Concall notes(Q1 FY 2024)
today
concall notes:
-India rigid plastic packaging market is expected to reach $18.02 billion by 2027 growing at a CAGR
of 8.01% from $11.55 billion in 2021.
-hospital furniture is another lucrative growth area.The growth prospects are bright with many new hospital facilities are
coming up and the government’s thirst on medical facilities as well
-Revenue:packaging 84.68%,hospital furniture7.51% and infrastructure furniture 7.82%.
-company’s plant operated at an average capacity utilization of around
approximately 70% plus on installed capacity of 25,000 metric tonnes per annum
-past quarters we are not able to maintain the expected profitability, the
cost pressure has been continuously weighing on our bottom line
-raw material 60% from imports and rest is domestic.
-Co. can’t substitute costly raw material with the Indian material so basically out of 60%,40% material is a compulsory material where we are buying from some other countries because India is not manufacturing that particular grade. They are forced to depend on the import.
-competitors facing same issue but still sell at lower price as compared to this co. hence the co. is facing pressure.
-EBIDTA target is 13%, but at least they are optimistic and seeing at least 10% EBITDA margin they require this year.
-co has worked a lot on cost reduction measures hence better EBIDTA is expected
-co is planning to launch new products for better margin and demand
-added 25 new customers in last Q
-pail container business is into testing and trial and error stage but will progress soon
-co is focusing more on bottom line but yes for next 2-3 Q,revenue outlook will improve for sure
-net WC cycle is 48 days
-interest rate increased from 9.97% to 11%
-presently the co is not putting cost pressure on customers as market is bad but will do that soon
-capex will be announced soon’
-exports will start soon
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