Good morning, ladies and gentlemen, welcome to the Automotive Axles Limited Q4 FY 2026 earnings conference call hosted by 360 ONE Capital Market Private Limited. As a reminder, all participant lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call please signal the operator by pressing star then zero on your touchtone phone. Please note that this call is being recorded I now hand the conference over to Mr. Sailesh Raja from 360 ONE Capital Market Private Limited. Thank you, over to you, sir. Yeah. Thanks, Sapnali. Good morning, and thanks to everyone who have logged into Automotive Axles for Q FY 2026 earnings conference call. From the management side, we have with us Mr. Nagaraja Gargeshwari, who is President and Whole Time Director, Automotive Axles Limited. Mr. Raman K, he's Interim CFO, Automotive Axles Limited, and Mr. Kishan Kumar, Whole Time Director, Meritor HVS India. Now I'll ask, you know, Mr. Nagaraja for an opening remark, post which we'll open for Q&A. Over to you, sir. Good morning, ladies and gentlemen. I'm Nagaraja Gargeshwari, President and Whole Time Director of Automotive Axles Limited. As Sailesh mentioned, along with me are Kishan Kumar Udupi and Mr. Raman K. First of all, thanks to the strong market. As you're all aware, we were able to close FY 2026 on a very high note. We were able to convert the demand and improve both the top and bottom lines. What we'll do is first Kishan will take us through the market and how we are looking at it, and followed by Raman sharing the results of Q4 and also the, you know, full year FY 2026. Then we'll open up for the question and answer. Over to you, Kishan. Yeah. Thanks, Nagaraja. Good morning to everyone. Like, all of us know, and I think I have been repeating this in the previous calls as well, the industry, especially in the commercial vehicle above seven and a half ton, it's been on a tremendous ride for the last three, four years. We have been seeing consistently 400+ market since FY 2023, that continued and ended in even a better place now for the FY 2026 full year with the market closing at around 480,000 vehicles, which is 16% above FY 2025. The special note here is the Q4, which is a phenomenal number for the industry. Each OEM crossing their own individual records, and so did we with our delivery and production during this quarter. What we can probably make out of the last year was probably the GST cuts that happened later part of the year, then the fleets, you know, the large and small fleets trying to get the benefit out of it. The replacement cycle also kicked in little bit earlier than the earlier predictions. The fleets actually went ahead replacing the vehicles, very positive sentiment overall. That, you know, showed up all the way to the last date of March in terms of production and sales. One more positive note here is, which probably there will be questions later, we also converted a good amount of the new products that we launched during the year, and the ramp-up was pretty good done. We were able to convert that as well, you know, in a very high success rate, I would say. With that, probably I will hand this over to Raman for a financial summary. Thank you. Thank you, Kishan. Good morning to all the participants in the call. Trying to take this opportunity to present the results for Q4 as well as the full financial year, FY 2026. From a top-line perspective, we ended quarter four with a revenue of INR 6,643 million, which is, you know, comparing to sequential quarter, we were up by about 18%. Year-over-year also, I think we had a similar growth of about 18.5%, 18.7%. The other income is about INR 55 million. That is kind of lower when compared to last quarter, given the geopolitical situations and the interest rate cuts that happened in the market. We were, our other investment income was slightly lower in the quarter, but nonetheless, I think most of the investment income are in the recovery stage at this point as we speak. Moving down, when compared to the material cost, I think, we had a total material cost of about INR 4,518 million, which is at about 68%, which has slightly improved year-over-year. This is, you know, in line with the new business model as well. The employee benefit expenses stood at INR 473 million at 7% on revenue, which is kind of mostly flat when compared to sequential quarter. The finance cost and depreciation are more or less in line. The depreciation is slightly up because we had some of the investments that kind of got capitalized in the last quarter. So there is a slight increase in the depreciation when you compare to the sequential quarter. The other expenses stood at INR 880 million. So I think that is again slightly up. Obviously, there is a variable portion in that other expenses as well, so that is the reason it has moved up. Otherwise, you know, all other fixed expenses remain quite stable. That leaves us with a total EBITDA of INR 825 million, which is about 12.4% on the revenue for the quarter ended Q4. And there were no exceptional item. We had reported some exceptional item in the last quarter. For this quarter, we don't have any exceptional item. That leaves us with a PBT of about INR 723 million, at about 10.8%. Our PAT stood at INR 539 million at 8% PAT. At 8%. When you compare this over the last, you know, last Q4, like Q4 of last financial year, I think we ended up with a similar PAT of about 8%. I think in terms of profitability, you know, we have sustained the same level of profitability, though we had, you know, the cost structure from last year to this year significantly varied, due to the, you know, reasons that we explained in the last quarter. Coming to full year, the revenue overall for the financial year 2026 was INR 21,777 million. The total income, including the other income, which is the investment income, is INR 22,099 million. There is a 5% overall growth in the revenue year-over-year. When comparing or when coming to the cost structure, I think our material cost for the current year stood at about 67.5%, close to 68%. I think we are fairly stable, and we have been improving year-over-year on the material cost front. Our employee cost stood at INR 1,592 million at about 7.3%. We had a lot of expenses this year. We had the workmen settlement that happened in the last quarter, as we explained in the last investor call. That had a impact. That is a one-time settlement for the next four years. That had an impact. From last year when compared to previous year, it has kind of gone up from 6.7%- 7.3%. Our total other expenses, which is the next significant item, is about INR 3,106 million at about 14.226% on revenue. So as I said there is variable portion on the new business model. I think, fairly, it is in line with the revenue that we had over the year. Overall, our EBITDA for the full year is at INR 2,692 million at 12.4%. We had the exceptional item, the annualized impact, what we discussed last time of about INR 120 million. Netting of that, our EBITDA stood at 10.6% for the year. When you compare to previous year, we had 10.1%, so we are about 40 basis points-50 basis points above that. The PBT for the full year stood at INR 2,198 million at 10%. Our PAT for the full financial year was, excuse me, INR 1,643 million at 7%. When coming to the cash flow, I think the major significant highlight that I want to give an update is on the CapEx. When compared to last year, in the last financial year, we spent more than INR 70 crore of CapEx. Whatever investments that was committed, you know, most of about 60%-70% was spent in the last year. In spite of all that, we were able to generate net of investments, INR 30 crore of cash that we have generated in the last financial year. Yeah, that's the financial update. I'm happy to take any questions. I'll hand it back to N.G. and Kishan for any other comments. Thank you. We will now begin with the question- and- answer session. Anyone who wishes to ask a question may press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. We will take the first question from the line of Samarth from Janak Merchant Securities. Please go ahead. Hello, sir. Am I audible? Yes. Yes, you are. Hello. Yes. Sir, we have changed the sales agreement. As per the new sales agreement, we pay technical fees to Meritor HVS. Can you share how much percentage of the sales we are paying to them now? You had mentioned that you will come out with this number somewhere around Q2, but we are yet to disclose the number. Raman, would you take that? Yeah, I'm just giving that. Overall, the technical fee will be, you know, is anywhere in the range between 4%- 4.5% and depending on the mix of revenue that we have. I think that's the broad percentage in which the technical fee operates. I hope that answers your question. Okay. Sir, last year in Q4 FY 2025 call, we had mentioned aspirational target of INR 4,500 crore-INR 5,000 crore top line in over next four to five years. You had mentioned that exports will be a key lever for this strategy. Can you talk more about exports and now considering that U.S. Class 4-Class 8 is also recovering and European markets are also stable. Do you expect that we'll see a significant growth in exports going forward? I can take it. This is Kishan. Thanks for the question, Samarth. Yes, in the long run, if you ignore the current temporary situation that we have seen in the U.S. with the tariff, I think in the long run the visibility is still to accumulate a good export orders, and this is also part of our global supply chain strategy. The investments that we are doing in AAL, whether it is for the capacity or to bring more, you know, a robust process, that is all in line with the demand that we have in the export and domestic market. Overall, as you rightly mentioned, the forecast with the domestic market growth, export and all other initiatives that we are taking up, the top line should grow in the order, rough order of INR 4,000 crore-INR 5,000 crore, with export being a large, better than the current contribution what we have today. Sir, will this be limited to subsystems, or we will go for completely assembled axles only in exports? Samarth, I think we have answered this in the past. The product line as such in Europe and North America don't allow us to supply the fully dressed axle because the products are different. It is largely going to be limited to the assembly, sub-assemblies, and probably trailer parts. In all those regions, there is a requirement to customize the end product to meet those regions' dom- OEM requirements, just like how we have a customization. That also limits the, you know, the export content to or scope of export to the, you know, the extent to the drive head, what we call the sub-assembly, and maybe some trailer parts. Got it, sir. Sir, like earlier we had mentioned in the existing production facility that we have, we can do somewhere around INR 2,700 crore in sales. Now since we are doing the CapEx, is this CapEx enough to reach your aspirational target, or we need to spend more? I'll take that. Nagaraja here. Again, I, it all depends on type of product mix that we are looking at. Currently, what we are looking at, you know, trying to understand or forecast the peak market demand and then putting up enough capacity to that. There will be one more set of investment is going to come in next 6-18 months' time. With that, we will be having enough capacity to, you know, meet our aspirational top line. Sir, can you, like, how much will we spend in this new facility or the new capacity creation? Yeah, again, I think at this point of time, you know, it will be a little bit challenge for us to, you know, forecast what it is because we are, like Kishan mentioned, we are looking at the needs of both the domestic customer and export opportunities. Based on that, you know, we may have to come out with the overall plan. That is what we are kind of working on in next, you know, like 6- 12 months. Then once we, you know, finalize on our next set of CapEx, you know, we'll be sharing with all of you. Sir, last question from my side. We were having another three products like the slipper suspension, the off-highway, the off-highway axles, which were also where we also had good growth plans earlier and even the ICV axles. What is the status on this? Let me take that question. This is Kishan again. Coming to off-highway, we do have sustained the business over the past several years with this customer. Apart from that, we are closely monitoring the off-highway industry. Products we have in the global portfolio, they are very unique to those regions. India is very unique. For that matter, it is still a very close watch and plan your long-term strategy. Right now, the current product portfolio, what we have is what we are supplying. Coming to the slipper suspension, we are still supplying that to our largest customer with a different arrangement where we have handed over the supply chain under an agreement, so that it is easier for them to manage because it has to be closely, you know, associated with their chassis of the assembly line. Both the businesses we continue to pursue. The last question was ICV. ICV is typically not a very strong hold for us globally as well. We do have products which we continue to improve and supply to the same customers. For us, the core is the heavy duty market, which is where our largest portfolio and the product, you know, the launch that we have done in the recent past. That remains our focus. Got it, sir. Sir, is there any situation where we are not able to supply enough demand means because of a capacity constraint in the domestic markets? I'll take that. You know, like we have mentioned, we foresaw that, you know, the kind of product mix is going to probably limit our ability to sell the market, and that's the reason, we initiated it about 12 months ago. At this point of time, unless the market really goes beyond the volumes what we have seen in the last Q4, I don't think we have any capacity constraints at this point of time. Got it, sir. That's all from my side. Thank you. Thank you. Before we take the next question, a reminder to all, you may press star and one to ask a question. We will take the next question from the line of N Modi, an individual investor. Please go ahead. Yes. Good morning. Sir, my question is regarding capacity utilization. At what percentage of capacity we are running our plant at the moment? The last quarter, when I look at it was over 90%. Presently, sir? The last quarter, we almost crossed 90% of our capacity. We were really doing at the, you know, peak of our capacity. Last quarter you are talking of, sir. At the moment, sir, in the month of April, May, what we are doing? Pardon me. Could you repeat? In the month of April and May, what we are doing, sir? April and May, you know, again, you know, the market has softened a little bit. You know, we are still, you know, above. We generally, you know, operate somewhere between 70%-80% of the capacity. Yeah, so that's what we'll be looking at. Again, it will be very difficult to look at one particular month. We should be looking at, you know, a broader horizon because, you know, the capacity on a particular day, week or a month, you know, it will be completely misleading. Okay. Okay, sir. Sir, by what time our capacity expected to be completed, this capacity enhancement? As we committed, you know, to you, the phase I and, I would say phase I and for one year, that's what we call is that capacity will be completed by end of December 2026. That's what we were telling to earlier question that, in next to six to nine months, we'll be coming under forming up our next phase of CapEx, you know, CapEx investment based on the both the domestic and the export market outlook. Okay. Okay, sir. Thank you. Thank you. We will take the next question from the line of Lakshminarayanan from Tunga Investments. Please go ahead. Sir, my first question is that, in terms of the current supply directly to the OE? Sorry to interrupt in between, Mr. Lakshminarayanan. You were not audible. Could you please use your handset mode and speak? My question is that, currently after the technical fee agreement, now we would directly supply to the OEs or the Tier I, right? All our products Yes. Your understanding. Essentially- Yes, your understanding is correct. Yeah, both in exports as well as in domestic. Correct? Yeah. Yes. So- Yes. The second question is that, I've been told that, I may be wrong, please correct me. I have been told that there is a transition towards tractor-trailers, and if that happens, there is, you know, the axle, there is the usage of axles will also come, I mean, multi-axle trucks would actually come down because of this tractor-trailer. If that is the case, does it, how does it positively or negatively impact us? Let me take that. This is Kishan here. Thanks for the question. You are right. There is a very clear trend for the last couple of years where we see the proportion of tractor-trailer, specifically 4x2, that is on the increase. In fact, we were expecting this, anticipating this even before the trend started happening, because this is a very typical trend we have seen in the global markets, and we had always the product ready. The product that we launched, the MS185, couples of years ago, and which we are now ramping up significantly, that is to cater to this heavy duty tractor-trailer market. What it means to us is where there were rigid ax- or the rigid multi axles, that, proportionately will reduce, the tractor-trailer will increase. It will be a cannibalization of some of the products that we have in the rigid axle, multi-axle, rigid axle, rigid vehicle platform, getting into the 4x2 tractor-trailer. This product, what we have launched with one customer, like three, four years ago, now we have launched with all our major customers. That is probably the highest, you know, axle in terms of capacity also that we are creating, expecting that this trend will continue for some time. On the other side, there is enough headroom in the industry where even the multi-axle rigid vehicle will also grow. If you have seen any of the forecasts, we are expecting the overall TIV by 2029, 2030 to be 500,000+, which means there is enough headroom for each of those platforms also to grow, which is a positive news for us because we have every segment covered with our portfolio. I hope that answers the question. Yeah. Yeah. Which means that it is not deflationary for you. As, you know, for example, the last concluded year or the year forward, it has not been deflationary for you in terms of the, your components that actually goes into these, you know, vehicles, right? Am I right? You are right in a way because we have a product available, and it's not a loss of business for us. On the, if you take a pure number of axles that we produce, because the configuration changes from a multi-axle to a single axle, that will bring the number of axles down, but not at the cost of loss of business. It's a continuation of business because we have the products available. Got it. The other thing which I have thought is that at least for the last one month or the last two months, there has been an increase in steel prices and all the metal prices in general. How is that that is actually, you know, impacting us? I'll take that. Probably, Raman, you can add to that. We always have a, you know, back-to-back agreement with most of the customers when it comes to commodity changes. This is a standard industrial practice. There may be a little bit of a lag or lagging in that, you know, adjustment. Definitely, you know, we, the business is always protected, and it is a standard industrial practice. Got it. Sorry. Just to add to that, our financial results are already trued up to the last increase. I think we already take the provisions. The settlement may happen later, but the financials are completely protected- Got it. ...for any market increase. Okay. Does it mean that since our fixed costs are there, this inflationary thing will be more contributing to our bottom line, right? Is that how it is if there is a inflation is secular for the next six, nine, 6- 12 months? Maybe I will just take it, Raman- Yeah. ...probably add to this. Sure. See, if you really look at our operation efficiency, there is always a focus on improving the productivity, and then at the same time also growing our top line, and thereby we protect our bottom line. Even in cases, as you can see in the Q4, we also improve it. So, while there is always a inflation, if you look at the last several years of our results, we have been able to always bring in the efficiency, and then productivity improvements, and both in internal operation and from our supply chain. So we always have to, you know, work on that, and that is one of our strength. We've been doing a good job, and we are very confident going forward also. We'll be able to, you know, take care of that, any potential inflation and then also offset it by our productivity improvements. One of the reason for the CapEx improvement is not only to, you know, add in additional capacity, but also to bring in the latest technology and efficient, you know, equipment so that, you know, we are always improving the focus on improving our bottom line. Got it. Just one more question, if I can squeeze in. You mentioned that as an industry, we are clocking more than 400,000 per year. Two questions. Is it right, being so cyclical as it was? Because this is something which I heard from one of your OEMs also saying that they think industry is not very cyclical in the last three, four years. Second, as we look ahead in current year, the demand continues to be strong. Is that what I could hear from your first few statements? Can you just help me understand or drill deeper into these two assertions? Okay, let me take that question. This is Kishan. What you have heard about the cyclicality, being more, I would say, narrowed in terms of the peaks and valleys, that is true. The numbers are in front of us. The year we came out of COVID, FY 2023, we had a 37% growth, and we crossed 400,000 for the first time after COVID. From there onwards, it's always the variation is within the 5% until last year. Last year we saw, and this is FY 2026, we saw a significant growth of 16%, and this is expected to continue because there is consumption. There is rural consumption. There are very clear indicators, whether it is GDP, IIP. It is going to continue. Whoever the OEM partner, it is not just one, I think, most of the OEMs are expecting this year, FY 2027, should also be a good year. When I say good year, it is 400+, but whether it is 420, 450, 480, that is probably too early to say because if you look at FY 2026, nobody forecasted 480. It was around 450, 460. There is always a room to cross, I would say the average of last four years. Got it. Got it. Got it. Thank you, sir. I'll come back in queue. Thank you. Thank you. We will take the next question from the line of Radha from Motilal Oswal Financial Services Limited. Please proceed. Hello, sir. Thank you for the opportunity. Am I audible? Sorry to interrupt. Ms. Radha, I would request you to please use a handset mode and speak. Yeah, sure. Yeah. Sir, my first question is, I understand that, while our focus has always been in M&HCV, but, since the company had entered into LCV, ICV segment a few years back, can you give us some sense from the next three-to-five-year perspective on your thoughts on expanding the addressable market available for the company by launching products, more products, either in LCV, ICV, and if possible, in SUV also in the future? Thank you for the question. This is Kishan. What we have been doing consistently in the past several years in terms of our product strategy that is aligned with how the industry is moving and where our core strength lies. Globally, it is in the U.S., if you have to talk about the U.S. market, it is Class 8, and Europe it is heavy duty axle and heavy duty vehicles, and even in India we are in the same forte. This is what differentiates us from the competition. We will continue to do that. All our product launches are focusing more on the medium and heavy duty and more so in the recent part on the heavy duty. Having said that, we already have enough products in the ICV, LCV where we strategically want to play. We necessarily don't want to go beyond a certain GVW or GAW level because that requires a lot of investment in the plant, and the return on that investment may not be as good as in our core business. For that purpose, product strategy and our supply chain and CapEx, that's always been focused more towards the heavier side of the industry. What percentage of your revenue is coming from LCV, ICV currently? Raman, you want to give an answer to that? Yes, Kishan. See LCV, ICV, there is a, it is a very small portion of the revenue that we have. Maybe I would say somewhere in the single digits at this point, maybe low, less than 5%. Understood, sir. Secondly, you know, since India is a cost-effective production and a lot of auto entry companies are keeping India as a production hub to export to their group companies, and the margins are in fact better in the exports market. Considering that we have Meritor as a partner, currently what percentage of overall sales is exports to Meritor global, and do you see this as a big opportunity going forward? Sorry to interrupt in between, sir. If you're speaking, you're not audible. Kishan? Yeah. I can take the second part of it. Yeah, I think we answered that partially in one of the earlier questions. Export is a growth area for us, and it is a part of the global supply chain strategy as well to make sure that all the investment that we are doing is utilized to the best of its capacity. Even, you know, the answer to what extent we can grow in the export is basically the product portfolio that are common today. There are also opportunities depending on how the domestic market behaves in the future. Right now, even though we are talking about INR 500,000+, if there is a downside, we always have the ability to do the global products. That is already plugged in our manufacturing strategy. Understood, sir. Lastly, I understand that you already have e-axles as a product already ready with you for many years now. Can you give us some sense on how the content per vehicle increases on an average if you compare it with the conventional ICE axles? Let me answer this question again. There are the technology or the architecture that we have in the e-axle that is an add-on to the traditional mechanical axle. That means what we are currently manufacturing in terms of the mechanical parts, gears and other things, plus the electric motor and other electronics, power electronics. It's always an add-on. Coming to which, again, you have not asked this question, but coming to India more specifically for e-axle ready, I think the industry is not ready yet. We are still in the traditional central drive plus mechanical axle world, which we have anyway protected with our current product portfolio. Yes, sir, I understand that, but I just wanted to understand how the content per vehicle will improve if and when it happens. That's, you know, like I said, 100% of what we are doing today plus the power electronics. It all depends on the pricing strategy. For India, it is too early to comment on that. Okay, sir. Thanks and all the best to you. Thank you. Thank you. We will take the next question from the line of Saket Kapoor from Kapoor Co. Please go ahead. Hello. Yes, sir. You're audible. Please proceed. Hello. Nagaraja, sir. Thank you for the opportunity. Firstly, if you could just give us some color on the tonnage part. I think so, you alluded to some number of peak revenue, we are prepared for a 5 lakh tonnages. Currently for this quarter and for the year as a whole, what have been our tonnages? Saket. All, I am not sure if I understood your question well. The way I'm reading the question is you are talking about the gross tonnage of the industry. Is that right? Sir, both. Firstly about you talk about that we are prepared when the industry requirement for 5 lakh reaches. Since you mentioned about we are operating at 90%-95%, what was our number for the quarter? Sir, second question, or just a continuation to the same also, last quarter you did spoke about some specification changes in the buses segment with respect to some state government making some changes with the floor height, and that will lead to the product axle product that we have developed. What is the update on the same, and when will that product be introduced, sir? Okay, I am still not clear on the first part, but let me take, you know, take on that how I am going to answer that. In terms of tonnage, there are two things. One is, our axles, what we supply to what vehicle it goes in terms of tonnage carrying capacity. Today, if you see, the heavy duty when we talk about it is 50 ton and above. Our product portfolio today with the single axle, MS185 largest axle in the industry and the tandem and HR axle, we are already there. We are going up to 70, 80 tons range. In terms of the industry tonnage for the full year, we were at 9.4 million tonnage. That is the total tonnage carrying capacity of the industry. Just to give you a, you know, a comparison of this versus the previous peak, which was FY 2019, where we also did the similar vehicle production of 476,000, it was 8.7. 8.7- 9.4 with the same industry level. That addition is coming from that heavy duty or higher tonnage vehicles, which is more and more increasing in the past few years, and it will go to continue. The second part of the question is related to the bus code, the low floor. Yes, there is more clarity on that, and it looks like the current product portfolio, what we have can meet most of the requirements. There are also some OEMs have a different strategy, and that is yet to evolve. It is still something that is, you know, currently evolving. The products that we have for that space, those are protected for that particular regulation that came in. Right, sir. Sir, I think so we did CapEx closer to INR 70 crore last year, sir. INR 73 crore rather. What are we emphasizing for the current year in terms of CapEx? Sir, as you were answering to my question, sir, if you could come up with an investor presentation wherein we speak about our product profile, the industry scenario, where are we placed in, and some color so that my questions are more aligned and I get we people get more aligned to what the industry trends are. That would suffice a lot of understanding to the same, sir. Sorry. Hi, this is Raman here, so I'll take the question. On the CapEx part, first piece of the thing, I think last year to now, I think last year we spent about INR 30 crore. This year we spent INR 70 crore. The coming year also we are expecting because the major spend are we going to complete the phases that we had already spoken about. We'll be almost similar range of CapEx spend will be there in the upcoming year as well. To your second question on the investor presentation, I think, yeah, we will, you know, we will look at that possibility of having a presentation done. Yeah. At least once a year or something, the product portfolio. Right, sir. Last point is on the employee benefit expenses part. Is it proportionate to what the utilization levels were for the quarter? I think so we hit a number of INR 47 crore-INR 48 crore for the quarter. That is on the higher side itself. How should that be aligned? Sir, just to get more sense, you mentioned that we will be doing a similar amount of CapEx that we did for the last year. In terms of the capacity augmentation, what should we end the year in terms of the incremental capacity that we will be operational by the end of this fiscal? The second question I will take. Probably first question, Raman is going to come back and talk to you. See, again, like we mentioned, the capacity what we are putting in here, you know, there is an augmentation, like I mentioned, with this, all these projects going on. We should be able to really meet any of the near time demand that is coming in domestic market and also potential opportunity from the export market. As Kishan mentioned, you know, we are expecting a domestic peak, something should happen at FY 2018 levels. We don't know what the product mix is You know, we are putting enough capacity to meet those peak demands. Again, the CapEx, I want everyone to be on the same page that it is not just the capacity, but also, like I mentioned, how do we bring in the new technologies and productivity so that we can always, you know, offset the inflationary pressure that might be there on our fixed cost. Raman? So that- Would you like to take on the earlier question? Sure. Yeah. Just on the employee benefit expenses, yeah, we had about INR 47 crore for the quarter. That had a bit of one-offs this time, so we had some leave encashment settlement and all that happened. About 8% of it was a one-off, on a like-to-like, you know, it should be lower by around 8%. Okay. Thank you for all the answer. Only to, just to make a small sense of that, since we will be working also on the efficiency part, what should be the EBITDA margin range going ahead? Where are we currently and with the type of efficiency and the acceleration program that we took, I think so for on a five year basis, where should our EBITDA margin shaping up and does the current state of business environment provides us into a different paradigm altogether with the type of changes and the CapEx that we have done? While we don't want to, you know, do a forward-looking statements at this point of time, like we have been always sharing and you can look back at our, you know, the past records. One is, we have been continuously focusing on, you know, improving our top line, but at the same time protecting the bottom line. All the efficiency what we are bringing in, we can assure you that it will not only offset any potential inflationary pressures or, yeah, potential adverse product mix. At the same time, we have been always working towards, and we have demonstrated that our bottom line is always, you know, going to improve. Definitely, the product mix and top line will kind of help us to get a much better fixed cost absorption. The rest is assured. I would say that, you know, you can look forward to the improved, you know, our margins. Thank you. We will take the next question from the line of Shikha Mehta from Time & Tide Advisors. Please go ahead. Hello, sir. Am I audible? Yes. Yes, yes, please. Yeah. Taking off from the previous participant, since our new capacity is expected to come live maybe by December this year, and you know, we're currently as on Q4 already at 90% utilization, is it, you know, a fair assumption to make that going forward, whatever improvement we see in our top line for the next two or three quarters will be mainly based on new products which might get us better pricing and better margins? Kishan, you want to take it up? Yes. I can answer the second part of that more specifically on the new products that we are launching. Like I mentioned earlier, some of them will partially cannibalize our current product line, but whenever we launch a new product, we try to capture the value pricing from that in terms of what features and what benefits that gives to the end customer. Yes, marginally it will be better in terms of profitability compared to the legacy products, and we capture the value in terms of placing the right pricing strategy, knowing that there will be a migration to certain extent from the traditional to the new product that we launch. This has been a policy for a long time. This is not something new, and we continue to do the same. Sir, I think on a previous con call you had mentioned that from a single to a tandem axle, I think your realization goes up almost 2x-3x. Is that correct? Is that the right way to see it? It's not to that extent. It depends again on the product family and specifically the tonnage or the GVW of the vehicle. It is probably not to 2x- 3x extent. It's, you know, I don't know if we can put a number there. It is probably around 10%-25% as a broad range, not more than that. Okay. Okay, sir. Understood. All right. Sir, lastly, on our market share, I think, you know, we have around 50%+ market share with Ashok Leyland. Is that maintained this quarter? Do we have any comment to make on that? On an average, the whole year we have maintained as per our agreement with Ashok Leyland. Like Nagaraj mentioned earlier, it is very difficult to pick one particular day or a week or a month because the product mix changes so much. We always try to keep the healthy average where our top line and the profitability both are well balanced. All right, sir. As on date, are we supplying products other than brakes to Tata? No. Our primary supply is to Tata is only brakes right now. There are cases when there are products which they need for the export market or, for example, buses. There are certain business that we do with them time to time, not a regular business. All right. Is this something that, you know, is part of our strategy to increase as a wallet share or are we happy with where we are currently? In terms of brakes, I think, we are pretty well-placed where we want to be. I think, the focus in brakes is always to have a healthy share so that we also cater compare You know, considering the capacity that we have, we always have multi-OEM strategy there. It's not just single OEM. No. I was asking on the axle side, is there a strategy to increase our wallet share in, say, a Tata Motors or not really, we're happy with where we are? There are continuous discussions, but right now I don't, I'm not in a position to confirm. There are different discussions at different levels. All right, sir. All right. Thank you so much, and again, congratulations. Thank you. Thank you. We will take the next question from the line of Avadhoot Joshi from Trivantage Capital. Please go ahead. Hi. Am I audible? Yes, sir. You're audible. Yeah. Please proceed. Good morning. Thank you for the opportunity and congratulations on the good set of numbers. Just on the demand side, Lakshmi sir already asked about it, but looking at the diesel price increase that we have seen and the availability of diesel, do we see anything changes in the schedules as kind of a thing from the OEMs happening in the near future? Have you seen already that the schedules are revised? Any kind of sense on that and the overall demand considering the diesel prices and stuff? If you can throw some light on that would be helpful. Sure. Thank you for the question. Let me restate what I mentioned earlier. The industry as such is in a very stable 400+ scenario every year, and the next year as well we are expecting it to be 400+. The other dynamics, external dynamics, like the diesel cost, that's too early to comment right now because there is demand. Specifically talking about Q1, Q2 of this financial year, that's a typical softer market. Historically, it's been like that, and we think it will continue that. How we come out of monsoon and how we end Q4, that will probably define whether it is a 400 + 20%, + 5%. That's something wait and watch. On a demand level, there is a consistent demand, what we have been seeing for the Q1 and Q2, that is continuing. Whether it changes significantly or not, it's time only can say that. As of now, there is no change to whatever we are seeing from the OEM's demand. That's what I can gather, right? That is true. true. It is a very typical Q1, Q2 that we see historically, and that is the level of demand we are seeing. Understood. Thank you. That's it from my side. Thank you, sir. Thank you. Thank you. We will take the next follow-up question from the line of Lakshmin arayan from Tunga Investments. Please go ahead. Yeah. Thank you. A few questions. Sir, as you know, step into the coming year, what are the three priorities, important priorities for the company, either qualitative or quantitative? The second question is that, there is an operating margin which you actually reported just now. Is this taking into consideration the technology fee, or, you know, how does it work, you know, whenever the technology fee kicks in? The third question is that as regulatory or safety norms go through changes, how do you benefit or is our business neutral when it comes to regulatory or safety norms for the commercial vehicle space? Sir, three questions. Okay. I'll take the first part of the question. Probably Kishan can talk about the safety norms and what is happening in the industry. Our three focus area, we have been always telling that one is, you know, we wanted to make sure that we are completing all this CapEx investment, you know, on time and then bringing in all the benefits associated with that. That is our focus. Again, by December, we should have those things in place. We are also kind of potentially looking at the technology. We were talking about, you know, the gears required for buses and coaches, and then a product associated with that which is under development and testing, which again, we're gonna kind of look at it. That's where we want to kind of look at it, the opportunities and probably realize, the additional, you know, the share of business, in the segments, you know, where we are still present but may not be very strong in that area. That is our the second area of focus. The third area, obviously that is, you know, I would say it has become more like a routine, and always be sensitive to the market demand changes and then continuously focus on protecting and growing our bottom line and then, you know, continue to be ready for any potential opportunities available in the export market. Those are all the three areas, you know, we would like to continue to focus, and especially, you know, this year. Got it. About the other two questions. Hi, yeah. This is Raman here. On the margins, I will take it, especially on the technical fee. The operating margin that we have declared now is after considering the technical fee. It is being approved on a monthly basis, based on the revenue, as I said, the mix and all that. The fourth quarter already considered it. The fourth quarter is completely after taking into that particular number. Yeah. No, it is all the quarters. All the quarter results are after considering the technical fee only. Got it. This is applicable on both export and domestic or only domestic? Both export and domestic, right? It is based on the agreement, what we are having. I think, you know, we probably will not be able to disclose all those details. No, sir, my question is that as an external participant, how, what is the number one has to assume on a blended basis for the entire year, right? The export and domestic keeps changing. You know, there is a margin that is being reported. I just want to understand that. Yeah. Like Raman mentioned earlier, it is in the range of somewhere between 4%-5%. You know, that's a thing you can look at it. On the total revenue. Also depends on the product like that. Yeah, on the total revenue. Yeah, on the total revenue, there is a broad range, depending on the mix of domestic and export, it will keep. Yeah. On the regulations. Okay. The last question. Sorry. Yeah. The last question was related to the regulations. There are in the next three to five years, couple of regulations that will come in the safety space. When we look at our product line, mainly the foundation brake in this case, there is not much that's going to change. Unless there is a very stringent norm on the stopping distance, which we are not seeing in today's discussions in the regulation space. It is more on bringing EBS and supporting systems where our pro you know, conventional foundation brakes are qualified, it can be used. There is no change that we are expecting. Now, the big industry move that has happened in the Western world is moving from drum to disc brake. With the current regulation, landscape, what we have, we think it will continue to be in a very niche market like buses and maybe hazardous goods. That means our current capacity and the demand, what we see for the drum brake, that will continue. All right. Sir, In the axle space. Yes, yes, go on. Yeah, yeah, sir. Axle space. Yeah. Continue. Axle space, we are not seeing any major changes in the regulation. There was one where the overload has been, to some extent, regularized, but that's, you know, a typical overload that we see on Indian roads all the time, so it has not changed anything in our product portfolio. Sir, as electronic braking system or ADAS, all those things, you know, come to mainstream, right? Whether there are trends such as smart axles or smart braking system, which means that there is some amount of digitalization happening there. Is it a far-fetched idea or it will actually get absorbed and you are actually capable of handling whether the signals are processed from the braking system or the axles to the, to the, you know, electronic braking or the ADAS or whatever that, right? I just want to understand your view for this. Yeah, sure. You are right. The ADAS and the electronic braking system, that's going to happen, but that doesn't have any influence on the mechanical axles or the brakes that we have. When you're talking about smart axle, yes, we have couple of axles that we qualify as smart axle in the global portfolio, but they are not applicable for Indian market as of now. If it moves in that direction, the products are available, it's more of licensing them and industrializing them. There is a, you know, wide range of different features that axles can provide, but that value has to be perceived by the end customer, which is where India has always been different. By how far are we, is it like two years behind or three years behind from smart axles subsequently here? Absolutely anybody's guess because Indian market behaves very differently from the Western world. It's. Got it. You know, all I can say is when it happens, we will be there. Is smart axle penetration is 100% in developed countries or is it even there? No, it's, even there it is very limited. Got it. You know, the definition of smart itself is very unique for each region. Unless we know that, it is difficult to say when what will happen. Okay. Thank you. Thank you. Thank you very much. Ladies and gentlemen, we will take that as the last question. With that concludes the question- and- answer session. I now hand the conference back to the management for the closing comments. Thank you. Once again, really appreciate all of you who have called into this conference. Thanks for all those questions. Like we mentioned, you know, we are in the midst of going through the CapEx cycle. The phase I we have already completed, we'll be able to complete the next phase by end of December. We've been really focusing on bringing in the new products and, as you can see that those results both in top line and our bottom line. Rest is assured we'll continue to strive hard, and, you know, make sure that we meet all our customers' demands and continue to explore growing opportunities that potentially might be coming in our export market. Thanks once again and have a great day. Thank you members of the man- Thank you. Thank you members of the management. Thanks. On behalf of 360 ONE Capital Market Private Limited, we conclude this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you.