ARO Granite Industries Limited Q4 FY23 Earnings Conference Call Summary
Financial Performance
• Revenue Decline: Revenue decreased to Rs. 163.90 crores from Rs. 224.74 crores in FY22.
• Negative PAT: Reported a loss of Rs. 5.78 crores compared to a profit of Rs. 8.91 crores in the previous year.
• Challenges: High container prices, quartz plant shutdown due to U.S. import duties, and the European energy crisis impacted performance.
• Optimism for Recovery: Management noted easing interest rates and improved market conditions.
New Facility in Jaipur
• Rationale: Established to reduce transportation costs for materials from Rajasthan.
• Market Competitiveness: Necessary due to the closure of quarries in Tamil Nadu and new quarry availability in Rajasthan.
Revenue Expectations
• FY '23 Challenges: High interest rates affecting construction.
• Future Projections: Optimistic about crossing Rs. 250 crores in the next financial year.
Quartz Business Insights
• Capacity Utilization: Quartz plant operating at 80-90% capacity.
• Projected Turnover: Expected Rs. 50 crores from quartz at full capacity.
• Investment Plans: Additional Rs. 20 crores to double quartz capacity in FY '24.
• Current Margins: EBITDA margins for quartz range from 5% to 10%.
Plant Financials
• Hosur Plant:
• Breakeven: Rs. 8 crores per month.
• Annual turnover: Rs. 180 crores with a 30% margin.
• Jaipur Facility:
• Breakeven: Rs. 5 crores per month.
• Fixed cost: Rs. 15 crores with a higher variable cost percentage of 70%.
Operational Strategies
• Material Shortages: Optimized quartz plant and utilized existing machinery for granite processing.
• Technology Utilization: Multi-wire technology contributes about 20% to Hosur turnover.
Technology Comparison
• BretonStone vs. Chinese Plants: BretonStone offers superior productivity and special color production, though end product quality is similar.
Conclusion
• Call Closure: Mahadevan Madangopal thanked participants and invited further inquiries.