Harsha Engineers International (HARSHA) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 performance aligned with expectations, with stable or slightly lower revenue but strong profitability and margin expansion compared to Q1 FY24, despite European softness.

• India engineering business sustained strong EBITDA margin growth, notably in the bronze bushing segment, and developed nearly 100 new products.

• China operations delivered strong top-line and positive bottom-line, while Romania continued to post operating losses but is expected to improve by Q4 FY25.

• Unaudited standalone and consolidated financial results for Q1 FY25 were approved with an unmodified auditor opinion.

• Mr. Chetan Prabhu was appointed as Senior Management, effective August 7, 2024, bringing 35 years of experience.

Financial highlights

• Consolidated revenue for Q1 FY25 was ₹35,106 lakh, compared to ₹34,796 lakh in Q1 FY24 and ₹38,815 lakh in Q4 FY24.

• Consolidated EBITDA for Q1 FY25 was ₹6,307 lakh (18.4% margin), up from ₹4,582 lakh (13.2%) in Q1 FY24.

• Consolidated PAT for Q1 FY25 was ₹3,605 lakh (10.5% margin), up from ₹2,458 lakh (7.1%) in Q1 FY24.

• Solar business revenue was ₹1,658 lakh with EBITDA of ₹71 lakh in Q1 FY25.

• CapEx of ₹4,200 lakh incurred in Q1 FY25.

Outlook and guidance

• FY25 guidance maintained: top line growth of 10%+ over FY24, with much higher bottom line growth expected.

• Romania expected to achieve positive operating margins by Q4 FY25 as customer engagement improves.

• Long-term strategic guidance remains at 10%-15% top line CAGR, with margin improvement targeted.

• Bronze bushing segment expected to contribute at least ₹8,000 lakh in sales for FY25.

• Stamped components business targets mid-term growth from ₹4,000-5,000 lakh to ₹20,000 lakh.