>HYDERABAD INDUSTRIES LIMITED: Aerocon Panels

Q3FY12 & FY11 Results 
During FY11, sales advanced by 2.8% to `726.2 crore but net profit fell by 43.6% to `50.6 crore. OP and NP margin stood at 13.4% and 7.0% against 22.3% and 12.7% respectively in the corresponding period last year. HIL was forced to briefly shut down its Dharuhera plant because of certain labour and regulatory issues, which resulted in decline in revenue from this segment. FY10 was an exceptional year in view of the decreased cost of production.


EPS for FY11 stood at `67.4.The DER as at FY11 stood at 0.29:1 whereas the value of the gross block at `444.5 crore.


During Q3FY12, sales rose 14.8% to `194.3 crore and net profit by 59.5% to `10.2 crore. (YoY). OPM and NPM stood at 10.5% and 5.2% compared to 8.5% and 3.8% respectively in Q3FY11. EPS for Q3FY12 stands at `13.6.


Expansion
HIL continues to expand its production capacity from time to time. HIL setup a new 90,000 tpa cement sheet plant at Balasore, Orissa, which started commercial production in Q3FY09. It also augmented its cement sheet capacity at Vijayawada plant by 90,000 tpa (commercial production started in Q2FY10) taking total capacity to 8.5 lakh tonnes a year.


In FY09, HIL had increased its thermal insulation capacity from 3,000 tpa to 6,000 tpa. HIL is further expanded its cement sheet capacity by setting up a 90,000 tpa plant at Jharkhand at cost of `40 crore; and increased capacity at existing UP plant by 90, 000 tpa at cost of `30 crore. A new unit at Golan, near Surat, Gujarat for manufacture of AAC blocks started commercial production during July 2010.


The total capacity of the cement sheet is at present 8, 54, 500 tpa. Prefab building panels at 4, 60, 000 tpa and prefabricated autoclaved capacity is increased to 3, 05, 000 from 1, 00, 000 tpa in 2010.


Aerocon Panels 
Aerocon Panels, used for construction of prefab structures and partition walls, has been extensively used in the infrastructure sectors like roadways, irrigation, power plants, airports etc and also in the construction of malls, schools, colleges etc.


Aerocon Panels business is expected to grow in excess of 25% a year for next few years. Aerocon AAC – Blocks, another key offering of HIL as part of its Green Building Products initiative also registering a good growth. This was possible due to the newly commissioned plant at Golan. After the stabilization period of six months of operation, the Golan plant is operating at above 60% of its capacity.


This has helped HIL to capture significant portion of the markets in west and south in a short time amidst intense competition, which is a reflection of the HIL’s aggressive and successful strategies in developing this business. The division will continue to grow in volumes in the coming years, although there will be pressure on prices as competition is likely to intensify further with new entrants in the market. However, the high acceptance of its Aerocon brand and focus on quality and reliability will help HIL to grow this business.


Thermal Insulation Products
This group of Calcium Silicate based insulating materials supplies to industries such as cement, power, petrochemical and fertilizer plants. Due to their superior properties and high quality, HIL’s products have gained good acceptance over its substitutes. Efforts are being made for developing new applications to expand the market size.


The thermal insulation products, which face capacity constraints, also suffer owing to surge in imports from China. The augmented capacity, improvements in efficiency and costs will help in recovery of this product
segment in 2011-12 and going forward on account of fresh investments in green field projects and replacement and modernization of plants in the Cement, Fertilizer, Petrochemicals and other industries.


To read full report: HIL
RISH TRADER