Shriram Pistons & Rings Ltd M&A Call Transcript

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

Question: Akshay Sam - Sam Capital - Analyst : Hello, sir. Am I audible?

Question: Akshay Sam - Sam Capital - Analyst : Sir, firstly, congrats on the acquisition. It's heartening to see very high margins of TGPEL. I had a few questions. Can you just tell us about what are the synergies you will have with another acquisition you did, Takahata, last year? And also since we've seen very high margins for this company in particular, I wanted to in particular know why are margins for Takahata very low despite them being around for 15 years already in India. Is it because of low capacity utilization or there are some other factors or the margins will eventually catch up with TGPEL? That's my first question.

Question: Akshay Sam - Sam Capital - Analyst : Sure, sir. My second question is regarding further acquisitions if you have planned in the pipeline. Obviously, you've said in the past that all of you are very active and looking out like a hawk for more potential investments. Can I know if the strategy of the company is to get into more use case applications since automotive industry is generally very cyclical? For example, if I may name a peer of yours, similar to what Tube Investments is doing, because there's so much potential for India's manufacturing sector in general. So looking at just, say, automotive with a narrow lens may not be the best strategy for future if we want to build more like an industrial hub in India. So in terms of just diversifying your use case applications, what is the strategy of management so that we'll not just look from the lens of automotive in general and look more like an industrial company? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:30AM, SHIE.NS - Shriram Pistons & Rings Ltd M&A Call

Question: Akshay Sam - Sam Capital - Analyst : Thank you so much. I'll get back in the queue.

Question: Vikram Rawat - East Lane Capital LLP - Analyst : Hi sir. Good evening. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:30AM, SHIE.NS - Shriram Pistons & Rings Ltd M&A Call

Question: Vikram Rawat - East Lane Capital LLP - Analyst : Thanks for the opportunity. Sir, my question is regarding given that these two acquisitions, how should we look for the scaling up of this plastic injection-molded business? And the second is on the (inaudible) side, what kind of capacity utilization levels are we running it? And current capacity, basically, how much potential revenue can we reach from the existing asset base? And is there any plan for the scaling up, like the CapEx we are doing in the Takahata, is there any further CapEx plan for this business? Thank you.

Question: Vikram Rawat - East Lane Capital LLP - Analyst : Thank you, sir. That's it from my side.

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Sir, congratulations and thank you for the opportunity. Sir, two questions. In this acquisition, out of overall revenue, how much would be roughly from the mold and how much would be from the moldings? And would there be entirely injection molding or the molds include the injection mold as well as blow mold and all?

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : So about 80% is the moldings, right?

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Molded parts, correct.

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Okay. And just a follow-up on this, in terms of margin, generally, mold margins, mold-making margins are much higher than the molding, right? So what would be a difference roughly in terms of the percentage?

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Sir, lastly, again on molds, how much would be the (inaudible) consuming molds? Out of that 20% revenue, how much is the third-party for which molds are manufactured?

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Okay. Sir, on utilization, how much it can go up with minimal capacity on debottlenecking --

Question: Mitul Shah - DAM Capital Advisors Limited - Analyst : Yes, sir. Thanks for the answer and all the best.

Question: Mumuksh Mandlesha - Anand Rathi Institutional Equities - Analyst : Yeah. Thank you, sir, for the opportunity. And congratulations on the acquisition, sir.

Question: Mumuksh Mandlesha - Anand Rathi Institutional Equities - Analyst : Yeah. Hi sir. Just firstly, I mean, in terms of the -- if you can help us how the Timex Group was -- I mean just in the landscape of this thing, what are the capabilities they have? And when we have the two partners, the Timex and the Takahata, how the technology will be then shaped up for the future, I mean, would it be different for different businesses or they would also combine it. Just firstly on this, sir. And --

Question: Mumuksh Mandlesha - Anand Rathi Institutional Equities - Analyst : And now, sir, it will be a play to both of the partners, I mean, both of the companies will be separately playing out in the market --

Question: Mumuksh Mandlesha - Anand Rathi Institutional Equities - Analyst : Okay, sir. Thank you. And sir, just on how is the ROC profile, if you can help us understand, for this business as of now? And I mean, are there any incrementally margin triggers you see that can support better margins for this acquisition, sir? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:30AM, SHIE.NS - Shriram Pistons & Rings Ltd M&A Call

Question: Mumuksh Mandlesha - Anand Rathi Institutional Equities - Analyst : Got it, sir. Thank you so much for this opportunity, sir.

Question: Akshay Sam - Sam Capital - Analyst : Hi sir. Thanks for the follow-up. Can you throw some light on the competitive landscape in the precision plastic molding segment in India? Because I've seen a lot of competitors abroad who are market leaders like OKE. They do very niche stuff such as plastic and metal fusion molding as well which --

Question: Akshay Sam - Sam Capital - Analyst : Are we the biggest in India, sir? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. DECEMBER 18, 2024 / 10:30AM, SHIE.NS - Shriram Pistons & Rings Ltd M&A Call

Question: Akshay Sam - Sam Capital - Analyst : So, sir, we have 15% market share at the moment and you think the market leader has what, around, say, [20%]? Is that it, sir?

Question: Akshay Sam - Sam Capital - Analyst : Understood, sir. Thank you so much.