Another good set of results, with sales growing by 14% and EPS by 27%. In the past, management used to overguide and underdeliver and this has changed significantly since Mr. Bharat Vageria has taken over as CEO. Not only are they being more measured in their capex spends, but they have been judiciously paying down debt while focusing more on value added capex. There is a good possibility that they end up delivering 20% ROCEs in next couple of years. Concall notes below.
FY24Q1
- Debt reduced by 32 cr. in Q1FY24
- Capex: 44 cr. (18 cr. towards established products + 26 cr. towards value-added products)
- Divestment discussions are at an advanced stage, talking with multiple customers to sell different parts of business geographically
- Expect 500 cr. of revenues in composite products in FY24
- US has declined by 20%, but haven’t seen that kind of pressure in other export markets
- Export breakup: 50% (South east Asia and Taiwan), 20% (USA), 30% (Middle East)
- MOX film: have capacities to do 150-160 cr. revenues. Don’t plan to add capacity
- Received PESO approval for manufacturing Carbon Fibre Reinforced Composite Cylinder (Type-III) for Medical Oxygen and Breathing air (first Indian company to get this)
- Will submit hydrogen cylinder to PESO for approval in 2024
Disclosure: Invested (position size here, no transactions in last-30 days)