Wonderful #racl geartech concall. I loved it. Key takeaways below:
1. RACL is EV ready
In b/w lines: EV require higher precision gears. Very few cos can make. Much higher gross margin.
1. RACL is EV ready
In b/w lines: EV require higher precision gears. Very few cos can make. Much higher gross margin.
Already doing tech investment in capex to be EV ready. Investment requirement in tech is much higher for EV gears. EV components will be 3-4% of topline in FY22.
2. Working with ZF on a BLW series 7 car for next year launch. Working on e-scooter or european company
In b/w lines:
1st marks RACL foray into premium luxury passenger vehicle transmission gears. 2nd is 1st time they designed entire drive train or kinematics.
In b/w lines:
1st marks RACL foray into premium luxury passenger vehicle transmission gears. 2nd is 1st time they designed entire drive train or kinematics.
For the 2nd, RACL will be sole supplier for next 10 years. Already have some visibility about volumes. Customer came to RACL 2-3 years ago, they co-designed the drivetrain.
3. What differentiates RACL. Why does it have 25% OPM in an industry which has 10-15% OPM?
From 2007-8 for 7-8 years they invested in building technology capabilities. They silently worked on acquiring skills and technology expertise which makes them indispensible for the client
From 2007-8 for 7-8 years they invested in building technology capabilities. They silently worked on acquiring skills and technology expertise which makes them indispensible for the client
They work on co-designing solutions with customers. Customer comes with requirement & drawing, then RACL suggests best possible way to realize highest value added for client while maintaining margins for RACL. Because they are able to provide end to end soution for engine gears..
because they provide such high quality work, client/customer do not negotiate too hard on the price. This is why they are able to command better margins.
If you like the thread, please RT so maximum investors can benefit.
Typo: BMW 7 series. :-)
Not comparing:
But sona comstar trades at 13x revenues, and racl at around 13x earnings accounting for the covid lockdown related bad earnings in q1 fy21.
You do the math.
But sona comstar trades at 13x revenues, and racl at around 13x earnings accounting for the covid lockdown related bad earnings in q1 fy21.
You do the math.
As always standard disclaimer applies: I am invested and biased. This is not buy or sell reco. Request everyone to do their own research. 🙏🙏 Please consider joining vp as well. wonderful research happens on Vp specially for smallcaps :
forum.valuepickr.com/t/racl-geartec…
forum.valuepickr.com/t/racl-geartec…
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