PPAP Automotive Q4 FY25 Earnings Analysis

- Revenue for Q3 FY25 grew 13.8% YoY to INR139.2 crores; 9-month revenue up 5.1% YoY to INR406.8 crores. - Current capacity utilization at 73%; expected to improve further in Q4 with increased sales. - New orders of INR192.8 crores in Q3, including INR107.6 crores from EVs; total 9-month new orders INR459 crores, with INR110 crores from EV vehicles. - Growth driven by volume increase rather than price hikes. - Expanding aftermarket and industrial product segments domestically and internationally (neighboring countries, GCC markets). - Focus on premiumization and value-added products, especially for local OEMs like Tata and Mahindra. - Commercial tool room business growing with 102 mold orders YTD; plant utilization trending to 80%. - Company aims to leverage market shifts towards utility vehicles and EVs for sustained revenue growth.

- PPAP Automotive expects improved financial performance from FY25 onwards, with growing revenues and EBITDA margins. - Q3 FY25 PAT turned positive at INR 1.6 crores versus loss last year; 9 months PAT up to INR 10.3 crores. - EBITDA margin improving to about 10-11% with focus on cost optimization and operational efficiency. - New order book of INR 459 crores for next 4-5 years supports revenue visibility and growth. - Expansion in aftermarket and industrial products expected to reduce OEM reliance, with aftermarket business targeting 10% revenue contribution. - Lithium-ion battery business aims to become cash neutral in 2-3 quarters, with long-term growth potential. - Capex planned at INR 35-40 crores for FY25 to support new orders and capacity expansion. - Capacity utilization currently at 73%, with improvements expected to boost asset turnover and profitability. - Margins may not return to 18-19% levels due to competitive pressures but are improving steadily.

- Total planned capex for the year is around INR 35 to 40 crores. - Approximately INR 10 crores is allocated for capex in the Chennai facility, serving southern customers. - Around INR 10 crores is earmarked for new infrastructure, including special purpose machines (SPMs) to fulfill new orders. - About 50% of the capex (around INR 15 to 20 crores) will be spent on maintenance of existing products. - The company is moving towards leasing land and building infrastructure for new facilities, investing mainly in machinery and equipment to reduce capex and improve asset turnover ratio. - Capex supports capacity expansion to cater to increasing orders and technological upgrades. - Long-term debt will be maintained at current levels to support capex plans over the next 2-3 years, with reduction targeted thereafter.

- The management stated plans to maintain current borrowing levels in the near term without increasing overall debt. - For the next 2-3 years, they plan to keep long-term debt at the current level due to ongoing capex plans. - After this period, the company aims to reduce net debt. - There was no mention of any new equity fundraising plans during the call. - The company is focusing on managing capex mainly through leasing options to reduce upfront investment and debt pressure. In summary, PPAP Automotive Limited does not plan immediate new fundraising via debt or equity but intends to maintain current debt levels with a medium-term goal of debt reduction. There is no indication of equity issuance in the near future.

- Total new order book for the year so far: INR 459 crores, to be executed over the next 4 to 5 years. - Out of this, orders from EV vehicles: INR 110 crores. - Orders from traditional ICE vehicles: INR 349 crores. - In Q3 alone, new orders secured: INR 192.8 crores (INR 107.6 crores from EV and INR 85.1 crores from non-EV). - Additional business since the previous call: INR 75 crores (INR 58 crores from EV and INR 16.78 crores from non-EV). - Order book reflects a healthy and balanced portfolio with strong growth in both EV and traditional automotive sectors.