Menon Bearings Q4FY23 concall highlights
- Manufacturers and exporters of bi-metal components, aluminium-casted products. The company has recently ventured into a new segment of brakes
- 3 manufacturing facilities all located in Kolhapur and 1 warehouse in USA
- Manufacturers bi metals which are highly critical moving engine components that operate in high
- temperature and pressure. Inside engines with high payloads.”
- Manufacturs Alkop (Aluminium castings)i.e critical alloy parts for auto and non-autousage
- set upplant and machinery to manufacture brake lining and brake shoes, which are made from ecoantifriction asbestos-free materials.
- Clients in auto segment : LCV and tractors
- Non auto clients : refrigerators, pumps, oil and gas pipelines and other customized products
- Clients are Cummins, Honeywell, John Deere, Concentric pumps, etcetera
- No single customer contributes +10% of revenue
- In-house machine building capacity, resulting in cost savings
- Present in 24 countries with 1000 dealers and distributors
- The domestic market size for bearings is around INR1,000 crores , company has a market share of 20-25%
- Aluminium castings products market size is Rs6000 crores
- Brake segment market size is Rs2000 crores, , market share 20-25%
- The commercial production for brakes has started in Q1 FY24,
- Capex till FY25 in 2 existing segments of Rs30 crores will be funded through internal accruals. Out of which 60% will be towards aluminium division i.e (60k sq ft factory) and 40,000 sq ft in bi-metal
- Demand will bounce back in coming quarters due to volumes from brakes and alkop growth (premium margin segment due to customization needs).
In Alkop segment, revenue grew by 29% while volume grew by 6% due to introduction of new products which are value added in nature.
“In bimetal division, auto sector is a prominent one i.e almost 80% is
automobiles. “ - In Alkop division, auto sector 50% and industrial 50%
- Exports for bi-metal fell due to slowdown in Japan companies (major one). Howver, in USA the business is growing
- EBITDA margins of 24-25% were clocked due to introduction of VAP products,company is confident in sustaining it.
- Brakes busness margin will be 18% and company is targetting to fetch Rs100 cr in within 3 years.
- Brakes capex were Rs8 crores , revenue potential will be Rs25-27 crores in FY24.Increase of 30-40% YoY in coming years.
- Expecting better enivornment from Q2FY24 for both the segments (YoY growth +20%) going ahead.
- Brakes business will be catering to after market (900 crore), aiming to fetch 15% of it
- Conversion ratio as said from receipt of RFQs to the actual start of business and commercial production is about 80% to 85%
- The company states that they are 100% sure that they will be growing by 20% on YoY basiseven after braking business coming in stream.
- In brakes business, after enetring into after market company will be foraying into OEMS by adding additional stream of line which will cost around Rs1.5-2 crores
- In exports, US and Japan has the largest share then African countries and Dubai
- Key competition in braking business are Rane Brakes. Rane Brakes and Hindustan Composites
- In bi-metals , company is exporting to USA, Japan, Korea, Mexico, Netherlands, and we can continue till Europe and Russia are weakened.”
- registered with 50 plus distributors now. All over India. So, after market, then state transport undertakings, then all transporters, private transporters, private operators and then OEM.
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