Solar Industries India Limited has informed the Exchange about Transcription of Conference Call with reference to the Unaudited Financial Results for the quarter and half year ended on September 30, 2...
November 3, 2023
To, National Stock Exchange of India Limited Exchange Plaza, Bandra Kurla Complex Bandra (E) Mumbai -400 051 Trading Symbol: “SOLARINDS EQ” Through NEAPS
To, BSE Limited Floor no. 25, PJ Towers Dalal Street Mumbai – 400 001 Scrip Code: 532725 Through BSE Listing Center
Subject: Transcription of Conference Call with reference to the Unaudited Financial Results for the quarter and half year ended on September 30, 2023 with the management of the Company.
Dear Sir/Madam,
Further to our letter dated October 26, 2023 we are forwarding herewith a copy of Transcription of Conference call hosted by Nirmal Bang Institutional Equities on Friday, November 3, 2023 at 11:00 a.m. to discuss the Unaudited Financial Results of the Company for the quarter and half year ended on September 30, 2023 with the management of the Company.
Kindly take the same on record and acknowledge.
Thanking you
Yours truly,
For Solar Industries India Limited
Khushboo Pasari Company Secretary & Compliance Officer
“Solar Industries India Limited Q2 FY2024 Earnings Conference Call”
November 03, 2023
ANALYST:
MR. PRASHEEL GANDHI – NIRMAL BANG INSTITUTIONAL EQUITIES
MANAGEMENT:
MR. MANISH NUWAL – MANAGING DIRECTOR & CHIEF EXECUTIVE OFFICER – SOLAR INDUSTRIES INDIA LIMITED MR. SURESH MENON – EXECUTIVE DIRECTOR – SOLAR INDUSTRIES INDIA LIMITED MR. MILIND DESHMUKH – EXECUTIVE DIRECTOR – SOLAR INDUSTRIES INDIA LIMITED MR. MONEESH AGARWAL – JOINT CHIEF FINANCIAL OFFICER – SOLAR INDUSTRIES INDIA LIMITED MS. SHALINEE MANDHANA – JOINT CHIEF FINANCIAL OFFICER – SOLAR INDUSTRIES INDIA LIMITED MS. AANCHAL – INVESTOR RELATIONS – SOLAR INDUSTRIES INDIA LIMITED
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Solar Industries India Limited November 03, 2023
Moderator:
Ladies and gentlemen, good day and welcome to Solar Industries India Limited’s Q2
FY2024 Earnings Conference Call hosted by Nirmal Bang Institutional Equities. 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 “*”then “0” on
your touchtone phone. Please note that this conference is being recorded. I now hand the
conference over to Mr. Prasheel Gandhi from Nirmal Bang. Thank you and over to you Sir!
Prasheel Gandhi:
Thank you Nirav and good morning to all the participants. Nirmal Bang Institutional
Equities welcomes you all to 2Q FY2024 earnings conference call for Solar Industries India
Limited. On the onset of the call I would like to thank the management of Solar Industries
India Limited for giving us an opportunity to host the call. From the management team, we
have Mr. Manish Nuwal, Managing Director & Chief Executive Officer, Mr. Suresh
Menon, Executive Director, Mr. Milind Deshmukh, Executive Director, Mr. Moneesh
Agarwal, Joint CFO and Ms. Shalinee Mandhana, Joint CFO. Before we begin the call I
would like to remind that will be a hard stop at 10:45 due to time constraints. I now hand
over the call to management for opening remarks post which we can take questions from
participants. Thank you and over to you Sir!
Aanchal:
A very good morning dear stakeholders and well wishers. My name is Aanchal and I would
like to welcome you all to the Q2 and half yearly conference of Solar Industries India
Limited. Before beginning I would like to wish my stakeholders a very Happy Diwali in
advance. To be honest every shareholder of Solar is already celebrating Diwali and
enjoying the explosion happening in our shares. I hope this Diwali of SIL keeps filling our
stakeholders like this. To begin with I would like to remind you that during this call we
might make projections or other forward-looking statements regarding future events and
about the future financial performance of the company. Please remember that such
statements are only predictions, actual events or results may differ materially and our
website will be updated with all relevant information kindly. Now I would request Solar CEO & MD Mr. Manish Nuwal for his opening remarks. Over to you Sir!
Manish Nuwal:
A very good morning to everyone. The revenue for the quarter stands at Rs.1347 and for the
half year it stands at Rs.3030 Crores. In this quarter we have achieved an all time high
EBITDA and PBT margin at 25.52% and 21.12% respectively mainly on account of fall in
commodity prices and stable currency movement in the quarter. Overall we have recorded
significant improvements in margins both sequentially and year-on-year basis aided by
continuous efforts and operational efficiencies. The company has received orders worth
Rs.1800 Crores plus from its prestigious customer Coal India Limited with a strong order
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Solar Industries India Limited November 03, 2023
book of Rs.3912 Crores we are expecting a higher volume growth of around 20% in the
FY2024 as against 13% achieved in the first half of this financial year. Given the
government’s focus on infrastructure growth and the consequent rising demand for urban
housing, housing and infrastructure sector is poised for strong growth. The final trials for
Pinaka are completed successfully. RFPs have been floated and we are expecting to receive
the orders very soon. These orders will be one of the biggest milestones for our company.
Looking at the geopolitical situations and healthy order book of Rs.1050 Crores we believe
the defence revenue should go up substantially now onwards. In our international
businesses though we have been supported by moderate raw material prices but geopolitical
tensions, higher interest rates and hyperinflation resulting into foreign exchange volatility
are causing challenges for us in the near term. Substantial progress has been made in
increasing global footprints, increasing the product portfolio for defence sector and
increasing domestic presence through acquisitions and initiation of Greenfield projects.
Now with expected increased volumes from mining, housing infrastructure and defence in
the coming quarters, we are expecting EBITDA margin to increase further from the earlier
guided EBITDA margins of 20% to 22%. With this I would like to thank you everyone and
wish you a Happy Deepavali in advance. Now I hand it over to Aanchal to take it forward.
Thank you.
Aanchal:
Thank you so much Sir. Coming to the quarter results, we have shared the investor
presentation carrying all the necessary information for your perusal on the website and the
exchanges still giving you little key highlights. Key highlights for Q2 and half year are:
This time we will be consolidating the quarter and half yearly results to make it faster. The
consolidated revenue for the quarter is Rs.1347 Crores against Rs.1567 Crores and for half
year it is Rs.3030 Crores against Rs.3182 Crores. Our explosive volume for the quarter and
half year is increased by 13%. Initiating systems revenue increased by 6% in the quarter and
24% in the half year. The percentage of the sectors in the customer basket are as follows:
CIL is up in the basket to 14% from 13%, non-CIL & institutional is at 15% from 17%,
HNI is intact at 15% in the basket, exports & overseas is intact at 47% and defence has
increased at 8% from 7% in the basket. In the half year the basket is more or less remains
the same except for the defence which is majorly increased by 3% that is from 6% to 9% in
the current basket and in absolute terms the same has increased by 49% year-on-year.
Coming to the cost, raw material consumption for the quarter stands at Rs.653 Crores
against Rs.933 Crores and half year stand at Rs.1615 Crores against Rs.2000 Crores.
Employee cost for the quarter stands at Rs.103 Crores against Rs.87 Crores and half year
stands at Rs.203 Crores. Other expenses for the quarter stands at Rs.255 Crores against
Rs.248 Crores. We reported an EBITDA of Rs.344 Crores against Rs.303 Crores showing a
massive rise in the margin from 19.36% to 25.52% in the seasonally weak quarter. We
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Solar Industries India Limited November 03, 2023
reported half yearly EBITDA of Rs.675 Crores against Rs.595 Crores with a margin of
22.29% against 18.69%. Interest and finance cost stands at Rs.25 Crores against Rs.19
Crores and for half year stands at Rs.50 Crores against Rs.34 Crores. Depreciation cost
stands at Rs.34 Crores against Rs.30 Crores and half yearly stands at Rs.68 Crores against
Rs.61 Crores. PBT stands at Rs.285 Crores against Rs.254 Crores with a massive increase
in PBT margins that is 21.12% against 16.18% and for half year it stands at Rs.557 Crores
against Rs.500 Crores with a massive rise in margins at 18.38% against 15.72%. PAT
stands at Rs.209 Crores against Rs.189 Crores with margins standing at 15.51% against
12.04% and for half year stands at Rs.411 Crores against Rs.371 Crores with a margin of
13.55% against 11.67%. These are the updates for the quarter and half year. Now we would
hand over to the Nirmal Bang and the Chorus conference call for the questions ahead.
Thank you.
Moderator:
Thank you very much. We will now begin the question and answer session. Ladies and
gentlemen, we will wait for a moment while the question queue assembles. The first
question is from the line of Sumit Jain from ASK Investment Managers Limited. Please go
ahead Sir.
Sumit Jain:
Manish congratulations on great margin performance. What I am keen to know is while we
are talking of a 20% volume growth just wanted to understand this 20% volume growth is
for the explosives business in India or for company as a whole?
Manish Nuwal:
The volume guidance is for the Indian market which is 20% growth for this financial year.
As far as international markets are concerned we are expecting a volume growth of 15% but
going forward we also are looking at increasing the volumes in the tune of 20%.
Sumit Jain:
So you are saying 20% for business as a whole next year in terms of volumes, 20% for
India business this year and 15% for international business this year that is the guidance?
Manish Nuwal:
Yes.
Sumit Jain:
This 20% in India includes initiating systems as well?
Manish Nuwal:
Yes 20% for both.
Sumit Jain:
So how much would have been the volume growth this year including initiating systems?
Manish Nuwal:
It is in the same range around 10% to 13%.
Sumit Jain:
Thank you Sir. I will come back in the queue if I have any more questions.
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Solar Industries India Limited November 03, 2023
Moderator:
Thank you. The next question is from the line of Dhananjai Bagrodia from ASK Investment
Managers Limited. Please go ahead.
Dhananjai Bagrodia:
Congratulations Sir on a very good set of numbers. Would we assume the EBITDA will be
stabilized with realization now stabilizing should we look at that?
Manish Nuwal:
We expect that there has to be some stabilization in realizations but we cannot say with
100% guarantee that it will be remaining like that because commodity prices are keep
fluctuating and we are expecting that prices should bottom out in this quarter. Now onwards
prices can go up but there is no surety on that front. That is why we believe that the volume
guidance which we have given that we are expecting a 20% volume growth and EBITDA
margins are going up so that should suffice our overall purpose for which company is
working.
Dhananjai Bagrodia:
Sir in terms of markets we have obviously received a very large order from Coal India how
are we seeing that execution with that full order which you have got this quarter have come
in the last order book or is there still some left?
Manish Nuwal:
No, the Coal India orders which we have received has started already from the month of
October and we are expecting that it will impact our overall volume growth now onwards.
Dhananjai Bagrodia:
So the full order will be in the order book right?
Manish Nuwal:
Yes and this order book is for the two years.
Dhananjai Bagrodia:
Sir lastly what would the capex for this year?
Manish Nuwal:
Our capex this year we have earmarked that we will be doing around Rs.700 Crores, but as
of now we have already done around Rs.230 Crores to Rs.240 Crores and we are expecting
that capex will go up now onwards and we are expecting that we should be doing around
Rs.650 Crores to Rs.700 Crores in this financial year.
Dhananjai Bagrodia:
Sure thank you.
Moderator:
Thank you. The next question is from the line of Noel Vaz from Union Asset Management
Co. Limited. Please go ahead.
Noel Vaz:
Thank you for the opportunity. My question was regarding the press release there was a
statement regarding overseas segment and there was a statement towards some kind of
volatility and FX related issues so I just wanted to get some idea about are we seeing some
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problems in specific geographies or do we expect the second half for the overseas segment
to be relatively subdued compared to first half so I just wanted to get an idea about that?
Thank you.
Shalinee Mandhana:
Firstly we have been seeing hyperinflation is there, continuous hyperinflation is around
Rs.31 Crores. It has been taken in other expenses on account of hyperinflation so around
2% has been hit on the margins with regards to EBITDA and also forex volatility continues
because we have been operating in so many geographies and looking at the current
geopolitical tensions so currently for the short term the volatility continues but how the
same will face out it is very difficult to speak at that moment.
Noel Vaz:
Just to clarify we are not expecting to see any kind of slowdown in terms of volumetric?
Shalinee Mandhana:
No, nothing in that perspective. Yes just sharing the challenges which have been going on.
Noel Vaz:
Fine. Thank you. I just wanted to get some clarity on that. Thank you. That is all from my
side.
Moderator:
Thank you. The next question is from the line of Amit Dixit from ICICI Securities Limited.
Please go ahead.
Amit Dixit:
Good morning everyone and thanks for taking my question. First of all congratulations for a
splendid set of numbers. I have two questions the first one is going back to again volume
growth guidance it is very reassuring that you have guided for 20% volume growth;
however, that implies that in H2 volume growth should be around 27% to make 20%
growth essentially, so I just wanted to understand the key drivers for the growth with what
all sectors you expect the growth to come from?
Manish Nuwal:
Yes for this year we have revised our volume growth guidance from 15% to 20% that is for
the whole year and positivity for issuing such statement is that we have received a big order
from Coal India and if you look at the coal mining growth it is going at a very fast pace and
they are increasing overburden removal in much larger quantities so that is the key reason
and another reason is that the thing which we were saying from last couple of quarters that
because of the high commodity prices definitely our finished goods prices were also high
and now since prices are bottoming out or at a much reasonable and sustainable level so
demand for these products has to go up and if you look at infrastructure side also after the
monsoon is over second half is always better than the first half so based on these positive
factors we believe that we should be able to achieve 20% volume growth in this financial
year.
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Amit Dixit:
Wonderful Sir. The second question is essentially on defence so you have very specifically
stated Pinaka order in the press release, now just wanted to get a sense on when we can
expect this order while I know the timelines are not in anyone’s control but when do you
expect that you will get this order and what would be the execution timeline, also in terms
of defence if you could just highlight some of the key developments that the company is
engaged in currently that would be great Sir?
Manish Nuwal:
Yes so like we have said that the trials which we were expecting to conclude in the last
quarter are already been done and products are successfully being tried out at the various
areas for qualification programs, so now with this RFPs has also been floated and in one of
the RFPs we have already participated, in another RFP we are going to participate in the
month of November, so looking at these kind of developments we expect that order should
start flowing from the month of December or January 2024. December 2023 or January
2024 so these are estimation. Definitely like you said that in defence things can go here or
there by three to four months is not a big deviation but we fairly estimate that we should
receive these orders in next three to six months time and that should help us to start
producing the products and supply from the next financial year and if you look at the kind
of development which we have been doing from last couple of years especially in last 12
years we have not only set up the most integrated facility of ammunition which is one of its
kind in the world and after setting up those facilities now we have developed plenty of
products which can go for variety of usages for our armed forces. Now with these
geopolitical tensions which we all are aware of which started almost one-and-a-half years
back and now it has increased in the Middle East also. Based on these factors we are
expecting that the kind of capabilities which our company has created will be utilized in
much better way in coming years. Based on these kind of developments we believe that the
sales of products for this sector should go up from the next quarter.
Amit Dixit:
So in the beginning of the year you gave guidance that defence revenue could be Rs.800
Crores so any chance that we would exceed this guidance this year?
Manish Nuwal:
We have given the guidance that we should cross Rs.700 Crores and we maintain that we
should be doing around Rs.700 Crores in this financial year because there were some delays
in execution side in this quarter so which will definitely shifted some of the revenue to the
next quarter so that kind of shifting can continue and as a result we are still expecting that
we should fairly do around Rs.700 Crores in this financial year but the major jump will start
from Q4 of this financial year or Q1 of the next financial year.
Amit Dixit:
Got it Sir. Thank you so much and all the best.
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Moderator:
Thank you. The next question is from the line of Dipen Vakil from InCred Equities. Please
go ahead.
Dipen Vakil:
Thank you for taking my question Sir. Sir my first question is on our realization. You
mentioned that the raw material prices have gone down and similarly the rates have also
gone down to almost 14% so can you help us with how much are the raw material prices
gone down and what can be expected in say at least one quarter going ahead with respect to
the commodity prices?
Shalinee Mandhana:
Firstly year-on-year basis the ammonium nitrite prices have gone down by around 50% and
with respect to that our realizations are down by 29% so currently we see the raw material
prices are stable at this level; however, it is very difficult as ManishJi had spoken earlier to
speak on the volatility because we see that from the current quarter onwards the prices may
start going up so difficult to predict where the same will be.
Dipen Vakil:
But has it remained at similar levels in October and November?
Shalinee Mandhana:
Yes and since the falling raw material prices is also very good for our industry as well as for
the infrastructure sector.
Dipen Vakil:
That was helpful. Thank you.
Moderator:
Thank you. The next question is from the line of Amit Vijay Saoji from A1 Investments
Limited. Please go ahead.
Amit Vijay Saoji:
Happy Diwali ManishJi and full team of Solar. Sir my question is we have order book of
Rs.3912 Crores and approximate defence order is Rs.1050 Crores as of now what will be
the order book approximate in next year?
Shalinee Mandhana:
So current order book which we have for Rs.1050 Crores it has to be executed over a period
of one-and-a-half years and currently as we spoke that we are expecting Pinaka orders in the
next two quarters so obviously when the order comes we will update on the order book.
Amit Vijay Saoji:
Any percentage terms of guidance?
Shalinee Mandhana:
It is very difficult at this stage to give that.
Amit Vijay Saoji:
This Rs.1050 Crores order book consists of hand grenade and again other material?
Shalinee Mandhana:
The basket of products, various rockets and even Armenia export order also is there.
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Solar Industries India Limited November 03, 2023
Amit Vijay Saoji:
Thank you.
Moderator:
Thank you. The next question is from the line of Rohan Gupta from Nuvama Wealth
Management. Please go ahead.
Rohan Gupta:
ManishJi good morning and congratulations on a strong set of numbers. Sir couple of
questions so first is on our defence business outlook though you mentioned roughly Rs.700
Crores is likely to be maintained we have seen that there has still been a quarterly volatility
in difference if you understand the nature, if you can give some sense with changing
geopolitical tension and you rightly mentioned that the world market was already seeing
Russia-Ukraine and now increasing tension between Hamas and Israel, so how the defence
business in this scenario is likely to change for us more importantly in terms of exports and
if you can give some sense over next couple of years though initially you mentioned
roughly the defence business should go up to roughly Rs.1500 Crores to Rs.2000 Crores
over next two years to three years how do you see that the scenario changing if you can give
some thought process if you can share on that Sir?
Manish Nuwal:
Yes like I have already shared that in last couple of years we have seen geopolitical tensions
are going up and with recent kind of conflicts in Middle East is definitely creating an
environment where demand for products which we are making should go up and that should
help us and another positive factor is that we have created lot of facilities to handle variety
of products for different, different requirements or different applications so looking at these
kind of scenarios we expect that orders from exports or orders from overseas customers for
defence should also go up substantially. One of the orders we have already shared in the last
year that we have received orders for Pinaka rockets from outside India and we believe that
such kind of orders for other products will also keep coming so that is what we can share as
of now and the current order book stands at Rs.1080 Crores and with Pinaka it comes up in
next three to four months or five months time that we lift the overall order book from
different sectors substantially and based on that we can give a guidance for the next year or
maybe 2025 or 2026, so let us wait for some couple of months to receive orders for Pinaka
and other products which we have been developing and showcasing to our valued investors,
so let us wait for some more time till we have received some concrete orders we will
definitely share with our valued shareholders.
Rohan Gupta:
Sir my question was more in terms of geopolitical tensions, we are in war since last two
years slow war and it has just only escalated, there is a continuous decrease in global
inventories of arms and ammunitions and it will only accelerate, we have seen that US and
Europe are almost getting out of the inventories, so with this new inventory increase or the
decline in global inventories in arms and ammunitions which is happening this is going to
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Solar Industries India Limited November 03, 2023
change the defence business maybe for next three to five years globally, I just wanted to
know that how we are placed in this changing scenario, do you see that we have made
inroads in many global markets when the next three to five years we will see that restocking
will happen we are ready with the new kind of new set of instruments maybe in rocket or
even in you can say that targeted drone kind of instruments which are going to see the
increasing application, so I just wanted to see that how the landscape which very clearly has
changed globally how we are going to benefit from that Sir I was just trying to understand
from that perspective?
Manish Nuwal:
What we have shared that the company has created infrastructure, the company has created
capabilities and the company has developed variety of products for different applications
and looking at the background of recent geopolitical environment we believe that these will
open up plenty of opportunities for our company and as we received orders we definitely
share with our stakeholders that is what I can comment at this stage.
Rohan Gupta:
Thank you Sir. Sir just one clarification on capex front you mentioned that initial guidance
was roughly for the capex of Rs.700 Crores you have spent Rs.340 Crores so you increase
the capex guidance for this year or it still remains at Rs.700 Crores I missed that point?
Manish Nuwal:
No, we are maintaining that the guidance of Rs.700 Crores still there and as of now
whatever we have invested is around Rs.240 Crores to Rs.250 Crores and in the next two
quarters we should be there around Rs.400 Crores to Rs.450 Crores.
Rohan Gupta:
Fine Sir. Thank you very much.
Moderator:
Thank you. The next question is from the line of Rushabh Shah from Anubhuti Advisors
LLP. Please go ahead.
Rushabh Shah:
Thank you for the opportunity. Sir my first question is on the margin profile so Sir you
guided that margin will be now above the originally guided band of 20% to 22% so what
level of margins are we now looking at?
Manish Nuwal:
So we are expecting that we should cross annualized margins above 22% so it can be 23%,
it can be 24% so as of now we cannot give a one figure and that is what we have been
giving guidance that normal guidance was 20% to 22% for this financial year. We are
revising it upwards above 22% so it can be either 23% or maybe 24%, that depends on the
kind of the market situation and demand of the products.
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Solar Industries India Limited November 03, 2023
Rushabh Shah:
Understood and Sir just wanted to understand on the defence front so the margins on the
defence segment higher than overall company average level or they are largely in line at
that 20% to 22% band?
Manish Nuwal:
So we have given guidance for the business as a whole and not for individual product or
individual section.
Rushabh Shah:
Sir just last one update on the capex side so earlier we had guided for Rs.750 odd Crores of
capex for the full year now we are still seeing around Rs.700 Crores we will be doing it for
the full year and currently I think we have done somewhat around Rs.240 odd Crores so
largely this will be concluded in the later part of the year and the resultant growth will be
visible in FY2025 levels?
Manish Nuwal:
We have given guidance of Rs.700 Crores for this year and we have spent Rs.240 Crores to
Rs.250 Crores and balance amount we are expected to spend by March 2024.
Rushabh Shah:
Sir any new capex announcements apart from the earlier guided number I think we were
adding four new geographies so apart from that anything we are adding new currently?
Manish Nuwal:
So all the expansions which we are taking place or which is going on is part of this amount
thank you.
Rushabh Shah:
Thank you Sir.
Moderator:
Thank you. The next question is from the line of Puneet Kabra, an Individual Investor.
Please go ahead.
Puneet Kabra:
Congratulations ManishJi and everyone. I had just a couple of questions. First question I
had was can you share any details around the business from private coal mines and what is
the outlook for that in the next couple of years given that licenses were handed out in the
last 18 months?
Manish Nuwal:
Can you share all the questions first so that I can answer them properly.
Puneet Kabra:
Yes and second was we had announced expansion in Southern India and Northern India for
cartridge explosives so if there is any progress around that those are the two questions?
Manish Nuwal:
So like we have said that we have a plan to expand our global footprints and increasing the
presence within our country. Based on that last year we have announced that we have
acquired a company Rajasthan Explosives and Chemicals that is being done to expand
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footprints in the northern part of the country and we have already applied for licenses. We
have acquired land and applied for licenses and we are going to start the construction of the
project very soon in the Western part of India. Similarly we have almost started identified
the land in Southern part of India and acquisition will start soon, so based on these kind of
planning we expect that the plant in Western part of India should be over by December
2024 and in Southern part of India should be over by mid of 2025 and if you look at the
private coal mines the licenses has been allotted to plenty of private coal mines and the kind
of nature or the value added services which they ask for so our company is well poised to
cash on on those kind of demands and we are quite bullish on demand from those sectors.
Similarly like I said that demand from Coal India will also grow up significantly because
the kind of investments they have done in the last three to four years for building of the
infrastructure should help them to increase the coal production and OB removal and that is
going to help our company significantly. Thank you.
Puneet Kabra:
Thank you.
Moderator:
Thank you. The next question is from the line of Pratik Mukasdar from RNL Investment
Partners. Please go ahead.
Pratik Mukasdar:
ManishJi congratulations for a great set of numbers. In these volatile times you and your
team have handled everything quite well. It is visible from our margin expansion. I have
couple of questions so like we stated about Pinaka Rockets we were also into development
of some drone-related technology can you throw some highlight on that that product how
much it is developed now, my second question is as you have been mentioning in the past
three concalls also that mining sector is growing very well so on your interactions with your
customers both Coal India and non-Coal India what is the sentiment that you are getting
about the longevity of the growth in mining sector? These were my questions.
Manish Nuwal:
So like we have said that we have started developing products based on unarmed vehicle
and we have successfully developed those products and based on that we have received an
order of supplying some quantity of numbers for army and we are going to start deliveries
in couple of months so we are also developing plenty of UAV-based advanced solution for
armed forces so that is an ongoing process and we keep investing in building those
capabilities so that is going to help our company in the coming years significantly and apart
from this another question which you have asked on coal production so like if you see the
coal production run rate it is going around 9% to 10% and the OB renewal is growing at
around 17% as far as Coal India is concerned so that is helping us to supply more quantities
to Coal India and if you look at the order size which we have received couple of weeks back
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so that is a significant order which we have received of that magnitude for the first time and
we were quite bullish on enhancing our presence within Coal India also. Thank you.
Pratik Mukasdar:
Thank you.
Moderator:
Thank you. The next question is from the line of Manish Mahawar from Antique Stock
Broking Limited. Please go ahead.
Manish Mahawar:
Good morning Manish. Manish just regarding the Pinaka what could be our opportunity
size or potential size of order or maybe requirement can come?
Manish Nuwal:
Any other question Manish?
Manish Mahawar:
Second thing in terms of Coal India order book which we got this time Rs.1800 odd Crores
and last time I think it was Rs.1470 Crores I believe so what was the volume uptake higher
versus last order that was the second question, third question was on the EBITDA margin
guidance what you have given 22% plus going forward next two or three years view earlier
our margin guidance used to be 22% so should we take it as a 22% to maybe 24% over next
two to three years?
Manish Nuwal:
As far as EBITDA margins are concerned for this year we have revised our guidance from
2022 to EBITDA margin of 22% plus. As far as margin guidance for the coming years we
will definitely issue after end of this financial year but definitely margin should improve
based on increased sales from different sections that is one. Second as far as size of Pinaka
order is concerned so till RFPs are finalized and orders being received we cannot comment
on that.
Manish Mahawar:
But what is the opportunity size maybe tentative number anything Manish on this Pinaka
one?
Manish Nuwal:
So like Manish you have your own resources to get all this information from army better
you do that because we cannot speak more on that.
Manish Mahawar:
Understood Sir no issue and this Coal India order what we have received Rs.1800 odd
Crores versus last two years back what we received order so what was the overall volume
increase in the last order to this order?
Manish Nuwal:
The Coal India has given an order with an increased volume of around 50% but the
conversion may not be up to 50%. That depends on their overall planning whether they buy
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Solar Industries India Limited November 03, 2023
from private sector or whether they want to buy from another public sector on nomination
basis but we are quite positive on this.
Manish Mahawar:
(inaudible) 40:54 was 50% is broadly right assuming that they assume the lower realization
versus the last order?
Manish Nuwal:
You can do your own calculations but as far as our guidance is concerned we have received
order which is a significant quantity increase and as far as margins are concerned we are
pretty much comfortable and based on our overall guidances we are rising our EBITDA
guidance upward.
Manish Mahawar:
Sure Sir, thanks and all the best Sir.
Moderator:
Thank you. I will now hand the conference over to the management for closing comments.
Aanchal:
This is all from our side. Thank you so much everyone for participating and may you have a
very fantastic Diwali ahead. Thank you.
Moderator:
Thank you very much. On behalf of Nirmal Bang Institutional Equities that concludes this
conference. Thank you for joining us. You may now disconnect your lines.
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