Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or future fundraising through debt or equity in the transcript. The management emphasized preserving cash and generating cash during the uncertain scenario caused by COVID and semiconductor shortages. They are continuing to invest internally with CAPEX plans higher than the previous year but have not indicated raising external funds through debt or equity. Dividend payout policy is flexible and depends on available surplus and fund requirements but no specific fundraising mentioned. Focus remains on operational efficiencies, working capital managemen

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

The company is continuing to invest despite uncertain times caused by COVID and semiconductor shortages. Current year CAPEX is higher than the previous year, with plans for even greater CAPEX in FY 2022-23. Capex is focused on supporting growth and leveraging India as a global base to serve customers, including exports. Investments include technology upgrades, casting lines from the parent company, and operational efficiencies. The company aims to achieve high single-digit to double-digit growth numbers next year. The management emphasizes balancing cash preservation with ongoing investments t

Future growth expectations in sales/revenue/volumes?

The company expects a positive growth trajectory over the next 3-5 years, targeting high single-digit to double-digit growth in sales/revenue. Despite a declining market in some segments (e.g., two-wheelers), Federal-Mogul Goetze is expanding its market share within these segments. Investment in new products and technologies, especially related to turbo engines, flex-fuel policies, and hybrid vehicles, is ongoing to drive growth. CAPEX for FY22 and FY23 is planned to be higher than the previous years, signaling continued investment into capacity and technology. The company focuses on leveragin

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

The company expects growth in the range of high single-digit to double-digit over the next 3-4 years. (Vinod Kumar Hans, Page 11) Despite a shrinking industry pie in some segments (e.g., two-wheelers), Federal-Mogul Goetze’s market share is expanding due to export ambitions and product portfolio shifts. (Page 11) Investment is increasing year-on-year, with CAPEX for 2022-23 planned to be 10-20% higher than the previous year, aimed at capturing growth opportunities. (Pages 11-12) Utilization rates are expected to improve from around 70-75% in Q3FY22 to approximately 85%, assuming easing of semi

Current/ Expected Orderbook/ Pending Orders?

The company has good visibility of orders from export markets, helping in overall growth. However, there remains uncertainty regarding semiconductor chip availability, with a cautious outlook for the next 3 to 6 months. Quarter 1 (Jan-Mar) is expected to perform better than Quarter 4 (Oct-Dec), indicating a positive ramp-up in utilization. The demand for passenger vehicles is expected to outpace supply through most of 2022, with some normalization expected only in Q3 of the next financial year. Export revenues were impacted in the recent quarter but are expected to improve as chip availability

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Federal-Mogul Goetze (India) LtdQ4 FY23Auto Components

Federal-Mogul Goetze (India) Ltd Q4 FY23 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 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→The company expects a positive growth trajectory over the next 3-5 years, targeting high single-digit to double-digit growth in sales/revenue.
→Despite a declining market in some segments (e.g., two-wheelers), Federal-Mogul Goetze is expanding its market share within these segments.
→Investment in new products and technologies, especially related to turbo engines, flex-fuel policies, and hybrid vehicles, is ongoing to drive growth.
→CAPEX for FY22 and FY23 is planned to be higher than the previous years, signaling continued investment into capacity and technology.
→The company focuses on leveraging India's position as a base for global customers, with an emphasis on exports and deemed exports.
→Growth opportunities exist in stringent emission norms, flex fuel vehicles, mild hybrids, and commercial vehicle segments.
→Recovery expected as semiconductor supply improves and COVID-related disruptions ease, with Q4 FY22 showing better utilization and order visibility.

Margin guidance

Category 3

→The company expects growth in the range of high single-digit to double-digit over the next 3-4 years. (Vinod Kumar Hans, Page 11)
→Despite a shrinking industry pie in some segments (e.g., two-wheelers), Federal-Mogul Goetze’s market share is expanding due to export ambitions and product portfolio shifts. (Page 11)
→Investment is increasing year-on-year, with CAPEX for 2022-23 planned to be 10-20% higher than the previous year, aimed at capturing growth opportunities. (Pages 11-12)
→Utilization rates are expected to improve from around 70-75% in Q3FY22 to approximately 85%, assuming easing of semiconductor supply constraints. (Page 8)
→Operational efficiencies and cost optimization initiatives are in place to support profitability, despite current pressures from raw material inflation and inventory absorption costs. (Page 12)
→Export margins are improving, especially in commercial vehicles, which will aid bottom-line growth. (Page 12)
→Uncertainties remain due to COVID and semiconductor shortages, but visibility is improving from Q1FY23 onward. (Pages 8-9, 12)

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Fundraise plans

→There is no explicit mention of any current or future fundraising through debt or equity in the transcript.
→The management emphasized preserving cash and generating cash during the uncertain scenario caused by COVID and semiconductor shortages.
→They are continuing to invest internally with CAPEX plans higher than the previous year but have not indicated raising external funds through debt or equity.
→Dividend payout policy is flexible and depends on available surplus and fund requirements but no specific fundraising mentioned.
→Focus remains on operational efficiencies, working capital management, and organic growth rather than external fundraising.

Order book

Yes

→The company has good visibility of orders from export markets, helping in overall growth.
→However, there remains uncertainty regarding semiconductor chip availability, with a cautious outlook for the next 3 to 6 months.
→Quarter 1 (Jan-Mar) is expected to perform better than Quarter 4 (Oct-Dec), indicating a positive ramp-up in utilization.
→The demand for passenger vehicles is expected to outpace supply through most of 2022, with some normalization expected only in Q3 of the next financial year.
→Export revenues were impacted in the recent quarter but are expected to improve as chip availability and market conditions stabilize.
→The company remains positive and confident about growth driven by investments and increasing market share despite current supply chain challenges.

Capex plans

Yes

→The company is continuing to invest despite uncertain times caused by COVID and semiconductor shortages.
→Current year CAPEX is higher than the previous year, with plans for even greater CAPEX in FY 2022-23.
→Capex is focused on supporting growth and leveraging India as a global base to serve customers, including exports.
→Investments include technology upgrades, casting lines from the parent company, and operational efficiencies.
→The company aims to achieve high single-digit to double-digit growth numbers next year.
→The management emphasizes balancing cash preservation with ongoing investments to capture global consolidation opportunities in the automotive sector.
→Strategic investments are targeted to support electrification trends, flex fuel policy, and higher content value hybrid vehicles.

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

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1Federal-Mogul Goetze (India) Ltd

Rev 3Mar 3

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