Setco Automotive Limited · NSE:SETCO
Setco Automotive — Q1 FY22 Earnings Presentation
20 slides from Setco Automotive's earnings presentation, Aug 8, 2021
Slide 1: Cover letter to stock exchanges
August 8, 2021 To, BSE Limited, National Stock Exchange of India Ltd, Dept. of Corporate Services, Listing Department Phiroze Jeejeebhoy Towers, Exchange Plaza, Bandra Kurla Complex, Dalal Street, Bandra (East), Mumbai – 400051 Mumbai - 400 001 Scrip Symbol: SETCO Company Code: 505075 Dear Sir, Sub:
Slide 2: Results FY21 and Q1FY22
Results FY21 and Q1FY22 Setco Automotive Limited Every adversity helps you discover an opportunity waiting to happen!
Slide 3: Disclaimer
Disclaimer NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES This presentation has been prepared by Setco Automotive Limited (the “Company”) solely for information purposes without regard to any specific objectives, financial situations or informational needs
Slide 4: Agenda
Agenda 1 Overview 2 Financial Results 3 Business Update 4 Outlook
Slide 5: Highlights/Journey from lockdown
1 Overview Highlights/Journey from lockdown FY21 Q1FY22 Industry/Economy • Lockdown quarter • Mix Start /Stop of economy in various parts of • Economy under standstill with mix opening India • GDP contracted by more than ~7.3%. • MHCV growth not comparable with last quarter • MHCV de-growth by ~30%
Slide 6: Growth strategy going forward
1 Overview Growth strategy going forward SWOT analysis Every adversity has an opportunity waiting to happen. The Senior management took the challenges of the global pandemic to re-examine in detail through a SWOT analysis and finalise a roadmap for the next phase of growth Strengths : Strong cus
Slide 7: Update on fund raising (India RF deal)
1 Overview Update on fund raising (India RF deal) Introduction India Resurgence Fund is a 50-50 joint venture fund between Bain Capital USA and Ajay Piramal Group. Proposed Investment in Setco The Investment Proposal involves moving down the clutch business of the company into the subsidiary Set
Slide 8: Overview
Overview
Slide 9: Highlights – MHCV Industry drop of >30% in FY21
1 Overview Highlights –MHCV Industry drop of >30% in FY21 MHCV Industry FY21 : MHCV Industry sales drop by ~30% in FY21 bringing down Industry volumes to decade low: Pandemic – induced crisis (Frequent Lockdowns) General economic slowdown Fleet efficiency improvement due to GST & additional
Slide 10: FY22 Outlook
1 Overview FY22 Outlook • While Q1FY22 has been subdued due to Covid wave-2, market is now coming back to strongly • MHCV industry is expecting to grow at exponential double digit growth rate of >30% • Setco sales to OEM’s estimated will be higher than the industry average due to BSVI Channel and
Slide 11: Financial Results
Financial Results
Slide 12: Segment mix – Standalone Sales
2 Financial Results Segment mix – Standalone Sales FY21 – INR 31,406 lakhs FY20 – INR 41,808 lakhs Key Aspects FY21 29.4% 66.4% 2.3% FY 21 Impact on margins due to lower operating leverage Higher commodity prices during the last quarter FY20 27.6% 68.8% 3.6% further impacted margins Q1FY22 0
Slide 13: Cost Analysis
2 Financial Results Cost Analysis Variable Cost Fixed Cost (INR Lakhs) Down by ~INR 19 73.3% Crs (~23.5%) over 8,138 7,481 FY19 6,229 72.3% 71.9% FY19 FY20 FY21 FY19 FY20 FY21 Variable Costs : FY 21 Variable Cost % has slightly increased due to unfavorable segment mix and higher commodity price
Slide 14: Details of One time Exceptional Items
2 Financial Results Details of One time Exceptional Items • As per accounting standards (IND-AS), Exceptional items in FY21 results includes the following: Particulars Rs. In lakhs Provision for diminution in Investments (Subsidiaries and Associates) 791 Provisions for Advances/Expected credit loss
Slide 15: Key figures – FY21 and Q1FY22
2 Financial Results Key figures – FY21 and Q1FY22 Standalone Key aspects – Standalone In INR lakhs FY20 FY21 Q1 FY21 Q1 FY22 Topline : Sales FY21 sales lower by ~24.9% YoY. 41,808 31,406 3,022 5,637 Q1FY22 sales were at 5637 lakhs. However, Contribution 11,588 7,124 845 1,149 FY22 expected to
Slide 16: Lava Cast
2 Financial Results Lava Cast • Lava Cast rationale: Assured timely supplies of quality Castings to avoid sales loss and reduce development time of new products. Strategic plant location to minimize freight cost of Castings. • Issues faced in Lava Cast Teething problems: Lower Capacity utiliza
Slide 17: Performance of Lava Cast since Inception
2 Financial Results Performance of Lava Cast since Inception Particulars 2020 2021 Lava Cast turnaround plan hinges on 4 pillars: Improve operating parameters on key variable Costs IN FY 21, Lava Cast achieved best ever contribution margin despite least Capacity (In MT) 30,000 30,000 capacity
Slide 18: Key figures – Consolidated FY20 and Q1FY21
2 Financial Results Key figures – Consolidated FY20 and Q1FY21 Consolidated Key aspects – Consolidated In INR lakhs FY20 FY21 Q1 FY21 Q1 FY22 Sales 47,032 35,926 4,135 7,063 • Consolidated performance subdued due to Lower top-line of Setco and hence lower Contribution 14,995 9,061 1,314 1,819 oper
Slide 19: Management Message
2 Financial Results Management Message The Covid pandemic specially the wave-2 continuously made us learn how to build a robust organization to manage unfolding uncertainties. At Setco we have taken a conscious step to reflect and introspect over the last 18 months by doing a deep analysis of what a
Slide 20: IR Contact
IR Contact Thank You We Invite You To Visit Setco Setco Automotive Limited Hiren Vala Mail : hvala@setcoauto.com Tel : 022-4075 5555 Anurag Jain Mail : anurag.jain@setcoauto.com Tel : 022-4075 5555