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    Kriti Industries

    KRITI
    Capital Goods·23 May 2025
    Management Summary

    Kriti Industries reported a challenging Q4 and FY25 with significant revenue and volume declines, particularly in the industrial segment, leading to a net loss. Despite this, the company is making strategic capex investments in building materials and column pipes, and management anticipates margin improvement and stable raw material prices going forward, with agri and building products segments showing growth.

    Highlights

    5
    • Agri-segment volume grew 5% YoY in FY25 to 53,696 metric tons.

    • Building Products segment volume grew 30% YoY in FY25 to 9,185 metric tons.

    • Approximately ₹10 crores spent on capex recently, with a major focus on building materials and column pipes.

    • Anticipated improvement in overall margins towards 10% going forward.

    • Raw material prices appear to be stabilizing after a long period of volatility, with a recent marginal price increase.

    Concerns

    5
    • Q4 FY25 revenue declined 29.3% YoY to ₹138 crores.

    • Q4 FY25 EBITDA was only ₹0.2 crores, leading to a net loss of approximately ₹4 crores.

    • FY25 annual revenue declined 16.7% YoY to ₹722 crores, with EBITDA margin at 3.93% (down 294 bps).

    • Industrial segment sales volume declined 68% YoY in Q4 FY25 and 73% YoY in FY25 due to intentional reduction of exposure.

    • Total sales volume decreased 24% YoY in Q4 FY25 and 10.7% YoY in FY25.

    What Changed2

    vs Q1 FY26

    Risks discussed4 → 3 (-1)Q&A highlights6 → 8 (+2)
    Key financials

    Metrics

    7

    Periods

    2

    Q4

    3
    • Revenue
      ₹138 Cr
      YoY-29.3%
    • EBITDA
      ₹0.2 Cr
    • Net Loss
      ₹4 Cr

    FY25

    4
    • Revenue
      ₹722 Cr
      YoY-16.7%
    • EBITDA
      ₹28 Cr
    • EBITDA Margin
      3.9%
      YoY-2.9%
    • Net Loss
      ₹4 Cr

    Segment breakdown

    FY25 Total Sales Volume
    67,543 metric tons41.8%
    FY25 Agri Segment Volume
    53,696 metric tons33.2%
    Q4 Total Sales Volume
    13,337 metric tons8.2%
    FY25 BP Segment Volume
    9,185 metric tons5.7%
    Q4 Agri Segment Volume
    9,154 metric tons5.7%
    FY25 Industrial Segment Volume
    4,662 metric tons2.9%
    Q4 Building Products Volume
    2,513 metric tons1.6%
    Q4 Industrial Segment Volume
    1,671 metric tons1.0%
    Treemap· Share of Volume

    Order Book

    low confidence

    "The company did not explicitly disclose order book or order inflow figures, focusing instead on sales volumes and market share in various segments."

    Source:
    Inferred

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    ₹10 crores

    Out of Rs. 55 crores raised

    Guidance & targets

    4
    CategoryTargetPriority
    Market Growth
    Agricultural Market Growth
    8% to 10% range
    Medium
    Profitability
    Overall Margin Improvement
    10% around
    Medium
    Profitability
    Agri Segment Margin
    around 10%
    High
    Profitability
    Building Products Segment Margin
    better margins
    Low

    Overall Margin Improvement

    Next quarter
    CurrentFY25 EBITDA Margin 3.93%
    TargetTowards 10%

    Why it matters

    Key profitability target for the company, indicating operational efficiency and pricing power.

    We certainly see improvement in margins going forward. And we must be able to improve them towards, I mean, 10% around going forward.

    How to verify

    key_financials.metrics[label='FY25 EBITDA Margin']

    Risks & concerns

    3
    RiskSeverity

    Sluggish Payments in Industrial Segment

    Contractors in the industrial segment faced delayed payments, leading Kriti Industries to reduce its presence in this market.Management acknowledged

    medium

    Raw Material Price Volatility

    Continuous decline in material prices in the past year created resistance, though prices are now stabilizing.Management acknowledged

    medium

    Uncertainty of Anti-Dumping Duty (ADD) on PVC

    Clarity on ADD for PVC is pending court decisions, impacting raw material procurement strategy.Analyst not addressed

    medium

    Q&A highlights

    8

    “Industrial segment market is generally dependent on MEP contractors, these contractors who are supplying to government or other projects. In this year, normally all these contractors were not getting payments in time, so payments were sluggish and that was where we wanted to control our business because we are not sure about the type of business, margins in business and timely payments. So we had very clearly decided to stay away as far as we are not sure that now industry has stabilized and government contracts and everything is streamlined.”

    Explains the significant decline in the industrial segment and management's cautious approach due to payment issues and margin uncertainty.

    asked by Praneeth

    3 min read6 chapters

    Detailed Narrative

    01

    Q4 & FY25 Financial Performance Overview

    Kriti Industries reported a challenging Q4 FY25 with revenue declining 29.3% year-on-year to ₹138 crores, resulting in a minimal EBITDA of ₹0.2 crores and a net loss of approximately ₹4 crores. For the full fiscal year 2025, revenue stood at ₹722 crores, a 16.7% decline from the previous year, with EBITDA at ₹28 crores and an EBITDA margin of 3.93%, a decrease of 294 basis points year-on-year. The company also reported a net loss of around ₹4 crores for the full year.

    02

    Segmental Volume Performance

    In Q4 FY25, total sales volume decreased by 24% year-on-year to 13,337 metric tons. The agri segment saw a 9% decline to 9,154 metric tons, while building products grew 18% to 2,513 metric tons. The industrial segment experienced a significant 68% decline to 1,671 metric tons. Annually, total sales volume for FY25 was 67,543 metric tons, down 10.7% year-on-year. The agri segment grew 5% to 53,696 metric tons, building products surged 30% to 9,185 metric tons, but the industrial segment plummeted 73% to 4,662 metric tons.

    03

    Strategic Shift in Industrial Segment

    The company intentionally reduced its exposure to the industrial segment due to sluggish payments from MEP contractors involved in government projects. Management stated they decided to 'stay away as far as we are not sure that now industry has stabilized and government contracts and everything is streamlined,' prioritizing timely payments and margin certainty. This strategic decision led to the substantial volume decline in the industrial segment, which is expected to remain low until market conditions improve.

    04

    Capital Expenditure and Growth Focus

    Kriti Industries has initiated new investments, spending approximately ₹10 crores recently out of ₹55 crores raised, with the remaining plans in discussion. The primary focus for this capital expenditure is the building materials segment and column pipes, which are considered value-added products. These investments aim to augment capacity, improve product range, and enhance offerings, particularly in the building materials sector, which is expected to see 'fairly good growth' from a low base.

    05

    Market Dynamics and Margin Outlook

    Management noted that raw material prices, after a period of continuous decline, have begun to stabilize since April 2025, with a recent marginal price increase. This stability is expected to support margin improvement, with the company targeting overall margins of 'around 10% going forward.' The agri market is projected to grow at an 8-10% range, and while agri margins are expected to be around 10%, building products are anticipated to offer 'better margins.' The company also highlighted its efficient price pass-through mechanism, typically within 24 hours of raw material price changes.

    06

    Competitive Positioning and Geographical Expansion

    Kriti Industries maintains a strong market position in its core regions like MP and Rajasthan, holding over 40% market share. The company is also expanding its presence in Maharashtra. For future growth, particularly in the agri business, the company plans to establish new facilities in regional areas to overcome transportation costs. Management emphasized differentiation through product quality, branding, marketing, and timely services, aiming to be recognized as a premium brand appreciated by customers.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.