Gabriel India hosted a conference call on May 24, 2023. In the conference call, the company was represented- by Manoj Kolhatkar, Managing Director and by Rishi Luharuka, Chief Financial Officer.

Key takeaways of the call

In Q4 FY23, passenger cars (PC) contributed 27% of total revenue, CVR 12%, two wheelers/ three wheelers 59% and trading 2%.

In FY23, passenger cars (PC) contributed 23% of total revenue, CVR 12%, two wheelers/ three wheelers 63% and trading 2%.

Two- wheeler segment growth 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.

As of March 2023, company’s share of business in 2W sales was 80%.

In FY23, company witnessed 300% YoY growth in EV-2W segment. Maharashtra’s EV sales accounted for 14% of the overall share of EVs registered for the quarter.

PV Segment recorded growth with new launches within key customers and SUV segment gaining traction. Share of Utility Vehicle sales in Gabriel Passenger Vehicle business is 64%.

CV segment observed moderate growth coming back slowly reflecting in better production volumes by OEMs.

In terms of channel mix, OE contributed 85% of total revenue in Q4 FY23, replacement 11% and exports 4%. In FY23, OE contributed 84% of total revenue in Q4 FY23, replacement 12% and exports 4%.

In Aftermarket segment, passenger cars (PC) contributed 37% of total revenue during March 2023 quarter, CVR 8%, two wheelers/ three wheelers 43% and trading 12%.

Capex incurred during Q4 FY23 was Rs 36.8 crore. In FY23, capex was Rs 106.5 crore.

Management highlighted that at current capacity, company can clock peak revenue of Rs 4000 crore.

In FY23, Net Working Capital Days stood at 18 as compared to 17 last year.

In Q4 FY23, Cash Flow from operations was Rs 115.1 crore as compared to Rs 30.8 crore inflow in Q4 FY22.

Strict management on costs resulted into better EBITDA. Going forward management expects EBITDA margin to improve.

In terms of export sales, company derives 32% of export revenue from Europe, Africa 8%, USA 7%, South America 26%, North America 1%, Asia 21% and Australia 5%.

Aftermarket contributed 31% YTD to export sales and OEM 69%.

Company launched 203 SKUs in FY23.

Company plans to develop more products for the core segment and Increase sales through national channels.

18 New Product lines launched were successfully in recent years and 4 NPL are in pipeline. Going forward, company expects to launch more new product lines and Focus on Latin American & African markets for Quantum growth in Export''s sales.

Company implemented product life cycle management (PLM) to increase the reuse of existing components & to improve productivity.

Company currently derives 12% of power from renewable sources, up from 0% in FY14.

On May 9, 2023, company signed a Technical Collaboration and Alliance agreement with Dutch-based Inalfa Roof Systems (Inalfa) to manufacture sunroofs for the fast-growing Indian automotive market. This alliance will help company enter a new segment that is fast garnering favour, especially with SUV and younger car buyers. The newly formed Inalfa Gabriel Sunroof Systems (IGSS), which will initially be a wholly owned subsidiary of Gabriel India, will manufacture sunroofs for PVs at a new plant near Chennai that will start operations in the Q1 of CY 2024 at a projected $22 million investment.

It is intended that IGSS will be converted into a joint venture between INALFA ROOF SYSTEMS GROUP B.V, Netherlands, and Gabriel India, with Inalfa holding 51% shareholding.

Board recommended final dividend of Rs 1.65 per share of Re 1 each, for the year ended March 31, 2023.