Shriram Pistons & Rings Ltd Q1 2025 Earnings Call Transcript

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

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Yeah. Good evening, sir, and thanks for the opportunity. Congratulations on strong performance particularly in terms of consolidated revenues. Sir, my first question pertains to the subsidiaries. We've seen very healthy growth in revenues as well as margins even on QoQ basis. Could you point out reasons for the same? Any order wins in EMFi or any other possible factors that you would like to call out?

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Understood, sir. That's very encouraging to hear. Just any color possible in terms of the end use segments, not specific customer names? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Understood. And sir, in your prepared remarks, you mentioned about looking for land in Neemrana adjacent to the existing facility. So what could be your outlook in terms of CapEx for this year and next year?

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Understood. And just finally, from my side, anything on M&A that you would like to highlight? The kind of candidates we are still looking for and financial parameters, et cetera, that we look at? Anything that you would like to highlight?

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Understood. Thank you, sir. That's it from my side. Wish you all the best. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Akshay Sam - Sam Capital - Analyst : Hi, team. Congrats on those numbers on a usually lean quarter. My first question is regarding the flex-fuel applications. For example, Bajaj launched recently a Freedom bike which is CNG powered. So is my understanding correct, if it gains more popularity, the value of products supplied by us for more flex-fuel products will go up because it's more complicated?

Question: Akshay Sam - Sam Capital - Analyst : Sir, my second question is regarding the two new subsidiaries, SPR EMF and Takahata. So with Takahata, obviously, we have room for expansion. Is it more related to more applications that will go forward as far as building from our customers? And regarding -- I just wanted to know that what is our right to win in this business. Because obviously, we are not the first company supplying the motors and controllers and we are a bit, I won't say late to the party, but we are not the first. (technical difficulty) in the EV business. That's all from me.

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : Good afternoon, sir, and congratulations on the good set of results. I am a shareholder of the company as well. And I'm just -- I have known this company for more than 15 years (technical difficulty) working closely with the finance team. Now over the 15 years, the company has gained a lot of respect across segments. Now having said that, there was an announcement and I'm going to ask a couple of quick questions regarding that. Regarding the facility of INR15 crore being extended to the MD, CEO. Now this question is to Mr. Gupta, there is a clause in Companies Act, Section 186, clause 7, which says no loan shall be given under the section at a rate of interest lower than the prevailing yield of 1 year, 3 year, 5 year or 10 year government security closest to the tenor of the loan. So is that not applicable in this case?

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : Okay. So this would be applicable to all the directors in that case?

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : Okay. And there was no observations from the independent directors on this?

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : Okay. Thanks for the clarification, sir. And one last question. There was a mention of listing on BSE some time back, I think the process when it was initiated. Is that process still on? Are there any timelines around it?

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : No. That's fair enough, sir. So I didn't want to follow up with the question, but the fact that you're calling it as an advance, I mean advance would, ideally theoretically speaking would be against rendering of some services or goods, but there is no additional service or good which is being rendered against this additional advance, right?

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : I mean as I said, I've been following up -- I followed your company, worked with your company and your management. So no further questions on that, sir. (multiple speakers)

Question: Rajit Aggarwal - Atharva Investment Managers - Analyst : So usually, it would take a quarter, two quarters. I'm not aware of that process. I'm just -- just to know, and it could take up to six months or up to one year?

Question: Sanjay Kular - ACME Private Limited - Analyst : Compliments to you for delivering excellent results. My question is very simple. What is the quantum of sales we expect to generate from subsidiaries? And secondly, follow up of that and in year-one, year-two and year-three, and do we have any plans to demerge this company probably at some point in time and give the shares of this company to the shareholders of Shriram Pistons and create more value for and add more value for the shareholders? Thank you.

Question: Sanjay Kular - ACME Private Limited - Analyst : Okay. I'll repeat it. Sir, what is the quantum of sales do we expect from the subsidiaries in the year one, year two, year three? Since we already started business and we started winning the businesses. So would you like to say something about quantum of sales?

Question: Sanjay Kular - ACME Private Limited - Analyst : Okay. Where do you see these two companies going in next five years combined sales of these two companies? Would you like to say -- what's your vision like?

Question: Abhishek Shah - Ambit Pvt. Ltd. - Analyst : Hi. Good evening and congratulations on a good set of numbers. So just in continuation of the previous question, just wanted to get a sense of how you're looking at FY25 on a consolidated basis. Any colors that you can share in terms of revenue growth, even relative to, let's say, the auto industry and in terms of this 22% EBITDA margin, how should we think about that in terms of sustainability or expansion going forward? Thank you.

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Yeah. Thank you for the follow up, sir. Sir, in terms of the Q1 gross margins if I look at, there was good improvement on sequential basis. Any reason for the same?

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Consolidated. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Jaimin Desai - Emkay Global Financial Services Ltd. - Analyst : Okay. And sir, what is the outlook in terms of exports and aftermarket? Are we continuing to see good inquiries and orders related to the core products especially because of businesses moving from China and Europe and other parts of the world to India? Anything you would like to share on that one?

Question: Prateek Bhandari - AART Ventures - Analyst : Yeah. Hi, sir. Thanks for the opportunity. Just wanted to understand that as to what the kind of CapEx plans -- hello?

Question: Prateek Bhandari - AART Ventures - Analyst : Yeah. What kind of CapEx plans are we having for the FY25?

Question: Prateek Bhandari - AART Ventures - Analyst : Yeah. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Prateek Bhandari - AART Ventures - Analyst : And you also mentioned that you are in the process of acquiring land parcel in Neemrana.

Question: Prateek Bhandari - AART Ventures - Analyst : So have we done that completely or we are still in the process of the same?

Question: Prateek Bhandari - AART Ventures - Analyst : And this is for Takahata, right?

Question: Prateek Bhandari - AART Ventures - Analyst : All right. Thanks a lot.

Question: Prateek Bhandari - AART Ventures - Analyst : Right. And when we can expect the same to ramp up?

Question: Prateek Bhandari - AART Ventures - Analyst : Last quarter of this year?

Question: Akshay Sam - Sam Capital - Analyst : Thanks for the follow up. Regarding SPR EMFi, you said the last quarter of this year, the plant will be -- new plant will be operational. Is that correct?

Question: Akshay Sam - Sam Capital - Analyst : When can we expect optimum utilization of the facility? I mean if you have a rough timeline if possible?

Question: Akshay Sam - Sam Capital - Analyst : Sir, also if I may, are there also plans on the annual to move into different categories in the EV space and not just be limited to (inaudible). Is that other (technical difficulty) plan to do that?

Question: Akshay Sam - Sam Capital - Analyst : Sure, sir. So what I'm saying is are there future plans to move into adjacent categories other than motors and controllers?

Question: Pradeep Chaudhary - Saamarthya Capital - Analyst : I want to ask regarding your aftermarket operations. What is our current market share and where do we see us in the next two years to two years in aftermarket?

Question: Pradeep Chaudhary - Saamarthya Capital - Analyst : Any color on the market share currently? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Prateek Bhandari - AART Ventures - Analyst : Hi, sir. I just wanted to understand that you mentioned that in terms of our exports, we are facing some issues when it comes to the queries from Europe due to the geopolitical tensions. So I wanted to understand as to which other parts of the world are we getting the inquiries from. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 29, 2024 / 10:30AM, SHIE.NS - Q1 2025 Shriram Pistons & Rings Ltd Earnings Call

Question: Prateek Bhandari - AART Ventures - Analyst : So Europe is the largest market in terms of our exports?

Question: Prateek Bhandari - AART Ventures - Analyst : All right. And in terms of the non-automotive applications, you stated that we are catering to many industries as well. So how much percentage of it flows to PSU and private if you can give a bifurcation of the same?

Question: Bharat Sheth - Quest Investment Advisor Pvt. Ltd. - Analyst : Hi, sir. Congratulations on good set of numbers. Sir, my only question is that in this piston rings and engine valves, what is our capacity utilization? That is first. And second, if (technical difficulty) hybrid vehicles, so how we are really placed to address that market?

Question: Bharat Sheth - Quest Investment Advisor Pvt. Ltd. - Analyst : Okay. Great. And sir, second question related to this, the EV -- sorry, the hybrid vehicle. Sir, is it safe understanding that, that it also provide us to improve our piston and ring business as well as motor and controller also?

Question: Bharat Sheth - Quest Investment Advisor Pvt. Ltd. - Analyst : To get some kind of I mean, see, how much value per content to, I mean, in that hybrid vehicle increases?