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Salzer
Electronics hosted a
conference call on Feb 9, 2024. In the conference call the company was
represented by Rajesh Doraiswamy, Joint Managing Director.
Key takeaways
of the call
The
broader market experienced a sluggish pace especially in the industrial switchgear
business, attributed to global geopolitical uncertainties, a deceleration in
the USA and Europe among other factors. The company despite these challenges
has seen growth coming in from Industrial switchgear and wires and cable
business divisions. The surge in demand for wires & cables is particularly
noteworthy, primarily driven by the flourishing real estate sector. Both
Building wires and Agri market cables experienced a substantial increase in
revenue.
EBITDA margin
improved to 11.4% against 10% in previous quarter mainly driven by lower
material cost in switchgear business. Observed
positive trend in decline of raw material costs and uptick in sales prices. Anticipate this momentum to persist,
contributing to the improvement of our EBITDA Margins.
Exports
were largely from North & South America as well as Europe.
Focus
of the company is on sustaining a well-balanced business mix between industrial
switchgear and wires & cables products to effectively improve the overall
gross margin.
Salzer
EV charger business – completed development of DC Fast chargers for EVs and expect
to launch the product in Q4FY24. Talking
to charge point operators for supply of chargers. The market is expects to be 2
lakh chargers in the country in next 3 years with each charger costing about 7
lakh each.
Expect a
volume growth of 20-25% and that is expected to drive the margin
growth. Expect a revenue of Rs 1100
crore for FY24.
Inventory days
remain same at 90 days.
Market poised
to grow at moderate rate given global challenges. Though there will be slight
slowdown in Indian market in the near term the company remains confident of
medium-long term potential of the business of the company.
Global investment
in green energy boosts investment in reneweable energy.
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