Q1 2025 Harsha Engineers International Ltd Earnings Call Transcript
Key Points
- Harsha Engineers International Ltd (BOM:543600) reported that their Q1 FY25 performance is in line with expectations, despite some softness in the Romanian market.
- The company achieved strong growth in the bronze bushing segment, with sales reaching INR20 crore, driven by key existing customers in the windmill gearbox manufacturing sector.
- The outsourcing of the cage business from Europe is progressing satisfactorily, indicating positive traction in this area.
- The company has started receiving orders from key customers who have set up new plants in India, aligning with the China+1 strategy.
- The business from Japan-based customers continues to grow, with sales of around INR18 crore in Q1 FY25, and the company expects this growth to catch up in the coming quarters.
- Top line growth in Q1 FY25 was slightly muted compared to Q1 FY24, partly due to the project nature of the solar business, which typically sees a leaner Q1.
- Sales of large-sized bearing cages were soft in Q1 FY25, primarily due to continued softness in demand from the windmill segment and industrial demand softening in Europe.
- The Romanian market continues to face challenges, with the company adopting a new strategy to increase the share of cages compared to semi-finished or casting business.
- Overall working capital cycle increased to 153 days in Q1 FY25, up from 141 days in the previous quarter, due to increasing pricing and inventory pipeline.
- The company incurred a CapEx of INR42 crore in Q1 FY25, which could impact short-term cash flows and financial flexibility.
Ladies and gentlemen, good day, and welcome to the Harsha Engineers International Limited Q1 FY25 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Vishal Rangwala, CEO of the company. Thank you, and over to you, sir.
Hi. Welcome to all of you for Harsha Engineers quarter one FY25 earnings call. As per our normal practice, our CFO, Mr. Maulik Jasani, will take you through the numbers in greater detail. However, I presume that you would have had a chance to look at that same.
First and foremost, I'm happy to report that quarter one FY25 performance is very much in line with our expectation. Except for continued softness at Romania level, which I will talk about at greater length a bit later.
As you would have seen, although the top line growth in quarter one FY25 appears to be slightly muted as compared to quarter one FY24. The profitability growth is quite
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