In This Article:
Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Sandhar Technologies Ltd (BOM:541163) reported a total income growth of 11.5% year-on-year for Q2 2025 and 10.9% for the first half of FY 2025.
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The company's EBITDA margin improved by 110 basis points year-on-year for the quarter, reaching 10.6% in Q2 2025.
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Six out of seven joint ventures are now profit-positive, with consistent performance improvements.
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The Romania plant is expected to reach break-even by the end of the financial year, indicating progress in overseas operations.
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The company has started commercial production of battery chargers for electric vehicles, receiving positive market feedback.
Negative Points
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One joint venture, Kwong San, remains marginally in losses, though it is expected to turn around.
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The company's expansion projects in Pune are delayed, with commercial production expected to start by January 2025.
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There is uncertainty in the automotive market due to geopolitical situations and fluctuating demand.
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The company faces challenges in achieving higher margins and returns on capital compared to industry peers.
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The EV business's future growth is uncertain, as it depends on the establishment of electric vehicles as a permanent fixture in the automotive industry.
Q & A Highlights
Q: What is the growth outlook for the sheet metal and cabin and fabrication business in Q2 and H1? A: The sheet metal business has seen significant growth, with monthly revenues doubling from 20 crores to 40-42 crores. The cabin and fabrication business is expected to close at around 550 crores for the current financial year, with a growth rate of 10-12%. (Respondent: CFO)
Q: How do you see top-line growth and margins evolving over the next 2-3 years, and why are margins lower compared to peers? A: The company expects margins to improve by 50 basis points annually, reaching around 11-11.5%. The nature of the business, which involves core manufacturing, affects margins. Revenue guidance for the next year is between 4,500 to 4,600 crores. (Respondent: CFO)
Q: What is the expected growth in the EV business in the coming years? A: The EV business's growth depends on the establishment of EVs in the market. The company is supplying components like DCDC converters and motor controllers for the two-wheeler industry, which is expected to grow faster. However, specific revenue projections are not included in the current business plans. (Respondent: CEO)