Elecon Engineering Co. Ltd. · NSE:ELECON
Elecon Engineering — Q1 FY2024 Earnings Presentation
43 slides from Elecon Engineering's earnings presentation, July 2023
Slide 1: Elecon Engineering Company Limited Investor Presentation – July 2023
INDIA’S LARGEST INDUSTRIAL GEAR SOLUTION PROVIDER ELECON ENGINEERING COMPANY LIMITED Investor Presentation – July 2023
Slide 2: 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 3: Company Overview
COMPANY OVERVIEW
Slide 4: 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 5: 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 6: 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 7: R&D strengthens our leadership position
R&D strengthens our leadership position DSIR approved In-House R&D facility R&D Team 20+ Software for designing, analysis and parameter validation 45 11 67 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 8: 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 Q1 FY24 is ~76% Bird’s eye view of the Facility 8
Slide 9: 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 10: 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 10
Slide 11: EON2 – Next Generation innovation in Engineering
EON2 – Next Generation innovation in Engineering Highlights of EON2 EON Series 1 NEW EON Helical and Bevel Helical Gearbox ❖ New EON Series brings transformative The Second Generation of advantages to both valued customers and EON the company 2 Design Highlights ❖ Innovative solution enhances operat
Slide 12: Product Enrichment through Addition & Upgradation
Product Enrichment through Addition & Upgradation Central Drive Planetary Vertical Roller Mix High Speed Gearbox Roller Press Gearbox Sugar Planetary Gearbox Dual Tandem Gearbox Gearbox Gearbox ❖ Features: Single Stage, ❖ Usage : Ball mill drive of ❖ Usage : Cement ❖ Usage : Power and Cement ❖ Usage
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 17
Slide 18: Awards and Recognition
Awards and Recognition Awards & Recognition 18
Slide 19: 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 five OEM Continue to focus on R&D and Expansion into new territories and The strategic turnaround with focus business in the European m
Slide 20: Industrial Overview
Industrial Overview
Slide 21: 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% 2023 2024 5.9% 5.2% 4.5% Infrastructure Boost The government’s growing attention towards infrastructure is expected to stimulate the cape
Slide 22: 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 23: 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 24: ESG Vision
ESG Vision
Slide 25: 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 26: 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 27: 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 27
Slide 28: 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 29: Q1FY24 Financial Highlights
Q1FY24 FINANCIAL HIGHLIGHTS
Slide 30: Q1FY24 Key Highlights
Q1FY24 Key Highlights Development on Overseas OEM Business: ❖ Signed-off Five OEM Business in European market, having annual estimated business volume of ~Euro 5 Million 1 ❖ Prototype is under development and to be supplied to the OEMs by Q3FY24, commercial production expected to start from FY25 2 O
Slide 31: Strong Consolidated Quarterly Performance
Strong Consolidated Quarterly Performance Revenue (Rs Crs.) Adj. EBITDA* (Rs Crs.) PAT (Rs Crs.) +26.4% +33.2% +72.5% 414 96 73 328 72 42 Q1FY23 Q1FY24 Q1FY231 Q1FY242 Q1FY23 Q1FY24 Adj. EBITDA Margin* (%) PAT Margin (%) Revenue Guidance +117 bps +470 bps of Rs 2,000 crores 21.9% 23.1% 17.6% in FY24
Slide 32: Consolidated Profit & Loss Statement
Consolidated Profit & Loss Statement Profit and Loss (Rs. Crs.) Q1 FY24 Q1 FY23 Y-o-Y Q4 FY23 Q-o-Q Revenue from Operations 414 328 26.4% 425 -2.4% Operating Expenses 216 171 251 Gross Profit 198 157 26.2% 173 14.2% Gross Profit Margin 47.8% 47.9% -10 bps 40.8% 694 bps Employee Cost 46 41 31 Other E
Slide 33: Consolidated Revenue Split
Consolidated Revenue Split Geography Wise Segment Wise Q1FY23 Q1FY24 Q1FY23 Q1FY24 13% 13% 29% 27% 71% 73% 87% 87% Domestic Overseas Gear MHE The company is focused on improving the revenue share from Overseas market and turning around the MHE Business 33
Slide 34: Consolidated Segment Wise Performance
Consolidated Segment Wise Performance Revenue (Rs Crs.) EBIT (Rs Crs.) Order Intake (%) Margins (%) 19% 25% Steel +26.6% +60.3% 22.1% Sugar 361 89 Cement 285 41.9% Power Gear 55 7.9% MHE Marine 8.0% Const. & Engineering 8.2% 4.4% 3.9% Others 3.6% Q1FY23 Q1FY24 Q1FY23 Q1FY24 Revenue Guidance of Rs 1,
Slide 35: Consolidated Order Book
Consolidated Order Book Order Intake (Rs Crs.) Open Order as on 30th June’23 (Rs Crs.) +22.4% +37.2% 497 793 406 578 655 446 361 476 102 138 45 51 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Gear MHE Key Highlights ❖ Gear Division: The order intake during the quarter stood at Rs 446 Crs., up by 24% on Y-o-Y bas
Slide 36: Historical Financials
Historical Financials
Slide 37: Historical Consolidated Financial Performance
Historical Consolidated Financial Performance Revenue (Rs Crs.) EBITDA (Rs Crs.) PAT (Rs Crs.) +12.0% 1,530 339 237 +34.1% +38.3% 1,212 1,088 1,044 246 185 140 140 90 58 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 EBITDA Margin (%) PAT Margin (%) +926 bps +728 bps 22.2% 15.5% 20.3% 1
Slide 38: Consolidated Historical Segment wise Financial highlights
Consolidated Historical Segment wise Financial highlights Revenue (Rs Crs.) EBIT (Rs Crs.) ROCE (%) Margin (%) 14 22 20 22 +15.2% 1,313 288 24.9% 25.4% +32.7% 24.2% 1,076 Gear 905 211 17.8% 859 196 123 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Revenue (Rs Crs.) EBIT (Rs Crs.) ROCE
Slide 39: Consolidated Historical Ratios
Consolidated Historical Ratios Return on Net worth (%)1 ROCE (%)2 Working Capital Cycle (Days) 18.8% 24.0% 99 91 17.6% 74 78 13.6% 10.7% 11.4% 6.4% 7.6% FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 FY20 FY21 FY22 FY23 Net Asset Turnover (x) Debt to Equity (x) Current Ratio (x) 0.9 0.5 2.5 0.7 0.3 1.6 0.5
Slide 40: Historical Consolidated Profit & Loss Statement
Historical Consolidated Profit & Loss Statement Profit and Loss (Rs. Crs.) FY23 FY22 FY21 FY20 Revenue from Operations 1,530 1,212 1,044 1,088 Operating Expenses 836 661 562 646 Gross Profit 694 551 482 443 Gross Profit Margin 45.4% 45.4% 46.2% 40.7% Employee Cost 150 128 118 134 Other Expenses 205
Slide 41: Historical Consolidated Balance Sheet
Historical Consolidated Balance Sheet Assets (Rs Crs.) Mar-23 Mar-22 Mar-21 Mar-20 Equity and Liabilities (Rs Crs.) Mar-23 Mar-22 Mar-21 Mar-20 ASSETS EQUITY AND LIABILITIES Non-current assets EQUITY Property, Plant and Equipment 527 523 548 590 Capital work-in-progress 0 1 0 0 Equity Share Capital
Slide 42: Historical Consolidated Cash Flow Statement
Historical Consolidated Cash Flow Statement Particulars (Rs Crs.) Mar-23 Mar-22 Mar-21 Mar-20 Profit before Tax 300 171 81 20 Adjustment for Non-Operating Items 50 106 148 136 Operating Profit before Working Capital Changes 349 277 229 156 Changes in Working Capital 27 -22 18 70 Cash Generated from
Slide 43: 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
Elecon Engineering Company — Q1 FY2024 Earnings Presentation on 6ix