MAYURUNIQNSEQ4 FY2022June 16, 2022

Mayur Uniquoters Ltd

7,188words
112turns
12analyst exchanges
3executives
Management on call
Rahul Dani
MONARCH NETWORTH CAPITAL
Suresh Kumar Poddar
CHAIRMAN &
Vinod Kumar Sharma
CHIEF FINANCIAL
Key numbers — 40 extracted
Rs. 147 Crore
the quarter. The company has achieved revenue from operations on a standalone basis amounting to Rs. 147 Crores, PBT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12%
25.5 Crore
mpany has achieved revenue from operations on a standalone basis amounting to Rs. 147 Crores, PBT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12% and 11% respectiv
19.5 Crore
evenue from operations on a standalone basis amounting to Rs. 147 Crores, PBT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12% and 11% respectively from the last qu
13%
147 Crores, PBT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12% and 11% respectively from the last quarter. The revenue from operation on consolidated basis
12%
rores, PBT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12% and 11% respectively from the last quarter. The revenue from operation on consolidated basis is 1
11%
BT 25.5 Crores and PAT 19.5 Crores during the quarter, which is in fact decreased by 13%, 12% and 11% respectively from the last quarter. The revenue from operation on consolidated basis is 162 Crore
162 Crore
% and 11% respectively from the last quarter. The revenue from operation on consolidated basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from t
33 Crore
ely from the last quarter. The revenue from operation on consolidated basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from the last
25 Crore
arter. The revenue from operation on consolidated basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from the last quarter. Our e
10%
on consolidated basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from the last quarter. Our endeavour is to make the company
5%
nsolidated basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from the last quarter. Our endeavour is to make the company a p
4%
ted basis is 162 Crores, PBT is 33 Crores and PAT 25 Crores and also had decreased by 10%, 5% and 4% respectively from the last quarter. Our endeavour is to make the company a preferre
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Guidance — 10 items
Vinod Kumar Sharma
opening
“Regarding our PU plants almost all the project activities are completed now except some small civil and site development work.”
Depesh Kashyap
qa
“Got it, Sir and about the PU plant, how much sales did we do in FY2022 and what is the expectation now going forward like you are doing a backward integration also, so how is the sales happening in this?”
Suresh Kumar Poddar
qa
“Today, I am running one shift as soon as we start running second shift I will order for the line, just to order the line and install it, so it has everything is ready I do not have to do anything and in six months we will be able to start a second line whenever we get the order.”
Vinod Kumar Sharma
qa
“In FY2023, we are planning to do capex of around 51 Crores in which 50% will be spent on putting the work knit plant in Gwalior more in the PU plant, and remaining will be incurred at the Dhodhsar plant for embossing and some other activities, which will add some value addition or capacity expansion.”
Rishab Bothra
qa
“I just wanted to understand you mentioned that because of ADT around 25% to 30% incremental revenue will be available in 2023 and 2024, correct?”
Suresh Kumar Poddar
qa
“Now in some cases fabrics are also replaced with PVC leather because the automotive fabric prices are very low compared to our best quality of PVC leather, which is introduced by this high about 40 Lakhs, 50 lakhs vehicles they have placed leather cloth only so what I mean to say is gradually it will grow, you will also grow, but you will grow very, very slowly because of this price.”
Hardik Samdani
qa
“My question is regarding when the cost of raw material and trade going forward normalizes does the company has to correct the pricing for its product going forward and if is it, how long does it will take for the company like till what time does the company have to correct the prices for all products?”
Hardik Samdani
qa
“Sir, followup question on this, should we expect any part of margin expansion going forward vis-à-vis with the elevated prices?”
Dhruvesh Sanghvi
qa
“We do not have any problems that Poddar Ji is in the company, so we do not have any issues, in thinking about that, and whatever time it takes, like you are saying that there will be some time, so that timing will be around two years, four years or five years, but from the mindset of the investor, what after Poddar Ji if we can get some clarity on this, because this is a question also that we need to ask you.”
Suresh Kumar Poddar
qa
“My job will be that okay, this is the line we need to go ahead with this kind of a product that is what we are doing.”
Risks & concerns — 3 flagged
What you mentioned about the replacement market just because cars are being fitted with airbags, so it becomes difficult to put up a seat cover on it, that is how it is in the aftermarket?
— Pritesh Chheda
Sir, just last question, so based on whatever FY2022, I know you do not share volume, but if you could just share the volume growth or decline number and what is the expectation for volume growth in 2023, in 2022 what it was and in 2023 what are you expecting?
— Pritesh Chheda
Sure, that is interesting, second point is in the ADDU one of the manufacturers in China has been exempted from this, so two questions, one is what is the risk from this manufacturer and also can imports be rerouted from other countries wherein so this…?
— Anil Sharma
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Q&A — 12 exchanges
Q
Sir, since the beginning of the year we were hopeful that we will ramp up supply with Volkswagen and Mercedes in South Africa, which is a high realization product for us in the last quarter, just wanted to understand what exactly happened there, any case Volkswagen was a new client and Mercedes is a new client, so your comments on that?
Suresh Kumar Poddar
The chips problems, semiconductor problems is going on from last one year, whatever projections they have given so far as Mercedes Benz is concerned, it was quite low not even 50%, but from last two months it is doing very well, so that is one thing I have spoken about Mercedes Benz and now Volkswagen we are doing okay business, there is no issue, no problem whatever they have said, they are buying only thing which has happened because of this quarter four result, aftermarket was a very big market, we were doing about 7 lakhs meter per month, but this quarter, which is not more than 3.5 to 3 l
Q
Sir, thanks for taking my question. Just wanted to understand how is the demand that you are seeing across various segments, you have already talked about auto and the replacement market, so if you can talk about footwear?
Suresh Kumar Poddar
For the supplier? Yes. Footwear is down because there was a 5% GST, which government has increased to 12%, so in the last quarter the sale was very down, although our sale of automotive was not that much down compare only that replacement work it was down, but footwear is really down, now it is improving because the season starts from April, May, June July, I mean Deepavali their market is going to be good only one month will be bad, then the full rainy season starts, otherwise, this year the footwear sale was down practically. Got it, Sir and about the PU plant, how much sales did we do in FY
Q
Good afternoon, Sir. I just wanted to understand you mentioned that because of ADT around 25% to 30% incremental revenue will be available in 2023 and 2024, correct?
Suresh Kumar Poddar
Yes. This is only the rate in DP has imposed or there is quantum, there is some import as well, I mean you mentioned some sense in terms of rate, rate of antidumping duty, so I just wanted to understand is there quantum restriction also which can be imported or there is no quantum restriction? You see, I have already spoken to you that 46% antidumping duty has been placed that has already started from May 25, 2022 and as I told you the difference of the prices will reduce. A lot will come to China price because of these manipulations and then China is making huge quantity that is why their cos
Q
Sir thanks for the opportunity and congrats on a good set of number. So, my first question was mainly on the raw material price increases, so how much of the price increase we have been able to pass onto the customers and how is the outlook there in terms of prices?
Suresh Kumar Poddar
In this year our raw material costs has increased by 6% compared to 2020-2021, I mean whatever we have passed on, we have passed on 6% to 7% less because the prices has increased tremendously, we have increased in the whole year about 27% to 30%, but the price of PVC chemicals, like PVC, resin and plasticizer increased 80% to 90% and the problem is that all the PVC manufacturers or plasticizer manufacturers are the big companies, they immediately increase the price, but when we go to the customers they do not give it from tomorrow because there are line of customers as I told you in PVC Indian
Q
Yes, sure.
Management
Q
Thank you. Sir, just a question on after the ATD and the opportunity for PU is so huge 95% is imported, so would you prioritize new PU lines or you would focus on PU chemicals to make it integrated first? Suresh Kumar Poddar: We have to focus on both, we have to focus on PU chemical important and as well as to produce more and more PU with imported PU also, as I told you that we are able put 46 cents antidumping duties that will also help us and one thing more you know there are two kind of PU, one is wet PU, which we are making in Gwalior, other is the dry PU in the same machine, which we are
Anil Sharma
Sure, that is interesting, second point is in the ADDU one of the manufacturers in China has been exempted from this, so two questions, one is what is the risk from this manufacturer and also can imports be rerouted from other countries wherein so this…? Suresh Kumar Poddar: We are working hard on all the areas, they are trying to come through Vietnam and all that, now we are working with the government, I have you spoken to VRI people also that something has to be done, one side Modi Ji is saying Aatmanirbhar and on the other hand, all these are becoming commercial, from where do you think Aa
Q
Sir, thank you for taking my questions. I had three questions, the first ones was on this PU for auto OEM exports you briefly touched upon the opportunity with Chrysler for their Malaysia plant, can you bit just expand a bit more on that opportunity because we have been working for PU in the auto export market?
Suresh Kumar Poddar
See, what is happening, I am talking this automotive market, this high solid PU what is I am talking is for the automotive market not for the general market because it is very expensive more than double than from wet PU right. Now there is only two manufactures in the whole world, one is in Europe and one is in Japan, third is Mayur, which could enter these two guys now because the prices are so high, is not that it can be used like PVC gradually they are putting up and what they are doing, they were placing leather because leather is still with this $20 is more than $50 for a square feet if y
Q
Sir, I wanted to know how much percentage of raw materials, we have imported in FY2022 and FY2021?
Suresh Kumar Poddar
Off the cup, it is not possible to tell you, write me a letter I will tell you. Sir, can you give me the revenue breakup for entire year 2022, the export OEM and export and other subsidiaries? For PU, domestic and export? Domestic is 77% and export is 23%. And the capacity utilization in PVC and PU? PVC is around 65% and PU 25%. Thank you so much, Sir.
Q
Sir, good afternoon. My question is regarding when the cost of raw material and trade going forward normalizes does the company has to correct the pricing for its product going forward and if is it, how long does it will take for the company like till what time does the company have to correct the prices for all products?
Suresh Kumar Poddar
Correct these reductions? Yes, reduction. Actually reduction will happen, it is started, already happening because the prices have started falling down in PVC resin and plasticizer, but the way it has been increase it cannot be decreased like that because the main problem is the power and fuel prices have increased, coal prices have increase two-and-a-half time, so that effect is also there, post we are reducing some prices from first of this month coming month from June because PVC resin and plasticize is falling. Sir, followup question on this, should we expect any part of margin expansion g
Q
Thank you very much for taking my question and congratulations on a decent set of number in challenging time. Just one thing, I was asking regarding this new substitute what is the management of strategy from that subsidiary future outlook?
Suresh Kumar Poddar
For PU? For the new purpose in Mayur textile. You see, one advantage in artificial leather is there, there are so many areas where it is used I mean wherever fabric is used wherever genuine leather is used, artificial leather is a replacement, but we are selling B2B not B2C, so B2B you are dependent only on buyer who are making the final product, suppose today you are manufacturing a footwear you are getting money from your buyer that money you are not going to pass on to me because you are selling B2C and I am selling B2B, now in furnishing industry it is such a industry that suppose you want
Q
There are two questions; if we put ourselves in your shoes, or rather if we put ourselves in the shoes of the investors, what is the planning for succession, so how should we think about it. We do not have any problems that Poddar Ji is in the company, so we do not have any issues, in thinking about that, and whatever time it takes, like you are saying that there will be some time, so that timing will be around two years, four years or five years, but from the mindset of the investor, what after Poddar Ji if we can get some clarity on this, because this is a question also that we need to ask y
Suresh Kumar Poddar
In India professionalized company there is none. Whatever is professionalized then we have Polynova Industry or us. Now if you talked about the world four, five big companies of artificial leather they are all professionalized. There are hardly maybe one company who is an owner company, all are your friends company, investor companies and they have naturally professional people, now in Mayur also I have started that, we had a very good CFO. Now we had appointed a very good COO, who was handling eighteen company in previous company and gradually we will go for CEO also. So now I am working on h
Q
Thank you for listening to me carefully and I assure you that Mayur will try to do their best and we are doing it for the benefit of the stakeholders and there is a huge opportunity. Now, I can see that golden plate is there. We have to catch it which we are doing it. Now you see we have had a European for R&D, now I am telling today you give me any product in the world, Mayur can manufacture. Now it is the time to expand the customer, which we are doing and we are getting it successful and I hope, not hope, I am sure that we will see the big change in next three years in the business. Thank y
Management
Speaking time
Suresh Kumar Poddar
36
Moderator
14
Pritesh Chheda
12
Vinod Kumar Sharma
11
Depesh Kashyap
8
Rishab Bothra
8
Aman Agarwal
5
Anil Sharma
4
Chintan Shah
4
Hardik Samdani
4
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Opening remarks
Rahul Dani
Thank you, Margaret. Good afternoon everyone. On behalf of Monarch Networth Capital, it is my pleasure to host the senior management team of Mayur Uniquoters. Today, we have with us Mr. Suresh Kumar Poddar - Chairman and Managing Director of the company and Mr. Vinod Kumar Sharma - CFO of the company. I would now request the management to provide their initial comments about the results. Thank you and over to you Sir!
Suresh Kumar Poddar
Good afternoon everybody. I welcome all of you to the fourth quarter and the year results, the CFO will start the speech after we will start the question and answer, do not hesitate to ask anything, I am here and Mr. CFO is here to reply. Thank you.
Vinod Kumar Sharma
Thank you, Sir. Good afternoon, dear investor and analyst. Ladies and gentlemen, it is a great pleasure to be here to share with you the performance of Mayur. Thanks for giving your precious time to join Mayur Uniquoters Limited Q4 FY2022 conference call. Mayur Uniquoters Limited being a market leader in the synthetic leather industry and an organized player has been able to leverage the emerging opportunities and deliver exemplary performance in past years both in national and international business markets. The markets are fully open in the second half in the year, but the automakers are still facing the production problems due to shortage of semiconductor chips in international market and because of this our OEM exports sale is impacted in the quarter; however, we are hopeful to regain the OEM sell and demand from the international market after four to five months. Now, I would like to start the financial highlights for Q4 FY2022 under review. We will also reply your queries if any
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