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00:00 I want to first off talk about Carborandum Universal.
00:04 You know, last two days, we've seen a 2% tank on the stock today.
00:10 You know, going to try and break this down a little bit more because we've got decently
00:15 positive commentary coming from this one.
00:18 Let's first off welcome the management, the managing director of the company, Sridharan
00:24 Rangarajan to talk to us about the numbers.
00:27 Welcome to NDTV Profits, sir.
00:29 Sure, pleasure.
00:30 Thank you.
00:31 Right.
00:32 So I want to first off try and understand what the outlook for FY25 is like.
00:38 What can we expect in terms of top line growth because Q4 was a flat year on a top line level
00:44 for you.
00:45 Absolutely.
00:46 Good.
00:47 Thank you.
00:48 I think as a full year, we delivered 4,628 crores in FY24.
00:55 If you exclude the exchange impact, it's a 7% growth.
01:00 Profit went up by 18.5%.
01:02 Free cash flow conversion is at 86%.
01:05 So it's a very good overall result.
01:09 PVAT margin improved by 170 bps.
01:13 On back of this, we are getting into FY25.
01:16 We feel that 9 to 11% growth overall is what we are expecting in FY25.
01:23 Carbon could grow about 11 to 12.
01:25 Ceramics could be 12 to 14.
01:27 Electro minerals about 5 to 6%.
01:29 This is what we are expecting.
01:32 Sure.
01:33 Okay, I take your point.
01:34 And with regard to margins, should we expect a margin improvement in FY25 from here?
01:42 Scope?
01:43 Right.
01:44 For FY25, I expect the overall margin of 13.5 should improve by 20 to 30 bps point.
01:53 The braces, we expect it should go up by 100 bps in FY25.
01:59 Ceramics could be, we will be able to maintain the same, which is at 26.5%.
02:03 Electro minerals, we see an improvement of 20 to 30 bps point.
02:08 This is what we are expecting.
02:11 Okay.
02:12 So, while I delve into some of these, you have also started your new business or rather
02:18 looking at electro minerals in a more active fashion and possibly even starting sale in
02:24 FY25.
02:25 So, from the growth that you are projecting in terms of revenue, how will the mix evolve?
02:33 What will contribute to this growth?
02:35 If you can talk to us about that.
02:36 So, electro minerals, the way I would like you to look at it is we have core products
02:42 and speciality and transformational products.
02:45 Core products include white fused, brown fused alumina and silicon carbide and some semi-fryable
02:51 products.
02:52 But as far as the speciality and transformational, we are looking at alumina, zirconia, zirmal,
03:00 silicon nitride, graphene, high purity silicon carbide.
03:04 This is the basket that we are trying to grow.
03:07 Today, this basket is about 11 percentage of our portfolio.
03:11 We are looking at at least taking this to 25% by 2030.
03:18 Got it.
03:19 And therefore, in FY25, where would growth shape up from?
03:25 What are those levers which you would use to grow?
03:28 So, the levers for the growth in abrasive is the industrial market growth in India,
03:36 as well as in Rodius in Germany and Avoco.
03:39 These are the two recent acquisitions that we have done.
03:43 So, this is the portfolio that we are looking at as abrasives growth.
03:48 As far as ceramics, I think the growth trajectory largely comes from, I would say, what we are
03:54 trying to get into ceramics for the semiconductor and ceramics for the EV industry and ceramics
04:00 for defense industry.
04:02 These are the three vectors of growth that we are looking at as far as ceramics are concerned.
04:09 Electro minerals, we are getting into, as I said, more towards the speciality and transformational
04:15 product.
04:16 But this will be a progressive growth from today's 11% to 25% by 2030.
04:23 How does HPSC fit into all this?
04:27 Because that's something new that you've ventured into.
04:31 And you know, you've possibly, if I understand correctly, you've done all your tests and
04:38 you have a 6MT capacity as well.
04:42 So where should that go and how should that start to contribute both to top line and margins?
04:47 Right.
04:48 I think, just like to clarify, high purity silicon carbide is what you mean by HPSC.
04:56 We are setting up a facility of 6/10.
04:59 We have not yet done.
05:00 We will expect in the next 18 months, this facility should be up.
05:04 This will serve two broad areas of industry.
05:07 One is technical ceramics.
05:10 That's one growth area that we are looking at.
05:12 The other growth area is silicon carbide based, you know, semiconductor wafers.
05:20 That's what is the next area that we are looking at.
05:23 We will be supplying to those industries where epitoxial growth and people related to that
05:29 will start buying our product.
05:31 So these are the two vectors of growth that we are looking at.
05:34 Okay.
05:35 Could you quantify the margin improvement, which one can expect, maybe even a band for
05:40 FI25?
05:43 So FI25, I did tell that, you know, we are looking at 20 bps to 30 bps in electro mineral.
05:49 So overall also 20 bps to 30 bps.
05:52 But I think we should look at this margin improvement in a five year horizon, which
05:57 will be far, far better.
05:59 And what would that number be over a five year horizon?
06:02 I am not able to guess at this stage, but it's going to be a very good number.
06:07 Sure, and the five year revenue CAGR, what would that be?
06:12 So right now we are doing at an organic growth of about 8%.
06:17 With including acquisitions, we are growing more than about 12% CAGR.
06:22 Should be far higher than this.
06:25 Okay.
06:26 The management of Carborandom Universal.
06:29 Thank you so much, sir, for speaking with us.
06:31 It's a pleasure speaking and understanding all of these different metrics.
06:35 Thank you.
06:36 Thank you.
06:37 Thank you.
06:38 (dramatic music)