Pricol limited – OEM automotive

Q2 FY 24 Short Notes:

Product Mix:

Driver Information and Connected Vehicle Solutions (DICVS)- 65%

Actuation Control and Fluid Management Systems (35%)

ACFMS is mostly towards export so slightly higher Margin.

But DICVS Margins are also improving as electronics prices have Stabilized. From average Value of Rs 300 per DIS now we are in the range of Rs 1200 but going forward it will be around 2500 in next 3 years.

In DICVS Segment 65% revenues comes from Two wheelers, 20% from Commercial vehicles and rest from Passenger Vehicles.

Revenue growth during this Quarter is slightly less mainly due to less EV sales due to FAME subsidy issue. Now EV again started to pickup from October. EV Vehicles form 8% of the sales by Volume and slightly more by Value.

In the Two-wheeler segment 8 out of 10 TFTs were manufactured by Pricol. In Four-wheelers we didn’t start early due to non-compete clause which ended only in 2020. So, now only we are starting in Four-wheeler segment.

In The ACFMS we have moved from low value products like oil pumps and chain tensioners to BLDC fuel pump and electric coolant pump. This has increased the average selling price from Rs150-200 to more than Rs 1000.

Revenue Guidance of 3800 crore to 4000 crore by FY26 maintained.

Revenues from Joint Ventures like Sibros and BMS power Safe will start from FY26.

EBITDA Margins of 13.5% will be achieved much before FY26 with sequential improvement of 0.3 to 0.4 in every Quarter.

Capex Plan:

Out of the total 600 crores Capex plan, 150 crores spent on last year, 200 crores is being spent this year and remaining 200 crores to be spent next year for modernization which will help in making revenue in the range of Rs 3800 to 4000 crores.

Disclosure: Invested and Biased.