23-05-2025
Orient Bell Ltd (BOM:530365) Q4 2025 Earnings Call Highlights: Navigating Market Challenges ...
Revenue: 666 crores in FY25, a decrease of 0.4% from 669 crores in FY24.
Gross Margin: Improved to 35% in FY25 from 33.6% in FY24.
Profit After Tax: 2.8 crores in FY25.
GVT Sales Mix: Grew to 41% in FY25.
Vitrified Mix: Improved to 58.5%, the highest level.
Capital Expenditure: 234 crores invested between FY19 and FY25, adding 10.9 million square meters of capacity.
Warning! GuruFocus has detected 2 Warning Signs with BOM:532234.
Release Date: May 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Orient Bell Ltd (BOM:530365) has successfully implemented cost-saving initiatives, including a solar power purchase agreement, which have helped reduce power costs and improve operational efficiency.
The company has focused on premiumization, with the salience of glazed vitrified tiles (GVT) growing to 41% and the rectified mix improving to 58.5%, contributing to better gross margins.
Orient Bell Ltd (BOM:530365) has been recognized for its brand differentiation, winning the 'Brand of the Year' award for tiles for the fifth consecutive year.
The company has made significant investments in marketing and brand awareness, which have resulted in increased brand recognition and website traffic.
Despite challenging market conditions, Orient Bell Ltd (BOM:530365) has maintained its credit ratings, reflecting its financial stability and creditworthiness.
The company faced a challenging operating environment in FY25, with subdued domestic demand for tiles and volatility in export markets affecting performance.
There is an overcapacity issue in the industry, particularly from the Morbi region, leading to increased competition and pressure on pricing and volumes.
Average selling prices have dropped industry-wide, impacting revenue growth, with a slight decline in total revenue compared to the previous year.
The company's capacity utilization remains low, around 55%, due to sluggish market conditions and increased capacity in recent years.
Orient Bell Ltd (BOM:530365) has experienced some top-level management changes, which could potentially impact strategic continuity.
Q: Given the challenging year due to overcapacity and price drops, do you anticipate any shutdowns or new capacity setups in the tile industry? A: Aditya Gupta, CEO: Despite the sluggish market, more capacity is expected to come online in Morbi in H1. We anticipate the capacity overhang to continue until market conditions improve.
Q: With freight rates dropping, do you expect exports to improve in FY26? A: Aditya Gupta, CEO: While we are not major players in exports, the freight issues from last year seem resolved. However, the impact of US tariffs and economic conditions in Europe and the US remain uncertain.
Q: Despite increased GVT sales, margins haven't improved significantly. When do you expect margin improvements? A: Aditya Gupta, CEO: Our margins are improving through cost efficiencies, but market conditions and pricing pressures have offset some benefits. We expect improvements as market conditions stabilize.
Q: How is the advertising spend impacting brand awareness and sales? A: Aditya Gupta, CEO: Our digital marketing has increased website traffic significantly. TV advertising has improved brand awareness slightly, indicating our marketing strategy is effective.
Q: What is the current capacity utilization, and what are the future CapEx plans? A: Aditya Gupta, CEO: Current capacity utilization is around 55%. We do not foresee any new capacity additions in FY26, focusing instead on maintenance and regulatory CapEx.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
