Precision Camshafts Ltd. · NSE:PRECAM
Precision Camshafts — Investor Presentation (July 2016)
35 slides from Precision Camshafts's investor presentation, July 2016
Slide 1: Investor Presentation July 2016
INVESTOR PRESENTATION JULY 2016 PRECISION CAMSHAFTS LIMITED
Slide 2: Camshaft is one of the most critical components of vehicle IC engine
CAMSHAFT IS ONE OF THE MOST CRITICAL COMPONENTS OF VEHICLE IC ENGINE Camshaft and its associated parts control the functioning of an internal combustion engine Camshaft design governs the engine’s power, efficiency, mileage and emission Camshaft design, manufacturing process and machining requ
Slide 3: Continuous developments in engine technology are expanding opportunities for camshaft manufacturers
CONTINUOUS DEVELOPMENTS IN ENGINE TECHNOLOGY ARE EXPANDING OPPORTUNITIES FOR CAMSHAFT MANUFACTURERS Engine technology is undergoing continuous developments – - Improvement in engine efficiency and VVT Evolving DOHC performance SOHC engine OHV technology Increasing efficiency and performance - Comp
Slide 4: OEMs increasingly outsourcing camshaft manufacturing; stringent approval limits suppliers
OEMs ARE INCREASINGLY OUTSOURCING CAMSHAFT MANUFACTURING HOWEVER, STRINGENT APPROVAL PROCESS LIMITS THE NUMBER OF SUPPLIERS Camshaft manufacturing process is highly capital intensive with long gestation period OEM’s source from suppliers with demonstrated technological and manufacturing capabili
Slide 5: Precision Camshafts is the leading supplier of camshafts in India and globally
PRECISION CAMSHAFTS IS THE LEADING SUPPLIER OF CAMSHAFTS IN INDIA AND GLOBALLY PCL is one of the world’s leading manufacturer and supplier of camshafts PCL has strong relationships with marquee global & domestic OEMs General Motors Tata Motors Ford Motors Mahindra and Mahindra Hyundai
Slide 6: Disclaimer
DISCLAIMER This presentation and the following discussion may contain “forward looking statements” by Precision Camshafts Limited (“Precision Camshafts” or “PCL” or the “Company”) that are not historical in nature. These forward looking statements, which may include statements relating to future res
Slide 7: Company Overview
DISCUSSION SUMMARY PCL – India COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL OVERVIEW & SHAREHOLDING SRUCTURE 7
Slide 8: Precision Camshafts – Brief Profile
COMPANY OVERVIEW PRECISION CAMSHAFTS – BRIEF PROFILE Incorporated in 1992, PCL is one of the leading manufacturer and supplier of camshafts in India and globally Global market share of 8% - 9% in passenger vehicle camshafts Supplies more than 150 varieties of camshafts for passenger vehicles,
Slide 9: Our Evolution
COMPANY OVERVIEW OUR EVOLUTION 1992 1999 2008 2012 2014 • Incorporation of PCL • Technical and financial • Tata Capital invests in • JV with Shenglong • Exclusive agreement • Started with supply JV with G. Clancey PCL by purchasing Automotive with EMAG, German of 600 camshafts / Limited, UK a shares
Slide 10: Marquee Customers and Global Footprint
COMPANY OVERVIEW MARQUEE CUSTOMERS AND GLOBAL FOOTPRINT MARQUEE CUSTOMERS GEOGRAPHICAL FOOTPRINT Canada Germany Russia UK Spain Uzbekistan Austria South Korea USA Hungary China India Brazil Geographies in which customers are serviced by PCL MARKETING NETWORK 4 continents serviced through various age
Slide 11: Board of Directors
COMPANY OVERVIEW BOARD OF DIRECTORS He holds a B.Com from Bombay University and a MBA from Pune University Mr. Yatin Shah Over 23 years of experience in the auto component manufacturing sector Chairman & Managing Director Received various awards, including J.R.D. Tata Udyog Ratna Award by Maha
Slide 12: Key Management
COMPANY OVERVIEW KEY MANAGMENT Mr. Achyut Gadre He holds a Bachelor of Science in Engineering from Shivaji University GM, Production Joined PCL in 1995 and has 19 years of work experience in automobile manufacturing Mr. Ajitkumar Jain He holds a Bachelor’s degree in production engineering from
Slide 13: Business Model
DISCUSSION SUMMARY COMPANY OVERVIEW Camshaft – Most Critical High Quality BUSINESS MODEL Component & Efficient of Engine Manufacturing COMPETITIVE ADVANTAGES Healthy Long BUSINESS STRATEGY & OUTLOOK Operating Development Margins Period – Strong Entry Barrier FINANCIAL OVERVIEW & SHAREHOLDIN
Slide 14: What is Camshaft?
BUSINESS MODEL WHAT IS CAMSHAFT? Camshaft Why is camshaft critical? Crankshaft Cylindrical rod / shaft Cam lobe 5C’s of IC engine Connecting rod Camshaft design impacts the engine’s power, efficiency, mileage and emission Cylinder block Cylinder head How does camshaft function? CAMSHAFT Camshaft c
Slide 15: Camshaft Manufacturing Technologies
BUSINESS MODEL CAMSHAFT MANUFACTURING TECHNOLOGIES Process Chilled Cast Iron Casting Ductile Iron Casting Assembled Camshaft With the chill-cast approach, cam lobes that need local hardening have chill Assembled camshafts are produced by inserts placed in the tool. The inserts freeze the molten iron
Slide 16: Long Development Period – Strong Entry Barrier
BUSINESS MODEL LONG DEVELOPMENT PERIOD – STRONG ENTRY BARRIER Camshafts play a very critical role in impacting the overall engine performance. Hence OEMs involve camshaft manufacturers right from the engine platform design stage Camshaft development process: In case of a new engine platform under de
Slide 17: PCL: Revenue & Margins
BUSINESS MODEL PCL: REVENUE & MARGINS Camshaft Castings (66%) FY16 Revenues Rs 4,767.4 mn Machined Camshaft (34%) SALES REALISATION OF MACHINED CAMSHAFT IS 2.5X - 3.0X TIMES OF CAMSHAFT CASTING GEOGRAPHICAL DISTRIBUTION OF SALES HIGHER SALES OF MACHINED CAMSHAFTS TO DRIVE MARGIN EXPANSION FY12 FY16
Slide 18: Competitive Advantages
DISCUSSION SUMMARY COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL OVERVIEW & SHAREHOLDING SRUCTURE 18
Slide 19: State of Art Manufacturing Facilities & Engineering Expertise
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES & ENGINEERING EXPERTISE INDIA FACILITIES CHINA FACILITIES – THROUGH STRATEGIC JVs Installed Capacity – FY16 Installed Capacity – FY16 Facility Description Joint Venture (Million Units p.a.) (Million Units p.a.) EOU Unit 4 Foundries Foun
Slide 20: State of Art Manufacturing Facilities - Foundry
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES - FOUNDRY Quality Certifications: ISO/ TS 16949:2009 Consistent manufacturing practices and defect free products ISO:14001:2004 Environmental Management System BS OHSAS: 18001:2007 Occupational Health & Safety Management System 20
Slide 21: State of Art Manufacturing Facilities – Machine Shop
COMPETITIVE ADVANTAGE STATE OF ART MANUFACTURING FACILITIES – MACHINE SHOP Quality Certifications: ISO/ TS 16949:2009 Consistent manufacturing practices and defect free products ISO:14001:2004 Environmental Management System BS OHSAS: 18001:2007 Occupational Health & Safety Management System 2
Slide 22: Capacity Expansion – Addition of New Machine Shop
COMPETITIVE ADVANTAGE CAPACITY EXPANSION – ADDITION OF NEW MACHINE SHOP CAPACITY EXPANSION: ADDITION OF MACHINE SHOP New machine shop for ductile / assembled / chilled cast iron camshafts at EOU division in Solapur Proposed capacity – 2.0 mn units / year Total capex – Rs 2,302 mn Capacity ad
Slide 23: Technology Evolution & Comprehensive Product Offering
COMPETITIVE ADVANTAGE TECHNOLOGY EVOLUTION & COMPREHENSIVE PRODUCT OFFERING PCL’s CONTINUOUS THRUST ON IMPROVING CAMSHAFT TECHNOLOGY AND EXPAND CAMSHAFT OFFERINGS Chilled Cast Iron Solid Camshafts Chilled Cast Iron Hollow Camshafts Ductile Iron Solid Camshafts Ductile Iron Hollow Camshafts Chilled C
Slide 24: Long Term Relationships with Marquee Global OEMs
COMPETITIVE ADVANTAGE LONG TERM RELATIONSHIPS WITH MARQUE GLOBAL OEMs TIER 1 / TIER 2 SUPPLIER TO MARQUEE CLIENTS STRINGENT OEM APPROVAL PROCESSES ADDS STICKINESS General Motors Tata Motors Inspection and review of the manufacturing Ford Motors Mahindra and Mahindra Operational facilities
Slide 25: Business Strategy & Outlook
DISCUSSION SUMMARY PCL’s ONE STOP SOLUTION Chilled COMPANY OVERVIEW Cast Iron Machined Camshaft Ductile BUSINESS MODEL Iron Sliding Machined Cams Camshaft COMPETITIVE ADVANTAGES Sliding BUSINESS STRATEGY Hybrid Cams Cam Camshaft Modules & OUTLOOK FINANCIAL OVERVIEW & Assembled Balancer SHAR
Slide 26: Business Strategy & Outlook
BUSINESS STRATEGY & OUTLOOK Focus to offer “One Stop Solution” with diversified product range - Chilled, Ductile and Assembled Camshafts Exclusive agreement with EMAG, a German machining and tooling process company, for licensing the 'Force Free Heat Diversify Product Range Shrink' process. This
Slide 27: Financial Overview & Shareholding Structure
DISCUSSION SUMMARY COMPANY OVERVIEW BUSINESS MODEL COMPETITIVE ADVANTAGES BUSINESS STRATEGY & OUTLOOK FINANCIAL OVERVIEW & SHAREHOLDING SRUCTURE 27
Slide 28: Standalone Financials Summary
FINANCIAL OVERVIEW STANDALONE FINANCIALS SUMMARY In Rs Mn REVENUES EBITDA & EBITDA MARGIN ** PAT & PAT MARGIN CAGR: 10 % CAGR: 29 % CAGR: 27 % ** Excluding Other Income LEVERAGE ANALYSIS RETURN METRICS Note: FY12 to FY15 figures are based on restated standalone financials sourced from Red Herring Pr
Slide 29: Consolidated Financials Summary
FINANCIAL OVERVIEW CONSOLIDATED FINANCIALS SUMMARY In Rs Mn REVENUES EBITDA & EBITDA MARGIN ** PAT & PAT MARGIN CAGR: 12 % CAGR: 34 % CAGR: 33 % ** Excluding Other Income LEVERAGE ANALYSIS RETURN METRICS Note: FY12 to FY15 figures are based on restated consolidated financials sourced from Red Herrin
Slide 30: Standalone P&L Statement
FINANCIAL OVERVIEW STANDALONE P&L STATEMENT Particulars (In Rs Mn) Q4 FY16 Q4 FY15 YoY % FY16 FY15 YoY% Revenue from Operations 1,036.6 1,257.3 -17.6% 4,243.6 4,978.0 -14.8% Other Operating Income 23.2 76.2 -69.5% 137.7 165.7 -16.9% Total Revenues 1,059.9 1,333.4 -20.5% 4,381.3 5,143.6 -14.8% COGS 3
Slide 31: Standalone Balance Sheet
FINANCIAL OVERVIEW STANDALONE BALANCE SHEET Particulars (In Rs Mn) FY16 FY15 Particulars (In Rs Mn) FY16 FY15 Equities & Liabilities Assets Shareholder's Funds Non-Current Assets Share Capital 947.4 818.4 Fixed Assets 2,052.8 2,092.0 Reserves & Surplus 4,152.5 1,562.8 Non-Current Investments 761.5 7
Slide 32: Consolidated P&L Statement
FINANCIAL OVERVIEW CONSOLIDATED P&L STATEMENT Particulars (In Rs Mn) FY16 FY15 YoY% Revenue from Operations 4,647.5 5,158.6 -9.9% Other Operating Income 119.9 165.7 -27.6% Total Revenues 4,767.4 5,324.3 -10.5% COGS 1,356.0 1,678.3 -19.2% Gross Profit 3,411.4 3,645.9 -6.4% Gross Margin 71.6% 68.5% 30
Slide 33: Consolidated Balance Sheet
FINANCIAL OVERVIEW CONSOLIDATED BALANCE SHEET Particulars (In Rs Mn) FY16 FY15 Particulars (In Rs Mn) FY16 FY15 Equities & Liabilities Assets Shareholder's Funds Non-Current Assets Share Capital 947.4 818.4 Fixed Assets 2,557.8 2,474.0 Reserves & Surplus 4,197.9 1,518.7 Non-Current Investments 620.1
Slide 34: Shareholding Structure
SHAREHOLDING STRUCURE % Shareholding – June 2016 Key Institutional Investors – As on 30th June 2016 SBI MF 7.07% IDFC PREMIER EQUITY FUND 3.60% ICICI Pru MF 1.96% Canara Robeco MF 1.28% HDFC MF 1.12% 34
Slide 35: For Further Queries
FOR FURTHER QUERIES: Mr Ravindra R Joshi Precision Camshafts Limited Director & CFO Email ID: rrjoshi@pclindia.in Contact No: 91 0217 23295433 Nilesh Dalvi / Yashesh Parekh Dickenson Seagull IR IR Consultant Email ID: nilesh.dalvi@dickensonir.com yashesh.parekh@dickensonir.com Contact No:+91 9819289
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