Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or upcoming fundraising through debt or equity in the provided transcript. The company discusses capital expenditure plans (around 10%-12% of revenue), funded through internal cash reserves, indicating no immediate need for external financing. The mention of a private equity investor in the unlisted contract manufacturing company hints at some investment within the group, but no new fundraising plans are disclosed. The merger of the contract manufacturing company with the listed entity is underway but no related financing or fund-raising details are

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

The company plans to increase capital expenditure (capex) from the usual 6%-7% of revenue to about 9%-12% over the next two years, roughly translating to around INR 60 Crore per year based on current revenues. Capex will focus on acquiring new infrastructure, with approximately 130,000 sq. feet already acquired for new production lines. Investments include upgrading from generation three to generation four technology in equipment and assembly lines, enhancing quality, capacity, and cost efficiency. The capacity expansion aims to support volume growth of 20%-25% per year, with capacity ramp-up

Future growth expectations in sales/revenue/volumes?

Volume growth relative to last year increased by about 17%, better than previous two years. Expected volume growth targets around 20%-25% per year, linked with capacity additions. Revenue growth for the first nine months stood at 19%-20%, with profitability growth slightly higher. Capital expenditure planned at 10%-12% of revenues annually to support capacity expansions and technology upgrades. Capacity increase phased over four years: limited revenue in year one, ~50% in year three, and ~75%-85% by year four post capex. Growth driven by expanding markets (North/South America, China,

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

Volume growth is expected at 20%-25% per year over the next few years, driven by growing market demand and capacity additions. Revenue growth for the nine-month period was 19%-20% year-over-year, with profitability growing slightly higher. Capex will increase to 10%-12% of revenue from the usual 6%-7%, supporting capacity expansion and technology upgrades. New platform developments and customer inquiries indicate robust medium-term growth prospects, especially in automotive electric motors. Manufacturing economies of scale in contract manufacturing are expected to improve EBITDA contribution t

Current/ Expected Orderbook/ Pending Orders?

The company mentioned that their platforms are being developed as generic platforms for multiple applications (engine, exhaust, turbochargers). By calendar year 2018, they expect to see ramp-ups of these new platforms, indicating active and growing order flows. The management highlighted that they do not wait for customer purchase orders before investing; they are proactively preparing capacity to meet demand. They have acquired about 130,000 sq. feet of infrastructure to support new production lines and expected order inflows. There is strong confidence in market opportunities, including good

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Igarashi Motors India LtdQ4 FY18Auto Components

Igarashi Motors India Ltd Q4 FY18 Earnings Call Analysis

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

Price: ₹410P/E: 90.6Market Cap: ₹1.2K 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

→Volume growth relative to last year increased by about 17%, better than previous two years.
→Expected volume growth targets around 20%-25% per year, linked with capacity additions.
→Revenue growth for the first nine months stood at 19%-20%, with profitability growth slightly higher.
→Capital expenditure planned at 10%-12% of revenues annually to support capacity expansions and technology upgrades.
→Capacity increase phased over four years: limited revenue in year one, ~50% in year three, and ~75%-85% by year four post capex.
→Growth driven by expanding markets (North/South America, China, Europe) and new customer enquiries, especially from China.
→Continued focus on quality and cost competitiveness to drive sustained growth.
→Product lifecycle expected to stabilize at 6-7 years, with efforts to increase penetration and downsize product life cycles.

Margin guidance

Category 3

→Volume growth is expected at 20%-25% per year over the next few years, driven by growing market demand and capacity additions.
→Revenue growth for the nine-month period was 19%-20% year-over-year, with profitability growing slightly higher.
→Capex will increase to 10%-12% of revenue from the usual 6%-7%, supporting capacity expansion and technology upgrades.
→New platform developments and customer inquiries indicate robust medium-term growth prospects, especially in automotive electric motors.
→Manufacturing economies of scale in contract manufacturing are expected to improve EBITDA contribution timelines (about 2 years vs. 4 years for IP products).
→Continuous investment in process upgrades, quality improvements, and automation will enhance competitiveness and margins.
→Employee costs and depreciation may rise in absolute terms due to scaling, but are expected to be stable or improve as a percentage of sales.

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Fundraise plans

→There is no explicit mention of any current or upcoming fundraising through debt or equity in the provided transcript.
→The company discusses capital expenditure plans (around 10%-12% of revenue), funded through internal cash reserves, indicating no immediate need for external financing.
→The mention of a private equity investor in the unlisted contract manufacturing company hints at some investment within the group, but no new fundraising plans are disclosed.
→The merger of the contract manufacturing company with the listed entity is underway but no related financing or fund-raising details are provided.
→Management emphasizes prudent use of cash deposits for growth but no direct reference to raising new debt or equity capital.

Order book

Yes

→The company mentioned that their platforms are being developed as generic platforms for multiple applications (engine, exhaust, turbochargers).
→By calendar year 2018, they expect to see ramp-ups of these new platforms, indicating active and growing order flows.
→The management highlighted that they do not wait for customer purchase orders before investing; they are proactively preparing capacity to meet demand.
→They have acquired about 130,000 sq. feet of infrastructure to support new production lines and expected order inflows.
→There is strong confidence in market opportunities, including good enquiry flows (RSQs) from China and globally.
→The firm expects volume growth of about 17% year-on-year, supported by existing and upcoming orders.
→No specific numeric orderbook value disclosed, but indications are that order intake is healthy and ramping up.

Capex plans

Yes

→The company plans to increase capital expenditure (capex) from the usual 6%-7% of revenue to about 9%-12% over the next two years, roughly translating to around INR 60 Crore per year based on current revenues.
→Capex will focus on acquiring new infrastructure, with approximately 130,000 sq. feet already acquired for new production lines.
→Investments include upgrading from generation three to generation four technology in equipment and assembly lines, enhancing quality, capacity, and cost efficiency.
→The capacity expansion aims to support volume growth of 20%-25% per year, with capacity ramp-up spread over several years (limited revenue in year 1, 50% in year 3, 75%-85% in year 4).
→A joint venture and technical cooperation with a top-notch powertrain actuators engineer from General Motors supports advanced product development.
→The company is moving towards platformized, brushless DC motor production, signaling strategic long-term investments in R&D and manufacturing capability.

How does Igarashi Motors India Ltd rank vs peers in Auto Components?

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1Igarashi Motors India Ltd

Rev 3Mar 3

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