Just talked again (actually I know him more 20 yrs.)
He said loan amount 84000 personal loan.
EMI 48 months (4yrs)
Installment 2899 per month.
I calculated it’s 27% (repay amount 138900 something)
(I have idfcfb credit card , rate 15 to 18% )

If this is true, it is against the thesis that they don’t sell a product if they cannot sell it to their family members. 27 percent yearly is too much, more than microfinance. Please confirm again, I doubt this is true.

ICICI Direct provides most mediocre advice

Ministry of Corporate Affairs approves revised demerger plan of SCI – Details, timeline | SCI share price today | Companies News, Times Now (timesnownews.com)

Notes from Q4 Earnings calls of FY21, FY22 and FY23:

Overall:

• 3 Divisions: Building Products (Sanitaryware, faucets, tiles, and Pipes), Consumer Appliances (Chimney, Water Heater, and Cooler), and retail (franchise stores + e-commerce site evok.in)
• Brand Hindware owned by the company
• Well established Channels. Possible to introduce new products with minimum incremental cost
• Targeting 18% to 21% sales growth, 14~16% EBITDA margin
• Densifying network in Tier 2, Tier 3, Tier 4, Tier 5
• Acquired the Building Products Manufacturing Business of the erstwhile HSIL for 700 crores. Transaction is effective FY23 | Around 3% EBITDA margin should increase due to the acquisition.
• Advertising budget around 4~5% of sales

1. Consumer Appliances Division:

• Started in 2015-16
• Key products: chimney, Water Heater, air coolers and kitchen furniture and fittings
• Overall retailers (1,10,000) | ~ 25% sell company’s categories. Onboarded 35~40% of that.
• Water Heater: JV (Hintastica Private Limited) with Groupe Atlantic, French multinational for heating products and hot water solutions. Will set up a state-of-art facility [600,000 pieces annually] for manufacturing in Telangana| Product’s brand name “Hindware Atlantic”.
• strong #2 player in chimney category with a 20% share
• Seasonality in sales: Q3 peak season for water heater and Q1 peak season for air coolers (65% of the annual demand)
• Present in 1,700 towns and more than 11,000 pin codes across the country | created a network of close to 400+ authorized service centers. In 3-4 years, service centers count will be ~ 1,000
• In kitchen furniture and fittings business, tied up with the world’s third largest kitchen furniture and fittings company FGV(Italy)
• Strategy is to capture the market first. Margins can always follow through. Expect consumer business to be 1000 crores by FY27 (was by FY25 earlier). Expect 7 to 8% EBIT margins in 2 yrs.
• Operating at 3% to 4% EBITDA. But has a potential to do around 10% EBITDA margin in steady state. In the interim, another 2% to 3% expansion should also happen.
• Working to in-source products to reduce the cost as well as working capital.
• Risk: Industry cannot pass on raw material inflation because of the high level of fragmentation. FY23 performance was impacted.

2a. Building products division- Bath ware (Sanitaryware, and faucets):

• Sanitaryware market is growing in upwards of 10%-12%.
• Project business 26%-27%. Retail 72% to 73%
• Aspire to outperform (1.5x) the market in both sanitaryware and in faucets
• Own plants running upwards of 88%-90% in sanitaryware and 65% in Faucet.
• Started getting back lost some channel partners with innovative products, increased marketing spends, and channel friendly policies.
• Prioritized the development of luxury brand Queo
• Bath ware business have an influencer program for plumbers
• In FY24, expect higher growth from faucet than in sanitary, driven by new launches
• In bath ware, looking to unlock about 1% to 1.5% EBITDA expansion over the next 12 to 18 months over fourth quarter margins of 15.3%
• Bath ware: 65% Sanitaryware and 35% faucets. ~10% contribution of volume is imported from China | Plant to reduce China dependence and bring the production in house.
• Working capital improvement ongoing exercise
• Faucets growth rate indicates gaining from both unorganized and organized sector
• Utilization ~90% for sanitaryware and ~45% for faucet. New faucets products are being developed within our plant. Also working on in-sourcing of a lot of Chinese products and outsourcing basic products to the domestic suppliers. Changeover may impact Q1/Q2.
• Risk: input gas prices for sanitaryware

2b. Building products division- Pipes [Brand ‘TRUFLO’]:

• 5 years old (started in FY18) into the market, but able to target Pan India markets.
• Optimistic to reach INR 1,000 crores revenue by FY24.
• Current capacity 48,000 TPA. Roorkee plant should be up by Q2FY25- initial capacity 12,500 tons that can be scaled to 25,000 tons at a lower marginal cost.
• When it comes to CPVC category, we are very strong in Southern, Northern and Western (to a certain extent) part of India, East it is a little bit new.
• Next 2 years, plan to go into the rural markets in existing markets, Central and Eastern India.
• Collaborated with Reliance Worldwide Corporation to introduce and market multilayer composite pipes and push-to-connect fittings under the brand ‘TRUFLO SharkBite.’
• Margins cannot be compared with the peers – new business. plan to grow fast. Constructed 3 plants in short span. CAGR is more than 40%. Employee costs are 4~5% higher than them, which in due course will come down 1% a year. will be at par with competitors in 3~4 Yrs.
• Pipes business shall improve margins by 1% i.e., 11.3%.
• Started manufacturing overhead water tanks at Telangana plant for key southern states.
• Risk: Fall in raw material prices leads to Inventory losses. For e.g., pipes division had inventory loss ~INR 43 crores in FY23.

Debt:

• Total Bank Debt as on Q4FY23 stands at INR 712 crore.
• Not inclined to be debt free. Always be at an optimal level of debt. In the last 4 to 5 years, we have invested our capital for creating new channels in the market. Cheapest cost of funding today for a tax paying and 18~20% ROCE business. Helps faster expansion.
• Debt repayment schedule – repay odd 100 crores of debt in FY24
• Capex funding: ~ 70% debt. Any surplus cash used to settle the working capital.
• Profits primarily used to reduce the working capital. In case surplus, repay the loans.

Capex:

• Pipes capex INR 180 crores
• Sanitaryware and faucets debottlenecking INR 30~40 crores
• Creating brand stores across the country INR 50 ~ 60 crores