Submission and Overview
• Date of Submission: June 5, 2023
• Earnings Call Date: May 29, 2023
• Key Participants:
• Mr. Kunhamed Bicha (Chairman and Managing Director)
• Mr. R M Subramanian (CFO)
• Availability: Transcript available on the company's website.
Company Position and Growth
• Industry Role: Leading player in electronic manufacturing services in India.
• Founded: 1997, with 12 manufacturing units and two new facilities in Chennai.
• Revenue Contribution: Vertically integrated solutions (PCB design, assembly, logistics) contributed 47% of FY 2023 revenues.
• Order Book Growth: Increased from INR 858 crores to INR 1,231 crores.
Financial Performance
• Q4 FY’23 Highlights:
• Revenue: INR 272 crores (29.6% YoY increase)
• Gross Margin: INR 102 crores (39% YoY increase)
• EBITDA: INR 41.1 crores (74.2% YoY increase)
• PAT: INR 22.7 crores (113.1% YoY increase)
• Full Fiscal Year:
• Revenue: INR 447 crores (12.4% increase)
• PAT: INR 52.5 crores (10.6% increase)
• Debt Management: Successful use of IPO funds for debt repayment.
Future Projections
• Revenue Growth: Projected 25-30% for FY’24 with operating margins of 12-13%.
• Sector Growth:
• Clean Energy: Expected to rise from 25% to 30-35%.
• Aerospace: Anticipated growth of 30-40% YoY.
• Capacity Utilization: Operating at 60-65% capacity, potential for 40-50% growth without additional investments.
Market Dynamics
• Export vs. Local Market: Shift from 80% exports to 38% local market share.
• Sector Focus: Clean energy and aerospace sectors showing promise despite U.S. recession trends.
• Inventory Management: Aiming to reduce net working capital days significantly.
Strategic Insights
• Competitive Landscape: Limited competition in clean energy currently, but future challenges anticipated.
• Vertical Integration Strategy: Collaboration with U.S. customers to leverage manufacturing subsidies.
• Focus on Profitable Growth: Avoiding low-margin businesses to maintain profitability.
Additional Insights
• Customer Onboarding: Lack of specific customer numbers but significant revenue from box builds.
• Capital Expenditure Plans: INR 30-35 crores for FY’24 and INR 40-45 crores for FY’25, focusing on refurbishing and machinery.
• Order Book Execution: Typically spans 12 to 14 months.
Closing Remarks
• Commitment to Shareholders: Emphasis on delivering long-term value and profitable growth.
• Management's Confidence: Assurance of achieving revenue growth targets and improving market share.