Pennar Industries Ltd Q2 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Harsh Bothra - Art Ventures - Analyst : Am I audible?

Question: Harsh Bothra - Art Ventures - Analyst : Thanks for the opportunity. My first question is in line with our earlier con call guidance of about PBT about 7%. What is the expected time line which we see and what are some levers if you can explain?

Question: Harsh Bothra - Art Ventures - Analyst : Thank you, and then my second question is in line with the as we have earlier, guided to exit our low margin business. First of all, let first explain me what are those low margin business and same like what is the expected timeline to exit them? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2024 / 6:00AM, PENN.NS - Q2 2025 Pennar Industries Ltd Earnings Call

Question: Harsh Bothra - Art Ventures - Analyst : That's it from me sir. Thank you and all the best.

Question: Darshan Jhaveri - Crown Capital - Analyst : Hello, good afternoon, sir. Thank you so much for taking my question. So, so I just wanted to understand now that I really planned will be operational from this quarter. So how would it impact the margins or you know how like the extra cost will be factored in for it? Like have we already hired employees, you know, just like you know, what could you give us some color on how the economics of the plant will work like utilization level that we can expect currently, what kind of revenue contribution can get?

Question: Darshan Jhaveri - Crown Capital - Analyst : Oh, okay. Oh, fair enough, sir, and sir with regards to our, you know, interest cost like so I think we are just to be just to confirm, you're saying around 3.75% of the revenue roughly like we'll be in this range only right now. Correct sir?

Question: Darshan Jhaveri - Crown Capital - Analyst : Oh, okay, sir, and sir, is there any kind of you know revenue guidance that you know, we could have for FY26 and the margin guidance for the same.

Question: Darshan Jhaveri - Crown Capital - Analyst : Is there any kind of revenue guidance for H2 and FY26 sir? In revenue and margin guidance.

Question: Darshan Jhaveri - Crown Capital - Analyst : Okay. Fair enough, sir. Yeah, that's it from me, sir. Thank you.

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : Sir. Am I audible, sir?

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : Sir. Can you throw light on this tens outlook on us because now that Trump has won and things are more clear and also PEB business here because the computers are reporting really good numbers. So if you can throw outlook 1-2 year outlook on these two, Pennar PEB US and India. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2024 / 6:00AM, PENN.NS - Q2 2025 Pennar Industries Ltd Earnings Call

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : Okay, so. Over the next 2-3 years, you feel most of our revenue line should be firing right? With the last what happened in the last 4-5 years in a sustainable manner? Most of all, I'm not saying every line of revenue.

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : If you compare the last 2-3-4 years. Can we as can we assume? I agree that things can nothing is in our hand. But but over the next 2-3 years, most most sustainable growth in terms of more revenue streams fighting up should happen, right? At least it looks like that as of now. Can I assume that?

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : Yes, but with. More revenue, more, more product lines firing up, not just from one. So it is always what happened in the last week before we had to restructure a lot of revenue lines. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2024 / 6:00AM, PENN.NS - Q2 2025 Pennar Industries Ltd Earnings Call

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : So any comments on working capital, your target, working capital in terms of number of days as converted.

Question: Vivek Kumar - Bestpals Research & Advisory - Analyst : Got it. Thank you. Thank you very much.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Hi sir, thank you for this opportunity. So I would like to first understand what is the capacity utilization currently across the plants and with the new plant coming in, I mean, what is the additional avenue potential from the new plant?

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Yeah, I mean I want to understand with the existing capacity, what is the revenue potential, maximum revenue potential.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : So sir, what kind of additional capacity are we coming up with? Apart from the INR300 crores that you mentioned and what are the timelines.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Yes.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : All right, and what is the CapEx and the I mean maximum any potential from these two.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Alright sir. Historically, we have been at about 8% to 9% of EBITDA margins. So, I mean, what kind of margins are we targeting, EBITDA margin are we targeting? And I mean, what gives us the confidence to, I mean, improve upon these margins because these are the numbers that we have historically been at and what would be, what would, what would be the main drivers of expansion in our margins.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Hold it. So my last question would be regarding the growth of what kind of CAG are we looking at for the next 2 to 3, three years? And in FY24 we did about INR3,100 crores while you mentioned that the max maximum potential is INR5,000 crores. So I mean by when do you envisage us reaching INR5,000 crores in your opinion, as per the current market demand.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : Alright. Is it realistic to you about 20% 25% growth or when you said double digit, we are talking about something in mid 10s or I mean, in that range.

Question: Gunit Singh Narang - Counter Cyclical Investments - Analyst : All right, sir. Thank you very much. Wish you all the best.

Question: Ishmohit Arora - SOIC - Analyst : Hi, sir. I just had one question, sir. When it comes to the second half of the financial year, now that our plan is kicking in, do you think that you starting some bit of operating like this coming to play in the H2 of this year?

Question: Ishmohit Arora - SOIC - Analyst : What basically do you think that we'll see some bit of operating leverage start playing out in the ed two of this financial year when it comes to looking at the operating margins of the company? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2024 / 6:00AM, PENN.NS - Q2 2025 Pennar Industries Ltd Earnings Call

Question: Ishmohit Arora - SOIC - Analyst : Right and sir, the second question is that currently on the balance sheet, I see there's another CWIP of INR128 crores, capital works in progress. Is this related to the hydraulic Capex that you're doing?

Question: Ishmohit Arora - SOIC - Analyst : Okay. Thank you, sir. Wish you all the best.

Question: Varun Ghia - Equitree Capital - Analyst : Hi sir. My first question is related to the some of the small businesses which you have exited invi Sola model businesses. So where has that cash been used utilized?

Question: Varun Ghia - Equitree Capital - Analyst : Okay, and if you could guide on the overall debt trajectory, so it's been increasing. We are even on the cost of debt. So going forward, where can we see that can we see that declining or.

Question: Varun Ghia - Equitree Capital - Analyst : Okay, thank you.

Question: Ashish Soni - Family Office - Analyst : In this quarter. How much percentage was your low margin business?

Question: Ashish Soni - Family Office - Analyst : And what about the growth in your strategic areas? Like how much percentage growth in different areas if you can give a ballpark on that as well?

Question: Ashish Soni - Family Office - Analyst : And what in terms of PEB, there is a lot of competition in India as well as the US. So are we seeing some market share challenges at least in this 2 markets or in terms of scaling up because I know the order book is increasing. But is it the same pace as your competitors are doing?

Question: Ashish Soni - Family Office - Analyst : The last question, I think you spoke about $1 billion revenue aspirations. Where do we see it getting metalizing in your plants?

Question: Ashish Soni - Family Office - Analyst : One last question, I think if I recollect the low margin business was almost 45% in one or two quarters back. Now, you said 30%. So what is this? 15% have completed some of this exited some of these businesses completed if you can elaborate on that that will also help.

Question: Ashish Soni - Family Office - Analyst : And just last question on this land bank that you have, I think so any plans on that the discussion at board level diverse that, so.

Question: Ashish Soni - Family Office - Analyst : So do you have any aspiration in the next one or two years too? Because I think you're planning for expansion, right? So instead of taking that can is both thinking in that direction to diverse and use that. Instead of taking that.

Question: Ashish Soni - Family Office - Analyst : Thank you and all the best, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. NOVEMBER 13, 2024 / 6:00AM, PENN.NS - Q2 2025 Pennar Industries Ltd Earnings Call