FY22Q2 concall notes
• 500-600 unique parts are manufactured each month with total volumes averaging 7-8 lakh every month
• Piaggio is the oldest customer, recently added Escorts for their domestic tractor division
• Ventured into passenger cars through ZF
• Electrical vehicles (EVs):
o Started export supplies to EV scooter parts
o BMW Germany launched EV scooter in Germany (model number CE04) which is being supplied by RACL
o In discussion with one EV scooter manufacturer in India
o Number of parts reduce in a product kit in EVs while realizations for the kit remains the same implying higher realization per part
o Have started giving breakup of ICE vs chassis & suspension (which will be required in EVs) vs EV revenue. FY22 will be 4% from non-ICE
• As a de-risking strategy, RACL is moving towards steering parts, the current parts are more towards the engine
• Bikes are 50% of revenues currently
• RACL was the first gear exporter to Japan in 2005
• The number of mechanical processes in-house is higher than competitors which leads to a complete business solution for clients
• Have very clear visibility of 500 cr. by FY25 with tied up business (or in advance stages of business being tied up). ZF and MAN trucks will contribute to 20-25% of 500 cr. by FY25. Comfortable with the current leverage (~0.98x)
• Internal focus is to keep exports to 65-70% and domestic mix to 30-35%. Domestic business was adversely impacted due to de-growth in 3-wheeler business. The new relationship with Escorts and TVS should improve domestic share
Disclosure: Invested (position size here)