Thread by @TYMFinance

Pricol conducted their concall for Q2 FY 22

"Target of 2,400 cr of revenues by 2024"

Here are the conference call highlights 👇🧵

Business Updates:

• Shortage of raw material % chip shortage impacted the production, and increased the cost of production with higher freight, resulting in an EBITDA reduction of ~2.5%.
• Commence production of the oil pump for Polaris (export customer).

• Continue to invest between 4.5 to 4.8% of our sales
on both product and process technology

• Long Term borrowings: expected to be down to 100cr in FY22, & debt free by March 23 (Long term borrowing of 142 cr & working capital borrowing stands at ~80 cr)

Pumps:

• Migrating into the larger pumps as a part of the de‐
risking strategy for increasing export.
• Caterpillar, (large water pump) will be exporting to US, which weighs ~100 kgs.

Newer Product:

• Co, is seeing a major transformation from the BSIV to BSVI.
• More than 60% of revenue growth has come from new product since 2020.
• Some of the existing products has been replaced by new products. For this, co. is investing in R&D to the extent of 4.5 - 5%.

Customer:

• 3 out of 4 Tata vehicles will be with Pricol products over the next few months, (across both commercial as well as the passenger vehicles)
• 5% of our revenue comes from Tata Motor, with expectation of 7‐8% of our total revenue by 3-4 year.

Export:

• ~10% of our revenue came from export business.
• On track for export share to be 20% of turnover by 2025.

Competition:

• With in‐house capability on both, tools & die‐cast part, Pricol is largely backward integrated.
• While co. is moving up the value chain & many electronic clusters are coming into fray.
• New products like the telematics, will lead Pricol to
grow in IOT sales

CAPEX:

• Co. will be CAPEX light in FY22 and FY23 & by end of FY23 co will start a cycle of capital assets
expansion to keep up the growth drivers, by Pricol is expecting to be debt free.
• For expansion in new products, there will be some fundraising, but not before March 23.

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