20MICRONS - 20 Microns Limited Share Price

In the recent earnings call, management provided a positive outlook, indicating an expected revenue growth of 15-18% for FY 25-26, building on a remarkable annual revenue performance of Rs.9,127 million for the FY 24-25, reflecting a year-over-year growth of 17.4%. They reported a 6% increase in revenue for Q4 FY 25 compared to Q3 FY 25, supported by strategic initiatives including client onboarding and product portfolio expansion. EBITDA margins improved to 12.7% in Q4 FY 25, indicating effective cost management amidst external pressures.

Management highlighted the robust performance of various segments, with exports contributing 13% to total revenue, and the paint sector being the largest revenue driver at 48%. They plan to strengthen their market presence while aiming for profitable growth. Furthermore, operational efficiency is a priority despite rising raw material and freight costs.

Key forward-looking points include the anticipation of 18-20% growth in the value-added niche segment over the next 2-3 years, in line with market trends. Additionally, the management indicated that they are actively working on increasing ownership in their Malaysian subsidiary, currently holding 86.68% in IQ (marbles) and 90% in GTLQ. They expressed optimism about operational stability with an internal mining project expected to reduce dependency on external suppliers and enhance margins, albeit it was noted that precise margin expectations from this initiative will take time to determine as operations commence.

Overall, management conveys confidence in sustainable growth and operational excellence as strategic priorities while navigating market challenges.

Question 1: "The subsidiary we are acquiring, how much do we already own and what are we paying to acquire the remainder?"

Answer: Currently, we own 86.68% of IQ Marbles and 90% of GTLQ, with the remainder held by minor stakeholders. We're in discussions to acquire the remaining shares under our strategic plan for our Malaysian subsidiary.

Question 2: "What can be the revenue that we are expecting from the value-added niche segment for the next 2 to 3 years?"

Answer: We anticipate an 18-20% growth rate in the value-added segment, considering market trends and product approvals that take longer than in traditional segments.

Question 3: "Can you please share any guidance for FY 25-26 for top line and the bottom line?"

Answer: We are targeting a growth of 15-18% year-on-year for FY 25-26, though uncertainty in various markets may affect this outlook.

Question 4: "What margin expansion can we expect after we start extracting from the Malaysian mine?"

Answer: It's too early to specify margin expansion as mining operations will commence in the next two months, allowing us to analyze ore quality and its impact on margins.

Question 5: "What is different between Malaysian and Vietnam calcium carbonate?"

Answer: The differences include purity, brightness, and end-use applicability. Each type serves specific industries based on these unique properties.

Question 6: "What are the capacity and revenue expectations for the new plant with Dorfner?"

Answer: We have not yet announced details for the Dorfner JV. We've operationalized a different JV with Sievert focused on tile adhesives and construction chemicals.

Question 7: "What were the revenue numbers of 20 Microns Nano Minerals for last year and this year?"

Answer: For FY 24-25, we closed with revenues of INR 104 crores, an increase from INR 88 crores in FY 23-24.

Question 8: "If we have so much cash with us, then why are we borrowing?"

Answer: While we have cash reserves, we need to borrow to strengthen revenues and support working capital without compromising our CapEx plans for future growth.

This summary encapsulates key Q&A exchanges from the earnings call, respecting character limitations while maintaining the core information shared.