Ladies and gentlemen, good day, and welcome to the business update call of Gabriel India Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectation of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Also, please note that since we have recently ended the quarter, the company shall discuss any questions related to quarter at the time of results declaration. Request the participants to limit their questions only related to technical collaboration and alliance with Inalfa Roof Systems for manufacturing sunroof for the Indian automotive market. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Kolhatkar, Managing Director from Gabriel India Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everybody, and warm welcome to this special investor call that we have arranged. So firstly, we are, you know, extremely happy to share that, you know, we, Gabriel India has, you know, taken its first step towards diversification into a product beyond, you know, the core, which is suspension systems. As you all know, we have a leadership position in the suspension systems, supplying and catering to all segments, right from two-wheelers, three-wheelers to passenger cars, commercial vehicles, and railways. We have, you know, been at some acquisition opportunities as, as I've mentioned in the previous calls as well. We had looked at a couple of them in the past, however, they did not, you know, they were not up to the mark, so they did not justify. We also in the meanwhile were identifying products which could be, you know, of interest. Of course, the focus was, you know, if the product is agnostic to the powertrain technology, which is, you know, I think in our case, and also it's a high technology product. So, you know, obviously, this was one product that we identified, which is the sunroof. Very high tech, aesthetic, you know, high customer perception, value product. So I'm very, very happy to share that we have found a great partner in Inalfa of Netherlands. They are the world's number 2 in this sunroof systems. You know, so and then I'm sure you must have read all the press releases. We had a press conference yesterday. We had the formal approval from the board and all the regulatory approvals. So, that's, you know, that's very briefly to introduce about today's call. And yes, as always, we are keen to listen to you and get your feedback and your suggestions and your comments on, you know, this major, you know, as, as you said, new chapter in Gabriel's future. So thank you, and over to you. Are we hearing here? Yes, sir. Yeah. So, over to the questions now. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Akash Pawar from Sahasrar Capital. Please, go ahead. Yeah, hi. Good afternoon. Thanks for taking my question. I just had a few questions. First one being, if you could help us understand, like in general, what is the cost of sunroof per car? I know it may vary from car to car, but on a blended basis, if you could give us a sense on that. Second one being, who are our major competitors in this segment? And third one, what is the opportunity side, like total addressable market for us? Thank you. Akash, sorry, your voice was a little unclear, but could you repeat the last question? I got the first two. The third question? Third one was, what is—like, what's the opportunity side for us in this segment? Growth. You're talking of growth opportunity? Yeah, addressable market, total addressable market for us. Okay. All right. So, yeah, so just to, start with the first question, which is, actually the cost, cost per car. As I said, we are just getting onto this, new business. So obviously we are, we are, we are unable to share or delve any details with the cost of the product, but suffice to say that it's a very high value product in a car. You should understand that the, you know, the product is a very highly aesthetic product. It actually is a part of the car. The sunroof is actually, you know, it is otherwise, if it was in the body, it would have been made by the OEM themselves. It is a part of the car which is being manufactured by a, a supplier. So it's, it's a high value product, obviously. The second question was on competitors. So here, I'll start with the maybe global perspective, that, you know, there are quite a few players. I would say mainly five or six key players. The world's number one is a German company called Webasto, and number two is Inalfa Roof Systems, with whom Gabriel is tied up. So, in India, there is only one player currently, which is Webasto, which I just mentioned, who have already set up a 100% subsidiary in Pune. They have a plant in Pune, and they have also another plant in Chennai. So this is what is the competition currently in India. There are plans of maybe another player coming in, but I'm not entirely, you know, sure about that. The third question was growth opportunities. So this product goes into the, you know, sunroof and mainly the take rate, as we call, is very high in the SUV segment. And as you know, the SUV segment is now growing at a very rapid pace. In fact, the highest growth in the passenger car growth story over the last couple of years has been in the SUV segment. And SUVs now form over 50% of the passenger car market in terms of sales. And in SUVs, the percentage of the sunroofs is very high. In fact, in some models it is as 70%, in some other models it is 50%. So I would say it is safe to state that in SUVs, it is about 40% penetration of sunroofs or 40% of the SUVs made will have a sunroof in India. The sunroofs are also there on the sedan and the hatchback. Now, even you know a small hatchback like the Hyundai i20 also has a sunroof. So it is you know now starting at that level, but that is a smaller sunroof. However, the SUVs have typically what we call the Panoramic Sunroof, which is a high value, a higher content per car. I hope I've answered all three questions about that. Yeah, yeah, that was helpful. Just, just one question from my side. Like, at present, what's the cost of sunroof as a percentage of total vehicle costs, like if you say in SUV segment? I have difficulty to state that at the time, whether I give you a percentage or... But I can tell you it's definitely a A category item. Okay. Sure, sure. Thank you. Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. Our next question comes from the line of Viraj from SiMPL. Please go ahead. Yeah, am I audible? Yeah, yeah. You go on. Yeah, just a couple of questions. First is, if you can just briefly talk a little bit more in terms of the JV partner, you know, so, you know, who are the major customers, and what are the major markets, you know, they have traditionally operated into? And when it says in India, did they have any sales which can eventually, you know, so in terms of scale up from the India JV now, and that, that, can that happen at a much faster pace? So that is part one. And second, if you can talk a little bit more in terms of the unit economics for the product. So typically, either say globally or in India, what is the typical margins ROC in this business, you know, which one can look at on a steady state business? Firstly, Viraj, we're having some difficulty with hearing the sound quality. So it was both in the earlier question as well as this. Just give me a moment. Should we take it on mobile? No, Viraj, if you don't mind, you know, we are having serious challenges, you know, understanding the voice because it's more of a handset issue. I think we are in Delhi. So we will, we will, I think, Viraj, we'll have to reroute the call to mobile. We'll just share with you Rakesh's number, and I think we'll, we'll take Viraj's call on that. Okay? Sure, I'll just wait. Yeah. Yeah, yeah. Just, just kindly, please kindly wait. Yeah. Ladies and gentlemen, we have the management back online. Viraj, you can proceed with your question. Yeah, hi. So just few questions. First is, if you can just talk a bit, you know, in a little more detail, one on the JV partner and on the product itself. So, you know, globally, in the SUVs, you said that, you know, they have a close to 25% share, but, You know, what is their strengths? And generally, in this particular product, you know, what it seems that there are just five or six major players globally. So what are the barriers to entry? I mean, how does one really differentiate one from the other? And in that sense, what does a JV partner bring to the table? So that is one. And second is, if you can talk a little bit more in detail on the unit economics for the product. So typically, on a steady state basis, what is the kind of margin or return this business, you know, generally does? So these are two questions to start with. Okay, yeah, Viraj, thank you, and, thanks for, you know, waiting for us back on the call. My voice is clear? Yeah, is my voice clear? Yes, sir. Go ahead. Yeah. Okay. Yeah, Viraj, so on, first on the Inalfa side, as I said, they are the number two player with almost 25% market share. They are based-- They started their journey, I mean, 1940s. So and they have, from there on, they have been supplying to absolutely the who's who of the automotive industry in UK, across the continents. So their key customers, just to name a few, in Europe, they are supplying to, you know, the Jaguar Land Rover, the Rolls-Royce, the Bentleys, even in the super luxury segment. They're supplying to Scania, Saab, Volvo, Mercedes, Audi, BMW, you know, Opel, Porsche. So, you know, these are the kind of brands. So they're all absolutely marquee labels. And in the Asian side, they're supplying to Hyundai, Kia, Samsung, Mitsubishi, Renault, Nissan, Honda, Nissan I already mentioned. These are customers. On the U.S. side, General Motors, Ford, of course, in addition to the global players, like I mentioned, of Mercedes, Audi, BMW, et cetera. So their customer spread is really absolutely, you know, top-class, that is on the Inalfa, you know, customer profile. And the strengths of Inalfa is, of course, due to because of these customer relationships, they understand the product very well. And like I mentioned, this is a skin panel. I mean, it's part of the body and styling of the car, so it is highly, highly valued and highly, I mean, very close to the perception of a quality of a car of the OEM. You know, the demands of the customer are very high. Mainly, the demands are in terms of, one is aesthetics, second is, you know, there should be no noise, third is there should no dust and water entry, inside the... Even if there is a sunroof, you know, even if it slides and opens, and then it has to keep doing that function repeatably over the life of the car. So it is a very intricate, very high technology, high quality product. So which leads us to the second question, which is, you know, the unit economics, it was asked by Akash also. So you can-- That's why I said the value of the product is quite high. It is definitely far more than our suspension system, you know, several times our suspension system that we supply for a car. In terms of steady state operations, we are looking at, you know, margins which are, I mean, EBITDA margins definitely in, you know, decent double digits. So that is what we are looking at. So it is definitely a much higher product value as well as margin product compared to our traditional suspension. Mainly because, as I said, it's a high-value product in terms of the customers, you know, take rate. Okay, just two more questions, and I will come back into you. One is, you know, you in the press release also, the interview which you gave to the press, we talked about, an aspiration of INR 1,000 crore sales, you know, by 2030, and also looking to spend, you know, INR 170 crore over the next three years. So, in terms of the current market structure, say, for sunroof in India, except for the largest player who has their own facility, is bulk of the market largely catered to by imports? And in that sense, you know, when we look to commission our own facility, say Q1 of CY 2024, would the scale-up be much faster because we have import substitution happening? Is that the right way to think about it? Yes, absolutely, Viraj. You're right, right on, on the spot. It will be a rapid ramp-up. So we are, you know, for the first order is from Hyundai, and Inalfa Korea is supplying to Hyundai already, so we are going to get all the support, from Inalfa Korea. In fact, there'll be, expats also in our, sitting along with us in our, new factory site in Chennai. So we already, you know, located the site and, and the ramp-up is going to be pretty fast. Our delivery date is also decided based on the localization of Hyundai. You know, it's a, it's a high product, so obviously localization is very important. Second, logistically also, it's a very big product, you know, so it makes sense to localize it at the earliest. So that's how it is. So, you know, it's, it's very much in the line of, as we discussed, the Atmanirbhar and Make in India mission, where we'll be helping, OEMs, with localization of their very high-value key products. This last question was in terms of value addition, you know, what will be the value addition in India? So why I'm asking is when you say, you know, the sunroof system, the glass, everything, is there the local sources available or... So in that sense, if you can explain what will be the value addition we would be doing? And when we say double-digit EBITDA margin, it's, that is after considering the royalty payment to JVR India or even to the parent of JVR? Yes, yes, absolutely. It's after everything. I'm talking about EBITDA, after everything, every cost has been considered. That, that is what it is. And in terms of valuation, or I'll put it the other way, I mean, I can't share the valuation, but I can tell you that the glass which is needed is being localized. We also have made a plan, very clear plan for localization, already. We have started work on localization. We identified suppliers. In fact, we are in the midst of negotiation with suppliers. However, this will take some time because there will be a validation from the customer as well. But localization of this, the individual parts will be key. That will happen over a phased manner. Okay, I come back into you. Good year. Good luck. Thank you. Our next question comes from the line of N. Puranik from Enam Securities. Please go ahead. Mr. Puranik, your line is unmuted. You could state your question. Yeah. I have a question on what's the arrangement you have with Inalfa in terms of technology and in terms of marketing arrangement? What are the markets that you can focus on if any in any specific segments of the market? Mr. Puranik, we have a technology agreement signed with them. Obviously, supply the technology, developing the product, from scratch. They, of course, bring their global customer base, which is why, which is how we are getting the Hyundai and Kia orders. In terms of marketing, we have a mixed arrangement because the Indian OEM relationships, as you know, you know, Gabriel and Anand is very strong. So we will be bringing in the Indian customers. We have already discussed with customers in private, and I can only tell you that there has been a very, very encouraging response with regard to this product and the need of OEMs to localize this product at the earliest, and the need for a good reputed player like Inalfa and supported by Gabriel to cater to this market. So if you can give a background to the selection of the partner and more importantly, the product, why did you choose this product? Is it that this will give you significant growth advantage, or it, or it will it also give you enough and more cross-selling advantage in growing your current businesses? So will, will there be- Yes. opportunities that will come by? Yes, good question. So why we chose this product, as I already told you, we are looking at higher technology, high value product, which is agnostic to the powertrain, you know, because there's so much of change happening, you know, everybody is unsure, you know, what happens to EV, what happens to battery, whether there'll be a hydrogen or fuel cell, whether there'll be a higher hybrid, whether it will be a, you know, flex fuel with ethanol. So a whole lots of combinations available and some products will change, which are directly dependent on the powertrain. Sunroof, fortunately, is one such product which is absolutely completely insulated from this. And in fact, it lies in the area of blue ocean kind of strategy. Mm-hmm. Because there's only one player, number 1, and number 2, this is, you know, the Indian buyer is now becoming more and more aspirational. And if you see, this is mainly in the SUV segment, where, you know, as I mentioned, the price elasticity of a customer who is going for a SUV is actually quite high. Mm-hmm. They are willing to expand and, you know, expand a bit in terms of their ticket size to meet their aspiration. They will not compromise. Just to, you know, validate this fact, I can tell you, and then you can do your... You can in fact check it out yourself, but you may also have done the same. Most of the bookings happen in the highest, what do you call, highest variant, the model. I mean, the fully loaded version sells the most. That is what is a clear trend, particularly in SUVs. Whereas in entry hatchback, it may be different because that is a very cost-driven proposition, right? But this part is in an area where there is very high growth and further huge scope available for high growth as more and more, you know, adoption and penetration of sunroof happen in this segment. Mm-hmm. In terms of market geography, which markets you will be focusing on apart from India? India. We have clearly defined the territory as India. But however, you know, the way, of course, the Indian market is exciting. There's enough and more opportunity, which is available in India, is the highest growth market. We are all seeing that. Correct. So, I don't see till 2030, you know, there will be any dearth of demand in India. How big is Inalfa by revenue and profit? Inalfa is about EUR 2 billion. It's about EUR 2 billion. INR 2 billion. And, very profitable? Yes, yes. 15%-20% EBIT kind of margin? Well, yes, it's not a listed company. Yeah. Not a listed company. Mm-hmm. That could be difficult to share. Mm. And, We are in 15 countries globally. Oh, mm. We have, we are very widely present, and in terms of engineering centers as well, there are five engineering centers all over the globe. Oh, okay. Yeah, and you know, we have almost some 800 odd patents. Mm. in 2020, in the year 2021, sorry. Mm. With almost 5,500 employees globally, and they do manufacture all kinds of sunroofs. Oh. So what other opportunities this agreement provides? Any development contracts, product, other product development contracts with them, apart from marketing it to Indian customers? To answer your question, anything which is required to be supplied in the Indian country- Mm. -is part of this agreement. A customer, global customer may be Indian. Depending upon the volumes and the economics of it, the decisions will be taken. Indian customers obviously is a good opportunity because the decision-making happens largely in India in those cases. In case of global, their relationship will help us get the business, if the supplies are to happen to the same customer in India. For example, Hyundai is just one of them. Mm. Excellent. It's going to be a big focus for growth- Yes. -going forward. Yes. Excellent. In fact, just to follow up question, actually, you know, we currently, Hyundai, Kia, are not Gabriel customers. Oh, I see. So this opens up that customer. Yeah. So you're going to find more cross-selling opportunity for you. Absolutely, yeah. Mm. Excellent. Thank you. Thank you. Ladies and gentlemen, we request you to restrict to two questions per participants. Our next question comes from the line of Chetan Gindodia from AlfAccurate Advisors. Please go ahead. Hi, sir. Thank you for the opportunity. Just wanted to understand the CapEx that we are putting for the plant. I just want to know, what can we expect from, from this plant? Chetan, your voice was cracking, so if you can... Yes. Sir, just wanted to understand, the 1 acre of CapEx that we're doing initially for the plant, what kind of acceptance can we see from this? Look, because it's a new entity, some of these CapEx are not necessarily machines. If you take those, you know, these are pre-operative expenses as well. Let's get, let's go with the number of INR 150 odd crores towards the productive machines which are going to be used in the production facility. That, the capacity is around 200,000 units. So as of now, depending upon the customers, the per unit rate, we'll be in a position to add in terms of assets and better once we have the first set of numbers out. Okay. So the capacity is currently for 200,000 units? Yes, the first line was only. Okay, got it. Got it, sir. Are there any aspirations you can share with respect to, going ahead, what kind of, you know, even further CapEx that you are looking to make for the entity? Like, say, like 4-5-year kind of, if you can share, what is your outlook in terms of revenue targets for, this new venture? Yeah. So, you know, we as, you must have read in the press release, we have to hit, you know, INR 1,000 crore, if all goes well, by 2030. And for that, we'll have to add, top it up, in the current percent, because we'll have to top it up by another INR 100 crore-INR 150 crore. Okay. Got it, sir. Thank you. Thank you so much. Thank you. Our next question comes from the line of Dhruval with Phillip Capital. Please go ahead. Yeah, good afternoon, sir. Thanks for the opportunity. What kind of revenue do you foresee that will come to PNL during the first year of operation, let's say next year? We will again, these questions are all going to answer the per unit first, the per revenue part. But, the first year of operation, 2023, is largely going to be settling of the facility. We begin sales in 2024. Anywhere between INR 300-400 crores is what we are saying. We are targeting, again, hopefully to break even in the first year itself, once we have sales. Yes. Okay. So when you talked about double-digit margins, so does it mean that, you know, after achieving certain scale, you will try to achieve that, or maybe this will come, you know, from the first year of operation? The double-digit steady state is from the second year of operations. Yeah. Okay, okay. And, you know, you have also have orders in hand from Hyundai and, Kia, right? So have you also started talking to other SUV majors like, you know, M&M or Tata Motors or even Maruti? Yeah. In fact, Durel, I forgot to mention earlier, we also, you know, well, I think it was Mr. Puranic, who asked, "Why, why this product?" While this product was, of course, you know, meeting all the criteria, another thing was, you know, the voice of the customer. So we have been talking to customers regularly over the last couple of years, and mentioning our interest to the customers that we are willing to look at some new products in Gabriel. So we know this one product that, you know, came as a suggestion from most of the customers was actually sunroof. So we have been in discussion with them, with all the key OEMs, and I can only say the response from them was very encouraging. We already got, you know, based on the press releases, many of them have actually written back to me already, you know, stating their best wishes. Okay, okay, okay. Thank you so much, sir. Thank you. Our next question comes from the line of Dharmendra Global from Helios Capital. Please go ahead. Yeah, good afternoon, Mr. Kolhatkar. Can you hear me? Yes, Dharmendra. Yeah. Hi. So this is first serious attempt from Gabriel to go beyond ride control. So is it a more strategic thing in nature, and will there be more forays that we can expect like this? Yeah, absolutely. So that's why we made it clear this is, you know, the, you rightly said, this is the first, you know, first big step in our diversification strategy. And Dharmendra, actually, we have been, you know, working at it for some time, and there were some targets which we had evaluated, which of course, did not come through. However, the good part is, this one, which is really, we are all very excited about the product, because of, as I said repeatedly, because of its real high value. This has come through, with, you know, the world's number two. So it, it covers very well and, this is the start of our diversification strategy, and we will certainly be looking at, more opportunities for sure. In this joint venture, did you go out and seek the JV partner, or did they come and seek you in India? Well, it was actually a mix of both. A mix of both and also with, you know, you know, the kind support of the OEM. So once you heard what the OEMs were saying, they put you on to the JV partner? Yes, and we are, we were also reaching out to... We had identified sunroof as a category, and we were also reaching out. Already had reached out to several sunroof makers. And, you know, the customer definitely here, you know, did help us a lot. Sure. Can you give us any timelines as to what other forays and by when we can hear something about it? Well, this is the first one, so we need to, of course, get this off the block and digest this. But yeah, I mean, it would not be out of place to say that, hopefully within this fiscal itself, you know, we may look at another one. Okay. Or at best. Yeah. Thank you. Thank you. Our next question comes from the line of Pratik Pandya from Girik Capital. Please go ahead. Yeah. Hello, sir. Sir, what, just to understand, so for Inalfa, this will be the, it will be like, are they already supplying in India or it will be the first time they'll be doing it? They are supplying. Currently, Inalfa Korea supplies to both Hyundai and Kia from Korea. Okay, so the 7% market share, which you expect for 2023, it includes the sales, which is going to be under the joint venture now? Yes. Yeah. Okay. Okay. What sort of market share are we eyeing over the next three-year period? The market share and obviously, we are looking at, I mean, being in the top two, I mean, yes, Webasto has the first mover advantage here. So it would be difficult for us to tell about, you know, whether we can be number one, but definitely, as I said, in the top two, we should be... We are in for that. Okay. So you mentioned Webasto has put up 100% subsidiary, and there is one more company of CIE Group, CIE Autoliv, having a plant in Pune. So, are they also big and serious competition to us? CIE Automotive also is a supplier of sunroofs, yes, globally. But as I said, in terms of global pecking order, they would be number 4, number 5. Okay, okay, okay. And that will be the case in India as well, I mean, as for your competition? Uh, yes. Got it. Got it. Okay. In terms of, in terms of technology, I think Inalfa and, very honestly, even the, the leader, which is Webasto, both, both share a very comprehensive technology basket of products, and, you know, spreading across the whole range of sunroofs. Okay, okay, okay. And if I, if I heard you correctly, you said, eyeing 400 cross sales in, in 2 years. Is this correct? Uh, yes. Hello? Yes, yes. Okay. Okay. Okay, sir. Thank you very much. Thank you. Thank you. Our next question comes from the line of Chirag Shah with White Pine. Please go ahead. Yeah, thanks for the opportunity. Sir, my first question is slightly different one. Why this acquisition has happened in a listed company? Because if you look at the Anand Group, it is not that they have many businesses in the ancillary space, which are not a part of subsidiary. This is the first time, in fact, a single company will have more than one business. If you look at the structure of the group, there is a separate company for each line of business, broadly speaking, except for one or two exceptions. So is there a change of thought process from the promoter and, can we expect a consolidation happening in the existing list of companies also? No, it's only that we, you know, as I mean, as Gabriel as a company, we were too dependent on a single product, which is suspension, where we have made, you know, a good mark, and we have attained the leadership positions, because always in our radar to diversify the products, we are only debating which product. So, you know, sunroof today is the right product. You know, maybe even one year back, it would have been even better. Before Your voice is cracking, actually. Is it any better now? Yeah, yeah, yeah. Yeah. So what I was telling is sunroof, you know, makes sense, more sense today, but let's say 4 years back, just before pre-COVID period, the penetration of a sunroof in passenger car was hardly 2%-3%. You know, so it did not make much sense then, but today it is suddenly making huge sense because the penetration now, people have got taste of the product and it is, you know, increasing. That's why, you know, we narrowed down on this product. And Gabriel has always been... What I told earlier, maybe my voice was cracking, but what I was mentioning earlier, was that Gabriel was dependent on only one product, its suspensions. In suspensions, it has achieved, you know, I mean, thanks to all the customers, we have achieved the leadership position in India. If you have seen in our vision also, clearly we have stated M&A as a clear pillar of our strategy. It was always on the cards. We were only waiting for the right product, and I think there couldn't have been a better product than the sunroof for us to take this first step. No, it's a great product. A good choice actually, according to me. Because when you look at the presence of the Anand Group, this is a big deviation done by them, where they create. They are having two products or two different type of joint venture or technology arrangements in a single company, in that sense. Otherwise, they have a separate company for a separate product/company or a partner. Let's use the word. That's right. See, finally, we have to see how to create value for the shareholder, right, and continuously. Yeah. So that was a driving force in which we have been, as I said, we have been working at it for some time, and yet today it has come to fruition, and this is just the beginning, yeah. The second question is that your INR 1,000 crore revenue estimation that you indicated over 2030, by 2030- Mm-hmm. What kind of market share you are assuming that you will have because to have that number? Is that Hyundai, Kia, with 60%-70% penetration with them, will help you to achieve this number, or it assumes more than one OEM? If you can just highlight, how do you think about this INR 1,000 crore number in terms of how it will come, how it will come across? So, Chirag, yeah, you're pretty much right. You know, the major, major customer would be Hyundai, Kia. Yeah. But yes, definitely, we will be looking at other customers. You are very well aware of the deep relationships we have with, you know, all the OEMs, but in particular, Tatas, Mahindras, Maruti Suzuki, Toyota, for sure. Within them, within these four, five customers that I spoke, we are talking of 90% of the market. So- 90% of the market. Yeah. I presume the business model would be like, there would be one key supplier who would have maybe 60, 70% of the share of business, and there could be a number two supplier for strategic reasons by OEM, right? That is the way to think about it. So for example, Hyundai, Kia, you may be 80% of the partner ultimately their requirement, and maybe 20% will be somebody else. That would be the business model that would evolve in the industry, or it will be more like suspension, where it could be reasonably distributed market share? No, no. I mean, from what we have learned from Inalfa, the pattern is more there's one, I mean, a dominant supplier, and then there's a second supplier. The second supplier. So in case you are able to make a breakthrough with other OEMs, you could be among the dominant suppliers. Yes. That would be in over a period of time. The second point is, just to make it clear, here there is no dual sourcing. You know, if- Yeah. If one model is won, it is only with them, because it's just too expensive. Yeah, yeah. Yeah, yeah, yeah. Precisely. From that perspective, and because given the platform sharing nature, it is actually more than one model, actually. Yeah. And also, it depends upon the kind of sunroof that is required. For example, it may be a single glass, small, what we call as TVS- Mm-hmm. —or it may be Panoramic Sunroof, the one we are planning to have. Okay. That will all depend as to which sort of segment in the model that you want to go for. Let me clarify. You are only looking at panoramic or you are also looking at TVS? We are looking at others, but at the moment we are beginning with panoramic. You're beginning with panoramic. Okay. Yeah, panoramic- So even in Hyundai, for example, something like i20, you may not be supplying, but you may be supplying to, say, Creta. Just, just as an example, I'm saying. Precisely. Creta does have Panoramic Sunroof. Yeah, yeah. But i20 doesn't have a Panoramic Sunroof. It has a normal TBS sunroof. Okay. Yeah. Yeah. Chirag, panoramic is a much higher value than the TBS. Yeah, yeah, it is, it is, it is. So last question, if I can just squeeze in one more question. Sorry. If you can help us understand the different components of the raw material basket, yeah. If you can, in terms of percentage, I don't want absolute value, but between glass and other parts, how that structure would be? If the raw material basket is INR 100, how the cost breakup is? And I presume you are looking to localize most of the things in first two years itself. Actually, we have, as I said, we have a clear location planned on, however, I will not be able to share the details. Please understand that we also have a partner here, so- Yeah. You know, that it could be right now we are unable to disclose it. I see. But yeah, clear localization plan is a strong pillar of success. Thank you. So last clarification, when I read the press release of today, it indicated you ultimately have 49% and 51% will be with Inalfa. First, you are acquiring a 100% stake, and then there is some rearrangement where Inalfa will have 51% stake. Is that the understanding correct? Yes. I'll give the reasoning for that. See, we have got this order as a localization plan for Hyundai, right? There is a clear target that they have in terms of meeting the timeline. Okay. Now, the best, while we have applied for the JV, the requisite approvals are under process. We don't want to stop the whole proceedings, so we have entered into a TA so that we can start, you know, we can hit the ground now immediately from today onwards, since we have made it public yesterday. Meanwhile, the processing of the application is going on. So we will have no delays. But, why are you not having 51%? Is it, is it a requirement coming from Hyundai itself that, they will or- Yes, that's a position, of course, with the partner, and the partner brings in technology. The partner brings in customer relationships, global customer relationships. Okay. Okay. Export can be an area of opportunity, or it's too early to even talk about it? Well, it can be. I mean, why not? I mean, you know, everybody who's here has got an export with some group. It might be a bit of a challenge in terms of the logistics. Okay. But, yeah, we, you know, we'll have to see as we, you know, mature into the lands. Yes. If the country was importing- Yeah. Exporting also is exactly the reverse part of it. So it can happen. Fair enough. Thank you very much, and all the best. Thank you. Thank you. Our next question comes from the line of Divyansh Gupta from Taxila Investments. Please go ahead. Hi, hi, sir. Can you hear me? Yes. Hello? Yeah, Divyansh, we can hear you. Yeah, most of my questions were answered, but there are a couple of questions that are left. So in the previous quarter's con calls, you had mentioned that you had a plan of INR 150 crore of CapEx for the year. So is it a fair assumption that, let's say, this CapEx for the JV is going to happen in parallel with the earlier planned CapEx, or there is some postponing of that CapEx? No, Divyansh, you are right. This is absolutely separate from what we've spoken in the previous investor call. Divyansh? Management members, the line of Divyansh Gupta has dropped from the question queue. We move on to our next question from... This is from the line of Riddesh Gandhi from Discovery Capital. Please go ahead. Hi, sir. You know, we are sitting on a reasonable amount of, you know, net cash, and obviously generating also reasonable amount of free cash flow. Are there other areas except for this, because you had indicated on your last con call that there are advanced discussions happening on potential acquisition. Is it this what you are referring to, or is there are other discussions also ongoing at the moment? Yeah, so it was this. In fact, Ritesh, it was one of the two opportunities we are pursuing. As I said, the other one has not come through for valid reasons, but this is the one that has come through. So clearly, when we spoke about acquisition, it was clearly this one that we spoke of. Got it. And Manoj, I understand is that, you know, what's the plan of the use of the free cash flow? Because even with this incremental CapEx, which is there- Yes. Given the amount of free cash flow, which we generate, what we already have on books, what's this sort of plan with regards to its deployment and the capital allocation? See, one, as we had mentioned in earlier calls, you know, last year we had made an intervention to augment our kind of backward—I mean, increase our backward integration and augment our casting capacity, aluminum casting, which is needed for the front forks. So we took it, you know, you know, a clear objective of, you know, reducing our imports from China. That's how we end up in that capacity. And this year also, we are doing the second phase of enhancing the capacities on the same aluminum casting. So clearly there is some part of backward integration, some part of regular CapEx, and yes, this new, you know, JV that we announced. And as I said, this is not the end. There'll be, obviously, we will be looking at more coming in the future. Of course. Sir, and just the last question is with regards to how is the internal hurdle rate we you know use with regards to capital allocation, either in terms of, I mean, equity, IRR, steady state, ROC, or how are we looking at it? Or kind of payback period, how are we looking at it? So, Ritesh, this, it all depends upon the kind of investment that we are looking at. For example, something which is towards ESG will look very differently as compared to a capacity enhancement, as compared to a quality enhancement, for that matter. An investment of this kind into a joint venture is also having its own hurdle rates, and, you know, we've spoken about this in the past. In the range of 20-odd% is what we typically like to look at in less than five years. Got it. Understood. So thank you, and all the best. Thank you. Our next question comes from the line of Jinesh Gandhi from Motilal Oswal Financial Services Limited. Please proceed. Hi, sir. Congrats on this JV. Couple of questions from my side. One is, with respect to the current import levels of sunroofs, would it be fair to say that import levels are upwards of 50% in sunroofs or how that would be? We lost you, Jinesh. Can you repeat that? In terms of level of imports today in sunroofs, would it be very high? Yes, yes. Obviously, it will be very high to start with, but the bigger commodities, like the glass, is what we are targeting. Oh, sorry. My, my question was about the sunroof system. The current imports in the industry, would it be very high? I'm not talking about the localization part of, the imports, more to do with the sunroof systems for the industry today. Yes, the import content is high for sunroofs, and, as I said, we have planned a localization of the key parts over a phased manner. It'll take 2-3 years. Okay. No, sorry. My question was, the sunroofs which are being used today in India, are largely imported or, it's being assembled in India or made in India, that way? Apart from Webasto, there is no other competition or there is no other supplier in the country. Okay. Let's say 200-300 thousand is the sort of Webasto supply. So remaining everything is an import in the country. So you said the Webasto has 200,000-250,000 in our country? For sure, but that's what the Chennai plant operations states the press release. Okay. Okay. For us, when you're saying INR 1,000 crore, it effectively means that we have to double our capacity from 200,000 today to achieve that INR 1,000 crore. Would that again be correct? Yeah, that's right. We'll kind of have to double the capacity. Okay. Lastly, for the future product categories which we may be looking at, so how are we evaluating it, especially considering that within the group also there are various businesses and growth plans that they're in? So how are we looking at and evaluating those categories in terms of approach to that? I understand, eventually something will materialize and some things won't materialize. So in terms of the overall group, again, when any product or any category is looked at, it's not from a company's lens that is looked at. So once the product is looked, its numbers are evaluated, the challenges are looked at, and then obviously, which is the best place to be at in terms of the synergy, in terms of the bandwidth which is available, in terms of customer connect, in terms of the product alignment. Those are the decision makers as to which company will it be sort of anchored with. Okay. Okay, got it. Awesome. Great! Thanks, and all the best. Thank you. Thank you. Our next question comes from the line of Pankaj with Affluent Assets. Please go ahead. Thank you all for taking my question. Sir, I just wanted to understand, you mentioned that you developed the product from roof system. As you mentioned in your introductory remarks, that it is part of the vehicle. So would that mean that it would be customizable, customized product for each and every OEM and for each and every model? So I just wanted to understand the stickiness of the client. Yes, yes, it will be totally customized because it has to meet the body styling, you know, the base surface of the car body, right? So it'll be, it'll be totally customized. And at that- The design, so you are, Inalfa would be the ODM manufacturer of the product, right? System. It- it- Design and development would be done by your company? Yes, yes. Yes. So accordingly, the margins will be better? Yes. Okay. Second thing, you also mentioned that you are looking for developing indigenization of the parts which goes into the system. So do we mean to say that we will be also supplying the parts to the leading manufacturers? No. So your question is that if we are able to develop a part, it will be supplied to Webasto? Is that the question? Sir, my question is, since you will be looking for indigenization of the part of the system. Hello? Sorry. Okay, dear management members, Pankaj has left the question queue. Okay. Move on to our next question. Yeah. Which is from the line of Viraj from SiMPL. Please go ahead. Yeah, hi. Thanks for the opportunity. Just few question. First is on the, you know, this whole arrangement of JV. And, you know, if you look at the approach typically with Hyundai and its vendors, you know, they typically go with a, you know, own setup kind of approach. So even with the JV partner, the kind of scale has, one would logically think they could have easily set up the shop on their own, you know, just like how Webasto did in India. So, you know, what is the thinking behind choosing or getting into JV and that too with Gabriel. So that is the first question. Okay, so I mean, of course, you know, the JV part, I mean, let's say Gabriel is always on the lookout for, you know, a good, reliable Indian partner, because India is, you know, a very complex country, and they would definitely, you know, benefit from, you know, deep relationships of, you know, Anand Group in India, particularly who are known for, who stand for their governance, for ethics, for ESG, ESG policy and philosophy, you know, and so on and so forth. So, and of course, quality and delivery standards, the market reputation. So they also look for, you know, reliable partners in India. Everything can be done 100%, but then, you know, and it's a mix of both, you know, both strategies. You, you... It's very difficult to say which one is the right strategy, right? So I mean, they also did their obviously due diligence with the OEMs and the market, and obviously, Gabriel and Anand did you know stand out as a good, reliable partner. And even from our side, we when we met them, you know, their their customer centricity, their people orientation, their high ethical standards, governance standards, what we saw in Inalfa also was a very good value match with regard to our own values at our group. So that's how, you know, we have gone for this JV. And it's I mean, it's not one you know one size fits all. So some may go for 100%, some may go for a partnership. Okay. Second question is, you know, if you look at the market currently, as you said, it's close to 5 lakh-unit market in terms of the end demand. But in terms of, just want to understand little bit on the market structure. So if you look at Webasto, you know, they had close to 2 lakh-5 lakh unit, and they just recently expanded and doubled their capacity to 5 lakh. And we are looking to set up a 2 lakh unit and looking to capitalize first with Hyundai and Kia. So in terms of opportunity to say scale up to other OEs, ex-outside Hyundai, Kia, is it that, you know, they already have those relationships with the parent companies, you know, at the global level, I would say with Suzuki or, you know, other major players, and hence, you know, that is what driving a faster scale up for them? So just trying to understand, you know, in terms of opportunity for growth, ex of Hyundai and Kia for us. I mean, Hyundai and Kia is something where Gabriel did not have a relationship, while Anand Group definitely has. So that's one plus that we got by this JV. They have a very, very strong relationship in Inalfa, Korea. But now that we are in a JV, Anand and Gabriel, and Gabriel brings to the table the deep relationships with Tata, Mahindra, you know, and of course, Maruti Suzuki. So naturally, we will be able to... And as I said, we have already got a lot of interest from these OEMs regard to this JV. Okay. So we should be able to definitely expand beyond, and that's the whole part of the plan, expanding beyond just two customers. Okay, and just one last question. On terms of the royalty and the fee payment, typically, what range that could be for the JV? See, broadly, the shareholders, eventual range of 4%-5% is the payout, depending upon which stage of the JV they are, we are in. Okay. Thank you. Thank you. Thank you. Our next question comes from line of Devansh Gupta with Taxila Investments. Please go ahead. Hi, can you hear me now? Sorry, got dropped off. Go ahead, Devansh. Yeah. So you mentioned that, in the first year, you are planning to break even, and then the steady state margins are expected in the subsequent years. So let's say by 2025, right? Yep. But you had also mentioned that the localization is planned over two to three years, so that should further expand the margin, right? So is it fair to say that two to three years down the line, the actual full-fledged higher margins will show up for the product? That's, that's what it looks like at the moment. There would be inflationary pressure as well on the business, but we will have to see as the year progresses. Got it. Got it. And in Inalfa, when you had mentioned the, range of clients that it serves, right? In Europe, you mentioned all the, luxury car, customers, like Range Rover, Mercedes, Audi. So is it, and while in India, they are doing Hyundai and Kia, which might be more economy, but is the product more suitable for, let's say, a high ticket size, price, vehicle, and will require a lot of customization in India to, let's say, price it down for the Indian ticket size? No, Devansh, it's well, I mentioned a whole host of customers, including Volkswagen. While I meant... Why I mentioned the luxury brands is they have that technological competence to even meet the exacting standards and demands of these, you know, high-value luxury brands. Okay. They also serve GM, Ford, Volkswagen, Saab, Renault, Renault-Nissan, and of course, Hyundai, Korea, Mitsubishi. They operate across the ticket size- Yeah. So up and down. That's why, one reason why we selected the partner also was, you know, the really strong technical expertise and, you know, this value offering across, cutting across the entire product portfolio, from an internal sunroof to a, you know, really fully loaded sunroof, which goes into, you know, as I said, a Bentley. Got it. Understood. Just last question, it might have been answered, I got disconnected. The earlier plan of INR 150 crore of CapEx is still on, right? Well, it's not that it's going to get delayed. No, yeah, you're right. It's not impacting the plan for Gabriel India. Got it. So funding for this will lead to some external debt borrowing, given, let's say, cash balance and CapEx for two years and cash flow management, cash flow from operation expected? Well, while we would not need it, but just to maintain a healthy debt-equity as well as leverage levels for the entity, we would be doing a mix of both equity and debt for the new entity. Got it. Got it. Understood. Thank you, and all the best. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Manoj Kolhatkar for closing comments. Thank you. Thank you so much, everybody. You know, so we are, as I said, we are really excited. I could also see from many of your questions and reactions and, you know, comments that you're you also share the excitement that we have in terms of taking this, you know, really big step into diversification strategy, which, which will really, you know, spell, spell a higher value for the shareholder. This is, this is what is our endeavor. Choosing, you know, when we choose partners also, you know, we, we keep in mind that the partner has to be among the best. Which is the same philosophy we have applied here. We've chosen a really top-class partner with top-class products and, you know, deep expertise in this product. So we are sure, you know, that we will, we will, you know, taste success in this and, on our journey to, you know, pursuing excellence in the core product suspension, which definitely remains the mainstay. Our vision there continues to, be the same in being the top five, globally in the suspension systems. And, this, of course, adds on, you know, to expand our portfolio and thereby, you know, mitigate our, our risk in terms of a company. So thank you. Thanks, everybody. Well, we'll of course, meet again on the call after the May results. Yeah. Thank you. Thank you. On behalf of Gabriel India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.