Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- AGI Greenpac Ltd (BOM:500187, Financial) reported a total income of INR611 crore for Q2 FY25, despite a scheduled furnace downtime.
- EBITDA increased by 20% year-on-year to INR166 crore, with a 27% margin, indicating improved operational efficiency.
- The company completed its furnace relining project in August 2024, which is expected to enhance operational efficiency and capitalize on growing demand.
- AGI Greenpac Ltd expanded its international presence by incorporating a wholly-owned subsidiary in the UAE to boost exports.
- The company received the SEEM National Sustainability Award for its contributions to sustainability, focusing on climate change, water stewardship, and waste minimization.
Negative Points
- There was a slight increase in other expenses this quarter, which could indicate potential cost pressures.
- The company faces ongoing litigation related to acquisitions, which could impact financial outcomes.
- Soda ash prices, a key input, remain volatile due to global supply-demand dynamics and geopolitical tensions.
- The market for mass segment glass containers faces competition from PET alternatives, which could impact demand.
- The acquisition of Hindustan National Glass is still pending due to ongoing court proceedings, creating uncertainty in expansion plans.
Q & A Highlights
Q: Can you explain the fluctuations in other expenses over the past few quarters?
A: Sandeep Sikka, Group CFO, explained that the fluctuations are primarily due to litigation-related expenses. These are expected to stabilize once the adjudication process is complete.
Q: What is the outlook for volume and revenue growth over the next two years?
A: Rajesh Khosla, CEO, stated that while the company is operating at high capacity utilization, they are exploring opportunities for inorganic growth, such as the potential acquisition of Hindustan National Glass (HNG), which could increase capacity.
Q: How are soda ash prices affecting your operations, and do you benefit from the drop in Chinese prices?
A: Rajesh Khosla noted that soda ash prices are influenced by demand and supply dynamics, and while there has been some price reduction, it is balanced by increased freight costs due to geopolitical tensions. The impact of Chinese prices is minimal on a global scale.
Q: Can you provide insights into the specialty glass segment and its sustainability?
A: Rajesh Khosla highlighted that the specialty glass segment is evolving and requires significant technology and skilled manpower. The company is on track with its plans and expects this segment to contribute positively to future growth.
Q: What is the status of the Hindustan National Glass acquisition, and what are the strategic reasons behind it?
A: Sandeep Sikka mentioned that the acquisition is currently under legal proceedings, and details cannot be disclosed. However, the acquisition aims to enhance market control in northern and eastern regions and improve operational efficiencies.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
