Salzer Electronics

Some quick notes from the concall:

• H2 steady growth expected
• smart grid, IOT devices, customised switch gears are growing
• smart grid requires advanced switch gear fuelling demand
• First order of 5cr for smart meters. Small step forward.
• 200cr worth of order which was earlier expected within smart meters this year does not look like a possibility this year. Next year confident for 700 cr though.
• Targeting margin of 11% by FY 26.
• DC fast charging and smart meters in the future to add significantly in the coming years.
• Other income includes shares of KC industry sold partly considering good valuation. Still holding 70% of the business.
• Expecting 12% margins for smart meters
• FY 26 Guidance - 1600 cr rev from switch gear, wire and cable and building. Plus 700 cr from smart meters with a blended margin of 11%.
• Fy 25 - 20 - 23% growth.
• Smart meter capacity is of 1000cr looking at the market 700 cr looks like realistic revenue target for next year.
• AMSPs have built big order books but the second line order from AMSPs to players like us is still in process.
• Building segment negative EBITDA for the qtr.
• capacity for set up for 100 chargers a month.
• total transformer business approx 250 / 300 cr. We are not into ditribution transformer. Low voltage segment. 690 V max. Application: building, equipments etc. Growth is good as It grew 30% plus.

If they meet their guidance of 2300 cr with 11% margin as per my rough calculation they can do about 125/130 cr of PAT which is about 14 times forward. Let’s see if the management can walk the talk.