7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
1/17
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
2/17
MA
Nan
AGEMENT
an Denim Li
Earnings
Febru
: MR. GOVI
ited Q3 FY
onference C
ary 12, 2016
D SHARDA
016 Results
ll
(PRESIDEN
Nandan Den
February
)
m Limited
2, 2016
1
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
3/17
Moderator:
Mandar
Ka
GovindSha
Q
se:
rda:
N
&
9M
GoodEvenin
the thirdqu
organizedby
mode. Later
questionplea
recorded.Iw
Hello!Good
totheearnin
havewithus
Beforeweg
forwardlooki
contemplate
arebasedon
statementsa
Withoutfurt
openingrem
AVeryWarm
thethirdqua
Comingtoou
profitability
businessgre
our product
DomesticDe
Shirtingdem
Thetotalrev
gross margin
EBITDAtoRs.
ndanD
Y16
ReFebrua
,LadiesandG
rter&First9
Dickenson Sea
we will condu
sepress*and
ouldnowliketo
fternoon,Ever
gscallofNand
romthemana
t started Iwou
ng statement
bythesestate
ourassumptio
aresultofne
eradoIwould
rks.Thankyou
WelcometoEv
terandthefirs
rperformance
ackedby healt
onthebacko
mix more in f
imfront,thee
nd.
enuesfortheQ
coupled with
418millionand
enimLi
sults
Coy12,2
entlemen. Iam
onthsFY16R
gull IR.At this
t a question a
onyourtouch
handoverthe
one.Onbehal
anDenimLimit
ementMr.Gov
ld like to remi
and actual
ents.Anyfor
nsasoftoday
informationor
nowliketohan
andovertoyou
eryonepresent
9Monthsoft
forthequarter,
hy demand in
highervolume
vor of the val
portmarketre
3ofFY16grew
fficient cost c
23.8%YoYgr
ited
nferenc16
Ali,moderator
sultsConferen
moment,allpa
nd answer ses
onekeypad.Pl
loortoMr.Ma
ofDickensonS
d fortheQ3
indSharda Pr
dyouall that
results might
ardlookingsta
ndweunderta
futureevents.
doverthecall
sir.
herefortheEa
eFY201516.
wecontinuet
DomesticDeni
sandimproved
ue added prod
mainsubdued,
by3.5%yearo
ntrol resulted
wthinPATtoR
Nandan Den
February
e
Call
for thisconfer
eCallofNand
rticipants lines
ion. At that ti
asenotethisc
darKapse.Ove
eagullIR,letm
First9Month
sident.
our remarks to
differ materi
ementsthatw
kenoobligatio
oMr.GovindS
rningsCallsfor
witnessgrowt
business.Our
realizations.W
ucts. While we
ealsowitness
nyeartoRs.28
in 10.1% year
s.156million.
m Limited
2, 2016
nce.Welcome
anDenimLimit
are in listeno
e if you have
nferenceisbei
rtoyousir.
welcomeyou
FY16.Today,
aymight inclu
ally from tho
makeonthisc
toupdatethe
hardatomake
andanDenim
hinrevenuesa
DomesticDen
continuetosh
did well on t
edslightlywea
74million.High
nyear growth
2
to
ed
ly
a
ng
all
e
de
se
all
se
is
or
nd
im
ift
he
er
er
in
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
4/17
On the mar
expandedby
Rs.8,624milli
millionand
3
expanded by
months.Incid
and forthep
16% higher
monthsisat
wherethesc
Duringtheq
volatileparti
anduncertai
challengeto
thecompany
aspercentag
boundtotak
Demand for
exportmarke
9 months pe
domestic de
manufacturin
thetotalreve
Overall,sequ
Shirtingbusin
The Board o
financialyear
During the q
approvalfro
hasbeenrec
shallentertai
value.
Asyoumay
which is fund
have comple
ins front, EBIT
96bpsto5.4%
on.Efficientco
0%YoYgrowt
107 bps to 16
entally,theEBI
eriodof9mon
s compared to
s.968million,
rewasRs.819
arterthatisth
lly inviewof t
ndemand
fro
ecideaboutth
intheprevious
to the revenu
prudentstocki
enim in theD
thadapincha
riod, exports c
im demand, a
gthat
led
to
re
nuesduringthe
entiallyDenim
esshaditsown
Directors has
.
uarter, pursua
the
BSE
and
eived fromPol
nthewarrant
eawarewear
edby70%deb
ed installation
DA margins ex
ortheQ3.The
stcontrolresul
hin
PAT
to
Rs.
.7% and PAT
TDAmarginan
ths.Cashprofi
the correspon
pby18%asco
illion.
beginningoft
he reducedcro
mthe
importi
eCottonstocki
quarterwerer
e.However, th
ngdecision.
omesticmarket
ndthereforeof
mprised of 13
part of the G
ducedofftake
9monthsperi
egmentinvalu
challenges.
also recomme
t to the shar
SEand
applica
sGlobalFund
olderstohave
inthemiddle
tand30%equi
of the Shirtin
panded by 100
otalrevenuefo
ed in12.6%Y
68million.
On
argin expande
PATmarginar
aftertaxwas
ding quarter pr
paredtocorre
hecottoncrop
psize reported
ngnations.
Du
ngpolicyandth
estrictedandh
epricesareno
was in linewit
takesinthese
of the total
rey Shirting ca
fthe
Shirting
p
d.
etermswasm
ded an interim
holders appro
ionmoney
bei
was25 lakhs fu
equivalentnum
ofourcapacity
ty.Togiveyou
s facility of 10
Nandan Den
February
bps to 16.7%
r9monthsgre
Ygrowth inE
themargin
fro
d by 101 bps t
eatthesamel
tRs.323millio
evious year. C
sponding9mo
eason,thepric
for the Indian
ingthe
volatil
ereforetheadv
simpactedthe
reasonablyst
hourexpectat
mentwereim
evenue in ord
acities were d
roductwhich
c
rginallyhigher
dividend of 8
al in the AG
g25%
of
the
t
llyconvertible
berofequitys
expansionplan
anupdateont
million meter
m Limited
2, 2016
and PAT mar
by5.4%YoY
BITDAtoRs.1,4
t,EBITDA
mar
o 5.4% for the
velinthequar
n forthequart
sh
PAT for the
thspreviousy
esofCottonw
Agriculturesect
ity,it
becomes
antageavailed
rawmaterialc
ableorsay ran
ion;however, t
acted.Duringt
r to cater to t
iverted to Den
mprisedof
6%
by1.4%,where
for the curre
and inprinci
otalconsiderati
arrant issue.
areofRs.10fa
ofRs.612cror
heexpansion,
s. The processi
3
in
to
40
in
9
er
er,
9
ar
re
or
a
by
st
ge
he
he
he
im
of
as
nt
le
on
e
ce
s,
e
ng
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
5/17
Moderator:
AbhilashaS
GovindSha
Abhilasha
S
GovindSha
AbhilashaS
GovindSha
atale:
rda:
atale:
rda:
atale:
rda:
facility isund
permeteran
The current
progresson
t
Goingforwar
backward int
trackwithou
a significant
enhanceour
WiththisIw
Thankyou
v
AnswerSessi
Global.Pleas
Sirinthistop
howmuchis
Whenweloo
priceshasgr
the Shirting
Shirting
capaIndia is still
betterfuture.
Sir,howmuc
ForShirtingv
thiswillbeco
thispointth
prettysmall
divertedtoD
Onceweahe
towardsDeni
thatalsocon
Notreally. In
installthepr
ererectionan
dthespinning
debtequity rat
heCAPEX
plan.
dweintendtof
egrationcomin
rclearfocuson
part of revenu
marginprofiles
uldnowliketo
erymuch.
Ladi
on.Wewill tak
goahead.
linegrowthof
driventhrough
kattheDenim
wnbyaround
usiness the vo
city
to
meet
tht thepointwh
Shirtingvolum
olumes,theba
mevery large
ttheShirtingc
ndthereforet
enim.
ad likeway for
mandcan tha
ributedtoward
theShirtingbu
cessingmachi
wehave insta
apacitystands
io is around 1.
urtherimprove
inposttheco
thevalueadde
is coming fro
aswellasthere
handovertoth
esand
gentle
ethe firstques
4%, Iwould lik
ealizationorh
olume,theDe
8%,takingthe
lumes have sh
Denim
demanere theDenim
eshavegoned
senumberispr
umber, there i
apacitiesaren
ereisasignific
wardwhether
bea reason f
sit?
sinesswearey
es thevaluea
lledDenimma
at70tonnesp
7 but over the
ouroperating
mpletionofou
dsegment.For
the valuead
turnratioprofil
eparticipantsf
en,we
will
no
tion fromthe li
etoknowthat
veweseenreal
imvolumehas
totalturnover
runk because
d.
Going
forwardemand isyet
wn?
ettysmall.Sot
salmost60%r
arly10million
antshrinkageb
ouwillcontinu
rquarteronq
etto installthe
dition intheS
Nandan Den
February
ufacturingcap
rdayasof31s
period it coul
arginsaswere
expansionpla
thenext3year
ed segment. T
e.
rtheQAsessio
wbegin
with
neofAbhilash
howmuchisv
izationgoingdo
grownbyaroun
fDenimupby
e diverted so
d
we
are
very
togoup.We l
erefore inthe
duction,butw
metersayear.
ecausethoseca
etodivertyou
artermargind
processingma
irtingbusiness
m Limited
2, 2016
cityof99milli
December20
d increase as
apthebenefits
.Wearewell
,weplantoha
hiswould furth
n.Thankyouall
heQuestion
a
Satale fromFi
lumegrowtha
wnyearonye
d3.5%andselli
almost (+11%).
e of our existi
ptimistic
becauok forward fo
percentageter
eneedto look
Thebasefigure
pacitieshadbe
Shirtingcapac
ip,marginallyh
chines.Unless
doesnothapp
4
on
5.
e
of
on
ve
er
.
nd
rst
nd
r?
ng
In
ng
se
a
s
at
is
en
ity
as
e
en
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
6/17
AbhilashaS
Govind
Sha
Abhilasha
S
Govind
Sha
AbhilashaS
Govind
Sha
atale:
rda:
atale:
rda:
atale:
rda:
and therefor
remunerative
Denimbusin
businessare
dipping;ifyo
Sirthatisye
So I wasjust
processingca
I guess it co
capacity.Ast
crop season
volatile.So
y
marketreach
ofthecrops
anexception
increased,th
reports whic
decent stock
volatilityort
bemissingno
Sir,in
this
F
utilization?
Secondhalf
thesecondh
thetimebec
theentire10
basedor the
comparedto
us,sowesho
Whatisyour
Rightnow,w
ourspinning
themachine
during the fi
Spinningfron
e we are forc
business, righ
ss issubsidizin
otas
lucrative
reallylookatt
ronyearitha
wondering wh
pacitywillgets
uld be somew
oansweryour
fcottonstarts
utake
certain
tostabilization
asonisgeneral
to thatparticu
nitstartedgoi
have been re
ofCotton.So
especulativen
wforthenext
17,how
much
fFY17weexp
lfforcapacity
usetheproces
millionmeters
processingbas
theinstalledca
uldbeabletod
pinningcapaci
earehaving in
capacityto124
delivery to sta
stquarterof t
t.
ed to sell the
now Idonot
gtheShirtingb
asthey
are
in
t
heEBITDAmar
grownupbut
ether we have
abilizedandw
ere in June 2
uestionabout
and in thebe
decisionsabou
phase,youal
lyabitofchall
larpartbecaus
ngdown,nowi
leased so far,
eareprettyc
atureintheev
8months.
canwe
see
v
cttohaveour
f110millionm
singcapacitiesf
wouldbeoper
ed industry, th
acityandsince
obetterwhenc
yasofnowan
talledcapacity
tonnesaday.
t towards the
enext fiscal
Grey Fabric.
havea very sp
usiness.That is
eDenim
busine
ins,ourEBITDA
quarteronquar
diverted more
encanwesee
16 that we w
EBITDAmargin
inningof thec
stocking
whic
aysareinventi
ngefortheCot
emarkethasst
thasreasonabl
hey also indica
onfidentnow t
entofcottonpr
olumein
Deni
expansioncom
etersfortheex
ortheShirting
tional.Letush
idealcapacity
boththebusin
omparedtothe
howdoyouse
ofaround70t
Weareataver
endofMarch
ewouldbead
Nandan Den
February
rey Fabric is
ecificnumber
tosaythemar
ss.Therefore
t
marginshasgr
terwehavese
towards Shirti
hirtingbusines
ould be up wi
dipping,thisis
ropseason the
overthe
peri
ganewpricin
tonbasedprod
artedwithav
stabilizedand
te that India
at thepricesa
icesorthecott
business
and
pleted,sowec
pansionthatis
ouldhavealso
pethatgenera
utilization isar
ssesarevery
industryavera
erampingthat
nnesperday.
yadvancedsta
ndbeginningo
ding significant
m Limited
2, 2016
really not a v
utasofnow t
gin intheShirti
emargins
are
n
wnup.
enamarginald
g. By when yo
spickingup?
h our processi
periodwhent
pricesarealw
dof
time,
till
t
.So,firstquar
ucers.Wearen
rysteadynote,
nowalltheUS
ill end up with
re stableand t
onmarketswo
Shirting
capac
ouldbehitting
underwayand
beeninplace,
llyintheweavi
ound80%85%
ellunderstood
es.
oingahead?
eintendtota
geandweexp
fApril. So I thi
capacitieson t
5
ry
he
ng
ot
ip.
ur
ng
he
ys
he
er
ot
it
PA
a
he
ld
ity
in
by
so
ng
as
by
ke
ct
nk
he
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
7/17
Abhilasha
S
Govind
Sha
AbhilashaS
GovindSha
AbhilashaS
GovindSha
Abhilasha
S
GovindSha
AbhilashaS
GovindSha
Abhilasha
S
atale:
rda:
atale:
rda:
atale:
rda:
atale:
rda:
atale:
rda:
atale:
Sirhowdoy
seasonando
Currentlyif
I
marginofar
around50%
withintheho
EBITDAmargi
About your
capacityram
Abhilasha,yo
CAPEXof
Rs.6
so far. Iams
capacitiesse
theLetterof
thevendor.
months,we
Soisitfairto
If you consid
would
be
becbut thisFY16
CAPEXhadal
Sir,thenwha
Ason31stD
loanwasclos
Sirifyoucou
havestateas
The term loa
differentban
bpstotheirb
Butsirherey
whatwillbe
ou seeyourm
nceyourbackw
really
look
at
und8%10%.
fourrequirem
use.Sowearel
n.
APEX overall, l
upandhowm
urquestion is
12crores
that
orry Idonoth
aratelyavailabl
Creditorweha
nce themachi
illendupspen
assumethatyo
er capital wor
ause
there
wo figureofRs.40
readybeenincu
isyourgrossd
cemberweha
etoRs.320cror
ldalsotellme
wellasTUFben
n is available t
ksandthewor
aserate.
oualsohaveh
ourcost?
rginsstabilizin
ardintegration
thefinancial
r
ncewehavet
entwhichwea
ookingatanap
ike how much
uchislikelytob
lightlytrickya
ehave
planne
avethedataof
erightnowand
vealreadyissu
nesareshippe
ingalmostRs2
uwillbecapital
inprogress as
ld
still
be
man0crorehasno
rredintheprev
ebtandhowm
dtotaldebtof
esandbalance
hatiscostof
efits.
o us from the
ingcapitalloa
isTUFaswella
afterthat?Yo
isgearedup,ho
sultsof
other
ebackward int
erightnowout
preciationofar
have you spen
einFY17onSp
d Icangiveyo
d,we
already
h
breakupofsp
forthebalance
dtheBankGua
it isonlyam
00crorestowa
izingRs.400cro
well as the p
things
which
entirelybeen
iousfiscalasw
chistermloan
closetoalmost
wasworkingca
ebtfortermlo
bank at their
sareavailable
sthestateben
Nandan Den
February
r rawmaterial
wdoyouseeyo
spinners,typic
egration, Igue
sourcing,that
und4%5%wh
in FY16 on D
inningandothe
utheoveralln
vecash
outlflo
inningandproc
amountweha
ranteesasper
tterof time th
dsthisCAPEXp
esduringFY16
rt of the capit
ould
be
capitalcapitalized inF
ll.
andworkingca
Rs.450crores,
italloan.
an?Iknowfor
ase rate plus
withthesame
fits incentives.
m Limited
2, 2016
costalso fort
urmarginsat?
ally,they
make
sthat8%10%
ouldbecaptur
enitcomestoo
nim and Shirti
rfacilities?
mberagainstt
of
Rs.400
cror
essingandden
ealreadyopen
greedtermsw
at innext say
lan.
alization, yes,
l
work
in
progr16aspartoft
pitalinthat?
fwhichthete
ermloanlikey
00150 bps fr
preadof1001
Soexcludingth
6
is
a
all
ed
ur
ng
he
es
im
ed
ith
5
e
ss
he
m
ou
m
50
at
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
8/17
Govind
Sha
Abhilasha
S
GovindSha
Moderator:
ReshaHari
GovindSha
Resha
Hari
rda:
atale:
rda:
:
rda:
:
If Iconsider
closeto10%.
therangeof
whichcould
would be ar
workingcapit
Sirhowarer
Theannualr
Thank you.
WealthServi
Sir,what isy
theindustryf
youhad tod
wereconstrai
The Indian D
15%18%wh
decision tod
twofactsint
our
disposal.
making all t
Denimmanu
hasbeensuff
the period o
exploding. So
future growt
manufacturin
FromFY13t
our
listed
plaexactlywoul
peers?Nowi
14%15%wh
whatisther
slowingdow
he total impac
Soeffectivelyt
1%2%as fara
berepaid
over
und 6%7%. Y
alwouldbeava
paymentsched
paymentwould
e will take th
es.Pleasegoa
ourunderstand
lowingandho
ivertyourShirt
nedintermsof
omestic deman
nI lookatthe
ivert theShirti
heShirtingbusi
So
it
is
really
ne more comm
acturingsince
eringforlast6
f time Shirting
weexpectDe
h if I believe o
gcapacitiesov
FY15,Nandan
yers
they
have
youattribute
fIlookatthel
ereasweareat
asonforsuchs
versusourpee
, thesubsidya
eborrowingc
s thenew loan
theperiod
of
s, on the wor
ilabletypically
uleifIcouldals
beclosetoRs.
next questio
ead.
ingonthedem
doyouseeth
ingcapacity to
capacityforDe
d for Denim h
CAGR.Sother
gcapacity to
nessbecausew
ot
remunerativercial and prud
wehave the fl
monthsorso.B
business will
nimdemand to
n the statistics
rtheperiodof
hasgrownat
grown
at
less
ttothe factthat
sttwoquarter
around10%1
tupendousgro
rs.Soifyoucou
vailableunder
stpostcommis
areconcerned
next2years
t
ing capital the
t12%.
ogetinFY16an
560crores.
from the line
andside ifyou
demandpickin
Denimmanufa
nimmanufactur
s been growin
isenoughde
enim isconcer
edonothavet
e
for
us
to
depential sense to
xibilityon that
utweconsider
lso bounce ba
continueand
number, typic
next23years.
round (+20%)
han
9%.
So
if
ywewereable
,forourlisted
% forDenim.
thfromFY13F
ldjustgivesom
Nandan Den
February
he stateandc
sioningofthep
.Fortheoldc
ime,the
existin
re are no subs
dFY17?
of Resha Haria
couldgivesom
gupbecauseI
cturing,does t
ing?
g historically a
andfortheDe
ed that isbasi
eprocessingf
loy
that
capaci divert some c
particularpart.
itasatempora
ck. Denim, of
here couldbe
lly India needs
nthetop line,
ou
could
just
htogrowsowel
peerstheyhav
o ifyoucould
Y15andrightn
einsightontha
m Limited
2, 2016
entralTUFwill
rojectwouldbe
rry forward loa
gborrowing
c
idies available,
from GreenEd
ecoloronhow
understandtha
at imply that
ywhere betwe
nim.Asfaraso
callygoverned
cilityrightnow
y.
Therefore,
itapacities towar
Shirtingbusin
ryphaseandov
course, has be
enough room
to double up
whereassome
ighlight
that
whlversustheoth
grownatarou
justhighlightt
owwearesort
?
7
be
in
ns
st
so
ge
is
if
e
en
ur
by
at
is
ds
ss
er
en
or
its
of
at
er
nd
at
of
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
9/17
Govind
Sha
ReshaHari
GovindSha
ReshaHari
Govind
Sha
ReshaHari
GovindSha
rda:
:
rda:
:
rda:
:
rda:
Thereason l
lasttwoquar
hasnotbeen
definitelyyou
toplineonly
endlessjourn
valuechain.
samereason
addedcapaci
havebeengr
arenotprese
and thoseop
increasedbot
Forthe9mo
Denim is al
business.
Denimsagain
revenue?
Thevaluead
Soaproduct
productstwo
product. So
becauseitis
numberthen
products
Haveyou loo
brandedreta
one, then h
requirements
Technically, i
gettingsome
anymanufac
3yearstime.
weareexpec
tmeexplainy
terswehaven
anyadditionin
rgrowth
is
goin
bymovingupt
eyandwehav
ut itwill take
intheyestery
tyandwehav
owinginallthe
ntonlyinthe
timizationproc
tomlineaswell
thsFY16,what
ost 94%95%
for9months,
itionisavery
whichis
aval
monthsdown
efinitelycaptu
hesameprodu
Ithinkweare
kedatany sor
ilcompanies?If
w does that i
?
is known as
nomination,b
urertogetthe
Wearealready
tingthat,wec
ufirstlyabout
otgrown in lin
themanufactu
gto
be
restrict
evaluechaint
juststartedit
sometimebefo
arswehavegr
notconfined
segments,so
assmarketbut
essarepaying
l.
wouldbeourr
f the total top
what isthesh
emporaryphe
ueadded
seg
helineand6
ringa shareof
ctwhichisbein
bletogetarou
ofbrand tieu
incaseyoudo
pact our real
ominated busi
t it isaveryti
nominationfro
intheprocess
uldbebeginni
thenegativeob
withthe indu
ringcapacity.If
dto
the
existin
hatisbywayof
almostayearb
rewecanreall
ownoverthe i
urproduct lin
earenotprese
wearecontinu
theirdividend
evenuesplitbet
line and bala
reofvalueadd
omenaandnor
entright
now
onthsdownth
the valueadde
gsold.But,aso
nd10%ofourr
psdirectly like
nothaveabra
izations or our
ness from the
econsuming
thegoodbra
atanadvanced
ngonthenomi
Nandan Den
February
servation inyo
tryexpectatio
wedonotadd
gvolume
and
y
valueaddedpr
ack.Soweare
reachasignif
dustryaverage
s toanypartic
ntonlyinthen
ouslyoptimizin
ywayof incre
weenDenimsa
ce is accounte
edDenims int
mallyitisafas
becomesaver
lineitbecome
dproduct isa
fnow,ifIhave
evenuepiefro
ifwecould sell
dtieupandif
margins or ou
rand. We are
rocessandtyp
dcouldbeany
stagewith23
nationbusines
m Limited
2, 2016
urstatement.T
isbecauseth
thecapacityth
ucan
grow
in
t
oducts.Thatis
movingupint
icantsize.Fort
becauseweha
ularsegment.
ichesegment,
gourproduct
ased top linea
ndShirting?
d by the Shirti
eoverallDeni
hionfrontrunn
ynormal
type
sacommoditiz
challenge in its
togiveaballp
thevalueadd
ldirectly to the
wemanageto
r working capi
in the process
icaltimetaken
herebetween
rands.Therefo
veryshortly.B
8
he
re
en
he
an
at
he
ve
e
e
ix
nd
ng
s
er.
of
ed
elf
rk
ed
se
et
al
of
by
2
re,
ut
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
10/17
Resha
Hari
GovindSha
ReshaHari
GovindSha
ReshaHari
Govind
Sha
ReshaHari
GovindSha
Resha
Hari
GovindSha
Moderator:
:
rda:
:
rda:
:
rda:
:
rda:
:
rda:
thatisourpe
theyprogress
Incase
we
d
we seean in
workingcapit
Working wit
impactthep
brandbyest
intothatbusi
bethemargi
atleast2003
Postthisincr
ouremploye
Not really, t
becausether
artthatislat
yes,manpow
deployedthe
werenoteve
yes,since
te
woulddefinit
Whatwould
Idonothave
Whatwould
Itisgoingto
Whatwould
OnSLMbasis
betweenRs.9
Thankyou.
Securities.Pl
rception,butal
butyes,thatis
notmanage
t
crease inour r
alalso?
brands actual
ofitabilitymarg
blishingaclos
ness.Soitisdif
,butgoingby
00bpsbecause
easedcapacity
s?
ere would defi
e isadistincta
stavailablein
erdeployment
technology,be
nthoughtof,n
tileis
relatively
elybesomead
eyouremploy
theexactnumb
ethetaxratet
ethenormalt
ethedepreciat
weareexpecti
0to100crores
ewill take the
asegoahead.
lthesebrandsh
anitemonour
havethis
tie
alizations,ave
ly will not imp
in.Profitability
tieupandha
icultformeto
laymansappr
ofthenominat
inbothDenim
nitelybe some
dvantageavaila
hemarket.So
is significantly
ause10years
owtheyareth
manpower
int
itionalmanpo
ecountason3
erbutIthinkit
hatwecanexp
xation.
ioncostforthe
ngthatpostca
peryear.
nextquestion
avetheirowns
agendaandwe
pthen
how
do
age sellingpric
ct the working
margincanbe
inganominati
assignanyparti
oachIthinkthe
ionbusinessfor
swellasShirti
addition to th
blewithNanda
definitelyifIco
loweras comp
ack,asthethin
reality.So,we
nsivesector
fo
errequirement
1stDecember?
shouldbeclose
ctgoingforwar
next23years?
pitalizationour
fromthe lineo
Nandan Den
February
tringentnorms.
areseriouslyw
esthat
affect
o
eandhowdoe
capital margin
nhancedbyas
nwithus.Righ
ularnumberas
EBITDAmargin
thesegment.
g,willwesee
manpower th
n,ourtechnolo
parewithany
red to theold
gswhichwere
aredefinitelyb
revery
additio
.
to
2500.
d?
depreciationw
fGauravPunja
m Limited
2, 2016
Soletusseeh
rkingonit.
urrealizations,
s that impacto
, but yes, it do
sociationwitht
tnowwearen
tohowmuch
couldincrease
ignificantjump
at we deploy b
gy isstateoft
oftheoldtime
timerswhoha
otthereorwhi
etterplaced,b
alcapacity,
th
uldbeanywh
bi fromEast In
9
w
do
ur
es
he
ot
ill
by
in
ut
e
rs,
ve
ch
t,
re
re
ia
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
11/17
Gaurav
Pun
GovindSha
GauravPun
GovindSha
Gaurav
Pun
GovindSha
GauravPun
GovindSha
GauravPun
Govind
Sha
Gaurav
Pun
Govind
Sha
GauravPun
GovindSha
jabi:
rda:
jabi:
rda:
jabi:
rda:
jabi:
rda:
jabi:
rda:
jabi:
rda:
jabi:
rda:
Sir,Iamfairl
yarncapacity
termsofSpin
In termsofS
7000Rotors.
Soisthisacu
Itistheexpe
Whatwould
Currentspinn
WehaveaC
oneachofth
Ithinkwewil
towards the
Rs.250crores
creatingthe
Soof theCo
aboutthere
Itisanopen
orevenwec
commercial
generallyatt
Sosirtheent
openmarket
Iwill
say
99.9
someoddlot
Sodoyoubu
Ourrequirem
So I will say
players.
newtotheco
ofIthink70to
dles,howmany
pindleswewo
rrentSpindleca
tedspinningca
ethecurrents
ingcapacityisa
PEXplanof610
esegmentsoft
lsharewithyou
spinning which
willgoforthe
rocessingcapa
ton requireme
aining30%wh
arket;Icanso
nendupimpo
ecision depen
heyearweend
ireYarnwhichi
aswell?
%is
meant
for
s.So,yes,weh
anyYarnfrom
entofYarnisc
as of today w
mpany.SoIwo
nnesperdaya
Spindlesdowe
ldbehaving I
pacityoristhis
pacity.
pindlecapacity?
round3000Rot
crores.Sodo
ecompanylike
thebroadernu
is meant for
enimcapacity
ity.
nt Iunderstand
eredowesourc
urceitfromM
rtingbecause7
ing on the pr
dwitharound
smadeinhous
thecaptive
co
vetosellthatY
outsideforyou
loseto140145
are sourcing
uldliketounde
ndthisisincrea
haveexactly?
thinkclose to
anexpectedSpi
orsandcloseto
ehaveabreak
Spindlesand
mber,outofRs
ur CAPEX cons
creationandar
70% isactuall
ethatfrom?
harashtra,Ican
%isanindicat
icing parity we
0%ofCottons
thatisusedfo
sumption,som
arnbutthatis
rDenimsorist
tonnesadaya
lmost 50% of
Nandan Den
February
rstandafewba
singto124ton
0,000Spindles
ndlecapacity?
35,000spindle
uponhowmuc
.610odd,Rs.25
umption in De
undRs.100od
I thinkgot fr
sourceitfrom
ivenumberbec
keep on taki
ourcefromGuj
rDenimsordo
etimeswe
end
veryinsignifica
atfullymet?
ndcurrentcap
our requireme
m Limited
2, 2016
sics.Sir,youha
nesperday.So
and it isclose
s.
harewespendi
0croreswould
nim only. Arou
croreswillgo
mGujarat.W
Rajasthan,Punj
auseitisalway
g a decision b
ratitself.
esellYarnint
upmanufacturi
ntquantity.
cityisaround
t from the oth
0
ve
in
to
ng
go
nd
or
at
ab
a
ut
he
ng
0.
er
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
12/17
Gaurav
Pun
Govind
Sha
Gaurav
Pun
GovindSha
GauravPun
Govind
Sha
Gaurav
Pun
jabi:
rda:
jabi:
rda:
jabi:
rda:
jabi:
Inyouropeni
Q3 numbers
increasedby
quarter,price
December 20
around67%i
Theremark
that remark
compared to
sharesomet
but,yes,that
Sowhat
is
th
policytomini
Anyspikeor
manufacturin
minimum lev
closetothe
can get our
location.We
goingtostart
stableenviro
Sirwhatabo
is your view
manufacture
thepricesof
notbuyYarn
Ithinkthekn
if you really
phasesevery
man,soalot
Yarnisyes,i
fairlypriced l
andtheYarn
Rawmaterial
ngremarkyou
that the cost
300basispoint
shave
fairly
re
14, if you reall
nthecurrentq
asincontextt
was definitely
the correspon
ingthere,com
opportunitywe
ein
house
like
mizetheriskon
nyrallyinthe
g.Sowenorm
elandour loca
arket.Soeven
cotton stock in
always take a
,yes,wemay
mentwe
can
g
tthisChinasit
because Chin
saredumping
Yarnprobably
fromIndia?
owledgethaty
lookat thehist
fourthor
fifth
ofconsolidatio
pactedbecaus
ookingatthep
pricesasofno
priceswouldco
saidaboutthe
of raw materi
s.So if Isee la
ainedin
the
sa
y look at the
arter.Wehave
theQ2FY16n
not with refer
ingquarterev
panytookcerta
couldnotcapit
cottonbecause
Cottonprices?
ricesofCotton
llydonotkeep
tionbecomes
ifweplacean
side the plant.
prudent viewd
ndupwitharo
owith
around
o
ationthatwe
a has not be
a lotofyarn in
oucouldsourc
uaresharingis
oryof theText
yearand
this
i
takesplace.
eofthesentim
ricesofCotton.
.
ntinuetobein
Cottonpricesb
l I think that
t inDecember
merange.
So
w
umber we wer
marginallydecl
umberswhich
ence to the co
erythinghas im
indecisionswh
alize.
itis
always
ari
isthepassthr
hugeinventory
nadvantageou
rderinthemo
So we are ge
epending on th
und23months
nemonth
or
on
aveinourhan
n buying any
thedomestic
etherawmate
whateverweh
ile industry, in
the
stage
whe
ethinkthecur
ntattachedto
Sowedonot
thecurrentran
Nandan Den
February
ingvolatilean
was about 66
14quarterver
hyhave
we
see
e at around 68
inedourrawm
asfortheSept
rresponding qu
proved. So ide
erewecouldh
sk.So
do
we
h
ughwhenitco
ofCottonwith
spropositionb
ningat8Oclo
ographically at
emarketplac
inventory,but
eand
ahalf
mo
,soanyoutloo
Yarn, so prob
arkets,soyou
rialcheaper ifC
aveperception
ustrypasses th
reaboy
is
diff
entsofteningo
theChineseex
expectanymaj
eorprobablya
m Limited
2, 2016
Icanseeinyo
and it basica
susDecember
the
spike?
% and we are
aterialcost,rig
mberquarter.
arter because
wasbasically
aveearnedmo
veany
mitigati
mestotheDen
us,keepitab
ecauseweare
kby2Oclock
an advantageo
. If themarket
underthenor
nthinventory.
konthatorw
bly all the ya
haveanyview
hinacontinues
inthemarket,b
rough the simil
erentiatedfrom
fthepricesoft
orts,butthey
orspike inCott
few?
1
ur
lly
15
at
t?
So
as
to
re,
on
im
re
so
e
us
is
al
at
rn
on
to
ut
lar
a
he
re
on
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
13/17
Govind
Sha
Gaurav
Pun
Govind
Sha
Gaurav
Pun
Govind
Sha
Moderator:
RahulAgar
GovindSha
rda:
jabi:
rda:
jabi:
rda:
al:
rda:
Thisisourpe
marketisbyi
withaveryp
positionthat
transactions
butwedono
Whatarethe
likenotamaj
FortheDeni
levelofindus
the current
Manufacture
Bangladesh a
trend, I think
themajortar
IfItalkabout
sales,howd
peopleacros
Mostlyforth
areno
excep
areusingonl
Thank you.
Investments.
Sir, good to
Denim,Iund
reasoncome
Not really,
around3.5%
ourdiscussio
upintheval
valueadded
thatparticula
pickswhicha
forced to red
rceptionasoft
tselfamajorch
rudentpolicy
wehave.
Ye
iththeindustr
speculateont
majorthreee
orpartofourt
themajorexp
trialization,wh
data of the i
sAssociation
i
ndbalance 25
apart fromBa
getchoiceforD
ourdistributio
wegoaboutt
differentcities
eTextilecomp
ionto
that
part
thatasaroute
e will take t
Pleasegoahea
see the realiza
rstandthatShi
toyourmindf
ay be you mis
or4%whenit
wesharedwit
echainthatis
segments, it is
rpart;wedon
reinsertedint
uceyourprod
oday,but,yes,
allenge.Sowe
herewesecur
,our
margins
yaverages,fort
herawmaterial
portdestinatio
taloverallreve
ortdestination
reTextileorth
dustry, but la
ndicatesthat
a
goes to as m
gladesh,South
enimmanufact
inExportmar
hat,dowehav
sellingourpro
niestheentire
icularroute.
M
.
he next questi
.
ion improvem
rtingvolumeh
rquarteronq
sed on that p
omestoDenim
hyouthatcom
bywayofthose
slightly technic
tconsidermet
efabric.When
ctionand ther
ettinganyrelia
onotspeculat
eour rawmat
maynot
be
unately,always
prices.
nsforourcom
nuesbutIthink
arethecountr
egarmentingis
st years data
lmost3/4th
of
anyas70 coun
eastAsiaands
rers.
etsorDomesti
eagentsdoing
ucts?
salestakespla
stof
the
comp
on from the li
nt, but bit dis
salsoshiftedt
uarterslowgro
rticular part, R
andtherealiz
panyhasastrat
valueaddeds
l; letme try to
erastheutilizat
wemoveupin
e isalwaysa tr
Nandan Den
February
bleinformation
onthatparta
rialaccording t
comparableon
ithasbeenpo
anybecausee
theymakeupa
ieswhereyou
themajorindu
which I gath
Indianexports
tries,but looki
omeoftheAfr
markets,sod
thatordowe
ethroughthe
aniesacross
the
ne of Rahul A
ppointed on t
Denim,butis
thinDenimvo
ahul. The volu
tionhasimpro
egicthoughtpr
gments.When
sharea techni
ionfactor,itis
thevalueadde
adeoffbetween
m Limited
2, 2016
fromtheChine
dnormallywe
o theorderbo
those
particul
itiveinourfav
portsareanyw
bout10%?
onothaveahi
stry.Idonotha
red from Den
ofDenim
are
ng to the curre
icancountries
wehavelikea
aveour inhou
agentonly.So
productsegme
garwal from V
e Q3 volume
thereanyspeci
lumesespeciall
e has grown
edby8%.Duri
ocess,itismovi
wetalkaboutt
calknowledge
henumberoft
segmentyou
the loss that
2
se
go
ok
lar
r,
ay
gh
ve
im
to
nt
re
ny
se
e
nt
EC
or
fic
?
by
ng
ng
he
on
he
re
e
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
14/17
RahulAgar
GovindSha
Rahul
Agar
GovindSha
RahulAgar
al:
rda:
al:
rda:
al:
incurduetol
overthatpar
demandfort
tobe
close
t
extentyes,t
gone up and
conferencec
atbecoming
geta largers
pursuingthis
Exports seem
domestic sup
realizationde
Exports I thi
differentpar
mix.Wheny
atimebeing
addedprodu
isabusiness
market, but
responding.
distributionn
themarketr
optimisticfor
thereisano
8yearcycle,
thatBush, if
marketandt
because you
wheneverev
last8yearst
Anyinterest
Rightnowwe
You said Rs.
capacities?
owerproductio
icularpart,yes,
heproductort
o50
52,
now
t
evolumeinm
the realization
llsaswell,we
oneof themos
hareofourrev
particularobjec
s to beweak
plies and that
growth
for
the
k there are s
sof theworld.
uhaveagrowi
djustmentbec
tsintothemar
ofthecompany
we cannot be
o we are fle
etworkacross
t
quirement.So
another23m
tgoingUSPres
incidentally,8y
you really turn
hathasbeenth
are from the
ery8yearsat l
ishasbeenthe
eingcapitalize
areintothemi
50 crores gro
nandthebenef
volumeinmet
heutilizationof
eaverage
of
t
tershasreduc
has also gone
onotwantto
tprofitableDe
enuescoming i
tive.
hich youalso
is why steady
next34month
me cascading
Sothere isde
gdemandwit
usewehaveto
ket;wehaveto
togetasizeab
married to tha
ible on that
heglobe.
So
it
wearefeeling
onths.Normall
identElectiont
earsnowforB
thepapersof
etrend inthe i
financial frater
astforthe last
trend.
asofnowore
ddleoftheproj
ss debt. Of th
itthatyougetb
ersisnottheb
thebrand,but
heindustry
is
g
d,butofcours
up because as
berecognizeda
implayersoft
thevalueadd
highlighted, bu
tate commodit
sbecause
of
ex
effect of the sl
initelyan impa
intheDomesti
utilizeourcap
haveabetter
lechunkofthe
idea permane
articular part.
oesnot
take
to
that,yes,expor
, if Ireally loo
eExportmark
arackObamaa
hehistory that
ndustryaswell.
ity because th
3presidentsw
erythingisinto
ects,sotheyar
at how much
Nandan Den
February
ywayofhigher
stindicatorwh
yes,numberof
ettingtowards
einourcaseth
we shared wi
savolumeplay
heworld.Sow
edsegmentan
t does that me
y typeDenim f
portsbeing
wea
owdown whic
cton theExpor
market,weca
cities,wehave
argin.Sofrank
revenuecomin
ntly if the exp
We are also
olong
atime
fo
tsmarketmay
atthehistoric
treallydoesn
dbeforethatC
hasbeen the
Iwillleavefor
is is what I h
hohavesurviv
P&L?
gettingcapitali
ould we attri
m Limited
2, 2016
pick
insertion.
enitcomestot
pickswhichus
5658.
So
to
t
evolumehasal
h you in the l
er,wearelooki
earetargeting
weareseriou
an that increas
abric would ha
kas
an
industry
h is coming fr
tcentricbusin
alwaystakeit
toforcetheval
lyspeaking,jus
gfromtheExp
ort market is n
blessed with t
rus
to
respond
reallynotbev
aldata,whenev
tsupport,itis
lintonandbefo
rend in thesto
youtorevalid
ve gathered t
d inthechair
zed.
bute to the n
3
So
he
ed
at
so
st
ng
to
sly
es
ve
?
m
ss
as
ue
it
rt
ot
he
to
ry
er
an
re
ck
te
at
or
w
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
15/17
Govind
Sha
RahulAgar
GovindSha
RahulAgar
Moderator:
Resha
Hari
GovindSha
ReshaHari
Govind
Sha
Resha
Hari
Govind
Sha
rda:
al:
rda:
al:
:
rda:
:
rda:
:
rda:
Itiscloseto
Sotheninth
askthe
same
theP&Linter
oristhereso
MaybeRahu
Sure.
Thank you.
Securities.Pl
Howmanym
Itisaround5
Withthepre
probablyyou
butifyoucou
Thevaluead
bywayofth
and in that
definednum
produceyou
facilitiesthey
impacted. So
product met
addition thr
adversely,bu
volumemay
Soitwouldb
right?
Yes, asa ma
processingro
s.250crores.
tcasejustwan
question,ifIre
estthatlooksq
eotherwayt
l,Icantakethis
he next quest
asegoahead.
etersofDenim
.4millionmet
iousparticipan
rvolumesmay
ldjustsortofju
itioncanhapp
processingoft
ase volume m
bersof theRP
canproduce.B
alwaysoperat
now dependi
r volume may
ugh the weav
twhenthevalu
otbeimpacted
emoredesirabl
nufacturer, we
ute.
tedtoclarifyo
movethat
new
uitehighasac
lookatit?
questionofflin
ion is from th
avewesoldin
rs.
tyoujustspok
notgrowasmu
stexplaintous
enintwoways
hefabric.Whe
y not grow be
.Within that
twhenitcom
withameter
g upon what
be impacted.
ing route, in t
eadditionisha
.
letosortofdo
wouldbe mor
ething,theea
debtwhich
is
R
sttobepaido
withyou?
line of Resh
the9months?
eaboutaswe
ch,right?IfIun
howwouldthis
oneitcouldb
itgoesbythe
cause the wea
RPMwhatever
stothevalue
erminute.Int
route is adopte
o if I am taki
hat case the
ppeningthroug
thevalueadditi
inclined to g
Nandan Den
February
lierparticipant
s.250crores
fro
debt.Isthatu
Haria from G
ovetowards
derstandthati
exactlywork?
ebyweavinga
weavingthenu
ing machine o
numbersofm
dditionbyway
hatcase,thev
d for which p
g a route of c
eter volume
theprocessin
onthroughthe
o for valueadd
m Limited
2, 2016
wasalsotrying
mthis
and
look
derstandingri
reenEdge Weal
orevalueadd
alittletechnic
doneitcould
berofpickspl
perates with p
ters youwant
oftheprocessi
lumemaynot
rticular SKU, t
reating the val
ay be impact
route,theme
processingrou
ition through t
4
to
at
ht
lth
d,
al,
be
ay
e
to
ng
be
he
ue
ed
er
e,
he
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
16/17
Resha
Hari
GovindSha
ReshaHari
GovindSha
Moderator:
RonitRame
Govind
Sha
Moderator:
PuneetNa
GovindSha
:
rda:
:
rda:
sh:
rda:
dwani:
rda:
Butobviously
like if we m
entirevaluea
It isa young
goingbythe
onlyatthep
isforthevalu
Howdoyou
averagereali
Itisadiffere
invogue
and
beevenRs.1
which isbein
fabric.The c
thatparticula
astheprodu
commandth
meter,wepr
Thankyou.
Pleasego
ahe
Canyougive
IfIhavetod
way itused t
Bangladesha
going to alm
nations.
Thank you.
individualinv
Myquestion
forthelastq
Puneet,thisi
verydiploma
therewouldb
ve more towar
dditionofDeni
ergeneration f
experienceoft
ocessingstage.
eadditionthro
efineavaluea
ationinrupees
tmetricactual
weare
the
fron
0meterfabric
g thrownasa
mpetitionwill
rfabric.Sotwo
ct isvalueadde
premiumont
fertodefinew
ewilltakethe
ad.
ouroutlookfo
finetheshort
oboom, thoug
s faras theDe
ost 70countri
e will take th
estor.Pleasego
iswesawalmo
arteroftheye
sthemostdiffic
replythatwe
esomeconstra
ds value adde
throughproc
abric, so it isd
eTextileindus
Sothereisfairl
ghtheprocess
ddedDenim?T
permeterorw
ly.Thevaluead
trunnersto
off
oritmaybeRs.
frontrunner int
catchupwith
monthsdownt
dor ithasnot
atproduct.Soi
hetherwehave
extquestionfr
Exportsandca
ermthenyes,
h thedollar is
nim is concern
s and predom
e next questio
ahead.
taflattishquar
rintermsofre
ultquestionto
anttodobett
ints intermsof
, whatwould
ssing?
ifficult forme t
rymostofthe
lygoodchance,
ingroute.
osedenims,w
oulditbesome
dedfabricisaf
rthat
particula
500permeterf
o the Fashion s
our constructio
helineitbecom
beencopiedby
nsteadofdefini
competitionin
omthelineofR
nyougivetheb
xportmarketd
ery supportive
ed theyareal
inantly to the
from the line
terthistimein
venueandprofi
answerinanyo
rthanwhatwe
Nandan Den
February
doing ittopro
ort of constrai
o predict anyt
imesthevalue
Iwouldsay80
ichisthemetr
othermetric?
abricwhichisn
product
in
the
abricaswell.S
egment then it
n,our finishing,
esaverynorm
thecompetiti
nganythingint
thatparticularS
onitRameshfro
reakupforExp
oesnotseemt
.Asofnow th
ost 75%. So t
Southeastern
of Puneet Na
ecember.Wh
ts?
ftheconferenc
havedone.
m Limited
2, 2016
cessingroutes,
us to move t
ing but genera
additionhappe
plusprobabili
ic,woulditbet
otseenrightn
market.So
it
m
ifitissomethi
isavalueadd
ourdesigning
lproduct.Aslo
n,wecanalw
ermsofrupeep
KU.
mVallumCapit
rts?
obeboomingt
IndianExport
ebalance25%
sian and Afric
dwani who is
tisyourguidan
calls.Iwillgiv
5
so
he
lly
ns
y,
he
w
ay
ng
ed
of
ng
ys
er
al.
he
to
is
an
an
ce
a
7/24/2019 Transcript of Conference Call with Investors/Analysts [Company Update]
17/17
Puneet
Na
GovindSha
Moderator:
MandarKa
Moderator:
dwani:
rda:
se:
ButIseethat
growindoub
thatoutlook?
Inthecurren
thatparticula
to.
Thankyou.A
Mr.Mandar
Thanks,Ali.T
getintouch
onefor
partic
Ladiesandg
nowdisconn
lasttimewhen
ledigitsaround
tfiscalsincew
rgrowthrate.
therearenof
apseforclosin
hankyouallfor
ithus.Ourco
ipatingagain.
A
ntlementhatc
ctyourlines.
everwemet,yo
18%20%year
arenotaddin
utyes,whenw
rtherquestion
comments.
participatingi
rdinateshave
ndhave
agood
oncludesthec
uhavebeenm
onyearforne
anycapacity,
elookatthene
inthequeue,I
thecall.Ifthe
eenprovidedi
weekend.
nference.Than
Nandan Den
February
intainingthat
t34years.Do
o it isdifficult
xt34yearsof
nowhandthec
eareanyfurth
ntheconcallin
kyouforjoinin
m Limited
2, 2016
andanDenim
youstillmaint
orustomaint
horizonweinte
onferenceover
erqueries,plea
ite.Thanksev
gusandyoum
6
ill
in
in
nd
to
se
ry
ay