BSE: 538970
Market Cap: ₹15k Cr.
Company Profile
Wardwizard Innovations & Mobility Limited (Bse small cap) is an electric vehicle manufacturer that particularly focuses on manufacturing 2 and 3-wheelers. The company is one of the few publicly listed total EV-focused companies, and it was established in 2016.
Business Model
The company operates under a manufacturing model with its own manufacturing plant. As of now, the two-wheeler plant is producing around 5,000 units per month.
In the case of three-wheelers, the management recently initiated production, and it currently stands at approximately 500 to 600 units per month. Similarly, for battery packs, the production ranges from 5,000 to 7,000 units per month.
Wardwizard Innovations (Bse small cap) currently has close to 110 distributor showrooms, with a target of reaching 100 new showrooms in the financial year. Additionally, they operate 22 company-owned showrooms.
New Collaborations for Growth
Wardwizard has entered into a collaboration with a US-based EV company called Triton EV. The company is targeting market segments in the Middle East and South Asia.
Additionally, the Bse small cap company have partnered with ANS Power to focus on cell technology. In a conference call with investors, management confirmed the signing of an agreement with a Dubai-based company named BEEAH Group to discuss manufacturing.
How is the management of Wardwizard?
Mr. Gupte is the Chairman and Managing Director of Wardwizard. He has 15 years of experience in sales & marketing, business development, client servicing, renewals, and operations, with 11 years of work experience in insurance.
Sanjay Mahadev Gupte is the Executive Director for Wardwizard and was previously the General Manager of Marketing at Poggen-AMP Nagar Sheth Powertronics Ltd. He has a National Apprenticeship Certificate from G.K.W Ltd in Mumbai.
Mr. Doshi is the Chief Financial Officer for Wardwizard and was previously the CFO of Mangalam Industrial Finance Limited. He is a Chartered Accountant (CA).
How is the financials of Wardwizard
The Bse small cap company has experienced significant financial growth over the past 5 years, achieving an outstanding compound annual growth rate (CAGR) of 101% in sales, implying a doubling of sales each year.
In the fiscal year 2024, there was an increase in the debtor days, indicating a longer period for cash payments on credit invoices. It will be interesting to see if this change is temporary or if it reflects a more substantial shift once the annual report and related comments are released.
The Reason for Decreased Net Margins
On the downside, the net profit margin decreased in 2024, primarily due to higher interest costs resulting from increased debt taken on by the company.
The director mentioned that this debt was acquired to expand company showrooms. Additionally, the company paid more than 50% in taxes, which could be attributed to deferred taxes.
In addition to this, the cash flow from operations is negative, the reason is the increased working capital. When the working capital is increased the cash is stuck with debtors. The Return on the invested capital however is close to the industry standard but on the lower side for a small to mid-cap company.
Financial forecasting of Wardwizard
What is going on in the EV Market of India?
The Indian two-wheeler EV market is experiencing significant growth, with a Compound Annual Growth Rate (CAGR) close to 26.1%, as reported by Wardwizard management. Multiple research reports also indicate a growth rate of 40-45% for the EV segment. This growth is evident in the increasing number of electric two-wheelers on the roads.
The rise of EVs is influenced by factors such as state subsidies, continued encouragement of EV adoption among Indian private automobile owners, and corporate and leasing clients.
Moreover, Government norms, incentives, rebates, and increasing awareness of e-mobility are attracting consumers to buy EVs, making EVs the fastest-growing segment.
Additionally, the presence of a large number of lithium-ion battery manufacturers and growing investment in electric power population technology are driving the market growth for EVs.