Key Highlights

Net sales in Indian operations grew by 24% YoY in Mar 18 quarter. All the divisions grew in India. Average growth seen by key customers like Maruti, M&M, Tata Motors and others for company's products is around 18.5%. Around 3% growth is due to higher raw material costs which are passed on and rest is due to higher value addition.

Indian operations clocked Ebidta margin of around 15.1% which is highest among past several quarters. Favourable raw material and scrap prices, higher volumes and better cost efficiencies helped the margins.

Optimistic about Indian operations in future and margins looks sustainable.

Prices of steel are increasing every month, saw some rate hike will come in further in Indian and global operations.

EU has seen a sales increase of 26% in Mar 18 quarter. 10% growth was due to positive currency translation while constant currency growth was at 16%, far ahead than the overall market growth.

The growth in EU was lead by Mexico plant of Bill Forge which was commercialized and supplies to Ford F Heavy duty flanges which also got commenced.

Caterpillar business grew by 46% in the quarter which ramped up well and will continue for few quarters.

However, margins in EU business stood at 12.8% and was affected due to higher steel price. However most of the customers have agreed on the price hikes.

EU margins can improve by 100 bps, post the passing of steel prices.

Long term growth will be similar to market growth in EU operations, which is lower than the current quarter growth which was higher due to higher ramp up of the new orders.

While cash flow is improving and balance sheet is getting stronger, the company has option of raising funds through QIP in future.

Rs 305 crore capex for incurred CY 17 largely from internal accruals. Capex for CY 18 will be lesser than that.