AVROINDNSENovember 15, 2022

AVRO INDIA LIMITED

8,824words
84turns
6analyst exchanges
1executives
Management on call
Shah. Vastupal Shah
Thank you. Good afternoon, everyone. Thank you for joining the conference call of Avro India
Key numbers — 40 extracted
20%
hich are going to be getting accrued on account of this. So recycled plastic pallets are almost 20% cheaper than what we have been consuming these days. And that will certainly add to the bottom li
rs,
hed a couple of our products like stool 21-inches, which is a plastic furnace stool, new baby chairs, a beautiful product, a new 4 kg chair, and we also have a couple of more products in pipeline, whi
INR 75 lakh
desired, we create those models and designs. For the period, on online sales contributed about INR 75 lakhs to the revenue, while offline sales has been contributing about INR 207, to just INR 20,72,60,00
INR 207,
es contributed about INR 75 lakhs to the revenue, while offline sales has been contributing about INR 207, to just INR 20,72,60,000 to the revenue. And outlook for the plastic market globally is very updat
INR 20,72,60,000
out INR 75 lakhs to the revenue, while offline sales has been contributing about INR 207, to just INR 20,72,60,000 to the revenue. And outlook for the plastic market globally is very update, and we are expecting a
145 billion
tlook for the plastic market globally is very update, and we are expecting a message that it was $145 billion in 2019, which is, of course, a little old data and which is expected to reach about $190 billion
190 billion
145 billion in 2019, which is, of course, a little old data and which is expected to reach about $190 billion in 2007, growing at the rate of CAGR of 5.8% globally. But in India, it is growing at the rate of
5.8%
ld data and which is expected to reach about $190 billion in 2007, growing at the rate of CAGR of 5.8% globally. But in India, it is growing at the rate of 15% because of the demographic that we have
15%
in 2007, growing at the rate of CAGR of 5.8% globally. But in India, it is growing at the rate of 15% because of the demographic that we have in the country. Rapid atomization increase in disposable
INR 21.56 crore
financial performance in the second quarter. For Q2 FY '23, the total income for Q2 FY '23 is at INR 21.56 crores against INR 14.67 crores in the Q2 FY '22, there's a growth of 46.97% year-on-year growth. And E
INR 14.67 crore
the second quarter. For Q2 FY '23, the total income for Q2 FY '23 is at INR 21.56 crores against INR 14.67 crores in the Q2 FY '22, there's a growth of 46.97% year-on-year growth. And EBITDA for Q2 FY '23 is at
46.97%
r Q2 FY '23 is at INR 21.56 crores against INR 14.67 crores in the Q2 FY '22, there's a growth of 46.97% year-on-year growth. And EBITDA for Q2 FY '23 is at INR 2.09 crores against INR 1.21 crores in Q2
Guidance — 20 items
Sushil Aggarwal
opening
“And that we could do only because we could forecast what is it that is desired, we create those models and designs.”
Sushil Aggarwal
opening
“And outlook for the plastic market globally is very update, and we are expecting a message that it was $145 billion in 2019, which is, of course, a little old data and which is expected to reach about $190 billion in 2007, growing at the rate of CAGR of 5.8% globally.”
Sushil Aggarwal
qa
“But these things will get streamlined over a period of time on the basis of the volume of sales that will be driving henceforth, because Q2 is normally a very subdued Q, because this is the season where normally there are rains and there are disruptions and all the no marriages, no functions and all that thing.”
Sushil Aggarwal
qa
“So invariably, we expect it to be a little subdued and but then nevertheless, we've been able to somehow take care of that.”
Sushil Aggarwal
qa
“So we believe that whatever these expenses are gone in -- there are a couple of onetime expenses, which are being taken care of and perpetual expenses will get shut off on the basis of the volume that will be driving henceforth.”
Sushil Aggarwal
qa
“Only thing is it is taking us time because of the bandwidth non-availability of bandwidth, we expect that over a period of the next couple of months, depending upon the amount of resources that we on-board, we should be able to percolate down and reach out to all these states across country and ensure that we are able to capitalize on the available market that exists for us.”
Siddharth Ahluwalia
qa
“And what will be the capacity for FY '23, FY '24 and FY '25?”
Sushil Aggarwal
qa
“FURNITURE We expect that this particular capacity should start giving us a result and that will give us a huge leverage not only in terms of the bottom line, but as well as the, let's say, the satisfaction that comes along of your own internal, let's say, arrangement of the product that you're consuming and manufacturing that there are no anomalies in terms of the quality or strength for that matter.”
Sushil Aggarwal
qa
“We certainly expect that profit margin should rise year-on-year because, ultimately, because the market exists, it's a sunrise industry and because the consumption is ever rising.”
Sushil Aggarwal
qa
“Aggarwal, what is very interesting in our case here is we are a very unique company or probably the only company in the entire country, which has got a downstream upstream project where right from the small line, right, from the up-cycling that we do or recycling that we do to the final product that we are selling, not only in terms of B2B, but in B2C also Flipkart, Amazon, etcetera, we have a complete value chain.”
Risks & concerns — 2 flagged
My question is, our margins are under pressure.
— Siddharth Ahluwalia
Do you see there is a stress in channel and distribution that we sort of need to increase the credit period and things like that?
— Devesh Srimali
Q&A — 6 exchanges
Q
Ihave a few questions. My question is, our margins are under pressure. So what the reason? And what is the outlook for the year?
Sushil Aggarwal
Okay. Anything else, or should I answer this first, and you will go ahead with the next question. All right. Let's me answer this. As you can see, we have these other expenses which are amounted to about INR 17 lakhs going up in this particular Q2. So I think there are the certain amount of issues, let's say, for example, there were some provision for the bad debt and the selling expenses went up during this time, some amount of admin expenses went up and all the thing. But these things will get streamlined over a period of time on the basis of the volume of sales that will be driving hencefor
Q
Congratulations for decent set of numbers. So I was going back to your commentary where you said that seasonally Q3, Q4 should be much-more healthier than what Q1, Q2 has been, can you help us understand what would be the driver that you see improving both revenue or margins or OUGO ® FURNITURE the things like that, over, H1 to H2, what would be the key difference in terms of demand as well as our volume growth and things like that?
Sushil Aggarwal
T'm sure all the FMCG products are sold sales across country normally picks up during the festival season or the marriage season. And probably, I would, more than festival, have put marries as the biggest growth driver of the country for that matter because the amount of marriages that happen in the country as well as very interestingly, for a lot of these people who are BPL families or, let's say, lower middle class family. For them, this is the furniture that they would give out to their daughters and families or this is a kind of furniture that they use for, let's say, their, let's say, eve
Q
Yes. So as you mentioned earlier, can I just provide more details on the company planning to bring some new products or some of the new designs that are coming up?
Sushil Aggarwal
Mr. Dilip, this is a very dynamic system. What happens, you know, I can't forecast for the next three, four years. But what we normally do is at least six months to one year ahead we sense the market. What is it that is required and needed. For example, we are one particular company which started creating, let's say, tags, barcodes, as well as, you know, wrapping of the whole chair, as well as putting the brands and all the things in case. In case you can find time, I probably went to order on Flipkart and Amazon. And just one or two pieces just to have a look at it, you'll feel, oh my God. We
Q
Sir, my first question is, can you tell me which will be your best quarter?
Sushil Aggarwal
Yes. We normally expect as I said Q4 is normally a very good quarter. Even Q] is normally a good quarter. But probably this year Q1 was not that good as it was expected to be. So Q2 is normally a little subdued quarter. And Q3 is an okay quarter. It's not bad. It's not too good either. What kind of demand you should see for next two quarters? Michelle, did you understand that please? What did he said? Next? What kind of demand you will see for two quarters I think? Til put it this way, that there’s not going to be an explosive demand for the product, but as usual, the continuous demand is cert
Q
So what sales volume that we have achieved during the quarter?
Sushil Aggarwal
What is the volume we have achieved in the quarter? Yeah, sales volume? Sales volumes in terms of quantities are? Let me just check that and let you know. One second, Til just give you that. How much is that? I think it's close to about, one second. Plastic furniture OUGO ® FURNITURE is about 5,60,396 pieces. And Q2 only, not half year, only Q2. And Granul is about 663,500 kgs. We also sell steel almira, let me tell you. That's of course in a very cold stage at this point of time. We are not doing aggressively about 170 steel almira we sold. And what is the average working capital cycle we hav
Q
Just one second, Michelle. Thank you very much. I would like to thank Siddharth Ahluwali, Devesh, Dilip Chaturvedi, Sandeep ji, all of you and all those other friends whoever not asked question. I would put it this way that you know as an aspirational company we are poised to grow not only from the standpoint that you know we carry a huge large great experience in terms of the product category that we're into, but we also have a leadership team in terms of the two sons that we have as well as the kind of leadership team that we have down the line to ensure that over a period time this company
Vastupal Shah
Yes. Thank you. Thank you, everyone, for joining the Conference Call of Avro India Limited. If you have any queries, you can write us at info@ kirinadvisors.com and once more many thanks to management team, Mr. Sushil Aggarwal and all the participants for joining the conference call. Thank you, Michelle. Thank you, Vastu. Thank you, all of you. Thank you. Have a nice day.
Speaking time
Sushil Aggarwal
36
Sandeep Mane
11
Moderator
8
Siddharth Ahluwalia
7
Dilip Chaturvedi
7
Siddharth Ahluwali
6
Devesh Srimali
5
Vastupal Shah
2
MODERATOR
1
Management
1
Opening remarks
Vastupal Shah
Thank you. Good afternoon, everyone. Thank you for joining the conference call of Avro India Limited. I would like to welcome Mr. Sushil Kumar Aggarwal, Chairman of Avro India Limited. Sushil ji, over to you, sir.
Sushil Aggarwal
Thank you. Thank you very much, Michelle, and thank you very much Vastupal. Very good morning to all of you, ladies and gentlemen. It's a pleasure to be connecting with you all over again, and I'm looking forward to a meaningful engagement and a dialogue with all of you. And I want to wish and I would extend warm wishes for the upcoming festival season ensuing an ongoing festivals that is happening. And this second quarter FY '23 conference call. Avro India Limited is one of the largest manufacturers of quality plastic molded furniture in Northern India and amongst the top five brands in the country. The product portfolio of company includes household and office plastic furniture molded tables, stools, almirah and so on so forth, more than 100 SKUs that we have. The products of the company are mainly known for its quality and durability, along with the long-term warranty and guarantee also. This has propelled the growth of its two established brands, Avro, A-V-R-O and Avon, A-V-O-N, th
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