Any current/future new fundraising through debt or equity?

Currently, the company is comfortable servicing its existing debt, with repayments progressing as scheduled. Gross debt stands at INR 620 crores and net debt at INR 581 crores, with expected peak debt not exceeding INR 700 crores. No accelerated prepayments of debt are planned; repayments will follow normal schedules unless better opportunities arise. The company is open to raising additional capital (debt or equity) in the future to fund inorganic growth opportunities or new growth channels. No specific fundraising through debt or equity is planned at present, but capital raising will

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

Two new plants in Pune are being set up: one for cabins and fabrication, and another for die casting; commercial production expected by end of January 2025 (Page 4, 11, 15). Capex of nearly INR 18 crores planned for Pune cabins/fabrication plant machinery installation (Page 8). Capex spend till date in current year is about INR 90 crores, mostly for finishing expansion in Pune and carry forward sheet metal projects (Page 7). Annual capex policy targets INR 150-155 crores (matching depreciation), but this year expected to be around INR 250 crores due to carry forward commitments of around INR 1

Future growth expectations in sales/revenue/volumes?

Revenue guidance for current year is INR 4,000 to 4,100 crores, with about 11% EBITDA margin. Next fiscal year revenue target is INR 4,500 to 4,600 crores, expecting around 11% margin. Capacity expansions (two plants in Pune for die casting and cabins/fabrication) expected to add 25-30% capacity and trigger volume growth. Existing plant utilization: Sheet metal capacity at 55-82%, with room to grow; die casting adding 25-27% capacity. Overseas operations projected to grow 12-13% in second half of the year. EV business expected to become a significant revenue channel over time, though

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

The company expects EBITDA margin improvement by 50 basis points this year, targeting around 10.45%, with further improvement to 11%-11.5% in FY '25 and '26. Revenue guidance for the current year is INR 4,000-4,100 crores, with expected growth to INR 4,500-4,600 crores next year. Overseas operations, including the Romania plant, aim to return to earlier EBITDA margin levels of 13-13.5% after stabilization. New expansions, especially in sheet metal, cabins, and fabrication, are expected to drive volume growth. The ramp-up of smart locks and EV-related components is projected to contribute to fu

Current/ Expected Orderbook/ Pending Orders?

Current orderbook is strong, with new capacities coming online and existing orders in hand. The company is engaged in discussions with several new customers, including EV start-ups like OLA, Acer, Simple, etc. There are ongoing developments for new parts, some already in the development phase and others expected to start production in the coming months. Bulk contracts with customers include price adjustments based on commodity price fluctuations, settled quarterly. New orders include smart locks for Suzuki and expanded supply for Honda 2-wheelers (locks, mirrors, casting), signaling orderbook

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Sandhar Technologies LimitedQ3 FY24Auto Components

Sandhar Technologies Limited Q3 FY24 Earnings Call Analysis

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

Price: ₹703P/E: 16.8Market Cap: ₹3.0K CrSector: Auto Components

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Revenue guidance for current year is INR 4,000 to 4,100 crores, with about 11% EBITDA margin.
→Next fiscal year revenue target is INR 4,500 to 4,600 crores, expecting around 11% margin.
→Capacity expansions (two plants in Pune for die casting and cabins/fabrication) expected to add 25-30% capacity and trigger volume growth.
→Existing plant utilization: Sheet metal capacity at 55-82%, with room to grow; die casting adding 25-27% capacity.
→Overseas operations projected to grow 12-13% in second half of the year.
→EV business expected to become a significant revenue channel over time, though exact ramp-up uncertain.
→Locking systems growth anticipated with new smart locks launch starting Q4 and next fiscal year, especially with Maruti Suzuki.
→Margin improvement expected with 50 basis points improvement planned yearly over next two years.
→The company aims to outperform industry growth owing to new business and capacity additions.

Margin guidance

Category 2

→The company expects EBITDA margin improvement by 50 basis points this year, targeting around 10.45%, with further improvement to 11%-11.5% in FY '25 and '26.
→Revenue guidance for the current year is INR 4,000-4,100 crores, with expected growth to INR 4,500-4,600 crores next year.
→Overseas operations, including the Romania plant, aim to return to earlier EBITDA margin levels of 13-13.5% after stabilization.
→New expansions, especially in sheet metal, cabins, and fabrication, are expected to drive volume growth.
→The ramp-up of smart locks and EV-related components is projected to contribute to future revenue and margin improvement.
→Cash flows are strong, with INR 142 crores generated in H1, supporting expansion without excessive debt rise.
→Management remains bullish on margin and revenue expansion driven by new investments and operational efficiencies.

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Fundraise plans

Yes

→Currently, the company is comfortable servicing its existing debt, with repayments progressing as scheduled.
→Gross debt stands at INR 620 crores and net debt at INR 581 crores, with expected peak debt not exceeding INR 700 crores.
→No accelerated prepayments of debt are planned; repayments will follow normal schedules unless better opportunities arise.
→The company is open to raising additional capital (debt or equity) in the future to fund inorganic growth opportunities or new growth channels.
→No specific fundraising through debt or equity is planned at present, but capital raising will be considered when growth opportunities necessitate it.

Order book

→Current orderbook is strong, with new capacities coming online and existing orders in hand.
→The company is engaged in discussions with several new customers, including EV start-ups like OLA, Acer, Simple, etc.
→There are ongoing developments for new parts, some already in the development phase and others expected to start production in the coming months.
→Bulk contracts with customers include price adjustments based on commodity price fluctuations, settled quarterly.
→New orders include smart locks for Suzuki and expanded supply for Honda 2-wheelers (locks, mirrors, casting), signaling orderbook additions.
→Capacity expansions in Pune (die casting and cabin/fabrication plants) will add approximately 25%-30% capacity.
→Existing clients such as TVS, Hero, Honda, Suzuki continue to provide stable revenue with ongoing parts orders.
→Order flow is expected to support 20%-25% higher output in the near future.

Capex plans

Yes

→Two new plants in Pune are being set up: one for cabins and fabrication, and another for die casting; commercial production expected by end of January 2025 (Page 4, 11, 15).
→Capex of nearly INR 18 crores planned for Pune cabins/fabrication plant machinery installation (Page 8).
→Capex spend till date in current year is about INR 90 crores, mostly for finishing expansion in Pune and carry forward sheet metal projects (Page 7).
→Annual capex policy targets INR 150-155 crores (matching depreciation), but this year expected to be around INR 250 crores due to carry forward commitments of around INR 100 crores (Page 7).
→Partial capex incurred for Romania plant overseas, with remaining machinery installation planned for next financial year (Page 4).
→Capex focused on expansion and new capacities to support future growth and increase output by 20%-30% (Page 13, 15).

How does Sandhar Technologies Limited rank vs peers in Auto Components?

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1Sandhar Technologies Limited

Rev 3Mar 2

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