Repro India LtdQ1 FY18Printing & Publication

Repro India Ltd

Q1 FY18 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Revenue guidance

Category 2

→Repro India aims to sell at least 24,000 books per day post capacity expansion (Page 15).
→Expansion underway in Mumbai (completing by end of July 2018), with Delhi and Bangalore facilities to follow within financial year, increasing capacity (Page 15).
→Books on Demand business volume grown from 5,500 to 7,500 books per day, with consistent quarter-on-quarter growth of 25%-35% (Pages 4-7).
→Indian online books market expected to grow from $6.5 billion to $12 billion in coming years, with online sales projected to increase from 3%-3.5% to 10% (Page 5).
→Digital print capacity expansion (Mumbai, Delhi, Bangalore) planned with CAPEX of Rs. 15-35 crores (Pages 7, 15).
→Publishing services focusing on MNC and integrated publishers to capture market opportunities (Page 15).
→Overall revenue growth driven by e-retail and books on demand segments, with confidence in continued quarterly growth (Pages 6, 7).

Category 3

→The company experienced a turnaround in FY18 with EBITDA of ₹42 crores and PAT of ₹16.39 crores, compared to a loss the previous year.
→Focus on growing the "books on demand" business, which reached sales of 7,500 books per day, showing quarter-on-quarter growth, with confidence in continued growth.
→Expansion plans include increasing digital printing capacity in Mumbai, Delhi, and Bangalore, expected to be completed within the current financial year.
→Cost rationalization efforts have led to savings of ₹25 crores annually, enhancing profitability.
→The company targets growth in publishing services, especially with multinational and integrated publishers, leveraging customized solutions.
→Limited guidance was provided on exact future earnings, but strong order books and market growth trends (online book market growing ~40%) suggest positive prospects.
→Debt levels expected to reduce due to controlled working capital needs and internal accruals.
→No explicit EPS guidance but trend indicates improving profitability driven by scaling operations and market opportunities.

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Yes

→The company plans to fund CAPEX expansion through a mix of long-term debt, past equity raised, and internal accruals (EBITDA generation).
→There is no current plan to raise additional working capital since the print-on-demand business does not require it.
→Debt is expected to be under control and reduce over the next 2-3 years given the nature of the business.
→No mention of any planned new equity dilution in the near future.
→The company prefers secure payment methods for exports and cautious financial management.
→Overall, fundraising will focus on manageable long-term debt and internal resources without aggressive equity or short-term debt issuance.

→The company opened the financial year 2018-19 with a healthy order book of ₹54 crores.
→Of this, ₹12 crores is from the export market and ₹42 crores is from the domestic business.
→The order book indicates a strong demand pipeline supporting ongoing business growth.

Yes

→Current CAPEX underway: Expansion of digital printing capacity in Mumbai, expected completion by end of July 2018.
→Future CAPEX planned for setting up additional digital printing facilities in Delhi and Bangalore, expected within 3 to 6 months after Mumbai expansion.
→Total CAPEX in FY18 was around ₹13 crores; planned CAPEX for FY19 ranges between ₹15 to ₹35 crores primarily for digital printing capacity expansion.
→Expansion aims to increase capacity from 6,000 to 20,000 books per day.
→Strategic focus on enhancing digital print capabilities to support the growing books on demand business and cater to integrated education publishers.
→Incremental capacity is expected to help capture larger share of the online book market and expand presence in North and South India with new facilities.

How does Repro India Ltd rank vs peers in Printing & Publication?

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1Repro India Ltd

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