Submission Details
• Date of submission: August 21, 2023
• Earnings call date: August 16, 2023
• Compliance: Submitted transcript to National Stock Exchange of India and BSE Limited
• Participants:
• Mr. G. Vamsi Krishna (Joint Managing Director)
• Mr. Shafiullah (Chief Financial Officer)
• Moderator: Mr. Irfan Raeen (Orient Capital)
• Transcript availability: On the company's website
Performance Overview
• Established position in building materials and synthetic yarn sectors
• Expanded manufacturing capabilities for Vnext fiber cement boards
• Strong demand despite global economic challenges
• Roofing business capacity utilization: >100%
• Vnext volume growth: 43%
• Target: Rs. 1,000 crores turnover by 2030
• Q1 revenues: Rs. 447 crores (down from Rs. 479 crores)
• Focus on reducing borrowings and enhancing sustainability
Q&A Session Insights
• Vnext division capacity utilization: 88-90% with a growth outlook of 25-30%
• Revenue split target: 50:50 between new-age and legacy businesses by FY25
• Multiple sourcing options to mitigate raw material dependency risks
• Stable export demand for Vnext products: 25-30% of production
• Gross margin: >15%
• Pricing pressures in roofing segment due to rising chrysotile fiber costs
Analyst Questions
• Concerns about revenue doubling in Vnext division despite projected growth
• Explanation of conservative revenue targets considering market conditions
• Challenges in roofing segment revenues attributed to rising input costs
• Recent margin drop in yarn business noted as cyclical, not constant
• Optimism about future growth and margin improvements across segments
Roofing Segment Outlook
• Steady demand in rural markets transitioning to cement roofing
• Plans to increase capacity in northern India
• Industry growth forecast: 3% to 5%
• No price cuts implemented in Q2 despite pricing pressures
• Confidence in expanding dealer network amidst competition
Capital Expenditure and Future Strategies
• Plans for Vnext business investments, no immediate roofing investments
• Positive trend in Vnext EBITDA margins (~15%)
• Discussion on potential demerger of Vnext division to unlock shareholder value
Closing Remarks
• Acknowledgment of valid suggestions and commitment to update stakeholders
• Emphasis on leveraging strengths across business segments
• Invitation for further inquiries through investor relations partner
• Clarification on pledged shares: 15.68% as of June 30, 2023
• Moderator's thanks to participants