Conference Calls and Earnings Call Transcripts for NSE and BSE Stocks

Management Comments

We are quite happy with how the quarter progressed. We have been performing consistently throughout the year and every quarter we continue to grow significantly both in terms of revenue and profitability. On a nine-month basis, we grew our revenue on a standalone basis at about 35% or Rs.403 crores versus Rs.298 crores for the nine months in the previous year. The operating expenses reduced by about 4% improving our EBITDA margin from 16% to 20%. In terms of Rupee values, we increased the EBITDA from Rs.48.5 crores to Rs.79.3 crores. PBT was also up at about 49% over previous year and profit after tax also improved by 74% year-on-year. On a nine-month basis, on a consolidated basis, we grew our revenues by 26%, Rs.363 crores versus Rs.459 crores in this quarter. Operating expenses reduced by 3% improving the EBITDA from 16% to 19%.

In terms of rupee value, we increased the EBITDA from Rs.57.2 crores to Rs.88.7 crores, which is an increase of 55%. PBT and PAT were up 41% and 60% respectively. We continue to be bullish about the coming quarter. Next quarter for us also will be a similar growth story for both revenue and profitability. We continue to have a healthy backlog in all three product lines. Our Glass Line business continues to do very well. What has been really heartening is the heavy engineering business where now we have a very strong backlog that puts us in a very good GMM Pfaudler Limited January 23, 2020 Page 3 of 20 position for next year especially for Q1 and we are making a lot of traction there, so that should give us a good amount of opportunity to grow the business in the next financial year.

The proprietary product business is also doing well. The Mixing Systems business, Filtration and Drying business, and the Engineered System businesses are showing a lot of traction, so we continue to be bullish on the opportunities available. The chemical as well as the pharmaceutical industry are continuing to invest and we are seeing a lot of opportunities out in the market and with our competitive edge we have been able to take the orders and to build our backlog. We also have some opportunities lined up. We recently launched our next five-year strategic plan that comes into effect on April 1, 2020. We have some good opportunities in the pipeline which if they eventually turn out positive, I think that will help us to the next level of growth in the coming months.

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Full Earnings Transcript: Conference Call between Management and Analysts

Full Earnings Transcript for Q3FY20: Conference Call between Management and Analysts

Full Earnings Transcript: Conference Call between Management and Analysts

Earnings Call Transcript for Q3FY20 between Management and Analysts

Opening Remarks

It was a difficult year, no doubt and the difficult conditions in the overall economy in general and the NBFC sector in particular, gave us the opportunity to test our resilience and the robustness of our business model and principles. We definitely had to do some heavy lifting and believe that we have come out much stronger at the end of the year. Our competitive strengths in our core businesses, ability to run down our defocused portfolio efficiently, ability to maintain margins and fees in difficult conditions, ability to raise adequate liabilities from diverse sources at the right cost, our early warning signals and project management capabilities, our assets resolution capabilities, our portfolio quality and last but not the least our execution abilities and group synergies have been adequately tested and have crystallised in form of good and steady financial performance.

First of all, we would view these results as one more quarter of delivering steady performance in line with our strategy of delivering assurance to all stakeholders. In the quest to deliver steady performance quarter after quarter, it is particularly important to do so especially in turbulent times and I believe that our performance for the last 4-5 quarters demonstrates that. We generated a steady ‘NIMs+Fee’ of 7.29% in this quarter and the PPOP stood at Rs. 1,334 Cr, up by 12% on YoY basis. This sustainability is achieved on back of a data analytics-based approach which has helped us to increase/maintain market share while maintaining asset quality. The asset quality remained stable with GS3 at 5.94% vs 5.98% last quarter and NS3 at 2.67% vs 2.83% last quarter with provision coverage going up since last quarter. Steady margins, steady credit costs and asset quality has enabled us to deliver once again a top quartile ROE of 16.51%. PAT for the quarter stood at Rs. 591 Cr keeping its steady trajectory. It must be explained that the PAT for Q2 FY20 included a tax benefit of lower tax rates for Q1 and Q2 together and this number after normalisation is Rs 597 Cr.

The profit trajectory is quite steady, the RoE was also 16.74% adjusted for this tax effect. So, both PAT and RoE have maintained a steady trajectory.

2. The second important point I would like to make is about the demarcation which is being seen between sound NBFCs and others - regarding raising of liabilities. This has, become clearer and more pronounced in Q3 FY20. Highly rated NBFCs with good parentage were clearly preferred over others by lenders of all genres. As a result, one of the major positives of the quarter, not surprisingly, came from liabilities side. LTFH raised ~Rs. 10,400 Cr in long term borrowing in the quarter, the highest ever since FY17. As I have said before, the market is clearly differentiating NBFCs with high ratings & inherent parentage strengths and any concerns about availability of funds continue to subside with each quarter. LTFH successfully raised long term funds from diversified sources, may it be traditional sources of bank borrowings or privately placed NCDs or newer sources like publics NCDs, ECBs and priority sector borrowings. We raised Rs. 1,408 Cr through Retail NCDs and Rs. 2,012 Cr through privately placed NCDs in this quarter.

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Transcript of Conference Call between Management and Analysts for Q3FY20