Samvardhana Motherson International Ltd Q1 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Yes. So my question was on the wiring harness business. So on the consolidated segmental you've seen a very sharp improvement in the profitability of the wiring harness on both Y-o-Y and quarter-on-quarter. Given that Motherson wiring -- Motherson Sumi, wiring harness not really seen any margin improvement. Is it fair to say that part of this improvement is driven by PKC? And if that is the case, what is the outlook for the PKC business and the margin improvement trajectory there? Vivek Sehgal Pankaj, can you take that one, please?

Question: Amyn Pirani - JPMorgan Chase & Co, Research Division - Analyst : Okay. Okay. And just a broader question. Last quarter, we had heard from you that the conversations with customers with respect to cost inflation pass-through has been concluded. We had seen the benefits also of that. So as we stand at the end of 1Q, are there still some costs which are yet to be fully like pass through to the customers? And are there conversations going? And are there any benefits that we expect in the coming quarters? Vaaman Sehgal Look, these are moving parts, right? I mean, can you tell me where energy prices are going to be in the next couple of quarters? I don't think anybody really can. So all those things which are still really moving, which are volatile, those conversations will definitely continue until we don't see stability in all of that. I think definitely on the -- perhaps on the wage increases, obviously, that happen once a year. So those product cemented, already done. But some of these bits which are moving parts, there will be continuing conversations still we don't see stability in there and the customers also acknowledge that this has now become part of the daily operations. So wherever there is volatility that is not in our control, those conversations will continue. So -- and I think the customers also appreciate that and acknowledge it. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2023 / 12:00PM, SAMD.NS - Q1 2024 Samvardhana Motherson International Ltd Earnings Call

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : So first one is with regard to the EBITDA margin expansion in the volumes business, especially in recent quarters, it seems to be feeling (inaudible). Any key drivers you can share of? Or can you make it a part of PPG now your disclosures are more becoming vision-wise, what you're driving might be similar fund modules are providing what are the drivers and how sustainable they are so that we can get more productivity on their expansion or build them to a model. Vaaman Sehgal Kunal, I couldn't hear the question very clearly, there was some [casting] and the noise. If you heard it, can you answer it or direct it?

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : Sure. So I was saying the wiring and modules in both the divisions, it seems to be scaling a new high in terms of EBITDA margins in recent quarters. As your disclosures has improved on this division side, would you be able to give more color where it's coming from, what parameters are leading to this so that we can try to predict them and try to bring them in a part of our projections. Or can you just give us some sort (inaudible) which is driving this EBITDA scaling new highs in use to be.

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : And the second one is the September quarter seems to be bulky with two large acquisitions to be part of the revenue, if I see your SMRPBV, the presentation, right? So can you indicate -- have you decided where you will place the large acquisitions in terms of division disclosure? And any impact we need to see on the margin profile, if that is the case for those divisions? Vaaman Sehgal Kunal, can you take this? I'm not sure how much we can speak about these acquisitions at the moment.

Question: Pramod Amthe - Incred Research Services Private Limited - Analyst : And the last one is with regard to the M&A wins. The speed at which you're closing the deals, it looks impressive. So at the same time, if I had to look at your PPT, when you are talking about global growth and as you referred to the -- even though recession fears are there, but the actual volume momentum seems to be steady double digit. So I wanted to know your thoughts these discussions were always on and is there a change in fund availability for these entities, which is making you to get the deals at your valuation or terms and hence you were able to close it? Or what's happening in the environment, which is turning favorable to you? Vaaman Sehgal Kunal, I can start, and you can add. Look, I think we've always told you that we stay true to our vision to be a globally preferred solution provider. And I think we have really focused on making sure that wherever the customers have issues, we are really the people there to be able to give them a lasting sustainable solutions to these things. And our track record is speaking for itself. So whenever there has been acquisition that Motherson has done in the past, we have solved those problems. We continue to hold those assets, we invest in those assets, we are growing together with the customer. And the track record all really speaks for itself. So I really can't comment on the others, but I can tell you that definitely, we are extremely focused on the customer. And working together with them, finding sustainable solutions and trying to get out of the mess that we've seen in the last few years with all these impacts that have come and hit on all sides, and finding good solutions to these companies, which have good technology or have a strategic location advantage or many things that could be working for it, which the customer wants to preserve and make sure that when a company like Motherson comes in, not only do we preserve that, but we enhance it. And that's why the trust is there. And I think that's all I can say. Of course, the seem hard work done by the team, the board really appreciated. This is a large number of acquisitions that have happened in a short period of time. The entire Motherson team has been working around the clock to make sure that the customers requests have been answered, and we've given it our best shot to come up for lasting solutions for these companies. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 10, 2023 / 12:00PM, SAMD.NS - Q1 2024 Samvardhana Motherson International Ltd Earnings Call And we're really quite proud of our efforts. And we've been patient in the last few years waiting for the right moment to really go out there and do acquisitions. So that's a combination of all these things coming together and definitely very, very hard work done by the teams to get us here and to make sure that the customers trust is full in us.