We know that LTCG are exempt from tax till Rs. 1 lac for shares/mutual funds.

How long is the LTCG period ? Is it 365 days exact?

E.g. if my purchase date is 30 Aug 2021 , what would be the date when it becomes eligible for LTCG?

Looks like a breakout on the weekly charts.Good volumes too.
This will hold true if it sustains above 130 by the end of the week

Snippets of concalls from 2021 till now. i have noted down the most important details, these are management excerpts. makes a good read and helps you to understand the company better.

Market Share

12%, 13% of the market in which we operate. It will be anywhere between 12% to 15%. There is no authentic data available in the refractory but on thumb rule basis I think we should be anywhere between 12% to 15% level

Competition

I think the competition is there from Vesuvius, RHI, you have Tata Refractories, you have OCL, quite a number of competition, in fact the large refractory players, Calderys India is there, though they are not our direct competitors, but there were a number of refractory space. Worldwide also these names are there, Vesuvius, RHI, Krosaki.

EBITDA Margin Guidance

14-15%

New Recruitment

we have Mr. James McIntosh, our Managing Director. James has been appointed as the Managing Director in September. Before becoming Managing Director, he was our President of our US subsidiary EI Ceramics and MCI

Products

flow control refractories primarily

Our refractories are more consumable. It is only after they commission the plant we come in, not at the capex side, once if that running our refractories continues.

we are into nonferrous in a very, very small manner.

We could do lot of improvements and earlier we had only ISO not only ISO was the major product basket. Now in the last few years last couple of years we have tried to increase the other product ranges also like Slide Gate, Purging, Precast and the monolithic side and this year the percentage of these products have grown much faster than ISO

We are talking of a few product introductions and some expansion in the existing product mix. One is the precast shapes. It will basically be large shapes which we want to introduce in Vizag so that plant is under construction right now and then we would also go into brick business. We are not into brick in a big way. We have a small pilot production in our existing plant in Odisha so we will get into that business just to take care of our existing flow control business to that extent and we would expand our capabilities of the bone flux, which we manufacture in Rourkela so we will have more automated fully automated plant in Vizag. (Magnesia carbon bricks.)

Demand

Mini Mills contribute around 10% to the total revenue

For 1 ton of steel you require anywhere between 10 kgs and 12 kgs of refractories.

Certainly India is the number two producer of steel in the world. I think in 2022 the production will grow about 6.5% to 7% and in 2023, hese are levels which are much higher than any other country in the world. Steel increase is directly related to our refractory business because IFGL is 100% in the steel industry

I think our presence is majorly to the large steel mills and the medium sector

it talks of going to about 300 million metric tonnes by 2030-2031 from a current capacities of 140 to 145 million metric tonnes, which is a significant growth anywhere between 7% to 8% or 9% CAGR

Customer Concentration

The company’s customer profile remains well diversified with its top five customers driving 30-35% of its total sales.

Tata could be somewhere around 10% of our domestic sales

s. But on the large side we have added few customers like Tata BSL which was the Bhushan Steel earlier, we have added JSPL Angul which is a very new large customer

Our business can increase the various customers like Bhushan Power and Steel which is now JSW Group, we have had new businesses with JSW Dolvi and then JSW Salem.

SAIL yes we are maintaining some share but in some segment

Exports

Its exports account for 55-60% of its total sales.

Out of our exports from India, it could be about 50% of that into the Europe

Capex

with new capacities in place following the completion of its greenfield capex in Vizag and additional capacities in pipeline to be operational by the second half of FY2023

IFGL Odisha Plant Rs. 50 Cr in FY23 & FY 24 (including Research & Technology Centre at Kalunga, Odisha for an estimated cost of Rs.20 crores) - Odisha, this is a combination of both the expansion of capacity in our manufacturing but also Rs. 20 crores of the expenditure is for the research and technology center.

Isostatic product, Slide Gate product which is exclusively made in Kalunga only. So we would like to increase the capacities there. So that’s that that will be our major product line where we will spend money

IFGL Kandla Plant Rs. 44 Cr in FY23 & FY 24 - e Kandla plant, because it is based in the SEZ, our objective for that plant is more or less export

Visakhapatnam Project Rs. 65 cr by FY23 & FY 24 - Visakhapatnam are in new product areas for the company

Overseas business

IFGL’s operations are spread across China, Germany, India, the UK and the US through its various stepdown subsidiaries

ICRA has considered the standalone financials of IFGL Refractories Limited (IFGL) given the management’s stated intent of not providing any financial support to its overseas subsidiaries from the domestic business.

Liquidity

Cash at March 2022 stood at about Rs.263 Crores.

120 crores cash sitting idle in consolidated BS in current account not yielding any returns

Debt

Negative

Manufacturing Capabilities

Plants at Kalunga, Odisha, India

Plant at Kandla SEZ, Gujarat, India

Plant at Visakhapatnam, Andhra Pradesh, India – (Greenfield Expansion)

first phase of Vishakhapatnam plant built at a total cost of about Rs. 30 crores. Commercial production of monolithic has commenced from 1st of September 2021. The installed capacity of this Phase-I plant is 48,000 metric tonne per annum. 2-3 years to reach optimum levels

Contracts Tenure

The domestic contracts are generally on a 6 months to 1-year contract, but of late, it has been like a 3 to 6 months because the user industry wants a shorter term because of price volatility

In the domestic market, we call it along with application so application and supply contracts would constitute about 60% to 70% of the total domestic business

Overseas, there is no application contract with us. It is the purely supply

So if it is one year contract it is almost a fixed price contract and if it is three year contract at the end of the first year you can ask for the trial increase with proper justification.

Capacity Utilization

75% on consolidated basis

Raw Materials

Magnesia, Alumina, Zirconia

I think in value terms in the past, it used to be about 50% imports and 50% domestic. Now, it could be like 60% is imports and 40% domestic, because the rupee has depreciated against the dollar

Steel Export Duty Impact

I think what is our understanding is that this export duty is just to control the prices and the inflation and I think this should be pretty short term may be one month to three months’ time. It should not affect any performance of the industry as such and we have not heard any deferment of any capex plan

Provisions

Out of it Rs.25 Crores to Rs.30 Crores are stuck in Ukraine and Russia so would it be recoverable or that is already into provision and all?

We have had a provision of Rs.13.8 Crore. we hope that once the situation resumes we will be able to because they are our long term customers. I think once they resume their operations, we should be in a position to recover that.

Goodwill & Tax Implication

Exceptional Item is the Impairment of Goodwill pertaining to German operations

And so this goodwill which is there with us how much is left more to be written-off?

Kamal Sarda : I think it should be about four and a half years left for write-off.

The tax impact of this is any ways taken on our books, right, last year.

Kamal Sarda : Tax impact is from 1st of April 2020, it is finished.

“Following the merger of erstwhile IFGL Refractories with the company under the amalgamation scheme goodwill of 267 Crores had arisen in the books of the holding company in 2016, which was being depreciated or amortized over a period of 10 years. As per the amendments in the Finance Act 2021 goodwill on amalgamation is no longer a depreciable asset and depreciation on goodwill is not allowable expenditure effective April 1, 2020. Company has therefore recognized one time deferred tax charge of 21.6 Crores for Q4 FY2021 and 20.2 Crores for year consequent to the reduction of depreciable amount of goodwill for the tax purpose to nil. This deferred tax charge does not involve any cash outflow either the current year or in the future also”