- Q2 FY25 Revenue: INR190 crores, 3% year-on-year growth.
- Q2 FY25 Steel Volume Growth: 11% year-on-year increase from franchise route.
- Q2 FY25 Own Manufacturing Steel Volume: 31,778 metric tonnes, 8% year-on-year growth.
- Q2 FY25 Royalty Income: INR33 crores, 11% year-on-year growth.
- Q2 FY25 Profit Before Tax (PBT): INR21 crores, 55% year-on-year growth.
- Q2 FY25 PBT Margin: 11%, up from 7.3% in Q2 FY24.
- Q2 FY25 Profit After Tax (PAT): INR16 crores, 56% year-on-year growth.
- H1 FY25 Total Revenue: INR375 crores, 5% year-on-year degrowth.
- H1 FY25 Profit Before Tax (PBT): INR41 crores, 38% year-on-year growth.
- H1 FY25 PBT Margin: 10.9%, up from 7.5% in H1 FY24.
- H1 FY25 Profit After Tax (PAT): INR31 crores, 41% year-on-year growth.
- Debt Status: Debt-free as of September 30, 2024.
- ROCE: 28.9% annualized.
- ROE: 22% annualized.
- Kamdhenu Ventures Q2 FY25 Revenue: INR55 crores, 17% year-on-year degrowth.
- Kamdhenu Ventures Q2 FY25 EBITDA: INR4 crores, 29% year-on-year degrowth.
- Kamdhenu Ventures Q2 FY25 PAT: INR1.2 crores, 65% year-on-year degrowth.
- Kamdhenu Ventures H1 FY25 Revenue: INR109 crores, 14% year-on-year degrowth.
- Kamdhenu Ventures H1 FY25 EBITDA: INR7 crores, 18% year-on-year degrowth.
- Kamdhenu Ventures H1 FY25 PAT: INR3 crores, 50% year-on-year degrowth.
- Average Selling Price (Paint Business): INR79 per kg/liter for H1 FY25.
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kamdhenu Ltd (BOM:532741, Financial) reported a 3% year-on-year revenue growth in Q2 FY25, reaching INR190 crores, driven by increased construction activities.
- The company's steel business saw an 11% growth in sales volume from its franchise route and an 8% growth from its own manufacturing facility.
- Profit before tax (PBT) margins improved significantly to 11% in Q2 FY25 from 7.3% in the previous year.
- Royalty revenue from franchisees increased by 11% to INR33 crores, highlighting the strength of Kamdhenu's brand and its capital-efficient business model.
- Kamdhenu Ltd remains debt-free as of September 30, 2024, with strong ROCE and ROE of 28.9% and 22%, respectively.
Negative Points
- The paint business experienced a year-over-year revenue degrowth of 14% in H1 FY25, with EBITDA declining from INR9 crores to INR7 crores.
- Kamdhenu Ventures Limited reported a 17% year-on-year revenue decline in Q2 FY25, with a significant 65% drop in profit after tax.
- The average selling price of TMT bars fell, impacting revenue growth from the company's own manufacturing facility.
- The company's dealer network expansion has been slow, with only a 35% increase since 2010, which may hinder future growth.
- The share price of Kamdhenu Ltd has seen a significant decline, raising concerns among investors about the company's market performance.
Q & A Highlights
Q: What actions are being taken to improve the paint business sales, given the company's small market share in the industry?
A: Harish Agarwal, CFO, explained that the company is focusing on expanding its dealer network and increasing the number of tinting machines. They are also investing in advertising with celebrities to enhance brand visibility and drive sales growth.
Q: Are there any specific challenges affecting the expansion of the dealer network for the paint segment?
A: Harish Agarwal, CFO, acknowledged the challenges but emphasized ongoing efforts to strengthen the dealer network, particularly in semi-urban and rural areas, to boost market penetration.
Q: What are the primary reasons for the reduction in the average selling price of TMT bars?
A: Harish Agarwal, CFO, attributed the reduction to market dynamics and supply chain factors, noting that the company is adapting its strategies to mitigate these impacts.
Q: Could you share the earnings guidance for the paint segment over the next two years?
A: Harish Agarwal, CFO, stated that the company has a roadmap to achieve a turnover of INR1,000 crores with a 15% EBITDA margin over the next four years, driven by strategic initiatives and market trends.
Q: How is Kamdhenu Paints tracking market penetration and what are the goals for brand growth?
A: Harish Agarwal, CFO, mentioned that 80% of sales are coming from Tier 2 cities, and the company is focusing on increasing market share in these areas through strategic marketing and distribution efforts.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
