Gabriel India hosted a conference call on May 25, 2022. In the conference call the company was represented by Mr. Rishi Luharuka – Chief Financial Officer and Mr. Manoj Kolhatkar - Managing Director.

Key takeaways of the call

Capex in FY22 was Rs 66.8 crore towards tech centre. Capex spend of FY22 also includes expansion of casting plant leading to 2x of normal capacity (currently 300 tons/ month).

The company guided for Rs 120 crore of capex for FY23 of which Rs 20-30 crore would be for maintenance and balance for growth. Working capital efficiency is expected to be improved further.

Margins remained muted due to a rise in steel prices, which rose abruptly and same is being recovered from customers. The management said that 85% hiked prices have been recovered. This may be visible in Q2FY23.

During the quarter the company added Stellantis (a global company) as client and is in active discussion with the same in the PV domain.

The company is focusing on increasing content with existing OEMs (like Royal Enfield, TVS, Bajaj, etc) and has successfully captured more than 50% market share in EV domain with OLA & Hero Electric added as clients.

Net Cash position stood at Rs 279.1 crore.

After market have increased from 11% in Q4 FY21 to 12% Q4 FY22.

Going forward, company intends to develop more products for the core segment and focus on Latin American & African markets for Quantum growth in Export's sales.

CV volumes started improving from Oct 2021. Company also witnessed improvement in CVR Volumes in Q4 FY22 compared to Q4 FY21.

In 2W and 3W segment, growth was primarily driven by efforts in terms of improving market share with key customers and higher efforts in terms of developing new products and on account of strong acceptance of end products in the market. In FY22, 2W and 3W accounted for 66% of total sales.

In PV segment, Growth impacted by discontinuation of Maruti Omni due to safety norms and replacement of Wagon R with newer model where GIL is not the supplier. In FY22, PV segment accounted for 22% of total sales and CV segment accounts for 11% of sales.

In FY22, 30% of total exports were for aftermarket and 70% to OEMs.

Net Working Capital Days stood at 17 as compared to 19 in same period last year.

Company expects reduction in energy consumption per unit of shock absorber through reduction in manufacturing losses.

Company Invested in solar rooftops across manufacturing plants with a capacity of 1.1 MW. Company also invested in group captive wind power plant to source renewable power at Hosur of 3.6 million units annually.

Company derived 16% of power from renewable sources compared to 0% in FY14.