Automotive Axles hosted a conference call on May 20, 2022. In the conference call the company was represented by Mr Thimmaiah Napanda – MD & CEO, Meritor India, Mr Nagaraja Gargeshwari – Whole time Director and Mr S Ranganathan – Chief Financial Officer.

Key takeaways of the call

Commodity price inflation remains a cause of concern however, company took various cost reduction measures at organization and plant level to offset high input cost.

Further cost measures are in place for Conversion, Material and Manpower cost control.

Company managed to improve operational performance and increase its share of business with OEMs.

Company expects to launch new products in FY23 and beyond. Strategy going forward is continuous focus on revenue improvement, cost reduction and new product development as part of Mission 25 Strategy.

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

Q1 FY23 demand is estimated slightly lower than Q4 FY22.

Company is second largest brakes manufacturer in India. Company offers products to Light, medium and heavy commercial vehicles.

Company's 55% of energy consumption needs were met by energy from Renewable Source in FY22. Company expects this share of renewable energy to go up to 70% in FY23 and 80% in FY24.

Company expects to replace LPG with PNG by Dec 2022. Also company expects to become carbon neutral by FY27.

Sustainable Manufacturing has led to Yield Improvement by 20% and Internal Material movement reduction by 50%.

Management expects strong growth in FY23 due to pick up in demand for commercial vehicles.

Capacity utilization expected in FY23 will be approx 75%.

Company has improved its realization per axle, which has led to value growth on YoY basis.

Company's strategy is to enhance market share, introduce more world-class products using technology expertise, cost competitiveness and productivity delivering high quality of products.

The company is looking at the military highway segment as another new vertical where it would supply axles to dump trucks, mill loaders, and QIB, etc. This will help the company to add new customers.