Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales volumes increased by 7.2% in the first half of the fiscal year, indicating strong demand.
- EBITDA improved by 3.6% in the first half and 4.5% in Q2, reflecting operational efficiency.
- The company is expanding its capacity in response to growing demand from major clients like Aditya Birla Group.
- Pharma segment sales are gaining traction, with significant growth expected from Q4 onwards.
- Gross margin per kg expanded to 86 rupees, driven by product mix improvements and operational efficiencies.
Negative Points
- Profit after tax (PAT) decreased by 10% due to higher depreciation and interest costs from recent investments.
- The Mahad plant faced delays due to local pollution and approval issues, impacting supply timelines.
- The company is experiencing competitive pressure in the paint segment, affecting pricing and volumes.
- Capacity utilization at some plants remains below optimal levels, affecting overall efficiency.
- The pharma segment is still in the early stages, with low capacity utilization and delayed approvals impacting immediate revenue contributions.
Q & A Highlights
Q: How is the demand from the Aditya Birla Group in the paint segment, and what are the current utilization levels at the Panipat and JR plants?
A: The demand from Aditya Birla Group is improving, prompting us to ramp up capacities by year-end. The Panipat and JR plants are currently operating at around 60% capacity, with new capacities being added.
Q: Can you provide details on the progress and revenue from the pharma segment?
A: The pharma segment has started showing progress, with sales reaching 75 lakhs in October. We expect numbers to increase as more companies like Marksons and MSM Labs begin taking commercial supplies.
Q: What is the breakdown of the recent capital expenditure, and which segments are being prioritized?
A: The recent capex of 62 crores, with an additional 25 crores committed, is spread across all segments. Pharma investments are significant, with expectations to reach 90 crores by the end of the financial year.
Q: How has the gross margin per kg expanded, and is this sustainable?
A: The gross margin per kg has expanded due to improved production volumes and cost efficiencies. This is sustainable as we consolidate printing operations and increase pharma sales.
Q: What are the expectations for volume growth in the paint segment and overall guidance for the year?
A: We expect a 7-8% growth in the paint segment for the full year, with overall volume growth likely to be in double digits, although slightly below the initial 15% target due to delays in plant operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
