In This Article:
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Revenue from Operations: INR414.98 crores, up by 37.46% YoY.
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EBITDA: INR66.95 crores, growth of 30.05%.
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EBITDA Margin: 16.13% for the quarter.
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Net Debt: INR432 crores as of December 31.
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Mark-to-Market ForEx Loss: INR3.76 crores, notional in nature.
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One-Time Expense: INR2.2 crores related to the merger of Pitti Castings.
Release Date: February 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Pitti Engineering Ltd (BOM:513519) registered the highest volumes for machine components in the company's history during Q3 FY25.
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The company developed and started commercial supplies for parts used in hydrogen electrolyzers, indicating a diversification into new markets.
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Revenue from operations for the quarter was INR414.98 crores, up by 37.46% on a YoY basis, showcasing strong financial growth.
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EBITDA for the quarter stood at INR66.95 crores, registering a growth of 30.05%, with an EBITDA margin of 16.13%.
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The commissioning of a new coating line positions Pitti Engineering Ltd as the only commercially available source for re-varnish laminations using hydro and thermal power generators, offering import substitution opportunities.
Negative Points
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The sheet metal side of the business experienced a decline in volumes on a quarter-on-quarter basis due to new emission control norms and market volatility.
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The company incurred a INR3.76 crores mark-to-market ForEx loss, which is notional in nature, and a one-time expense related to the merger of Pitti Castings amounting to INR2.2 crores.
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Volatility in the small LV motor market and disruptions in the alternator market due to CPCB Bharat VI norms are expected to continue affecting the business until Q1 FY25.
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Despite a promising product development pipeline, the company faces challenges in meeting its INR2,000 crore revenue guidance for the full year, with expectations now around INR1,750 crores.
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The company's net debt stood at INR432 crores as of December 31, indicating a significant financial obligation.
Q & A Highlights
Q: Can you explain the reason for the expansion in gross margins this quarter? Is it sustainable? A: The expansion in gross margins is primarily due to the significant growth in our machine component business, which typically has higher margins. We expect these margins to fluctuate slightly based on the product mix between machine components and sheet metal business. (Akshay Pitti, Executive Vice Chairman and Managing Director)
Q: What is the consolidated volume for the quarter, and how does it compare to previous guidance? A: Consolidated volumes for lamination products were about 14,738 tonnes. We are on track to meet our guidance of 62,000 tonnes for the full year. (Akshay Pitti, Executive Vice Chairman and Managing Director)