Satia Industries conducted conference call for Q4 FY22.
"Target of 1400 cr of topine and PAT margins of 10%"
Here are the concall highlights
๐งต๐
"Target of 1400 cr of topine and PAT margins of 10%"
Here are the concall highlights
๐งต๐
Business Updates:
โข Prices of Raw Material were significantly impacted during the quarter due to volatility in prices.
โข This led to lower in margins for entire industry.
โข Wood pulp price has not been increased much than that of other RM.
โข Prices of Raw Material were significantly impacted during the quarter due to volatility in prices.
โข This led to lower in margins for entire industry.
โข Wood pulp price has not been increased much than that of other RM.
Plastic Ban:
โข Entire industry is waiting for government rule out, to sense the government seriousness. If this rules out, then cutlery segment would drive growth for Satia.
โข Until Plastic Ban comes up, currently cutlery prices are not lucrative in compare to plastic.
โข Entire industry is waiting for government rule out, to sense the government seriousness. If this rules out, then cutlery segment would drive growth for Satia.
โข Until Plastic Ban comes up, currently cutlery prices are not lucrative in compare to plastic.
Paper Machine 4:
โข PM4 was operating at 43% capacity in Feb & 66% of capacity, while in May, SIL is running at 68% of capacity.
โข Realization from PM4 as of now is ~79,000 rs tone, because of better quality, finish & furnish. Avg. realization is 75,000 Ton
โข PM4 was operating at 43% capacity in Feb & 66% of capacity, while in May, SIL is running at 68% of capacity.
โข Realization from PM4 as of now is ~79,000 rs tone, because of better quality, finish & furnish. Avg. realization is 75,000 Ton
Down time:
โข PM4 Down time of capacity 6-7% (340 days)- This is at 64 GSM.
โข If SIL manufactures higher GSM (80-84 GSM) for government textbook, then production increases.
Lower GSM has lower production.
โข PM4 is running at 900Met per minute, which capacity is 1100Met
โข PM4 Down time of capacity 6-7% (340 days)- This is at 64 GSM.
โข If SIL manufactures higher GSM (80-84 GSM) for government textbook, then production increases.
Lower GSM has lower production.
โข PM4 is running at 900Met per minute, which capacity is 1100Met
Cutlery Segment:
โข Cutlery Segment Machine was in operation in Feb 2022.
โข Co. is moving slow in cutlery, as current focus is on PM4. Mgmt is also waiting for government action on plastic ban.
โข Currently co. is awaiting for Plastic Ban, while arrangement from Zume at dilemma
โข Cutlery Segment Machine was in operation in Feb 2022.
โข Co. is moving slow in cutlery, as current focus is on PM4. Mgmt is also waiting for government action on plastic ban.
โข Currently co. is awaiting for Plastic Ban, while arrangement from Zume at dilemma
Operation:
โข Cost of material was increased by more than 50%, while price rise was 36%. Price gap was 3,000 Rs per ton which impacted 8% of EBIDTA.
โข Agri Residue, Waster paper commands 5,000 Rs ton higher realization than Wood Pulp, which in current time is eliminated.
โข Cost of material was increased by more than 50%, while price rise was 36%. Price gap was 3,000 Rs per ton which impacted 8% of EBIDTA.
โข Agri Residue, Waster paper commands 5,000 Rs ton higher realization than Wood Pulp, which in current time is eliminated.
RM:
โข Focus to increase Agro Residue from 200 to 300 TPD (will come in Mid June) & wood pulping facility to 300TPD from 150 TPD (Will operational in Sept).
โข Agri Residue has seen higher inflation. (Price Rise from 6,000 Ton to 12,000 Ton- Current Rise is ~70%+).
โข Focus to increase Agro Residue from 200 to 300 TPD (will come in Mid June) & wood pulping facility to 300TPD from 150 TPD (Will operational in Sept).
โข Agri Residue has seen higher inflation. (Price Rise from 6,000 Ton to 12,000 Ton- Current Rise is ~70%+).
RM Consumption:
Agro Residue: 48%
Wood Pulp: 42%
Balance for Other.
Next Year Requirement:
- Wheat will be available locally.
- Wood Chips: 30% from local area and 70% from out Mid East India.
- SIL will only buy 5-10% of pulp outside India.
Agro Residue: 48%
Wood Pulp: 42%
Balance for Other.
Next Year Requirement:
- Wheat will be available locally.
- Wood Chips: 30% from local area and 70% from out Mid East India.
- SIL will only buy 5-10% of pulp outside India.
Price Rise:
โข Big Mills have increase price rise in May and planning more for June (total of 7000 Ton).
โข SIL has increased the price of 75,000 TPA, hence most of the price rise is already taken by SIL.
โข Big Mills have increase price rise in May and planning more for June (total of 7000 Ton).
โข SIL has increased the price of 75,000 TPA, hence most of the price rise is already taken by SIL.
Guidance for FY23:
โข Mgmt expect sales volume of around 2,00,000 Tons of Paper, & with current price of 75,000 Rs per ton Revenue guidance would remain for Rs 1,400 - 1,500 cr.
โข EBIDTA margins expectation if 20%; PBT of 15% & PAT of ~10%.
โข Mgmt expect sales volume of around 2,00,000 Tons of Paper, & with current price of 75,000 Rs per ton Revenue guidance would remain for Rs 1,400 - 1,500 cr.
โข EBIDTA margins expectation if 20%; PBT of 15% & PAT of ~10%.
Ratios:
โข Asset turn: Current asset turn at 1x. Mgmt targets asset turn to be at 1.8x.
State Text Book
โข State Text Book Order Book: 10-12K Tone & additional requirement from UP for around 4,500 Ton & NCERT will have order lead.
โข Asset turn: Current asset turn at 1x. Mgmt targets asset turn to be at 1.8x.
State Text Book
โข State Text Book Order Book: 10-12K Tone & additional requirement from UP for around 4,500 Ton & NCERT will have order lead.
Other:
โข Term Loan as of now is 370cr & 40cr of short term loan(which was 308cr last year). Next year debt is to be at 310cr. Int rate 6-7%.
โข Biological asset grows with increasing age of wood. As age increases prices and value of wood increase.
โข Term Loan as of now is 370cr & 40cr of short term loan(which was 308cr last year). Next year debt is to be at 310cr. Int rate 6-7%.
โข Biological asset grows with increasing age of wood. As age increases prices and value of wood increase.
Loading suggestions...