Slides
Page 1
Harsha Engineers International Limited Earnings Presentation – Quarter ended June’25
Page 2
2 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Disclaimer/ Safe Harbor Cautionary statement regarding forward-looking statements ● This presentation may contain certain forward-looking statements relating to Harsha Engineers International Limited (“HEIL”, or “Company””) and its future business, development and economic performance. These statements include descriptions regarding the intent, belief or current expectations of the Company, its subsidiaries and associates and their respective directors and officers with respect to the results of operations and financial condition of the Company, subsidiary or associate, as the case may be. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to (1) competitive pressures; (2) legislative and regulatory developments; (3) global, macroeconomic and political trends; (4) fluctuations in currency exchange rates and general financial market conditions; (5) delay or inability in obtaining approvals from authorities; (6) technical developments; (7) litigation; (8) adverse publicity and news coverage, which could cause actual development and results to differ materially from the statements made in this presentation. Company assumes no obligation to update or alter forward-looking statements whether as a result of new information, future events or otherwise. Any forward-looking statements and projections made by third parties included in this presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections. ● This presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this presentation. This presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this presentation is expressly excluded. ● This presentation does not constitute a prospectus, offering circular or offering memorandum or an offer, or a solicitation of any offer, to purchase or sell, any shares and should not be considered as a recommendation that any investor should subscribe for or purchase any of company’s securities in any jurisdiction. Neither this presentation nor any other documentation or information (or any part thereof) delivered or supplied under or in relation to the shares shall be deemed to constitute an offer of or an invitation by or on behalf of company. No part of it should form the basis of or be relied upon in connection with any investment decision or any contract or commitment to purchase or subscribe for any of company’s securities. ● HEIL assumes no responsibility to publicly amend, modify or revise any forward looking statements, on the basis of any subsequent development, information or events, or otherwise. Unless otherwise stated in this document, the information contained herein is based on management information and estimates. The information contained herein is subject to change without notice and past performance is not indicative of future results. HEIL may alter, modify or otherwise change in any manner the content of this presentation, without obligation to notify any person of such revision or changes. ● No person is authorized to give any information or to make any representation not contained in and not consistent with this presentation and, if given or made, such information or representation must not be relied upon as having been authorized by or on behalf of HEIL. ● This presentation and its contents are confidential and should not be distributed, published or reproduced, in whole or in part, or disclosed by recipients directly or indirectly to any other person.
Page 3
3 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Index Business Update Company Overview Summary on use of IPO Proceeds Quarter and Year End Highlights
Page 4
QUARTER END HIGHLIGHTS
Page 5
5 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Financial Highlights - QoQ PAT - Engineering CONSOLIDATEDRevenue - Engineering CONSOLIDATED EBITDA - Engineering CONSOLIDATED 6,236 3,834 6,603 6,526 19.1% 11.6% 20.0% 18.7% - 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Q1FY25 Q4FY25 Q4FY25-Adj.* Q1FY26 EBITDA EBITDA % 32,658 33,032 34,883 0 5000 10000 15000 20000 25000 30000 35000 Q1FY25 Q4FY25 Q1FY26 Revenue outside India (%) 62.7%54.3%61.1% 3,561 1,215 3,983 3,726 10.9% 3.7% 12.1% 10.7% Q1FY25 Q4FY25 Q4FY25-Adj.* Q1FY26 PAT PAT % EBITDA - Engineering INDIA PAT - Engineering INDIA 3,821 (5,201) 4,300 3,983 15.7% -20.8% 17.2% 15.5% Q1FY25 Q4FY25 Q4FY25-Adj.* Q1FY26 PAT PAT % Revenue - Engineering INDIA 24,365 25,043 25,647 -4000 1000 6000 11000 16000 21000 26000 Q1FY25 Q4FY25 Q1FY26 Revenue outside India (%) 52.2%47.4% 40.1% 5,998 (2,938) 6,564 6,385 24.6% -11.7% 26.2% 24.9% (4,000) (2,000) - 2,000 4,000 6,000 8,000 Q1FY25 Q4FY25 Q4FY25-Adj.* Q1FY26 EBITDA EBITDA % ₹ in Lakhs EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost *Adjusted for Exceptional Items - Rs, 2,768 lakhs (Consolidated) and Rs.9,501 lakhs (Standalone) for Impairment loss of subsidiary investment
Page 6
6 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Business Update ▪ Our India Engineering business (HEIL + HEAL) continues to show satisfactory performance with a growth of around 5% in top line and around 6.5% growth in Adj. EBITDA in Q1 FY 2026 over Q4 FY 2025. However, sequentially i.e. Q1 FY 2026 over Q4 FY 2025 the performance is more or less flat, again attributable to Q4 being generally the strongest quarter. ▪ HEAL Greenfield Bhayla Plant Phase-1 has commissioned with commercial production date being 26th June, 2025. However, since the plant has not scaled up, HEAL has reported with negative EBITDA and PAT mainly due to fixed overheads as well as interest and depreciation charges. ▪ Exports from India have started picking up – again signalling some early signs of revival in industrial demand particularly in Europe and China. ▪ The Bronze Bushing segment clocked sales of around Rs. 25 crores in Q1 FY 2026 and continues to enjoy strong positive tailwinds. Company has also signed the Agreement for Bushing with one of it’s multinational customer with revenue potential of around Rs. 117 Cr per annum.
Page 7
7 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Business Update ▪ Harsha Romania has, for the first time in several quarters, reported a top line growth in Q1 FY 2026 of almost 18% over Q1 FY 2025, again signalling some revival of industrial demand in Europe. Harsha China also maintain its growth trajectory in top line. ▪ At consolidated level, the foreign subsidiaries have reported the combined loss primarily owing to continued negative EBITDA in Harsha Romania while Harsha China has shown growth in its bottom line. ▪ The Solar business top line in Q1 FY 2026 has remained flat as compared to Q1 FY 2025, but the EBITDA and PAT continue to be in the positive territory.
Page 8
8 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Consolidated P & L Statement EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost (₹ in Lakhs) Particulars Q1 FY26 Q4 FY25 Q1 FY25 FY24-25 REVENUE : Revenue from Operations 36,529 37,297 34,316 1,40,765 Other Income 1,073 1,103 790 3,773 TOTAL REVENUE 37,602 38,400 35,106 1,44,538 EXPENSES : Cost of Material Consumed 19,682 18,869 17,667 72,883 Change in Inventories of Finished Goods & Work-in- progress (1,002) 1,311 (943) 985 COGS 18,680 20,180 16,724 73,868 Employee Benefits Expenses 5,069 4,559 4,639 18,155 Other Expenses 7,203 7,043 7,436 29,188 Bad Debts Write Off / Net Sundry Balance write off 34 1,999 - 2,060 Exceptional Items - 2,768 - 2,768 EBITDA 6,616 1,851 6,307 18,499 Margin % 18.1% 5.0% 18.4% 13.1% Finance Costs 257 146 256 877 Depreciation and Amortization Expense 1,053 986 1,021 4,054 PROFIT BEFORE TAXATION 5,306 719 5,030 13,568 Tax Expenses 1,513 958 1,425 4,637 PROFIT AFTER TAXATION 3,793 (239) 3,605 8,931 PAT Margin% 10.4% -0.6% 10.5% 6.3% Other comprehensive income (475) (119) 40 (229) Basic Earnings per Share - In ₹ 4.17 (0.26) 3.96 9.81 Diluted Earnings per Share-In ₹ 4.17 (0.26) 3.96 9.81
Page 9
9 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Certain Key Parameters and Break Up ^ Adjusted for Exceptional Items - Rs, 2,768 lakhs (Consolidated) and Rs.9,501 lakhs (Standalone) for Impairment loss of subsidiary investment ^^Adjusted for Bad Debts Write off impact of Solar – EPC and O&M for Q4 FY25 and FY24-25 EBITDA = Profit/ (Loss) Before Taxation+ Depreciation and Amortisation + Finance Cost Particulars Q1 FY26 Q4 FY25 Q1 FY25 FY24-25 Revenue from Operations - Engineering & Others - Consolidated 34,883 33,032 32,658 1,26,885 - Engineering & Others - India 25,648 25,043 24,365 95,819 - Solar - EPC and O & M 1,646 4,265 1,658 13,880 Adj. EBITDA - Engineering & Others - Consolidated 6,526 6,603^ 6,236 22,683^ - Engineering & Others - India 6,385 6,564^ 5,998 22,399^ - Solar - EPC and O & M 90 27^^ 71 655^^ Adj. PAT - Engineering & Others - Consolidated 3,726 3,983^ 3,561 12,743^ - Engineering & Others - India 3,983 4,300^ 3,821 14,161^ - Solar - EPC and O & M 67 50^^ 44 505^^ Other Income - Interest Income 232 404 315 1,315 - Share of Profit/Loss from Cleanmax Harsha Solar LLP 24 (13) 11 29 - Share of Profit/Loss from Sunstream Green Energy One Pvt. Ltd. - - - - - Gain / (Loss) on Exchange Rate Fluctuation 272 255 132 925 - Miscellaneous Income 57 14 12 43 - Gain / (Loss) on Sales of Investment in Subsidary Co. /Associates - - - - - Gain / (Loss) on Sale of Investment (Mutual Fund) 170 65 70 197 - Gain / (Loss) on Fair value of Investments (measured at FVTPL) 318 378 250 1,264 - Total Other Income 1,073 1,103 790 3,773 (₹ in Lakhs)
Page 10
10 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Working Capital – Consolidated – Key Parameters Revenue from operations annualised and used as denominator for No. of days calculation. (₹ in Lakhs) Q1 FY26 Q1 FY25 FY 24-25 1 Inventories a. Raw Material - Amount 6,392 7,785 5,865 No. of Days 16 21 15 b. Semi Finished- Amount 2,752 2,707 2,381 No. of Days 7 7 6 c. Finished - Amount 12,498 12,831 11,348 No. of Days 31 34 29 d. Stores & Spares and Tooling - Amount 13,282 13,623 13,792 No. of Days 33 36 36 2 Receivables - Amount 32,405 31,509 30,259 No. of Days 81 84 78 3 Trade Creditors- Amount 11,709 10,751 14,673 No. of Days 29 29 38 Sr. Particulars
Page 11
11 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Utilisation of IPO Proceeds as on 30th Jun’ 2025 ₹ in Lakhs Particulars Amount Total IPO Proceeds 45,500 Less: IPO Expenses (2,560) Net Proceeds as per Prospectus 42,940 Less: IPO Expenses (excess contingencies hold) - Net Proceeds available 42,940 ₹ in Lakhs 1 Pre-payment or scheduled repayment of a portion of the existing borrowing availed by the Company 27,000 27,000 - 2 Funding capital expenditure requirements towards purchase of machinery 7,795 7,351 444 3 Infrastructure repairs and renovation of our existing production facilities including office premises in India 712 712 - 4 General corporate purposes 7,433 7,433 - Total 42,940 42,496 444 Unutilised AmountSr. No Particulars Amount as proposed in the Offer Document Amount Utilised
Page 12
Company Overview
Page 13
13 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Harsha At A Glance Largest manufacturer of precision bearing cages in India* 5 strategically located manufacturing facilities with various warehouses at different locations worldwide – supplying products to over 25 countries across 5 continents Diversifying into complex and specialized precision stamped components Capability to manufacture bearing cages with diameters between 20mm to 2,000mm with >7,500 products manufactured since incorporation 6.5% of the market share in the global organized bearing brass, steel and polyamide cages market^ Supplies products to each of the top 6 global bearing manufacturers^^ Note : *Largest manufacturer in terms of revenue in organized sector; ^in CY2021 ^^As of 31st March 2022 50-60% of domestic market share China RomaniaIndia Schaffler AG NTN NSK TIMKENSKFJTEKT
Page 14
14 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Bearing cages | ~US$5.2bn market expected to grow at ~6.4% Bearing cages form an important component within Bearings Separate rolling elements, reduce friction & heat generated in bearing Keep the rolling elements evenly spaced optimizing load distribution on the bearing Cages offer high rigidity, strength High heat resistant operating conditions Small portion of total cost of bearing - The global bearing cages is estimated at about 5% of the global bearings market Bearing Cages are critical components requiring highest lead time, technical & tooling expertise Bearing cages have increasing usage across key fast-growing end user industries Breakup of Bearing Market based on Application (USD bn) 93.4 104.6 171.7 2020A 2021A 2029F Global Bearings Market (USD bn) Domestic Bearings Market (USD bn) 4.4 5.5 10.3 2020A 2021A 2029F 8.3% CAGR 6.4% CAGR Segment / Market Size 2022 F 2029 F % share 2021 CAGR % Automotive 24.8 37.0 22.5% 5.8% Aviation & Aero 21.9 34.0 19.7% 6.5% Railways 19.5 30.9 17.6% 6.7% Construction 15.2 24.2 13.6% 6.8% Mining 12.3 19.3 11.1% 6.6% Electronics 10.0 15.5 9.0% 6.5% Agriculture 6.2 9.5 5.6% 6.3% High growth bearing cages market 4,670.1 2020 8,583.5 2029 6.4% CAGR Global Bearing Cages Market (USD mn) India market is expected to grow at a CAGR of 8.3% during 2021 to 2029. Given the complexity of bearing cages production , customers prefer continuing with reliable vendors for a long period for consistency of quality Global bearing companies have steadily increased outsourcing manufacture of bearing cages Supplies to each of the top 6 global bearing manufactures
Page 15
15 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 ✓ Railways ✓ Industrial machines ✓ Pumps ✓ Compressors ✓ OEMs ✓ Engine applications ✓ Crushers ✓ Steel mills ✓ Thermal turbines ✓ Windmills ✓ Agricultural machines ✓ Automotive parts ✓ Chemical machinery ✓ Utilities ✓ White appliances ✓ Chemical machinery ✓ General industries ✓ Blowout preventers ✓ Extruders ✓ Gearboxes ✓ Offshore drilling ✓ Oil rigs ✓ Traction motors for railways Different designs of bearing cages with diverse applications Comprehensive solution provider offering diversified suite of precision engineering products Bearing Cages Cylindrical Roller Angular Contact Ball Spherical RollerDeep Grove Thrust Roller Taper Roller Cylindrical RollerAngular Contact Ball Spherical RollerDeep Grove Thrust RollerTaper Roller Sand Casting Bronze Bushing ✓ Railway Seal ✓ AC Compressor Head ✓ Bronze Bushing for Wind Gear Box ✓ Chassis Parts ✓ Engine Drive ✓ Clutch Components ✓ Gear Shifter Assembly Parts Precision Stamping Components
Page 16
16 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Tool Manufacturing • Comprehensive tooling, testing and measurement infrastructure • Dedicated tool production facilities at Changodar have strengthened HEILs ability to meet customer demands Process Design & automation • Decades of experience – technologically driven manufacturing process enables HEIL to provide solutions in a cost-effective manner • In-house automation has helped to optimize O&M expenses, reduce production cycle time and minimize capex • Indigenously designed vision camera system detects defects that are not possible to detect with naked eye Product Development • Expertise in product development - product development cell and innovation centre Tooling Design • Expertise to design and develop advance tooling inhouse which enables HEIL to manufacture precision products • Engaged with customers to in product development process from design stage Expertise in tooling, design development and automation Full-service capabilities under one roof Product Design Support Tooling Design Tooling Manufacturing Development, Testing & Measurement
Page 17
17 Privileged & Confidential, © 2022, All Rights Reserved. 48 63 153 0 171 78 219 33 40 247 123 38 6 128 195 191 191 191 Key Strategies going forward Enhance market leadership in bearing cages and customer base expansion Increased focus on developing products suited to capture market opportunity in the growing EV segment Retain and strengthen technological leadership through continued focus on development and automation Focus on growth by partnerships with customers and opportunistic inorganic acquisitions Growing bronze bushings and specialised component segment Focus on increasing operational efficiencies to improve returns %
Page 18
T H A N K YO U R=56 G=87 B=35 R=83 G=128 B=52 R=115 G=140 B=75 R=181 G=210 B=134 R=120 G=155 B=186 R=191 G=191 B=191