Any current/future capex/capital investment/strategic investment?

FY24-25 capex is around Rs. 150 crore, focused on new machining capacities, infrastructure, and automation to support high volumes from key clients like JLR e-Axle and PSA. Capex includes both growth and maintenance investments (Rs. 250-300 crore mentioned for Rs. 700 crore incremental business). Major capex this year due to building infrastructure for new projects, with less requirement for huge capex in the next 2-3 years. Focus on automation to control rising manpower costs. Capacity expansion planned with around 50,000 tonnage capacity, utilization currently ~65-70%, with scope to go up to

Future growth expectations in sales/revenue/volumes?

Alicon expects around 15% revenue growth in FY24-25, increasing total income from Rs. 1,560 crore to Rs. 1,800 crore. By FY25-26, revenue is projected to surpass Rs. 2,200 crore, implying a CAGR of over 16% for three years. Growth driven by new product SOPs, new customers, and deferred volumes from FY24 contributing to FY25 revenues. Passenger vehicle segment expected to grow, with cylinder heads for Maruti and Stellantis ramping up volumes significantly. Positive outlook for 2-wheelers, especially with increasing volumes ahead of elections and shift from EV to ICE products. Commerci

Future growth expectations in earnings/operating earnings/profits/EPS?

Alicon targets revenue of over Rs. 2,200 crores by FY 2025-26, reflecting a CAGR of over 16% over three years. Expect around 15% revenue growth in FY24-25, moving from Rs. 1,560 crore to Rs. 1,800 crore. EBITDA margin improved to 14% in Q4FY24 and is expected to sustain or improve, with a target to maintain around 14% for FY25 and FY26. PAT grew by 19% YoY in FY24 and is expected to increase further with margin expansion and revenue growth. Earnings growth backed by ramp-up in key passenger vehicle clients and higher value-added products, including hybrids and EV components. Capex pl

Current/ Expected Orderbook/ Pending Orders?

Current order book stands at around Rs. 9,000 crores to Rs. 9,150 crores, spread over 6 years till FY'28-'29. Order bookings in FY'23-'24 were about Rs. 770 crores. New business order inflow expected at Rs. 1,200 crores for FY'24-'25. Major customers contributing to the order book include Jaguar (10-15%), Toyota, PSA (Stellantis), Maruti Suzuki, Danfoss, and JLR. EV segment constitutes about 30% of the Rs. 9,000 crore order book. Growth opportunities exist with hybrid vehicles, cylinder heads for passenger vehicles, and structural parts. Orders from commercial vehicles constitute about 20% of

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Alicon Castalloy LtdQ1 FY24Auto Components

Alicon Castalloy Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹651P/E: 27.6Market Cap: ₹1.1K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 1

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Alicon expects around 15% revenue growth in FY24-25, increasing total income from Rs. 1,560 crore to Rs. 1,800 crore.
→By FY25-26, revenue is projected to surpass Rs. 2,200 crore, implying a CAGR of over 16% for three years.
→Growth driven by new product SOPs, new customers, and deferred volumes from FY24 contributing to FY25 revenues.
→Passenger vehicle segment expected to grow, with cylinder heads for Maruti and Stellantis ramping up volumes significantly.
→Positive outlook for 2-wheelers, especially with increasing volumes ahead of elections and shift from EV to ICE products.
→Commercial vehicle segment expected to grow due to infrastructure spending and urbanization trends.
→Global business contribution increased (28% in Q4 FY24 vs 21% previous year), with new long-term packages from Daimler starting 2026.
→Hybrid and ICE vehicle content to remain significant alongside EV, supporting diverse growth avenues.

Margin guidance

Category 1

→Alicon targets revenue of over Rs. 2,200 crores by FY 2025-26, reflecting a CAGR of over 16% over three years.
→Expect around 15% revenue growth in FY24-25, moving from Rs. 1,560 crore to Rs. 1,800 crore.
→EBITDA margin improved to 14% in Q4FY24 and is expected to sustain or improve, with a target to maintain around 14% for FY25 and FY26.
→PAT grew by 19% YoY in FY24 and is expected to increase further with margin expansion and revenue growth.
→Earnings growth backed by ramp-up in key passenger vehicle clients and higher value-added products, including hybrids and EV components.
→Capex planned around Rs. 250-300 crores over the next two years to support incremental Rs. 700 crores business, ensuring capacity expansion and automation for margin improvement.
→Operating leverage and improved working capital efficiencies expected to drive enhanced returns and EPS growth.

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Fundraise plans

- For FY'25, Alicon Castalloy Limited is planning a significant capex of around Rs. 150 crore, primarily for new projects and maintenance. - Previous discussions indicated a capex of Rs. 250-300 crore associated with Rs. 700 crore incremental business, likely funded through a combination of internal accruals and debt. - Finance cost rose by 27% year-on-year in Q4FY24 due to increased borrowings and higher interest rates, suggesting existing utilization of debt facilities. - There is no explicit mention of planned equity fundraise in the provided transcript. - The company is focusing on controlling investments and improving working capital efficiency to support ROCE targets, indicating a preference for optimizing internal resources. Hence, while increased debt is implied to support capex and growth, there is no clear indication of immediate equity fundraising plans.

Order book

Yes

→Current order book stands at around Rs. 9,000 crores to Rs. 9,150 crores, spread over 6 years till FY'28-'29.
→Order bookings in FY'23-'24 were about Rs. 770 crores.
→New business order inflow expected at Rs. 1,200 crores for FY'24-'25.
→Major customers contributing to the order book include Jaguar (10-15%), Toyota, PSA (Stellantis), Maruti Suzuki, Danfoss, and JLR.
→EV segment constitutes about 30% of the Rs. 9,000 crore order book.
→Growth opportunities exist with hybrid vehicles, cylinder heads for passenger vehicles, and structural parts.
→Orders from commercial vehicles constitute about 20% of sales, mostly from global markets.
→Ongoing addition of new orders driven by PV segment with ramp-up from Maruti, JLR, Toyota, PSA, and others.
→Supply to Maruti includes cylinder heads and prospective hybrid vehicle parts.

Capex plans

Yes

→FY24-25 capex is around Rs. 150 crore, focused on new machining capacities, infrastructure, and automation to support high volumes from key clients like JLR e-Axle and PSA.
→Capex includes both growth and maintenance investments (Rs. 250-300 crore mentioned for Rs. 700 crore incremental business).
→Major capex this year due to building infrastructure for new projects, with less requirement for huge capex in the next 2-3 years.
→Focus on automation to control rising manpower costs.
→Capacity expansion planned with around 50,000 tonnage capacity, utilization currently ~65-70%, with scope to go up to 85-90%.
→New technology adoption like friction stir welding expected to begin benefiting from Q3 FY25.
→Ongoing investments to support a ramp-up in passenger vehicle and commercial vehicle segments including hybrids and EVs.

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