Delton Cable Nov-24

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Questions and Answers

Which sectors present substantial potential for growth according to the company overview?

  • Real Estate and Manufacturing
  • Retail and Hospitality
  • EPC, Railway, and Telecom (correct)
  • Healthcare and Agriculture

What aspect of the company has contributed to its strong brand recall over 75 years?

  • Heavy investment in digital marketing
  • Long-standing customer relationships (correct)
  • Diverse product range and sustainable practices
  • Innovative pricing strategies

What type of solutions does the company offer in the context of Structured Cabling?

  • Smart Metering solutions (correct)
  • Renewable energy solutions
  • Telecom and EPC solutions
  • High-voltage electric solutions

Which statement best describes the company's market strategy?

<p>To be a niche player in low-voltage electric products (C)</p> Signup and view all the answers

How does the company describe its operational model?

<p>As a one-stop shop for low-voltage electric products (C)</p> Signup and view all the answers

Which of the following cable types are used in railway signaling?

<p>Railway Quad Cables (B), Control Cables (C)</p> Signup and view all the answers

What is the primary focus area of Delton as a cable solutions partner?

<p>Railways and Telecom (B)</p> Signup and view all the answers

Which segment is NOT mentioned as one of Delton's served domains?

<p>Automotive (A)</p> Signup and view all the answers

Which type of cables are specifically mentioned for underground applications?

<p>PIJF Cables (D)</p> Signup and view all the answers

What is the emphasis of Delton's offered products?

<p>Premium Products with Prime Performance (D)</p> Signup and view all the answers

Which of these connections is highlighted in Delton's slogan?

<p>We Connect, We Protect (D)</p> Signup and view all the answers

Which of the following customers does Delton primarily serve?

<p>EPC Companies (C)</p> Signup and view all the answers

In which sector is telecommunications specifically categorized in the content?

<p>Diverse Domains (C)</p> Signup and view all the answers

What is the company's target working capital cycle range?

<p>100-120 days (C)</p> Signup and view all the answers

How does the company plan to enhance productivity?

<p>By employing an asset-light approach with leased facilities (C)</p> Signup and view all the answers

What is the maximum cash conversion cycle noted in the data for FY25?

<p>136 days (D)</p> Signup and view all the answers

Which strategy does the company adopt regarding public sector clients?

<p>Reduce focus on public sector clients (C)</p> Signup and view all the answers

What percentage does the company aim to maximize asset utilization through?

<p>58% (D)</p> Signup and view all the answers

In terms of the working capital cycle, which metric appears in the data?

<p>Receivables Days (C)</p> Signup and view all the answers

What approach is the company moving away from in its operational strategy?

<p>CAPEX heavy approach (A)</p> Signup and view all the answers

What is the cash conversion cycle in days reported for FY22?

<p>206 days (B)</p> Signup and view all the answers

What percentage growth did Delton Cables report for its revenue in Q2 FY25 compared to the previous year?

<p>94% (C)</p> Signup and view all the answers

What is the EBITDA margin for Delton Cables in Q2 FY25?

<p>6% (D)</p> Signup and view all the answers

How much was the increase in PAT for Q2 FY25 compared to the same quarter the previous year?

<p>155% (A)</p> Signup and view all the answers

What is the total value of Delton Cables' current order book as of September 30, 2024?

<p>₹ 2750 million (D)</p> Signup and view all the answers

Which segment contributed 46% to the revenue in Q2 FY25?

<p>Railways (A)</p> Signup and view all the answers

What was the investment approved by the board for setting up an additional capacity (Plant III)?

<p>₹ 100 million (A)</p> Signup and view all the answers

What was the percentage growth of EBITDA for H1 FY25 compared to the previous year?

<p>50.9% (A)</p> Signup and view all the answers

Which of the following contributed the least to the revenue during Q2 FY25?

<p>Other segments (A)</p> Signup and view all the answers

What is the manufacturing capacity of the facilities mentioned?

<p>700 CR (B)</p> Signup and view all the answers

Which sector is NOT mentioned as a focus area for expansion?

<p>Aerospace (B)</p> Signup and view all the answers

What approach is emphasized for conventional sectors?

<p>Unconventional approach (B)</p> Signup and view all the answers

What key factor is emphasized for business positivity?

<p>Private Sector spending (A)</p> Signup and view all the answers

Which factor is categorized as an external factor impacting business?

<p>Central government policies (D)</p> Signup and view all the answers

What is the primary focus of the strategic transformation mentioned?

<p>Large Private EPC players (B)</p> Signup and view all the answers

What is a key strength identified in the manufacturing base?

<p>State-of-the-art facilities (B)</p> Signup and view all the answers

What drives the strategy towards a sustainable revenue model?

<p>Optimizing profit margins (D)</p> Signup and view all the answers

Which of the following is NOT a part of the output expected from the transformation process?

<p>Improved brand recognition (B)</p> Signup and view all the answers

What aspect does the organization want to build on in terms of market leadership?

<p>Quad cables (C)</p> Signup and view all the answers

What is highlighted as a crucial internal factor for growth?

<p>Demand-pull focus (A)</p> Signup and view all the answers

Which government initiative is mentioned as a driving force for expansion?

<p>Make in India (B)</p> Signup and view all the answers

What aspect of revenue strategy is emphasized for future growth?

<p>Sustainable practices (A)</p> Signup and view all the answers

What does the strategy aim to enhance besides growth?

<p>Profit margins (A)</p> Signup and view all the answers

What is the focus area for expanding the approval base?

<p>Catering to more players (B)</p> Signup and view all the answers

What was the PAT for Q2FY25?

<p>154 million (C)</p> Signup and view all the answers

What was the EBITDA margin for H1FY25?

<p>8.4% (B)</p> Signup and view all the answers

What was the total income from operations for H1FY25?

<p>3,191 million (C)</p> Signup and view all the answers

Which of the following had the highest percentage increase in Year-over-Year (YoY) in Q2FY25?

<p>PAT (A)</p> Signup and view all the answers

Which line item saw a decrease in the total for H1FY25 compared to H1FY24?

<p>Total Equity (A)</p> Signup and view all the answers

What was the significant exceptional item noted in Q2FY25?

<p>Exceptional Gains (A)</p> Signup and view all the answers

What was the percentage increase in cash and cash equivalents from FY24 to H1 FY25?

<p>44.3% (C)</p> Signup and view all the answers

What was the total assets value for H1 FY25?

<p>3,462.7 million (C)</p> Signup and view all the answers

What was the percentage change in the Cost of Materials Consumed in H1FY25 compared to H1FY24?

<p>109.7% (D)</p> Signup and view all the answers

What was the finance cost for Q2FY25?

<p>64.3 million (A)</p> Signup and view all the answers

Which metric reflects the profitability in terms of equity for FY24?

<p>RoE (A)</p> Signup and view all the answers

What was the reported EBITDA for Q2FY25?

<p>104.3 million (A)</p> Signup and view all the answers

What was the year-on-year (YoY) growth in employee benefits expense from Q2FY24 to Q2FY25?

<p>67.9% (B)</p> Signup and view all the answers

Which component contributed the most to total liabilities in H1 FY25?

<p>Borrowings (D)</p> Signup and view all the answers

Flashcards

What is the core business of the company?

A company offering a wide range of low-voltage electrical products for different industries.

What are the primary target markets for the company?

The company specializes in providing electrical products and services to the EPC, Railway, and Telecom sectors.

What does 'Long-standing Customer Relationships' suggest about the company?

This implies that the company has a strong reputation and long-standing relationships with its customers.

How does the company cater to the EPC sector?

The company caters to the top EPC contractors in India, showing its expertise and influence in the industry.

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What is the company's role in the railway sector?

The company aims to play a significant role in the modernization of India's railway system by providing specialized cables.

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Railway & Metro Cables

Cables used in railway and metro networks for signaling, power, and communication purposes. Examples include underground, shielded, and Quad cables.

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Industrial Braided Instrumentation Cables

These cables are designed to be robust and reliable, often featuring features like shielding and armoring to protect them from harsh environments.

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Control Cables

This type of cable is used for communication between control systems and devices often found in industrial applications

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Underground PIJF Cables

These cables are designed to be durable and survive harsh environments, often insulated with protective materials like jelly filling.

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Industrial Cables for Diverse Sectors

Cables used in various industrial applications like oil and gas, energy, and transportation, often requiring specific features to meet challenging conditions.

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Railway Telephone Cables

These cables provide the essential communication infrastructure for railway networks, enabling voice and data transmission.

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Delton's Customer Base

Delton is a well-known supplier of cables and cabling solutions for various sectors, including railways and telecommunications, fostering partnerships with major clients.

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Delton's Diverse Domain Expertise

Delton's expertise extends to various domains, meeting diverse demands across sectors like energy, transportation, and telecommunications.

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Cash Conversion Cycle

The time it takes a company to convert its investments in inventory and other resources into cash from sales.

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Asset Light Approach

A strategy focusing on using leased assets to achieve increased productivity.

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Sweating Assets

Refers to the company's strategy of maximizing the utilization of assets by focusing on efficient operations.

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Operating Expenses (OPEX)

The cost of running a business, including salaries, rent, and utilities.

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Capital Expenditure (CAPEX)

Spending on acquiring fixed assets like buildings and equipment.

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Shifting Focus in Client Base

Reducing dependence on public sector clients and focusing on EPC players with high ratings.

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Direct Sales Approach

This refers to streamlining operations by utilizing direct sales channels to customers, eliminating intermediaries.

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Working Capital Cycle Target

The company aims to maintain its working capital cycle between 100 and 120 days, focusing on efficiency in managing its resources.

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Delton Cables Q2 & H1 FY25 Performance

Delton Cables' financial performance during the second quarter (Q2) and first half (H1) of the fiscal year 2025.

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Q2 FY25 Revenue

Total revenue generated by Delton Cables during Q2 FY25, showing a significant increase compared to the same period last year.

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Q2 FY25 EBITDA

The profit generated by Delton Cables after deducting operating expenses from revenue in Q2 FY25.

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Q2 FY25 PAT

Net profit earned by Delton Cables during Q2 FY25.

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Total Order Book

Delton Cables' total order book as of September 30, 2024, representing the value of all contracts they have secured and are yet to fulfill.

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Plant III Capacity Expansion

Delton Cables' investment in setting up an additional manufacturing facility (Plant III) to cater to increasing demand from the telecom sector.

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H1 FY25 Revenue

The total revenue generated by Delton Cables during the first half of FY25, signifying impressive growth compared to the previous year.

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H1 FY25 EBITDA

EBITDA earned by Delton Cables during the first half of FY25, indicating a strong financial performance.

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Demand-Pull Strategy

A strategy focused on selling products based on existing customer needs, rather than pushing new products.

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Profit Margin Optimization

A strategy focused on maximizing profit margins by efficient resource allocation and cost management.

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Sustainable Revenue Growth

A strategy focused on generating sustainable revenue growth and ensuring long-term business stability.

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Aligned Dynamics

The combination of internal factors, such as a company's vision and operations, with external factors, such as government policies and market trends.

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Endurance

The ability to withstand economic fluctuations and market challenges by adapting to changing conditions.

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Strategic Transformation

The process of transforming a business to unlock its potential by taking a new approach and focusing on specific areas with the potential for high growth.

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EPC Project Cables

Cables designed for transmission of electricity and data in construction projects.

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Railway Cables

Cables designed for the transmission of electricity and data on railway networks.

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Telecom Cables

Cables designed for the transmission of data in telecommunications networks.

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Building on Brand Recall

A business strategy focused on the expansion of a product offering into related segments by leveraging existing brand recognition and expertise.

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PAN India Presence

A focus on expanding a company's product offerings and presence across different geographical regions.

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Structured Cabling Solutions

A focus on developing and offering structured cabling solutions for buildings and infrastructure.

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Untapped Areas

The identification and exploitation of untapped markets and opportunities for growth.

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Tailored Solutions

The allocation of resources to cater to the specific needs and market demands of each business segment.

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Market Leadership

A business strategy focused on achieving market dominance in specific sectors by leveraging existing strengths and recognizing market opportunities.

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Q2FY25 Total Revenue

The company's total income from operations in the second quarter of fiscal year 25 (Q2FY25) was INR 1,752.9 million.

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H1FY25 Total Revenue

The company's total income from operations in the first half of fiscal year 25 (H1FY25) was INR 3,191.3 million.

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H1FY25 PAT

The company's net profit after tax (PAT) in the first half of fiscal year 25 (H1FY25) was INR 115.1 million.

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Return on Assets (RoA)

This ratio measures a company's profitability relative to its total assets. It reflects how efficiently a company uses its assets to generate profits.

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Return on Equity (RoE)

This ratio assesses a company's profitability relative to its equity. It reveals how effectively a company utilizes funds invested by shareholders to generate profits.

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Working Capital (W.Cap) Days

This ratio highlights a company's efficiency in managing its working capital. A lower number generally indicates better working capital management, while a higher number might suggest inefficiencies.

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Return on Capital Employed (RoCE)

This ratio assesses a company's return on capital employed, encompassing debt and equity. It underscores how effectively a company leverages its entire capital base to create profits.

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H1FY25 Total Assets

The company's total assets at the end of the first half of fiscal year 25 (H1FY25) were INR 3,462.7 million.

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H1FY25 Total Equity

The company's total equity at the end of the first half of fiscal year 25 (H1FY25) was INR 828.7 million.

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H1FY25 Total Liabilities

The company's total liabilities at the end of the first half of fiscal year 25 (H1FY25) were INR 3,462.7 million.

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FY24 Total Revenue

The company's operating income, or revenue, for the fiscal year 2024 (FY24) was INR 2,738.8 million.

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FY24 EBITDA

The company's operating profit before interest and taxes (EBITDA) for the fiscal year 2024 (FY24) was INR 195.6 million.

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FY24 PAT

The company's net profit after tax (PAT) for the fiscal year 2024 (FY24) was INR 146.6 million.

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Study Notes

Investor Presentation

  • Delton Cables Limited presented on November 12, 2024.
  • The presentation included unaudited financial results for the quarter and half year ending September 30, 2024.
  • Information also available on the company's website (www.deltoncables.com)
  • The presentation adhered to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
  • Vivek Gupta, Managing Director, signed the presentation.
  • DIN: 00035916

Company Overview

  • Delton Cables is a pioneering company specializing in low-voltage cables.
  • Founded over 75 years ago, Delton Cables has a strong brand recall for telecommunication cables.
  • Has expanded into sectors like railways, EPC, and smart metering.
  • The company's vast product offerings and robust approval base position it as a leading low-voltage cable supplier to global customers.
  • The company offers a wide array of low-voltage electric products including wire & cables, structured cabling solutions, and smart metering solutions (Smart Meters)
  • Strong history over 75 years, established pan-India presence, and customer relationships.

Diverse Product Range

  • Delton Cables caters to a wide variety of sectors, including EPC contractors, Railways, and Telecom.
  • Product lines include Industrial Braided Instrumentation Cables, Individual Shielded Instrumentation Cables, Underground Signaling Cables, Railway Quad Cables, Optic Fiber Cables, Telephone Cables, Overall Shielded Control Cables, Power Cables, Underground PDF Telephone Cables, Jelly Filled Cables, and Railway Telephone Cables.
  • Delton is a preferred cable and cabling solution partner for many EPC, Railways, and Telecom customers across India.

Diverse Segments

  • Delton Cables caters to various sectors: Aerospace, Energy, Smart Metering solutions, Oil & Gas, Telecommunications, Railways, Cement & Steel, Defence, and Transportation.

Key Strengths

  • Focused, growth-oriented, niche market approach.
  • Strategic focus on Telecom and Railway sectors.
  • Established pan-India presence and sales network.
  • Strong customer relationships and brand recall.
  • Flexible and effective manufacturing base and capacity.
  • Strong internal factors like clarity and efficiency.
  • External factors and policy alignment with infrastructure spending.

Segment Strengths

  • EPC Project Cables: Focused on Pan-India expansion and new opportunities
  • Railway Cables: Strong presence in existing market.
  • Telecom Cables: Building on brand recall to related segments.

Strategic Transformation

  • Past Hurdles: Concentrated product portfolio, non-diversified segments, and concentrated clientele.
  • Transformation Process: Focus on large private EPC players, building a niche product portfolio, and effective working capital management.

Key Growth Metrics: Revenue & Profitability

  • Revenue growth for Q2 2024-2025
  • Growth in Capacity Utilization
  • Revenue increase compared with previous years.
  • Significant increases in profitability.
  • New segment additions to propel company growth

Key Growth Metrics: Working Capital Efficiency

  • Rationalized Inventories
  • Focus on high-rated customers
  • Maintains a healthy working capital cycle

Future Growth

  • Asset-light approach to maximize asset utilization
  • Continued investment in additional manufacturing capacity (Plant III) to cater to emerging sectors.

Board Members

  • The presentation features details about the company's board members.

Corporate Information

Financial Highlights (Q2 & H1 FY25)

  • Significant revenue growth.
  • Improvement in EBITDA and PAT margins.
  • Increased capacity utilization and efficiency in working capital management.
  • Robust order book.

Result Analysis (H1 FY25)

  • Revenue and EBITDA growth compared to previous years.

Result Analysis (Q2 FY25)

  • Significant revenue growth during the second quarter
  • Strong performance in EBITDA and profitability during the second quarter.

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