Release Date: May 29, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Suprajit Engineering Ltd (BOM:532509, Financial) reported a consolidated revenue growth of 7% year-over-year, reaching INR3,106 crores.
- The company's consolidated operational EBITDA increased by 23% to INR401 crores, indicating improved operational efficiency.
- The Domestic Cable Division saw a revenue increase of 13%, driven by strong aftermarket performance and diversification efforts.
- Suprajit Engineering Ltd (BOM:532509) has successfully launched new products, including the combi brake system for multiple OEMs, enhancing its product portfolio.
- The company has a robust order book and expects double-digit revenue growth in the coming year, supported by strong export growth and strategic wins in global markets.
Negative Points
- The Phoenix Lamps Division experienced a decline in Q4 EBITDA due to customer write-offs, impacting overall profitability.
- The Electronics Division faced a weaker-than-expected Q4, primarily due to a sales drop from a large customer and lower plant utilization.
- Suprajit Engineering Ltd (BOM:532509) is dealing with tariff issues, particularly in the US, which could impact margins and require ongoing negotiations with customers.
- The company incurred significant one-off expenses related to restructuring and legal costs, which affected financial performance.
- The SCS business, particularly in Europe, is facing challenges due to a slow-moving economy, and the company expects some losses in the near term before achieving EBITDA positivity by Q4.
Q & A Highlights
Q: Considering the poor export situation, where do you see the top line moving for SCS in the next three years? And how soon and confident is the team in taking EBITDA positive?
A: Although the European market is not growing, we continue to have a decent year for the European part of the business. The year will be one of stabilization and consolidation for SCS. We expect to turn EBITDA positive by Q4 of the current year, with a full-year revenue target of USD 40 million.
Q: What were the one-off expenses and restructuring charges booked for Q4 and FY25? Also, please explain the customer write-offs and their quantum.
A: Customer write-offs were higher this year due to insolvency of a European customer and issues with some EV clients. One-off expenses included costs related to the SCS transaction, restructuring in Matamoros, and moving the warehouse from Germany to Hungary. These amounted to around INR 25-30 crores for the year.
Q: Can you provide insights into the braking business and its growth prospects?
A: The braking division is scaling up, supplying both new and existing models. We are working on innovative braking systems, including ABS, and have reached an inflection point with CBS mechanisms being productionized this year. The vision is to be a one-stop shop for all braking solutions, particularly for two-wheelers.
Q: How are the new business wins translating into growth, considering the roll-offs of previous contracts?
A: Launches are getting delayed, and some existing contracts are rolling off. However, Suprajit Automotive and Suprajit Europe have shown significant growth. Despite a weak global market, the Controls Division expects double-digit growth this year.
Q: What is the outlook for the Electronics Division given the slowdown in the EV market?
A: We have taken necessary write-offs for certain EV customers. We are replacing lost business with new orders from other EV and ICE customers. Additionally, supplying internally to our Matamoros and Hungary plants will help fill the order book.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
