Top Mutual Funds
- 17 May 2024
- ICICI Securities
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REVENUE DE-GROWTH CONTINUES ON DECLINE IN EXPORTS AND LOWER EXPLOSIVE REALISATION
News: Revenues declined by 16.5% YoY (+12.7% QoQ) to Rs 1610.7 crore in Q4FY24 as the revenue across major segments remained lower on YoY basis. Explosives segment revenue (46% of total) declined by 19% YoY (+6.3% QoQ) to Rs 736 crore as volume growth of 24% YoY (+8% QoQ) was negated by decline in realisations (-34% YoY, flat QoQ). Exports revenue (37% of total) was down by 20% YoY (-5.6% QoQ) to Rs 589 crore. However, defence segment revenue (12% of total) increased by 75% YoY (+213% QoQ) to Rs 194 crore. EBITDA margin improved significantly by 342 bps YoY (-297 bps QoQ) to 22.0%, primarily led by lower raw material (ammonium nitrate) prices. Subsequently, EBITDA was down 1.1% YoY (flat QoQ) to Rs 353.7 crore. PAT was up 10% YoY (+9.4% QoQ) to Rs 242.7 crore on higher other income and lower tax outgo. For FY24, revenue is down 12% YoY to Rs 6070 crore with EBITDA margin at 23% (vs 19% in FY23). FY24 PAT is up 8% YoY to Rs 875.3 crore.
Views: Overall operational performance remained subdued during FY24, on account of lower explosive realisations and decline in export sales. EBITDA margin improvement was largely led by lower RM cost (ammonium nitrate prices). Explosives volume growth remains strong at 20% in FY24, led by strong growth from the mining & Infra sector. With an order backlog of Rs 2500 crore in explosives and robust pipeline, volume growth is expected to remain healthy at ~15% YoY. Defence segment is also expected to witness strong growth in the coming period led by execution of a healthy order backlog of Rs 2600+ crore (5x FY24 defence revenue). Company expects defence segment revenue share to increase to 20%+ in FY25E (from 9% in FY24). However, recovery in exports segment would be the key thing to watch out for in coming quarters.
Impact: Neutral