Thread by @TYMFinance

Talbros Automotive conducted the concall today at 12:00 noon for Q1 FY22.

"Talbros in working hard to supply product to entire eco-system and entire value chain"

Here are the Conference call highlights ☎️🧵

Industry Updates:

• Supply Shortage and Chips Shortage is still creating issue in the industry.
• Automobile segment saw massive hit. However this quarter has seen pick both in domestic and export front.
• 7-10% of 2 Wheeler market is expected to convert in EV by 2025.

EV vs OEM:

• There is lot more disruption going on in the EV industry, hence any major investment in EV segment may turn risky.
• However there is lot more scope in India, as consumption is very less which. Hence even OEM segment will have increasing growth in India.

Revenue Share:

- Gaskets: 53%
- Forgings: 31%
- MTC: 10%
- NLK: 3%
- TMR: 3%

(Geographic Revenue Share Breakup in Image)

Export:

• Export business is processing well. Export revenue share increased from 25% to 28% in current quarter.
• Standalone Forgings business achieved 53% revenue from Exports.

Gasket Business:

• 100% Asbestos Free players.
• Talbros has ~40% Market share in Gaskets, and is almost 3x the nearest competitor.
• Co. is looking with different OEM and EV company in export market to grow business at double digit growth, for next 2-3 years.
• CAPEX: ~10cr

Forgings:

• 50% of business came from export, which mgmt expect to be sustainable.
• Also supplying to EV players in global market. (Received order worth 25 cr to be delivered in FY22 for Plugin Hybrid EV)
• CAPEX of 12-13 cr for machines and building products

Joint Ventures:

• Company is looking for new products to introduce with JV, while there are available facility which may lead to increase in revenue.
• Maruti may impact sales
• No major capex planned with JV this quarter.

Margin:

• Co. expect EBIT margin to be in range of 12-14% and mgmt expect this to be sustainable.
• There may impact of margin in QoQ basis, however annually margins are expected to averaged out with mentioned target.

Capacity Utilization:

- Gasket- 76%
- Forging- 72%
- Nippon Leakless - 60%
- MTC- 70%
- Talbros Marugo- 75%

Company expects this utilization rate to increase

Customer:

• Maruti remain key customer of Talbros, whose plant was shut down temporarily , during quarter leading to decline in sales.
• Top 5 customers contributes around 40% of the revenue share.
• Co. sees lot of scope in export for and tie-up with new customer.

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