Suprajit Group Q4 Profit Rise 43% YoY At ₹699 Cr | NDTV Profit - video Dailymotion

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00:00 I'm currently joined by Ajit Kumar Rai, founder and chairman of the Suprajeet Group.

00:05 Sir, thank you so much for taking time out for us.

00:09 Good afternoon, thank you for having me.

00:14 Very good afternoon to you as well.

00:16 Now, we have seen strong performance by the company in the fourth quarter.

00:20 EBITDA has been slightly subdued.

00:23 How do you summarize the quarter for us and what's the outlook going forward?

00:29 I think we had an excellent quarter actually.

00:32 Overall, business has grown.

00:34 The margins have also increased compared to last year.

00:38 I think what's important in this quarter has been that all the divisions performed well,

00:44 particularly the domestic cable division, electronics division, as well as the Phoenix lamps division did very well.

00:51 Suprajeet Controls division had a year where it consolidated its operations.

00:56 Now, I think it is ready to take the business to the next level.

01:01 Going forward, we expect that the domestic business as well as the international business will grow and will grow in double digits.

01:11 We expect domestic margins will be where it is historically, whereas we expect that the controls divisions will improve its margin.

01:19 It has had a margin of about 6% last year.

01:23 We expect it to improve to about 8%.

01:26 Overall, we see the outlook for the year being quite positive.

01:29 Thank you so much for joining us.

01:37 I wanted to just continue the conversation you said on margins.

01:40 Now, as you highlighted, the SCD division has seen some margin pressure of roughly 200 basis points.

01:46 While for domestic cable, it has been flat for Phoenix, it has been a decent performance for the year, roughly up about 400 basis points.

01:55 I just wanted to run through, if you could give us a run through of the margin performance across divisions.

02:02 And how do you see this playing forward in the next financial year?

02:06 Coming to the Suprajeet Controls division, which is the one which had some challenges of margins in the last year,

02:13 it has been due to a few areas of concern.

02:17 One is, of course, in China, we had to relocate our plant at a one-off cost to a new location.

02:24 And in the US, I think we basically had issues at our Mexican plant relating to a China tariff, which has been slapped on some products,

02:34 as well as the significant increase in employee costs, which has been almost 25% last year, and it was 20% the year before.

02:42 And of course, the global automotive market has been just about flat, whereas the global non-automotive market,

02:50 which is obviously been serviced by Suprajeet Controls division, had a negative growth.

02:56 I think they were the challenges of last year. I think those challenges have been fairly well addressed this year.

03:02 So, we expect the business to grow. Last year, we hardly had any growth in Controls division.

03:07 We do expect a double-digit growth with an improved margin, because all these costs have been now sort of absorbed.

03:14 Some of the costs could not be absorbed. So, we see an improvement in margin.

03:19 Whereas in the other three divisions, which is mostly domestically focused in terms of Phoenix Lamps,

03:24 domestic cable division, as well as Suprajeet Electronics division, they're all expected to do comfortable double-digit.

03:31 I think on the Phoenix Lamps division, due to the restructuring we took in Europe by liquidating Trifa

03:40 and consolidating all the business in our single entity that is LuxLite, and certain changes in the operational efficiencies,

03:47 have seen the margins improving very nicely from low single-digit last year to 15% this year.

03:54 Electronics division is our new division. I think in that new division, we have done very well.

03:59 We did the first full year of operation, and within the first full year, they have gone to the double-digit.

04:04 The order book position is very strong. I think this year also, we expect Suprajeet Electronics division

04:09 actually doing a significantly high double-digit business growth with a comfortable double-digit margin.

04:16 Domestic cable business is our bread and butter. Historically, that has been our core business and continues to be so.

04:22 I think that will also grow with the increases in beyond cables projects, with the improvement in aftermarket business.

04:30 We expect that that business also will grow in double-digit with historic margins of 16-17%.

04:37 I think that's what the overall outlook for the year is.

04:41 Thank you so much for explaining that in so much detail, sir.

04:44 Now, I wanted to just talk about the segmental as well as the divisional performance.

04:49 Now, for auto, the four-wheelers are roughly 36% of your revenue,

04:54 while two-wheelers, which was traditionally the bread and butter, likely a decade ago, is now at roughly 27%.

05:02 Now, I just wanted to take a slightly longer term, roughly like three- to four-year view from you.

05:07 Where do you see both these divisions going? How do you see the revenue picture for both these?

05:12 And what kind of proportions are you seeing going forward as well? And if you would just talk us through that.

05:18 It's a very interesting point. I think historically, Suprajit has been a two-wheeler company,

05:24 basically catering to the two-wheeler industry. About 15 years ago, nearly 95% of our business was in two-wheelers.

05:31 We continue to grow the two-wheeler business, but completely de-risked and diversified ourselves into other segments.

05:38 Suprajit's philosophy is to de-risk and grow profitably.

05:41 In line with that, we continuously grew the other areas, which is automotive, which is non-automotive, and in the aftermarket.

05:48 That's why from that 95% and 5%, we are today seeing nearly 37% in automotive and 27% in two-wheeler.

05:57 Going forward in the next few years, I expect that the automotive business will further consolidate and higher.

06:03 It will be in excess of, I think, 40%. Probably, the two-wheeler business, we are growing the business,

06:10 but still, with the kind of growth we are having, probably, it will remain where it is, maybe around 25%.

06:16 Whereas, the non-automotive and aftermarket business, which has been 18%, 19%, will also show some improvement in the market share.

06:24 That's how we look in terms of the total pie when you look at three, four years' outlook.

06:32 [Music]

Suprajit Group Q4 Profit Rise 43% YoY At ₹699 Cr | NDTV Profit

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