MIDHANINSEQ4 FY22June 11, 2022

Mishra Dhatu Nigam Limited

8,122words
131turns
9analyst exchanges
1executives
Management on call
Sanjay Kumar Jha
Chairman and Managing Director.
Key numbers — 40 extracted
Rs. 323.29 crore
e of the highlights which initially I will start with Q4 results. Q4 for 21-22 we have sales of Rs. 323.29 crores against 345.87 from the previous year. And VOP for in this fourth quarter of this 21-22 is at ar
Rs. 352 crore
inst 345.87 from the previous year. And VOP for in this fourth quarter of this 21-22 is at around Rs. 352 crores against the previous year of 271. There is a growth of around 30%. Also, we have the PBT which i
30%
s 21-22 is at around Rs. 352 crores against the previous year of 271. There is a growth of around 30%. Also, we have the PBT which is Rs. 110 crores against Rs. 101.53 crores which we have recorded i
Rs. 110 crore
against the previous year of 271. There is a growth of around 30%. Also, we have the PBT which is Rs. 110 crores against Rs. 101.53 crores which we have recorded in the previous year, registering a growth of 8
Rs. 101.53 crore
of 271. There is a growth of around 30%. Also, we have the PBT which is Rs. 110 crores against Rs. 101.53 crores which we have recorded in the previous year, registering a growth of 8.8%. Similar trend is in t
8.8%
es against Rs. 101.53 crores which we have recorded in the previous year, registering a growth of 8.8%. Similar trend is in the PAT also where our Q4 PAT against 74.62 of the previous year, the quarte
Rs. 80.99 crore
PAT also where our Q4 PAT against 74.62 of the previous year, the quarter four of 21-22 stood at Rs. 80.99 crores. This year also, if you see the overall for 21-22 as in the full year, complete year of 21-22, w
Rs. 859 crore
the overall for 21-22 as in the full year, complete year of 21-22, we have achieved a turnover of Rs. 859 crores against the earlier last year turnover of Rs. 813 crores registering a growth of around 5.7%. VO
Rs. 813 crore
of 21-22, we have achieved a turnover of Rs. 859 crores against the earlier last year turnover of Rs. 813 crores registering a growth of around 5.7%. VOP also there is an increase of around 28% corresponding t
5.7%
59 crores against the earlier last year turnover of Rs. 813 crores registering a growth of around 5.7%. VOP also there is an increase of around 28% corresponding to the previous year so against 771 fr
28%
er of Rs. 813 crores registering a growth of around 5.7%. VOP also there is an increase of around 28% corresponding to the previous year so against 771 from the previous year, this year we have achie
Rs. 988 crore
responding to the previous year so against 771 from the previous year, this year we have achieved Rs. 988 crores. And there's a corresponding increase in the PBT also and PAT also. And PBT stood at Rs. 239.12
Guidance — 20 items
Kaitav Shah
qa
“So, can you please throw some light on this, why these balances are increasing and is company planning to use this material for some future project?”
Dr. Sanjay Kumar Jha
qa
“So, whatever we generate, probably we have to store for some time and then when the next order is coming, I will be utilizing those things.”
Kaitav Shah
qa
“Adding on that so if the balances are increasing, so any plan to written off in the near future of these inventories?”
Aditya
qa
“So, unlike India, where in many of the products you are the lead market leaders, but when we go to international markets the competition will be higher.”
Dr. Sanjay Kumar Jha
qa
“We are expecting in the next six months, we are expecting that we will be getting that.”
Management
qa
“If I go for a commercial scene, like what I supply to railways or stainless steel, then my value will be less, even margins also will be less.”
Dr. Sanjay Kumar Jha
qa
“And our main purpose target is for that only.”
Dr. Sanjay Kumar Jha
qa
“Our team is working towards that, and we have some small progress also we have made, and we will be updating you as and when we will get the good amount of orders.”
Management
qa
“And this project also wide plate mill is kept with the funding by the government agencies as a strategic is nature.”
Abhijit Mitra
qa
“And any revenues that you have thought of in 23, 24, 25 from this project?”
Risks & concerns — 8 flagged
As you are aware in the last quarter there is some impact of the current conflict which is going between Ukraine and Russia and also that has put a lot of pressure in some of our raw materials as well as the sales also, so we could not realize certain amount of sales in the last moment due to this affecting, due to this war.
— Dr. Sanjay Kumar Jha
That's a challenge, we are trying to regularly we are working on that.
— Dr. Sanjay Kumar Jha
So, there will be a pressure on the margin, but then definitely somebody has to improve the efficiency, there is a lot of opportunity in that.
— Romil Lalit Jain
Yes, you have really mentioned over this, this is an area of concern for all the metal and especially this special alloys and metal producers in the country.
— Dr. Sanjay Kumar Jha
That is putting the pressure in our profitability margins and all.
— Dr. Sanjay Kumar Jha
If your efficiency is improved, you can get the margin otherwise in today's condition, whatever raw material price is there very difficult to sustain the profit, very difficult.
— Dr. Sanjay Kumar Jha
This is very difficult because customers…margins are basically decided by what type of orders we are getting.
— Dr. Sanjay Kumar Jha
Definitely there will be a pressure on the margins in the future.
— Dr. Sanjay Kumar Jha
Q&A — 9 exchanges
Q
I have two questions. First question is related to the inventory. So, we have the sub line item is called internally generated scrap and rejected material. So, if you see over the past five years that portion as a percentage of inventory is increasing consistently. In 16 it was around Rs. 17 crores and the percentage of inventories was around 6%. That has increased to Rs. 217 crores and 27% of inventory for the FY20-21. So, can you please throw some light on this, why these balances are increasing and is company planning to use this material for some future project? Can you please throw some l
Dr. Sanjay Kumar Jha
You have rightly told that whether the company is trying to use this inventory. First of all, our company we are manufacturing very special alloys and special materials. So, these materials whatever we generate the scrap during the process, it cannot be sent outside and showed outside and basically, they are very valuable in nature. And our orders are not having uniformity. We cannot get the same order on a regular basis. So, whatever we generate, probably we have to store for some time and then when the next order is coming, I will be utilizing those things. So, this is the reason precisely t
Q
Just wanted to understand, we have been targeting exports growth for the last few years. So, just wanted to understand which countries are we targeting and what kind of products are we looking to export?
Dr. Sanjay Kumar Jha
Export, the country which we are targeting, there are almost, I don't have the list readily available here, but I will tell you, we are targeting Germany, we are giving to Turkey, we are giving to some Bahrain also, France also we have given, we have also supplied to US also, UK also, and we are also making the deemed export. So, there are various sectors where our export is going on. And I'll tell you it's basically the beginning. Because in the international market since we are entering the first time, our products are being tested for quality, for processing, for certification. And that’s w
Q
So, I have 4-5 questions. First of all, if you can lay down the CAPEX that is scheduled for wide plate mill, armour plant, spring plant, and the power plant, if you just tell me the CAPEX numbers for each of these plants? The total CAPEX that they are scheduled to do.
Dr. Sanjay Kumar Jha
Already for wide plate mill our CAPEX expenditure is completed now. And our CAPEX was around if I remember correctly, around Rs. 500 crores. And for armour also our CAPEX already we have completed more or less, very little part is left now, so there almost around Rs. 60 crores we have spent. And third area you have asked about? Spring plant. Spring plant also our CAPEX expenditure is coming to an end now. Hardly 10% is left. But there we have almost placed around Rs. 30 crores. And you said about powder? Powder, yes. For powder we have not spent so far. Already it is in the stage of now tender
Q
My question is on the defence side. I think our government is very vocal about defence and a lot of opportunities have come up in the defence space, right from ship building to army and everything, aerospace and all. So, what kind of rub-off effect do we expect our business because lot of these alloys and special steels will also be used in the defence category. So, can you just throw some light on that? Maybe in the next 2, 3, 4 years, where do we see ourselves in terms of revenue or maybe EBITDA margins and all? Thanks.
Dr. Sanjay Kumar Jha
First of all, I would like to mention here that yesterday itself the Defence Acquisition Council had cleared the AOM, that acceptance for your, that is called equipment. That has been already cleared by DAC, Defence Acquisition Council, and which calls for that investment of around Rs. 76,390 crores. Now there if you see the classification, I would like to draw one area, that area is they are talking about the of indigenization of materials for Sukhoi engine. Do you know that today in our country, Sukhoi is the main, one of the biggest fleets for our entire aerospace, Air Force? So, for the Su
Q
Just to continue the previous questions, on the armour plant what is the maximum potential revenue that you can see sir per annum?
Dr. Sanjay Kumar Jha
Our plant means? The armor plant. Armor has a great potential, country we have an estimate, it was not by me, it was given by a consultant. We see that there is a potential of Rs. 250-300 crores. Rs. 3000 crores is the total volume in the country, but we can see MIDHANI can grab 10% also of that. It will not be less than Rs. 300 crores. And the capacity is enough to address that? No, right now we are adding further. We are in the process of improving the capacity. Certain supply chain also is the issue because all materials are not available in the country, so we have to depend on the import.
Q
The first question is, just wanted little more color on how is the profitability getting managed? Because we have seen most of the raw material, most of the metals scaling new highs in terms of prices, whereas we have been able to maintain our margins despite having fixed price orders? So, just wanted to get a sense of how we are doing it and what do we expect for the next year? Do we expect to maintain the profitability or not given the surge in the prices of raw materials?
Dr. Sanjay Kumar Jha
Yes, you have really mentioned over this, this is an area of concern for all the metal and especially this special alloys and metal producers in the country. Because you know that there's a lot of volatility in the price of raw materials. That is putting the pressure in our profitability margins and all. We have also faced in the current financial year, means previous financial year our expenditure has increased because of increase in price of the raw material, because of increase in the price of the fuel. So, a lot of other issues are also there, power cost. My submission is that this is a pa
Q
My question is in extension to the earlier participant. So, of the Rs. 3000 crores ASTRA order, what will be the size of opportunity for us?
Dr. Sanjay Kumar Jha
Right now, I cannot translate. We are having a number, but I expect that from there MIDHANI may get around Rs. 250 crores. Alright. So, approximately 10% of total order value is our addressable opportunity, 8% to 10%? Pardon? Approximately 8% to 10% of the order value will be our opportunity size, correct? Normally, yes. Alright. My second question is, we had signed a MoU with Lockheed Martin in February 2021 and we were expecting some revenues to flow into FY22. So, could you just explain where are we in terms of this MoU and any progress in terms of financial milestones? For Lockheed Martin,
Q
Sir, my first question is on the space program. We are seeing the budget for the space program has not yet scaled up in last two to three years. So, what is your sense of the opportunity here from next three to four-year perspective?
Dr. Sanjay Kumar Jha
In fact, in space program there is a shift in country's policy where India has decided to go for public private participation. And now they are looking for investment by the private sector. So, this is a time where they are trying to reconcile and see that how the private sector can participate. So recently for the five launches of PSLV, already the firms have given a bid and I am sure already they have selected some sort of a consortium from the private and public participation and then that is where the investment is coming up now. You may not find their budget is increasing as far as ISRO i
Q
I will say that this interaction has been quite satisfactory, very nice. All the participants have put very apt questions and queries and I was very happy to answer. And some of the things which we could not answer you can take it from our financial results and other data. But we are very fortunate to have all of you who are stakeholders in our company, and I can also tell you that this company has a great potential in the future because some of the products which we are developing for which we cannot put in the public domain for strategic applications have a good potential as our defence manu
Management
Speaking time
Dr. Sanjay Kumar Jha
54
Abhijit Mitra
21
Moderator
11
Aditya
10
Management
8
Shalabh Agarwal
8
Romil Lalit Jain
7
Kaitav Shah
5
Anuj Sharma
5
Ronak Chheda
2
Opening remarks
Dr. Sanjay Kumar Jha
Good afternoon and I welcome all the investors and the stakeholders for today’s conference. I am very pleased to announce here some of the highlights which initially I will start with Q4 results. Q4 for 21-22 we have sales of Rs. 323.29 crores against 345.87 from the previous year. And VOP for in this fourth quarter of this 21-22 is at around Rs. 352 crores against the previous year of 271. There is a growth of around 30%. Also, we have the PBT which is Rs. 110 crores against Rs. 101.53 crores which we have recorded in the previous year, registering a growth of 8.8%. Similar trend is in the PAT also where our Q4 PAT against 74.62 of the previous year, the quarter four of 21-22 stood at Rs. 80.99 crores. This year also, if you see the overall for 21-22 as in the full year, complete year of 21-22, we have achieved a turnover of Rs. 859 crores against the earlier last year turnover of Rs. 813 crores registering a growth of around 5.7%. VOP also there is an increase of around 28% correspon
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