Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Precision Camshafts Ltd (BOM:539636, Financial) has started serial production of assembled camshafts for an Indian OEM, with plans to expand to larger volumes next year.
- The company has not lost any business or market share from any customer during the challenging period.
- Two new manufacturing plants in Solapur are nearing completion, which will enhance production capabilities for assembled camshafts and EV production lines.
- The company is actively working on heavy vehicle electrification projects in India, which are expected to be significant milestones.
- Precision Camshafts Ltd (BOM:539636) is focusing on import substitution projects in India, which could expand its market share beyond the current 70% in the passenger vehicle segment.
Negative Points
- Standalone net profit decreased to 5.3 crores from 13 crores in the previous quarter, primarily due to decreased sales and higher operating costs.
- Subsidiary Memco reported a break-even margin, with a decrease in sales attributed to an industry slowdown.
- The e-mobility subsidiary Emos in the Netherlands faced revenue dips due to economic slowdown and geopolitical instability in Europe.
- The ramp-up of EV volumes in India has been slower than anticipated due to regulatory and market challenges.
- Consolidated income decreased by 18% quarter on quarter, driven by decreased sales at MFT and Emos.
Q & A Highlights
Q: What is the status and outlook for the EV business in India and Europe over the next 12-15 months?
A: The EU business is facing significant challenges due to economic slowdown and subsidy pullbacks, with recovery expected early next year. In India, electrification projects are progressing slowly due to regulatory complexities, but there is growing interest, especially in heavy vehicle electrification, which is expected to see significant developments in the next 2-3 quarters. (Respondent: Whole Time Director of Business Development)
Q: Can you provide details on the new manufacturing capacity and its impact on the order book?
A: The new capacity is being added for projects starting in late 2025 or 2026, primarily for camshafts. These projects are for existing engines, reducing risk. The capacity will be fully utilized in the next 1.5 years as production ramps up. (Respondent: Whole Time Director of Business Development)
Q: What is the reason for the drop in volume of machine and casting camshafts by 13%?
A: The decline is due to reduced demand in Europe and other regions like Brazil and Mexico, not due to loss of market share. The Indian market remains flat. (Respondent: Whole Time Director of Business Development)
Q: How are the subsidiaries performing, and is there a need for strategic changes?
A: Subsidiaries are facing challenges, especially in Europe, due to market conditions. The focus is on making them self-sufficient without relying on PCL for financial support. Strategic evaluations are ongoing, but current market conditions are not favorable for divestments. (Respondent: Whole Time Director of Business Development)
Q: What is the market share of Precision Camshafts in the Indian passenger vehicle segment?
A: Precision Camshafts holds approximately 70% market share in the Indian passenger vehicle segment. (Respondent: Whole Time Director of Business Development)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
