Meeting Overview
• Date: May 3, 2023
• Location: Kolkata
• Communication: Transcript shared with BSE and NSE on May 10, 2023
Key Challenges and Performance
• Challenges Faced in 2022:
• Labor shortages due to COVID-19 recovery
• Increased logistics costs from the Russia-Ukraine conflict
• Performance Highlights:
• Increased market share
• Improved operational efficiency through technological investments
Expansion Plans
• New Developments:
• Significant expansions in Kolkata and Vizag
• Plans to produce previously imported mould flux powders domestically
• Investment Details:
• Total investment for expansions: ~INR 100 crores
• Future capex planned: ~INR 93 crores for new product lines
Financial Management
• Working Capital Management:
• Efficient management highlighted by Nitin Jain
• Stable trade working capital at 18-20%
• Cash Flow:
• Strong cash flow generation despite INR 112-113 crores capex last year
Strategic Focus
• Local Production:
• 95% of sales from locally produced goods
• Alignment with "Make in India" initiative
• Growth Strategy:
• Aim to double business in India over the next 5-10 years
• Open to inorganic growth opportunities
Product Lines and Market Dynamics
• Product Focus:
• Mould flux as a flow control product
• Basic monolithic products for flow control and melting refining
• Market Positioning:
• Positive view on industry consolidation reducing competition
• Focus on organic growth and leveraging R&D investments
Margin and Competitive Landscape
• Margin Concerns:
• Decline in margins noted, but long-term potential remains positive
• Factors affecting margins include market challenges and customer focus shift
• Competitive Analysis:
• Differences in product offerings contribute to margin gaps
• Recent competitor acquisitions not seen as a threat
Future Outlook
• Service Income Growth:
• Service income doubled to INR 600 crores
• Export Strategy:
• India positioned as a manufacturing hub for Southeast Asia
• Market Growth Potential:
• Anticipated growth in flow control products, especially in Vietnam
• Refractory Market Strategy:
• Focus on high-value segments rather than commoditized products
• Confidence in future growth driven by new product introductions and strategic focus on targeted product lines.