Mayur Uniquoters Q1 FY27 earnings call

Mayur Uniquoters Ltd reported a robust Q1 FY27 with consolidated revenue from operations reaching INR 269.23 crores, marking a 25% year-on-year increase. Consolidated Profit Before Tax (PBT) grew by 35% to INR 74.12 crores, and Consolidated Profit After Tax (PAT) increased by 38% to INR 56.12 crores. On a standalone basis, revenue was INR 247.03 crores, with PBT up 41% to INR 77.79 crores and PAT up 43% to INR 58.95 crores. The overall growth was primarily price-driven, with volume growth around 2%.

The company's total exports contributed INR 103.80 crores to standalone revenue, with export OEM specifically growing by a significant 39-40% year-on-year to INR 73.56 crores. Domestic sales stood at INR 143.23 crores, including INR 56.08 crores from auto OEM and INR 41.16 crores from footwear. Management noted that export volume growth was over 9%, while domestic volume growth was around 1%. New OEM supply orders from the U.S.A. are significantly contributing to export sales and overall profitability, with this momentum expected to continue for the next 2-3 years.

Mayur Uniquoters is expanding its production capacity by adding a new line, which is expected to commence production by February-March 2027, adding 5 lakh meters of capacity. This expansion is projected to generate an additional INR 250-400 crores in revenue annually, depending on the product mix. The current capacity utilization is between 75-78%, which will adjust to 65-66% with the new line, providing further headroom. The company is also evaluating two more expansions, potentially including one outside India, with a possible capex of INR 250 crores over the next two years if an international facility is pursued.

While the previous quarter's high margins were attributed to one-time^📎 foreign exchange gains, the current quarter's margins are considered sustainable at 25% plus 1-2%. However, the company faced significant cost pressures, with raw material prices experiencing volatility since March and shipping costs increasing by up to 4x due to the Gulf War. Despite these challenges, management has not aggressively pursued price hikes in the export OEM market, especially in the U.S., due to market softening and strategic reasons, but has sent new requests as the situation changed.

The company is actively considering an international plant to de-risk supply chains for global automotive OEMs, as some customers prefer suppliers closer to their operations. Despite market volatility^🌐 from events like the Trump tariff and West Asia war making the final decision on location challenging, management believes a global presence enhances the company's image and effectiveness, especially for automotive customers. Potential locations include Mexico or the U.S., with a final call pending.

The PU plant continues to operate underutilized, with no significant improvement in the last three months due to volatile market conditions and rapidly expanding costs of PU raw materials. Management acknowledged that they are not aggressively focusing on the PU export market currently, finding it tough to compete against China. While sampling for top brands has been done, no business has been confirmed, and a strong recommendation for the PU plant's immediate future is not available.

Mayur Uniquoters highlighted its ongoing corporate social responsibility efforts, including planting around 50,000 trees and planning for more extensive plantations. The company has adopted schools to support children's education, engaged in healthcare initiatives, child skill development, water and sanitation projects, and distributed essential items like books and clothes in nearby villages. These initiatives have received recognition from the state government.