Synergy Green Industries LtdQ3 FY24Industrial Products

Synergy Green Industries Ltd

Q3 FY24 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

4 of 5 growth signals are positive — a strong management growth story.

Revenue guidance

Category 3

→Current order book expects revenues to rise from ₹370 crores to ₹450 crores next year, with potential upside if Envision development accelerates.
→Capacity expansion planned from 30,000 tons to 45,000 tons, with future Greenfield project aiming to raise capacity to 100,000 tons and eventually up to 200,000 tons within 2-3 years.
→Guidance of recurring annual orders around 10,000 tons from Envision, translating to ₹130-140 crores per year, expected to mature over 2-3 years.
→Targeting 18% EBITDA margin by FY 27 after completion of expansion projects.
→Expect stable capacity utilization at 80-85%, currently running at 90-93%.
→Growth driven by global OEM demand, with exports forming ~25% of revenue and continued diversification beyond wind segment.
→Consistent revenue growth seen historically, with a fourfold increase in last 5-6 years due to global market focus.

Category 1

→Company targets an 18% EBITDA margin by FY27 post project completion (Page 8).
→Current-year margin expected to cross 15% due to favorable order book and stable raw material prices (Page 6).
→Revenue expected to grow from ₹370 crore in the current year to ₹450 crore next year driven by strong order book and capacity expansions (Page 5).
→Capacity planned to expand from 30,000 to 45,000 tons, with a vision to scale up to 100,000 tons in 2-3 years and eventually 200,000 tons through a Greenfield project (Pages 6,8).
→Order book and contracts (e.g., with Envision) support recurring annual revenues of about ₹130-140 crore once fully mature (Page 6).
→Expected growth in volumes and improved margins through backward integration (machining in-house) projected to reach 18% EBITDA margin (Page 11).
→Consistent past growth with revenues growing fourfold over the last 5-6 years and stable profitability indicate strong future earnings trajectory (Page 3).

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Yes

No information is provided regarding the same in the latest conference call.

Yes

→Current order book is around ₹370 crores with an expected increase to ₹450 crores next year.
→The company has signed a contract with Envision for a supply of up to 10,000 tons annually, translating to recurring orders worth approximately ₹130-140 crores per year.
→The order book is expected to grow further once the Envision development is fully matured.
→Synergy Green is continuously adding new OEMs and focusing on top global OEMs like Senvion, Nordex, Vestas, and Gamesa.
→Capacity is being expanded from 30,000 to 45,000 tons, with plans for a new Greenfield project to increase capacity to 100,000 tons or more to meet growing demand.
→The company has a diversified order base and expects demand to reach 100,000 tons within 2-3 years.

Yes

→Synergy Green is currently expanding foundry capacity from 30,000 to 45,000 tons as part of a Brownfield expansion, expected to complete by March (page 5).
→A new in-house machining facility is being set up, with completion anticipated by September due to long lead times for machines (page 5).
→The company has sanctioned a ₹157 crore expansion project funded through internal accruals (₹26 crore), equity infusion (₹37+ crore), and debt (balance) (page 5).
→Plans to build a new Greenfield project to increase total capacity to 100,000 tons in the next 2-3 years, with potential to go up to 200,000 tons thereafter (pages 6, 8).
→Capex peak expected this year with debt peaking at ₹160-170 crore, tapering to around ₹150 crore next year (page 7).
→Expansion driven by securing large orders including a recent long-term supply agreement with Envision and ongoing developments with Nordex and others (pages 6-12).

How does Synergy Green Industries Ltd rank vs peers in Industrial Products?

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1Synergy Green Industries Ltd

Rev 3Mar 1

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