Automotive Axles hosted a conference call on Feb 11, 2022. In the conference call the company was represented by Mr Thimmaiah Napanda – MD & CEO, Meritor India, Dr N Muthukumar – Whole time Director and Mr S Ranganathan – Chief Financial Officer.

Key takeaways of the call

Management expects company's growth ahead to be driven by new Business wins, Launch of New products and drive in eMobility business.

Company took a lot of technology initiatives in terms of manufacturing. Digitalization implementation of Industry 4.0 to make company more competitive.

Commodity price increases gives continuous pressure on margins. However Cost control measures are in place for conversion, material and manpower cost.

Company expects significant savings through mission 2022 timeframe driven by focus on overall cost optimization.

Company acquired equity shares of Parola Renewables. This investment is for the company to avail solar power from Parola Renewables for it's outside the main line of business of the units situated at Hootagalli Industrial area.

Company had positive cash flow for the quarter and for 9 months ended Dec 21.

Company plans to take 90% of power consumption by solar power by FY2027.

Management expects CV segment recovery to continue. It also witnessed good demand for multi axle vehicles. Company expects to increase its penetration in brake segment.

With e-commerce picking up demand for LCV and MCV segment is also expected to grow. Company is witnessing good month on month growth in registration and sales of vehicles.

Exports remained relatively stable, with slight growth compared to last year.

Company invested in capacity expansion projects in 2019 and 2020. Currently is capacity utilization is around 60-65%. If the market comes back to normal levels the capacity utilization can go up to 90% levels and boost the topline.

Management is working towards improvement in margin, which is expected to come back to earlier levels of around 12%.

Company expects EV penetration to significantly increase over next 7-10 years, even in CV segment.

Company expects Q4 FY22 to be similar to Q4 FY21 in terms of sales.