Sarla Performance Fibres – Another Interesting Textile Story in Making?

Minutes of concall (note – had to be in/out of concall due to some work)

1. Volume grew marginally by 4% y-o-y
2. USA plant has broken-even
3. Company is enjoying gross margin expansion due to crude price fall. Gross margins for H1 FY2016 have been 62%. However, historically gross margins have been ~52%, which is also very appreciable
4. Nylon 66 plant commenced operations. Full year sales from Nylon 66 is expected to be ~INR 15 cr. hence, contribution to H2 FY2016 is INR 7.5 cr. 2 shipments already made till date
5. RM/sales ratio is USA ops is 30% implying gross margin from USA plant of 70%!! RM/sales ratio from India ops has been ~50% over last decade!
6. For H1 FY2016, India capacity utilized = 4700 TPA and USA capacity utilized = 1900 TPA
7. Training manpower in USA ops is creating delay in USA plant’s ramping up
8. Guidance for FY2016 sales of INR 350 cr. and PAT of ~INR 46 cr.