Automotive Axles hosted a conference call on May 28, 2024. In the conference call, the company was represented by: Dr N Muthukumar –President & COO Meritor HVS India, Mr Nagaraja Gargeshwari – President & Whole Time Director, Automotive Axles and Mr S Ranganathan – Chief Financial Officer, Automotive Axles.

Key takeaways of the call

In FY24, CV Market has grown close to 4% supported by bus segment.

The company continues to focus on revenue optimization strategies. The company plans to expand its business with various customers.

In Q4 FY24, the company’s exports segment grew 4% YoY in value terms. The company is constantly adding new products in its portfolio, which is leading to growth in exports. The company is also launching a new product optimized for the 9m bus segment. All these product launches will help grow revenue.

The company guided maintenance capex of about Rs 50-60 crore in FY25.

The EBITDA margins are expected to expand post H2 FY25 backed by rising demand for higher tonnage axles by OEMs, largely stable commodity prices, along with cost control and value engineering initiatives undertaken by the company.

Company aims to outpace the industry growth by increasing market penetration through growth in exports, increasing domestic market share, and introducing new products.

Management emphasized its growth strategy of increasing content per vehicle.

Increased government spending on public transport, Voluntary Vehicle Scrappage policy, good monsoons, and increased Infrastructure spends by the government are positive triggers for the industry.

Company is focusing on Industry 4.0 & other digitization initiatives, along with improvement in conversion and material cost performance.

Company is working closely with its customers using the latest technology solution and e-Axle, to support electric vehicle manufacturing.

The Board has recommended a Final Dividend of Rs 32 per share of Rs 10 each for the Financial Year 2023-24.