- Q4 Sales Growth: 17% year-on-year.
- Q4 Profit Before Tax (PBT) Growth: 25% year-on-year.
- Q4 Stand-alone Aggregate Sales: INR 2,084 crores.
- Q4 Profit Before Tax (PBT) Before Exceptional Items: INR 316 crores.
- Q4 Margins: 15.2% of sales, up from 14.1% last year.
- Q4 Free Cash Flow: INR 178 crores.
- Unexecuted Order Book (as of March 31, 2024): INR 6,276 crores, 45% higher year-on-year.
- FY24 Aggregate Sales: INR 7,610 crores, 16% growth year-on-year.
- FY24 Profit Before Tax (PBT): INR 1,146 crores.
- FY24 Margins: 15.1% of sales, up from 14.1% last year.
- FY24 Return on Capital Employed (ROCE): 37%.
- FY24 Free Cash Flow: INR 784 crores.
- Segment-wise Q4 Sales: INR 1,263 crores, 6% growth year-on-year.
- Segment-wise Q4 PBIT: INR 175 crores, 13.9% of sales.
- Segment-wise Unexecuted Order Book (as of March 31, 2024): INR 2,544 crores, 25% higher year-on-year.
- Segment-wise FY24 Sales: INR 5,015 crores, 10% growth year-on-year.
- Power Systems Q4 Sales: INR 821 crores, 39% growth year-on-year.
- Power Systems Q4 PBIT: INR 152 crores, 18.5% of sales.
- Power Systems Unexecuted Order Book (as of March 31, 2024): INR 3,731 crores, 64% higher year-on-year.
- Power Systems FY24 Sales: INR 2,598 crores, 28% growth year-on-year.
- Consolidated Q4 Sales: INR 2,192 crores, 15% growth year-on-year.
- Consolidated Q4 PBT: INR 307 crores.
- Consolidated FY24 Sales: INR 8,046 crores, 15% growth year-on-year.
- Consolidated FY24 PBT: INR 1,137 crores, 14.1% of sales.
Release Date: May 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Q4 FY24 sales grew year-on-year by 17%, and PBT grew by 25%.
- For FY23-24, sales grew by 16% year-on-year, and PBT grew by 24%.
- Unexecuted order book as of March 31, 2024, was 45% higher year-on-year at INR6,276 crores.
- India Ratings upgraded the company's long-term credit rating from AA/stable to AA+/stable.
- The company declared and paid an interim dividend of INR199 crores, INR1.3 per share in March 2024.
Negative Points
- Pricing pressure in the low tension motor business due to increased competition.
- Margins in the Industrial Division were lower year-on-year due to intense competition.
- Copper prices have increased significantly, impacting cost structures.
- The semiconductor project will take at least four years to start contributing to revenue.
- The consumer product portfolio underperformed, with marginal growth or decline.
Q & A Highlights
Q: Can you provide more details on the industrial uptick in order inflow for this quarter? Is it primarily due to the Railways business?
A: The industrial segment includes motors and railways. A significant portion of the order inflow this quarter is from the Railways business. (Natarajan Srinivasan, Managing Director)
Q: Are you seeing any improvement in the Industrial Motor business, and do you expect it to pick up post-elections?
A: We expect the situation to improve after the elections. Currently, some projects are slow due to election activities. (Natarajan Srinivasan, Managing Director)
Q: Can you comment on the semiconductor opportunity and when revenues from this segment will start contributing to the topline?
A: The semiconductor project will take about four years to implement. There is a significant demand, and we are partnering with world leaders. Revenues are expected to start flowing in four years. (Natarajan Srinivasan, Managing Director)
Q: Can you talk about the volume growth in the industrial segment and whether the competitive intensity has eased?
A: From Q3 onwards, we have seen positive growth. The market growth is around 12-15%, and CG is at the same level. However, commodity prices like copper have increased, making it difficult to predict price realization. (Ramesh Kumar, President, Industrial Division)
Q: Are there any plans to add manufacturing capacity for drives, given the strong industrial demand?
A: We are exploring various options to grow the drives business, including potential capacity increases. However, no firm actions have been decided yet. (Natarajan Srinivasan, Managing Director)
Q: Are the high margins in the Power Segment maintainable, or were there any one-offs this quarter?
A: There were no one-offs. If material prices remain stable, we should be able to maintain these margins. (Natarajan Srinivasan, Managing Director)
Q: Can you provide details on the railway segment's performance and order book?
A: We expect strong growth in the railway segment, with a projected 40% increase in the top line this year. Current year sales are around INR1,300 crore plus. (Natarajan Srinivasan, Managing Director; Susheel Todi, Chief Financial Officer)
Q: What is the update on the EV motors front, and when can we expect supplies to start?
A: We have developed prototypes for one application, which are under testing. We are also in advanced stages of design for two other applications. Supplies are expected to start post FY24. (Ramesh Kumar, President, Industrial Division)
Q: How do you plan to leverage the global demand-supply mismatches in the power equipment market to increase exports?
A: We are currently focused on meeting domestic demand and selectively taking high-margin export orders. Capacity expansion is ongoing, and further expansion will be considered after current projects are completed. (Natarajan Srinivasan, Managing Director)
Q: What is the outlook for the Power Systems segment in FY25, and are you detecting any slowdown due to elections?
A: We have a strong order book and do not expect any slowdown in the Power Systems segment. (Natarajan Srinivasan, Managing Director)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
