#Visaka Industries Earnings Call Notes📝🧵

@Nigel__DSouza @nid_rockz @zeeeshansyed @MrRChaudhary @equialpha
1/ Performance Image
2/ V Next Biz

-It has picked up as lockdown ended

-Digitization has helped

-Utilization is 70% & EBITDA% is 15%

-They have been working in this segment since last 10 years and currently the are banking on good margins and this year they expect to post 15-20% higher biz
-Expect healthy growth ahead

-They are consistently trying to spread this biz, they generated 200 crs and expect this to go up with similar margins

-They branded though IPL this year & advertising would go up in coming quarters

-Adopting more of technology in their own space
3/ Asbestos Biz

-Market for Asbestos has improved due to its affordability in low income groups, rural demand was good with maintained prices
-They are in one of the worst times currently since last 3-4 years, positive thing is, rural attraction which can give a growth in this market bcz substitute products are not in road with this segment
-They are working hard to maintain in house keeping by cost reduction to get better margins coupled with their command on premium price validation

-They are doing both, Non-Asbestos sheet and Asbestos cement roofing sheets, they are even exporting Non-Asbestos to middle east
-Steel sheets are more into commercial and industrial segments whereas asbestos are more in residential segments

-Premium of Rs.10-15 per meter in Non-Asbestos cement roofing sheets

-Asbestos sheets are priced lower by 12-13% than metal sheets
-There's huge shift to rural sides, as lot of people went back to their homes which has uplifted the markets

-Rural people cannot live under metal roof all the time which has attracted them towards asbestos products

-Asbestos prices will remain stable, Q4 will have more clarity
4/ Atum & Solar

-Atum, new division has improved revenue due to pick up in pharma, hospital and data centers

-It is required across the country in various fields which has created a good pipeline, their first project is in Dubai for a mosque
-Achieved patent for solar roof, 1st company in world to get the patent for roof power generation

-Main contributor in this quarter was roofing biz and will continue to be

-Atum is taking baby steps & is integrated product from V next segment
-Fibre prices are yet to be finalized but overall trend is expected to be the same and they might be in the line with overall prices
-They are trying to replace the metal sheets with solar, via Atum, most of the people are now shifting to solar

-They go with a metal sheet with a solar on top, they are seeing huge traction in data segment, construction segments for roofs like Atum
-Solar roofing sheets today they are at the same cost metrics in terms of installing traditional metal sheets & solar on the roof

-Base utility of the product is high, it is A-fire rated and has bunch of new product advantages which can beat out traditional ways
-Advantages are savings in labour charges, savings from two traditional charges of metal and roof, these have been overcome by the Atum by taking care of both roof and solar angle

-In data centres, they don’t need additional roof or solar panels
-40% more efficient than traditional method. Additionally solar module installment is 100KW in 1000Sqf, they can be do that in 700sqfeet

-Energy system usage is same as traditional

-They do offer MNCs
-Right now they have 30MW facility with ~7500cr revenue strength, they can expand this to 60MW and can double the output
Atum coming up as an emerging product for solar sheets

-Order book for Atum is ~2-2.5MW which is one month production

-They are even getting repeat orders
5/ Textile Biz

-Q3 onwards textile should start picking up

-Synthetic yarn continued to be under pressure due to closure of main markets in Q2, Bhiwandi in Mumbai and Bhilwara in Rajasthan

-Expect 50% of revenue recovery in yarn biz in coming quarters
6/ Industry

-Roofing biz is benefited from non availability of steel sheets and now steel companies have also increased prices which will maintain this growth

-No price increment this quarter
-There is a drop in industry wise price increment (of around Rs.5-6)from Q1 due to off season scene, still comapny is demanding highest price in the industry

-Bcz of steel sheets price increase, overall output has increased in the rural segment
7/ Other Highlights

-Construction plan in 2020 in Coimbatore

-They maintained premium in their products

-Managed to infuse good technology at right cost

-Working capital days stood at 93 days from 130 days due to better collection terms

-Interest cost & net debt came down
-Gross debt will be ~100cr by yr end

-Revenue break up in building materials: 60-70% from Asbestos division and V neck 20-25%

-Pulp prices were higher last quarters and have stabilized now, they are doing higher R&D to maintain better output
-In north, utilization was 70% & target is 80% by Q4

-50-60cr capex towards new plant

-Bought more land in North to set up panel plans & product has come out exceptionally well & is also exported to Nepal & other northern parts
-Growth was also backed by lockdown as there was a deficit created

-In Q2 their labours returned in majority at construction sites which kept operations stabilized

-They are targeting to match the same revenue in all segments except textiles
-They would be focusing on value addition products and premium maintenance than volume going ahead but will try to maintain volumes as well

-Raw material suppliers are Brazil, Russia & Kazakhstan

-Roof biz is not for existing roofs, it is either for new or replacements roofs
-Operating ratios are better than peers as they targeted premium rather than volumes

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21 Nov
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🧵 ImageImage
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@gvkreddi @SandipGhose @nid_rockz @nakulvibhor @saketreddy

🧵 Image
1/ Demand Drivers

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1/ #PLI scheme

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