Shilchar reported another excellent set of earnings yesterday:
Revenues up 44% yoy
EBITDA up 110% yoy
PAT up 128% yoy
For the full FY company has ended with 280 cr revenues & an EBITDA of 53 cr,which translates to full year margins of 19%.Thus,revenues & margins are both well above the management guidance.Cash flow is also fantastic with ocf at 39 cr.It is also noteworthy that the sharp rise in EBITDA margins from Q2 to Q3 has sustained in Q4 as well.Operating leverage alone can’t lead to such a jump.So,it stands to reason that better export share too would be contributing.Key point to understand would be if there is a change in the sales/delivery model of the company.
Going by the Q4 runrate,company should be very close to 80% capacity utilization.As such I would a capex announcement some time in Fy24 if demand momentum sustains.There is a small rise(3 cr) in PP&E for FY23.
Overall,inspite of the sharp rise in price over the last 12-18 months,stock trades at pretty reasonable valuations of 17x TTM.If the company can sustain earnings at close to Q4 runrate then further re-rating awaits.Return ratios are now north of 40%,though this maybe nearing a peak.Looking forward to the AR & then the AGM for some hints at capex & demand scenario.
Disc.: Invested.Views are biased.
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