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Financial Performance • Record Revenues: INR 1,092 crores for Q1, nearly double from the previous year. • Key Segments: • Engineering: INR 829 crores (up 99%) • Infra: INR 168 crores (up 1,600%) • Polymers: Decline noted. • Consolidated EBITDA: INR 104.7 crores. • Profit After Tax (PAT): INR 32 crores. • Order Book: INR 5,844 crores with a tender pipeline of INR 18,000 crores.
Management Insights • International Presence: Teams in 6-7 countries, strong marketing team of 30-40 members. • Production Capacity: 300,000 tonnes/year, current utilization at 70%, expected to rise to 90%. • EBITDA Margins: Maintained at 9.5% to 10%, above industry average. • Future Growth: Anticipated revenue increase of INR 800-1,000 crores from capacity expansion.
Debt and Financial Strategy • Debt Management: Primarily working capital debt, recent rights issue raised INR 50 crores. • Revenue Growth Guidance: 25% for the year, with plans to secure additional INR 150 crores.
Order Pipeline and Market Focus • Order Conversion: Typically convert 25% of bidding pipeline into contracts. • Geographical Focus: Strong emphasis on the Indian market due to high T&D demand. • Renewable Energy Investments: Key driver for order growth.
Segment Performance and Challenges • Telecom Contribution: 20-25% of engineering revenue. • Infra Division Slowdown: Attributed to election-related delays, but optimism for growth remains. • Polymer Business: Retail sales grew by 20%, but project sales impacted by elections.
Future Outlook • Margin Improvement: Aspiration to exceed 10% margins in coming years. • Capital Requirements: No immediate plans for further capital raising beyond rights issue. • Product Rejection Rates: Negligible, with structured pricing mechanisms in place.
Closing Remarks • Revenue Growth Confidence: Over 25% annual growth expected for the next two years. • International Market Diversification: Strategy to secure higher-margin orders. • Commitment to Sustainability: Emphasis on sustainable business practices.
Skipper Limited Conference Call Summary (May 2, 2024)
Financial Performance • Record Revenue: Rs. 1,153 crores for Q1 FY24, a 76% increase YoY. • Segment Performance: • Engineering: Rs. 701 crores revenue. • Infrastructure: 3034% growth. • Consolidated EBITDA: Rs. 108.6 crores, 9.4% margin. • Fiscal Year 2024 Revenue: Rs. 3,282 crores, exceeding guidance. • Order Book: Record Rs. 6,215 crores, strong revenue visibility.
Management Insights • Future Growth: Optimism in domestic T&D sector and diversification into telecom and water EPC projects. • Capacity Expansion: Targeting 25% CAGR growth, increasing capacity from 300,000 tons to 375,000 tons. • Profitability Goals: PBT margin target of over 10% for FY25.
Q&A Highlights • Gross Profit Margins: Decline from 36% to 21% addressed; margins assessed on a 12-month basis. • Working Capital: Target net working capital between 90-100 days. • Interest Expenses: Reduced from 5.25% to 4.7%, aiming for 4.4%-4.5% next fiscal year.
Sector Focus • Telecom Sector: Strong demand for tower additions; 15%-20% market share in telecom towers. • EPC Segment: Strong bid pipeline; focus on larger power transmission projects. • CAPEX Plans: Rs. 200 crores investment funded through internal accruals and long-term debt.
Market Dynamics • Bidding Strategy: 25%-30% blended win rate; minimal regulatory risks. • Inventory Management: Current inventory of Rs. 1,200 crores, improved inventory days. • Global T&D Market: Projected significant investment growth through 2030.
Future Outlook • Revenue Growth: 25% CAGR expected in infrastructure and engineering divisions. • Election Impact: Difficult to quantify, but optimistic about order inflow. • Profitability Focus: Emphasis on cash flow stabilization and debt reduction.
Financial Performance • Record Revenue: INR 8,015 million, 80% year-over-year increase. • EBITDA: INR 770 million, margin of 9.6%. • Order Book: INR 57,790 million, indicating future revenue visibility. • Rights Issue: Successfully closed, oversubscribed by 1.77x.
Management Insights • Growth Areas: Strong performance across all segments, particularly Infra with 1,672% growth. • Market Confidence: Management optimistic about growth and diversification into new sectors.
Q&A Highlights • International Demand: Strong demand from Middle East and North America; competition from Chinese and Turkish firms. • Impact of Red Sea Crisis: Some effects noted in Israel and Egypt, but mitigated by shipping routes. • Government Expenditure: Skipper holds 10-15% market share in ultra-high voltage segment.
Financial Metrics • Debt Levels: Approximately INR 700 crores; working capital cycle around 120 days. • Capital Expenditures: INR 70 crores for the year focused on capacity optimization. • Export Revenue: Decreased by 8-10% year-over-year; expected to maintain levels similar to the previous year.
Future Projections • Revenue Growth Target: Aiming for 25% CAGR over the next three years; nearly 50% growth achieved this year. • Tax Regime Change: Planned reduction of tax rate from 33% to 25% next year. • Order Conversion Rate: Targeting INR 4,000 crores in orders next year with a 25% conversion rate from a INR 15,000 crores pipeline.
Operational Efficiency • Utilization Rates: Engineering segment at 80%; plans for brownfield and greenfield expansions. • Margin Improvements: EBITDA margins improved from 9.1% to 9.9%; profit before tax margins increased from 1.3% to 3.8%.
Closing Remarks • Sustainable Growth: Confidence in achieving profitable revenue growth and improving margin profile while focusing on sustainable practices.
Financial Performance • Record Revenue: Rs. 772 Crores for Q2 FY2024, a 57% increase year-on-year. • Segment Contributions: • Engineering: Rs. 595 Crores • Polymer: Rs. 112 Crores • Infra: Rs. 64.2 Crores (490% increase) • Order Inflow: Rs. 1,529 Crores, 232% year-on-year growth. • Order Book: Rs. 6,074 Crores, highest in company history.
Growth Opportunities • Electrification Demand: Strong position to capitalize on urban and rural electrification and international transmission lines. • Global Inquiries: Benefiting from the "China plus one" trend. • Diversification: Into telecom, railway electrification, water EPC, and grid irrigation with a tender pipeline of Rs. 12,620 Crores.
Financial Management • BSNL Order Contribution: Approximately Rs. 125 Crores for the quarter. • Debt Management: Short-term debt at Rs. 716 Crores; decrease in long-term debt. • Margin Guidance: 12% for engineering, 9-10% for infrastructure.
International and Domestic Market • Exports: To over 65 countries, strong demand from Middle East and North Africa. • Domestic Order Book: Rs. 6,000 Crores, focusing on T&D for renewable energy goals.
Future Projections • Revenue Growth: Projected minimum 25% CAGR over the next three years. • Rights Issue: Planning a Rs. 200 Crores rights issue to bolster working capital. • Order Book Execution: Typically executable within 15 to 24 months.
Operational Insights • Capacity Utilization: 70-75% for engineering, 60% for polymer segments. • Future Capex Plans: Capacity debottlenecking and potential Greenfield expansions pending approval. • Advertising Spend: Expected to remain stable at 2-3% of sales.
Competitive Positioning • Advantages Over Competitors: Cost advantages from end-to-end integration, favorable location, and normalized sea freight rates. • Market Entry Focus: Emphasis on registrations, approvals, and product testing for new markets.
Conclusion • Commitment to Growth: Confidence in achieving over 25% CAGR driven by engineering contracts and polymer performance. • Sustainable Practices: Commitment to sustainable business practices and appreciation for participant support.
Financial Performance • Revenue Growth: 33% year-over-year, reaching Rs. 555 Crores. • Key Segment Increases: • Engineering: +15.6% • Polymer: +46% • Infrastructure: +269% • First-Quarter Highlights: Highest-ever revenue in polymer business with 97% volume growth. • Operating EBITDA: Rs. 57 Crores (10.2% margin). • Profit Before Tax (PBT): Rs. 23 Crores. • Profit After Tax (PAT): Rs. 16 Crores. • Order Book: Record Rs. 5,372 Crores (200% increase in new orders).
Strategic Focus • "China Plus One" Trend: Reducing dependency on Chinese suppliers. • Global Engagement: Collaborating with 150 global EPC players. • R&D Investments: Establishing a robust R&D center and tower testing station. • Market Anticipation: Growth in T&D infrastructure, especially in renewable energy.
Market Opportunities • Investment Projection: Rs. 2.4 Lakh Crores in India's transmission grid by 2030. • Estimated Market Share: 25-35%. • EBITDA Margin Goals: 12-13% in tower engineering division.
Operational Insights • Inventory and Working Capital: 5 months and 130 days, respectively. • Competitive Landscape: Among top five T&D structure manufacturers globally. • Order Intake: Rs. 700 Crores from Power Grid Corporation.
Export and International Market • Export Margins: Anticipated to be 2-3% higher than domestic projects. • International Bidding Pipeline: Rs. 6,000 Crores, focusing on developing regions.
Competitive Dynamics • Limited Competition: Mainly from Turkish manufacturers. • Sea Freight Rates: Returned to pre-COVID levels, enhancing competitiveness.
Segment-Specific Insights • Polymer Segment: Current low margins due to scaling, with expectations for improvement. • Capex Plan: Rs. 75 Crores for maintenance and capacity optimization. • Domestic Demand: Strong in Rajasthan and Gujarat, with expected margins of 12-13% in engineering.
Future Outlook • Cautious Approach: Focus on executing the first water EPC project before expansion. • Tender Pipeline: Significant increase with expectations for consistent awards. • Debt Reduction Plans: Targeting 25% CAGR growth over the next three years. • Focus on Profitable Growth: Emphasis on margin improvement and sustainable practices.
Conference Call Overview • Date: May 16, 2023 • Submission Date: May 23, 2023 • Participants: Key management including Directors Sharan Bansal and Devesh Bansal, CFO Shiv Shankar Gupta, and Deputy GM Aditya Dujari. • Moderator: Rahul Mishra from Centrum Broking Limited. • Purpose: Discuss audited financial results for Q4 and FY23, and future outlook.
Financial Highlights • Record Revenue: • Q4 revenue: INR 657 crores • Annual revenue: INR 1,980 crores (16% increase) • Segment Performance: • Polymer segment: Highest quarterly revenue of INR 149 crores. • Engineering export sales: 80% YoY growth, totaling INR 723 crores. • Order Inflow: • Record order inflow: Over INR 4,137 crores, including a major INR 2,570 crore order from BSNL. • Order book: All-time high of INR 4,551 crores. • Debt Management: • Reduced gross debt to INR 484 crores. • Operating EBITDA: Increased by 46%.
Strategic Insights • Bidding Strategy: • Focus on EPC players with expected quarterly order inflows of INR 400-500 crores. • Current bid pipeline: INR 66 billion internationally, INR 35 billion domestically. • Telecom Sector Growth: • Recent contracts from BSNL for 4G towers. • Anticipated increase in telecom revenue share.
Market Expansion and Future Plans • North American Market: • Small orders currently, with optimism for larger future orders. • Capital Expenditure: • FY '24 budget: Approximately INR 75 crores. • Revenue Mix: • 79% from engineering and EPC; polymer segment expected to grow faster.
Market Share and Distribution • Current Market Share: • Approximately 1%, with aspirations to increase to 1.5%-2%. • Distribution Network: • Nearly 30,000 retail touchpoints; plans to enhance branding.
Manufacturing and Financial Efficiency • Manufacturing Capacity: • Concentrated in Eastern India with a capacity of INR 60,000 crores (50% utilization). • Interest Cost Management: • Potential to reduce interest costs from 5% to around 4% of revenues.
Industry Trends and Growth Opportunities • PVC Industry: • Organized share currently at 60%, expected to grow as unorganized players exit. • Order Book Composition: • 62% from non-T&D products, with growth opportunities in telecom and railway sectors. • Export Growth: • Targeting 75% of order book from exports within two years, with expected 25% CAGR in revenue growth.
Conclusion • Management expressed confidence in achieving high double-digit revenue growth and maintaining margins between 11% to 13%, with potential for improvement as export activities scale up.
Financial Performance • Net Revenue: INR 445 crores, up from INR 400 crores YoY. • Key Segments: Strong contributions from engineering and polymer segments. • Export Sales: Increased by 85% YoY, making up 61% of engineering revenue. • Record Order: Secured INR 2,570 crores from Bharat Sanchar Nigam Ltd.
Management Insights • Optimism for Growth: Supported by favorable government policies and a robust tender pipeline. • Forex Losses: Conservative hedging policy in place, resulting in largely notional losses. • Order Book: INR 4,705 crores expected to be executed over 5-6 quarters.
Sector-Specific Discussions • Telecom Sector: Growth potential noted, especially for 5G rollout. • PVC Business: Margin pressures acknowledged, but recovery anticipated with increased construction activities.
Operational Strategies • Working Capital Cycle: Efforts to reduce from 120 days to 90 days. • Retail Expansion: Plans to double retail sales touchpoints in the polymer segment, focusing on Northern and Eastern states.
Historical Context and Market Position • Revenue Decline: Diversification into telecom and railway sectors due to limited domestic opportunities post-FY '18. • Export Reach: Now exporting to over 50 countries.
Challenges and Future Outlook • Order Cancellations: 50% of the order book subject to price variation; the other half is firm. • Underground Transmission: Not seen as a threat in the export market due to higher costs. • Growth Projections: Confidence in achieving high double-digit revenue growth and exceeding 25% CAGR over the next three years.
Closing Remarks • Diversification Benefits: Emphasis on pursuing higher-margin orders and improving profitability. • Appreciation: Acknowledgment of participants' support during the call.