Release Date: October 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Shriram Pistons & Rings Ltd (NSE:SHRIPISTON, Financial) reported a strong year-on-year revenue growth of 17% for the quarter, demonstrating robust demand for its products.
- The company achieved a 15% growth in EBITDA and an 11% increase in profit after tax (PAT), indicating improved operational efficiency.
- Despite challenging market conditions, the company managed a sequential top-line growth of 5% quarter-on-quarter, with EBITDA and PAT growing by 9% and 7% respectively.
- The company is actively pursuing strategic initiatives to broaden its product offerings, including technology-backed components for hybrid, hydrogen, and other alternative fuel solutions.
- Shriram Pistons & Rings Ltd (NSE:SHRIPISTON) has expanded into electric vehicle mobility solutions and high precision injection molded parts, with significant progress in these areas.
Negative Points
- The global automotive market has been affected by a downturn in EU production volumes and geopolitical tensions, impacting export sales.
- Passenger and commercial vehicle segments faced pressure, posting lower single-digit growth, which could affect future performance.
- The company is experiencing challenges in the export market due to geopolitical situations, which may continue to impact sales.
- There is a concern about OEMs cutting down production, which could affect the company's growth in the second half of the year.
- The company carries a reasonable amount of debt on its balance sheet, which could pose financial risks if not managed properly.
Q & A Highlights
Q: How does Shriram Pistons & Rings Ltd view the market outlook for the second half of the year, especially with concerns around OEM production cuts?
A: Krishnakumar Srinivasan, CEO, acknowledged the concerns but expressed optimism, noting that the company has been successful in securing new business and expects to outperform the market. Despite OEMs projecting low single-digit growth, Shriram Pistons aims to continue its growth trajectory by penetrating new markets and enhancing aftermarket outreach.
Q: What is the company's position regarding the Bajaj two-wheeler CNG segment, and how has the response been?
A: Shriram Pistons is the sole supplier for the Bajaj Freedom 125 CNG model. The CEO reported a positive outlook, citing Bajaj's commentary on strong sales growth for the model, which aligns with the company's expectations for continued demand.
Q: How does Shriram Pistons plan to navigate the challenges in the passenger and commercial vehicle segments?
A: The CEO highlighted that while these segments face low growth, the company benefits from its presence in multiple segments, including two-wheelers and tractors, which are performing well. Additionally, the company is focusing on aftermarket sales and expects export markets to recover, aiding overall performance.
Q: Can you provide insights into the company's strategy for the hybrid and electric vehicle markets?
A: Shriram Pistons is actively involved in both hybrid and electric vehicle markets. The CEO mentioned that the company is well-positioned in hybrid engines and is making significant investments in electric vehicle components, such as motors and controllers, to capitalize on the growing demand.
Q: What are the company's plans regarding its debt and cash balance management?
A: The CEO explained that the company strategically uses packing credits and other financial instruments to maintain a stable debt-to-equity ratio. The focus is on leveraging opportunities for debt at favorable interest rates while ensuring efficient cash management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
