Company Overview
• History: 63 years in CNC manufacturing and automation.
• Recent Innovations: Shift towards smart manufacturing post-COVID.
Challenges Faced
• Financial Decline: 43% revenue drop in FY23 and negative profit after tax.
• Operational Issues: High fixed costs, raw material price fluctuations, manufacturing inefficiencies.
Strategic Initiatives
• Cost Management: Rationalizing manpower and transitioning to a dealer-based sales model.
• Outsourcing: Non-core activities and localizing supply chains.
• Market Focus: Emphasis on automotive, aerospace, and general engineering sectors.
Future Outlook
• Growth Projections: Double-digit growth in the Indian machine tool sector over the next 15 years.
• Geographical Expansion: Targeting new regions and sectors, particularly aerospace.
Financial Management
• Receivables Concerns: 70% of receivables outstanding for over six months; concentrated among distressed customers.
• Supplier Relationships: Supportive suppliers, no interest on delayed payables.
Patented Technologies
• Value Addition: Patents enhance machine performance and cost efficiency, providing a competitive edge.
Inventory and Cash Flow Management
• Inventory Practices: Techniques to reduce holding times; no negative impact from employee retrenchments.
• Loan Defaults: Acknowledgment of cash flow issues; plans for a rights issue to stabilize finances.
Order Book and Financial Outlook
• Current Orders: Order book at Rs. 35 crores; pipeline of Rs. 190 crores in proposals.
• Execution Timeline: Estimated at 3 to 5 months for current orders.
Investor Relations
• Rights Issue: Ongoing discussions for promoter equity infusion.
• Future Updates: Commitment to regular updates on financial goals and performance.
Conclusion
• Management Confidence: Optimism about overcoming challenges and improving operational efficiency.
• Commitment to Growth: Focus on achieving Rs. 225 crore turnover with a 25% EBITDA margin in the coming years.