Max India Q3FY17 Concall Summary

Max India Logo

Financial Highlights

  • Revenue for the quarter is at 639 crores, growth rate is 16% y-o-y
  • EBITDA margin has improved by 26 basis points & it is at 10.5% this quarter
  • The company has taken out Rs 40 crore in cost in the first 9 months as against the target of 30 crores & expect another 15 crore of cost take out in the last quarter   
  • Treasury corpus of around 320 crores
  • Antara senior living is project & is still in premature stage & the company is in commissioning stage. There is also little bit of accounting issue there as there is lease model to collect the revenues over 60 year period etc. It needs another 9 to 12 months to shape up the business 

Max healthcare

MHC Q3FY17 Financial Performance
  • Robust 9M revenue growth of 23% to achieve Rs 1939 Cr. EBITDA growth at 34% to 203 crores
  • Significant proportion of revenue growth is driven by MHC Star Specialties with renal sciences leading the revenue growth at about 36%.
  • Margins improved by 103 basis points to 11%
  • The improvement in profitability is driven primarily by improvement in margins of new hospitals expanding to 7.5% vs 3.4% in the corresponding period
  • Strong growth expected from Vaishali hospital & Saket city hospital. Want to double bed capacity to 5000 from currently 2500
  • Max Healthcare is expected to continue to outpace growth of most of the other corporate hospital chains in the country
  • Price growth is not easy for the company as it needs regulatory nod, the price increase is on an average 8-10% & once in 2.5 years
  • EBITDA margin for mature hospital & new Hospital is around 11.5% & 8%. 
  • Business of Max labs currently housed in Max healthcare & later on it will be transferred to 100% separate company
  • Manpower has been deployed in 65% of the branches & the IT systems have been integrated with the banks' core system
  • The new pathology B2B business launched in May 2016 has already done over 250 plus tie-ups. It will be launched in Q4FY17, & company intends to scale up the business quite fast
  • The stent pricing control will have minimal impact on the company as cardiac business is not significant one, the impact may be around 10-20 crores

Max Bupa

Max Bupa Q3FY17 Performance
  • Health insurance business performance in its chosen B2C segment continues to remain strong with B2C growth premiums about 24%.
  • Good Customer experience and renewal growth of 30% has also resulted in the conservation ratio improving to 85%
  • Focus on cost led to reduction in loss to 2 crore corresponding to 12 crore loss last year
  • Max bupa GWP premium growing at 23% to 401 crores.
  • Losses were reduced to Rs 18 crore from 52 crores of previous year
  • Tie up with Bank of Baroda is gaining traction as branch ramp up is improving. This alliance will provide Max Bupa access to 5400 branches & almost 60 million customers & is beneficial in long run
  • Among private players the company has about 4.25% of market share
  • Company has tie up with 6 banks including one regional bank i.e Standard Chartered, Deutsche, RBL, Federal Bank, Bank of Baroda and Sarva UP Gramin Bank
  • Claim ratio has come down from 59% to 54% in the quarter
  • Agencies are company’s largest distributor channel & few NBFC. These contribute to 7-8% of the business
  • Max Bupa is growing around 25% and is on course for an operating breakeven in FY19. 

Capex and Expansion Plans

  • Capex In 9 months is around 50 crores which is mainly on replacement of equipments & small additions to the beds etc.
  • The company spent roughly around 45 crore on the Shalimar projects which is undergoing at this point. For vaishali another 150 beds are to be added, so that adds up to around 100 crores in 9 months
  • Capex for Q3FY17 is 35 crores
  • Capex next 4 to 5 years one can be assumed at 2.5% of the revenues & on the beds it can be average 75 lakhs per bed & then spread it over 2 years
  • Launched new oncology day care in Delhi in June 2016 & this year with a team of 200 people have joined already.
  • Earlier for Saket City, the beds allotted were 300 & then 600 in next phase. But now the company has accelerated the Saket city beds to 650 & therefore the balance 300 of the 1200 available capacity gets pushed out by about 2/3rd after the 650 comes in. 
  • For FY17 earlier it was planned for 85 beds because the of the liver transplant program which was introduced which required much space relative to the normal,therefore, there was scaling down of beds in Saket city
  • In FY19 the company has to buy the rest of stake in Saket city
  • Earlier CAPEX expectation was around 2000 crore & in that 1200 crore will be on new bed addition & around 800 crores was on buyback of the stake. But there is slight change because now the CAPEX will only be around 1800

Update on Demergr

  • Max financial services after demerger of the life insurance business will merge with Max India
  • Application for the same have been filed at various regulatory authorities like SEBI, IRDA, CCI

Demonetization Impact

  • Impact of 7-8% due to demonetization
  • On Q4 the effect will be smaller as compared to Q3. 
  • The hospital business continues to be slow in January 


Trident Q3FY17 Concall Summary

Trident logo

Financial  Highlights

Trident Q3FY17 Financial Performance
  • The net revenue  was Rs. 1139 Cr in  Q3FY17 increasing by 26% compared  to   Rs. 905 Cr in Q3FY16
  • EBITDA improved by 30% to  Rs . 233 Cr translating EBITDA margin of 20.5%
  • PAT grew by 26% to  Rs . 79 Cr against Rs. 62 Cr over corresponding Quarter last year
  • PAT including comprehensive  income improved by 18% to  Rs. 71 Cr
  • Revenue increased by 26% to Rs. 3487 Cr in  9MFY17 while EBITDA increased by 30%  to  Rs. 725 Cr translating into EBITDA margin of  20.8%
  • PAT was Rs. 237 Cr higher by 36% 9 MFY17 compared to Rs. 175 Cr in 9MFY16. PAT including comprehensive income was Rs 240 Cr, an increase  of  35% corresponding period  last year
  • 65-75% of exports are to US and about 15-20% are to Europe

Segment wise performance

  • The percentages of Bath and Bed together as well as Yarn of total revenue for nine months: 48% is with Bed and Bath both and around 19% is Paper and 34% is Yarn
Trident Q3FY17 Segmental Revenue
  • Textile Segment

    • Revenue from textile segment  was Rs . 916 Cr in  n Q3FY17 against Rs.  704 Cr in the Q3 of  FY 16 giving a YoY growth of 30%.
    • EBT was higher by 11% at Rs. 83 Cr and EBT margin was at 9.1%.
    • EBT margin has been declined as of  150 basis point due to  increase in the
    • price of cotton in Q3 FY 16
    • 9 Month Revenue of  textile segment stood at Rs. 2838 Cr higher  by 32%   YoY
    • EBT of textile increased by 26% to Rs. 291 Cr while the EBITDA margin was 10.2%.
  • Paper Segment
    • The revenue  were  higher  by 11% at Rs .  223  Cr compared  to Rs. 201 Cr in Q3 of FY 1 6. In paper size the  increase in realisation on YoY is  4%. QoQ will  be around 1.5-2%.
    • Overall EBT increased sharply by 62% at Rs. 63 Cr translating the EBT margin at  28.4% which is higher by  890 basis point YoY. This was due to better realisation of paper products and higher valuation of paper products.
    • In the paper segment the revenues were up by 5% to Rs. 650 Cr .
    • EBT of paper segment increased to 49% to Rs. 178 Cr translating the  EBT margin of  27.5% higher  by 810 basis point YoY
Trident Geographic Revenue Q3FY17

Awards & Recognition

  • Trident was conferred with runner-up award  of  prestigious  PMI India  award  2016, for  its integrated textile project at  MP.
  • Several awards for energy conservation such as award of National Energy Conservation award 2016 by ministry of power, Govt of  India.
  • EPMA energy conservation award 2016 by Indian paper mill association

Revenue  Analysis

  • Out of total revenue 49% of revenue is from bath & bed both, and  around  19% is from paper and 34% is from yarn .
  • The team appointed in US and UK both is doing well. And in last 9 months the team has as shown a good growth in terms of order book and pipeline and visibility, towel volume has been increased by 20%.
  • Spill over in towels in Q3 and company is confident that Q4 will be better than Q3
  • About 65-70 % export is in US and 15%-20% is in Europe.


  • The net debt of Rs. 2608 Cr as on 31 Dec 2016 which is down from Rs. 3273 Cr as of 31 March 2016
  • Debt equity ratio was 1.4x over 1.9x over last year
  • Repaid outstanding term loan of Rs. 78.5 Cr including high rate debt of Rs. 8 er, with this the company has paid Rs. 445 Cr of debt including Rs . 159 Cr of high rate debt
  • Long term  debt as on 31st  Dec 2016 is Rs. 2072 Cr out of which more than 75% is covered under TUF scheme
  • Average cost of the TUF loan is less than 3%.
  • The net debt had gone up about Rs . 100 Cr because of procurement of cotton and inventory
  • In bed linen, the utilization has gone down and is about 27% in this Quarter against 32% in previous Quarter.
  • The company is moving towards right direction with right approach in utilization
  • In FY 18 company is planning to repay Rs. 400 Cr of debts.The payments will be done by free cash flows.
  • Overall debt in Towel segment in FY18 will be Rs. 400-500 Cr less
  • SBI has reduced the MCLR by 150 basis points and he company has already got the benefit of approximately 50 basis points

 EBITDA margins

  • In Textile, EBITDA margins will 18-22%
  • In last 2 years the margin in yarn was between 12% -20% and now, the range is between 15% -22%.
  • In towels the margin is 20-24% due to marketing and US clients.
  • In bed linen they have not even reached breakeven yet. Breakeven is expected in Q4.
  • Decline in EBITDA margin was due to two reasons firstly, the increase in the raw material cost which is cotton, cost of cotton in Q2 was less than the cost of cotton in Q3. Secondly, in this Quarter. the company had a MTM forex of about Rs. 8 Cr like contracts of exports.
  • In towels there is decline in the utilization and was at 46% in the quarter . and in Q2 was 58%.
  • In yarn 45 days is the lead time and cotton prices are increasing so, proportionately the price will increase .
  • In FY 18 the utilization will be around 65% for towels and 50% for bed linen

Impact of high cotton prices

  • Company procures cotton between month of October to March and in yarn there is 45 days lead time and in towel there is 3 months lead time .
  • The utilization of bed linen is 27% in Q3FY17 vs 32% in Q2Fy17. The overall utilization has been declined however, the proportion of processing has been increased significantly. Capacity utilization for paper business stood at 90%
  • In  Q3FY17, the ratio of processed and unprocessed cotton is 90:10.


  • Capex maintenance will be around Rs. 50-55 Cr in a year.
  • Expansion in Europe and US, penetration in these market and offices are open in Europe to take care of the market.
  • Capex in paper segment
    • No  such  capex  done,  just  evaluation  of  the  existing  operations  to  meet  the margins. Debottenecking can improve production by 15-20%

Update on Clients

  •  Increase in clientele base and major growth is from visiting clients, no exact data of clients as of now
  • Many clients had been added mostly in US in last Quarter and this Quarter
  • Penetration in new market also will be  done
  • No of customers for bed linen was 5 in Q3FY17, out of which 2 are big customers.

Regulatory Updates

  • Import duty in US
    • India has an inherent advantage in cotton and that will be kept in consideration while preparing import regulations by  US.
    • Import duty is 9% in bed and home textile in US
  • Demonetization impact on paper  segment
    • Paper segment is having good demand and demonetization has no impact in India
  • New notification of rebate of Ministry of textile on exports.
    • Rates are still not decided but 3-4% on output cost, 2% for  procurement and 5% of VAT
  • Effects of 3.5% of duty from the govt notification.
    • That is generic for bed & bath and the rate has not been decided yet and duty drawback committee will sit and decide the same and can be done anytime in future

Price expectation

  • Possibility of decrease of price in FY 18  in  Paper industry
  • It completely depends on price & demand.
  • FY18 will be good for the paper (writing, printing & copier ).Import from Indonesia is in writing and printing.
  • Cotton production is expected to be increased and cotton prices also hiked and reached to 42000 per candy, in December the rates was 40000 per candy.

Realisation in yarn

  • Only bed linen has been increased to 15% and other as similar to last quarter.
  • YoY the  towel realisation was less around 6% whereas yarn was 13 % higher

Capacity Utilisations

  • Capacity Utilization of Bed Linen facility was 29% in 9M FY17, while the utilization in Bath Linen stood at 49% based on tonnage capacity. Yarn business also reported improved utilization level of 92%.
  • in Bed Linen, the utilizations are lower. It is at 27% in this quarter as against 32% in the previous quarter which is Q2. However,  60% was processed and 40% was non quarter. The proportion is 90-10 in Q3FY17, and so realizations are going to improve.
  • Towel segment capacity is 90000 ton details.The segment is given as of maximum rated limit and at normal capacity it will be around 75-80% can be achieved.India is more competitive than china in towel and cotton.
  • The capacity in paper is around 1 lakh 75 thousand ton per annum and utilization is 90%.

Cotton procurement prices/ hand textile fair response.

  •  Average  cotton prices are around  42000  per candy.
  • The yield in cotton per hectare has been increased.
  • For every 20% increase in cotton prices the impact at  Yarn level is around 8% to 10% whereas in Towel and Bed Linen, it is around 5%
    to 6% only.
  • Very good response for hand textile for bed sheets, towels, and other products

Patents benefits

  • Patents always showcase the customers as a USP and they look as a different Product and it keep the company ahead from the other compet it ors.
  • Paper demand is increasing day by day

Guidance for FY 18

  • FY 18 seems very promising, as all the initiative taken by the Company in past, have started delivering results and momentum will be good in upcoming  quarter
  • Top management of company is ready to focus on global scale capacity in shortest possible time, the company is confident of generation robust cash flow  and  will create tremendous value for the stakeholders
  • Demand of writing, copier, and printing is good and 50% of production is from printing & writing which is B2B and 50% is copier right now
  • Company will increase the copier paper segment.
  • The company topline will grow by 20% in FY 18.
  • Rs. 400 Cr debts wil be repaid per year and the flow of cash will be there and the cash generation will be more than the  payment
  • Demand in US and globally will be flat only in towel segment
  • The proportion of Indian products is increasing at 10% CAGR YoY.


Reliance Infrastructure Q3FY17 Concall Summary

Reliance infra logo

Financial Highlights

Reliance Infra Q3FY17 results
  • Total income for the quarter is at 7247 crore, a 11% increase from corresponding previous quarter
  • EBITDA of 1990 crore increase of 20% from previous quarter
  • Net profit after Tax of 375 crore increase of 49% from previous quarter
  • Net Worth of 24889 crore which is a book value of Rs 946 and a consolidated book value of Rs 31,616 crore which is at Rs 1,202 crore
  • The company is expecting the exit of Mumbai distribution business not before March 2018 as there are multiple approvals required
  • The interest cost has gone up mainly due to butibori, the way butibori is accounted in books.
  • Depreciation is also gone up because of the fair value which has been reflected in assets  as per Ind-As requirement
  • There is impact of Rs 350 crore due to butibori as increase in finance cost
  • Depreciation is bit lower than 500 crore & is increased due to butibori
  • The company has regulatory income due to favorable order from from MERC which is roughly around 200 crores in the quarter 

  EPC business

  • Order book currently is 5500 crore
  • The company won 2 X 250 megawatt thermal power EPC project from Neyveli Lignite in Rajasthan. Started work near Bikaner & the project will be completed in 36 months
  • Another project declared in L1 & it is 2 X 800 mw BOP project & expect that loi will be issued in the month of March & with these 2 projects the total order book will be about 9000 cr
  • Total bids in pipeline are about 18000 crore
  • The key verticals which the company focusing are the power vertical which includes the entire generation, transmission, distribution etc.
  • There are also mega projects like bullet train, high speed train, the Mumbai Nagpur expressway.
  • The expected EPC orders on will be more than 2 lakh crore for FY18 & FY19
  • The company is bidding on all the above project & hope to win. Target win rate in the region is 10%, which will translate to 20000 crore of order a year, so the order book the company is focusing by the end of FY19 is to the region of 50000 crore
  • The Company has got approval from CCI for the asset monetization transactions
  • Already filed for CERC approval for transfer of license of 2 WRSS projects in to the SPVs
  • The hearings have commenced & discussion started with the lenders for the lender approval, & expect to move the project by March-April of this year
  • The company has met the senior management of Parbati Koldam & procured their approval for selling the company’s 74% to Adani. It could take between 3 to 6 months the WRSS transaction to be consumed. 

Road business

  • Filed DRHP for 10 road projects. The DRHP is for the value of 3000 crore with an option to retain 25% over subscription
  • In the process of getting NHAI approval & the lenders approvals, which is expected to get in first half of March
  • Expect to lauch InvIT in March second week & SEBI approval is expected in February
  • With this the company will be project manager for 10 road projects & continue to manage & do the balance completion of the projects.
  • The company will monetize 55-60% for these projects on the basis of the evaluation from bankers & as well the entire debt will get off the balance sheet on a consolidated basis
  • The company will complete the Delhi Agra project by the end of FY18 & expect to put this project in InvIT as a right of first refusal thereby realizing additional equity for the company & its shareholders
  • The company intends to raise 3000 crore & intend to dilute around 50-60% of the holding & continue to hold 40% 
    Investment around 3200 crore

Impact of Demonetization

  • No negative impact of Demonetization, on the contrary there was growth in business
  • Metro business grew at 18% in Nov to December, in terms of passenger growth
  • The road business was slight muted but still saw positive growth of 3% in Nov & Dec. The consumers are moving slowly to digital & for road business there was more than 10% digital payments in the 2 months
  • Power business did not see any reduction in demand 

Power business

  • Business continues to perform well
  • Collected nearly 3000 crore till Q3 out of which out of which 5500 which was approved by the regulator
  • There was a small anomaly in the cross-subsidy surcharge which has got corrected in the MYT order, which is now making the company's HT commercial and industrial customers and high end LT commercial and industrial customers more competitive.
  • It helps customers become more competitive compared to co competition & there was 400 million odd worth of migration which was still left pending & that reverse migration has started
  • The company expects that over a couple of quarters the entire base of customers who had moved only because of price would back to company
  • The company managed Delhi distribution with a steep demand of 6400 mw during summer & peak demand of 4160 mw for 4 discoms in the last quarter
  • The company continues to add customers to both Mumbai & Delhi networks
  • Added 61400 customers in the Q3 & serving 7 million customers, effectively it will be 35 million actual customers

Defence Business

  • The company has joint venture with Dissault Aviation & got CCI approval.
  • The project will be done both the offset for the 36 Rafale jets which government ordered
  • The total offset contract will be over a period of 7 years which works out to be around 30000 crore & the facility which is coming at mihan will be primarily doing this contract
  • This facility will also do MRO for these jets over the next 50 years & will be big value contract for the defence business
  • The company announced that the shipyard Reliance Defence & Engineering is the only shipyard which has been shortlisted by the US Navy.
  • This is for getting the refurbishment & servicing done for the entire Indian Ocean & the company is expecting around 100 such ships in the region to be serviced
  • The company expects 15-20 ships to be serviced on an annual basis as the total value of business expected is to the tune of almost 15000 crore over a period of 5 years
  • The company has signed contract for 14 fast patrol vessels totaling to almost 916 crore from the Indian coastguard & the shipyard has delivered highest weight Panamax class vessel, 74500 DWT which has sailed to its customers.
  • The company has a lot of bids on the shipyard site which are in active consultation by the government
  • Over the last couple of years the company has tied up with majors across various verticals
  • Expect the revenue to kick in FY18 itself

Infrastructure business

  • Earned a revenue of 244 crore in Q3FY17 which is growth of 13%
  • EBITDA margins are at high +85%
  • Mumbai metro is the densest metro carrying 3.5 lakh commuters on daily basis. Last week the company crossed the milestone of 250 million commuters
  • On arbitration award the company has got approvals from the banks for the bank guarantees to be given to NHAI & expect these will help reduce debt
  • There are also large arbitration awards of which judgments have been reserved especially like in case of Delhi metro or Yamunanagar or some other projects
  • The company’s CAPEX cycle is expecting a bit of tail end as it needs to do for Delhi Agra & Pune satara roads which is less than a 1000 crore to be spent over the next 1 year where debt & equity is fully tied up