Concall Notes – Nov 2024
Financial Performance:
Q2FY25 revenues reached ₹228.9 crores, a solid growth of 19.6% YoY.
H1FY25 revenues stand at ₹469.1 crores, marking impressive growth of 26.4%.
Robust volume growth of 30% YoY for H1FY25.
Achieved an all-time high order book of ₹340 crores.
Export revenue grew by 2.7X, now constituting one-third of total revenue.
Operational Highlights:
Seamless pipes sales increased by 21% YoY; welded pipes saw a slight dip of 2% in Q2FY25 but grew 13% in H1FY25.
Domestic market size expanded from 2.2 lakh metric tons to 3.2 lakh metric tons from FY20-24, with market share increasing from 3.7% to 6.2%.
Management expects to increase market share to low double digits in the coming years through foray into fittings and value-added products.
Team Expansion:
Appointed Mr. Neelanjan as Chief Strategy Officer and Mr. Mark Light as Business Development Officer (Energy).
Mr. Neelanjan brings over 20 years of experience across various industries, while Mr. Mark Light has over 30 years in international sales and business development.
Market Outlook:
Positive export outlook in Europe, with strong demand and quality on par with local manufacturers.
Anticipating growth in the US market post-election uncertainty; appointed local representatives to build connections.
Middle East demand remains strong in the oil and gas sector, with approvals from major players expected to boost orders.
Domestic demand remains solid, particularly in oil and gas, engineering, chemicals, and power sectors.
Challenges:
Some orders were delayed due to heavy rainfall, impacting domestic performance.
Fluctuations in raw material prices affected revenue expectations.
Increased ocean freight costs have softened margins despite strong export growth.
Future Growth Strategies:
Focus on expanding value-added product portfolio, including specialized tubes and fittings.
Anticipating strong second half of FY25 driven by sustained export growth and expansion into new geographies.
Capital investment for expansion is progressing, with the first phase set to launch in March 2025.
Capacity Utilization:
Current capacity utilization for seamless pipes is over 85%, while welded pipes are around 60%.
Targeting seamless utilization of 85-90% and welded at around 70% by year-end.
Market Dynamics:
Anti-dumping duty on welded stainless-steel pipes from Vietnam and Thailand may reduce imports and benefit domestic players.
Management sees a healthy demand for seamless pipes, with expectations of 6-8% market growth overall.
Investment and Capex:
Total CAPEX for FY25 expected to be around ₹150 crores, with ₹100 crores planned for the second half.
Projects are on track for completion by March 31, 2025, despite some delays due to weather conditions.
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