MSTC Limited Q4 FY24 Earnings Conference Call Summary
Key Highlights
• Date of Call: May 28, 2024
• Announcement Date: June 3, 2024
• Management Present: Mr. Manobendra Ghoshal (Chairman and Managing Director), Mr. Subrata Sarkar, Mrs. Bhanu Kumar
Financial Performance
• Revenue:
• Consolidated revenue of Rs. 961.37 crores (up from Rs. 879.17 crores)
• PBT of Rs. 340.18 crores (year-on-year increase)
• PAT reported at Rs. 171.91 crores (down from Rs. 239.23 crores)
• Tax Regime Impact: Effective tax rate reduced from 34.944% to 25.168%
• Sector Contributions:
• E-commerce and marketing segments contributed to revenue growth
• Scrap revenue declined due to lower volumes and prices
Business Developments
• Auction Success:
• 20 coal mine blocks auctioned
• Over 10,000 NPAs sold
• Future Plans:
• Expansion into new sectors (data centers, recycling)
• Enhancing capacity and expertise
Q&A Session Insights
• Revenue Model:
• E-sale revenues include percentage and event-based charges
• Other minerals typically charged on a percentage basis
• End-of-Life Vehicle (ELV) Recycling:
• 37,000 government vehicles processed
• Infrastructure Services:
• Plans to enhance services and tap into the private sector for scrap business
Strategic Focus
• Revenue Mix:
• 45-50% from scrap, 30-35% from e-sales
• Capacity Building:
• Focus on manpower and technology improvements
• E-commerce Growth:
• Significant shift towards electronic transactions anticipated
Challenges and Concerns
• Employment Costs:
• 27% increase attributed to industry-wide wage revisions
• Revenue Growth:
• Slower growth in government business due to policy factors
• Financial Clarity:
• Requests for clearer sector-wise revenue breakdowns
Closing Remarks
• Management's Optimism:
• Positive outlook for future growth
• Feedback Acknowledgment:
• Management expressed gratitude for participant insights
• Disclaimer:
• Forward-looking statements carry inherent risks and uncertainties

MSTC Limited Q3 FY24 Earnings Conference Call Summary
Key Financial Metrics
• Total transaction value: ₹1,178.23 billion (first nine months)
• Profit Before Tax (PBT): ₹233.37 crores (7.01% growth, up ₹15 crores YoY)
• Standalone revenue: ₹316.23 crores (13% decline)
• E-commerce revenue: Increased from ₹244.86 crores to ₹268.05 crores
• Profit After Tax (PAT): Fell from ₹163.17 crores to ₹152.41 crores due to higher tax rates
Operational Highlights
• Progress in auctioning critical mineral blocks and real estate sector engagement
• Focus on increasing volume in e-commerce to offset scrap rate decline (10% decrease noted)
• Joint venture (JV) with Mahindra for vehicle scrapping nearing breakeven, facing regulatory challenges
Investor Inquiries
• Strategies for enhancing e-commerce profitability discussed
• Clarifications on JV's profitability and capacity provided
• Revenue potential from scrapped vehicles and MSTC portal usage explained
Future Business Opportunities
• Plans to expand auction platform to include B2C segments and various immovable properties
• Potential for e-commerce growth and digitization of activities emphasized
• Government's vehicle scrappage policy and its implications discussed
Financial Updates
• Cash balance sufficient for operations; detailed figures expected in the next conference
• Refund of ₹90 crores from Standard Chartered Bank confirmed
Conclusion
• Management expressed gratitude for participant questions and support, indicating ongoing engagement with stakeholders.

MSTC Limited Q2 FY24 Earnings Conference Call Summary
Key Financial Highlights
• E-commerce Growth:
• 10.33% increase in e-commerce earnings, exceeding ₹185 crores.
• Profit Before Taxes:
• 9.60% rise to ₹159 crores.
• Legal Refund:
• ₹90 crores refund related to a legal case.
Strategic Focus Areas
• E-commerce Expansion:
• Plans to enter vehicle scrappage and recycling industries.
• Circular Economy Role:
• Acting as a catalyst by facilitating scrap auctions and collaborating on vehicle recycling policies.
Commodity Prices and Market Insights
• Scrap Prices:
• Decreased but showing signs of recovery.
• Iron Ore Prices:
• Stabilized at lower levels compared to the previous year.
Concerns and Clarifications
• FSNL Disinvestment:
• MSTC not directly involved; implications will unfold over time.
• E-commerce Revenue Discrepancies:
• Service charge revenue is event-based, not directly tied to volume.
Business Operations and Future Plans
• Non-Scrap E-commerce Growth:
• Constitutes about 50% of revenue; both sectors expected to grow.
• Joint Venture with Mahindra:
• Slow progress due to infrastructure and policy needs.
Financial Management
• Cash Balance:
• ₹750 crores in fixed deposits; 55% dividend declared.
• Recovery Efforts:
• Legal steps being taken to recover ₹81 crores from Jai Balaji Industries.
Challenges and Capacity Utilization
• Scrapping Centers:
• Eight operational centers with a capacity of over one lakh vehicles per annum, currently processing less than 10%.
• Coal Auctions:
• Primarily conducted by Coal India; auction availability limited by long-term client commitments.
Government Support and Future Initiatives
• Merit-Based Success:
• Business success relies on experience rather than direct government mandates.
• Sales Boost Initiatives:
• Ongoing efforts to enhance sales in the scrapping business, with a focus on state-level policies and infrastructure improvements.
Conclusion
• Management expressed appreciation for investor feedback and commitment to ongoing improvement in operations and strategic initiatives.

MSTC Limited Q1 FY24 Earnings Conference Call Summary
Key Financial Highlights
• Revenue from Operations: ₹193.64 billion (2.53% increase YoY)
• Profit Before Tax (PBT): ₹82.56 crores
• Stable PBT Levels despite declining iron ore prices
• Recognition: Most efficient Mini-Ratna in non-manufacturing PSU category
Operations and Auctions
• Coal Sales: MSTC sells mined coal from Coal India and conducts coal block auctions.
• Auction Frequency: Decreased from 6-7 events/month to 4 due to policy changes.
• Competition: MSTC is not the exclusive service provider for Coal India's auctions.
Investor Concerns and Suggestions
• Communication: Investors requested better transparency and advance notice for presentations.
• Subsidiary Sales: Inquiries about potential special dividends and direct communication with directors.
• Cost Estimation: Challenges in estimating costs for vehicle scrapping facilities discussed.
Challenges and Market Conditions
• Capacity Utilization: Concerns raised about low utilization of scrapping centers.
• Revenue Discrepancies: Questions about inconsistencies in reported e-commerce income.
• Tax Rates: Criticism regarding high tax rates and lack of clear communication.
Future Outlook
• Revenue Stability: Expected stable revenues with growth in the e-commerce segment.
• Joint Venture Expansion: Recycling joint venture expanding, though initial profitability is uncertain.
• Projected Growth: Anticipated growth of 10-15% for the upcoming fiscal year.
Additional Insights
• Goods Traded Decline: 18.5% year-on-year decline attributed to falling iron ore prices.
• Cash Reserves: Substantial cash reserves (₹1,600 crore) prompting suggestions for a share buyback.
• Employee Demographics: Average employee age around 37-38, with competitive recruitment processes.
Conclusion
• Investor Engagement: Appreciation for investor participation and commitment to improving communication and transparency.

MSTC Limited Q4 FY23 Earnings Conference Call Summary
Financial Performance
• Total Business Volume: Increased by 120% to over ₹3,00,000 crore.
• E-commerce Revenues: Rose by 18.66% to ₹348 crore.
• Profit Before Tax (PBT): Increased by over 42% to ₹313 crore.
• Profit After Tax (PAT): Grew by 19% to ₹239 crore.
• Provisioning: Previous provisioning eliminated, indicating a positive outlook.
Key Projects and Initiatives
• Successful Auctions: Included coal and mineral blocks, redundant power plants, and government vehicles.
• Vehicle Scrapping Centers: Plans to expand from 6 to around 25 centers in the next few years.
• Challenges: Attracting vehicle owners due to price competition with unorganized recyclers.
Scrap Sales and E-commerce Growth
• Scrap Sales: Contributed significantly to e-commerce revenue, reaching ₹168 crore in FY23 (25% growth).
• Government Policies: Optimism about growth due to supportive government policies.
Balance Sheet and Financial Clarifications
• Tangible Net Worth: Approximately ₹400 crore.
• Cash Position: Strong despite temporary fluctuations in liabilities.
• Future Sales Expectations: Anticipated increase in end-of-life vehicle sales in FY24.
Government Vehicle Sales
• Sales Overview: Approximately 2,000 government vehicles sold last year, with 10,000 more in the pipeline.
• Regulatory Changes: Current regulations apply only to government vehicles; private vehicles will follow.
Investor Inquiries and Management Responses
• Cash Reserves: ₹1,500 crore; management retaining cash for growth opportunities rather than buybacks or higher dividends.
• Revenue Nature: Service income based on transaction value.
• FSNL Disinvestment: Ongoing process under DIPAM oversight.
• Scrappage Margins: Calculated on a percentage basis.
E-commerce Performance Concerns
• Customer Satisfaction: Some concerns raised about e-commerce revenue relative to auction proceeds.
• Client Loyalty: Majority of clients remain loyal, with ongoing efforts to enhance customer experience.
Conclusion
• Positive Outlook: Management expressed confidence in MSTC's future growth and commitment to improving services, despite current challenges.

MSTC Limited Q3 FY23 Earnings Conference Call Summary
Financial Performance
• Total revenues increased from INR 185 Crore to INR 202 Crore.
• Profit before tax rose from INR 142 Crore to INR 206 Crore (standalone basis).
• E-commerce transaction value grew by 52.16%.
• Profit after tax showed significant growth despite a slight dip in consolidated revenue.
E-commerce Expansion
• Plans to enhance e-commerce footprint through a new government mandate for vehicle scrapping.
• Targeting INR 300 Crore in revenue, dependent on market conditions.
• "Other income" in e-commerce includes indirect revenue sources.
Operations and Capacity
• Currently operating six plants, with plans to expand to eight or nine by year-end.
• INR 1.4 Crore invested to fully subscribe to authorized share capital.
• Previous cautious expansion due to vehicle availability; recent incentives have improved conditions.
Vehicle Scrapping Business
• Vehicles older than 15 years will be scrapped and sold on the platform.
• Estimated 1.5 million such vehicles exist; auction fees waived until March.
• Profitability linked to the condition of processed vehicles.
Joint Ventures and Competitors
• Low capacity utilization in Mahindra joint venture; specific figures to be provided later.
• Limited competition in the scrappage market, with RVSF licenses being issued.
Litigation and Financial Implications
• Ongoing litigation with Standard Chartered; appeal restored by Bombay High Court.
• INR 90 Crore deposited as a pre-condition; no further provisions anticipated.
Market Outlook and Growth Strategies
• E-commerce growth and diversification into other commodities to mitigate risks.
• Optimism for strong Q4 contingent on market conditions.
• No significant competition expected from the GeM portal.
Revenue Model and Other Income
• Revenue model for e-auctions includes value-based commissions and fixed charges.
• Other income totaled INR 20 Crore, including e-commerce service fees and dividends.
Future Considerations
• Ongoing business with public sector banks; no progress on their own auction portals.
• Cash reserves and potential shareholder returns are being considered.
• All government vehicles must be auctioned through the MSTC portal.
Conclusion
• Emphasis on e-commerce-driven growth and government focus on circular economy initiatives.
• Gratitude expressed to participants for their support.