Tega Industries held a conference call on 14 November 2022 to discuss the results for the quarter ended September 2022 and way forward. Mr. Mehul Mohanka - MD & Group CEO, Mr. Syed Yaver Imam - Director – Global Product Group and Mr. Manoj Kumar Agarwal - Director – Global Finance and CFO of the company addressed the call.

Highlights of the Concall

• The company delivered double digit growth in key metrics despite unfavorable global challenges.

• The company reported robust sales growth seen across all geographies specially in Australia which was lagging behind due to prolonged restriction from covid even though macro environment continues to be challenging, .

• The company operating leverage is enhancing the profitability as scale of operation is growing which is evident from margin expansion both in annual and sequential terms.

• The company has a strong pending order book of Rs 345 crore at the end of Q2FY23.

• The company mentioned that it has exciting line of projects to unlock the next leg of growth including capacity expansion in Chile and India.

• Capex was funded through internal accruals and not added fresh debt during the quarter.

• Working capital days improved during the quarter at 143 days from 169 days in March 2022 which was on the higher side due to supply chain issues.

• The company is net debt positive by Rs 28 crore as of 30th September 2022.

• The company did about Rs 115 crore in Dyna prime in H1FY23 with a growth of 32% and going forward it expects growth of more than 25%.

• In non Dyna prime the company did Rs 252 crore in H1FY23 with a growth of 20% and non mill is Rs 126 crore with a growth of 40%.

• In Q2FY23 Dyna prime reported revenue of Rs 70 crore with growth of 1-2% while non Dyna prime reported Rs 113 crore with a growth of 9% and non mill reported revenues of Rs 80 crore with a growth of 60%.

• Non mill liner growth was higher due to opening up of Australia from last two quarters (remained closed due to pandemic).

• The company expects normalization of logistics cost in coming quarter which was lost last year and benefit margins.

• Revenues saw 20% growth YoY in Q2FY23 wherein volume growth was 18%, price growth was 2% and exchange impact was nil.

• The company expects its margin to be around 21-23%.

• The company has seen growth in in all geographies in H1FY23 except North America which is expected to ramp in H2FY23. South America revenue growth was 31% in H1FY23 while Africa grew 14%, EMR 80%, Asia pacific 43% and North America was down 7%. India revenue growth was 37%.

• The company did a capex of Rs 57 crore in H1FY23 and further expects about Rs 15-20 crore in H2FY23