Arman Financial Q4FY18 Concall Summary

Arman Financial.png

Financial highlights

Armn Financial Q4FY18 financials.png
  • AUM grew from 190 crores to 450 crores over last year which is 120% growth y-o-y
  • The growth is attributed to competition vacuum post demonetization and expanded branch network
  • Income from operations increased to 110% previous year Q-o-Q, with two third being from microfinance side, 20% from two-wheeler side and remaining from MSME side
  • Profit this quarter was Rs. 2.43 crores are compared to loss of 74 lakhs for fourth quarter last year
  • Last year was extraordinary due to demonetization effect, but the company has continued to grow at 40% to 50% for last 8 years
  • The NIM have come down from 17.3% in 1QFY2018 to 13.2% in 4QFY2018, the reason being that the companyhas now become almost completely leveraged for its Tier 1 and Tier 2 requirements


  • SAP has invested 50 crores in the form of CCD
  • It will be converted into ordinary equity after 18 months
  • The purpose of this funding is to decrease over all interest cost, better rating from credit rating agency and manage risk

MFI business 

  • Disbursements was 400 crores this category for completeyear
  • Company plans to foray into Rajasthan for MFI operation
  • Company is using aggressive write-off policy to take tax benefits
  • Average loan size in UP is Rs 18000 and 100% of the disbursements are cashless
  • Company is unique in having dedicated recovery staff in those branches where there are recovery problems
  • Next year target will be about 400 crores to 450 crores AUM in this category
  • Collection efficiency post-demonetisation is about 99.42%
  • Operating expense is 8.5%
  • Currently, there is not a lot of pricing pressure in this business, but it is more about timely delivery of funds that is important to customers of this segment
  • Company sees lots of opportunities in UP and hence it is going to open around 20 branches there in next year

Two-Wheeler segment 

  • Disbursements was 484 crores this category for the year
  • Next year’s target would be around Rs 90 crores to Rs 100 crores AUM in this category
  • Operating expense in close to 6% to 6.5%

MSME Segment 

  • Disbursements was 46 crores this category for the year
  • Company plans to start Loan against property product
  • Next year target would be around Rs 100 crores plus another Rs 25 crores to Rs crores from LAP
  • Operating expense is about 10% to 11%
  • The product is priced such as to achieve margin of 3%
  • The target group for this product is people with well-established businesses who are unbanked at the moment


  • Increase in provision was Rs 87 lakhs for standard assets because of increased asset size for this quarter
  • Write-off was Rs 87 lakhs for this quarter


Other Concall Summaries of Arman Financial Services

Aegis Logistics Q4FY18 Concall Summary

Aegis Logistics.png

Financial Highlights

Aegis Logistics Q4FY18 Financial Performance.png
  • Total revenues for the financial year ending 2018 March were Rs. 4,791 crores versus Rs. 3,939 crores in FY17
  • A rise of 22% for consolidated Aegis group revenues seen
  • Total EBITDA for FY18 was Rs. 306 crores versus Rs. 247 crores in FY17, rise of 24% year-on-year. 
  • Profit after tax for the group was Rs. 214 crores versus Rs. 136 crores in FY17, a rise of 57%
  • Earnings per share reached Rs. 6.38 for the year versus Rs. 3.97 in FY17, a rise of 61%
  • Board has approved a Rs. 75 paisa final dividend
  • Total dividend for the year to Rs. 1.25 per share

Business Updates

  • Very strong growth in imports over the next 10 or 15 years
  • Domestic production is operating at full capacity right now
  • All the refineries have the full capacity of LPG right now
  • Domestic production of LPG always will be less expensive than imports
  • Aegis is at the full domestic production of LPG, 
  • There might be some small debottlenecking of refineries, etc. 
  • Already seeing rising imports from the oil companies
  • Trend is clear for rising imports 
  •  Expect to maintain the throughput volumes in Pipavav and Mumbai terminals and more Autogas stations are in the pipeline

Liquid Terminal division

Aegis Logistics Q4FY18 Liquid division.png
  • The revenues for the year reached a record Rs. 168 crores versus Rs. 154 crores in FY17. Saw a rise of 9% year-on-year
  • The EBITDA for the year for the division was Rs. 103 crores versus Rs. 91 crores in FY17. A rise of 13% year-on-year
  • Steady overall performance for this division.
  • The future growth will depend on new capacity, in Kandla, Haldia, and Mangalore 

Gas Terminal division

Aegis Logistics Gas Division Q4FY18 Performance.png
  • Revenue for the year was Rs. 4,622 crores versus Rs. 3,776 crores in FY17
  • The EBITDA for the division for the year was Rs. 203 crores versus Rs. 156 crores in FY17. A year-on-year rise of 30% in the EBITDA
  • Expect a major boost to the LPG terminal volumes in FY 2019
  • Due to full year operations of the Haldia terminal
  • Haldia terminal was commissioned in Q3 of FY 2018
  • In FY 2019, full year benefit of the Haldia sales volumes will be seen
  • Sales volumes are currently running far above the budget in Haldia. 
  • The one year budget was mentioned to be around 0.5 million tonnes. That would be the full year annualized budget for sales volumes in Haldia. 

LPG volumes

Aegis Logistics LPG Volume Q4FY18.png
  • Most important segment in the LPG volumes is the LPG throughput terminal logistics volumes
  • For the year it was 1,742,467 metric tonnes versus in FY17 reached 1,349,899 metric tonnes
  • A rise of 29% in the volumes of LPG handled at the 3 terminals in Mumbai, Haldia and Pipavav
  • LPG sourcing volumes for the year were 1,176,598 metric tonnes versus in FY17 1,043,067 metric tonnes, a rise of 13%
  • The Packed LPG Commercial Cylinder business was 13,504 metric tonnes for the year versus 12,521 metric tonnes in FY17, a rise of 8%
  • Bulk industrial distribution sales of LPG was 40,232 metric tonnes versus 23,539 metric tonnes in FY17, a rise of 71% 
  • Autogas was 24,150 metric tonnes for the year versus 23,217 metric tonnes in FY17, a rise of 4% 
  • Key driver of rising LPG profit in the division was the LPG terminal logistics volumes 

    Autogas Stations

    • All new stations of Autogas are unified petrol, diesel under the Essar brand and Aegis Autogas - Aegis Auto LPG.
    • New stations constructing are selling petrol, diesel under the Essar brand as well as Aegis Autogas. 
    • Dealers are selling 3 products rather than 1
    • Around 11 of the old 107 stations have already been petrol
    • Diesel has already been added and continuing to see each of the current 107 stations more can be petrol and diesel. The main benefit is that getting more traffic in the station
    • Apart from LPG, petrol and diesel vehicles also coming through
    • That is the focus for the future that all new Autogas stations of Aegis are under unified stations
    • In the Essar petrol stations around 5 or 6 of Aegis Autogas pumps have been put
    • A limited amount the main focus will be on our all Autogas network to put Essar branded petrol and diesel

      Top-Line Growth

      • It is misleading because international LPG prices go up and down
      • Focus should be on actual metric tonnes rather than LPG prices because they go up and down
      • In Q1 because of rising oil prices and gas prices a sudden jump is there 

      LPG import

      • There are fluctuations from time-to-time in import volumes
      • Do not see that as any major trend, major change in trend
      • The trend is very strong import growth continued for the year because of the penetration of LPG rising in the rural areas under the Ujjwala Scheme, etc. 
      • In Aegis imports Haldia has very strong imports, etc. 
      • When the oil companies schedule their deliveries of LPG imports or domestic production, there are fluctuations with that
      • Expect continued growth, strong growth in imports

      Domestic Production

      • Fluctuates depending on the production schedule
      • Domestic production expansion will be flattish or low single-digit kind of growth
      •  There is limited capacity on domestic production
      • The incremental growth in satisfying the increased LPG demand is going to come from imports
      • Quarter-by-quarter, there are sometimes fluctuations
      • Trend is very strong growth in imports as the Government of India continues to increase penetration particularly in the rural areas of LPG

      LPG prices

      • International LPG prices are rising
      • Impact on demand is not there due to LPG prices rising
      • Even though prices are rising, they are still from a fairly low base
      • Demand continues to be strong and expect that to continue.


      • Mundra is active on building an LPG terminal.
      • There is enough imports which are projected to happen in West Coast India
      • Going to continue to build for that

      Liquid profitability

      • Different product mixes, chemicals, depends on trade flows
      • Sometimes the more chemicals are bought which are higher values, sometimes more bulk petroleum
      • Should not think too much into quarter-by-quarter figures of operating profit
      • It remains a steady basis
      • Until new capacity on stream,it is a steady business
      • The terminals of Mumbai, Kochi, Haldia are all full and operating at full capacity
      • Pipavav remains at roughly around 20% capacity utilization, that has not changed
      • It is a steady business and there are fluctuations
      • Focus for the future is bringing the new capacity of 100,000 kiloliters in Kandla
      • There is 25,000 kiloliters in Mangalore and the capacity expansion in Haldia of 35,000 kiloliters
      • Full operation in FY 2019 that will significantly add to revenues and profit
      • Gave Liquid terminal marketing team a very demanding target for the next 2 years in terms of revenues 

      Haldia LPG pipeline

      • Latest information is IOC is making good progress on that pipeline that this is the Paradip to Durgapur pipeline via Haldia, 
      • They are making good progress on that pipeline
      • Achieving 2.5 million metric tonnes is not dependent on that pipeline
      • Aegis can handle 2.5 million tonnes both by road and some other work to be done on future Rail movement of LPG
      • Pipeline will come and that will only enhance evacuation possibility
      • HPCL is building the largest bottling plant in Asia in Panagarh
      • They are actually very close to completing that bottling plant
      • Is great news for our progress towards that 2.5 million tonnes figure
      • Still have to lay pipelines from the Panagarh to Haldia terminal which they have committed
      • They have still not even started working on that
      • Aegis can still move by road LPG to that bottling plan
      • After 6 months of operation in Haldia Aegis is so far above the budget in Haldia
      • It is primarily HPCL and there is also BPCL cargoes which are coming in
      • They have completely stopped transporting any LPG from Vizag all the way to the Northeast
      • BPCL is also bringing good cargoes into Haldia. 
      • Growth in Haldia in this year is going to power Aegis earning overall as we have said but much above budget
      • Current run rate is far above the budget far above
      • Figure will be talking about between 3 years to 5 years from start of operation

      Pipavav Liquid Terminal

      • Focus has now shifted to Rail movement of LPG from Pipavav
      • Have been negotiating with Gujarat Pipavav Port
      • Decided that was the priority rather than Liquid Rail movement
      • There is a lot of scope for increased LPG throughput movement by Rail in Pipavav
      • Once contract agreement is signed with Gujarat Pipavav on LPG Rail movement, will again talk to them about Liquid Rail movement
      • Expansion was completed some quarters ago and it is going very well
      • Maintaining good volumes in Pipavav and utilizing all the tanks that put up to in storage.
      •  Also storing other gases like butylene for Reliance in Pipavav
      • Can add another 2-3, 4 but it is always dependent on when the volumes are there
      • Breakthrough on Rail movement in Pipavav would then determine the future.

        Mumbai Terminal 

        • The throughput volumes cannot increase beyond 1.1 million tonnes
        • Everything is on road transport except for the Reliance contract on propane which goes to the pipeline because there is only road tankers can be handled on a daily basis
        • That is the current run rate that doing right now in FY 2019
        • Chakan pipeline is completed to Poona can start moving products in that 1.2 million tonne capacity pipeline
        • That is the only way the company can raise the throughput in Bombay (Mumbai) towards 1.4 million tonnes
        • Completed interconnection of 2.8 kilometers in December 2016

        Timeline On The New Terminal In The West Coast

        • There is no timeline
        • Going for meetings and negotiations on deals are happening
        • Take time because these are very-very large projects deal 

          Demand CAGR

          • Expect to be somewhere between 6% to 8% demand growth
          • Areas like Northeast, it is going to be higher because the penetration is lower
          • Being governed by how fast the public sector companies IOC, HPCL, BPCL are building out that rural penetration distribution network in the Ujjwala Scheme
          • They are growing as fast as possible 

          Aegis Logistics Market Share for Imports

          • That is a dramatic increase being talked about for the last few years which is expected to be 25% to 30% market share
          • Not only the new Haldia terminal but perhaps the next couple of deals
          • Dramatic increase from currently around 15% of handling of LPG imports to around 25% to 30% 
          • It depends on building that terminal capacity the extra terminal capacity

          Tax Rate

          • All Indian Accounting Standards has been implemented as of this year
          • Target an effective tax rate of around 20% to 22% for next financial year
          • Pretax profit irrespective of the increase in the effective tax rate will be growing well
          • Rising post-tax profit in the current year even though there is an increase in the effective tax rate.

          Future Outlook 

          Aegis Logistics Q4FY18 Liquid Capacity expansion.png
          • The growth in revenues and profits will come from the major capacity increases in the following 3 projects.
          • • Kandla   
            • First, the 100,000-kiloliter project in Kandla. 
            • Project was completed in Q4 of FY 2018
            • Project is complete, waiting for the final permission to fully start the operations.
          • •  Mangalore Port   
            • The second project is a 25,000-kiloliter project in Mangalore Port. 
            • Project should be completed in Q1 of FY 2019 and then, the final permission to start operations
          • •    Haldia
            • The third project the 35,000-kiloliter expansion in Haldia
            • Expected to complete project in the first-half of FY 2019
            • Q4FY18 was much better than Q3FY18 for Haldia port
            • Current run rate, is far above 40,000 tonnes to 50,000 tonnes per month budget
            • Budget was 0.5 million tonnes for the first full year operation
            •  3 years to 5 years is a realistic time frame to achieve 2 mn to 2.5 mn 
          • There was very good throughput in all the terminals as far as Haldia, Bombay (Mumbai), and Pipavav
          • Expect that resulting in 29% growth in overall LPG volumes in those 3 terminals
          • Will maintain the full kind of full results in Pipavav and Mumbai going ahead
          • Can increase throughput further is that Uran pipeline connection
          • Waiting for HPCL to finish their Chakan project, might be the end of calendar year 2018 to complete that project
          • Connected into that Uran pipeline some time ago but they are not using that
          • Road evacuation from the Mumbai terminal for the LPG
          • Expect greater volumes in Mumbai
          Aegis Logistics Q4FY18 LPG expansion.png
          • Growth in FY19
            • Lot of it depends on Haldia volumes
            • Bombay (Mumbai) and Pipavav to continue the current run rate which is
            • Going to be the major incremental volume growth on last year’s 1.74 million tonnes
            • The growth rate depends on whether the customers tender and whether they on their own requirements and whether they import themselves or whether they tender more
            • The company makes $3 to $4 per tonnes in Singapore
            • If IOC, HPCL, BPCL, want to bring product then bidding would be done
            • If they find that they can import themselves through the national oil companies of Saudi Aramco and others, cannot force them to come up with them
            • Main focus is how much LPG can be handled in terminal
            • FY 2019 will see continued strong growth in imports for India as a whole and in Aegis terminal
          • Scenario by FY 2020
            • The gap is rising between domestic production and domestic consumption, which means more imports
            • Gap is going to be increasing because domestic production is stagnant
            • More imports mean more terminals
            • Indian Oil is trying to build 1 terminal in Kochi, which is a 30,000 terminal
            • Got into some problems with National Green Tribunal
            • BPCL is trying to construct 1 more terminal in Haldia a 30,000 tonnes terminal which is under construction
            • Apart from those 2 public sector projects, only Aegis is building LPG terminals
            • Currently planning another 2 LPG terminals in collaboration with the public sector
            • Bulk of the incremental import capacity is going to come from either public sector or Aegis
            • India should then be able to handle the imports by FY20


          Other Concall Summaries of Aegis Logistics



          Ujjivan Financial Services Q4FY18 Concall Summary

          Ujjivan Financial.png

          Financial Highlights

          Ujjivan Financial Q4FY18.png
          • Quarterly disbursement rose by 6% from previous quarter and 61% YoY to INR 2262 crores
          • The disbursement in the whole year grew by 13% in total to reach INR 8052 crores
          • The gross loan of the firm grew by 18.5 form March 2017
          • Firm through its operations has added 7.6 lakh new borrowers in the fiscal year
          • The share of MSE and housing finance saw twofold upsurge from the previous value of 2.4% to reach a figure of 7.3% , the major improvements came in the later part of the year
          • Net Interest income of the quarter grew by 24.8% from the previous quarter to reach INR 271.8 crores
          • Company healthy increase in the net margins which stood at 12.8 for the ending quarter up from 11.1% from the preceding quarter
          • Total credit cost of the year stood at INR 310.8 crores which was in line with the earlier predictions of the company
          • Both GNPA and NNPA of the firm has reduced since last quarter
          • The collection efficiency of the all the loans that had been passed since January 2017 is 99.6% which is good
          • Net Profit for the quarter stood at INR 64.9 crores which was considerably higher than the last quarter profits INR 29.3 crores
          • The ROA and ROE has improved since the last quarter and over the period of one year also since the last fiscal year
          • In coming three years time the company is eyeing for 33% business coming from the MFI and are expecting quarter of that to be secured loan


          Ujjivan Financial Services Deposits.png
          • The deposit base of the bank stood at INR 3772 crore as of March,2018 out of the total deposit base 3.7% was CASA and 11.3% were retail deposits. Company is optimistic of gaining more traction in the retail deposits
          • The company is eyeing for 25% of the total deposit base to come from the retail at the end of this fiscal year
          • Around 50% of the total loan advances in Q4 2018 were covered by the deposit base against only 36% in Q3 2018

          Microfinance Business

          • The total microfinance disbursements in the Q4 stood at INR 1910 crores
          • The loan disbursed to the individuals grew by 31.6% and also the total disbursement grew by 1.8% over the last quarter
          • The company took cautious stance after the demonetization and only those branches were given go-ahead where the efficiency of collection were higher and had returned to normalcy
          • The business in the MFI domain would ramp up in the coming fiscal year

          Cost of Funding

          • The average cost of funding the operations of the bank reduced by 140 basis point to remain at 9%, the improvement came as the strategic result of repayment of legacy loans and increasing the deposit base which was at considerably less rate of interest
          • However the cost to income ratio of the company has worsened from 53.1% in 2017 to 67.1% in 2018   
          • Company at the start of the fiscal year had legacy funding of 64% which they have repaid to some large extent
          • They are hopeful of repaying remaining 30% in the current fiscal year

          Risk Management

          • Bank has invested heavily in the risk management practices in form of KYC and AML
          • They have a dedicated team of individuals who look after the risk management
          • The credit policies and risk management practices have been formulated keeping in mind the specific type of risk faced in the branches and clusters

          Operating Expenses

          • Operating expense of in the year showed marginal increase in comparison to last year because most of the opened branches were of URC type and had very low cost impact
          • Also the company estimates of the operating costs at the beginning of the year matched significantly with the end year results
          • This year the cost to income ratio might increase by 3-4% owing to multiple branch openings


          •  More than 60% of the customers would be with the company for more than 2 years now and another 30% could be in between 1 to 2 years
          Ujjivan Financial Services Strategy.png


          Other Concall Summaries of Ujjivan Financial Services

          Skipper Q4FY18 Concall Summary



          Financial Highlights

          Skipper FY18 Financial Performance.png
          • Revenue grew by 24.6% to Rs. 2074 crores
          • Net sales increased to Rs. 593 crores from Rs. 564 crores compared to corresponding quarters last year
          • EBITDA increased by 25.2% to Rs. 274.93 crores
          • Reported EBITDA increased to Rs. 108.58 crores from Rs. 101 crores in the corresponding quarter
          • Operating margin slightly increased to 13.3% as compared to 13.2% in FY17
          • PBT increased by 23.1% to Rs. 152.77 crores against Rs. 124.09 crores in FY17
          • Reported PBT and PAT numbers were at Rs. 74.08 crores and Rs. 49.53 crores respectively
          •  Board of Directors has recommended highest ever dividend of 165% for FY18
          • Requirement of Forex derivative gain to be reported on mark-to-market basis has resulted in increased profitability numbers of previous year
          Skipper Q4FY18 Financial Performance.png

          Engineering product business

          • Engineering product business continues to demonstrate robust performance 
          • Secured or favourably placed in new orders worth in excess of Rs. 620 crores for engineering products, supplies from PGCIL, SEBs, telecom and solar companies and for various supplies across Europe and Southeast Asia
          • EBIT margins jumped due to execution of some high margin contracts
          • Company will have virtual monopoly in the upgradation of Northeastern infrastructure project

          Polymer Business

          • Polymer business is expected to grow at around 40% in coming years
          • No plan of hiving off polymer business into separate entity
          • Performance of polymer business remains challenging due to uncertainties surrounding GST and after effects of demonetization
          • Robust demand from agricultural as well as construction sectors for polymer piping business

          Plumbing Business

          • Share of plumbing business to be increased as it has better margins
          • The split between agriculture and plumbing business is targeted to be 50:50 as compared to 65:35 last year


          •  Total installed capacity is 265,000 tonnes per annum
          • Utilization of capacity is close to 90%
          • Capacity has been enhanced by 35000 tonnes during the year
          • Capacity addition of about 30,000 tonnes in upcoming year
          • PVC capacity is around 51000 per annum; utilization is nearly 50%


          • The company has received approval from core in railways for manufacturing of traction masts
          • Projects worth in excess of Rs. 40,000 crores have been announced to connect North-eastern states to rest of the country
          • Logistically well positioned to target these projects
          • Got approval in Mexico and Canadian Welding Bureau which qualifies the company to supply to North America as well
          • Strategy is to keep getting approvals and to keep interacting with customers in order to bid and secure projects

          Order Book

          Skipper Q4FY18 order book.png
          • Total order book as on March end is Rs. 2627 crores
          • Well diversified between domestic, PGCIL and private players, SEB and exports
          • In the order book, 44% is PGCIL, nearly 40% is SEBs and other domestic customers and rest is exports
          • Bulk of the order book would be in SEBs, private developers and telecom in domestic side in upcoming years
          • Total order book to sales is at approximately 1.5x of last year sales
          • Growth from increased participation opportunity from export, Northeast and east India states like Jharkhand, Bihar and Odisha.
          • Ordering in TBCB has been dull this year

          Growth Prospects

          • PCGIL’s plan to build intrastate transmission projects by tying up with SEB will give boost to industry
          • States like Karnataka, Tamil Nadu, West Bengal, Andhra Pradesh and Telangana are increasing T&D spending to reduce AT&C losses and building infrastructure on high voltage lines
          • Flagship programs like Saubhagya, IPDS and DDUGJY disperse good investments and opportunity in this sector
          • Diversified portfolio will enable to tap opportunities in sectors like railways, solar and telecom and reduce its overdependence on a particular industry
          • Confusion among channel partners led to deferment in placing newer orders and holding onto their inventories
          • With effects of demonetization, GST and RERA waning off and revival in the economy coupled with GST benefits for organized players, growth to get back to 35 to 40 % during the year
          • One of the lowest cost producers of TBCB globally
          • Focus is to maintain a balance between growth and margins
          • Devaluation of Rupee has made Indian products more competitive
          • Customers in 30 to 35 countries

          Vector Consulting

          • Vector Consulting Group to assist in polymer operations by implementing theory of constraints
          • Operations will be managed through a full-based replenishment system ensuring high availability at distributors with lower inventory in company’s supply chain
          • It will also aid in setting up and developing partnership with plumbers and contractors through a long-term loyalty program across relevant product range

          Working Capital

          • Manufacturing of own raw material, MS Angle, extends working capital cycle by 45 to 50 days
          • Slight increase in overall debt number in the working capital


          • Total CAPEX plan is around Rs. 75 crores
          • CAPEX in engineering product business to be Rs. 55 crores including capacity expansion, maintenance CAPEX as well as test bed
          • CAPEX in polymer business to be around Rs. 20 crores including fittings, CPVC, HDPE as well as pipe business
          • CAPEX for FY18 was Rs. 61 crores

          JV with Metzerplas

          • JV with Metzerplas is expected to start operation by October 2018.
          • Location of JV is Hyderabad, work has already started
          • Total CAPEX is about $4 million of which Skipper’s portion is about $2 million
          • To be funded by partly debt and partly equity


          • Total gross debt number is around 498
          • Debt with current maturity is around 45 crores
          • Debt to equity ratio stands at 0.78 as compared to 0.83 last year

          Raw material prices

          • Not affected by increase in raw material prices
          • Any increase or decrease in raw material prices is passed on to the consumers


          Other Concall Summaries of Skipper

          Biocon Q4FY18 Concall Summary


          Financial Highlights


          • Total Consolidated Revenues for the year were at Rs.4336 crores, up 6% compared to the previous fiscal.
          • Revenues from Operations were Rs.4130 crores, which reflects a growth of 5% compared to the previous fiscal. This includes licensing income of Rs.23 crores as compared to Rs.145 crores the previous year.
          • Biocon incurred a gross R&D spend of Rs.380 crores this year. Of this amount, Rs.216 crores is reported in the P&L corresponding to 8% of revenues excluding Syngene. They capitalized an amount of Rs.165 crores as compared to Rs.135 crores in FY2017.
          • Biocon booked a forex gain of Rs.83 crores this year, compared to a loss of Rs.3 crores the previous year. Major gains amounting to Rs.74 crores were booked in Syngene.
          • Group EBITDA stood at Rs.1035 crores for the year, down 9% with an EBITDA margin of 24%. Core margins that is EBITDA margins net of licensing, impact of forex, and R&D stood at 27%.
            Reported Net Profit for the year was Rs.372 crores, which represents a Net Profit margin of 9%.
          • The effective tax rate for the full year at 26% again appears higher than last year of 19%.
          • The Board of Directors have recommended for approval by the shareholders, a Final Dividend of Re.1 per share (20% of face value of each share) for the financial year 2017-18.


          Biocon Q4FY18 Financial Highlights.png
          • Total Consolidated Revenues for the quarter of Rs.1237 crores, which is up 27% compared to last year.
          • Revenues from operations were at Rs.1170 crores, which reflects a growth of 26% compared to last year. This includes licensing income of Rs.2 crores this quarter compared to Rs.16 crores in Q4 last fiscal.
          •   Biocon incurred gross R&D spends of Rs.98 crores this quarter. Of this, Rs.51 crores is reported in the P&L corresponding to 7% of revenues excluding Syngene. We capitalized an amount of Rs.47 crores related to their biosimilars and insulin analogs development expenses.
          • Biocon booked a forex gain of Rs.42 crores this quarter as compared to a loss of Rs.17 crores in Q4 last fiscal. This gain is reflected in the ‘other income’ line of the P&L statement.
          • Group EBITDA was at Rs.300 crores for this quarter, with EBITDA margin at 24%. Core margins, i.e. EBITDA margins net of licensing, impact of forex and R&D stood at 26%.
          • Reported Net Profit for the quarter was Rs.130 crores, which represents a Net Profit margin of 11%.
          • The effective tax rate at 21% for the quarter appears higher than last year tax rate of 2% last year as they had utilized R&D incentives and deferred tax asset for the full year in Q4 of last year.

          Key Busines Highlights of the year

          • Biocon’s partner Mylan received approval for Ogivri™, Biocon’s partnered biosimilar Trastuzumab from the USFDA in December 2017. It became the first company from India to get its biosimilar approved by the USFDA and their biosimilar Trastuzumab also received approval in Brazil through Biocon’s partner Libbs Farmaceutica. Subsequently an approval in Turkey was also received.
          • Mylan and Biocon also received approval from the European Commission and Therapeutic Goods Administration (TGA) Australia, for Semglee™, which is their biosimilar Insulin Glargine. Semglee™ is expected to be launched by their partner Mylan in Australia and Europe in the second half of this year.
          • Biocon and Mylan agreed to accelerate the introduction of biosimilar Adalimumab in Europe through Mylan’s in-licensing arrangement with Fujifilm Kyowa Kirin Biologics or FKB. FKB’s product is at an advanced stage of review with EMA and could potentially obtain approval in Europe in the second half of 2018.
          • Biocon and Mylan have also agreed to expand their longstanding collaboration with the addition of two next generation biosimilar programs with Insulin Glargine 300 units/ml and Pertuzumab.
          • Syngene, Biocon’s Research Services subsidiary, extended its contract and increased the scope of its engagement with BMS, its largest customer. Syngene also expanded its ongoing research collaboration with Amgen and signed a multi-year agreement with GSK.
          • Biocon was ranked among global top 10 biotech employers as per the 2017 rankings released by Science Career magazine. They are the only Asian company to feature in this list.

          Business segments

          Biocon Q4FY18 Segment Financials.png

          Small Molecules

          • Small Molecules revenues were Rs.1508 crores, which is down 8% from the previous year. The segment clocked revenues of Rs.426 crores for Q4FY18, which is up 8% YoY
          • This segment faced headwinds as a result of pricing pressure and channel consolidation by our clients in the US, which impacted our static sales. Continued demand for immuno-suppressants helped offset some of the pressure in this segment.
          • Despite the pressures, Viocon were able to increase market share for some of their specialty APIs in key markets.
          • Biocon also made regulatory submissions for multiple APIs across developed and key emerging markets. This will help this segment while moving into FY19.


          • Biologics revenues grew 10% to Rs.770 crores in FY18
          • Biologic segment revenues grew 47% in Q4FY18 and 10% for the full year.
          • The full year growth was impacted by shut down of fill-finish plant for modifications and requalification post regulatory audits last calendar year and lower licensing income pertaining to this segment.
          • Adjusting for impact of decrease in licensing income, product revenues growth was strong at 68% in Q4 and a decent 29% on a full year basis.
          • The growth was led by insulin sales in Malaysia via the offtake agreement, higher sales in Mexico where their partner won a government tender and traction in the AFMET region contributed to the insulin growth.
          • Antibodies product revenues increased as a result of the expansion of their geographical footprint in emerging markets.

          Branded Formulations

          •  Branded Formulations grew 14% to Rs.149 crores in Q4. and 11% to Rs.612 crores in FY18
          •  In FY18, the growth in Branded Formulations, which comprises India and UAE, were led by strong growth in the UAE business at 33%, while growth of the Indian business remain muted at 4%, with performance impacted due to various challenges faced by the business.
          • The UAE business reported an overall strong revenue growth driven by their metabolics portfolio, which comprises novel in-licensed products like Jalra and Imprida and their own brand of biosimilar Insulin Glargine, Glaricon™.
          • In India, Biocon launched Krabeva®, a biosimilar Bevacizumab, our second oncology biosimilar launch in India. Developed for the treatment of metastatic colorectal cancer and other types of lung, kidney, cervical, ovarian, and brain cancers, it is an important addition to our current oncology portfolio in India.
          • Biocon hadto take price reductions in some of their products, both mandatory as well as market-based. Furthermore, there was a temporary volume shortfall for certain biologic products due to the shutdown of their biologics facility in Q2 and Q3 of FY18.


          • Syngene registered revenues of Rs.1423 crores, reflecting a strong growth of 19% compared to the previous fiscal.    Syngene reported revenues of Rs.409 crores, up a solid 45% compared to Q4 of last fiscal.   Syngene reported revenues of Rs.409 crores, up a solid 45% compared to Q4 of last fiscal.
          • Syngene’s revenues recorded a strong growth this year on the back of an overall strong performance across its businesses. While discovery services and development manufacturing services showed strong momentum, dedicated centers continue to be on a strong footing.
          • Revenue growth in Q4 was a robust 45%, signaling a full recovery from the impact of the fire incident that happened in December 2016. The damaged facility is expected to be fully operational during the first quarter of FY19.

          Product Development Updates

          • The review of Biologics License Application (BLA) for biosimilar Pegfilgrastim by USFDA is progressing. The target action date for a decision by USFDA is June 4th, 2018.
          • In Europe, the regulatory review of Marketing Authorization Application (MAA) for biosimilar Trastuzumab and biosimilar Pegfilgrastim are also progressing and decisions by CHMP is expected by the end of this calendar year.
          • In the US, Mylan and Biocon’s application for Insulin Glargine under the NDA pathway is under review by the FDA.
          • The global Phase III trial of biosimilar Bevacizumab continues. For Insulin Aspart, Biocon has recently completed global Phase I study and expect a PK/PD readout shortly.

          Revenue from licensing

          • A lot of Biocon’s licensing income has been related to local partnering of their biosimilar assets and clearly looking at the biosimilar asset opportunities, their focus to date had been largely on Trastuzumab. 
          • Biocon still have opportunities with the other biosimilar programs to do partnering which are in late stage of development.

          Interest costs & expenses

          • The majority of the interest cost is on their debt in Malaysia, a debt of almost $180 million and the interest costs on that net of the subsidies which they receive from the Government of Malaysia is in the P&L.
          • Apart from that, Biocon have smaller debt facilities for other plants, and again bulk of that is in the P&L, and a very small component is capitalized along with the plant cost.
          • At some point in time Biocon are open to divesting a small stake in Syngene to raise additional funds if management prefer not to taking on too much debt on balance sheet.

          Capitalized expenses

          • Although the filing for Trastuzumab and Glargine is over, it does not necessarily mean that the expenses are over. 
          • Biocon still have some expenses coming for these two molecules. The bulk of the capitalization is now for Bevacizumab which is in global Phase III.
          • As per Biocon’s capitalization policy, they only capitalize molecules where they have got an approval for that particular molecule in one of the markets, thereby establishing scientific proof of concept and also the technical and the commercial feasibility.
          • For Toujeo and Perjeta, all the initial expenses, till the time of first approval will be in the P&L.


          • Last year, the cash outflow at the Biocon level, excluding Syngene was around 400 crores. A small component of that was for the new antibiotics facility. 
          • Capex for FY19 & 20 should be anywhere around Rs.500-600 crores per year.
          • Majority of this is coming from our new antibodies facility, construction for which had started last year.
          • Mylan will also be contributing on that facility, so the numbers would get reduced. But the combined capex for next two years, at a Biocon level excluding Syngene, is expected to be around Rs.1000 crores.

          Future Outlook

          • Biocon expects the absolute numbers to go up next year and spends to be in a similar range of 15-16% of revenue. On an absolute basis, Biocon expect gross R&D spend to be in the range of Rs.450-500 crores.
          • The two new drugs that have been added to the pipeline with Mylan and molecules with Sandoz are in early stages of development. Greater spends from them will come when these molecules move into the clinic.
            The increase in R&D expenses next year will be on account of our novel molecules pipeline and ANDAs.

          Gross Margin pressure

          • If comparing with last year, there was a reduction of 4% and that’s mainly on account of Small Molecule pricing pressure. But if comparing it with the third quarter, then both the quarters had gross margin of ~55% which is in line with the trends seen in this year.

          IP issues

          • From Trastuzumab perspective Mylan and Roche are reaching to a global settlement. 
          • As far as Pegfilgrastim in the US is concerned, there is an on-going IP process as part of the BPCIA Act.

          Branded India business slowdown

          Main reasons:

          • Shortfall of biologics because of the upgradation and requalification of the plant
          • Biocon also had the impact of GST and had some unfavorable pricing which they had to take to face competition.

          Secondary reason: 

          • Biocon had some operational issues leading from attrition which impacted execution. So the next year, Biocon will not have these shortage issues and the impact of GST is behind.
          • In order to tackle pricing issues, Biocon have installed a key account team, which focuses on business and on key accounts and therefore to be able to guard the business more closely.

          Biologics vs Generics

          • The cost involved in bringing a generic molecule to the market is significantly lower; generally it is between 5 to 10 million dollars. Whereas it takes upwards of 100 million dollars to bring a biosimilar to the market.
          • It takes almost 3 to 5 years minimum to bring a biosimilar drug to the market compared to a generic molecule.
            Taking into account all these dynamics, it is very expensive and very long drawn out in terms of the regulatory time line to bring a biosimilar product to the market.So biosimilars have low competition and high prices.
          • The FDA and the EMA organization are learning along with the industry on how to approve these biosimilars with collaboration of Biocon and other frontrunners in the industry.

          Info on biosimilars

          • Pegfilgrastim

            • Biocon has had both resubmissions last year and there are typically changes in rapporteurs that are handling it and so there is some level of fresh look at it, but clearly Biocon benefit from the review that is already completed. So it is not essentially de novo.
            • On the FDA side, there is nothing new to report there. Biocon have their action date coming up in June and they are comfortable where they stand in the review process.
            • Pegfilgrastim will be launched in the second half. However management cannot comment on the Trastuzumab launch date because that is governed by the IP settlement.
          • IN105
            • The program right now is in Phase III, and Biocon have initiated the studies. A few patients have been dosed and the dosing will continue for the next couple of years. 
            • Biocon will look at the data on an interim basis sometime next year. It is all in discussion with the DCGI office. Biocon is very enthusiastic about this program.
          • Adalimumab
            • Biocon and FKB will participate in whatever costs and profits Mylan has as part of its deal.
            • They participate in their share of that as per global arrangement. So to that extent it would be a three-way.
            • However, Biocon’s own product has completed phase III clinical in the first half of 2017. There is time to take a decision on which option to pursue in the US and in other markets. So the management have not ruled in or ruled out any option outside of Europe at this stage.

          Malaysian Operations

          •  In FY18, Malaysia reported an operational loss of $5 million at a standalone level, when excluding the impact of R&D. In FY19, the fixed expenses are projected to increase to $50 million on account of increase in operating expenses.
          •  Biocon’s Malaysia insulin facility is making good progress and receiving approvals for both the facility and the products from various regulatory agencies globally which will help them aim for operational breakeven in Malaysia after excluding R&D expenses in FY19.
          • At an operational level the P&L would have a delta of 7 million dollars. However due to various moving parts, one cannot necessarily correlate the delta with the top line growth with accuracy.

          ANDA filings

          • Biocon have filed 2 ANDAs in FY18 and our plan is to file more in FY19.
          • R&D ramp up on small molecules is also likely to be seen going forward, largely because of management’s focus on submitting some of these ANDAs which are not just regular, but difficult to make products.

          Bangalore Plant

          • The construction for this new facility started last year. It will take about two years to commission the facility, a year after that to qualify and file for approvals, and then one year to get the approvals.
          • So by next year, the facility itself should be commissioned and in 2020 Biocon will do the development work to file in various markets. Finally, in early 2021 commercial sales are expected to start from that facility.

          Contribution of Biologics

          • With increasing performance of biosimilars portfolio in the market place, a better contribution from the Biologics is expected. The percentage contribution of the Biologics segment to the overall business pie is definitely going to trend upwards. 
          • Being a high value and a high margin business, margins should also improve once biosimilars become a significant part of the business.
          • Aspirational target of $1 billion dollar
          • Biocon is well on track for Biologics and Research Services.
          • However, Biocon are likely to face some challenges and headwinds in their Branded Formulations numbers and also in terms of their Small Molecules numbers.
          • Because of the kind of market dynamics that are prevailing in the world, there have been tremendous pricing pressures, price enforcement by NPPA etc.
          • There are a lot of challenges that Biocon had not anticipated, maybe five years ago which are proving to be a hindrance in achieving $1 billion revenue in FY2019.


          Other Concall Summaries of Biocon

          Yes Bank Q4FY18 Concall Summary

          Yes Bank.png

          Financial Highlights

          Yes Bank Q4FY18 financials.png


          • The total assets crossed Rs 3 trillion mark in the Q4
          • Both total deposits and total loan crossed INR 2 trillion mark
          • International banking asset clocked the level of $2.8 billion which they have booked in the GIFT CITY
          • The NPA of the bank improved to 1.28% as compared to 1.72% in the quarter ended in last December
          • The net credit cost for the year was curtailed to 76 basis point even when the overall market expectations stood somewhere between 100 to 120 basis point
          • The guidance for the net credit cost for the coming fiscal is set somewhere between 50 to 70 basis points
          • The dividend payout ratio to remain at 17.7% 
          • Net profit recorded an increase of 29% in Q4 to reach the figure of INR 11794 million and for the whole FY the net profit grew by26.9% 
          • Net interest income showed an improvement of 31.4% over the preceding quarter and on YoY basis it grew by 33.5%
          • Income from non-interest services increased to INR 14210 million with an improvement of 13% over the preceding quarter
          • Cost to income ratio for the whole year improved by 1.2% to remain at 40.2% in comparison to the last fiscal year
          • ROA for the year stood at 1.6% and ROE for the year stood at 17.7% 
          • Total assets of the bank grew by 45.3% in the year to surpass the 3 trillion mark
          • Offshore assets through International Business Unit of the bank grew by 166% YoY
          • With a sequential growth of 90% and YoY of 54.1% the corporate business across the eight relationships groups stood 67.9% at the end of the Q4
          • Bank was able to maintain a healthy capital adequacy ratio of 18.4%
          Yes Bank Q4FY18 Key Financial Parameters.png


          • Yes bank has been ranked overall #2 by the Ministry of Electronics and Information Technology across all bank segments
          • German Agency OEKOM research awarded YES bank the prime status which made it the only Indian bank to receive such a recognition


          • Funds through perpetual bonds of Rs 54.15 billion and Rs 70 billion of Tier-II bonds were raised

          Risk Weighted Assets

          • Total risk weighted assets of the bank stood at INR 2.55 trillion
          • The ratio of the RWA to the total assets improved by 5% in the year
          • Bank has target of bringing the RWA to the total assets to 70%


          Yes Bank Asset Quality Q4FY18.png
          • Sequential improvement in NPA from 0.93% to 0.64%
          • The PCR coverage at present is 50% with an improvement of 3.6% from the December
          • The Bank has set a target to raise the PCR to 60% by September

          Asset Quality Composition

          Yes Bank Sectoral Mix Q4FY18.png
          • Portfolio of the security receipts improved from 1.06% to 0.92% sequentially from December
          • Out of total outstanding security receipts of INR 18.8 billion recovery of 35-40% is expected in the FY 2018-19


          • YES Bank has exposure to only two accounts out 12 as listed by the RBI, and only accounted for 0.16% of the total advances
          • The provisioning coverage on the two accounts remains at 50%
          • In NCLT-II YES bank has exposure to the 7 bank accounts out of 28
          • Total loan amount for 7 accounts stood at Rs 6.5 billion with three major accounts amounting to Rs 5.7 billion
          • The provisioning coverage on 7 accounts remains at 43% 

          Corporate Portfolio

          • The overall value of the corporate advances stood at 67.9% of the total advances
          • The sensitive sectors as classified by the bank are energy and power sector, Iron and steel, Telecom and gems and jewelry
          • 80% of the corporate portfolio has been rated A

          Infrastructure and HR Resources

          • Bank has a total of 1100 branches and ATM network of 1724
          • Total headcount of the human resources stood at 18238
          • In order to improve the service levels, quality assurances and turnaround time back-office operations of the bank would be shifted to 700000 sq.ft. centralized center in Chennai


          Other Concall Summaries of Yes Bank



          Vip Industries Q4FY18 Concall Summary

          Vip Industries.png

          Financial Highlights

          VIP Ind Q4FY18 financials.png
          • Revenue growth of 16% corresponding to quarter of the previous year
          • Consolidated revenue growth of 10% over previous year
          • EBITDA growth of 79% compared to Q4 last year
          • EBITDA this quarter was 15.6% as opposed to 10.1% in Q4 last year
          • EBITDA growth of 89% compared to last financial year
          • EBITDA this year w as 14.3% as opposed to 10.9% last financial year

          Business Updates

          • International business shrunk in Q4
          • Domestic growth was due to volumes growth
          • Growth in Aviation in giving strong tailwind to industries growth.
          • GST will strengthen formal economy hence in long run will be very beneficial for the company
          • Historically low sale Q4 has seen increased sales due to backpacks
          • Outlook for sales for  next year is very good


          • Skylar brand is growing very well
          • VIP brand is growing very well
          • Very intense campaign is being run for Carlton brand
          • Caprese, a ladies handbag brand, is doing very well
          • Caprese is currently in top three ladies handbag brand in India
          • All the four brands - Caprese, Carlton, Aristocrat and Skybags - are being advertised together for the first time

          New subsidiaries 

          • Two new subsidiaries have been incorporated in Bangladesh – VIP Industries BD Manufacturing Private Limited and VIP Luggage BD Manufacturing Private Limited
          • One manufacturing facility under VIP Industries BD Manufacturing Private Limited in March 2018

          Risks for VIP Industries 

          • Continued depreciation of rupee
          • Launch of aggressively priced products to counter competition

          Canteen Stores Department

          • Canteen stores operate at 5% markup so distribution cost is negligible as compared to other channels
          • CSD business is coming down for VIP industries
          • CSD did not give high overdue at the end of Q4
          • CSD as a percentage of total revenue of VIP Industries is 20%


          • Hard luggage is manufactured in India in VIP factories
          • Soft luggage is mixture is manufactured in China and Bangladesh


          • Bangladesh factory capex was Rs 8 crores
          • Company is planning capex of Rs 20 crores for next two years


          • Market share of VIP industries has been highest for many years
          • Market penetration of the category very low around 20%

          Raw Material

          • 50% of material is foreign country denominated ( both raw as well as finished goods)
          • Company maintains inventory of three to four months due to this effect of currency exchange rate fluctuation is seen in the next quarter results
          • In last few months Rupee has depreciated hence it will result in margin compression
          • Prices of raw material have increased
          • 50% of the material is purchased from China
          • Polycarbonate products which are manufactured in house in India are expected to grow for many years to come because they are strong and light


          Cyient Q4FY18 Concall Summary



          • Revenues have grown to $607 million. It is a very strong growth, 12.9% in dollar terms and 11.7% growth in constant currency terms and this would be observed across all the eight business units of the company.
          • The operating profit for the year stood at Rs.594.2 Crores, which is a growth of 13.3% compared to the previous year.
          • The net profit for the year was at Rs.429.6 Crores, a growth of 16.1% over the last year.
          • A final dividend of Rs.4 per share is declared in this quarter, which takes the total dividend for this financial year or the financial year 2017-2018 to Rs.13 per share for the full year.
          • In terms of the cash, Cyient has a good cash of about 10,937 million. This is after paying the dividends at the enhanced payout of about 40% for this year.
          • Cyient  has made 408 million of other income and for the year 1,489.


          Cyient Q4FY18 Financial Performance.png
          • Revenue is $164.6 million, the highest ever in a single quarter, signifying a growth of 16.8% year-on-year, 8.3% quarter-on-quarter in dollar terms.
          • All the eight based business units have witnessed a similar growth year-on-year basis. The services revenue came up at $142.7 million signifying a strong growth 14.3% in year-on-year term.
          • Operating profit for the quarter stood at Rs.149.2 Crores, which is 19.6% growth on a year-on-year basis.
          • DLM/Design Led Manufacturing witnessed the highest ever-quarterly revenue and the operating margins in the recent years.
          • Net profit for the quarter stood at Rs.121.5 Crores with the growth of 16.2% year-on-year terms over the last financial year.
          Cyient Q4FY18 performance metrics.png

          Tax Rates

          • The tax rate for the exit quarter is about 25% 
          • With the focus on SEZ, they are looking at the full year benefit of US taxation, so definitely there is good possibility of much reduced tax rate in the next year.

          DLM (Design Led Manufacturing)

          • The total pipeline in DLM is about quarter billion dollar, and the adjusted figure will be about 50%, 60% of that.
          • DLM had extraordinary growth in between the two quarters and because of that the working capitals had been consumed, so the free cash flow has been negative, but management is working on generating the free cash flow in case of DLM.


          • Cyient continue to support 25 government schools for education of the underprivileged children.
          • As a part of initiative to increase IT literacy, they have added one more Cyient Digital Learning Center, which now takes the total to 57.
          • Cyient was recently recognized by the Telangana Government for the green initiative wherein 6000 sampling have been planted in our facility.

          Business updates 

          Cyient Q4FY18 Revenue Segmentation.png
          • Cyient is planning to expand their Pune facility to about 100 FTE.


          • On the operation front, Cyient and Bluebird Aero Systems Limited of Israel signed a MoU to address the opportunities in the Indian UAV space and subsequently have entered into a joint venture on April 11, 2018. The joint venture is 51% owned by Cyient and 49% by Bluebird.
          • Bluebird brings 3 technologies: SpyLite, ThunderB, MicroB which are quite unique, and some of the things applications that they can be used in are very relevant for India, for example high attitude or the varied conditions that exists across the country or rather long coastline that we have in the country.
          • Therefore, the JV after the transfer of technology will indigenize, manufacture, integrate, test, support UAV systems and Cyient is in the process of building up a factory for this in Hyderabad with 100 systems a year.
          • The investments will be relatively minimal because the factory for example to produce UAV is quite it is not very capital intense. Payback is quite attractive.


          • Cyient created the initiative called New Business Accelerator (NBA) to facilitate innovations within Cyient to really focus on developing new products service and solution.
          • Cyient are committing this year that is about 100 basis points of revenue or margin, so about $7 million plus will go towards the NBA initiative.
          • $7 million is a combination of opex and capex and some of these will also be quite Capex intensive because how the technology is being developed.
          • There is pretty clear revenue plan because for something to get funded through the NBA there is process that is followed and one of the key elements that the processes or business case wherein management have clear anticipation of what is the revenue that it is going to generate out of particular business.
          • Cyient would see a lot of investments in newer and emerging technologies because the focus is now not just on building a better asset that maintaining it and running it more effectively, which means that people are embedding a lot more in terms of IoT and distributed computing and so on and so forth into the train itself. 
          • The utilities and geospatial market is also seeing some good traction.
          • Aerospace  and defense is expected to grow by 10%.
          • Cyient also became the founding member of Xynteo India, 2022 consortium; this is the government of India initiative to enable affordable medical facility to widest section of the society.
          • Their IRIS certification was extended to comply with ISO TS22163:2017 after its successful audit.
          • In terms of services business, they continue to have a good conversion of about 45%.

          Growth in Services

          • There is no particular that is going to stand out. The medical business will grow at a fairly good way just because it is a small business unit, similarly with semiconductors.
          • Although there was a dip in terms of the aerospace customer, but going forward there will be sustaining of revenue because of new opportunities coming up in this area.
          • Services sector order intake for this quarter was a bit soft but forward-looking revenue targets is in place that there is no such decline if looked at full-year and also the overall pipeline is the highest ever and have more than billion dollar of pipeline.
          • Service sector margins is about 16% for next 2 to 3 years which can be moved up by 100 or 200 basis points but then investments have to be cut which are done for FY2020.
          • Cyient is confident with the operational improvements are going to be such that they will improve despite the wage hike, the services margins by 100-basis points and after making the investments, service margin will be flat.


          • There are two buckets into which the investments are going. The one is complete subsystems and the second is emerging technology:
          • There is a lot of work that is being done in machine learning in areas of interest for example the geospatial business machine learning from extrapolating features from a map, etc.
          • Second bucket of investment is developing products where subsystem level or assembly or sports system level and Cyient are able to actually completely design and own a subsystem.
          • Cyient have five customers in transportation unit given that it is concentrated industry and four out of that five grew in double-digit, so that was beneficial.
          • The free cash flow for services business typically targeted about 40% to 50%.
          • After generating the positive EBITDA and then over a period of time, a conversion like 40% of EBITDA to free cash flow in DLM can be achieved.
          • Breakeven is targeted for the next year for DLM, so next year also negative cash flow for DLM can be anticipated.

          Cash Flows

          • Cyient have seen very handsome growth in this particular year. They have also seen that year-on-year our DSO has reduced.
          • There is no headwind on capex. There was a slight headwind on the tax this year but not anymore.
          • The impact of the foreign exchange fluctuation on March 31 wherever receivables are restated to the extent of about Rs.20 to Rs.23 Crores. Internally management is not at all worried on free cash flow, they are on the right track, having delivered a good conversion of about 50%.
          • 3 Subscale segments: semiconductor, off-highway and medical
          • Each one of the businesses different strategies; medical is quite bullish on design to build, so Cyient do designing, build manufacturing is a part of it, so which means very strong transaction is being witnessed there.
          • Semiconductor is also in a similar situation. So the semiconductor is also trying to beef up both internally and externally.
          • According to management, Off-highway equipment will be done internally.
          • Both semiconductor and medical especially are very, very important for the long-term growth because those are emerging areas and some very strong traction is witnessed.

          Future margin

          • The business is transforming more into design led manufacturing. A lot of onsite centers have been put up in for aerospace as well as other verticals.
          • Now with business moving more to end-to-end, 14% margin would be the new near normal.


          Other Concall Summaries of Cyient



          Welspun Enterprises Q4FY18 Concall Summary

          Welspun Ent.png

          Infrastructure Highlights

          •  Currently the portfolio value of the HAM model stood at INR 7000 crores
          • EPC business of the firm which currently stood at INR 5500 crores might get escalated to INR 6000 crores
          • The first phase of the Delhi-Meerut Expressway was completed 14 months before the scheduled delivery date and company has already applied for the provisional completion certificate
          • They are hopeful to deliver other projects as well on or before time namely GSY, CGRG
          • The financial closure of the Aunta-Simaria had been completed already and the appointment date might get scheduled in the Q1 of FY 2019
          • Company had already started minting money from two of its projects and revenues from other projects are expected to come very soon
          •  In addition to the bid of Rs 1837.32 crores for L1 project, two other projects with the cumulative bid value of INR 2000 crores were placed
          • Company is hopeful of winning additional orders of INR 5000 crores and the revenue projections are expected to touch INR 1000 crores which would double year after year

          Financial Highlights

          • The total income of the year ended stood at INR 1093 crores
          • EBITDA of the company showed whopping improvement of 145% from last year to reach the value of INR 166 crores
          • PBT and PAT increased by 225% and 154% respectively to reach the figure of INR 139 crores and INR 110 crores
          • Net worth of the company at the end of the year stood at INR 1457 crores with a cash surplus of INR 647 crores
          • Assets worth value of INR 726 crores were under investment at the end of the year

          HAM Projects

          • In the Oil & Gas the company would invest between INR 150-175 crores in the coming years
          • In the Tamilnadu project an investment of INR 360 crores had already been done against the announced investment of INR 480 crores

          Inland Waterways Business

          • The company would start bidding for the projects from Q2 FY2019 and is expecting to book orders of value INR 1000 crores

          SPV Debt

          • The SPV debt of the Delhi-Meerut Expressway stood at INR 372 crores at the end of the financial year

          Oil & Gas

          • The revenues from the oil & gas division are expected to come from Q3 or Q4 of the financial year 2020

          Business Strategy

          • The company has the clear aim of gaining operational efficiency
          • The strategy remains simple, complete the project in the least possible time and the safest way possible by doing so they would be able to de-risk the investments


          Other Concall Summaries of 



          Wonderla Holidays Q4FY18 Concall Summary


          Market update 

          • The annual revenue for the Indian Amusement Theme Park industry has been about Rs.17 billion and is growing at a CAGR of more than 17.5%.
          • The industry is estimated to grow to at least Rs.40 billion by 2020.
          • GST rates on the admission fee have been reduced from 28% to 18% by the GST Council.
          • The company is expecting double-digit growth in the number of footfalls at its parks.

          Business overview

          • Wonderla received an aggregate of 2.5 million visitors in the FY2018.
          • The company saw a 5% rise in average ticket revenue per visitor.
          • The company believes that they are placed very well to exploit the industry growth.
          •  Wonderla currently has three operational parks and the fourth park is to be launched in Chennai where they have already acquired 62 acres of land.
          • The company is almost debt-free as of now.
          • Dividend payout order ratio for Wonderla stands at 26.5%.

          Financial highlights

          Q4 FY2018: 

          Wonderla Q4FY18 financial performance.png
          • Company’s revenue decreased by 7.5% year on year from Rs.59.3 crores to Rs.54.92 crores which were driven by 12.1% year on year decline in footfall.
          • Company’s share of non-ticket revenue improved from 25.3% in Q4 FY2017 to 28.7% in Q4 FY2018.
          • In the Q4 FY2018 EBITDA increased by 79.2% from Rs.8.5 crores to Rs.15.2 crores. 
          • Company’s EBITDA margin almost doubled from 14.4% to27.8% in Q4 FY2018.
          • In Q4 FY2018 company’s PBT increased by 58.4% from Rs.4.2 crores to Rs.6.7 crores.
          • PAT grew by 9.1% from Rs.3.3 Crores to Rs.3.6 Crores.
          • In Q4 FY2018 cash PAT increased by 37% from Rs.9.8 Crores to Rs.13.4 Crores are indicating a continued generation of healthy operating cash flows.
          Wonderla Revenue Analysis Q4FY18.png
          Wondrla Q4FY18 Revenue Analysis.png

          Pricing in FY2018

          • Price was changed three times, one pricing for April to June when Wonderla was in service tax regime; another pricing was there from July to February because of GST for amusement parks was brought down in February.
          • Wonderla’s goal is to maintain the price. However, a 2% overall increase has been taken compared to the previous year.

          Tax rates charged in Q1 FY2018:

          • In Q1 FY2018 each park had a different way of charging taxes.
          • In Bengaluru last year Wonderla was charging only 5% entertainment tax, and a provision for the service tax was made.
          • There was no entertainment tax in Kochi, so only service tax was levied.
          • In Hyderabad, the entertainment tax was 20%, and the service tax was 15%. 

          Resort business

          • 4% to 5% of the total business of Wonderla comes from resorts.
          • There has been a change in the strategy to move towards retail rather than corporate.
          • Wonderla in tying up with PayTM, Cleartrip and all the online OTAs.
          • The company has observed a bigger jump in the number of direct bookings because of the shift from corporate to retail.

          Bengaluru park

          Wonderla Bangalore park Q4FY18.png
          • Wonderla has seen a declining footfall in the Bengaluru park; a substantial decline has been observed in the group.
          • The company has stated pricing as the reason for the decline in the footfall. 
          • Bengaluru park is at least 15% more expensive than the other two parks owned by Wonderla.
          •  There has been an increase of Rs.200 in the price of a ticket from FY2017 to FY2018.
          • The footfall in the Bengaluru park has been about 10 to 12 lakhs.
          • Replacement cost for Bengaluru park is more than Rs.350 crores.
          • Company’s investment for the Bengaluru park is about 150 to 160 crores.
          •  In the starting, the Bengaluru park had about 40 to 45 rides now that number has increased to 62 in which 41 are dry rides, and 21 are wet rides.
          • Wonderla is developing a digital wallet system through which people can spend more money inside the parks. This system is piloting in Hyderabad and Bengaluru park.

          Kochi park

          Wonderla Kochi park Q4FY18.png
          • The company does not see a huge impact of the Nipah on the footfalls of the Kochi park.
          • In the beginning, Kochi park had about 10 to 15 rides the number has grown to 56 rides, out of which 22 are wet rides, and 34 are dry rides.
          • The company is looking for aggressive growth in footfalls for the next couple of years.
          • The company invested around 120 crores for the Kochi park and now sees its replacement cost to be around Rs.350 crores.
          • The company sees Kochi as the most price sensitive market and finds that group sales are higher in proportion.
          •  Kochi park saw a footfall of about 10 to 12 lakhs.

          Hyderabad park:

          Wonderla Hyderabad park Q4FY18.png
          • Hyderabad park was started in 2016 and Company has invested about 280 to 290 crores for the park.
          • For the FY2019 Q1 company has observed some good growth in Hyderabad, it is growing at around 17% regarding footfalls.
          • The company has beaten its estimates regarding the revival of footfalls at the Hyderabad park.
          • Wonderla has started a new big ride in Hyderabad, that ride does not exist in Bengaluru and Kochi park.
          • Hyderabad park currently has a total of 44 rides out of which 18 are wet and 26 dry rides.
          • The company is slowly spreading out to nearby towns like Rajahmundry and Vijayawada to increase the footfalls.
          • The reason for not getting a relatively healthy nonticket revenue has been stated that the base year was already high in Hyderabad because the park went for a dress code in the starting (2016) itself whereas, other two parks has implemented in the later part of the previous year.
          • Wonderla has started the piloting of the new digital wallet system in Hyderabad.
          • Hyderabad park saw a footfall of about seven lakhs, and the company targets a 13% footfall growth in the next year.

          Chennai project

          • Company has decided not to build the park until the local body tax issue is resolved.
          • Wonderla is looking for a slight relief from the Tamil Nadu Government after which it will start the construction of park of which the design is almost complete.  


          • The company has put its utility cost under scrutiny.
          • The company is doing solar power purchase and have installed a solar panel, so utility costs are coming down
          • People cost for the company which is their highest cost is also coming down.
          • Spares and maintenance cost has also come down compared to the previous year.
          •  The company has been able to bring the marketing cost down because it is trying to do more performance-based marketing and referral-based marketing.
          • Wonderla made a movie ‘’The Mission Interstellar ride’’ at the cost of about Rs.3.5 crores.


          Other Concall Summaries of  Wonderla Holidays

          Thermax Q4FY18 Concall Summary


          Quarter Highlights

          Thermax Q4FY18 Performance.png
          • The order intake in the fourth quarter increased by 37% from last quarter
          • Overall order intake of the group increased by 45% in comparison to the preceding year to reach the figure of INR 6380 crores
          • Revenue of the quarter dipped by 5% in comparison to the corresponding quarter last year
          • Overall revenue of the year stood at INR 486 crores which is 2% less than the last year’s revenue
          • The overall group’s PBT stood 100 basis less than the preceding year PBT
          • However the Thermax’s own PBT was marginally improved by .2% in comparison to the last quarter
          • PBT of the whole year stood at 10.1%


          • Q4 didn’t turned out to be as expected in terms of the revenue because of the various reasons
          • Introduction of the e-waybill posed problem of synchronization with the suppliers and this factor standalone created the impact of INR  100 crore
          • Danstorker group had negative performance in the quarter
          • Chinese subsidiary had to take prudent decisions for the ongoing litigations
          • Indonesian subsidiary saw uprise in the operating expenses which could become better in the coming quarter
          • Until the issues at the china subsidiary are sorted out it would be utilized as a manufacturing facility to cater to the demand coming from other markets
          • Air pollution line of the business had to bear the brunt of increasing steel prices and reported very low profitability
          • In the chemical business the accounting of  plant depreciation resulted in very less profitability

          Agreement with Babcock & Wilcox

          • Thermax would buy 49% shareholding of the Babcock & Wilcox and acquire the entire manufacturing facility also
          • The move would strengthen the Thermax technology front in the Supercritical, subcritical and captive size boilers
          • They would get the technology helpful in reducing the NOx levels which would otherwise be very costly to acquire

          New Facilities 

          • Dahej plant has started its operations and is expected to reach its maximum capacity by the October
          • Factory in the Sricity is expected to become operational by the end of Q2 in the forthcoming year

          First Energy

          • Plant is recovering from the decrease demand owing to the high oil prices
          • Currently 1100 tonnes is the total pellet sales which is expected to increase to the level of 1400 tonnes per month once the oil prices become stable at $55-60 per barrel
          • It is expected to break even in the current fiscal year

          Sectoral Outlook

          •  In both energy and environment sectors company has enough orders to execute which were not there last year
          • The problem of the cashflow has also been resolved and Thermax is positive about both the sectors in the coming future
          • Cost of the raw materials has very less impact, barring one of the steel type all are purchased  well in advance
          • Chemical business front has been affected by the increasing oil prices due to increase in the cost of Styren
          • Also the overall capacity utilization was little less than the 50% which would increase to 70-75%
          • Also the overall capacity utilization was little less than the 50% which would increase to 70-75% once the Dahej plant is fully operational


          • Phase 2 expansion at the Dahej factory would be  carried out with capex expenditure of INR 50 crores
          • In the Indonesian factory only $15 million has been spent out the planned $25 million, the remaining amount would be expensed in the phase 2

          Nature of orders and Margins

          • The very nature of the business in this domain is to have fixed price contracts until mentioned explicitly in the contract clause
          • The margins estimate has to be made at the time of the contract
          • Most of the raw materials already have a fixed rate and there would be variation due to the prices of the steel which has to be bought from the open market at the prevailing prices
          • This year Thermax would aim for the double digit margins
          • Orders from PSUs in fertilizer, steel and aluminium industries are expected

          Business opportunities in Foreign countries

          • Plenty of opportunities are expected in the Middle East region
          • As the focus of most of the companies across the globe has shifted to gas based fuel therefore, Thermax would ass that to its capability as well


          • Competition for Thermax is not significant in the capacity in which they operate


          Cummins Q4FY18 Concall Summary


          Financials of Q4 FY2018

          Cummins India Revenue Trend FY18.png
          • Net sales grew by 4% to 1206 Crores as compared to Q4 FY2017. Domestic sales declined by 5% to 816 crores while exports grew by 30% to 390 Crores.
          • Net sales dropped by 9% to 1296 crores as compared to 1318 Crores in the previous quarter. Domestic sales declined by 9% while exports declined by 7%
          • Profit before taxes grew by 7% to 209 crores as compared to 195 Crores recorded in Q4 FY2017. 
          • Profit before taxes declined by 5% to 209 crores as compared to 220 Crores recorded in the previous quarter.
          • For the FY2018, net sales were 4952 Crores which is almost equal to the last year’s 4958 Crores. Domestic sales at 3378 Crores improved by 1% while exports declined by 2%     
          • Net profits before tax at 852 crores excluding a one-time gain of 56 crores on sales of asset declined by 6% compared to 908 crores recorded in the previous year.
          • Power gen was at 330 crores, industrial was 197 crore and Distribution business was around 300 crores.
          • The domestic growth would have been 5% instead of 1% as compared to last year had the price reduction been normalized for GST 
          • Industrial segment registered 8% growth driven by rail and construction segment and distribution grew by 6%. Despite competitive pressure, power gen business remained flat.
          • Dividends were increased from 700 to 750% reflecting the confidence in future. 
          • The markets in which they are present in power gen business, they have grown their overall share by 1%.
          Cummins Dometic vs Exports FY18.png


          • Exports breakup for this quarter: The low horsepower was around 70 crores. Mid was about 110 crores. Heavy duty was 25 crores, and high horsepower was 150 crores. Spare was about 30- 40 crores.
          • Domestic breakup for this quarter: Low horsepower was around 110 Crores; Power gen is 33 crores. Mid is 100 crores. Heavy duty is about 30 crores. High horsepower is 180 crores.
          • Industrial segment breakup - Compressors was about 35 crores. Construction was 80. Mining was about 25 crores. Rail was 50 crores (one of our best quarters). And then the others were about 10 crores.
          • Capex for the last year was about 200 crores which was used in putting up a new Conrod line and robotic line for exports. Another usage was in the phase 1 of tech centre of about 130 to 140 crores.
          • Some of their property has been leased out at 8% pre-tax rental income which at maturity stage would start to receive an income of almost 100 crores and provider buffer for other fluctuations. 
          Cummins FY18 Domestic revenue.png
          CUmmins FY18 Export revenue.png

          Growth Prospect in FY19

          • Expecting a growth of 8% to 10% in domestic market while the export segment is expected to remain flat considering the current market situation
          • Industrial segment is expected to grow by 9% to 10% while the expectations in power gen segment is to grow by 7% to 8%
          • As the commodity prices are increasing they are looking for the introduction of new products to improve their margins which are under pressure for last few quarters.
          • They are hopeful of the recovery of global power gen market for exports and are ready to capitalize on demand improvement in both the HHP and LHP markets.
          • With the government’s push towards creating infrastructure, they are optimistic of the long-term state of the domestic economy will drive their sales. 
          • They are optimistic about the marine market. They have got the projects however lacking on the execution part as the government ship yards have significant backlogs and financial situation of ship yards is not very good. 
          • Power gen business did not see much growth because they could not fulfil an order by primary shipments from the engine plant which will be done by secondary shipments in this quarter. 
          • Infrastructure segment in power gen business is expanding. The order board in manufacturing segment is starting to get better which was not strong earlier. 
          • Rental business is seeing upward trend. Data centre, one of their main strengths wherein they have very strong market share will continue to expand in the coming year.
          • The export segment is very inconsistent overall in terms of regions. They see some positive gains from the African and Middle east markets.
          • They feel that they will do well as a company when the emission standard will become stringent and they have already started planning for those changes. 

          Market Presence

          • They possess 100% share in water rig market and they grew by 8% even though it came down to almost half in size in the preceding year.
          • They have the market share of around 65% to 66% in high horsepower market size of 2500 units in power gen business which is 3% to 4% higher than the previous year.
          • All the industrial market engines are manufactured by Cummins internally except a 6-litre engine which they source from Tata Cummins.
          • They don’t cater to high horsepower products in oil and gas and mining. They just cater to high horsepower gen segment. 
          • They are very dominant in the bigger construction side like DLF or bigger apartments where 500, 750 KVA gensets are required. 
          • Almost 70% of the 20-tonne excavators used for road construction are powered by Cummins.

          Future Strategies

          • FY2019-20 is going to be the peak of Capex cycle with spending of about 350-400 Crores on Kothrud high horsepower tech cells and its upgradation. After that there will be a sharp decline in the Capex.
          • For the projects business, they have started the completion of the plant in Pirangut where they used to make some small gensets, etc and revamping it to cater to industrial requirement for some value-added systems.
          • The market is price sensitive and some new players are coming in. They are aggressively working on ‘’Accelerated Cost Efficiency Programme’’ to make sure that their cost structure across the direct material, manufacturing overheads etc get aligned. 
          • They are focusing to continue to maintain and expand shares in the segments they play strongly and working on launching products which have better margins. 
          • They are launching various products in the industrial space and power gen segment.
          • They are expanding their distribution centres in Phaltan as their parts business continues to grow.
          • They adjust for the exchange rate at which they export for Cummins Inc within the quarter. 
          • There were some issues in the collections from Cummins overseas entities.