Prevest Denpro Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Prevest Denpro Limited (PREVEST) Q3 FY22 Earnings Concall

Q&A Highlights:

• Pranay Jain from Dealwell Capital asked that since the export thrust is getting stronger and domestic visibility increasing, what’s the revenue guidance for the next two years. Atul Modi MD said that the company’s export business has grown by about 60% in 3Q and overall export growth in the nine-month is 80%. PREVEST is hoping to touch around INR60-65 crore with export and domestic in the next two years.

• Pranay Jain from Dealwell Capital also asked that on export side, which will be the new markets the company would be entering in FY23. Atul Modi MD replied that the company’s thrust in FY23 is America, Canada, Brazil and Australia, which are high priced and promising markets.

• Pranay Jain from Dealwell Capital asked about the shareholder return objective the company has in mind going forward from next year. Atul Modi MD answered the company has not decided yet anything on this part. After the annual financial results, the company will decide about the dividend and rewards to the shareholders.

• Ankit Gupta with Bamboo Capital asked about the rationale behind getting into sanitizer, disinfectants and mouthwashes. Atul Modi MD replied that the company’s focus is not on sanitizer because the new facility is one which can manufacture sanitizer. The company’s focus is on disinfectants for medical devices, mouthwashes and mouth rinses. These products are innovative products that are not currently available in Indian markets.

• Ankit Gupta with Bamboo Capital enquired about the substantial increase of EBITDA margins in the nine months of FY22 and sustainability of it. Vinay Jamwal replied that PREVEST performance margin increase from 33% to 43% has been due to the sale of high margin product in 3Q22 that was not happening last year. In the coming year, PREVEST is expanding the existing product line and with addition of new product, the margins will further increase.

• Dhruv Bheda of J.R. Stock Broker enquired about the current installed capacity and the capacity coming up in the next couple of years. Atul Modi MD said that the company’s installed capacity is 150 metric tonnes and PREVEST has utilized about 85% capacity. And from the IPO, the company has taken about INR2 crore for the modernization and expansion of existing capacity.

• Dhruv Bheda of J.R. Stock Broker also asked if the company is looking for any inorganic opportunity and what will be the capacity addition at the end of FY23 in volume terms. Atul Modi MD said that on inorganic opportunity, the company does not see any business of that type available in India, but is looking for it outside India.  On capacity addition, the company feels it will confidently reach to its projections with its existing infrastructure.

• Yogansh Jeswani from Mittal Analytics asked about the company’s USFDA approved products, if they are product based on plant based approval. Atul Modi MD replied that PREVEST’s products come under the medical device category, which has a different route of approvals. The approval is not of facility but it’s the approval of the product and its composition.

• Yogansh Jeswani from Mittal Analytics also asked about the company’s top selling products. Atul Modi MD said that company’s top selling endodontic and prosthodontics range of products are dental composite filling materials, dental cement, and cavity lighteners.