Stylam Industries Limited (526951) Earnings Call Transcript & Summary

Thanks for the opportunity here. I'm an individual shareholder with your company. I just have 2 questions. First thing is regarding the delay in the plant commissioning because in the last con call, as far as I remember, if I remember correctly, Mr. Jagdish Gupta said that there were some issues that are environmental parent which was then set out and the plan had to -- was supposed to be commissioned soon. Now this time, again, there's some delay and the reason is now in family crudes. So I request some clarity on the issue, like -- or if there is some other strategic reason because of which we cannot diverge the final details, so that is also understandable, but if you can share that. Also second question is regarding ICA partnership, and I believe that ICA has nominated some members on the board already. So there will not be some road map, which must be visible to the growth of the company. So again, if you can share that, if there's not any strategic limitations to that, you can help us. Being investors in our company, it will give us some clarity on the issue.

Yes. Yes, sir, [indiscernible] you mentioned that at [indiscernible].

Sir, sorry, sir, but your voice is very feeble, if you can -- I don't know if mic position or something, but we are able unable hear you properly.

Hello. Now it's okay?

Sorry to interrupt, sir. I would request you to please come closer to the device a bit and then speak. Can you hold the mic towards your mouth and then speak.

It is okay now.

Yes, sir, it's okay.

[indiscernible] environment problem. We will go to at media [indiscernible] in the note number of reps that [indiscernible]in instruction we're going to define the customer to market on. May last year, last thing on that so big [indiscernible]. Now we [indiscernible] already going on. We have quite a full year in line. We already are in [indiscernible] market and has a plan and we're [indiscernible] We have maybe 1 reason more mentioned, how we can [indiscernible] we are more [indiscernible] than. So certainly, then some going [indiscernible] of binders. So a commission production right. So I think, like we mentioned, that there actually [indiscernible] again on the and they have not given anything and measures we discuss anything for the future. In and particularly striving not deviate of about 9 years, our market already side [indiscernible] and their profit only the for front, other plans [indiscernible] where ideas a more liquidity stratification. That they're very happy with the [indiscernible] going. And we this estimation and we have shared that this year also [indiscernible] not also in more time into that mentioned there.

Okay, sir. And sir, 1 more thing. Like with this open offer thing, ICA not getting the full share what they wanted. There was supposed to be some offloading from your side to them. So if that...

[indiscernible] we are not in a a loan retire.

Correct, sir. So like now you, again, are going to increase your stake, but what do you plan to do so? Are we going to increase the stake from the open market

we are and [indiscernible]

Any differential allotment plan, sir?

Sorry to interrupt Mr. Rahul. I would request you to join back the queue as there are participants waiting for their turn. We take the next question from the line of Aditya Srinivasan, an individual investor.

Congratulations on a great set of numbers. So you mentioned that in the domestic market, we will see good change really from Q3 of FY '27. So I just want to know how it's going to ramp up? And what will be the revenue share what can we expect the revenue share, maybe a tentative percentage? Also with the export share contracting, how can we expect the EBITDA margins to move as well? So this is my first question. I'll come back with my second question once we are done with this question.

I think there won't be any contraction in the export market at all. I think the ratio might be thin and the market we are doing a of revenue right now the that might increase in the focus on the [indiscernible] we are trying to run the domestic market in a very efficient way so that it won't hamper the margin at all. And again, Q3 onwards, we expect the numbers to be better. Again, the [indiscernible], would be ramping up to file you will see that in the number.

Understood, sir. And also for my second question, on the new upcoming plant, before you mentioned at the 35% to 40% capacity utilization, revenue of about INR 350 crores to INR 400 crores. But now

No, no, we said in I say 25% to 30% on a conservative basis.

We take the next question from the line of Yogansh from Mittal Analytics. I would request you to please come closer to your device and then speak. Your voice is coming a bit low.

Is it better now?

Much clear.

Congratulations to the entire Stylam team for great set of numbers. Sir, most of the questions have already been answered, so I won't repeat them. Just one question on your domestic side. Like in the last con call, you were mentioning that you have taken certain price hikes. So keeping that price hike in mind, if you could just share what was that price hike? And with the price hike, we don't see a meaningful change in the top line year-on-year. So if you could just broadly explain that. And also now with the improved metrics that you are putting in place, how would the EBITDA margin on the domestic side change? We understand that before the past issues baggage was there and the EBITDA margin on domestic side was lower. So going forward, how do you see those things trending? Again, not a very near-cycle change I'm expecting from your answer, probably you can talk about the year's plan that you have.

I think on the last but we were asking your first question higher price in [indiscernible] second point will be regarding your domestic definitely quarter 1, the venue will be had at what we will do in Q4 or maybe early years behind and do see Q2 so you see the ramp-up of the volumes that may be you see a significant drop out. So it is [indiscernible]

Got it, sir. And sir, on the EBITDA margin side, if you could guide how that will be?

We are looking at. We actually don't calculate both separately or is just difficult to target EBITDA margin for domestic and exports looking at new production, which is how many of the ones which are. Almost everything is coming in deciding in an debate. But I think the margins would kind of be delayed.

Got it, sir. And sir, on the ICA's partnership that you've been talking about and a lot of participants have several questions around it. So you said we will be taking care of the business, the operations, even the market development and PatMax will go for a tech transfer from them. right? So this tech transfer will be related to the laminate product or any other product? Because I suppose there are...

For anything [indiscernible] for anything. And this was -- this is nothing new. Disposal there is a strategic partner in the company on by [indiscernible]. This will be a technology transfer and any [indiscernible]

We take the next question from the line of Chirag Shah from White Pine Investment Management.

Congrats for good set of numbers. questions on [indiscernible] business. So one, can you update where are we in the cost expression? And does it also mean we need to add more SKUs as well as having more distributors are covered region? And by when do you expect the cost correction will be over -- if we have more another 6 months to 12 months, most of the work is done?

Correct. I think you're right it. On 3 to 6 months, adding more distributors adding more partners in various markets. And we were actually not [indiscernible] any of the [indiscernible] enter the market and maybe a team

Okay. And does it also more [indiscernible] to be added in the existing locations also?

Sorry, can you repeat?

More SKUs at the...

Not SKUs. [Foreign Language] again product launches. answer that you were actually much measured in many of the on that -- now the changing is just adding more cities, adding more [indiscernible].

And sir, second question is for us for CFO for the quarter, is that there has been a margin improvement in the domestic business, while revenue may be is stagnant. When we look at the data, there is a significant improvement in various cost items. So has the business -- and can you quantify the delta change. It was last [indiscernible]

I cannot comment on the chain, but actually we have stopped the market [indiscernible] many products.

Your voice is echoing.

I think just the losses have been renewed. That is the only thing which might be a improvement in the harness.

Okay. And on the U.S. exports, anything you would like to share again update in terms of traction or anything -- any update you would like to share on the U.S. region exports?

So nothing to share as of now. We are supplying there. I think the [indiscernible] move on up to you as an but in today's money was mentioned that have been unable and proven earlier and as a country as of now.

Yes. So now I presume customers would be coming with orders, right? [Foreign Language] variety of reasons

[Foreign Language] So there is no change in the [indiscernible].

Okay. So but we are not interested...

Could you please rejoin the queue. We take the next question from the line of Anup Parik from Anand Rathi Shares & Stock Brokers.

Sir, can you give us some sense of what is the current cost of the [indiscernible] and minimum in rupee? And do you expect any further cost inflation.

[indiscernible] We cannot predict the longer parenteral on bank and this [indiscernible] and even if we were to remember raw material in a on a raw material, [indiscernible]

Okay. And how much price hike we've taken in the domestic market in FY '27? And do you expect...

There are multiple [indiscernible] I will not be in a because of a every drains -- and as does not even see any case price hike because in the normal, it's in the same. If it further [indiscernible] investigation open, then we have to do.

Understood. And sir, what is the reason for 10% Q-o-Q decline in the low cost and also a sharp ration the depreciation. So if you can give us a sense on what would be the quarterly [indiscernible] depreciation amount as commissioning of the new laminate plant?

[indiscernible]are you talking about.

Yes. 10% CRP reduction. So what could be the reason.

And I think your voice is not audible 10% reduction, I do not understand.

Am I audible?

Can you repeat your question?

What is the reason for 10% Q-o-Q decline in the employee cost and a sharp revision in the depreciation amount? And also, what would do quarterly depreciation for commission with the new laminate plan?

[indiscernible] going forward, firstly, for the quarter, i.e., we employ cost immediately [indiscernible] we use for a plan already have [indiscernible]. The basic [indiscernible] cost of labor or [indiscernible] but they are already higher very high. So all good [indiscernible] I think you are comparing the [indiscernible] correct?

Comparing to the previous quarter quarter-on-quarter.

Yes. So basically, in the year, we we are doing some [indiscernible] additions. So that addition, we are considering the [indiscernible] in the last year. So we see [indiscernible] in the 6 months when we comparisons, we are going to [indiscernible]

Yes. Sir, last question, what is the proportion of the laminate revenue comes from U.S. and what portion comes from Middle East market?

From Middle East market, I think that I don't have the numbers in my hand and then we [indiscernible] number. I think U.S. would be [indiscernible]

Sir, can you repeat 10% to 11%?

U.S. and Middle East both would be 10% to 11 % each.

We take the next question from the line of Ankur Kumar from Alpha Capital.

Sir, actually, your voice has been very difficult to understand. So my questions are mostly repeat. So I wanted to understand, you're saying this new capacity is going to come from September, and we expect INR 300 crore type revenue from this plant in this year and next year, around INR 600 to INR 700. Am I understanding it right, sir? And on debt -- correct. Okay. And on depreciation and employee, can you repeat on what number you said, sir, I couldn't understand.

To the employee costs will be in the [indiscernible] last quarter in the -- that is where we are expecting the same in [indiscernible]

Okay.

And depreciation revenue now for the new plan [indiscernible]

Sorry, sir, depreciation would be?

[indiscernible]

Okay. Sir, I couldn't understand. Maybe you can upload transcript, I'll read through that.

We take the next question from the line of Rudraksh Raheja from ithoughts financial consulting.

Just one question on the export front. Could you help us understand which other markets that are doing very well for us, and this is the highest quarterly exports we have already done? And how do you see this going forward? Do we need more geographies? Or will we generate more growth from the existing geographies?

We will really grow on the exixting geography as well as having [indiscernible] also secondly, Europe is our most -- Europe is the region [indiscernible]

Got it. And there are no challenges in the U.S. and the Middle East as of now.

As of now, there are any [indiscernible] right now for Middle East. In fact, in the entire world right now, Europe is [indiscernible] and that is part of the business [indiscernible].

Ladies and gentlemen, we take that as the last question for the day. So on behalf of Systematix Shares & Stocks Limited, that does conclude this conference. Thank you for joining us. You may now disconnect your lines.