Usha martin rough concall notes
Volume growth guidance is 12-15%. They have guided for maintaining margins around current levels (19-20%) and gradually grow them over time. Brunton shaw order book is 7-8months. India business is 1-2 months but majority of the business here is the annuity part o&m buisness (common in industry). On the EBITDA/Tonne drop, they mentioned to track the number on yoy basis. Going ahead, they want to reduce their exposure to lrpc, to focus on the plasticated and galvansied part of lrpc (steel wire rod prices down 6000rs and on an overall lrpc level prices down by 8000rs in FY 24 due to increased competition. Wire prices down to 80k per ton from 90k per ton) . New capex is live as of Q1FY25 and ramp up will take 9-12months. Phase 2 capex to get completed in 12-18months. Asset turns on the current deployed capital for the capex will be 1.5-2x with ~70% utilisations. Management doesnt want to push volumes by compromising on the price and margins and is hence ramping it up gradually and focus on value added products. Phase 1 capex capacity addition-40,000 ton (and phase 2- 10,000 ton (both from internal accruals). In the phase two of capex, they will get into high value added aluminium and zinc wires category for example in mountainous regions as a rockfall barrier protector ropes ( “decent value product”) and mining segment. They have started their shipments (oil, crane and port segments)to Saudi Arabia and revenues will start from Q1 and gradually pick up. Thailand facility has capacity of 180 tons per month and is focused towards elevator (US focus) and GP ropes. Facility has land for further expansion. Synthetics sling business (oil and gas and wind energy) to start from Q2 ( will start for customers in UK and europe and management wants to get into America at a later stage) as they currently in the process of acquiring all the equipments.
There was a disclosure related issue raised related to GDR options( 1 to 5 shares) with Peterhouse (the other brother) which is disclosed in the BS. Overall tone seemed a little less bullish compared to previous Q. Management seems to be focused at maintaining current margins while driving the topline with volumes so less scope of major margin expansion in FY25.
Subscribe To Our Free Newsletter |