Tega Industries Limited has informed the Exchange about Transcript of Analysts/Institutional Investor Meet/Con. Call
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August 12, 2022
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Sub: Transcript of the Investors' Conference Call for the Quarter ended June 30, 2022
Dear Sir/Madam,
Pursuant to Regulation 30 read with Schedule Ill of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, please find enclosed the Transcript of the Investors' Conference Call of Tega Industries Limited ('the Company') held on August 8, 2022 at 3:30 PM IST for the quarter ended June at same 30, https://www. tega ind ustries.com/tega-investors/#g r.
the Company's website
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Thanking You,
Yours faithfully,
Tega Industries Limited Registered Office: Godrej Waterside, Tower-II, Office No 807, 8'" Floor, Block DP-5, Salt Lake Sector V, Bidhannagar, Kolkata, West Bengal 700 091 Tel: +91 33 4093 9000 I Fax: +91 33 4093 9075 I www.tegaindustries.com
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CIN : L25199WB1976PLC030532
“Tega Industries Limited Q1 FY23 Earnings Conference Call”
August 08, 2022
MANAGEMENT:
MODERATOR:
MR. MEHUL MOHANKA – MANAGING DIRECTOR AND GROUP CEO, TEGA INDUSTRIES LIMITED MR. SYED YAVER IMAM – DIRECTOR, GLOBAL PRODUCT MANAGEMENT GROUP, TEGA INDUSTRIES LIMITED MR. MANOJ KUMAR AGARWAL – DIRECTOR, GLOBAL FINANCE AND CHIEF FINANCIAL OFFICER, TEGA INDUSTRIES LIMITED MR. NACHIKET KALE – ORIENT CAPITAL
Page 1 of 17
Moderator:
Ladies and Gentlemen, Good day and welcome to the Tega Industries Limited
Tega Industries Limited August 08,2022
Q1 FY23 Results Conference call organized by Orient Capital. 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 ‘*’ and then ‘0’ on your touchtone phone. Please note that this
conference is being recorded.
I now hand the conference over to Mr. Nachiket Kale from Orient Capital.
Thank you and over to you, Sir.
Nachiket Kale:
Hello and Good afternoon everybody. Welcome to the Q1 FY23 earnings
conference call of Tega Industries Limited. Today on this call, we have Mr.
Mehul Mohanka – Managing Director and Group CEO along with Mr. Syed
Imam – Director, Global Product Management Group and Head of Sales, also
accompanied by Mr. Manoj Kumar Agarwal – Director, Global Finance and
Chief Financial Officer.
Before we proceed in the call just a small disclaimer that the conference call
may contain some forward-looking statements which are based on the beliefs,
opinions and expectation of the company as on the date of this call, the actual
business may differ materially. A detailed safe harbor statement has also been
given on the company’s investor presentation which was uploaded to the stock
exchanges today. I would now like to hand over the call to the management.
Mr. Mehul can you please take over.
Mehul Mohanka:
Thank you Nachiket. Good afternoon and a warm welcome to all the
participants in the call. I am joined today this afternoon by two of my
colleagues Mr. Yaver Imam who is a Director - Global Product Management
Group and Mr. Manoj Agarwal who is our CFO. I hope everyone by now has
had an opportunity to go through our financial results and investor
presentations which have been uploaded on the stock exchanges as well as on
our website. We are happy to present the financial results of the first quarter of
this financial year. This quarter was marked by a bleak global macro
environment affected by the geopolitical issues in Europe, the recessionary
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Tega Industries Limited August 08,2022
outlook in leading economies, the volatility in currencies and inflationary
pressure on raw material.
In unfavorable circumstances the underlying strength in our business is evident
in our performance. On a year-on-year terms we have delivered double digit
growth across all our key metrics. Since this is the first time that we are
declaring our Q1 results after listing I would like to explain a crucial factor in
our revenue pattern. As seen in our full year results published last quarter our
revenues build up throughout the financial year starting from a moderate Q1
and finishing higher in Q4. Hence the performance analysis of year-on-year
versus quarter-on-quarter for our business will be more relevant.
For the past few quarters, the disruption in supply chain coupled with rising
fuel and commodity cost affected our margins. In Q1 there was some respite
in logistics cost which has reduced since the last quarter. However, the costs
are still higher than the normal prices from a pre COVID era and commodity
inflations persists as well as raw material prices remained elevated.
As a business we pass through any cost escalations to our customers with the
lag of a few quarters. We are encouraged by the opportunities in front of us
and have a strong pipeline with a robust order book of INR 3,004 million as of
June 30th 2022 compared to INR 2,359 million as on March 31, 2022. We are
committed to building a true home grown global power house in our industry.
Now, I would like to hand over to Mr. Manoj Agarwal our CFO to take you
through the financial performance of the company for the period under review.
Manoj Kumar Agarwal: Thank you Mr. Mohanka and a very good afternoon to all the participants. I
will share the highlights of our performance for the quarter following which
we will be happy to respond to your queries. Company reported a total revenue
from operation at Rs. 2,444 million delivering a strong growth of 41.1% YoY,
material margin also improved by 200 bps sequentially from Quarter 4 of
March 22 to the quarter of June 22. Hence, we have been able to pass through
some of the price increase to our customers. Operating EBITDA stands at 461
million and has almost doubled from Rs. 235 million in the corresponding
quarter last year.
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Tega Industries Limited August 08,2022
Operating EBITDA margin improved from 14% to 19% YoY showing
improvement of 500 bps points on a YoY basis. The improvement of EBITDA
is due to higher volume that resulting in better absorption of fixed cost also.
Other expenses has gone up from 461 million last quarter last year to INR 588
million in this quarter. Most of the growth on account of higher volumes only
and some element of price as well. PAT has delivered a strong growth of 94%
YoY and stands at 230 million INR from 118 million INR corresponding
quarter. PAT margin is up from 7% to 9.5% an increase of 250 basis points. If
I have been to exclude the non-operating income the PAT has gone up from
3.33% to 10.77% on YoY basis. Now we can open the floor for the Q&A.
Thank you.
Moderator:
Thank you very much. We will now begin the question-and-answer session.
We have our first question from the line of Sandeep Tulsiyan from JM
Financial. Please go ahead.
Sandeep Tulsiyan:
My first question was on the value versus volume growth that you have seen
in the first quarter and prices increases that you have taken we did see a very
strong top line growth of 41%, so if you could just break it up to understand
how much of price increase is taken and what will be realization increase is
built in this number if any more price increases are yet to come through which
could not be completely taken under this quarter?
Manoj Kumar Agarwal: So, out of this 41% actually there are three components. One is exchange side
in the exchange we have lost about 3% YoY. And on the price side we take
increase of around 13% to 14% of price side and the volume is about 30%.
Sandeep Tulsiyan:
And also if you could help us understand between your different segments mill
liners and non-mill liners how the growth has been and within mill liners
specifically DynaPrime range how that has grown in the quarter and if you can
also give some qualitative perspectives which are the different geographies
where you are seeing growth around any particular over category which is
growing faster than the other, how do you see this number planning out for the
year a qualitative perspective on the same please?
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Manoj Kumar Agarwal: On the three broad category which talked about DynaPrime mill segment and
Tega Industries Limited August 08,2022
non DynaPrime mill segment and a non-mill segment. On DynaPrime side on
absolute terms, we have grown about 157% which consists of volume about
150% price 10% and exchange loss of 10%. Having said that just to put on
record that if you can recall last year first quarter there were some challenges
in Chile in supply chain side. So, there we have not been able to built up about
15 crores of revenue so that is because the trajectory is showing very high in
terms of growth DynaPrime in this quarter which will certainly normalized in
the coming quarters. On the mill side non DynaPrime, we have grown about
32% - again 18% is more of a business growth and 17% is about price growth.
Non mill side we have grown 15% YoY i.e. 8% is about business growth and
about 7% is a price growth in that.
Sandeep Tulsiyan:
Any perspective on the ore versus geography vs new customer addition that
you can help us to understand how this growth can turn out for the financial
year FY23?
Syed Yaver Imam:
As far as ore is concerned in the ore we are concentrating on copper and gold
ore as we have right from the beginning from the IPO we have been informing
that 75% is there. So, our focus is still on gold and copper and with iron ore as
small portion of that. The process that we have put in as far as buildup of
identifications, trials and turning it into a full mill as far as DynaPrime is
concerned is going on across geographies earlier it was limited to LATAM
now we are doing it across geography. We have also concentrated on the
business development with putting someone actively involved with business
development. So, our business development activity is very strong and some
of the numbers which you are getting is because of the increase in the business
development activity.
Sandeep Tulsiyan:
And last question what I have is on the logistics and on the capex cost logistics
if you can I think in the previous call you have been pretty transparent in
highlighting how this cost cannot be completely pass through, but as these cost
will come down which we are seeing what kind of margin impact this has had
in the current quarter and how much it can cool off to and also on the annual
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Tega Industries Limited August 08,2022
capex number we had given overall guidance of 250 crores to 270 crores over
a three year period so how much will you incur in the current financial year out
of that?
Manoj Kumar Agarwal: On the logistic side what we see that the peak which was in Quarter 3 last
financial year from there it is on the downtrend when I say downtrend it has
gone down at least by 20% - 22% from the peak, but still very high from the
normalization rates what we had pre COVID levels. Yes that is a impact on our
margin if you see the margin what we had in the March quarter from there we
have able to build up about 200 plus basis point on a quarter-to-quarter basis.
So, normalization of logistic cost from the peak is giving some advantage to us
in terms of overall margin increase and we still believe that this will go little
further down as well. Having said that we do not know how China Taiwan
issue will ramp up because that will may have again a big impact if it happens
to be a kind of a disaster otherwise we believe that logistic cost going to be
little more normalized in that sense. So, mix of normalization and passing
through the customers will help us to take the margin to a level of 60% which
is what we aspire for. On the capex side, we are still on the same kind of stand
what we have taken in the last call. As of now on the Chile side we already
acquired land having spent about 25 crores towards that and the rest of the year
will be going to kind of spent on the capex side as planned and want to talk
about 250 crores of capex plans for next three years which is still going to
happen on a yearly basis most spent will happen in first two years and third
year will be little lower.
Moderator:
Thank you. We have the next question from the line of Dhiral from
PhillipCapital. Please go ahead.
Dhiral:
Sir if you can quantify the DynaPrime number for the quarter?
Manoj Kumar Agarwal: DynaPrime quantity of revenue is 453 million against 176 million
corresponding quarter last year.
Dhiral:
And what about non DynaPrime mill liner and non-mill liners?
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Tega Industries Limited August 08,2022
Manoj Kumar Agarwal: So, let me breakdown for you so on the revenue side for the current year
DynaPrime is 453 million, non DynaPrime mill liner is 1,389 million and non-
mill is 466 million.
Dhiral:
And sir gross margins if you compare on a YoY basis it is down 180 bps, so
what explain the fall in the gross margins?
Manoj Kumar Agarwal: What is down?
Dhiral:
The gross margins if I say gross margin on a YoY basis last year Q1 as
compared to this year Q1 it is still on 180 bps?
Manoj Kumar Agarwal: Yes so as I said that if you see the last year the price traction of the upward
side started from Quarter 2 onwards. So, the price impact was not there in
Quarter 1 last year and the price ramp up started from the Quarter 2. Hence if
you see the trajectory of the margins, the margin started going down from
Quarter 1 onwards until March last year and from March last year to this
quarter we are again coming up gradually. So, that mean to say 60.42% was in
Quarter 1 last year and March was 56.58 now we have come up to 58.70. So,
in that sense we have been able to transfer the cost to the customers, but as we
said it will take little longer time because of the very abnormal increase in
prices. So, we are just coming through the 60% trajectory in the next one to
two quarters.
Dhiral:
If I say sir on the other expense side on a quarter-on-quarter basis despite the
fall in the revenue our other expense on Q1 has remained elevated?
Manoj Kumar Agarwal: So, the other expenses mix of the fixed cost and your variable cost now the two
elements if you see otherwise the inflationary environment is very big. So, all
the inflation globally is very high. In fact, it is the other way round that inflation
is double digit outside India which is the most cost prone countries that is
impacted the cost in terms of other expenses and also some of the volumes are
sitting there. So, in other ways we have been able to manage the inflation
environment by keeping the cost at the same level what we had last quarter.
Page 7 of 17
Dhiral:
We are still maintaining our EBITDA margin guidance at 21% to 23% for the
Tega Industries Limited August 08,2022
full year?
Manoj Kumar Agarwal: You are right.
Dhiral:
Sir just lastly since our 85% to 90% of revenues export generated and we have
seen rupee depreciating almost 5% to 6% in June quarter and then too we have
reported exchange loss that you stated earlier, so what is the reason for that?
Manoj Kumar Agarwal: In our numbers lot of exchanges are there. So, in the revenue what has
happened that on the India side, dollar side we have gained about 20 million in
revenue, but when we have translated the overseas revenue into INR there is a
loss of about 75 million. So, Indian dollar side we have gained, but while we
convert our revenue to INR we have lost about 75 million. So, hence 75 million
loss and 20 million gain is making 55 million of net loss as far as revenue is
concerned.
Dhiral:
Sir, which are the three major revenue sir in which we book our sell apart from
dollar?
Manoj Kumar Agarwal: So, India we have dollar then Euro, AUD & CAD and as far as our other entity
is concerned which is Chile and South Africa that is in Peso, ZAR locally. So,
we need to convert that into INR while we make our accounts. So, there is a
transition loss of 75 million.
Moderator:
Thank you. We have a next question from the line of Balasubramanian from
Arihant Capital. Please go ahead.
Balasubramanian:
Sir our exports value growth source 50% and volume growth minus 27% as far
EXIM and the major of exports in Australia around 44% and Netherland and
South Africa and Canada and remaining other countries what kind of
challenges, you are facing while transporting these countries right now, so what
is the containers cost average it kind of 20,000 to 25,000 for foot increase
containers?
Page 8 of 17
Manoj Kumar Agarwal: Let me try to answer because I think I am not able to clearly heard you because
Tega Industries Limited August 08,2022
of line disturbance. So, when you talk about the challenges in exporting the
material outside India so that challenges little bit eased out this financial year.
So, even challenge was there last year also we have been able to plan in
advance to ensure that our customer should not suffer and we have not failed
any of the supply to any of our customer worldwide. Now from there things
are much better as of today. As I said that the prices of containers has gone
down by 22% from the peak of Quarter 3 last financial year. So, availability of
containers even price both are on a downtrend trajectory, but again we are
keeping a very close watch on that how it plan up.
Balasubramanian:
Sir it shows that 27% volume de-growth so you are exporting more value added
products?
Manoj Kumar Agarwal: When you say 27% volume you talk about quarter-on-quarter?
Balasubramanian:
Yes sir compared to last quarter?
Manoj Kuamr Agarwal: So, that is what I think our MD initially said that if you have seen our March
quarter results our is a lumpy business hence we ramp up from Quarter 1 to the
Quarter 4. So, Quarter 1 tends to be lower and Quarter 4 tends to be higher as
a business. So, hence comparing with the quarter-on-quarter may not give a
good direction to you even you can compare YoY gives a better direction as
far as our business is concerned.
Balasubramanian:
Yes I am talking about year-on-year compared to last year quarter?
Manoj Kumar Agarwal: Last quarter we have grown 41%.
Balasubramanian:
I am talking about the volume growth in exports?
Manoj Kumar Agarwal: So, volume growth I said we have grown about 30% of volume growth YoY.
Balasubramanian:
Sir could you please give a breakup for Chile revenue DynaPrime under this?
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Tega Industries Limited August 08,2022
Manoj Kumar Agarwal: So, I think that much of revenue will just we are just going in very detail. The
DynaPrime basically Chile what they do about close to about 80% to 85% in
the new segment in DynaPrime about 15% they do in non DynaPrime segment.
Moderator:
Thank you. We have next question from the line of Digant Haria from
GreenEdge Wealth. Please go ahead.
Digant Haria:
My question was I understand that most of our sales comes from the mining
industry, but within mining if you can give some flavor of how much comes
from copper, aluminum as in within non ferrous which are the major drivers
and within each of them do we have major clients where we can still make in
roads and ensure that our growth for future years is high?
Manoj Kumar Agarwal: So, in our business basically you rightly said we deal with more of mining
processing industries. So, on a metal side we deal majorly on the gold and
copper side and gold is a major portion of our revenues tends to be 40% to 45%
and then followed by copper which is a 20%-22% and third is about iron ore
which is about 15%. These three are the major segment for our revenue driver
and then rest of about I would say about 15%-20% comes from all set of metals,
talk about platinum, titanium, diamond, zinc, aluminum so lot of metals are
there, but the major contribution comes from gold and copper which is about
65%.
Digant Haria:
I understand that in gold maybe we would be quite dominant because gold is
anyways very small quantities are mined every year, but then in iron ore and
aluminum I think that our market share in these metals would be very low
because these are very large industries especially the iron ore and the
aluminum, so is there any scope like is there much more scope than what were
there in these industries or the products they use are different from the products
that we have in case of mill liners for conveyor products?
Yaver Imam:
75% of the liner business is in copper and gold. The reason being that copper
to mine one ton of copper you have to process around 200 tons of ore. In gold
to get 10 grams of gold you have to process one ton of ore. So, what happens
is if you look at iron ore and aluminum. Aluminum the total different industry
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Tega Industries Limited August 08,2022
the process is different. As far as iron ore is concerned, iron ore today occurs
at a very high grade around in India we have 67%-70% of the grade in globally
in Brazil and all you have around 40%-45% there. So, they have to be enhanced
from 45% to 67%. So, the mill requirements are much lesser over there
compared to other industries. So, that is why our market share is also in gold,
copper and then iron ore as Manoj said the reason being that the process
requirement for the liners is accordingly.
Digant Haria:
And in gold and copper would we present with the top 10 or top 15 mining
companies of the world like would we have inroads there or are there some big
accounts which we can still crack in the coming years?
Yaver Imam:
As we had said right from the beginning in the IPO we are just touching this
thing because the area which we are opened with DynaPrime it is a billion
dollar industry as the liner industry for us and we have just started in that and
we as Manoj said we did around 1 crore last year. So, there is a huge growth
prospect going there and we are in present in all the top 40 miners of the world.
Moderator:
Thank you. We have our next question from the line of Alisha Mahawla from
Envision Capital. Please go ahead.
Alisha Mahawla:
Sir what is the capacity utilization currently?
Manoj Kumar Agarwal: So, in this Quarter 1 we were at about 61% of our capacity utilization?
Alisha Mahawla:
For FY23 except the capex that we are doing actually there is no other capex
that we are currently doing?
Manoj Kumar Agarwal: Yes.
Alisha Mahawla:
And what was the order book number that you mentioned I missed it?
Manoj Kumar Agarwal: We have about close to 300 crores order book.
Alisha Mahawla:
And this is executable in one quarter three, four months?
Manoj Kumar Agarwal: It is about close to four months.
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Tega Industries Limited August 08,2022
Alisha Mahawla:
And would you like to quantify based on the current demand also because you
have said that currently the global environment is kind of bleak what is the
kind of volume growth that the company can aspire for the current year?
Manoj Kumar Agarwal: So, as we said that we are looking for 15% to 18% of CAGR in next 3 year to
5 years, but the idea is always to surpass that.
Moderator:
Thank you. We will take our next question from the line of Bhavin Vithlani
from SBI Mutual Fund. Please go ahead.
Bhavin Vithlani:
Could you help us on what has been the freight cost as a percentage of revenue
and we were targeting to move significant part of our customers from CIF to
FOB and where are we in that journey?
Manoj Kumar Agarwal: So, our packing forwarding cost which was about close to. So, forwarding cost
of about 8 plus percent, has come down close to about 7.25 percentage at
standalone level because major freight is sitting in India as of now, and it has
two impact. One is that the freight trade has gone down and the first quarter
what we are saying that we have also been able to transfer some of the
customers into FOB as well. So, overall, basically that gives us a advantage of
50 basis points in this quarter.
Bhavin Vithlani:
Sorry for this what was the freight rates pre the increase let us say in FY19-20?
Manoj Kumar Agarwal: So, that was about close to about let us say 6.5%, 6% kind of thing. So, as we
said last time that the gap was around 1.5% was coming. So, maybe we have
been able to manage 50 basis point as of now we have still challenge of 1%.
Bhavin Vithlani:
And we expect it to correct during the course of next financial year?
Manoj Kumar Agarwal: So, the idea is to just see that how much we can pass on let us say about 25 bps
points further and if some downtrend continue in the freight side that may help
us to come to normalize and get it 1% by the year end that is a mix of both
price correction and the price pass on both.
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Tega Industries Limited August 08,2022
Bhavin Vithlani:
The second question is on the DynaPrime side we were roughly around 30
million last year, could you give us a picture as to where our DynaPrime has
gone in for various test and the customer has given us an approval, so if those
approval were to be converted into the entire conversion by the customer, what
could our revenue potential be over the next year or two from the DynaPrime
given where the trails have been successful?
Yaver Imam:
I think there is a lot of forward-looking statement you want over there, but just
to tell you what we have been maintaining right from the beginning that as far
as DynaPrime is concerned we are going to grow at 30% CAGR for the next
two-three years and if you look at the figures that is happening today we are
on line with that.
Bhavin Vithlani:
On the non-mill liner side we saw muted growth last year, could you just help
us what was the key reason and what is the outlook that we are seeing
currently?
Yaver Imam:
As far as non-mill growth is there Manoj has given the figure about the growth
that we have done in the non based mill also. So, I think the trajectory of the
growth is happening in all the three verticals which is DynaPrime even in non
DynaPrime as well as the non-mills business.
Bhavin Vithlani:
The question was I mean the lower growth versus the other two categories in
the non-mill liner segment, was there any specific reason why our growth was
lower last year and why are we expecting the growth rates to move up?
Yaver Imam:
No there is no specific reason what we have done in this year I mean we have
also taken out a vertical for non-mills to concentrate on that. So, I think over
the next couple of quarters it will start I mean it is already start giving some
results. The concentration on non-mill will also bring into that growth
trajectory we are looking for in the other sector.
Bhavin Vithlani:
Just last question how is the profitability between the DynaPrime the
conventional mill liners and the non-mill liner segment?
Page 13 of 17
Manoj Kumar Agarwal: As we discussed last time also that as of now the margin in both the sides is
Tega Industries Limited August 08,2022
more or less same. So, it is not something very differential margin in the
DynaPrime mill liner and non DynaPrime mill liner. DynaPrime mill liner help
us in create the volume in the business and idea is to just to give a push the
DynaPrime in the market which will help us to clear the market and ultimately
to focus on price increase. So, focus is basically today on the getting more
market share with the fact that the price input cost has gone up abnormally high
last year at least we have been able to pass through those prices as of now
bearing 1% and 1.5% gap I mean that is what we are focusing on as of today.
Moderator:
Thank you. The next question is from the line of Niraj Mansingka from White
Pine Investment Management Private Limited. Please go ahead.
Niraj Mansingka:
I just had a question how many sites you have right now in DynaPrime
including trials in each?
Yaver Imam:
I think we should really go away with the number of site because what is
happening if you see the revenue growth you have a very strong revenue
growth that is basically on the process of trial and presentation in the various
places. So, growth of site and growth of business both are going hand-to-hand.
So, if you are looking at what is the percentage of growth we have there close
to around that we have the growth in the number of sites over there. I would
not like to really specifically go into the number of sites in this call.
Niraj Mansingka:
But could you share some color on the growth I understand you said 30%
growth CAGR for next few years, but can you show some growth color so that
we can understand will it back in 400?
Yaver Imam:
Right from the beginning, right from the IPO what we have been saying is the
process that we are going through where we are introducing in different
geographies the DynaPrime. As of now today we have non DynaPrime
working in Africa, South Africa, Russia, in Australia, in Canada and USA we
put in this thing. So, Latin America whatever has happened the results of that
are being taken globally. In Latin America also, we are looking at getting into
newer customers which are over there. So, as of now spread across globally we
Page 14 of 17
Tega Industries Limited August 08,2022
have number of sites on which we are working and depending upon the
customer and the process they are having number of sites will start coming into
the picture which will reflect in both the order booking as well as the revenue
growth that we will get from DynaPrime and looking at what has happened and
is happening today and 30% CAGR is given what we are looking at in this year
and the next couple of years.
Niraj Mansingka:
Question related to this if you are talking about 30% CAGR DynaPrime then
why you are having the low guidance for 15%-18% for next few years?
Yaver Imam:
DynaPrime has a low base so what is happening if you multiply the base of
DynaPrime with the other basis which is growing at different trajectory then
you will get the cumulative at 17%-18%.
Niraj Mansingka:
I asked you that non-DynaPrime revenue has been growing reasonable
number?
Yaver Imam:
That is what he is thinking if you look at finally when we look at DynaPrime
is out shaping the growth in all the other categories and has a lower base. Once
the base comes to the same level probably DynaPrime will drive this thing, but
as far as accumulated growth is concerned of all the categories then you get
that thing based on 30% growth of DynaPrime.
Moderator:
Thank you. We have next question from the line of Keval Ashar from DSP
Investment Managers. Please go ahead.
Keval Ashar:
What is our right to win in hybrid mill liners compared to the ones
manufactured by our global peers?
Yaver Imam:
Can you repeat your question please?
Keval Ashar:
Sir, what is our right to win in hybrid mill liners compared to the ones
manufactured by our global peers?
Yaver Imam:
I mean again right from the IPO we are saying if you look at the hybrid liner
with our DynaPrime ranges there are two categories of the hybrid one is the
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ball mill and the SAG mill. In SAG mill area as of now with a body of work
the only creditable supplier is us. So, our basic is disruption of this thing
compared to the steel liners how the steel liners are working and what values
we are delivering. Other peers are in the hybrid category they have to design
and establish their product before they come up to the level that we are there.
So, most of them are close to around two to three years behind us.
Keval Ashar:
And the second question is you mentioned 30% growth in DynaPrime for the
next few years of that 30% how much would be volume growth?
Yaver Imam:
I am talking about volume growth only.
Keval Ashar:
So, then how much would be the increase in realization year-on-year for
DynaPrime?
Yaver Imam:
I mean that again will be a little difficult to say because the pricing, costing
freight everything what is happening is a very fluid kind of a situation every
year. We are right from the beginning we have told that we intend to keep the
margins as close to 60% as possible and that is what we are going to do and
depending upon year-to-year how the cost as well as logistic cost can be passed
on we will be doing that.
Moderator:
Thank you. We have our next question from the line of Khadija Mantri from
Sharekhan. Please go ahead.
Khadija Mantri:
My question is that in our portfolio is everything manufactured in house or do
we have some imported components as well?
Manoj Kumar Agarwal: No everything is in house manufacturing.
Khadija Mantri:
Sir who all are our competitors and is it possible to quantify the market share?
Yaver Imam:
We have already as far as the Red Herring prospectus was there we had already
given the market share as well as who are our major competitors. Major
competitor is Metso in DynaPrime range where we had on with Steel Liner,
Select Metals, Bradken these are these and as far as the global market share is
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Tega Industries Limited August 08,2022
concerned for mill liners we are inching to number four as far as the market
share is concerned.
Khadija Mantri:
And sir there has not been any change given the global headwind there is no
change in the market share?
Yaver Imam:
We are talking about the report which is a year old so not major shift will occur
in a year.
Moderator:
Thank you. In the interest of time this will be the last question. I would now
like to hand the conference over to Mr. Nachiket Kale for closing comments.
Over to you sir.
Nachiket Kale:
Thanks to all participants who asked question on this call, we thank everybody
to spare their time and come today. I would also like to thank the management
for taking all the questions and providing their insights. For any other queries
you can get in touch with Orient Capital, Investment Relation Advisors for
Tega Industries. Please take care everybody, have a nice day. Thank you.
Moderator:
Thank you. On behalf of Tega Industries that concludes this conference. Thank
you for joining us and you may now disconnect your lines.
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