Q1 FY25 Financial Performance:
- Consolidated operating income: ₹5,676 million, up 18% YoY.
- EBITDA: ₹641 million, representing a 31% YoY increase; EBITDA margin: 11.29%.
- Net profit: ₹448 million, a 35% YoY increase; PAT margin: 7.89%.
Segmental Performance:
1. Engineering Division:
- Revenue: ₹3,235 million, a 13% YoY increase.
- EBIT: ₹188 million, up 26% YoY.
- Steady order inflows for medium-sized jobs; robust domestic enquiry bank.
- Total order book: ₹3,394 crores.
- Execution of international contracts contributed to improved turnover.
- Expecting increased pace of execution for larger EPC jobs in upcoming quarters.
2. Chemical Segment:
- Revenue: ₹1,994 million, a 36% YoY increase.
- EBIT: ₹498 million, also up 36% YoY; maintained steady margins.
3. Consumer Division:
- Revenue: ₹660 million, a 9% YoY increase.
- Reported a loss of ₹34 million, compared to a loss of ₹15 million YoY.
- New product launches gaining market acceptance.
Order Book and Execution Insights:
- Engineering division’s UP contract expected to be substantially executed by the end of FY25, dependent on fund releases and government approvals.
- Current residual value of UP project: ₹813 crores; Q1 execution: ₹26 crores.
- Anticipated significant improvement in execution from Q2 onwards, post-election-related cash flow impacts.
Management Changes:
- Transitioning to Non-Executive Non-Independent Directors for certain management members to facilitate professional management and support growth.
- CEO to assume role of Managing Director as part of planned management transition.
Strategic Focus and Market Positioning:
- Positive outlook for the chemical segment; aiming for 15% growth, contingent on stable input prices and foreign exchange dynamics.
- Ongoing capacity expansion in resins and chemicals targeted at international markets.
- Enhanced focus on R&D and innovation to drive profitability and competitive edge.
Challenges and Headwinds:
- Legacy project continues to impact margins; expected to taper out after Q2 FY25.
- Execution delays attributed to election-related funding uncertainties.
- Management remains cautiously optimistic about future order inflows and revenue growth.
Future Growth Prospects:
- Anticipating substantial revenue growth from international markets, particularly in North America and Europe.
- Continued investment in technology and capacity expansion to enhance profitability.
- Maintaining a robust enquiry pipeline with ongoing evaluations for large engineering projects.
CAPEX and Expansion Plans:
- Resin project nearing commercial operations expected in FY26; 3-4 years to reach optimum capacity utilization.
- Expansion initiatives in Orissa for backward integration and capacity augmentation.