Yasho Industries Q1 FY24 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 1
Fundraise
No
Order
N/A
Capex
Yes
2 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 3- Yasho Industries expects volume growth, aiming to improve from current 17%-18% utilization to over 20% in near term.
- Q1 FY24 saw 6% volume growth sequentially compared to Q4 FY23, though volumes were down YoY versus Q1 FY23 due to robust demand and higher prices then.
- For FY24, management targets over 95% utilization of the current 12,500 metric ton capacity in Vapi.
- New facility at Pakhajan (expansion) is expected to start commercial production by early FY25, with full ramp-up by FY26 targeting at least 90% utilization.
- New facility’s sales contribution is not expected in FY24 but will support growth from FY25 onwards.
- Long-term volume growth aims to leverage "Make in India" opportunities and increased demand from North/South America and Middle East markets.
- Management expects sustainable growth in revenue with expansion and improved product mix post new capacity commissioning.
See what Yasho Industries management said on margin guidance — free account, 30 seconds.
Fundraise plans
No- The company expects a total debt level of about Rs. 500 crores by FY24, including working capital requirements.
- There was no mention of any new equity fundraising in the call.
- Management indicated no further CAPEX plans in the next 2-3 years beyond the ongoing Phase-1 expansion.
- Future CAPEX discussions will likely start in early FY26, after achieving optimum utilization of the current expansions.
- No specific mention of incremental debt beyond the Rs. 500 crore figure related to FY24 was provided.
See what Yasho Industries management said on order book — free account, 30 seconds.
Capex plans
Yes- Ongoing CAPEX: A Greenfield project at Pakhajan is underway, expected to start production in early FY25, focusing on industrial segment products.
- Capacity: Current capacity at Vapi is 12,500 metric tons; post expansion, total capacity will be around 30,000 metric tons per annum.
- Utilization: Targeting above 95% utilization at Vapi in FY24; new facility expected to reach optimum utilization (90%) by FY26.
- Expansion Timeline: New facility commercialization expected by early FY25; optimum utilization anticipated within 2 years.
- Future CAPEX: No additional CAPEX plans for next 2-3 years beyond ongoing; further CAPEX will be considered after achieving 70%+ utilization by FY26.
- Investment: Approximately Rs. 400 crores invested in Phase-1, largely in land development and infrastructure; Phase-2 CAPEX expected to be lower due to prior investments.
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Margin guidance
Category 1- Yasho Industries expects volume growth this year, aiming for above 95% capacity utilization at their Vapi facility in FY24, up from ~90% last year.
- New Pakhajan facility to commence production in early FY25; full ramp-up expected over 2 years, targeting 90% utilization by FY26.
- Margins currently under pressure due to raw material price declines and competitive pricing; expected improvement in H2 FY24 and beyond with better product mix and new industrial segment capacity.
- EBITDA per ton is variable; management focuses on percentage margins rather than per-ton absolute numbers, aiming for margin improvement as volumes rise.
- The new capacity in FY24 is not expected to contribute significantly to topline this fiscal, but will drive future growth.
- Long-term growth supported by "Make in India" initiative and increasing demand from domestic and overseas markets.
- No major CAPEX planned until FY26 after achieving optimum utilization of current expansion.
Order book
- The management did not provide explicit figures for the current or expected order book during the call.
- However, there are indications of strong demand from large customers waiting for the new facility to start production, suggesting a healthy pipeline.
- Trials for the new facility are expected to start by October-November, and commercialization is anticipated by early FY25.
- The company is engaging actively with customers, with some already showing strong commitment and willingness to increase future business.
- Increased enquiries and business inquiries stemming from the "Make in India" initiative indicate potential growth in orders.
- Overall, Yasho Industries is confident of achieving above 95% capacity utilization on existing capacity this year and aims for 90% utilization in the new facility by FY26, implying an improving order trajectory.
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