- Chip shortage: Despite strong underlying demand across businesses, 2QFY22 performance was severely impacted by the chip shortage. The supply of chips is improving gradually, although not very strongly.
- RM cost impact: Also, the transitory impact of higher RM prices (due to the lag in pass-through) impacted all the business in 2Q. However, the contractual lag in pricing is expected to narrow going forward.
- The SMRPBV order book as of Sep’21 stood at EUR15.3b (v/s EUR15.6b as of Mar’21), with gross new order wins of EUR2.1b and the start of production of orders worth EUR2.4b.
- The share of EVs in the order book stood at 27% (v/s 25% in Mar’21). MSS supplies to 7 of the top 10 EVs globally. The pure EV platforms come with advanced features, resulting in higher content for the same components of MSS.\
- SMRPBV was impacted by lower revenues (due to the chip shortage), along with higher input, labor, and freight costs in key geographies, resulting in an adverse impact on margins.
- PKCs’ performance was impacted by a sharp QoQ drop in volumes in China and the EU, along with the continued impact of elevated costs (EUR9m) on account of new launches and supply chain disruptions. However, these launch-related costs started to recede in 2Q.
- Net debt (incl. lease liabilities) as of Sep’21 increased QoQ to INR88.97b (v/s INR74.64b in Jun’21) due to higher working capital.
- M&As: All of the support from the government is now drying up, resulting in a very strong M&A pipeline (the strongest in the recent past).
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