Kamdhenu Ltd
Q2 FY22 Earnings Call Analysis
Industrial Products
fundraise: Yescapex: Yesrevenue: Category 2margin: Category 3orderbook: No information
💰fundraise
Any current/future new fundraising through debt or equity?
- The Company is actively working on strategic investments and fundraising.
- There are plans for some strategic investment or fund raising in the near future.
- Specific details about the nature (debt or equity) of the fundraising are not disclosed.
- The demerger of the paint business is aimed at enabling both entities to raise necessary funds and find strategic investors independently.
- This move is intended to create focused growth platforms and improve operational flexibility.
- No explicit mention of immediate debt raising was made; emphasis seems on equity and strategic partnerships.
(Reference: Page 10)
🏗️capex
Any current/future capex/capital investment/strategic investment?
- Kamdhenu Limited is working on raising funds through strategic investment or private equity, as indicated by Harish Agarwal in response to Pankaj Jain's question about plans related to the paint business demerger and achieving revenue targets by FY26.
- The Company is focused on increasing annual steel capacity through the franchise route from 38 lakh metric tonnes to 50 lakh metric tonnes over the next two years, primarily by expanding capacity in existing franchise units rather than adding new ones.
- There is ongoing investment in product development and innovation at the steel manufacturing plant, which doubles as an R&D and employee training center.
- No specific capex figures are provided, but these initiatives imply future capital expenditures and strategic investments aimed at growth and capacity enhancement.
📊revenue
Future growth expectations in sales/revenue/volumes?
- Kamdhenu is targeting a branded revenue turnover of Rs. 22,000 crore by FY24, with Rs. 20,000 crore expected to be achieved by FY23.
- Steel volumes grew 30% YoY in Q1 FY23 and the company plans to increase annual steel capacity through the franchise route from 38 lakh metric tonnes to 50 lakh metric tonnes over two years.
- Paint business demand is growing, with a 65% YoY revenue rise in Q1 FY23 to Rs. 54.7 crore and volume increasing 39% to 7,082 KL.
- The company aims to increase royalty income mainly by increasing volumes rather than per tonne rate hikes.
- Kamdhenu plans to expand its presence in East and North India where sales are strong, while improving South and West regions.
- They expect stable or slightly increasing raw material prices, and will pass price hikes to customers when major competitors increase prices.
- Demerger of the paint business should allow focused growth and fund raising for expansion.
📈margin
Future growth expectations in earnings/operating earnings/profits/EPS?
- Kamdhenu Limited is on track to achieve a branded revenue turnover of Rs. 22,000 crore by FY24, having already reached Rs. 5,300 crore in Q1 FY23 and projecting to cross Rs. 20,000 crore turnover in FY23 itself.
- Royalty income is targeted to reach around Rs. 110 crore in FY23, with Rs. 27 crore already achieved in Q1.
- Steel business revenue increased by 70% YoY in Q1 FY23, and EBITDA grew by 7% with an 8.1% margin; profit before tax marginally improved YoY.
- The paint business reported 65% YoY revenue growth in Q1 FY23 but had a slight negative EBITDA, expected to improve with premium product focus.
- Capacity expansion plans include increasing steel capacity from 38 lakh MT to 50 lakh MT through franchise route over two years, supporting volume growth.
- Demand outlook is positive across construction and infrastructure projects, supported by government initiatives like PM Awas Yojana.
- Management is considering strategic investment/fund raising to support growth.
📋orderbook
Current/ Expected Orderbook/ Pending Orders?
The provided transcript and document pages do not mention any specific details about the current or expected order book or pending orders for Kamdhenu Limited as of Q1 FY23. The discussion primarily focuses on sales, capacity utilization, revenue growth, market demand, pricing, and expansion plans without direct reference to order book status. Therefore, no information is available regarding current or expected orderbook or pending orders in the given document.
