Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Shilchar Technologies Ltd (BOM:531201, Financial) achieved full capacity utilization in Q4, ahead of their original target for 2026.
- The company reported its highest ever top line and bottom line performance on both a quarterly and annual basis.
- There is strong demand in both domestic and export markets, with a robust order book of approximately INR400 crores.
- The Board has recommended a final dividend of INR12.5 per equity share and approved an equity bonus issue.
- The company is well-positioned to capitalize on emerging opportunities in the transformer sector, supported by favorable industry trends and government initiatives.
Negative Points
- The company has not yet finalized its capacity expansion plans, which could potentially delay future growth.
- There is uncertainty regarding potential US tariffs on transformer exports from India, which could impact future business.
- The receivables have increased disproportionately compared to revenue growth, although they are largely LC-backed.
- There is a risk of oversupply in the market due to capacity expansions by competitors, which could lead to pricing pressure.
- The company is conservative in its expansion approach, which may limit its ability to quickly capitalize on high demand.
Q & A Highlights
Q: What are the plans for listing on NSE, and why has it been delayed?
A: Alay Shah, Managing Director, explained that the plan for NSE listing is in progress. The company needs a minimum INR10 crores of paid-up capital, which will be achieved through the issuance of bonus shares. Once the bonus shares are issued, the authorized capital will be INR11.44 crores, allowing the company to apply for NSE listing.
Q: How is Shilchar Technologies preparing for potential US tariffs on transformer exports?
A: Alay Shah stated that the company has a strategy in place to mitigate the impact of potential tariffs. He emphasized that North American sales constitute less than 20% of total revenue, and the company is confident that its business will not be significantly affected by such tariffs.
Q: What are the company's plans for capacity expansion in the next 12 to 18 months?
A: Alay Shah mentioned that while a concrete plan has not been finalized, the company is actively working on expansion details, including capacity targets and budgeting. Once finalized, the company will present the details to shareholders.
Q: How does Shilchar Technologies view the demand for transformers in both domestic and export markets?
A: Alay Shah highlighted that demand is strong in both markets, with a robust order book and a steady flow of inquiries. The company is optimistic about maintaining high demand levels in the near future.
Q: What is the company's approach to managing foreign exchange exposure given the high percentage of export revenue?
A: Alay Shah explained that the company does not hedge its foreign exchange exposure due to the minimal outflow of foreign currency. Historically, the company has gained from foreign exchange fluctuations and prefers to manage its exposure without hedging.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
