Shakti Pumps conference call was today at 2:00 pm.
"Vision to be 5000 Crore topline till 2025"
Here are the Key takeaways of the call ππ
Business Update:
β’ Business segment has performed well. All the segment did show all time high sales and profit.
β’ Solar Sales is going on a good note.
β’ Management did see a good recovery and expect the margins to remain at a same level.
β’ Cash Flow of the business remain all time.
β’ Company did have order book till April
Cash Flow
β’ Company did delayed the state, order where there were no subsidies. Company only participated where the subsidies are available and the cash is reimbursed earlier.
Conti.
β’ As the company is now buying big order of quantity, the creditor days of the company has been shifted increase lot and company is arm twisting the supplier as well.
β’ CFO this quarter was around 60 crores and improvement was majorly due to borrowings which was extended.
Sales and Margins:
β’ EPC sales did well and the good business was visible from Maharashtra.
β’ The price of 5HP pump was not decreased but the company did sold lower hp pump price in the Haryana state which made good sales and sales margin of the business.
Conti.
β’ Continuous Sales and and increasing margins helped maintaining the margins of the business.
Inventory Days
β’ Supplying to Farmers has been around 120 days which has been reduced from the past, as the operational efficiency has been improved.
KSUM Tender:
β’ Total tender is around 10,000 crore.
β’ Shakti Pumps is the only leader in Bihar state, hence the company will be receiving good amount of tender.
β’ Company has capacity to increase order book as well as the company is still running at 47% of the capacity only.
Future Growth:
β’ Company did has capacity to increase the order size, and the supply it as well, but the company is not doing unitl the there is early payment realization.
β’ If the company only sells pumps then company can easily do turnover of Rs1000.
Conti.
β’ Company will have to expand to come up to turnover topline of around 5K crore, which is also possible as per mgmt in the near future
Operating Leverage- As the manufacturing is at optimum utilization company there is always an increase in the margins. Margins is to be ~15-16%
KSUM Tender
β’ Entire KSUM Tender sales was a part of the EPC sales only.
β’ Around 10,000 pumps were added by the government out of which around 50% was been taken by Shakti Pumps
β’ Next tender for which pre-bidding is going on, of which finalizing will be done in a month
Conti
β’ As company did good performance, Shakti Pumps has chance to get good part from the bidding.
β’ Mgmt did expect no delay in the sales as the government action this year shows good signs.
β’ Mgmt did find the action of KSUM which is best for the farmer.
Plan B of delay of KSUM- In case of delay of the sales, company has plan to sale the manufacturing thing to export as well but company did not expect any delay.
Monsoon impact: Monsoon donot have any impact on sales, there is only difficulty in placing the pump.
Success Factor:
β’ 25 crores of Investment in subsidiary which was performed very well for the company.
β’ With owned solar plants company did have decrease in the costing, hence this show good margins int his quarter
β’ For 10000 Pump company did require 1000MW solar required.
Vision of 5000 crore:
β’ Company did have vision of reaching the 5000 crores topline till 2025.
β’ For this company will have expansion at necessary stage, and this will majorly own investment.
β’ Company did have any vision of solar panel or solar cell.
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"Target to purchase 20% of the new music this year for the next 30 year"
Here are the key highlights of the call ππ
Business Updates:
β’ There has been slow and steady growth and the industry is slowly coming out of Covid.
β’ Entertainment and Education has seeing a good growth in digitization.
β’ Saregama is in a good position to take the advantage of the digitization.
β’ Cost has been tightened over the past 2 quarter.
β’ Company debt company last year, has been reduced a lot.
Growth Driver:
β’ Primary driver for the 24% sales growth is the Carvaan sales and the music right.
- Specialty chemical: There were enhanced volumes across products. Enhanced volume led to better utilization of capacity of multi product and dedicated plants as well
- Capex is on track.
- Revenue from existing products continue to improve.
Technical textile business: this segment gave a steady business as there was faster than expected recovery in Tyre industry.
- Domestic demand for refrigerants is picking up.
- Company will focus on sales ramp up from newly commissioned plants in Thailand and Hungary.
Business Update:
β’ Business has been reveamped and seen good growth.
β’ Tier 2 and Tier3 has seen good growth.
β’ Q3 turned out to be more than what we expected.
β’ EBIDTA Margins attained a new higher.
Gas Price:
β’ Remained same than that of past quarter. Avg Price in Northern India is 25-26 price, which was 30-31 last year
β’ Out of this around 50% of this price is for long term
Segment:
Bathware & Sanitary is already CF +. Ply will take more 2 year for generating cash flow.
Business Updates:
β’ Company has managed to maintain the new normal and looking for steady growth.
β’ Business has returned to new normal.
β’ Second wave of covid has lesser impact
β’ Over past 3 months company has maintained operational efficiency
β’ Collaborated with Deerfield Discovery and Development (3DC) to advance integrated drug discovery projects
β’ Co. has also collaborated with virtual system in order to communicate with the clients easily.
β’ Expansion Hyderabad facility will increase the operational aspect