equity at end of FY19 could be 0.7-0.8

 

Link :

https://youtu.be/E60gjyHdW58

 

 

 

 

Management Interviews – NIIT Technologies, Mastek Ltd., Ashok Leyland, M&M, Bajaj Auto, Sterlite Technologies

NIIT Technologies

  • Annual Salary hikes comes in Q1 leading to depressed margins
  • Order intake for this quarter is $151 mn vs $110 mn YoY with US as lion’s share
  • US is now 50% of revenues vs 48%
  • Within BFSI, amount of spends coming from Capital markets subsegment to meet regulatory impediments are large

Link

https://twitter.com/BloombergQuint/status/1019554623768522752

 

Mastek Ltd

  • As a result of our investments in last 18-24 months, we are seeing a good momentum in topline
  • Financial performance is a lag indicator, our pipeline have grown 25% QoQ, order book remains robust, we are signing multi year deals
  • More IT services will be needed to establish departments set out due to Brexit
  • Sequentially US grew 4.2% and 10% YoY. Investments in digital commerce space (Retail to Ecommerce) is where we are helping our customers
  • We have been in UK for 22 years and US for a year and a half
  • Margins trend will continue to have upward bias as we keep on investing and growin the business

Link

https://twitter.com/BloombergQuint/status/1019555890603556865

 

Ashok Leyland

  • Taken price hike of 1.5-2% in April which helped us to neutralize increase in RM prices
  • In chase of volumes we are not going to do heavy discounting. We don’t push credit into pipe and try to take offtake higher
  • Net cash on books is 1200 crs
  • Its 12-13th sequential quarter of double digit ebitda margins
  • Hopefully in 2nd half of this year we can see softening of steel prices
  • Market share for current quarter is 30.2% for MHCV segment (fallen by 4.5%)
  • Gained market share in LCV segment from 15 to 16% -> 34% growth in volumes
  • We are clearly walking away from negative margins sales and let some of business go. For us it not a market share game, our plan is to grow profitably
  • 8-10% growth at the end of the year is very much possible
  • Extra load in existing vehicles brings safety concerns as it will be overloaded; can be brought prospectively in new vehicles
  • Last quarter we saw heavy discounting by other players to play volume game

Link

https://twitter.com/CNBCTV18News/status/1019483592085270530

 

M&M

  • Govt notifications on extra load cannot be applied retrospectively as we have designed vehicles as per earlier rules
  • Will have to design new truck for new axle load
  • It will take minimum of a year to design and make trucks to be able to leverage full axle capacity that govt has now approved

Link

https://twitter.com/CNBCTV18News/status/1019483282470158336

 

Bajaj Auto

  • Exports grown by 31% in totality
  • Domestic motorcycle grown by 40%
  • CV business grown by 80%
  • All in all grown by 36% in number terms
  • Had a record sales in international three wheelers, on track to achieve 2 million on export side
  • CV business – runrate of 100,000 coming per quarter, annual target of 375,000
  • Domestic motorcycle – Industry growth at 19%, we have grown at 34%
  • Margins at 18.4% vs 20% tradionally
  • CV and Exports have seen same margins
  • Domestic motorcycle is growing more in terms of topline so margins have come off on overall business
  • Will go in more aggressive in terms of pricing and market share for M1 segment (entry level) which forms 15% of turnover
  • Sports segment, 3 wheeler, Spare parts will continue with the same margins

Link

https://twitter.com/CNBCTV18News/status/1020242425636245504

 

Sterlite Tech

  • Sitting at all time high order book from 3100 cr to 6034 cr as on June 2018
  • As of the visibility today we are predicting $ 100 mn profit mark can be achieved by march 2019
  • Margins significantly improved from FY 16 to FY 17
  • One of our facilities which was operated at 45% utilization is now operated at 95% utilization
  • Overall operating efficiency is improving
  • 24-25% margins is our medium term outlook (no expansion)
  • Metallurgica acquisition will help in Europe as a startegic hub and also brings in new set of customers. Will be EPS accretive immediately
  • Out of 6000 cr order book, 5000 cr is coming from products which is largely from european markets. Rest 1000 cr is system and software development

Link

https://twitter.com/CNBCTV18News/status/1020164688032612352

Management Interviews – MIRC Electronics, SH Kelkar, Dish TV, Balaji Telefilms, Bajaj Electricals

MIRC Electronics

  • Sold 150,000 units grossing 90 crs of washing machines last year , expecting it to go upto 250,000 units this year grossing 160 crs

 

  • Contribution margin in washing machines will go up from 27% to 31%

 

  • Capacity utilization at 50% now

 

  • Bennett coleman holds 7% stake in company which in effect can do 60 crs worth of advertising, out of which 30 crs is unutilized at this moment

 

  • By next March warrants will kick in, so total infusion will be 130 crs (90 crs + 40 crs warrants), Our borrowing was 150 crs.

 

  • Non core assets can realize 120-130 crs

 

Link : https://twitter.com/CNBCTV18News/status/1016922438284673024

 

SH Kelkar

  • Long term initiatives such as Investment in R&D , Sales expansion, Reducing operating expenses are all in track

 

  • Pressure on gross margins as raw material supply scenario which has panned out in Indian chemical suppliers

 

  • Had a 6% dip in gross margins at 39% vs 44% (Average margins). Will slowly recover in 2nd half of Financial year

 

  • On last years base we can grow Revenues at excess of 15%

 

  • We have higher market share in premium products then in lower range products

 

Link : https://twitter.com/CNBCTV18News/status/1016946164149596160

 

Dish TV

  • Added 3 lakh subscribers in this quarter

 

  • Revenue growth guidance – 7 to 8 % for full year

 

  • HD has contributed 40% of new subsscribers this quarter. Out of total subscribers base 17% are consuming HD content

 

  • Ebitda margins has moved up from 30.5% to 33.6% QoQ. Guidance 34-36% this year

 

  • Synergies from personal cost, back end, admin, content has just started to come in

 

  • One time cost have come in Finance cost due to upfront fees paid on re nogotiation of D2H debt at much attractive interest rate. Finance cost will be 25-30 crs lower from what you see now

 

  • Our market share is more than 40%, focus is to add share on net basis and increase ARPU

 

  • With incoming of Tariff order, it will help restore level playing field between cable and DTH

 

Link : https://twitter.com/CNBCTV18News/status/1016929570631532544

 

Balaji Telefilms

  • We have doubled the number of subscribers in last 3 months from 1.2 million to 3.5 million (Excl. JIO)

 

  • We aim to breakeven and have library of 70-75 shows by end of 3 years

 

  • We have carved out exclusive digital rights for some TV shows

 

  • Telcos giving data are very cheap rates which is boosting consumption

 

  • Content comes at cost of 30L-50L for ½ Hour

 

  • Every 6-7Th show will be a show in regional content

 

  • Target of reaching 8 million subscribers by 2020-2021

 

  • ARPU right now is 15 Rs and aim is to get it to 20 Rs, will do that by pushing it to international audience at 1$ i.e. 65-70 Rs

 

Link : https://twitter.com/ETNOWlive/status/1016912708896092162?s=08

 

Bajaj Electricals

  • Last 2 years have taken a lot of hits to get our distribution in place, now expecting a high two digit growth

 

  • June July August will have a low base effect so 15% – 20% growth would be normal given good demand this year

 

  • Have good orders in EPC business from UP Power Distribution which will tilt % contribution. However we want to maintain it at 50-50 in the long run as EPC gives visibility but is risky business. Core business is consumer product business

 

  • We placed bid for 16 projects of low cost housing expecting to get 3-4, but we got it for all 16 projects i.e. order of 5000 crs. Which we do not have capacity for. Luckily in survey we found many houses do not exist, so will have to do orders worth 3000-3500 cr by March 2020

 

  • Total order book is higher than 8000 crs

 

Link : https://twitter.com/ETNOWlive/status/1016903607143133190?s=08

 

 

Management Interviews – M&M, CCL Products, Take Solutions, Mahindra Life, Motherson Sumi, Bajaj Electricals

M&M – Tractor & Farm Equipment Division

  • Q1 growth will be in mid teens, annual growth will be at 8-10% and hence demand shall get subdued going forward in the year
  • Growth last year was on low base, as we get in H2 of this year, base will be higher
  • Last year 37% of revenues came from global businesses
  • We lead the prices in the industry. Last price increase was in march timeframe
  • Will look at prices again in July – August
  • In next 5 years we aim 50% from global revenue against 37% now
  • Levers to growth will be
    1. Shift from Tractor to Farm Machinery
    2. Global strategy – Global business growth
    3. Creating new technologies
    4. Managing costs

Full Interview :

https://www.youtube.com/watch?v=ESEMGS4inI0

 

CCL Products

  • New plant coming online at end of this FY
  • If we receive customers approval in time we can reach upto 20% growth or else it stays in range of 10-20%
  • Ours is not a commodity based business, we supply to brands and brand owners. So change in coffee prices does not impact our business materially
  • Revenue growth is not a correct indicator for us, as revenue figures are based on tea / coffee prices which have fallen 15-20% from last year which automatically means proportionate decrease in topline
  • 70% of production cost is raw material itself, so significant impact will be seen in topline
  • Bottomline will give you better indicator because as volumes increase bottom line is also increasing
  • US consumes 80k tonne of instant coffee, japan consumes 25k tonne, We in India consume only 10-15k tonne. India is growing at 15-20% YoY
  • Our focus will be on new products where we see larger potential of growth
  • Last year we achieved 46 crs in domestic market, this year we are projecting 100 crs based on our Q1 performance

Full Interview :

https://www.youtube.com/watch?v=YvM3VW_83jY

 

Take Solutions

  • Looking at organic growth rate of 23-24%
  • Strong order book which stands at 190 million $ as on 31st March
  • Last 12 quarters, Lifescience business have grown at 8.5% CAGR QoQ
  • Going through acquisition route in clinical research business in USA
  • We have cash of 350 crs on B/S
  • We are seeing account led growth from existing customers which is giving us higher revenues
  • Our aspiration is to do 500-600 mn $ in revenues in three years and we are currently at 246 mn $
  • depreciation does not impact us much as we earn in $ we also spend much in $

Full Interview :

https://www.youtube.com/watch?v=GTXtGB3yqS8

 

Mahindra Life

  • Commences new project ‘Roots’ at Kandivali East in Mumbai
  • Sub 1 acre project – 1.42 L sq ft saleable area
  • Sub 200 crs of revenue potential from this project
  • 1 project going on in NCR, 1 in Bangalore, 1 in Pune, 1 in Hyderabad and 1 in Chennai
  • Evaluating the impact of Accounting Std changes on Financials
  • Will see few launches in Mumbai and Out of Mumbai in this year

Full Interview :

https://www.youtube.com/watch?v=TOppO0KIMdI

 

Motherson Sumi

  • 3 new greenfield sights will add as by 2019-2020 it will add a billion USD to topline
  • This seems to be the last plant for the order book of 17.2 billion
  • Acquisitions will make much of a impact on to the topline, we are sitting at 12.5-13 billion, will go to 18 billion for motherson sumi
  • We have a huge pipeline for acquistion, we are negotiating
  • Hungarian and other plants will come to full capacity in 2018 end or Q1 2019

Full Interview ;

https://www.youtube.com/watch?v=i5dKTRNL-9U

 

Bajaj Electrical

  • Margins are very competitive in government orders, from industry point of view its not a money making situatuion for us as tender prices are very low
  • 1st acquisition for Bajaj Electricals – 80% shares will be acquired in NIRLEP and subsequently 100%
  • NIRLEP’s last year turnover was 60 crs and clients like IKEA, Future group. Turnover in current year should cross 80 crs
  • NIRLEP is not profitable as of now

Full Interview :

https://www.youtube.com/watch?v=nrdpwGOyKi0&feature=youtu.be

 

 

Management Interviews – Saksoft, Sanghi Inds, Escorts, BEML, Welspun Corp, Lemon Tree Hotels, Omax Auto, Bluestar

Saksoft

  • Focused on digital services in following spaces
    1. Fintech
    2. Healthcare
    3. Logistics
    4. Ecommerce
    5. Telecom
    6. B2B
  • Our revenue drivers are
    1. Application services
    2. Digital testing
    3. Analytical services
  • depreciation is good as 90% revenus comes from Europe and US
  • 5 Customers with more than 1 million $ revenue
  • 90% revenues comes from repeat customers
  • Margins can improve 50-100 bps from current 13% odd
  • We keep looking for midsize companies between valuation of 5mn to 10mn in size
  • Expect growth to be better than last year
  • Small debt of 25 crs
  • Promoter % holding has reduced only because of reclassification from promoter to non promoter

Full Interview:

https://twitter.com/CNBCTV18News/status/1006101894152912896

 

Sanghi Industries

  • Not cut off any prices from May in Mumbai
  • There will be impact on price as well as volumes as monsoons will arrive
  • Mumbai forms around 10% of our market
  • A fortnight’s shutdown was taken in month of Feb which was a one off event, growth should return to normalcy from this quarter
  • FY 19 we expect to end at 3-3.2 mn tonnes of volumes sales
  • Typically Q1 and Q2 will see 40% of the years volume and Q3 and Q4 see 60% of the voumes
  • Diesel and Energy prices have gone up and will have impact on whole industry
  • In Q4 no cement company posted 20%+ margins and Ebitda have come down to below 1000 from 1200-1400 range
  • Fly ash availibility shall improve next quarter or so
  • Capex plan is on track as planned, entire project will get commissioned by end of FY 20

Full Interview :

https://www.bloombergquint.com/videos?id=5b1e0126bf48855f66543239

 

Escorts

  • Expect insutry to grow at double digit somewhere around 9-11% is possible on a already strong base
  • Escorts have been supplier to Indian railways for suspension and braking systems, now we are looking to expanding our portfolio going into electrical categories
  • There is an inflation pressure since last 15 months and trend will continue for this year too, so far able to pass on all costs with a lag of a quarter
  • We are expecting 2.5 times growth happening on topline side
    1. Railways – 4 times growth
    2. Construction – 3 times growth
    3. Tractor – 2.5 times growth

Full Interview :

https://twitter.com/ETNOWlive/status/1006099015065165825

 

BEML

  • Order book is around 6700 crs and expecting good orders this year
  • Can see 30% revenue growth this year
  • Mining and construction order book target is 1800 crs
  • Rail and Metro order book target is 1800 – 1900 crs
  • Defence we see 1000 crs order this year
  • Improved margins will come from spare sales in defence, high end equipments in mining and construction, memo orders in railways
  • Margins will be better than last year
  • Capex this year will be double of last year (70 crs) into aerospace, rail and metro, ARV order in defence
  • Stake sale is delayed because of due diligence process

Full Interview :

https://www.youtube.com/watch?v=tbDI0lVfXos

 

Welspun Corp

  • 2 orders one from Latin American market and one from American market which will be serviced in this FY itself
  • Current order book is at 1.64 Mill Tonnes, consolidated order value of 11400 cr rs. These 2 orders out together will add 700 crs odd
  • Both orders will be fairly remunerative as compared to previous orders
  • Margins in American order will be higher than normal margins
  • Very strong demand and prices for oil so American market looks good, till now we have not faced any hindrance
  • We are already booked for 9 months of this year

Full Interview :

https://twitter.com/ETNOWlive/status/1006407074467778560

 

Lemon Tree Hotels

  • Demand over last 5 years have grown 13% a year and supply is only going to grow at 6-7%
  • No one is building hotels anymore due to poor economics at present
  • Huge shift seen in young middle class population with rising disposable income towards branded mid market hotels
  • There would roughly be a 500-1000 bps of difference between Revenue nos. of a hotel chain and a standalone hotel
  • Over 200k hotel rooms in India, over 62% is branded
  • Over time standalone hotels will be under pressure to merge with chains
  • Next 5-7 years – ther will be 5-6 dominant chains in India international as well as domestic
  • Bombay region has highest barrier to entry because cost of land is very high and development approval process is a nightmare
  • Mumbai Lemon tree premier is 671 room hotel, 8L sq ft built up area, will be ready in next 3.5 years. Avg rates will be around 8000 rs. with 80% occupancy
  • Group occupancy rate is at 76-77%
  • Our ability is to re price in better in winters than in summers
  • Current debt is 1000 crs, don’t see debt significantly going up this year
  • In summary we have 6600 rooms, 66 hotels.
  • 300 room hotel in Bombay, 200 room in Pune, 90 room in Dehradun, 140 room in Kolkata and 140 room in Udaipur. All owned assets
  • Also open another 700 managed rooms this year.
  • Bombay will require significant investment of 800 crs, 200 crs already funded, rest will be through internal accruals and little debt. Peak debt will be 1300 crs. Will be comfortably able to service it
  • ARR’s are higher for this holiday season than last year

Full Interview :

https://www.youtube.com/watch?v=0bDYn9i-6nc

 

Omax Auto

  • Indian railways have taken decision to replace conventional ICF designed coaches with German LHP designed coach
  • There are roughly 45000 coaches in circulation today and replacement is planned in next 7-8 years i.e. 6000 coaches per year plus annual demand of 3500 new coaches evey year. So demand will be around 10000 coaches p.a.
  • We make coach furnishing items to support production units
  • Current capacity utilization is at 72% and processing 4800 tonnes stainless steel every year. With capacity expansion in next 2 years the capacity will double
  • Formal production will start in last quarter of FY 19 (Around 15-20% of overall capacity to come online)
  • Last year turnover from Indian railways was 150 crs , tgt for 2020 is to take it to 500 crs, reducing the dependence on 2W business
  • 3 years down the line railways shall form 35-40% of overall sales
  • Ebitda in last year was 4.5%, expecting it to rise to 7-8%
  • Our margins from railway business are better than automotives
  • Looking to dispose land in Gujarat and certain part of Northern India

Full Interview :

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

 

Bluestar

  • Penetration levels in this country is very low say around 5%
  • Impulse purchase due to summer have not happened this year but market outlook demand has not gone
  • As far as GDP grows by 7-7.5%, market for room air conditioners will grow by 10%
  • Jan to March was a good quarter, April to June is not going to be good but at the year end we see 10% growth.
  • Inventory levels is the one pressure one can see, industry will have 500,000 units as inventory i.e. 2-3 months
  • Good monsoon and festival season is the hope
  • North and West did good in May, South and East sales were down due to rains.
  • Air conditioner is the last durable for many buyers i.e. after 4wheelers
  • Very likely to increase prices in July or Aug

Full Interview :

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

 

 

 

 

Management Interviews – UFO Moviez, Gujarat Gas, Glenmark Pharma, Thomas Cook, Coal India, Godfrey Phillips

UFO Moviez – Kapil Agarwal, Joint MD

  • Ad revenue growth should be 20% or above
  • Minutes Ad / Show should grow at 20-25%
  • of screens are constant 50 +/- is what we expect
  • Main screens growth is coming from multiplexes where we do not have advertising rights as they sell their own advertising
  • Caravan has grown from EBIT of 2crs to 8crs and expecting healthy growth further

Full Interview:

https://twitter.com/CNBCTV18News/status/1001716589711036417

 

Gujarat Gas – Nitin Patel, CEO

  • We can maintain 6.8 mmscmd volume growth
  • We have defined 2 segments PNG/CNG (Gas provided by Govt. of Gujarat) and LNG (Buy and Sell to the industries), Growth will come from both segments
  • Industrial prices – 80-90% contracts are dollar based; dollar shocks are passed on
  • CNG/ PNG is non dollar based pricing – we monitor and pass on the prices as per strategy
  • Bids for 86 geographies and 147 districts opening shortly – Out of these we have bid for 48 in 1st screen and 2nd screen is going on, eventually we will see at 20 odd cities for bidding

Full Interview:

https://twitter.com/CNBCTV18News/status/1001713785256767488

 

Glenmark Pharma – Glenn Saldhana, CMD

  • US business is challenging but got couple of approvals this quarter
  • From Q1 one should see US business doing much better than last year
  • New approvals will over shadow the price decline that we see in US
  • Everyone is facing margins pressure in US and hard to predict what will it look like
  • On a full year basis margins will look reasonably good, not providing any specific number
  • Several molecules under development which could get out licensed in current year
  • Will generate free cash in core business which will bring down debt
  • Strong growth from India in domestic and consumer care business
  • R&D spends @ 12% will remain flat on full year basis

Full Interview :

https://twitter.com/CNBCTV18News/status/1001711057059176448

 

Thomas Cook – Madhavan Menon, CMD

  • After removing one offs – profitability have grown by 9% in Q4
  • Sterling holdiays resort losses halved; EBITDA nos. have shown signs of turnaround
  • SOTC and Thomas cook forward booking for outbound travel is 34% above last year, after depreciating Re it is still 28-30% growth
  • Have used analytics to follow on leads and regional tours have taken off significantly this year
  • Foreign exchange business is the cash cow in thomas cook portfolio, no intention of demerging
  • Not want to get into NBFC at this time

Full Interview :

https://www.youtube.com/watch?v=7USZtOngDOg

 

Coal India – Samiran Dutta, Chief Manager – Finance

  • Q4 was best in last few years in terms of production and offtake
  • Production was 183 mn tonne and offtake was 158 mn tonne
  • In Jan 2018 we have revised our prices
  • Realizations in Q4 were Rs.1573 / tonne vs 1495 / tonne
  • FY’19 production growth at 16% and offtake at 13%
  • Targetting production of 630 mn tonne in FY 19
  • Incentive is around 500 crores which is included in sales number
  • E – Auction prices is around ~2000 / tonne
  • Started year with 55 mn tonne of inventory
  • Receivables have come down as marketing team is continously monitoring and hope to continue in future also

Full Interview:

https://twitter.com/CNBCTV18News/status/1001664994038104064

 

Godfrey Phillips – KK Modi, President

  • Industry volumes have come down by 4%
  • Illicit cigarettes are around 25% od total market
  • FY 19 Industry growth will be flattish and our volumes will go up slightly (in single digits)
  • Slight increase in prices due to gst but not significant
  • FY 19 if taxes remains stable, prices will remain stable, as industry will not raise prices
  • Current mkt share is slight higher than 12%
  • We are currently selling only in 40% of India , looking for geographical expansion esp. Soth India

Full Interview :

https://www.youtube.com/watch?v=hpWrpUs0zhk