Visaka Industries Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Visaka Industries Limited (VISAKAIND) Q3 FY22 Earnings Concall

Management Update:

• Vnext business for the second consecutive quarter, recorded the highest ever quarterly revenues. And estimating highest ever revenues for the full year 2021-22.

• The company said the new boards plant at Coimbatore is operational from 1 Jan, 2022. And the capacity addition would be about 50,000 metric tonnes and it would further add to the top line and the bottom line in the coming financial year.

Q&A Highlights:

• Luv Preet asked about the reason for the margin drop from 14.9% in 2Q22 to 12.5% in 3Q22. Vamsi Krishna Director said that the company is having a huge price differential in the raw material input costs, which have gone up across various industries. Secondly, logistic costs have gone up drastically across the world.

• Chirag Shah asked about the approximate cost of setting up the plant in Coimbatore. Vamsi Krishna Director replied that the company has spent about INR90 crores to INR100 crores in this facility. VISAKAIND is getting a revenue also around the same range, around 1:1 capital to turnover ratio for that.

• Chirag Shah also asked about the timeframe for the utilization of INR100 crore from the Coimbatore plant. Vamsi Krishna Director answered that by FY23-end the company should be able to touch that number.

• Chirag Shah also asked about the EBITDA margins of boards product, if it would be in the 12% range or with the increase in value-added products this would go up. Vamsi Krishna Director said the company is doing great in designer boards, which is giving better pricing and margins in the market. Therefore, the effort is to increase the value-added products and product mix as well. The company is looking at least 15% upwards margins for this division in terms of the complete operations.

• Subham Agarwal from Aequitas India asked about the roofing and board division and how the current season is panning. Vamsi Krishna Director said there has been some amount of slowdown due to Omicron. The market is on the recovery and in the rural segment the trend is looking positive.

• Mulesh Savla from Shah and Savla asked that on the ATUM division, the company is not gaining good traction and what’s the cumulative megawatt constructed till now and plan for 2-3 years. Vamsi Krishna Director said The company has setup about 30 megawatts in plant capacity and in the last couple of months crossed about 60-70% in capacity utilization. In the coming quarters expects 100% capacity utilization.

• Sathish Kumar asked if solar panels are manufactured by the company or imported and if the new import duty will impact or benefit the company in the solar business. Vamsi Krishna Director replied the import duty will help the company since VISAKAIND is a completely made in India product and ALMM certified. Currently the company is importing only solar cells all else is made in India.

• Vishal Talreja of DD asked about the revenue model for EV charging station. Vamsi Krishna Director said the company is focusing on the charging infrastructure. The company is creating solar generating network station where the full infrastructure will be built by Vnext products and the roof by ATUM.