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Electrical Equipment/Products company Rishabh Instruments announced Q3FY24 & 9MFY24 results:
Financial Performance Overview
- Revenue Growth: Revenue increased by 19% YoY in Q3FY24 to Rs 1,593 million and for 9MFY24, it rose by 30% to Rs 5,118 million.
- Gross Margin: Gross margin remained stable in Q3FY24 at 54.8% compared to 54.7% in Q3FY23. For 9MFY24, there was a slight decline to 56.8%.
- Adjusted EBITDA: Adjusted EBITDA showed a decrease of 40% YoY in Q3FY24 at Rs 137 million. However, for 9MFY24, it increased by 42% to Rs 835 million.
- Profit After Tax (PAT): PAT fell by 59% YoY in Q3FY24 to Rs 73 million. On the other hand, for 9MFY24, PAT increased by 9% to Rs 376 million.
Business Segment Performance
- Standalone Business: The standalone business showed a marginal increase in revenue in Q3FY24 to Rs 458 million from Rs 457 million in Q3FY23. The 9MFY24 revenue grew by 23% YoY to Rs 1,655 million.
- Lumel (SA): Recorded a significant revenue increase of 37% YoY in Q3FY24 to Rs 485 million and saw a 43% growth to Rs 1,336 million for 9MFY24.
- Lumel (Alucast): Revenue for Q3FY24 rose by 16% YoY to Rs 589 million, and for 9MFY24, there was a 29% increase to Rs 1,981 million.
Product and Geographic Expansion
- Product Development: Around 15 new products were added from the company's R&D centers, which contributed approximately 10% to the topline growth.
- Geographic Revenue Increase: Notable revenue growth is seen from Europe, Poland, and the USA, with a 40% revenue growth in Europe for 9MFY24, a 32% increase from Poland, and a 40% rise from the USA.
Business Outlook & Strategy
- Operational Efficiency: The company remains focused on enhancing operational efficiency and improving working capital days, which stood at 118 for 9MFY24.
- Market Penetration: There is a strategic focus to grow market share and penetrate new markets to broadening the customer base, considering the global infrastructure growth.
Commenting on the results, Dinesh Musalekar, CEO of Rishabh Instruments, stated, “During 9MFY24, we achieved a growth of 30% YoY in Revenues to Rs 5,118 million which reinforces the demand for our products both in Electrical and Diecasting business globally as we continue to see top-line growth in all the companies and all the geographies despite a slowdown in major economies across the globe.
The margins and bottom line for our Electronics business have been increasing quite significantly due to the cost optimization efforts to reduce our manufacturing cycle times and cost of materials. However, in the Lumel (Alucast) Aluminium Diecasting business, the profits are low due to the launch of technically challenging projects for the automotive industry in the EV space. These are long-term multi-year contracts and are expected to generate higher revenues and profits once these projects are stabilized over the next few quarters.
During 9MFY24, we have added around 15 new products designed and developed from our R&D Centers in Nashik, Zielona Gora (Poland), and Shanghai (China) in line with our commitment to continuously innovate and introduce new products. We have ~20 products in the pipeline to be added by FY25. These new products added in the last 2 years contributed to around 10% incremental growth to our topline. In our pursuit of enhancing the customer experience, we are actively investing in our R&D facilities to innovate and design, develop, and manufacture products fully in-house. Our primary objective is to enhance our product offerings, leveraging our in-house capabilities to achieve a distinct cost competitiveness. We hold a positive outlook on exploring untapped markets to enhance our existing market share as well as penetrating new markets to broaden our customer base. We have witnessed a positive response from existing customers on the back of our quality norms and this gives us confidence to tap higher market share across geographies. Our operations in India are witnessing favorable momentum, propelled by substantial infrastructure investments from both the public and private sectors.
Despite the economic slowdown in European regions, its impact has been minimal in our industry on the back of higher spending commitments by the government towards clean energy transition. Furthermore, our China business saw strategic introduction of high-quality products which eventually will help us to enhance our local market penetration. The products manufactured by our Chinese subsidiary V&A have high demand in many geographies specifically in Europe and the US.
We remain highly committed to fostering steady growth over the years through our unwavering dedication to innovation and providing end-to-end solutions to our customers.”
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