Gujarat Mineral Development Corporation Ltd Q1 FY23 Earnings Conference Call Insights

Key highlights from Gujarat Mineral Development Corporation Ltd (GMDCLTD) Q1 FY23 Earnings Concall

Q&A Highlights:

• Amit Dixit from Edelweiss asked about reason for realization increasing QoQ, but for Mata No Madh there was a decline. Roopwant Singh MD said that the realization from Mata No Madh being low is mainly on account of more supply to the power sector.

• Amit Dixit from Edelweiss also enquired about mining cost. Roopwant Singh MD answered that there has been a huge upward correction in fuel prices. Since diesel accounts for more than 50% of cost, there has been a huge correction in the range of INR80-120 for bulk supply, which impacted mining cost.

• Vaibhav Barjatya of H&I Investments asked that on volumes, if the company is seeing significant shift from gas to coal for customer by doing some capex. Roopwant Singh MD said that that shift the industry keeps on taking every few years. Currently the shift is in favor of solid fuels. And with solid and imported fuel pricing going up, they are still sustained.

• Parthiv Jhonsa with NVS Brokerage asked about the target of 10 millon tons and the perception for remaining 3 quarters. Roopwant Singh MD replied that the company is chasing 10 million tons. 2Q23 is going to be slightly late, because of excessive rains, while last two quarters, GMDCLTD will have to do a lot of catching up.

• Parthiv Jhonsa with NVS Brokerage asked about lignite and if the prices are firming up or range bound. Roopwant Singh MD answered that in March, the prices for imported coal has stabilized. So GMDCLTD need a certain differential and it maintained it. There was a slight spurt but now those prices are easing.

• Deepak Poddar of Sapphire Capital asked about the INR1,800 to INR1,900 per ton EBITDA in 1Q23, if it’s sustainable. Roopwant Singh MD said that what GMDCLTD’s internal analysis and market analysis says, that in the near future, the company expects imported coal holding some price and hope to sustain that differential.

• Rishabh Shah from RS Capital asked if there is a possibility or opportunity to cater to the market outside Gujarat also. Roopwant Singh MD replied that the company has currently limited itself to Gujarat due to the demand being significantly large. In 3-4 years, GMDCLTD’s production should go up to 14-15 million tons and will think of looking beyond Gujarat.

• Rishabh Shah from RS Capital asked about the company’s investments in some listed companies if it’s going to be monetized or will stay till eternity. Roopwant Singh MD clarified that at the moment the company is holding the stock. So based on capital requirements and timing, GMDCLTD will taking a call on them.

• Hemant asked about FY23 target in terms of revenue and margins. Roopwant Singh MD said in 2Q23, expects slight moderation and GMDCLTD will be catching up in 3Q and 4Q and expects to ram-up the capacity.

• Hemant also asked about EBITDA per ton for FY23. Roopwant Singh MD answered that it should be better than last year, provided the price differential holds.