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The company held conference call on 31st October 2017 to discuss the results for the quarter ended September 2017. The Amit Patel – MD and Samir Joshipura – Group CEO of the company addressed the call.
Following are the key highlights of the call:
The net sales stood at Rs 1432 crore while net profit stood at Rs 26 crore for Q2.
The net sales stood at Rs 2994 crore while net profit stood at Rs 94.7 crore for H1 FY18
Last 3-4 quarters have been turbulent for Prefabs, as it reflects the headwinds of pre-GST and post GST.
Custom Molding (CM) has done extremely well.
Prefab sales are dragging from last November. The company is cautious in about this division due to receivables and working capital issues..
During H1FY18 cash generated amounted to Rs 217 crore. Out of which maintenance capex was Rs 95 crore. Resulting into a surplus of Rs 122 crore. The company effectively managed working capital which generated positive cash flow of Rs 132 crore. Out of the above positive cash flow, the company reduced Net Debt by Rs 203 crore. Net cash balance as on 30th September stands increased to Rs 245 crore against Rs 174 crore as of FY17. Net debt stood at Rs 3355.7 crore.
Custom Molding retail business – Expects very strong growth. It has grown by 40% in FY17. Door, windows, cabinets and false ceiling besides waste bins form a vast basket of retail product portfolio vs earlier only to tank business.
Custom Molding retail business - due to GST and SAP rollout , the business has suffered in H1 FY18. In Q3 and Q4, the mgmt expects business to come back on track.
H1FY18 – Infra and prefab busienss saw de-growth, while Custom Molding and electrical business has seen growth.
Reduction in EBIDTA margin – GST impacted high margin prefab business. The company is very cautious on Government focus business of prefab. Due to reduction in prefab busienss, the company is able to bring it receivables down and get cash.
Prefab or monolithic- going forward will see flat or negative growth in this business.
Prefab is now not focus business of the company and once its situation improves, will once again focus on this business. Presently, Custom Molding in India and EU will led the growth for the company.
Will see lower EBIDTA margin due to not focus on Prefab, which is high margin business, but will see improved ROE and ROCE.
The company will commit additional capex when its capacity utilization reach around 85% across its plants.
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