Ador Welding hosted a conference call on Nov 9, 2023. In the conference call the company was represented by Aditya Malkani, ED.

Key takeaways of the conference call

Volume growth for consumables and equipment in Q2FY24 is about 22% and 35% respectively.  The momentum continues in Oct 2023 as well.   Margin dip is primarily due to product mix. 

Export contribution in H1FY24 is about Rs 60 crore.  The H1Fy24 sales are almost that of last year’s export sales. Middle East accounts for about 80% of its exports sales.  Ador is a well entrenched/established brand in Middle East as the company is there in that market for long time. But what the company is now doing post covid is building a structural organisation to cater to the market such as building right distribution partner and  brand investment etc. Investing time and effort on expanding the high value products business and there is 3-5% margin difference between the HVP and other products.

Dec 23/Jan 2024 onward execution will start for the Rs 125 crore ONGC order. During Jan-July 2024 about 90% of order will be executed.  Slight delay in commencement of execution and that will be set right in order burnout time frame.  The company is pushing for billing of about Rs 70 crore in this order in FY24.

Not bidding for orders sub Rs 20 crore.  Bid pipeline is about Rs 100 crore.

Rhino e showcased Feb march 2023 the first battery powered welder in India.  Launched in sep 2023.

Volume continue to pickup going forward.

Adding lot of capacity, the utilization will be about 70%.

BIS Issue – BIS filed a case that is relating to error on the part of the company in imports.  The company has stay on the compounding order claiming about Rs 25 crore by BIS which the company feels it is irrational. Now the case is in the courts.   

Once merger happens there will be margin improvement.   Product mix enrichment is also underway which will also aid. There is no room for further scale up in Equipment margin.   If automation business is scaled up that will aid the margin growth. So it will not happen overnight but will be gradual. Scale level has to go up for improvement in margin for equipment.

Ship building is picking up well, railways are doing well, and power is also making a comeback. The auto is steady. 

About 10% of growth is expected for Ador Fontech in FY24.  Expect the Ador Fontec merger to be completed by Q4FY24.

The company is looking to expand its market share in general infra engineering and shipbuilding in domestic market.