Bullish concall from Rushil. Not going into the details as transcript will be available soon, just highlighting what I thought were the main points:
- 23% EBITDA margins and 55% gross margins should be sustainable for the year
- Barring unforeseen circumstances, they can annualize Q1 revenues for FY23 – no import threat in coming 2Qs due to high freight costs and raw material prices are now stable
- Purpose of rights issue is to reduce debt – Management will participate in Rights issue. They haven’t frozen on 200Cr size yet, size may be smaller. They were grilled heavily on this dilution by investors who thought FCFs from this year onwards should be sufficient to bring down D/E ratio
- Overall value added mix for AP Plant is now 10-12% and Plant has delivered 25% EBITDA as opposed to 32% EBITDA for KR Plant. In remaining 3Qs, AP Plant should be able to improve its EBITDA further as value added proportion increases
- Greenply Plant likely to go live in Vadodara in Q4 FY23, Rushil has 15-20% sale in West region and expects only temporary margin pressure if any in West due to this Plant.
- As per them MDF utilisations in FY22 were around 75% and even with 6-7L CBM new capacities coming in by FY24, they expect demand to grow at 15-20% so that utilisation levels remain around 70%+ throughout this capacity expansion phase. Don’t expect sustained margin pressure in near future, only temporary while demand catches up with added capacities.
- Considering idea of new capex, nothing concrete yet, capex may be be in allied products (Particleboards?)
- AP Plant can function at 110% capacity i.e. 265000 CBM if needed
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