Analyst Meet / AGM     27-May-24
Conference Call
GMM Pfaudler
Cost optimization to result in improvement in profitability

GMM Pfaudler hosted a conference call on May 22, 2024. In the conference call the company was represented by Tarak Patel, Managing Director.

 Key takeaways of the call

Business diversification strategy of the company has helped it mitigate the slowdown in the chemical sector and allowed it to focus on non-traditional industry segments.

Ongoing cost control and operational excellence measures have helped it maintain margins and positions it well for future.

Consolidated Order Backlog as end of Mar 31, 2024 stood at Rs 1,689 crore(down 22%YoY, up 4%QoQ). Order Intake in Q4FY24 stood at Rs 861 crore, up 14% Q-o-Q and that for FY24 stood at Rs 3014 crore (down 11% from Rs 3392 crore). Order intake is driven by technologies (non glass lined) and systems.

Standalone order backlog as end of Mar 31, 2024 stood at Rs 459 crore (down 16%YoY, up 6%QoQ) and order intake in FY24 was Rs 945 crore (down 15%YoY). International order intake in FY24 was down 10% to Rs 2178 crore and the order backlog was Rs 1249 crore (down 25%YoY).

In FY25 while India margin stand stable, there is improvement in profitability of international business.

Cost reduction and operational excellence measures continue across geographies. Restructuring of UK operations in final phase. The company expects china recovery is soon.  The company is also increasing automation in India operations and all this are expected to boost margin going forward.

Revenue and EBITDA guidance for FY25 given earlier was Rs 3700 crore and Rs 630 crore respectively. As of now the company is not changing the guidance. Considering the revenue of Rs 3446 crore and EBITDA of Rs 477 crore (@13.8% margin) for FY24, meeting EBITDA target may seems tough. But the company is taking  up cost optimization and the company will revive the FY25 guidance two quarters down the line.  With cost optimization, the company at least expects to maintain core EBITDA margin.

Capacity utilization at India operations for glass lined equipment was  65% and for others it is about 75%.  

Edlon order intake and EBITDA performance ahead of plan.


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