Mishra Dhatu Nigam conducted conference call on 29 July 2022 to discuss the financial results and performance of the company for the quarter ended June'22. Dr. Sanjay Kumar Jha, Chairman & Managing Director of the company addressed the call

Highlights of the Concall

• The company has clocked a turnover of 114 crore almost same as Q1 of the last year, but its production has gone up in the first quarter. The value of production has gone up by almost 90% higher. So the impact of this higher production will be seen in the second quarter.

• All metal companies faced pressure on the profit mainly due to increase in the cost of raw material, which includes nickel, moly, cobalt and also the increase in the price of fuel. The company consumes the LPG in large quantity and also power cost also has gone up. There is an increase of 25% to 30% in the cost of all major raw materials YoY which the company consume for its production.

• The company expects sales to be higher in Q2FY22

• The company feels there will be margin pressure for second quarter as well to higher cot of raw materials, LPG and power cost. However from third quarter it expects margins to normalize.

• The company is part of the committee towards certification work for Sukhoi engine. Till now it has not got any order from Sukhoi. The total engine is coming around Rs 1000 of crore but what Midhani will get from the raw materials is to be decided later.

• The company is making engine parts for Jaguar aircraft (Adour engine). It is getting the regular order after the execution of 40 sets. Now again it has got the order for around Rs 66 crore order from HAL. It is we are getting regular.

• The company had some issues in the land acquisition and environment clearances for JV work with Nalco but now all those things are in place and it has gone to the first stage of appointing that consultant for execution of the project. The company is giving the equity of around Rs 170 crore.

• Current order book is similar to what it was in March 2022 at Rs 1377 crore - around Rs 600 plus crore is for the space, Rs 300 crore plus for naval sector, missile around Rs 130 crore, Rs 100 crore is coming around energy and balance Aero Rs 67 crore, Airbus Rs 65 crore, Railway Rs 12.5 crore, and others are miscellaneous. It expects to get Rs 1000 crore of order book in FY23.

• The company has two types of generations with scraps - one time generation is that which it can recycle. Second is which it cannot recycle. Recyclable scrap almost reached a 70% and balance it has to either dispose it or either it has to keep in the stock.

• The company expects sales of Rs 950 crore in FY23.The company targets to grow its profit by 25% every year.

• Mishra Dhatu is the only company in India to produce titanium. The company has also other products and technology for which it has monopoly but it cannot be discussed on open platform. Titanium is a wonder metal because it has very unique properties and then it carries lot of cost which finds application in defense and space.