Hello Sir,

Hope you are doing well.

Recently, I was going through the con-call of Sahyadri Industries which deals in Asbestos and non-asbestos flat sheets and boards.

While the demand for the products seems stable, the industry is reeling under the pressure of surge in raw material prices.

As a result, despite the increase in sales, almost all the companies from the sector have reported lower margins and profits.

Finally, it seems the raw material prices are softening and stabilizing. Is it time to take a contrarian call on the stock/sector?

Below, we have shared interesting insights from the Q2 FY 24 con-call of Sahyadri Industries to understand the current situation and the outlook for the company.


Before that, a few days back, we released our new stock recommendation for our Alpha and Alpha + Members

Company’s main growth and profit driving segment has grown more than 10x in terms of sales and profit in the last 10 years. We believe it has the potential to double its PAT in the next 3 yrs

For details on the stock click HERE


Sahyadri Industries – Insights from Q2 FY 24 con-call of the company

– Industry

  • The Q2 of the fiscal year is usually challenging for the roofing business. The inflation is still persisting at elevated levels affecting consumer spending in rural area
  • Going forward we expect a softening of imported raw material prices leading to better margins for us subject to forex fluctuation
  • We foresee roofing demand going up in H2 FY ’24 and intend to grow higher than the industry
  • Roofing demand growth is generally between 6%-8% and that is what is going to be in ‘25 also

– Performance

  • At Sahyadri, we have experienced high raw material prices along with rupee depreciation in H1 FY ’24 compared to H1 FY ’23
  • The overall capacity utilization has increased from 71% in H1 FY ’23 to 79% in H1 FY ’24
  • The operations at the Perundurai plant are also stabilizing on a steady state basis. Further we expect capacity utilization to inch up gradually in future
  • H1 FY 24 revenue contribution – 20% is the Non-Asbestos and 80% is Asbestos


  • The company is progressing well on its Maharashtra capex plant with around 45% of the overall capex already being incurred through internal accruals so far
  • We have already incurred around INR 45 crores. And going forward, there may be around INR 20 crores more

– Debt

  • Gross debt stood at INR 139.3 crores as on 30, September 2023, which includes short-term borrowings of INR 101.2 crores

– Guidance

  • Our endeavor is to focus on newer markets along with deepening presence in the existing markets
  • Also, we continue to focus on value-added products and increasing overall utilization levels
  • The endeavor is to reach INR 1,000 crores sales in next 3-4 years
  • The prices of the raw material is now getting stabilized, imported raw material prices; So going forward, margin would be little better than what you have already seen



Disclaimer: This is not a recommendation to buy/sell Sahyadri Industries. The securities quoted are for illustration only and are not recommendatory.


Best Regards,

Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.com/


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