CONFERENCE CALL - from Capital Markets
Expects growth in range of 10-12% in FY17
The company has conducted a conference call on 6 June 2016 to discuss the financial performance for the fourth quarter March 2016 and FY16 and way forward. Mr. Abhishek Somany, Joint Managing Director of the Company, addressed the conference call.
Key highlights
- Net sales of the Company grew 12.7% to Rs. 514 crore in Q4FY16 and rose 12.4% to Rs. 1721 crore in FY16. Q4FY16 PBT grew by 85.7% YoYto Rs. 37 crore and 38.7% to Rs. 91 crore in FY16. PBTmarginsbeforeexceptionalitemat7.3%forQ4FY16and5.5%forFY16.
- The Company gross revenue grew 12% YoY to Rs 533 crore in Q4FY16. The revenue mix was Rs 91 crore from own manufacturing, Rs 265 crore from JVs, and Rs 177 crore from outsourcings. For FY16, gross revenue grew 12% YoY to Rs 1790 crore, with revenue mix was Rs 368 crore from own manufacturing, Rs 798 crore from JVs, and Rs 624 crore from outsourcings.
- Sales mix in Q4FY16 - Own manufacturing (35%), JV (50%) and Others (17%) while for FY16 sales mix - Own manufacturing (35%), JV (45%) and Others (20%).
- The Company tiles business sales volume grew 9.9% YoY to 13.82 million square meters (msm) in Q4FY16, while it rose 9.4% to 46.35 msm in FY16. For Q4FY 2016, sales volume mix was 1.63 msm from own manufacturing, 6.35 msm from JVs and 5.84 msm from others. For FY16, sales volume mix was 7.83 msm from own manufacturing, 18.78 msm from JVs and 19.74 msm from others.
- The correction in gas prices and Anti-Dumping duty on Chinese vitrified tiles has increased competitive edge for tiles manufacturers especially the branded tiles players.
- The Company expansion of Kassar plant(Haryana) for 4 MSM of Glazed Vitrified Tiles(GVT) was successfully completed and commercial production was commenced from March 28, 2016. With this total access to tiles manufacturing capacity increases to ~60 MSM.
- Low gas prices, energy conservation practices as well as a value-added mix aided margin expansion in the Q4FY16.
- The Company expects maintaining 0.5-1% increase on PBT margins in FY17 and to maintain PBT growth between 10-12%. A healthy value-added mix will continue to aid margins this year.
- The Company guides 10-12% revenue growth in FY17. The manufacturing unit at Kassar will help topline and bottomlines both this year. Growth in FY17 will also be aided by strengthening demand, especially post monsoon. The focus will also be on expanding sanitaryware manufacturing, which has already begun.
- The Company guides total capex of 40-45 crore for FY17.
Disc: Not invested any more.
Sold off during Feb correction to cash in on the LTCG and reallocate to higher conviction picks.