Himatsingka Seide Limited

41%

despite high inflationary and supply chain challenges. During the fiscal, total revenues grew by 41% and stood at ₹3,203 crores, our highest ever. Revenues from brands during FY22 stood at ₹2,260 cro

₹3,203 crore

flationary and supply chain challenges. During the fiscal, total revenues grew by 41% and stood at ₹3,203 crores, our highest ever. Revenues from brands during FY22 stood at ₹2,260 crores compared to ₹1,798 cr

₹2,260 crore

rew by 41% and stood at ₹3,203 crores, our highest ever. Revenues from brands during FY22 stood at ₹2,260 crores compared to ₹1,798 crores in the previous year. During the quarter, revenue streams from brands

₹1,798 crore

203 crores, our highest ever. Revenues from brands during FY22 stood at ₹2,260 crores compared to ₹1,798 crores in the previous year. During the quarter, revenue streams from brands stood at ₹548 crores vers

₹548 crore

to ₹1,798 crores in the previous year. During the quarter, revenue streams from brands stood at ₹548 crores versus ₹565 crores during the previous year and ₹556 crores during the Q3 FY22, that is a previo

₹565 crore

n the previous year. During the quarter, revenue streams from brands stood at ₹548 crores versus ₹565 crores during the previous year and ₹556 crores during the Q3 FY22, that is a previous quarter. During Q

₹556 crore

, revenue streams from brands stood at ₹548 crores versus ₹565 crores during the previous year and ₹556 crores during the Q3 FY22, that is a previous quarter. During Q4 FY22, capacity utilizations remained s

72%

or our manufacturing facilities during the quarter stood as follows. Terry towel division stood at 72%, in line with the previous quarter 72%, sheeting division capacity utilization stood at 79% versu

79%

ood at 72%, in line with the previous quarter 72%, sheeting division capacity utilization stood at 79% versus 81% in the previous quarter, and spinning division recorded 101% capacity utilization as a

81%

in line with the previous quarter 72%, sheeting division capacity utilization stood at 79% versus 81% in the previous quarter, and spinning division recorded 101% capacity utilization as against 101.5

101%

acity utilization stood at 79% versus 81% in the previous quarter, and spinning division recorded 101% capacity utilization as against 101.5% in the previous quarter. We however see reduction in capaci

101.5%

s 81% in the previous quarter, and spinning division recorded 101% capacity utilization as against 101.5% in the previous quarter. We however see reduction in capacity utilization levels in the near-

“Although we expect inflationary headwinds to continue in the near-term, our outlook on our industry and our integrated business model continues to be optimistic.”

“Now, to answer your other question, what we will be specifically doing, well, it's not just the inventory piece that needs to come down.”

“Just one more question, how much will be the total outstanding from government in incentives and everything put together, approximate number?”

“So, these are the areas that we would now be wanting to decongest going forward.”

“So accelerated working capital decongestion along with scheduled repayment of debt is what we will be focused on, ideally.”

“So margins I can't be specific about it, but it's obvious that under these current circumstances of commodity prices and some fluctuation that we will see on demand, margins will be under pressure.”

“streams have become stronger and will continue to become stronger going forward.”

“And given the demand slowdown, is there a possibility that we will be able to work for new price hikes or any kind of discussion of that sort with our customers?”

“So, normal organic CAPEX levels, Gaurav, are in the region of between ₹60 crores and ₹70 crores is what we normally forecast.”

“And so we expect that to continue, but as far as near-term is concerned, we pushed it out by additional six months as we had outlined in our update, given the global volatility.”

Shrikant Himatsingka

17

Moderator

5

Anuj Sharma

2

Aman Kr Sonthalia

2

Mithun Aswath

2

KP Rangaraj

1

Amber Nagori

1

Prerna Jhunjhunwala

1

Gaurav Jain

1

KP Rangaraj

Ladies and gentlemen, good day, and welcome to the Himatsingka Seide Q4 FY22 Conference Call hosted by Batlivala & Karani Securities India Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Roshan Nair from Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir. Thank you, Peter. Good evening, everyone. On behalf of B&K Securities, I would like to welcome you all for 4Q FY22 post results conference call of Himatsingka Seide Limited. Today we have with us from the senior management of the company, including Mr. Shrikant Himatsingka, Managing Director and CEO; Mr. KP Rangaraj, President, Finance and Group CFO; Mr.

Anuj Sharma

This completes the short update on the business and the financial performance. I now hand over to our Managing Director and CEO, Mr. Shrikant Himatsingka for your Q&A please. Thank you. We will now begin the question-and-answer session. Our first question is from the line of Anuj Sharma from M3 Investment. Please go ahead. Yes. Thank you for this opportunity. I had three questions. The first is, if we compare the current scenario with the one in 2008-2009, wherein we had just come out of a CAPEX cycle, what are the similarities or differences between the two scenarios? I mean, it took us four years in 2008-09 to come out of that. So, just help us understand what are the differences between then and now?

Shrikant Himatsingka

Yes, okay. The second one is, if we look at our debt, despite our intention to reduce it and that too with the modest amount, we've actually seen increase in debt. So, what have been the key challenges? And I heard you deferring one of the CAPEX. So what are the other strategies you are pursuing to reduce the debt more aggressively? And the third is given the slow ramp up in capacity utilization, do you think in high insight, we could have been more staggered in our CAPEX or this you think was the best optimal strategy? Thanks. Okay. So, let me just answer all your three questions. So, as far as, I'll take your question on capacity utilization first. So, Anuj, these plants are configured in a particular way wherein when you set them up, you sort of have a certain quantum of capacity that has to be on boarded and put on stream. One can stagger it beyond the point because it affects other aspects of plant functioning and economics. So, to the best of our knowledge, our planned configurat

Shrikant Himatsingka

point number one. We see it across the board, vis-a-vis price points we see it across the board vis-a-vis regions. Yes, there are differences in intensity, but there doesn't seem to be a pattern as far as we are concerned. So, in every region there seem to be some players who have, let's say, a greater need for deferrals and have slower off take. And in the same region we have players who are not affected at all. But overall, we seem to see at region levels, general sort of approach of slowing a little till the inventory corrects as far as our clients are concerned. So it's not like it's price point specific. It's not like its region specific. We are seeing it across the board. And the essential driving factor per our understanding is the fact that they need to correct their inventories and this might take a few months. Now, whether it's two months or three months or four months, it's a little difficult to predict. But as far as we are concerned, we think that this volatility will cont

Amber Nagori

Thank you. Our next question is from the line of Amber Nagori with JCW. Please go ahead. Yes. Good evening, everyone. Congratulations on your results. I would like to ask, we can see the long-term debt and short-term debt has been increased. So I would like to ask the management, how exactly are you planning to use these funds or whether you have already used it? Thank you.

Shrikant Himatsingka

Amber, thank you for your question. So, these funds have been deployed as it is evident. So they're either in the form of working capital in the ecosystem or as far as term debt concerned, it's largely gone to fixed assets. So, as I was mentioning earlier, we have finished our CAPEX cycle. We were actually clear on our deleveraging journey post completion of our CAPEX cycle, but unfortunately we were hit by the global turbulence that we witnessed during FY22 as far as inflation is concerned, and other issues are concerned, including but not limited to supply chain and other aspects of volatility that we faced. And so we basically landed up with some increase in debt during FY22. There was also the delay that I spoke about as far as the reimbursements of export incentives were concerned and so on from the Government of India. So that also caused some spike in short- term debt. So, these are the areas that we would now be wanting to decongest going forward. And so this will help us pare