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GMM Pfaudler
hosted a conference call on Feb 6, 2025. In the conference call the company was
represented by Tarak Patel, Managing Director.
Key takeaways of
the call
Order intake in
Q3FY22 was up 5% to 798 crore and for 9mfy25 OI was up 13%yoy to Rs 2442 crore.
Order Backlog as end of Dec 2024 was up 7%YoY toRs 1740 crore [including
international OB of Rs 1207 crore, down 2%YoY &6%QoQ; domestic OB of Rs 577
crore, up 8%qoq & 33%yoy].
Opportunity
pipeline remains stable across geographies, product mix continues to evolve.
All GLE
production have moved to one facility i.e. Gujarat with the company closing the
Hyderabadmanufacturing facility. Operating out of two plants at 60% capacity is
not a prudent strategy given market conditions and orders on hand. The company
will be start using the Hyderabad manufacturing facilityagain once the GLE
volume picks up and new product line demand comes up.
The general
weakness in chemical industry continues, negatively impacting capex cycles and
new investments. Despite this slowdown, our shipment, order intake and backlog
for this quarter remain stable.
Chemical is bit
slow slowdown in agrochemicals some volume has picked up despite margin under
pressure, in next few quarter some investment to happen. Fine chemicals expect
investment to pick-up. Pharma quite positive some traction in SI pharma, added
significant capacity in Hyderabad.
Its diversification
strategy are start yielding fruits. The company have made up some of shortfall
from new industry verticals such as Oil & Gas, Petrochemicals,
Semi-Conductor and Metals & Minerals.Mixing, non glass line engineering and
solid separation etc. are turning in growing numbers.
Worst is behind
and two quarter away for full turnaround.While the outlook remains stable for
this financial year, the company continue to focus in its efforts on
strengthening its market share, reducing costs and improving efficiencies.
Currently the focus of the company is to have stable FY25 and at the same time
increase order intake and order backlog to support strong execution right
through-out the next fiscal.
Poland
manufacturing facility Investment agreement signed and executed in Dec’24. This
along with rationalizing UK manufacturing facility also help profitability at
international business.
Revenue stable
and EBITDA up 3% compared to Q2 FY25.
EBITDA margin improved to 12.0% compared to 11.6% for Q2 FY25.
GLE orders
volume has increased. GLE business internationally
also to improve in next 2 quarters.
EBITDA margin
for current fiscal is expected at 12%. Want to improve the margin for next
fiscal but putting a number will be difficult.
Services –
growing domestic/Indian services biz (which has a better margin) is a priority
from current single digit to a contribution level of services in the company’s
international biz. The company has made
organisational change and start increasing focus on services.
GLE no Chinese
players in the Indian market. Globally GLE is bought from local manufacturers
as it requires higher level of after sale support. But as far as Mixing in
specific application there are Chinese competition.
Every product
range (except heavy engineering) it enters the focus is to have differentiated
products.
On consolidated
numbers the contribution of mixing is about 10-12%.
In terms of
industry wise revenue mix about 70-80% chemical &pharma, next big industry
exposure is O&G and petrochemicals.
Mixing cater to wider range of industries.
The company
apart from India has low cost manufacturing capability/facility at Brazil and
China to cater to the global demand and it is not necessary that the equipment
has to come from high cost facilities in US or Europe.
The company
executed 2 orders from Poland facility and it has one 3rd large
order to be executed in Poland.
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