Trident Q4FY17 Concall Summary

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Financial Highlights

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For Q4FY17

  • Net revenues stood at Rs. 1330.1 crores, up by 36% compared to Rs.978.2 crores in Q4FY16.
  • EBITDA improved by 27.3% to Rs. 262.1 crores translating to EBITDA margin of 19.7%.
  • PAT grew by 63.6% to Rs. 99.7 crores against Rs. 60.9crores in Q4FY16.
  • PAT, including comprehensive income, up by 50.8% to Rs. 91.7 crores.
  • Outstanding loans of Rs. 132 crores repaid including high cost debt of Rs.68 crores.
  • Segment-wise Performance
  • Textiles Segment
  • Revenues up by 40.1% at Rs. 1055.8 from Rs. 753.5crores in Q4FY16, YoY.
  • EBITDA was up by26.9% to Rs. 180.1 crores; EBITDA margins stood at 17.1%.
  • Paper Segment
  • Revenues up by 3.5% to Rs. 225.4 croresfrom to Rs. 217.8 crores in Q4FY16.
  • EBITDA sharply up by 28.1% to Rs. 82 crores;EBITDA margins of 36.4%, up by 699 basis points YoY.
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For FY17

  • Net revenues increased by 29.3% to Rs. 4839.3 crores.
  • EBITDA Improved by 29.9% to Rs. 991.9 crores translating to EBITDA margin of 20.5%
  • PAT stood at Rs. 337 crores, up by 39.1% compared to Rs. 242.3 crores in FY16
  • PAT stood at Rs. 337 crores, up by 39.1% compared to Rs. 242.3 crores in FY16.
  • PAT including comprehensive income, improved by 33.6% to Rs. 331.7 crore.
  • Net Debt stood at Rs. 2714.5 crores as on 31st March 2017, down from Rs. 3420.8 crores as on March 31, 2016.
  • Net Debt to Equity Ratio stood at 1.0 against 1.4 as on 31st March 2016.
  • Free Cash Flow stood at Rs. 749.4 crores for FY17.
  • Repaid a total of Rs. 576 crores in FY17 including Rs. 227crores of high-cost debt.
  • Long-term debt as on 31st March 2017 stood at Rs. 2048 crores, of which 75% (Rs. 1552 crores) is covered under the TUF scheme.
  • Segment-wise Performance
  • Textile Segment
    • Revenues stood at Rs. 3864.1 crores, up by 34.2% YoY.
    • EBITDA increased by 31.9% to Rs. 690 crore s; EBITDA margins stood at 17.9%.
  • Paper Segment
    • Revenues up by 5 % to Rs. 872.4 crores.
    • EBITDA u p by 25.7% to Rs. 301.9 crores; EBITDA margins at 34.6%, up by 569 basis points YoY.

  Capacity Utilization

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  • For Q4, Yarn operated at 96% utilization; Bath Linen at 54% utilization; Bed Linen at29% utilization; and Paper at 88% utilization.
  • Full-year rates are 93% for Yarn; 50% for Bath Linen; 29%for Bed Linen; 89% for Paper.
  • In FY 2018,expected Bath Linen utilization is 55%-60%; Bed Linen utilization is40%-50%.

 FOREX

  • FOREX realization was Rs 40 crores for Q4, highest ever in any quarter.
  • Hedging is done with 4-5 months of hedge position;30%-40%, and open at 50%-60%.
  • India's export share to U.S. is right now around 40% in Towel and 50% in Bed Sheet.
  • Company market share of towel in U.S. for the calendar year 2016 is around 13%.

 Income Distribution

  • Other income of Rs. 49 crores in Q4.
  • FOREX gain is Rs. 40 crores.
  • Interest income is about Rs. 5 crores from the customers and vendors
  • Other small amounts are insurance claims and others.
  • EBITDA Margin guidance for FY18 is 18%-22%.

 Borrowings

  • Total gross borrowings are Rs. 2,852 crores; net borrowings are at Rs. 2,714 crores
  • Out of the total borrowings, TUF based loan is Rs. 1,552 crores and short-term borrowing is Rs.804 crores.
  • Scheduled repayment for FY18 is about Rs. 300 crores.However, expected repayment is about Rs. 400-450 crores.
  • Average cost of debt is around 4%, but Rs. about 500 crores still cost 10%-10.5%.

 Home Textile Segment

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  • Cotton inventory dipped by Rs. 100 crores as compared to last year.
  • Internal consumption for Yarn is 35% for FY17, and 37% for Q4, expected to be 40%-45% in FY18 due to utilization improvement.
  • Breakeven at EBITDA level for Bed Linen expected in Q2FY18 when capacity utilization is 40%.
  • For Bed and Bath Linen, CAGRwas 3% to 4% in the Europe.
  • CAGR in US for last 4-5 years was 4% to 5%.
  • In FY 2018 expected CAGR is 3% to 4% in U.S. market.

 Paper Segment

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  • Paper price increase in Q4FY17 is 4%.
  • Upgradation of Paper machines can be expected in the coming quarters with CAPEX of about Rs. 100-200 crores spread over 2-3 years.
  • Effective tax will be around 27% - 28% in FY 2018 also.
  • Ratio of branded vs Copier segment in Paper business is around 50%-55%.

 CAPEX

  • No expansion is expected for any of the businesses
  • The focus would be on debottlenecking of Bath and Bed Linen, costing about Rs. 50-100 crores for FY18.

 Realizations

  • From FY16 and FY17, the Yarn realizations has improved by double-digit.
  • Bath Linen is more or less flat in FY 2016 and FY 2017.
  • For Bed Linen, this is the first year of operations, with an improving quarter-on-quarter.
  • In a 5-years period, the Towel realization has been improved significantly, currently at 70% - 80%.
  • 2 years back market share in U.S. Towel exports was around10% - 11%, now up to 13% for the calendar year 2016.
  • For India, market share in U.S. market is around 40% to 42% in Bath Linen and 50% to 52%in Bed Linen

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