Any current/future new fundraising through debt or equity?

As per the transcript (Page 11), Rico Auto Industries mentioned there is no plan for any new Greenfield project currently. The company is focusing on optimizing and utilizing existing capital equipment rather than investing in new capital-intensive projects. No explicit mention was made about any ongoing or planned fundraising through debt or equity in the call. They are managing internal resources for expansion and product volume increases without additional capital infusion. Overall, there appears to be no current or immediate future fundraising plans through debt or equity discussed in this

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

No current plans for any new Greenfield projects as of now. The company is focused on optimizing and utilizing existing capital equipment rather than making large new investments. They have redeployed capital equipment previously used for other components to support production of new products and expansion. There is emphasis on improving margins and capacity with internal resource optimization rather than fresh capex. Any future capex will be driven by organic growth, especially tied to increased business from existing customers like Maruti Suzuki. The company continues to support EV and hybri

Future growth expectations in sales/revenue/volumes?

Around 15% of Rico Auto's turnover already comes from EV and hybrid vehicle components, with definite plans for growth in this segment. No current plans for new Greenfield projects; focus is on optimizing existing resources and capacities. Increased share of business with major OEM Maruti Suzuki from 8.5% to 12%, especially for water and oil pumps, with volume expansion requests ongoing. Efforts to optimize internal resources and equipment utilization to support volume growth without large new capital investments. Continued engagement with defense sector for electronic fuses and ammuni

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

Margins improved from Q1 to Q2 FY24 on both standalone and consolidated basis, with standalone EBITDA margin increased by 1%. Profitability is on track with double-digit earnings growth expected in FY24 consolidated results. Increase in share of business with major OEMs (Maruti Suzuki's water and oil pump business growing from 8.5% to 12% share) supports volume growth and margin improvement. Optimization of resources and better price realizations (e.g., alloy wheels at subsidiary Rico Jinfei) expected to enhance profitability further. Expect incremental earnings from growing EV and hyb

Current/ Expected Orderbook/ Pending Orders?

The company is currently bidding for defense orders worth around Rs. 1,000 crores related to shooting ranges for the Army, Air Force, BSF, and CISF. (Page 9) Recent government contracts for electronic fuses were shelved, but the company continues as a sub-vendor supplying to the current ammunition suppliers. (Page 9) Defense orders such as for fuses and batteries are expected to pick up with ongoing trials and approvals. (Page 10) There is mention of a working capital stock of about 1000 fuses, which will be utilized once trials are successful. (Page 10) The company has ongoing busines

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Rico Auto Industries LtdQ3 FY23Auto Components

Rico Auto Industries Ltd Q3 FY23 Earnings Call Analysis

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

Price: ₹141P/E: 29.7Market Cap: ₹1.7K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

Order

Yes

Capex

1 of 5 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Around 15% of Rico Auto's turnover already comes from EV and hybrid vehicle components, with definite plans for growth in this segment.
→No current plans for new Greenfield projects; focus is on optimizing existing resources and capacities.
→Increased share of business with major OEM Maruti Suzuki from 8.5% to 12%, especially for water and oil pumps, with volume expansion requests ongoing.
→Efforts to optimize internal resources and equipment utilization to support volume growth without large new capital investments.
→Continued engagement with defense sector for electronic fuses and ammunition components, with expected order value around Rs. 1,000 crores.
→Profitability has improved with margins increasing quarter-on-quarter, indicating potential for better revenue growth going forward.
→Some hiccups expected in the near term (as in current year), but growth trajectory maintained by expanding product range and customer base.

Margin guidance

Category 2

→Margins improved from Q1 to Q2 FY24 on both standalone and consolidated basis, with standalone EBITDA margin increased by 1%.
→Profitability is on track with double-digit earnings growth expected in FY24 consolidated results.
→Increase in share of business with major OEMs (Maruti Suzuki's water and oil pump business growing from 8.5% to 12% share) supports volume growth and margin improvement.
→Optimization of resources and better price realizations (e.g., alloy wheels at subsidiary Rico Jinfei) expected to enhance profitability further.
→Expect incremental earnings from growing EV and hybrid vehicle component supplies, which already contribute 15% of turnover.
→Defence orders around Rs 1,000 crores, with growing ammunition product bookings, provide revenue visibility.
→No significant capex planned, but internal resource optimization is boosting productivity without large investments.
→Overall, management expects steady revenue and margin expansion with more profitable product mix and customer diversification.

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Fundraise plans

→As per the transcript (Page 11), Rico Auto Industries mentioned there is no plan for any new Greenfield project currently.
→The company is focusing on optimizing and utilizing existing capital equipment rather than investing in new capital-intensive projects.
→No explicit mention was made about any ongoing or planned fundraising through debt or equity in the call.
→They are managing internal resources for expansion and product volume increases without additional capital infusion.
→Overall, there appears to be no current or immediate future fundraising plans through debt or equity discussed in this transcript.

Order book

Yes

→The company is currently bidding for defense orders worth around Rs. 1,000 crores related to shooting ranges for the Army, Air Force, BSF, and CISF. (Page 9)
→Recent government contracts for electronic fuses were shelved, but the company continues as a sub-vendor supplying to the current ammunition suppliers. (Page 9)
→Defense orders such as for fuses and batteries are expected to pick up with ongoing trials and approvals. (Page 10)
→There is mention of a working capital stock of about 1000 fuses, which will be utilized once trials are successful. (Page 10)
→The company has ongoing business in EV and hybrid vehicle components, contributing about 15% of turnover, with growth expected but no new greenfield projects currently planned. (Page 12)

Capex plans

→No current plans for any new Greenfield projects as of now.
→The company is focused on optimizing and utilizing existing capital equipment rather than making large new investments.
→They have redeployed capital equipment previously used for other components to support production of new products and expansion.
→There is emphasis on improving margins and capacity with internal resource optimization rather than fresh capex.
→Any future capex will be driven by organic growth, especially tied to increased business from existing customers like Maruti Suzuki.
→The company continues to support EV and hybrid vehicle component supply, which contributes 15% of turnover, but again without new large capital investments planned.
→Discussions or tie-ups with other companies hinted but no confirmed capital investments detailed at this time.

How does Rico Auto Industries Ltd rank vs peers in Auto Components?

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1Rico Auto Industries Ltd

Rev 3Mar 2

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