ASK Automotive Limited Q1 FY 2024-25 Earnings Conference Call Summary
Conference Call Details
• Date: August 1, 2024
• Hosted by: ICICI Securities
• Key Management Present:
• Mr. Prashant Rathee (Whole-Time Director)
• Mr. Aman Rathee (Whole-Time Director)
• Mr. Naresh Kumar (CFO)
• Mr. Sanjeev Arora (VP of Financial Strategy & Investor Relations)
• Chairman Mr. Kuldip Singh Rathee was absent due to illness.
• Transcript available on the company's website.
Economic Outlook
• Indian economy projected to grow at 7.2% in FY25.
• Government initiatives focused on infrastructure and rural development.
• Two-wheeler segment production increased by 19.6% in Q1 FY25.
Financial Performance
• Revenue increased by 31% year-on-year.
• EBITDA grew by 59%.
• PAT rose by 63%, marking the highest quarterly figures in company history.
• EBITDA margin improved to 11.9% due to higher volumes and cost optimization.
• Market leadership maintained in Advanced Braking Systems and growth in Aluminum Lightweighting Precision Solutions.
Future Growth Plans
• Expansion plans include a new solar plant and a facility in Bengaluru, operational by Q4 FY25.
• Management aims to outperform industry growth and focus on stakeholder value creation.
Margin and Export Strategy
• Aman Rathee aims to maintain EBITDA margins between 12% to 13%.
• Plans to increase export contribution from 4% to 10% over five years.
• Recent operationalization of the Karoli plant and economies of scale expected to drive margins.
• Investment of Rs. 250 crore to Rs. 300 crore in CAPEX planned for the year.
Industry Insights
• Two-wheeler industry growth at approximately 19%, with long-term growth expectations of 7% to 8%.
• Temporary decline in export revenues due to inventory corrections, but rebound anticipated.
• Joint venture revenue share decreased due to supply chain disruptions, expected to improve by year-end.
Product Development and R&D
• Progress on HPDC alloy wheel project discussed, with optimism for developments by Q4.
• Focus on disc brake pads, with major customer HMSI handling complete brake systems.
• Strong presence in the EV sector, catering to 80% of the industry.
Competitive Advantages
• Emphasis on aluminum lightweighting for ICE and EV vehicles.
• Proprietary formulations in friction materials and strong engineering capabilities in aluminum products.
• Competitors in aluminum space include Endurance, Sundaram Clayton, Rockman, and Rico.
Conclusion
• Management expressed confidence in growth strategy and market position.
• Gratitude extended to participants for their questions and engagement.

ASK Automotive Limited Q4 and FY 2023-24 Earnings Conference Call Summary
Financial Performance
• Revenue Growth: 17% increase for FY24.
• EBITDA Growth: 26% increase for FY24.
• PAT Growth: 41% increase for FY24.
• Q4 Total Income: Rs. 786 crore, a 38% year-on-year increase.
• Full Year Total Income: Rs. 3,005 crore.
• EBITDA Margins: Improved to 10.4% for FY24.
• Dividend: Announced a 50% dividend.
Product Segment Growth
• Key Segments: Notable growth in advanced braking systems and aluminum lightweighting solutions.
• EV Segment: Significant strides made.
• Exports: Positive developments noted.
Strategic Partnerships and Initiatives
• Partnership with LIOHO Machine Works: Producing HPDC alloy wheels for two-wheelers using gravity die cast technology.
• Joint Venture with AISIN Group: Marketing auto components in the independent aftermarket for passenger cars (ASK holds 51% stake).
• Investment in Solar Power: Rs. 48 crore in a 9.9 MW solar power plant in Haryana as part of ESG initiatives.
Future Growth Projections
• Revenue Growth: Anticipated 8-9% growth in the two-wheeler segment for FY25.
• Margin Improvement: Expected 100 basis points increase due to operational efficiency.
• CAPEX Plans: Rs. 600 crore over two years, with projected revenue potential of Rs. 1,200 crore.
Operational Insights
• Debt Management: Aiming for a debt-to-EBITDA ratio of around 1x.
• Production Capacity: Confidence in reaching historical margin peaks of 12-13%.
• Working Capital Cycle: Improved to 17 days, expected to stabilize around 27-28 days.
Investment Plans
• Bangalore Investment: ₹200 crore this year and an additional ₹300 crore next year.
• Return Projections: Projecting a ROC of around 25% next year.
• Capacity Utilization: Targeting 60% in the first year, full utilization within 1.5 years.
Conclusion
• Confidence in Performance: Management optimistic about meeting investor expectations and delivering strong results through innovation and sustainable growth.