Hester biosciences Q4FY17 Concall Summary

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Financial Highlights

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  • Most of the company’s revenue is from poultry vaccines, as it started the same in 1997. The poultry vaccines business grew about 19%. On the exports side the company grew at 44% & estimated growth of 100% on domestic sales. Overall there was 21% better than planned growth
  • Total sales in the Q4 FY17 is recorded at INR 34.93 crores as against INR 28.18 crores in Q4 FY16 thereby achieving a growth of 23.95% compared to Q4 FY16
  • Total sales for the year ended FY17 is recorded at INR 123.22 crores as against INR 100.89 crores in year ended FY16, thereby achieving the growth of 22.13%
  • Company's total domestic sales is INR 106.69 crores in year ended FY17 as against INR 88.22 crores in year ended FY16 thereby an increase in domestic sales by 20.95%
  • Company’s total export sales is INR 14.43 crores in year ended FY17 as against INR 10.02 crores in year ended FY16 thereby an increase in export sales by 44.01%
  • EBITDA is achieved at 33.30% for Q4 FY17, while in the year ended FY17 EBITDA is achieved at 33.22% as against 33.10% in FY16
  • Net profit is achieved at 20.25% for Q4 FY17 as against 19.53% in Q4 FY16. While in the year ended FY17 net profit is achieved at 20.16% as against 19.05% in the FY16
  • Fixed assets turnover in FY17 stood at 1.50 times as against 1.40 times in FY16
  • Inventory level decreased by 23 days and stood at 97 days in FY17 as against 120 days in FY16
  • Total receivables decreased by 16 days and stood at 78 days in FY17 as against 94 days in FY16
  • Overall, working capital cycle decreased from 107 days in FY16 to 66 days in FY17
  • Company has invested Rs 15.31 crores in FY17 on Capex
  • ROCE stands at 24.06% in FY17 as against 20.69% in FY16
  • ROE is at 20.75% in FY17 as against 19.16% in FY16
  • ROI stands at 13.52% in FY17 as against 12.10% in FY16
  • The board of the directors had declared and paid interim dividend of Rs. 3 per equity shares on 20th October 2016. Further, the board has recommended a final dividend of INR 2.30 per equity shares
  • Total dividend for the financial year FY17 will be Rs. 5.30 paisa per equity shares, resulting into total payout of 18.15% of PAT as per company’s dividend payout policy
  • EPS for the Q4 FY17 is INR 8.32 per share as against INR Rs. 6.47 per share for Q4 FY16 whereas annualized EPS for FY17 is INR 29.20 per share compared to INR 22.60 per share for FY16
  • The exports estimates is based on the registration mainly on the registration activities & partly on the tender. The company cannot control the registration time, some time it is fast & sometime it is slow. It is a cycle which the company has to follow. In Q4FY17 the company got quiet a few registration & again it believes that there will be good spurt in business

 PBR tender business

  • The PBR Tender business which it started is slowly picking up
  • On the poultry front, it has been a steady growth, a little more than the forecasted growth because of having a good market share, a good product line. On the large animal side, the company did a little better, being a smaller division, yes the growth rates have to be higher.
  • The company is reasonably confident that it will grow the business at approximately 50% at least in this current financial year.

Diagnostic Business

  • There has been delay in launch of diagnostic business & will be launched in Q1 of this financial year. It is hoped that this division settles by Q2-Q3 from where we would start generating sales. The company is very confident that the profitability in this division should be reasonably better than the average profitability of the other divisions. The company is doing some seed marketing, test marketing, for a proper forecasting system
  • The company has made little improvement in the bottomline as well as sales growing at 24% & in the year end at around 22%
  • Earlier the company rushed into production once the order is received but now it is streamlined the process to at least ensure the profitability that is derived from each of the production batch.

International developments

  • Commercial production in Nepal started in the end of last calendar year.
  • Focusing on additional tender business as well as the domestic sales from the Nepal plant
  • Company focus is on Africa in this financial year & in this year it has developed strong distribution network mainly in Eastern Africa & then going further to southern part of Africa & then to Western Africa. The distribution network will be in place in 3-4 months
  • It wants to make deeper penetrations into African market


  • Company has spent 6% of its topline on R&D expenditure which has been a little higher than earlier years & continue its spending between 6-8% approximately in this financial year
  • It intends to roll out in this financial year is the thermostable PPR vaccines. It is mainly to immunize goat & sheep in the backward area
  • The vaccines have passed laboratory test & will launch it in couple of months
  • In Q4 the business has grown on the topline at around 22%. It is planning growth of over 30% in this financial year
  • The company’s operation is divided into 4 verticals
    • Poultry vaccines
    • Poultry health products
    • large animal vaccines
    • large animal health products

 Poultry vaccines division

  • Company has booked sales of 27.61 crores in Q4 FY17 as against INR 23.98 crores in Q4 FY16
  • Sales for the year ended FY17 has booked at INR 102.24 crores as against INR 85.47 crores in year ended FY16

 Poultry health division

  • sales booked at INR 1.15 crores in Q4 FY17, sales for the year ended FY17 has booked at INR 3.68 crores as against INR 3.37 crores in year ended FY16
  • Overall 23.01% growth is registered in Q4 FY17 as against Q4 FY16. While 19.22% growth is recorded in the year ended FY17 as against year ended FY16. 

Large Animal vaccines division

  • Company has booked sales of INR 4.51 crores in Q4 FY17 as against INR 2.07 crores in Q4 FY16
  • Sales for the year ended FY17 has recorded at INR 6.83 crores as against INR2.13 crores in year ended FY16

Large Animal health products division

  • Company has booked sales of INR 1.66 crores in Q4 FY17 as against INR 1.88 crores in Q4 FY16. Sales for the year ended FY17 has recorded at INR 8.37 crores as against INR 7.26 crores in FY16
  • Under large animal division, overall 84% growth is registered in Q4 FY17 as against Q4 FY16 while annually 61.84% growth is recorded for FY17 as against year ended FY16

Results of Standalone Hester Biosciences Nepal

  • Nepal plant has been commercialized on 15th November 2016
  • The company is 65% JV partner in Hester Biosciences Nepal Pvt ltd
  • Company’s total equity share capital is INR 11.87 crores on year ended FY17
  • Total sales for the year ended FY17 is recorded at INR 1.31 crores
  • Total pre-operating expenses for the year ended FY17 is INR 3.77 crores
  • Company has booked total loss of 2.14 crores in FY17 hence total accumulated losses of the company is 2.23 crores at the year-end of FY17
  • Total debt finance from the bank is INR 26.79 crores in FY17. Total fixed assets investment capitalized is INR 43.40 crores in FY17
  • The company has got registration from Africa mainly from 2 vaccines from Kenya, 3 vaccines from Uganda, 1 in another country
  • The company proposes that with more products lined up, the possibility to get business even for the vaccines registered earlier becomes higher
  • The thermostat PPR vaccines can retain efficacy even in higher temperature
  • For Nepal plant the fixed cost investment capitalizes to 43.40 crores & total preoperative expenses is 3.77 crores. The company has booked these profits
  • Fixed cost for Nepal plant starting FY18 is 2.5 crores for the year on the administrative side. Other expenses like Interest & all. The company has booked the debt around 26 crores & rate of interest is 9. So 5 to 6 crores will be total fixed cost for the year FY18
  • The company says that the delay in Tender is not under its control & it is not dependent on the company
  • There are other non tender business also which company is looking, but the registration process again from Nepal takes as much time as what it takes from India. Hence there involves gestation period for non registration business
  • The company hopes sales from Nepal plant to cost 10 crores

Future Outlook

  • The company has forecast growth of 15 for the poultry side in domestic market
  • The company is still not wanting to commit capex to African plant. It will commit once it is sure of the whole project
  • The company is making small investment in a company in Mehsana of around 2.63 crores which is yet to be paid out. With this investment, the company will have a controlling interest in that company, it will also be able to control product supply
  • The manufacturing expenses have declined in FY17 from Rs 16.8 crores to 15 crores mainly due to product mix, differential cost of production, manufacturing cycle
  • The company has been making strong efforts to lower working capital & it hopes to be efficient in fiancés
  • The company has not many products in pipeline but 2-3 products. The company plans to launch 20 products this year. Mainly medicines, feed supplements, disinfectants
  • The company is going to tender in India for a quantum amount of 20 lakhs to 12 crores per tender. It depends upon country to country
  • The company expects doses of around 5 or 6 billion & would go up by approximately anything between 15-22% depending upon the product mix
  • The company has estimated capex of 15-16 crores
  • The company does not have monopoly in any markets. It is putting its own infrastructure, distribution. Hence accessibility to markets by its own team without depending on other distribution network will be advantage
  • Any vaccine in the world which has a different composition has to have new registration
  • The company is looking at a market of Rs 150 crores in Africa
  • In India the company is looking at market of around Rs 100 crores
  • The company has no plans developing human vaccines
  • The company has still no plans to come up with QIP as it believes that lesser equity the more returns to the investor
  • The company has actively been looking for acquisition in Europe but is not aggressively
  • For 2020 the company has a vision of turnover of Rs 1000 crores. The company is expecting a growth of around 20-23%
  • The company does not see the outbreak of poultry flu as risk because vaccine does not depend upon an outbreak. Vaccine is preventive medication which has to be given irrespective whether there is outbreak or not

Mastek Q1FY18 Concall Summary


Key Financial Highlights

  • Q1FY18 was a good start to the new financial year which continued to deliver excellent enterprise software solutions to their clients and grown in key markets of the UK and the US, where India has been flat
  • The revenue growth of 5.3% in constant currency has improved the 12-month order backlog by 3% in rupee terms
  • Revenue for the current quarter stood at Rs. 188 Crores in against Rs. 183.4 Crores and increased 2.5% q-o-q
  • Operating income stood at Rs. 185.5 Crores versus Rs. 180.4 Crores and increased 2.9% in rupee terms
  • Constant currency revenue growth was at 5.3% on a q-o-q basis
  • In terms of profit metrics, the EBITDA was Rs. 24.8 Crores versus Rs. 21 Crores for the last quarter and increased 18% quarter-on-quarter basis
  • The EBITDA margin stood at 13.2% in current quarter in against 11.5% for the last quarter giving 170bps margin expansion
  • Net profit stood at Rs. 14.7 Crores as compared to Rs. 10.5 Crores last quarter which increased almost 40% on a q-o-q basis
  • Netprofit margin stood at 7.8% in current quarter in against 5.7% in the last quarter
  • In terms of cashbalance, the cash, cash equivalents and fair value of the mutual funds holdings stood at Rs. 150.4Crores versus Rs. 153 Crores for the last quarter
  • Forex hedges for the next twelve months, has got £11Million of GBP coverage at an average rate of Rs. 96.92
  • Last quarter reported Rs. 14.5 Crores in PAT and the restated number as perIndAS was Rs. 10.5 Crores
  • The PAT for the last quarter reduced to Rs. 10.5 Crores
  • Revenue by regions Q1 FY18, 69.4% of the revenue comes from UK, 27.2% from US and 3.4% is from others
  • Revenue by industry during thequarter – government continues to contribute the significant amount of revenue at 34.7%
  • Financial services grew to 19.3%, retail was at 37.6%,IT and Other Services is at 8.5%
  • Application Support and Maintenance is at 10.5% of the revenue, BI and Analytics at 8.9%, Agile Consulting at 8.4%, Assurance and Testing at 2.2%
  • As company wants to limit only profitable engagement, from a quantum point of view, the revenue is Rs. 6.3 Crores for the quarter
  • Interms of revenue by type, the split between fixed price and time & material which has increase this quarter
  • Fixed bid revenues increased to 19.3% and time & material revenuesat 80.7%
  • The company is investing in account management andsales because ofdelivery track record – once delivered has got to be seen
  • As with the growth of the business and client, company expect to grow like in the next two to three years with major revenues coming in from BI 

Key Opeational Highlights

  • The 12-months order backlog stood at Rs. 344.6 Crores or £41.1 Million as on 30th June, 2017 as against Rs. 333.2 Crores or £41.2 Million as on 31st March, 2017 which has a growth of 3% in rupee terms
  • Top 5 clients contributed 41.3% of the revenues and top 10 clients contributed 53.8% of the revenues
  • Total employees count stood at 1,684, split as 1,143 offshore and 541 onsite as compared to 1,577 for the last quarter of which 1,045 was offshore and 532 onsite
  • The liabilities relating to North America business is around Rs. 141 Crores which is a combination of loan that took to fundTAISTech acquisition and the present value of contingent consideration
  • The key contributors to adjustment was the business combination that took away Rs. 1.6 Crores, employee benefit expenses which is predominantly the ESOP expenses that contributed to Rs. 2.7 Crores of the cost and the deferred tax
  • The TAISTech integration is going well and is on track where the company has started to observe the benefits of integration in the market place
  • Company’s DSO stood at 72 days as of 30th June anda significant increase from last quarter but this waspurely driven by timing and wasback to the mid-fifties as of date
  • The existing cost structure are working about 12% - 12.5%
  • The logos are spread across the consulting business where the average yield of valuingconsulting and the average tenure is relatively small which istransactional in nature
  • The margin from North America operations were around 5% - 6%
  • Company has two parts in North America business which is the pure acquisition and the organic play
  • In terms of improvement, as the investments have started giving return, the company will start to add to the bottom line, asthey are very ambitious about North America asa geography
  • The 12 clients which were added, are across the three geographies – UK, US and India
  • Company is the SI for their ATG platform and the deal sizes are anywhere in the typical 1- 2 Million kind of range at this point of time
  • Order book has not increased significantly on a q-o-qbasis
  • Company is covered on GBP till Rs. 96whosehedgepolicy allows to go up to three years

 Key Growth highlights

  • Reflected in a solid account growth of 12 new logos which increased the trailing customers to 161 to the capacity in their engineering talent by moving theemployees to 1,684
  • Constant currency growth is to 5.3%
  • CAPEX has two fundamental portions to it, one is any investment interms of growth and innovation; the other one is the refresh and replacement

Strategic highlights:

  • Company is implementing Vision 2020 which is  thebusiness strategy to become leader in digital transformation
  • The Company has now started to link the consulting business who were doing cross sale initiatives and up sale initiatives
  • Mastek has planned to invest Rs. 150 Crores for the growth of the company
  • The aging facility requires regular upkeep andthere is a bit of an expansion that needs to be addressed from a geographical footprint point of view
  • The company is predominantly into Government both Centralas well as State government andis trying to reduce the engagements where the paymentcycles are very elongated
  • In light of the employee cost increases – these are supposed to come over the next two quarters
  • The six service lines that has identified for business is Application Developmentwhich stood at 42.8%, Digital Commerce stood at 27.2% for the current quarter
  • In UK geography, the IT providers are BJSS and Kainos along with other large India based on IT service providers


Ahluwalia Contractors Q3FY17 Concall Summary

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Financial Highlights

Ahluwalia Q3FY17 Performance
  • Turnover was 358.08 crores, PAT was 24.45 crores corresponding to last year turnover of 319.95 crores & 19.84 crores respectively in Q3FY17
  • EPS for Q3 stood at 3.65 as compared to 2.96 in last year Q3
  • EBITDA margin was 13.19% as compared to 12.36% in the corresponding quarter last year and PAT margin stands at 6.83% as compared to 6.20% in the corresponding period last year
  • For 9 months the company achieved a  turnover of 954.68 crores and PAT of 65.65 crores in comparison to a turnover of 865.89 crores and a PAT of 57.71 crores in the corresponding period of FY16
  • For 9 months EPS was 9.8 in FY17 as compared to  8.6 in FY16
  • For 9 months EBITDA margin stood at 13.61% as compared to 12.41% & PAT of 6.88% as compared to 6.66% in the corresponding last year
  • Current Debt level outstanding is 70 crores working capital from the bank & the rest 28 crores from unsecured loan from the promoter. Right now the total debt is 101 crototak
  • Debtors day is 155 days. Company has Debtors of 555 crores & inventory is 207 crores & trade receivable is 297 crores & total working capital is approximately 130 day

Operational and business highlights 

  • There is bit slow down & company is cautious around the time of elections. The company from south have become aggressive.
  • The company has seen improvement in working capital, the payments have been struck in private players. It is looking to liquidate some of the inventory
  • The company has acquired inventory worth about 80 crores & in the next year it may acquire another 30-40 crores
  • The company sees competitive intensity going up. Some players who were notbidding have started bidding like B.L.Kashyap & Billimoria.
  • Over a couple of years the company sees the ticket size increasing. The government departments are coming up with larger packages as far as bids are concerned. Competition will increase a little bit & then the company may see some foreign players coming in the long run which will be good for the industry
  • The company does not see any traction in the affordable housing & expects only closer to next round of general elections
  • There is no income tax receivable outstanding, the company has received whatever it had to come
  • The company has 2 arbitrations going on, one with Emaar for games village & one with CPWD for the stadium & there are half a dozen other arbitrations which are going on with various clients which are expected to. The company got another award with the Art of living Foundation for whom the company had done residential project in the outskirts of Bangalore. The award was in company’s favor to the tune of 8 crores
  • The company has been associated with metros like Bangalore, Delhi & Mumbai metros. There are at least 6 metros coming in different cities & company will continue to bid on these. The company has a precast tie up with Russian company. The company is looking to grow MEP verticals also

Order book 

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  • The company received orders of 1450 crores in the financial year till date.
  • Net order book of the company as on December 31, 2016, stood at 4013 crores to be executed in the next two to two-and-a-half months.
  •  The target for the entire year was about 1600 crores. The company is already done 1450 crores in last quarter & the company’s target is 1600 crores to 2000 crore
  • The order pipeline stands at about 1200 crores
  • The order pipeline comprises of hospital project in Calcutta which company has bid, Convention center & residential project for government. There is also a large private sector residential project with one of the known corporate in Mumbai & there are some MEP projects in Delhi & NCR for which company has bid. 
  • Order inflow is 1450 crores & out of which 85% is government. Out of total order book of 4000 crores, public sector is 68%.
  • The breakup of order book is commercial 5%, hospital 22%, infra 12%, institutional 29%, residential private 23%, residential government 8%. Infra & Industrial would be about 12.5%. Residential government is about 7.8%
  • The geographical break up of order is North 63%, East 14%, West 23
  • The company is expecting redevelopment order from NBCC, NBCC are coming out with one or two large tenders in next 30-45 days. The average ticket size would be around 700-800 crore.
  • The company has order from NBCC to the tune of 120 crores. This order from NBCC has built in escalation clause. This his fixed price contract is awarded about two-and-a-half years ago after which the project was a non-starter because there was a dispute on the ownership of land between two government entities, DDA and CRPF, so that was resolved and this project began eight-nine months ago. This is the large datacenter for National Intelligence Grid, otherwise, there is no fixed size contract and generally all the tenders which come from the public sector come with an escalation clause
  • Out of 4000 crores, one can discount 400 crores & they do not drag company balance sheet. So virtually the order book is currently around 3600 crores
  • The prices of steel came down after the NBCC order which is beneficial to the company. Over the entire year, NBCC should tender out anywhere between 3000 to 4000 crores, so company target would be to bag at least one project.
  • The company has no L1 orders. The quantum of price fixed orders is 120 crores, which is the order from NBCC
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Order foreclosure  

  • About 400 crores of orders are moving at a relatively slower pace, the company is renegotiating & trying to extricate, get bank guarantees released & tell them that the company will come back as & when they have a line of sight on their funding. The basic idea of the company here is to insulate itself from overhead risks & potential escalation risk & it has been successful to quite a large extent. For example, Jaypee where the company is able to get to foreclose the contract. 
  • In 9 months the company has roughly 200 crores of projects foreclosed.
  • The company has a potential loss of about 50 crores due to 2.5 months Bihar projects foreclosure. There has been escalation done & Chief Minister has announced an early inauguration of the convention centre in patna. So the company is hoping to conclude one  project in the next 3 months & other project by the end of the year
  • The company has been able to lease out about 60% of quota assets & in about middle of FY18 the leasing should be about 100%. The company is expecting revenue of about 1 crore every month by middle of FY18. The company is realizing about 30 lakhs in this quarter.

Focus of debt reduction  

  • The company is planning to infuse equity to the tune of 30-35 crores, to bring interest cost down & make the virtually zero debt company
  • The promoters are extremely focused for the last two years to make it a zero debt company
  • The company wants to continue to reduce interest burden & that is why it is infusing money & wants to use portion of the proceeds which comes in to bargaining power as far as procurement is concerned.


  • As far as quota is concerned, the company does not want to kind of have a distress kind of a deal, & wants to bide Its time. Since now the realestate is down the company is hoping that in about a year & a half time it will pick up & able to monetize the asset
  • The company has a quota revenue of 30 lakhs for the quarter
  • The size of quota asset right now is about 80 crores financially & physically about 3.5 lakh square feet.
  • The company promoters are infusing capital at price of 285, which is worked on a formula of allotment of shares.


  • Guidance to the year stood for 10-15%, the growth for the year was 12-13% & next year the target would be upward of 15% 
  • EBITDA target for next year is between 13.5% to 14% & after that the company is expecting to cross 14%
  • Over a medium period of 2-4 years the company sees a revenue growth of 15-20%. 
  • The CAPEX for next year would be in the range of 30-35 crores. For 9 months the company had around 14 crores CAPEX. The company is acquiring certain new machinery so the capex is needed


Repro India Q4FY17 Concall Summary

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Key Highlights

  • The company had strategic direction revolved around growing the e-retail organization as a whole
  • The company is trying to breakeven in case of Rapple.

Export Data

  • Export Debtors was 75 crores in September & had come down to Rs 67 crores in December with focus on collections which has come down to Rs 49 crores as on date. A lot of efforts have gone in collection of export debtors
  • Last year company did only 60 crores of export. This led to drop in overall revenues & also a strain on the profitability in Q1 & Q2 & had losses in these quarters. But Q3 was turned around & Q4 has been significant jump from Q3 also
  • The company has closed the year with 10% EBITDA of Rs 32.6 crores which is higher than last year which was 7.8%
  • The company’s initiatives have paid dividends. Month on Month business has been growing & today it has reached a sales of 2 crores per month.

Retail Business

  • Company has entered into a e retail business named Repo Books-on-Demand. It is actually the business model as it generate demand online & fulfill it through digital printing
  • It had set up plant in Bhiwandi which is state of art one book factory where it prints, bind, pack & dispatch books within minutes. It is aggregating titles for the domestic publishers, & also getting international titles from Ingram with whom it has signed partnership agreement.

Online Business

  • Company is selling books to 7 channels like Amazon, shopclues, flipkart, Rediff, Paytm, Infibeam & Snapdeal. Ingram content is largest content aggregator from publisher in the US, which got 14 million titles from 45000 publishers & as partners in India the company has access to it

  • Currently, the company has got more than 1.2 million titles which it has got from Ingram which it is selling in India. It has reverse agreement with Ingram whereby the titles that it has aggregating from the domestic publishers it is going to give it Ingram for global selling & Ingram has a footprint across the globe through 39000 sellers that it can retail its books through. So this platform has given an opportunity for Indian publishers to sell books globally. So It is the biggest model
  • Indian book market is 6th largest in the world. It is 3rd largest as far as English is concerned. As per Nielsen study this year the market is estimated to be around Rs 37000 crores & growing at over 20% year on year
  • Online sales of books was Rs 1200 crores slightly over 3% of the total books market of Rs 37000 crores. It is estimated to touch 8000 to 10000 crores in next 3 to 5 years
  • The company’s pioneer position in books on demand & selling books online it feels that it is very positioned to capture large share of market going forward. The company has a model where it acquires content from publishers or through aggregators & able to sell it in Indian market & also globally the Indian content. The second opportunity with Ingram is that it is able to bring International titles & sell them in India. In India International books were imported to the value of 75 million.

Supply Chain Disruption

  • The third opportunity is the existing supply chain which & like to disrupt the same. In India there are long term credit terms, default, returns & the publishers are saddled with unsold stock, huge inventories, stock returns, payment defaults & today they do not have any other alternative. So the company is tying up with Indian publishers where it gives them model of zero inventory, zero obsolescence, zero book returns, zero freight cost & can sell its full catalogue. This is very advantageous for the publisher
  • Last quarter the company had said that it has around a million titles which it was selling in India. Today it has reached to 1.25 million titles selling in India
  • The company was doing revenues of around Rs 30 lakhs per week & has touched 50 lakh per week as on date. It is doing 2000 books per day
  • It has started investments in Mumbai & want to set up facilities in Chennai & Delhi to cater to all the regional customers in all the 3 big markets in India & will increase its capacity to around 12000 books per day which should solve the purpose of increasing the sales
  • There are other opportunities in self publishing market. Self publishing is big in US, it is almost 18% of the market. In india it is recently started & believes it will grow very fast & the company is ideally placed to service this platforms

Reverse Global Program

  • Then there is reverse global program where Indian content is sold globally through Ingram. The whole industry is actually creating a disruption in the publishing industry & this type of disruption has been seen in other industries. So as a content aggregator, the company is aggregating books which it does not own just like Uber where it does not own any taxis & Air BNB where they don’t own hotel they are just aggregators. The company is in similar position today having asset model like with no working capital & can grow the industry by adding more & more titles from publishers domestically as well as internationally.
  • Export business has reduced & domestic business has increased. In Q4 it did 39% more business compared to previous quarter last year. While Africa is reviving in terms of what the company is able to get some monies out of the country & has been careful in selecting new business

Financial Highlights

Repro Q4FY17 financials
  • Sales has increased 12% from previous quarter from 81 crores to 91 crores.
  • EBITDA has increased to 15% as compared to last quarter of 14%
  • Annual employee cost has been reduced from 50.8 crores in previous year 2015-16 to Rs 44 crores in the last year 2016-17
  • Other expenses have come down from 93 crores to 66 crores & finance cost has come down from 19 crores to 15 crores
  • Export debtors was 61.74 & Domestic debtors are Rs 115 crores
  • Sales for the year 2015-16 was Rs 388 crores but for 2016-17 it was 323 crores
  • EBITDA for the year improved from 8% to 10%
  • Revenue from one book was around 3.5 crores
  • The company has 1.2 million titles listed which is mix of domestic & international. These are not necessarily front titles, they are mix of front titles, back titles, old titles & Ingram has 14 million titles & will be listing all these over a period of time.

Promotional Activities

  • The company have done promotional activities. The promotion happens from the publisher’s side, channel side & the company also pitch in. so there are banner ads there are keyword searches & different type of promotions that can be done & social media marketing
  • The company is doing promotion activities under separate subsidiary which is a 100% owned subsidiary called Repro Knowledge cast limited & this company has done EBITDA of around 57 crores
  • The company has efforts to increase sales & sell as many books as possible & it is not focusing on Category B& C type books
  • The company is not worried about competition because it does not want to get in price wars. It does not want to do sales just for sake of sale. It has got 1.2 million titles & has much more potential of selling other titles at reasonable prices & making decent profits
  • Ingram has got 14 million titles is market leader in aggregators. The second largest aggregator has only 10% of the number of titles as Ingram. Therefore the company does not see much of competition as they will not be able to get access to these 14 million titles
  • The company has invested quite a bit in IT systems, in the processes & have established a very good relationship with ecommerce channels. It is not ruling out competition but it will continue to keep growing month on month
  • There was strike in one of the plant of the company & is still continuing. The plant is running with limited number of workers who has joined the strike. The company is using facilities from other plant & outsourcing some to ensure that activities do not get hampered. It has no effect on revenue as Q1 is lean quarter & Q4 will be the heaviest where turnover of 90 crores will be achieved
  • The company believes that in coming 5 years it will have sales of 10000 crores which will mostly be of hard copy as ebook market is very low in India. It is very convenient to buy a printed book & the trend is going to continue.
  • The company has content which will be modify for kindle
  • Business in Africa is revived a bit. It is able to recover most of the debtors. It has million dollar orders from Nigeria
  • The company is very choosy about clients in print business with all the orders secured by LCs. Focus is on growing the Books-on-demand business where it sees getting good traction
  • For the Q4 the company has 40 crores of orders in pipeline
  • The company has credit period of 90 to 120 days credit period
  • The company has exclusive tie up with Ingram. It took 2 years to crack agreement with Ingram. The company has invested in IT systems & working on digital printing for last 5 -7 years
  • There is difference between traditional printing & print on demand. Traditional printing depends on how many copies of the books that need printing. If they are very large runs like 50000-100000 then large machines are needed. If shorter quantity have to printed like 2000-3000 then it has to be done on sheet fed machines. So as quantities reduce cost keeps on reducing.
  • If one is doing 50000 books the cost would be around 15-20% of the MRP of the book. If digital printing is done then it depends anywhere in the range of 25-40%.
  • The company has competition selling front titles but company has an advantage where they can provide books at within 24 hours. The company is targeting back titles & mid titles & when people run out of front titles they do come down to may be mid title, then Repro will only have them.
  • The company believes that once start exposing the titles with back titles there are lot of times one find that there is a latent demand for those titles which people were not aware of & if company starts selling those books there are more potential for mid & back titles that could be 70-80% of market.
  • There is increase in paper & in traditional business paper is quite a substantial part of cost in the traditional business of printing. But whatever increase happens the company passes on the cost to clients.
  • The Raffles turnover is small less than a crore
  • The company is targeting Rs 8000 crore of online selling in E-tailing business
  • The company is expecting a capex of around Rs 10 crores
  • Company currently has 1.2 million titles out of 14 million titles from Ingram & to get the remaining the company will have to spend on IT, bandwidth, server, storage etc. Also the company is participating in book fairs of London, Frankfurt & new york in US & meet publishers along with Ingram & talk to them about the potential in India & after that will able to get those titles. After 2 to 3 years the company will be able to get the 14 million titles
  • The company has started selling Indian book outside India with Ingram but are very less around 2000 books.

Demand from Indian Publishers

  • Many Indian publishers have got excellent quality especially in Engineering, Medical & so people believe that there are good potential for those books. Secondly there is market for regional language books for Indians settled in US, Europe etc. which is big market. So therefore the company does not know what the demand is but believe & from the estimate that it is potential area & next year or so should be able to see contributing to top line.
  • The demand is mainly from North America, Europe, Australia & then other countries like Japan, Brazil, China
  • The company presently has best margins in the industry because the business is highly competitive & the best part is cost of printing longer run would be 15-25% of the cost of book. The company gets 75-80% of sale & pays publisher 20% or 15%. So the chances of improving profitability is high.
  • The company believes that it is highly fragmented industry & a lot of small players who do not have any overheads are able to offer highly competitive rates. The company is not investing in the traditional business & looking to getting into newer business where profitability is high.

Revenue from Online Websites 

  • Amazon is the largest partner, then Flipkart. Amazon contributes to more than 50-60% of the market. In amazon when sale happens the money is received within one week, in fact twice a week
  • From Raffles, Books on Demand, E-retail business is concerned the company gets money upfront every week from the channels, & pay the publisher at the end of the month or 45 days, so there is no working capital requirement in fact the company has negative working capital. Whereas in traditional business earlier there was 90-120 days typical credit cycle. So as proportion of revenues from the new business increase, working capital requirement will keep coming down.
  • Raffles is for annuity rather it is monthly subscription model, so maximum 30 to 90 days is the credit period there.
  • The company is adding a 250,000 titles per quarter
  • The company pays a certain percentage of sale to channel i.e Amazon, Flipkart etc which is the variable cost, the printing of book is variable cost. The only fixed cost is the investment in machinery, the capex & the employee salary & premises.
  • The company does not see any raising of money
  •  The company feels that the debt is seasonal & once the next couple of quarters it should come down & mostly the debt is short term working capital. Total long term debt has come down to 76 crores, which was 98 at beginning of the year.
  • The company is not publishing e books but only distributing. All the books are for Ingram. There are about 8 lakh books & can be sold in Kindle format.


Aegis Logistics Q4FY17 Concall Summary

Aegis Logistics Logo

Financial Highlights

Aegis Q4FY17 Financials
  • The revenues for 2016-'17 financial year was Rs. 3,938 Crores versus Rs. 2,213 Crores year earlier, rise of 78% yoy. 
  • Total segment EBITDA for the year was Rs. 246 Crores versus Rs. 225 Crores year earlier, rise of 9%.
  • Profit before tax was Rs. 172 Crores for the year compared to Rs. 153 Crores year earlier, which is a rise of 12%, and net profit after tax was Rs. 134 Crores as compared to Rs. 126 crores year earlier, rise of 6%.
  • Liquid terminal division revenues for FY17 was Rs. 154 Crores versus Rs. 170.6 Crores year earlier, and the EBITDA was Rs. 90.7 Crores for FY17 as compared to Rs. 102.4 Crores year earlier.
  • For gas division, revenues in FY17 was Rs. 3,779 Crores versus Rs. 2,043 Crores year earlier. EBITDA for the year FY17 was Rs. 155 Crores versus Rs. 123 Crores, a rise of 26% yoy.
  • As per the details of investor release, ITOCHU will invest Rs. 250 Crores approximately US$39 million
  • Aegis will use part of funds from ITOCHU to significantly accelerate the building of next two LPG terminals, which will most likely be on the West Coast of India.
  • A change in government pricing for auto LPG and follow where they used to have the auto LPG pricing 40% cheaper than petrol but now started doing 50% cheaper.
  • As Pipavav is concerned, currently expecting at 1.4 million tonnes, and are probably somewhere in the range of 800,000 to 1 million tonnes.
  • Strategic sense made for both the companies (ITCHOU & LPG) which also makes financial sense in good valuation and will use part of this money Rs. 250 Crores to invest in other Aegis projects like the two LPG terminals 

Key Company Highlights

  • ITOCHU of Japan, will acquire new shares and take a 19.7% stake in subsidiary HALPG called Hindustan Aegis LPG, which is the Aegis subsidiary, developing and building the LPG terminal in Haldia
  • The negotiation carried out with ITOCHU in Haldia on the valuation, was based on discounted future cash flows of their project, taking into account number of years of projections which is around 10 years of future cash flow projections
  • ITOCHU is the second largest LPG company in the world
  • In quarters '16-'17 Aegis Group International Singapore, directly doing the sourcing business and was no more businesses in Hindustan Aegis which is also the only business in Haldia LPG terminal.


Aegis capex
  • The whole industry starting from the oil national companies is in a rush to build LPG import capacity.
  • Using Uran, Aegis interconnections into Uran-Chakan pipeline, once infrastructure is ready at Chakan then the total capacity of pipeline is 1.2 million tonnes a year.


  • The Aegis Auto Gas business, reached 23,217 metric tonnes for the FY17 versus 21,680 metric tonnes, a rise of 7.1% in sales volume and all the LPG segments growing and contributing to the bottom line, resulting in the good increase in the gas division EBITDA last year
  • Packed LPG Cylinders business under the brand name Aegis Puregas, achieved 12,521 metric tonnes for the year FY17 versus 11,904 metric tonnes year earlier, a rise of 5.2%
  • The significance of the ITOCHU deal announcement that is going to speed up Aegis's process even further because the infusion of these funds is only going to speed up the process of building and the next couple of LPG terminals.

Key Operational Highlights

  • The Kandla and Haldia capacity expansion along with very strong business in Mumbai terminals and the existing terminal in Haldia and Kochi these are all doing well
  • The proposed deal with ITOCHU for 19.7% stake in the Haldia LPG project and once deal is completed, will significantly speed up Aegis's next phase of expansion in the LPG business specifically for the next two LPG terminals
  • According to Kandla, Pipavav is a new port, in which its difficult to persuade customers to start out and expect this 100,000 kiloliters when it is commissioned from day one to be fully occupied.


  • With BPCL, HPCL had one major contracts with all the other customers and the target for AGI, Aegis Group International in Singapore of 1 million tonnes
  • Planning 100 turns a year in Haldia, which is 100 times, 25,000 Crores to 2.5 million tonnes which already achieving in Mumbai
  • Pipavav, Mumbai started selling gas into North East India through their joint venture in Singapore AGI

Other Updates 

  • Haldia is over 90% capacity utilization and Pipavav unfortunately is still weak but the Q4 is below 20% capacity utilization
  • The demand forecast for India are much higher than was projected earlier because the penetration of LPG is increasing at a much more rapid pace due to new government schemes like the Ujjwala scheme for below the poverty line


Asian Granito Q4FY17 Concall Summary

Asian Granito logo

Financial Highlights

Asian Granito Q4FY17
  • Quarterly y-o-y growth has been 10.5%, the volume growth is about 15% and for the year growth is about 7.5% and volume growth is of 10%
  • Last year, the company declared a total dividend of Rs 1.3 per share
  • The GST of 28% which implemented is good due to the payment of 28-30% taxes 12.5% excise, 2% CST and 15% VAT
  • After demonetization, the company received numerous Government projects which had low value products and were outsourced from Morbi, due to which EBITDA margins got impacted in this quarter
  • Prices of Soluble Salt reduced from Rs. 75 per square foot in 2004 to Rs. 20
  • Now 1.5% of the expense is spent around Rs. 16 Crores towards branding, samples, sales promotions
  • Earlier, it was Rs.8 Crores which increased to 15 Crores and will increase to 2 to 2.5% because after the implementation of GST, branding would increase in coming years 


Asian Granito Capex
  • Having a turnover of Rs. 1,150 Crores at Plant through increase in utilization – Rs.150 crores, another Rs 150 Crores from the existing Crystal Plant and Rs. 60 Crores from the new Quartz line
  • About Rs 150 Crores from JV in south India, approximately Rs 200 Crores from additional expansion in Crystal and the rest would be outsourced or partnered through JV in Morbi
  • US and Europe are the biggest market for Breton technology in India, has only one plant and it has a huge CAPEX
  • The new CAPEX that is after August because there is a wait for product for about three months in the market 

Key Operational Highlights 

  • The company took a decision to manufacture GVT products in south Indian Andhra Pradesh
  • Newly launched around 50 different products in 20mm and 30mm thickness which got a great response form dealers in the meet
  • EBITDA margin for this product should be in the range of 30% - 33%
  • At present, exports orders worth Rs.8 to 10 Crores and there was a good demand of the product in domestic metropolitan cities
  • Standalone capacity is Rs 85,000 per day sq. meter and Rs 15,000 is outsourced adding total capacity to 1,00,000 sq. meter per day which currently are 65% to 70% utilization
  • Current mix of revenues is 19% is GVT, double charge is almost 22% in total tiles turnover
  • Due to demonetization, some distress and plus while selling high end products which helped gaining market share, the debtor’s days  increased by 10-15 days
  • All the production is done from the perspective of the international market only
  • Tiles are exported and all of the 7% and the new exports of quartz, exports can become 10%
  • In GST, 28% will be the rated whose current tax structure is around 30%, so there will be no negative impact but it will be only positive
  • Now the CAPEX done is around 20 Crores, internal accrual is about 11-12 Crores is through LC and rest 8 crores is from internal accruals
  • The dealer is separate even in international and domestic markets
  • 85% to 90% is the capacity utilization in quartz
  • There is no threat from China also as anti-dumping duty of $1.87 has been levied by the government, there by restricting small dealers to import


  • The Government projects which normally are at 15%, have increased to 17-18%
  • Revenues were Rs. 1,150 Crores this year and next year exoexted growth would be 12-13%
  • GVT growth is above 30% double charge is around 15%
  • The growth of the Ceramic and Soluble Salt Industry would be 5%-10%
  • In Morbi, around 50 new plants are coming up in the GVT and double charge space
  • Export market which was around Rs. 2,000 Crores, went up to Rs. 5,000 Crores which is expected to reach higher around Rs. 8,000 Crores as well
  • In April month also the growth rate was about 10% as compared to this month

Key Strategy & Outlook

  • The company is focusing to increase its retail sales, and has targeted 120 showrooms but have achieved 144 showrooms and completed it and also the company’s retail base which was 35%, grown above 37%
  • By 2020-21, the target of reaching turnover of Rs. 2000 Crores, concentrated a lot on the product mix, the low value products taken up by Morbi which will concentrate on manufacturing of high value products
  • Company want to increase by retail segment to around 50% in the coming years, 25% from Governmental projects and the rest through Institutional
  • Working on different strategies to reduce Working Capital Cycle which should also come down in coming years
  • The company hopes to maintain margins in the range of 13-15% for the next year
  • First target is optimum utilization of all their plants
  • Post implementation of GST, consolidated taking place in the industry
  • Company planned a JV in south for GVT products with 51% stake with a total investment of Rs. 35-40 crores through internal accruals
  • Inventory days increased 86 days, the main target is to focus on high value products which will be manufactured in-house



Bajaj Corp Q4FY17 Concall Summary

Bajaj Corp

Financial Highlights

Bajaj Corp Q4FY17 financials
  • Revenue growth is flat vis-à-vis the last financial year.
  • In terms of volume sales, there was a drop of 3.2% during this financial year
  • EBITDA for the year is 270 crores which is a decline of 3% over the EBITDA of the last financial year.
  • The EBITDA margin remains a very healthy 34.2%
  • PBT and PAT are 280 crores and 220 crores after adjusting the exceptional item of 18.38 crores
  • For Q4 17, volumes have declined at 6.9% whereas the turnover has declined by 1.9%

Market Conditions

  • Environment continues to remain subdued with overall Hair Oil market growth at just 1.6% in value terms for FY 17
  • Volume  growth of the Light Hair Oil was slightly better at 4%
  • Hair Oil industry volume growth has picked up marginally vis-à-vis the third quarter but not substantially
  • Revival in Hair Oil growth are more in the urban markets compared to urban markets

Business Highlights

  • Strain on the primary sales volume is mainly due to destocking that continues in the wholesale segments as well as the rural markets
  • 47% of the sales comes from wholesale
  • Increased focus on improving efficiency of the sales force to improve direct reach
  • Currently, they have around between 6 lakhs - 6.5 lakhs direct outlets. Have the aim to reach around 7-7.5 lakhs outlet directly
  • Modern trade growth was 24% in Q4. Cash purchases have started after the adverse impact of demonetization.
  • Gross margins not expected to increase this year.
  • Secondary sales growth in Q4 was around 3%-3.5%.
  • Inventory level at the distributor end currently is 30 days. It has gone down in Q4 after moving up in Q3
  • Minimum of 1/3rd of Pat to be given as dividend. If Cash is not utilized, they can give more
  • In Bajaj Almond Drops, around 50% of sales is still in glass Bottles. Other 50% in PET bottles
  • Aim to increase their focus on the rural market.

Market share

  • Market share in Feb 2017 has touched an all-time high of 61.3% in value terms
  • Intent to reach a market share of about 65% by 2018
  • Plan to increase market share in States in which they have less than 50% market share like West Bengal
  • Relative Market share this year is 4.6 which is highest till now
  • Market share for the year is 30 bps less due to emergence of smaller player
  • The rural sector should see a reversal if the monsoon as good this year

Raw Material Prices

  • LLP remained at Rs. 46.22 per kg versus Rs. 46.37 per kg which was there in the third quarter of this financial year.
  • Spot prices of LLP have gone up to Rs. 64 a kg, they are still using the LLP which we stored at Rs. 46 a kg
  • New communication strategy to be used on the back of extensive clinical trials done on the brand.
  • The focus in the test market is on using chemist panel for distributing Nomarks Cream and using an integrated marketing campaign to improve consumer awareness and preference for the brand
  • Will be extending this strategy both in terms of communication and distribution in more states
  • On back of this and our improved reach in international markets, we should see a reversal of sales trends on Nomarks in the first half of this financial year
  • //;;;;The urban states you will see more focus on Nomarks
  • FAL (Fair and Lovely) has grown the market significantly in the last two months because of increase in the grocery part of the business
  • FAL is not chemist driven product. It is a process or general merchant driven product
  • Would get into 4 more states, by May-June of this year

Value-added Perfumed Hair Oil

  • They expect this category to grow rapidly as this category has been growing at 5% for the past few years while the volumes for regular coconut oil has decreased by 7%.
  • Within this category, they have high hopes from Amla lite, VACNO, Ayurvedic and Cooling sub-categories


  • Impact of demonetization has majorly waned down in q4
  • Secondary sales showed a growth of 3-3.5% which is 5% higher compared to Q3
  • Cash purchases have also started picking up after the adverse impact of demonetization
  • However, Demonetization derailed their project on launching new products in first quarter of FY 18.


  • GST will help in providing tax benefits for their Guwahati factory
  • Expected to have major impact on the wholesale market
  • Still un-clarity on whether they would come under 18% bracket or 28% bracket
  • Sales Force Automation programme- Saathi
  • The company has more than 1000 odd sales people in the market
  • Certain percentage of these sales people may be operating sub optimally as difficult to keep track of everyone
  • Now, each officer has 5-6 people under him and he can actually find out where there is a slack in sales calls


  • Grown by 56% this quarter in value term
  • Added 4 new markets. Among the big markets that we have added is Russia and Egypt. Among the smaller markets we have added markets in Africa like Kenya and Ethiopia
  • Currently around 5.7% of total turnover, It was under 4% in Q4 16

Key Focus Areas for Future

  • Increase Market share gains from other hair oil segments
  • Focus on rural penetration
  • Leverage existing strengths to introduce new products
  • Pursue inorganic opportunities