Q3FY22 Concall Highlights ( Please verify, there might be mistake in listening or Typing)
• There is good traction from real estate, while the Non-Agri and Agri mix is 60:40 in terms of value and in terms of volume it tends to be 65:35
• The Agri market is not yet opened up due to several reasons like uneven rainfall which have depressed the demand but the company is expecting the demanding opening up from Mid-February.
• Update about the sale on land- part of the land will be sold, it’s been under the process of completion in due course and effect can be seen in March results.
• ₹10-12 per kg margins should be expected in the pipes segment
• Fitting revenue in FY21 is 150 crores
• There is high volatility in the raw material prices, the spread has also been narrowed down and there is dumping from China and other countries which have been affected to the bottom line.
$ Per MT Q3FY22 Q3FY21 Current Prices ( As on 27.01.2022)
PVC 1756 1235 1500
EDC 969 470 920
Ethylene 1068 843 965
VCM 1403 960 1210
• CPVC has performed very well while UPVC hasn’t done good and is expected to do better when demand opens up from the agriculture side.
•
Pipes & Fittings Segment ( Volumes)
Agri Non Agri
Q3- (-24%) ( QoQ) Q3- 4% QoQ
YOY - -5% YOY – 30%
• The total no of SKU’s are 2200+ and the total non-agri ( includes fittings) are 1200-1300+
• Distribution- Key markets and focused areas are south and west India while new growth is expected from the north and east India
• Capex- in Pipes there is no requirement for CAPEX
Fittings incremental Capex will be deployed
• Total Capex for the year is 100 crores in which company deployed 50-60 crores and rest will be deployed in the next qtr. 100 crores of Capex would be deployed in the next financial years as well.
• Advertisement spend is 1-1.5% of the revenue
• China PVC is trading at 1300$ while due to supply constraints they could adequately supply to other countries, while Asia pacific the rate is 1500$
• Volumes
• Agri- 100,000 9MFY22
110,000 9MFY21
• Non-Agri- 55000 9MFY22
42000 9MFY21
• There is a shortage on the supply side of adhesives, looking for alternative suppliers for various products
• CPVC duty is been expiring next month but the company is expecting to continue ( key point to focus on the macro event)
• Expecting 5-7% of correction of PVC