Q1FY25 results are very good Y-O-Y and lower than than Q4FY24.
The point to note here is that management has stated that commodity prices are going up and scarcity of CRGO material with increasing price trend would increase input costs .
… The Company at present is witnessing healthy enquiry pipeline. However, with the
steep run up in material prices, orders closing take longer time at purchasers’ end.
New projects announcement by private corporates is yet to get momentum post
election results. Looking ahead, the business outlook likely to remains stable,
boosted by steady domestic demand and continued government support for
green energy and infrastructure projects.
… The challenge going forward is with increased demand for transformers in local and international markets managing supply chain i.e sourcing required raw material and components at budgeted cost with timely supply. The lower commodity prices have supported corporate profitability in FY:24 but recent trends of uptick in input prices, led by industrial metal prices and scarcity of CRGO material is likely to result in higher input cost going forward.
In view of the above, it appears margins might have peaked in Q3/Q4FY24. And Q2 FY 25 results may not match sequential result trend.
Discl: Invested and pruned partial qty at todays’s price post results. I am not qualified to advice and take my opinion with pinch of salt.
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