Himatsingka Seide Limited

Shrikant Himatsingka

MANAGING DIRECTOR AND CEO, HIMATSINGKA SEIDE LIMITED

Kp Rangaraj

PRESIDENT, FINANCE AND GROUP CFO, HIMATSINGKA SEIDE LIMITED

Dilip Panjwani

EXECUTIVE VP AND CFO, STRATEGIC FINANCE, HIMATSINGKA SEIDE LIMITED

Sachin Garg

SENIOR VP, STRATEGIC

Prerna Jhunjhunwala

ELARA FINANCE, HIMATSINGKA SEIDE LIMITED SECURITIES INDIA PRIVATE LIMITED

54%

for our manufacturing facilities during the quarter stood at as follows, Terry Towel division was 54% against 72% in the previous quarter; Sheeting division recorded 55% capacity utilization against 7

72%

ufacturing facilities during the quarter stood at as follows, Terry Towel division was 54% against 72% in the previous quarter; Sheeting division recorded 55% capacity utilization against 79% of the pr

55%

ows, Terry Towel division was 54% against 72% in the previous quarter; Sheeting division recorded 55% capacity utilization against 79% of the previous quarter; our Spinning division recorded 78% again

79%

% against 72% in the previous quarter; Sheeting division recorded 55% capacity utilization against 79% of the previous quarter; our Spinning division recorded 78% against 101% of the previous quarter.

78%

rded 55% capacity utilization against 79% of the previous quarter; our Spinning division recorded 78% against 101% of the previous quarter. During the quarter, revenue stream from brands stood at INR

101%

pacity utilization against 79% of the previous quarter; our Spinning division recorded 78% against 101% of the previous quarter. During the quarter, revenue stream from brands stood at INR 439 crore ver

INR 439 crore

78% against 101% of the previous quarter. During the quarter, revenue stream from brands stood at INR 439 crore versus INR 582 crore during the previous year and INR 548 crore during the last quarter. We expe

INR 582 crore

the previous quarter. During the quarter, revenue stream from brands stood at INR 439 crore versus INR 582 crore during the previous year and INR 548 crore during the last quarter. We expect to have a challeng

INR 548 crore

venue stream from brands stood at INR 439 crore versus INR 582 crore during the previous year and INR 548 crore during the last quarter. We expect to have a challenging first half of FY'23, mainly on account o

INR 679 crore

te. I now move over to the financial section. Consolidated total income for the quarter stood at INR 679 crore versus INR 820 crore in the previous year. This represents a decline of 17.2% year-on-year. Consol

INR 820 crore

to the financial section. Consolidated total income for the quarter stood at INR 679 crore versus INR 820 crore in the previous year. This represents a decline of 17.2% year-on-year. Consolidated EBITDA for the

17.2%

er stood at INR 679 crore versus INR 820 crore in the previous year. This represents a decline of 17.2% year-on-year. Consolidated EBITDA for the quarter was INR 52 crore versus INR 163 crore in the pre

“We expect to have a challenging first half of FY'23, mainly on account of the inventory correction initiatives being undertaken by major clients across markets and the unprecedented levels of inflation across raw materials, energy and supply chain costs.”

“However, we expect progressive improvement during the second half of the fiscal driven by the anticipated lowering of inflation and inflation levels with the arrival of the '22-'23 cotton crop and the normalizing of demand as the inventory correction initiatives are complete.”

“Sir, and my last question is with respect to the overall demand scenario, means can you give some guidance to what are your feedback when you're extracting the retailers now as the end customers started a lifting of the goods?”

“And when do we expect normalization kicking in?”

“And we should hopefully at this point be looking at some progressive improvement starting from Q3 is what we anticipate at this point.”

“Sir in terms of cotton inflation that we're seeing that there will be some correction coming in from when the arrivals come in.”

“Do you think there will be a price correction even from your customers side, that they are asking for lower price before starting your offtake?”

“It will be a case-to-case basis because the clients have given, let's just say, a differential price increases across products and across categories.”

“So I think to a certain extent, the correction will be a correction and stakeholders in this state, clients will understand that they cannot expect a decrease in price.”

“Sir, my question is again on the demand and the capacity utilization you will be expecting in the second half.”

Shrikant Himatsingka

11

Prerna Jhunjhunwala

5

Moderator

3

Mithun Aswath

1

Prerna Jhunjhunwala

KP Rangaraj Ladies and gentlemen, good day, and welcome to Himatsingka Seide Q1 FY'23 Post Results Conference Call hosted by Elara Securities 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Prerna Jhunjhunwala from Elara Securities Private Limited. Thank you, and over to you, ma'am. Thank you, Vivian. Good evening, everyone. On behalf of Elara Securities India Private Limited, I would like to welcome you all for Q1 FY'23 post results conference call of Himatsingka Seide Limited. Today, we have with us the senior management of the company, including Mr. Shrikant Himatsingka, who is the Managing Director and CEO; Mr. KP Rangaraj, President, F

Shrikant Himatsingka

cash and cash equivalents as on 30 June, '22 stood at INR 179 crore. In addition, the total amount of unsold RoSCTL scripts stood at INR 188 crore as of 30 June, 22. Consequently, the company's net debt outstanding as of 30th June stood at INR 2,797 crore compared to INR 2,629 crore as of 31 March. '22. With this, I complete my update. We would be happy to take on your questions now. I would request Mr. Shrikant Himatsingka, our MD and CEO, to answer your Q&A. Thank you very much for your patience. The first question is from the line of Vikas Jain from Equirus Securities. Kindly proceed. My first question, you mentioned about the reason for the higher interest cost as to a completion of the state level incentives. Can you give some more color about it? And is it like the interest cost will continue to remain at the current level going ahead as well? Vikas, the provisioning we've made as per our internal provisioning policy, because the government of India seems to be late on reimbursem

Prerna Jhunjhunwala

Sir, just wanted to understand the demand scenario in U.S. and non-U.S. Is it any different? Or is it similar across geographies?

Shrikant Himatsingka

By and large, Prerna, across major retailers in a range bound manner is pretty similar. We don't see many exceptions. There are some retailers who have largely completed their inventory correction exercises. That's something that's positive. And we are seeing them go back to their older levels of offtake or near there in a range bound manner, unless the others, who are still work in progress and working through the inventory. We have also seen many retailers who have been given clear mandates by their management to substantially reduce the inventories they have on hand and on water. And this clear direction is something that we've seen across various clients. So I don't see much of a difference between U.S. and non-U.S. in terms of approach.

Prerna Jhunjhunwala

Okay. And sir, we've also seen this inventory correction cycle earlier in 2018, '19 period by the retailers. Is the situation severe than that? Or is it similar to that?

Shrikant Himatsingka

No. I think, Prerna, the '18, '19 must have been a little more ordinary course. I don't recall if you were mentioning '18, '19 in context of Himatsingka or context to the industry.