Ratings downgrade.
Ceo resign is Big red sign?
2b109890-b73d-4551-9f57-eac6c24eabf9[1].pdf (273.0 KB)
Flat revenue growth and net profit to loss.
They are disposing the retail business of EVOK furniture which should reduce losses in future.
Company will raise ₹205 Cr through rights issue, details of which are not provided at present.
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======Aug 2024 results=====
A…HINDWARE
1…Building product
Rev@489 cr
Ebit@26cr
Ebit margin@5.4%
2…Bathware
Rev@326cr
Ebitda@42cr
Opm@12.7%
Pbt@10.4cr
3…plastic pipe
Rev@163cr
Ebitda@10.9cr
Opm@6.7%
Pbt@-4.43cr
4…Condumer
Rev@110cr
Ebitda@3.0cr
Opm@2.7%
Pbt@-6cr
B…CERA
Revenue@547cr
Ebitda@ 92cr
Opm@17%
I have not studied cera but as per screener, cera has 10%-15% revenue from tiles and other items
So if we substract it from total revenue,
547cr-16%=460
Now, lets compare bathware segment of both
1…Hindware
Bathware
Rev@326cr
Ebitda@42cr
Opm@12.7%
2…Cera
Revenue
547cr-16%=460cr
Opm@17%
Is hindware losing its marketshare and opm to cera ??
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Aug 2024(Q1 2024- Concall)
1…Bathware segment
A…Restructuring
=Q1 was affected due to
A… restructuring and consolidation of sanitary and faucet segments
@25% affected
B…Slow down of market leads to low revenue but fixed cost is there
So ebidta decreased
=In the September quarter, we are not expecting any deterioration in our bathware segment performance because of the sales force restructuring, which we have done in the June quarter.
=That’s a onetime impact we took out, 25% of our off-roll and on-roll manpower at that time. And we believe it had whatever impact it had to have
happened in quarter 1. Quarter 2 will basically be more reflective of the market
.
=Building upon the success of our cost optimization and business streamlining initiatives, we have
deepened synergies between our Bathware and consumer appliances business.
=This collaboration has resulted in improvements in efficiency and cost. Early wins in warehousing,
logistics, marketing and particularly institutional sales channels are promising.
= While the full impact of our back-end integration will be realized in the coming quarters, we are also streamlining our sales force to optimize efforts and expect extremely positive results.
B…Complete insourcing
=Focus is completely to in-source material and provide alternate to imports. This will also help us further garner up the margins, which we had talked about because right now, when we import from China, a lot of margins are left with the vendors in China, which we plan and intend to bring it in-house
2…Pipe segment
=We feel that pipe business has an
ample opportunity to grow
=We have expanded our product portfolio with the successful launch of 24 products for underground drainage systems. Additionally, we are set to introduce high-value offerings such
as Double Wall Corrugated pipes and Fire sprinkler systems by this year end
=We expect 16-18% volume growth and Double digit ebidta growth
3…Consumer segment
A… Restructuring
=Our consumer Appliances business delivered INR111 crore in revenue with an EBITDA of INR3 crore at a 2.7% EBITDA margin reflecting the positive impact of restructuring cost optimization and exiting our loss-making retail furniture business
=What we have done is we are now having a lot of synergies which are shared between Bathware as well as our consumer business in terms of our back end.
B… Exiting from loss making
=We believe that kitchen is our core business. That’s where we
make our margins.
=And currently, there are some categories which are eroding all the margins which we are earning in the kitchen part of the business. So, this evaluation is currently on. Once
the conclusion is done and we make appropriate decisions, take an approval from the Board, I
can share more details to the investors.
4…Restructuring
=So, as an answer to the Bathware business, in the bathware business, we had only one specific objective around merging our faucet business into your sanitaryware business in terms of the
manpower, in terms of the sales force
=We have done that. So, no more restructuring to happen for the bathware business.
= Additionally, what we have done is we are now having a lot of
synergies which are shared between Bathware as well as our consumer business in terms of our back end. So, the marketing, logistics, warehousing, the synergies are coming into both
consumer as well as our Bathware business.
= So that’s already happened now in terms of our execution is done. The benefits will start coming into us in the course of the year.
= We will be evaluating if there are any categories where we would be not making money or we’re losing. So, some evaluation of the categories in our consumer business is an ongoing exercise, which we do. So, if any other restructuring which can happen is around those lines. But for that, I think most of our restructuring has already been done, and the benefits will start coming in the second half of the year.
4…Capex
=new plant will start contributing from Q3 2025
=Other new plant @170-180cr@rokree plant
5…Board has approved raising fund@205 cr
6…Capacity utilization
=Our capacity utilization in Q1 FY25 for sanitaryware was about 86%, and for faucet it was about 58.5%.
7…Expected growth
=We feel on a medium to long-term range we should continue to grow on an average 15% to 18% on sales, and 20% plus on the EBITDA margin.
=next 3, 4 years, we’ll be able to demonstrate 20% CAGR on EBITDA.
Disc…invested
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Any news on the proposed rights issue of 250 cr?
Expected ratio and price ?
Should the Slow downward grinding in price be a indication of unfavourable Rights price or ratio ?.
The stock price keep going southwards without any hope for any reversal. Any specific reason attributed for this drastic fall?
I could see LIC children’s MF has taken a position recently along with another FII despite not so good results.
Concall summary . Q2-2025. (nov 2024)
Rev/Ebidta/pbt
1…Bathware @360cr/35cr/3cr
2…pipe@ @187/13/-3
3…Consumer@ 83/-7/-16
1…BUILDING PRODUCTS
=Due to restructuring, sales are affected which is temporary
=We have underperformed in this period with the other competitors(cera) which has declared the results. I don’t think it’s a permanent kind of a loss. I think it’s a temporary blip .
=The reason behind
underperformance is our restructuring process. We deal with 400
distributors and these 400 distributors put the product in the market. The consumer demand from
the outlets remains very similar. However, because of the internal changes of restructuring which we have made, our primary dispatches to these customers have actually got impacted. I personally believe it
would basically be a recovery more sooner than later.
=By the end of the year, we should be very close to the numbers of the competitor in this
financial year
=Unfornunately, restructuring is happening when market condition is not good
=While overall demand remains subdued, we are encouraged by some positive momentum in the faucets category
=We’ve done lots of good work around a Six Sigma project, which basically
has increased what we call our first-time throughput. So first time right, basically, which was operating at about 76%. So if I’m casting 100 pieces, we were getting 76 pieces as the final
output. Now that number has moved from that to about 84-85, so basically 8-odd percentage
improvement.
2…PIPE
= TRUFLO continued strong
volume growth and reported 11% year-on-year increase in H1 FY25.
=We are also diversifying our product offerings, introducing premium high-value products to
meet our evolving customers’ needs. We have launched foam core products for underground
drainage applications this quarter and will introduce double wall corrugated pipes and fire
sprinkler systems in the coming FY25.
=Further, construction of our Roorkee facility is progressing on schedule with plans of its operation by the end of FY25, i.e. Q4FY25
=We had a volume growth of 11% for H1. But value-wise, we were flat because of the down prices of the raw materials
C…CONSUMER
=This business is also affected due to sluggish demand
=Elica’s numbers as well, which is in a similar category in kitchen, which was negative in quarter 2. So that has
impacted our overall margins there
=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth.
=Profitability is our first focus for consumer business
= We have a very healthy margin in the kitchen business. We have a 42%, 43% gross margin in the kitchen business. And we believe that if we focus on that and try to get more
revenue out of that, it will also aid our profitability objective. So that’s where my focus is.
= I’m not going to be focusing on our seasonal businesses as much as I’m going to focus on my kitchen
business
=On a profitability side, we have 1 or 2 more quarters of stress, but we are
very sure that the business will come out good in terms of profitability as well as revenue growth
= So for us, the steps which we have taken is basically we have cut out a lot of our categories, and retail
SKUs where our margins are lower. We are cutting it out on a very aggressive basis
4…RESTRUCTURING
=In our Bathware business we’ve done a bit of restructuring. We have kind of merged our sanitary and faucet teams. And we have also done a bit of restructuring between our Consumer business and Bathware business, where our back-end operations have combined into a single operating
unit. S
=This will increase out profitability
Disc…invested since 3yrs
Seen huge volatility in results and stock price
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