Release Date: May 03, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sales grew by 6% year-on-year to INR 14,388 million in Q1 CY24.
- EBITDA increased by 18% year-on-year to INR 2,684 million.
- EBIT grew by 24% year-on-year to INR 2,126 million.
- EBT rose by 25% year-on-year to INR 253 million.
- EBITDA margin improved to 17.2% (excluding one-off subsidy), higher than both Q1 CY23 and Q4 CY23.
Negative Points
- European operations saw a 7% year-on-year drop in sales due to a high base effect from Q1 CY23.
- EBITDA margin in European operations was adversely affected by lower sales and stock reduction.
- The tractor and MHCV markets in India shrunk in Q1 CY24.
- Delays in ramping up new orders, especially in the EV space, are affecting growth.
- The slowdown in the US construction equipment market is expected to impact sales in Metalcastello.
Q & A Highlights
Q: The Mexico business still continues to be reported in India financials, right?
A: Yes, it is still reported in India financials. (Vikas Sinha, Senior Vice President Strategy and Chief Investors Relations Officer)
Q: How was the decline in the European business on a euro basis?
A: The decline in Europe on a euro basis is about 2%. The ForEx impact has been 2%, and the raw material price decrease also had a 2% impact. (Ander Alvarez, CEO)
Q: Are you happy with the India growth? Do you think we could do something better to improve our growth?
A: We are satisfied with the business evolution and management in India. We expect better growth in the next quarters as new projects ramp up. (Ander Alvarez, CEO)
Q: Is there a reclassification on the other operating income in India?
A: Yes, we have started using the scrap generated by stamping within our foundries, which has been reclassified. (K. Jayaprakash, CFO)
Q: Can you guide us on the CapEx for CY24?
A: Our CapEx is approximately 5% of our turnover. In the first quarter, we spent almost INR1 billion, and we expect to maintain this level. (Ander Alvarez, CEO)
Q: What is the status of the new orders and CapEx allocation in India?
A: We are adding capacity in all verticals, including composites, stampings, and forgings. We have new orders worth INR3 billion for the next two years. (Ander Alvarez, CEO)
Q: How do you see the European margins for the rest of the year?
A: We expect to recover margins to last year's levels, despite a flat market. The first quarter was affected by the Easter holiday. (Ander Alvarez, CEO)
Q: What is the performance and future outlook for Bill Forge Mexico?
A: Bill Forge Mexico is performing well, with sales above $3 million per month. We expect to be close to $40 million in calendar year '24. (Ander Alvarez, CEO)
Q: What is the impact of the transition from IC to EV on your business?
A: In India, the value at risk is not very high, and we see it as an opportunity. In Europe, we are preparing for the transition with new orders for EV components. (Vikas Sinha, Senior Vice President Strategy and Chief Investors Relations Officer)
Q: What are your thoughts on the new concept of Giga castings?
A: Giga castings are more oriented towards OEMs and involve significant investment. We do not see it affecting our kind of parts. (Ander Alvarez, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
