Any current/future new fundraising through debt or equity?

As of the August 10, 2023 conference, Uniparts India is net debt free with a net cash position of approximately Rs. 54 crores. Recent debt repayments have been made, including paying off term debt in July. Interest expenses are low and are related to some remaining term debt that is being paid off monthly. Management has not indicated any current plans for new fundraising through debt or equity. Focus is on deploying existing cash, particularly for acquisitions, rather than raising fresh capital. The company remains cautious about protecting return on capital and is looking at strategic opport

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

Current CAPEX for Q1 FY24 was approximately Rs. 8.2 crore. The company is focusing on deploying cash in acquisitions, actively pursuing strategic investments especially in newer segments. Management is strategically looking at opportunities arising due to global economic slowdowns and high interest rates, particularly in the US and Europe. There is a strong emphasis on protecting return on capital and not diluting core business areas. New business awards have significantly increased (Rs. 330 crore trailing 12 months vs Rs. 200 crore previously), indicating investment in order book exec

Future growth expectations in sales/revenue/volumes?

Uniparts India expects strong future growth with a focus on new business awards, which increased from Rs. 200 crore to Rs. 330 crore year-on-year. New business worth Rs. 150 to 175 crore is expected to come in the next fiscal, over and above existing business. FY25 is anticipated to deliver significantly higher growth than the long-term predicted 16%. The long-term growth target remains at 16% over a 4-5 year period, driven by secular market growth (4-5%) plus 11-12% from new business and market share gains. Growth is supported by segments like construction, UTV/ATV, 3PL, and hydraulic segment

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

Uniparts maintains a long-term growth guidance of around 16% CAGR over 4-5 years, driven by secular market growth (4-5%) and new business, China Plus One, and market share gains (11-12%). FY25 is expected to deliver significantly higher growth compared to the current year’s slower performance due to cyclical factors. EBITDA margins remain strong, maintained north of 20%, with warehouse business margins expected to increase from 44% to 47-48% over 3-4 years. Return on Capital Employed (ROCE) target has been raised from north of 25% five years ago to north of 30% currently, reflecting impr

Current/ Expected Orderbook/ Pending Orders?

The new business awards have increased from about Rs. 200 crores last year to Rs. 330 crores on a trailing 12-month basis, indicating strong order inflow. The total OEM order book stands at over Rs. 500 crores, spread over the next four years. Approximately Rs. 92 crores of the new business awards are already implemented and contributing to sales, with the full annualized impact expected to be Rs. 150 to 175 crores for the next year. New orders include segments like China Plus One, UTV/ATV, construction, 3PL, and hydraulics, though detailed breakup is to be provided later. The order bo

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Uniparts India LtdQ2 FY23Auto Components

Uniparts India Ltd Q2 FY23 Earnings Call Analysis

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

Price: ₹680P/E: 19.3Market Cap: ₹2.6K 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

→Uniparts India expects strong future growth with a focus on new business awards, which increased from Rs. 200 crore to Rs. 330 crore year-on-year.
→New business worth Rs. 150 to 175 crore is expected to come in the next fiscal, over and above existing business.
→FY25 is anticipated to deliver significantly higher growth than the long-term predicted 16%.
→The long-term growth target remains at 16% over a 4-5 year period, driven by secular market growth (4-5%) plus 11-12% from new business and market share gains.
→Growth is supported by segments like construction, UTV/ATV, 3PL, and hydraulic segments linked to the China Plus One theme.
→Management expects the US construction and large agri equipment markets to remain strong, while pockets like US small agri and aftermarket are subdued but cyclical.
→Warehousing business model changes support improving margins alongside volume growth.

Margin guidance

Category 3

→Uniparts maintains a long-term growth guidance of around 16% CAGR over 4-5 years, driven by secular market growth (4-5%) and new business, China Plus One, and market share gains (11-12%).
→FY25 is expected to deliver significantly higher growth compared to the current year’s slower performance due to cyclical factors.
→EBITDA margins remain strong, maintained north of 20%, with warehouse business margins expected to increase from 44% to 47-48% over 3-4 years.
→Return on Capital Employed (ROCE) target has been raised from north of 25% five years ago to north of 30% currently, reflecting improving profitability metrics.
→New business awards are increasing sharply, from Rs. 200 crore to Rs. 330 crore in trailing twelve months, providing visibility on future revenue and profit growth.
→Operating cash flow remains robust, supporting further growth and potential acquisitions in newer segments.

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Fundraise plans

→As of the August 10, 2023 conference, Uniparts India is net debt free with a net cash position of approximately Rs. 54 crores.
→Recent debt repayments have been made, including paying off term debt in July.
→Interest expenses are low and are related to some remaining term debt that is being paid off monthly.
→Management has not indicated any current plans for new fundraising through debt or equity.
→Focus is on deploying existing cash, particularly for acquisitions, rather than raising fresh capital.
→The company remains cautious about protecting return on capital and is looking at strategic opportunities for acquisitions, leveraging its strong cash position.

Order book

Yes

→The new business awards have increased from about Rs. 200 crores last year to Rs. 330 crores on a trailing 12-month basis, indicating strong order inflow.
→The total OEM order book stands at over Rs. 500 crores, spread over the next four years.
→Approximately Rs. 92 crores of the new business awards are already implemented and contributing to sales, with the full annualized impact expected to be Rs. 150 to 175 crores for the next year.
→New orders include segments like China Plus One, UTV/ATV, construction, 3PL, and hydraulics, though detailed breakup is to be provided later.
→The order book remains robust despite market fluctuations, with strong traction in US construction and large agriculture equipment markets.
→Aftermarket order book visibility is limited; it typically does not extend beyond 90 days.

Capex plans

Yes

→Current CAPEX for Q1 FY24 was approximately Rs. 8.2 crore.
→The company is focusing on deploying cash in acquisitions, actively pursuing strategic investments especially in newer segments.
→Management is strategically looking at opportunities arising due to global economic slowdowns and high interest rates, particularly in the US and Europe.
→There is a strong emphasis on protecting return on capital and not diluting core business areas.
→New business awards have significantly increased (Rs. 330 crore trailing 12 months vs Rs. 200 crore previously), indicating investment in order book execution and expansion.
→Expansion areas include hydraulics, greater than 70 horsepower segments, UTV/ATV launch in Q4 FY24, and China Plus One initiatives.
→Overall, the company maintains cautious optimism and is leveraging its net cash position (Rs. 54 crore net cash at end Q1) for targeted capital deployment, especially acquisitions.

How does Uniparts India Ltd rank vs peers in Auto Components?

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1Uniparts India Ltd

Rev 3Mar 3

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