@Dhvanit_Merchant17, @kdjolly, @DocDhiru

While the SME arena is hyperactive, updates, ideas and musings from our prolific contributors have been much muted. Request you all to pl share your experiences of the last 3 months and how you see the SME space faring in the coming months.

Disclosure : started investing recently in SMEs, with interests in TAC info, Z Tech, Supreme Power and Shivalic Power cont.

Q1 FY25 Financial Performance:

• Consolidated operating income: ₹5,676 million, up 18% YoY.
• EBITDA: ₹641 million, representing a 31% YoY increase; EBITDA margin: 11.29%.
• Net profit: ₹448 million, a 35% YoY increase; PAT margin: 7.89%.

Segmental Performance:

1. Engineering Division:

• Revenue: ₹3,235 million, a 13% YoY increase.
• EBIT: ₹188 million, up 26% YoY.
• Steady order inflows for medium-sized jobs; robust domestic enquiry bank.
• Total order book: ₹3,394 crores.
• Execution of international contracts contributed to improved turnover.
• Expecting increased pace of execution for larger EPC jobs in upcoming quarters.

2. Chemical Segment:

• Revenue: ₹1,994 million, a 36% YoY increase.
• EBIT: ₹498 million, also up 36% YoY; maintained steady margins.

3. Consumer Division:

• Revenue: ₹660 million, a 9% YoY increase.
• Reported a loss of ₹34 million, compared to a loss of ₹15 million YoY.
• New product launches gaining market acceptance.

Order Book and Execution Insights:

• Engineering division’s UP contract expected to be substantially executed by the end of FY25, dependent on fund releases and government approvals.
• Current residual value of UP project: ₹813 crores; Q1 execution: ₹26 crores.
• Anticipated significant improvement in execution from Q2 onwards, post-election-related cash flow impacts.

Management Changes:

• Transitioning to Non-Executive Non-Independent Directors for certain management members to facilitate professional management and support growth.
• CEO to assume role of Managing Director as part of planned management transition.

Strategic Focus and Market Positioning:

• Positive outlook for the chemical segment; aiming for 15% growth, contingent on stable input prices and foreign exchange dynamics.
• Ongoing capacity expansion in resins and chemicals targeted at international markets.
• Enhanced focus on R&D and innovation to drive profitability and competitive edge.

Challenges and Headwinds:

• Legacy project continues to impact margins; expected to taper out after Q2 FY25.
• Execution delays attributed to election-related funding uncertainties.
• Management remains cautiously optimistic about future order inflows and revenue growth.

Future Growth Prospects:

• Anticipating substantial revenue growth from international markets, particularly in North America and Europe.
• Continued investment in technology and capacity expansion to enhance profitability.
• Maintaining a robust enquiry pipeline with ongoing evaluations for large engineering projects.

CAPEX and Expansion Plans:

• Resin project nearing commercial operations expected in FY26; 3-4 years to reach optimum capacity utilization.
• Expansion initiatives in Orissa for backward integration and capacity augmentation.

Yes, Smartlink is not yet matured/strong brand enough where it can own and control a segment fully within the DC infra. Also its not a name that people will stand by irrespective of pricing. They still have a long way to go.

Does it has the ingredients to grow into one of the brands in the DC theme pictorial? Possibly Yes. Will it? that will depend on the journey of the company and the decisions it takes along with the way.

Read through the thread. Promoter’s record on treating minority shareholders is dubious