Yazaki India sharp increase of operating marging due to complete pass through of raw material prices.

Despite increase in copper (key raw material for YIPL) prices, operating margin saw a sharp increase in FY22 from 2.62% in FY 21 to 6.95% in FY22 due to complete pass through of raw material prices.

The company is expected to have healthy revenue growth of 45-50%  in fiscal 2023, up from Rs 2,357 crore in fiscal 2022 on the back of increasing orders from Maruti Suzuki India Ltd (MSIL; ‘CRISIL AAA/Stable/CRISIL A1+’) and the two-wheeler segment, expected growth of Tata Motors (mainly PV) and supply of SMT meters. Revenue has grown by 62% for FY22, mainly supported by strong volume growth in both automotive and industrial applications across all customer segments.

Company’s financial risk profile remains moderate marked by average capital structure, resulting from networth expected at Rs. 150-170 core as on March 31, 2023 and total debt of ~Rs. 1330 crore. Debt levels increased to Rs. 1332 crore as on March 31, 2022, however ~30% of the debt consists of unsecured loans from parent, to help fund the ongoing capacity expansion plans.