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Gabriel India hosted a conference call on Aug 8, 2022. In
the conference call the company was represented by Manoj Kolhatkar, Managing Director and Rishi Luharuka, Chief Financial Officer.
Key takeaways of the call
Started FY23 on a good note. Lot of new models launched and lot more are
yet to be launched from Indian auto industry.
Q1FY23 is much better compared to
Q1FY22 Order book for auto industry is strong. As per SIAM data, the 2W sales
grew by 38% YoY and 3W grew by 6 % YoY respectively in Q1 FY23. Within the 2W
segment, Scooters grew by 81%, Motorcycles grew by 27% and Mopeds grew by 69%
in Q1 FY23Growth in 2/3 Wheelers was primarily driven by efforts in terms of
improving market share with key customers, higher efforts in terms of
developing new products and on account of strong acceptance of end products in
the market. Passenger Vehicles see
strong growth on the back of new launches. CV volumes have started improving
from Oct'2021. Improvement in CVR
Volumes in Q1 FY23 (12%) compared to Q4 FY22 (11%).
Revenue mix for Q1FY23 was 65%
from 2/3 wheelers; 22% from PVs; 11% from CVs and 1% from trading/AFM. Interms of channel mix OE accounted 84% of
Q1FY23 revenue, with replacement and export account 13% and 3%
respectively.
After market have increased from
12% (Q4 FY22) to 13% (Q1 FY23). Of the aftermarket about 44% is for
2/3wheelers, 38% is PCars, 8% CVs and 10% is trading.
The company have 30% market share
in 2/3wheelers. 23% in PVs and 89% in
CVs.
Demand 4w continuing to be strong. 2w price increase particularly in entry
segment has negative impact. 2w sales though subdued, it is on recovery mode
toward festival season demand. Even though it's off by long way from its recent
peak. EV have strong surge. B Segment to
drive growth for 2wheelers.
Less than 1% of total auto market
of India is EVs. Share of EVs in two wheelers have increased
and monthly 2 wheeler EVs volumes touched a steady volume of about 15000 nos
every month. 2wheeler EV penetration is
4.5% across India but that is good in certain states such as Maharashtra,
Gujarat, Karnataka and Delhi. Maharashtra's EV sales accounted for 13% of the
overall share of EVs registered in June'22.
GIL's share of business in EV
2wheelers is about 60%.
EBITDA margin for Q1FY23 has
increased by 200 bps to 7.1% compared to Q1FY22 despite gross margin contract
by 140 bps to 23.5%.
Capex spent in FY22 was to the
tune of Rs. 66.8 crore largely towards Hosur plant (OLA & Nest Project);
Chakan (Tech Centre, MQB & ZLD project); expansion of casting plant under
Nest Project and expansion of Dewas palnt (rod division and paint line). Capex
incurred during Q1FY23 was about Rs 21.3 crore.
Prices of steel and aluminum have
witnessed steady increase. But there is little softening on sequential basis
recently.
Benefit of softening of commodity
price to kick in from next quarter.
Target is double digit EBITDA
margin working to achieve it. The company is working on aftermarket and exports
as product mix plays key role in margin.
In CVs there is no possibility
for increase in content management but has to be driven by industry volume
growth numbers.
In PVs catering to new models of
MSIL, M&M and VW. 22% to 25%
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