Quick Heal Technologies Q3FY18 Concall Summary

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Financial Highlights:

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  • There has been continued and steady growth in the revenue driven by a strong uptick of retail products by partner communities and following the stabilisation of GST.
  • Comparing Q3FY18 to Q3FY17, as seasonal comparison, it shows that revenue growth is of 18%. 
  • Growth in Seqrite brand for enterprise and government is 37% Q3-to-Q3, which is substantial, and retail, which was 7% up over the same period of last year. 
  • License in sales increased for retail in volume terms is higher than revenue, i.e. there is stabilization at the middle end for the product. 
  • On other hand, enterprise products, the volume growth is actually slightly lower than revenue growth, which means that there is better ARPU or better price per license from the company from entry level corporate to mid corporate customers. 
  • Net impact on working capital is that it has decreased from 86 days to 52. 
  • There is a PAT of Rs.6.6 Crores versus Rs.1.6 Crores last year. 
  • Revenue of Rs.6.6 Crores is the bottom-line for this quarter, for nine-months it is Rs.33.8 Crores despite bad Q1.
  • The EBITDA for three months 17.8% for the entire nine-month period at 27.5%.
  • Cash generated is Rs.280 Crores by the end of quarter. It is about Rs.40 Crores higher than what is was in last quarter. 
  • Employee cost has decreased substantially over the last one year, which was around 10 Crores and decreased to 7 Crores.
  • The net cash is around Rs.430 Crores on the balance sheet.
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New products/Offers

  • Cloud based end point security is launched this quarter and solutions for managed service provide as MSP product launched, that it will enable the service provider to provide solutions through Cloud Solutions i.e. it enables service providers to offer the solution and have a Cloud based solution to gives lot more efficiency for offering the solutions. 
  • Company is launching a mid-priced mobile security solution primarily targeting e-commerce channel so that should help to get more customers who want to adopt it first time and it will help to get in more paid customers. 
  • Company is driving more partnerships to get more free users who want to just have a footprint of mobile security solutions and hopefully they would upgrade from free to paid solution down the course. 
  • Company has launched a UTM product in December so far about 30 plus installation done successfully.
  • Company launched UTM 2.0, portfolio is increasing and the plan is to give more value for solution and also increasing the number of solutions in the portfolio.

Growth Updates

  • Company entered in technology collaboration with Finland Based Company, Jetico and introduced end-point encryption solution to enterprise customer under Seqrite. This product has received an encouraging response from businesses and government establishments.
  • The flagship products continue to win in sale recognitions which Seqrite end point security and Quick Heal Total Security receiving best Triple Plus Certificate from AV Labs.
  • In line with the commitment to secure digitization of our nation, collaboration with Government Cyber Swachhta Kendra to offer a free Botnet removal tool has resulted in a 51% decrease in Malware infection in all networks across the country, which demonstrates a robustness of our products.
  • There is lot of focus on strengthening the distribution network and primarily looking at the dealers, Currently company has brought 20000 dealers on board with Quick Heal.
  • In the encryption position, Company had a partnership with the Finland company and launched that solution in this quarter and things are progressed. 
  • Company bought the source code from Jetico and company will be using that source code for doing derivative of that. 
  • In Q2FY18 company had around 26 warehouses across India, but after GST then it has to be reduced to three warehouses across India, so the transportation time is taking play a bit time and that is the reason company has stared closing quarterly sales four to five days before quarter end actually because the delivery is important.

Enterprise vs Retail

  • In the enterprise and government segment, the strategy to focus on customer retention while adding new customer had led positive result with Seqrite successfully retaining 80% of its customers. 
  • In the enterprise business, there has been growth in both enterprise and government. Company has a good footprint of end point security solutions. There is opportunity to cross sell and up sell. The solutions in the portfolio like data loss prevention, we have added encryption, Company has MDM which is a mobile device management, all these are great products to get more value to our customers for not only to add more customers but for existing customers will give more value. 

Users

  • Company is acquiring about 21 new customers every day and there is increased focus to have more larger accounts with 500 plus users
  • Company has added about 25 new customers with 500 plus users and that shows that the products solutions are getting adopted not only into plus 500 user accounts but in a larger account and that will drive further. 
  • The total number of customers that company have is about 25000 and the total number 500 plus user accounts that company have right now is about 100 plus. The largest account company have is about 5000 users. 
  • The median for per customer currently it is about 150 to 200 endpoints. 
  • Retention is about 75% as a percentage of active license.
  • The Retention on enterprise royalty, around 79% of the customers that are getting expired, will get renewed and company will retain them and on retail front, retention rate it is close to 35%. 
  • The maximum number of the users’ company serve in government is 5000 users company have installed and the highest for private players will about 3500 to 4000 users.

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PI Industries Q3FY18 Concall Summary

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About the company

  • PI Industries is regarded for its consistency in introducing new research backed products
  •  Cemented various portfolios of advanced products in view of the farmers
  •  Well established relationship with innovators which act as a platform for next phase of growth with partnerships across the value chain
  •  PI industries is at the forefront for being a part and parcel of the overall agchem value chain; Supporting global innovators for commercializing their solutions

Financial Performance

  • Order book stands at close to USD 1.15 billion
  • CAPEX was around Rs.175 crores
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Q3FY18 Performance

  •  Revenue increased by 10.3% to Rs.538 crores (Domestic- Rs.170 crore and export – Rs.368 crore); 3% growth in domestic sales and 14% growth in exports
  •  EBITDA stood at Rs.105 crores with a margin of 19.5%; reduction by 200 bps due to increase in raw materials prices and irregular rainfall
  •  Increase in raw materials and product mix impact has resulted in softer margin
  •  Profit realized was Rs. 81 crores

9MFY18 Performance

  •  Revenue reduced marginally to Rs.1652 crores (Domestic – Rs.682 crore, Export – Rs.970 crore)
  •  Reduction in revenue due to uneven rainfall during kharif, GST changeover and the planned lower export shipment during H1 FY18
  •  EBITDA stood at Rs.358 crores with a margin of 21.6%
  •  PAT slightly reduced to Rs.261 crore YoY due to change in effective tax rate from 14% to 22%

Balance Sheet position

  •  Net Equity to debt stood at 0.03x
  • Cash surplus of Rs. 243 crore

Indian Economy

  • Nation has suffered the effects of below average monsoon for many seasons, leading to reduction in the investment by the farmers on farm and diversify their crop basket
  •  New initiatives in the latest budget announcement to uplift the farmer’s prosperity
  •  MSP to be increased by 1.5 times
  •  Development of rural haat for GrAMs(Gramin Agriculture Markets)
  •  Increase in the support in farm credit
  •  Fasal Bima Yojana and greater allocation on Krishi Sinchai Yojna
  •  Domestically, water availability issue in Tamil Nadu, North Karnataka, Chattisgarh and Coastal Andhra

Export Operations

  •  The supplies are being ramped up as per plan
  •  Commercializing four new products in current FY
  •  Sizable order book and projected improvement indicates growth momentum has revived and is expected to improve

Raw materials

  • Stress in the raw material supplies from China witnessed; impacting supply schedules of exports; this is expected to be short term
  •  Developed alternate raw materials sources in India and other geographies to de-risk the delay in supply due to non-availability of raw materials
  •  This poses an opportunity to backward integrate many products in China
  •  PI is the partner of choice for other companies who are exploring alternate source of raw materials
  • Reduced the dependence on Chinese raw materials from 32-35% to less than 20%; planned to reduce further in next 6-9 months

Expected growth outlook

  • Companies’ portfolio being integrated and re-aligned post mergers and corporate restructuring; expected to open up opportunities
  •  Focus in technology and innovation would help increase the partnerships with global innovators
  •  Growth in the pipeline of high potential novel offerings for launch in India; two products planned to launch next year, one wheat herbicide and one rice insecticide
  •  Cash generated is expected to be strong resulting in healthier balance sheets
  •  Following quarters seem promising as global macro-sentiment is expected to be more supportive

Market Scenario

  • The market condition looks better when compared to last year
  •  Pipeline inventory in different countries have gone down, indicating that the market is reviving to its normalcy

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Jet Airways Q3FY18 Concall Summary

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Financial Highlights

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  • 11th consecutive profitable quarter
  • Net profit of Rs. 186 Crores at a consolidated level.
  • The company reported a profit of Rs. 315 Cr for 9MFY18
  • The total RASK or Revenue per Available Seat Kilometre at Rs. 4.28 compare to Rs. 4.22 in the same period last year with an increase of 1.4% YoY.
  • CASK increase to Rs. 4.33 for Q3FY18 as compared to Rs. 4.22 for Q3FY17
  • CASK (Overall cost unit) increased to Rs  4.33 compared in Q3FY18 to 4.22 in Q3FY17
  • FX gains and losses have not been calculated or considered for CASK calculation
  • CASK excluding fuel fell by 2.6% to Rs. 3.02 against Rs. 3.10 in the Q3FY17
  • The firm adopted Indian Accounting Standards (IndAS) in previous quarter.
  • EBIT is Rs 186 Cr as against 299 Crores last year. This includes profit on sale and leaseback of aircraft amounting to Rs 327 Cr
  • PAT is Rs 186 Cr versus Q3FY17 PAT of Rs 299 Cr
  • Profit for 9MFY18 was Rs 315 Crores as compared to 863 Crores in 9MFY17, this profit includes 518 Crores from sale and leaseback of aircrafts.
  • Gross revenue increased by 10.2 YoY to 6,412 from 5,817 Crores in Q3FY2017.
  • EBITDA was 1,186 Crores as compared to 1,302 Crores last year.
  • EBITDA for 9MFY18 was 3,200 Crores compared to 3,860 Crores for the same period last year.
  • ASKMs grew by 9.7% YoY.
  • 170 Crores on depreciation
  • On 31st December 2017The gross debt on the balance sheet stood at 8,430 Crores
  • Of the total debt, aircraft debt stands at 2,214 Crores.
  • 71% of the total debt is denominated in US dollars.
  • The net debt as on 31st December, 2017 stood at 7,925 Crores, an increase of 40 Crores over September 2017
  • The increase of loans was attributed to :
  1. seasonal working capital  fluctuation
  2. Drawdown of close to 225 Crores towards the BKC property which the firm  acquired this year
  • In cargo business the firm  had almost 30% increase in the tonnage and 40% increase for the first 9 months
  • Other income reported has gone up by 145 Crores

Macro-Environment

  • Brent rate increased by 21% in the quarter to US $58.50 per barrel compared to US $48.50 per barrel in the same period last year
  • The Gulf market continues to remain weak
  • Yields continue to be under pressure

Operations Update 

  • Available Seat Kilometres or ASKs increased by 8.7% QoQ to 15 billion, the primary reasons behind this are:
  1. Full period impact of the 777 aircraft that came back only in December of 2016
  2. The firm Added five 737 aircraft
  • Passenger traffic increased by 13.4% YoY totalling to 7.7 million passengers this quarter.
  • Loyalty programme; Jet Privilege; is the largest loyalty scheme of its kind in India
  • Jet Privilege has won nine awards in various categories at the Customer Loyalty Award and Customer Experience Awards at the Customer Fest Show 2018. The awards were:
  1. Best Use of Contests/Promotions in a Loyalty Program
  2. Best Use of Data Analytics in Predictive Modelling
  3. Best Customer Experience awards of the year in banking.
  • The firm not satisfied with its time performance and it’s taking actions for the same.
  • Total capacity domestic and international put together in terms of seats grew by 6.8%,
  • Overall seat factor of 84% in this quarter compared to 79.6% in previous quarter, with a growth of 4.4 points YoY.
  • Carried passengers 6.12 million passengers in Q3FY17 and 6.99 million in Q3FY18 an increase of 14.3%.
  • The firm carried 6.99 million compared to 6.12 Million last year with growth of 14.3% YoY.
  • Increased corporate segment from 33%, 34% to 47%, 48% in the domestic
  • Close to 17% is the Gulf ASKs out of total ASKs
  • The total aircraft count of the firm is  117 :
  1. 16 is owned by the firm
  2. 101 are on an operating lease

Domestic Operations

  • Carried 5.5 million passengers with 16.7% growth YoY.
  • Domestic revenues to the total revenues were 44.8% in the quarter
  • ASKMs during the quarter went up by 16.9%.
  • Total domestic revenues were 2,729 Crores, up by 14.5% as compared to Q3FY17
  • Passenger revenue from domestic operations increased by 15.5% to 2,386 Crores.
  • Domestic load  at 85.4%, which reflects an increase of 4.7 points compared to Q3FY17
  • Domestic revenue per passenger has declined by around 4%.

International Operations

  • Carried 2.17 million passengers, a growth of close to 6% YoY.
  • International revenue accounted for 52% of total revenue
  • ASKM grew by 6.1% compared to Q3 of last year
  • Passenger revenues from international operations increased by 9.3% to 2,853 Crores
  • Seat factor in the international markets stood at 83% an increase of 3.7 points.
  • Revenue per passenger has increased by around 2.5%.

CS-UDAN Schemed of Government

  • The firm participated in the second round of bidding of the scheme
  • The firm has been awarded the following routes
  1. Delhi to Nashik ( The firm will fly on 737’s)
  2. Lucknow to Patna( The firm will fly on ATR)
  3. Nagpur-Allahabad-Indore( The firm will fly on ATR’s)
  4. Lucknow-Bareilly-Delhi( The firm will fly on ATR’s)

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Adani Ports and SEZ Q3FY18 Concall Summaries

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Financial Highlights

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  • The ports’ operating revenue in Q3 went up by 15% and registered 1940 crores. 
  • For the nine-month period, the same ports’ revenue was up 8% to 5446 crores.
  • The SEZ and port development revenue, combined in Q3 was 100% increase, 400 crores and for the nine months, it was 1650 crores. 
  • The revenue of the logistics front has grown by 10% in nine months and said 3% in this quarter.
  • Increment of EBITDA margin to 70% in FY ‘18 as guided earlier and CAPEX for FY ‘18 will be in the range of Rs. 2500 to 2800 crores. 
  • The total EBITDA registered a growth of 26% and stands at about 1800 crores in this quarter and about 5300 crores in nine months, which is a 29% increase as far the nine months’ period is concerned. 
  • The EBITDA margin stands at 68% against 64% in Q3 FY ‘17 and for the nine months’ period, it stands at 68% as against 66% in the nine-month period of FY ’17.
  • Ports EBITDA grew from 68% to 70% in Q3, another addition of 200 basis points
  • In the nine- month period, it was 70% which grew up by 1% from 69%.
  • In EBITDA, there is an increase of 23% against the cargo growth of 16%. 
  • On a year-on-year basis, operating income in Quarter-3 increased by 22% to Rs. 2689 crores while EBITDA after adjusting for Forex gain or loss increased by 26% to Rs. 1784 crores. 
  • Margins improved by 400 basis points to 68%, profit before tax during the same period increased by 48% to Rs. 1439 crores and profit after tax increased by 18% to Rs. 994 crores thus translating into a earnings per share of Rs. 4.8.
  • Profit after tax was Rs. 2745 crores, thus translating into an EPS of Rs. 13.26.
  • A small expenses of about 54 crores in this quarter which leads to the total income, after adjusting the SEZ expenses, to be 2635 crores, a growth of 19%. Total income for the nine-month period is about 7700 crores with a growth of 24. 
  • The logistics income grew by 3% in the quarter and 10% for nine months, it was about 200 crores in Q3 and about 600 crores in nine months. 
  • Australia’s operating income registered about 100 crores in Q3 and about 300 crores in nine months, and there is a small other income of about 48 crores in Q3 and about 140 crores in nine months. 
  • With this, the total income grew by 22% to 2689 crore and in the nine months, it grew by 31% to 8140 crore.
  • PBT after exceptional items stands increased by 48% to 1439 crores for the quarter.
  • PBT stands at a 30% growth, close to 4000 crores mark for the nine-months period.
     
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Cash Flows and Payout:

  • In FY ‘17, Rs. 315 cr was distributed as payout, which was 47% of our free cash flow. 
  • In FY ‘18 on a conservative basis, there will be a generation of a free cash flow of 1200 to 1500 crores against Rs. 670 crores generated in FY ‘17. 
  • Next year, subject to board approval, expectation of rewarding shareholders by distributing similar percentage of free cash flow. This will translate into doubling of FY ‘17 payout of Rs. 315 crores.
  • The remaining free cash flow will be used to reduce debt and further improve the net debt to EBITDA ratio.

Growth:

  • For the nine months ending December 2017, operating revenue grew by 31% to Rs. 8140 crores while EBITDA after adjusting Forex gain or loss grew by 29% to Rs. 5277 crores. 
  • Margins improved by 200 basis points to 68%. 
  • The gross finance cost is flat for this Quarter and has shown a slight increase of 5% in the nine-month period, if you give adjustment of Kattupalli, that will show about 991 crores, which is there as per the published results, and PAT for the nine-month period is at 2745 crore, which is about flat compared to previous nine-months in spite of a very large taxation incidence. 
  • In Q3FY18, it actually registered an 18% growth to 994 crores. 
  • There is a flat performance for PAT for nine months and a growth of 18%. 

Taxation 

  • Tax provision is about a percentage higher, instead of the 28 , it is about 30 , that is because of the SEZ income, the board development income. 
  • On a normalized basis (for the 12-month ) in terms of any additional bulk incomes like that by SEZ might push it for that particular quarter, otherwise, the range will be around 28 to 29. 

Volumes

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  • Cargo volume in Q3 of FY ‘18 grew by 16% year-on-year against the 4.4% cargo volume growth achieved by major ports. 
  • Coal volumes at Mundra grew by 9%, at Hazira by 41%, and at Dahej by 70%. In container segment, our growth was 29% compared to major ports growth of 8%. 
  • Container volumes at Mundra grew by 26%, at Hazira it grew by 31% and at Kattupalli by 52%.
  • Cargo volumes in Quarter-3 as compared to Quarter-2 of grew by 11%. This was again led by all-round growth in the major cargo that company handled.
  • Expectation of cargo volumes to grow one-and-a-half times of all India cargo growth and in container segment, the growth will be more than two times growth of container volumes on all India basis.
  • Total handling TEU in Hazira for Quarter-3 was 131,900 and for Kattupalli it was 127,500 TEUs
  • Breakdown of total handling TEUs at Mundra:- 
    • MICT it was 275,000
    • ForCT2 it was 264,000
    • for CT3 that is MSC terminal it was 363,000
    • for CMA terminal, it was 150,000. 
  • Q3FY18 saw a sharp recovery in coal volumes and almost a 13% growth.
  • Trans-shipment growth in Mundra port has been almost 40% in trans-shipment volume compared to last year and that is mainly because MSC has increased their vessel sizes in Mundra on their current services and also that they have added a new service in Mundra.
  • 0.6 million ton increment in growth because of this normalization of HMEL(HPCL-Mittal Energy Limited).
  • Total volume growth for this quarter is about 16%, but the revenue growth is not more than 15%.
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Business Updates

  • All major commodities handled by the company registered a double-digit growth. 
  • Coal grew by 13%, crude grew by 10%.  
  • The larger ports continue to grow, Mundra grew by 17% while Hazira grew by 9%, and Kattupalli grew by 45%. 
  • Dahej, which had a de-growth in Quarter-2 is back on growth trajectory and registered a growth of 93%.
  • Company started handling Agri products at Dahej port.
  • Overall coal grew by 22%, crude grew by 19% and container grew by 7%. 
  • During the nine months of current fiscal year, APSEZ handled cargo volumes of 135 million metric tons, registering a year-on-year volume growth of 7%. This is against 3.6% growth registered by major ports. 
  • While containers grew by 22% other bulk cargo grew by 8%. Today, 62% of the volumes are stable and long-term cargo compared to 61% at the end of Q2FY18
  • Expectation of starting expansion from next quarter onwards in Kattupalli. Phase-1 will be construction of liquid tanks along with railway line and the bulk handling facility mainly for fertilizer, Agri, and steel products. Expected CAPEX of not more than 800 crores to 900 crores over the course of two years.

Vizag Terminal

  • Vizag as is not being profitable as isn’t being operative for some time. It is expected that  in the next quarter or five months, terminal might be surrendered and losses will be seized.
  • The impact of impairment of Vizag terminal at a consolidated basis is about Rs 156 Cr , however, there is a tax benefit on that of Rs 72 crores, and therefore, the real impact on our P&L would be actually only Rs 83  Cr after taking the tax break of Rs 72 Cr. 
  • In a similar manner, in APSEZ actual net impact on P&L is Rs 225 Cr on a standalone basis because of an investment from APSEZ into that company as well as a loan from APSEZ into that company.
  • It didn’t go into the consolidation is because certain losses which were there in the Vizag terminal were already accounted for in the earlier period in the consolidated level.

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Apar Industries Q3FY18 Concall Summary

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Financial Highlights

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  • The consolidated revenue it came in at about Rs 1,500 crores for the quarter which is up 31% from Q3 FY17. 
  • The YTD 9 month’s picture revenue is up 15% at around Rs 4,054 crores. The EBITDA was down 13% at Rs. 285 crores and the EBITDA margin has come in at about 7%.
  • In the auto lube segment , the 9 months period revenue grew 24% to reach Rs 1,572 crores. Global shipments for auto lube segment for the 9 month period is 14% higher coming at about 298,000 KL. 
  • The EBITDA for the quarter actually declined from Rs 107 crores to Rs 99 crores resulting in an EBITDA margin of about 6.6%.
  • Profitability in both the oil business and the cable business has been better and the performance has also improved compared to Q2 FY18 as some of the effects of the GST has started stabilizing. 
  • Profit after tax for the quarter came in at Rs 40 crores versus Rs 43 crores. 
  • Profit after tax margin actually came in at about 2.6%. Depreciation for the quarter is up 23% at about Rs 14 crores. 
  • Profit after tax for this 9 months period came in at Rs 105 crores which is about 23% lower than the same period previous year. 
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Business Updates

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  • Speciality oil business is expected to have at least a 7% to 8% growth over and above the 14% which is seen this year and on the cable business it is expected about a 20% growth. 
  • This year the conductor has not that done well and the speciality oil as a segment has done well while the cable continues to doing well. 
  • The oil business has actually performed much better in the third quarter compared to the second quarter and something similar is expected in the fourth quarter also. 

Conductors Business

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  • The conductor revenue was up 25% at Rs 638 crores compared to Rs 510 crores in Q3 FY17. 
  • Export contribution of the conductor business came in at 47% of the revenues. Conductor business order book today stands at Rs 1,531 crores which is higher than Rs 1,406 crore at the end of September. So, orders came into the extent of about Rs 125 crores more. Export orders contributed about 50% of the pending orders.
  • High efficiency conductor contribution to the total conductor revenue stands at around 13% for the quarter.
  • The conductor business 9-month FY18 revenue came in stable at about Rs 1,674 crores with exports contributing to about 48%. The high efficiency conductor revenue for the 9-month period came in at 15%.
  • EBITDA for conductor business per metric tonnes post Forex adjustment came in at about Rs. 8,900 per metric tonnes. 
  • EBITDA post Forex per metric tonnes decline to about Rs 7,000 from Rs 13,900 in Q3 FY17.
  • EBITDA for conductor segment per MT had is at Rs. 8,900 that is the actual performance versus the Rs 10,000 per MT guided for the year.
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Specialty Oil Business

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  • The revenue for the transformer and specialty oil business for the quarter grew strongly by about 34% to reach Rs 567 crores compared to Rs 423 crores a year ago.
  • EBITDA transformer and specialty oil business per KL after Forex adjustment for the quarter that increased by 17% to Rs 4,522 per KL. 
  • The EBITDA of auto lube segment per KL after Forex came in at Rs 4,130. 
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Cable Business

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  • In the cable business, it delivered a good revenue growth of about 36% and revenue for the quarter came in at about Rs 285 crores compared to Rs 211 crores from a year ago.
  • The 9 months period for the cable division revenue is up 34% to reach Rs 780 crores and it will lead to hit sales number of approximately Rs 1,100 crores for the year. 
  • The sales revenue of the optical fibre were increased about Rs 120 crores to Rs 1,100 crores for this division. 
  • Overall cable segment revenue for this year is expected to be around Rs 1,000 crores.
  • The EBITDA of the cable business post Forex adjustments increased to 10.8% from 9.7% in the period a year ago.
  • EBITDA for the optical fibre post Forex adjustment has come in at about 9.2%. 
  • On the Cable side, the EBITDA’s have gone up from 8.3% which there has been guidance for the year to over 9% for the 9 months period. 
  • On the cable side it is expected that the EBITDA percentages will remain, 9.2% for the 9 months period.
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Orders Update

  • Key players participating in T&D infrastructure both domestically in India and Indian players have received orders of almost Rs 12,773 crores compared to about Rs 4,500 crores in the previous quarter. A large portion of this actually has come in from business that has been won from overseas.
  • There has been substantial orders in the domestic distribution segment in the last few months about Rs 109 crores which is expected to increase capacity utilization primarily of our Jharsuguda plant. 
  • Within the elastomeric segment, there have been seen a substantial increase in ordering from the Indian railways as well as on the defence side compared to a few years ago. So, even though the elastomeric volume has fallen the profitability has increased within that segment. 
  • The conductor order book in terms of volume is 97,000 metric tonne and the export contribution is Rs. 1500 crore and the break up is around 50% export and 50% domestic. 
  • HEC is around 14% of the total order book.
  • Global shipments transformer and specialty oil business for the quarter, it increased by 16% in volume terms to reach almost a 106,000 KL compared to about 91,000 KL a year ago. 

Volumes:

  • The Hamriyah plant delivered volume of about 43,000 KL in the 9 months period. 
  • The Conductors volume number for FY18 is expected to come in between 150,000 tonnes and 155,000 tonnes. 
  • In the last quarter the automotive lubricants grew in volume terms by 52% and is expected to still grow by 20%.
  • In the conductor segment, the volume has caught up well because till last quarter there was guidance of a 12% de-growth but company is already at (-5%) growth. Volumes are picking up in a very good way.
  • In auto lubes segment, there was the highest historical volumes delivered which amounted to about 8,716 KL , 52% higher than the same period previous year. This was largely led by growth in the OEM segment and also a 10% increase in the retail sales.

Development 

  • The Saubhagya scheme which was announced in Q2 FY18, has been launched in Assam, Madhya Pradesh, Jharkhand and Mizoram. Also, as far as UDAY is concerned states like Nagaland, Andaman & Nicobar, Dadra & Nagar Haveli, Daman and Diu have also signed the MOU with the government. So, today there are 27 states and 4 union territories which are part of UDAY. 
  • There has been progress in terms of the effectiveness of UDAY as the losses for DISCOMs participating in the UDAY scheme have come down from Rs 51,590 crores to about Rs 36,905 crores. 
  • The new manufacturing assets that company have put in place have been commissioned in Jharsuguda and Lapanga in Orissa. The power cable plant in Umbergaon is also now producing at close to full capacity and the new plant in Hamriyah also had its highest production in the last quarter. 
  • New aluminium rod making and melting facility in Lapanga has commenced production based on ingots. Company has signed a binding MOU with Hindalco for delivery of molten metal.
  • There is a tie up with EPC contractors for new lines and joint bidding is being done on the line so that when the business comes to that particular EPC contractor the automatic conductor comes to the company. Similar arrangements have also been done in Nepal.

CAPEX

  • In the cable business, the CAPEX is expected to be between Rs 20 crores-Rs 25 crores in FY19.
  • The CAPEX was largely involved in terms of putting up new land building and electrical connections, etc. and the cost of shifting of capacity from Silvassa to Orrisa has been written off.

    Capacity

    • The capacity in the Orissa belt at Jharsuguda stands at about 80,000 metric tonnes, 50,000 tonnes higher than what was originally planned. This movement has been done primarily keeping in mind all the benefits accruing from GST with the locational advantage coming out of the Orissa location.  
    • Power cable business actually is up but the company is basically limited by capacity at the moment.
    • Conductor guidance given at the beginning of the year was close to Rs 10,500 per metric ton. In the 9 months company have come in Rs 8,900 and the expectation for the fourth quarter is to do something in that same range. 
    • In the oil segment, the guidance for this year is of about a 375,000 KL. 297,000 KL is done so far and for the cable business it is expected to close at about Rs 1,100 crores. 
    • Out of the 180,000 tonnes, the original plan was 150,000 in the Silvassa area and 30,000 in Jharsuguda but it ended up with 80,000 in Jharsuguda and 100,000 in Silvassa. So, there is a big change and all that is happened during this year. 

    Downloads

    DCM Shriram Q3FY18 Concall Summary

    DCM Shriram.png

    Financial Highlights

    DCM Shriram Chemicals Business Q3FY18.png
    • The overall Q3FY18 Net Revenue is at Rs. 1784 crores and it  grew 31% over the same period last year.
    • The revenues of own products is at Rs. 1393 crores and it is up by 36% whereas revenues of traded products is at Rs. 391 crores and it is up by 15%.
    • Growth in revenues of own products is mainly driven by volume growth across all our businesses.
    • Volumes growth contributed 30% out of the total 36% growth in revenues.
    • Chemicals, plastics, Sugar and sugar power registered significant volume growth.
    • The PBDIT for Q3FY18 at Rs.347 crores was up by 73.5%.
    • The PBDIT for own products was Rs. 299 crores, up 74% over last year.
    • The margin for own products went up from 16.8% in Q3FY17 to 21.5% in Q3 FY18.
    • There is healthy margin improvement across most of our business verticals except Sugar, during this period.
    • The finance costs and depreciation charges came in higher by 7% and 19%, respectively.
    • This was due to capitalization of Chemical expansion projects in September 2016 and Power Co-gen in Nov. 2016.
    • Tax rate was also higher, estimated at 24.7 % for the current year vis-à-vis 13.5% last year.
    • The Net profit stood at Rs. 213 crores that is 56% higher than corresponding period last year.
    • The Gross Debt as at 31st December, 2017 stood at Rs. 631 crores vs. Rs 964 crore as on Dec 31, 2016. Cash and Cash equivalents stood at Rs. 454 crore vs Rs. 190 crores for the same period.
    • The financials for 9 month 2018 recorded similar trends as the Q3FY18 financials.
    • Overall net revenues was up 28% with revenues of own products going up by 40%.
    • Volume growth provided 30 % out of the 40 % revenue growth in own products. Both Sugar and sugar power sale & Chemicals registered significant volume growth.
    • The PBDIT at Rs. 996 crores was up 71% and PAT at Rs. 619 crores was up 57% over 9MFY17.
    DCM Shriram 9MFY18 Financials.png

    Expansion plans

    • There is  announcement of expansion initiatives in Chloro-Vinyl (including captive power plant) and Sugar businesses( including power and distillery) amounting to Rs. 1,200 crore are progressing well.

    Chloro Vinyl Business

    Chloro Vinyl Q3FY18.png
    • The Chloro-Vinyl business of the Company has highly integrated operations with multiple revenue streams and 143 MW captive power generation facilities.
    • Chemicals operations are at two locations (Kota – Rajasthan and Bharuch – Gujarat), while Vinyl is at Kota only.
    • The multiple revenue streams enable the Company to optimize operations in a manner to maximize the contribution per unit of power .

    Chemicals Business

    DCM Shriram Chemicals Business Q3FY18.png
    • Net revenues of the businesses for Q3’18 at Rs. 427 crores grew 88% YoY and 26% sequentially.
    • The overall volumes registered growth of 34% YoY and 9% sequentially.
    • The ECU realisations grew 22% sequentially. This led to the PBIT of the business reaching Rs. 217 crores for the quarter, up 201% YoY and 48% sequentially.
    • The Nine months period registered volume growth of 33 %, revenue growth of 68 % and PBIT growth of 129%.
    • The chlorine demand growth has actually been higher than Caustic, supported by low prices of chlorine in the country. As a result of these efforts, the Bharuch plant is now operating at 100% capacity.

    Plastics Business

    DCM Shriram Plastics Business Q3FY18.png
    • The Net Revenues of the business for Q3’18 stood at Rs. 151 crores, up by 44% due to higher volumes.
    • Volumes grew by 66% on a Y-o-Y basis due to lower sales in Q3FY17.
    • The PVC prices were down 7% YoY and 2% sequentially.
    • The Supreme Court’s ban on the usage of petcoke is reflected in terms of higher cost.
    • PBDIT went up to Rs. 25 crores vis-à-vis Rs. 19 crores, last year due to higher sales volumes.
    • The plant operations were stable except the disturbance caused by ban on use of Petcoke. This led to lower production as well as cost increases.

    Sugar Business

    DCM Shriram Sugar Business Q3FY18.png
    • Q3FY18 Net Revenues of sugar business at Rs. 432 crores was up 21% YoY, led by higher sugar and power volumes.
    • The Sugar sales volume went up by 19%, in line with higher crushing as season commenced earlier.
    • The power sales volume are up 50%. Lower sugar realizations, higher cane costs and decline in prices of Molasses & bagasse adversely affected the profits of the business.
    • The PBIT of the business at Rs. 49 crores, was lower by 45% YoY. During the period, the Company also recorded inventory loss of Rs. 22 crore due to the declining sugar prices.
    • For 9MFY17, the turnover at Rs 1574 crores is up 59% and PBIT at Rs 231 crores is up 27%.
    • An increase of 15-20% is expected in cane crush for the season 2017-18 on top of 47% increase in cane crush last season.
    • It is expected to commission 150 KLD distillery by end of January 2018. This will provide part insulation against the present softness in Molasses prices.
    • The sugar prices have seen sharp drop in the last few months. The net margins have turned from +ve Rs 495/ per qtl in last sugar season to –ve Rs 200 presently.

    Shriram Farm Solutions Business

    Shriram Farm Solutions Business Q3FY18.png
    • Q3FY18 net revenue came in higher by 27% to Rs. 316 crores, including impact of recognizing SSP subsidy arrear for Q2 FY18, subsequent to change in the system of claiming subsidy for July-Dec 2017 announced by the govt.
    • ‘Value Added’ segment’s revenue stood higher by 30% vis-à-vis last year.
    • Sales of variety seeds and growth nutrients registered healthy growth whereas SSP’s sales was stable.
    • The PBIT stood at Rs. 33 crores vs Rs. 19 crores last year.
    • Earning improved due to better PBIT margins in value added inputs.

    Fertiliser Business

    DCM Shriram Urea Business Q3FY18.png
    • Net Revenues of fertilizer business in Q3’18 is up 13% YoY.
    •  The volumes were up 4%, led by higher production.
    • There is one-off positive impact of freight arears amounting to Rs. 5.5 crore that was recognized during Q3 FY18; overall recovery of arears stood at Rs. 19.5 crores for the season.
    • The PBDIT for the quarter came in higher at 83% to Rs. 25 cr vs. Rs. 14 crores last year.
    • Margins improved with better operating efficiencies
    • The company is  working with the government to review the energy consumption norms applicable wef April 2018 and also reimburse the fixed costs at the enhanced rates announced by the previous govt.

    Fenesta Business

    Fenesta Business Q3FY18.png
    • The Q3 FY18 net revenue was up 33% YoY, as the segment recorded healthy growth in deliveries and project execution.
    • Volumes in the ‘Retail’ and ‘Projects’ segment stood higher by 11% and 117% YoY, respectively.
    • The contribution of the Retail segment to net sales stood stable at 62%. Business earnings improved as a result of higher revenues.
    • The business is making positive PBT over the last several quarters.
    • The overall order booking also marked a healthy improvement of 10% YoY.
    • The Fenesta business achieved high growth deliveries and revenues which led to improvement in PBDIT margins also.
    • The order book, which has been under stress in this business since last few quarters, experienced modest growth during Q3’2018.
    • Retail seems to be on upward trajectory, however the project segment still looks challenging.

    Bioseed Business

    DCM Shriram Bioseed Business Q3FY18.png
    • Q3 is an off-season for this business in India and in the overseas markets, with very limited sales.
    • India Revenues in Q3FY18 were marginally down at Rs. 37 cr against Rs. 44 cr in Q3 FY17.
    • International Business saw revenues at Rs. 19.5 cr. vs. Rs. 8.2 cr. last year. For Nine months ending Dec 2017, the International business recorded revenues of Rs 74 crores, up 56% YoY.
    • Q3 is typically an off-season for this business both in the domestic and international geographies in which we operate.

    Other Businesses

    • Operations of the Cement business remained steady during the quarter, with revenues higher by 3%.
    • In Hariyali, there is a continuous work with BPCL to reduce out fuel pump outlets and sell the properties, however, the progress is slow.
    • Cement operations have been stable except the disturbance caused by ban on use of petcoke.
    DCM Shriram Cement Business Q3FY18.png

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    Apollo Tyres Q3FY18 Concall Summary

    Apollo Tyres.png

    Financial Highlights

    Apollo Tyres Q3FY18 Financials.png
    • On a consolidated basis, the net sales were at Rs 40.2 billion
    • The net sales crossed the Rs 40 billion mark for the first time.It is a healthy growth of nearly 17% on a YoY basis and QoQ basis
    • This growth is majorly led by Indian Operations where the revenue growth was 21%
    • EBITDA (excluding other income) was at Rs 5 billion
    • EBITDA registered a margin of 12.3%, an increase of about 2% on a QoQ basis
    • The sequential growth in margin was on account of decrease in RM prices
    •  RM consumption prices in Q3 increased by about 7% on YoY basis

    New manufacturing unit

    • In Q3FY18 the company has started work on its next manufacturing facility in India
    • The foundation stone was laid in Andhra Pradesh on January 9, 2018
    •  The company plans to invest about Rs 2,000 Crores in the first phase

    Brand building activities

    • The company has partnered with the ongoing Indian Super League (ISL) for the current season
    • The company has also become the principal sponsor for the ISL team, Chennaiyin FC, and the title sponsor for I-league team, Minerva Punjab FC

    India Operations

    •  There was a significant benefit on account of decline in TBR imports post the antidumping duty imposition
    • The sales for Q3 were Rs 26.3 billion, a growth of 21% on a YoY basis and nearly 9% on a QoQ basis
    • This was primarily led by growth in volumes,majorly in TBR segment
    • The volume growth was nearly 16% on a YoY basis and about 12% on a QoQ basis
    •  EBITDA stood at Rs 3.7 billion, a margin of 13.7% as compared to 14.6% last year
    • However, margins improved by about of 2% on a QoQbasis

    Revenue segmentation

    •  90% of the revenues continue to come from the domestic operations and 10% through exports
    • Given the strong volume growth in the truck segment, the revenue from the truck category increased to 62%
    • This is about 2% higher than thenormal standards
    • The raw material basket came down by about 3% on a QoQ basis

    European operations

    • The sales were at Rs 13.9 billion, a growth of 11% on a YoY basis
    • EBITDA was at Rs 1.2 billion at 8.3%
    • Capacity in place would already be in excess of 10,000 tyres per day
    • The number of SKUs that are industrialised and hence cleared for commercial production limits the utilization of capacity
    • The actual production today has already crossed 5,000 tyres per day and hence it is saleable production
    • Volume growth was almost flat
    • The growth in revenue was primarily due to product mix improvement with major sales being in UHP and winter tyres

    Hungary plant

    • Hungary plant progress continues to be on track
    • The plant has currently reached a production of about 5,000 passenger car tyres per day
    • The company expects to close the year at about 7,000 car tyres per day production
    • The total capex spent on the plant is now close to 450 million and balance would be incurred in the first half of next year

    Plan for Hungary plant

    • The Hungary plant would be producing 7,000 tyres per day by the end of current fiscal year
    •  It should start getting close to the plant capacity
    • It should start getting close to producing about 14,000 tyres per day
    • The Hungary plant, starting from mid next year, would start ramping up on the truck capacity
    • As of now there has been no thought process, on phase 2 of Hungary plant
    • Hungary plant produces a mix of Vredestein and Apollo brand
    •  80%- 85% of volume would be the Vredestein brand, and the balance would be Apollo brand

     Dutch manufacturing unit

    •  The revenue from Dutch Manufacturing Operations was €121 million, a marginal growth from €118 million on a YoY basis
    • There was a significant growth contributionfrom ReifenOperations,given the winter season
    • Revenue for Reifen for the quarter was €66 million
    • The EBITDA margin improved from 8.5% to 12%
    • Hungary continues to be at loss, with the peaking of losses in the current quarter at about €3 million
    • The company expects to improve the situation in the coming times
    • There was no additional volumes coming from the Indian Operations, given the strong demand in India
    • The company would target to reach a break-even situation by end of the current quarter

    Growth in India

    • The overall volume growth in the truck segment was 22% with about 50% growth in TBR and a marginal growth in the TBBsegment
    • Passenger car segment was flat vis-à-vis last year
    • The company continues to make good grounds with about 90% growth in the 2 and 3-wheelers
    • Light commercial vehicles witnessed a volume growth of 10%

    Increase in other expenses

    • The other expenses in India have increased to Rs 488 Crores- increase of about 14% on sequential basis
    • The increase would be on account of  higher production and volume as the freight charges, power fuel, etcgoes up
    • The brand spend has also gone up
    • EBITDA for the European Operation is € 15 million, which is 12%
    • Reifen EBITDA is about 5%

    Landed cost of raw materials

    • Natural Rubber Rs 140/kg, Synthetic Rubber Rs 125/kg, Carbon Black Rs 65/kg and Dipped Fabric Rs265/kg

    Tractor tyre growth for India

    • QoQ growth was a flat because of weakness in the domestic scenario on a sequential basis
    •  Contribution of TBR & TBB to the top line
    • TBR currently would be about 35% and TBB would be 28%

    Reduction in margins in European operations

    • Three reasons are majorly responsible for the reduction
    1. The startup cost of Hungary
    2. The increase in RM not really followed up by the industry in terms of price increases
    3. Company’s own change of a much higher cost structure looking at OEM business, which still has not materialised in enough volumes

    Future outlook

    • The company expects a slight increase in the raw material prices going forward
    • The Gross Debt on a consolidated basis stood at Rs 43.6 billion at the end of Q3
    •  This is a slight reduction on a QoQ basis on account of scheduled debt repayments
    • The Net Debt came down substantially from Rs 41.4 billion to Rs 23.4 billion, primarily on account of the proceeds from QIP that the company had closed in the beginning of Q4
    • The Net Debt to Equity at the end of last quarter stood at 0.25
    • Going forward, the situation of European operations would improve as capacity ramps up
    • The target internally is to achieve EBITDA break-even by the end of Q3
    • The company hopes that it will start contributing positively to the profitability next year onwards
    • The company expects slight increase in the RM basket in Q4
    • Some of the players in the industry have already announced price increases in few product segments
    • Given the strong demand situation, there is a possibility of price increases
    •  The exports have come down significantly especially to Europe
    • The company has been running flat out on capacity
    •  At present, everything that is being produced is being sold in domestic market
    •  There is also a de-bottlenecking exercise that is going on
    •  Till then, there would be a capacity constraint, which is limiting the volume growth
    • In Europe, TBR production will start in the next couple of quarters
    •  There is a lag of almost one year vis-à-vis the passenger car- it would follow a similar curve
    • The TBR capacity in FY2019 in Europe would be a very small one
    • It will be in a meaningful manner only from FY2020
    • Europe also would see a small increase in the next quarter on account of the recent crude inflation
    •  The pricing scenario, as of now, in the industry remains weak
    •  No player has announced price increases
    • The growth in the industry overall in 2017 has been positive
    •  Margins of European players have been fairly good
    •  There is no real pressure in a big way on profitability on the European players

    Downloads

    Elgi Equipments Q3FY18 Concall Summary

    Elgi Equipments.png

    Financial Highlights

    • Sales has increased by 25% from 3325 million to 4154 million
    • EBITDA increased by 71% from 278 million to 474 million
    • The company by virtue of the increase sales should have had a higher EBITDA to the extent of 370, but the material cost is higher in the current quarter compared to the previous quarter and that has taken away close to 26 million in revenue for the company.
    • The biggest incremental cost that has hit EBITDA is labor cost that is increased across the world with the biggest chunk of that coming from India.
    Elgi Eqyupments Q3FY18 Revenue Mix.png

    Domestic Growth Scenario

    • Company had growth across all the verticals of our businessin India
    • Industrial compressor business has been good, but the biggest growth came from construction and mining in terms of percentage the biggest growth was in construction mining
    • Company had seen growth in the railways, but not anything significant.
    • Overall India’s performance has been good across all the business verticals
    • 2018-19 to continue to move on the same trajectory as seen in the last two quarters
    • Reasonable contribution from the steel and power segment only if they start reviving . Not much expectations from power sector due to the many number of stressed assets and even in steel all the delinquent assets are being auctioned.
    • In terms of revenue split-up India is about 7072 and the rest of the world would be about 4300 ( in millions)

    International Market Highlights

    • The company has done well in Australia, continuing to grow, profitable and expect to see some good initiatives there in the coming years
    • Southeast Asia has been a bit of a challenge so far; it is marginally better than last year, but nowhere near the targeted numbers
    • Middle East has been a challenge, but things are beginning to pick up now hence,fourth quarter should be better for Middle East and 2018-19 should be better.
    • Europe has done very well. Both Rotair products sold worldwide as well as ELGi products sold by Rotair in Europehave done well
    • America continues to be strong for the company;  growth seen across all all the verticals in America
    • Brazil has been a challenge though the economy seems to be coming back and the company has done reasonably well in terms of ensuring that no money is losing out and sales has been lower than last year.y
    • The company's primary focus is Europe, America and India is the high priority geographies. The second level priority is Australia, Indonesia and Thailand

    Long-term Growth perspective

    Elgi Equipments Selected Geographies.png
    • The company has identified specific products and specific geographies that they want to focus on and have just initiated the search process for inorganic growth opportunities in these key markets
    • The company feels that it needs to first have a strong leadership team in place before venture into inorganic opportunity
    • In the next three to four months’ time, at least in the key markets the company will have all the resources in place to be able to pursue this opportunity.
    • 2018-19 could be at least minimum we should be able to do 15% without any inorganic growth opportunity.

    International markets

    • Margins in international markets are expected to be affected by two things - One is the present stage of the price and cost structure
    • Marginal opportunities may be to increase prices and marginal opportunities to reduce cost
    • The country level risk where the company has been struggling two areas where there is a continuing kind of challenge one is China and the other one is Brazil
    • In China , the company has decided to scale down the operations but not exit since China is the largest compressor market in the world. The company is committed to remain in a hibernated situation in China and plans to go back to the drawing board and build a product strategy for China.
    • Until that period there are expected to be some marginal write offs that the management has decided to take in China.
    • In Brazil, the company growing, the company has restructured the business and has stopped making losses
    • The growth rate for Q4 and most certainly for 2018-19 is sustainable with the international subsidiaries and especially Europe and US

    Impact of Increased domestic wages

    • Increased the headcount as part of our various market initiatives
    • Moving compensation towards the market level but doing it in a phasely manner.
    • Pressure on people cost to remain for the next few years at least

    Oil Free Compressors

    • Already been rolled out for validation, got machine running in the field and have a detailed plan worked out.
    • Global launch will be probably in 2019, but India launch will be probably in the second half of this calendar year
    • Product can serve both very effectively, so to that extent there will be an expansion of opportunity rather than the market
    • Price difference between oil free screw and oil lubricated pistoncould be anywhere between double to 250 tons, 200 to 250% for oil free screw

    Net Debt position

    • Net debt as of December was about Rs.180 Crores, debt position to be around Rs.115 Crores by March 2018
    • Plans to  bring it under control by March to the level of about Rs.115 Crores

    Market share in the air compressor market and automotive equipment

    • In the compressor market, it is probably 30% and in the automotive equipment, it is about 40% to 45%.

    Road construction, Railways

    • Railways has grown, but it is not a big number, it is a single digit growth
    • Double digit growth on a road construction business and general other road and dams and other construction
    • Presence in railways is more on the intercity and the goods railways.

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    Talbros Q3FY18 Concall Summary

    Talbros.jpg.png

     Industry overview

    Industry overview Talbros.png
    • Indian Auto Industry grew at 16% in Q3 and the company grew at 28% for the quarter
    • The performance of auto sector was mainly due to good monsoons, improved rural sentiments, increased production of BS-IV compliant vehicles.
    • SIAM final sales estimates for the current fiscal through March expects passenger cars to grow between 7% and 9%, commercial vehicles at 13%, two-wheeler 12%.
    • Industry report suggests the business environment on commercial vehicles, two-wheelers, three-wheelers and LCV has stabilized
    • Favourable macroeconomic conditions, stabilization post GST, healthy order books with a focus on localization will help in achieving company’s targets
    Aurtocomponent opportunity.png

    Company Updates 

    • Company is confident to achieve the targets for Q4 and for next two years mentioned in the business stateodstes
    • The company is already BS-IV compliant and also ready with BS-VI products.
    • Company has been approved by Governments for outsourcing.
    •  Instead of importing rubber-coated steel from Germany or Europe company will use Indian steel and will coat the rubber on it
    • Talbros is in talks with Iran Isuzu Motors and North European, non-automotive player to improve its exports
    • The company has already supplied to Volvo and Ducati and is in talks with Polaris of US for export.
    •  The company is already supplying Heat Shields to the commercial vehicle like Volvo and Daimler at about Rs.4 Crores to Rs.5 Crores per annum
    • The company is attempting to make indoors with Hyundai and Maruti
    • The company received a lot of RFQs from a global player for Heat Shield
    •  Sales of the JV were lower in this quarter because of the dependency on Maruti, Hero and Honda.
    • Yamaha, Hero, HMSI are the major customer and these customers also growing well
    •  The company gave certain cost down to Hero, which has impacted the turnover from the Hero side to maintain the status quo in terms of market share
    Talbros Portfolio.png

    Financial highlights

    Talbros Q3FY18 Financial Highlights.png
    • Total income for the quarter as for Indian GAAP was Rs.134.48 Crores, the same as per Ind-AS is Rs.103.98 Crores.
    • The difference is on account of consolidation of the share of revenue for JVs, which has not been taken into account in Ind-AS.
    • EBITDA as per Indian GAAP was Rs.17.1 Crores during this quarter with a margin of 12.71%
    • The EBITDA as per the Ind-AS is Rs.13.09 Crores, which does not include the share of JV.
    • Adjusted PAT for the quarter was at Rs.6.40 Crores as per Indian GAAP and as per Ind-AS, it is Rs.5.67 Crores.
    •  The adjusted PAT margin improved from 4.9% in Q3 FY2017 to 5.45% in Q3 of FY2018.
    • Total income for nine-months of FY2018 as per Indian GAAP was Rs.377.45 Crores, the same as per Ind-AS is Rs.287.02
    • The difference is on account of consolidation of share of revenue from the JV.
    • EBITDA as per Indian GAAP is Rs.45.58 Crores with the margin of 12.08%, the same as per Ind-AS is Rs.32.21 Crores, which does not include the share of JVs.
    • Adjusted PAT for nine-month of FY2018 is Rs.15.58 Crores as per Indian GAAP and PAT was Rs.13.19 Crores as per Ind-AS
    •  The company has reduced the working capital, which would be visible at the end of March
    • EBITDA increased by 12.7% for Q3 on a consolidated basis.
    • Profits decreased from associates, which is Rs.1.6 Crores in Q3FY18 compared to Rs.2.2 Crores in Q2FY18
    •  In aftermarket company increased its selling price by 4% and from January
    • The company expects the exports to be around Rs.9 Crores to Rs.10 Crores next year, on a turnaround of Rs.55 Crores next year
    Talbros 9MFY18 Financial Highlights.png

    Gasket Division including Nippon Leakless Talbros

    •  Talbros holds 38% of the market share domestically.
    • The revenue from standalone gasket business was Rs.74 Crores and NLK was at Rs.10.9 Crores during the Q3 of financial year 2018.This is on the account of company’s product mix going 55 towards export 45 towards domestic.
    • This segment saw combined EBITDA of almost Rs.12.3 Crores.
    • The revenue from standalone gasket business was at Rs.209.92 Crores and NLK was at Rs.35.3 Crores for the nine-months of FY2018.
    •  Consolidated EBITDA for this segment is of almost Rs.33.6 Crores during this nine-month.
    • Standalone gasket sales recorded a growth of about 22.37% because of improved rural demand and low vehicle financing rates.
    • Nippon Leakless witnessed sales volume growth on the account of sales to HMSI.
    •  The company is working with its local material suppliers to reduce dependence on imported content for Nippon LeaklessTalbros
    • The company expects growth of 20% minimum in the aftermarket on the gasket side
    • The sales in most profitable fter market segment had witnessed sequential growth over the last three quarters.
    • GST had introduced to 18% from earlier 28% in November of this year and company started witnessing the benefits from the same.
    • Focus on OE export business has helped in securing orders from Cummins, USA, Zetor Tractors – Czech Republic and non-automotive conglomerate in Austria for gasket business.
    • Other  business initiatives for cost savings such as the installation of post-coating line and localization of raw materials are on track.
    • The company sent estimates of certain global OEM contracts for gasket business from Cummins as well as ZetorTractors, Czech Republic.
    • Talbros in very hedged auto component player is supplying to all these segments.
    •  Order of Rs.4 Crores received from Cummins, USA and should start in the year by September quarter of this financial year
    • Margins went up to 13.31% of Q3, up from 12.7% last year quarter.

     Forging business

    • 54.3% growth in the revenues to Rs.29.15 Cr in Q3 FY2018 on a Y-o-Y basis from Rs.18.9 Cr. in Q3 FY2017
    • The revenue grew by 45.42% from Rs.51.9 Crores in nine-month of FY2017 to Rs.75.42 Crores in nine-month of FY2018.
    • The company secured contract from BMW for forging division and from Jaguar Land Rover for its Magnettidivision which will increase the working capital cycle in the case of export orders
    • The company’s decision is post coating line, which has got established in the month of February will help reduce imports
    • Disinvestment of company’s materials plant in Sona to India based materials by June of next year will help in reducing working capital
    • Forging business in this quarter showed growth of 54% and Rs.2 Crores a month is already happening from the forging business
    • Margins had gone up on 9.5% last quarter of last year to 11.7% this year.
    • Forging segments power consumption which used to be 18% to 19% of company’s topline power cost come down 10% due to use of grid power.
    • The company secured an order from Maruti Suzuki to supply control arm assembly for the tractor suspension with estimated annual revenue of Rs.24 Cr p.a.
    • The company received increased business from SML ISUZU for moulded hoses and started supplies of hoses to Japan Mitsubishi.
    • Talbros enjoys the success of the Baleno and Breza and the S-Cross where it is present both in Marelli as well as Talbros Marugo

     Magneti Marelli Talbros

    • Company has 50:50 joint venture with MagnetiMarelliChassis Systems, a Fiat Group company with the scope to design and develop complete chassis for OEMs.
    • MMT saw a 27.81% revenue growth this quarter because of higher volumes.
    •  Total portion of revenue to TACL in Q3 of FY2018 was around Rs.13.6 Crores.
    • Revenue grew by 28.96% from Rs.29.5 Crores in nine-month of FY2017 to Rs.38 Crores in nine-month of FY2018.
    • Margins improved on account of improved volumes achieved from the sales to Maruti Suzuki
    • Jaguar Land Rover business which is roughly about Crores and half a month has been successfully implemented.
    • Capacity utilization as well as exports on JLR have jumped to 7% for the quarter an EBITDA versus 5.6% in last year same quarter

     Talbros Marugo

    •  Company entered in a new joint venture with MarugoRubber Industry in Japan, which caters to antivibrationcomponents and hoses.
    •  TMR saw a 41.16% revenue growth in Q3 of FY2018 over Q3 of FY2017.
    • Total revenues share attributable to TACL was at Rs.5.2 Crores.
    •  Revenue has grown by 18.33% from Rs.9.99 Crores in nine-month of FY2017 to Rs.13.3 Crores in nine-month FY2018.
    • TalbrosMarugo has shot up to 7.39% for the EBITDA versus 2% of the last quarter due to better capacity utilization
    • The company started supplying hoses to Marugo Rubber Japan in Q3

    Capex

    • The company is in the phase of expanding its capacity to approximately Rs.28 Crores to Rs.30 Crores per month.
    • The company’s special plant will be finalized by the month of March and company may require Rs.10 Crores to Rs.12 Crores for that
    •  In the forging business, company has just put up a facility of press 700 tonnes last month.
    •  A 1000 tonne press will be operational this month and by putting additional four or five machining lines capacity will be around Rs.12 Crores per month with a growth of another 25% to 30% next year.
    • •In Magnetti Marelli company is looking for capex in Jaguar and Maruti and expects a capacity of Rs.8 Crores to Rs.9 Crores.
    • Capex of presses and robotics will be around Rs.8 Crores to Rs.9 Crores and Rs.250 Crores will take care of the MagnettiMarelli
    • The company is looking at a capex of Rs.10-Rs.12 Crores in the gasket, Rs.5-Rs.6 Crores in forging, Rs.8-Rs.9 Crores in MMT, Anti-Vibration Rs.2-Rs.3 Crores, and in Marugo Rs.2-Rs.3 Crores for next year.

    Capacity utilisation

    •  Nippon Leakless has a spare capacity line in Uttaranchal which can be used
    • Company is taking up a small facility in Manesar and putting up some robotics welding machines there with a capex of around Rs.1 Crore or Rs.2 Crores
    • Marugo Rubber has the capacity of up to Rs.20 Crores in hose business
    • Utilisation levels for the gasket are 80%, forging is at 85% to 90% level, MMT also 80%, Nippon Leakless is about 70% and TalbrosMarugo Rubber in the Anti-Vibration it is 80% to 85%

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