Sirca Paints conducted their concall for Q2 FY 22
"To mark revenue to 1000 cr CAPEX of more 15-20cr is required"
Here are the conference call highlights π§΅π
"To mark revenue to 1000 cr CAPEX of more 15-20cr is required"
Here are the conference call highlights π§΅π
Business Updates:
β’ Highest ever revenue achieved due to Unico and are expecting the same performance in the coming quarter.
β’ Gross Margins remain subdued due to volatile raw material price. GP Margins are not back to pre-covid level, and co. is planning for price rise.
β’ Highest ever revenue achieved due to Unico and are expecting the same performance in the coming quarter.
β’ Gross Margins remain subdued due to volatile raw material price. GP Margins are not back to pre-covid level, and co. is planning for price rise.
Production & Capacity:
β’ Production facility is already commission which was under fire accident. Q3 production of 7 Lac Litre.
β’ These facility is penetrated for manufacturing Nitrocellulose, Melamine (Unico brand)
β’ Current utilization of 25% and target of FY23- 100% .
β’ Production facility is already commission which was under fire accident. Q3 production of 7 Lac Litre.
β’ These facility is penetrated for manufacturing Nitrocellulose, Melamine (Unico brand)
β’ Current utilization of 25% and target of FY23- 100% .
Premium Segment:
β’ Premium market is already going good in Upper north (presence in 7 states).
β’ For this company is expanding its geographic area and had started the depot.
β’ Focus now remains to expand in Gujarat, South Market, Chattisgarh, via new facility in South.
β’ Premium market is already going good in Upper north (presence in 7 states).
β’ For this company is expanding its geographic area and had started the depot.
β’ Focus now remains to expand in Gujarat, South Market, Chattisgarh, via new facility in South.
Wall Paints:
β’ Wall Paints which was started last year had problems earlier, but last 2-3 months are turning out better for the companies.
β’ Same sales team is utilized to expand the wall paints segment, hence there would not additional cost.
β’ Wall Paints which was started last year had problems earlier, but last 2-3 months are turning out better for the companies.
β’ Same sales team is utilized to expand the wall paints segment, hence there would not additional cost.
CAPEX:
β’ Planning to expand alternate manufacturing unit for Unico in Southern unit which will be commissioned by end of Fy22.
β’ CAPEX of 5.5 cr at Coimbatore is started with focus on economic product, Melamine & wall Paints side.
β’ CWIP is the shift of office and godown.
β’ Planning to expand alternate manufacturing unit for Unico in Southern unit which will be commissioned by end of Fy22.
β’ CAPEX of 5.5 cr at Coimbatore is started with focus on economic product, Melamine & wall Paints side.
β’ CWIP is the shift of office and godown.
Revenue & Margins:
β’ Margin maintenance was due to stocking up of inventory earlier through Sirca Italy (leading to low price inventory).
β’ While cost optimization on fixed cost reduced the cost of production.
β’ 20-25% is expected to be sustainable margins.
β’ Margin maintenance was due to stocking up of inventory earlier through Sirca Italy (leading to low price inventory).
β’ While cost optimization on fixed cost reduced the cost of production.
β’ 20-25% is expected to be sustainable margins.
Sales Mix:
- 9.5cr- Unico
- 4.5cr- Wall Paint
- 48cr- Italian CU
β’ Mgmt targets to growth at 25-30% of topline growth for next 3-4 years.
β’ ROCE targets remain 25-30%.
- 9.5cr- Unico
- 4.5cr- Wall Paint
- 48cr- Italian CU
β’ Mgmt targets to growth at 25-30% of topline growth for next 3-4 years.
β’ ROCE targets remain 25-30%.
Raw Material:
β’ Prices are increased for every products of Sirca Paints.
β’ Price hike would be acceptable as a market leaders are also increasing the price. As Sirca has laready done 2 price hike (vs industry of 1) this time price hike would be 5%.
β’ Prices are increased for every products of Sirca Paints.
β’ Price hike would be acceptable as a market leaders are also increasing the price. As Sirca has laready done 2 price hike (vs industry of 1) this time price hike would be 5%.
Price Hike:
- Sirca Paint: 12% price with some rebate
- Unico & Wall Paints- 8% till now and 5% more in Q3
- Italian product price hike is more than industry, but it is expected to absorb in Europe
β’ Price hike was announced by industry leaders as well, but this is coming down
- Sirca Paint: 12% price with some rebate
- Unico & Wall Paints- 8% till now and 5% more in Q3
- Italian product price hike is more than industry, but it is expected to absorb in Europe
β’ Price hike was announced by industry leaders as well, but this is coming down
Marketing:
β’ Planning to increase the dealer network
β’Unico product is much premium product for Sirca Paint, which can be widely accepted across all country
β’ Co. is targeting to increase to 6,000 distributor and increase small branches. Mgmt is confidence to reach 5,000 soon
β’ Planning to increase the dealer network
β’Unico product is much premium product for Sirca Paint, which can be widely accepted across all country
β’ Co. is targeting to increase to 6,000 distributor and increase small branches. Mgmt is confidence to reach 5,000 soon
Strategy:
β’ Strategy remains to keep one big distributor in every region and to market the product in every region.
β’ Co. is also increasing focus towards retail side, by bring small size products. While contracts side focus will remain in-tact.
β’ Strategy remains to keep one big distributor in every region and to market the product in every region.
β’ Co. is also increasing focus towards retail side, by bring small size products. While contracts side focus will remain in-tact.
Others:
β’ H1 witnessed decreased in debtor days and co. is also bringing channel financing to further bring down the debtor days.
β’ Inventory days are targeted to be optimized for Unico product.
β’ Travelling cost are expected to be back to normal in Q3.
β’ H1 witnessed decreased in debtor days and co. is also bringing channel financing to further bring down the debtor days.
β’ Inventory days are targeted to be optimized for Unico product.
β’ Travelling cost are expected to be back to normal in Q3.
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