Centum Electronics Limited Conference Call Summary (May 29, 2024)
Key Highlights
• Conference Call Date: May 24, 2024
• Management Present: Nikhil Mallavarapu (Executive Director), K S Desikan (CFO)
• Hosted by: JM Financial
Financial Performance
• Revenue Milestone: Surpassed INR 1,000 crores for the first time.
• Q4 Performance:
• Consolidated revenue: INR 297 crores (flat QoQ, down 6% YoY).
• EBITDA: INR 18 crores (decline due to lower domestic BTS revenues and one-time expenses).
• Full Year Performance:
• Consolidated revenue: INR 1,091 crores (18% increase YoY).
• EBITDA: INR 86 crores.
• Standalone revenues: INR 632 crores (26% increase).
Order Book and Growth Outlook
• Order Book: Increased to INR 1,640 crores (10% growth in last quarter).
• Future Growth Target: Medium-term revenue growth of 18% to 20%.
• Order Inflows FY'24: Totaled INR 1,200 crores.
Financial Management
• Working Capital: Expected to stabilize around 65 days.
• Debt Levels: Projected between INR 170 crores and INR 180 crores.
• Interest Costs: Anticipated between INR 37 crores and INR 40 crores.
Margin Targets
• FY'25 EBITDA Margin Goal: 10% to 12%.
• Long-term EBITDA Margin Target: 14% to 15%.
Segment Contributions
• Revenue Breakdown:
• 40% from EMS, remainder from built-to-spec and engineering services.
• Defense Sector Contribution: Approximately 46% of revenue.
Strategic Insights
• Contract Mechanisms: EMS contracts are typically cost-plus; built-to-spec contracts are often fixed-price.
• Cost Management: Ongoing cost reduction initiatives and improvements in overseas subsidiaries.
Future Plans
• Operational Efficiency: Focus on higher-margin projects and improving profitability.
• Growth in Subsidiaries: Anticipated modest sales growth of 8%-10% for FY'25.
Conclusion
• Positive Outlook: Strong project pipeline and recent revenue milestone achievement indicate optimism for future growth and profitability.

Centum Electronics Q3 FY24 Earnings Conference Call Summary
Announcement
• Transcript of Q3 FY24 earnings call available on February 13, 2024.
• Call held on February 9, 2024, featuring:
• Executive Director Nikhil Mallavarapu
• CFO K.S. Desikan
• Moderator Bhavani Kumawat from PhillipCapital India Pvt Ltd.
Financial Performance
• Consolidated revenue: INR 298 crores (51% YoY growth).
• Standalone revenue: INR 176 crores (72% YoY growth).
• Order book: INR 1,489 crores, impacted by delays in the Build to Spec (BTS) segment.
• Significant improvement in EBITDA and net profit reported.
• Management optimistic about 20-25% top-line growth next year.
Key Discussion Points
• Order Book and Financial Outlook:
• Delays in BTS segment noted, but supply chain conditions improving.
• Shift to shorter-term purchase orders causing temporary slowdown.
• New customer acquisitions expected to offset declines.
• Growth and Margin Expectations:
• Caution expressed about achieving 25% growth next year.
• Cost reduction plan in France and Canada targeting EUR 2 million savings.
• Medium-term revenue growth guidance: over 20% with EBITDA margin of 11%-12% for FY25.
• Export Receivables and Demand:
• No delays in export receivables confirmed.
• Temporary slowdown in industrial customer demand due to overstock.
Customer Engagement and Market Trends
• Engagement models vary by business segment; longer-term contracts common in BTS projects.
• Growth drivers identified in industrial segment: grid automation and hydrogen fuel cells.
• Strong customer relationships emphasized as crucial for long-term success.
Competitive Landscape
• Discussion on "China Plus One" strategy:
• Centum perceived to deliver quality comparable to Switzerland and the US.
• India’s advantages in engineering and design highlighted.
• Competitors for Indira MOU project mentioned: Astra Microwave and L&T.
• Future opportunities explored in electronic warfare, radar, and space.
Company Evolution and Market Distribution
• Company evolved from single product to diversified global player.
• Revenue distribution: 50% Europe, 15% North America, 30% Asia.
• Competes with global players like Plexus and Sanmina.
Margin Targets and Future Growth
• EBITDA margin targets discussed:
• Expected close to 10% for the current year, moving to around 12% next year.
• Goal of mid-teen margins by March 2025.
• Optimism about growth driven by initiatives like Make in India and the China Plus One strategy.
Conclusion
• Management expressed eagerness for future engagements and thanked participants.

Centum Electronics Limited Q2 FY '24 Earnings Conference Call Summary
Key Financial Highlights
• Consolidated Revenue: ₹248 crores, a 23% year-on-year increase.
• EMS Business Growth: 53% growth contributing to revenue increase.
• Order Book: Strong at ₹1,548 crores, with growth expected in EMS and BTS sectors.
• EBITDA: ₹17 crores reported.
• Debt Increase: Due to capital expenditures, rising from ₹263 crores to ₹298 crores.
Segment Performance
• Healthcare Segment: Contributes about 9% to total revenue, with growth plans in telemedicine.
• EMS Segment: Increasing contribution but lower margins compared to BTS.
• BTS Segment: Expected balanced revenue contribution in the second half.
Management Insights
• Focus on Existing Segments: Emphasis on the electric vehicle (EV) market.
• Operating Profit Margins: Target of 10% for the full year, requiring higher margins in H2.
• Order Inflows: Strong visibility, but no specific guidance provided.
Challenges and Strategies
• Canadian Business Losses: Confidence in achieving profitability within two quarters.
• Geopolitical Impact: No significant disruptions reported.
• Cost Overruns: Acknowledged in legacy projects; strategies in place to mitigate future risks.
Future Outlook
• Growth Trajectory: Driven by macroeconomic tailwinds and strategic positioning in high-growth sectors.
• Debt Management: Confidence in reducing debt through operational cash generation.
• Joint Venture Update: Awaiting progress on government contracts related to the Indra partnership.
Capital Expenditure
• Investment Plans: Approximately ₹30 crores planned for the current year, with maintenance CAPEX of ₹10 to ₹15 crores annually.
Conclusion
• Positive Outlook: Management expressed confidence in sustained revenue and margin growth, supported by a strong order book and favorable macroeconomic conditions. The call concluded with well wishes for the Diwali festival.

Centum Electronics Limited Q1 FY24 Earnings Conference Call Summary
Overview of the Call
• Date: August 14, 2023
• Moderator: Anuj Sonpal (Valorem Advisors)
• Key Speakers: Nikhil Mallavarapu (Executive Director), K S Desikan (CFO)
Company Performance Highlights
• Operational Income: Increased by 17% year-on-year to INR 244 crores.
• EBITDA: Rose to INR 18 crores, reflecting improved margins from EMS growth.
• Order Book: Steady at INR 1,542 crores, with positive outlooks in defense and electric mobility.
Q&A Session Insights
• Subsidiary Performance: Acknowledged losses; expected improvement in the second half with a target EBITDA margin of 7-8%.
• EMS Business Contribution: Electric mobility orders to be executed over 4-5 years; PIS pipeline valued at around 100 crores.
• Canadian Subsidiary Margins: Anticipated improvements as fixed-price contracts are completed.
• Effective Tax Rate: Confirmed at 25% for FY24; transition of ER&D operations from Canada to India is ongoing.
Growth and Margin Expectations
• EMS Sector Growth: Driven by new customer ramp-ups in high-tech areas and increased defense orders.
• EBITDA Margin Goals: Targeting 10% for the French subsidiary; overall consolidated EBITDA margins expected to reach 10-11% for FY24.
• Order Book Breakdown: 30-32% ER&D, 38-40% EMS, 28% bill to specification.
Revenue Growth Projections
• FY24 Growth Target: Aiming for 20% growth, primarily from the BTS segment, which is expected to grow over 25%.
• Long-term Growth: Anticipated CAGR of 20% over the next two to three years.
Closing Remarks
• Management expressed gratitude for participation and encouraged further inquiries through Investor Relations.
• K S Desikan extended wishes for a Happy Independence Day.