I attended the con-call today. To me the management did not sound convincing with regards to its aspirational target of Rs. 1000 crore topline by FY25.
Key excerpts from the call,
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For softness in Indian business, the management is hoping for better macro environment to bail them out. Upcoming monsoon, abating of heatwave, govt initiatives etc. will help growth in the future. They’ve also staffed up on the B2B side (including some senior hires) to help with sales in the Indian market.
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They will continue to add distributors in the Indian market going forward as well.
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The fund raise of Rs. 150 crores will be tapped into as and when needed for growth initiatives. Nothing firmed up as of now.
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15-20% volume and value growth expected going forward. Management maintains its INR 1,000 crore topline target of FY25. However, it will come only with inorganic opportunities. Did the management ever mention this before? I don’t remember hearing this before. Without inorganic growth, the company maintains it guidance of the topline growing by 20% in FY25.
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Ebitda margins will be maintained in the range of 18-20% in FY25
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Higher other expenses in this quarter on account of, higher freight costs (1-2% additional cost), integration of United Granite (not one time in nature, all operational costs) and advertisement expenses.
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There has been no impact of the Red Sea issue on the company’s revenue. No impact expected in Q1 either.
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Receivable days have been impacted by the Red Sea issue. However it will come back to normal in the coming quarter.
Disc: Invested as a tactical 12-18 months bet. Not happy with the Q4 results or the guidance going forward. Will exit on the next bounce back (if any).
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