Kesoram Industries Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Kesoram Industries Limited (KESORAMIND) Q3 FY22 Earnings Concall

 Q&A Highlights:

• Saket Kapoor from Kapoor and Company asked about the production and sales number for 3Q22 and nine-months. Radhakrishnan P CEO said that the production was higher by 49% at 5.4 million metric tonnes for the nine months vs. 3.6 million metric tonnes last year.  Sales grew 54% at 5.3 million for nine months. For 3Q22, volume was 1.82 million tonnes vs. 1.44 million last year.

• Saket Kapoor of Kapoor and Company also asked how the company is looking to close FY22 in terms of volumes and utilization levels. Radhakrishnan P CEO replied that on volume, the company should end up 4Q22 with the same volume as 3Q22.

• Saket Kapoor with Kapoor and Company enquired that with the elevated prices of coal and diesel, what price adjustments the company has taken for 3Q. Radhakrishnan P CEO said the company is looking at selling closer to the geography, penetrating the geographies closer to the market and increasing the share of blended cement.

• Aviral Jain at Siguler Guff asked about the sustainable volume the company is targeting given the current capacity on an annual basis. Radhakrishnan P CEO said that the company has not been operating its business at the right level. The company will finish FY22 at about 7 million tonnes and sustainable level should be 0.5-1 million higher than that.

• Aviral Jain at Siguler Guff enquired if the company is looking at any capacity expansion it can do through debottlenecking or increased blending. Radhakrishnan P CEO answered that there is scope for debottlenecking. But the company is still OPC heavy and it will try to first correct that and optimally use a clinker which is currently available. The company added that it doesn’t have a constraint on grinding capacity.

• Rajesh Ravi from HDFC Securities asked about the clinker production for the nine month period. Radhakrishnan P CEO answered that the clinker production for the nine months is about 4.33 million tonnes.

• Rajesh Ravi of HDFC Securities asked about the company’s view on the rayon business. Radhakrishnan P CEO said that after the suspension of work the company has reopened. So the company wants to bring the rayon business where it is sustainable without any support and is seeing a lot of potential in this. And Kesoram rayon is a widely used product which is a substitute for silk.

• Ashna Seth Saral Management asked about the remuneration taken by the promoters for the nine months. Radhakrishnan P CEO said that the Chairman is the non-executive Chairman, so promoter doesn’t take any remuneration at all.

• Neha Idnany of Minerva Advisors asked that by when does the company believes it will achieve the INR50 sustainable cash. Radhakrishnan P CEO replied that it should be in 15 months’ time from now.

• Sanjeev Damani asked about the share of blended cement in 1.82 million last quarter and if it has improved sequentially.  Radhakrishnan P CEO answered that 50% will be close to blended cement. As for growth, the company added it’s growing hand in hand in blended cement and in OPC.