Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Chaman Lal Setia Exports Ltd (BOM:530307, Financial) reported an 11% increase in revenue, indicating positive growth despite challenging market conditions.
- The company successfully managed to maintain profitability despite high ocean freight costs and fluctuating rice prices.
- New infrastructure developments, including three new units in Karnal, are expected to enhance production capacity and revenue.
- The company has a strong presence in multiple countries, selling in over 80 countries, which diversifies risk and expands market reach.
- Chaman Lal Setia Exports Ltd (BOM:530307) is actively expanding its customer base and exploring new markets, including potential opportunities in Japan.
Negative Points
- The company faced significant challenges due to increased transportation costs, which impacted profitability.
- Rice prices have been volatile, with a noted decrease in prices affecting revenue in certain quarters.
- The company's gross margins have decreased from 31% to 22% over the last five years, indicating pressure on profitability.
- There were issues with electricity affecting the efficiency of new plants, currently operating at 60% capacity.
- The domestic market expansion, particularly for the Maharani brand, has been slower than anticipated, with limited substantial progress.
Q & A Highlights
Q: What is the volume growth for this year and quarter, and what is the current inventory volume?
A: The sales volume increased by 11-12% this year. The current stock includes over 65,000 tons of rice and 7,600 tons of paddy. (Respondent: Unidentified_1 and Unidentified_4)
Q: What are the expectations for volume growth this year, and were there any inventory losses due to higher-priced inventory?
A: There were no inventory losses as the inventory was bought at a lower price, and sales were hedged. Prices are now rising, allowing sales at higher prices. (Respondent: Unidentified_1 and Unidentified_4)
Q: How have transportation costs impacted profitability and margins?
A: Transportation costs have doubled in the last year, impacting profitability. However, this is expected to be a short-term issue as business readjusts. (Respondent: Unidentified_4)
Q: What is the status of the new facility at Gandhidham, and what activities are planned there?
A: The Gandhidham plant is set to be inaugurated soon. The company follows a flexible model to protect against market fluctuations. (Respondent: Unidentified_4)
Q: What is the future guidance for revenue and capacity expansion?
A: The company expects to achieve a revenue of 2000 crores with the new plants coming online. Three new units in Karnal are operational, with two running at 60% efficiency. (Respondent: Unidentified_1 and Unidentified_4)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
