- Revenue (Q4 FY '24): INR326.6 crores, up from INR302.7 crores in Q4 FY '23.
- Revenue (FY '24): INR1,166 crores, up from INR1,037 crores in FY '23.
- Export Revenue Share (Q4 FY '24): 27%, with a year-on-year growth of nearly 18%.
- Export Revenue Share (FY '24): Nearly 25%.
- EBITDA (Q4 FY '24): INR33 crores, up from INR34.7 crores in Q4 FY '23.
- EBITDA (FY '24): INR117 crores, up from INR95.9 crores in FY '23.
- EBITDA Margin (Q4 FY '24): 10.13%, an improvement of 198 basis points year-on-year.
- EBITDA Margin (FY '24): 10%, an improvement of 78 basis points year-on-year.
- Profit After Tax (Q4 FY '24): INR13.3 crores, up from INR9.9 crores in Q4 FY '23.
- Profit After Tax (FY '24): INR47.1 crores, up from INR39.6 crores in FY '23.
- Industrial Switchgear Revenue Contribution (Q4 FY '24): 53.7%.
- Industrial Switchgear Revenue Contribution (FY '24): Nearly 55%.
- Wire & Cable Revenue Contribution (Q4 FY '24): 40.5%.
- Wire & Cable Revenue Contribution (FY '24): 39.5%.
- Building Products Revenue Contribution (Q4 FY '24): 5.8%.
- Building Products Revenue Contribution (FY '24): Nearly 6%.
- Kaycee Industries Revenue (FY '24): INR48.81 crores, up from INR41.7 crores in FY '23.
- Kaycee Industries EBITDA (FY '24): INR6.78 crores, up 42% year-on-year.
- Kaycee Industries PAT (FY '24): INR5.49 crores, up 28% year-on-year.
- Kaycee Industries PAT Margin (FY '24): 9.1%, an increase of close to 100 basis points from last year.
Release Date: May 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue growth: Salzer Electronics Ltd (BOM:517059, Financial) reported a revenue increase to INR326.6 crores in Q4 FY '24 from INR302.7 crores in the previous corresponding period.
- Export performance: The export share of revenue was 27%, demonstrating a year-on-year growth of nearly 18%.
- EBITDA improvement: EBITDA excluding other income increased by 34% year-on-year to INR33 crores in Q4 FY '24.
- Profit after tax: The profit after tax was INR13.3 crores in Q4 FY '24, a year-on-year growth of 35%.
- New product development: The company successfully developed smart meters and received BIS certification for their single-phase smart energy meter.
Negative Points
- Setback in EV chargers: The company's EV chargers failed the communication test required for certification in India, causing delays.
- High sales outstanding: The Building Products division is slowing down due to high sales outstanding with specific distributors.
- Dependency on order inflow: The ability to achieve 100% capacity utilization for smart meters depends on the order inflow, which is uncertain.
- Geopolitical and economic challenges: The company faces challenges due to geopolitical tensions and economic slowdowns in key markets like the U.S. and Europe.
- Cash conversion cycle: The current cash conversion cycle is 145 to 150 days, which the company aims to reduce but has not yet achieved.
Q & A Highlights
Q: Please throw some light on the smart metering facility, whether this is B2C for household or (inaudible).
A: Yes, sir, smart meters are used in residential houses, small businesses, and factories for measuring and monitoring power usage. We have developed three-phase meters and are in the process of getting BIS certification for them. The factory installation is almost complete, and we expect commercial production to start soon.
Q: What is the future guidance for top line and EBITDA margin for FY '25?
A: Excluding the features, we expect to grow anywhere between 18% and 23% in the coming year. EBITDA margins have improved by around 70 basis points this year, and we expect them to go up by another 1 percentage point, targeting around 10.5% to 11%.
Q: My question is again on the smart meters. Are we going to supply directly to DISCOMs, and what are the future plans?
A: Right now, our focus is on manufacturing meters and supplying to ISPs who have orders from DISCOMs. We have an AM ISP license from REC, allowing us to participate in future tenders directly from DISCOMs.
Q: What is the expected revenue from smart meters for FY '25?
A: It is difficult to give a precise projection, but we expect at least 50% capacity utilization, translating to around INR400 crores to INR500 crores in revenue if everything goes well.
Q: Can you give a growth expectation for each business segment for FY '25?
A: Industrial Switchgear business should grow around 22%-23%, Copper Wire & Cable business between 18%-20%, and the Building Products division by around 40%. Overall, we aim to increase our EBITDA margin by at least 100 basis points.
Q: What percentage of market share are we looking to capture in the smart meter segment over the next three years?
A: The market is very large, with an estimated 25 crore meters to be replaced over the next five to six years. We aim to sell at least 3 to 4 crore meters in the next five years.
Q: What are the expected margins for the smart meter facility?
A: We expect an EBITDA margin of close to 15% for the smart meter business, considering it will be a short working capital cycle.
Q: What is the status of the EV chargers, and what are the future plans?
A: We encountered a setback with the communication test for the EV chargers. We are working on updating the software to meet Indian standards. Despite the temporary slowdown in the EV market, we expect it to grow, and we aim to capture a significant market share in EV chargers.
Q: What is the CapEx plan for FY '25?
A: There is no major CapEx planned other than completing the smart meter facility. We will have a maintenance CapEx of approximately INR17 crores to INR20 crores.
Q: What is the current debt level, and how was the CapEx for the smart meter facility funded?
A: Our working capital borrowings are around INR284 crores, and long-term debt is INR12 crores. For the smart meter facility, we have taken a term loan of around INR20 crores, which we have not fully availed yet.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
