Shakti Pumps (India) Limited (531431) Earnings Call Transcript & Summary

Ladies and gentlemen, good day and welcome to Shakti Pumps (India) Limited Q4 and FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rohit Anand from Ernst Young LLP. Thank you and over to you, Mr. Anand.

Thank you, Nirav, and good afternoon, everyone. On behalf of Shakti Pumps (India) Limited, I welcome all of you to the company's quarter 4 and FY '22 earnings conference call. I am Rohit Anand from Ernst & Young IR [indiscernible], and we managed Investor Relations for Shakti Pumps (India). You would have already received the quarter 4 and FY '22 results and investor presentation, which is also available in our filings with the BSE and NSE. To discuss the company's business performance during the year and outlook, we have with us today Mr. Dinesh Patidar, Managing Director; Mr. Ramesh Patidar, Executive Director, Exports; Mr. Dinesh Patel, Chief Financial Officer; and Mr. Ravi Patidar, CS and Compliance Officer. Before we proceed with the call, a disclaimer. Please do note that anything said on this call during the course of the interaction and in our collaterals, which reflect the outlook towards the future and which should be construed as a certain -- future -- forward-looking statements must be viewed in conjunction with the risks the company face and may not be updated from time to time. More details are provided at the end of the investor presentation and other filings that can be found on our website, www.shaktipumps.com. Should you have any queries or you need any further information at the end of this call, you can please reach out to us at the email addresses mentioned in the company's collaterals. With this, I would now hand over the call to Mr. Dinesh Patidar. Over to you, sir.

[Foreign Language] Over to Dinesh.

Thank you, sir. Good afternoon, everyone. Moving on to the financial highlights, the company reported a consolidated revenue of INR 385 crores in Q4 FY '22, a 20% growth as compared to INR 320 crores in Q4 FY '21. The EBITDA for the Q4 FY '22 INR 36 crores, declined by 27% as compared to INR 50 crores in Q4 FY '21. The EBITDA margin for Q4 FY '22 stood at 9.2% as against the 15% reported in Q4 FY '21, a 6.9 bps decline year-on-year basis on account of sharp rise in raw material costs and other operating costs. The profit after tax for Q4 FY '22 is INR 22 crores as compared to INR 31 crores in Q4 FY '21. During FY '22, consolidated revenue was INR 1,179 crores, a 26% growth year-on-year basis as compared to INR 930 crores in FY '21. This is the highest ever revenue for us since inception and a milestone as we cross the INR 1,000-crore mark in revenue. EBITDA at INR 111 crores declined by 22% year-on-year basis as against 142 crores in FY '21. EBITDA margin at 9.4% declined by 5.1% bps year-on-year basis as compared to 15.3% in FY '21. PAT for the year was at 2 -- INR 65 crores as compared to INR 76 crores in FY '21. This is all from my side. With this, we can now open the floor for question and answers. Thank you.

[Operator Instructions] The first question is from the line of Mohit K. from DAM Capital Advisors.

I have a few questions. So I'll start with the KUSUM Scheme. So have you started selling pumps under the KUSUM Scheme? And as per your PowerPoint sheet, there is -- the total market is [indiscernible], 17,000 tonnes. So do you think that it will be executed completely in this year, FY '23?

[Foreign Language]

Sir, [Foreign Language] You have taken a 45% increase in the market price. So are we confident of retaining the 35% market share going ahead as well?

Yes, yes. Definitely. [Foreign Language]

Okay. And so how much are the -- how much are we targeting, the revenues and EBITDA, for next year from inverters?

[Foreign Language] year-on-year.

Year-on-year. So [Foreign Language]?

Yes.

Oh. So [Foreign Language] on specifically inverters [indiscernible]?

Inverter maybe [Foreign Language]

The next question is from the line of Nirav Asher from Latin Manharlal Securities.

So [indiscernible] one questions, sir. First, update or guidance here. Lack of historical data. Is it EPC or it's -- or EPC and OEMs together?

[Foreign Language]

[Foreign Language]

Yes.

[Foreign Language] because phone call [Foreign Language] 5% price hike.

[Foreign Language]

Average [Foreign Language]

[Foreign Language]

I understand. [Foreign Language] target, sir, for next year?

Right.

[Foreign Language] 20% market share. [Foreign Language]

30%. 3-0, 30%.

Okay. So who are the other competitors?

[Foreign Language] Tata. Tata is not [Foreign Language]. Tata [Foreign Language]. So Tata is in solar panel, [indiscernible], VFDs, structure or pump motor [Foreign Language]

[Foreign Language] Tata Solar Panel [Foreign Language] solar panel [Foreign Language], right?

Right. [Foreign Language]

[Foreign Language]. Solar panel prices have gone up in last quarter?

Yes. [Foreign Language]

So are -- we expect the [indiscernible] this quarter, Q1, or Indian -- can margins [Foreign Language]

[Foreign Language] quarter-on-quarter and year-on-year. Growth [Foreign Language]

[Foreign Language] margin at 9.3%. So [Foreign Language] 15% [Foreign Language] going ahead?

[Foreign Language]

So our product, the majority is -- what is the majority raw material which is used in...

50% [Foreign Language] solar panel [Foreign Language]

Okay.

[Foreign Language]

Is it a major concern? This [indiscernible]?

[Foreign Language]

Okay. But -- okay, sir. [Foreign Language] Africa export [Foreign Language]

[Foreign Language]

And are we expecting better margins in there?

Yes.

What are the margins -- export [Foreign Language] go up [indiscernible] unless the U.S will make [indiscernible]. And now everything has opened up. So can we export on U.S. and other markets also?

[Foreign Language]

The next question is from the line of Niteen Dharmawat from Aurum Capital.

Sir, I just have a [indiscernible]. [Foreign Language]

[Foreign Language]

Okay. [Foreign Language], by the way. [Foreign Language]

[Foreign Language] 90 days [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] consolidated?

Consolidated? [Foreign Language] Dinesh [Foreign Language] update.

Sir, around INR 100 crores.

[Foreign Language]

The next question is from the line of Hardik Vyas from The Economic Times.

Sir, [Foreign Language] 40% [indiscernible] selling price to [indiscernible] Hotel. So the 40% is the solar panel cost [Foreign Language] prices.

[Foreign Language] price freeze, solar panel [indiscernible] [Foreign Language]

[Foreign Language]

[Foreign Language] price.

[Foreign Language]

[Foreign Language]

Got you. Are these -- [Foreign Language]

Right.

[Foreign Language]

[Foreign Language]

[Foreign Language] December quarter [Foreign Language] margin tie September quarter [Foreign Language]. But how are we looking at the raw material prices moving from here?

[Foreign Language] definitely improve or [ slightly ] improve.

Okay. Sir, I believe we don't have that clause in our KUSUM [indiscernible] price increase in [indiscernible] to maintain our margins. [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Well, I'm glad [Foreign Language]

[Foreign Language] export price increase here. B2C market [Foreign Language]

Got you. Export margins [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sir, last question [Foreign Language]. EPC [Foreign Language]

The OEM specifically [Foreign Language]

Low margin [Foreign Language]

[Foreign Language]

The next question is from the line of Forum Makim from Equitree Capital.

I have a couple of questions. Sir, last year, 1.5 lakh [Foreign Language] 3 lakh 17,000 tonnes installed [Foreign Language] considering it's not low implementation or KUSUM Scheme there.

[Foreign Language]

[Foreign Language]

Yes. Last year, [Foreign Language]

[Foreign Language] 1 lakh 50,000 contracts. Now this is 80,000 you implement. [Foreign Language]

[Foreign Language]

So your 3 lakh 17 May last year [Foreign Language]

Yes.

Okay. Okay, sir. Oh, sir, your 3 lakhs 17 [Foreign Language]

[Foreign Language]

So then [Foreign Language] 3 lakhs 17 [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language] 2 lakhs [Foreign Language] INR 2,000 crores [Foreign Language]

[Foreign Language]

[Foreign Language]

Right. Right.

Okay. As well, [Foreign Language]

[Foreign Language]

Okay. Okay. [Foreign Language]

[Foreign Language]

Okay. Okay. So sir, [Foreign Language] or finished good inventory [Foreign Language]

Actually, finished goods [Foreign Language]

[Foreign Language] electronic components' stock level [Foreign Language]

Okay. Okay. So [Foreign Language] 1 lakh [Foreign Language] inventory or consign?

Yes, yes. Definitely, Consignment.

Are [Foreign Language] working capital requirements [Foreign Language]

[Foreign Language]

Okay, sir. And sir, at these volume numbers, [Foreign Language] or FY '22 [Foreign Language] breakout of KUSUM, OEM or export [Foreign Language]

[Foreign Language]

[Foreign Language]

[Foreign Language]

Sir, just one last question. [Foreign Language] price, raw material price [Foreign Language]. Will price revision continue [Foreign Language]

[Foreign Language]

Okay. [Foreign Language] INR 250 crores [Foreign Language]

Well, actually, project [Foreign Language]

[Operator Instructions] The next question is from the line of [ Jatin Kumar ] from Alpha Capital Advisors.

[Foreign Language] 8 lakh pump [Foreign Language]. So it's not conservative guidance [Foreign Language] [ 40% ] growth [Foreign Language].

[Foreign Language]. Otherwise, definitely, [Foreign Language]

Okay, sir. [ 40% ] growth [Foreign Language] domestic or export [Foreign Language]

[Foreign Language]

Okay, sir. So sir, [Foreign Language]

[Foreign Language] 6% [Foreign Language]

[Foreign Language]

[Foreign Language]

[Operator Instructions] The next question is from the line of Anurag Patil from Roha Asset Managers.

[Foreign Language]

[Foreign Language]

[ BLI ]

[ BLI ], yes. Yes. [ BLI ], yes, yes, yes. Good question. [ BLI ], yes, [Foreign Language]

There's no investment plant currently or...

[Foreign Language] capital investment, but there's no plan [Foreign Language]

Okay. So [Foreign Language] FY '23 [Foreign Language]

[Foreign Language], yes.

[Foreign Language]

[Foreign Language] R&D from 60%, 70% [Foreign Language] motor or chargers. [Foreign Language]

Sir, you [Foreign Language] FY '24 or [Foreign Language]

Right, right, right.

The next question is from the of Akshay Kothari from Envision Capital.

[Foreign Language] Shanghai, Bangladesh. [Foreign Language]

Right. [Foreign Language] 100% [Foreign Language]

The next question is from the line of [ Hadidi ] from [ Niveshe ].

Can you hear me, sir?

Yes.

So -- yes. So the structure which you were talking about, [indiscernible], you're talking about the China subsidiary?

[Foreign Language] 100% [Foreign Language]

Okay. Okay, sir. And sir, [indiscernible] on China. Many companies [Foreign Language]

[Foreign Language]

Okay, sir. And sir, the capacity utilization for [indiscernible]?

[ About 80% ] [Foreign Language] 35. So 37.

For this site, sir, any reason for this capacity utilization? Do you have a target [Foreign Language].

[Foreign Language]

Okay, okay. And sir, just regarding the CapEx thing, many questions [indiscernible]. Sir, upon -- currently, it's just EV you have now? Is there CapEx planned there?

[Foreign Language]

Okay, sir. Got it.

[indiscernible]

Sorry, CapEx planned. [Foreign Language] panel.

Sorry, sir?

CapEx planned? [Foreign Language]

Okay.

[Foreign Language] R&D plus other expenses [Foreign Language]

Okay, sir. Sir, going forward, [Foreign Language] CapEx planned as we are introducing controller, motor and chargers?

Yes, yes. [Foreign Language]

[Operator Instructions] The next question is from the line of [ M. S. Raja Sekkar ], individual investor.

A [indiscernible] company. You are basically a solar pump company. And [indiscernible], you are mostly dependent on the government's KUSUM Scheme. But [Foreign Language] KUSUM Scheme [Foreign Language] So my request to you is a KUSUM Scheme, government scheme [Foreign Language], I think we should not depend on that. You should depend on OEMs and other market or other installations because KUSUM Scheme, other -- if you depend on the government scheme, [indiscernible] performance [Foreign Language] How do you come out of KUSUM Scheme? KUSUM Scheme [Foreign Language]

Yes. Actually, [Foreign Language]

[Foreign Language] last year 33 [Foreign Language]

[Foreign Language]

No, no. Of course, [Foreign Language]

[Foreign Language]

And you're right. [Foreign Language]

[Foreign Language]

And [Foreign Language] you should depend on the other market other than KUSUM. KUSUM [Foreign Language]

Yes, [Foreign Language]

Thank you very much. Ladies and gentlemen, due to time constraint, that will be the last question for today. I now hand the conference over to Mr. Dinesh Patidar for closing comments.

[Foreign Language] Thank you.

Thank you very much. On behalf of Shakti Pumps (India) Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.