Talbros Automotive Components hosted a conference call on May 24, 2024. In the conference call, the company was represented by: Mr. Anuj Talwar– Joint Managing Director and Mr. Navin Juneja– Director and Group CFO.

Key takeaways of the call

In FY24, the company demonstrated robust growth in terms of business performance and profitability on back of strong order execution and operational efficiencies.

Over the last two years, company has been consistently securing new orders throughout product segments. Even in April 2024, the company secured, through its JV, order of Rs 1,000 crore from a leading European OEM.

These orders are to be executed over a period of next 8 years commencing from Q4FY25. This order is centered on the supply of Suspension Arms tailored for both conventional ICE vehicles and new age EV platforms for EMEA and NAFTA regions. This will further improve the market share in Europe and open new avenues of growth with existing and new OEMs in that region.

Exports contributed 15% of Gaskets Revenue, 54% of Forgings Revenue, 17% Marelli Talbros Chassis Systems, 6% of Talbros Marugo Rubber.

In FY24, gasket & Heat Shield Business grew 18% YoY. Forgings business grew 27% YoY, TMR grew 44% and MTCS grew 24%.

In Q4 FY24, gasket & Heat Shield Business grew 12% YoY. Forgings business grew 28% YoY, TMR grew 8% and MTCS grew 29%.

In FY24, 2&3 Wheelers contributed 19% to revenue, Passenger Vehicle 34%, HCV & LCV 24%, Agri & off Loaders 10% and others 13%.

Based on market, OEMs contributed 63% to total revenue in FY24, exports 25%, aftermarket 4% and others 8%.

Management expects export contribution to increase to 35% by FY27.

The company plan to grow Gasket Business revenue by 13% CAGR till FY27 to Rs 700 crore supported by increased Focus on Exports.

In Gasket Business, 2&3 Wheelers contributed 29% to total revenue, PV 6%, MHCV 27%, LCV 15%, Agri and off loader 8% and Others 15%.

The company plan to grow forgings business by 23% CAGR till FY27 to Rs 500 crore supported by increased Focus on EV’s.

In FY24, EV share in total revenue stood at 3% and management expects it to reach 12% in FY27.

In FY24, capacity utilization of Gasket Business was 85%, forgings 80%, MTCS 75% and TMR 80%.

No single customer contributed more than 15% to its revenue. In FY24, its largest customer Maruti Suzuki India contributed 14%, Tata Motors 9%, Bajaj Auto 6%, Jaguar Land Rover 6%, Tata Cummins 6%, Hero Motocorp 5%, BMW 5%, JCB 4%, DANA ITALIA SRL 3%, and Honda 2%.

The board recommendation a final dividend of Re 0.50 per equity shares of face value of Rs 2 each for the financial year 2023-24.

In Jan 2024, the company has completed the process of divesting and selling entre 40% stake in Joint Venture, Nippon Leakless Telbres. The net gain from the transaction has been disclosed as exceptional items. The capital gain tax on sale of investment has been disclosed as a part of the tax expense in the results.