Sirca Paints India Limited

Sirca Paints Q4 concall notes-
• Company is not able to realize full potential in Q4 due to construction and spray painting bans in Delhi, NCR. Co witnessed a slower offtake in Jan and Feb, however momentum was regained in Mar’23.
• Strategic initiatives:
 Launched Oikos (https://www.oikos-paint.com ), a globally renowned luxury brand in India. OIKOS specializes in decorative solid color finishes and texture paints.
 Manufacturing agreement with Sirca S.P.A Italy. Company has now acquired the rights to manufacture 10 different polyurethane wood coating products in India, which were earlier imported from Sirca S.P.A Italy. These products roughly make up 50% to 55% of the company’s total revenue of Italian polyurethane proteins. And thus, it will allow us to cut down our import bill, optimize greatly our inventory days of finished goods. However the savings will be utilized towards advertisement and promotional activities.
 Company also has recently launched a new water based days coating range, D’Aqua PU. In line with global trend of transition from solvent-based coatings towards water-based coatings.
• Oikos- A special texture paints – as the market is now moving from wallpaper to special texture paints – niche product.
• 70% of the revenues are from north india 30% rest of india now they are planning to be as big as in rest of india
• Capex of Rs 15cr lined up, which can generate additional revenue of Rs 190-200cr at peak.
• Current utilization of capex is 30-35%. Manufacturing of 10 products which were earlier imported and now will be manufactured in India, which contributed to almost 50% to 55% of the imported sales we are expecting that the current facility in this financial year will reach to almost 80% utilization. At peak topline will be Rs 400 cr.
• Company inventory days up due to logistics issue especially in Europe. However considering the company will manufacture Sirca Spa Italy products in India and will source the 99% raw material locally.
• Inventory days will be reduced by 50%.
• Expecting a CAGR of 40% growth with EBITDA margins to be 21-25%.