DCXINDIANSEQ1 FY24August 10, 2023

DCX Systems Limited

6,797words
86turns
11analyst exchanges
4executives
Management on call
H S Raghavendra Rao
CHAIRMAN AND
K S Ranga
CHIEF FINANCIAL OFFICER – DCX SYSTEMS LIMITED
R. Sankarakrishnan
DIRECTOR – DCX SYSTEMS LIMITED
Shiva Kumara
VICE PRESIDENT, OPERATION DCX SYSTEMS LIMITED
Key numbers — 40 extracted
13.5 billion
right. And also as you are aware last time I mentioned there is a huge offset backlog of our DOMW 13.5 billion there is no much improvement on the same figure is still like you can check the DOMW website the
INR170.10 crore
rs for Q1 FY24, vis-a-visQ1 FY23. The operational revenue for the quarter ending Q1 FY24 stood at INR170.10 crores, vis-a-vis is INR213.25 crores for Q1 FY23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis
INR213.25 crore
3. The operational revenue for the quarter ending Q1 FY24 stood at INR170.10 crores, vis-a-vis is INR213.25 crores for Q1 FY23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis INR11.64 crores in Q1 FY23. PA
INR18.71 crore
4 stood at INR170.10 crores, vis-a-vis is INR213.25 crores for Q1 FY23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis INR11.64 crores in Q1 FY23. PAT stood at INR9.85 crores in Q1 FY24, vis-a-vis INR5.76
INR11.64 crore
, vis-a-vis is INR213.25 crores for Q1 FY23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis INR11.64 crores in Q1 FY23. PAT stood at INR9.85 crores in Q1 FY24, vis-a-vis INR5.76 crores in Q1 FY23. The o
INR9.85 crore
23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis INR11.64 crores in Q1 FY23. PAT stood at INR9.85 crores in Q1 FY24, vis-a-vis INR5.76 crores in Q1 FY23. The operational revenue dipped by 20.24% when c
INR5.76 crore
1 crores, vis-a-vis INR11.64 crores in Q1 FY23. PAT stood at INR9.85 crores in Q1 FY24, vis-a-vis INR5.76 crores in Q1 FY23. The operational revenue dipped by 20.24% when compared to Q1 FY23. EBIT increased by
20.24%
INR9.85 crores in Q1 FY24, vis-a-vis INR5.76 crores in Q1 FY23. The operational revenue dipped by 20.24% when compared to Q1 FY23. EBIT increased by 60.74% of 555 basis points. PAT increased by 71.01%.
60.74%
in Q1 FY23. The operational revenue dipped by 20.24% when compared to Q1 FY23. EBIT increased by 60.74% of 555 basis points. PAT increased by 71.01%. This is the summary of the financials for the qua
555 basis point
The operational revenue dipped by 20.24% when compared to Q1 FY23. EBIT increased by 60.74% of 555 basis points. PAT increased by 71.01%. This is the summary of the financials for the quarter ending Q1 FY24.
71.01%
y 20.24% when compared to Q1 FY23. EBIT increased by 60.74% of 555 basis points. PAT increased by 71.01%. This is the summary of the financials for the quarter ending Q1 FY24. If you have any queries, I
rs,
ou compare the numbers with Q1 FY ‘23 and Q1 FY ‘24, you will see a dip actually in absolute numbers, but actually, it is not a dip if you ask the demand, what was required to be honored during the qu
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Guidance — 20 items
Raghavendra Rao
opening
“Secondly, as you are aware, on the many things in the plates of DCX today, and a couple of technological JV, it is happening, the signing will be happening very shortly with the foreign OEMs.”
Raghavendra Rao
opening
“So we have ordered the equipment that is in on the way, I think next couple of weeks our OFC will be operated.”
K.S. Ranga
qa
“Actually, what happens is, this project specific demand will be there.”
K.S. Ranga
qa
“And what happens is in our business, when you compare quarter-to-quarter, yes, there will be in one quarter, there will be a dip and another quarter, there will be a increase.”
K.S. Ranga
qa
“So, when you see a performance over a period of nine months to 12 months, definitely there will be a, we will be back to normal and there will be a growth, when compared to the previous year.”
Raghavendra Rao
qa
“So normally this is happening from last six years, not like we are going to do the revenue will be dipped into this thing.”
Gem
qa
“In addition to that, could you also give guidance for the next upcoming three quarters, let's say?”
R Sankarakrishnan
qa
“As a matter of principle, I think we have maintained, not to venture out into guidance forecast mainly because the supply chain is so volatile globally and there is a lot of pipeline orders, which are getting added.”
R Sankarakrishnan
qa
“In order to priorities the project execution, etcetera, all we can say is, you could see the last five years of history The company has been growing from strength to strength, year after year.”
R Sankarakrishnan
qa
“I think that, company will continue to grow at a very, very reasonable CAGR, positive CAGR and thereby improving the operating margins, etcetera.”
Risks & concerns — 5 flagged
I don't see any challenge in achieving the growth, what we are looking at.
— K.S. Ranga
As a matter of principle, I think we have maintained, not to venture out into guidance forecast mainly because the supply chain is so volatile globally and there is a lot of pipeline orders, which are getting added.
— R Sankarakrishnan
Okay, and my last question, do you foresee any challenge in terms of supply chain or in terms of your sale going down in next one or two years?
— Sanjay Sood
It will keep on improving the situation because many companies are reopened, reshifted and there is no factor of fab problem and as on today and we are very clear and supply chain is getting improved year- on-year and there is no much challenge in the supply chain now and going forward too.
— Raghavendra Rao
Ours is a very 100% risk-free model, risk mitigation.
— Raghavendra Rao
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Q&A — 11 exchanges
Q
So, in terms of financials, I noticed that during Q1 FY24, there was a reduction in sales year-on- year. So, could you please throw some lights on this as to how the company is taking to face the challenges and make sure that, the group is sustainable over the coming quarters?
K.S. Ranga
See here, Shiv, you will answer or? Go ahead, Ranga.
Q
Yes. Sir, this is basically the turnover. Actually, what happens is, this project specific demand will be there. You cannot say, yes, when you compare the numbers with Q1 FY ‘23 and Q1 FY ‘24, you will see a dip actually in absolute numbers, but actually, it is not a dip if you ask the demand, what was required to be honored during the quarter Q1 FY ‘24. And what happens is in our business, when you compare quarter-to-quarter, yes, there will be in one quarter, there will be a dip and another quarter, there will be a increase. So, when you see a performance over a period of nine months to 12 m
Gem
In addition to this, would you... Yes, sir. Go ahead… To add to Mr. Ranga, Raghvendra here, see, as you are aware from our IPO time and the last earning call, normally you cannot divide our revenue by divided by four. Okay, see what's happening. Normally you can see not only for ’20- ’21 or the last six years, our history shows first quarter always, first and second quarter, we achieve only 30%, 35% of the total revenue. And the majority it is coming in the third quarter and fourth quarter. I will tell you the reason, why it is happening first quarter down. See, this all, I have a seven, eight
Q
Alright, alright, I'll join the queue. Thank you sir, thank you so much. Wish you all the very best.
Raghavendra Rao
Thank you, sir.
Q
Yes. Good evening. I want to know what is the order value from Israel Partners, in terms of percentage?
Raghavendra Rao
Present order book was about, out of 1535, I can say, in the present, Israel will be around 35%- 40%, it is coming from Israel. And what is the frequency of you getting orders from there? Is it annual or quarterly? It is not like that, it is a project the way where they get order definitely whether it's offset or non- offset. As I mentioned in the last call we are not only considered by Israelis only for offset order. We do for their internal requirement also and also when they have a requirement when they got a PO, anything they want in the cable and wire harness, PCB assembly system integrat
Q
Good afternoon, sir. I wanted to ask about the PCB production that you are planning to do, sir. How much benefit you'll get from the operating margins?
Raghavendra Rao
On the EMS you're talking? Yes, sir. And the PCB assembly. And also the facility detector. See, that is also that depends on the margins, operating margins, there is a captive business involved. We are expecting direct view on the direct order to come. That also depends on the country to country, customer to customer. And overall, in the EMS area, you, very well it is going on the market. And I'm not dreaming that into those areas, because I concentrate only aerospace and defense, maximum medical and railways. So looks very, apart from the captive business, like to be a good jump in the operat
Q
So my question is on order – so currently we have order book of INR1535 crores. So like what is the time duration for the execution of this order?
Raghavendra Rao
This present order, this may takes about another 12 months, Shiva? Shiva Kumara 12 to 18 months. Okay and one more question. So we were expecting some big order inflow, if I am correct. So what happened to that? And that's what in my first, in the starting remarks, this thing only I mentioned. And that is very well positioned. And any time it is to be expected, with not only that, there are many things that are happening in the good way. And expected, because see, one thing I like to request everyone here. So this is not like where we are working with the general companies or these companies a
Q
Good evening sir. So my question is regarding the working capital. So, last quarter you mentioned that you are expecting our inventories and trade receivables to reduce this quarter. So please, could you clarify on that?
K.S. Ranga
Yes, Yes. The inventory, if you remember, one minute, I'll just open the numbers and... So the inventory, and... So the inventory, if you remember, one minute, I'll just open the numbers and... So the inventory as on 31st March, if you see was INR2,285 crores, sorry INR228.51 crores vis- à-vis INR203.93 crores. Out of INR228 crores, the split of INR228 crores is INR84.66 crores is raw materials and INR143.85 crores finished goods. Now when you compare this with the current quarter closing stock, the finished goods has come down from INR143.85 crores to INR13.97 crores. So, almost entire FG we
Q
Yes. Hello. Can you hear me?
Management
Q
Thank you sir for the opportunity. I have a couple of questions. So, firstly, with respect to the OFC business business, my question was that the current OFC facility that we started, so how much percentage of the products that we use fall under this category and what is the revenue potential for the same And secondly, with respect to the same business, since the government has imposed an anti- dumping duty for five years on import of optical fibers, so will it have an impact on our OFC business?
Raghavendra Rao
This is OFC business we have just started. It is not a big facility. In the existing facility, we need to add a few crores of capex. And this is not replacing with our regular cable, this has been some of the special cables used in the very sensitive area in radars or design system, there are mix of technology has been used both the normal cable and of the OFC cables and coming to the, of course, there is a big market for the OFC 2. And we are just talking to --we have just installed our facility. And as I mentioned, certification is going on for OFC2. And there are a couple of inquiries, a co
Q
Sir, I wanted to understand how much material that the product we produce are imported, how much raw material is imported, and if we are planning to source it locally?
Raghavendra Rao
No, actually in the present scenario, we buy locally about 80%. 80% we buy locally and 20% we import. Okay, and also do we saw the commercial aerospace business in our wire harness segment? Sorry, can you please repeat your question please? Yes, so I was asking whether we serve the commercial aerospace business in the wire harness business? Raghavendra Rao No. let me answer technically on this. See, the commercial, aircraft is always we called as Class 3, okay, whether you take it as a commercial aircraft or a military aircraft or fight controls, what all we produce this will be suitable for C
Q
Thank you. I would like to thank you, entire team of DCX System for this effort and hard work and dedication with the company. We are fully focused. And thank you all, Shiva, Ranga, Shankar sir. And I appreciate my joining the conference call. Also like to highlight to my dearest investor and please I want to make a special announcement here. Ours is a very 100% risk-free model, risk mitigation. What all we build, we ensure payment will be paid back to our company. And our PAT is reserved for that. And also, we are working with a defense company, and there are certain Indian defense clearance,
Management
Speaking time
Raghavendra Rao
25
Moderator
13
K.S. Ranga
9
Sampanth Nayar
7
Gem
5
Janmajay Gandhi
5
Preeti Sharma
5
Karan Sanwal
5
Sanjay Sood
4
Tirth Gosar
3
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Opening remarks
Raghavendra Rao
Thank you. Namaste and good evening, everyone. I would like to wish you all very warm welcome to DCX System Limited Earning Conference call for the first quarter ending 30th June 2023. I would like to bring my gratitude to take the time of your valuable time to join this today. I will introduce in my team Mr. Sankarakrishnan, Director and Mr. Ranga, CFO and Mr. Shiva Kumara, VP Operation and also our IR agency Ad Factors. So once again welcome you all for the conference call. As I mentioned and the company is very clear vision. In the last first call also I mentioned the same thing. There are good development that is happening in the company. First is, I would like to bring it to your all of attention, our own only one subsidiary called RaNeal Advanced Systems. It is fully ready and machineries and building all the things infrastructure wise is fully compliant and ready approved by many of our foreign existing customer and the new customer. The only thing is we need to move the commerc
K.S. Ranga
Yes. Thank you. I'm Ranga here. Good evening to everyone. Thanks for attending the earnings call. I'm hereby presenting the numbers for Q1 FY24, vis-a-visQ1 FY23. The operational revenue for the quarter ending Q1 FY24 stood at INR170.10 crores, vis-a-vis is INR213.25 crores for Q1 FY23. EBIT for Q1 FY24 stood at INR18.71 crores, vis-a-vis INR11.64 crores in Q1 FY23. PAT stood at INR9.85 crores in Q1 FY24, vis-a-vis INR5.76 crores in Q1 FY23. The operational revenue dipped by 20.24% when compared to Q1 FY23. EBIT increased by 60.74% of 555 basis points. PAT increased by 71.01%. This is the summary of the financials for the quarter ending Q1 FY24. If you have any queries, I can take on this.
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