Trident Ltd

Q3 FY19 Earnings Call Analysis

Textiles & Apparels

Full Stock Analysis
capex: Yesrevenue: Category 3margin: Category 3orderbook: No informationfundraise: Yes
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fundraise

Any current/future new fundraising through debt or equity?

- The company is undertaking a major expansion project in the yarn segment at Budni, Madhya Pradesh, costing INR 1140 crores. - Funding for this project will be through a mix of debt (INR 855 crores) and equity (INR 285 crores). - Another project involves de-bottlenecking and modernization of existing paper units at Dhaula Plant, Punjab, costing INR 222 crores. - Funding for this paper unit project will be through debt of INR 148 crores and internal accruals of INR 74 crores. - No additional or separate fundraising through new debt or equity is explicitly mentioned beyond these projects.
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capex

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

- Trident is undertaking an expansion project in the yarn segment at Budni, Madhya Pradesh with a total cost of INR 1140 crores. - Funding: INR 855 crores debt and INR 285 crores equity. - Capacity increase: 48,482 TPA. - Expected operational start: 2021. - Revenue addition: Approx. INR 1170 crores from outside sales post-expansion. - Debottlenecking & modernization of existing paper units at Dhaula Plant, Punjab. - Total cost: INR 222 crores. - Funding: INR 148 crores debt and INR 74 crores internal accruals. - Capacity increase: 20,000 TPA. - Aims to strengthen paper units and market presence. - Maintenance capex for FY20 guided at approximately INR 100 crores, focused on small maintenance, de-bottlenecking, and capacity upgrades.
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revenue

Future growth expectations in sales/revenue/volumes?

- Home Textile business registered strong growth in FY19 and sustained momentum in H1 FY20. - Revenue in Textile segment grew by 4% in H1 FY20 compared to H1 FY19. - Bath and Bed Linen sales volume grew by 7% and 20% quarter-on-quarter in Q2 FY20. - Capacity utilization targets for FY20 revised to ~70% for Bed Linen and maintained ~60% for Bath Linen. - Company maintains guidance of EBITDA margins around 18%-22% on a sustainable basis for FY20 and FY21. - Expansion projects in yarn (adding approx. INR 1170 crore revenue post-expansion) and paper segments till 2021 expected to aid revenue growth. - Marketing initiatives targeting top US retailers and exploring e-com platforms to sustain and increase volume growth. - Government export incentives (RoDTEP) expected to provide additional impetus to textile exports. - Overall, company remains optimistic to sustain and grow its Home Textile business volumes and revenues.
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margin

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

- The company maintains guidance of EBITDA margins around 18% to 22% on a sustainable basis for FY20 and FY21. - Net revenue grew by 4% in H1 FY20, with bath and bed linen sales volumes growing 7% and 20% Q-o-Q in Q2 FY20. - Profit after tax for H1 FY20 stood at INR 260.3 crores with EPS of INR 5.11. - EBITDA for H1 FY20 stood at INR 559.6 crores (21.2% margin). - Capacity utilization targets: Bed Linen at 70% (+-5%) and Bath Linen at 60% (+-5%) for FY20. - Expansion projects in yarn and paper segments expected to add significant revenue (approx. INR 1170 crores from yarn). - Growth initiatives include increasing market share in US, Europe, and Japan with enhanced marketing and direct e-commerce sales. - Overall optimistic on sustaining growth in Home Textile business despite economic challenges.
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orderbook

Current/ Expected Orderbook/ Pending Orders?

The document "3473.pdf" does not explicitly mention the current or expected order book or pending orders for Trident Ltd in Q2 FY20. The information provided focuses on financial performance, capacity utilization, marketing initiatives, industry outlook, and frequently asked questions but does not disclose specific details about order book status or pending orders. If you need detailed information on the order book, it might be best to contact Trident Limited directly via their Investor Relations contacts: - Abhinav Gupta / Ankit Mahajan - Email: abhinavgupta@tridentindia.com, ankitmahajan@tridentindia.com - Tel: +91 161 5039 999