Xpro India – getting bigger?

XPRO India –

Q4 and FY 24 results highlights –

Q4 outcomes –

Sales – 128 vs 124 cr
EBITDA – 16.8 vs 19.3 cr ( margins @ 13.1 vs 15.5 cr )
PAT – 12.4 vs 4.3 cr ( due exceptionally high tax rate in Q4 LY )

FY 24 outcomes –

Sales – 465 vs 511 cr
EBITDA – 66 cs 74 cr ( margins @ 14.2 vs 14.6 pc )
PAT – 44 vs 45 cr

Company raised 140 cr by issuing 14.35 lakh warrants @ 975 per warrant. Out of these, 1.05 lakh warrants were issued to promoter linked entities. These warrants entail 35 pc upfront payment and remaining 65 pc within 18 months

Company also raised an additional 150 cr by issuing 13.62 lakh shares to Institutional buyers @ Rs 1101 per share

Company’s products –

Dielectric / Capacitor films – Company is the only manufacturer of Di-electric films in India catering to 33 pc of country’s requirements. These films are used as the di-electric medium in new age capacitors. Company intends to double its dielectric film manufacturing capacity in FY 25 and triple its manufacturing capacity before end of FY 26. These are difficult to make, require exceptional in house skilling and the process in capital intensive. No one in India except XPRO has been able to make them

Company can make Dielectric films with thickness varying from 3 to 15 microns. Lower the thickness, higher the complexity in manufacturing them

Coex Sheets – used as sheets / liners in refrigeration industry. Here also, company is a mkt leader with most white goods makers as their clients

Cast films – used in tyre and tread industry, conveyer belting industry, in making sanitary pads, diapers, surgical drapes, packaging industry

Subdued demand for refrigerators resulted in pricing and volume pressures for the company’s Refrigeration liners business in FY 24. The same is expected to reverse in FY 25

Breakdown of sales in FY 24 –

Sale of Di-Electric films @ 145
Sales of Coex sheets + Liners @ 255 cr
Sale of Cast films @ 65 cr

The new capacities of Di-Electric films that the company is putting up will be able to make films with thickness as low as 2 microns ( mkt is moving towards lower thickness films )

The second line ( new one ) of the Di-Electric films should go live in Q3 this yr. The third line is expected to go live in Q3 of next FY

DiElectric films have high end / low end applications. Eg – for a ceiling fan capacitor, the specs required are not very stringent. But the films used in Capacitors used in high end applications like EVs etc are significantly high value and command a pricing premium. Its the higher end films where the company intends to play

EBITDA margins for Di-Electric films is > 40 pc !!!

EBITDA margins for rest of the films is around 5-6 pc !!!

Disc: holding, biased, not SEBI registered