Analyst Meet / AGM     19-Feb-19
Conference Call
IFGL Exports
Lower Dec 18 qtr margin was a one-off
The company held its conference call on 19 Feb 2019 and was addressed by key management

Key Highlights

World's steel demand is going to increase due to rising demand from BRICS countries. India's steel demand is expected to increase by 6-7% due to increase in infra and construction activities.

India's steel production was up by 4% in April to Dec 18 period. India is now the world's second largest steel producer, surpassing Japan. Steel consumption in India is expected to grow by 5.7% YoY and reach 92.1 MT in 2018 (as per World Steel Association).

Fresh Capital Investments into capacity expansions and resolution of NCLT cases will lead to further production to match the increasing demand.

Global Refractories Market is estimated to grow at a CAGR of 5.2% and reach a size of $ 48,620 Million by 2023. India is expected to exhibit promising growth in the global refractories market and grow at a similar rate. The rise in Demand can be attributed to increased Capital Investments in various sectors as well as increased infrastructure & construction activities.

Ebidta margin for Dec 18 qtr at consolidated level was at 10.3% prior to goodwill write off of Rs 6.7 crore. This is as compared to margins of around 12.5-13% normalized margin for the company.

The margins were lower due to increased trading activity than manufacturing. The margin for Dec 18 was a one off and margins will come back to normalcy in coming quarters.

Monocon reported net sales of around 21.6 M Pound up by 14% YoY for 9 mths ended Dec 18. There was a 13% growth in Ebidta. Limited scope for further margin improvement in Monocon which remains around 8.5%.

Hoffman revenue for 9 mths ended Dec 18 stood at 7.7 M Euro up by 6%, Ebidta breakeven but some losses at PAT level. German market is becoming too cost competitive. Limited scope for margin improvement as well, but higher volumes will make it green at PAT level in coming quarters.

Expects around 14% kind of net sales growth and margins of around 12.5% on consol basis will be maintained.

80% capacity utilization at Kandla facility. Will inch towards 90% in FY 20. Around Rs 30 crore of capex in Kandla facility for new products in refracrory space to get commissionned by end of Mar 20.

No change in working capital cycle.

No price increase made

Raw material price is steady.

Rs 22 crore of gross debt. At net level the company is a debt free company.  

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