Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Shaily Engineering Plastics Ltd (BOM:501423) reported a robust top-line growth of 14% to 179 crores in Q1 FY25.
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The company improved its gross margins and EBITDA margins, which stand at 42.1% and 20.1% respectively.
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Shaily Engineering Plastics Ltd (BOM:501423) received purchase orders for one of its pen injectors worth $10 million per year.
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The company is expanding its horizons to include contract manufacturing for medical devices and specialized packaging solutions.
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Shaily UK has shown significant growth and is building capabilities to cater to big pharma, indicating strong international expansion.
Negative Points
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Machine utilization rate was around 39% in Q1 FY25, indicating underutilization of capacity.
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The domestic business showed a decline, with revenues either flat or slightly down year-on-year.
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There were technical engineering challenges in Q1 with one of the products, affecting supply timelines.
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The company faces uncertainties in the European market due to ongoing demand issues.
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The insulin business, while stable, is price-sensitive and significantly commoditized, potentially impacting margins.
Q & A Highlights
Q: Can you provide more specifics about the $10 million purchase order for pen injectors? A: The purchase order is for the insulin market and will be supplied over the current year and spill over into the next year. (Respondent: Managing Director)
Q: Are there any updates on the semaglutide project and its expected timeline? A: We plan to start supplies by the end of this year, either in December or January. The multi-cavity tooling program and assembly assets are set to be qualified by September 2024, with design verification over the next three months. (Respondent: Managing Director)
Q: How does the company ensure that its devices do not infringe on existing patents? A: We have conducted a Freedom to Operate (FTO) analysis, spending close to $180,000 to ensure our devices do not infringe on existing patents. (Respondent: Managing Director)
Q: What is the status of the projects in the UK, and how do they relate to the India operations? A: Projects start in the UK with device development up to design verification. Once completed, commercial supplies are made from India, indicating future business potential. (Respondent: Managing Director)
Q: Are there any new opportunities in the consumer electronics segment? A: We are in the initial stages of evaluating business opportunities in consumer electronics and are in discussions with potential customers. (Respondent: Managing Director)