Anyone invested in KNR construction.is it a good company for long term

Summary of L&T Technology Services Q1 FY25 Earnings Call

Key Highlights:

• Revenue grew 6% YoY (Year over Year) but declined 3% QoQ (Quarter over Quarter) due to SWC seasonality.
• Large deal wins were strong, with two $30 million deals, two $15 million deals, and three deals with a total contract value (TCV) of $10 million.
• The company is investing in Sales and Technology under its “Go Deeper to Scale” strategy to prioritize growth.
• They expect their revenue and margins to improve from this quarter onwards.

Segment Performance:

• Mobility: Strongest growth in the last 6 quarters (6%+), driven by Auto, followed by Commercial Vehicles and Aero. Won 3 large deals in Mobility. Focus on EV, Hybridization, Vehicle Engineering, and Software Defined Vehicles (SDV).
• Sustainability: Slight YoY growth due to strong performance in Plant Engineering, offset by a decline in Industrial Products. The decline is temporary due to supply chain issues and large deal delays. They are investing in asset management solutions and see this as the next growth engine.
• Hi-Tech: Good growth in Semiconductors, with strong demand for AI chip design. Medical sub-segment is seeing spending on Sustenance engineering, QARA, Value analysis and Value engineering, Digital manufacturing solutions for operational excellence. They are seeing multiple large deals in play across Telecom, Semcon, ISV, and MedTech.

Outlook:

• The company is comfortable with its guidance of 8-10% revenue growth.
• They see growth in all three quarters ahead and expect H2 to be better than H1.
• Their aspiration of $1.5 billion in revenue by FY25 remains unchanged.
• They will host an Investor and Analyst Day on August 27th in Bangalore.

Other Points:

• The company filed 47 patents in Q1 and has a cumulative total of 1,343.
• They are ranked as a Leader in the Everest Connected Product Services assessment.
• EBIT margin for the quarter was 15.6%, in line with the aspiration of 16% for FY25.
• The company expects the EBIT margin trajectory in H2 to be better than H1.
• They are actively recruiting freshers and laterals, but automation is reducing the straight-line impact of headcount on revenue.
• Wage hikes for the year are expected to be finalized in the next week or so and will be effective from October.

Key Points:

• L&T Technology Services (LTTS) is targeting an 8%-10% organic revenue growth for FY25.
• The company is also aiming to achieve a $1.5 billion revenue run rate by the end of FY25, which may include inorganic growth through mergers and acquisitions (M&A).
• LTTS has a strong pipeline of deals, with a significant portion being proactive deals initiated by the company.
• The company is focusing on M&A in three key areas: Automotive in Europe, ISV & Hyperscalers in North America, and Medical in North America.
• LTTS expects its revenue to grow every quarter for the rest of FY25, with a stronger H2 compared to H1.
• The company is confident in its growth prospects despite potential macro headwinds.

Other Call Highlights:

• LTTS is seeing increased customer interest in cost reduction, cash conservation, and faster time-to-market solutions.
• The company is investing in Artificial Intelligence (AI) and is incorporating it into many of its bids.
• LTTS plans to be more transparent by issuing press releases on new wins and partnerships.
• The recent large deals won by LTTS are ramping up at different paces depending on the specific customer situation.

Inorganic Growth:

• LTTS confirms that M&A is part of their strategy to achieve the $1.5 billion revenue target.
• The company is looking for targets in the range of $50 million to $150 million with the right margins and valuations.

Overall, the call portrayed a positive outlook for LTTS with strong growth prospects and a clear M&A strategy. L&T Technology Services is focused on growth and is making investments to achieve its goals. They are confident that their revenue and margins will improve in the coming quarters.

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Technical View: BCC Fuba

Price breaking out on a weekly and daily chart with High Volume after 10 months of consolidation.

Daily chart breakout after the budget announcement with Highest Volume of the Year

There was some increase in the customs duty (BCD) from 10 to 15 percent on PCBA of specified telecom equipment.

However, PCB is chosen based on the specific requirements of the telecom equipment, such as durability, heat resistance, and signal integrity.

Mutilayer PCBs are one of them and Bcc Fuba is a manufacturer of the same.

It’s my guess based on the budget announcement and positive reaction by the stocks, I may be wrong altogether.

Disc: Have a position based on technical, will close the trade if it falls below the resistance level marked.

A good read on medplus

Styrenix Performance Materials Limited Q1 FY2025 Earnings Call Summary

Highlights:

• Sales volume increased by 8.6% compared to Q4 FY24 and by 21% compared to Q1 FY24.
• Revenue increased by 16.7% compared to Q4 FY24 and by 28.5% compared to Q1 FY24.
• PBDIT stood at 13.1%, which is better by 0.7% compared to Q4 FY24 and 3.7% better compared to Q1 FY23.
• Profit after tax stood at 8.7%, which is better by 0.5% compared to Q4 FY24 and better by 2.8% compared to Q1 FY24.
• Debottlenecking projects are on schedule.
• FY25 volume guidance remains 15% to 20% growth.
• No guidance on EBITDA margins provided.
• New product lines launched under the brand names STYROLOY and ASALAC.
• CAPEX for FY25 is estimated to be in the tune of Rs. 60 crores to Rs. 70 crores.

Key Questions and Answers:

• ABS imports: There has not been a major shift in imports year-on-year. Ocean freight costs have impacted raw material imports but haven’t significantly affected overall EBITDA margins.
• Sales volume split: In ABS, auto and household appliances are the larger markets. In PS, it’s household appliances and packaging.
• Global spreads: Global spreads have not changed much in the last 1.5 years. The company’s performance benefits from operating leverage as volumes go up.
• Power and fuel cost savings: Some plants have already commissioned cost-effective steam generation projects. The full savings are expected next year. Power cost saving options are under evaluation.

Additional Notes:

• The company stopped disclosing individual product volume breakdown due to competitive reasons.

• Pledges on promoter holdings have been released.

• The debottlenecking project is different from the brownfield expansion project. The basic engineering study for the latter is still ongoing.

• Realization increase is mainly due to product mix changes. The company also sells SAN and polystyrene at lower costs compared to ABS.

• Capacity Utilization: Styrene Performance Materials is operating at near full capacity for ABS and Polystyrene. Debottlenecking projects are underway to increase capacity.

• ABS Spreads: There is disagreement between the company and a caller on ABS spreads. The company claims spreads haven’t changed in the last two years, while the caller argues they have increased 30-40%.

• CAPEX: The company plans a total CAPEX of Rs. 650 crores over the next few years to nearly double ABS capacity and increase Polystyrene capacity by 50%. They will provide more details on the spending timeline in the next few months.

• Debottlenecking: Debottlenecking is expected to increase ABS capacity to 100-105,000 tonnes by the end of the current quarter. The company is aiming to complete debottlenecking for Polystyrene in the next quarter.

• Other Expenses: The benefit seen in other expenses in Q1 is expected to be sustainable, with some variations due to product mix and seasonality.

• New Products: The company has launched new products under the brand names STYROLOY and ASALAC. ASALAC uses a specialized ASA rubber along with SAN and AMSAN. They have received some validations and small commercial orders but expect bigger benefits later in the year.

• Stake Sale: The recent stake sale by the promoter was to retire debt taken for acquiring the company’s shares.

• Revenue Distribution: ABS revenue comes from Automotive (40%), Household Appliances (40%), and other industries. Polystyrene revenue comes from Household Appliances (40%), Packaging (40%), and other industries.

• Impact of Management Change: The new management has implemented changes to improve product efficiency, projects, and customer relationships, focusing on growth.

• Freight Costs: The recent increase in ocean freight costs is not reflected in Q1 results but may be seen in Q2.

• Power and Fuel Costs: The company is implementing projects to use alternate fuel sources, which will reduce costs significantly. The benefit will be seen incrementally from Q2 onwards and fully realized next year.

Overall, the company is experiencing volume growth and stable margins. New product launches and cost-saving initiatives are positive signs for future performance.

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