GNA Axles-Poised for growth

AGM Notes – 29th September 2023

• Tractor sales increased in 2022 and GNA’s market share increased in this segment

• Long term borrowings at 47cr, 4.46m to 4.9m components we are producing right now.

• Future outlook – expects growth in CV doemstic by 20%, tractor low single digit growth, first 5 months have been flat for tractor and 15% growth for CV domestic

• export is stable at present, expecting to match sales revenue of last year, North america and europe are looking good right now

• looking to increase our contribution from NA and europe

• started rear axles for suv both domestic and exports. Slowly ramping up sales- can do 80cr this year

• Expecting single digit growth this year 6-9%, steel prices are dropping every quarter so top line growth is limited

• Answering a question on if they will consider stock split – Share price is steadily increasing, it also increases with shareholder interest. Our work is reinvestment of funds, growth and rest is upto interest of shareholders. If valuation increases a lot we will consider split no consideration right now.

• Acquisition – we can consider if there is an opportunity. Did not seem like they are considering anything right now or they are looking out.

• US strike in auto companies – It is limited to 3 big players, it is continuing and it is affecting their vehicle production in cars and SUV segment. We are in CV segment which are not under these unions, consumption of our goods due to this strike is not affected.

• On competition or new players entering – No new player roughly in our area in India, only existing players. We cannot discuss competition in AGM

• We have reinvested yearly to cut down our costs and we have 70% market share in tractor market.

• On why we are not present much in tractor/off highway in US and only in CV – In CV exports it is standardised and economical to buy from us but off highway export is not standardised in US

• Additional capacity of 600k by next April May. SUV capacity to be doubled by April

• If entering African market – African market we never announced and we are not planning to go there as of now

• EV axle shafts – Our axles are already there in EV trucks and SUV. No different axle/shafts are requried for EV vehicles. Other parts are different like engine etc. No additional investment for EV from our end is required. We are supplying axles and OEMs would already be using them in EVs, might be 2-3% of our sales. (It seemed like they are not at all affected by EVs as axles/shafts are same in EVs as well)

• 150cr more investment in next 2 years for capacity expansion. 100cr expansion done this year, 1m pieces capacity to be added, current capacity 7-8m pieces

• Growth outlook for next 5 years – Revenue growth we are targeting 10% for next 5 years as base is high, margins should be maintained with our initiatives to cut down costs

• On if we are planning to reduce debt instead of doing expansion as interest rates are going higher – debt equity we are maintaining below 0.3 which is well below what others are doing in forging industry