Another HFC, which is even faster growing than can fin plans for an IPO
ie PNB housing finanace, it is growing really gud, with low NPA, better brand name etc.
Even we have their numbers discussed in past in this thread.
So, how will this impact can fin during listing time ?
dpnds they come with which valuations ?
can this lead to some rerating again ? wishful thinking
rgds
Call addr by Mr. Prayasvin Patel CMD & Mr. Rajat Jain CFO.Highlights-Capital Mkt
Co bagged orders worth Rs 112 crore in Sep'15 quarter in Gears division domestically as compared to Rs 107 crore of orders in Sep'14 quarter, and total order book position as on Sep'15 stood at Rs 258 crore as compared to Rs 275 crore in Sep'14.The company continues to remain cautious on order intake and was very selective. Given the order backlog, outlook remains robust for execution in coming quarters.Management continues to remain optimistic for orders and its execution in H2 FY'16. As per the management, the open cast mining would see more inflow of orders in next 9 months time frame. Upsurge will happen in order inflow in H2 FY'16.Defense, sugar and fertilizer sector are showing good traction and good orders are expected in H2 FY'16.Ebdita margins at consolidated level was around 13% in Sep'15 quarter largely due to improvement in international gear business and domestic gear business and increase in sales of spare parts together with tight costs control initiatives.
Elecon EPC or the MHE business sales stood at around Rs 101 crore in Sep'15 quarter with a loss of about Rs 12 crore and international gear business reported sales of Rs 74 crore for Sep'15 quarter with PAT of Rs 1 crore.Elecon EPC business has an order book of around Rs 1000 crore and international gear business has orders of around Rs 60 crore as on Sep'15.
Overseas entity Ebidta is expected to remain around 7% going forward for rest of FY'16.
Overall, management expects around 10% growth in consolidated net sales and Ebidta margins of around 12-13% for FY'16.Debt at consolidated level as on Sep'16 stood at around Rs 632 crore.The company is operating at 45% of capacity for gear business and there are not much capex planned for next 12 months.As per the management, so far not much benefit of lower steel prices was visible to the company as the company always booked the raw material on back to back basis.Around Rs 275 crore is the retention money lying with customers for more than 1 year now. Management expects Rs 60 crore of recovery before Mar'16.
GS Sundararajan, MD &Subhasri Sriram, ED addr the call:Highlights by Capital Mkt
The company continues to exhibit steady growth across all segments in Q2FY2016, while well penetrating in to all geographies. The company expects second half of FY2016 to be better in terms of growth.Assets under Management (AUM) growth of the company accelerated to 17% at Rs 18165 crore at end September 2015 against a growth of 16% a quarter ago and 3% a year ago.The disbursements increased 9% to Rs 4527 crore in Q2FY2016 over Q2FY2015. Segment wise disbursement stood at Rs 1995 crore - small enterprise finance, Rs 800 crore - two wheelers, auto loans - Rs 200 crore, personal loans Rs 250 crore and Rs 1291 crore – gold in Q2FY2016.Off-balance sheet AUM of the company stood at Rs 500 crore, which is less 3% of AUM. The company has not conducted any securitization deals in H1FY2016, while expects to conduct securitization deals only in Q4FY2016.Overall Gross NPA ratio rose to 3.3% at end September 2015 from 3.17% at end June 2015. However, the Net NPA ratio was maintained at 0.65% with strong provision coverage ratio of 80.2% at end September 2015.Write-offs stood at Rs 71.23 crore, GNPA ratio including write-offs, stood at 3.69% at end September 2015.
Gross NPA increased by 50 crore in Q2FY2016 to Rs 582 crore at end September 2015, mainly contributed by small enterprise finance and gold loan book.Gold Loan Book GNPA stood at 2.55%, while non-gold GNPA was at 3.51% at end September 2015.
The company plans to shift NPA recognition norms from existing 180 days to 150 days over dues basis on 31 March 2016.As per the company, the GNPA would double to Rs 1000 crore from present level of Rs 582 crore, after shifting to 150 days over dues NPA recognition norms from present 150 days.Based on the current balance sheet position, the company estimates GNPA to be at Rs 1300 crore on 120 days and Rs 1700 crore on 90 days over dues basis.
With the huge customer base and small ticket size, the company and its collections teams are educating customers to adapt to the new NPA recognition norms.
Shriram Housing Finance:Shriram Housing Finance has crossed the AUM level of Rs 1000 crore at end September 2015. The AUM comprises mainly 90% of retail loans and 10% builder finance.The branch network of the company stood at 77 branches at end September 2015.
During the quarter, Shriram Housing Finance has tightened its NPA coverage and provisioning norms, which had a impact of Rs 1.2 crore on profitability. Accordingly, the provision coverage ratio was raised to 24% from 18%.
Highlights of the call by Capital Mkt
On sequential basis, Tata Elxsi registered 11% rise in its consolidated sales to Rs 269.66 crore for the quarter ended September 2015.OPM fell 30 basis points from 23.0% to 22.7% which saw OP rising 9% to Rs 61.28 crore.PBT rose 7% to Rs 58.31 crore.PAT rose 7% to Rs 38.10 crore.On y-o-y basis, sales jumped 31% and OPM rose 240 basis points from 20.3% to 22.7%. OP was up 47%. PBT grew 66% and PAT was up 61%.
Embedded product design (EPD) accounted for 80.9% of sales.Industrial design (ID) accounted for 12.3% of sales.System Integration accounted for 6.0% of sales.Visual computing Labs accounted for 0.80% of sales.For the six months ended September 2015, Tata Elxsi registered 28% rise in its consolidated sales to Rs 507.18 crore.OPM improved 240 basis points from 20.0% to 22.4% which saw OP rising 43% to Rs 113.60 crore.Other income jumped 191% Rs 210.28 crore.Other income includes Rs 4.3061 crore forex gain against a loss of Rs 39 lakh.PBT rose 71% to Rs 112.91 crore.PAT rose 66% to Rs 73.82 crore.
For the six months, Embedded product design (EPD) accounted for 80.5% of sales.Industrial design (ID) accounted for 11.9% of sales.System Integration accounted for 6.7% of sales.Visual computing Labs accounted for 0.90% of sales.On y-o-y basis, sales jumped 31% and OPM rose 240 basis points from 20.3% to 22.7%. OP was up 47%. PBT grew 66% and PAT was up 61%.
Of the increase in employee cost, around 85% rise is due to salary revision effected from July first. Rest was due to change in offshore/onsite mix and rise in head count.Current head count is 4500.For the six months ended September 2015, Tata Elxsi registered 28% rise in its consolidated sales to Rs 507.18 crore.OPM improved 240 basis points from 20.0% to 22.4% which saw OP rising 43% to Rs 113.60 crore.Other income includes Rs 4.3061 crore forex gain against a loss of Rs 39 lakh.PBT rose 71% to Rs 112.91 crore.PAT rose 66% to Rs 73.82 crore.The quarter was steady for EPD business. Main component for EPD business is transportation and broadcasting business.Transportation business saw good spread in customers and geographies. The company diversified revenue mix in this segment.Broadcast business saw good traction in OEM and tier I customers.Utilization rate little less than 75% during the quarter. So there is a little bit of head room, not too much.Margins won't be very different in next few quarters.The company is seeing good opportunity in health care.The management does not see any cause for alarm regarding growth rates going forwards vis a vis current growth rates.
Call was addressed by Mr. M P Taparia MD-Key highlights by Capital Mkt
There was a volume growth of 16.5% to 57226 MT and value growth of 5.6% to Rs 755.21 crore for the quarter ended Sep'15 on YoY basis.Sale of value added products stood at 32.31% Vs 29.18% on YoY basis.Plastic piping business value wise grew by around 14% and 26% in volume terms during the Sep'15 quarter. The segment reported an OPM of around 13.5% for Sep'15 quarter as compared to 12.6% for Sep'14 quarter.
Packaging products value wise de-grew by around 0.6% and grew volume wise about 4% in during the Sep'15 quarter on YoY basis. The segment reported an OPM of around 15.5% for Sep'15 quarter as compared to 13.1% for Sep'14 quarter.
Industrial segment value wise de-grew by around 12% and de-grew by 1.9% in volume terms during the Sep'15 quarter on YoY basis. The segment reported an OPM of around 9.7% for Sep'15 quarter as compared to 9.3% for Sep'14 quarter.
Consumer segment value wise grew by around 14% and 10% in volume terms during the Sep'15 quarter. The segment reported an OPM of around 11.2% for Sep'15 quarter as compared to 7.8% for Sep'14 quarter.The company expects to incur a capex of about Rs 200 crore for 9 months ended FY'16. Management expects commercial production of new units to Kharagpur and Malanpur to commence from Nov'15 onwards. Entire capex will be through internal accruals.The prices of raw material moved downwards during Sep'15 quarter. Management expects overall raw material prices to remain in range bound fluctuations and affordable.The company has received its first export order of US $ 55000 of CPVC fire sprinkler system in Sep'15 quarter.Also, the company expects to supply about 5000 pieces of Composite LPG cylinders to South Korea in Dec'15 quarter and expects tender from Government refineries for their requirement of about 8000-12000 pieces of composite cylinders in Dec'15 quarter.Average debt stands at around Rs 350 crore as compared to around Rs 500 crore on YoY basis. An average cost of borrowing is about 8.9%.
The company holds about 63800 sq feet of saleable are of supreme chambers and will sell at appropriate prices.Subsidy for Sep'15 stood at Rs 1.29 crore as compared to around Rs 6 crore in Sep'14 quarter.CPVC volumes and value stood at 2712 MT and Rs 75 crore for Sep'15 quarter as compared to 2054 MT and Rs 55 crore for Sep'14 quarter.Piping Industry growth was around 12-13% as compared to 26% growth in piping business for the company. Most of the growth in piping came from housing.More sale of value added product has resulted in higher realization in consumer product segment.
Agriculture was better in Oct 2015 on YoY basis and demand should be better in H2 FY'16 for piping segment.Material handling division has grown in volume terms by 7%. Industrial segment volumes were lower by 6% and were lower by14% in value terms due to tough times of industries. Both automotive and non-automotive segment have suffered in Sep'15 quarter.
The company expects to achieve volume growth of around 15-18% for 9 months ended March 2016. Management expects about Rs 3200 crore to Rs 3300 crore turnover for 9 months ended Mar'16, unless there is a major movement in raw material prices. OPM is expected to remain around 13.5% for 9 months ended Mar'16.
Ya he did not reply anything to his competitors like gimmell and wingloo which are ahead of him and infact comparing with vietnam and bangladesh which everybody knows will not be able to compete.
I consider that waiting or timing the dollar price is totally foolish thing to do ( you are waiting for 3% gain and giving 8% of short term loans...makes no sense ) how can a business man can do this?
We need to think why he is doing so, what could be the reason?
TPP : Still did not understand and I think we should dig deeper on the implification of this treaty, he sounded confident on that ( I need to check what actually it is, does this treaty really a threat ) then all our textile exporting company will be in threat i.e indocount, nandan denim to name few.
Brand development : I think he knows brand building is very difficult and costly affair and not safe for this size of company, so he has started with brand licensing and along with that developing own brand which can share the shelf in the stores with other brands ( retailers for whom he is manufacturing and doing business for such a long time and having good relations )....my thoughts ( could be not convincing )
Even if they are able to achieve sales of 50 - 100 million dollars for own brand it can be a terrific addition to the bottomline.
I would still give benefit of doubt to Kitex because they are in wonderful business, corporate goverance is a issue ( need to be very vigilant on this issue for every action taken by management )
Disc : Invested
This week I decided to get some information on their 2nd largest project – Beyond 5, which is expected to contribute Rs 600cr to the company’s topline over the next 4-5 years as per the company’s presentation.
This is also located in Ahmedabad, about 10-15 km away from the Uplands project. This has a 9-hole golf course and a Sachin Tendulkar – designed clubhouse (SMAASH) of 60000 sq feet (that’s massive!).
Around the golf course, Arvind will be building around 100 villas which will occupy 2% of the land area. The remaining area will be developed and sold as plots. There are totally about 600 plots of varying sizes starting from 500 sq yard, including the 100 plots over which Arvind will do the construction. Depending on the buyer’s requirement, Arvind can undertake construction activities over the vacant plots or else the buyer can do his own construction. They also intend to start a property management arm and help in leasing villas to visitors on behalf of the owners. But that’s for much later.
Beyond 5 is still in pre-launch stage. 80% of the approvals have been received and remaining are expected by year end. Which is when they will launch the project. The rates mentioned below are the pre-launch rates which could go up when the project is launched. This is a joint development with the land owner (Arvind does not own the land). Arvind will develop, construct, market and maintain (for about 2 years after handover, after which the society would take over). Land has been already been fully converted to Non-agricultural and title is clear. The project will be completed over 3 years. Fencing has been done. Road network construction is under process. Office building will be fully ready in November. 25-30% of the project has already been sold out.
The marketing person candidly advised that if someone is looking for investing and does not intend to stay there, the plots are the best option. Beyond 5 has been designed more as a weekend getaway and not for staying all the time, although the buyer is free to do so if he wants. If someone is looking at their first or second home, then Uplands is a better choice. Within Beyond 5, purchasing a constructed villa makes sense for those who intend to use it frequently, like say every month or fortnight. For less frequent users, it does not make sense as the maintenance charges would he high. He informed that the land price is already double of what they had negotiated with the owner when they entered into the agreement 2 years back. Since then there have been several developments in the surrounding area such as a resort, a water park, a club etc (I missed the names, but he mentioned one owned by Bakeri family – related to Achal Bakeri of Symphony).
Now for some statistics:
All cheque payments, in white. No black money. 20% down, 3.5% in 12 instalments, and 1.5% over the next 24 months (appx). The entire project is self funded by Arvind.
I wasn’t able to get a breakdown in order to arrive at the Rs 600 cr figure mentioned by the company in their presentation.
Observations – like Uplands, this also appears to be a post sort of high end project – but more like a resort for short stays. When asked about the demand for so many villas (800 of Upland and 100 of Beyond 5), the marketing person started singing praises about the potential of the area (never ask a barber if you need a haircut).
Profitability from this project would be lower since majority is plot development, however investment required from the company would also be lower.
These 2 projects constitute 72% of the expected revenue, with the remaining 9 projects contributing 28%. So there is significant concentration risk. While Arvind as a group may have the ability to execute the projects, demand scenario for upmarket projects in Ahmedabad is something that needs investigation. Their remaining projects are smaller “fast moving” constructions, and new launches in this category would be necessary to sustain cashflows.
There seems to be a significant gap between the “potential” of the company and current market cap of 160 crores. The market could get more confident as the offtake improves and if they announce new launches.
Discl – not a recommendation. Had taken a starter position earlier and added a bit recently.
Shobhan Mittal, ED & V. Venkatramani, CFO, add the call.HighlightsCapital Mkt
Operational performance
Greenply Industries hasdelivered a stable financial and operating performance in Q2FY16, despite a largely sluggish macro environment, chiefly driven by two pronged strategy of gaining market share from theunorganised segment and enhancing operational efficiencies through animproved product mix.The company has registered net revenues of Rs 400.77 crore in Q2FY16, down by 2.4%from Rs 410.71 crore incorresponding quarter.Plywood revenue was down by 7.8% YoY to Rs 287.72 crore, contributing 72% of net sales.MDF revenue grew by 14.5% YoY to Rs 113.05 crore, contributing 28% of net sales. The Company plywood plants utilization stood at 102% and MDF plants utilization at 91% in Q2FY16.Gross margins expanded by 360 bps YoY to 45.1%, led by better product mix. EBITDA margin wasup 130 bps YoY to 14.1%. EBITDA was up by 7.5% at Rs 56.50 crore compared to Rs 52.56 crore. Ad expenditure to sales stood at 3.9% in Q2FY16. PBT rose by 12.9% at Rs 36.42 crore. PAT gained by 1.5% at Rs 27.24 crore.
The Company working capital cycle improved 8 days QoQ to 49 days in Q2FY16, led by better inventory and debtor management. Net debt to equity stood at 0.54x as on September, 2015 as compared to 0.79x as onSeptember 2014.
Plywood: (A) Plywood production declined by 9.8% to 8.25 million square meters (million sqm). (B) Average capacity utilisations wereat 102% as compared 113% corresponding previous quarter. Sales volumes de-grew by 2.1% to 12.03 million sqm. (C) Average net realisation of Plywood decreased by 2.5% to Rs 235per sqm. (D) EBITDA Margin decreased to 9% from 9.5% corresponding previous quarter.
Medium Density Fibreboards (MDF): (A) MDF production grew15.1% to 41032 Cubic Meters (CBM). Sales volumes stood at 42067 CBM, up by 11.7% from 37667 CBM in Q2FY15. (B) Average Capacity Utilisation was at 91% compared to 79% corresponding previous quarter.(C) Average realisations of MDF increased by 2.5% to Rs 26818 per CBM. (D) EBITDA Margin rose to 27.9% from 23.2% corresponding previous quarter.The company holds largest pan-India player with 26% share of organised plywood market and 30% share of domestic MDF market. The company have 4 state–of-the-art manufacturing facilities for Plywood and 1 facility for MDF –largest in the country. With Plywood industry size of ~ Rs. 180 billion and MDF industry size of ~Rs. 14 billion, the company expects industry likely to benefit from rising residential/ commercial construction, increasing urbanization, high disposable incomes and Government Announcement regarding construction of 100 smart cities.The Company hopes rising demand from the real estate sector, increasing urbanization, higher disposable incomes and growing middle class will be key industry driver going forward. Meanwhile government announcement regarding construction of 100 smart cities would facilitate further to boost to the industry. The Company expects rollout of GST helps the industry to facilitate faster shift from unorganised to organised players.The company guides to increase the number of distributors and retailers going forward. Presently, the company has around 1170 plywood and 600 MDF distributors/stockist and 6000 plywood and 4000 MDF retailers. Also, serviced by 33 branches for ply and 15 branches for MDF pan-India.The company plans to continued its investments in advertisement and promotional spends to increase brand visibility pan-India, with Ad spends stood at around 3% of net sales.
On expansion plans- The Company plans to optimise utilisation of plywood plants in existing facilities and increase outsourcing proportion to 30% from 20% presently over the next 3 years. Also, with plans to setting up new MDF plant in Andhra Pradesh over FY16-19 to cater to future demand.The Company revised down its topline growth target to ~6-8% in FY16 from previous guidance of 10-12%. The Company expects a topline growth of ~5-6% in H2FY16. Margins expected to improve by 50-70 bps inFY16 driven by better product mix and costcontrol.
The Company guides a maintenance capex of ~Rs 30 crore for FY16.The Company expects to rise by 100 bps on the margins front in current fiscal year. Also, guides to maintain MDF operating margin of ~27-28%.The Company guides an effective tax rate of ~23-25% for FY16.
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Yes I do know that it is not a quarterly event 
Maybe should have framed the question properly
I think the interview you are referring to was after Q1 results where the mgmt. said that Q1 numbers were impacted due to maintenance activities carried out in Q1.
Please do update if you find the source where it says that maintenance was carried out in Q2.
Thanks.