PPAP Automotive Limited

rs,

nspire people to outperform their potential in order to exceed the expectations set forth by customers, society as well as stakeholders. The Company's state-of-the-art manufacturing facilities are sprea

12.5%

g forward. Compared to last year, the quarterly production volume of the industry is almost down by 12.5%. During this quarter, we have started delivering parts for the newly launched Maruti Celerio as wel

100%

or the Company which is being rolled out in Elpis Components Distributors Private Limited, which is 100% subsidiary of PPAP. The focus for this vertical continues to develop and supply spare parts as well

rs 250

well as premium car accessories and cleaning products for the customers. Currently, the Company offers 250 plus products as spare parts and 50 plus products for accessories. We have already established a d

50%

ve transformation the government policies are also supporting it. The expectation is that more than 50% of the industry may be switching over to electric vehicles in the next four to five years. We hav

7.1%

nts for Q3 and nine months for financial year 2022. For the standalone results, the revenue grew by 7.1% from Rs.103.8 Crores to Rs.111.2 Crores in Q3 on a quarter-on-quarter basis. Revenue witnessed a st

Rs.103.8 Crore

and nine months for financial year 2022. For the standalone results, the revenue grew by 7.1% from Rs.103.8 Crores to Rs.111.2 Crores in Q3 on a quarter-on-quarter basis. Revenue witnessed a strong growth of 41% i

Rs.111.2 Crore

r financial year 2022. For the standalone results, the revenue grew by 7.1% from Rs.103.8 Crores to Rs.111.2 Crores in Q3 on a quarter-on-quarter basis. Revenue witnessed a strong growth of 41% in nine months finan

41%

Crores to Rs.111.2 Crores in Q3 on a quarter-on-quarter basis. Revenue witnessed a strong growth of 41% in nine months financial year 2022 against the previous year financial year 2021. EBITDA remained

Rs.11.7 Crore

months financial year 2022 against the previous year financial year 2021. EBITDA remained flat at Rs.11.7 Crores on a quarter-on-quarter basis with company achieving a double-digit EBITDA margin of 10.5% in Q3 f

10.5%

Rs.11.7 Crores on a quarter-on-quarter basis with company achieving a double-digit EBITDA margin of 10.5% in Q3 financial year 2022. EBITDA grew by 62.8% to Rs 27 Crores in nine months of financial year 20

62.8%

h company achieving a double-digit EBITDA margin of 10.5% in Q3 financial year 2022. EBITDA grew by 62.8% to Rs 27 Crores in nine months of financial year 2022 on a year-on-year basis. The margins are unde

“In the past two years, we have restructured ourselves internally and identified five business verticals which will be catalyst for growth going forward.”

“We are developing approximately 400 parts for our customers which will be in production in the next two years.”

“We believe the chip shortage issue is easing out gradually which will enable the industry to deliver higher sales going forward.”

“We are very confident that this vertical will show promising growth going forward.”

“Our aim is to improve capacity utilization levels going forward and achieve operational efficiencies.”

“Just to summarize, we anticipate that industry tailwinds, the development of favorable policies and a vision for long-term and sustainable growth will provide us with numerous Opportunities in the coming years.”

“When can we expect an uptick in capacity utilization?”

“On a steady state basis what kind of EBITDA margins can the Company achieve going forward?”

“| believe that issue is easing out right now so Can we expect a normal scenario for the same?”

“Putting a number towards this will be a little difficult for us because we do not want to give any guidance or something, but we are working hard and we are quite positive in finding new opportunities in all these five verticals that we have been talking about till now.”

Abhishek Jain

3

Sachin Jain

2

Amit Shah

1

Dipti Kothari

1

Moderator

1

Abhishek Jain

Ladies and gentlemen good day and welcome to PPAP Automotive Limited Q3 FY2022 earnings conference call. This conference call may contain forward-looking statements about the Company which are based on the beliefs, opinions and expectations of the Company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode and anyone who wishes to ask a question after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing “*” then “0” on your touchtone phone. Please note that this conference is being recorded. | now hand the conference over to Mr. Abhishek Jain — Managing Director & CEO from PPAP Automotive Limited. Thank you and over to you, Sir! Thank you Tanvi. Good evening, ladies and gentlemen. Welcome to our Q3 and 9M financial year 2022 earnings call. | am Abhis

Amit Shah

Our consolidated results, our aftermarket subsidiary has grown profitable and contributes positively. The EV component subsidiary as | just said being a new company is expected to contribute positively this quarter. Just to summarize, we anticipate that industry tailwinds, the development of favorable policies and a vision for long-term and sustainable growth will provide us with numerous Opportunities in the coming years. All these opportunities are technologically and strategically ready for us to capitalize on. Also, we perceive significant improvement in the performance of the individual business verticals which will enable our company to scale new heights in future. Thank you everyone for your patience listening and now Tanvi we can open the floor for question and answers. We will now begin the question-and-answer session. The first question is from the line of Amit Shah from Ace Securities. Please go ahead. Thank you for taking my question. Sir firstly Sir the company’s capacity

Abhishek Jain

Like | said apart from this battery pack system, currently we are extending our existing portfolio which is plastic parts and tools through all these EV two-wheeler makers so, right now we have RFQs from two of such makers for developing their complete plastic parts and tools also. Understood. Thank you. Thank you. The next question is from the line of Anil Kumar Sharma an Individual Investor. Please go ahead. As there is no response, we will move to the next question, which is from the line of Nisha Desai from Raga Securities. Please go ahead. Good afternoon, Sir. | have a couple of questions. | wanted to understand we are witnessing a pressure on EBITDA margins on sequential as well as on a year-on-your basis so what are the reasons for the drop in the margin? It is primarily due to the commodity prices, which have unprecedentedly gone up in the last nine months so, operation side we are quite efficient. We continue to be efficient but this nine-month sudden and unprecedented prices

Abhishek Jain

Sir like how much percentage of rise in the raw material price have you passed through to the customer in this quarter Q3? In this quarter because if you see the major increase was in the Q2 in the raw material prices so because there is a quarter lag on the part so that was passed on to the customer because there is 50%:50% of the agreement with the customer and 50% part we are able to pass on the materials increased cost to the customer so in this quarter the prices has been literally a bit stable; however, the impact which has come due to Q1 and Q2 that is reflecting in the Q3. Sir, then on the industry front can you guide us through this current issue of the semiconductor chip shortage which is going on? | believe that issue is easing out right now so Can we expect a normal scenario for the same? For the semiconductor shortage. Yes, | mean if you could give us some update on that what was your view on that? There were a couple of issues why this semiconductor shortage happened. Fir

Dipti Kothari

financial year when some more new capacities are expected to come up in Taiwan basically. Sir my last question, Maruti Suzuki is expecting Q4 to be the best quarter in this fiscal year are you witnessing a similar scenario? Well, Maruti Suzuki contributes 50% to our sales so | think you can extrapolate that information with what Maruti is saying. Sir, this was very helpful. Thank you so much. Thank you. The next question is from the line of Dipti Kothari from Kothari Securities. Please go ahead. Sir, | have a few questions. In the non-auto segment how is the pail container business shaping up and new development in this space? For the pale container side, initially we have started with agriculture industries, so we have developed a certain product for the Pail industry and further we are developing more products for this lubricant side and the chemical industry. Can you tell us about the overall strategy at a group level and what is the top line growth expected in next three to five ye

Sachin Jain

You can also access this report on our website the report which we have published. Thank you. Thank you. The next question is from the line of Manish Arya from ICICI Bank. Please go ahead. Good afternoon, Sir. my question is on the capacity. We have seen there has been lot of significant capex done in the last four years by the Company. It is almost like more than Rs.150 Crores that have been spent already and there has been additional capacity initiative Rs.105 Crores more in the Company coming year 2022 and 2023 and considering there has been not much traction | do understand because of the fact that there has been slowdown in financial prudence and there was COVID impacted year 2021 predominantly; however, we just want to know how traction in the coming two years can be because | think there has been a lot of capacity available to the Company and also the second question was since there has been significant increases in the debt level of the Company from Rs.12 Crores in financial ye