recent Interaction with management
What part of sales is consumption / replenishment demand?
Ans- difficult to answer since customers don’t intimate if end product is used in capex or replacement, ball park 30% should be replacement (off hand number, no backing)
What is the relationship amongst the promoters ? (Choudhary, Patel and Kothari)
Ans- Promoters are friends, part of steel industry and knew each other before starting the company
% of purchases and sales through Related parties?
Ans- Small part is through related parties and being reduced further
How is Venus able to grow / scale up so quickly in last 7-8 years?
Ans-
Anyone can put up a plant in the country
No entry barrier as such in the industry, however, it takes 3-4 years to get approval of brand with OEMs and EPC consultants. Also, need certifications in export markets
Promoter experience in this industry
Is the business confined to any distance constraints due to logistics cost etc.,?
Ans- Venus is located close to Kandla port, hence import of raw materials and export (targeting 20% of revenues) is cheaper
Ratnamani, Jindal and Venus – all 3 are in western part and hence no disadvantage
Working capital has been increasing over the years, at what level it will stabilise? Working capital days increased to 150 days in FY22 from 63 days in FY21
Ans- 120-130 days is the current working capital since 60 days credit needs to be given for direct sales, 90-100 days of inventory of raw materials and Finished goods is maintained and 40-50 trade payable days
In SS – 60 days credit is a norm and hence Venus also needs to offer. Clients are usually big companies and hence no issues of write offs as such.
Current utilization %, expected time to ramp up new facilities? Any orders for new facility?
Ans- 90% capacity utilization, Q4 numbers should be similar to Q3.
All 3 expansion should go live in Q1
4000 MT is imported every month as per company, new expansion plan is for 500MT
Welded should see revenues flowing in from 2nd half of the Financial year
Anti-dumping duty will stay for 5 years – mainly on lower grades since
Venus can manufacture all grades
Market size of the products in the states and products in which Venus operates?
Ans – Not relevant as such since logistics is not an issue
Current facility is in Kutch, how much more land is available for expansion?
Ans- Little land will be left after current expansion but land is available in the vicinity for future expansion if required
Main consumption of steel pipes is by Oil and Gas industry, with low crude prices, do we see any slowdown?
Ans- No slowdown in general as per management
Does the factory have any hazardous / solid / liquid discharge?
Zero discharge plant. Acid Regeneration plant will further reduce acid wastage since 80% of the Acid will be recycled – improve ESG compliance
Air pollution etc., isn’t there in the industry
Product rejection rate? How has the trend been over the years?
Ans- negligible
Plant is mostly automated, also inspection is done before dispatch for direct orders
Environment clearances have been received for the new unit?
Ans – Yes, CT has been received. Will get CC once plant is being started
Any incentives received from the government?
Ans- 3-4 crores in terms of SGST can be received per annum for few years if tubes are sold in Gujrat from Gujrat Government
Clients receive PLI in Pharma, Chemical etc.
Some exemption on electricity costs too
What % of products will be off the shelf vs customised?
Reducing the % traders. Currently no customized products
Disc : invested
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