Sundaram-Clayton Reports 16% EBITDA Growth, Appoints New CFO

Financial Performance

Sundaram-Clayton Limited (SCL), a leading manufacturer of engineered aluminium die-cast components for the automotive sector, reported a robust 16% improvement in EBITDA, reaching Rs. 70.60 crores compared to Rs. 61.10 crores in the same quarter of the previous year. The company's standalone revenue stood at Rs. 444.10 crores, down from Rs. 553.60 crores in the corresponding quarter last year. However, it's worth noting that the previous year's figure included revenue from the Hosur business, which was sold in the fourth quarter of the previous fiscal year.

Operational Highlights

India Operations

SCL's operations have ramped up smoothly at its new Thervoy Kandigai Plant (TKP) in Chennai, following the commencement of full-scale operations at its state-of-the-art mega die-casting smart factory. In a strategic move to enhance operational efficiencies, the company is consolidating its three plants (TKP, Oragadam, and Mahindra World City) into two (TKP and Oragadam). This consolidation process is in its final stages.

US Operations

Despite ongoing softness in the overall North American market, SCL's US operations have shown promising results. The company's US plant in South Carolina has begun serial production and supplies to customers from its 4,400-ton machine. Notably, the US operations registered their highest quarterly sales performance of Rs. 79.70 crores since inception, marking a 32% increase over the same quarter of the previous year.

New CFO Appointment

In a significant leadership change, SCL has appointed Hariharan V as its new Chief Financial Officer, effective September 1. Hariharan brings over 32 years of rich experience in the manufacturing industry, with expertise in finance, planning, marketing, human resources, internal audit, and risk management.

Hariharan's educational background includes:

Bachelor's Degree from St. Joseph's College, Trichy
Chartered Accountancy certification from the Institute of Chartered Accountants of India
Post Graduate degree in Engineering Business Management from the University of Warwick
Various leadership development programs

Having joined SCL in 1997, Hariharan has been instrumental in leading various functions within the company, including finance, marketing, business planning, human resources, and internal audit. His appointment as CFO comes after a successful tenure overseeing the company's US project.

Strategic Outlook

Despite challenges in the North American market, SCL continues to view it as a long-term strategic market with growth opportunities. The company's investment in its US plant and the recent performance improvements underscore this commitment.

As Sundaram-Clayton Limited moves forward with its plant consolidation in India and expansion in the US, the company appears well-positioned to capitalize on its operational efficiencies and global market presence in the automotive components sector.

With its focus on high-quality, innovative solutions for global customers in both commercial and passenger vehicle segments, and a strong emphasis on sustainability, SCL continues to strengthen its position as a leader in lightweighting, advanced manufacturing, and future-ready automotive solutions.

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Sundaram Clayton Limited (SCL), a leading manufacturer of engineered aluminium die-cast components for the automotive sector, has announced its quarterly results. Despite a decline in revenue, the company reported significant improvements in EBITDA and its US operations.

Financial Performance

SCL reported standalone revenue of Rs. 442.12 crores, down from Rs. 549.04 crores in the same quarter last year. The revenue decrease is primarily attributed to the transfer of the Hosur business unit. However, the company's EBITDA showed a notable improvement, increasing by 16% to Rs. 70.60 crores compared to Rs. 61.10 crores in the corresponding quarter.

The net profit for the quarter stood at Rs. 17.01 crores, with earnings per share of Rs. 7.72.

India Operations

SCL has successfully ramped up operations at its new Thervoy Kandigai Plant (TKP) in Chennai without any disruptions. This state-of-the-art facility is expected to enhance the company's production capabilities and efficiency.

In a strategic move to improve operational efficiency, the company is in the process of consolidating its three Indian plants into two facilities.

USA Operations

The company's North American operations have shown remarkable growth. SCL's US operations achieved their highest quarterly sales of Rs. 79.70 crores, marking a significant 32% increase over the previous year. This performance underscores the company's growing presence and success in the North American market.

Investments

During the quarter, Sundaram-Clayton invested Rs. 77.31 crores in its overseas subsidiary, Sundaram Holding USA Inc. This investment demonstrates the company's commitment to expanding its international operations and capitalizing on growth opportunities in the US market.

Outlook

Despite the challenges posed by the revenue decline, SCL's improved EBITDA performance and strong growth in US operations indicate a positive trajectory for the company. The successful ramp-up of the new Thervoy Kandigai Plant and the ongoing consolidation of Indian facilities are expected to further enhance operational efficiency in the coming quarters.

Sundaram-Clayton Limited continues to focus on providing high-quality, innovative solutions to global customers in the automotive sector. With its emphasis on operational efficiency, international expansion, and strategic investments, SCL aims to navigate current market conditions while positioning itself for long-term growth in both domestic and international markets.