Analyst Meet / AGM 18-Aug-15
Conference Call
Himadri chemicals
Expects to benefit from growth in auto segment
Himadri chemicals conducted conference call to discuss the results for the quarter ended June 2015.Senior management of the company addressed the Concall.
Highlights of the Concall
Net Sales were Rs. 275.8 crore, representing a fall of 21.5% as compared to Q1FY'15 primarily driven by decline in sales price y-o-y
EBITDA was Rs.16.6 crore for Q1FY2016,a decrease of 63.5% compared to the same period last year. EBITDA margin was at 6.0% vs 12.9% in the same period last year primarily due to lower realisations
The company had a net loss of Rs. 20.1 crore as compared to a profit of Rs. 14.4 crore in Q1FY2015. PAT for the quarter was impacted due to lower operating profit
The headwinds of the s
luggish aluminium and steel sectors coupled with unfavourable currency fluctuations continued to impact financial performance during Q1FY'16 with revenue declining by 21.5% and operating profit by 63.5%.
The slowdown in the steel sector has been prolonged and harsh. It has been reeling under the pressure of overcapacity, waning demand and declining prices. The major steel producing country, China, has been exporting significant amount of steel at lower prices owing to its weakening domestic demand and stagnant economy
Steel demand from India is likely increase in the near to medium term however it is unlikely to be sufficient to offset the decline in China. The steel consumption in India is expected to grow by 7% in FY2016.
The aluminium industry is in a tight spot due to surging cheap imports into India and declining LME prices. Industry has made proposal has been made to the Government to increase the import duty to bring some respite in the near term
The long term prospects of the steel, aluminium and auto sectors in India is promising as the Indian economy is back on the growth track due to the increased demand from key sectors of economy such as infrastructure, logistics and real estate. The revival in the economy is bound to increase the demand for all its primary products.
Himadri chemicals is also expected to benefit from the growth in the auto segment primarily the commercial vehicle segment
The domestic tyre demand is expected to grow by 4-8% over the next three years. Over the medium term, the competitive intensity in the tyre industry will rise with expected commissioning of several Greenfield and Brownfield capacities by domestic as well as international players
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