EMFI, the company’s acquired entity recorded an EBITDA margin of negative 18.6% on a standalone level in FY23 . Furthermore, given the small scale of operations, EMFI’s profitability is unlikely to impact SPRL’s consolidated EBITDA margins.
SPRL caters to various segments of the automotive industry including OEMs which have been the highest contributor to revenue (FY23: 64.1%; FY22: 60.4%) followed by aftermarket sales (17.0%; 20.1%) and exports (18.9%; 19.5%).
Furthermore, being a diversified player, the company caters to the entire auto spectrum of two-wheelers, three-wheelers, PVs, CVs and tractors with a healthy market share in each of these segments. SPRL’s exposure to diversified industry segments as well as replacement and exports markets offsets the risk arising from a feeble demand from a particular sector or a customer. Furthermore, with acquisition of EMFI, which is into electric vehicle (EV) drive train components such as electric motors and motor controllers for the EVs and other applications, helping it diversify its revenue to the engine-agnostic segments.
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