Salzer hosted a conference call on Nov 6, 2023. In the conference call the company was represented by Rajesh Doraiswamy, Joint Managing Director.

Key takeaways of the call

Industrial Switchgear, Wires & Cables and Building Electrical Products accounted for 56.44%, 37.46% and 6.10% of Q2FY24 revenue. 

Overall market has been bit slow due to international geopolitical uncertainty, high oil prices etc.  Seen growth coming in from Industrial switchgear and wires and cable businesses especially in high demand products like three phase transformers, Wire harness, relays and new products like contactors etc.

Not seeing difference in demand in first month of Q3FY24 from that of Q2FY24 and there continue to be slowness.    See the slowness (reduced growth) in demand is temporary and expected to pick up Q4FY24.  So the FY24 growth is now expected at 18-20% downgraded from earlier guidance of 22%.   Confident of achieving a PAT margin of 4% for FY24.  

 Revenues from exports were largely from Asia, North & South America, Middle East / Africa as well as Europe.    Export share is about 29.2% in H1FY24 and 34.8% in Q2FY24.   Expect export share will be 30% for FY24 up from 25-26% in FY23. Fortunately exports are doing well gained by addition of new product.  Not recovered the actual price for new products in exports and once that is recovered the margin will be good.

Focusing on maintaining a balanced business mix between industrial switchgear and wires & cables products to manage overall gross margin percentage.

On the EV front, the company completed the developmental activities for DC Fast charger, and is taking steps to roll out the product in the current fiscal after securing clearances from the regulatory bodies.  The fast charger is expensive and thus no need for personal use purchase and largely for public charging where there is lot of tenders are coming up across the country.

Have recently developed lot of new products for a new segment HVAC (Heating, Ventilation, and Air Conditioning). This segment comprises products like definite purpose contactor, AC disconnect Switches and Whips and disconnects. These products are being used in both domestic and Industrial AC systems.

North America & Europe 60-65% of exports of the company.   In H1FY24 the US market exports has doubled gained by new products and new customers. Europe market has been good with a growth of 40% and apart from growing market the company gained by addition of new products and new customers.   Middle East grown up by 50% on low base.  However the Far East and Europe the growth has slowed down off late.

Industrial Switchgear EBITDA margin was 11.5% and that to grow by 0.5% in H2FY24. But W&C to be stable at 7%.

The company will get part of the growth Schneider gets in India. Salzer and Schneider constantly work on new product development.