Automotive Axles hosted a conference call on Nov 9, 2022. In the conference call the company was represented by Dr N Muthukumar – President & COO Meritor HVS India, Mr Nagaraja Gargeshwari – President & Whole Time Director, Automotive Axles and Mr S Ranganathan – Chief Financial Officer, Automotive Axles.

Key takeaways of the call

Cummins has completed its acquisition of Meritor (ex -parent company of automotive axles). The acquisition of Meritor has added products to Cummins' components business that present attractive growth opportunities across the Company's range of power solutions and applications.

Management expects Q3 FY23 demand to be slightly higher than Q2 FY23.

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

Company continuous to focus on Industry 4.0 & other digitisation initiatives. Commodity price softens however; company is still undertaking cost reduction initiatives and sustainable manufacturing practice.

Company is focusing on green energy. As of sept 2022, 70% company's energy needs are coming from renewable sources.

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

Company intends to focus on off highway segment going forward.

In the long term, company expects defense space to reduce its dependence on automotive space.

Company is working on exporting subassemblies directly to outside OEMs for which there is huge demand.

Ashok Leyland remains company's largest customer, but company is steadily adding more customers to diversify its revenue. Going forward, the increasing share of business with other OEMs like M&M, TML, VECV, etc., is expected to reduce the over reliance on Ashok Leyland.

The company is focusing on growth through its ‘Mission 25' strategy of growing revenues, enhancing profitability, new business wins, generating operating excellence, and creating customer value. Going forward, company is expected to continue outperforming the industry supported by an increase in the share of business with customers, strengthening product portfolios, focus on export and increase in contribution from new products.

Management commentary: Jennifer Rumsey Cummins' President and CEO said, “We are excited to welcome Meritor's employees into Cummins. Together, Cummins and Meritor will move further and faster in developing economically viable decarbonized powertrain solutions that are better for people and our planet”.

Baba Kalyani Chairman , Bharat Forge said, “I warmly welcome Cummins as our new partner in Automotive Axles and Meritor HVS. Bharat Forge has a long relationship with Cummins as a supplier and also user of their engines in our special products and we look forward to bigger relationship, now as partners in this venture and also as a supplier. I wish the venture all success. Unfortunately , I am not able to personally be there to make this announcement jointly with Ms. Anjali Pandey of Cummins but look forward to this new relationship which will benefit all of us”.