Rane Group secures ₹220 crore worth of new orders in Q2.

Rane Group, a prominent player in the auto parts industry, announced that its companies have secured new business orders worth ₹220 crore in the second quarter of FY25, including ₹170 crore in export orders. This comes as both domestic and export businesses continue to show growth despite certain challenges.

In the Q2 FY25 period, Rane Madras received international orders worth ₹140 crore and domestic orders totaling ₹30 crore, which included ₹25 crore from the electric vehicle (EV) segment. Other group companies such as Rane Brake, ZF Rane, and Rane Engine Valve also secured new orders during the quarter.

However, Rane Group's total revenue for Q2 FY25 slightly decreased to ₹920 crore, compared to ₹930.5 crore during the same period in the previous year.

During the earnings call, Harish Lakshman, Chairman of Rane Group, revealed that the company may reduce its initially planned capital expenditure (capex) for FY25 from ₹400 crore, though the three-year capex target of ₹1,000 crore remains unchanged. ZF Rane will account for 45% of this capex, while Rane Madras and Rane Steering Systems will collectively contribute ₹550 crore.

Lakshman also shared that over 80% of the capex will be focused on capacity expansion to meet the growing demand in both domestic and export markets, which have seen growth rates exceeding 20%. The remaining 20% will be directed toward capability building, engineering, and R&D.

Regarding the ongoing amalgamation of Rane Madras, Rane Engine Valve, and Rane Brake Lining, Lakshman provided an update, noting that a no-objection certificate had been obtained from the Bombay Stock Exchange and the National Stock Exchange as of July 18, 2024. A joint application was filed with the National Company Law Tribunal (NCLT) Chennai on August 26, 2024, with secured creditors’ consent, and meetings for shareholders and unsecured creditors are scheduled for November 20 and 21, 2024.

Lakshman also addressed the slowdown in demand in the domestic automobile market during the first half of FY25 but pointed to positive signs from the festive season sales. "We will need to wait and see if this momentum sustains for the rest of the fiscal year," he concluded.

HBL