In This Article:
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Total Income: INR112.43 crores, a 41% increase year-over-year.
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Profit: INR20.38 crores, a 29% increase.
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EBITDA: INR8.54 crores, reflecting a 20% increase.
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Profit Margin: Slight decrease due to startup costs of a new factory.
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EV Chargers Installed: Over 5,800 across India.
Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Servotech Power Systems Ltd (NSE:EQSERVOTECH) reported a substantial 41% increase in total income for the quarter, reaching INR112.43 crores, driven by the adoption of electric vehicles.
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The company secured orders for EV chargers from over 90% of oil marketing companies, capitalizing on government initiatives to reduce oil imports.
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Profit increased by 29% to INR20.38 crores, showcasing strong financial performance.
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Significant progress in product development, including technology that enables CCS2 chargers to accommodate electric vehicles with GB/T connectors, eliminating the need for dual charging infrastructure.
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The company has installed over 5,800 EV chargers across India, demonstrating its commitment to expanding EV infrastructure and clean energy solutions.
Negative Points
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Profit margins slightly decreased due to startup costs associated with the new factory, indicating potential short-term financial strain.
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The market for 30-kilowatt power modules is currently dominated by China, with a 90% share, posing a competitive challenge for domestic production.
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Working capital days are relatively high, around 110-112 days, which could impact liquidity and operational efficiency.
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There is a minor decline in EBITDA and PAT margins, raising concerns about long-term sustainability of profit margins.
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The company may face threats in the EV charging business due to increasing competition and market dynamics.
Q & A Highlights
Q: Can you provide insights into the competitive landscape and how Servotech's products differ from competitors? A: Raman Bhatia, Managing Director, explained that Servotech's products are distinguished by their advanced technology, such as the ability to accommodate different EV connectors, which reduces the need for dual charging infrastructure. This innovation positions Servotech favorably against competitors.
Q: Could you update us on the Uttar Pradesh project? A: Raman Bhatia mentioned that the Uttar Pradesh project is progressing well, with significant developments expected to contribute to the company's growth trajectory.
Q: What are the long-term sustainable EBITDA and PAT margins, considering the minor decline this quarter? A: Raman Bhatia noted that despite the slight decline, the company is focused on growth and expects margins to stabilize as new projects and innovations mature.