FY 23-24 Earnings Call - My notes (Invested and biased)
Firstly…Key concern of initial speakers was the “missed 150 cr topline” to which the mgt clarified that they implied incl of taxes which they have delivered. Logical explanation.
Second…this was again a very confident session by the Mgt, all responses were full of conviction, and where needed, sufficient details were given, and repeated patiently again when asked for by some late entrants. There was two or three supplementary submissions by the second rung leadership also…on one instant not hesitating to call out the corrupt practices of the rating agency!
Guidance .
250Cr incl of taxes for CFY
350 Cr in NFY, 500Cr by 2026-27
Likely to do 60-62Cr per qtr going fwd
Last FY turnover was 150Cr approx incl of taxes
Segment Breakdown .
Coil springs…70-80cr
Forging…70cr
Air spgs…bal i.e 75-80Cr
Total…225Cr ( 250 cr incl of taxes)
Capacity .
Air spg only. 250 coaches/1000 spgs per month. (doubled from last call, as stated)
Total Cap. Max turnover potn of 350Cr with current capacity
Will need to do incremental capex to reach 500Cr capacity, have landbank for 500Cr turnover.
May require 15-20 Cr for the capex to incr capacity, expansion in each of the three segment to mov from 350Cr to 500cr
Have already Iden bottlenecks, addressing them, adding some machines, on progressive basis
Order book . 150Cr
2 years ago, starting order book for the year was 60-70 Cr, now 150Cr
3-4 Tenders Every day, will keep adding to order book
Air spg order . Did 18 Cr in last FY, Q4 was 7Cr. (monthly run rate 5Cr not met) Some Bellows are imported, red sea issue delayed shipments. Rubber portion is 40% (imported), rest is fully indigenised value add. All set to meet the timeline i.e in Q1?
Air Spg Type.
120KN,140KN,160KN,180KN
LHB coaches require 160KN spring, now FSL is the regular source and getting 100%orders.
180KN for EMU (metro coaches), currently FSL is a devp source, will qualify in 2 months to become a regular source.
Can Cater for 50% reqmt of railways reqmt of spgs (all type, IR will order 3.5k/7k coaches - in CFY as stated in Q2 call)
6T hammer capex . 2.5/4Cr done with rev potn 15-20Cr in CFY, Next FY can be 60-70Cr. To commence production by 15 Jul.( some delay, as this was to begin in Q1)
Margin . Maintain as in q4. Confident of improvement, 1 yr from now, if not earlier.
Misc Points
Competition. Not reasonable to take cognizance of (gave details of 03 companies in Air spgs and 7-8 small suppliers ex kolkota for others products). Still awaiting RDSO approval for regular supplier status which, takes 2 years to graduate from devp source to regular source… gives advantage to FSL. Enjoy confidence of RDSO due to quality and safety conscious approach.
Replacement cycles.
Coil spgs after 5yrs
Air spgs after 8yrs.
Equity Dilution. No major reqmt for addl funds to move ahead in existing segments. No plans nor reqmt to dilute equity in near future. Did not seem to be intrested to respond to a suggestion to consider increasing liquidity due to the low float and high share price.
Exec Time. 60 days from recpt of orders.
Looking to supply to Siemens, bombardier etc
No royalty to conti tech. Are suppliers to them
Defence . No new input.
Pl supplement for better understanding.
Subscribe To Our Free Newsletter |