I attended the call ( Krishca Concall Updates -whatsapp Fwd ):
Over 200 customers.
Major order from Vedanta Ltd worth ₹20.25 crore.
Successfully commissioned a new strapping line on 13th May 2024.
High margin product will be produced.
Current order book worth ₹28.8 crore.
Participating in 5-6 contracts, more than the Vedanta order.
New plant increases monthly capacity from 1,500 tons to 3,000 tons, with peak capacity at 2,500 tons.
Peak capacity could result in ₹300 crore in strapping sales.
Biggest competitor does not offer color strapping; the company provides custom branded straps in the southern region.
People in Raipur and Jalna are indifferent to branding.
On steel prices volatility:
Fixed and variable components; fixed comprises value addition and margins, passed on to customers.
Margin component remains consistent with a one-month lag; long-term contracts have a price variation clause.
Competition from Middle East and China:
Chinese pricing is lower; FTA with UAE provides a 5% duty benefit.
Local presence in the Middle East, offering end-to-end packing solutions.
Plant in the Middle East could source raw materials from China, Korea, or other countries.
Business depends on steel production.
Peak utilization expected within the next 4 years.
Looking for a joint venture in the Middle East; updates expected within 6 months.
Expansion focus on US markets, Sri Lanka, Bangladesh, Australia, and Europe.
Targeting large volume buyers.
FY24 exports were ₹17 crore; FY25 exports expected to double, aiming for ₹100 crore in 5 years.
Targeting a minimum of 25% pa CAGR for next 4-5 years .
Operating margin expected between 15%-20%.
Market share:
Over 10% in steel strapping.
Less than 5% in packing contracts.
Long-term goal to capture 30% of the overall market.
Delay in commissioning the new plant due to machinery supply and installation delays.
Current utilization of the new plant is less than 15%.
Sent from my iPhone
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