{"id":158583,"date":"2024-02-09T06:55:18","date_gmt":"2024-02-09T11:55:18","guid":{"rendered":"https:\/\/44.250.171.167\/?p=158583"},"modified":"2024-02-09T06:56:38","modified_gmt":"2024-02-09T11:56:38","slug":"sarthak-metals-ltd-q3-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/sarthak-metals-ltd-q3-fy24-earnings-conference-call-insights\/","title":{"rendered":"Sarthak Metals Ltd Q3 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Sarthak Metals Ltd (SMLT) Q3 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>New Business Initiatives<\/strong>\n<ul>\n<li>Company launching new flux cored wires business with successful trial production runs and BIS certification.<\/li>\n<li>Targeting government approvals for railway sector.<\/li>\n<li>Launching new biotech division focused on enzymes for ethanol production and other applications.<\/li>\n<li>Tied up with CSIR for technology transfer and working with institutes for standardization.<\/li>\n<li>Plans to invest INR 100 crores into biotech division to generate INR 350 crores revenue at 30% margin.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Revenue down 19% YoY and 3% QoQ to INR 75 crores for 3Q.<\/li>\n<li>EBITDA margins affected by lower sales of high margin cored wires and aluminum pricing cycle.<\/li>\n<li>Finance cost increased sequentially and YoY to INR 33 lakhs.<\/li>\n<li>PAT at INR 1.72 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Cored Wire\/Aluminium Flipping Coils Business Update<\/strong>\n<ul>\n<li>Revenue of INR 28 crores in Q3.<\/li>\n<li>Lower price realizations and volumes due to multiple factors.<\/li>\n<li>Top clients include leading steel manufacturers.<\/li>\n<li>Aluminum flipping coils revenue of INR 36 crores in Q3.<\/li>\n<li>Painful commodity pricing cycle affecting margins.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Opportunities<\/strong>\n<ul>\n<li>Government&#8217;s 20% ethanol blending target by 2025 to require 1,000 crore liters including 100 crore liters 2G ethanol.<\/li>\n<li>Biotech enzymes global market over INR 75,000 crores with 10-15% CAGR.<\/li>\n<li>Plans to focus on enzymes for ethanol, breweries, textiles, food processing etc.<\/li>\n<li>Also focusing on protein nutrition and dietary supplements.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Flux Cored Wires Update<\/strong>\n<ul>\n<li>Early adopter of the technology.<\/li>\n<li>Strategic location near major fabrication houses with large order books.<\/li>\n<li>Too soon to reveal order book details.<\/li>\n<li>Rapidly getting approvals from customers.<\/li>\n<li>New segment, confident can utilize 100% capacity in coming quarters.<\/li>\n<li>At peak can generate INR 4 crores revenue; plans to scale up capacity.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Diversification\/Exploration<\/strong>\n<ul>\n<li>No plans to diversify into other metal sectors currently.<\/li>\n<li>Focused on the two new initiatives in flux cored wires and biotech.<\/li>\n<li>Biotechnology top focus area currently.<\/li>\n<li>Aiming to establish credibility in renewable energy enzymes for ethanol blending.<\/li>\n<li>Also want to build a healthcare segment within biotech division.<\/li>\n<li>Government support a positive in biotechnology space.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Performance vs. Guidance<\/strong>\n<ul>\n<li>Revenue of INR 236 cr in 9M significantly below full year guidance of INR 400 cr.<\/li>\n<li>OPM also lower than guided.<\/li>\n<li>Factors contributing to downturn:\n<ul>\n<li>Lower product realizations hurting revenue and margins.<\/li>\n<li>Volatile and cyclical pricing especially for aluminum.<\/li>\n<li>Rising input costs but falling output prices.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><strong>Demand Environment<\/strong>\n<ul>\n<li>Domestic cored wire sales muted, no change.<\/li>\n<li>Increased aluminum sales 20% QoQ.<\/li>\n<li>Overall demand still flat, not highly growing.<\/li>\n<li>Steel market still in cyclical downturn.<\/li>\n<li>Not seeing volume growth to gain market share as indicated.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margins Sustainability\/Drivers<\/strong>\n<ul>\n<li>Current low gross margins not sustainable due to high impact of aluminum business cycle.<\/li>\n<li>Also lower cored wire exports due to inventory issues.<\/li>\n<li>Aluminum business needs revival to escape pricing cycle.<\/li>\n<li>Taking measures like lower inventory to improve situation.<\/li>\n<li>Improving product mix toward cored wires.<\/li>\n<li>Higher exports and steel quality mix.<\/li>\n<li>Improved capacity utilization.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Competitive Positioning<\/strong>\n<ul>\n<li>Facing pricing pressure unable to pass higher costs.<\/li>\n<li>Need to clarify competitive edge in this environment.<\/li>\n<li>Steel prices rising but unable to take price increases.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Outlook<\/strong>\n<ul>\n<li>Q4 sales expected to remain flat.<\/li>\n<li>Margins need price realization to improve.<\/li>\n<li>Aluminum highly commoditized, needs price recovery.<\/li>\n<li>Global tensions preventing aluminum price increases.<\/li>\n<li>FY24 revenue estimate around INR 330 crores.<\/li>\n<li>FY25 baseline growth of 10%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Capacity Utilization<\/strong>\n<ul>\n<li>Cored wires at 60% utilization.<\/li>\n<li>Aluminum at 50-60% utilization.<\/li>\n<li>Peak revenue at current prices around INR 700-800 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Biotech Enzymes<\/strong>\n<ul>\n<li>New non-core business, a leap for company.<\/li>\n<li>Gaining credibility via government collaborations.<\/li>\n<li>Detergent companies early focus area.<\/li>\n<li>Flagship product for 2G ethanol blending program; order potential on ramp up.<\/li>\n<li>Leveraging business experience to enter new area.<\/li>\n<li>INR 10 crores investment in FY25; Revenue to start in H2 FY25.<\/li>\n<li>INR 100 crores total investment over time.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Sarthak Metals Ltd (SMLT) Q3 FY24 Earnings Concall New Business Initiatives Company launching new flux cored wires business with successful trial production runs and BIS certification. Targeting government approvals for railway sector. Launching new biotech division focused on enzymes for ethanol production and other applications. Tied up with CSIR for technology transfer [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753],"tags":[9162,10169,9847,2132],"class_list":["post-158583","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","tag-aluminum","tag-earnings","tag-lead-alloys","tag-manufacturing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":158849,"url":"https:\/\/alphastreet.com\/india\/unlocking-growth-sarthak-metals-q3-2024-performance-and-future-expansion-strategies-revealed\/","url_meta":{"origin":158583,"position":0},"title":"Unlocking Growth: Sarthak Metals&#8217; Q3 2024 Performance and Future Expansion Strategies Revealed","author":"Divyansh_Kasana","date":"February 15, 2024","format":false,"excerpt":"Introduction: Sarthak Metals Limited (NSE: SMLT), a prominent player in the metallurgical industry, recently conducted its Q3 2024 earnings conference call, shedding light on its financial performance, strategic initiatives, and future outlook. Led by Sagar Shah, Vice President and part of the Promoter Group, the call provided valuable insights into\u2026","rel":"","context":"In &quot;AlphaGraphs&quot;","block_context":{"text":"AlphaGraphs","link":"https:\/\/alphastreet.com\/india\/category\/infographics\/"},"img":{"alt_text":"SHARDAMOTR Q1 FY26 Earnings Results","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/04\/iStock-1443507250.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/04\/iStock-1443507250.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/04\/iStock-1443507250.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/04\/iStock-1443507250.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":163962,"url":"https:\/\/alphastreet.com\/india\/sarthak-metals-ltd-reports-73-83-drop-in-q1fy25-net-profit-amid-50-35-revenue-decline\/","url_meta":{"origin":158583,"position":1},"title":"Sarthak Metals Ltd Reports 73.83% Drop in Q1FY25 Net Profit Amid 50.35% Revenue Decline.","author":"Divyansh_Kasana","date":"August 20, 2024","format":false,"excerpt":"Sarthak Metals Ltd, established in 1995, specializes in the manufacturing and sale of cored wires, ferro alloys, aluminum wire, and related products. In the first quarter of FY25, the company reported revenues of \u20b940.61 crores, marking a significant year-on-year decline of 50.35% compared to \u20b981.80 crores in the same quarter\u2026","rel":"","context":"In &quot;AlphaGraphs&quot;","block_context":{"text":"AlphaGraphs","link":"https:\/\/alphastreet.com\/india\/category\/infographics\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2024\/08\/01e456ac-ceb9-4a51-a86f-9ee436429fbb.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":161577,"url":"https:\/\/alphastreet.com\/india\/sarthak-metals-ltd-q4fy24-70-fall-in-profits\/","url_meta":{"origin":158583,"position":2},"title":"Sarthak Metals Ltd Q4FY24; 13% fall in Revenue.","author":"Divyansh_Kasana","date":"May 24, 2024","format":false,"excerpt":"Sarthak Metals Ltd (earlier known as Sarthak Metals Marketing Private Limited) was incorporated in 1995 and is a part of the DB group. 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YTD revenue of INR 1,168 crores, up 13%. EBITDA at 6.04% in lead vertical. Overall EBITDA at 5.4% due to aluminum and expenses. Current\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg?resize=700%2C400&ssl=1 2x"},"classes":[]},{"id":168491,"url":"https:\/\/alphastreet.com\/india\/sarthak-metals-ltd-q4fy25-25-rise-in-profits\/","url_meta":{"origin":158583,"position":5},"title":"Sarthak Metals Ltd Q4FY25; 25% rise in Profits","author":"Divyansh_Kasana","date":"May 23, 2025","format":false,"excerpt":"Incorporated in 1995, Sarthak Metals Ltd manufactures and sells cored wires, ferro alloys, aluminium wire and related items Financial Results: Sarthak Metals Ltd reported Revenues for Q4FY25 of \u20b93,853.00 Crores down from \u20b94,164.00 Crore year on year, a fall of 7.47%. Total Expenses for Q4FY25 of \u20b93,486.00 Crores down from\u2026","rel":"","context":"In &quot;AlphaGraphs&quot;","block_context":{"text":"AlphaGraphs","link":"https:\/\/alphastreet.com\/india\/category\/infographics\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2025\/05\/download.png?resize=1400%2C800&ssl=1 4x"},"classes":[]}],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/158583","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/users\/1767"}],"replies":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/comments?post=158583"}],"version-history":[{"count":0,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/posts\/158583\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media\/154818"}],"wp:attachment":[{"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/media?parent=158583"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/categories?post=158583"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/alphastreet.com\/india\/wp-json\/wp\/v2\/tags?post=158583"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}