Dear @bheeshma Bheeshmaji,

Sorry that we don’t see your posts in this forum often. I spotted this and read it after 3 years!

Since he looked at an investing horizon of 3 years, i would love to see a sequel to this story to see what happened, so far.

Also, like to see the how your journey as an.investor progressing.

Steel Strip wheels Q2 highlights –

Total plants – 04

Current capacity –

Steel wheels – 20 million +, by end of FY 24 – another 7 million wheel capacity would be added
Alloy wheels – 3 million + , by end of FY 24 – another 1.8 million capacity would be added

Employees – 7000 +

Last 5 yr revenue, PAT CAGR @ 15, 19 pc

Tata Steel holds 6.9 pc stake in the company
Nippon Steel holds 5.5 pc stake in the company

Domestic Mkt share ( steel wheels ) –

45 pc in PVs
53 pc in MHCVs
44 pc in tractors, 70 pc in OTR
30 pc in 2-3 wheelers

Sale contribution from steel wheels – 72 pc

Sale contribution from alloy wheels – 28 pc ( it was 3 pc in FY 19 )

Q2 financial outcomes –

Sales – 1134 vs 1081 cr
EBITDA – 124 vs 117 cr
PAT – 52 vs 55 cr

Volumes – 5.1 million vs 4.7 million

Cash and cash equivalents @ 44 cr

Capex spend for H1 FY 24 @ 190 cr. For full FY 24, expect capex spends @ 320 cr

Out of this, 190 cr are being spent on Capex of Alloy wheels capacity

Intensity of capex to reduce going fwd into FY 25,26

H1 export performance –

H1 exports volume @ 2.1 vs 1.5 million
H1 export sales @ 331 vs 294 cr

Trade receivables have increased in H1 due greater growth in export sales. Export sales have higher receivable cycles

Export customers, dialling down their Chinese imports and ramping up their India imports – a huge positive for the company. Expect alloy wheel exports to further pick up by next FY

Hopeful of getting alloy wheel orders from Maruti Suzuki. That should come as a nice trigger for the company

Uptick in the CV cycle is another tail wind for the company

Company setting up capacity of steering aluminium knuckles. To have a revenue potential of Rs 220-250 odd cr by FY 25. It’s an import substitute, no other manufacturer in India. This business can grow 5-10 times in next 5-7 yrs as industry shifts from steel to aluminium knuckles. Here, the margin profile should be similar to alloy wheels. Total capex for this to be around 200 cr. Out of this 50 cr odd to be spent this yr and the rest in FY 25

Alloy wheels is a high growth Mkt as more customers opt for alloy vs steel wheels

Current Debt on books at around 800 cr

Company has acquired AMW auto components for about 140 cr. Expecting a revenue of aprox 150 cr for FY 25. Should pick up further in FY 26. AMW auto components is into manufacturing of large steel wheels

Avg EBITDA margin difference between domestic alloy vs domestic steel wheel supplies is around 400 bps ( ie 4 pc ). For exports business, this margin gap is lower

FY 24 revenue guidance @ 4500-4700 cr odd with slight margin improvement in H2

Disc: holding, biased, not SEBI registered

The 522cr order book figure given also includes the executed orders, as clarified by the management in the call last week. Unexecuted OB would be the balance

Krishca has released its latest analyst concall recording.

https://nsearchives.nseindia.com/corporate/KRISHCA_16112023155401_KSSLEarningsCallAudioRecordingNov2023.pdf