Category
🗞
NewsTranscript
00:00Good morning and welcome to Earnings Judge, right here at NETV Profit.
00:09We're tracking Platinum Industries Limited right now on the back of their quarter 4 performance.
00:14The company recently listed on the bourses in the month of March 2024.
00:18For the quarter 4, the revenues grew by roughly 33% to come in at 80 crores, while EBITDA
00:24as well as PAT were high in the high single digits.
00:26We're now joined by Mr. Krishna Rana, Chairman and MD of Platinum Industries.
00:32Good morning, sir, and thank you so much for joining NETV Profit this morning.
00:36Good morning. Thank you so much for having me here.
00:39Firstly, sir, congratulations on your recent listing on the stock exchanges.
00:43I just wanted to start by asking you now on the company, how is the quarterly revenue been?
00:48We've seen an increase on the year-on-year as well as in the quarter-on-quarter levels
00:53from the roughly 60 crore average that you guys were doing in the past three quarters to 80 crores.
00:58What's led to the sudden rise in revenue, sir?
01:04Sir, just going back to the numbers, if I make you understand, the company has posted 231 crores
01:12of turnover in 2023 March. This year, the turnover that has increased has reached to 265 crores
01:20which is a 14% rise in the turnover. So, if you compare the last quarter,
01:27so normally in the pipe industry, in our plastic industry, there is a seasonal time which is from
01:34the month of June to September where the business is a little bit slower due to rains. But normally,
01:40all the pipe companies and the customers, they pick up their businesses from the month of September
01:46to March. So, last quarter, every company is on a higher production scale. So, that has also led to
01:53our increase in sales. Probably, if you see that we have also increased our margins. In 2023,
02:00we were on 16.16% PAT, but by 2024, we have posted 16.23% PAT. So, there has also been a
02:10marginal increase in the PAT percentage. So, talking about the quarter 4, we have also
02:17introduced a new product which has increased the sales of our company and which has led to increase
02:25in sales. So, we have crossed from 60 crores, we have jumped to 80 crores of turnover in the quarter
02:314. So, this new product that you have introduced, how much would that have led to the revenue
02:36increase? So, you can say 15% it has contributed in the revenue. Understood. And like you rightly
02:45said, you are in the PVC stabilizer business where you make the product as well as CPVC additives.
02:52Now, I wanted to just clarify before we go forward, would you also be subject to seasonal
03:00trends in the speciality chemical business or is it more that because you are supplying in the
03:04building material space in the PVC business, what kind of seasonal trends does your
03:11business see? Because in the speciality chemical business, and that's my next question,
03:15we've seen a lot of dumping from China as well in this product segment. So, how does the seasonality
03:21of which particular sector affects your business more? So, as I also explained to you that
03:29pipe industry like we are basically present in the polymer industry and PVC is our main,
03:36PVC as a polymer is our main focus. In India, if you see the PVC pipe sector,
03:41the polymer is consumed 75% in the pipe sector. And due to which that during the rains,
03:48that is every year from financial year April to March, June, July, August, these are the three
03:55months that affect the sales. But it is depending upon that which pipes are produced for plumbing
04:01application, for column application, that is underground pipes, for drainage application,
04:06for agriculture. So, normally if you see during the rains, plumbing pipes are manufactured more
04:13and the company stock it and other pipes are there, they are manufactured on the regular
04:17courses after the rains are over. So, there is a permutation combination of the product that
04:22the customers select in terms of manufacturing, but there is a hit due to rains because the
04:26agriculture sector during that period is down. Understood, sir. And is your product affected
04:33by any kind of China dumping? Mainly, do you see any kind of import substitution to your product
04:38that you sell here right here in India? See, as far as China products are concerned,
04:44we don't see any competition from China because of the quality parameters that we make over here.
04:49So, we have one of the biggest R&D centers in the country as compared to any peers that we have.
04:55We have people working in a lab who are PhD in polymer science, organic chemist, all from
05:01different educational background. We are researching heavily on different products,
05:06launching new products to the market and we see that the India demand, the need for the product
05:11in India is, in terms of innovation is extremely high and we are also supporting the government
05:18initiative of following the sustainability path. As far as the innovation is concerned,
05:24China, I don't foresee withstanding the competition over here in the country.
05:29That's great to hear, sir. So, on demand momentum, you did say that probably the second quarter
05:35is affected by rains and that's where the product, depending on the plumbing products,
05:40is more in demand. I just wanted to take a step back to take the whole financial year of 2025,
05:46how are you seeing the demand for the next particular year and if you have any insights
05:52on how the previous year was for you as well because you said that the quarterly revenue
05:55has gone up from 60 to 80 crores. Is this sustainable for the second half of the financial
06:00year? Would we see that growth and the company maintaining this particular revenue roughly around
06:0580 crores per quarter? Yes, I can say that we can bank upon this information. The reason is that,
06:12as I told you that there is an addition of a new product line. So, the basket of products that we
06:17carry in our company is the product mix is really good. So, say for example, if one particular
06:23product in one industry is not functioning or the sale is not happening, we have a chance of
06:29shifting to another product and where we can boost the sales. But looking at the introduction of the
06:33new products, we see a good boost in sales for the coming quarter, coming year. We are very,
06:38very positive on that. And just to take the question forward on margins, we did see in your
06:45RHP that the margins from a COVID low of 8% which was seasonally affected at that time,
06:51they've gone to roughly 26% in the September quarter and now as you mentioned for this
06:55quarter as well has done well. Do you see this particular range of roughly 19 to 20%
07:01in this particular range for this particular financial year on margins?
07:06So, are we speaking about EBITDA margins? EBITDA margins, yes, sir.
07:09Okay. So, yes, the EBITDA margins if you see in 2023, we were on 23% of EBITDA margins,
07:1823.73 to be precise. In the year 2024, our EBITDA margins have improved to 24.09%.
07:27So, that is almost 0.3%. You can say 15% rise in the EBITDA margin in terms of numbers. So,
07:36we increased from 54.93 crores to 63.69 crores. This is also the COGS that has been improved
07:46in terms of getting our EBITDA margins better. And is this sustainable around this particular
07:51range for this whole financial year as well? So, we wish to sustain it. Looking at the
07:57competition, of course, there are other players, but we are very strong in this sector. So,
08:02we wish to sustain these margins. And so, one of the key use of proceeds
08:08from your IPO was into two manufacturing facilities that you're stepping up. One is in
08:12Egypt and one's right here in Maharashtra. Now, I do understand that you already have a facility
08:17here in Maharashtra. What's the timeline of completion of both of them? Because you've just
08:22received the compensation in this particular in March, basically. So, can you just update us,
08:28how do you see both these facilities shaping up? When do you see the completion of this?
08:33And I have a related question to that as well. So, with respect to Maharashtra, the plant that
08:39is shaping up, we will start our trial production by the end of November. And we wish to start the
08:45commercial production by the month of January 2025, which is as per our DRHP plan. In Egypt,
08:54we have recently started our all construction activities. So, the acquisition of land was
08:59done last year. Probably in Egypt, we wish to reach by May 2025, June 2025, we'll start. One
09:08month we might be delayed over there. And how is the company tackling,
09:14because once the facility does come on stream, because you've seen a lot of currency fluctuations
09:19in Egypt. I wanted to understand what's the rationale of the company setting up a facility
09:25there and also on customers. I think you will be having some international customers, very close to
09:31the region and that's probably the logic. But could you just update us on that as well?
09:36So, Egypt basically is a strategic location for us. And once we start the commercial production
09:42in Egypt, we are eyeing to cater to entire Commessa, that is all the African countries,
09:47Gafta, that is Middle East. We are having an access to South of America and probably there
09:54are many avenues that will open for our company. As far as the devaluation of the currency in Egypt
10:01against the US dollars is concerned, yes, the EGP was devalued in the month of March
10:08by 45% to 50%. And I think it is stable since 2 months and we see the stability
10:16for the coming years also because IMF has also funded Egypt in terms of their restructuring plan.
10:23But if you see, we had done a land acquisition and we had a 5-year payment plan with the
10:33developers over there. So, only the 2 years installment we have paid. But if you see the
10:40devaluation, it has benefited to our acquisition in terms of our project cost for the land lowering
10:48by 20% to 30%.