Decent set of numbers from Wheels India. As promised by management, profitability ratios have increased and good to see the same ratios in H2FY25 as well.
Investor presentation:
From press release:
- Also good growth is seen in hydraulics division. Management is confident of doubling the revenue in 2- 3 years from the current 150/160 Crs.
- Loss making Wheels India Cars (Passenger car steel wheels) has turned profitable
- Industrial segment turned profitable (loss reported in YoY quarter was due to one time pre inspection charges)
- Reported a strong operating cash flows of Rs 215Cr vs 194 Cr half yearly.
- Rs 133 Cr worth of inventory has been reduced
- As per management Company has gained market share in export markets. But things are slow in US and EU. Need to wait for these markets to normalize for volume to pick up.
- As per the management as the profitability of the company is increasing, expected to reduce the debt going farword (they didn’t mention how much, but considering the capex of 225Cr this FY25, my guess is that they could reduce in the range of 30-50Cr keeping the debt of the same level as that of FY24)
Even if we consider muted revenue growth – 5K cr (~ same as that of FY24), OP margins of 7.25%, company shall clock 362.5Cr of operating profits. If we take out 120Cr of depreciation and 80Cr of interest, PBT shall be around 150Cr where as the current EV is around 2500Cr)
Press release:
Disc: Invested and topped up in the recent market fall.
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