Rishi Laser- A Precision Fabricator

Q4 FY24 Con Call Notes – Organized Summary

Customer Update:

• Two customers in USA and one in Australia with ongoing commercial orders.
• Significant business growth expected after Q3.

Raw Material:

• Increased steel capacity expected in the next six months, potentially stabilizing prices.

Capital Expenditure (Capex) & New Business:

• New 70,000 sq ft facility 30 km from existing plants (₹10 cr investment).
• ₹2-5 cr allocated for routine upgrades.
• Full plant utilization expected in 2-3 years.
• Entering round & square steel processing (tubes).
• First machines for this new business arriving by Q2, generating revenue from Q3 onwards.

Products:

• Round & square steel processing will target:
  • Equipment manufacturers
  • Furniture industry
  • Hospital industry (stainless steel tubes)
• Large cutting facility at the new plant to supply parts to Chennai and Bangalore factories (currently at full capacity).

Business Segment Growth:

• Top line growth anticipated in H2 driven by export expansion.

Exports:

• Initial commercial exports commenced with Emerson Electric (USA).
• First commercial order received from an Australian company (glass processing equipment).
• Caterpillar (domestic supplier):
  • Parts exported to two US plants.
  • Aftermarket component orders received.
• France: Parts exported last year.

Manpower & Efficiency:

• Maintaining current headcount while increasing sales by 50-60% through robot installation in the Bangalore plant.

Growth Potential:

• Optimistic outlook for H2 growth in the off-road construction equipment sector (large dumper trucks for mining).
• Conservative FY25 growth guidance: 15%.
• Potential for larger construction equipment customers (Caterpillar) to reach ₹120-150 cr revenue within 3-4 years.
• Combined revenue potential of new and existing facilities: ₹300 cr (conservative estimate).

Margins:

• Margins depend on skilled labor costs.
• Training facility opening in Gujarat to address this.
• Double-digit EBITDA margin possible with higher growth.

Plant Utilization:

• Bangalore & Chennai: Full utilization.
• Gujarat & Pune: Underutilized (exact utilization level needed).

Competitors:

• Apex Auto
• Surin Auto
• Model infrastructure