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 :


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 :

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.


  • 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
  • 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.



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




Concall Summaries – Century ply KEC International Greenply Indigo Daawat GSFC and more

A lot of concall summaries – Harsh Doshi.

Companies covered :

  • Century ply
  • KEC International
  • Greenply
  • Indigo
  • Daawat
  • GSFC
  • Kwality
  • NCC
  • Satin Credit
  • Ruchira Papers
  • JKIL
  • Banswara Syntex
  • Ahluwalia Contractors
  • Camlin fine science 

For detailed concall audios –