- Total Income: INR421 crore in Q4 FY24, a 31% increase from INR321 crore in Q4 FY23.
- Sequential Revenue Growth: 4% increase from INR406 crore in Q3 FY24.
- Gross Margin: 54.1% in Q4 FY24, up from 51.6% in Q4 FY23.
- Employee Costs: Increased by 33% year-on-year, including an ESOP cost of INR3.6 crore for the quarter.
- EBITDA: INR59 crore in Q4 FY24, a 78% increase from INR33 crore in Q4 FY23.
- EBITDA Margin: 14% in Q4 FY24, up from 10.3% in Q4 FY23.
- Finance Costs: Increased by 27% year-on-year to INR10.8 crore.
- Depreciation: Increased by 25% year-on-year to INR20.9 crore.
- PBT: INR27.4 crore in Q4 FY24, up from INR8 crore in Q4 FY23.
- Profit After Tax: INR20.5 crore in Q4 FY24, a 112% increase from INR9.7 crore in Q4 FY23.
- Full Year Total Income: INR1,553 crore in FY24, an 11% increase from INR1,405 crore in FY23.
- Full Year Gross Margin: 51.5% in FY24, up from 49.2% in FY23.
- Full Year EBITDA: INR199 crore in FY24, a 27% increase from INR157 crore in FY23.
- Full Year EBITDA Margin: 12.7% in FY24, up from 11.2% in FY23.
- Full Year PBT: INR81 crore in FY24, a 31% increase from INR62 crore in FY23.
- Full Year Profit After Tax: INR61 crore in FY24, a 19% increase from INR51 crore in FY23.
- CapEx: INR40 crore in Q4 FY24, totaling INR114 crore for the full year.
- Revenue Growth Outlook: Anticipated 15% growth in FY25, targeting INR1,800 crore in total income.
- Long-Term Revenue Target: INR2,200 crore by FY26, equating to a CAGR of over 15%.
- New Orders: INR150 crore in Q4 FY24, with total new order booking reaching INR9,150 crore over six years.
Release Date: May 18, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Alicon Castalloy Ltd (BOM:531147, Financial) reported its highest ever quarterly revenue of INR 421 crores in Q4 FY24, marking a 31% increase year-on-year.
- The company achieved a gross margin of 54.1% in Q4 FY24, up from 51.6% in the same quarter last year, driven by an improved product mix and stabilized alloy prices.
- EBITDA for Q4 FY24 increased by 78% year-on-year to INR 59 crores, with EBITDA margins improving to 14% from 10.3% in Q4 FY23.
- Alicon Castalloy Ltd (BOM:531147) has a strong order book of INR 9,150 crores, executable over the next six years, indicating robust future growth prospects.
- The company is expanding its capabilities in new technologies and geographies, with significant traction in EV and hybrid vehicle components, including a major project with Jaguar Land Rover for eAxle production.
Negative Points
- Employee costs rose sharply by 33% year-on-year in Q4 FY24, driven by minimum wage increases and new hires, impacting overall profitability.
- Finance costs increased by 27% year-on-year due to higher borrowings and interest rates, affecting net profit margins.
- Depreciation expenses rose by 25% year-on-year, driven by the addition of new assets and re-evaluation of asset useful life, which impacted net profitability.
- Despite higher revenues, the company faces challenges in maintaining consistent gross margins due to fluctuating aluminum prices and product mix changes.
- The company anticipates a significant CapEx of INR 150 crores in FY25, which may strain cash flows and require careful financial management to avoid impacting liquidity.
Q & A Highlights
Q: Can you share the segmental mix for FY24, specifically for two-wheelers, passenger vehicles (PV), and commercial vehicles (CV)?
A: For FY24, the segmental mix was as follows: two-wheelers contributed 40%, passenger vehicles 33%, commercial vehicles 19%, and non-auto 6%.
Q: What is the expected revenue outlook for FY25 and FY26?
A: We anticipate revenues of INR1,800 crores for FY25 and INR2,200 crores for FY26. This growth will be driven by new orders from major OEMs such as Maruti, JLR, Toyota, PSA, Dana, and MAHLE.
Q: What is the expected share of electric vehicles (EV) in FY24?
A: The EV share in FY24 was 12%.
Q: What is the expected CapEx for FY25, and what will it be used for?
A: The expected CapEx for FY25 is around INR150 crores. This will primarily be used for building capacities for new orders, especially for the JLR eAxle and PSA projects, as well as for automation to control manpower costs.
Q: What is the current capacity utilization, and what is the maximum achievable utilization?
A: The current capacity utilization is around 70%. The maximum achievable utilization is between 85% to 90%, considering the need to keep some capacity for volume fluctuations.
Q: How do you see the impact of the shift from EVs to hybrids on your business with Jaguar Land Rover (JLR)?
A: We are prepared for this shift. Our investments are being made phase-wise, and our machines are universal, allowing us to produce a variety of parts, including ICE, EV, and hybrid components. This flexibility helps us mitigate risks associated with volume fluctuations.
Q: What is the impact of the recent write-off of INR8 crores?
A: The INR8 crores write-off pertains to old receivables. While we aim to minimize such write-offs, they are a part of running a large business. We expect such occurrences to be minimal in the future.
Q: What are the key focus areas for non-EV parts?
A: Our focus areas for non-EV parts include A-class parts like cylinder heads, engine parts, and structural components. We also see significant opportunities in the commercial vehicle segment and non-auto sectors like defense and infrastructure.
Q: How do you plan to achieve the target of 20% return on capital employed (ROCE)?
A: We aim to improve asset turnover ratios through higher value-add products and better capacity utilization. Additionally, we are focused on improving margins and reducing working capital days by optimizing inventory and receivables management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
