Key highlights from IFGL Refractories Limited (IFGLEXPOR) Q1 FY23 Earnings Concall
Q&A Highlights:
- Laxmi Narayana asked about the band of GM the company can operate and the sustainability of it. Kamal Sarda CEO replied that the company still maintains the margins that it had told in the past. In 1Q23, due to rupee depreciation, the continuous increase in freight cost, price increase and slowdown in steel industry GM was affected.
- Hitesh with Aksa Capital enquired about the pricing with domestic customers, the contract terms. Kamal Sarda CEO said the domestic contracts are 6 months to 1 year contract, but from recent times it’s in the 3-6 month range. On pricing, the company did price increase in 4Q22, while in 1Q23 the increase was marginal.
- Hitesh with Aksa Capital asked about the price hike, and if RM prices decline, will the company benefit from it. Kamal Sarda CEO replied that price decisions are discussed when the contract renewal takes place.
- Sanjay Nandi of Ratnabali Investment asked about the driver of EBITDA margin declining a bit on a YoY basis vs. peers. Kamal Sarda CEO answered that the impact on EBITDA has been on the standalone results. So that has been transferred to consolidated results.
- Saket Kapoor from Kapoor Company asked if the RM pass on happened completely or if the company is expecting any further reduction in margins. Kamal Sarda CEO replied that the margin improvement will break for 2Q23 and 3Q24. The target is to remain at 15% plus EBITDA.
- Saket Kapoor of Kapoor Company enquired about the utilization level expectation. Kamal Sarda CEO replied that as of now the company is at the same levels as it was in the past.
- Subham Agarwal of Aequitas asked about the capex timeline of each of the three projects and the total potential revenue. Kamal Sarda CEO answered that the potential timeline is FY24 and it will come in phases. On the topline growth, the company normally takes a level of about 3-3.5 times of capex and it will take 3-5 year time to reach that level.
- Raj Shah asked about the capacity utilization for 1Q23 on a consolidated level. Kamal Sarda CEO replied that there are various companies at various product levels. So some of product levels the capacity utilization could be anywhere between 85-90% and some will have 60% or so. So average around 75%.