For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Ganesh Benzoplast Ltd (BOM:500153) reported a consolidated revenue of INR 976 million for Q2 FY25, showing a positive comparison to the previous year's INR 1,026 million.
The company achieved a net profit after tax of INR 164 million for Q2 FY25, an increase from INR 156 million in the corresponding period of the previous year.
The LPG project is progressing with key approvals in place, and construction activities such as firefighting systems are already completed.
The chemical division has shown improved margins, with efforts to increase capacity utilization and operational efficiencies.
The company maintains a steady rental business with margins around 48-50%, indicating stable income from this segment.
Negative Points
Standalone revenue for Q2 FY25 decreased to INR 543 million from INR 562 million in the same quarter last year.
There is uncertainty regarding the timeline for receiving all necessary approvals for the LPG project, which could impact project completion.
The company faces challenges in achieving the previously projected EBITDA targets due to market conditions and pricing pressures.
The rail logistics business has not yet delivered the expected returns on investment, with limited customer base impacting profitability.
Legal and professional fees remain high due to ongoing court cases, which could continue to affect financial performance.
Q & A Highlights
Warning! GuruFocus has detected 6 Warning Signs with BOM:500153.
Q: What is the approval status for the revised LPG project, and when is the construction expected to start and complete? A: The main approval for PESO is already in place, which allows for the start of construction. Other approvals are in process and expected shortly. The firefighting construction is completed, and test piling is expected to start next week. The project is expected to take approximately two years from then. - Chairman and Managing Director
Q: Can you provide insights into the financial performance and expectations for the chemical and LST divisions? A: The chemical division has shown improved margins due to increased efficiencies and favorable raw material costs. The LST division's revenue includes both rental and service portions, with the rental business maintaining steady margins. The company expects to achieve a 5-6% growth rate in the coming years, with significant growth anticipated from the LPG and chemical capacity expansions. - General Manager of Finance and Taxation