I had written a few questions to the company and am sharing the answers.
1. We had incorporated Worth Wellness Private Limited in 2020 with an object to manufacture Diapers. However, business hasn’t yet started. Can you please update progress in the business?
Worth: We have dropped the Diaper Project.
2. Similarly, can you also update about progress in Worth India Pack, which is supposed to manufacture corrugated boxes? What will be the main difference between their business and our standalone business, and why did we need to incorporate this subsidiary?
Worth: Worth India Pack was originally incorporated for expansion of the Company in the existing line of Business of Corrugated Boxes. Moving forward, any expansion will be done in Worth Wellness Pvt. Ltd.
3. In all our subsidiaries or partnerships, why is Worth’s shareholding less than 100%? Especially given how much cash we have on our balance sheet
Worth: We plan to take the ownership higher for Worth Wellness Pvt. Ltd.
4. We were adversely impacted by kraft paper prices in the past, how are the prices now and when can we expect to get back to 13-14% margin levels?
Worth: Prices are very Volatile and moreover competition has increased manifold. Also a lot depends on the market conditions and the competitive landscape.
5. In the last couple of years, we have added lease hold land of close to 5 cr. (including 2 Cr. in FY23). Where have been bought land and what is our capex plans for this year?
Worth: We had acquired land for Worth Wellness Pvt. Ltd. Capex plan depend on market condition.
6. We also see capital commitments of 11.6 cr. in the contingent liability items. What is this capex related to?
Worth: Expansion under process in our Vapi Unit (Yash Packers).
7. With reduction in freight rates, why have we not seen an improvement in margins?
Worth: We primarily use paper that is domestically manufactured.
8. What is the expected growth in FY24 and our growth plans in next 2-3 years?
Worth: It depends on market conditions and raw materials price. However, we are always looking out for increasing business with existing and new customers.
9. Why did we see a 29% decline in our sales in Q1FY24? Are we seeing soft demand?
Worth: It is due to reduction in Raw materials prices. Change in raw materials prices are passed on the our customers.
Disclosure: Invested (position size here, no transactions in last-30 days)