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Gabriel India hosted a conference
call on Nov 15, 2021. In the conference call the company was represented by
Manoj Kolhatkar – Managing Director and Rishi Luharuka – Chief Financial
Officer.
Key takeaways of the call
GIL continues to gain market share
in 2W segment with its market share in Q2FY22 stand at 25%. Share of 2W/3W in Q2FY22 revenue stood at
66%, PC 22%, Commercial Vehicles & railways 10% and trading 2%.
Growth in 2W/3W was primarily
driven by efforts in terms of improving market share in key customers, higher
efforts in terms of developing new products and on account of strong acceptance
of end product in the market.
OEM contributed 81% of the
revenue in Q2FY22, 14% to replacement market and 5% exports. Of the aftermarket 2W/3W account 40%, CVR
37%, PC 9% and 14% trading.
CV volumes have started improving from Oct'2021
Improvement in PC Volumes in Q2 FY22 compared to Q2 FY21.
Export sales in Q2FY22 stood at
Rs 30 crore (up from Rs 11.9 crore in Q2FY20 & Rs 12.5 in Q2FY21) with OEM
account for 72% and aftermarket account for 28% of the revenue.
Exports have increased from 3% (Q2 FY21) to 5% (Q2 FY22) owing to new order from DAF & VW (Exports incl. both OE & AM export sales).
In case of DAF the company started supply the first order and sent samples for
second order with 3rd order in product development stage. In case of VW the company got the VW Russia
order on the strength of its relationship with VW India and now its getting lot
of RFQ from other VW entities from various markets. The company is in
negotiation with another European OEM.
Focusing to increase presence in Aftermarket
of Latin America, Africa & North America.
Top OEM customers in 2W/3W
segment were TVSM, Yamaha & Bajaj.
The company have 21% market share
in PC segment including aftermarket. Top OEM customers in PC were
Maruti Suzuki, Volkswagen, Mahindra & Mahindra.
Demand for Passenger Car is very
solid with long wait list for various models. The production is hampered by
chip shortage. Chip shortage to
continue till H2CY22 was the current expectation. Though some temporary issue is sorted out
the large lack of capacity to meet current demand still remains.
PC Segment business of the
company had the negative impact of discontinuation of Maruti Omni due to safety
norms and replacement of Wagon R with newer model where GIL is not the
supplier. However from MSL the company has got the supply contract for Jimni
and another model which will be produced by both MSL and Toyota.
Not closing eyes on even small of
EV orders as at the point no one knows who is going to click. Considering volumes are low and thus to keep
the initial costs down, the company either forces the customer to accept
standard products or with minimal modification or pass on the product
development cost to customers.
Gross margin in Q2FY22 stood at
24% down from 26.1% in Q2FY21. Last 2 week little mellowing down of price of
steel and aluminium. Large part of input
cost was passed on to customers with about 85% of the RM cost is indexed to
commodity prices. Cost reduction initiatives (i.e. Core 90) is continued and
closely monitored, reviewed and implemented across the company. The benefits of
core 90 helped it partly to offset the impact of higher RM costs.
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