Himatsingka Seide Ltd has conducted their conference call for Q4: FY2021
Here are the key highlights π
Here are the key highlights π
Business Updates:
β’ Demand for home textile continuous to be strong.
β’ Improvement in capacity utilization and order book
β’ Revenue growth driven by enhance capacity utilization in terry tower.
β’ Q4 revenue doesnot include recognition of export incentive under RoDTEP scheme.
β’ Demand for home textile continuous to be strong.
β’ Improvement in capacity utilization and order book
β’ Revenue growth driven by enhance capacity utilization in terry tower.
β’ Q4 revenue doesnot include recognition of export incentive under RoDTEP scheme.
Capacity Utilization:
- Sheeting: 76% in Q4 - 71% in Q3
- Terry Towel: 63% in Q4 - 45% in Q3
- Spinning: 101% in Q4 - 101% in Q3
Co. has space to de-bottleneck the facility, but will do at proper time.
Revenue Mix:
β’ Brand Share: 565cr Q4 vs 385 in Q4FY 20 vs 550cr in Q3Fy 21
- Sheeting: 76% in Q4 - 71% in Q3
- Terry Towel: 63% in Q4 - 45% in Q3
- Spinning: 101% in Q4 - 101% in Q3
Co. has space to de-bottleneck the facility, but will do at proper time.
Revenue Mix:
β’ Brand Share: 565cr Q4 vs 385 in Q4FY 20 vs 550cr in Q3Fy 21
Impact on Profitability:
- Lockdown due to wave 2
- Disruption due to covid
- Non Recognition of Export incentive under RoDTEP, as price is yet not decided
- Increase in Raw material price of raw cotton
- Lockdown due to wave 2
- Disruption due to covid
- Non Recognition of Export incentive under RoDTEP, as price is yet not decided
- Increase in Raw material price of raw cotton
Raw Material:
β’ Raw Cotton and Yarn prices are highly inflated. On weighted average basis lot of people has absorb.
β’ Superior product mix, price increase and grow will offset inflation.
β’ There is no issue of supply of yarn, as supply chain disruption are handled.
β’ Raw Cotton and Yarn prices are highly inflated. On weighted average basis lot of people has absorb.
β’ Superior product mix, price increase and grow will offset inflation.
β’ There is no issue of supply of yarn, as supply chain disruption are handled.
Integration:
β’ Company is partially integrated for yarn facility, while partially is bought from third party. 35-40% is produced internally.
β’ There wont be increase in spinning capacity for the near term time.
β’ Company is partially integrated for yarn facility, while partially is bought from third party. 35-40% is produced internally.
β’ There wont be increase in spinning capacity for the near term time.
Growth:
β’ Enhance capacity in sheet & terry towels can growth the sales
β’ Organic de-bottlenecking can enhance the capacity.
β’ Home textile has growth both topline & bottomline.
β’ ROCE target: 17-18%
β’ There are few 2-3 players, with entry barrier & upside can do well for co
β’ Enhance capacity in sheet & terry towels can growth the sales
β’ Organic de-bottlenecking can enhance the capacity.
β’ Home textile has growth both topline & bottomline.
β’ ROCE target: 17-18%
β’ There are few 2-3 players, with entry barrier & upside can do well for co
Debt:
β’ Gross debt- 2467 cr in Mar21 vs 2814cr in Mar20
β’ Total Term Debt 1613cr while Working Capital debt at 836 cr.
β’ Major capex is done and only organic capex is there, hence debt would be reduced (~200cr). Continue focus on delivering the balance sheet.
β’ Gross debt- 2467 cr in Mar21 vs 2814cr in Mar20
β’ Total Term Debt 1613cr while Working Capital debt at 836 cr.
β’ Major capex is done and only organic capex is there, hence debt would be reduced (~200cr). Continue focus on delivering the balance sheet.
EBIDTA:
β’ Normal EBIDTA is in the range of 20-22%.
β’ There would be little impact in the margin in coming quarter due to increase in raw material price.
β’ On annual basis, co. can be near to the bottom level of margin.
β’ Normal EBIDTA is in the range of 20-22%.
β’ There would be little impact in the margin in coming quarter due to increase in raw material price.
β’ On annual basis, co. can be near to the bottom level of margin.
RoDTEP: Benefit impacted in Q4 is by 35-40cr. According to media it should be announced shortly.
However inflation is high in month of may, hence any exceptional gain from benefit can be offsetted.
However inflation is high in month of may, hence any exceptional gain from benefit can be offsetted.
Europe Tie-up:
β’ Co. has tied up with Disney for supply of product, and there is excitement in operation going on. Mgmt expect good growth coming up for this year.
Maintenance CAPEX: 3.5% of Net Block
β’ Co. has tied up with Disney for supply of product, and there is excitement in operation going on. Mgmt expect good growth coming up for this year.
Maintenance CAPEX: 3.5% of Net Block
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