Same store sales growth has been 15% during 9MFY24.Company is focusing on VAP and non steel products.Furthermore,Non steel share improved to 11% in Q3 from 9% in Q2.Operating margin is at its lowest 3%.Company is consistently adding premium brands.Sanitary revenues and tiles revenues were up by 40% in 9MFY24.Fotia ceramica did well in kerala and is being expanded in karnataka,maharashtra and tamilnadu.states.Company has given 20%-25% sales growth guidance for next 5-6 years.It is obivious that company will have good OPM if it improves its non steel products share.However,how swiftly company does that will be key growth driver here.Company has not provided any targets for the share of non steel segment.Steel segment has EBITDA OF 3-3.5% whereas non steel segment has 5-5.5%.Company is targeting 3.5-4% EBITDA in near term.Capacity utilisation(Manufacturing vertical with low ROCE) was around 40% due to less focus on manufacturing but after demerger they will improve capacity utilisation and returns.Management is trying to squeeze highest returns from same store as much as it can then strategically adding new stores.Company has 4% to 5% private label share which they will increase in future.The key metrics to track here are same store sales growth,non steel share,margin expansion,inclusion of premium products,ROCE of manufacturing vertical and fotia’s perfomance in other states
Disc:Not invested still tracking
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