Kirloskar Oil Engines hosted a conference call on May 9, 2024. In
the conference call the company was represented by Gauri Kirloskar, Managing
Director and Sachin Kejriwal, CFO
Key takeaways of the call
Standalone B2B sales for Q4FY24
stood at RS 1210 crore (up 22%yoy) with sales of powergen being Rs 518 crore
(11%yoy), industrial at Rs 309 crore (up 28%yoy), distribution &
aftermarket at Rs 210 crore (up 210 crore) and international at Rs 173 crore
(up 70%).
For FY24 the standalone B2B sales
was Rs 4182 crore [ Powergen up 15% to Rs 1905 crore; industrial up 18%yoy to
Rs 1008 crore; Aftermarket up 19% to Rs 749 crore, international sales up 32%
to Rs 520 crore. In FY24, the International sales surpassed Rs 500 crore for
the first time.
The B2B business of the company
is in transition from simple diesel engine manufacturer to technology driven
leader in the power and energy systems. B2B segment growth of the company was
backed by strong demand in key sectors such as construction, infrastructure,
and railways.
Power Generation: Strong demand
for CPCBII gensets. Continue to fulfill orders for both CPCBII and CPCBIV+.
Significant growth in Gas genset sales, good demand for OptiPrime, executed
2000 kVA OptiPrime orders in Q4FY24.
CPCB IV+ products have experienced good traction.
Natural Gas portfolio – getting
certified for cpcb4+. Demand for this product come where natural gas supply is
available.
Industrial: Industry biz grown
consistently. Traction from construction
and railways segment. BSV program on track. Starting FY25 on very strong order
board.
Standalone B2C sales for Q4FY24
were up 10% to Rs 168 crore [ WMS sales at RS 153 crore (up 22%) and FMS at RS
15 crore (down 45%)].
Efforts focused to enhance
profitability in the B2C segment have yielded substantial improvements in
segment PBIT compared to the previous year.
In case of B2C the EBITDA margin currently was 6.6% and that will slightly go up going forward. B2B business EBITDA margin was 14% and the company
looks to improve it going forward.
Embarking on the final year of
our 2X 3Y journey, the company is confident in the ready to stay the course and
meet targets i.e. Revenue of Rs 65 billion and double digit EBITDA margin.
PBT of LGM jumped from more than
4 times from Rs. 8 Crore to Rs. 34 Crore Y-o-Y. Export is now more than 30% of
the revenue for LGM with growth of 15% (YOY) with margin improvement
Transitions associated with
emission norm changes: CPCB+ demand to gather momentum as the deadline getting nearer at Jun 30,
2024. In Q4FY24 the powergen demand is mix of cpcb2
and cpcb4+ engines. Expects gradual
pickup in demand for CPCB4+ product demand through the quarter ended Jun 2024. Volume of CPCB+ products may remain flat for
short term and pickup once the shift to CPCB4+ is complete. The companies that have their products
certified (including your company) will see market share gain. The company will
be better position to comment on realization once one or two cycle got
completed. Expect 35-40% growth in realization
in CPCB4+ products.
Import content for CPCB4+
products currently stand at 9-10% compared to
3% for CPCB2 products.
B2C - Increasing market share
with deepening market with channel expansion.
|