Capitaline

Results 21-Jul-22

Analysis

Rajratan Global Wire

Targets 20-25% volume CAGR over next 3 to 5 years

Rajratan Global Wire consolidated net sales have increased 37.93% to Rs 251.43 crore in Q1FY23 compared to Q1FY22. Operating profit margin has jumped from 19.76% to 20.96%, leading to 46.34% rise in operating profit to Rs 52.71 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 60.56% to 60.68%. Purchase of finished goods cost fell from 2.92% to 0.33%. Employee cost decreased from 3.86% to 3.53%. Other expenses rose from 14.58% to 15.33%.

Other income rose 1,466.67% to Rs 1.41 crore. PBIDT rose 49.88% to Rs 54.12 crore. Provision for interest rose 12.84% to Rs 4.13 crore.

PBDT rose 54.05% to Rs 49.99 crore. Provision for depreciation rose 15.68% to Rs 4.28 crore.

Profit before tax grew 58.99% to Rs 45.71 crore. Provision for tax was expense of Rs 11.17 crore, compared to Rs 6.83 crore. Effective tax rate was 24.44% compared to 23.76%.

Net profit attributable to owners of the company increased 57.57% to Rs 34.54 crore.

Promoters’ stake was 65.00% as of 30 June 2022 compared to 65.00% as of 30 June 2021.

Commenting on the performance, Mr. Sunil Chordia, CMD, Rajratan Global Wire Ltd said

“We have continued from where we left off in FY2022 and have continued to focus on outperforming on previous benchmarks across all our production, sales, productivity, customer service and performance metrices. 3 key levers namely our recent debottlenecking at our Pithampur plant, our Thailand plant expansion and our upcoming Greenfield capacity at Chennai will also help us to grow at our targeted 20-25% CAGR (in volume terms) over the next 3 to 5 years.

We have also taken up digitisation efforts at our Pithampur (India) plant, which will also be replicated for our upcoming Chennai plant, this will help our production processes and systems become more efficient and smarter. Our rejection rates have continued to be below 0.02% in India which showcases our commitment to quality. Overall our entire team at Rajratan is geared up to “Outperform” on what we have already achieved”

Business highlights

Rajratan India

§ Average Capacity utilisation stood at 85%.

§ Digitisation of manufacturing process with introduction of machine data loggers implemented across all production departments.

§ Zero Liquid discharge facility fully installed and operational at India manufacturing unit.

§ New patenting furnace installed for 2500 MT, now operational thereby debottlenecking for incremental capacity utilisation.

§ Improved on-time dispatch rate to 92%.

§ Customer complaints continued to be at record low levels of 0.016%.

§ Capacity expansion update (Chennai – Greenfield – 60,000 TPA) - All approvals received from Govt of Tamil Nadu as per targeted schedule. 1st milestone of construction work completed as per schedule with 99% adherence to schedule.

Rajratan Thailand

§ The average capacity utilisation levels stood at 87%.

§ Improved on-time dispatch rate to 94%.

§ Customer complaints continued to be at record low levels at 0.032%.

§ Capacity expansion to 60,000 TPA under finalisation – awaiting final approval of EIA Audit.

§ Capacity expansion update (Expanding capacity to 60,000 TPA) - EIA audit completed with approval expected by September 2022. All major equipments / machines have arrived at site, with installation work in progress. Project is expected to begin commercial production by Q2FY23.

Full year results analysis

Net sales of Rajratan Global Wire have increased 63.37% to Rs 892.86 crore. Operating profit margin has jumped from 16.85% to 20.34%, leading to 97.14% rise in operating profit to Rs 181.59 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 59.95% to 59.55%. Purchase of finished goods cost fell from 1.25% to 1.13%. Employee cost decreased from 5.20% to 3.61%. Other expenses fell from 16.56% to 15.65%.

Other income rose 22.70% to Rs 2 crore. PBIDT rose 95.85% to Rs 183.59 crore. Provision for interest rose 15.24% to Rs 15.43 crore. Loan funds declined from Rs 142.29 crore as of 31 March 2021 to Rs 136.71 crore as of 31 March 2022. Inventories rose to Rs 81.91 crore as of 31 March 2022 from Rs 51.01 crore as of 31 March 2021. Sundry debtors were higher at Rs 180.95 crore as of 31 March 2022 compared to Rs 116.60 crore as of 31 March 2021. Cash and bank balance rose to Rs 8.44 crore as of 31 March 2022 from Rs 7.50 crore as of 31 March 2021.

PBDT rose 109.28% to Rs 168.16 crore. Provision for depreciation rose 10.07% to Rs 15.52 crore. Fixed assets increased to Rs 310.94 crore as of 31 March 2022 from Rs 250.85 crore as of 31 March 2021. Intangible assets stood at Rs 0.10 crore.

Profit before tax grew 130.40% to Rs 152.64 crore. Provision for tax was expense of Rs 28.31 crore, compared to Rs 13.12 crore. Effective tax rate was 18.55% compared to 19.80%.

Net profit attributable to owners of the company increased 134.01% to Rs 124.33 crore.

Equity capital stood at Rs 10.15 crore as of 31 March 2022 to Rs 10.15 crore as of 31 March 2021. Per share face Value remained same at Rs 2.00.

Promoters’ stake was 65.00% as of 31 March 2022 ,compared to 65.00% as of 31 March 2021 .

Cash flow from operating activities increased to Rs 119.16 crore for year ended March 2022 from Rs 38.71 crore for year ended March 2021. Cash flow used in acquiring fixed assets during the year ended March 2022 stood at Rs 87.33 crore, compared to Rs 27.56 crore during the year ended March 2021.

The scrip is trading at Rs 845

Rajratan Global Wire : Consolidated Results
Particulars	2206 (03)	2106 (03)	Var.(%)	2203 (12)	2103 (12)	Var.(%)
Net Sales	251.43	182.29	38	892.86	546.54	14
OPM (%)	21.0	19.8		20.3	16.9
OP	52.71	36.02	46	181.59	92.11	35
Other Inc.	1.41	0.09	999	2.0	1.63	39
PBIDT	54.12	36.11	50	183.59	93.74	35
Interest	4.13	3.66	13	15.43	13.39	0
PBDT	49.99	32.45	54	168.16	80.35	44
Depreciation	4.28	3.7	16	15.52	14.1	17
PBT before EO	45.71	28.75	59	152.64	66.25	52
EO	0	0		0	0
PBT after EO	45.71	28.75	59	152.64	66.25
Taxation	11.17	6.83	64	28.31	13.12	23
PAT	34.54	21.92	58	124.33	53.13	61
EPS (Rs)*	#	#		24.5	10.5
Notes
* EPS is on current equity of Rs 10.15 crore, Face value of Rs 2, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

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