11.03.2022 (FY22Q3 concall notes)
• Input cost inflation + freight cost + higher gas prices lead to shrinkage in EBITDA margins. Higher other expenses was mostly due to high gas prices. Also in Q3FY21 prototyping contribution was higher which led to high margins last year
• Will try to maintain 20-23% EBITDA margins
• Net debt has increased by 16 cr. over Q2
• Semi-conductor shortage had much lesser impact on their customers until now
• Ongoing capex of 50 cr. is close to fully spent
• Electric vehicles (EVs):
o Got a new order from a domestic 2-wheeler manufacturer (incumbent) that will make EV scooters (under confidentiality)
• ZF: SOP is in June 2022, have started sea shipments in March 2022. Cleared level 1 validations and will be dispatching to RACL’s warehouse in Europe
• In domestic segment, main focus is on large incumbent companies followed by newer companies who are starting up in the EV segment. However, the main focus is on getting business from incumbents
• There is no systematic trend in raw material price spurts
• Focus on lower payable days as they can get better pricing thereby increasing margins. Working capital costs are much lower than the margin benefit it brings
• Hiring: Hire freshers out of colleges, have a 2-year training program on the shop floor
Disclosure: Invested (position size here, no transactions in last 30 days)