Asian Granito India Ltd Q4 FY17 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
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 analysisRevenue guidance
Category 3- FY18 revenue growth target: 12-13%
- Volume growth in FY17 was about 10%; expecting continued growth in volumes with focus on high-value products like GVT, Double Charge, and quartz.
- Quartz segment expected to contribute additional Rs. 50-60 crores in revenue with ~30% EBITDA margins.
- Expansion plans include increasing dealer network from 970 to 1,200 by March 2018 and growing showrooms from 144 to 200.
- Target to increase retail sales to around 50% in coming years.
- By 2020-21, aiming for a turnover of Rs. 2,000 crores through organic and inorganic growth.
- Capacity utilization expected to rise: Crystal plant utilization forecasted to move from 65-70% to 80-85%.
- New product lines (e.g., quartz and parking tiles) launched with good market response, indicating potential for volume expansion.
- Industry consolidation post-GST to offer growth and margin improvement opportunities.
See what Asian Granito India Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
- No specific mention of new fundraising through debt or equity in Q4 FY2017 call.
- The company plans minimal CAPEX this year with focus on internal accruals and LC (Letter of Credit) for machinery purchase.
- Quartz segment CAPEX of around Rs. 20 crores mostly funded via internal accruals and LC.
- Future planned CAPEX includes Rs. 35-40 crores for South India JV in 2019, funded through internal accruals.
- Debt reduction planned via annual repayments of Rs. 17-18 crores gradually reducing long-term borrowings.
- Management indicates focus on organic and inorganic growth post-GST to minimize CAPEX.
- No explicit discussion about raising funds through fresh equity or debt during the call.
See what Asian Granito India Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- Current CAPEX of around Rs. 20 crores incurred for quartz segment expansion (brownfield expansion).
- Quartz capacity recently expanded to 1,600 sq. meters, with plans to add another 1,600 sq. meters through debottlenecking and further brownfield expansion.
- Planned CAPEX of Rs. 35-40 crores for a JV in South India (Andhra Pradesh) focused on GVT products, expected in 2019.
- Additional CAPEX of around Rs. 100 crores planned for expansions, including Crystal plant and other ventures.
- Maintenance CAPEX typically around Rs. 8 to 9 crores annually.
- Future expansions and CAPEX decisions for quartz segment to be based on market response after a 3-month observation post recent line launch.
- Minimal CAPEX for the current year, focusing on optimum utilization and possible JV/outsourcing in Morbi to leverage market consolidation post-GST.
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Margin guidance
Category 3- Target revenue growth for FY18 is 12-13%, building on 7.5% growth in FY17.
- EBITDA margins are expected to improve and be maintained in the range of 13-15% for FY18, up from around 11.5% in FY17.
- Growth drivers include increased market share in high-value products like GVT, Double Charge, and new quartz segment with 30% margins.
- Quartz segment expected to add Rs. 50-60 crores revenue with highest EBITDA margins (30-33%).
- Expansion plans include increasing dealer network from 970 to 1,200 and showroom count to 200 by March 2018.
- Benefits from GST implementation expected through industry consolidation and organized sector growth.
- Working capital cycle improvement and retail sales growth to positively impact earnings.
- Longer-term revenue target of Rs. 2,000 crores by 2020-21 with organic and inorganic growth strategies.
- Capacity utilization target increases (e.g., Crystal plant from 65-70% to 80-85%) to support margin and profit expansion.
Order book
- Current order book for quartz segment stands at Rs. 9 crores (Page 12).
- The Rs. 9 crores order book includes quartz products with 20mm and 30mm thickness (Page 12).
- All quartz production is targeted primarily for the international market, and the company has already received approvals and taken orders for export (Page 12).
- The company is observing demand for new quartz lines before committing to further capacity addition (Page 5).
- Exports currently contribute around 7% to revenue, indicating some portion of orders are export-oriented (Page 12).
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What Asian Granito India Ltd's management said in earlier quarters
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