I am sharing my notes from their FY23 AGM.
- A lot of our growth in past 2-years has come from export of pneumatic nails to the USA. Can you talk about our competitor in this business and how we have seen such growth recently?
Mainly sell stainless steel fastener and pneumatic nails, strength is quality and services. Growth came from stainless steel nuts and bolts which were launched 1-2 years ago. Have been seeing good growth, but market is very dynamic
- Is it true that we are the one of the two companies approved for supplies of pneumatic nails to the USA?
Many companies sell these, they are not the only ones
- In last 2-years, we have a new item on our balance sheet called “Other payables” which was 41 cr. in FY23 and 26 cr. in FY22. How is this item different from “Trade payables” and why has this item shown up in last 2-years? What does this pertain to?
Other payables are related to ocean freight and clearing bills, payment to shippers is made in 60-90 days after they raise the bills
Starting transport business to grow current business
- In FY23, we spent 18 cr. in capex. What did this pertain to, what capacity was added?
Machinery: 11 cr.
Solar panel: 2 cr.
Rest: New building, shed
- What is our capex plan for FY24 and what growth do we envisage this year?
More markets and products, growth is coming from domestic and international markets
- What was our capacity utilization in our different business segments in FY23? We used to report production numbers until last year but this data was missing from this year’s annual report. Can you tell us production numbers for FY23?
Overall sales volume increased by 7,000 MTPA
Wires: 30,000 MTPA (22k MTPA in FY22, 25k MTPA in FY23)
Nails: 30,000 MTPA; 92% utilization (14.9k MTPA in FY22; witnessed 23% volume growth)
Nuts and bolts: 10,000 MTPA; new product saw 164% volume increase
At full utilization, envisage 10-20% higher revenues
- In the USA, we sell through a promoter owned entity “Geekay Wires USA”. Why do we require to sell via a promoter entity and why can we not sell directly by incorporating a subsidiary in USA?
Their customers wanted this US subsidiary as they don’t want supplier name to show up, also large costs involved in setting up US subsidiary
- We bought a stake in ASP Pvt Ltd which is involved in the same business as ours. What is the purpose behind this investment, are we using their capacity to serve demand?
It’s a strategic investment, ASP is profitable and has similar products as Geekay
Other group cos
- Involved in trading of iron ore and steel (313 cr. sales)
General
- 5-7% EBITDA margin in this industry
- Other income comes from freight, which is also part of business. They categorize it this way to show demarcation of freight costs to customers
- Pay 12% interest rate to directors
- Suppliers: Vizag steel plant, Hindustan zinc
- Industries: Government electricity boards, construction, general engineering, recently got approved by railways
- Bharat wire is a peer in galvanized wires.
- Government balances: GST input credit, advance taxes
Disclosure: Invested (position size here, no transactions in last-30 days)