Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- UNO Minda Ltd (BOM:532539, Financial) achieved its highest ever quarterly revenues, with group revenues growing by 17% year-on-year to INR5,112 crores.
- The company reported a 20% year-on-year increase in EBITDA for the quarter, with margins improving to 11.36%.
- The electric two-wheeler segment showed significant growth, with retail sales increasing by 58% year-on-year.
- UNO Minda Ltd (BOM:532539) has been expanding its capacity across multiple product lines, including lighting, alloy wheels, and EV components.
- The company has secured new orders and partnerships, such as the TLA with Mobis for speakers, indicating potential future growth opportunities.
Negative Points
- The commercial vehicle sector faced a 13% decline in production volumes due to various external factors, impacting overall performance.
- Finance costs increased to INR46 crores due to higher borrowings for CapEx and land acquisition.
- The company's share of profit from associates and joint ventures decreased, partly due to Minda Westport becoming a subsidiary.
- The European market downturn negatively impacted the acoustic business and international sales.
- Net debt increased to INR1,735 crores as of September 2024, primarily due to expansion CapEx and land bank expenditures.
Q & A Highlights
Q: My first question is on the favorable margin performance this quarter. There seems to be almost 70 basis points QoQ improvement in margin. What were some of the factors that helped the margin performance this quarter?
A: Sunil Bohra, Group CFO: The improvement is roughly around 30 basis points year-on-year, despite some businesses being in the expansion phase. This aligns with our guidance at the beginning of the year. The margin improvement is due to operational efficiencies and strategic cost management.
Q: Can you talk about the TLA with Mobis for speakers? How do you see the business opportunity with a strong partner like Mobis?
A: Nirmal Minda, Executive Chairman: The partnership with Mobis is strategic, especially as our previous partner faced bankruptcy. This move strengthens our technological capabilities and opens up potential future opportunities, although no specific discussions are ongoing at this moment.
Q: Could you provide a breakup of two-wheeler and four-wheeler alloy wheel revenues? Also, what is the industry scenario on the two-wheeler alloy wheel side?
A: Sunil Bohra, Group CFO: For the quarter, two-wheeler alloy wheel revenues were INR246 crores, and four-wheeler revenues were INR460 crores. The industry is seeing increased local manufacturing, reducing imports. Despite new capacities, we maintain a competitive edge through quality and efficiency.
Q: Can you provide insights on the new order win for hub drive motor and mid drive motor?
A: Sunil Bohra, Group CFO: These orders are from new-age OEMs launching new vehicles, not existing models. The market is still nascent, and while we have stopped providing specific revenue targets, we remain optimistic about growth in this segment.
Q: How do you see demand trends on the ground, especially for domestic two-wheeler and four-wheeler segments?
A: Sunil Bohra, Group CFO: Demand trends are in line with expectations. Q3 is typically softer due to annual shutdowns, but we remain optimistic about medium to long-term growth, supported by our ongoing investments and capacity expansions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
