Key highlights from Kriti Industries (India) Ltd (KRITIIND) Q1 FY23 Earnings Concall
Q&A Highlights:
- [00:06:49] Ankit Gupta from Bamboo Capital asked about the reason for demand getting impacted for PVC pipes for agriculture purposes. Shiv Singh MD replied that the impact was mainly due to the fire that constrained KRITIIND’s capabilities to produce. Demand was better than projected and shown growth over last year QtoQ. KRITIIND is seeing good demand going forward.
- [00:08:24] Ankit Gupta with Bamboo Capital also enquired that if the fire had not happened what incremental metric ton volume KRITIIND was projecting for 1Q23. Shiv Singh MD answered that the company was not able to convert RM inventory due to fire and had it been converted, KRITIIND would have increased about 20-30% over what it has sold.
- [00:09:05] Ankit Gupta of Bamboo Capital asked about the inventory loss for 1Q23 due to fall in PVC prices. Shiv Singh MD replied that overall it would be in excess of anywhere between INR17-20 crores.
- [00:10:35] Ankit Gupta of Bamboo Capital asked about growth for building products segments in FY23. Shiv Singh MD answered that KRITIIND is expecting and trying to achieve its projected numbers at about INR100 odd crores for FY23.
- [00:12:55] Dhwanil Desai from Turtle Capital enquired that with PVC resin prices stabilizing, if the company expects lower inventory losses in 2Q23 than 1Q23. Shiv Singh MD answered that there was a further fall of about INR20 after 1Q23 end. Also KRITIIND couldn’t complete the production plans of 1Q23, which had to be carried over to 2Q23. Therefore, there will be some trading losses in 2Q23 also.
- [00:19:46] Karan Bhatelia from Asian Market Securities asked about the PVC pricing if it’s at the bottom or there will be correction from here also. Shiv Singh MD said that speaking to suppliers everyone feels that pricing is towards the bottom end of the curve and there are less chances of any further downward movement. KRITIIND is seeing good growth in terms of demand in India.
- [00:21:14] Viraj Mehta with Equirus PMS enquired that by what time the company expects its insurance claim to be settled. Shiv Singh MD clarified that all surveys and assessments have been done. The papers are being given to the insurance company by the valuers of the laws which are likely to be done in the coming week.
- [00:24:55] Rupesh Tatiya of IntelSense Capital asked about the split of agricultural product revenue of INR156 crore between MP, Rajasthan, Maharashtra and rest of markets. Shiv Singh MD replied that exact numbers cannot be given but overall MP is the largest market, Maharashtra and Rajasthan second and UP, AP following.
- [00:34:30] Rajesh Kumar Ravi with HDFC Securities asked about the EBITDA margin guidance for 2H23. Shiv Singh MD answered that 2H23 onwards EBITDA margin should improve and it will be above the 10%, 11% earlier. Therefore, it should go up to 11%, 12%, 13% upwards.
- [00:35:40] Rajesh Kumar Ravi with HDFC Securities enquired that 2-3 years down the line, what kind of revenue mix KRITIIND is looking at agri and non-agri. Shiv Singh MD answered that the agri percentage will come down significantly to about 65% of total business and non-agri about 30-35% of total business.
- [00:46:25] Rajesh Kumar Ravi with HDFC Securities asked about the current status of the increased capacity, the CWIP of INR13.7 crore. Vinita Puntambekar CFO answered that it is part of current increase capacity and the expansion will be completed in the month of August and production will be commenced from the expanded capacity.
- [00:46:51] Rajesh Kumar Ravi with HDFC Securities enquired about the capex for FY23. Vinita Puntambekar CFO replied that it will be approximately INR20-25 crores.