Release Date: May 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- EBITDA for Q4 FY24 grew by almost 49% year on year, reaching INR34 crore.
- Profit after tax for Q4 FY24 increased by 40% year on year to INR20 crore.
- The company completed all major CapEx projects, including the spinning capacity of polyester yarn for PTCF.
- The demand for two-wheeler tyres in India is improving.
- The company is focusing on increasing the share of value-added products in its portfolio to improve competitiveness and profitability.
Negative Points
- Overall demand for NTCF shows slight improvement but growth remains muted.
- Commercial vehicle tyre demand remains flat, and tractor tyre demand is declining due to subpar monsoon.
- Overcapacity in China is leading to dumping into India, impacting demand and margins.
- Operating revenue for FY24 decreased by almost 16% year on year.
- EBITDA for FY24 declined by around 42% year on year, and profit after tax decreased by around 53% year on year.
Q & A Highlights
Q: What is your estimate for the coming year's revenue growth and any new developments with tyre companies? Also, do you have any surplus land for redevelopment?
A: While we do not provide forward-looking statements, we expect revenue growth between 10% to 15%, potentially up to 20% depending on market conditions and import pressures from China. We do not have any surplus land for redevelopment; all our land is utilized for manufacturing activities.
Q: When will the expanded capacity come into production, and what production increase can we expect?
A: The expanded capacity for nylon tyre cord fabric is fully utilized, with older facilities stopped for efficiency gains. The polyester tyre cord fabric, commissioned in March, will undergo a rigorous approval process before full utilization, expected to contribute to a 5% to 10% volume growth in FY25.
Q: What was the total capacity utilization last year, and what is the current installed capacity?
A: Last year's capacity utilization was around 80%. The current installed capacity is 92,000 tons per annum, which can be fully utilized if market conditions are favorable.
Q: What is the status of your demand for antidumping duty?
A: There is no antidumping duty on our products currently. We continue to follow up with the finance department through our associations, but there has been no positive response despite DGTR recommendations.
Q: Are you looking to acquire distressed players in the NFY segment?
A: No, we are not considering acquiring any stressed assets or companies. Our focus is on improving value addition within our portfolio and reducing costs to enhance competitiveness.
Q: What kind of ROCE are you envisaging for the PTCF facility?
A: We generally work with an ROCE or payback period of around five to seven years, which is above our cost of capital.
Q: What were the caprolactam prices for the last quarter and this quarter?
A: The average caprolactam price for this quarter was around $1690 per metric ton, compared to $1645 in the last quarter.
Q: Can you quantify the inventory gains during this quarter?
A: Inventory gains are part of our regular business and cannot be specifically quantified as they depend on the timing of material purchases and normal price movements.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
