Here are my notes.
• 20-25% of CAPEX are funded through internal accruals and rest are funded by bank borrowings
• Ideal asset turns ~ 2, currently its 1.4x. Excluding land, useful equipment contribute ~140 cr.
• The gear capacities are fungible for ICE and EV customers, EVs require higher precision
• Instead of generating free cash, management believes to use cash to fund growth. With growth, reinvestment needs (in percentage terms) will come down
• Capex in 3 buckets: creating capacity for new customers, creating capacity for existing customers and modernization of equipment
• Capacity for gears, shafts and other equipment: Provide 5-7 mn parts in a year
• About 5-7% of vehicle cost is from gears
• 50 cr. CAPEX in FY21, plan another 50 cr. in FY22. Industry norm is to pay 20-25% as advances for procurement of machines
Disclosure: Invested (position size here)