3. INTRODUCTION
• Gujarat- based Exxaro Tiles is engaged in manufacturing
and marketing of vitrified tiles used majorly for flooring
solutions.
• It commenced business as a partnership firm in 2007-08
as a manufacturer of frit, which is one of the raw materials
used in manufacturing of tiles and has over the years,
diversified, expanded and evolved into a manufacturer for
vitrified tiles.
• Its well-known brand series include Topaz Series, Galaxy
Series, High Gloss Series, etc.
• It focus its research and development efforts on developing
products which are innovative and in line with the trends.
• Some of its key product development highlights include:
1) 3D Effect in Double Charge Vitrified Tiles
2) Replica of Natural Stones in Double Charge
Vitrified Tiles
3) High transparent glaze in weight method for
glazed vitrified tiles
4. FINANCIALS
Particulars
(in Mn.)
FY19 FY20 FY21
Revenue 2,440 2,440 2,599
EBITDA 396 462 521
EBITDAM(%) 16.2% 18.9% 20%
PAT 89 113 152
PATM (%) 3.7% 4.6% 5.9%
EPS (INR as
reported)
2.7 3.6 4.5
Net Worth 1,095 1,207 1,360
Total Debt 1,435 1,621 1,610
Total Assets 3,693 3,871 3,853
ROE (%) 8.1% 9.3% 11.2%
5. FINANCIALS
• ETL has delivered an impressive earnings performance
during last two years.
• Revenue and EBITDA clocked 3% and 12% CAGR,
respectively over FY19-FY21
• PAT recorded a healthy 31% CAGR over the same period.
Notably
• EBITDA margin improved from 15.6% in FY19 to 18.5% in
FY21, mainly led by continued reduction in staff cost and
better operating efficiency
6. ANALYSIS
Company/business:
1.Increase in exports promises scalability of business
2.History of high customer retention and manufacturing for
some of them for more than ten years promises quality and
reliability
Management
1.The Managing Director and Whole-time Directors
together have more than 15 years of leadership experience at
the company.
2. The promoters continue to hold 42 per cent stake in the
company after the IPO
Financials
1.Debt-equity ratio=1.2
2.Interest-coverage ratio=2.2
3.Gradual increase in EPS
4. The company has a stretched working capital cycle of
around 160 days in FY21, much higher than the prominent
players.
7. RISK FACTORS
• There is risk of easy substitution by other market players
as the company is into the production of vitrified tiles,
which can be easily substituted with other types of floor
tiles and products like mosaic, granite, and marble.
• The company provided security regarding loans from
banks by creating a charge over its movable and
immovable properties. The total outstanding amount
payable by the company stands at Rs 142 crore as of
FY21.
• It carries high trade receivables on its balance sheet,
accounting for 94 per cent of its current assets and 24 per
cent of its total assets. As the company plans to expand,
this can increase the quantum of trade receivables and
inventories.
• Increase of fuel prices , any negative impact in
construction and real estate sectors are also some of the
threats
8. CONCLUSION
My view:
• Fundamentals and financials are quite strong
• Management seems to be trustworthy
• Purpose of ipo issue reduction of debt and funding
working capital may make it phobic for investors at initial
stage but prospects of company can attract investors
• Only thing to be considered is the working capital cycle
It is a potential risk to be worked upon
• Overall the company can be expected to give moderate
returns to its investors in mid-term