Elecon Engineering Co. Ltd. · NSE:ELECON
Elecon Engineering — Q2 FY24 Earnings Presentation
48 slides from Elecon Engineering's earnings presentation, Oct 20, 2023
Slide 1: Regulation 30 Investor Presentation filing letter
ISO 9001'2015 [!).[!) - A. TUVRheinland ISO 14001 :2015 ISO 45001:2018 . •• [!) .".1 • '- -. .... 01:• 11 ;;u ;;n www.1uv.com ID 9105017019 20th October, 2023 To, The Manager (Listing), The Manager (Listing), The BSE Ltd. National Stock Exchange of India Ltd. Mumbai Mumbai Company's Scrip Code: 5057
Slide 2: Investor Presentation – Q2 & H1FY24
ONE OF ASIA’S LARGEST INDUSTRIAL GEAR SOLUTION COMPANY ELECON ENGINEERING COMPANY LIMITED Investor Presentation – Q2 & H1FY24
Slide 3: Safe Harbor
Safe Harbor This presentation and the accompanying slides (the “Presentation”), which have been prepared by Elecon Engineering Company Limited (the “Company”), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe fo
Slide 4: Safety and Wellness
Safety and Wellness Period Minor Major Fatal Q2 FY24 0 0 0 Q1 FY24 1 0 0 Last 3 Financial Years 2022-23 0 0 0 2021-22 1 0 0 2020-21 0 0 0 At Elecon, safety and well-being take precedence as our utmost concern. Over the last three years, we have not experienced any Major and Fatal incidents. Our comm
Slide 5: Company Overview
COMPANY OVERVIEW
Slide 6: Engineering Co providing Innovation led Technology Solutions
Engineering Co providing Innovation led Technology Solutions Company compliant with an Integrated Management System based on ISO 9001:2015, ISO 14001:2015, and OHSAS 18001:2007 First in India to manufacture sophisticated standards equipment for bulk Material Handling with product range that caters m
Slide 7: Started in 1951 and evolved as Asia's Largest Gear Solutions Co.
Started in 1951 and evolved as Asia’s Largest Gear Solutions Co. Established in Mumbai by Late Shri Ishwarbhai Patel Acquisition debt repaid Forayed into Successful execution of defence manufacturing Listed on Bombay (Indian Navy) project Established Gear division conveying equipment Stock Exchange
Slide 8: Values & Culture at Elecon
Values & Culture at Elecon Our Values are our Bedrock! Delightful Customer Resolute Trust Ingenious Value Creation Ethics at Experience Entrepreneurship the Core Ensure unparalleled positive Foster unwavering trust through Demonstrate accountability for Create value and enable growth Uphold the high
Slide 9: Global MNC with Strong Distribution Network
Global MNC with Strong Distribution Network Overseas Market Domestic Market 100+ 65+ Distributors & Dealers Distributors & Dealers 35+ 55+ Customer Customer representatives representatives 4 Manufacturing & Pan India Assembly Centers Presence 10 Sales Offices MANUFACTURING FACILITIES ASSEMBLY & SERV
Slide 10: R&D strengthens our leadership position
R&D strengthens our leadership position DSIR approved In-House R&D facility R&D Team 63 20+ Software for designing, analysis and parameter validation 11 85 Engineers team dedicated for R&D 1 10 2 Patents granted and 3 Patents applied PhD ME BE DME Design & Development Process Design Analysis & Value
Slide 11: State of the Art Manufacturing Facility
State of the Art Manufacturing Facility State of the art facility located at Vallabh Vidyanagar, Gujarat The facility is spread over 335,000 Square Meter Capacity utilization for H1FY24 is ~76% Bird’s eye view of the Facility 10
Slide 12: Gear Division – Providing a wide variety of solutions
Gear Division – Providing a wide variety of solutions Diversified across Best in class Gear World Class industries such as 39%* Market Share Widest range of Solutions operations with low Power, Cement, in the Domestic Industrial Gears lead time Sugar, Steel etc. Organized Market In-house Strong Bran
Slide 13: Supplying to multiple industries thus diversifying risk
Supplying to multiple industries thus diversifying risk Steel Cement Sugar Plastic Industry Agnostic Gear Access to new market Resilience to Business Sustainable Performance Solutions opportunities Cycles Defence Rubber Mining Power 12
Slide 14: EON2 – Next Generation innovation in Engineering
EON2 – Next Generation innovation in Engineering Highlights of EON2 EON Series 1 EON2 Helical and Bevel Helical Gearbox ❖ EON2 Series brings transformative The Second Generation of advantages to both valued customers and EON the company 2 Design Highlights ❖ Innovative solution enhances operational
Slide 15: Product Enrichment through Addition & Upgradation
Product Enrichment through Addition & Upgradation RTC Gearbox Screw Jack Gear Box Crane Gearbox ❖ Features: Single Stage, Worm Gear, Speed Reducer ❖ Features : Single Stage, Worm Gear, Speed Reducer ❖ Usage : For drives of transporting equipment, lifting gears, crane & elevators ❖ Usage: Used in tir
Slide 16: MHE Division: A proxy to Capex Creation
MHE Division: A proxy to Capex Creation Largest supplier of Pioneers in Stockyard Machines Enhanced manufacturing Bulk & Wagon tipplers in diversification Widest range of End User Industry MHE India across industries products Consistent delivery Robust In-House Discontinued EPC Maintaining of high-q
Slide 17: Re-oriented the Business since 2019
Re-oriented the Business since 2019 MHE Division witnessed remarkable turnaround becoming profitable with focus Pioneers with market leadership on Products & aftermarket business Discontinued the EPC Currently Projects and focus on achieving 20%+ products, spares & ROCE service business Strategic in
Slide 18: Board of Directors
Board of Directors Shri Prayasvin B. Patel Shri Pradip M. Patel Shri Prashant C. Amin Shri Jai S. Diwanji Chairman & Managing Director Non-Independent & Non-Executive Director Non-Independent & Non-Executive Director Independent & Non-Executive Director Experience of 48 years in engineering industry
Slide 19: Strong Management Team
Strong Management Team Shri Kamlesh Shah Shri Narasimhan Raghunathan Group Chief Financial Officer Chief Financial Officer With over 25 years of extensive expertise, he possesses Having amassed over two decades of experience, he a diverse background in Business Strategy Planning & has proven his pro
Slide 20: Strong Relationship with Marquee Clients
Strong Relationship with Marquee Clients Gear MHE …and many more The Brand Names and Logos mentioned are the property of their respective owners and are used here for identification purposes only 19
Slide 21: Awards and Recognition
Awards and Recognition 2nd Consecutive Year in a row 20
Slide 22: Way Ahead…
Way Ahead… Supply to OEM in the New Product Development Market Expansion Growing the MHE Business European Market sustainably and profitably Successfully signed off Six OEM Continue to focus on R&D and Expansion into new territories and The strategic turnaround with focus business in the European ma
Slide 23: Industrial Overview
Industrial Overview
Slide 24: Economic & Industrial Outlook
Economic & Industrial Outlook Strong Demand Indian GDP Growth Outlook Growth outlook for gears and MHE segments remain positive on the back of strong demand. 6.3% 6.1% 2023 2024 5.2% 4.5% Infrastructure Boost The government’s growing attention towards infrastructure is expected to stimulate the cape
Slide 25: Industrial Gearbox Market Size
Industrial Gearbox Market Size Global Market (USD Mn) Asia Pacific (USD Mn) India (USD Mn) Asia Pacific – CAGR (2022 to 2030) 4.1% 4.5% 396 4.9% 12,800 5.2% 5,436 4.9% 8,988 3,633 270 2030 5.6% 4.4% India Japan China Others 2022 2030 2022 2030 2022 2030 Key Growth Drivers ` Growing Government Techno
Slide 26: Key Sector Outlook
Key Sector Outlook ❖ Steel & Mineral Industry has been consistently doing well for the past 3 years ❖ Elecon is the leading and the sole Indian manufacturer of 900 TPD sponge iron plant in the country Steel ❖ Both Iron-ore and finished steel segment are growing at a faster pace and is expected to gr
Slide 27: ESG Vision
ESG Vision
Slide 28: Sustainable towards Environment
Sustainable towards Environment 70% Energy from Renewal ~85% Lighting converted into 60% Green Campus Sources LED • Wind Power – 14MW • Solar Power – 5 MW ~4000 Sq Mtrs unused land 40% reduction in using wood Electric powered developed into Green Belt Area by replacing to Nail-less equipment enhance
Slide 29: Elecon Engineering – A responsible Corporate
Elecon Engineering – A responsible Corporate Health and Medical Promoting Sports Caring for Society ❖ Blood Donation Camp ❖ Food Distribution for needy ❖ Elecon Cricket Academy ❖ Supporting charitable hospitals with ❖ Support to Weaker Section of latest medical equipment ❖ Elecon Tennis Academy Soci
Slide 30: Vision for Inclusiveness
Vision for Inclusiveness Business Partner Meet 01 Promoting procurements from MSME 02 Business Partner Meet Dealer and Channel Partner Meet 03 CSD Sales Conference 04 Sustainable Supply Chains Web Supplier Portal for sustainable Supply Chain 05 29
Slide 31: Building Strong Workforce with Care
Building Strong Workforce with Care Sustained Workforce Leadership Development Program Celebrations ❖ Celebrate employees' achievements ❖ Leadership Development program under “Gurukul” ❖ Celebrate various occasions & Prize ❖ 10+ Years average service period of an employee Project distribution from t
Slide 32: Q2 & H1 FY24 Financial Highlights
Q2 & H1 FY24 FINANCIAL HIGHLIGHTS
Slide 33: H1 FY24 Key Highlights
H1 FY24 Key Highlights Development on Overseas OEM Business: ❖ Signed-off Six OEM Business in European market, having annual estimated business volume of ~Euro 5.5 Million 1 ❖ Prototype is under development and to be supplied to the OEMs by Q3FY24, commercial production expected to start from FY25 A
Slide 34: Strong Consolidated Quarterly & Half Yearly Performance
Strong Consolidated Quarterly & Half Yearly Performance Revenue (Rs Crs.) EBITDA (Rs Crs.) PAT (Rs Crs.) +25.5% +38.9% +51.2% 899 219 162 +24.8% 716 +28.2% +37.3% 157 107 485 119 89 389 93 65 Q2FY23 Q2FY24 H1FY23 H1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 Q2FY23 Q2FY24 H1FY23 H1FY24 EBITDA Margin (%) PAT Ma
Slide 35: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Profit and Loss (Rs. Crs.) Q2FY24 Q2FY23 Y-o-Y Q1FY24 Q-o-Q H1FY24 H1FY23 Y-o-Y Revenue from Operations 485 389 24.8% 414 17.0% 899 716 25.5% Operating Expenses 263 212 216 480 383 Gross Profit 222 177 198 420 333 Gross Profit Margin 45.7% 45.4% 47.8% 46.7% 46.6%
Slide 36: Consolidated Balance Sheet
Consolidated Balance Sheet Assets (Rs Crs.) Sep-23 Mar-23 Equity and Liabilities (Rs Crs.) Sep-23 Mar-23 ASSETS EQUITY AND LIABILITIES Non-current assets EQUITY Property, Plant and Equipment 530 527 Capital work-in-progress 0 0 Equity Share Capital 22 22 Right to use of Assets/Investment Properties
Slide 37: Consolidated Cash Flow Statement
Consolidated Cash Flow Statement Particulars (Rs Crs.) Sep-23 Sep-22 Profit before Tax 212 137 Adjustment for Non-Operating Items 19 32 Operating Profit before Working Capital Changes 230 168 Changes in Working Capital -8 -4 Cash Generated from Operations 223 165 Less: Direct Taxes paid 43 24 Net Ca
Slide 38: Consolidated Revenue Split
Consolidated Revenue Split Geography Wise Segment Wise Q2FY23 Q2FY24 Q2FY23 Q2FY24 20% 14% 13% 30% 70% 80% 86% 87% H1FY23 H1FY24 H1FY23 H1FY24 14% 13% 23% 30% 70% 77% 86% 87% Domestic Overseas Gear MHE The company is focused on improving the revenue share from Overseas market and turning around the
Slide 39: Consolidated Segment Wise Performance
Consolidated Segment Wise Performance Revenue (Rs Crs.) EBIT (Rs Crs.) Order Intake (%) Margins (%) 23.9 26.0 21.8 25.4 Steel +26.8% +47.3% 22% Sugar 199 Cement 784 +38.2% 43% Power Gear +26.9% 618 135 H1FY24 7% MHE 423 110 333 80 Marine 10% Const. & Engineering 4% 6% Others 3% 5% Q2FY23 Q2FY24 H1FY
Slide 40: Consolidated Order Book
Consolidated Order Book Order Intake (Rs Crs.) Open Order as on 30th Sep’23 (Rs Crs.) +8.9% +16.8% 913 738 838 632 -3.7% 615 821 432 416 744 520 383 375 112 123 49 41 94 92 Q2FY23 Q2FY24 H1FY23 H1FY24 H1FY23 H1FY24 Gear MHE Key Highlights ❖ Gear Division: The order intake for H1FY24 stood at Rs 821
Slide 41: Historical Financials
Historical Financials
Slide 42: Historical Consolidated Financial Performance
Historical Consolidated Financial Performance Revenue (Rs Crs.) EBITDA (Rs Crs.) PAT (Rs Crs.) +21.0% 1,530 339 237 +35.2% 1,212 +103.0% 1,044 246 219 162 899 185 140 58 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 EBITDA Margin (%) PAT Margin (%) +440 bps +1000 bps 24.3% 18.0%
Slide 43: Consolidated Historical Segment wise Financial highlights
Consolidated Historical Segment wise Financial highlights Revenue (Rs Crs.) EBIT (Rs Crs.) ROCE (%) Margin (%) 21.6 19.6 22.0 25.4 +20.5% 1,313 +21.3% 288 27.2% 24.9% 24.2% 25.4% 1,076 Gear 905 211 199 196 784 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 Revenue (Rs Crs.) EBIT (
Slide 44: Consolidated Historical Ratios
Consolidated Historical Ratios Return on Net worth (%)1 ROCE (%)2 Total Asset Turnover (x) Net Fixed Asset Turnover Ratio (x) 20.9% 26.8% 0.9 3.2 18.8% 24.0% 0.9 2.9 0.7 2.3 13.6% 17.6% 0.5 1.8 11.4% 6.4% FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 FY21 FY22 FY23 H1FY24 Debt to
Slide 45: Historical Consolidated Profit & Loss Statement
Historical Consolidated Profit & Loss Statement Profit and Loss (Rs. Crs.) FY23 FY22 FY21 Revenue from Operations 1,530 1,212 1,044 Operating Expenses 836 661 562 Gross Profit 694 551 482 Gross Profit Margin 45.4% 45.4% 46.2% Employee Cost 150 128 118 Other Expenses 205 176 179 EBITDA 339 246 185 EB
Slide 46: Historical Consolidated Balance Sheet
Historical Consolidated Balance Sheet Assets (Rs Crs.) Mar-23 Mar-22 Mar-21 Equity and Liabilities (Rs Crs.) Mar-23 Mar-22 Mar-21 ASSETS EQUITY AND LIABILITIES Non-current assets EQUITY Property, Plant and Equipment 527 523 548 Capital work-in-progress 0 1 0 Equity Share Capital 22 22 22 Right to us
Slide 47: Historical Consolidated Cash Flow Statement
Historical Consolidated Cash Flow Statement Particulars (Rs Crs.) Mar-23 Mar-22 Mar-21 Profit before Tax 300 171 81 Adjustment for Non-Operating Items 50 106 148 Operating Profit before Working Capital Changes 349 277 229 Changes in Working Capital 27 -22 18 Cash Generated from Operations 376 254 24
Slide 48: Thank You
Thank You Company: ELCON ENGINEERING COMPANY Investor Relations: Strategic Growth Advisors Pvt. Ltd. LIMITED www.sgapl.net CIN: L29100GJ1960PLC001082 CIN: U74140MH2010PTC204285 Shri Narasimhan Raghunathan / Shri Ashish R Jain Mr. Sagar Shroff / Ms. Prachi Chhugani Email: narasimhanr@elecon.com / arj
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