Sahyadri Industries gains over 1% post steady Q3 earnings

8 Feb 2022 , 09:18 AM

Sahyadri Industries Limited has declared its un-audited Financial Results for the Quarter and Nine months ended December 31, 2021.

Revenue during the quarter was impacted due to frequent cyclones in the southern India Lower other income on account of lower cash which was utilised towards capex funding impacted net profit.

EBITDA had been impacted due to sharp rise in raw material and freight cost, however the Company has passed some cost to its customers.

Update on Capacity Expansion

Perundurai (Tamil Nadu) Plant

• Capacity expansion of flat sheets
• Capex of Rs60cr has been assigned for the said facility expansion out of which we have incurred Rs47cr till now via internal accrual
• Post expansion the capacity will increase by 72,000 MT
• Commercial production is expected to begin in Q4 FY22

Odisha Plant

• Greenfield expansion for Manufacturing of Asbestos Corrugated Sheet Products
• The Company has applied with Odisha state government for necessary approvals and search for suitable land has started as per State norms
• Capex of Rs95cr has been assigned for the said facility expansion
• The Company is building capacity of 1,20,000 MTA to cater East Market
• Commercial production is expected to begin from Q3 FY23

Commenting on the results and performance for 9M FY22, Satyen Patel, Managing Director of Sahyadri Industries Limited said, “During the quarter, the company reported a steady revenue growth of 10% YoY on the back of business recovery gaining momentum. There was a moderate disruption due to Omicron variant of covid, however due to vaccination program and ease of restrictions across states, the recovery is gradually reaching its pre-covid levels.

Revenue during the quarter was impacted due to frequent cyclones in the southern India. The rise in raw material prices has an impact on gross margins and the uptick in freight costs has an impact on EBITDA margins, however the Company has passed some cost to its customers. The Company has also liquidated some treasury investments to fund capex through internal accruals which is visible with the decline in the other income in 9M FY22 as compared to 9M FY21.

We believe in enhancing shareholdeRsvalue and with that underlying thought, we have paid an interim dividend of Rs3 per shares (30% of Face value).

We have clocked 79% Capacity utilisation in 9M FY22. The work at Perundurai is in progress and commercial production is expected to begin in Q4 FY22. The company has launched couple of retail studios in Maharashtra showcasing all kinds of products and plans to open additional 50 studios by March 2022 across multiple locations. The retail division currently is a small segment and will grow in the coming quarteRswhich will boost the sales going forward.

I am delighted to announce that the Company will set up a new unit in Maharashtra for manufacturing of Non-Asbestos Cement Board having a capacity of 72,000 MT PA. The Company will incur a capex of INR 95crores and the commercial production is expected to commence by Q1FY25. The capex will be funded mostly by internal accruals and debts.

Just to reiterate, our vision is to become a Pan India Player and we are committed to achieve our vision on the back of capacity expansion, improving operational efficiencies and entering new geographies.

Also, we are awaiting Final approval of NCLT Mumbai Bench for Scheme of arrangement Between Poonam roofing products Private Limited and Sahyadri Industries Limited.”

At around 9:17 AM, Sahyadri Industries was trading at Rs525 per share higher by 1.30% on the BSE.