MAYURUNIQNSEQ2 FY 2022-23November 16, 2022

Mayur Uniquoters Ltd

6,500words
132turns
11analyst exchanges
4executives
Management on call
Suresh Kumar Poddar
CHAIRMAN AND MANAGING DIRECTOR, MAYUR UNIQUOTERS LIMITED
Vinod Kumar Sharma
CFO, MAYUR UNIQUOTERS LIMITED
Rahul Dani
MONARCH NETWORTH CAPITAL
Suresh Kumar Poddar
Chairman and Managing Director of the company and Mr. Vinod Kumar
Key numbers — 40 extracted
Rs. 194.5 crore
or the quarter. The company has achieved revenue from operations on standalone basis amounting to Rs. 194.5 crores, PBT is Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased
Rs. 32.47 crore
has achieved revenue from operations on standalone basis amounting to Rs. 194.5 crores, PBT is Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respe
Rs. 25.39 crore
rom operations on standalone basis amounting to Rs. 194.5 crores, PBT is Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respectively on Q-on-Q basis.
3%
BT is Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respectively on Q-on-Q basis. The revenue from operations on consolidated basis is
10%
Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respectively on Q-on-Q basis. The revenue from operations on consolidated basis is Rs. 20
11%
.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respectively on Q-on-Q basis. The revenue from operations on consolidated basis is Rs. 204.51 cro
Rs. 204.51 crore
10% and 11% respectively on Q-on-Q basis. The revenue from operations on consolidated basis is Rs. 204.51 crores, PBT to Rs. 35.09 crores and PAT Rs. 27.17 crores which is increased by 2%, 4% and is the same P
Rs. 35.09 crore
y on Q-on-Q basis. The revenue from operations on consolidated basis is Rs. 204.51 crores, PBT to Rs. 35.09 crores and PAT Rs. 27.17 crores which is increased by 2%, 4% and is the same PAT respectively on Q-on-Q
Rs. 27.17 crore
venue from operations on consolidated basis is Rs. 204.51 crores, PBT to Rs. 35.09 crores and PAT Rs. 27.17 crores which is increased by 2%, 4% and is the same PAT respectively on Q-on-Q basis. Our endeavor is t
2%
is is Rs. 204.51 crores, PBT to Rs. 35.09 crores and PAT Rs. 27.17 crores which is increased by 2%, 4% and is the same PAT respectively on Q-on-Q basis. Our endeavor is to make the company a prefe
4%
is Rs. 204.51 crores, PBT to Rs. 35.09 crores and PAT Rs. 27.17 crores which is increased by 2%, 4% and is the same PAT respectively on Q-on-Q basis. Our endeavor is to make the company a preferred
Rs. 33 lakh
d vendor, monthly quantity is around 4,000 meters at the 10 Euro per meter which is coming around Rs. 33 lakhs per month and regular supply will start nearly 40,000 meters per month from February 24. Our c
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Guidance — 20 items
Management
opening
“The company has also decided to put up 3.56 plant for which necessary project are expected to start soon.”
Mohit Khanna
qa
“Anything else that is under the plan for this year and next year in terms of powered integration or any CAPEX plans?”
Management
qa
“Net profit items they are reducing when they have a shortage, so that is why it is happening and I think in the next quarter, 1 or 2 quarter it should come inline and further more we are getting more business for new models and for our existing models where we are not in major way that results will start coming within 3 months I means within 3 months to one-year time, we will have more than 150,000 business per month which will be about if I multiply by 8 years.”
Mangement
qa
“In regards to this margin effect, so on the year 23-24 and 24-25 because the business will start improving in export area from next year 23-24 and 24-25 for which we have already got the business and the production will start.”
Viraj Kacharia
qa
“Or these are from new OEs we have got new orders and we expecting them to materialize in next year and the year?”
Management
qa
“So now as I told you in the beginning that we are increasing the number of customers, we are trying to increase the number of items, number of items means models and this has already been awarded and as I told you from 23-24 and 24-25 the export business will be at least 2.5 times then what it is in next 2 years.”
Kunal Shah
qa
“And sir, what is the client that we have added in the current quarter, you mentioned some Hyundai, I could not hear, pardon me for my excuse so you mentioned that BMW basically will be from FY24, but you did mention something about Hyundai as well right, so am I missing out something?”
Depesh Kashyap
qa
“So do you think your margins are going to improve when your lower cost inventory comes through in the next quarter?”
Management
qa
“Then you can say from January, we can sell that 25,000 meters per month from Malaysia and then we are talking to the American factory also and if that goes off, it is going on trial and which will go on and then may be in that 6, 9 months another same quantity will be started from then.”
Management
qa
“So that is why I said that I do better future in 23-24 and 24-25 because if this business happen like I have 60,000-70,000 yards per month within next 6 months or 1 year time, then you multiply by $20, how much it comes, 60,000 x $20 x 80, so it will be about Rs.”
Risks & concerns — 8 flagged
It is very difficult to say because somebody asked 2 mm thickness, 3 mm, somebody 5 mm and then the density is different, 60 density, 80 density.
— Management
It is difficult to say any reason for automotive business and when they keep on changing sometime suppose they told for after 1 year but starts early itself, whatever information we are getting accordingly we are trading.
— Management
We see across passenger vehicles at least for the domestic markets then the volumes have been very good, but when we observe our revenue in comparison to quarter-on-quarter or year-on-year, there seems to be decline, so part decline could be because of the raw material pricing which is due to crude going down.
— Kunal Shah
See, it is very difficult to say at this junction for the local market.
— Management
It is very difficult to tell about margins in advance.
— Management
So it is very difficult to project the margin, but I can tell you it will be better only from next year I’m talking 23-24, 24-25.
— Management
So that means if the dollar price goes up we have a lot pressure on raw material?
— Hitesh Sharma
I thank all the investor for their time to listen to us and I can simply say that the company is trying its best to get maximum margin to do the maximum results, as the competition is increasing, so to compete in the market as now a days is very difficult thing but still we are managing.
— Management
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Q&A — 11 exchanges
Q
Good afternoon sir. My question is regarding your initial comments, I think I have not got it correctly. So supply for BMW will start from February 2023?
Management
No, 2024. From February 2024. February 24, and then the forward integration which is that you just mentioned could you just elaborate little bit more on that? This flame lamination when you make flame that time it shows that you have to laminate foam, PU foam, you understand. So that is done by the separate laminator, but now we have started our own, so that to customer we can laminate and give it directly. Otherwise, they to take our materials and they have to give somebody nearby and then get it again, so we have put up our own plant. So, it is more than…. Will this result in realization imp
Q
Just 3 specific questions. First is if I look at our overall growth rate, growth for this particular quarter and if I compare both year-on-year and sequential year so it seems to be below what the industry growth has went across segments. So can you just provide some perspective in terms of which segment you are seeing as a growth or de-growth probably and how will the growth trends being across different segments?
Management
You can note down the total volume length over the past quarter, in last quarter we sold Rs. 70 lakhs meters and this quarter we have sold Rs. 75 lakhs meters. So 7 ½ % growth is there in volume. So has the price corrected and hence we are seeing a muted phase growth? I mean can you give segment wise growth, how it has performed? Segment-wise growth, we can say export general we have grown 4.5% and with auto section, we have grown around 30% in domestic. And in export it is down 21% is down in the volume term and remaining is little bit less reduced or the decreased in the quarter. Okay. So, i
Q
I actually could not understand the volume part, so I have 2 questions, sir as the question was put by one gentlemen before as well. We see across passenger vehicles at least for the domestic markets then the volumes have been very good, but when we observe our revenue in comparison to quarter-on-quarter or year-on-year, there seems to be decline, so part decline could be because of the raw material pricing which is due to crude going down. So just wanted to understand 2 things volume data, how should one look at that? Second is you mentioned that there was 10%, Rs. 70 lakhs volume increasing
Management
You raise one by one question, your first question then after getting that right from us, second question. Sir, 2 question I had, first question a) that our revenue from first quarter to second quarter, right, increased from Rs. 70 lakhs to Rs. 75 lakhs, correct me if I am wrong? Correct. But, still when I see our revenue on a quarterly basis, it has come down from Rs. 201 crores to Rs. 195 crores, so I understand that would be because of the raw material pricing also linked to crude? Price reduction. It is because of price reduction, but here price is going down. But, what about the margins,
Q
Sir, on the margins again, I just want to understand that the PVC resin prices have corrected Rs. 30, Rs. 35 per kg since the last quarter, but when I look at your RM cost rate per meter that has just corrected by Rs. 14. So do you think your margins are going to improve when your lower cost inventory comes through in the next quarter?
Management
See, it is very difficult to say at this junction for the local market. As I told just now that the export has got a better margin and it will improve. Now the problem in Indian market is where so many Indian manufactures who supply to this OEMs and then whenever the price is down they immediately reduce the prices to get more and more business but this does not happens, get the business once. Currently the problem is that when your prices are increasing that time you get benefit because you have already have that stock and when your prices are going down, then you are losing because you have
Q
Sir, you talked about domestic auto market but can you give some color on domestic footwear market, how things are stepping up? Are we debtor quarter-on-quarter in terms of volume? Just one indication on the business?
Management
Automotive and domestic? Footwear domestic, sir. Footwear domestic, it is going same to the same. Little change at the lower side, but it is going. 22 lakh meters we have sold in last quarters and against the 23.80 lakh meters in Q1. So, any hope of traction in coming quarters in footwear business? See, footwear will be better, but November will be little bit down because you know after Diwali and all that worker goes to their native places so there is a shortage and then people keep much more stock during this festive season because their sale is mainly for 15 days, so in that time they have
Q
Sir, my question was with respect to the outlook for exports in coming 2 quarters like as we speak, we are already in the middle of third quarter and at least on a semiconductor chip side, the volumes are improving on a quarter-on-quarter basis for all the OEMs. So do you see some sort of improvement even in the coming 2 quarters? Notwithstanding your comments on FY23 and FY24, but respect to second half of current financial year?
Management
Pardon what you said please? Next 2 quarter. Last 2 quarter? No, next 2 quarter. The coming second half of current financial year, sir? So I think it should be same like what it is or little bit more. But, the chips availability has started improving since last month or 2, so should not it also impact you as well? It is improving that is why I am saying that there is little chance, if we see auto OEM domestic the volume was 14.69 in Q2 quarter, July to September which was 12 earlier. Now see it is volume or domestic it is increased by 18% and value increased by 19% quarter-to-quarter between l
Q
I just want to check up what is the import component of the raw material? And what is the market share in the footwear and auto? And I see lots of competitions putting up the plant from Europe and the Far East, so how you see your market share going up or down?
Management
Market shares will be done, in this competition your market share will increase or decrease, we cannot say, because competition is more. I told you 23-24, 24-25 it will increase. If it increase gradually, market share will increase. It is not that those models I am getting is for me only. It is from the existing supplier also, I am taking out the results. Yes, European and the Far East people are setting up their plants over here in India? Yes, even if the people are putting up a plant here in India, fine because they want to get out of China as much as possible and the cost is also increasing
Q
Sir, as you told like next 2 years will be very good, but if we see regarding margin then 2015, 2016, 2017, 2018, 2019, 2020 this 5 or 6 years it has also happened that we have earned 6% to 7% more margin than that of today’s margin. Does the sustainability competition has increased so much that we will not be able to do that kind of margin ever in the next 4, 5 years? It will be helpful if you can tell something on this?
Management
See, it is like this is a very typical question. I have told that I am trying to export more and more, so that I get a better margin and when export will increase, then margins will be better so overall will also be increased because OEM export is very important for us and we are behind that only. General export is also increasing nicely, and now what I told you all that we are starting this reselling of furnishing material of course that will take 3, 4 years, but it will keep on moving and it will bring a good margin. As we are talking about furnishing material, in that 30% to 40% margin is t
Q
Poddar ji, in auto export we are signing new models and what do we think from that in 3, 4 years, can we double our auto export with signing new model?
Management
See, it is your duty to try. Just now told that from Rs. 1 lakhs to Rs. 1.10 lakhs is happening. In the next 2 years it will become Rs. 3 lakhs from Rs. 1, 10,000 we have 90% hope, already orders have started to come. And the addition is also very high. You see our average is nearly 240 per m in average, but export on an average if we take say $9 that is approximately Rs. 650 that is nearly. So today due to that our topline will also increase and bottomline will also increase that is why we are behind it. Here growth is happening automatically domestic OEM automotive is increasing 15% to 20% e
Q
Sir, how much is our export auto as a percentage of total sales in this Q2 quarter?
Management
In value it is around 13%, export auto. And in Q2 our average was like Rs. 1,10,000 meters per month? Yes, it was near Rs. 1,15,000 meter. And that we expect by next year should inch up to Rs. 3 lakh meter per month over a period of FY25? In 2 years it will happen. And in this realization rate will be same, sir or it will be better there also? It will be better. And the second was in India Volkswagen India was to be started, is that has started? Already going on. We are alone supplier to Volkswagen. And last, how much is our export general as a percentage of sales? It is a 10%, around 10% expo
Q
I thank all the investor for their time to listen to us and I can simply say that the company is trying its best to get maximum margin to do the maximum results, as the competition is increasing, so to compete in the market as now a days is very difficult thing but still we are managing. As I told you please go ahead and see the margins of all the leather cloth companies in the world, what kind of a margin they are having. Now we are having more margins because of our continuous focus on the business and on the products and to work working all over the world wherever we can get the best price
Management
Speaking time
Management
60
Moderator
13
Viraj Kacharia
9
Aman Shah
8
Mohit Khanna
7
Kunal Shah
7
Nirmal Shah
6
Depesh Kashyap
5
Hitesh Sharma
5
Awanish Chandra
4
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Opening remarks
Rahul Dani
Thank you, Inba. Good afternoon, everyone. On behalf of Monarch Networth Capital, it is our pleasure to host the senior management of Mayur Uniquoters. Today we have with us Mr. Suresh Kumar Poddar – Chairman and Managing Director of the company and Mr. Vinod Kumar Sharma - CFO of the company. I would now request the management to provide some initial comments of the results. Thank you and over to you, sir.
Management
Thank you Rahul. Good afternoon dear investors and analyst. Ladies and gentlemen, it is a great pleasure to be here to share with you the performance of Mayur. Thanks for giving your precious time to join Mayur Uniquoters Limited Q2 FY23 Conference Call. Mayur Uniquoters Limited being a market leader in the synthetic leather industry and an organized player has been able to leverage the emerging opportunities and delivering exemplary performance in past years both in national and international business markets. Now we would like to start the financial highlights for quarter 2 FY23 under review. We will also reply your queries after our review on financial results for the quarter. The company has achieved revenue from operations on standalone basis amounting to Rs. 194.5 crores, PBT is Rs. 32.47 crores and PAT Rs. 25.39 crores during the quarter which is slightly decreased by 3%, 10% and 11% respectively on Q-on-Q basis. The revenue from operations on consolidated basis is Rs. 204.51 cr
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