Talbros Automotive Components hosted a conference call on Aug 8, 2024. In the conference call, the company was represented by: Mr. Anuj Talwar– Joint Managing Director and Mr. Navin Juneja– Director and Group CFO.

Key takeaways of the call

In Q1 FY25, gasket & Heat Shield Business grew 9% YoY. Forgings business grew 21% YoY, TMR grew 4% and MTCS grew 24% on YoY basis.

In Q1 FY25, 2&3 Wheelers contributed 16% to revenue, Passenger Vehicle 36%, HCV & LCV 23%, Agri & Off Loaders 12% and others 13%.

Subdued demand in the CV segment was managed with improved export sales and better cost controls.

In Q1 FY25, exports contributed 16% of Gaskets Revenue, 55% of Forgings Revenue, 18% Marelli Talbros Chassis Systems and 5% of Talbros Marugo Rubber.

The growth in Q1 FY25 was driven by effective order execution and operational efficiencies.

Capitalizing on consistent order inflows from leading OEMs, the Company anticipates a strong upward trajectory in business and profitability.

The company plans to introduce innovative and value-added products that meet the evolving needs of the customers. This will strengthen its market presence and drive sustainable growth for the company.

Over the last two years, company has been consistently securing new orders throughout product segments.

Based on market, OEMs contributed 61% to total revenue in Q1 FY25, exports 27%, aftermarket 3% and others 9%.

Management expects export contribution to increase to 35% by FY27.

The company plan to grow Gasket Business revenue by 13% CAGR till FY27 to Rs 700 crore supported by Large Order Book for New Products and increased Focus on Exports.

In Q1 FY25, 2&3 Wheeler contributed 23% to total gasket revenue, PV 10%, MHCV 30%, LCV 11%, Agri and off loader 11% and others 15%.

The company plan to grow forgings business by 23% CAGR till FY27 to Rs 500 crore supported by increased Focus on EV’s and growing geographical presence.

In Q1 FY25, 2&3 Wheeler contributed 2% to forgings business revenue, PV 37%, Agri and off loader 54% and others 7%.

In Q1 FY25, EV share in total revenue stood at 3.3% and management expects it to reach 12% in FY27.

The company has a diversified customer base. In Q1 FY25, its largest customer Maruti Suzuki India contributed 15% to revenue, Tata Motors 9%, Bajaj Auto 7%, Jaguar Land Rover 9%, Tata Cummins 7%, Cummins India 2%, BMW 5%, JCB 5%, DANA ITALIA SRL 3%, and VE commercial 3%.

Management expects Pune facility to start delivering good volume from Oct 2024 onwards.

In Q1 FY25, gaskets and heat shield business had a capacity utilization of 88%, forgings business utilization was 85%.

Management expects Total Debt to remain under Rs 100 crore.