Rishabh Instruments Limited - Q3 & 9MFY24 Financial Performance

Rishabh Instruments Limited (RIL / the Company), a global energy efficiency solution company, announced its Unaudited Financial Results for the quarter & nine months ended 31st December 2023.

Company wise performance

- Standalone Business - Revenue for Q3FY24 stood at INR 458 Mn as compared to INR 457 Mn in the Q3FY23, remained flat Y-o-Y. Revenue for 9MFY24 stood at INR 1,655 Mn, registering a growth of 23% Y-o-Y from INR 1,341 Mn in 9MFY23.

- Lumel (SA) - Revenue for Q3FY24 stood at INR 485 Mn as compared to INR 354 Mn in the Q3FY23, growing 37% Y-o-Y. Revenue for 9MFY24 stood at INR 1,336 Mn, registering a growth of 43% on a Y-o-Y from INR 932 Mn in 9MFY23.

- Lumel (Alucast) - Revenue for Q3FY24 stood at INR 589 Mn as compared to INR 508 Mn in the Q3FY23, growing 16% Y-o-Y. Revenue for 9MFY24 stood at INR 1,981 Mn, registering a growth of 29% on a Y-o-Y from INR 1,540 Mn in 9MFY23.

Q3 & 9MFY24 Highlights

- Consolidated revenue increased by 19% on a Y-o-Y basis in Q3FY24 and 30% on a Y-o-Y basis in 9MFY24.

- Adjusted EBITDA (excl. ESOP expenses and WHT Provisions) decreased by 40% on a Y-o-Y basis in Q3FY24 on account of

* Launch of new products in Aluminum die-cast business with higher development cost & relatively lower revenues in the initial phase, however, these are long term contracts with higher revenues visibility going forward.

* Addition of new product portfolio of Solar String Inverter, which has shown higher revenue growth but has comparatively lower Gross & EBIDTA margins. However, once we achieve scale in this vertical, we are optimistic of increasing our margin trajectory going forward.

- Adjusted EBITDA (excl. ESOP expenses and WHT Provisions) increased by 42% on a Y-o-Y basis in 9MFY24 and adjusted EBITDA margins (excl. ESOP expenses and WHT Provision) for 9MFY24 increased by 141bps. This was largely propelled by company's in-house cost effectiveness & process improvement initiatives.

- Profit After Tax for Q3FY24 was down by 59% Y-o-Y and stood at INR 73 Mn, Profit After Tax for 9MFY24 was up by 9% on Y-o-Y basis.

- Net Cash and Cash Equivalents as on 31st December 2023 stand at INR 918 Mn.

- Working capital days for 9MFY24 stood at 118 days. The Company strongly remains committed to operational efficiency and continue to see several improvements on the working capital front.

New Products development

* Company is amongst the first Indian company to design, develop and manufacture Solar String Inverters end to end.

- Added next generation inverters "NEO RADIUS" in 3 phase ranging from 3 KW to 20 KW and continue to develop up to 120 KW in our R&D.

* Our Poland R&D team has developed and introduced KD6 and KD10 Paperless Recorders, N31U Universal Programmable Digital Meters, ND31 IoT Enhanced Power Quality Analyzer

Overseas Business

* Lumel SA - Electronics operations in Europe continuous to thrive with Y-o-Y 43% growth for 9MFY24. This is due to company's penetration in medium voltage segment, industrial automation and green energy.

- Further we have invested in state-of-the-art third dedicated SMT line to exclusively support EMS business in Lumel SA.

* In Lumel Alucast, the Aluminium diecasting business has seen revenues increasing by 29% Y-o-Y for 9MFY24. The addition of new projects/product has impacted on the EBITDA margins temporarily.

However, these are long-term contracts expected to generate higher revenue going forward with better margin profile due to operating leverage play.

* Our China operations has started to grow post extended covid shutdown in China. The growth in revenue is 29% Y-o-Y for 9MFY24.

* This strategic acquisition in China will help us to source electronic components for Lumel SA and the Indian company reducing cost of raw materialsin the coming years.

* V&A is expanding R&D for new product development and expansion of current product profile.

* Our Sifam Tinslay USA and UK entities are steadily growing, the USA business has grown by 25% and UK business by 16% Y-o-Y for 9MFY24.

Commenting on the results, Mr Dinesh Musalekar, CEO of Rishabh Instruments Limited, said, "During 9MFY24, we achieved a growth of 30% Y-o-Y in Revenues to INR 5,118 Mn 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 in all the geographies despite slowdown in major economies across the globe.

The margins and bottom line for our Electronics business has been increasing quite significantly due to the cost optimization efforts to reduce our manufacturing cycle times and cost of materials. However, in Lumel (Alucast) Aluminium Diecasting business, the profits are low due to the launch of technically challenging projects for 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 a 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 pipeline to be added by FY25. These new products added in 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 inhouse.

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 market 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 economic slowdown in European regions, its impact has been minimal in our industry on the back of higher spending commitments by 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 from our Chinese subsidiary V&A have high demand in many geographies specifically in Europe and US.

We remain highly committed to foster the steady growth over the years through our unwavering dedication to innovation and providing end-to-end solutions to our customers."

Shares of Rishabh Instruments Limited was last trading in BSE at Rs. 596.05 as compared to the previous close of Rs. 606.70. The total number of shares traded during the day was 9124 in over 721 trades.

The stock hit an intraday high of Rs. 615.80 and intraday low of 587.35. The net turnover during the day was Rs. 5450781.00.

Source : Equity Bulls

Keywords

RishabhInstruments INE0N2P01017 ElectricalEquipment Q3FY24 9MFY24 ResultUpdate