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Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL


Here is a short summary from the Q2-FY18 Earnings Call Transcript of a few selected stocks. The sole objective of this post is to provide a quick short digest of disclosures relating to the company that came to the forefront during the earnings call. Over the course of this quarter, we intend to keep an eye out for the transcripts of other companies as well.
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Note: Capitalmind does not take any responsibility of the accuracy of the information provided by the management of the company.
Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL
Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL
Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL

Astra Microwave Products

Current Performance (Q2)

  1. While the company had given a guidance for the quarter of Rs.90 Crores, the company was able to generate business only for Rs.54 Crores [converted to IND-AS to regular accounting standard, this would mean Rs.69 Crores]. Exports stood at Rs.2.2 Crores.
  2. Reasons for the lackluster performance – Unforeseen technical related issues, delay in receipt of the free issue of material, moving of execution of contracts to the last quarter, change in the design to meet the cost, delayed new product development are some of the reasons. One of their DRDO related order has some issues. This had earlier got deferred from Q1 to Q2 and now has moved all all the way forward to Q4.
  3. Order book as on date for this year is Rs.170 Crores. Current order book is about Rs.576 Crores and the accumulated orders booked for the first six months is about Rs.170 Crores. Company is likely to book an additional Rs.300 plus Crore order during the remaining 6 months of the year. Full year guidance stands at Rs. 450 Crore which will be re-confirmed during Q3 results. [Rs.125 Crores worth work has been done for Bharat Electronics].
  4. Total order backlog – Rs. 585 Crores – Defense at Rs.322 Crores, Space at Rs.87 Crores and Exports at Rs.154 Crores with the remaining coming in from meteorology and other totalling Rs.23 Crores.
  5. Company is expecting about $200,000-$300,000 worth of order execution from the Singapore subsidiary – mostly through designing a couple of MMICs and is expected to break even from next year.
  6. Rafael JV – currently undergoing the design to cost model and is expected to be completed in at least six months’ timeframe. Contract is expected to come in Q1 next year with a target order value of Rs.70 Crores to Rs.80 Crores. This is the Air Force contract that the company [Astra Rafael JV] has bagged and is expecting at least another two years for this to mature.
  7. Long-term debt repayment beginning from Q2 of next year [a non-convertible debenture] – April repayment would be Rs.25 Crores and September repayment would be another Rs.25 Crores.

Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL


Current Performance (Q2)

  1. After a challenging first quarter that witnessed some GST-led wholesale destocking, the company recovered substantially to report a good second quarter.
  2. Domestic business – growth stood at Boroplus +38%, Navratna +16%, pain management +15% and male grooming (including Fair & Handsome +12%), Kesh King -16% due to the challenging trade sentiments in the wholesale channel.
  3. Close to 60,000 outlets were added In H1 FY2018. The count now stands at Rs.7.9 lakh retail outlets with a target to reach Rs. 8.3 lakh outlets by March 2018.
  4. 9 months growth guidance – 16% to 17% top-line growth with a volume growth of 13% to 14%. Company expects expect international business to do about 16% – 17% growth [growth contribution from new products is expected to be around 1% – 1.5%].
  5. 70% to 75% restocking has happened (post GST and demonetization), but the company is witnessing very different trends in different zones pre and post GST. There was faster recovery in South than North post demonetization. This time wholesale is seeing a slower recovery in South than the North.
  6. On the loan book of the company – debt has come down to Rs. 370 Crores from Rs.390 Crores at the end of September. While short term debt has increased, the company has been able to reduce long-term loans and expects to be debt free by the end of March 2018.
  7. Capex guidance for the current year stands at Rs. 150 Crores with the company looking at a Capex of Rs. 100 Crores for FY 2018-19.
  8. On the winter portfolio – Boroplus has seen a growth of almost 37%-38% and the management is optimistic of closing the quarter with good numbers.


Company is looking forward to early signs of recovery in the overall industry environment along with stabilization of the post GST scenario. Expect normal monsoons, increasing rural income, benign raw material cost, enhanced government spending and streamlining of GST in generating good growth on medium-to-long-term basis.
Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL


Current Performance (Q2)

  1. Company has expanded capacity in the last two years with another 1.25 lakhs metric tonnes scheduled to get commissioned in Q4 FY2019. Company has increased by Rs.500 per tonne [chemicals business – soda ash] , the impact of which will reflected in the next quarter.
  2. Soda Ash business [based on data of the last 20 to 30 years] has had a very healthy margin of 28% to 30% [15 years back margin was Rs. 2,400; today the margin is around Rs. 7,000] and this is why the company is looking at setting up a Greenfield project for which the board approval was obtained. Time duration for this project to kick off will be around 5 years. Initial capex set aside is Rs.125 Crores primarily on the land [1200 acres or 1500 acres of land which could take 2-3 years to acquire] as well as the various approvals. The plant itself with half a million tonne capacity will cost Rs.3000 Crores over 5 years [Rs. 60,000 per tonne cost].
  3. New capacity on stream in Turkey for Soda Ash [primarily since China which was supplying 50% of the world’s soda ash is reducing output]. Of the 2.5 million capacity only a million has come online.
  4. Threat of the oversupply from Turkey of 2.5 million metric tonnes expansion had gradually faded away along with the recent change in the Chinese markets especially across the Chemical sector [the drop of 25% of the total supply or half a million tonnes in terms of capacity].
  5. Headwinds in the textiles business are not over yet with the company expecting the headwinds to continue for another 2-3 quarters before the situation gets clear – oversupply resulting in the drop in the prices, Rupee Dollar scenario, higher cotton prices and impact of GST.
  6. Textile business revenue dropped by approximately around 8% with capacity utilization at around 77%. Company does not see any top-line growth in these two quarters.
  7. Debt level stands at Rs. 1,360 Crores as compared to Rs. 1,430 Crores as on March 2017.
  8. Capex for 2017-18 and 2018-19 is Rs.500 Crores approximately of which Rs.300 to Rs.325 Crores is for the chemical business, Rs.160 Crores for the spinning business.

Q2-FY18: Earnings Notes: Astra Microwave Products, Emami & GHCL


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