Any current/future new fundraising through debt or equity?

The company has tied up a long-term debt of Rs.37 crores for the new galvanizing plant as part of a total CAPEX of Rs.50 crores, with Rs.12-13 crores coming from internal accruals. For the Bhilai plant expansion, the company plans to use internal funding but is also considering raising some capital (possibly debt or equity) for that project. Current debt level stands at Rs.227 crores, with fund-based limits of Rs.195 crores and Rs.32 crores of GECL, plus non-fund based bank guarantees of about Rs.200 crores. The company does not expect to reduce debt in the near term because it is focusi

Any current/future capex/capital investment/strategic investment?

The company is undertaking a significant CAPEX program progressing as per schedule. Setting up a new galvanized unit with a capacity of 96,000 metric tons at unit-III in UP, expected commissioning by September 2022; this will be the largest structural galvanizing plant in Asia. Establishing a second plant with 25,000 metric tons capacity for the heavy steel structural division in Bhilai, Chhattisgarh, costing Rs.40 crores, also expected by September 2022. New galvanizing plant and heavy steel structure plant will enhance capacity and operational efficiency, especially for monopoles and heavy s

Future growth expectations in sales/revenue/volumes?

Company projects top-line growth of 25%-30% for FY23 and beyond. Revenue expected to increase from around Rs.700 crores this year to approximately four to five times within five years. Telecom segment to grow steadily by 8%-10% per year, reaching Rs.400-500 crores in 4-5 years. Heavy steel structures and railways electrification segments are expected to drive strong growth. New galvanizing plant and heavy steel structure division (e.g., L&T bullet train project) to improve margins and add revenue. Expects doubling of towers for 5G rollout over next 3-5 years, increasing demand in telecom infra

Future growth expectations in earnings/operating earnings/profits/EPS?

Salasar Techno Engineering expects revenue to grow 4 to 5 times over the next 5 years. PAT (profit after tax) is likely to grow 6 to 7 times due to operating leverage. EBITDA margins are currently around 10% and expected to improve slightly with new galvanizing plant and entry into higher-margin segments like monopoles and heavy steel structures. Telecom segment growth expected at 8%-10% annually, contributing Rs.400-500 crores revenue over next 4-5 years. Heavy steel structures and railway electrification segments are key growth drivers with better margins (~11%-12%). Government infrastructur

Current/ Expected Orderbook/ Pending Orders?

Overall order book as of December 31, 2021, stands at Rs. 1,030 crores. Breakdown: - Unexecuted EPC orders: Rs. 695 crores. - EPC orders where the company is L1 and Letters of Intent (LoI) expected: Rs. 95 crores. - Manufacturing orders under heavy steel structure unit: Rs. 163 crores. - Export orders in hand: Rs. 77 crores. Heavy steel structure division order book increased from Rs. 61 crores (September 30, 2021) to Rs. 163 crores. Railways project order book approximately Rs. 250-300 crores (running and unexecuted). Telecom business order book is private and steady (~Rs. 350-400 cr

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Salasar Techno Engineering LtdQ4 FY23Industrial Manufacturing

Salasar Techno Engineering Ltd Q4 FY23 Earnings Call Analysis

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

Price: ₹6.17P/E: 64.6Market Cap: ₹1.3K CrSector: Industrial Manufacturing

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Company projects top-line growth of 25%-30% for FY23 and beyond.
→Revenue expected to increase from around Rs.700 crores this year to approximately four to five times within five years.
→Telecom segment to grow steadily by 8%-10% per year, reaching Rs.400-500 crores in 4-5 years.
→Heavy steel structures and railways electrification segments are expected to drive strong growth.
→New galvanizing plant and heavy steel structure division (e.g., L&T bullet train project) to improve margins and add revenue.
→Expects doubling of towers for 5G rollout over next 3-5 years, increasing demand in telecom infrastructure.
→Steel plant capacity expansions in India to boost demand for prefabricated structures.
→Export orders for telecom towers to Southeast Asia and Africa are ongoing.
→Overall capacity utilization currently around 40%-45%, with planned expansions to meet demand.

Margin guidance

Category 2

→Salasar Techno Engineering expects revenue to grow 4 to 5 times over the next 5 years.
→PAT (profit after tax) is likely to grow 6 to 7 times due to operating leverage.
→EBITDA margins are currently around 10% and expected to improve slightly with new galvanizing plant and entry into higher-margin segments like monopoles and heavy steel structures.
→Telecom segment growth expected at 8%-10% annually, contributing Rs.400-500 crores revenue over next 4-5 years.
→Heavy steel structures and railway electrification segments are key growth drivers with better margins (~11%-12%).
→Government infrastructure projects (railways, transmission, highways) provide strong demand visibility.
→Operating efficiencies and better product mix expected to enhance overall profitability.
→Debt levels likely to remain stable due to growth-driven CAPEX; no significant deleveraging anticipated in near term.

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Fundraise plans

Yes

→The company has tied up a long-term debt of Rs.37 crores for the new galvanizing plant as part of a total CAPEX of Rs.50 crores, with Rs.12-13 crores coming from internal accruals.
→For the Bhilai plant expansion, the company plans to use internal funding but is also considering raising some capital (possibly debt or equity) for that project.
→Current debt level stands at Rs.227 crores, with fund-based limits of Rs.195 crores and Rs.32 crores of GECL, plus non-fund based bank guarantees of about Rs.200 crores.
→The company does not expect to reduce debt in the near term because it is focusing on growth of 25%-30% next year.
→No explicit mention of fresh equity fundraising during the call.

Order book

Yes

→Overall order book as of December 31, 2021, stands at Rs. 1,030 crores.
→Breakdown:
→ - Unexecuted EPC orders: Rs. 695 crores.
→ - EPC orders where the company is L1 and Letters of Intent (LoI) expected: Rs. 95 crores.
→ - Manufacturing orders under heavy steel structure unit: Rs. 163 crores.
→ - Export orders in hand: Rs. 77 crores.
→Heavy steel structure division order book increased from Rs. 61 crores (September 30, 2021) to Rs. 163 crores.
→Railways project order book approximately Rs. 250-300 crores (running and unexecuted).
→Telecom business order book is private and steady (~Rs. 350-400 crores expected revenue range).
→The L&T bullet train project order in heavy structures is about Rs. 125 crores, with potential for increase after completion.
→New plants for galvanizing and heavy steel structures are expected to further support order execution and revenue growth.

Capex plans

Yes

→The company is undertaking a significant CAPEX program progressing as per schedule.
→Setting up a new galvanized unit with a capacity of 96,000 metric tons at unit-III in UP, expected commissioning by September 2022; this will be the largest structural galvanizing plant in Asia.
→Establishing a second plant with 25,000 metric tons capacity for the heavy steel structural division in Bhilai, Chhattisgarh, costing Rs.40 crores, also expected by September 2022.
→New galvanizing plant and heavy steel structure plant will enhance capacity and operational efficiency, especially for monopoles and heavy steel structures.
→The Bhilai plant will help tap opportunities in Eastern India.
→Planning new projects in Bhilai for welded structures with a CAPEX of Rs.40 crores.
→Long-term debt tied up for galvanizing plant CAPEX—Rs.37 crores approved plus Rs.12-13 crores from internal accruals.
→CAPEX aligns with expected growth in railways, telecom, and infrastructure sectors.

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