KAMDHENUNSEFebruary 03, 2023

Kamdhenu Limited

3,339words
66turns
10analyst exchanges
2executives
Management on call
Satish Agarwal
CHAIRMAN & MANAGING DIRECTOR
Harish Agarwal
CHIEF FINANCIAL OFFICER
Key numbers — 40 extracted
rs,
ll. Along with me, I have Mr. Harish Agarwal – Chief Financial Officer and Strategic Growth Advisors, our Investor Relations Advisors. We have uploaded our result and investor presentation for the q
23%
r 2023. Despite high fluctuations in commodity prices, our company has reported revenue growth of 23% year-on-year basis to Rs.183 Crores for Q3 FY2023. For nine-month FY2023 revenue stood at 565 Cro
Rs.183 Crore
uations in commodity prices, our company has reported revenue growth of 23% year-on-year basis to Rs.183 Crores for Q3 FY2023. For nine-month FY2023 revenue stood at 565 Crores delivering a growth of 36% year
565 Crore
of 23% year-on-year basis to Rs.183 Crores for Q3 FY2023. For nine-month FY2023 revenue stood at 565 Crores delivering a growth of 36% year-on-year basis. The TMT steel demand continues to grow driven b
36%
83 Crores for Q3 FY2023. For nine-month FY2023 revenue stood at 565 Crores delivering a growth of 36% year-on-year basis. The TMT steel demand continues to grow driven by factors such as rise in de
38 lakh
eturn with minimal investment. Our presence and brand recall in the market with 38 lakh metric ton capacity through franchise model places us in the sweet spot. We are looking forward t
20,000 Crore
o propel further growth. With the current demand we expect to achieve a brand sales turnover of 20,000 Crores by FY2023. Going forward we can confidently say that the industry and our company will see a bri
25%
viewpoint. For the quarter, our franchise volumes as well as volumes from our facilities grew by 25% on year-on-year basis. Our company constantly monitors their research and development division,
4%
chnologies like converting steel commodity into high yield strength weldable TMT steel bars to be 4% lesser in weight and 20% stronger than other normal TMT steel bars. Going ahead we are focused
20%
ng steel commodity into high yield strength weldable TMT steel bars to be 4% lesser in weight and 20% stronger than other normal TMT steel bars. Going ahead we are focused on increasing our annual
50 lakh
re focused on increasing our annual capacity through franchisee route from 38 lakh metric tons to 50 lakh metric tons over the period of two years. To conclude, our company holds a strong market share in
7.65 lakh
rough the financials for Q3 nine-month FY2023. Our steel volume from franchise root have stood at 7.65 lakh metric ton in Q3 FY2023 as compared to 6.1 lakh metric ton in Q3 FY2022, a year-on-year growth of
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Guidance — 10 items
Satish Agarwal
opening
“With the current demand we expect to achieve a brand sales turnover of 20,000 Crores by FY2023.”
Satish Agarwal
opening
“Going forward we can confidently say that the industry and our company will see a brighter future as infrastructure plays a crucial role in growth of the infrastructure.”
Rahil Shah
qa
“Just wanted to have your outlook for the revenue growth and EBITDA margins for the next quarter as well as the next financial year, any views on how you plan to just keep improving, and other factors that would help.”
Rahil Shah
qa
“You are saying that you will be moving forward in the same lines as previous quarter or previous year, so to say.”
Akash Mehta
qa
“What do you expect that to be in 2024 and 2025.”
Satish Agarwal
qa
“We hope the results of this budget will definitely increase the demand of steel products, and for that we are just gearing up and already we are installing the capacity as per the requirement and hope we will be able to compete the demand in the next one year or two year.”
Karan Mehta
qa
“So what would be the revenues and PAT guidance for FY2024 and 2025?”
Harish Agarwal
qa
“In FY2023, we have a plan of around 28 lakh metric ton from the franchisee, and in the next year we are targeting 36 lakh metric ton.”
Parth Vasani
qa
“So how do you plan to achieve it, and are we planning any fund infusion there.”
Satish Agarwal
qa
“We have a aggressive target of 1000 Crores by 2028, but that totally depends on at what time we get the funds through strategic investor and accordingly the future will be planned.”
Risks & concerns — 1 flagged
So right now it is very difficult to say that how much amount is to be allocated on the branding, but we have aggressive plan.
— Harish Agarwal
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Q&A — 10 exchanges
Q
Good numbers are there. Just wanted to have your outlook for the revenue growth and EBITDA margins for the next quarter as well as the next financial year, any views on how you plan to just keep improving, and other factors that would help. Thank you.
Harish Agarwal
In fact, we are looking for a better result quarter-by-quarter. If you can see the trend of last three quarters the results are in the upward trend, and we are hopeful that the result would be in the same manner, and you will see in the coming future that the result are better than the past. You are saying that you will be moving forward in the same lines as previous quarter or previous year, so to say. Yes. Thank you.
Q
Good afternoon. Thank you for the opportunity, and I had two primary questions. Firstly on the franchisee network that you were guiding towards expanding; how are we planning to do that?
Harish Agarwal
In fact we are giving opportunity to the existing unit to increase their capacity, and if there is limitation in any of the franchise in any particular region then we are looking for a new franchise unit. In terms of the branding and promotion expenses, could you just give those numbers for Q3 and nine months FY2023. In the nine month we have spent around 38 Crores on the branding and marketing expenditure, and in this quarter we have 13 Crores expenditure. Just to follow up on that. What do you expect that to be in 2024 and 2025. For branding expenses. Yes. Yes. It would be on the increased w
Q
I have a couple of questions. Firstly with this major push in the infrastructure projects in the country; how are you planning to meet the increasing demands for steel.
Satish Agarwal
As you will go through our presentation, we are already on this work and we have a planning of increasing the installed capacity from 38 lakh ton to 50 lakh ton in next two years. Already we are working on it through franchise route, and in most of the franchises the capacity expansion work is in progress, and as well the demand of the market. We hope the results of this budget will definitely increase the demand of steel products, and for that we are just gearing up and already we are installing the capacity as per the requirement and hope we will be able to compete the demand in the next one
Q
Good morning. I just have two questions. Firstly our royalty income grew by 29% year-on- year and Q3 and by 25% in nine months. Could you tell the amount of royalty our company charged per ton, and secondly in our steel business revenues from our own facilities were up 29% in Q3 and 39% in nine months? So was this growth driven by volumes or was it on account of higher realization.
Harish Agarwal
First I would like to answer the franchisee rate of royalty. The nine month average royalty is Rs.392 per metric ton and it was Rs.385 in the last year of same period of nine month. So it has been slightly increased, and the other is what is the volume growth or the price growth in the last quarter or nine months. So the average price of this quarter is Rs.64,516 and it was in Q3 of the last year Rs.62,423, if you take the average of nine month, then the average nine month is for the current nine month Rs.68,779 per metric ton as against Rs.60,709 per metric ton. So there is an increase in the
Q
Thank you, can you help us understand the current utilization levels at our KD plant.
Harish Agarwal
That is around 85%. If you can throw some light on the demand scenario for the steel products. Yes. There is a demand. That is why we are creating premium on the best local brand. So there is a demand of Kamdhenu product. You can see in the turnover also that it has been increased in terms of quantity of the franchise unit as well as our own manufacturing. In the franchise unit we have achieved the sales turnover of 21.77 lakh metric ton as against 17.78 lakh metric ton that is growth of around 25%, so there is a demand of Kamdhenu product. How was the change in the prices of raw materials? In
Q
Thank you for the opportunity. Most of my questions are answered, I just have one question. So what would be the revenues and PAT guidance for FY2024 and 2025?
Harish Agarwal
In fact, we are seeking a growth of 25% in our own plant as well as in the franchise network. In FY2023, we have a plan of around 28 lakh metric ton from the franchisee, and in the next year we are targeting 36 lakh metric ton. From our own plant we have the limitation of our own plant that the capacity is 1,20,000 metric ton, so around 95% capacity we shall be able to achieve in FY2024, and it would be multiplied by the price which may vary from 60,000, 65,000, 70,000 then the turnover will depend on that prevailing price at that time. Thanks. I will come back in the queue for further questio
Q
Good afternoon. Thanks for the opportunity. I just want to know, you just mentioned that your capacity utilization is 85%. So it is for the franchise unit or own unit.
Satish Agarwal
This is for own unit. What about franchise unit, how much. It would be around 70%. Okay. Thank you so much.
Q
As one of our previous participant asked upon TMT bar. Just wanted to know, who are our major competitors for TMT bars, and what is our competitive advantages in that.
Harish Agarwal
In fact at the national level, we are competing in the retail segment with the Tata Steel. Because Tata Steel has the retail network, and we are having the retail network. We are selling our 90% product in the retail market, Tier 2, Tier 3. So we are directly competing with Tata Steel, if you say at the national level, but at the regional level there are so many local brands in Raipur you can see Goel TMT, in West Bengal some other one, and in Punjab you may find Amba. So locally we are competing with the local brands, but at national level we are competing with the Tata Steel. What is the com
Q
Good afternoon and thank you for the opportunity. I had a couple of questions. I know the demerger is done, but can you tell us how is the demand for paints currently, and also how has been the trend in prices for raw materials for paints.
Satish Agarwal
You are asking for the paint business. Yes. Have you gone through the results of Kamdhenu as well as so many other paint companies. Definitely, there was the price escalation for the raw material prices, and particularly the sales volume are not much increased of any company, and margins pressure is there, but during this Q3 results and hopefully in Q4 being the financial year closing and March targets, we hope the volumes we will achieve the targets and let us see because if Asian or other big companies are not increasing the prices, then nobody can increase the price, but earlier to that and
Q
I take this opportunity to thank you everyone for joining on the call. I hope we have been able to address all your queries. For any further information kindly get in touch with me or SGA our Investor Relation Advisor. Thank you once again.
Management
Speaking time
Harish Agarwal
17
Moderator
12
Satish Agarwal
7
Akash Mehta
5
Anuv Shah
4
Viraj Shah
4
Parth Vasani
4
Rahil Shah
3
Ashay Jain
3
Deep Goyal
3
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Opening remarks
Satish Agarwal
Good afternoon, and a very warm welcome to everyone present on the call. Along with me, I have Mr. Harish Agarwal – Chief Financial Officer and Strategic Growth Advisors, our Investor Relations Advisors. We have uploaded our result and investor presentation for the quarter on the stock exchanges and company’s website. Hope everyone had a chance to go through the same. Few days ago on January 24, 2023, Kamdhenu Ventures Limited, the holding company of Kamdhenu Color and Coatings Limited that is the paint business got listed on BSE and NSE. This demerger shall enable better management focus, operational flexibility, and allow businesses to independently pursue growth plans. This shall further enable both companies to raise necessary funds, find strategic investors, and employ specialized manpower for each businesses, and thereby create a platform to pursue next level of growth. Coming to the steel business. We have delivered strong growth in Q3 and nine month of financial year 2023. Desp
Harish Agarwal
Thank you. I will take you all through the financials for Q3 nine-month FY2023. Our steel volume from franchise root have stood at 7.65 lakh metric ton in Q3 FY2023 as compared to 6.1 lakh metric ton in Q3 FY2022, a year-on-year growth of 25%. For nine-month FY2023, steel volume grew by 22% to 21.77 lakh metric ton. Our TMT volume from own facility stood at 26,936 MT in Q3 FY2023 as compared to 21,512 lakh metric ton in Q3 FY2022, year-on-year growth of 25%. For nine-month FY2023 TMT volume grow by 23% to 78,150 MT. Total brand sales turnover for Q3 FY2023 stood at Rs.5,295 Crores as compared to 3,973 Crores in Q3 FY2022, a growth of 33% year-on-year basis For nine month FY2023 total brand turnover grow by 38% year-on-year basis to 15,520 Crores. Royalty income through franchisee stood at Rs.30 Crores in Q3 FY2023 as compared to 23.2 Crores in Q3 FY2022, a growth of 29% year-on-year basis. For nine month FY2023 it grew by 24.5% to 83.7 Crores. Revenue from own facility was up by 29% to
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