The group held its Analyst Meet on 26th June'12 and was addressed by Mr.
- Rane group consist of holding company in form of Rane Holding followed by various subsidiaries namely Rane Madras (53.8%), Rane Engine valve (53.6%), Rane Brake lining (41.6%), Rane Diecast (79%) and Rane Holdings America (100%). It also includes joint ventures namely Rane TRW Steering (50%), Rane NSK Steering (49%), and JMA Rane Marketing. It also includes two associate companies namely Kar mobiles (39.5%) and SasMos HET Technologies (26%).
- Rane group reported net sales of Rs 2424 crore, up by 19% and PAT growth of 14% at Rs 113 crore. Group operating EBIDTA stood at 11.3%. Groups net worth stood at Rs 580 crore and it operates at Debt Equity ratio of 0.76%.
- In terms of product line basis, of the total group sale, about 27% come from manual steering and suspension, 25% from Hydraulic power steering, 9% from steering columns and Electronic power steering, 15% from friction material, 19% from valve train, 2% from die casting and rest 3% from seat belts. In terms of markets, about 69% of total sale is to OE, 13% to after market, 15% to exports and ret to others.
- Rane Madras is a manufacturer of steering and suspension systems for every segment of automobile industry viz passenger cars, multi utility vehicles, light commercial vehicle, heavy commercial vehicle and farm tractors. It holds 39% market share in Steering gear products and 72% market share in suspension and steering linkage products in India. The company has moved to manufacture hydraulic products as well.
- Rane Madras has reported net sale of Rs 657 crore for FY'12, up by 15% y.o.y and PAT of Rs 27.6 crore, down by 5% y.o.y. On customer segment basis, about 23% of sale comes from UV segment, 22% from Passenger car, 21% from farm tractors, 4% from MPV, 12% from LCV, 6% from SCV and about 12% from M&HCV. In terms of market, about 65% of sale comes from OEM, 6% from OES, 13% from after market, and rest from exports. The company has debt equity ratio of 1:1 and ROC of 23.5% as of Mar'12.
- For FY'12, the sale from new product generated 15% of total revenue and revenue from domestic sale grew by 19%. Premium transportation charges were brought down considerably due to creation of new capacity. During FY'12, capex of about Rs 50 crore was incurred majority on capacity addition, utilities and infrastructure. For FY'13 capex program of Rs 61 crore is planned which would be for new capacity additions with necessary balancing equipment and utilities.
- For FY'13, management expects demand for mechanical steering gears to be used along with electric power steering will increase. The company has the capability to manufacture different components of multiple lot sizes and will diversify further into gears for various applications in all terrain vehicles, hydraulic cylinders for applications in tractors and commercial vehicles and hydrostatic units for use in tractors. Overall, management expects Rane Madras to maintain 18% sale growth and 25% ROC for FY'13.
- Rane Engine Valve (REV) manufactures engine valves, valve guides and tappets and valve train components for various engine applications and caters to al segments such as PC, LCV< UV, SCV, M&HCV, 2W, 3W etc. The company is market leader in terms of market share in OEM and replacement market. It is well known brands in exports to EU, North America and Far Eastern markets.
- For FY'12, REV reported net sale of Rs 302.20 crore, up by 6% and PAT of Rs 8.6 crore, down by 20%. Operating EBIDTA stood at 14.2%. Domestic sale was up by 5% to Rs 211 crore and exports was up by 7% to Rs 90.9 crore. On customer segment basis, about 23% of sale comes from SUV/LCV/MCV/HCV segment, 25% from 2W/3W, 8% from Stationery engine and 11% from Tractors. In terms of market, about 55% of sale comes from OEM, 15% from after market, and rest from exports. The company has debt equity ratio of 1:1 and ROC of 12.6% as of Mar'12.
- REV incurred a capex of about Rs 33 crore mainly on capacity enhancements and modernization. For FY'13 capex of about Rs 25 crore is planned for necessary balancing equipments and utilities.
- For FY'13, management expects the company to achieve sales growth of 15% and ROC of 18%.
- Rane Brake lining (RBL) is a JV with Nisshinbo Brakes for know how in asbestos free brake linings, disc pads and clutch facings. It has applications in every segment of auto industry such as PC, LCV< UV, SCV, M&HCV, 2W, 3W etc. Domestically, it has 41% market share in OE, 15% in aftermarket and 15% in rail. The company exports its products to various countries in Saarc, Middle East, EU, Far East and Africa. It is currently supplying composite brake blocks to Srilankan railways and Malaysian railways.
- For FY'12, RBL has reported net sale of Rs 358 crore, up by 18% and PAT of Rs 16.2 crore, up by 6% y.o.y. OP. EBIDTA margin stood at 11% for the year. Revenue from domestic business grew by 17% and exports were up by 26%. Sale from new products contributes about 5.5% of total revenue. On customer segment basis, about 32% of sale comes from PC, about 3% from SUV/LCV/MCV segment, about 43% from HCV, 3% from 2W/3W, 8% from Railway and aircrafts each, and 3% from Tractors. In terms of market, about 53% of sale comes from OEM, 33% from after market, and rest from exports. The company has debt equity ratio of 0.87 and ROC of 16.4% as of Mar'12.
- RBL has planned a capex of about Rs 48 crore (including Rs 10 crore for R&D) for brake lining, passenger car linings and disc pad expansion in sintered friction materials.
- Management is trying hard to localize the whole formulations and testing facility which in turn will improve the margin. Overall, For FY'13, management expects RBL to register 18% growth in net sales and 20% in ROC.
- Kar Mobile (KML) is engaged in production of quality valves for internal combustion engine and is specialized in manufacture of large engine valves. It is a preferred supplier to OEM's such as John Deere, Escorts, Cummins, Ashok Leyland and it exports to companies such as Wartsila, Electro Motive, Liste Petter, Hatz etc. KML is specialized in manufacturing range of valves for all off road engines like caterpillar, komatsu, for power generation engines like Cummins, wartsilla and for heavy commercial engines like MB, Scania, Volvo, Navistar, mack etc.
- For FY'12, KML reported net sale of Rs 115 crore, up by 25% y.o.y and PAT stood at Rs 6.1 crore, up by 94% y.o.y. Operating EBIDTA margin stood at 9.9%. Revenue from domestic business grew by 14% and exports were up by 41%. Sale from new products contributes about 15% of total revenue. On customer segment basis, about 8% of sale comes from PC, about 9% from SUV/LCV/MCV segment, about 26% from HCV, 12% from engine, 14% from Railway and others and 31% from Tractors. In terms of market, about 32% of sale comes from OEM, 19% from after market, and rest from exports. The company has debt equity ratio of 1.1 and ROC of 18% as of Mar'12.
- KML has invested about Rs 16 crore in FY'12 to increase the overall capacity from current 8.5 m values p.a to 10.5 m p.a. KML plans to invest another Rs 20 crore primarily on capacity expansion and modernization so as to improve productivity and scale up the operations. Overall, management expects the company to register sale growth of 18% and ROC of 20% for FY'13.
- Rane TRW Steering System (RTSSL) is a JV partnership with TRW Automotive USA, which manufactures steering systems and seat belts. The Steering gear division manufactures fully integrated hydraulic steering gears, hydraulic pumps, power rack and power steering fluid including plastic reservoir. The JV has a dominant market shares in commercial vehicle steering, passenger car steering and utility vehicle segment.
- RTSSL reported net sale of about Rs 620 crore for FY'12, up by 9% and PAT stood at Rs 48.9 crore, down by 4% y.o.y. Revenue from domestic business grew by 9% and exports were up by 7%. On customer segment basis, about 41% of sale comes from PC, about 26% from UV segment, and rest from HCV segment. In terms of market, about 82% of sale comes from OEM, 6% from after market, and rest from exports. The company has debt equity ratio of 0.11 and ROC of 39% as of Mar'12.
- RTSSL has incurred capex of about Rs 34 crore in FY'12 in capacity building and about Rs 46 crore will be spent again primarily for increasing capacities. The company plans to offer latest technology in steering at competitive price through aggressive localization. It is also in active discussion with TRW to manufacture air bags and offer complete occupant safety systems to customers.
- Rane NSK Steering (RNSSL) is a JV with NSK Japan where Rane group has 49% stake. The JV manufactures manual steering columns and electric power steering and is a preferred OE partner to major PC, Commercial vehicle and Multi Utility vehicle manufacturers.
- The JV reported net sale of Rs 308 crore, up by 74% y.o.y for FY'12 and PAT of Rs 5.4 crore as compared to loss of Rs 5.6 crore for FY'11. The sale from new products generated 46% of total sale for FY'12. The company successfully doubled its capacity so as to create new production line for Swift and Ertiga in addition to A star model. On customer segment basis, about 79% of sale comes from PC, about 6% from MUV segment, and rest from other segment. In terms of market, about 99% of sale comes from OEM and rest from exports. The company has debt equity ratio of 0.13 and ROC of 13% as of Mar'12.
- RNSSL has incurred capex of about Rs 47 crore in FY'12 in capacity building and about Rs 21 crore will be spent again primarily to localize production of imported KD parts. The company is continuously increasing the production capacity to match the demand for EPS systems which is continuously increasing over HPS system.
- Rane Diecast (RDL) was acquired by the Rane group in 2006 to capitalize the export market opportunities particularly for TRW. Its services include design, development and machined aluminum casting components and sub assemblies. Its main products are steering housing and engine components and its customers include TRW, Simpson, RTSSL and others in PC segment.
- RDL reported net sale of Rs 63.3 crore up by 73% and negative PAT of Rs 0.1 crore for FY'12. This company had severe losses in the past due to 2007 recession and bankruptcy of Chrysler. However with revival in US automotive market and company winning contracts in FY'11, the company is into profits as far as PBT is concerned for FY'12. About 78% of total sale are exports and rest are to other segments. Sale of EPS to TRW, USA constitutes significant part of export sale of the company. Of the total sale about 77% goes to PC segment, 10% to engine, 5% to HCV and rest to other segments. RDL has debt equity ratio of 8.1.
- RDL had incurred capex of about Rs 4.3 crore for capacity enhancements in FY'11 and plans to incur capex of about Rs 5 crore to enhance die casting and machining production capacity. Overall, management expects to achieve ROC of 20%.
- Overall, Rane group has targeted to achieve a turnover of about Rs 4000 crore by 2015. Dividend policy of group companies stands around 35-40% of PAT.
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