GOCL Corporation Ltd Q2 FY18 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
No
Order
Yes
Capex
Yes
2 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 3See what GOCL Corporation Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
No- As per the discussion on pages 5 and 10, the company has not taken any new term loans recently, indicating no immediate new debt fundraising.
- The capex plan for the current year is progressing well with about Rs.30 Crores expected to be spent by year-end, funded through existing cash resources.
- There is no explicit mention of planned new equity fundraising in the provided transcript.
- The company is cautious about committing to large capex due to market shifts and intends to clarify future capex plans by May.
- Overall, no concrete plans for fresh debt or equity fundraising have been announced at this time; reliance appears to be on internal accruals and prudent capex management.
See what GOCL Corporation Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- The company plans to undertake capex but is cautious due to a market shift, wanting to understand it well before committing to large investments.
- Licensed capacities are expected to increase by about 42%, which will require capex; exact figures for the next 2-3 years are yet to be finalized.
- This year’s capex is progressing on schedule, with about Rs.30 Crores expected to be spent by year-end.
- Competitors are announcing capex of Rs.200-300 Crores over the next 2-3 years; GOCL plans to keep pace by utilizing existing capacities and planned expansions primarily at Hyderabad and Rourkela.
- There is a focus on modernization and expansion of existing capacity and exploring new locations.
- On the Realty side, active marketing and development efforts are ongoing, with approvals expected and work likely to start soon (e.g., Hyderabad development expected to break ground by March).
- No loans have been taken recently; the company maintains a good cash position for funding capex.
Track GOCL Corporation Ltd — get its next earnings analysis in your feed
Margin guidance
Category 3- The company is on a positive growth path in its core explosives and energetics business, with new products well accepted and exports growing.
- Orders in hand stand at around Rs.700 Crores, with an expected increase in licensed capacities by about 42-46%, enabling higher offtake.
- The domestic commercial explosives industry is projected to grow at 10-12%, with GOCL targeting 18-20% compounded growth over the next three years.
- GOCL projects 20% compounded growth in commercial explosives revenues over three years, outpacing industry growth.
- The company is cautious with capex, planning but awaiting clarity on market shifts before committing large investments.
- Improved operational efficiencies and marketing efforts are expected to support growth.
- Realty development may add value but is progressing slower than expected.
- Overall, growth in earnings, operating profits, and EPS is anticipated, aligned with capacity expansion and industry demand.
Order book
Yes- Current order book is approximately Rs. 700 Crores, which includes:
- - Rs. 680 Crores orders from Coal India and private sector.
- - Rs. 320 Crores orders for year one (September 2017 - August 2018).
- - Rs. 380 Crores orders for year two (September 2018 - August 2019).
- Coal India orders increased by about 25% in volume and 21% in value compared to the previous tender.
- Additional export orders contribute to the total order book.
- Order execution is well organized, with capacity increases expected to handle the volume rise.
- Licensed capacity for cartridge explosives expected to rise by 50%, from 50,000 to ~75,000 tonnes.
- Licensed capacity for bulk explosives expected to increase by about 42%, approximately 52,000 tonnes.
- Company confident of achieving at least 18% to 20% compound growth over next three years.
How does GOCL Corporation Ltd rank vs peers in Chemicals & Petrochemicals?
Pro featureHow does GOCL Corporation Ltd rank in Chemicals & Petrochemicals?
Compare GOCL Corporation Ltd against every Chemicals & Petrochemicals company (Q2 FY18) on revenue, margins and earnings-call signals.
Continue your research
What GOCL Corporation Ltd's management said in earlier quarters
Others in Chemicals & Petrochemicals this season
- Sudarshan Chemical Industries Ltd (Q1 FY27)
The net debt has already been reduced significantly from Rs.922 Crores at acquisition to Rs.531 Crores. Key concall takeaways from Sudarshan Chemical…
- Indo Borax & Ch. (Q1 FY27)
250-260 crores in FY27 with about 20% EBITDA margin, growing at 11-12% annually in absolute terms. Key concall takeaways from Indo Borax & Chemicals Ltd's Q1…
- SRF Ltd (Q1 FY27)
Chemicals business is guided for 15-20% growth in FY27, with a strong Q1 performance positioning the company to possibly hit the higher end of this range (Page…
- Deepak Fertilis. (Q1 FY27)
Long-term demand-supply balance looks stable with 6-7% market growth, supporting sustained revenues despite new capacity additions. Key concall takeaways from…