Concall notes below.
FY24Q1
- Growth guidance: 12-15% sales growth in FY24 and 20% CAGR between FY24-26 with margin improvement
- Quarterly revenue breakup (201 cr.): Domestic auto OEM (44 cr.), domestic replacement (27 cr.), footwear (48 cr.), export general (20 cr.), export auto OEM (46 cr.; 5.7 lakh m; 807/m realization) and others (6 cr.)
- Expect 225 cr. of auto OEM exports in FY24 (vs 157 cr. in FY23) and 575-600 cr. in FY26
- Newly added customers (Ford USA, Mercedes South Africa, VW India, BMW, Hyundai, Kia, etc.) should see gradual improvement in volumes
- Mercedes: 30’000 m/month
- BMW: 2-3’000 m/month through Thailand. Direct supplies to South Africa can start in March 2024. Volumes will reach same levels as Mercedes
- PU business is struggling due to Chinese dumping (sold 1.81 lakh m; 5.5 cr.)
- PU strategy: Work with footwear OEMs and position themselves as a preferred vendor for PU leather, similar to how they penetrated Korean auto OEMs through tie-up with Baiksan for supplies to Kia and Hyundai India
- Footwear is expected to revive in October 2023
- Zara and some other global brands visited their PU plant, hoping to convert them into customers and if they are successful, volumes can be huge. Most of these visits are for sports shoes
- Auto replacement demand remained subdued due to government’s airbag mandate for backseat
- B2C: Will expand retailers to 1,000 by end of FY24 from ~350 currently
Disclosure: Invested (bought shares in last-30 days)
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