Q3FY24 Concall Notes
- Tanzania plant commenced production. Will cater to plastic manufacturing in EU and India.
- Will incur 600cr capex by FY26.
- 25%+ revenue CGAR and 35%+CAGR PAT and 25%+ROCE targeted by FY27.
- 18 per kg normal margin in lead. Currently at 23 per kg.
- Aluminium normal margin is 9 per kg.
- Red sea crisis temporary headwind.
- In case of aluminium we are not fully hedged. We don’t see any solution here. Per ton EBIDTA will fluctuate. Engaging with MCX to manage the risk using hedging mechanism. By Q1FY25 we can have this in place.
- Aluminium margins will be better next quarter. Near to 11 per kg.
- 90% of Aluminium sale is outside India. So we don’t bring aluminium into India.
- there is arbitrage to bring Lead into INDIA.
- We are working on a alternate sourcing where we source from OEM, recycle it and then sell it to OEM.
- Expect Q4 to be better than Q3FY24.
- 20cr commodity hedging gains this quarter. Reflected in other Income.
- Target is to bring Lead contribution in total revenue to less than 75%. 12 to 13% coming from non lead business currently. This will go to 25% by FY27. Plastic and aluminium will grow fast to make this happen.
- Historically 50% revenue come from international sales. Fell down to 45% now due to red sea crisis
- We don’t see any differentiated margins in tyre. New plants that we put up for tyre will see margins similar to competitors.
- Established JV and land is allocated by govt in Oman. Environmental study is submitted, waiting for clearance to put up a plant. Will recycle lead, aluminum and plastic in Oman.
- Life of a solar panel is 25 years. Current volume is not that big right now to consider. In future we will go into solar recycling.
- We fabricate and design our own plants.
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