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Rane (Madras) Ltd (BOM:532661) Q4 2025 Earnings Call Highlights: Record Sales and Strategic ...
Release Date: June 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Rane (Madras) Ltd (BOM:532661) achieved record sales and strengthened customer partnerships, with the group recording its highest ever turnover of 7,413 crores.
The merger of Rane Engine Valve Limited and Rane Brake Lining Limited into Rane (Madras) Ltd was successfully completed, creating synergy and operational efficiency.
The company reported a revenue of 905 crores in Q4 FY25, marking a 5.8% year-over-year growth.
Rane (Madras) Ltd secured new orders worth over 230 crores during the quarter, primarily for the steering and linkage business and the light metal casting business.
The company is exploring monetization options of surplus non-core land parcels to reduce debt and liability, with shareholder approval already received.
The commercial vehicle segment growth was modest and still impacted by infrastructure-related disruptions.
The light metal casting business has not yet fully turned around operationally, though improvements are being made.
The company faces challenges in achieving significant margin improvements in the engine components and casting businesses.
Rane Steering Systems Limited continues to struggle with legacy orders impacting margins, with improvements expected only over the next 2-3 years.
The global uncertainty and domestic market conditions make it difficult for the company to provide clear guidance on future growth.
Q: Can you elaborate on the benefits of the merger and the plans for non-core asset sales? A: The merger has improved the balance sheet, reducing debt to 52% of total capital employed. We plan to monetize surplus land to further reduce debt by 150 to 200 crore this financial year. The exact amount depends on the nature of the transactions, which could include outright sales or co-development. Mr. Harris Lakshman, Chairman of Rane Group.
Q: What is the strategic direction for Rane Madras in terms of new products and business focus? A: Rane Madras aims to create scale and achieve double-digit EBITDA with a comfortable debt position. While new product additions through M&A are planned, they are 12-15 months away. Current focus is on optimizing capital allocation across existing product lines, with a strong emphasis on exports and aftermarket growth. Mr. Harris Lakshman, Chairman of Rane Group.
Q: What is the status of the US subsidiary and the expected synergy benefits from the merger? A: The US subsidiary's turnaround is challenging, and we have not yet received the owed amount. However, there is potential for recovery through asset charges. The merger is expected to yield synergy benefits through cost savings and operational efficiencies, aiming for a double-digit EBITDA even in a down market. Mr. Harris Lakshman, Chairman of Rane Group.
Q: Can you provide an update on the CapEx plans for FY26 and the expected revenue growth? A: We plan to invest between 400 and 450 crore in CapEx, depending on market conditions. The aspiration is to achieve a minimum of 12% revenue growth, with potential to reach 15% over the next three years, contingent on market performance. Mr. Harris Lakshman, Chairman of Rane Group.
Q: What are the prospects for Rane Steering Systems and the impact of legacy orders on margins? A: We have reached an understanding with Maruti for price corrections on legacy orders, but significant margin improvements will take 2-3 years. New business with better margins will start production in 2027-2028. Current margins will remain in single digits until then. Mr. Harris Lakshman, Chairman of Rane Group.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
