Thread by @SmartSyncServ

Q2FY21 Results & Concall Notes on BKT

~Strong Numbers
~Highest Ever Quarterly Volumes
~Strong growth in Sales, EBITDA, PBT & PAT

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Highlights of the Quarter's Performance

Volumes

~Segment Wise
~Channel Wise
~Geography wise

Financials

~P&L
~Forex Gain/Loss
~B/S
~Cash Flows

Concalls Points

•Guidance of surpassing FY20 volumes marginally in FY21
•As Europe is entering into lockdown mode, guidance is a conservative one
•Due to tech advancement & product-mix capacity will reduce capacity (6-7%). Mgmnt will give more clarity on it in the next call

•Volume growth is a mix of market growth and capturing market share from competitors.
•Inventories were down in Q1 as there was less production, it is slowly being built up.
•Inventories are still not on a normalized level; it is expected to build up further going forward.

•EBITDA margin guidance continues to be 28-30% on a long term sustainable basis.
•Natural rubber prices have been very volatile in the last 6 months & are on an increasing trend as of now.
•Upbeat on the Indian market and have increased their brand-building initiatives here.

•Other exp as a % of sales continues to be around 21% and that’s sustainable.
•OTR segment’s contribution has increased significantly in recent years. (from 20% to 33%)
•Ultra-large radial tires (57”) have been launched a week ago.
•Australia & Asia- very good traction

•Leader in Australia agri segment.
•BKT spends around 100 Cr every year on A&P. And these expenses have been provided for. So, do not expect any further A&P expense in the subsequent quarters.
•Import ban of tires in India is restricted only in CV so does not impact BKT.

•No comments on the impact of the new lockdown in Europe as it is too early to know the exact impact.
•Currently, the OEM & channel partners continue to suggest that the demand will be maintained but uncertainty still persists.
•No major increase in employee expenses.

•ASP (245-252/Kg ) will continue to be the same despite the reduction (6-7%) in production capacity.
•India, Australia & North America are the growth opportunities for Ultra Large Mining tires ging ahead.
•Realizations on these tires are marginally higher than the rest.

•Q2 growth was largely due to orders of Q2 only & not due to slippages of Q1 which were booked in Q2.
•Market share is 5-6% in India.
•Margins in India are slightly lower but on a consolidated level, it does not change the equations much.

End