NDR Auto Components (NSE:NDRAUTO) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Ndr Auto Components Limited Conference Call. As a reminder, all participant lines will be in a listen only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Gavin Diksa from CDR India. Thank you, and over to you, sir. Thank you, Ndr. Good day, everyone, and a warm welcome to all of you participating in this Q1 FY 'twenty seven earnings conference call of Ndr Auto Components. We have with us today Mr. Pranav Relan, the Hold Time Director Mr. Vikram Krishna Rathi, CFO and Vice President and Mr. Rakesh Rasagi, GM Finance and Accounts and Mr. Rajat Bandari, Executive Director and Company Secretary.

0:58 Before we begin, I would like to mention that some statements made in today's discussions may be forward looking in nature and are subject to risks and uncertainties. A statement in this regard is available in the presentation of the exchanges and shared with you earlier. We will start the call with opening remarks from the management, following which we will have an interactive Q and A session. I now invite Mr. Pranav Vellan to share some perspectives with you with regard to the operations and his outlook for the business. Over to you, Pranav. Good day, everyone, and a warm welcome to our Q1 FY seven earnings conference call. Thank you for joining us today. This has been an eventful quarter for Ndr Auto Components. I will touch upon the key highlights in a bit, but let me first quickly take you through our numbers.

1:43 Revenue driven by execution of our strong order book stood at INR 2 and 21.45 crores for the period under review. Our EBITDA margin remained healthy at INR 11.88% despite the environmental and supply chain challenges the sector has been faced with. This is testimony to our operational efficiency and our increasing emphasis on addition. Q1 FY seven EBITDA and PAT stood at INR 26.44 crores and INR 16.40 crores, respectively. In June 2026, we commenced operations at our Ndr. Hayashi facility at Bangalore, the plant which will manufacture sunshades.

2:30 It enables us to diversify our product portfolio and enhance the value we offer to our customers. We are also delighted to inaugurate our new facility under the subsidiary Ndr Auto South in Anandpur. The SOP will start from Q2 FY seven. This plan optimally positions us to efficiently cater to seat print and claim requirements of our OEM customers with operations in South India. Lastly, it was our pleasure to welcome Tee Suzuki san, the CEO of Suzuki Motor Corporation Japan as the guest of honor at the celebration on July 2 to commemorate the fortieth anniversary of our group company, Bharat Sis.

3:17 Sales volumes to all our partner OEMs continue to improve, reflective of both capabilities and encouraging environment. Our endeavors continue to be deepen our relationships with our current customers, enhance the number of OEMs we partner with and expand and enrich our portfolio of offerings. These initiatives take time, but we are optimistic that our efforts will translate and enable us to create sustainable value for all our stakeholders. The auto and auto component industry is going through exciting times, and we believe there is considerable opportunity for an entity with quality operations and a deep understanding of this space.

4:02 We will now be happy to take your questions. Thank you very much. We will now begin the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of from NDRAUTO.

4:52 Actually, I wanted to ask on the order book side, like, can you provide some segregation based on the products which we have? Like, what is the segregation for the order book? And also wanted to understand the pathway that... For the 3,000 crores of guideline and how one should read... And also on the order book, how one should read like will it be a revenue recurring revenue? Or is it a onetime revenue? So the INR 3,000 crore target continues to be our endeavor, and we will update you on that progress. The order book that we have, you can add it to our existing revenue, and that is what the number of businesses that we booked currently.

5:45 Yes. On the order book, right, can you provide some segregation based on the products we have, like for the seating, how what is it and for maybe ambient lighting or some other? So we most of the products are from the seat frames and the seat covers. In addition to that, we've also going to set up a plant for seat insert. So that is going to be there. There is going to be a new plant for seat latch and there's going to be a new plant for seat belt reminder system. In addition to that, there are some new ambient lighting orders that we've received, but that's a smaller part of the order book. Okay. And sir, also, how do you see our margin shaping going now with our products expanding? And can we assume that you will stick to our current ROCE going forward?

6:36 So our margin should be at a similar level, and our ROCE also should be at a similar level. Next question is from the line of Jadan Chawla from RTL Investments. Yes. Hi, good afternoon and thanks for the opportunity. Congratulations on a very strong performance on the margin side, especially this quarter where there were a lot of margin pressures on commodity. My first question is, you've highlighted in your presentation a new ambient lighting order. So if you could just talk about some more details in terms of the size and what client?

7:23 So we've got a couple of new models from Maharishi Suviti. The size is a little small, but it should be starting in 2028. Okay. Got it. And your overall order book is at a similar level, I think, as the last quarter's order book at least INR50 crores. So has there been no kind of change in the order book overall order book broadly? So we are actually bidding for a lot more business. So as confirmations come, then we'll share that quarterly. Got When I look at your overall revenue growth this quarter and over the last few quarters, the top line growth is now largely in line with the production growth at your key client, Maruti. Earlier, it used to be a lot higher. I understand there is an element of model seasonality in this. When do you start when do you see this kind of starting to change in India's outperformance over the key clients' production schedule starting to kick in?

8:33 So as soon as our new projects start, I think our South project is starting sometime this quarter. And then we have NDR safety and SBR and lab traffic sometime early next year. We should have an update to this number. Got it. Got it. And for the recently launched BREZA, there is it seems there is a lot of excitement around the model. Are you continuing to supply what you were supplying with the for the outgoing model? Yes, we continue to supply 100% of the model. Got it. And in this quarter, you also talked about an 8 crore extra, I think, spend on India South. So are you looking to further increase the capacity at India South?

9:23 So we actually took debt to fund that. We're converting that into equity. Okay. Got it. Got it. Thanks a lot. I will come back in the queue. Thank you. Next question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead. Hello. Yes. I hope I'm audible. Yes. You can hear me? Yeah. Hello. Yeah. Thank you, sir. Sir, firstly, thank you for the changes made to the investor presentation that that looks much better and more informative. So please please do align them going ahead also. Sir, when we look at your Slide number eight, wherein about the project expansion update you have given, I think so there are two projects that would that are commissioned that will be commissioned for this year. Firstly, the ambient light, which you have mentioned for June 26, that is the first quarter and then about our the South unit at Anandpur, which is expected at July 26. So taking into account, how will the ramp up happen and what should we expect for the remaining part of the year to add to the incremental revenue profile? And sir, you were mentioning answering to the earlier participant about some debt to equity conversion. I missed your point there. If you could just first explain that.

10:52 Okay. So for Ndr Safety, I think we had invested CapEx. Sorry, Ndr South, we had invested taken debt to invest in that. Now we've converted that into equity. The second question is regarding the project. So see, Ndr South is going to start operations sometime in the next ten or fifteen days. We've inaugurated that. So that should add to the revenues. And then for the third project, Ndr Hayashi, that's a joint venture that we signed with the Japanese company. We've got some sunshade business that has started. And in addition to that, we've got some ambient lighting business, which should start in 2028. Okay. So the ambient and the Sunset business is expected to contribute from FY 'twenty eight?

11:45 Since the Sunset business has started, the ambient lighting business will contribute from 2028. Okay. And for the Southern unit, we have already commissioned, as mentioned in your presentation where you have also displayed the photograph. So this will add as a to the totality for this quarter and going ahead, this INR 23 crore CapEx in the seed trim business? So we've incorporated the plant. It is starting production in another maybe ten to fifteen days. So Q2, you should see some addition to that. What should be the revenue profile for the remaining this year and when run at full capacity? The revenue potential for that plant is about INR 70 crores to INR 80 crores subject to how the model performs.

12:35 Sir, taking into account our EBITDA margin trends, sir, what are we doing exactly to improve upon it because we are in this band of 11% correctly there. And going ahead also with the commissioning of the facility and the ramp up therein, how are we seeing our EBITDA margin trending, sir, going ahead? So our EBITDA margin should be at a similar level, should be at about 11% to 12%. And all our commodities are indexed, and that is why we are able to maintain these margins. Okay. Now shifting to the P and L part, sir, I think so the other expenses line item has gone up this quarter again on a sequential basis also and definitely on a year on year basis. So what explains this increase on a sequential basis from a revenue of $2.30... Yes, please.

13:31 We've had a lot of marketing expenses at this time for a lot more customers. In addition to that, we've also had some R and D expenses because we have to make prototypes for new customers. So this is one off only? This will not this will get even outgoing, right? These expenses will tend to continue as we're trying to grow aggressively. In addition to that, we've also hired some people for our growth. Okay. But this should be the trend going ahead then. That is what the EBITDA number is. So that has been factored. So this is what the new normal should be. That is what you are trying to confirm. Yes. Okay. Sir, and on the growth in the revenue part that I missed you in your opening remarks with order book at INR $6.50 crores as on June, and I think so you spoke about some big pipeline also.

14:28 We did revenue growth of 1919.5%. So is what the likelihood run rate or with the commissioning of the projects, the new one, this will get a big uptick going ahead? It should have a slight uptick going ahead. Correct, sir. Right, sir. And on the Bharatiya part of the story, can if you could just show, right, how are things shaping up and what should we expect? That is where the share of profit from joint venture is being mentioned, that is INR 1 crore 78 lakh. That is also a lower number. That is the share of profit is from Harajeet. In addition, there is also some loss from our Ndr Hayashi joint venture. So I think that is why that's the number.

15:24 Thank you. Next question is from the line of Manish Gupta from Equinox Investments. Please go ahead. Sir, afternoon, and thank you for the opportunity. Sir, this is regarding Bharat Seats only. So in Q1, Bharat Seats has grown revenues by about 35%. So would you say that the growth that you witnessed has exceeded the expectations that you had? Yes, I think it has exceeded the expectations what we had. Okay. So what will be the main contributing factors to this large growth? And are these sectors sustainable? Yes, these numbers seem to be sustainable, and it's because the market is doing quite well.

16:17 Okay. And sir, in light of this, let's say, higher trajectory of revenue growth in Bharat Sheets, you had earlier given a top line guidance of about INR 3,000 crores to INR 3,500 crores by financial year thirty. So would we you'll be encouraged to revise that guidance upwards? So that should be about INR 3,500 crores of R and D by 2030. All right. And sir, apart from, I mean, this premiumization of seats that's happening, air conditioned seats or rented seats or so does that, the premiumization also flow to Bharat seats? Or is it a part of India component? So most of the premiumization comes to Bharat seats as it does the final seat assembly.

17:06 The premiumization for the frame and the seat cover tend to come at NDRA. Alright. And so besides four wheeler seats, if Bharat seats also going to earlier, there was some plan about railways, wheels or something. So are you thinking of adding some more lines to Bharat seats? No. No plans to do here, Chris. We'll stick to four wheeler seats and some carpet NDRA and some two wheeler seats. Next question is from the line of Sai Kiran from Pornata Investments. Please go ahead. Hello, am I audible? Yes. Yes, go ahead. Yes.

17:52 Thank you sir for the opportunity and a very good set of numbers. Sir, I wanted to understand from the cost advantage side. So in Q3 of FY 'twenty six, we mentioned we have cost advantage. So can you give a brief like what how we have a cost advantage? And can you give us a spectrum compared to competitors where we fit in? So we still make it. We're probably the most backward integrated seat player and our scale helps us. I think we make more than 1,000,000 seats now. So I think that gives us cost advantages. Okay. Got it. And sir, can you give a breakup? So we have a target of INR 3,000 crores revenue by 2030. So can you give a breakup between existing and new facility? How much of that would be contributed?

18:42 So this two target is our endeavor that we wish to achieve. Our current revenue is about INR $2.20 crores quarterly. You can add our order book to that. And our goal is to do about INR 2,000 crores from our organic business. The 1,000 organic part is something that we're still working on in organic part. Got it, sir. And just one last question. So we are doing customer diversification. So just wanted to know what new products are coming in. Can you share some points on the same line and who and the customers you are in talk with? And are they in the final terms or are they still going now? So customers we're continuously discussing with. I think the obvious ones are the Indian customers that we're targeting.

19:30 But to state, we don't want to share at the moment. Once something finalizes, then we'll let you know. Got it, sir. Thank you. Thank you. Next question is from the line of Kosh Najar from Electrum PMS. Please go ahead. Hi, sir. Thank you for the opportunity. So a couple of questions. So first, when do we expect $6.50 crore order book to be in the full ramp up phase by this year? Secondly, are we planning any CapEx depending on the customer commentary on the two nonproductive as of nonproductive lands that we have on our books? So any visibility over there in terms of CapEx? And lastly, what will be the asset on that we're expecting on the total INR 150 crores CapEx that we're doing for the different plants and different products?

20:24 So the INR $6.50 crore order book should come incrementally till 2030. We haven't given a we're not giving a breakdown of it right now. In terms of CapEx, we are looking to acquire new business for the two empty lands we have. So once we acquire new business and we think it's viable to set up a plan, that's when we'll announce it. I'm sorry, what was your third question? The overall asset on the INR 150 crore combined CapEx that we have planned across different plants and different products? So it should be approximately four. Next question is from the line of Dhananjay Pagaruria from Alkmi Capital.

21:22 Your voice is breaking. Can you comment a better reception area, please? Can you hear me now? Yes. Firstly, congratulations, Pranav and team, for superb set of performance considering this environment. Most of the questions are answered. Just a couple more. In today's day and age, are we getting approached by more customers for them to diversify from their existing base? And some of the other auto OEMs are looking to diversify into different segments and different countries. Do we have any of those in our minds also? So we are getting approved by multiple customers to set up, but I think we're not at that stage. And at the moment, we're just looking to expand within India. Okay. And on the first part is basically predominantly, what are we doing which is keeping margins so strong? Are we facing an issue from any customers that they want us to reduce any selling price or anything along those lines?

22:21 So we're not facing any pressure from customers to reduce selling price. We've actually been able to set up our cost increases with operational efficiency. Wow. And third part, what CapEx numbers are we expecting for the next couple of years? So the CapEx should be about INR 40 to INR 50 crores for the next couple of years annually. Okay. And perfect. Well done again. This is really superb numbers in this environment. Thank you. Thank you. Next question is from the line of Rohit from Electrum PMS. Please go ahead. Yes. Hi, I'm audible. Yes. Go ahead. Yes. Hi, Manav.

23:08 Congrats on a good set of numbers. Hope you're doing well. So I have two, three questions. One is just wanted to have some idea from your side. How are we planning to kind of diversify our OEM base? Because obviously right now, Maruti is the core engine that is there. But let's say given some timeline of about next two, three years, how do you see that happening in terms of diversification? So, Maruti having said that, Maruti is being our core client. We've got we're bidding for business from Toyota and we're bidding for new business with Kia. In addition to that, we are continuously working with the other two OEMs. Okay. Okay. So let's say over the next two, three years, we should see some business ramp up from the non royalty clients as well?

23:57 Yes. That is what we're planning to. Okay. Okay. Secondly, just so I think it's obviously a very good step that you are now becoming a multi product kind of a company. But let's say going towards FY twenty twenty nine, broadly how much can be the non seat revenue when you combine all the other products broadly? And is there a major margin difference there, if you can quantify something? So seating will probably be our largest non seating will always be a smaller part of our revenue given the content of it, but I don't have numbers at the moment that I can share. The non seat will be at slightly higher margins?

24:46 Non seat should be at similar margins. Similar margins. Okay. Okay. Just to understand a little bit on EV, when electrification increases, how do you see the EV contribution ramping for us? And is it different in terms of margins or ROCs? Or it's similar? So in terms of margins and ROCs, it's similar. And in terms of the top line, there is a slight increase. Okay. Okay. Sorry. And lastly, just on the new products, I think just one thing to understand, maybe what would be our right to win there? Would it be cost? Or would it be timely deliveries? Would it be quality because obviously there will be other suppliers as well in these products.

25:35 We would be maybe second or third. So some sense on how do you look at this? It's a combination of cost, quality, delivery relationship. There's no one single factor. Okay. Okay. But you would be like the third or second or the third player here by any chance? For which product? In the non seats that you are doing, let's say ambient lighting and the other products that we would be doing? Yes, we will be the second or third player to enter. Okay, okay, okay. Got it. Thanks so much and wish you all the best. Thank you. Thank you. Next follow-up question is from the line of Saket Kapoor from Kapoor and Company. Please go ahead.

26:23 Sir. Sir, the split I have got if you have mentioned in the presentation that the loss from the JV is INR 58 lakh. So this is what about the IRC one which mentioning about? It it is Yes. Okay. And sir, going ahead, how would this number now likely to shape up? I think so since we have commercialized the unit and and the the costs have been now going to the PNL. So So with the commissioning in the coming ten days, and you will get at least one month only, if you could just give a number of what would be contribution when ramped up at, say, optimum level in terms of a quarterly rate? So actually, the loss is going to continue for some time. We've got the whole team in place right now, and we're currently acquiring a lot new business at the moment.

27:19 Okay. So even with the ramp up of the businesses, we are going to continue to book losses in this through the joint venture? So we will continue to have losses for some quarters until we touch a breakeven point of sales. Okay. And sir, can you give that money? The time line, I have... This number of 58 lakh would would be higher going ahead or this is the ballpark number? I think this is only the employee cost or the overhead expenses that are there and the depreciation? Or if you could just elaborate what are you trying to explain the losses will continue? So we have the whole overhead setup. We have this whole team setup right now. So that is why the losses are continuing.

28:08 And the plant is still small for the organization that is set up. Correct, sir. And sir, when we look at the southern unit part, the South India, India Components South, what what would be if their contribution and how that will get in the... That will also get consolidated. So how will their performance be reflected? It it will be in the similar joint... Under the joint venture only? How will that that number be reflected through the P and L? Yes. It... Yes. It will be reflected through that only. And how will their their contribution shape up? Right now, they're committing also there going ahead and... That should be positive, but the numbers, exact numbers, I think we'll share that with you in the results, sir.

29:04 Okay. So just to conclude, sir, on what we have done on Q1 basis, there is a very good likelihood that we improvise and exhibit better operating profit going ahead with the commissioning and also the cost rationalization that will happen with the ramp up. Is this understanding correct, sir? Yes, it should be. Okay. Okay. Thank you, Pranavkar and team, and all the rest. Sir, regarding Bharat Sri, sir, are we looking for India clients... Our engagement with your investors going ahead? Yes. Definitely. You can connect any day. Okay. Thank you, sir, once again. Thank you.

29:53 Next question is from line of Jatin Chalo from RCL Investments. Please go ahead. Yes. Hi. The question is pertaining to your Orangabad plant. Any kind of timelines and on, you know, when are you looking to start? Because it seems Toyota India, you know, similar plans for a plant in Orangabad, that's significantly delayed. So can we use this plant for any other client? And what's the thought process there? So we've got the land at the moment. We are still acquiring business from Toyota. So once we acquire the business, that's when we look to set up the plan. But would it be like to say that it's difficult now that we get too much business by FY 'thirty there? Because I think Toyota is now saying calendar year 'twenty nine is when the plan starts.

30:49 Yes, that seems to be correct. Got Got it. And you said that your margins on seats and non seats would be similar. I think your asset terms on the non seat business is higher. So shouldn't the margins there be a little bit lower? Because I would assume you would have a similar ROCE profile. So the new products that we've done, the ROCE will be slightly lower. But in terms of our overall numbers, it shouldn't change much. Got it. Got it. And on the NDRAUTORIA side, when you said it will take a few quarters for breakeven, any ballpark revenue range when you kind of breakeven in that joint venture? So it should be about INR 100 crores to INR 150 crores that it should breakeven in. So we were hoping that the Toyota project would have come earlier, which could have helped us a little bit, but I think that's also a little bit slightly delayed.

31:47 Got it. Got it. Thanks a lot. Thank you. Next question is from the line of Danish Wara from InvestopMS. Please go ahead. Yes, sir. Actually, a follow-up question from some a question asked before. Just wanted to know what is our revenue on ballpark potential for the JV, which we have done at in the next two to three years? So the potential that we were targeting is about 2 to 300 crores, but that was over the course of five to six years. Got it, sir. And again, on the the target which we have given about 303,000 crores, what will be the main lever? Will it...

32:36 Will our seats and frame will trim product will be the main lever or any other product which you see can be a big trigger for achievement of the 3,000 crore? So our largest product will be seats, but we continue to look to add new products to that, sir. Okay. Great. Thank you. Thank you. Thank you. Anyone who wishes to ask a question may press 1. Next question is from the line of Tanisha Wara from InvestQ PMS. Please go ahead.

33:43 Hello, sir. And my last question, what is the ratio of the trims to frame that we provide to? Is there any arrangements you have for the CEO? I don't have that offhand, but we can share that with you. Yeah. Thank you. Participants, you may press star and 1 to ask the question. Anyone who wishes to ask the question may press 1. Next question is from the line of Rajesh Agarwal from Manure. Please go ahead.

34:35 Sir, just I wanted to ask you a question. We have a vision of $3,000 turnover by 2030. So what would be the sustainable EBITDA margin when we We've only given a top line number as a guidance. We are not giving EBITDA margins in guidance. Okay. But it will be around this range only, 10% to 11%? We're not sharing that. Oh, okay. Okay. Thank you. Thank you. Participants, you may press star and one to ask a question. Anyone As there are no further questions, I'll now hand the conference over to the management for closing comments.

35:34 Thank you for your time and participation. We continue to be optimistic about the opportunities before us and look forward to sharing these with you as we move forward. Should you need any input or clarification, please write into us or our Investor Relations partner, CDR India. Thank you. Thank you very much. On behalf of Ndr Auto Components Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.