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R R Kabel Limited Q1 FY25 Earnings Conference Call Summary
Key Highlights • Date of Call: July 31, 2024 • Revenue: Highest-ever quarterly revenue of approximately INR 1,808 crores • Year-on-Year Growth: 13% • Volume Growth: 13% increase in wire and cable segment (87% of total revenue)
Segment Performance • Wire and Cable Segment: • 50% of domestic market volume growth from cables • Target margin improvement of 60 to 80 basis points year-over-year • Margin decline attributed to product mix shift from copper wires to aluminum cables
• FMEG Segment: • Revenue growth of 32% • Increased advertising expenses of INR 12 crores impacting profitability • Optimism for breakeven in the next three to four quarters
Challenges and Outlook • Raw Material Price Volatility: Impacting margins, particularly with copper prices • Export Market: Shipment delays noted, but demand remains strong • Advertising Costs: One-time brand transition cost; expected normalization in future quarters
Strategic Initiatives • Capex Plan: INR 500 crores to support 20% volume growth • Market Expansion: Focus on southern and eastern India, high-voltage cables for future growth • Product Mix: Currently 70% wires and 30% cables; adjustments made for copper price fluctuations
Q&A Insights • Brand Transition: Transition from Luminous to RR Signature expected to complete by December 2024 • Capacity Expansion: Planned for March 2025, with some machines operational by September and October • Distribution Network: Focused approach for both FMEG and wire and cable segments, emphasizing electricians' role • Export Challenges: Container availability issues, with a projected 15% to 20% volume loss in exports for the current quarter
Future Expectations • Double-Digit Margins: Anticipated for wire and cable segment within nine months • CAGR Target: 20% in volumes, including exports • Revenue Growth: Significant expectations in the FMEG segment, supported by new product introductions and improved inventory management.
R R Kabel Limited Earnings Conference Call Summary
Date and Submission • Date of Call: May 29, 2024 • Submission to: BSE Limited and National Stock Exchange of India on June 3, 2024
Key Highlights • Record Performance: FY24 marked the company's most successful year with: • Revenue: Rs. 6,595 crores (43% increase) • Operational EBITDA: 43% increase • PAT: 57% rise • Market Position: Moved from fifth to fourth largest wire and cable manufacturer in India. • FMEG Segment Growth: Contributes 12% to revenue, with significant expansion.
Financial Insights • Wire and Cable Segment: Primary revenue driver; EBIT margins improved by 140 basis points in FY24. • Domestic Market Performance: 4% year-on-year growth in Q4; overall revenue grew by 20% due to higher exports. • Copper Prices: Rising prices addressed; company can pass costs to consumers.
Expansion and Retail Strategy • Retail Network: • 144,000 retail touchpoints • 7,900 dealers • 450,000 electricians • Added over 10,000 retailers in FY24 • Digitization: Fully digitized secondary sales tracking for strategic insights.
Capital Expenditure (CAPEX) • Investment Plans: Rs. 500 crore for FY24-25, with major expansions expected by March 2025. • Raw Material Mix: 70% copper, 30% aluminum.
Future Growth Projections • Wire and Cable Segment: Projected 20% volume growth for FY25, with margin improvement of 100-120 basis points. • FMEG Segment: Revenue guidance of Rs. 1,000 crore for FY25, driven by new products and brand investments.
Market Concerns and Responses • Domestic Growth: Clarified that domestic volume growth is around 12%, with exports growing at 40%. • FMEG Losses: Attributed to higher advertising expenses; breakeven expected in 4-5 quarters. • EBITDA Margin Comparison: Projected margins could reach 10.5%-11% in 2-3 years.
Future CAPEX Plans • Long-term Outlook: Preparing for a new CAPEX cycle over the next three years to meet future demand.
Conclusion • Call Closure: Shreegopal Kabra thanked participants and concluded the call.
RR Kabel Limited Earnings Conference Call Summary
Date and Submission • Date of Call: January 30, 2024 • Transcript Submission: February 3, 2024, to BSE and NSE
Financial Performance • Q3 FY24 Revenue: Rs. 1,633.5 crores (11% YoY increase) • Nine Months Revenue: Rs. 4,840.5 crores (19% growth) • EBITDA for Q3: Rs. 112.6 crores • Profit After Tax: Rs. 71 crores (slight YoY decline) • Primary Revenue Driver: Wire and cable segment (89% of total revenue)
Growth and CAPEX Plans • CAPEX Plan: Rs. 500 crores over the next two years • Volume Growth: 20% over the past nine months; 10% in Q3 • FMEG Segment Growth: 20%, driven by fans and lighting sales
Q&A Highlights • Domestic Volume Growth: 12% (excluding exports); exports grew by 36% • Export Revenue: Nearly 30% of total revenue, attributed to product mix and brand strength • Capacity Expansion: Plans to double power cable capacity • Margins: Projected improvement of 140 basis points year-on-year
Regional Performance • Regional Growth Trends: Strong in West and North; slower in South and East • Retailer Base: Surpassed 120,000, focusing on increasing sales per retailer
Future Outlook • EBITDA Margin Projections: 10% to 10.5% over the next few years • FMEG Segment Profitability: Expected to break even by FY25 • Long-term Growth Strategy: Focus on balanced growth in domestic and export markets
Conclusion • Management expressed confidence in growth trajectory despite challenges, emphasizing quality and sustainable practices.
R R Kabel Limited Q2 FY24 Earnings Conference Call Summary
Financial Performance • Q2 FY24 Highlights: • Revenue growth: 18% YoY to INR 1,610 crores • EBITDA increase: 93% to INR 121 crores • PAT doubled to INR 74 crores • First Half FY24: • Revenues: INR 3,207 crores, up 23% YoY • PAT more than doubled to INR 148 crores
Segment Contributions • Wire and Cable Segment: • Contributed 90% of revenue • Volume growth: 28% in H1 FY24 (Wires: 25%, Cables: 32%) • FMEG Segment: • Revenue growth: 20% • Currently facing losses but expected to improve with premium product focus
Export Performance • Exports accounted for nearly 29% of revenue, up from 25% the previous year • Key markets: Europe, USA, UAE • No signs of slowdown in export demand
Future Plans • Planned capex: INR 500 crores over FY '24 and '25 • Focus on expanding power cable capacity and increasing copper wire manufacturing • Targeting over 20% revenue growth and improved EBITDA margins (currently at 9%)
Regional Performance • North and West India account for 65% of revenues • Efforts to strengthen presence in weaker regions
Capacity Utilization and Strategy • Current capacity utilization: 70% • Plans to double power cable capacity and increase copper wire capacity by 20% • Focus on building a network of electricians to enhance brand loyalty
Market Insights • Anticipated strong demand for energy-efficient BLDC fans in the second half of FY24 • Government contracts contribute only 1% of revenue
Financial Position • Gross borrowings: INR 670 crores, primarily for working capital • Strong working capital position with 65 days of net working capital
Growth Prospects • Equal focus on domestic and export markets • Anticipated growth in wire and cable (over 20%) and FMEG (30%) • Positive outlook for the wire and cable industry driven by government initiatives and market position