Imp points Elecon Engineering concall Q4 FY23:
• Guidance FY24 – Consolidated revenue 2000CR – Gear div – 1700Cr & MHE- 300CR @22% EBITDA margins
• Fy23 – 71% Domestic revenue, 22% from overseas subsidiary & 7% exports from India, see total overseas share going to 40% from 29%
• Fy23 – Gear division 86% revenue contribution & MHE 14%
• New product launch – EON series 2 (6 products)– Caters to Steel, power, oil * Gas, rubber & plastics, water treatment, cement.
• Open order book 714Cr, 569cr Gear division & 145 MHE
• Focus is on targeting European market OEM’s, challenges in local market there present us with a good opportunity there
• Recently got significant approval from paper & pulp manufacturer in Europe (Largest in industry), already supplying some equipment’s to them from India
• 15Cr one off expenses (provisions on spares > 2 years, bad debts 4.8cr & other items), 8cr one off incomes
• Employee cost has reduced on account of actuary report – where provisions have been found more than adequate in previous years
• Gear division utilisation – 70%, MHE – 30-40%
• FY24 expecting Capex 50-60 Crs, utilisation will be FY25
• Goal in long term will be to: 1. Develop certain products where not present 2. Expand reach globally, especially Europe & USA, this includes looking for acquisitions & strategic tie up’s
• Replacement market for us is 20-30%, 70% customers are repeat customers
• Have been able to harness marine opportunities in Europe, looks to be promising.
• Indian navy intends to reorder ships supplied in past where we are preferred suppliers
• Expect new orders from power sector, where we are preferred suppliers due to our past supplies to them
• Since turnaround fast & prices of COGS vary, order book is not high
• Have 34% of organised market share in India
• Since we are conservative & expect opportunities, cash is reserved & hence limited dividend
• Higher numbers will be visible in Q3 &Q4
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