KPR mills – textiles & sugar

Q3Fy23.pdf (525.8 KB)
Quarterly result Update: Q3FY23:
1)The company recorded a total turnover of Rs 1431.4 crores in Q3FY23 as
compared to Rs1259.1 crores for the corresponding quarter of the previous
year. This is a growth of 13.7% Y-o-Y and 17.3% Q-o-Q.

2. The Net profit stands at Rs 174.6 crores as compared to Rs 211.8 crores last
   year. This is a decrease of around 17.6% Y-o-Y and on Q-o-Q basis, there is a
   decrease of 14.1%.

3. The EBITDA is Rs 281.9 crores as compared to Rs 330.6 last year.

4. The OPM remained at 19% as compared to 26% in the previous quarter and 24%
   in the previous year.

Concall Update:
Capex Announcements:

1. The company has announced the expansion of ethanol capacity in K.P.R sugar mills Ltd.
   They have proposed to increase the ethanol capacity from 130 KLPD to 250 KLPD at
   the cost of Rs 150 Crores. The project will be funded through internal accruals and
   term loans and is also eligible for interest subsidy under the ethanol augmentation
   scheme. The project is expected to complete by 2023-24.

2. Vortex spinning mill: The Company plans to set up a vortex spinning mill for viscose
   yarn production with an estimated project cost of Rs 100 Crores. The project is
   expected to be complete by the financial year 2024 and the entire project cost will be
   funded through internal accruals.

3. Solar power plant: The Company plans to set up a 12-megawatt solar power plant
   for captive consumption with a total cost of about Rs.50 Crores. This project cost
   will be met through internal accruals. The project is expected to complete this year
   which is 2023.

4. The expansion of projects under the printing division. The company plans to increase
   the production capacity of its processing and printing by debottlenecking the
   process, which will increase production by about 20%. The total project cost of
   Rs.50 Crores will be met through internal accruals.

5)The company has an order book of Rs 1000 crores for garments
.
6) There is no issue on the demand side as far as garments are concerned. The prices of
cotton is fluctuating which has affected the margins.

7. The management has guided that due to capex, in the sugar division, there would be
   an increase in revenue of about 50 Crores because the sugar will be converted into ethanol
   and the revenue of about 100 Crores from 2024, 2025 onwards because it will be
   completed in 2024 only. The solar power plant will give a cash saving of around 12 Crore
   per annum and the processing division capacity will increase by 20%. It will be internally
   consumed.

8)Garment production will be at full capacity from next year onwards. The company is
expanding in other businesses but as far as the garment is concerned, it will be only done
once the macro situations are stabilized.

9. Due to the volatility in cotton prices, the company is planning to keep cotton stock
   as low as possible. Currently, the stock is for 2 months.

10)The ethanol plant has been fully utilized in the current quarter. The first and second
quarters are off-season for sugar and the third and fourth quarters are good seasons.

11. As far as FASO is concerned, the demand for the same is ramping up, and the company
    is planning to reach a breakeven level in 2023-24.

Attaching the concall transcipt with important points highlighted.