Thaai Casting LtdQ3 FY24Auto Components

Thaai Casting Ltd

Q3 FY24 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 3

→Targeting revenue of INR220-225 crores for FY25-26, with conservative estimates around INR190-200 crores due to some delays.
→Order book of around INR350 crores with INR190-200 crores expected to be executed in the next 12 months.
→Revenue from wind energy business to start from FY26-27, with capex of INR70-75 crores already underway.
→Gas nitriding service business started revenue recently, contributing around INR9 crores monthly.
→Focus on increasing automotive segment revenue from 60% aiming for further growth, while balancing with higher-margin non-automotive segments.
→Planned scaling in part sizes in auto segment, from current 6 kg parts targeting up to 9 kg parts.
→Investments planned to support growth over next 5 years, including capex for machinery and robotics for automation.
→Expansion to exports expected from next year onwards to grow international footprint.

Category 3

→Revenue target for FY 2025-26 is INR 220-225 crores, with a conservative estimate currently at INR 190-200 crores due to delays.
→EBITDA margin guidance for FY 2025-26 is maintained around 25-27%, with potential to catch up to near 27%.
→Net profit margins expected to stay stable around 9.89%-11%.
→Operating margins have decreased from ~29%-30% to ~25% due to a higher share of automotive parts with lower margins.
→Future growth driven by expansion in automotive passenger vehicle segment (95% focus), wind energy components from FY 2026-27 onwards, and new verticals like gas nitriding services.
→EPS is expected to grow with increasing revenues; current H1 FY25 EPS is 2.15.
→Continuous investments in automation, robotics, and capital expenditure (~INR 70-75 crores for wind energy) to support growth and productivity.
→Working capital and debt expected to increase moderately with expansion but geared towards stable long-term growth.

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Yes

→Thaai Casting Limited is planning to enhance working capital with a modest increase in debt.
→Recently requested an additional INR 5 crores from bankers for working capital.
→Total debt currently is around INR 62 crores; expected to increase by INR 8-10 crores due to new machinery and capex.
→Post increase, total debt expected to be around INR 77-80 crores by end of FY25.
→The additional debt is primarily to fund capex for new projects and machinery to support business growth over the next 5 years.
→No mention of any new equity fundraising plans in the current discussion.
→Capacity and equipment investments are ongoing, with financing managed through incremental debt and banking facilities.

Yes

→The total order book is around INR 350 crores.
→Orders for the next 12 months are significant but the exact breakup is not specified.
→INR 154 crores order book is domestic, possibly for passenger and commercial vehicles.
→An existing INR 220 crores order secured in February is part of the ongoing enhancements, expecting INR 90+ crores from it this year.
→Order execution timeline spans the next 60 to 80 months, covering 3 to 5 years after production start.
→Additional orders under negotiation, some LOIs signed, awaiting purchase orders, mostly smaller than INR 150 crores.
→Strong pipeline from existing customers for model launches of 2026 and 2027.
→The company expects to complete about INR 125 crores revenue this year and target INR 190 crores next year from the order book.

Yes

→Capex is ongoing and essential for growth, mainly for upgrading or acquiring new machines to support tougher operations, higher precision, and new business models.
→Recent investments include machinery like INR1.4 crore secondary operation machines imported from Turkey, expected to start revenue contribution by June-July next year.
→INR70-75 crore capex planned for wind energy business, with machinery delivery timelines of 15-16 months, installations targeted by September 2025.
→Gas nitriding vertical has three furnaces; all operational with increasing production and utilization.
→Robotics implementation is in progress, targeting 30-40% increased automation next year to enhance productivity and reduce manpower.
→Working capital enhancements planned with additional INR5 crore requested from banks.
→Overall machinery investments expected to add around INR8-10 crore, supporting business for at least 5 years.
→New investments are "captive" to specific projects, contributing to incremental revenue and margins.

How does Thaai Casting Ltd rank vs peers in Auto Components?

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