Sterling Tools Ltd

- The company has a commercial paper facility approved by the Board but has decided **not to activate commercial paper borrowing at all** due to tight scheduling and unfavorable cost compared to current short-term borrowings (5.5%-7%). - No mention of plans to raise funds through equity in the provided transcript. - Incremental capex plans of INR 25-30 crores this year are funded internally, aimed at capacity expansion and new product capabilities, indicating no immediate external fundraising need highlighted. - No explicit announcements about future fundraising via debt or equity were disclosed in the transcript. In summary, Sterling Tools Limited is currently **not pursuing new debt via commercial paper** and has not indicated any new equity fundraising plans. They plan to fund capex through internal accruals.

- Sterling Tools is increasing engineering spend to INR 6-7 crores, a 3x increase to strengthen engineering capabilities including headcount, testing, and validation. - A new Bangalore tech center has been opened for upgrading current products and developing new product lines. - Incremental capex of INR 25-30 crores planned this financial year to add capacity in the fastener business, including for specific products and balancing equipment. - The INR 30 crores capex is additional to previous capex plans aimed at growing beyond INR 800 crores in revenue and enabling manufacturing of new products. - Capacity expansion ongoing in the EV component business from 300,000 units to 500,000 units per annum. - Continuous investment planned to maintain the first-mover advantage and strengthen the EV product portfolio beyond motor control units.

- Fasteners business revenue growth guidance for FY24 is expected between 17% to 20%, despite a muted industry outlook. - Volume growth contributes significantly, with 21% volume increase in FY23; product mix and price increases contribute around 7-8%. - Robust revenue growth plans extend to FY25 and FY26, driven by new product development and increased share of business. - EV component business aims to at least double revenue from FY23 levels (INR 171 crores), with capacity expansion underway (from 300,000 to 500,000 units per annum). - EV business growth supported by confirmed contracts from over 15 customers across two-wheelers, three-wheelers, and LCVs. - Two-wheeler segment fastener revenue grew 36% in FY23; PVs 25%, CVs 62%, and farm equipment 36%. - Margin retention remains a priority; fasteners EBITDA margin guidance around 16% for FY24. - Growth expected to be volume-led with a combination of new products and market share gains.

- Fasteners business revenue expected to grow 17%-20% in FY24; potential to reach full capacity revenue of INR 800+ crores with ongoing incremental capex (~INR 25-30 crores). - EV business revenue targeted to at least double from INR 170 crores in FY23, with capacity expansion underway (from 300,000 to 500,000 units annually). - EBITDA margins anticipated to improve: fasteners business margins around 16%; EV business margins expected to rise from 6.5-7% in FY23 to 8%-10% in FY24. - Consolidated EBITDA margins will likely exceed 13% in FY24 driven by margin improvements in both segments. - Return on Capital Employed (ROCE) in the EV business is strong at about 35%. - Overall earnings growth expected to be robust, supported by faster-than-industry revenue growth across segments and ongoing product development.

- Sterling Tools Limited has confirmed contracts with 15 customers in the EV segment, covering two-wheelers, three-wheelers (cargo and passenger), and LCVs. - Despite fluctuations in volumes due to market and regulatory factors, the company expects order volumes to increase as the industry stabilizes. - The company currently holds a 100% share of business with one of its largest customers. - Three-wheelers volumes have started picking up well, with good growth noted in Q4 FY23. - LCV volumes are expected to pick up from around Q3 FY24, currently selling in small quantities. - The company aims to at least double its EV business revenue from INR 170 crores in FY23 in the near future. - Sterling Tools anticipates a 2x growth potential in the EV business from current levels as new orders from multiple customers materialize.