Thread - Rajratan wire results & concall details (Not a buying recommendation)
RAJRATAN GLOBAL WIRE fantastic result, their competition got closed. Now the only player in that sector. Their Thailand plant is also doing well.
Rev +49% at ₹184cr
EBITDA +113% at ₹32.7cr
Margins at 17.8% vs 12.4%
PAT +282% at ₹23.2cr
Production: During Q4FY21, In India 12375 and Thailand 8786 tonnes, 21521 tonnes in total. Full year production 42000 tonnes in India and 29366 tonnes in Thailanad.
Expansion plan: They are looking to expand the capex in Thailand. Currently Rajratan is doing 35k total production capacity expansion from 37k to 60k in Thailand. It will take total capex Rs 65 to 70 cr spill over in two years. Cost not incurred currently & invested little amount
India capacity 120000 tonnes currently with 50% utilization. Expected to grow another 60000 tonnes in India. Looking for closer to port. Rajratan (India) embarked on commissioning a warehouse in South India to deliver faster and be closer to customers.
There is good development, Major export to Indonesia Sri Lanka, Vietnam, Malaysia, Italy, South Korea and Czech Republic.
Major increase in demand in business because Import of tyres are banned in India & tariff and non-tariff barrier on import has gone up. India is emerging alternate to China and India can export too.
Rajratan completed 30 years, going forward evaluation is expected. There is lot of increase in demand. For current month they are struggling to supply, still have some stock. Overall Rajratan is not adversely affected in demand due to covid situation.
Asset turnover in Greenfield expansion: New location major investment in land and machines. They work from two locations and it would be de-risk.
2 to 2.5 Asset turnover ratio, Bead 0.9 is use in cycle tyre or in aircraft, also it depends on user. Increase production of thicker bead wire sizes used in Truck Bus Radial tyres, where margins are higher.
Guidance: CAGR rate of 25% in term of top line growth as per management. Raw materials - 3 times prices hike taken in metal prices. Delay of one quarter but looking at current situation they will be able to pass on to customer. Major producer in Thailand bead wire.
Everything else come from organised business from Thailand. Looking to expand the market share from 20% to 30%.The Company has widened its customer base in USA, Sri Lanka & Europe.
Market size:
1.2 mn. tonnes size including china. (Half of the worlds market is China)
LNG third biggest cost & it's going up but it won't impact due to volume gone up
Approval plant capacity time frame.
Thailand won't require separate approvals as already have the capacity.
In Chennai need to take approvals from government as new plant and putting this plant as per customer demand.
In us market second biggest market 200k tonnes after china market. (In us there are 3 players)
Tax rate: Earlier they were in higher tax rate, now there is some correction in tax rate in India and they are paying 20% in here & 15% in Thailand

Almost every other tyre co Image

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