Delton Cables May-24

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Questions and Answers

What is the primary market focus of the company?

  • Heavy machinery and equipment
  • High-voltage electric products
  • General consumer electronics
  • Niche market of low-voltage electric products (correct)

Which sectors offer substantial potential for the company?

  • Banking and finance
  • Manufacturing and textiles
  • EPC, Railway, and Telecom sectors (correct)
  • Retail and e-commerce

How long has the company been established?

  • Over 50 years
  • Over 100 years
  • Over 75 years (correct)
  • Over 25 years

What type of solutions does the company provide in addition to wire and cables?

<p>Smart metering solutions (B)</p> Signup and view all the answers

What key attribute contributes to the company's reputation?

<p>Long-standing customer relationships (C)</p> Signup and view all the answers

What is the improved Cash Conversion Cycle for the company based on the data?

<p>116 days (B)</p> Signup and view all the answers

What strategy was employed to rationalize inventories?

<p>Reducing SKUs and following a focused product range (B)</p> Signup and view all the answers

What is the target working capital cycle range the company aims to maintain?

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

What focus shift is indicated regarding public sector clients?

<p>Reduce focus on public sector clients and shift to high-rated EPC players (C)</p> Signup and view all the answers

What approach is the company employing for future growth?

<p>An asset light approach utilizing leased facilities (D)</p> Signup and view all the answers

What percentage of asset utilization improvement is targeted through sweating assets?

<p>76% (A)</p> Signup and view all the answers

What is the primary focus when installing top-tier machinery for higher productivity?

<p>Using an OPEX model instead of CAPEX (D)</p> Signup and view all the answers

What change occurred in the Cash Conversion Cycle from FY22 to FY23?

<p>Decreased by 48 days (D)</p> Signup and view all the answers

What significant development occurred for Delton in 1980?

<p>First license to make Jelly Filled cables (B)</p> Signup and view all the answers

Which year marks the transformation for the Maiden Metro Line of DMRC?

<p>2023 (C)</p> Signup and view all the answers

In which year did Delton first supply cables for ISRO's satellite space project?

<p>2002 (C)</p> Signup and view all the answers

What product expansion is mentioned for the year 2020?

<p>Supply to Rawatbhata atomic power station (D)</p> Signup and view all the answers

Who is described as the second generation leader of Delton?

<p>Mr. Gupta (A)</p> Signup and view all the answers

Which product was first manufactured by Delton in 1955?

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

What aspect of the company is highlighted as beneficial for investors?

<p>Strong tailwinds for long-term growth (C)</p> Signup and view all the answers

What is the allocated capital for the phased capex plan in FY22?

<p>INR 2500 cr (C)</p> Signup and view all the answers

What was initiated by Delton in 1957?

<p>Inaugurated textile braided cordage manufacturing (C)</p> Signup and view all the answers

Which approach is employed for resource allocation in the phased capex plan?

<p>An Asset Light Approach (B)</p> Signup and view all the answers

In which year is the pivotal year noted for the phased capex plan?

<p>2024 (C)</p> Signup and view all the answers

What percentage does the extra high voltage segment represent in the branded vs unbranded share?

<p>45% (B)</p> Signup and view all the answers

What is the main segment focus of the company?

<p>Predominantly low-voltage segment (C)</p> Signup and view all the answers

How long has the company been a well-known brand in the industry?

<p>75 years (C)</p> Signup and view all the answers

What is the market size noted in billions for the specified context?

<p>27.8 Bn (B)</p> Signup and view all the answers

Which market approach is the company adopting according to its presence?

<p>B2B2C approach (D)</p> Signup and view all the answers

What percentage of the market is represented by the low voltage segment?

<p>74% (D)</p> Signup and view all the answers

What is the projected growth strategy mentioned for future growth?

<p>Systematic resource management (A)</p> Signup and view all the answers

What was the percentage increase in total income from operations from Q4FY23 to Q4FY24?

<p>64% (A)</p> Signup and view all the answers

Which financial figure represents the EBITDA margin for FY24?

<p>7.7% (B)</p> Signup and view all the answers

What was the reported profit after tax (PAT) for Q4FY24?

<p>146.6 (D)</p> Signup and view all the answers

How much did the finance costs increase in percentage from FY23 to FY24?

<p>109% (C)</p> Signup and view all the answers

What was the total equity reported in FY24?

<p>713.3 million (C)</p> Signup and view all the answers

Which of the following shows the decrease in tax from Q4FY23 to Q4FY24?

<p>-62% (A)</p> Signup and view all the answers

What was the year-over-year change (YoY) in employee benefits expense for FY24?

<p>49% (C)</p> Signup and view all the answers

What was the total assets figure for FY24?

<p>2672.2 million (A)</p> Signup and view all the answers

Which reported percentage shows the increase in manufacturing expenses from Q4FY23 to Q4FY24?

<p>97% (D)</p> Signup and view all the answers

What is the increase in profit before tax (PBT) after exceptional items, represented as a percentage increase from Q4FY23 to Q4FY24?

<p>747% (C)</p> Signup and view all the answers

How much was the reported revenue for FY23?

<p>2734.8 million (D)</p> Signup and view all the answers

What was the reported cash and cash equivalents for FY24?

<p>84.8 million (D)</p> Signup and view all the answers

What percentage did the cost of materials consumed represent for FY24?

<p>59% (A)</p> Signup and view all the answers

Which year showed the highest reported EBITDA at a glance?

<p>FY24 (A)</p> Signup and view all the answers

What is the primary focus of the manufacturing facilities mentioned?

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

Which sector is NOT mentioned as part of the strategic focus for expansion?

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

What is the aim of Delton’s efforts in relation to government support in telecom?

<p>To roll out 5G effectively (B)</p> Signup and view all the answers

Which of the following is a key factor aligned with internal dynamics?

<p>Focus on demand-pull strategy (D)</p> Signup and view all the answers

What is emphasized in the company’s growth strategy?

<p>Sustainable revenue growth (D)</p> Signup and view all the answers

Which segment is currently seeing increased approvals?

<p>Power cables segment (B)</p> Signup and view all the answers

Which trend is expected to bolster private sector expenditures?

<p>Higher GDP growth rates (A)</p> Signup and view all the answers

What is one of the outputs of the strategic transformation process noted?

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

What characterizes the company’s approach to conventional sectors?

<p>An unconventional approach (A)</p> Signup and view all the answers

Which of the following is a factor influencing external dynamics?

<p>Private sector capital expenditure (D)</p> Signup and view all the answers

What key strength is emphasized in the manufacturing base?

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

Which factor is NOT aligned with the internal dynamics of the company?

<p>Reduction of labor costs (A)</p> Signup and view all the answers

How is market leadership in Quad Cables described?

<p>Building on market leadership (B)</p> Signup and view all the answers

What does the strategy heavily emphasize for achieving profit margins?

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

Flashcards

What is this company's key selling point?

This company offers a wide range of electrical products for different sectors, making it a convenient one-stop shop for customers.

What are the company's focus sectors?

The company focuses on specific sectors like EPC, Railway, and Telecom, where there is good potential for growth.

What distinguishes the company in terms of experience?

The company has a long history and a strong reputation in the market, built over 75 years.

What types of cables does the company specialize in?

The company offers various cable types, specifically for EPC, Railway, and Telecom sectors.

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What other solutions does the company provide?

The company offers other solutions besides cables, like structured cabling, metering solutions (smart meters), and more.

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Focus on Large Private EPC Players

A strategic approach that emphasizes investing in large private EPC players within the company's targeted sectors like telecom and railway.

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Tailored Solutions for Each Segment

Delton's commitment to developing tailored solutions for each segment's unique needs.

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Increasing Approvals in Power Cable Segment

The company's emphasis on securing approvals for its products in the power cable segment.

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Consolidated Market Share in Railway Segment

Expanding Delton's market share in the railway segment by offering a consolidated brand presence.

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Leveraging Government Infrastructure Spend

The company's vision to leverage government infrastructure spend, particularly in telecom and railway.

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Demand-Pull Strategy

This strategy aims to create a demand-driven, sustainable revenue model for the company.

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Sustainable Revenue and Growth Strategy

The company's commitment to generating sustainable revenues and profits, emphasizing responsible business practices.

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Aligned Dynamics

A combination of internal and external factors that influence Delton's growth and market position.

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Demand-Pull Focus

Delton's approach involves focusing on manufacturing and selling products that are in high demand, rather than pushing products that may not be desired by the market.

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Concentrated Product Portfolio

Delton's past hurdles include having a concentrated product portfolio.

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Transformation Process

Delton's transition from focusing on a niche product portfolio to expanding into larger private EPC players.

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Effective Working Capital Management

Delton's strategy to achieve revenue growth and improved profitability through effective management of working capital.

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Bringing Equilibrium

Delton's efforts to balance internal and external factors, aligning its vision, policies, and operations to achieve goals.

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What is cash conversion cycle?

It represents the time a company takes to convert its investments in inventory and other resources into cash.

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How did this company improve its inventory management?

Reducing the number of SKUs (stock keeping units) and focusing on products that generate high value increases efficiency.

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How did the company improve its receivables?

Reducing focus on public sector clients and targeting EPC players with high creditworthiness

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What is the company's working capital management strategy?

The company aims to manage its working capital cycle within a specific range, ensuring optimal efficiency.

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What is the company's asset management strategy?

The company prioritizes efficient use of existing assets rather than acquiring new ones.

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What is an OPEX model?

This approach involves a focus on operational expenses rather than large capital expenditures.

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What are OPEX?

It refers to the expenses incurred to run the day-to-day operations of a business.

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What is CAPEX?

It refers to investments in long-term assets, such as property, equipment, and machinery.

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Capitalizing Higher Asset Turnover

A strategy to accelerate the turnover of assets, usually through investments to increase capacity or efficiency, while maintaining a focus on minimizing capital expenditure.

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Asset Turnover (A/T)

A financial measure that shows how efficiently a company is utilizing its assets to generate revenue. A high turnover indicates efficient asset use.

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Capacity Utilization

The percentage of a company's production capacity that is being utilized. A high utilization rate indicates efficient operations.

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Phased Capex Plan

A deliberate approach to gradually invest in assets over time, focusing on efficiency and maximizing asset utilization while keeping capital expenditure low.

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Asset Light Approach

An approach to business that aims at minimizing the amount of capital tied up in physical assets, focusing on renting, leasing, or strategic partnerships for resources.

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Pivotal Year

The point in time where a company reaches a critical turning point in its growth trajectory, often marked by significant investments in assets.

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Market Size

The size and value of the market for electrical products, which are categorized by voltage levels.

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Share by Voltage

A measure of the size of the market for cables, grouped by their voltage level, including low, medium, and high voltage.

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Strong Tailwinds

The company's growth trajectory is strong due to favorable market conditions and internal strengths.

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We Connect We Protect

The company is focused on connecting and protecting infrastructure and systems in various sectors.

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Delton's History Tapestry

The company has been supplying cables and related products for various significant projects since its inception.

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First Braided Cordage Manufacturer in India

A key milestone in 1957 marked the beginning of Delton's manufacturing of braided cordage for the first time in India.

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Delton's IPO on the BSE

Delton's IPO on the Bombay Stock Exchange in 1982 marked a significant step in its growth journey.

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ISRO Cable Supplier

Delton's involvement in supplying cables for the Indian Space Research Organisation (ISRO) demonstrates its expertise in advanced technology.

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Expanding Product Portfolio

Delton's expansion into structured cabling solutions showcases its commitment to expanding its product portfolio.

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Second Generation Leadership

The company's board is led by a family member, Mr. Gupta, who has been the Chairman for 17 years.

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What is PAT?

The profit a company makes after deducting all expenses from its revenue.

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What is EBITDA Margin?

A measure of a company's profitability, calculated by dividing EBITDA by total revenue.

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What is a Profit & Loss Statement?

A financial statement summarizing a company's revenues, expenses, and resulting profit or loss over a specific period.

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What are Total Assets?

This refers to the total assets a company owns, including both current and non-current assets.

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What is Total Equity?

This represents a company's ownership structure, including shares held by investors and retained earnings.

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What are Total Liabilities?

This includes all the money a company owes to others, both short-term and long-term liabilities.

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What is Total Income from Operations?

This represents the amount of money a company makes from its core business operations.

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What are Total Operating Expenses?

This refers to all the expenses incurred by a company in the production and sale of goods or services.

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What is EBITDA?

This represents the profit a company generates before accounting for interest, taxes, depreciation, and amortization.

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What are Depreciation & Amortisation?

These are expenses related to using and maintaining a company's assets, such as machinery and equipment.

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What is PBT?

This is the profit a company makes after deducting all expenses except for taxes.

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What are Borrowings?

This represents the amount of money a company owes to financial institutions or other lenders.

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What is Return on Capital Employed (RoCE)?

This measures how efficiently a company uses its assets to generate profits.

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What is Return on Equity (RoE)?

This metric measures how much profit is generated from each rupee of shareholder investment.

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What is Working Capital Days?

This refers to the amount of time a company takes to convert its investments in inventory into cash.

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Study Notes

Investor Presentation - Delton Cables Ltd

  • Date: May 15, 2024
  • Purpose: Investor presentation for the audited financial results of the company for the quarter and financial year ended March 31, 2024.
  • Compliance: Complies with SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015.
  • Company information:
    • Registered office: Delton House, 4801, Bharat Ram Road 24, Darya Ganj, New Delhi - 110002 (INDIA)
    • Phone: +91-11-23273907
    • Email: [email protected]
    • Website: www.deltoncables.com
    • CIN: L31300DL1964PL C004255
    • ISO 9001-2008 Company
    • BSE Scrip Code: 504240
  • Company Overview:
    • Delton Cables is a pioneering cable and wires company specializing in low-voltage cables.
    • 75 years of experience.
    • Strong brand recall for telecom cables.
    • Now a customized branded supplier for high-growth sectors like railways, EPC, telecom, and smart metering.
    • Extensive presence in India.
    • Supplying cables for ISRO, Maiden Metro, etc.
    • Focused, growth-oriented with a niche market (EPC, Railway, Telecom).
  • Key Strengths:
    • Large product portfolio (Wire & Cables, Structured Cabling Solutions, Metering Solutions (Smart Meters)).
    • Long-standing customer relationships. Extensive brand recall.
    • Broad reach (Pan-India Presence and Sales Network).
  • Versatile Product Range:
    • Cables catering to the top EPC contractors in India.
    • Catering to the rapidly growing railway and metro network in India.
    • Strength in the modernization of India's telecom sector.
  • Diverse Segments:
    • Products for various industries: Aerospace, Energy, Smart Metering, Oil & Gas, Telecommunications, Railways, Cement & Steel, Defence and Transportation.
  • Customers:
    • Proven partnerships with well-known companies like Siemens, adani, Tata Projects, Honeywell, etc.
  • Manufacturing Base:
    • State-of-the-art manufacturing facilities with a capacity of ₹700 crore.
    • Emphasis on innovation, efficiency, and versatility
    • Aiming for an Asset Light Approach.
  • Segment Strengths:
    • Tailored solutions for different sectors
    • Expansion into unconventional sectors like nuclear, defense, and water & smart metering.
  • Aligned Dynamics:
    • Internal factors (clarity, efficiency, endurance) combine with external factors (Delton's efforts, enabling policy, private sector capex) to bring equilibrium.
  • Strategic Transformation:
    • Focusing on large private EPC players.
    • Building a niche product portfolio focusing on high-growth segments.
    • Effective management of working capital.
  • Key Growth Metrics (Q4 & FY24):
    • Highest ever quarterly revenue at ₹1,331 million (up 64% Y-o-Y).
    • Total revenue of ₹4,033 million for the year (up 47% Y-o-Y).
    • Improved EBITDA and profit after tax.
    • Capacity utilization improved greatly (Increased from 44% in FY22 to 76% in FY24).
    • Reduced working capital days (from 218 days in FY22 to 138 days in FY24)
  • Corporate Information: Details of the company’s leadership, board members, and contact information.
  • History:
    • Delton's history from 1957 to 2023, highlighting notable events and milestones.

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