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Key Highlights • Earnings Call Date: May 30, 2024 • Sales Growth: 23% year-on-year increase in sales turnover • Export Growth: Tripled exports compared to the previous year • Inventory Management: Reduced work-in-progress inventory from INR 759 crores to INR 669 crores
Financial Performance • Production Value: Decline year-on-year, viewed as a necessary correction • Order Book: Decreased from INR 1,762 crores to INR 1,579 crores • Future Orders: Current order inflow at INR 1,767 crores, with an expected additional INR 1,150 crores • Revenue Growth Projection: Anticipated growth of 20-25% for FY '23
Product Portfolio • Revenue Breakdown: • Super Alloys: 20% • Titanium Alloys: 14% • Maraging Steel: 34% • Defense Focus: 78% of the order book is defense-related
Collaborations and Projects • International Collaborations: Ongoing projects with aerospace companies, including Kaveri Dry Engine and AMCA program • GE and HAL Collaboration: MIDHANI likely to supply materials for the GE 414 engine
Inventory and Revenue Management • Rohtak Armor Factory: Order book of INR 140 crores, with FY '24 revenue of INR 21 crores • Wide Plate Mill: Order book of INR 250 crores, with FY '24 revenue of INR 235 crores • Inventory Strategy: Aligning sales with inventory levels and implementing a scrap disposal policy
Customer Advances and Supply Efforts • Customer Advances: Approximately INR 350-400 crores • Arjun MBT Order: Confirmed order of INR 130 crores for material supply • LCA Program: MIDHANI's role in providing materials emphasized
Conclusion • Turnover Achievement: Surpassed INR 1,000 crores • Future Outlook: Optimism for performance despite supply chain challenges
Company Overview • Date of Call: February 27, 2024 • Submitted to: BSE and NSE on March 1, 2024 • Key Participants: Dr. Sanjay Kumar Jha (CMD) and management team
Performance Highlights • Mixed Results: Growth in production and sales, but pressures on profit before tax (PBT) and profit after tax (PAT). • Product Development: Significant achievements in aerospace sector and improved order book for high-end applications. • Facility Modernization: Led to increased turnover and progress in export certifications.
Financial Insights • Raw Material Pricing: Concerns about nickel pricing affecting EBITDA margins; recovery expected in Q1 FY25. • Revenue Breakdown: • Superalloys: 20% • Titanium alloys: 9% • Maraging steel: 34% • Special steel: 27% • Others: 10% • EBITDA Margin: Decreased from 29% to 14.2% due to raw material price fluctuations.
Competitive Landscape • Impact of FDI: Increased competition anticipated; potential pressure on margins. • Technological Capabilities: MIDHANI has exceptional capabilities and a diverse product profile.
Future Prospects • Order Book: Approximately Rs. 1,750 Cr with significant opportunities in defense and aerospace sectors. • CAPEX Plans: Investment of around 80 crores this year to enhance existing capacity; challenges in acquiring equipment from Europe.
Production and Supply Chain • Titanium Capacity: Strong demand but supply constraints for sponge material currently hindering production. • Aerospace Components: Ongoing efforts to indigenize components for aero engines, particularly for the LCA program.
Conclusion • Optimism for Growth: Confidence in achieving 20% growth due to new facilities and focus on titanium and superalloys. • Strategic Role: MIDHANI's commitment to supporting India's strategic material requirements emphasized.
Conference Call Overview • Date: November 15, 2023 • Submitted transcript to BSE and NSE on November 17, 2023 • Key personnel: Dr. Sanjay Kumar Jha, CMD
Financial Performance • Turnover: • 25% increase to INR 227.48 crores from the previous quarter • 40% growth for the first half of FY24 • Profit Decline: • Decrease in profit before tax (PBT) and profit after tax (PAT) due to rising raw material costs
Order Book and Growth Prospects • Current Order Book: INR 1,500 crores • Future Growth: • Projected year-on-year growth of at least 25% • Focus on optimizing production costs to capture market share
Raw Material Challenges • Nickel Prices: Increased from INR 1,700 to INR 2,100 per kg • Titanium Sponge Prices: • Surge from INR 700 to nearly INR 1,300 per kg • Supply constraints due to geopolitical issues • Impact on Contracts: Fixed-price contracts unable to pass on cost fluctuations
Inventory Management • Challenges in maintaining inventory levels due to rising costs and lack of secondary markets
Revenue Breakdown • Sector Contributions: • 25% from space • 50-55% from defense • Remaining from other sectors • Revenue Target: Approximately INR 1,400 to 1,500 crores expected this year
Capital Expenditures and Working Capital • Planned capex of INR 100 crores • Working capital borrowings totaling INR 350 crores
Strategic Focus • Aiming for INR 200 crores in exports (10-15% of turnover) • Targeting entry into international aerospace supply chains, especially in aero engine manufacturing
Customer Advances and Payables • Received INR 200 crores in customer advances in the first half of the year • Increased payables due to inventory pressures and delayed government payments
Closing Remarks • Emphasis on transformation and commitment to becoming a leading aerospace supplier • Acknowledgment of stakeholder support and interest in the company's future growth
Key Highlights • Date of Call: August 22, 2023 • Revenue Growth: 60% year-on-year increase • Value of Production: 26% rise • Sales Contribution: Rohtak facility contributed 30% • Order Bookings: Exceeded ₹520 Crores, mainly from defense sector
International Opportunities • Growing Interest: Increased interest from international aerospace firms • Export Prospects: Ongoing opportunities with Rolls-Royce and GE Aerospace
Margin Profile • Margin Variability: Margins vary by customer and sector; sustainable EBITDA margin of 25-30% possible • Inventory Management: High inventory levels acknowledged; efforts to reduce through recycling
Capital Expenditure • Capex Plans: ₹80 Crores focused on aerospace fasteners and titanium products • Joint Venture Status: NALCO joint venture on hold due to viability concerns
Order Book and Future Expectations • Current Order Book: Stands at ₹1,570 Crores, expected to exceed ₹2,000 Crores by year-end • Market Opportunities: Favorable market conditions in aerospace materials
Strategic Positioning • Indigenization Efforts: Enhanced capacity, technology, and skilled manpower • Bid Pipeline: Ministry of Defence expedited project sanctions benefiting MIDHANI
Aerospace Sector Involvement • Civil Aerospace Role: Goal to exceed ₹100 Crores in export orders • Order Composition: Even split between short and long cycle orders
Revenue Guidance • Top-line Growth: Maintaining guidance for 20% increase in FY2024 • Growth Performance: Experiencing growth above 20%
Future Orders and Capacity • Armor Order Negotiations: Clarified that the order for Arjun MBT is still under negotiation • Titanium Capacity: Anticipated additional production capacity of 500 tons
Closing Remarks • Operational Efficiency: Focus on managing inventory and rising material costs • Margin Outlook: Absolute margins expected to improve despite percentage challenges
Meeting Overview • Date: May 30, 2023 • Company: Mishra Dhatu Nigam Limited (MIDHANI) • Moderated by: Amit Dixit (ICICI Securities) • Key Personnel: • Dr. Sanjay Kumar Jha (Chairman & Managing Director) • N. Gowri Sankara Rao (Director of Finance) • T. Muthukumar (Director of Production & Marketing) • Transcript Availability: Publicly accessible on the company's website.
Financial Performance • Sales: Rs. 871 crores for FY23. • Profit After Tax (PAT): Slightly lower than previous year due to rising costs. • EBITDA: Remained stable despite challenges.
Key Developments • Operational Success: • Rohtak facility sales: Rs. 32 crores. • White plate mill sales: Rs. 219 crores. • New Facilities: • 8-tonne vacuum induction melting facility producing C-276 alloy. • Record Order Bookings: Notable contracts from Pratt & Whitney and GE Healthcare.
Market Expansion • Export Market: Targeting high-end customers in aerospace and healthcare. • Domestic Projects: Supplying materials for advanced combat vehicles and aircraft engines. • New Product Developments: Bulletproof jacket for the Air Force.
Production and Inventory Challenges • Production Issues: Technological modifications needed for wide plate mill. • Inventory Management: Targeting a reduction of 100-120 crores in the current fiscal year.
Financial Projections • Operating Profit Margins: Estimated range of 25% to 30%. • Government Spending: Projected growth of 10% to 20% in CAPEX. • Sales Target: 10% from exports, aiming for around 100 crores in FY24. • Top-line Growth: Projected at approximately 20% for the coming year.
Segmental Revenue Breakdown • Space: 40% • Defense: 24% • PSU (mainly defense): 21% • Energy: 6%
New Product and Joint Ventures • Advancements: Manufacturing capabilities for railways and energy applications. • Joint Venture with NALCO: Reassessing project scale due to demand projections.
Capital Expenditures and Debt Management • Annual CAPEX: Around 100 crores for capacity enhancement. • Debt: Manageable, with plans to repay 20 crores annually.
Raw Material Costs and Production Efficiency • Raw Material Costs: Account for 35.5% of VOP. • Scrap Usage: Increased to 60% in Q4, contributing to cost savings.
Future Outlook • Revenue Expectations: Rohtak facility and wide plate mill projected to reach around 500 crores in FY24. • Order Inflow Projections: Anticipated Rs. 500 crores from the missile sector and opportunities in space and defense. • Commitment to Excellence: Assurance of future success and technological advancements.
Conference Call Details • Date: February 8, 2023 • Participants: • Dr. Sanjay Kumar Jha (CMD) • Mr. Gowri Sankara Rao (Director Finance) • Mr. T. Muthukumar (Director P&M) • Moderator: Mr. Amit Dixit (ICICI Securities)
Financial Performance • EBITDA: Increased by 10% year-over-year. • Revenue: Slight decline from ₹234 crore to ₹231 crore. • Order Book: Stable with expectations for growth.
Key Developments • New Facilities: Commissioning of seamless tubes and nickel-based alloys. • Recycling Focus: Increased scrap usage in alloy production from 40-45% to around 60%. • Market Positioning: Advancements in nickel-based alloys and wide plate mill.
Challenges and Strategies • Raw Material Procurement: Issues due to reduced space budget and rising costs. • Impact of Russia-Ukraine Conflict: Affected supply of titanium sponge; mitigation strategies in place. • Quality Standards: Rigorous testing for recycled materials in aerospace and defense.
Strategic Partnerships • Boeing and Lockheed Martin: Ongoing discussions; no orders yet from Lockheed Martin. • Potential Orders: Positive indications from Rolls Royce and Pratt & Whitney.
Future Outlook • Revenue Guidance: No specific forecasts due to uncertainties; optimistic about maintaining previous performance levels. • Sector Focus: Anticipated orders from energy, defense, aerospace, and railway sectors. • Product Diversification: Emphasis on reducing dependency on a few segments.
Management Confidence • Growth Potential: Confidence in new facilities and products like Super Alloy 276. • National Development Contribution: Management remains optimistic about MIDHANI's future performance.