Some brief notes from the management meet that I attended recently:
• Exports should be around 600Cr for the whole year
• Exports can kick in and ramp up the volume growth further – 1L in first half itself (40k in last year) – $300m+ size opportunity – we are looking to get 1-3% market share, if not more – huge opportunity size in exports and we are looking to grow along with the demand and market scenario that is there in front of us – all the domestic companies can be winners (including competitors) – European players losing ground – time for Asian players to be aggressive
• Even if the OEMs plan to shift 5-10% of their procurement from China – India may not even be able to serve it – that is the size of opportunity in front of us and Wheels India, Minda, etc.
• Expects revenue from knuckles to be around INR35-40 crores in FY25 (no revenues to be recognised this FY)
• Margins going forward can be around 11.2-13% – as the mix tilts more towards alloy
• Steel Wheels – Volumes are high but the growth in volumes is low
• AMW may take 5-6 months to become fully operational after Dec this year – focus will begin from CV Segment
• FY26 will be the year when AMW will meaningfully start contributing to the revenues
• No meaningful difference in margins in AMW segment – in fact, consolidated margins may be slightly lower for the next 2 years because of the high fixed cost – but the company is trying its best to not have an adverse impact on the existing business margins
• Can expect some good progress on the Maruti deal front in the next concall
• Company level ROCE should sustain above 20%
• Revenues should be around 4500Cr for FY24 and 5200Cr for FY25 (some changes can be there due to value changes due to RM price changes)
• Volume Growth should be 12-13% this FY and 10-12%+ for next FY
• 4W business is protected due to BIS and anti dumping duties – similar protection is not available for 2W
• 4W Segment – imports have come down dramatically from 50% earlier – not seeing it go back to those levels again
• Market share is most critical – our aim is to get more market share
Management seems to have a lot of clarity and confidence in the business and its growth potential. Really like the tone of the mgmt. Let’s see how it pans out!
Disc: Invested
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