In the recent Q1 call, there are certain red flags. Please see below from the recent transcript. There are serious mistakes pointed out by analysts in the presentation. There is lot of confusion on order book and Bid book. I think this business seems risky as 80% of the order book is from Saudi Arabia and looking at current political situation in middle east, I find this business quite risky.
Transcript portions
Dhavan Shah: Sir, this is Dhavan Shah from Alfacurate Advisors. So, my question is on the projected capacity
by FY26. So, in this presentation, I think we have shown that by FY26, we will be having
2,25,000 capacity of ERW versus the last quarter presentation it was showing roughly 2,75,000
tons, so why there is a reduction of roughly 50,000 tons in ERW?
Nikhil Mansukhani: 5,000 tons in ERW?
Dhavan Shah: This quarter presentation is showing 2,25,000 tons of ERW capacity by FY26 and in the last
quarter presentation, it was showing roughly 2,75,000 tons?
Nikhil Mansukhani: So, Dhavan, there might be some clerical error. We will get back to you on that
Pradeep Rawat: Sir, my first question is regarding our ERW CAPEX, so we are planning to expand 100,000 tons
per annum capacity for ERW. So, what would be the CAPEX for this expansion and when could
we assume this plant to be commissioned?
Nikhil Mansukhani: The ERW CAPEX, Pradeep has already been completed and it is under operation.
Pradeep Rawat: So, I am talking about the expansion that we have shown in our presentation. So, currently, we
have a capacity of 1,75,000 tons per annum and we are expecting this capacity to be 2,75,000.
So, I was just asking for that additional capacity?
Nikhil Mansukhani: Pradeep, we will get back to you that. I think there has been some clerical error on that. So, we
will get back to you on that like we said in the first thing, we will get back on that particular
thing.
Dhavan Shah: And when this Saudi Arabia plant would commission?
Nikhil Mansukhani: 12 months.
Dhavan Shah: So, it would be in FY26 only?
Nikhil Mansukhani: Yes.
Dhavan Shah: And so I think in the presentation, we have to update that thing also, right?
Nikhil Mansukhani: Correct. We will send the updated one.
Darshil Pandya: So, just one question from my end, regarding the 10% EBITDA margin guidance that you have
given. So, if we could know that is it because of the order book that we have right now has a
higher margin or how will we achieve that margin in this full year?
Nikhil Mansukhani: The order book which we have now is on the exports are more on the higher margins. So, we
are confident to achieve the yearly guidance which we are giving.
After reading the Q1 Transcript, My confidence level is low and I am thinking of booking profits to be on safer side. Views of more knowledgeable members are requested on my assessment.
Disclosure- I bought at 138-140 level, I am not a SEBI registered advisor and my views are biased and are based on my little understanding of the business. Please make your own assessment for any decision you take.
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