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Asian Granito India LtdQ1 FY18

Asian Granito India Ltd Q1 FY18 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹50.3P/E: 114.6Market Cap: ₹1.5K CrSector: Consumer Durables

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3
  • Expect 13%-15% growth in net revenues for FY18 and around 15% growth for FY19.
  • Aim to increase retail sales from 37% to 40% by next year, with an overall shift toward organized players benefiting post-GST.
  • Target to grow organized players faster, capturing market share from unorganized sector, especially post-GST.
  • Plan to expand showroom network to over 200 by year-end and over 500 PAN India by 2020.
  • New plant operational from July-August 2018 expected to add Rs. 140-150 crores in revenue in FY19.
  • Contract manufacturing and outsourcing high-value products to leverage low CapEx growth.
  • Focus on increasing volumes in premium product segments like GVT and Double Charge tiles.
  • Expected volume growth over 17%-18% year-on-year with improvement in retail sales driving margins.

See what Asian Granito India Ltd management said on margin guidance — free account, 30 seconds.

Fundraise plans

The transcript does not mention any current or future plans for fundraising through debt or equity. Key points related to financials and expansions include: - No specific mention of raising funds via debt or equity in the discussion. - Expansion plans through internal accruals, especially for South India plant with minimum CAPEX. - Focus on contract manufacturing and joint ventures to grow without heavy Capex. - No clear indication of debt or equity issuance as a funding strategy in the transcript. - Emphasis on operational growth, increasing showroom count, and capacity utilization rather than fundraising. - Management highlights brand building and efficiency improvements as growth levers. Thus, based on the provided content, there are no stated plans for new debt or equity fundraising at this time.

See what Asian Granito India Ltd management said on order book — free account, 30 seconds.

Capex plans

Yes
  • No major CAPEX planned for the current year; growth in South India to be driven through internal accruals and a JV with 51% stake with minimal CAPEX. (Page 8)
  • A new plant in South India through JV focused on manufacturing soluble salt and GVT products (80:20 mix) to reduce transportation costs and improve margins. (Page 7)
  • A 60-acre land allotment for a new project plant expected to start implementation by end of August 2017 and become operational by July-August 2018, adding Rs. 140-150 crores of revenue in FY19. (Page 11)
  • Use of contract manufacturing in Morbi to outsource high-end products under the AGL brand with low capital expenditure. (Page 4)
  • Expansion in Crystal plant utilization aimed to reach 85-95% this year and 100% next year with revenue target of Rs. 350 crores. (Page 10)

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Margin guidance

Category 3
  • Revenue growth is expected at 13%-15% in FY18 and around 15% in FY19.
  • EBITDA margins were around 12% in the recent quarter, expected to maintain roughly 12.5%-13% in FY18.
  • Margin improvement is anticipated due to GST implementation; target is to reach ~15% margins in the next 4-5 years.
  • Profit after tax grew 29% YoY in Q1 FY18 to Rs 11.1 Crores; net profit margin improved by 80 bps to 4.9%.
  • Expansion plans including increasing retail share and contract manufacturing will aid growth.
  • New plants and capacity utilization increases expected to add Rs. 140-150 crores in revenues in FY19.
  • Advertising spend increased to support brand building; targeting 2.25%-2.5% of revenue.
  • Management confident of achieving FY18 margin guidance of 15% and moving towards Rs. 2,000 crore turnover by 2020-21.

Order book

  • The transcript does not explicitly mention the current or expected order book or pending orders.
  • It does highlight that the company is increasing its retail focus and expects growth by capturing market share from unorganized players post-GST.
  • There is mention of outsourcing and contract manufacturing plans, including a contract in Morbi to produce 15,000 boxes per day.
  • The company aims for a gross turnover of Rs. 2,000 crore in the next 3-4 years.
  • They plan to increase retail from 37% to 50% and increase government business to 25% in the future.
  • Expansion includes plans for new plants (e.g., South India JV with Rs. 150 crore turnover expected) and increased showroom presence (200+ showrooms targeted by year-end).
  • Overall, the company is optimistic about volume growth and order inflow driven by organized market expansion and government projects.

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