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Submission Details • Date of submission: August 14, 2024 • Earnings call date: August 12, 2024 • Compliance: Submitted transcript to BSE and NSE as per SEBI regulations • Key personnel: • Jitendra Divgi (Managing Director) • Sudhir Mirjankar (CFO) • Moderator: Ashutosh Tiwari (Equirus Securities) • Transcript availability: On the company's website
Key Developments • Award: Toyota Supplier of the Year for the second time in three years • Project approval: Maharashtra government approved a mega project under the electric vehicle policy • New contract: Secured a multi-year contract for a four-wheel drive transfer case, projected revenue over INR 800 crores
Q1 FY25 Performance • Total income: INR 59.4 crores (4% decline from Q1 FY24) • Transfer case business: 25% decrease in demand • EV transmission segment: Tenfold year-on-year growth • EBITDA: INR 13.9 crores (22% decline) • Profit after tax: INR 5.96 crores (43% decline) • Future outlook: Anticipated recovery in exports and growth in the EV sector
Market Trends and Adaptation • Industry shift: Emphasis on electrification and hybrid technologies • Operations focus: Adapting to hybrid vehicles in response to upcoming CAFE norms post-2027 • Export opportunities: Anticipated 15% revenue from exports in FY '25, increasing to over 20% in FY '26
Product Development and Launches • Mahindra Thar: Ready for launch, initial supply expected soon • Long-range EV transmission: Development underway with promising NVH results • Hybrid vehicle specifications: Early stages of development with OEMs, prototypes needed by mid-2026
Business Expansion • Orders from China: Capacity of 20,000 units per month, potential business exceeding INR 50 crores • Opportunities in Thailand: Leveraging India's free trade agreement with ASEAN
Strategic Focus • Hybrid solutions: Emphasis on strong hybrid technology to meet emission norms • Dual-clutch transmission (DCT): Product expected by end of 2026, sales in 2027 • Ongoing negotiations: Discussions with MG and other OEMs for product offerings
Conclusion • Management expressed optimism about future growth, particularly in the EV sector and hybrid technologies, while inviting further engagement with investors.
Conference Call Overview • Date: May 27, 2024 • Hosted by: Equirus Securities • Key Management: Jitendra Divgi (Managing Director), Sudhir Mirijankar (CFO) • Transcript available on the company's website • Included forward-looking statements and was recorded for reference
Key Highlights from FY '24 • New Developments: • Commissioned a new plant in Shirwal • Produced India's first mass-produced EV transmission for Tata Tiago • Launched a high-speed dynamometer for EV transmission testing • Began fulfilling new export orders with revenue recognition expected in FY '25
• Financial Performance: • Total income: INR 273 crores (2% decline from FY '23) • Q4 FY'24 revenue: INR 65 crores (11% decrease YoY, 3% increase QoQ) • EBITDA: INR 53 crores (29% decrease YoY) • PAT: INR 40 crores (22% decline) • Recommended final dividend: INR 2.60 per share
Future Projections • Growth Expectations: • Projected topline growth of 8% to 10% for FY '25 • Aiming for a return to 15% CAGR by FY '26 • Focus on diversifying revenue streams, particularly in EV transmission
• Long-Range Planning: • Systematic review of forecasts and conservative guidance • Emphasis on steady-state operations and revenue-generating business
Challenges and Resilience • Acknowledgment of challenges from COVID-19, geopolitical tensions, and competition • Confidence in the company's ability to withstand market shocks • Ongoing investments to modernize manufacturing infrastructure
Key Performance Indicators (KPIs) • On-time delivery • Customer parts per million (PPM) • Revenue per employee • Cost reduction
Market Insights • Discussion on export business and competitive edge in high-margin proprietary products • Potential growth in the North American market, especially in aftermarket segments • Collaboration with Japanese OEMs and focus on three-wheeler market opportunities
Conclusion • Emphasis on maintaining EBITDA margins above 20% • Commitment to strategic focus areas and shareholder communication • Gratitude expressed to participants at the end of the call
Earnings Call Overview • Date: February 2, 2024 • Submitted transcript on February 6, 2024 • Key management present: Managing Director, Whole-Time Director, CFO, COO • Transcript available on company website
Company Introduction • Managing Director: Jitendra Divgi • Location: Pune, operational for nearly 60 years • Vision: To be a world-class Indian brand in automotive systems • Product Verticals: • Manual transmissions • Four-wheel drive applications • Electric vehicle (EV) transmissions • Automatic transmissions • Market Presence: Recent expansions into Western Europe and Mexico
Financial Performance • Q3 Performance: • Revenue: 67 crores (8% decline QoQ, 4% increase YoY) • Gross margins decreased by 4% • Stable EBITDA at 26% • Investment: 17.8 crores in growth capital expenditures • Cash reserves: 259.87 crores • Challenges: Market difficulties in defense and EV sectors
Manufacturing Advancements • COO: Dipak Vani • Investments in: • Sophisticated machining centers • Gear grinding machines for EV components • Dynamometer durability test stand for various transmissions
New Business Initiatives • Business Cycles: Market and selling, developing and launching, supply and support • Recent orders include: • Pickup truck component in North America • Gearbox for Tata's Punch model • Ongoing developments in manual and automatic transmissions
Strategic Vision and Market Position • Emphasis on agility and speed in the evolving automotive industry • Shirwal plant as a transformative asset for EV transmissions • Reduced product development timelines from 18 months to 4 months • 14% conversion rate on requests for quotes (RFQs)
Q&A Highlights • Transfer Case Segment: Limited market in India but significant global potential • EV Drive Business: First-mover advantage and established client relationships • Revenue Growth Target: At least 20% growth anticipated • Revenue Goal: Targeting 1,000 crores by 2026-27 with a strong pipeline of opportunities worth 2,500 crores • Defense Revenue: Expected to recover with renewed orders for FY25
Conclusion • The call provided insights into the company's performance, challenges, and strategic initiatives, reaffirming its commitment to product leadership and market resilience.
Divgi TorqTransfer Systems Q2 FY24 Earnings Call Summary
Key Management and Financial Overview • Date of Call: November 1, 2023 • Participants: Managing Director Jitendra Divgi, new COO Deepak Vani, CFO Sudhir Mirijankar • Financial Recovery: • Revenues returned to last year's levels • 19% revenue increase from the previous quarter • EV segment generated ₹10 crores (15% of total revenue) • Gross margins and EBITDA slightly declined due to product mix and fixed costs • Cash reserves at ₹270 crores at the end of H1 FY24
Operational Updates • EV Production: • Monthly output of e-gear drives at 2,500 to 3,000 units • Plans to expand to four additional models • Defense Sales: • Increased sales contributing to overall performance recovery • Investments: • New facilities in Shirwal and Sirsi, Karnataka • State-of-the-art equipment for gearbox manufacturing • Pioneering high-speed reliability testing in India
Program Developments • Key Projects: • Orders secured for Ford F-150 reduction hub component • Development of transfer case for Mahindra's new THAR • Production of manual transmission parts for Mahindra models at 8,000 units/month • Advancements in EV components for Mahindra's XUV400 • Readiness for production at Tata Motors for Tiago, T-Core sedan, and Punch SUV
Challenges and Future Outlook • Core Business Recovery: • Geopolitical issues affecting key customer MG • Optimism with new Mahindra product launches • EV Supply to Tata Motors: • On schedule with 100% on-time delivery, 30% capacity utilization • Collaboration with Hyundai: • Ongoing discussions, but no commitments yet
Strategic Insights • Capacity Utilization: • Importance of product and customer diversity for resilience • Significant investments leading to increased depreciation and startup costs • Gross Margin Reduction: • Changing product mix impacting margins • Focus on mainstream products to enhance volume and resilience • Industry Transformation: • Positioning to capitalize on EV growth and supply chain changes • Closing Remarks: • Emphasis on infrastructure and advanced manufacturing technology for sustained growth • Gratitude for investor support since going public
Earnings Call Overview • Date: August 17, 2023 • Submission of transcript to BSE Limited and National Stock Exchange of India • Management present: Jitendra Divgi (Managing Director), Hirendra Divgi (Full-time Director), Sudhir Mirijankar (CFO) • Format: Opening remarks followed by Q&A session
Financial Performance Highlights • Significant revenue decline due to: • 30-40% drop in transfer cases segment • Transition from internal combustion engines to hybrids with Toyota • EBITDA remained above 20%, indicating profitability • Optimism for recovery in Q2 driven by: • New business awards • Ramp-up of EV transmission production in Shirwal
New Business Developments • Successful pilot launch of new units with positive feedback from Tata Motors • Collaboration with Mahindra for a 220 crore investment in last-mile mobility • Supply of components to major clients like Ford and Audi • Expansion into India's three-wheeler EV market
Q&A Session Insights • Discussion on recent orders worth 720 crores and their impact on financial performance • Production for BorgWarner business to begin in January, with peak expected next financial year • Clarification on quality issues affecting Q1 production not related to their products • Focus on returning to revenue of over 100 crores by next year
Market and Competitive Landscape • Emphasis on opportunities in North American market and electrification of three-wheelers • Company operates in four segments: manual transmissions, four-wheel drive systems, EV transmissions, dual-clutch automatics • Leadership in EV transmission systems, largest manufacturer in India
Future Outlook • Secured over 300 crores worth of business under development • Revenue target of 1,000 crores as per annual report • Adjusted IPO raise from 200 crores to 180 crores due to timing and investment needs • Focus on aligning expenditures with supplier capabilities
Conclusion • Management committed to transparency and compliance with SEBI regulations • Emphasis on strategic focus in high-growth areas, particularly in the evolving EV market • Appreciation for participant questions that facilitated deeper discussion on strategies and outlook
Earnings Call Overview • Date: June 2, 2023 • Context: Transcript submitted to BSE and NSE following audited financial results for FY ending March 31, 2023. • Participants: Management team including Managing Director and CFO.
Company Performance Highlights • Post-IPO Growth: Significant increases in revenue, EBITDA, and PAT. • Business Development: Focus on electric vehicles (EVs) and exports. • Growth Strategy: Adherence to IPO prospectus outlined strategies. • Financial Health: Strong balance sheet with investments in new facilities.
Operational Updates • Manufacturing Focus: Specializes in gearboxes for the automotive industry; expanding operations with a new plant. • Partnerships: Technology agreements with BorgWarner and Hofer Powertrain for EV transmissions. • Contracts Secured: Notable contracts with Tata Motors and MG Motors, including defense contracts.
Competitive Edge • Tier-One Supplier: Strong emphasis on R&D and product range including manual, automatic, and hybrid systems. • Market Responsiveness: Ability to adapt quickly to market changes and customer needs. • Industry Recognition: Awards from Toyota for quality and delivery.
New Facility Developments • Shirwal Plant: Nearing completion, will produce indigenously designed transmissions for Tata's small cars. • Production Capabilities: Equipped with state-of-the-art technology and flexible production lines.
Q&A Session Insights • EV Transmission Timeline: Tata Motors project in launch phase; ramp-up expected by Q2 FY 24. • Mahindra Components: Development for last-mile delivery vehicles and three-wheelers. • Three-Wheeler Market: Acknowledged complexities but emphasized experience in commercial vehicle engineering.
Multinational Influence and Market Outlook • R&D Landscape: Multinationals lead in branded passenger car development; Indian firms can reduce costs. • Electrification Trends: Optimism about rapid electrification in India; potential for Indian firms to set global benchmarks.
Software Development in EV Sector • Importance of Software: Acknowledged role in EV ecosystem, particularly for safety features. • Current Focus: Concentration on mechanical components with developed software competencies. • Future Preparedness: Ready for regulations on integrated systems but not involved in motor and inverter software.
Conclusion • Management expressed confidence in strategic direction and potential for continued success in the automotive sector.