Key Points from Q2 Concall Summary
- Acquisition of HNG is going to be debt funded; Later on focus will be debt rationalization; In two years from acquisition the debt levels are targeted to be normalized to Rs.2,000 – 2,200 Cr.
- With HNG capacity getting added, 2-3 year down the line, company will be able to achieve revenue of 5,500 Cr. per year. Current market cap is ~ 5,600 Cr.
- Confident to maintain the margins between 20-22% for AGI business. The fluctuations in raw material prices are adjusted in contract with the customers will help to keep the margins. For HNG capacity, there is a likelihood of having the margins lower than that for AGI. Later the optimization and efficiencies will be required to be driven
- There are several cases at High Court, Supreme Court and NCLT level against the resolution plan of HNG acquisition by AGI
- 15-18% revenue growth is guided by the management
- They are optimistic about the benefits of premiumization in alcohol businesses due to demographic and economic evolution of the country
- The current capacities can support the business of about Rs2,500 Cr per year.
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