All resolutions were passed

https://www.bseindia.com/xml-data/corpfiling/AttachHis/3b4e4f90-1152-4ffd-9c2f-092b2357e883.pdf

Notes from the Transcript of Management Commentary on Annual Audited Financial Results

Margins

• Cyclical business: Product and raw material prices fluctuate based on demand.
• Target margin: Aim for $70-90/ton profit regardless of pricing cycle.
• Normalized earnings: This margin range generates $60-80 million/quarter.
• Post-Covid (2021-2022): Strong demand led to higher than usual margins due to rising product prices.
• Normalized margins: Sustained earnings above $70-90/ton may not be typical.

2023 review

• H1 2023: Significant market downturn due to:
  • Resurgence of Chinese exports
  • Chinese economic slowdown
• Q2 2023: Gradual price retreat with mid-year stabilization
• Summer 2023: Further price decline driven by:
  • Reduced raw material costs
  • Increased Chinese exports again
• Current situation: Market prices have plunged:
  • Previous highs: $900 – $1400/ton
  • Current lows: $400 – $700/ton
• Price decline: Descent has been prolonged and erratic, unlike the market’s gradual ascent.
• Impact: Downturn has hindered ability to restore customary margins.

Outlook

• Positive outlook: Potential for reaching market bottom in Q1 and returning to conventional earnings in H1.
• Challenge: Working through overpriced inventories to achieve this goal.
• Target metric: View business in terms of unit margin rather than percentage margin.
  • Whether product is priced at $300 or $1000 per ton, focus is on maintaining normal per ton margin.
• High-value inventory progress: Made significant progress in using up high-value stock from previous year.
• Inventory depletion: Likely to deplete remaining stock by Q1 end.
• Profitability outlook: Positioned for profitability across most products by Q2.
• Challenge: Restore traditional managed margins during Q2.

External challenges

• Supply increase: Imminent capacity additions (10-15%) may disrupt supply-demand balance.
• Long-term outlook: Gradual absorption expected due to:
  • Aluminium capacity expansions in India and the Middle East.
  • Aligned expansion of CPC and CTP with new customers.
• Expectation: More balanced market in the long term.

CAQM relief and impact
(Commission for Air Quality Management)

• CAQM relief for Calciners: Petroleum coke import restrictions relaxed.
• Increased import limit: Overall limit for Calciners raised from 1.40 to 1.90 million tons per annum.
• Benefits all Calciners in India.
• CAQM increased CPC import limit for Aluminium Smelters:
  • From 0.5 million tons to 0.8 million tons (from FY 2025-26 onwards).
  • Aligns with India’s increased primary aluminium production.
• Benefit:
  • Vertical Shaft Calciner in SEZ can import both RPC and CPC for internal use.
  • This helps increase CPC plant capacity utilization.
• Capacity utilization improvement plan:
  • Discussions with customers for increased supplies.
  • Discussions with suppliers for sourcing more raw materials.
  • Logistical planning for higher volume movement.
• Expected outcome:
  • Gradual improvement in capacity utilization over the next few quarters.
  • Lower per-ton fixed costs due to increased capacity utilization.
• Current CPC plant utilization: 55-60%.
• SEZ plant kiln status:
  • 4 out of 6 kilns operating at low capacity.
  • 2 remaining kilns have not started due to raw material shortage.
• Action plan:
  • Start operations at the remaining 2 kilns in 3-4 months.
  • Make logistical arrangements for increased production volume.

Reason for poor performance vis-a-vis competition

• High inventory strategy: High inventory of raw materials in India to:
  • Safeguard against supply disruptions and facility shutdowns.
  • Ensure uninterrupted operations and meet customer quality requirements.
• Drawback:
  • Increased costs due to falling raw material prices impacting high inventory value.
  • Operational challenges related to managing large inventory volumes.
• Moving forward, committed to enhancing operational efficiency

If the Supreme Court’s main concern is ensuring right to healthcare, that is a very complex issue that simply cannot be solved just by capping consultation fees and bed charges. The biggest hurdle in my opinion is the grossly skewed distribution of clinics, nursing homes and hospitals across rural and urban areas. Large swathes of the population in rural India have no access to even primary care. At the same time, big cities are swamped with more hospitals than the local population needs, leading to cut-throat competition and unethical practises just to survive. The reason for this is a big difference in the quality of life between these two places. Poor infrastructure, lack of good schools, employment opportunities for spouses, comfort amenities–all of these factors cause doctors to flock to the cities and grind it out rather than go to underserved areas where they will be not only be respected more, but earn more as well.
Solving discrepancy in healthcare access and availability is more than just making it cheap. It will require a general upliftment of the underserved regions. Capping charges is not going to do it.

An updated chart,

2 points/ risks here to watch out for,

1. WMAs are looking to start into a declining slope, which never is a good sign from a momentum point of view.

2. RSI also is showing a declining trend. Still above 50 but close watch needs to be maintained.

As described in the post earlier, big red volume candle was not so encouraging. Might enter a consolidation stage if not further degradation.

A big green candle as a shoot up from 30 WMA might be encouraging in coming days. Of course this has to be after very low red candles (Signaling reduced volatility).

Disc. – No positions. Only for study purpose.