Release Date: May 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Consolidated revenues rose by 5% to INR 1,541 crores in FY '24, supported by export initiatives and healthy contributions from the flexible segment.
- EBITDA grew by 7% to INR 251 crores, translating into a margin of 16.3%.
- Cash PAT for the year stood at INR 206 crores, showcasing financial strength.
- Strategic plan to establish a greenfield facility in Southern India to broaden pan-India presence.
- Received numerous prestigious awards, including the PrintWeek Printing Company of the Year 2023 and the Innovative Printer of the Year 2023.
Negative Points
- Subdued demand environment in the domestic market affected growth.
- High base effect from the previous year and reduced demand in select end-user industries impacted FY '24 growth.
- CapEx budget for the new Chennai plant is not finalized and may exceed INR 100 crores.
- Flexible packaging segment's capacity utilization is still low, indicating underutilization.
- Challenges in the export market due to the Red Sea crisis, impacting margins and growth.
Q & A Highlights
Q: How much CapEx is planned for the new Chennai plant, and when will it be operational?
A: The CapEx budget for the company as a whole is more than INR 100 crores, similar to the previous year. The Chennai plant is expected to start this calendar year and certainly within this financial year. - Akshay Kanoria, Executive Director
Q: What kind of growth is expected in FY '25 from rigid, flexible, or overall segments?
A: We anticipate a return to our long-term growth trend this year, aiming for around 10% to 15% growth, although this depends on the revival of domestic consumption. - Akshay Kanoria, Executive Director
Q: How will the increase in flexible packaging share affect overall margins, and what is the sustainable EBITDA margin going forward?
A: Despite the increase in flexible packaging, margins have been on an upward trajectory. We expect to sustain margins at the 15%+ level. - Akshay Kanoria, Executive Director
Q: What is the current revenue run rate for Creative, and have any new customers been acquired?
A: We have secured several new customers, particularly in the electronics and consumer products segments. We aim to turn Creative into a triple-digit crore revenue business in the long term. - Akshay Kanoria, Executive Director
Q: Can you explain the significant improvement in margins this quarter and its sustainability?
A: The improvement is due to a benign raw material situation and an improved job mix. We expect margins to remain stable but do not provide long-term guidance. - Akshay Kanoria, Executive Director
Q: How will the Red Sea crisis impact export margins and growth?
A: The crisis has increased shipping costs, impacting margins and growth. However, this is a global issue, and we are managing it as best as possible. - Akshay Kanoria, Executive Director
Q: What is the outlook for the new Chennai plant and its impact on revenue?
A: The Chennai plant will start this calendar year, but its revenue impact will be more significant in the next financial year. It will focus on carton manufacturing. - Akshay Kanoria, Executive Director
Q: What is the current utilization level for flexible and folding segments?
A: Overall utilization is approximately 75% to 80%. The flexible segment has lower utilization due to recent capacity additions. - Akshay Kanoria, Executive Director
Q: How is the Innofilms business performing, and what are the future plans?
A: Innofilms is stabilizing in terms of film quality and is expected to become a revenue and profit contributor this financial year. - Akshay Kanoria, Executive Director
Q: What is the growth outlook for the FMCG segment, and how has it performed in the last three years?
A: The FMCG segment is our largest and historically highest-growing segment. However, growth has been marginal in the last few years due to weak volume growth. - Akshay Kanoria, Executive Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
