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Solar Industries India Ltd
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Ladies and gentlemen, good day, and welcome to Solar Industries India Limited Q4 FY '22 Earnings Conference Call hosted by Antique Stockbroking. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stockbroking. Thank you, and over to you, sir.
Thank you, Aman. On behalf of Antique Stockbroking, I would like to welcome all the participants on the call of Solar Industries. From the management, we have Mr. Manish Nuwal, Managing Director and CEO; Mr. Suresh Menon, Executive Director; Mr. Moneesh Agrawal, Joint CFO; and Ms. Shalinee Mandhana, Joint CFO on the call. Without further ado, I would like to hand over the call to Mr. Nuwal for opening remarks, post which we will open the floor for Q&A. Thank you, and over to you, Manish ji.
Thank you, Manish. A very good morning to our dear stakeholders and well-wishers. Welcome to yet another conference call of Solar Industries India Limited. My name is Aanchal and I would like to welcome you all to the fourth and final investor conference call for the year FY '21-'22.
To begin with, I would like to remind you that during this call, we might make projections or other forward-looking statements regarding future events about the future financial performance. Please remember that such statements are only projections. Actual events or results may differ materially. And our website will be updated with all the relevant information timely. Now I would request Solar's MD and CEO, Mr. Manish Ji Nuwal for his opening remarks. Over to you, sir.
A very good morning to all of you. We are pleased to announce that our company has achieved a healthy revenue growth of 57% with profits increasing by 58% for the year despite of supply chain and geopolitical disturbances. The best ever results in the history of our company reflects an all-around performance across sectors and geographies wherever we are operating.
We are all set to enter FY '23 with continued focus on execution of our key priorities and strategic investments to increase the product portfolio and market presence. We are targeting a business growth of 13% plus in FY '23, despite the headwinds we may face as a part of the global economy. Our optimism is built on expected growth from all the operating sectors like Mining, Housing and Infra, Defense and our Overseas business.
With the government of India's substantial increase in allocation and policy support for housing, roads, railways and different sectors, we see a very good opportunity for sustained growth in our businesses. Based on healthy performance, our company has proposed a dividend of INR 7.5 per share for the current year as compared to INR 6 per share in the previous year. Now I will hand over the call to Aanchal to take you through the financials. Thank you.
Thank you, sir. It gives me immense pleasure to brief you with the financials of back-to-back highest quarters in the FY '21-'22. A positive momentum in all sectors where we operate has made a strong foundation for sustainable growth in future also. Key highlights for the fourth quarter are: The consolidated revenue is up by 66%, that is INR 1,317 crores versus INR 791 crores. Explosives revenue is up by 89%, that is INR 788 crores versus INR 418 crores. Our explosive volume has increased by 11%, that is 119,356 metric tonnes versus 107,336 metric tonnes. Realization of explosives has increased by 69%, that is INR 65,948 versus INR 38,922.
Coal India as a percentage initiating system revenue increased by 5%, that is INR 117 crores versus INR 111 crores. Coal India as a percentage of revenue stands at 20% as compared to 18%, whereas revenue has increased by 89% year-on-year to INR 262 crores from INR 139 crores.
Non-CIL and Institutional is up by 122%, which is INR 198 crores versus INR 89 crores. Housing and Infra, the revenue was up by 58% to INR 385 crores from INR 244 crores.
The Export and Overseas revenue showed an increase of 34% year-on-year to INR 389 crores versus INR 291 crores. Defense revenue is up by massive 270% in the quarter to INR 72 crores from INR 20 crores.
Coming to the cost breakups. Raw material consumption increased by 87% from INR 437 crores to INR 816 crores. Employee Cost has increased by 34% year-on-year from INR 66 crores to INR 89 crores. Other expenses has increased by 20% from INR 124 crores to INR 149 crores.
EBITDA. We reported an EBITDA of INR 264 crores against INR 167 crores in the previous quarter. Interest and finance charges cost is up by 41% from INR 10.48 crores to INR 14.78 crores. Depreciation has increased by 32% from INR 23 crores to INR 30 crores.
PBT increased by 64% from INR 134 crores to INR 219 crores. PAT increased by 84% from INR 95 crores to INR 175 crores. These were the small updates for the quarter.
Let me take you through the yearly financials now. The revenue for the year is up by 57% year-on-year from INR 2,516 crores to INR 3,948 crores. Domestic explosives quantity is up by 22% from 333,082 metric tonnes to 406,372 metric tonnes. Realization of domestic explosives increased by 45%, that is from INR 34,798 to INR 50,417 per tonne. Revenue from domestic explosives increased by 77% from INR 1,159 crores to INR 2,049 crores.
Initiating systems revenue increased by 23% year-on-year from INR 325 crores to INR 398 crores. Coal India as a percentage of the basket is almost at the same level, that is contributing around 18% of the sales from 17% in the previous year. It has grown by 69% year-on-year, contributing to INR 715 crores.
Non-CIL and Institutional has grown by 103% and stands at INR 537 crores. H&I has grown by 54% year-on-year and stands at INR 972 crores. Export and Overseas showed an increase of 37%, stands at INR 1,435 crores. Defense has shown a rise of 21% and stands at INR 249 crores.
Coming to cost breakup. Raw materials. So material cost is up by 73% year-on-year from INR 1,347 crores to INR 2,327 crores. Employee cost has increased by 26% from INR 231 crores to INR 290 crores. Other expenses have gone up by 38% from INR 424 crores to INR 583 crores. EBITDA is increased by 43% from INR 536 crores to INR 767 crores.
Interest and finance has increased by 11% from INR 45 crores to INR 50 crores. Depreciation has increased by 17% from INR 94 crores to INR 109 crores. We recorded a PBT of INR 607 crores compared to INR 397 crores, which is an increase of 53%. We recorded a PAT of INR 455 crores compared to INR 288 crores, which is an increase of 58%. This is all from our side. Now we'll be happy to take any questions, comments or suggestions that you may have. Over to you.
[Operator Instructions] First question is from the line of Sujit Jain from ASK Investment Managers.
Manish ji, our compliments on a very good set of numbers. If you can split your 30% guidance into estimated volume and pricing growth for FY '23?
The 30% annual growth guidance what we have given is based on the situation in our Housing and Infra, Coal India market, Singareni, and Exports and Overseas. And in this year, we are also likely to increase Defense sales substantially. So based on the growth in various sectors, we have given a guidance of 30% on overall business.
Is it safe to understand that close to about 15-odd percent to 20% could come from pricing?
Yes. That is what we have maintained in the previous annual conference also that we are likely to increase our volume by 15% on an annualized basis for the next couple of years. For FY '23 also, we maintain the same stand that we are targeting a volume growth of around 15%, and we are expecting that around 15% will be a price rise, which can be based on an average price of the full year.
And in Overseas FY '22, there is a 37% value growth. If one looks at the realization increase that you report for explosives domestically, which was up 44%, how does one read into this number. Does it mean that there has been a substantial currency translation, which has led to this little dilution to 37% growth and so volumes were robust? Or volumes were kind of muted in Overseas business?
As far as overseas market is concerned, our volume has increased by around 10%, and the balance came from the price increase. In overseas market, the price increase of our raw material is not as significant as it has increased in the Indian market. So gradually, prices are increasing, and we are increasing our prices in the overseas market as well. As far as translation loss is concerned, in this year, the translation loss is around INR 180 crores.
Sure. And in terms of our hedging policy, how much of our sales we hedge typically?
As far as our policy is concerned, we are completely hedging the imports whatever we are doing. And on the export side, we are keeping it open. And as far as various subsidiaries are concerned, we are trying to hedge as much as possible, and it is as per our hedging policy -- ForEx policy.
Sure. And one last question is, one is following the interesting development that is kind of done, you've tested your Loitering Munitions in Ladakh successfully as some of the media reports are saying. How does this arrangement with this company [indiscernible] 45% work in terms of eventually getting contracts with the defense forces?
Just repeat your questions again, because there was some slight disconnect at my end.
I'm saying, Zmotion Autonomous Systems Private Limited, in which we've acquired 45% stake. There are media reports that you have successfully tested the Loitering Munition, in which you are working kind of with Zmotion. How does this partnership work in future to get the contracts from defense forces in Loitering Munitions, et cetera?
Like we have already shared that this company Zmotion has the expertise in the domain of making unmanned aerial systems and Solar has an expertise to produce or weaponize those UAVs. So it's a strategic investment, and that is going to strengthen our initiative to introduce all those weaponized UAV systems, and that is for offensive and Counter Drone system as well. So I believe our strategic investment in Zmotion is going to strengthen our portfolios for these sectors.
We have the next question from the line of Bharat Shah from ASK Investment Managers.
Yes, Manish ji, congratulations to you and the entire Solar team. In my 20 years of observing Solar business, I'm sure you will agree, this probably is the most defining year in terms of outcome?
Thank you very much, sir.
Manish, and if we look at in a year way, business angle, business is higher, whether we look at our coal business or B2B or Infra business, or even the Defense, which was leading, and of course, the International. In all of these, [indiscernible] date particularly satisfied because every single business is higher and every single business has delivered remarkable kind of numbers. Seeing all of this great positivity, what are the things that worry you? Or what are the things that we see as potential changes which are not visible in numbers?
So the only challenge which everybody is facing at the moment is on sourcing raw materials on time and at better prices, because what is happening that whatever price rise has happened in the last 1 year, or specifically last 6 months, is mind-boggling. And no one had expected the price will rise to this extent. And as a result, we are also facing lots of challenges in increasing our prices. The raw material price of ammonium nitrate has increased by almost 79% in the previous years. And we are unable to increase the same prices to our customers. But we are taking up the issues with Coal India and Singareni, and hopefully, in a couple of months, we will be able to raise our prices to the tune of increasing raw material.
So this is our biggest challenge at the moment to source raw materials and continue our supply chain and passing on the impact even to our customers. So this is our biggest challenge as far as our current business is concerned. As far as Defense is concerned, over the last couple of years, we have already passed through the initial turbulences and challenges. We are at the moment in a better position. And we believe that all those basic or initial challenges are not there for us at this stage.
As far as overseas subsidiaries or overseas businesses are concerned, we have started doing much, much better than the previous year. And in FY '23, we are going to see a total turnaround in our overseas business. That's why, despite of various challenges in procurement side, pricing side, we are maintaining that we will be able to have a healthy or sustainable EBITDA margins of 18%, 19%, and we are likely to increase our top line at 30%. So this is based on the challenges and the opportunities what we have and whatever efforts we have put in last couple of years, so those are likely to reflect in our numbers in the coming year as well.
And given the fact that each different business has different gestation period and certification period. And each of the 5 lines of main activities, we've seeded in a different way over a period of time. Would you really say that now will we take into account not just the current year, where you have guided for 30% plus kind of a growth, but on a more longer-term basis, would we say that each of our businesses is positioned in such a way that there is a healthy long-term growth virtually based on all the hard work and the foundational growth which has happened? Or would we say that beyond the current year, there can again be kind of unpredictability?
So we believe that the efforts which we have put in the last couple of years, especially in the last 5 years, so whatever business we have increased, we have almost doubled in the last 4 years.
We believe that the opportunities what we have and the efforts which we have already put and which we are going to do more in a couple of years, we believe that same kind of growth rate we should expect in the next 4 to 5 years.
Which means about 15% volume growth and whatever may be price increase plus or minus?
Yes. We expect that 15% should be in the volume terms or around 10% to 15% should be realization side, which can vary between 10 or 5 or 15. So we believe that on an average, we should be able to grow at around 20% to 25% on compounded basis.
For 5 years or so.
Yes. This is our plan. Yes.
And at the beginning of the year of last year, that is financial year 2022, did we have an incline or did we have an anticipation that financial year '22 would turn out to be such a remarkable year? Or it kept falling in place as the year progressed?
So actually, whatever guidance we gave was based on our market feel that we should be able to grow at 30% in FY '22. But that was based on our volume growth of around 15%, 17% target, and balance was from the price increase. So in this year, our volume has increased by around 22% in domestic markets, which is a little more than what we were targeting.
Pessimistically, if we say that when we give a target of say around 15%, 20%, so definitely, our aim is always more. And on a conservative basis, if we calculate, or if we take all the risk factors and all those things, so definitely, we have to be on a conservative side. And based on that, we gave a guidance of 15% volume growth and 15% price rise. So this year, we have definitely achieved more than what we have anticipated.
[Operator Instructions] We'll move to the next question that is from the line of Rohan Gupta from Edelweiss.
Congratulations on a very strong set of numbers given the current challenges.
Sorry, Rohan, your voice is not very clear. Requesting you to use the handset please.
Is it better now.
Yes.
Yes. Sir, congratulations on such a strong set of numbers despite the challenging environment. Sir, a couple of questions and I'll come back in queue. Sir, first is on that, we believe that our pricing in the industry is definitely linked with the raw material prices. However, the margin per kg or per tonne which we enjoy are generally fixed.
Sir, surprising, and it's a positive surprise to see that our percentage margins actually at almost close to 20% for the current quarter has been maintained despite the rising or almost 50% kind of price increase. So just wanted to understand, sir, it means that per tonne margins would have definitely improved to match the percentage margins. Sir, if you can elaborate a little bit more about how the pricing formula is working and what has led to the increase in per tonne margins for the quarter?
Rohan, you have raised a question related to how we are maintaining margins even at highly increased prices of our raw material. There is a formula and there is a fixed component in that. And based on that, our prices are increasing based on our raw material. But like we have been saying that it is difficult to pass on the complete impact of price rise to our customers, even our formula doesn't capture the kind of rise which we have seen in last couple of quarters. And because of that, our margin, as far as in percentage term, saw some reduction. If you see it a raw material percentage, it is now around 62% compared to the previous quarter of around 59% and 55% on the year-on-year quarter last year.
So this is the reality. We are also facing the same challenge. And we are trying to pass on the price rise to our customers. So it's a continuous journey. And this kind of situation nobody has seen in the industry actually. So we are also part of that.
Sir, rather than concern, it was a positive thing for me. Actually, I just wanted to understand a little bit more. So when the customer pricing is more in terms of percentage, margin is being maintained or per tonne margin is being maintained, sir?
Actually, our product basket is not only on per tonne basis. Some pieces we are selling on numbers, some pieces in meters, some in other kind of unit of measurement. So it is very difficult to really respond to your question of how we are maintaining margins on per tonne basis. It's a basket of various SKUs, which are on different terms. So that is difficult. What we have maintained that, we are trying to have margins of around 18% to 20%, even at the highly elevated prices of raw material.
Right. And sir, like for this year also, the overall EBITDA growth for our company has been much ahead, 64%, which is much higher than the volume growth which we have reported, close to 22% for the company. So definitely, that in terms of the pricing environment, the rising price environment has helped us in higher EBITDA growth. Next year, also, you are still expecting close to 15% kind of price-led growth in your guidance of 30% revenue growth. So one should expect that the EBITDA growth will be also close to -- or profit growth will be more than 30% in your guidance, because that is more to do with the revenue guidance. So in terms of profitability, do you maintain that the profitability growth also will be in sync with the revenue growth?
Like I have said that raw material prices have increased a lot. Because of that, our EBITDA margin in the while financial year is around 19.43% compared to 21% in the previous year. So looking at the highly elevated raw material prices, we believe that any margin around 18% to 20% should be sustainable, and that is what we are maintaining for the coming year as well.
Okay. And sir, just 1 on the raw material availability, you mentioned that it's a challenging environment, especially the Russia, Ukraine crisis going on, and Russia being one of the key supplier of AN. So how is the availability issue which we are tackling, because there's only 1 large supplier in the domestic market. So are we exploring other markets to compensate the loss from Russia? Or how much our dependence was from Russia?
So our supply chain team is working on all the possibilities to mitigate this kind of situation. And fortunately, we were able to overcome the current challenge. We believe that in coming year also, we will be able to maintain, or we will be able to maintain the same kind of supply to our customers. And we are confident we will be able to handle this situation.
The next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
Congratulations to the entire team of Solar for a stellar performance. I have 3 broad questions. One is on the availability of the raw material. Second is on the performance of the international subsidiaries, especially South Africa and Australia. And third is on the Defense part? So on the first question on the availability of raw materials, if you could just help us, because Russia, Ukraine were very critical suppliers for ammonium nitrate and that supply line having been broken, if you could just help us understand on the availability of raw materials. Are we seeing any capacity increases from the domestic suppliers? So any outlook on that will be very useful.
Yes. Currently, I think the government is also looking into this, and we see small increases in capacities of domestic manufacturers of ammonium nitrate. And our supply chain team and the procurement team is actually sourcing from other countries. I think we should be able to sail through with the increase in the domestic production and as well as sourcing from other sources other than Russia and Ukraine.
Sure. Any substantial increase in the capacity domestically? There was an expectation that Deepak Nitrite is going to commission large volumes in this year?
It will take some time for them. They are on that track only of substantially increasing their capacity, but that should take some time. But they may make some incremental increase in their capacity in this current year.
Sure. That's helpful. The second question was on the international subsidiaries, and for us, we've been seeding South Africa and Australia, in particular, and these were anticipated to be critical growth drivers. So if you could just help us how has been the performance of these 2 entities in the financial year '22? And what are you anticipating for fiscal '23, especially for South Africa and Australia?
Yes. Our subsidiary-wise financials would be actually be published along with our annual report. So the details would be available there. Just to give you an information that in both these cases, COVID played a crucial role, delaying our project in the last couple of years, particularly in Australia. We should be shortly stepping our production facility in Australia. And as soon as we do that, we would definitely be making this announcement in Australia. As far as volume growth in Australia is concerned, it is on track. And in South Africa, again, the same issue of COVID, 2 years there was a delay. But I think this year, we should be on track. We expected it to be on track last year, but again, COVID was a spoiler. I think this year, we should be on track.
Sure. That's useful. And lastly, on the defense part. There were news report on successful test of the Pinaka enhanced version and we also had the Pinaka guided. If you could give us a color on where are we in this project? Do we expect any RFP to be issued this year, and the path followed on the Defense?
Yes, we have completed most of the trials. And in the next 3 to 6 months, we expect the RFP should also come. And once the same comes, we'll update.
Our next question is from the line of Abhijit Mitra from ICICI Securities.
First question is on the financials. And before that, congrats on a great set of numbers. First question is on consolidated financials. Other expenses have come off on a quarterly basis. So just to understand the nature of this. Is this is a normalized other expense run rate on a consolidated trend that we can expect? Or there can be variations in there?
Yes. As regards to other expenses, this quarter we had some ForEx gains of around INR 16 crores as compared to the losses in the previous quarter. And secondly, we had actually good collections during the year with the effort we have been putting to reduce our debtor days, which is reflected in the number of debtor days, which has come down to 50 from 66. As a result, the provisions as per book that has to be made, some reversals were there in the provisions.
Okay. So what would have been the total ForEx gain plus reversal amount? Would it be around INR 25 crores, INR 30 crores?
Yes, roughly.
Okay. Okay. Great. Great. The second question is regarding further investments. If you can give the CapEx guidance for the next couple of years. And also, since Zmotion has been selected as 1 of those 14 participants, initial set of participants for drone manufacturing PLI, so what is the outlook? Or what is the possible CapEx that we are looking at to capture that opportunity? So this would be my second question.
Yes. The CapEx for the year stands around INR 400 crores to INR 450 crores, keeping in view the strategic investments we have been making. That includes Zmotion also.
Okay. Okay. If you can break it up into explosives, overseas, and defense?
That will be difficult. So as and when we do that, we'll update. And all of it depends upon the coming opportunities also.
The next question is from the line of Abhishek Ghosh from DSP Mutual Fund.
Sir, just in terms of the raw material price increase which you have not been able to pass on to your clients, what would be the quantum? Is it like a 4%, 5% increase? Or is it a number larger than that?
Yes. We cannot give the exact percentage. But on an average, there is a lag of almost 3% on total basis.
So margins to that extent, assuming raw material prices stabilize, can improve from the fourth quarter exit? Is that a fair assumption to make?
It will take some time. As for our business sense is concerned, it is going to take time. And margins from 18% to 20% will be a reasonable guess on our that we should be able to achieve. And maybe by the end of FY '23, there should be some kind of settlement in prices. And definitely, once those price start settling, we should be able to reach, or we should be able to realize EBITDA margins of plus 20%.
Sure, sure. And sir, the other thing is, the volume growth that you have achieved in the current year, supply chain issues have been around not just for you but for the industry, but given your balance sheet, given your size of procurement, you would have been able to procure it much better. So have you seen market share gains both in the B2B and the B2C part of it in the domestic market? Because I see a sharp [ jump in the Housing and Infra revenues ] in the current quarter.
Sorry to interrupt Mr. Ghosh, your voice is breaking.
Is this better now? Or am I still breaking?
This is better.
Yes, sorry. So sir, just repeating my questions, I see a very sharp jump in the Housing and Infra revenues in the current quarter on a Q-on-Q basis. There's almost a 75% to 80% kind of a revenue increase. Would you attribute that to market share gains, because raw material would have been a much bigger issue for some of the smaller players. Some color there will be helpful, sir.
If you look at the increase in Housing and Infra, then definitely, we have increased our sales to that sector. But definitely, Coal India and Institutional market also has done fairly well. Our volume has increased more than this to that sector in this quarter.
Correct, yes. But would you attribute some amount of market share gains in some of these segments because the smaller players are not able to procure the ammonium nitrate to that extent? Any thoughts?
Yes, I agree to your view that whenever such kind of situation happens, the stronger or better people will definitely increase the market share because of their ability to procure material and to sustain such kind of shocks in the system. Definitely, we have increased some market share, the exact number I don't have right now, but this is based on our market feedback, and that is a part of our strategy as well.
So in light of supply chain issue and the smaller players getting a little weaker, overall demand momentum being strong, is there any thought of the overall larger CapEx plan that you are referring to the 2 other units beyond Nagpur, any thoughts around it in terms of have you been able to finalize that, or there's still some time around it?
Like in the last year we have shared that now we are planning to expand our market presence in different parts of the country. So based on that strategy, we have almost zeroed down on 3, 4 land parcels and going to finalize them in a couple of months. So once we finalize, definitely we will share, but it is our part of the strategy to increase the footprint in the Indian market, as because we have seen that our ability to give the better product, on-time delivery, and our relationship with customers are pretty well compared to our competitors. So we have no reason to not increase our market presence in the country, and that's part of our strategy. So we are moving forward on that part.
Next question is from the line of Chirag Muchhala from Centrum.
The question is on Defense segment. So firstly, can you quantify the order book of Defense? And secondly, out of the multi-mode hand grenade order that we had of INR 410 crores, how much is already booked now in FY '22?
Chirag, currently, the order book stands at around INR 475 crores. And as regards to your second question, we had to supply 10 lakh pieces. We have supplied around 40% of the same.
Okay. So is the remaining 60% order will be executed entirely in FY '23? Or it is likely to spill over beyond that also?
Entirely in this year.
Okay. And any possibility of a repeat tender coming for multi-mode hand grenade?
We expect the same. So as and when that comes, we will update on the same.
Okay. Sir, second question is on ammonium nitrate. So sir, at a company level, what kind of inventory can we keep of ammonium nitrate, because I believe that this is not a raw material which is very easy to keep in terms of inventory over a sizable quantity?
We just track the overall inventory. So the current inventory we have is around 113 days. So that is the average level that we will maintain.
Okay. So ammonium nitrate inventory will be more or less in line with the overall company inventory?
Yes. This is the total inventory which the company has.
And last question, sir. As of FY '22, what would be our bulk and package explosive capacity in the domestic market, and if possible, our utilization rate?
Sorry, we do not share the capacity on the product purpose as a policy matter.
Okay. Is it possible to share the utilization rate?
So utilization is very difficult for industry like us. So there are multiple products and the same capacities can be used for different products.
[Operator Instructions] We have the next question from the line of Ravi Naredi from Naredi Investments.
Thank you, Manish ji to give such a fantastic result so far. Can you bifurcate domestic top line and export difference separately? How much top line is domestic and how much in export?
The Exports and Overseas is around INR 1,435 crores out of INR 3,947 crores. So around INR 2,500 crores is domestic.
INR 2,500 crores. And profit margin is same in both the categories?
We look at the margins for the company as a whole. So the margin for the quarter stands at around 13%, and the year is around 11.5%.
Okay. Manish ji, this question is for you. Any purpose to keep 2 Joint CFOs in company? Any specific reason?
No, there is no specific reason for keeping 2 CFOs. It was a need of the company. So everyone felt there was need for 2 Joint CFOs.
I take so many companies, but I have never seen any companies having 2 CFO. That's why I'm asking you. It is your prerogative and right to keep whatever you want. But just any purpose to keep to run the company in a smooth way, that is my question.
Yes. This is basically -- I mean, we are a growing company, so there was a need to have -- and that was the need for the management to have 2 CFOs.
We have the next question that is from the line of Pratik Mukasdar from RNL Investment Partners.
Manish ji, congratulations on a fantastic set of numbers to you and your team. My only question is, can you just throw a little bit of light on our Defense portfolio? I mean, what products we are trying to come out with and what is the way forward, and how government stands? We are listening quite a bit of things that government is trying to indigenize so and so things and they are really focusing post the geopolitical conditions. So how much is the reality if we could throw light as an industry person, it would be very great.
Sir, like we have been seeing various news articles that Government of India has brought a list of X number of items to be under a list where we can't import. So every such kind of information is available in the public domain. As far as our company is concerned, we have developed plenty of products in various categories, like we have said that high-energy materials, pyros, igniters, fuses, small arms and ammunitions, and like rockets, now we have started missiles, and last couple of months, we have also shared that we have successfully tested drone-based ammunition at our campuses. So we have a complete bouquet of products to take care of various opportunities. Definitely, we can't meet all those requirements, but we are working on enhancing our product portfolio, and that is part of our last 5 to 6 years of investment in the same line. And going forward also, we maintain that we will keep continuing investing and enhancing the product portfolio, not only for Defense, but for our core business of explosives for mining sector as well. So we will continue on that part.
Okay. Secondly, sir, have we allocated any certain budget for our research and development on our various profile? Or as and when opportunity comes, we take on these activities?
Actually, it is difficult to fix any budget at this stage, because opportunities are available, and we are fully geared up, and we don't see that we should restrict any budget for research and development or increasing the product portfolio. So we have not fixed or not limited our resources on this front.
Our next question is from the line of Bhavin Vithlani from SBI Mutual Fund.
Two follow-up questions. One is if you can help us, what would be your market share in the coal mining segment, Coal India and SCCL in this fiscal year? And also your market share in the Infra and the Housing segment?
The market share varies between 25% to 30% in various sectors, difficult to give one single mark for every sector. But on an average, it is varying between 24% to 30%.
And we would have seen an increase in the market share in the financial year gone by?
Yes. In the last 10 years, our market share has definitely increased from 17%, 18% to almost 24%, 25%. And now it is moving towards around 30% on all India basis.
Sure. The second question is on the Defense again. And we have seen corporatization of the OFBs and a larger part of the ammunition was coming from the OFBs. So what's the kind of opportunity that you see now that some of these tenders will now actually come out for competitive bidding against OFBs which were part of the government entity, which were not coming out. How do you see yourself at this corporatization? Does this actually help you in terms of your growth path? Or it's more like business as usual, as earlier?
There are a few couple of points on this question. First is that our country definitely has invested a lot in creating a lot of facilities in government run companies like ordnance factories. And that has been privatized only to bring more transparency and to increase their efficiencies to meet our country's requirements.
Similarly, we all know that in every sector, private companies have been allowed to enter, and defense is one of that. So we believe that our country is definitely offering a lot of opportunities as far as defense is concerned, because the first advantage for our country will be that once we've regularized most of our requirements, definitely, those opportunities will be available for the companies operating into the country. And we are one of the private sector company who has entered into this kind of business much ahead than others' entry. And going forward, we believe that more efficient enterprises in the country will offer more benefits to the sector as a whole. That is that much I can express my views.
Our next question is from the line of Bharat Shah from ASK Investment Managers.
Yes. Manish, in terms of our lines of activity, some of the key growth drivers we all are kind of familiar with, that what is driving the demand for our products in the Housing or Infra or in Defense and Coal India, et cetera. Are there, apart from the kind of usual long-term factors that we all take into account to make some kind of judgment about what the future is likely to be, any other trends or any other factors that you have observed, which you think have altered for better our trajectory in any one or more of these verticals. Any new dimensions that, other than normally what we have observed over the last some time, any new factors that have come to your light, or that you believe is likely to come to frequent?
As far as the trends on basic economy, which is helping us, we all know about that, like roads, railways, housing and infrastructure. We all are aware of the government policies on these sectors. Defense is one of the rising sectors, which we have already discussed. As far as new trends are concerned, we believe that our investments in developing the products for space applications will definitely offer us the long-term opportunities. It will take time, but we will get advantage of our early investment.
Similarly, if you look at our recent investment in offering drone-based ammunition, so these are the futuristic products. These are not the old-age technology products or already developed products or products which are available off-the-shelf like products. So we believe that the investments into products for space, investment into products for unarmed vehicle or drone-based systems will definitely offer us good opportunities for our company.
And Manish, while it is hard to make kind of a categoric statement on the question that I want to raise now, but how much of the growth in the last some time, especially last year, and what we anticipate going ahead, is the growth, because externally, the factors are favorable and that is driving the growth, and how much of it you would attribute that our strategic initiatives, either setting up manufacturing centers in select international locations or products or building a certain line of activity patiently, like in Defense, how much, in your opinion, the growth is kind of outside the firm, and how much of it is coming, in your opinion, from what we are doing to the business?
So like we have been keeping investing and enhancing our global footprint and enhancing our capacities and make them to the global scale has definitely helped us. And after the COVID, we have seen that there is another kind of trend where international buyers want to shift their manufacturing -- or shift their procurement options apart from China to any other nations, who can offer them better supply chain reliability and better products at competitive prices. So we believe that this effort to build a global scale capacity and to have a global presence is going to help us.
The next question is from the line of Manish Mahawar from Antique.
Manish ji, just I have 2, 3 questions. One, in terms of volume growth in the fourth quarter, right, it's broadly 11%, right, which is I think a bit slower or lower as compared to earlier quarters. So is it that customers are a bit of resistant or have some reluctance to buy given the higher prices and we are seeing some deferment of revenue into the next year?
Yes. During this quarter, we had some subdued demand we could see from the customers since the prices have risen to very high levels.
Okay. And in terms of some book-to-bill question, in the fourth quarter, what was the translation loss in the overseas facilities? I think annual number is INR 180-odd crores. What is the number for fourth quarter?
Around INR 80 crores.
INR 80 crores. And what is the impact on EBITDA?
EBITDA around INR 10 crores in the fourth quarter.
INR 10 crores, right? And for annual, what is the impact -- annual basis EBITDA impact?
Around INR 20 crores, INR 21 crores.
Around INR 21 crores. And last one, in terms of Exports and Overseas, which is INR 1,430-odd crores, is it possible to share the breakup in terms of export and overseas?
Yes. For the Overseas for the whole year, the number stands at INR 1,197 crores.
INR 1,197 crores for Overseas, right?
Yes.
Okay. And lastly, just a confirmation, Manish, you said 25% to 30% market share for us, right, 17%, 18% earlier. So this is just the revenue or volume market share you're talking about?
Can you come with the question again?
Either value or...
No, no, the top line which we had spoken like on 30% is on volume.
Volume, right?
No, your question on market share, basically, we calculate it on volume basis, not on value terms.
Next question from the line of Rohan Gupta.
Sir, one question on CapEx. If you can give some guidance on that next year CapEx, and in what segment wise, how much you are planning to spend?
So we have a long-term CapEx plan. Based on that, in this financial year, we are going to spend around INR 400 crores to INR 450 crores. And most of the investments will go for Defense and increasing our geographic presence in the country. And some of the investment will be for the Overseas expansions.
Sir, would the further breakup in terms of how much planning in Defense and how much in Overseas would be possible to share? Like earlier, you used to mention almost 1/3 in every segment. So should we draw the similar number or it will be different segment wise?
Overall, they are same numbers, but more allocation will go for Defense related products, say 40% for enhancing the capacities in India, and geographical footprint, say around 40%; 20% will go for the Overseas businesses.
Okay. And sir, in Overseas are we going to spend aggressively in any of the newer markets this year or this 20% that is roughly close to INR 80 crore INR 100 crores spend will be increasing the capacities in existing markets?
Yes, it's a blend of increasing some new footprint or adding new geographies and expanding the capacities in the existing markets.
Okay. Sir, in overseas market this year, the revenue growth has been slightly lower than the domestic market, what we have witnessed. So just wanted to know, is there any -- however, we have explored the new markets in last year, any particular reason that why the overseas growth would have been slightly lower in the current year, I mean, we have reached close to INR 1,400 crores revenues in overseas, 37% growth, much lower than the overall growth of the company. So any particular reason you see that any particular markets didn't perform well or what could have been the reason, if you can explain?
There is no specific reason to that, but the volume has increased by around 10%. And in the coming years, it will be more than 10%. So we are moving as per our target. And in FY '23, we believe that the growth will continue at 30%, 35%, which is based on volume increase plus price rise.
So overseas growth also will be 30% to 35%, in line with the overall top line growth guidance which you gave.
Yes, yes.
Okay. Sir, just last bit from my side. So we have seen in Defense, we are also getting aggressive about the acquisitions opportunity, though small level acquisitions like we did earlier, Skyroot, now Zmotion. So do you see that there are enough opportunities for investment in this segment and that will be the way going forward for you, that keep on identifying the opportunities and making investments there?
Like we've already said that we are identifying, or we are ready to identify companies which can help us or where we can help them to build our businesses for the future. So we are definitely open to investing in all such kind of opportunities and investment in Skyroot and Zmotion is part of that.
Sir, how much money was invested in Zmotion, if you can quantify the number, for 25%.
It is available in the public domain. You should look at that.
Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Mr. Manish Mahawar for closing comments. Thank you, and over to you, sir.
Thank you, Aman. On behalf of Antique Stockbroking, I would like to thank the team of Solar Industries for providing us an opportunity to hold the call. Manish ji, would you like to make closing comments?
Yes, we are thankful for everyone who has participated in the call, and we expect to come back with more fantastic results in quarter one. Thank you so much, everyone.
Thank you very much. Ladies and gentlemen, on behalf of Antique Stockbroking, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.