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Banswara Syntex Limited Q1 FY25 Earnings Call Summary
Earnings Call Overview • Date: August 7, 2024 • Participants: Managing Director Ravindra Toshniwal and CFO Kavita Gandhi • Focus: Financial performance and industry landscape
Industry Challenges • Textile sector facing: • Subdued demand • Rising costs • Geopolitical issues • Anticipated gradual improvement
Financial Performance (Q1 FY25) • Total income: Rs. 274.7 crores (10% decline) • Profit After Tax (PAT): Rs. 1 crore • Division performance: • Yarn: 25% revenue decline • Fabric: 10% revenue growth • Garment: 14% sales decline
Future Outlook • Expected demand recovery in H2 FY25 • Drivers: Government initiatives and potential global sourcing shifts from Bangladesh to India
Strategic Focus • Emphasis on tailored clothing (suits and blazers) due to upcoming wedding seasons • Challenges in export market: • Competition from Bangladesh • Shift towards casual wear • Plans to enhance capacity in tailored clothing and diversify into casual sportswear
Uniform Sector Importance • Ongoing contracts with European armies provide steady business • Commitment to value-added products in fabric and garment segments
Yarn Division Recovery • Recent 25% drop in yarn turnover due to labor shortages • Optimism for recovery in upcoming quarters
Innovation and Market Share • Need for innovation and superior service to capture market share • Investment in specialty worsted yarns while sourcing regular yarns externally
Technical Textiles and CAPEX • Promising growth in technical textiles for defense applications • Projected CAPEX: Rs. 180-190 crores over the next two years
Inventory Management • Stable raw material inventory • Slight increase in finished goods inventory due to upcoming orders
Conclusion • Acknowledgment of challenging financial results • Optimism for future improvement and encouragement for stakeholder support
Banswara Syntex Limited Q4 and FY24 Earnings Call Summary
Announcement Details • Date of earnings call: May 13, 2024 • Announcement made on: May 17, 2024 • Compliance with SEBI regulations • Participants: Managing Director Mr. Ravi Toshniwal and CFO Ms. Kavita Gandhi • Call included forward-looking statements and a Q&A session
Financial Performance • Total income declined by 15.3% to INR 1,282.1 crores • Profit margins decreased • Yarn division saw slight sales volume increase • Fabric and Garment divisions experienced revenue declines • Optimism for future growth due to: • Recovery in domestic demand • Reduced raw material prices • Favorable government initiatives
Market Focus and Strategy • Current market ratio: 60% domestic, 40% export; aim for 50-50 balance • Focus on sustainability and operational efficiency • Interest in U.S. market recovery after a 56% sales decline • Launch of new brands: Simone (high-end) and One Mile (affordable)
Working Capital Management • Inventory cycle reduced from 185 days to 175 days • Improved working capital management reported
Brand and Product Development • Company primarily an OEM supplier with limited branding • Collaboration with brands like Ralph Lauren and Gap • Significant growth expectations with Marks & Spencer and Next in the U.K.
Market Trends and Future Outlook • Growing preference for manmade fibers noted • Joint venture with Tesca in automotive textiles nearing INR 100 crores in sales • Expansion in electric vehicle textiles • Technical textiles not expected to significantly contribute to turnover
Closing Remarks • Optimism for the upcoming quarter and potential government support • Acknowledgment of participant engagement and questions • Belief in India's enduring growth story regardless of political changes
Banswara Syntex Limited Q3 FY24 Earnings Call Summary
Company Performance • Date of Call: January 30, 2024 • Total Income: INR 920.8 crores (down 18.4%) • Profit After Tax: INR 26.9 crores • Yarn Division: 8% decline in value • Fabric Revenues: 22% decline • Market Outlook: Signs of recovery in the domestic market; focus on high-value products and new opportunities.
Management Insights • Capital Allocation: • Yarn Division: INR 40 crores invested, INR 18 crores planned for Q4 • Fabric Segment: INR 18 crores • Garment Division: INR 5 crores • Annual Investment: Typically INR 100 crores; plans to reduce for compliance enhancements. • Capacity Utilization: Lowest in 40 years; focus on premiumization and quality.
Q&A Highlights • Outsourcing and Capex: Investments in polyviscose spun yarn; plans to outsource filament and worsted yarns. • Sales Potential: Could reach INR 2,000 crores without additional capex, contingent on demand stimulation. • Export Demand Projections: US market showing recovery; challenges in Europe due to rising freight costs. • China Plus One Strategy: Competitors benefiting; India has potential to capture fabric market.
Product and Brand Development • Man-Made Fibers: Optimism about affordability and sustainability; shift from China to India expected. • Brand Initiatives: Launch of new Italian brand and direct-to-consumer brand, OneMile. • Capital Expenditure for FY25: Focus on modernization and maintenance, estimated at INR 40-50 crores.
Market Trends • Festive Season Sales: Disappointing performance; strategic shift from exports to increasing domestic market share (from 50% to 60%). • India-UK FTA: Uncertainty regarding timeline; ongoing efforts by government officials.
Conclusion • Despite challenges, management remains optimistic about future growth and the company's strategic focus on premiumization and adapting to market demands.
Earnings Overview • Date of Call: November 8, 2023 • Total Income: Fell by 18.6% to INR 624.2 crores in H1 FY24 • Profit After Tax: INR 18.5 crores • Sales Decline: • Yarn, fabric, and garment segments all declined • Garment segment saw the largest drop of 24%
Industry Challenges • Key Issues: • Inflation and geopolitical factors affecting demand • Significant decline in demand from the USA and UK • Current Market Conditions: • Subdued demand across the textile sector • Inventory levels at 115 days, higher than usual
Future Outlook • Recovery Expectations: • Optimism for recovery in the second half of FY24 • Anticipated recovery in the garment sector in Q1 of the next fiscal year • Financial Goals: • Targeting a cash profit of 10% and net profit of around 5% • Revenue capacity projected at INR 2,000 crores, with potential for INR 3,000 crores
Strategic Initiatives • Capital Expenditure: • Planned capex reduced from INR 120 crores to INR 107 crores • INR 5-6 crores allocated for brand development • Acquisition Plans: • Upcoming acquisition from Italy to be announced later • Innovation Focus: • Ongoing developments in stretch fabrics and technical textiles
Market Dynamics • Revenue Distribution: • Currently 60% domestic and 40% export, aiming for a 50-50 ratio • Impact of Free Trade Agreement: • Potential 10% to 15% boost in exports from India to the UK
Conclusion • Optimism for Future: • Confidence in maintaining performance similar to the previous year • Positive outlook for domestic and export demand recovery • Closing Remarks: • Wished participants a Happy Diwali
Banswara Syntex Limited Q1 FY24 Earnings Call Summary
Company Performance • Date of Call: August 8, 2023 • Total Income Decline: 14.6% to INR 306 crores • Challenges: Muted demand in textile sector due to global recession and high inflation • Optimism for FY24: Anticipated demand rebound in second half, especially during festive season • Revised Revenue Guidance: INR 1,400 to 1,450 crores
Financial Metrics • Decrease in EBITDA and Profit After Tax: Attributed to lower sales volumes • Capacity Utilization: Currently low, expected to improve with demand
Acquisition Plans • Italian Fabric Brand: Aimed at enhancing direct distribution to tailors • Launch Date: Planned for February next year • Revenue Expectations: INR 100 crores in the first year, potential growth to INR 200 crores
Segment Contributions • Yarn: 44% • Fabric: 34% • Garments: 21%
Working Capital and Market Outlook • Current Working Capital: Around INR 150 crores, with plans to maintain within INR 150-160 crores • Market Strategies: Positive impact from "China Plus One" and "Europe Plus One" strategies • FTA with Australia: Sales have more than doubled
Division Utilization and Profit Margins • Garment Division Utilization: Currently at 47%, expected to increase by 20-30% • Profit Margin Expectations: Revised from 12% to 9-10%, dependent on strong Q3 and Q4 performance
Long-term Growth Objectives • Revenue Doubling Goal: Target to double revenues in four years • EBITDA Margin Target: 15% • Current Net Debt: Below INR 300 crores, with marginal increase expected
Conclusion • Optimism for Second Half of FY24: Growth potential in India’s textile sector despite current challenges.
Conference Call Overview • Date: May 16, 2023 • Transcript submitted to BSE Limited and NSE of India on May 20, 2023 • Led by Managing Director Mr. Ravi Toshniwal • Disclaimer on forward-looking statements included
Key Highlights • Introduction of new CFO Kavita Gandhi • Positive market shift towards India due to the China-plus-one strategy • Government initiatives expected to boost textile exports to $20 billion
Financial Performance • Q4 FY23: • Yarn sales: -18% YoY to Rs. 126 crores • Fabric sales: +3.7% YoY to Rs. 141 crores • Garment sales: +41% YoY to Rs. 97 crores • FY23: • Total income: +26% to Rs. 1,498.8 crores • Profit after tax (PAT): Rs. 111.4 crores • CAPEX: Rs. 97 crores, with plans for Rs. 120-150 crores in FY24
Growth Targets • Revenue growth targets for FY24: • Yarn: 8-12% • Fabric: 11-14% • Garments: 12-16% • Anticipated revenues for FY24: Rs. 1,550 to Rs. 1,700 crores
Q&A Session Insights • Concerns about domestic synthetic fabric quality and supplier availability • Discussion on scalability of garment production in India • Strategy for growth with Uniqlo in Southeast Asia • Planned CAPEX of Rs. 28 crores for FY24 in the garment division • Potential acquisitions, including a company in Sri Lanka
Strategic Initiatives • Commitment to improving technology and quality in synthetic textiles • Value-added sales in FY23 amounted to Rs. 198 crores • Acquisition of an Italian brand to enhance brand presence in India • Joint venture with TESCA showing profitability
Future Outlook • Management confident in achieving sustained growth and operational efficiencies • Anticipation of slight margin decline due to market headwinds but stable EBITDA levels expected • Aim for peak revenue of Rs. 1,700 crores with existing capacities
Conclusion • Management expressed appreciation for stakeholder engagement and outlined future plans.
Banswara Syntex Limited Q4 and FY23 Earnings Conference Call Summary
Announcement Details • Date of Call: May 16, 2023 • Compliance: SEBI regulations • Participants: Mr. Ravi Toshniwal (Managing Director), new CFO Kavita Gandhi • Disclaimer: Forward-looking statements involve risks and uncertainties • Communication signed by: Hanuman Prasad Kharwal (Company Secretary)
Market Context • Favorable shift in textile market towards India due to the China-plus-one strategy • Indian government initiatives (PLI scheme, mega textile parks) expected to boost textile exports to $20 billion
Company Performance • Leadership restructuring to enhance growth • Sales Performance: • Yarn: 18% drop to Rs. 126 crores • Fabric: 3.7% growth to Rs. 141 crores • Garments: 41% surge to Rs. 97 crores • Revenue growth targets for FY24: • Yarn: 8-12% • Fabric: 11-14% • Garments: 12-16% • Export sales increased significantly
Financial Highlights • Q4 FY23 revenue: Flat at Rs. 369 crores • Operating margins: Improved to 14.9% • Profit after tax: Increased to Rs. 27.8 crores (from Rs. 19.4 crores in Q4 FY22) • FY23 total income: Grew by 26% to Rs. 1,498.8 crores • FY23 PAT: Rs. 111.4 crores • Anticipated muted Q1 FY24 due to global inflationary pressures
Q&A Session Insights • Concerns raised about domestic synthetic fabric ecosystem and quality local suppliers • Scalability of garment production in India discussed; labor availability reassured • Strategy with Uniqlo in Southeast Asia confirmed for growth in fabric and garment sectors • Future CAPEX plans: Rs. 28 crores for FY24 in garment division, potential acquisitions mentioned
Strategic Focus • Commitment to improving technology for synthetic textiles • Planned CAPEX of Rs. 80 crores for FY24, potential debt raising • Expected low double-digit growth over the next five years • Acquisition of an Italian brand to enhance product offerings
Additional Notes • Banswara Brands Private Limited established to build a fabric brand • Joint venture with TESCA discussed positively regarding profitability • Challenges in the yarn segment acknowledged, with investment decisions based on potential returns
Conclusion • The call concluded with appreciation for dialogue and future travel plans by Mr. Toshniwal.
Conference Call Overview • Date: February 14, 2023 • Transcript submitted to BSE Limited and NSE of India on February 20, 2023 • Participants: Mr. Ravi Toshniwal (Managing Director), Mr. Ansh (Head of Finance) • Format: Listen-only mode with Q&A session • Disclaimer: Forward-looking statements involve risks and are based on company beliefs
Financial Performance Highlights • Quarterly Performance: • Revenue dropped by 10% to Rs. 367.9 crores • Improved EBITDA margins from 13.7% to 15.7% • Fabric division sales increased by 5% • Garment division faced production challenges due to labor absenteeism • Year-to-Date Performance: • 37% revenue increase with significant growth in garment and fabric sales • Anticipation of a robust order book for Quarter 4
Capital Expenditure (CAPEX) Plans • Total CAPEX plan: Rs. 150 crores over two years • Rs. 50 crores allocated for each division: garment, spinning, and fabric • Recent investments: • Rs. 30 crores in garments • Rs. 10 crores in spinning • Rs. 15 crores in fabric • Focus on tailored clothing and leveraging existing operations before new investments
Market and Competition Insights • Acknowledgment of competition from Bangladesh and Sri Lanka • India's complete supply chain offers a competitive advantage • 50-50 split between export and domestic sales, with a focus on domestic growth
Export Market Performance • Current slowdown in export market due to excess inventory • Long-term growth potential as supply chains shift towards India • Ongoing trials with Uniqlo and secured orders from PVH Group
Debt and Financial Management • Current debt: Rs. 382 crores (gross), Rs. 340 crores (net) • Decrease in debt from previous quarters • Confidence in managing CAPEX and working capital needs with bank support
Operational Insights • Capacity utilization: deliberate reduction in yarn production • Challenges in fabric and garment divisions due to order volume and labor shortages • Target top line of approximately Rs. 2,500 crores with planned CAPEX
Conclusion • Optimism about future growth in the textile industry • Focus on developing a direct-to-consumer (D2C) presence and online operations for new ventures • Positive outlook on operational efficiencies and margin improvements in joint ventures.