{"id":160919,"date":"2024-05-07T11:39:23","date_gmt":"2024-05-07T15:39:23","guid":{"rendered":"https:\/\/44.250.171.167\/?p=160919"},"modified":"2024-05-07T11:39:25","modified_gmt":"2024-05-07T15:39:25","slug":"cg-power-and-industrial-solutions-ltd-q4-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/cg-power-and-industrial-solutions-ltd-q4-fy24-earnings-conference-call-insights\/","title":{"rendered":"CG Power and Industrial Solutions Ltd Q4 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from CG Power and Industrial Solutions Ltd (CROMPGREAV) Q4 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Financial Performance<\/strong>\n<ul>\n<li>Q4 FY24 sales grew 17% YoY, PBT grew 25% YoY.<\/li>\n<li>FY24 sales grew 16% YoY, PBT grew 24% YoY.<\/li>\n<li>Margins improved due to higher realizations, favorable product mix, and cost efficiencies.<\/li>\n<li>ROCE for FY24 was 37%.<\/li>\n<li>Free cash flow generated in Q4 was INR 178 crores, and in FY24 was INR 784 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Order Book<\/strong>\n<ul>\n<li>Unexecuted order book as of March 31, 2024 was 45% higher YoY at INR 6,276 crores.<\/li>\n<li>Industrial division order book was 28% higher YoY at INR 2,544 crores.<\/li>\n<li>Power systems order book was 64% higher YoY at INR 3,731 crores.<\/li>\n<\/ul>\n<\/li>\n<li><strong>New Venture<\/strong>\n<ul>\n<li>Received approval to set up an outsourced semiconductor assembly and test facility in Sanand, Gujarat.<\/li>\n<li>Estimated investment over 5 years is INR 7,600 crores, funded by govt. subsidies, equity, and potential bank borrowings.<\/li>\n<li>Partners are Renesas Electronics Corporation and Stars Microelectronics.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Industrial Segment<\/strong>\n<ul>\n<li>Industrial division order inflow up 33% QoQ and 45% YoY in Q4.<\/li>\n<li>Large part of order inflow came from railways business.<\/li>\n<li>Ex-railways industrial motor business activity still muted, expected to pick up post elections.<\/li>\n<li>Industrial segment volume growth around 12% in Q4.<\/li>\n<li>Competitive intensity still high, difficult to predict pricing due to volatile commodity prices.<\/li>\n<li>No revenue deferral in the segment in Q4.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Semiconductor Venture<\/strong>\n<ul>\n<li>Received approval to set up outsourced semiconductor assembly and test facility.<\/li>\n<li>Partnering with global leaders like Renesas and Stars Microelectronics.<\/li>\n<li>Huge demand expected in India for semiconductors to reduce import dependency.<\/li>\n<li>Right to win seen as strong given partnerships and demand outlook.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margins Outlook<\/strong>\n<ul>\n<li>Power segment margins expected to sustain at high teens if material prices remain stable.<\/li>\n<li>Industrial margins may improve post elections if demand picks up.<\/li>\n<li>Railway and power being tender-based, margins depend on competitive bidding.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Railway Business<\/strong>\n<ul>\n<li>Strong 40% revenue growth expected in railway business this year.<\/li>\n<li>FY24 railway sales around INR 1,300 crores.<\/li>\n<li>Efforts ongoing at advanced stage for railway propulsion and other offerings.<\/li>\n<li>Working with Korean company for train set propulsion system.<\/li>\n<li>Project expected to be completed by June 2024.<\/li>\n<\/ul>\n<\/li>\n<li><strong>EV Motor Development<\/strong>\n<ul>\n<li>Prototypes for one EV application under testing.<\/li>\n<li>Designs for two more applications at advanced stage.<\/li>\n<li>Once testing done, motors and controllers to be provided to OEMs for approvals.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Exports<\/strong>\n<ul>\n<li>Current industrial exports around 3-4% of industrial motors business.<\/li>\n<li>Target to take industrial exports to 20% in 3-4 years.<\/li>\n<li>New motor capacity expected to start contributing to revenues from next financial year, which should aid growth in industrial exports from FY25 onwards<\/li>\n<li>Exports growth linked to capacity expansion plans.<\/li>\n<li>Limited scope for power transformer exports as domestic demand to consume expanded capacity.<\/li>\n<li>Selective high-margin export orders considered based on payment security.<\/li>\n<li>No concrete plans yet for dedicated export facilities.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Consumer Products Business<\/strong>\n<ul>\n<li>Part of industrial segment, degrew marginally in FY24.<\/li>\n<li>Plans approved to scale up this business going forward.<\/li>\n<li>Investments and actions initiated to drive growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Power Transformer Capacity Expansion<\/strong>\n<ul>\n<li>Doubling power transformer capacity from 17,000 MVA to 35,000 MVA.<\/li>\n<li>Adding 50% capacity in distribution transformers from 5,500 MVA to 8,500-9,000 MVA.<\/li>\n<li>Expected revenue potential of INR 1,800 crores from incremental PT capacity.<\/li>\n<li>DT capacity expansion to take revenues from INR 450 crores to INR 700 crores.<\/li>\n<li>Both expansions expected to be completed in next 12 months.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Railway Business Growth Drivers<\/strong>\n<ul>\n<li>Supplying directly to Indian Railways production units for Vande Bharat, Metros, Sadharan.<\/li>\n<li>Growth driven by increase in locomotive production from 1,200 to 1,500 units.<\/li>\n<li>Limited approved suppliers giving advantage to bag more orders.<\/li>\n<li>40% revenue growth expected in railway business this year.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from CG Power and Industrial Solutions Ltd (CROMPGREAV) Q4 FY24 Earnings Concall Financial Performance Q4 FY24 sales grew 17% YoY, PBT grew 25% YoY. FY24 sales grew 16% YoY, PBT grew 24% YoY. Margins improved due to higher realizations, favorable product mix, and cost efficiencies. ROCE for FY24 was 37%. Free cash flow [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,5753],"tags":[10169,8204,2132],"class_list":["post-160919","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-industrials","tag-earnings","tag-electrical-equipments","tag-manufacturing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":160516,"url":"https:\/\/alphastreet.com\/india\/cyient-ltd-q4-fy24-earnings-conference-call-insights\/","url_meta":{"origin":160919,"position":0},"title":"Cyient Ltd Q4 FY24 Earnings Conference Call Insights","author":"Praveen","date":"April 25, 2024","format":false,"excerpt":"Key highlights from Cyient Ltd (CYIENT) Q4 FY24 Earnings Concall Industry Trends China Plus One strategy driving new opportunities in regions like India. 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