Trident Q1FY18 Concall Summary

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Financial Highlights

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  • Total Revenues stood at Rs. 1210.4 crores, up by 3.3% fromRs. 1171.7 crores in Q1FY17.
  • EBITDA up by 4.5% to Rs. 259.4 crores translating to EBITDA margin of 21.4%.
  • PAT grew by 13.2% to Rs. 88.9 crores against Rs. 78.5crores in Q1FY17.

 Segment-wise Performance

 Contribution to Revenue

  •  Home textile (bed and bath put together) - 49% of the revenues.
  • Yarn - 33% of revenue.
  • Paper - 18% of revenue.
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Textiles Segment

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  • Revenuesup by 3% at Rs. 996 croresfrom Rs. 964crores in Q1FY17.
  • EBITDA was down by7% to Rs. 164 crores; EBITDA margins stood at 16%.
  •  Yarn captive consumption increased to 40% from 35% in previous quarter.
  • Yarn business contributed 33% of the total revenues.
  • Bed Linen sales volume growth was 32% Y-o-Y.
  • Towel sales volume growth was down by about 7%-8% Y-o-Y.
  • Bed & Bath Linen contributed 49% of the total revenues
  • Lower EBITDA margin due to
    • Increase in the cotton prices by almost 20% on Y-o-Ybasis.
    • continuous rupee appreciation affecting realizations in towel and bed linen.
  • Breakeven expected for Bed Linen by the month of Sept-Oct.
  • In FY19, about 15% to 20% EBITDA margin in Bed Linen is expected.
  • For Home Textiles, 85%-90% of revenue is from exports and 10%-15% is domestic.

Paper Segment

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  • Revenues up by 3% to Rs. 214 croresfrom to Rs. 207crores in Q1FY17.
  • EBITDA sharply up by 33% to Rs. 95 crores;EBITDA margins of 44%.

 Debt and Repayment

  • Net debt stood at Rs. 2669 crores as on June 30, 2017, down from Rs. 2714 crores as on March 31, 2017
  • Net debt down by Rs. 752 crores since the last 5 quarters.
  • Long-term debt as on June 30, 2017 stood at Rs. 1821 crores, out of which more than 75% is covered under the TUF scheme.
  • Repayment of high-cost term debt ahead of repayment schedule will be continued to strengthen the balance sheet and help reduce the overall interest costs.
  • This led to decline in the Net Debt to Equity Ratio at 0.9 against 1 as on March 31, 2017.
  • In Q1FY18, term loans of Rs. 227 crores including high cost debt of Rs. 187 crores were repaid.

 GST Impact

  •  For the Textile business – 5% GST.
  • For the Paper business – 12% GST.
  • Not much impact on the exports side of the business.
  • Beneficial domestically since much of the competitors are in the unorganized sector; GST will help to get an edge over them.
  • The company expects higher expected sales figures and margins across the product portfolio of the company.

 Utilization Capacity

  •  For Q1, Yarn operated at 95% utilization; Bath Linen at 51% utilization; Bed Linen at36% utilization; and Paper at 88% utilization.
  • In FY 2018,expected Bath Linen utilization is 55%+; Bed Linen utilization 40%-50%; and Paper utilization 90%+.

     Hedging

    •  Done due to fluctuations in exchange rates.
    • For yarn and paper, hedging is done on a back-to-back orders basis.
    • For home textiles, hedging is done on a program basis.
    • The company is hedged for around 5-6 months with a rolling policy in place till now.

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