Rico Auto Industries Limited

Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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Arvind Kapur

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So, what gives us confidence or what is the risk we can see on this, number that you have mentioned?

— Deepak Poddar

The two-wheeler industry is always the biggest challenge then of course, it is the car industry and commercial vehicles and then the exports.

— Arvind Kapur

And beyond high pressure die casting, would we also be looking at low pressure die casting as such?

— Karthi Keyan

We do a lot of low pressure die casting, aluminum these are all gravity casting and we do a lot of it.

— Arvind Kapur

Q

Good evening. My name is Arvind Kapur, and I am sitting here with my colleagues in our Head Office in Gurgaon and we are all in the same room except one of my colleagues who has joined us from US. He is on a marketing trip to the US. This year, we grew about 26%-27% and we are happy about that. This is despite the shortage of the chips and also the Ukraine war, which has been carrying on for almost 97 days now. And despite that, we managed to grow and, we have grown all across, be it the cars, the electric vehicles, commercial vehicles and even in the two-wheelers, we have grown. And, despite

Management

Q

I have got couple of question Sir. First of all, thank you for the 0.40 dividend, which is higher than last year and the merging of subsidiaries, which gives a good indication for the Rico Auto future. Now Sir, last time you said there is a lag of around Rs.10-Rs.12 crores for the aluminum, have you received in this quarter or still it is pending, sir?

Arvind Kapur

The lag comes in every quarter and so when it is received it takes three months to recover the amount. So, that is a normal practice. Now from next quarter onwards, probably there would be a gain that we would be getting, there would not be a lag. And we are waiting for the situation because this commodity price increases have gone for a little too long. Now, I think for almost about a year and a half, two years, we have just been paying and the lag has always remained. So, now with your experience of all these years, we had been through a pretty tough time because there was a airlifting, then

Q

I just wanted to know that when do we start operations for the Toyota project, specifically from the new capacities that we are installing?

Management

We have already started the production and we are ramping up, now, and August onwards it would be peak and where the production is already started. And, the die cast machines and other machines, which are expected to come, those would add to our capacity. But at the moment we utilize the current machines which are with us. We took advantage of the chip shortage and some of the equipment was not being used for, Renault and, the other Kia and etc. So, we used those equipment and divert those capacities for the Toyota projects. So, the productions are already on. Thank you. And what would be the

Q

So, you had mentioned, expected revenue of Rs.2350 crores. It is really very appealing figure, but in which you even mentioned that it will also be factoring the, you know, company shifting their bases from China to India. So, the expected, you know, the figure of Rs.2,350 crores inculcating them, these company shifting or your existing clients, or what?

Arvind Kapur

Rs.2350 crores is what we have budgeted as per the orders we already have in hand, which we are executing at the moment. And what has happened is that the customers are actually picking up little more than whatever, indication they had given, but whatever is being transferred from China, those are the add-ons that will come. Okay. That is an add on. Yes. Those add-ons, will be in, some of the current components as well as also new component, which will also come in.

Q

Thank you very much for the opportunity. I have got queries, one is now revenue of Rs.2,400 crores roundabout, given you mentioned the chip shortage will still continue the end of 2023. So, what gives us confidence or what is the risk we can see on this, number that you have mentioned? And my second query is revolved around your margins. Now, you did mention that commodity prices are softening and we have started covering from the lag of raw material prices. So, how do you see EBITDA margin going into FY2023? Yes, those are my, question

Arvind Kapur

When I mentioned that Maruti is talking of 2.1 million, they've factored the chips that are going be available. This is the commitment that the chips suppliers in Malaysia, in, Taiwan and Indonesia they have given to Maruti Suzuki. And so that is based on that Maruti could have actually gone even beyond that. And, similarly, if you look at Kia and if you look at Renault-Nissan others, this year, the budget is solely based on the chips that have been committed by the supplier. So, when we've taken our budget in the 2 million industry, we have discounted slightly, mainly because of the past expe

Q

Couple of questions, Sir. One would be can you give us some, thoughts on how you will see debt evolving over a period of time? It’s fairly high, given your growth, therefore working capital requirements and against that cash flow. So, how do you see debt evolving over a period of time?

Arvind Kapur

Your question is that how is the debt going to evolve over time? Yes, debt Sir. You have currently about 600 crores of debt on your books. I suppose Yes, your point is right. That our working capital requirement is growing with the business. But along with that, we are, repaying our term loans. So, what is happening is that kind of balancing is happening. So, whatever additional requirement is there, but simultaneously we are repaying also. So, on that front, it is reducing. So, that is why we said that by the year end, we should expect almost the same level of debt. I would like to tell you o

Q

Hero actually started starting electric vehicle right from July onwards. Do we have any orders related to the electric vehicle from Hero?

Arvind Kapur

Wherever Hero is involved, we will always be there. And the second question is like, do you have any kind of R&D related to electric components, if you have like how many players we have working on actually to do kind some kind of R&D component rather than actually waiting for customer? Let me give you one interesting answer. You know, when the electric vehicle these new components that we got from, BMW and also the other customers, the PSA and others, a lot of R&D was ours because you cannot use just any aluminum alloy in this. There's a very special aluminum alloy which was totally 100% reco

Q

So, do we stick to the margin guidance of 11% going forward.

Arvind Kapur

I am committing 10%, but 11%? We, we will probably cross 11% also by the year end. By the year end. You will see the change every quarter. There are a couple of reasons for this one is, of course, there is more efficiency now working, number two, where we have been able to cutdown lot of costs. And number three is the introduction of new component, which come in, the new components when they come in, they are at better margin. And that impacts the overall situation in the company. So, that also we do not like component, which lasts for 20 years. We like components, which needs a change within

Q

Thank you so much for taking our time to be with us today. And, we are, very confident of this year and hopefully, the Ukraine war does not expand further. And, if it, remains only there, we all hope that we get over it. Russia is expected to get over the water in 15 days, but it has been 97 days now. Hopefully this, war should end. And if that happens, the market will grow even further. But having said that, the Indian market will grow. The US market is growing. Now even the European market is, has opened up. And, so we are very confident that. This year budget, we have been little conservati

Management