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Analyst Meet / AGM - Analyst Meet

Expects entire building product segment to do well in general in FY 19 due to election year

Everest Industries

21-Mar-2018, 02:39
In interaction with Mr. Manish Singhi, Managing Director on 20 March 2018.

Key Highlights

Roughly, around Rs 600 crore of sales come from Roofing segment, around Rs 200 crore from Boards and Panels and around Rs 500 crore from Prefabricated Engineering (PEB).

Company has market share of around 16% in roofing and 22% in Boards and Panels. It was able to gain market share in roofing segment, but had lost market share in Boards and Panels from 30% to 22% due to increase in competition.

Exports account for around 25% of Boards and Panels which was earlier at 50%. While exports have bottomed out, it will not be possible to reach to 50% of total sales going forward. The company will follow a dealer distribution model in exports and offer a complete solution instead of products in Middle East. No plans for any manufacturing unit there.

Expects entire building product segment to do well in general in FY 19 due to election year where we will see higher spending from government on rural infrastructure. Home for all, swatch bharat will do well in FY 19.

Company has introduced various new products in roofing and this is well accepted by the market. While the overall market growth was sluggish in the past, the company was able to garner more market share.

FY 17 was an aberration year for the company. Management says to forget it and move on. The company's internal target is to grow net sales by around 20% every year.

FY 13 Ebidta margin was around 10%. Expects to reach to this kind of margin in next 2-3 years of time frame.

The company has around 6 lines of roofing which gives them a capacity of around 6 lakh tons which translates into sales of around Rs 700 crore. Boards and Panels at optimum capacity can generate sales of around Rs 300 crore and PEB has capacity of around 60000 tons which translate into sales of around Rs 650 crore. At optimum level, these are the capacities and sales that the company can generate.

PEB is more of capital employed business. Around Rs 125 crore of capital is employed in this segment every year and company aims an ROC of around 18-20% every year. That's how this segment has to be looked into rather than sales and margin which fluctuate due to fluctuating steel prices.

Capex will be around Rs 25-30 crore every year largely on maintenance and others.