Key Highlights

Of the total installed capacity of around 200 M cables, Suprajit produced around 157 M in FY'16. The capacity is expected to increase to around 225 M cables by end of FY'17 as the capacity addition program in Chennai and Sanand plant comes to an end. Management expects remaining capex of around Rs 15-20 crore to be spent in Suprajit.

Suprajit consolidated (other than Phoenix lamps) has reported a Ebidta margin of around 16.5% for FY'16 an improvement of around 180 bps as compared to FY'15. Lower raw material costs and better efficiencies have resulted in higher margins. Management is confident of maintaining the margins in a band of around 15-16% going forward.

Of the total consolidated revenue of Phoenix lamps around 65% comes from exports and rest from domestic market. Of these 65% of exports more than 55% is from EU markets where the products are exported to EU subsidiaries and rest are direct exports and aftermarkets.

Of the total consolidated revenue of Suprajit Engineering (other than Phoenix), around 81% of sales is from domestic market and rest is exports. 52% of total sales come from 2 W, 33% from automotive segment, 10% from after markets and rest from non automotive space.

Of the total consolidated revenue of Suprajit (including Phoenix), around 66% of sales is from domestic market and rest is exports. 40% of total sales come from 2 W, 25% from automotive segment, 32% from after markets and rest from non automotive space.

Phoenix lamps have completed restructuring of both 2 subsidiaries namely Luxlite (in Luxembourg) and Trifa (in Germany). There was around Rs 20 crore of impairment losses due to that.

So Phoenix started to do well at consolidated level from Sep'15 onwards. As per the management, while lot of restructuring and cleaning process is completed, the exercise is a continuous process and will be over by end of FY'17. Till then Phoenix should show its improved performance every quarter on QoQ basis.

The Merger between Suprajit and Phoenix is awaited from Sebi and hence no further updates on merger were shared by the management and nothing was discussed as well.

Suprajit continued to outpace the industry growth, which grew by around 3% in FY'16 while the company grew by around 13%. As per the management, April and May 2016 were very good for the industry and Suprajit continued to outperform its business in these 2 months as well.

Government has in Dec'15 passed an order on additional light parameters for lamps and certain additional features to be provided with the lamps as compulsory for heavy transport. This will bring in additional replacement demand from OE players in India.

The Other expenditure for the Mar'16 quarter included some one off expenditure like Rs 4 crore expenditure towards QIP which happened in Feb'16, some discounts to customers which are settled in year end, CSR expenditure etc.

Going forward, new products, newer export markets and geographies, leverage of markets between Suprajit and Phoenix will drive the growth.

For Phoenix, after markets business will continue to be better and so is the exports of Automotive will be good. However, the Non-Automotive export market will continue to struggle. The company is predominately in North America and is aiming for newer markets like South America and others.

Capex for Phoenix will be around Rs 30 crore for FY'17