Was Going through the Craftsman Automation Q2FY23 Earning call and there is an interesting observation by the MD and I am sharing Verbatim here as i couldnt find the Craftsman Automation thread ( Mods please move to appropriate Thread if needed or delete )
Since they are into Aluminium Die casting business , i am not sure if Sona is also operating in this Particular segment but still its insightful observation on the overall EV theme ,hence sharing :
Craftsman Automation –Q2FY23–Earning Call Snippet on EV Aluminium parts mfring –17th Oct22 :
Q : How are we looking at Aluminum business for EV 2Wheelers? –
‘Early this year, we got orders from start-ups in EV –some are under development, some are under trial production now but overall the no.s are not very appealing for financial results, so its a long way off from Minimum economic scale of this business to be fruitful as a co. so whatever revenue in Q2 for 190Cr in Aluminum business doesnt carry any EV portion for it. We have factored in EV sales from Next Fiscal even though we will start from Q3FY23 onwards.
–We are aggressive to take critical parts , not interested to take simple parts on commodity pricing & at automotive pricing we need automotive no.s so volumes. if the volumes are getting split up in 10/20 players & the same automotive price we stand to loose so we have to pick out the winners, we have to pick out the volume & we have to get the pricing also right which needs to be much higher because of the lower volumes so there is a challenge there.
–We are not in big development cycle, we have developed lot of EV parts but all parts put together looking at the volume , it doesnt change the topline too much so we are very careful about how much focus we are giving towards the current state.
–Also, the models are evolving as these models been designed in a way in the beginning and now when it comes to cost many models are getting redesigned for the cost effectiveness by the start-ups , I think the mature cos will do very good design to start with itself & you can see the cost sheet approach which we appreciate & I think the market will mature in the coming years.’
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