Any current/future new fundraising through debt or equity?

The company currently has cash available of around Rs. 200 crores and an additional borrowing capacity of Rs. 400 crores, implying a total financial capacity of approximately Rs. 600 crores. There is no explicit mention of plans for new debt or equity fundraising. Management prefers to use internal cash generation for capital expenditure, particularly for technology upgradation, emission norms compliance, and new engine programs, avoiding the use of new debt. The company is focused on maintaining financial credibility to serve global customers, with an emphasis on being debt-free in India t

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

The company is investing approximately Rs. 90-100 crores in CAPEX for the financial year, with two-thirds allocated to technology upgradation and the rest for capacity expansion (Page 8). Focus on making production lines more flexible to handle fluctuations between passenger car and two-wheeler demand due to regulatory changes and market conditions (Page 8). Evaluating growth opportunities related to the transition to TGDI engines and steel pistons, which require significant investments (Page 8). No major shift in the current business portfolio, but ongoing modernization, innovation, and te

Future growth expectations in sales/revenue/volumes?

The company expects a 10-12% increase in revenue potential from expanded capacity by around 2025, adding approximately Rs.120-150 crores on top of the existing Rs.1400-1500 crores annual run rate. Growth opportunities are tied to new technologies like TGDI engines and steel pistons, especially with export engine projects commissioning their plants. Global export business is expected to substantially shoot up post-semiconductor shortages, possibly from the second half of the next calendar year, driving significant traction. The company is focusing on flexible manufacturing lines to handle

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

Current PAT margins are at the bottom, but steps are underway to improve margins through operational efficiencies and better recovery mechanisms. Utilization levels were impacted by plant shutdowns but are expected to improve in H2, depending on OEM deliverables. EBITDA margin in a normal business scenario is expected around 16%, factoring in volume growth, operational productivity improvements, and recovery of commodity cost escalations. Cash generation remains strong (~Rs. 40-45 crores per quarter), with plans to invest in technology upgradation and capacity expansion related to TGDI engines

Current/ Expected Orderbook/ Pending Orders?

The company highlighted a significant booking backlog with all OEMs, amounting to nearly five lakh (500,000) vehicles pending. Due to the semiconductor shortage, this backlog will not be fulfilled immediately or at full pace. Improvement in the semiconductor supply is expected to be gradual and step-by-step, not instant. Better visibility from OEMs regarding chip availability is anticipated from December onwards. The semiconductor shortage impact is expected to linger for the next two quarters, affecting order fulfillment and utilization. OEMs, including major players like Maruti, are unable t

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Federal-Mogul Goetze (India) LtdQ3 FY21Auto Components

Federal-Mogul Goetze (India) Ltd Q3 FY21 Earnings Call Analysis

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

Price: ₹453P/E: 13.9Market Cap: ₹2.6K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

Order

N/A

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→The company expects a 10-12% increase in revenue potential from expanded capacity by around 2025, adding approximately Rs.120-150 crores on top of the existing Rs.1400-1500 crores annual run rate.
→Growth opportunities are tied to new technologies like TGDI engines and steel pistons, especially with export engine projects commissioning their plants.
→Global export business is expected to substantially shoot up post-semiconductor shortages, possibly from the second half of the next calendar year, driving significant traction.
→The company is focusing on flexible manufacturing lines to handle passenger cars and two-wheelers to manage demand fluctuations efficiently.
→Emission norm changes and adoption of CNG, biofuels, and hybrid engines present further growth potential through product modifications rather than diversification into new categories.
→Market recovery is underway but remains volatile due to semiconductor shortages, commodity prices, and COVID impacts in key regions.

Margin guidance

Category 2

→Current PAT margins are at the bottom, but steps are underway to improve margins through operational efficiencies and better recovery mechanisms.
→Utilization levels were impacted by plant shutdowns but are expected to improve in H2, depending on OEM deliverables.
→EBITDA margin in a normal business scenario is expected around 16%, factoring in volume growth, operational productivity improvements, and recovery of commodity cost escalations.
→Cash generation remains strong (~Rs. 40-45 crores per quarter), with plans to invest in technology upgradation and capacity expansion related to TGDI engines and emission norm changes.
→Expanded capacity can increase revenue potential by 10-12% over current capacity levels (~Rs. 1400 crores annual run rate).
→Semiconductor shortages and supply chain volatility may continue to impact near-term earnings, but recovery is anticipated in the second half of the next calendar year.
→Dividend distribution is being evaluated based on cash flow, CAPEX needs, and market conditions.

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Fundraise plans

→The company currently has cash available of around Rs. 200 crores and an additional borrowing capacity of Rs. 400 crores, implying a total financial capacity of approximately Rs. 600 crores.
→There is no explicit mention of plans for new debt or equity fundraising.
→Management prefers to use internal cash generation for capital expenditure, particularly for technology upgradation, emission norms compliance, and new engine programs, avoiding the use of new debt.
→The company is focused on maintaining financial credibility to serve global customers, with an emphasis on being debt-free in India to win business.
→Dividend distribution is being evaluated but deferred until after stabilization of technology upgrades and production cycles.
→The company is monitoring market volatility and evaluating opportunities but has not announced concrete plans for raising funds through debt or equity at this time.

Order book

→The company highlighted a significant booking backlog with all OEMs, amounting to nearly five lakh (500,000) vehicles pending.
→Due to the semiconductor shortage, this backlog will not be fulfilled immediately or at full pace.
→Improvement in the semiconductor supply is expected to be gradual and step-by-step, not instant.
→Better visibility from OEMs regarding chip availability is anticipated from December onwards.
→The semiconductor shortage impact is expected to linger for the next two quarters, affecting order fulfillment and utilization.
→OEMs, including major players like Maruti, are unable to immediately fulfill their total demand due to chip constraints.
→The company is optimistic that the improved semiconductor supply situation will help address the backlog progressively.

Capex plans

Yes

→The company is investing approximately Rs. 90-100 crores in CAPEX for the financial year, with two-thirds allocated to technology upgradation and the rest for capacity expansion (Page 8).
→Focus on making production lines more flexible to handle fluctuations between passenger car and two-wheeler demand due to regulatory changes and market conditions (Page 8).
→Evaluating growth opportunities related to the transition to TGDI engines and steel pistons, which require significant investments (Page 8).
→No major shift in the current business portfolio, but ongoing modernization, innovation, and technical application upgrades (Pages 7-13).
→Cash reserves are being used strategically for technology upgradation, emission norms compliance, innovation, modernization, and supporting global customer credit viability rather than debt financing (Pages 7, 13, 14).
→Monitoring and selectively investing in global technology transfer equipment suited to Indian operations rather than relocating entire lines globally (Page 10).

How does Federal-Mogul Goetze (India) Ltd rank vs peers in Auto Components?

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1Federal-Mogul Goetze (India) Ltd

Rev 3Mar 2

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