Key Highlights

The execution of export order of around Rs 55-60 crore in H2 FY 18, led the spurt in revenues and profitability. While some sales was booked in Dec 17 quarter, the margins were completely booked in Mar 18 quarter which resulted in spurt in overall profitability for Mar 18 quarter.

The raw forging component sales have now come below 30% of total sales, as compared to around 60% in FY 15. In another 2 years time, raw forging will be around 10-15% or may be less of the total sales.

Overall auto components sales account for around 73% of total sales of FY 18. The company aims to increase the sale from transmission components, chassis, industrials, drivers etc. Cross selling of these products along with gaining more market share from existing business, will be the target.

After successfully execution of the machining order from EU countries, the company received yet another order of around same value which will be executed in H2 FY 19.

More export enquiries are going on and expects some conversion to happen soon.

Domestically, while CV is doing well, and so as the passenger car segment. The company serves both the market. It is gradually cutting down its exposure to 2W segment. Domestic business is more or less steady and higher CV volumes will result in better volumes for the company.

The company had completed a capex of around Rs 25 crore for new machining lines in FY 18. This has resulted in higher depreciation and interest costs. The company will incur around Rs 15-18 crore capex in FY 19, as it needs more machining capacities for the orders.

The company is open for equity dilution at appropriate time, as looking at the projected growth; it would require capital going forward.

Exports now account for around 30% of total sales as compared to around 15% in the past. Going forward exports will be around 40-45% of total sales.

The company has acquired new clients and business is ramping up with them. But it needs more capacities if the orders need to be executed in shorter time.

Aims for net sales growth of around 14-15% in FY 19 with better margins. There will be some volatility on quarterly basis due to accounting standards issues on actual recognition of sales.