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Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: July 24, 2024 • Participants: CEO Harsha Kadam, CFO Hardevi Vazirani • Compliance: Transcript available on the company's website, signed by VP - Legal & Company Secretary Ashish Tiwari.
Company Performance Highlights • Sales Revenue: Surpassed INR 2,000 crores for the first time, 12% increase from previous quarter, 13.3% year-over-year growth. • EBITDA: Reported at INR 385 crores with an 18.6% margin. • Q2 Growth: 10.3% revenue growth in H1 2023; Vehicle Lifetime Solutions grew 4.8%, Industrial sector grew 16.5%.
Economic Context • Indian Economy: Projected GDP growth of 7.3% by the Reserve Bank of India. • Automotive Sector: Recovery in 2- and 3-wheelers; slight decline in passenger and commercial vehicles.
Export Performance • Growth: 20% sequential growth attributed to European economy stabilization and new market penetration in Southeast Asia. • Caution: Geopolitical uncertainties may impact future exports.
Capital Expenditure Strategy • Investment Plan: INR 1,500 crores over three years for new plants and increased capacity. • Expected Benefits: Incremental sales from investments already materializing.
Industry 4.0 Initiatives • Digitalization: Focus on machine condition monitoring and smart lubrication systems. • Applications: Solutions are brand agnostic and applicable across various products.
Product Development and Market Adaptation • Hybrid and Electric Vehicles: Strong product portfolio across various vehicle technologies. • Non-Bearing Segment: Comprises 40% of business, includes advancements in hybrid and electric vehicle technologies.
Closing Remarks • Future Outlook: Continued focus on cost management, business expansion, and adherence to ESG principles. • Contact Information: Provided for further inquiries.
Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: April 26, 2024 • Presenters: • Mr. Harsha Kadam, Managing Director and CEO • Ms. Hardevi Vazirani, Director of Finance and CFO • Focus: Q1 financial results for the period ending March 31, 2024 • Transcript available on the company's website
Accolades and Achievements • Received multiple awards for customer-centric approach: • "Best Supplier Award" from TAFE • "Partnership Award for Quality and Technology Support" from John Deere (fifth consecutive year) • Recognized for corporate social responsibility: • "Best Skill Development Program" trained over 1,000 rural youths, with 80% securing employment
Economic Outlook • India's GDP projected to grow by 7.2% in Q1 2024 • Automotive sector production growth of 5.2%, driven by passenger vehicles • Decline in tractor segment production
Financial Performance • Q1 2024 Revenue: INR 1,849 crores (9.2% growth YoY) • EBITDA: INR 338.8 crores (18.3% margin) • Profit After Tax (PAT): INR 227.7 crores (12.3% margin) • Negative free cash flow of INR 25.6 crores, down from positive cash flow in Q4 2023 • Domestic market growth of 12.4% YoY
Strategic Developments • Restructured divisions to align with trends: • New E-Mobility division created • Focus on managing operating costs and expanding product portfolio • Acquisition of Koovers, a B-to-B e-commerce platform, showing 24.6% revenue increase
Earnings Call Highlights • Export performance rebounded with over 10% increase in Q1 2024 • E-axle business on schedule with localization efforts • Strong demand recovery in gearbox manufacturing for the wind sector • Ongoing investments in traditional IC engines and electric vehicle technologies • Planned INR 1,500 crore CAPEX aimed at localization and backward integration
Future Outlook • Continued focus on growth in the industrial sector, particularly in wind energy and two-wheelers • Localization rate achieved: 77% in Q1 • Commitment to securing orders in the Asia Pacific region and enhancing export capabilities
Conclusion • Schaeffler India remains optimistic yet cautious in navigating market volatility, with a strong focus on operational efficiency and strategic growth initiatives.
Schaeffler India Limited Analyst/Investor Meet Summary
Company Performance and Outlook • Date of Meeting: March 15, 2024 • Key Executives Present: Managing Director Harsha Kadam, CFO Hardevi Vazirani • Export Challenges: Stagnation in export declines, particularly in Europe and the US. • Diversification Efforts: Focus on expanding exports to Southeast Asia (Vietnam, Indonesia). • Supply Chain Issues: Acknowledged as temporary, not significantly impacting demand. • Capital Expenditures: No cuts; viewed current challenges as temporary setbacks. • Long-term Commitment: Focused on growth in India and expanding export base.
Competitive Landscape • Competition from Timken: Addressed concerns regarding the spherical roller bearings market. • Localization Efforts: Achieved 75% localization, with plans for further increases. • Railway Sector Strength: Strong position in electric locomotives and metro trains.
Sector Insights • Wind Sector Recovery: Challenges due to geopolitical issues, but signs of recovery noted. • Process Industries Growth: Driven by government infrastructure initiatives. • Electric Vehicle Transition: Adapting production strategies to market trends, recognizing growth in both EVs and internal combustion engine (ICE) vehicles.
Capacity and Investment • Current Capacity Constraints: Need for investment in ICE technologies and hybrid/EV solutions. • Domestic Growth Focus: Bearings constitute 60% of business; commitment to double-digit growth in India. • "China Plus One" Strategy: Diversifying sourcing while maintaining operations in China.
Electric Vehicle Initiatives • EV Projects Progress: On track with phased localization of production. • Value Comparison: Higher content value for EVs compared to ICE vehicles. • Market Outlook: No immediate risks to ICE sales from EVs in India for the next decade.
Acquisition and Market Position • Koovers Acquisition: Expected to double revenue to over INR 140 crores, enhancing B2B platform and service market penetration. • Railway Sector Opportunities: Shift towards privatization in wagon manufacturing opens new sales opportunities. • Operating Margins: Confidence in sustaining margins at 18-19%.
Strategic Developments • Vitesco Acquisition: Enhances capabilities in the electric vehicle market through software and controller technology. • Market Positioning: Strong relative to parent company; no current discussions on ownership changes. • Distribution Business Growth: Importance of growing distribution to offset export declines.
Automotive Bearings Market • Market Composition: Automotive bearings comprise 8-10% of business; aftermarket focus primarily on clutches.
Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: February 19, 2024 • Key Personnel: • Mr. Harsha Kadam (Managing Director and CEO) • Ms. Hardevi Vazirani (Director of Finance and CFO) • Compliance: Transcript available on the company's website, signed by Ashish Tiwari (VP - Legal & Company Secretary).
Economic and Industry Landscape • Indian economy growth: 7.6% year-on-year for Q3 2023. • Automotive sector: Strong performance, especially in passenger vehicles. • Agricultural sector: Struggled due to erratic rainfall. • Government focus: Fiscal consolidation and infrastructure development.
Financial Performance • Q4 Results: • Top-line growth: 3.4% • EBIT margin: 14.9% • Profit after tax: 11.7% (1% lower than previous year) • Yearly Results: • Total revenue growth: 17.8% • Automotive technologies segment growth: 9% • Industrial segment growth: 17% • Exports decline: 36% compared to Q4 2022.
Investment and Dividends • CAPEX increase: From INR 316 crores in 2022 to INR 610 crores in 2023. • Dividend payout: INR 26 per share (8% increase from previous year). • Commitment to increase dividend payout ratio to 50%.
Social Initiatives • Social Innovator Fellowship Program: 260 applications received, top ten selected for mentorship with IIM Ahmedabad.
Export and Market Challenges • Export business decline: 30% drop, but domestic sales grew. • Geopolitical tensions affecting demand in Europe, US, and APAC. • Exploration of Southeast Asian markets for growth.
Sector Performance Insights • Mixed performance in industrial sectors: Slowdown in off-road equipment and 2-wheelers, growth in wind energy and railways. • Strategic focus on electric mobility and localization.
Electric Vehicle (EV) Plans • Collaboration with Vitesco India on e-axle project. • Strategic acquisition of Vitesco to enhance digitalization and electronics capabilities.
Expansion Plans • Updates on Savli industrial bearings facility and Hosur automotive components plant: • Savli: Phased capacity additions focused on renewable energy and railways. • Hosur: Greenfield project expected to begin production by Q1 2025.
Business Performance Outlook • Railway sector: Double-digit growth in 2023. • Automotive segment: Strong performance, especially in commercial vehicles. • CAPEX guidance: INR 500 crores for the next two years.
Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: October 27, 2023 • Compliance: SEBI regulations • Key Personnel: • Harsha Kadam (Managing Director) • Satish Patel (CFO) • Transcript Availability: On company website • Communication Signed by: Ashish Tiwari (VP - Legal & Company Secretary)
Economic Landscape • India's GDP Growth: Approximately 7.8% • Key Sectors: Strong performance in steel, cement, and mining • Automotive Sector: Mixed results; passenger vehicles up 8.6%, flat for two-wheelers and tractors
Financial Performance (Q3 2023) • Sales: INR 1,843 crores (5.2% YoY increase) • EBIT Margin: Stable at 16% • Profit After Tax: INR 235 crores (12.7% margin) • Free Cash Flow: Increased by 57.6% YoY
Business Highlights • New Wins: Advancements in automotive technologies and industrial sectors • Export Demand: Decline due to geopolitical issues in Europe • Domestic Growth: Positive performance, with automotive technology contributing 42% to revenue
Earnings Call Insights • Automotive Technologies and Aftermarket: Strong double-digit growth • Industrial Segment: Anticipated recovery despite earlier weak demand • EBIT Margin for Q3: 15.9%, with a 9.1% YoY increase in profit margins • Capital Expenditures: INR 157 crores invested
Q&A Session Highlights • Export Sales Decline: 21% drop attributed to global economic conditions • Geographical Distribution of Exports: • 47% to Europe • 30% to Asia Pacific • 10-15% to China • 10% to USA • Pricing Actions: No increases in bearings business due to stable steel prices • Electric Vehicle Order: Localization efforts ongoing • Capex Plans: INR 1,500 crores over three years targeting double-digit growth • Other Income: Primarily interest income, increased due to old refunds and cash yields
Additional Notes • Plant Utilization: Maneja plant over 85%, automotive plants around 80% • Seasonal Trends: Lower demand in Q3 for automotive aftermarket • New Plant Construction: In Hosur, not a relocation • Koovers Acquisition: Current capex does not include investments for Koovers, still in integration phase
Conclusion • The company remains optimistic about long-term growth in India, driven by government infrastructure initiatives and domestic demand recovery.
Schaeffler India Limited Analyst/Investor Call Summary
Call Overview • Date: August 31, 2023 • Participants: • Mr. Harsha Kadam (Managing Director and CEO) • Mr. Satish Patel (Director of Finance and CFO) • Ms. Gauri Kanikar (Facilitator) • Focus: Acquisition of KRSV Innovative Auto Solutions Private Limited
Acquisition Details • Target Company: KRSV Innovative Auto Solutions (operates Koovers) • Significance: First acquisition for Schaeffler India • Strategic Goals: • Enhance automotive aftermarket business • Leverage digitalization trends • Market Potential: • Indian automotive aftermarket projected to grow significantly • B-to-B e-commerce expected to reach EUR 1.4 billion by 2030 • Financials: • Acquisition value: INR 142.4 crores • Koovers projected turnover: INR 77 crores in 2023
Strategic Benefits • Market Intelligence: Improved access to market data and customer engagement • Digital Solutions: Enhance digital presence and product offerings • Synergies: Integration with Schaeffler's existing aftermarket business • Growth Projections: Automotive aftermarket expected to grow by 75% by 2030
Q&A Highlights • Synergies and Integration: • Enhanced product accessibility through the app-based platform • Inclusion of Schaeffler products on Koovers • Margin Impact: • Potential for margin improvement as Koovers expands • Competitive Landscape: • Koovers will offer diverse products, mitigating competition concerns • Open platform for all applicable auto component products • Management and Future Growth: • Founders of Koovers to remain involved • Focus on double-digit growth in the aftermarket
Investment Considerations • Future Investments: • Upgrading IT and logistics for scalability • Specific financial figures not disclosed; focus on growth opportunities post-acquisition
Conclusion • The call concluded with an invitation for further questions and expressions of gratitude to participants.
Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: July 27, 2023 • Compliance: SEBI regulations • Key Executives: • Harsha Kadam (Managing Director) • Satish Patel (CFO) • Format: Presentation followed by Q&A • Transcript available on the company's website
Economic Outlook • Positive GDP growth projections by IMF and World Bank • High overall Foreign Direct Investments despite a slight Q2 decline • Government initiatives like Make In India and PLI schemes support inflows
Automotive Sector Performance • Mixed results: • Passenger vehicle production: +7% YoY, -6% QoQ • Commercial vehicles: -13% QoQ • Two-wheeler production: +12% • Schaeffler India sales growth: 4.6% YoY, reaching INR 1,829 crore • Stable EBIT margin: 16%
Financial Highlights • Revenue: INR 1,829 crore (8% increase QoQ, 4.6% YoY) • EBIT: INR 294 crore (8.7% increase QoQ, 7.3% YoY) • Profit after tax: INR 237 crore (8.2% increase QoQ, 5.1% YoY) • Working capital management: 19% ratio to sales • CAPEX: INR 135 crore in Q2 • Free cash flow: INR 109 crore
Sustainability Initiatives • Commitment to carbon neutrality by 2040 • Goals for 100% renewable energy usage by 2024 • Ongoing projects for energy efficiency and water conservation • Target for 10% annual reduction in accident rates by 2025 • 8% female workforce representation goal by 2025
Q&A Highlights • Exports: 3% growth in H1 2023; focus on localization and diverse geography • CAPEX for 2023: Full-year plan of approximately INR 550 crore • Product Integration: Progress on Melior Motion and Ewellix acquisitions • Auto Aftermarket: Over 90% sales from manufactured products • Wind Energy Sector: 16% increase in wind equipment production; 31% growth in wind sector business • Electric Two-Wheelers: Reengineered bearings for high-speed motors • Railway Sector: Strong position with new projects like Vande Bharat trains • Localization Drive: Goal to increase domestic production to 80% • EV Transition: Ongoing investments in electric axle projects; cautious about profitability predictions
Closing Remarks • Focus on growing exports and optimism for recovery in the European economy in 2024 • Invitation for further questions via email
Schaeffler India Limited Analyst/Investor Meet Summary
Meeting Overview • Date: February 17, 2023 • Participants: Managing Director & CEO Mr. Harsha Kadam, CFO Mr. Satish Patel • Purpose: Discuss Q4 CY2022 earnings results • Transcript available on the company's website
Economic Context • Challenges: Global monetary tightening, Ukraine war impact • GDP Growth: Projected over 6.5% for India • Inflation: Beginning to moderate • Sector Performance: Strong in automotive (passenger vehicles), declines in 2-wheelers and wind energy
Financial Highlights • Q4 Sales Revenue: INR 1,794 crores (17.8% YoY increase) • EBIT Margin: Stable at 16.2% • Annual Turnover: INR 6,867 crores, driven by 60% export growth • Profit After Tax: INR 231 crores for Q4 • Dividend: INR 24 per share (50% increase from previous year)
Strategic Focus • Future Plans: Emphasis on electric vehicle applications and product expansion • ESG Commitment: Climate neutrality by 2040, 100% renewable energy by 2024, 20% water reduction by 2030
Board Meeting Insights • Resolution: Allocate 50% of net income • Focus: Sustaining margins, capital deployment, and cash generation
Export Performance • Strategy: Relocating manufacturing to India, investing in large/midsize bearings • Export Growth: Consistent quarter-on-quarter growth despite global challenges
Capital Expenditure • 2022 Investment: INR 500 crores, revised to INR 1,500 crores over three years • Focus: Domestic and export growth
Segment Breakdown • Revenue Composition: 55% automotive, 45% industrial • Railway Revenue: 4-5% of total sales, including metro and passenger vehicles
E-Mobility Developments • 3-in-1 e-axle system for electric vehicles • Expected content per vehicle: EUR 60 to EUR 70
Conclusion • Ongoing investments in railway technology and digital solutions • Invitation for further questions via email