Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue from operations grew by 15.48% year-over-year.
- EBITDA margin improved to 13.38%, reflecting better operational efficiency.
- PAT margin increased to 7.56%, indicating stronger profitability.
- EPS rose from INR 2.62 to INR 3.74, showing significant earnings growth.
- No long-term borrowings, indicating a strong balance sheet.
Negative Points
- ROCE decreased from 23.18% to 20.54% year-over-year.
- Export revenue remains muted due to weakness in the U.S. market.
- Challenges in providing exact future revenue growth guidance due to market uncertainties.
- Increased contingent liabilities due to ongoing labor cases.
- Competition in the TFT cluster market is intensifying, posing a potential threat.
Q & A Highlights
Highlights of Pricol Ltd (BOM:540293, Financial) Q1 FY '25 Earnings Call
Q: Can you break down revenue from DIS and actuation and control and fleet management systems?
A: The rough breakup is 70% from driver information system (DIS) and 30% from actuation and control and fleet management systems (ACFMS). - P. Ganesh, CEO
Q: What type of volume are we expecting from new product launches over the next 12 to 18 months?
A: The volumes and value are expected to be quite significant, but exact numbers cannot be disclosed due to NDA with customers. - P. Ganesh, CEO
Q: What is the content per vehicle now compared to 2-3 years ago?
A: The content per vehicle has increased significantly, roughly 2x compared to pre-COVID times, and could potentially reach 3x in the coming years due to digitalization and value addition. - P. Ganesh, CEO
Q: What is the revenue growth guidance for this financial year and next year?
A: While specific percentages cannot be provided due to forward-looking statement restrictions, Pricol is poised for significant growth driven by value addition in products. - P. Ganesh, CEO
Q: Can you provide an update on new projects, especially on the e-cockpit side and disc brakes?
A: Both e-cockpit and disc brakes are in intense testing and validation stages, with SOP expected in the next 12 to 18 months. - P. Ganesh, CEO
Q: Is there a revisit to the margin guidance given the strong performance in Q1?
A: It is difficult to comment due to the dynamic nature of the product mix, but the aim is to maintain current levels. - P. Ganesh, CEO
Q: How do you see the outperformance versus the industry, especially with new competitors entering the TFT cluster market?
A: Pricol differentiates itself through value addition, local design centers, backward integration, and long-term customer relationships, which should keep it competitive. - P. Ganesh, CEO
Q: Can you break down the revenue by segment (2-wheeler, 4-wheeler, CV, off-highway)?
A: Approximately 65% from 2-wheelers, 15% from commercial vehicles, 10% from personal passenger vehicles, and the remaining from tractors and off-highway. - P. Ganesh, CEO
Q: Are there any updates on inorganic opportunities and the labor case?
A: Inorganic opportunities are being evaluated and are in negotiation stages. The increase in contingent liability on the labor case is due to accumulated interest, with no new cases added. - Siddharth Manoharan, Director of Strategy & Priadarsi Bastia, CFO
Q: What is the outlook for export revenue, especially in the U.S. and Europe?
A: Exports are expected to remain muted for the next three quarters due to U.S. market conditions but are anticipated to improve thereafter. Europe is a key market with ongoing developments and strategic customer engagements. - P. Ganesh, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
