Ndr Auto Components Limited (NDRAUTO) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to NDR Auto Components Limited Conference Call. As a reminder, all participant lines will be in the lesson-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. And now in the conference, over Mr. Gavin Deeksa from CDR India. Thank you, and over to you, sir.

Thank you, Neera. Good day, everyone, and a warm welcome to all of you participating in this Q1 FY27 earnings conference call, India Auto Components. We have with us today Mr. Pranav Relan. The Old Time Director, Mr. Vikram Krishnarathi, CR4 and Vice President, Mr. Rakesh Rastagi, GM, Finance and Accounts, and Mr. Rajat Bhandari, Executive Director and Company Secretary. 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&A session. I now invite Mr. Pranav Anand 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 FI27 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. Revenue given by execution of our strong order book stood at Rs. 221.45 crores for the period under review. Our EBITDA margins remain healthy at Rs. 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, FY27, EBITDA, and PADS stood at Rs. 26.44 crores and Rs. 16.40 crores, respectively. In June 2026, we commenced operations at our NDR Hayashi facility at Bangalore, the plant which will manufacture sunshaves. 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 Ananspur. The SOP will start from Q2 FY27. This plant optimally positions us to efficiently cater to see trims and claim requirements of our OEM customers with operations in South India. Lastly, it was our pleasure to welcome T. Suzuki-san, the CEO of Suzuki Motor Corporation Japan, as the guest of honor at the celebration on July 2nd to commemorate the 40th anniversary of our group company, Bharatiya. Sales volumes to all our partner OEMs continue to improve, reflective of both capabilities and encouraging environments. Our endeavors continue to 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 the space. We will now be happy to take your questions.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask the question may press star and 1 on the touch phone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

Participants, you may press R and 1 to ask the question. The first question is from the line of Tanishvara from NWESQPMS.

Please go ahead.

Hello. Am I audible? Yes.

Yes. Hello.

Yeah, yeah. Congratulations on your number. 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 guidelines 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 one-time revenue?

So, the 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 have booked currently.

Yeah, on the order book, can you provide some segregation based on the products we have, like for the seating, what is it, and for maybe ambient lighting or some other?

So, most of the products are from the seat frames and the seat covers. In addition to that, we are 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 flats and there is going to be a new plant for seatbelt reminder system. In addition to that, there are some new ambient lighting orders that we have received, but that is the smaller part of the order book.

Okay, and sir, also, how do you see our margin shaping going on with our product expanding, and can we assume that we will stick to our current ROC going forward?

So, our margin should be at a similar level, and our ROC also should be at a similar level.

Thank you.

Next question is from the man of Jatin Chawla from RTL Investments. Please go ahead.

Yeah, 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, you know, talk about some more details in terms of the size and, you know, what client.

So, we've got a couple of new models from Maruti C50. The size is a little small, but they should be starting in 2028.

Okay. I've got it. And your overall order book is at a similar level, I think, as the last quarter's order book, at least 50 crores. So, has there been no kind of change in the overall order book broadly?

So, we are actually bidding for a lot more business. So, as confirmations come, then we will share that quarterly.

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 kick line, Maruti. Earlier, it used to be a lot higher. I understand there is an element of... When do you see this kind of starting to change in NDR's outperformance over the key clients' production schedule starting to kick in?

So as soon as our new project starts, I think our south project is starting sometime this quarter, and then we have NDR, safety, and SDR, and lab starting sometime early next year. We should have an update to this number.

Got it, got it. And for the recently launched Brezza, there is, you know, it seems there is a lot of excitement around the model. Are you continuing to supply what you were supplying 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 NDR South. So, are you looking to further increase the capacity at NDR South?

So, we actually took debt to fund that. We're converting that into equity.

Oh, got it. Got it. Thanks a lot. I will come back in. Thank you.

Thank you. Next question is from the line of Saakit Kapoor from Kapoor & Company. Please go ahead.

Yeah, I hope I'm audible.

You can hear me?

Hello. Thank you, sir. Firstly, thank you for the changes made to the investor presentation that looks much better and more informative. So please do align them going ahead also. Sir, when we look at your slide number eight, about the project expansion update you have given, I think so. So, there are two projects that will be commissioned for this year, firstly about the ambient light, which you have mentioned for June 26th, that is the first quarter, and then about the south unit at Anantapur, which is expected at July 26th. 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.

Okay, so for NDR, I think we had invested capital. 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, NDR South is going to start operations sometime in the next 10 or 15 days. We've inaugurated that. So, that should add to the revenue. And then for the third project, NDR Hirashi, that's a joint venture that we signed with a Japanese company. We've got some sunshade business that has started, and in addition to that, we've got some ambient lighting business, which will start in 2028.

Okay, so the Ambient and the Sunshade business is expected to contribute from FY28.

Since the Sunshade business has started, the Ambient lighting business will contribute from FY28.

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 I put, to the totality for this quarter and going ahead. There's 23 crore capex in the seed trim business.

So, we've incorporated the plant. It is starting production in another maybe 10 to 15 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 a full capacity?

The revenue potential for that plant is about 70 to 80 crore, subject to how the model performs.

Sir, taking into account our EBITDA margin trend, 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&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?

We've had a lot of marketing expenses at the time for a lot more customers. In addition to that, we've also had some R&D expenses because we have to make prototypes for new customers.

So this is one-off only. This will get even outgoing.

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. So, this should be the trend going ahead then. That is not 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 come.

Yes.

Okay, sir, and on the growth in the revenue part, sir, I missed you in your opening remark with order book at 650 crore as on June, and I think so you spoke about some bid pipeline also. We did revenue growth of 19%, 19.5%. So, that is what the likelihood run rate or with the commissioning of the projects, the new one, this will get a bid uptick going ahead.

It should have a slight update going ahead.

Correct, sir. Right, sir. And on the Bharati part of the story, sir, 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 1.78.000. That is also a lower number.

So, that is the share of profit is from Bharat Seats. In addition, there is also some loss from an NDR-Hayashi joint venture. So, I think that is why this is the number.

Thank you. Saket, I'll request to come back for a follow-up. Next question is from the line of Manish Bhutta from Equinox Investments. Please, go ahead.

Sir, good afternoon, and thank you for the opportunity. Sir, this is regarding Bharat Seats only. So, in Q1, Bharat Seats has grown revenues by about 45%. 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 that we had. Okay. So, what would be the main contributing sectors to this large-ish growth, and are these sectors sustainable? Yes, these numbers seem to be sustainable and it's because the market is doing quite well.

Okay.

And so in light of this, let's say, higher trajectory of revenue growth in Dharakseeds, you had earlier given a top-line guidance of about 3,000 crores to 3,500 crores by a financial aid party. So would you be encouraged to revise that guidance upwards? So that should be about three and a half thousand crores for Bharati, by 20th century. All right. And, sir, apart from, I mean, this premiumization of seats that's happening, you know, air-conditioned seats or vintage seats, 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. The premiumization for the frame and the seat cover tend to come at NDR. All right. And so, besides four-wheeler seats, is 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 raceways. We'll stick to four-wheeler seats and some carpet enliets and some two-wheeler seats. All right, sir. Thank you, sir.

Thank you. Next question is from Lionel Saikaran. From Purnatha Investments, please go ahead.

Hello, Am I Erdogan?

Yes, go ahead.

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 FY26, we mentioned we have cost advantage. So, can you give a brief like how we have a cost advantage and can you give us a spectrum compared to competitors where we fit in?

We're probably the most backward integrated seat player, and our scale helps us. I think we make more than a million seats now. So I think that gives us cost advantages.

Okay, got it. And so can you give a breakup? So we have a target of 3000 crores revenue by 2030. So can you give a breakup between existing and new facility? How much of that would be contributed?

Our ultimate target is our endeavor that we wish to achieve. Our current revenue is about 220 crores quarterly. You can add our order book to that. And our goal is to do about 2,000 crores from our organic business. The 1,000 organic part is something that we're still working on. Inorganic part.

Got it, sir. And just one last question. So we are doing customer diversification. So we 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, but the stage we don't want to share at the moment, once something finalizes, then we let you know.

Got it, sir.

Thank you.

Thank you. Next question is from the line of Kosh Nahar from Electrum BMS. Please go ahead.

Hi, sir. Thank you for the opportunity. So a couple of questions. So first, when do we expect the 650 crore order book to be in the full ramp up phase by which year? Secondly, are we planning any capex depending on the customer commentary on the two non-productive as of now non-productive lands that we have on the 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 150 crores capex that we're doing for the different plants and different products?

So the 650 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 a 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 turn on the 150 crore combined paper that we have planned across different plants and different products.

So, it should be approximately 4. 4. Right, sir. Thank you.

Thank you. Next question is from the line of Dhananjay Pagroodhya from Alchemy Capital. Please go ahead.

Thank you.

Kanan, your voice is breaking. Can you come in a better reception area, please?

Can you hear me now? Firstly, congratulations, Pranav and team, for a superb set of performance considering this environment. Most of the questions are answered, just a couple more. In today's D&H, 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 approached 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 Mahajan so strong? Are we facing an issue for many customers that they want us to reduce any selling price or anything along those lines?

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 40 to 50 per once 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 Lion of Roman from Electrum PMS. Please go ahead.

Yeah, hi, I'm Audible.

Yes, go ahead.

Yeah, hi, Rana. 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, you know, kind of diversify our OEM base? Because obviously, right now, Maluti is the core, you know, 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 audience.

Okay, okay. So, let's say over the next two, three years, we should see some business sample from the non-Maruti clients as well.

Yes, that is worth the planning. So, seating will probably be our largest part. Non-seating will always be a smaller part of our revenue given the content of the vehicle. But I don't have numbers at the moment that I can share.

The non-seat will be at a slightly higher margin.

The non-seat should be at a similar margin.

Similar margins. Okay. Okay. And just to understand a little bit on EV, so, you know, when electrification increases, how do you see the EV contribution ramping up 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, that is a slight entry. Okay, okay.

Sorry. And lastly, just on the new products, I think just one thing to understand, maybe what would be a right to win there? Would it be cost or would it be timely deliveries? Would it be quality? Because obviously, you know, there will be other, you know, other suppliers as well in these products. We would be maybe second or third. So, some sense on, you know, how do you look at this?

It's a combination of cost, quality, delivery, relationships. 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 products?

In the non-seeds that you're doing, let's say ambient lighting and, you know, the other products that we would be doing.

Yes, we'll be the second or third player to any product.

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 Sakit Kapoor from Kapoor and Company. Please go ahead.

Yes, sir. Sir, the split I have got, if you have mentioned in the presentation, that the loss from the JV is 58 lakh rupees. So, this is what about the IRC one, which you were mentioning about? Okay. Going ahead, how will this number now likely to shape up? I think so, since we have commercialized the unit and the costs have been now flowing through the P&L, so with the commissioning in the coming 10 days, and you will get at least one month only, if you could just give a number of what would be its contribution when ramped up at 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 of new business at the moment.

Okay. So, even with the ramp-up of the businesses, we are going to continue to book losses here in this joint venture.

So, we will continue to have losses for some quarters, and till we catch a break-even point of sales.

Okay, and sir, can you give just the timeline, this number of 58 lakhs would be higher going ahead, or this is the all-part number, I think, so this is only the employee cost or the overhead expenses that are there, and the depreciation, or if you would just elaborate, what are you trying to explain, the losses will continue.

So we have the whole overhead set up. We have this whole team set up right now. So that is why the losses are continuing. And the plan is still small for the organization that is set up.

And sir, when we look at the southern unit part, the South India, NDR component South, what would be, if their contribution and how that would get in the, that would also get consolidated, so how will their performance be reflected? It will be in the similar joint, under the joint venture only? How will that number be reflected through the P&L?

Yes, it will be reflected through that only.

And how will their contribution shape up with now their commission also there, going ahead?

That should be positive, but the numbers, exact numbers, I think we'll share that with you and the results.

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?

Yeah, it should be. Okay.

Thank you, Pranav, sir, and team, and all the rest. Regarding Bharat Street, sir, are we looking for our engagement with your investors going ahead?

Yes, definitely. You can connect any there.

Thank you, sir. One second.

Thank you. Next question is from Lanus Jatin Chalo, from RTL Investments. Please go ahead.

Hey, hi. The question is pertaining to your Aurangabad plant. Any kind of timelines and, you know, when are you looking to start? Because it seems Toyota's India, you know, similar plants for a plant in Aurangabad, that's significantly delayed. So can we use this plant for any other client and, you know, what's the thought process?

So, we've got the land at the moment. We're still acquiring business from Toyota. So, once we acquire the business, that's when we look to set up the land.

But would it be like to say that it's difficult now that we get too much business by S530 there? Because I think Toyota is now saying calendar year 29 is when the plant starts.

Yes, that seems to be correct. Got it, 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 ROC profile.

With the new products that they've done, the ROCs will be slightly lower, but in terms of our overall numbers, it shouldn't change much.

Got it, got it. And on the NDR Hayashi side, when you said it would take a few quarters for break-even, any ballpark revenue range when you kind of break-even in that joint venture?

So it should be about 100 to 150 crores that it should break-even 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, slightly delayed.

Got it, got it. Thanks a lot.

Thank you. Participants, you may press star and want to ask a question. Next question is from the line of Tanishwara from Invesque PMS. Please go ahead.

Yes, sir. Actually, a follow-up question from some, a question asked before. Just wanted to know what is our revenue ballpark potential for the JV which we have done with Hayashi in the next two to three years?

So, the potential that we were targeting is about 200-300 crores, but that was over the course of 5-6 years.

Got it, sir. And again, on the target which we have given about 3,000 crores, what will be the main lever? Will our seat and frame trim product will be the main lever or any other product which you see can be a big trigger for?

So, our largest product will be seats, but we continue to look to add new products to touch our target.

Great. Thank you.

Thank you.

Participants, you may press star and 1 to ask the question. Anyone who wishes to ask the question may have a star and one.

A reminder to all the participants, you may have a star and one to ask a question. Next question is from Tanish Voda from InvesQPMS. Please go ahead.

Hello, and last question. What is the ratio of the trims to frame that we provide to? Is there any ranges you have?

I don't have that offhand, but we can share that with you.

Yeah, sure.

Thank you. Participants, you may press star and 1 to ask the question.

Anyone who wishes to ask a question may press star and one.

Next question is from the line of Rajesh Agrawal from Manior. Please, go ahead.

I wanted to ask you a question. We have a vision of $3000 turnover by 2030. So what would be the sustainable EBITDA margin?

We've only given a top line number as a guidance. We're not given EBITDA margin as a guidance.

Okay. But it will be around this range only, 10 to 11%.

So we're not sharing that.

Okay.

Thank you.

Thank you. Participants, you may press star and 1.

To ask a question, Anyone who wishes to ask a question may press star and 1. As I don't know, for the questions, I'll now hand the conference over to the management for closing comments.

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 in to us or our investor relations partner, CDR India. Thank you.

Thank you very much. On behalf of NDR Auto Competence Limited, let's conclude this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.