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Rishabh Instruments Limited Q1 FY 2024-25 Earnings Conference Call Summary
Overview • Date of Call: August 9, 2024 • Submission Date: August 12, 2024 • Key Management Present: • Narendra Goliya (Chairman & Managing Director) • Dinesh Musalekar (CEO) • Vishal Kulkarni (CFO) • Anand Laddha (Finance Director)
Financial Performance • Consolidated Revenue: INR 1,693 million (1.8% YoY decline) • Adjusted EBITDA: INR 109 million (59% drop) • Profit Before Tax (PBT): INR 46 million (59% decline) • Revenue Breakdown: • Rishabh India: 7.2% decrease • Lumel S.A.: 22.4% increase • Alucast: Flat revenue, negative adjusted EBITDA
Business Highlights • Electronics Sector: • Revenue: INR 939 million • Adjusted EBITDA margin: 16% • Solar string inverter segment: 204% YoY growth • Automotive Sector: • Challenges due to rising costs and stringent contracts with EV OEMs • Ongoing negotiations for price adjustments • Expansion Plans: • Facilities in Nashik and Lumel SA • Establishing R&D center at IIT Mumbai • Focus on non-automotive and electronic sectors
Strategic Acquisitions • Microsys Acquisition: • SCADA software company to enhance operational efficiency • Integrates data from industrial sensors into cloud systems
Market Outlook • Indian Market: • Significant growth potential due to government infrastructure spending • Expected double-digit growth • Poland: • Lumel SA thriving in electronics due to energy transition investments • China: • Targeting INR 30 million in sales for the financial year
Future Projections • Revenue Growth: • Modest growth of 8% to 10% for the current year (down from 18% to 20%) • Electronics segment expected to grow by 15% to 18% • EBITDA Margins: • Aim to recover previous margins of 15% to 16% in the next fiscal year
Management Insights • Confidence in Alucast business outlook over the next 1-2 years • No current plans to divest Alucast business • Focus on innovation and product development with a commitment to invest 2% of revenues in R&D
Q&A Highlights • Discussion on Lumel's solar business and new product pipeline (12-15 new products planned annually) • Investment in aluminum die-cast business currently on hold due to due diligence issues
Rishabh Instruments Limited Q4 FY 2023-24 Earnings Conference Call Summary
Submission Details • Date of submission: June 3, 2024 • Conference call date: May 29, 2024 • Key executives present: • Narendra Goliya (Chairman and Managing Director) • Dinesh Musalekar (CEO) • Vishal Kulkarni (CFO)
Company Performance Highlights • Revenue Growth: • 21.1% increase in revenue compared to FY23. • 21% revenue growth for FY24; 2% increase for Q4. • Key Segments: • Electrical Automation and Metering & Control Devices: 17% growth. • Aluminum diecasting: 19% growth. • Solar string inverters: 142% growth in Q4.
Strategic Focus • Growth Targets: Aiming for 20-25% year-on-year growth. • Product Expansion: Ongoing efforts to enhance product portfolio and management professionalization. • Acquisition Plans: Potential acquisition in aluminum diecast segment expected in six months.
Operational Insights • Manufacturing Efficiency: Enhancements and product redesigns to improve profitability. • Capital Expenditures: New SMT lines in Poland and India to support EMS growth. • R&D Initiatives: Introduction of 19 new products contributing 10% to electronic segment revenue.
Market Performance • Indian Market: 14.6% YoY revenue growth; benefits from increased government infrastructure spending. • International Operations: • Poland: LUMEL SA revenue rose by 28%. • China: 19% growth post-COVID; purchase desk established to support operations.
Financial Performance • Q4 FY2024 Results: • 35% decline in consolidated adjusted EBITDA to INR 214 million. • 42% decrease in consolidated PBT to INR 112 million. • Segment Performance: • India business revenue: 14.6% growth to INR 2,246 million. • LUMEL SA: 38% revenue increase with 225% EBITDA growth.
Challenges and Strategies • Margin Pressures: Rising employee costs and inflation in Poland affecting aluminum diecasting. • Cost-Reduction Strategies: Renegotiating contracts and implementing cost-saving measures. • Capacity Utilization: Average utilization around 65%; investments planned to enhance capacity.
Future Outlook • Growth Projections: • 18-20% growth expected for the next year. • Consolidated EBITDA margin projected over 15% for FY25. • Commitment to Quality: Focus on expanding into untapped markets in India, USA, and China.
Closing Remarks • Emphasis on transparency and adaptability in a dynamic market. • Assurance of a healthy future despite current challenges in the aluminum market.
Rishabh Instruments Limited Q3 FY 2023-24 Earnings Conference Call Summary
Overview • Date of Call: February 14, 2024 • Transcript Submission: February 20, 2024 • Participants: • Mr. Narendra Goliya (Chairman & Managing Director) • Mr. Dinesh Musalekar (CEO) • Mr. Vishal Kulkarni (CFO) • Moderator: Ms. Bhoomika Nair (DAM Capital Advisors)
Company Background • Established 40 years ago, specializing in energy efficiency solutions. • Four main product segments: • Electrical Automation • Metering Control and Protection Devices • Portable Test and Measurement Instruments • Solar String Inverters • 99% of manufacturing is in-house.
Financial Performance Highlights • Q3 Turnover: Rs. 1,593 million (19% YoY increase) • Nine-Month Turnover: Rs. 5,118 million (30% growth) • Key Segments: • Electrical Automation, Metering and Control Devices, Aluminum Die Casting: Double-digit growth. • Solar String Inverter: 460% revenue increase.
Product Development and Market Strategy • 25 new products launched in the past nine months; 20 more planned for FY25. • Focus on R&D to enhance product offerings and competitiveness. • Strong presence in FMCG, pharmaceuticals, and renewable energy sectors.
International Operations • European operations (Lumel SA) reported significant growth (37% for Q3, 43% YoY). • China operations recovering post-COVID with 29% YoY growth. • Shift to being a net exporter to China; growth in US (25%) and UK (16%) operations.
Financial Challenges and Outlook • Q3 FY24 adjusted EBITDA: Rs. 137 million (41% decline); PAT: Rs. 73 million (59% decline). • Nine-month adjusted EBITDA: Rs. 835 million (42% increase); PAT: Rs. 376 million (9% increase). • Margin declines attributed to ESOP costs, tax provisions, and new product impacts. • Projected adjusted EBITDA margin target of 18% for FY25.
Strategic Initiatives • Acquisition of Lumel integrated into operations; no plans for divestment. • Focus on partnerships in the EV sector, particularly in battery heat management. • Ongoing efforts to enhance operational efficiency in aluminum die-casting.
Investor Engagement • Discussions on project costs, margin pressures, and financial reporting practices. • Emphasis on the need for better clarity on development costs and their impact on financials. • Acknowledgment of temporary challenges with expectations for stabilization in upcoming quarters.
Date and Context • Date of Call: October 5, 2023 • Submission Date: October 8, 2023 • Focus: Unaudited financial results for Q1 FY24
Key Management Participants • Chairman: Narendra Goliya • CEO: Dinesh Musalekar • CFO: Vishal Kulkarni
Financial Performance Highlights • Consolidated Revenue: Increased by 38% to INR 1,724 million • Adjusted EBITDA: Rose by 48% to INR 303 million • Standalone Revenue Growth: • India: 37% • Exports: 55% • Domestic Revenue: 19% • Segment Growth: • Aluminium Die Casting: 32% • Metering Devices: 47% • Electrical Automation: 10%
Lumel Business Updates • Lumel SA: • Revenue: Increased from INR 280 million to INR 400 million (43% growth) • EBITDA: Nearly doubled from INR 37.7 million to INR 77.19 million • Key Growth Areas: Electrical automation (32%), Metering/control devices (58%) • Lumel Alucast: • Revenue: Grew from INR 524 million to INR 683 million (30% growth) • Profitability Impact: Non-operational expenses reduced adjusted EBITDA growth to 5%
Growth Strategy and Outlook • Medium to Long-Term Goals: • Top-line growth target: 20-25% • EBITDA growth target: 18-20% • Growth Strategy: Focus on organic and inorganic growth, production capacity expansion in India and Poland • Government Support: Modified Special Industrial Package (MSIP) in India • Solar String Inverter Production: Collaboration with an Italian company, focusing on domestic demand first
Investment Plans • IPO Proceeds Utilization: INR 63 crore investment in product line expansion • New facilities: ~INR 30 crore • Machinery upgrades and testing equipment for solar inverters
R&D Commitment • R&D Spending: 2.5% to 3% of total revenues • Collaboration with IIT Jodhpur: Focus on green energy research
Market Position and Competition • Strong Market Positions: Current transformers and analog panel meters • Regional Performance: Strongest in Western India; challenges in Eastern region • Analog vs. Digital Meters: Continued demand for analog meters despite digital technology rise
Customer Strategy and Inorganic Growth • Customer Portfolio: Focused on 20 groups, with 10 large customers • Inorganic Growth: Exploring acquisitions in aluminum die casting and electronics, primarily in India and Europe
Future Growth Expectations • Growth Targets: 20-25% for both Indian and Lumel businesses • Adjusted EBITDA Margin: Currently at 18%, with expected improvements in Alucast margins
Closing Remarks • Commitment to Transparency: Emphasis on sustainable growth across R&D and infrastructure • Gratitude for Investor Trust: Focus on long-term relationships and transparency in operations