KRISHCA STRAPPING H1 (FY2024) CONCALL NOTES
Currently steel prices are rising compared to Q1. Currently purchasing average at 70rs and selling at 92 – 95 Rs.
Company has several contractors for procuring raw material like 6 month and 3 months contracts. During Steel uptrend they try to use these 6 month contractors at fixed price. During Steel downtrend they purchase at spot price to manage the margins.
Current capacity utilisation is around 65%. Current line can make 140 Cr revenue at 100% utilisation. With the New capex line company can make 300 Cr at 80 to 90% utilisation.
Seals contributing 5% of revenue.
In December the company expects one more packaging contract to be confirmed. Currently participating in 6 to 7 big packaging contracts. Much bigger compared to contract packaging contract orders. In packing contracts 30 to 40% consist of steel straps and remaining 60% are manpower cost, packaging tools cost, etc…
The new capex line already has some customer commitments to sell 4Cr month on month.
Within 1 year the company can reach 40 to 50% utilisation in the new line.
In the first half of the year company achieved 4.5 Cr sales in Export. Already surpassed 4.5 Cr export sales in q3. So H2 will be better in terms of export order. Next financial year aims to reach 20% sales to export.
During September month 11cr sales happend & especially 4cr sales made in the last week of september. That’s why receivables numbers are high…
In the next financial year management expects some improvement in payable days.
Overall market size around 3000 crores including packaging contracts and steel strapping production.
In the long run management wants to have 50% market share in the packaging segment.
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