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The company held its conference call on 11th May 2017 and was addressed by Mr. Rahul Gautam MD
Key Highlights
As per the management, demonetisation had continued its effect in Mar'17 quarter as well. Promotions and discounts were continued to be given and focus remained on maintaining the market share.
TDI prices were up by around 8-10% in Mar'17 quarter which affected the margins as company did not took any price hikes in Mar'17 quarter. There was no other reason for lower margins.
Subsequently, price hike of around 7% were taken on 20th April'17. Management expects Ebidta margin which has dropped to around 9-10% in Mar'17 quarter, to come back to around 11% going forward.
Almost entire growth in FY'17 has been due to better realisations and price hikes and there was hardly any volume growth.
Post GST, lot of unorganised market will change and lot of benefits in terms of higher market share will come to organised sector.
270 exclusive stores were added in FY'17. Management expects to add around 400 exclusive showrooms in FY'18.
The company is generally price setter in the industry and the competition follows the company on their pricing of product decisions.
TDI prices in May'17 have come down to around Rs 225 a kg as compared to around Rs 250 a kg a month back. A new capacity around Satara is coming by Nov'17 and management expects going forward, TDI prices to remain range bound with an upward bias. Also, worldwide, TDI and polygons new capacities are coming up in next 6-8 months and there is not that much significant demand coming up for these products in international markets.
Australian operation is more or less stable. In Australia, the company caters to the furniture and bedding industry while other industries like chemicals which the company was catering earlier, is not doing well.
Company took a strategic call of not distributing dividend in FY'17 due to its planned acquisitions in FY'18. Management is looking for 2 acquisitions which would add new brands and reach for the company.
The company is by and large ready for GST and have made its dealers and distribution channel also geared up for the same.
New products which are of premium category segment will be launched in FY'18.
Management expects future to be very optimistic and lot of reforms will help the company to increase its market share in India.
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