NDRAUTONSENovember 09, 2022

Ndr Auto Components Limited

3,680words

116turns

9analyst exchanges

5executives

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Management on call

Pranav Relan

WHOLE-TIME DIRECTOR – NDR AUTO COMPONENTS LIMITED

Vinod Kumar

CHIEF FINANCIAL OFFICER – NDR AUTO COMPONENTS LIMITED

Sanjeev Kumar

FINANCIAL ADVISOR – NDR AUTO COMPONENTS LIMITED

Rajat Bhandari

EXECUTIVE DIRECTOR AND

Supriya Madye

KIRIN ADVISORS PVT LTD

Key numbers — 40 extracted

28.66%

for Suzuki Gixer and Suzuki Access. Our group companies, Bharat Seats Limited, your company owns 28.66% in Bharat Seats Limited which carries on the business of manufacturing car seat assemblies, carpe

INR 951.41 lakh

mblies, carpet set for automobiles and motorcycle seats. The Company posted a profit after tax of INR 951.41 lakhs during H1 of FY 22-23. Toyo Sharda India Private Limited, the Company owns 50% stake in

50%

ax of INR 951.41 lakhs during H1 of FY 22-23. Toyo Sharda India Private Limited, the Company owns 50% stake in Toyo Sharda India Private Limited which carries on the business of manuf

Rs. 189.58 lakh

business of manufacturing car seat lifter and recliner. The Company posted a profit after tax of Rs. 189.58 lakhs during H1 FY 22-23. Toyota Boshoku Relan India Private Limited, your company owns 50% stake in T

INR 0.40 lakh

ia Private Limited which had no operations during the financial year 22-23 and incurred a loss of INR 0.40 lakhs. Industry: We are a seating solution provider company which falls in the auto ancillary segment

INR 4.2 lakh crore

cles is a key growth driver for our business. The automotive component industry turnover stood at INR 4.2 lakh crores (USD 56.5 billion) between April 2021 to March '22. The industry had revenue growth of 23% as co

56.5 billion

er for our business. The automotive component industry turnover stood at INR 4.2 lakh crores (USD 56.5 billion) between April 2021 to March '22. The industry had revenue growth of 23% as compared to financi

23%

akh crores (USD 56.5 billion) between April 2021 to March '22. The industry had revenue growth of 23% as compared to financial year 18-19. In financial year '22, exports of auto components went up 43

43%

3% as compared to financial year 18-19. In financial year '22, exports of auto components went up 43% to INR 1.41 lakh crores, which is equivalent to USD 19 billion. As per the Automobile Component

INR 1.41 lakh crore

ompared to financial year 18-19. In financial year '22, exports of auto components went up 43% to INR 1.41 lakh crores, which is equivalent to USD 19 billion. As per the Automobile Component Manufacturer Association

19 billion

r '22, exports of auto components went up 43% to INR 1.41 lakh crores, which is equivalent to USD 19 billion. As per the Automobile Component Manufacturer Association ACMA forecast, auto component export

30 billion

anufacturer Association ACMA forecast, auto component export from India are expected to reach USD 30 billion by 2026. The auto component industry is projected to record USD 200 billion in revenue by 2026. S

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Guidance — 11 items

Rajat Bhandari

opening

“As per the Automobile Component Manufacturer Association ACMA forecast, auto component export from India are expected to reach USD 30 billion by 2026.”

Pranav Relan

“In fact, I think that there's going to be a larger demand towards the SUV space going forward maybe in a year or two.”

Sandeep Mane

“And my next question is, how is our order book and sorry, are we pulling both for the next quarter?”

Pranav Relan

“So at the moment, it's not fully utilized because it just started production, but going forward, we expect it to be at 80% to 90%.”

Pranav Relan

“So I think one way to mitigate the risk for us will be to look at adding new customers over there, and we're looking to do that”

Ankur Shah

“So basically, on a base of around 750,000 will be adding 200,000, 250,000”

Soham Das

“Do you have any fundraising plans for the next year, financial year?”

Vihang Shah

“So what is the price difference between both the models and what will be the average pricing for the average seating set at pricing?”

Vihang Shah

“So in terms of approximately what will be the cost difference, if you can say, I'm not asking the exact price, but if the Alto sets costing around, let's say, INR 1,000.”

Vihang Shah

“So what will be the cost for approximate cost for the Grand Vitara?”

Risks & concerns — 5 flagged

So do you see any risk coming from there?

— Soham Das

So see, I'm just trying to understand the risk which these plants run.

— Ankur Shah

So what is the kind of risk do we face in such plants.

— Ankur Shah

So I think one way to mitigate the risk for us will be to look at adding new customers over there, and we're looking to do that

— Pranav Relan

And likely a new incumbent would find it difficult to enter into Maruti stable.

— Ankur Shah

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Q&A — 9 exchanges

Thank you, The management has actually performed very stupendously and it's a really impressive result. So I just wanted to ask a few things. So is there any new production facility, especially the Bangalore facility that has gone online that has created this growth? Or is there something else?

Pranav Relan

So it's the new Bangalore facility that has commenced production. And in addition to that, we have a new Alto, which has started. Sorry, I couldn't get the last sentence. So the new Alto has started production, that's a model we never had in the past. So I noticed that while the current work in progress has come down, the new capex facility has come online. But the depreciation has not really gone up rather it has stayed flat. Is there any particular reason that we have for that? We have changed the depreciation policy in the second half. Previously, depreciation was provided on written down v

Thank you for the opportunity. So I have two to three questions regarding the product portfolio that we have. So currently, we are providing seating for Alto Wagon R, Desire, Breeza, which are among top 10 products in India, along with the Maruti. So how much do we provide to this the cars in terms of their number of units. So all total requirement is fulfilled by us? Or there are any other players who are also supplying for this model.

Sanjiv Kumar

In case of Brezza, in case of Grand Vitara, Wagon R, CIAZ these are all being supplied 100% by us. And Alto and SWIFT is half. So in terms of then when we go to the Hyryder and Urban Cruiser space, so here, we are also a sole supplier? Or are we… We are sole supplier for that. So have you seen any rise in the demand for this SUV models in the last two to three months after the launch? Yes, there has. I think there's a six-month waiting for the models. So let's see how the ramp-up happens. I think we should ask the Maruti numbers, that's the best way to look at it. Yes, fair enough. So I just w

So my question is that are we facing a raw material supply issue to meet the sudden rise in the production?

Pranav Relan

We are not facing any raw material issues. And what about our current capacity and its capacity utilization? So for the NCR region, it's about 650,000. And for the Bangalore plant, it's about 200,000 to 250,000 and we are at an 80% to 90% capacity utilization. 80% to 90% ?. Yes, thank you.

I have two, three questions, sir. Sir, as a Maruti Suzuki report, the report is highest ever quarterly sales, how about our sales growth and would we supply their requirements?

Pranav Relan

Yes, we were able to supply the requirement completely and our sales grew more than the Maruti sales number due to an addition of two new models? Was our capacity sufficient to make rising demand? Yes. capacity is sufficient to meet the rising demand. And my next question is, how is our order book and sorry, are we pulling both for the next quarter? So our order book is strong. We're setting up another footprint in Gujrat. Once the new models come in, then we can discuss that.

Sir, can you call out the capex on the Bangalore plant?

Pranav Relan

About INR 30 crores. And you mentioned that you were able to ramp up the Bangalore plant to 80%, 85% or it is at the company level? No, it is going to be at 200,000 or 180,000 volume of the Hyryder and the Grand Vitara. So at the moment, it's not fully utilized because it just started production, but going forward, we expect it to be at 80% to 90%. So see, I'm just trying to understand the risk which these plants run. So let's say, right now, Grand Vitara and the Hyryder are going well. And let's say, one year down the line, these models might phase out or the market preference might change. S

So I had three quick questions. Do you have any fundraising plans for the next year, financial year?

Pranav Relan

No fundraising plans at the moment. I think we can meet our requirements through our cash and books and our internal accruals. Earlier, you used to produce fleets for trains, especially Shatabdi. Do you have any plans to reenter that space with the introduction of new trains like Vande Bharat? I don't think we're focusing too much on the railway space. What we are focusing on is to add new products and new customers. And do you have any plans of pursuing the export markets? So our product is not exportable, but product components might be so way evaluating that. And start exporting. And sir, h

Thank you again for giving the opportunity. I have two questions regarding the price differences between the lowest and the highest model that we are selling. So that will be Alto and Hyryder. So what is the price difference between both the models and what will be the average pricing for the average seating set at pricing? If you can throw some light on that?

Pranav Relan

So I don't think we can give prices for models because of customer confidentiality, but what I can say is when the fabric, when the trim changes from fabric to artificial leather is when a content really shoots up. So in terms of approximately what will be the cost difference, if you can say, I'm not asking the exact price, but if the Alto sets costing around, let's say, INR 1,000. So what will be the cost for approximate cost for the Grand Vitara? So just wanted to see the gamut of the product range that we command? Again, I can't give those numbers, but it's a substantial amount. Average als

So, I have one quick question. Sir, any outlook on margins?

Pranav Relan

So we will maintain our EBITDA margins going forward. At current levels? Yes, at current level. And sir, the price passing mechanism, like is it very smooth? And is it very direct? Or there are some times where we are not allowed to pass on the price from the OEM? So like are the contracts very clear on the RM price passing? So the commodity increases? Yes, correct. So if the commodity goes up or down, our pricing, we get it from the customer? So it is 100%, right? It's not like 50%, 60% or anything like? 100%. So that way on an absolute per set basis, we are more or less contained with the ma

Thank you, each and every one for joining the call. If you need any further assistance, please feel free to write me at Supriya@kiraninvestment.com. I thank you the management team and every participants. Thank you.

Management

Speaking time

Pranav Relan

Ankur Shah

Soham Das

Moderator

Vihang Shah

Dilip Chaturvedi

Sandeep Mane

Supriya Madye

Sanjiv Kumar

Rajat Bhandari

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Opening remarks

Supriya Madye

Thank you. Good evening to everyone. I welcome you to NDR Auto Components Conference Call for the Q2 FY '23 numbers on behalf of Kirin Advisors Private Limited. We have with us today; Mr. Pranav Relan, Whole-Time Director; Mr. Vinod Kumar, Chief Financial Officer; Mr. Sanjeev Kumar, Financial Advisor and Mr. Rajat Bhandari, Executive Director and Company Secretary. For the opening comments, now I hand over the call to Mr. Rajat Bhandari. Over to you, sir. Thank you.

Rajat Bhandari

Thank you. Hello, everyone. Belated festive greetings. I welcome you all to the second conference call of NDR Auto Components to discuss the performance of the company during the second quarter of FY '23. It is a great pleasure to have you all on the call. I will quickly brief you about the company. NDR Auto Components is a flagship company of the Rohit Relan Group. The Company was incorporated in March 2019 with a view to demerge automobile seating business of Sharda Motor Industries Limited. The company is engaged in the business of manufacturing seating solutions like frames and trims for four-wheeler and two-wheeler vehicles. We have three plants located at Gurgaon Haryana and Pathreri Haryana and the new commissioned plant at Bengaluru. The management and the senior leadership team of the group have more than three decades of hands-on experience and expertise in this domain. The Company is supplying seating arrangements to Rohit Relan Group, Bharat Seats, who is key supplier to le

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Ndr Auto Components Limited

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