In This Article:
Release Date: May 27, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Revenue from operations increased by 22.4% year-on-year, driven by a better product mix and strategic focus on high-value product sales.
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Profit after tax rose by 13.1% year-on-year, indicating strong bottom-line growth.
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The strategic acquisition of the iconic Wembley brand is expected to unlock significant growth opportunities across India.
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The company is expanding its market presence in emerging regions such as Madhya Pradesh, Chhattisgarh, Northeast, and South India.
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Lower crude oil prices are expected to positively impact margins in the near future.
Negative Points
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EBITDA margin declined slightly due to heightened competition, which led to more schemes and discounts to support sales growth.
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The acquisition of Wembley has not yet doubled revenue as initially expected, with only a 20% growth forecasted.
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The company faced environmental challenges in the Delhi NCR region, impacting sales during January.
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The competitive landscape in the paint industry has intensified with new entrants, particularly in the decorative segment.
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Export opportunities are limited due to unfavorable geopolitical situations, focusing only on Nepal and Sri Lanka.
Q & A Highlights
Q: What impact will the acquisition of Wembley have on Sirca Paints' gross margins and EBITDA going forward? A: The gross margins for the core business are around 51%, while the new acquisition has slightly lower margins. However, the integration of Wembley into Sirca's distribution network and ecosystem is expected to have a positive impact on the overall EBITDA. The company anticipates a 25% growth in the new business for the financial year, which should contribute positively to the consolidated growth of 25-30%. (Respondent: Unidentified_4)
Q: How has the competitive landscape in the paint industry changed with new entrants, and how is Sirca positioned? A: The entry of new players has increased competition, particularly in the decorative segment. However, Sirca's focus remains on wood coatings, where competition is less intense. The company expects margins in its core wood coating products to improve as competition in this segment is limited. (Respondent: Unidentified_4)
Q: What is the expected growth for the Wembley brand and its impact on Sirca's overall revenue? A: The Wembley brand's nine-month sales were around 35 crores, with expectations of a 20% growth in the current year. The integration with Sirca's operations is complete, and the company anticipates improved EBITDA margins due to softened crude prices. The combined sales of Welcome and Wellco brands are expected to grow by about 50%. (Respondent: Unidentified_4)