Vardhaman Special Steels (#VSSL) conducted Concall today at 2:30 PM for Q1 FY21
Here are the conference call highlights.
"Co. is targeting 155K Tonnes of production for FY 22"
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Here are the conference call highlights.
"Co. is targeting 155K Tonnes of production for FY 22"
Hit 'Retweet' to educate more investors ☎️🧵
Business Updates:
• Sales volumes stood at 43,705 tonnes.
• Growth is attributed from growing demand in the automotive sector & strong demand from OEMs manufacturers.
• Co. received EC for expansion from 2,00,000 MT per annum to 2,80,000 MT per annum of rolled products.
• Sales volumes stood at 43,705 tonnes.
• Growth is attributed from growing demand in the automotive sector & strong demand from OEMs manufacturers.
• Co. received EC for expansion from 2,00,000 MT per annum to 2,80,000 MT per annum of rolled products.
Industry Update:
• Car segment is doing very well, while 2/3 Wheeler are struggling.
• Export market in automotive is doing well, where VSSL has targeted customer. Sales from US is improving.
• Automotive Steel are included in PLI, however DELP scheme is not announced.
• Car segment is doing very well, while 2/3 Wheeler are struggling.
• Export market in automotive is doing well, where VSSL has targeted customer. Sales from US is improving.
• Automotive Steel are included in PLI, however DELP scheme is not announced.
Revenue Split:
• Bright Bars are around 15% of revenue share.
• Export revenue share currently is very small (Around 5%), but mgmt expect this share to increase, with the target of 25-30% of export revenue.
• Bright Bars are around 15% of revenue share.
• Export revenue share currently is very small (Around 5%), but mgmt expect this share to increase, with the target of 25-30% of export revenue.
Margin front:
• Price of Raw Material has increased where mgmt is in negotiation with customer as well.
• VSSL has 6 monthly price settlement, however due to current volatility, co. has come to 1 month settlement.
• Price of Graphite is 275$
• Price of Scrap is 535-540$.
• Price of Raw Material has increased where mgmt is in negotiation with customer as well.
• VSSL has 6 monthly price settlement, however due to current volatility, co. has come to 1 month settlement.
• Price of Graphite is 275$
• Price of Scrap is 535-540$.
CAPEX:
• 250-55 cr of CAPEX for next 2-3 years. It includes all the cost of R&D, Shifting to White Bar.
• Mgmt feels to have capacity crunches despite of CAPEX, for which mgmt is also looking for alternative of capacity.
• This will increase the ROCE of co.
• 250-55 cr of CAPEX for next 2-3 years. It includes all the cost of R&D, Shifting to White Bar.
• Mgmt feels to have capacity crunches despite of CAPEX, for which mgmt is also looking for alternative of capacity.
• This will increase the ROCE of co.
Customer:
• There wont be any impact with Ichi Steel in this coming year.
• This year would be majorly on product and quality testing.
• Maximum benefit would be visible on the coming in year.
• There wont be any impact with Ichi Steel in this coming year.
• This year would be majorly on product and quality testing.
• Maximum benefit would be visible on the coming in year.
Inventory Build Up:
• VSSL has build up inventory, as they have plant shutdown in Nov for 15 days. Even plant in Punjab was shut down for 6-9 days for unexpected power cut, where inventory was used up.
• VSSL has build up inventory, as they have plant shutdown in Nov for 15 days. Even plant in Punjab was shut down for 6-9 days for unexpected power cut, where inventory was used up.
Other Key Data:
• D/E guidance would be < 0.5.
• With current market scenario, mgmt expects to be debt free in the coming 2-3 year.
• Competitor: Mukund, Sunflag, Kalyani, are the near competitor of VSSL.
• D/E guidance would be < 0.5.
• With current market scenario, mgmt expects to be debt free in the coming 2-3 year.
• Competitor: Mukund, Sunflag, Kalyani, are the near competitor of VSSL.
"Mgmt comment on Shareholding Buying"
Promoter had surplus liquidity which was invested in the business
"The problem of market is when promoter have surplus liquidity, their investment is terms as optimism, & when promoter need money and sell few share, it is taken negatively."
Promoter had surplus liquidity which was invested in the business
"The problem of market is when promoter have surplus liquidity, their investment is terms as optimism, & when promoter need money and sell few share, it is taken negatively."
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