Concall summary . Q2-2025. (nov 2024)
Rev/Ebidta/pbt
1…Bathware @360cr/35cr/3cr
2…pipe@ @187/13/-3
3…Consumer@ 83/-7/-16
1…BUILDING PRODUCTS
=Due to restructuring, sales are affected which is temporary
=We have underperformed in this period with the other competitors(cera) which has declared the results. I don’t think it’s a permanent kind of a loss. I think it’s a temporary blip .
=The reason behind
underperformance is our restructuring process. We deal with 400
distributors and these 400 distributors put the product in the market. The consumer demand from
the outlets remains very similar. However, because of the internal changes of restructuring which we have made, our primary dispatches to these customers have actually got impacted. I personally believe it
would basically be a recovery more sooner than later.
=By the end of the year, we should be very close to the numbers of the competitor in this
financial year
=Unfornunately, restructuring is happening when market condition is not good
=While overall demand remains subdued, we are encouraged by some positive momentum in the faucets category
=We’ve done lots of good work around a Six Sigma project, which basically
has increased what we call our first-time throughput. So first time right, basically, which was operating at about 76%. So if I’m casting 100 pieces, we were getting 76 pieces as the final
output. Now that number has moved from that to about 84-85, so basically 8-odd percentage
improvement.
2…PIPE
= TRUFLO continued strong
volume growth and reported 11% year-on-year increase in H1 FY25.
=We are also diversifying our product offerings, introducing premium high-value products to
meet our evolving customers’ needs. We have launched foam core products for underground
drainage applications this quarter and will introduce double wall corrugated pipes and fire
sprinkler systems in the coming FY25.
=Further, construction of our Roorkee facility is progressing on schedule with plans of its operation by the end of FY25, i.e. Q4FY25
=We had a volume growth of 11% for H1. But value-wise, we were flat because of the down prices of the raw materials
C…CONSUMER
=This business is also affected due to sluggish demand
=Elica’s numbers as well, which is in a similar category in kitchen, which was negative in quarter 2. So that has
impacted our overall margins there
=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth.
=Profitability is our first focus for consumer business
= We have a very healthy margin in the kitchen business. We have a 42%, 43% gross margin in the kitchen business. And we believe that if we focus on that and try to get more
revenue out of that, it will also aid our profitability objective. So that’s where my focus is.
= I’m not going to be focusing on our seasonal businesses as much as I’m going to focus on my kitchen
business
=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth
= So for us, the steps which we have taken is basically we have cut out a lot of our categories, and retail
SKUs where our margins are lower. We are cutting it out on a very aggressive basis
4…RESTRUCTURING
=In our Bathware business we’ve done a bit of restructuring. We have kind of merged our sanitary and faucet teams. And we have also done a bit of restructuring between our Consumer business and Bathware business, where our back-end operations have combined into a single operating
unit. S
=This will increase out profitability
Disc…invested since 3yrs
Seen huge volatility in results and stock price
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