Had attended Q4FY24 con call, would like to share higlights along with my comments:
Revenue & OB:
- Achieved all guidance i.e. 25-30% Revenue Growth and 20%+ EBITDA for FY24. In fact, looking at OB along with recent Mable acquisition - company is headed for 35% growth for FY25 while building OB for FY26 as well.
- OB stands at 854cr and 57.2% are exports. However, this is double-edged sword in terms of OB being fixed-priced contracts. So, Raw Material Booking on continous basis will be key to secure them at right costs.
- Management hinted that we could book at lot more OB but want to be within our executable limits (On-time delivery) and within our desired margins.
- Mentioned about reaching 1000cr. mark revenue in FY27.
CAPEX and Growth Initiatives:
- Company acquired Mable Engineering for 33cr. The annual revenue may touch 50-60Cr in FY25, this is based on single-shift basis meaning potential of revenue is lot more. Post FY25, company plans to really accelerate Mable Engineering.
- Mable is giving advantage of expanding product line into Silos, Geography Diversification, and making some of Anup’s equipment in Mable facility.
- Earlier, company planned to increase Kheda Facility with additional 0.5 bay. This will be done in Q1 and operational in Q2. On full-year basis the 2-bays currently at kheda will generate 200cr (For FY26).
- Company will go plan for Phase II expansion at Kheda by FY25-end. Facility will come in quickly and CAPEX willl be lower v/s Phase I because all utility around was build during Phase I.
- Company discussed plans to start Skids and Moulds in Phase-III. So, quite a crystal clear objective in terms of how to take this company forward step-by-step.
Other Important KTA:
- Exports are majorly into US and Middle East. Diversified the revenue and not dependend on one location…
- Exports have 30-40% advances, hence a lot of savings in terms of Working Capital. So, return ratios will improve a lot. Exports do have better margins but want to take FOREX fluctuation into account. Had FOREX been constant, the margins would be >20%.
Note: Have highlighted only the points which I think are important. Might have missed some of the remarks made by management.
My Take:
I am pretty happy with way company guided on exports. There will be better WC efficiency as 30-40% will be advances. There is possibility to achive >20% EBITDA on exports. Hence, with Mable, it looks 35% revenue growth is within reach for FY25. And, on top the quality of earning is a big plus as the cash conversion is prestine.
Discl: Invested.
Regards,
Mukul Jain
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