NDR Auto Components hosted a conference call on Jan 27, 2023. In the conference call, company was represented by: Pranav Relan- Whole Time Director, Mr Vinod Kumar– Chief Financial Officer and Mr Sanjiv Kumar – Financial Advisor.

Key takeaways of the call

The performance of the company is directly linked to the performance of automobile industry. Improvement in road infrastructure and national connectivity would drive the demand for NDR auto components.

The enforcement of BS-VI standards of safety and emission is anticipated to help the export market expand for the benefit of auto component players in India.

NDR Auto is a key supplier of metal structures and frames of car seats to Bharat Seats.

In Q3 FY23, company's capacity utilization for NCR facility was between 80-90% and 60-70% for Bengaluru facility.

Going forward, management expects capacity to improve for Bengaluru facility.

Company is setting up new plant in Gujrat to serve requirement of new clients. Management expects Gujrat facility to become operational by March 2023. All the investments will be made from internal accruals and cash flows.

As of Dec 2022, company remains debt free with cash balance of around Rs 38 crore.

Company expects EBITDA margin to improve going forward.

Maruti, company's biggest client has sold 465,911 vehicles in Q3 FY23. These numbers indicate robust demand.

Company is currently supplying for brezza and Grand vitara, however management indicated new business from new SUV models (sporty compact SUV fronx and off-roader jimny) of MSIL.

Given the technological agnostic nature of company's products, it has greater opportunity to tap EV transformation.

Management indicated new airbag rule would increase its content per vehicle.

Two-wheelers business contribute between Rs 50-60 crore of revenue per annum. Management expects this number to improve going ahead.