Good set of results with 20%+ sales growth and higher EBITDA margins due to higher consumable sales. My notes from concall is below.
- Revenues were impacted due to supply chain problems (especially for semiconductors). Have been buying from spot market which increases costs by 40’000 per printer. Printers are generally sold at cost price, currently there is slight loss on sale of printers
- Good traction in consumables as industrial activity improved, still don’t believe production is at optimal level (can generate 10-15% higher consumable sales)
- Gross margin improvement was due to higher consumable sales
- Most growth in last year was volume driven, pricing was only 5-6%
- Focusing more on tele calling to increase lead conversion
- Import constituent account for 25-30% of raw material
- Printer: 18-19%, Consumables: 56-57%, Services: 22-23%, remainder mask division
- Sold 750 printers this quarter (CIJ is generally at 65-70% of total printer sales) – installed base is >15’500
- Markprint acquisition is to provide capability for higher end printers in order to meet customer requirements. Markprint has a printer base of 300 (making 1.5 mn Euro revenues per year and expect it to double in 2-3 years). They are into higher end printers. This will be the framework going forward, focus on acquiring capabilities
- In China, 30’000 TIJ printers are sold annually vs India sales of 14’000-15’000. In addition, there are other kind of printers sold in China
- Cement business declined a lot as customers didn’t care for quality of prints. This division had 3 lakh consumable sales per printer. As a result, consumable sales per printer has come down over time
- Current sales mix is more towards the industrial side (~60%) vs packaging (~40%). This should come down to 55% for industrial side and 45% for packaging over time
- Track& trace segment: currently revenues are negligible from this segment. Offering more customized capabilities to track each shipment and transitioning towards higher revenues from services
- Field staff count was mentioned as 300+ vs 360 earlier. There is actually no reduction in field staff, company is actually looking at increasing field staff due to higher business expectations
- Current capacity can cater to 300-350 cr. of sales, will require more warehousing space in Guwahati once they cross that
- Capital allocation: Will keep 50 cr. in terms of liquidity + 50 cr. in terms of bank limit. Remainder will be given back to shareholders
Disclosure: Invested (position size here, no transactions in last-30 days)