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Xpro India Limited Q4 and FY 2023-24 Earnings Conference Call Summary
Call Overview • Date: May 29, 2024 • Key Executives: • Mr. C. Bhaskar (Managing Director and CEO) • Mr. Vinay Kumar Agarwal (CFO) • Mr. Kamal Sewoda (Company Secretary) • Transcript available on company website and submitted to BSE and NSE.
Financial Performance • Q4 Revenue: INR 128.41 crores (3% YoY growth) • Production Volumes: Increased by 20% • EBITDA: Decreased from 15% to 13% • FY 2023-24 Sales Value: INR 465.41 crores (8.9% decline) • Profit Before Tax: INR 60.16 crores (slight increase from previous year) • Net Debt-to-Equity Ratio: 0.07 • Return on Equity (ROE): 17.5% • Dividend Recommended: INR 2 per share
Strategic Initiatives • Capacity Expansion: Ongoing at Barjora site, expected to commence operations this year. • New Subsidiary: Establishing in UAE to enhance global supply chain. • Sustainability Partnership: Collaborating with Tata Power for solar energy supply.
Market Insights • Dielectric Films Market: 30% market share; production specifics considered trade secrets. • Export Challenges: Limited by capacity constraints; total exports down to INR 13.4 crores. • Future Demand: Optimistic outlook in consumer durables and electric vehicle sectors.
Q&A Highlights • Production Specifics: Modal consumption in India is generally in the 6-8 micron thickness range. • Market Trends: Shift towards thinner films; targeting higher-value products over cheaper imports. • Capacity Timeline: Expected operational by Q3 of the fiscal year. • Financial Metrics: 85% of costs funded through supplier credit; significant payments expected in June quarter. • Future Capex Plans: Significant investments planned for FY '25 and '26.
Challenges and Considerations • EBITDA Margin: Slight decrease from 14.5% to 14.2%; attributed to raw material price drops and geopolitical issues. • Revenue Contributions: Directly impacted by polymer price fluctuations; no recent capacity additions. • Supplier Lead Times: Marginal improvements noted; sourcing of machinery involves both local and international suppliers.
Closing Remarks • Commitment to quality and open communication with investors emphasized. • Invitation for further inquiries through investor relations partners.
Submission Details • Date of submission: May 30, 2023 • Earnings call date: May 23, 2023 • Participants: Key executives including Chairman, Managing Director, COO, and CFO • Transcript availability: Company website
Financial Performance Highlights • Overall Performance: • Revenue: INR 510.97 crores (first time surpassing INR 500 crores) • EBITDA: Increased by 16.6% • Debt: Significantly reduced • Dividend: Recommended INR 2 per share • Divisional Performance: • Biax division: Significant growth • Coex division: Faced challenges due to market conditions
Investment and Expansion Plans • Manufacturing Lines: • Two advanced manufacturing lines acquired • First line operational by FY 2024-2025, second by FY 2025-2026 • Solar Energy Partnership: • Investment of up to INR 2 crores for a 26% stake in Tata Power Renewable Energy Limited • Capacity Expansion: • Focus on BOPP films segment
Market Insights and Challenges • Capacitor Industry: • Focus on dielectric film capacitors, particularly polypropylene films • No import duties on dielectric films in India • Manufacturing Challenges: • Development of customized products and thinner films for new applications • Entry Barriers: • High capital costs, specialized technology, long lead times, and product development complexity
Demand and Growth Projections • Demand for Capacitor Films: Approximately 15,000 tons per annum • Market Growth: • Anticipated growth rate of 8-10% per annum • Potential combined growth estimate of around 15% • Biax Segment: Investment of around INR 500 crores for capacity expansion
Product and Pricing Strategy • Product Mix: Focus on value-added products in the Biax division • Pricing: Average realization for Biax division around INR 450 per kilo, influenced by input costs
R&D and Future Outlook • R&D Investments: Continuous development necessary for high-tech industry • Thinner Films: New line expected to produce films down to 1.5 microns • Global Market Potential: Significant demand increase anticipated by 2030, especially in EV and non-conventional energy segments
Conclusion • Commitment to quality and customer satisfaction emphasized • Ongoing focus on innovation and market positioning