Will warrents issue dilute share for existing share holders who dont apply , or benifit existing share holders.
How is it going to be positive? It will make the situation worse, because in an industry , oversupply is going to be a sword, putting money further for supplies surely won’t bear fruits.
I highly recommend you to listen (rather than read) the Q4FY23 concall of the co. The global requirement for this product by 2030 would be 70-80 lines. So demand would be there. Supply takes time to come up (you may know that it takes 2-4 years to start productoin after placing orders for the machines).
Moreover, currently there’s only 1 line in India and with upcomng 2 more lines from Xpro and 1 line from SRF, the total would be 4 lines by 2026/27 and would be just enough for Indian market requirement. So Supply Demand mismatch is not a issue at the moment.
From the available information, the base machines cost would be 500 cr for the 2 machines and customization, building , installation would take it to 600-700 cr.
The co has raised 150 cr via Warrant issue and they generated 80cr cash through internal accruals and may 160cr more in Fy24 and Fy25 combined and so the total cash equivalents would be 390 cr. And remaining 210-310 cr could come from Supplier credit (can avail upto 85% of the based machine cost).
Considering the co has working capital days of 30-40 days, the Working capital requriement would be less than 100-140 cr even considering incremental revenue of 1500 cr. But working capital loan could be availed easily from Banks as the co has good credit rating (not the best).
So, I believe and wish the new capex would be for capacity expansion. It’s prudent to wait for confirmation from the co and to find out more details like the Enquiries from the customers, New applications/segments, etc. The ramp up in capacities in FY25 and FY26 would tell more about the managment, execution and competitive intensity.
It’s time to wait and see while keep tracking the new developments in the industry and co
Praveen
Disc: Holding and biased. Please do your own due diligence. The above data/points provided may be inaccurate
15 Likes
My only issue is the company neither provide any investor presentation nor hold any regular investor con calls. The management has not updated any progress on the capacity expansion. Very difficult to track what’s happening behind the scenes.
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Xpro India Limited has proposed a capital raising plan for the approval of the Shareholders, which has been announced as required. In summary, the Company intends to raise upto Rs. 140 Crores through preferential issue of Convertible Warrants and upto Rs. 150 Crores through a Qualified Institutions Placement (QIP). The promoter group will also participate in the preferential issue, to signify their continuing commitment through their significant holding.
The key intent of the Board is to further strengthen the capital resource base of the Company in light of the growth plans that are in motion, and the underlying strategic vision of being a focused player of consequence in the dielectric BOPP film business in the global space, besides consolidating our domestic first-mover status.
The management is confident of being on track with the timelines for the expansions as detailed in the last Annual report, and as mentioned in subsequent releases. As a step towards enlarging our successful footprint in the industry’s global supply chain the Board has approved the setting up of a subsidiary in the United Arab Emirates.
9 Likes
Hi, anyone tracking the stock? Seems to have underperformed heavily this quarter.
XPRO India -
Q4 and FY 24 results highlights -
Q4 outcomes -
Sales - 128 vs 124 cr
EBITDA - 16.8 vs 19.3 cr ( margins @ 13.1 vs 15.5 cr )
PAT - 12.4 vs 4.3 cr ( due exceptionally high tax rate in Q4 LY )
FY 24 outcomes -
Sales - 465 vs 511 cr
EBITDA - 66 cs 74 cr ( margins @ 14.2 vs 14.6 pc )
PAT - 44 vs 45 cr
Company raised 140 cr by issuing 14.35 lakh warrants @ 975 per warrant. Out of these, 1.05 lakh warrants were issued to promoter linked entities. These warrants entail 35 pc upfront payment and remaining 65 pc within 18 months
Company also raised an additional 150 cr by issuing 13.62 lakh shares to Institutional buyers @ Rs 1101 per share
Company’s products -
Dielectric / Capacitor films - Company is the only manufacturer of Di-electric films in India catering to 33 pc of country’s requirements. These films are used as the di-electric medium in new age capacitors. Company intends to double its dielectric film manufacturing capacity in FY 25 and triple its manufacturing capacity before end of FY 26. These are difficult to make, require exceptional in house skilling and the process in capital intensive. No one in India except XPRO has been able to make them
Company can make Dielectric films with thickness varying from 3 to 15 microns. Lower the thickness, higher the complexity in manufacturing them
Coex Sheets - used as sheets / liners in refrigeration industry. Here also, company is a mkt leader with most white goods makers as their clients
Cast films - used in tyre and tread industry, conveyer belting industry, in making sanitary pads, diapers, surgical drapes, packaging industry
Subdued demand for refrigerators resulted in pricing and volume pressures for the company’s Refrigeration liners business in FY 24. The same is expected to reverse in FY 25
Breakdown of sales in FY 24 -
Sale of Di-Electric films @ 145
Sales of Coex sheets + Liners @ 255 cr
Sale of Cast films @ 65 cr
The new capacities of Di-Electric films that the company is putting up will be able to make films with thickness as low as 2 microns ( mkt is moving towards lower thickness films )
The second line ( new one ) of the Di-Electric films should go live in Q3 this yr. The third line is expected to go live in Q3 of next FY
DiElectric films have high end / low end applications. Eg - for a ceiling fan capacitor, the specs required are not very stringent. But the films used in Capacitors used in high end applications like EVs etc are significantly high value and command a pricing premium. Its the higher end films where the company intends to play
EBITDA margins for Di-Electric films is > 40 pc !!!
EBITDA margins for rest of the films is around 5-6 pc !!!
Disc: holding, biased, not SEBI registered
11 Likes