Sandhar Technologies hosted a conference call on Nov 12, 2024. In the conference call, the company was represented by Mr. Jayant Davar : Co-Chairman and Managing Director and Mr. Yashpal Jain : CFO.

Key takeaways of the call

In Q2 FY25, the company achieved significant YoY PAT growth along with enhanced EBITDA margin.

With an increased focus on enhancing operational efficiency, improving margins, generating free cash flow, and boosting return on capital employed, the company anticipates strong growth in the coming quarters.

The Investment in new projects has started generating revenues.

The company has guided revenue of Rs 4,100 crore for FY25 and Rs 4,600 crore for FY26, with an EBITDA margin of approximately 11%.

The company inaugurated and successful commissioned cutting-edge manufacturing facility namely Sandhar Auto Electric Solutions (Wholly Owned Subsidiary Company) strategically located in Behrampur, Haryana. This new venture is poised to revolutionize the EV product line with its exceptional range of Motor Controllers, Battery Chargers and DC-DC Converters, designed specifically for the 2-wheeler and 3-wheeler markets.

In Q2 FY25, 2-Wheelers contributed 63.3% to revenue, Passenger vehicles 16.1%, OHV 14.3%, CV 1.4% and others 4.9%.

In H1 FY25, 2-Wheelers contributed 62.1% to revenue, Passenger vehicles 16.7%, OHV 14.4%, CV 1.6% and others 5.2%.

In Q2 FY25, locking and vision systems contributed 23.9% to total revenue, Cabins & Fabrication 13.6%, Sheet Metal 18.1%, ADC – Overseas 11.7%, ADC – Domestic 14.4%, Assemblies 10.4% and Others 7.9%.

In H1 FY25, locking and vision systems contributed 23.9% to total revenue, Cabins & Fabrication 13.7%, Sheet Metal 18.4%, ADC – Overseas 12.3%, ADC – Domestic 13.6%, Assemblies 10.3% and Others 7.8%.

The company is focused on diversification of product portfolio and deleveraging balance sheet.

The company expects to benefit from increasing wallet share with customers and rising content per vehicle.

The company recorded strong turnaround of its JV businesses. Six of its JVs have become EBIT positive, which will start contributing to profits in coming quarters.

Romania project is moving towards maturity and is expected to breakeven by end of FY25.

Company expects adoption of smart locks to accelerate in FY25, which auger well for the company as smart locks costs 8-10 times more compared to mechanical locks.

Suzuki order for smart lock has been delayed from Nov 2024 to Jan 2025.

The company is experiencing strong growth in its die casting sheet metal business. Its capacity utilization ranges from 55% to 82%, providing room for further growth.

In terms of Geographical Breakup, standalone contributed 75.2% to total revenue in Q2 FY25, Indian Subsidiaries 13.1% and Overseas Subsidiaries 11.7%.

Standalone contributed 74.6% to total revenue in H1 FY25, Indian Subsidiaries 13.1% and Overseas Subsidiaries 12.3%.

Operating cash flow for H1 FY25 and Q2 FY25 was Rs 163 crore and Rs 53 crore, respectively.

Capex for H1 FY25 was approximately Rs 90 crore, with management projecting a total capex of Rs 250 crore for FY25.

Gross debt stood at Rs 620 crore as on 30 September 2024.