Beardsell Dec-17

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What has been a significant growth driver for Beardsell Limited during the quarter?

Delay in client orders due to GST implementation

Reduction of manufacturing costs

Government orders continuing during the quarter (correct)

Increase in the number of employees

What project marks Beardsell's entrance into new geographies?

IIT Jammu project for partition walls (correct)

The Quikbuild factory in Delhi

Gurgaon office development

Madhya Pradesh villas project

What amount of Quikbuild orders is currently being negotiated?

Rs. 50 million

Rs. 150 million

Rs. 100 million (correct)

Rs. 75 million

Which statement describes the reason for delays in orders from clients?

Implementation of GST (C) Signup and view all the answers

What has been approved by CPWD and various state PWDs?

Quikbuild (D) Signup and view all the answers

What has contributed to Beardsell's business success in the last 20 years?

Commitment to timely delivery (A) Signup and view all the answers

What is a significant challenge in the business landscape described?

High entry barriers for new players (B) Signup and view all the answers

What strategic model did Beardsell launch to enhance project implementation?

Franchisee/authorized licensee model (C) Signup and view all the answers

Which technology emphasizes the construction of affordable homes in smart cities?

3D technology (A) Signup and view all the answers

What characteristic of Isobuild projects has been advantageous for Beardsell?

Acceptance in government agencies (A) Signup and view all the answers

What is a primary benefit of using the Quikbuild system in construction projects?

Enhances structural integrity for high wind conditions (B) Signup and view all the answers

Which factor contributes to the reduced costs in the housing project?

Lower raw material and construction equipment costs (D) Signup and view all the answers

What strategy has Beardsell employed to maintain consistent margins in their packaging business?

Introduce new product variants instead of raising prices (A) Signup and view all the answers

What is the expected outcome for institutional customers over the next three years?

Expansion of production capacities (A) Signup and view all the answers

Which type of packaging innovation has Beardsell recently developed?

Cost-effective and shock resistant EPS packaging (A) Signup and view all the answers

What has been a significant change reported in Beardsell's revenue from Q2 FY17 to Q2 FY18?

Strong increase in revenue from established clients (B) Signup and view all the answers

Why are there high entry barriers in the packaged products market?

Complexity of the business (C) Signup and view all the answers

What is a predicted trend in sales for EPS products in the near future?

New client additions from previously untapped sectors (A) Signup and view all the answers

What unique packaging solution has Beardsell developed for electronics and ordinance items?

Anti-static packaging (B) Signup and view all the answers

What is a major focus area for Quikbuild's growth?

Southern states (C) Signup and view all the answers

Which of the following is NOT a key feature of Quikbuild's affordable housing?

High maintenance costs (D) Signup and view all the answers

Which application is specifically mentioned for the sandwich-panel based cold storage?

Marine products (D) Signup and view all the answers

What benefit does the Quikbuild panel bring to construction projects?

Consistently high quality (A) Signup and view all the answers

What type of housing is considered part of Quikbuild's modular housing solutions?

Student housing (D) Signup and view all the answers

What characteristic of Quikbuild's site offices enhances their usability?

Energy efficiency (D) Signup and view all the answers

Which benefit is highlighted for Quikbuild panels compared to RCC built structures?

Shortened project timelines (B) Signup and view all the answers

What aspect of Quikbuild's housing projects contributes to affordability?

Lightweight materials (C) Signup and view all the answers

What was the percentage decrease in revenue for Q2 FY18 compared to Q2 FY17?

27.9% (C) Signup and view all the answers

What factor largely impacted the deferment of capital expenditure (capex) by customers?

Demonetisation and GST implementation (B) Signup and view all the answers

What was the percentage change in PAT for H1 FY18 compared to H1 FY17?

-136.2% (C) Signup and view all the answers

What strategic step is being taken to improve margins in the packaging business?

Reduction in operational costs (A) Signup and view all the answers

What is the expected order finalization timeline for Quikbuild inquiries?

By end of December 2017 (B) Signup and view all the answers

What was the total revenue from operations reported for the quarter ended September 30, 2017?

381 Rs million (D) Signup and view all the answers

What main area of business is the company optimistic about, according to Bharat Anumolu?

Both Prefab and Packaging (A) Signup and view all the answers

Which financial category saw a decrease of 86.4% for H1 FY18?

EBITDA (D) Signup and view all the answers

What caused the marginal hit in revenues for the pre-fabricated business?

Customers postponing orders (C) Signup and view all the answers

How much is the total expected value of Quikbuild projects in negotiation?

Rs. 1,000 million (C) Signup and view all the answers

What was the trend in the company's total comprehensive income for the quarter ended June 30, 2017?

A decrease of 14 Rs million (C) Signup and view all the answers

What challenge did the company face in reporting its financial results?

Conversion between IGAAP and Ind AS (D) Signup and view all the answers

Which customer approach is expected to increase revenue for the packaging business?

Loyalty incentives for existing customers (B) Signup and view all the answers

What is one of the key growth drivers in the packaging business?

Bid for turnkey projects from governmental bodies (D) Signup and view all the answers

Which financial metric shows the highest improvement from FY14 to FY17?

Net Profit (A) Signup and view all the answers

What benefit contributes to the healthy growth of pre-fabricated buildings?

Rising acceptance in residential and commercial spaces (C) Signup and view all the answers

In the financial overview, which year had the lowest EBITDA figure?

FY14 (D) Signup and view all the answers

What aspect helps to mitigate the impact of raw material price volatility?

Larger customers negotiating flat processing charges (C) Signup and view all the answers

What was the net sales figure for FY17?

Rs 1,904.3 million (A) Signup and view all the answers

Which asset category showed a significant increase in value from FY14 to FY17?

Tangible Assets (A) Signup and view all the answers

What was the trend in Earnings Per Share (EPS) from FY14 to FY17?

Increase over the years (D) Signup and view all the answers

What factor contributes to the underutilized capacity in the packaging business?

Room for meeting higher demand without additional capital expenditure (D) Signup and view all the answers

What does the term 'Isobuild' refer to in the packaging context?

Steel sandwich panel business (D) Signup and view all the answers

In FY15, what was the net profit recorded?

(Rs 1.0 million) (D) Signup and view all the answers

What characterizes the interest expenses in the financial overview?

Fluctuated significantly across the years (B) Signup and view all the answers

Which fiscal year showed a significant improvement in EBITDA Margin?

FY17 (C) Signup and view all the answers

What indicated the company's improving balance sheet performance?

Rising current and non-current assets (C) Signup and view all the answers

Study Notes

Financial Year 2017-2018 Q2 & H1 Earnings Presentation

Presentation date: December 2017
Investor brief from Citigate Dewe Rogerson Communications Private Limited, enclosed for Q2 FY 2017-2018 earnings presentation

Disclaimer

Forward-looking statements in the document are subject to risks and uncertainties (government actions, local politics, economic developments, technological risks).
Beardsell Limited is not responsible for actions taken based on these statements and has no obligation to update them.

Content

Q2 & H1 FY18 Performance
Business Overview
Growth Drivers
Financial Overview

Business Highlights

Prefab: Government orders continue, implementation started in Q2; Quikbuild approved by CPWD and various state PWDs; Quikbuild orders exceeding Rs. 100 million; Launching authorized contractor/licensee programs; expanding steel fire-rated/clean rooms; Karad facility to supply steel parts for existing appliance customers.
Packaging: Steady performance with deepening relationship with consumer durable players (Godrej & Boyce, Haier); Expansion expected from subsidiary unit in Supa(Maharashtra), with volume increase of 50% by Q4FY18 and profit equal to other EPS units.
New Geographies: J&K project, IIT Jammu, Uttarakhand villas, Madhya Pradesh villas; Quikbuild projects in the North Indian region in Delhi.
Sales of Land and Building: Sale of land and building at MIDC, Patalganga, Rs. 80 million completed as of November 2017. Profit of Rs. 25.3 million to be booked in Q3 FY17.
Commercial Paper: Issued commercial paper to Indiabulls Liquid Fund - Rs. 10 crore @ 8% to reduce interest costs for working capital.
Appointment of CFO: V.V. Sridharan appointed as Chief Financial Officer.

Environment Overview

Prefab: GST expected to positively impact an organized player like Beardsell; Affordable housing exempt from GST; ITC available for all pre-fab products; 3D construction technology in 25 major cities to speed up construction under Pradhan Mantri Awas Yojana.

Managing Director's Comments

Challenges in the past couple of months; expects order booking to be healthy.
Large order win expected in January 2018 for at least one low-cost housing project by April 2018; technical parameters are met and strong references exist.
Packaging business growth is healthy; cost reduction steps to improve margins.
Optimistic about Prefab and Packaging businesses.

Financial Overview (Q2 FY18)

Revenue: Rs. 359 million (-27.9% QoQ)
EBITDA: Rs. 9 Million (-84.7% QoQ)
PAT: (Rs. 10) million (-140% QoQ)
Topline impacted due to deferment of capex by customers because of demonetization and GST implementation.

Financial Overview (H1 FY18)

Revenue: Rs. 739 million (-21.5% YoY)
EBITDA: Rs. 15 million (-86.4% YoY)
PAT: (Rs. 17) million (-136.2% YoY)
Topline impacted due to deferment of capex by customers because of demonetization and GST implementation.

Financial Reconciliation (Q2 FY18)

Reconciliation of results between previous GAAP and Ind AS accounting principles, showing revenue, profit before tax and profit after tax figures (with different ending dates)

Balance Sheet Snapshot (as of September 30, 2017)

Networth: Rs. 391 million
Fixed Assets: Rs. 420 million
Cash & Investments: Rs. 56 million
Net Debt: Rs. 85 million

Pre-fabricated Business

Revenue: Q2 2017: 245.3 million , Q2 2018: 180.6 million, H1 2017: 453.6 million, H1 2018: 330.1 million
EBIT: Q2 2017: 31.6 million, Q2 2018: 14.4 million, H1 2017: 62.6 million, H1 2018: 24.4 million
Comments: Marginal revenue hit due to customer postponements and project cancellations. West Africa project in pipeline for Q4 FY18; Own machinery for Quickbuild started; Quikbuild enquiries in negotiation stage; significant orders expected by end of December 2017.

Pre-fabricated Buildings (Growth Drivers)

Business Operations: 20-year history; focused on efficient, timely delivery.
**Market Entry Barriers:**High barriers resulting in fewer competitors.
Expertise: Using customized market needs with good delivery model in South India.
Quikbuild Business: Maintaining its momentum, with Rs. 1,000 million in enquiries.
Growth Drivers: Growing awareness of cost-effectiveness, franchisee model start-ups for scale-up, successful implementations for Isobuild, focus on 3D technologies, customer projects /assurance of payment terms and southern state focuses.

Pre-fabricated Product Offerings

Cold Storages: Sandwich-panel based, superior insulation for Marine, Fruits, Pharma, Perishable items.
Affordable Housing: Value-oriented, quake-resistant, lightweight materials.
Modular Housing: Student, worker, refugee housing, military housing.
Site Offices: Dismantlable, energy-efficient, for remote areas.

Benefits for Housing Projects

Low Cost: Reduced labor and material costs.
Fast Implementation: Time-efficient design, production, transportation, and erection.
Uniform Quality: Structural integrity, earthquake resistance and high winds.
Simple Construction: Consolidation of masonry, insulation, plastering, utilities thus reducing construction complexity.

Completed Projects

List of completed project images (I & II).

Business Overview (Packaging & Molded Products)

Revenue: Q2 2017: 218 million , Q2 2018: 163.7 million, H1 2017: 433.8 million, H1 2018: 371.3 million
EBIT: Q2 2017: 31 million, Q2 2018: 10.5 million, H1 2017: 59.1 million, H1 2018: 20.8 million
Comments: Strong relationships with consumer durable players; Cost reduction strategies; Increasing revenues from large customers and new flexible foam business.

Packaging & Molded Products Business (Growth Drivers)

High-value/bigger ticket-size customers; New product variants instead of price increases.
High entry barriers due to business complexity.
Increasing demand and quality service sales expected in the near future.
Aggressive marketing and cost advantages.
Institutional customer expansion expected over following 3 years.

Packaging & Molded Products Business

Company innovations in packaging design and development.
Providing cost-effective & shock-resistant EPS packaging solutions.
Anti-static packaging for electronics & explosives.
Safe & secure transportation solutions for top consumer durable companies.

Driving Organizational Growth

Pre-fabricated Buildings: Bidding on turnkey projects from private and government bodies.
Packaging: Immunity from raw material price volatility; underutilized capacity; and negotiation for flat processing for larger clients
Pharma, Electronics & Specialty: Government requirements for Isobuild (steel sandwich panel) business.

Financial Overview (Income Statement)

Figures for FY14, FY15, FY16 and FY17 for Net Sales, EBITDA, EBITDA Margin, EBIT, Interest, Tax Expense, Net Profit and Earnings per Share. Consolidated figures for the later years.

Financial Overview (Balance Sheet Performance)

Figures for FY14, FY15, FY16 and FY17 for Equity and Liabilities (Shareholders’ fund; long term borrowings and provisions), Assets (Tangible assets; WIP; Goodwill; current investments, loans etc); and Current liabilities (short term borrowings, trade payables, current liabilities, provisions etc.).

Contact Details

Contact information (phone numbers, emails) for Gavin Desa and Rabindra Basu of CDR India.

Thank You

Thank you message included.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

This quiz explores the significant growth drivers and strategic initiatives of Beardsell Limited over the recent quarter. Test your knowledge on key projects, client challenges, and technologies that influence the company’s success and future endeavors in the construction sector.