HIL Limited Q4 & FY24 Earnings Call: Key Highlights
Financial Performance:
- Revenue Growth: HIL India achieved a 4.3% year-on-year revenue growth in Q4, reaching Rs. 534 crores.
- Profitability: EBITDA and PBT margins declined, mainly due to pricing pressures and one-time costs.
- Segments Performance: Pipes & Fittings segment saw a 23% volume growth, while Polymer Solutions segment’s profitability improved despite pricing pressures.
- Roofing Solutions: Achieved highest-ever sales volume, strengthening market leadership.
- Building Solutions: Experienced volume growth but faced margin pressure due to intense competition.
- Parador (Flooring Solutions): Confidence in recovery in FY25 due to improving macro-economic indicators in Europe.
Operational Performance:
- Focus on Volume Growth: Prioritizing volume growth across all segments, particularly in Pipes & Fittings.
- Cost Optimization: Implementing initiatives such as value engineering and supply chain optimization.
- Digitalization: Undergoing a digital transformation to enhance efficiency and decision-making.
- Leadership & Talent: Continued investment in leadership and R&D teams, recognized as a Great Place to Work for the sixth consecutive year.
Future Outlook:
- Revenue Growth: Aims for a consolidated 15-20% revenue growth in FY25, driven by all segments and new market expansion.
- Profitability Improvement: Expects a 200-300 basis points improvement in consolidated EBITDA margin in FY25.
- Commercial Segment Focus: Intends to increase focus on the commercial segment for growth and profitability.
- Geographic Diversification: Actively diversifying into high-growth markets like the UK, US, and China.
- Government Projects: Actively participating in government infrastructure projects leveraging capabilities acquired through the Topline acquisition.
Concerns:
- Pricing Pressure: Intensifying competition and volatile raw material prices continue to exert pressure on margins.
- European Market Recovery: Recovery pace and extent in the European market remain uncertain.
Other Points:
- Topline Acquisition Integration: Actively working on integration and expects synergies in procurement, operations, and sales.
- Sustainability: Committed to ESG goals, focusing on eco-friendly products, waste reduction, and social value creation.
- Capacity Expansion: Plans for capacity expansion in various segments to support future growth.
- People & Culture: Continues to invest in building a strong and enabling work culture.
I believe the next 2-3 quarters will be very important or a key deciding factor to see if management is able to execute it as expected or not.
Key Concern: The company is in to a competitive business segments so the only thing to watch is execution of management as per guidance and there are too many variables in this business to let it move as per expectations.
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