Ladies and gentlemen, good day, and welcome to Gabriel India Limited Q1 FY 2023 earnings conference call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations 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. 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 and then zero on your touchtone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Kolhatkar, Managing Director, Gabriel India. Thank you, and over to you, sir. Thank you. Good morning. I hope my line is clear or audible? Yes, sir, we can hear you. Okay, thanks. So good morning, all. This is Manoj Kolhatkar. A warm welcome to everybody who's joining on the call today. Joining me is Rishi Luharuka, who's our CFO, Nilesh Jain, our Company Secretary, and our Investor Relations advisors at SGA. We have uploaded our results and this presentation for the quarter ended 30th June on the stock exchange and the website. Hope all of you had a chance to go through the same. So I'll, you know, come to the presentation slide by slide, but before that, I'll just set the context. You know, briefly, I'll just tell you about the operations of the company for the Q1. So just to share that, you know, it has at least started on a, you know, good note after, I must say, you know, two years of COVID. This first quarter has been very strong, and thankfully for all of us, we have not seen any, you know, COVID pandemic wave hitting us. Yes, I mean, of course, we all know that it's not entirely behind us, but I think the vaccinations, overall, have helped the country at large. Also, we have seen a robust, you know, industry volumes, and, you know, that is reflecting our results as well. Also, you know, we are seeing a lot of new models being launched and many more yet to be launched just before the festive season. So our utilization level, utilization levels also have been fairly good. Before we get into the numbers, I'll provide a quick update on the current environment. So Q1 FY 2023 was, of course, much better than the last quarter of last year comparable period, because we all know in last year, we had the COVID second wave hitting us. So you know, we had subdued sales in the month of May and also in June to some extent. So this clearly reflects in the results as well. However, automobile industry continued to witness, you know, increases in prices of steel, aluminum, and other metals. Semiconductor shortage also is not entirely behind us, but, as you all have seen, the order book is very strong, and particularly the passenger vehicle players have been able to introduce a lot of new models, in this, you know, rather euphoric environment. Passenger vehicles saw improved performance in the first quarter, driven by several of these new launches, easing supply chains, so, you know, some of the OEMs were able to manage the semiconductor issue a little better. We also saw in the first quarter, after, I think, almost, you know, eight quarters of continuous price increases in commodity, we saw a little softening of the commodity prices. Yes, a shift in consumer preference, moving towards AC SUVs rather than, you know, hatchbacks and sedans. With the upcoming festive season, this demand is expected to sustain. The two-wheeler segment was impacted due to significant increase in input costs, multiple price increases by the OEMs, and of course, yes, the running cost, you know, driven by the higher fuel prices. I think these have been dampeners in the two-wheeler, which is kind of the bottom of the pyramid, particularly in the commuter segment. The CV sales, commercial vehicle sales, they have improved year-on-year basis, and we are seeing higher infrastructure spending by the government, opening up of the economy, and also increased freight movement. So CV segments have also been quite quite robust. While I said two-wheeler sales are still a little subdued, but it is showing signs of improvement ahead of the festive season. Retail demand still seems far from the giant levels of earlier, as inventory at dealerships have remained little over the ideal level. According to many experts, the festive season sales are 20%-30% higher than any normal month. Many dealers do not expect to reach the pre-COVID levels of these festive season sales yet, especially in the commuter segment. But according to dealerships, both the inquiries and footfalls have increased, have reduced at the dealerships. Coming to the semiconductor scenario, which I said is getting a little better. So we have seen, you know, better shipments from all OEMs. Waiting times, or waiting periods in the SUV segment have remained still lengthy. Strong bookings for newly launched vehicles indicate a strong pipeline of demand. EV, this is the electric vehicle segment, has witnessed, you know, massive surge as was predicted. EV sales across two-wheeler segments has increased significantly, even in terms of buses, due to the very aggressive push by all governments, all state governments. You know, we are seeing, you know, good increase in the commercial vehicle buses as well. However, that number is very small. But coming to two-wheelers, that has been quite robust. And the fuel price, which is going up, is adding, you know, to make this equation of cost of ownership even better for the two-wheeler EVs particularly. EV industry can be expected to be consistent. Demand for two-wheelers, three-wheelers is expected to be accelerated by massive demand from the B2B sector, which would also be aided by the gradual shift of two-wheeler buyers to electric mobility. Though at present, EVs still account on the overall level, less than 1% of the total market in India, the demand is, you know, growing very strongly. Like, I mean, out of the total, almost three million EVs sold in 2022, I mean, the FY 2022, I mean, only 21--only about 21,000 were EVs, which accounts to hardly 0.7%, but it is up from 0.2% in the FY 2021. And in fact, as we speak, in the first six months itself, we have crossed the figure of 20,000 electric vehicle passenger cars. So you can see the growth rate is really phenomenal in passenger cars as well. In two-wheelers, it is, you know, far more rapid. I'll share the figures also going forward. But, you know, just to mention, the two-wheeler EVs is plotting almost 50,000 number every month. We had 50,000 the first few months of this calendar year, January, February, March. And then, yes, we saw some spate of fires, battery fires, et cetera, which slowed down the growth, but it's now coming back again to almost 50,000. So in the month of July, I think the sale was, the registration was about 44,000 in EV two-wheelers. Now coming back, coming to the numbers, now I'll switch to the presentation. So, Rishi, and since I'm at a different location, I would request my CFO, Rishi, to, you know, handle the presentation part, which I'm sure you are able to see. Right, Rishi? Everybody will be able to view that, right? Sir, the presentation was already shared on Friday. Ah, it's already shared. Yeah, yeah. Okay. So we'll... Fine. So if you are referring to the presentation, then I'll, you know, slide, the first slide is slide number—should we start from the beginning, Rishi? Yeah. Okay. Okay. Yeah. So this is the slide number three. I'll tell the slide number so that you all can refer to that. This is our response to COVID. You know, why we still put it up is because, yes, you know, we are still seeing some cases of COVID. Thankfully, the intensity is very low. It's normally a mild flu, but we should never think that it's behind us, so we are taking all the necessary precautions. We have done the second dose. We have done even the booster dose to all employees. So we continue taking all precautions because safety is, you know, of paramount importance to all of us. Next slide, Rishi. These are the support initiatives which were, you know, so useful for us when the second wave, which was particularly devastating, you know, you know, helped us steer through that, that wave, so we continue those initiatives. Next. Coming to the result update, I'm on Slide seven, which is the financial highlights for the Q1. So as you can see, revenue, we had the highest ever, you know, quarterly sales, crossing INR 720 crore in one quarter. So that is really excellent work done by the entire team. And of course, thanks to our customers for, you know, having very robust pipeline of orders. The same figure you can see in the month of Q1, comparable quarter last year was just 450. But as I said, it was a COVID-impacted month, so we really should not be comparing. However, it is 60% higher than, you know, that particular quarter. In terms of EBITDA, again, we clocked back to 7%+. We are at 7.1%. So about INR 51 crore of EBITDA compared to the quarter Q1, FY 2022, INR 23 crore. And even if you see the last quarter, I mean, the preceding quarter is INR 37.7 crore. In terms of PBT, we again crossed the 6%, which we were doing earlier, 6.2%, which is, you know, significantly higher than 3.5% achieved in the comparable quarter for the last year. Next slide, Rishi. Yes, these are the same numbers, but you see the percentage growth over the last comparable quarter, which is Q1 FY 2022. Revenue, as I mentioned, is 60% higher, but EBITDA is 120% higher, and PBT is 181% higher than comparable quarter last year. We are a net cash position of INR 262 crore, and we incurred about INR 21 crore of CapEx during the period. Next slide. These are again the same numbers, I won't go through them. Maybe we can skip. These are just the broad trends so that you can understand the trend from a trend perspective, but ROC is, you know, again, back to robust level of 29.2, which is in fact among the highest that we have seen. So, you know, I would say reasonably good set of numbers, thanks to, again, a good quarter for the industry as well. This is Slide 12, which shows the financial track record trends. Again, you can see after the dip in the COVID year and the last year, it's again clawing back to better levels. These are some key ratios. As you know, we declared dividend of INR 1.6, so maintained our consistent dividend paying policy. In fact, we have been consistently about 20%. This year, in fact, it will be 25%. In terms of segment mix, you see the last - the first graph, the large bar, Q1 FY 2023. You can see that two-wheeler is still about 65%, which is the maximum chunk of the this. Passenger car is 22%, CV is at roughly 12%. And in terms of aftermarket, just, yeah, just say that, yeah, in terms of, you can see the aftermarket percentage, which is in the second graph, which is a replacement market, is 13%. Export is still small. I'll, I'll come to that specific issue, but aftermarket has increased from 12% to 13%. There's a marginal improvement because we have, again, been able to, you know, really aggressively push sales in aftermarket. Next, please. This is the segmental performance. This is the first slide on two-wheeler and three-wheeler. So we have about 30% market share. Again, in terms of future development, again, EV is continues to remain our focus, in terms of that, getting and improving our market share. So we have now got on board of a new model of Okinawa, which is doing very well, called the Praise. So you know, the SOP is on—the start of production has already started, so we are on that as well, and on several of the models. And as mentioned earlier, we have got the LOI for the Hero Electric model as well, and that SOP is in October this year. So we are in Hero as well. That was the only thing that was missing, so we have got into Hero Electric, the EV two-wheeler as well. Coming to, you know, the story on EVs, where I think Gabriel has, you know, done very well in terms of entrenching it itself very firmly. So currently, as we stand in the month of June, 13% of Maharashtra's sales in two-wheelers have been EVs. So the penetration, as we call, is, you know, 13%. At the country level, this figure is still just about 4.5%. But, in Maharashtra, this figure, in fact, in July, is even better. July, I think the figure is 16%. So it's, you know, Maharashtra, Gujarat, Karnataka, and I think in Delhi, have shown, are showing very good penetration levels, of electric vehicles. But the important point here is that Gabriel share in this is 60%, you know, compared to our normal, IC engine share, which is more towards 30%, a little less than 30%. Here, we have increased our market share to 60%. In the last call, if you recollect, we have shown this figure to be about 50%, 51%. So that continues. And our growth in EV, while the base is still small, but the growth in EV two-wheeler segment from in FY 2021-2022, compared to 2020-2021, has been 85%. And in fact, this figure, you know, keeps strengthening month-on-month. The last box you can see, we have shown the models. You can see all those models where we are there. So these are the top-selling models today. So we are there on five of the six top-selling models, so Okinawa, Praise, Ampere, Ola, Ather, and TVS iQube. So, you know, everywhere we are, Gabriel is a single source, and the list of the customers is displayed on top. Then next slide, please. Coming to passenger cars, here again, we have had a marginal improvement in market share. The good news is that we are on, you know, on several of the new SUVs that are being already that are in the phase of launching, but they have already been displayed. As you know, the Maruti Suzuki Grand Vitara, the new Brezza, and the Toyota Hyryder. You know, all of these are with Gabriel Shocks, and you know, they're completely feature loaded, so we expect them to do very well in the marketplace. Pricing is yet to be announced, but we are sure that should also hopefully be good. So our share in SUVs will in fact further improve. And as I mentioned earlier, now SUVs sell more than the passenger car sedans and hatchbacks. So in fact, India is going to become an SUV market, and our presence there is, you know, quite good. We are there, as I said, on the Suzuki three platforms, and one more, the new Alto is going to get launched shortly. We are also on that. We are right now in the midst of you know, just scaling up production for that as well. We are also on the Stellantis or the Peugeot Citroën CC21. We have also been awarded the eCC21, which is the electric vehicle on the same platform. So that will also, you know, hopefully come through in this financial year. And we also got the Volkswagen the MQB 2.0, which is, you know, you are seeing the vehicles today, the Volkswagen Virtus the Skoda Kushaq, and the Volkswagen Taigun, and of course, the Skoda Slavia. So these are the four platforms. So we have started production on a couple of them, and we'll shortly be getting on the SUVs as well. So this is the story in passenger cars. Coming to commercial vehicles, which is on Slide 18. Here, we have 89% market share, in fact, almost, you know, very, very dominant position. And, you know, here, due to the increased spending in infrastructure from, by the government, and also, increase in, you know, again, buying of buses, because, you know, the movement has started in terms of people going back to public transport, the schools, et cetera. So we are also seeing a good improvement there. You know, so here we have a very good market share. Next, Rishi. Aftermarket, I did mention already, we had an excellent sale of INR 331 crore in the, highest ever sale that we had in the year, year that went by in 2021-2022. And if you see the first quarter, we are almost at INR 100 crore sale in one quarter itself. So again, this has been, you know, a good story to share in terms of our penetration, in terms of improving our brand, Gabriel, right at, you know, the Tier 2, Tier 3 cities as well, and also in continuously introducing new product lines even beyond suspension. So that also is, you know, helping us in gaining more traction, and becoming a one-stop shop for, you know, our customers, in terms of the distributors and dealers. And exports, yes, I did mention, I'll come to the slide. This was doing very well. Last year, we crossed INR 100 crore sale, but this year, unfortunately, we had a setback because our sale was to Volkswagen of Russia, and we all know the conflict that is happening in that geography. And Volkswagen is actually, you know, shutting down that plant. So we'll have to see on that particular aspect as to... They had indicated they'll restart in Q3 of this financial year, but that might get deferred a bit more, and we actually don't know, to be honest, we don't know what is the future. We are discussing with Volkswagen, clarity yet to emerge. So that has been a little bit of setback, but our orders to DAF of Netherlands, they are very strong. You know, as I said, we got validated to, on DAF of Brazil as well, so that continues to grow. So we'll have to, be realistic, work on how to make up this Volkswagen Russia exports. Yeah, next slide. Rishi, you want to take on the balance sheet quickly? Yeah, this being a quarter, the numbers on the balance sheet are, are for the previous, full year. In terms of cash flow for this quarter, again, because of the increase in volumes, we've had an increase in the working capital, but we continue to maintain, 17 days of, net working capital, as against 19 of the previous year ending. So over to you for that. Yeah. So if you, if you see, you know, if you map the last seven years in terms of how the market has moved and how well Gabriel moved in terms of growth, we have mapped it down, this is on Slide 23. On segment by segment, two-wheelers, three-wheelers, passenger cars, and commercial vehicles. While the market has been, you know, either negative or marginal growth over this entire block of seven years, which also include, of course, the COVID period, Gabriel has grown by, you know, roughly an average of 7%-7.5% in each segment, which really shows that, we are actually improving our market share. This has been mainly enabled by the strong R&D and customer focus, and our, our, you know, focus towards customer satisfaction. Next, Rishi. Core 90, we have mentioned on this cost reduction drive that we have. You know, we have continued with that term because it's caught on with every employee. So we are continuing that, you know, focus in a renewed fashion, and we... I mean, all the teams are really working hard on each and every aspect of this, trying to reduce cost and eliminate waste to the best possible extent, which has yielded us a little bit of profitability as well. Our vision, we had defined as being amongst the top five manufacturers of shock absorbers in the world, based on, you know, export domestic dominance and technology, and of course, exports and M&As. So we continue to work on each and every you know prong that that is mentioned here. Yeah, that's I have come to the end of the presentation, but that's that's pretty pretty much the end of you know the presentation that I had to share. We we also have you know we'll formally be inaugurating it. We already started working in this picture that you see on this slide number 38, if you refer your you know presentation back. Slide number 38 shows a picture of our new tech center in Chakan you know which is which is going to enhance testing and validation capabilities. And also, we have made a small noise track of for this particular you know the tech center. So this is coming, come up very well, and I'm sure this will go very well with improving our position with customers, and also helping us develop more and more reliable and robust and high technology products to offer to them. Yeah, so that's, I think we can end, and of course, we have continued to win several awards. We got an award from Ashok Leyland just a couple of weeks back. We already had won an award from Tata Motors, Suzuki, and also from Honda Motorcycles. So that also continues to go on strongly. So yeah, that's pretty much the end of you know the presentation that I had to share. And now I'll yeah, I think I'll leave it open for, you know, questions from you, any questions from you, and look forward to hearing from all of you. Thank you. Thank you. Thank you very much, sir. Ladies and gentlemen, we 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. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Viraj from SiMPL. Please go ahead. Yeah, hi. Am I audible? You are, sir. Thank you for the opportunity, and congratulations for good set of numbers in such a challenging environment. I just have three or four broader questions. First is on the growth part. So, you know, if you look at sequentially and even, you know, year-on-year basis, so the growth has been quite strong. And if one was to kind of better understand the volume versus price mix in this, what would that be? And a related question is on the aftermarket growth. You know, we've seen the highest ever quarterly sales in aftermarket. And if you look at the mix in terms of, say, the core ride control products, vis-à-vis the other products, the mix has largely been the same. Just trying to understand, you know, what is driving growth, if it's distribution, how much of a lever further we have in terms of, you know, in terms of the potential penetration where we would like to be? Any perspective on that? Thank you. Yeah, thanks. Thanks, Viraj. So, you're able to hear me? Yes, sir. Yeah, okay. Yeah, so in terms of growth, you rightly pointed out, some of it is, yes, you have to factor the commodity price revisions that have happened. But even if you factor that, there is still a reasonable amount of growth. In terms of if I knock off the commodity effect, it would be you can reduce, you know, about 10%, but our growth has been far in excess of that. So obviously, there is a clear incremental market share, which we shared already. You know, we you could see each and every segment. Passenger car has moved to a better market share, two-wheelers has gone to 30%, EV has grown from 50% to 60%, and commercial vehicle, of course, we are, you know, 89%, so that's more or less in line with the industry. So growth has been, you know, quite good. Aftermarket also, the growth has been better than the industry. So I would say on the whole, except exports, there has been a good growth in each and every segment. Sir, on the aftermarket business, can you just provide some color on the elements which are driving the growth? Well, I think, I mean, basically, our penetration in terms of all the city, tier one, tier two to tier three cities, that has helped well. And also, you know, the new products that we have launched. You know, we had a little issue with the tires, so we have relaunched that with better quality. So that has taken off well, you know, better aesthetic quality and even performance, so that has also helped. The brake pads that we have launched, that is gaining traction. So overall, I think it's a mix of aggressive push, better branding, better reach, and new product basket. So all this is helping the aftermarket, you know, gain. We have taken also a price increase in the market. Obviously, there we can't take it exactly in line with the commodity. You have to do it in, you know, creeping, in a creeping fashion, which we have been doing continuously, and it is being well received by the market. Yeah. Hello? Viraj, do you have any more questions? Yeah, sorry. Second question was largely on the gross margin, and the operating margin. So, you know, if you look at our mix, by and large, you have seen a very strong increase in share of aftermarket, CV, and, you know, even passenger vehicles. And these are typically, the categories where, which come highest in the pecking order for margin power. But still, our overall gross margin is still around, say, you know, 23.5%, which is lower end of the historical band. So is bulk of the RM cost now in the books, and should we—how should we understand both the movement into the gross margin and operating margin for us in the next few quarters? Yeah, Rishi, you want to take that? Sir, it looks like Rishi's line is dropped. Okay. Okay. So, just to mention while Rishi comes on, you know, there has been, yes, of course, there has been a commodity recovery, but, you know, the effect for the quarter, the softening of the quarter will happen only from next quarter, because. And then moreover, it has to sustain. We have seen April, May, June of softening, particularly in steel. But that has to sustain for us to really, you know, start getting better margins. So when the market is continuously increasing, we did share with you that there's a clear arithmetic impact in terms of, you know, the margins going down. Because your price goes up only with the customer as regards the RM, raw material component. The rest of the part, you know, the customer does not compensate. So once you have a continuously escalating kind of scenario in commodity, the margins do take a beating, which is what we saw happen over the entire last year. Now we are expecting that this—if this softening continues, sustains, we should see the reversal in trend. So, in the operating costs, I mean, is it, we are—are we at the threshold level? Because we've seen a good amount of efforts, you know, the efforts which are put in over the last couple of years. We've seen good amount of, benefit coming out of that. So do we see any further more improvement from that, or that will only be incremental? So we should see further improvements in that. I mean, our efforts in terms of, as we call the VA/VE or value engineering, value analysis, and waste elimination efforts through our, you know, core 90, that continues. So, you know, we will continuously look at improving our margins. We have just crossed 7%. You know, our target has always been being in the double digit of EBITDA. We had come close to that, but then a down market in 2019-2020, and then followed by COVID, has taken all the steam of that. So we still... I mean, yeah, 10% looks difficult, but we'll still aim to get as close as to that as possible. Okay, just last question. I'll come back and queue. Any update on the new product, which you were doing the feasibility and, you know, you were looking to design by this quarter? Which new product? We applied on the PLI along with the parent, and- Okay, PLI. So we are still evaluating. I mean, we have the report is ready. So we are trying to, I mean, get more details and flesh it out even more. I mean, we've got the entire, I mean, market map, the kind of parts that we are looking at, in great detail, segment-wise, that has been done. So it is still work in progress. Okay, I'll come back and queue. Thank you and good luck. Yeah. Thanks for that. Thank you. Our next question is from the line of Shashank Kanodia from ICICI Securities. Please go ahead. Yeah, hi. Good morning, sir. So I just wanted to check, so 7.1% EBITDA margin should be a base margins for us, right, going forward? So we're building upon this, given the fact that RM costs have softened out? Yes, if the RM trend continues, I mean, the, you know, softening, then we'll definitely see a, I mean, better margin than this. However, having said that, there is, yes, you know, there is immense pressure from the OEMs as well, to keep reducing cost. I mean, that we are seeing a little, you know, a little more heightened push from the OEMs. So we'll have to find a way to mitigate that. But, if the RM trends continue, as I said, surely, this should be the base. Okay, fine. Secondly, sir, in terms of new product launches, so are we present with M&M, types of kind of XUV700 and Scorpio N, which were launched recently? Yeah. So we are there with XUV700. We are there in new Thar, both these models. And, Scorpio, you know, historically has been in the competition. I mean, even the earlier Scorpio was with them. So, that is with, that is not with us. Having said that, Thar is a new addition. So Thar and XUV700, both are doing extremely well, and both are with Gabriel. Okay. We are 100% supplier, and we are going to- 100%. 100%. Yeah. Great. And sir, lastly, you know, did we had any board deliberations upon the professional fee that we paid to the parents? So any thoughts on that? Pardon, I couldn't get that. Can you repeat? Sir, we pay 2% of our revenues as professional fee to the parent, right? So were there any deliberations on this on the board meeting? Any outcome? No, no, we did not have any deliberations on that. Because we have... We take, and we have done that, you know, it's a completely arm's length pricing that we do. This kind of services we take from the parent, you know, are quite varied and, you know, right from human resource to finance to taxation to, of course, the brand, not to mention, not to forget that. Customer relationships, we do leverage. So, no, we have not, we have not taken that up in our deliberations. And like, as what Mr. Kolhatkar has mentioned, there are a host of services which we are actually receiving from Anand Corporate, which, you know, if we were to sort of source it from a vendor, would be equivalent to what we are actually paying. Yes, there are challenges with regards to the margins and the top line going up. So the perspective which was shared in the previous meeting is an interesting way of looking at it. But just to share, in terms of what services we are sourcing from Anand Corporate, of course, it's the brand, first and foremost. Second is the human resource development part. We also have Anand University, which is basically responsible for training and development of all employees. We have the corporate business development function. We have the aftermarket logistics function, whereby all the CMSA, all the warehousing facility is sourced from them. ... We get a lot of support in terms of legal and taxation from them. Internal audit is a completely hosted function by Anand Corporate. Insurance, because of the leveraging of various companies coming together and getting better rates, that's handled out of Anand Corporate. Corporate communication, as well as, you know, the CSR activities, these are handled out of corporate. So, yes, we've taken your point, but with regards to services, I just wanted to mention that what all are we sourcing from. Sure, sure. Thank you. And sir, one last thing: so what kind of production ramp-up are we seeing with Ola Electric? So, any thoughts on that? So are we hitting a 10,000 per month mark anytime soon? So well, the volumes are, you know, as you know, currently down. There are a host of factors, like, including their, you know, components availability. So that is, we have seen it slowed down the ramp-up. But we are sure it will get there. It's a great product, and internally, I drove it myself. Really wonderful product. I'm sure it will get back to those volumes, which they have always been telling. Sure, sir. Thank you so much, and wish you all the best. Thank you. Thank you. Our next question is from the line of Amar Kant Gaur from Phillip Capital. Please go ahead. Hello? Yeah, hello. Am I audible? Yeah. Thanks for taking my question, sir. I have a couple of slightly longer-term questions. So what I would like to understand, first of all, is in terms of our current margins, what kind of RM impact is embedded there, and which over time, if it gets corrected, what kind of benefit can we see on our margins from the RMs itself? Um... Hello? You, you mean if, if we get a complete back-to-back? Yes, yes, yes, yes. So- So I'll take that. If you look at the whole of the last years and the this quarter as well, roughly give and take the commodity impact because of timing differences and others where sort of complete back-to-back is not there, say, for example, in aftermarket, as well as some of the proprietary items where we don't want to disclose the chemistry and can't be indexed, though that impact would be roughly in the range of 0.8%. However, we have to also remember that close to 2%-2.5% is the denominated impact that has come by virtue of pure math. Okay. So, tell me if my understanding is correct. So in case these things get normalized, we would be closer to maybe 9%+ kind of margins in the current quarter, had this not been there? Assuming the whole commodity cycle reverses and goes back to where it began, the answer will be yes. Okay. So, would there be any other drivers to these margins going up to, let's say, our target levels of double digits? Is there anything else that we are working at? I think, yeah, yeah, several things, Amar, on that. You know, it's a product mix also. Pricing is, margin is a big factor of product mix. Yes. That's why we want to push more of aftermarket and exports. Certainly, these two will help us, you know, improve our margins, infinitely. While aftermarket, we are seeing that happen, exports, I mentioned due to some unforeseen uncontrollable issues, we've got behind a bit. Yes. So, I'll come back to exports later on. But, within the current trends that you also talked about and the industry is also seeing, SUVs are gaining more and more traction versus sedans and hatchbacks. And, definitely for those SUVs, would the margins be slightly better than hatchbacks or sedans for us? No, there's no much difference in terms of margins. But however, if we are able to introduce new technology, which is what we did in XUV700, you know, the Mahindra model, we introduced a new model, a new technology called FSD, or Frequency Selective Damping. There, we are able to improve our margins little bit. So if we are able to bring that, some, you know, additional technology, that's what we are trying to do. That's why this new tech center, we have hired an expert as our chief technology officer. So with that, we are hoping that, you know, we should... But it will be more over the longer term. Okay. Okay, and, sir, on the technology side also, with Scorpio and Mahindra talked about something called as a Pentalink technology, is, what are your views on that? And, is that something that we can also try and develop and maybe introduce in some of the other products that might be in the market? No, that's the overall suspension geometry. That's not entirely with only, only the shock absorbers. You know, that is more a prerogative of the vehicle manufacturer. In that, we only have our play is only suspension. So in fact, what we offered in XUV700, as a technology, I would say, that itself is quite good. Okay. Okay. My second question is on the Core 90 program that you have? Yes. Could you quantify what kind of benefits have we achieved so far from it, and what kind of benefits are we looking to get in the future? If you can quantify in some way, like fixed cost reduction or something else. Yeah, yeah. Rishi, yo u want to take that? So, Mohammed, the overall benefit would be in the range of 1 odd percent period till date that we would have received under the various initiatives which we have taken. There are some challenges also that we have faced during the course of last six quarters or eight quarters, actually. So, net of net, we've, you know, clocked that kind of a 1% odd. All right. And, sir, a couple of clarifications. That 60% share of business that you talked about was for the whole of the 50,000-odd numbers that we are seeing for electric vehicles, or was it for specific? Yes, yes. We are talking of the registered market, of course. Yes, yes. The city speed or high speed models. Yeah, yeah, high speed. Because the low speed, it's still, you know, kit from China that people assemble, and we are and we have no clue on the numbers. So the industry speaks only of the registered, Are we? Yeah. So that means we would be around 25,000-30,000 kind of a vehicles we'll have our products on in EVs in India. Oh, yeah, yeah. Yeah, for sure. Like I mentioned, those top, you know, the top five... Out of top six, we are there on top five. Yeah. And going forward, the sixth one is also- Each is selling roughly 5,000. Each is selling roughly 5,000-6,000. So 5,000 into 5,000, 25,000, 30,000, so way over. Understood. So basically, with that new addition, this, this would further go up maybe north of INR 30,000 crore? Yes. Absolutely. Absolutely. So, sir, are we doing anything on the low speed side of this electric two-wheelers, or is that something we are not interested in? No, we are not doing anything. You know, these, as I said, they are buying the kits from, China. It's just impossible to- Yeah. I, my view is they may in fact die off. They want the restrictions. You know, all these quality issues, or recall policies come in place, it'll become difficult for them to continue with this. All right. And then finally, on the export side, you said it was to Volkswagen in Russia. And what percent of... what percentage of our exports would have exposure to Russia, or would it be 100% to Russia only, or? No, no, no, not 100%. I mean, it was per month, we are selling about, let's say, or on the whole year basis, about INR 25 crore-INR 30 crore. Okay, out of INR 100 crore? Out of 100, out of INR 100 crore, yeah. Understood. Understood. Thank you so much, sir. Thanks. Thank you. A reminder to our participants, if you wish to ask a question, you may enter star and one. The next question is from the line of Jayesh Gandhi from Harshad Gandhi Securities. Please go ahead. So congratulations on good set of numbers. My question is, when we supply shock absorbers to, say, electric two-wheelers, what's the price differential that we enjoy vis-à-vis a two-wheeler IC engine? If you can spell out in terms of, say, 1.2 x or 1.5 x or whatever is the case. Mm-hmm. Well, Mr. Gandhi, I can't spell out the figure, but yes, I can tell you that the margins are better. are the margins better than existing level, which we- Yes. I mean, which we did in 2018 or something like that? Yes, they are better than that. Okay. When you were talking about your aspiration of being into top five shock absorbers in the world, you talking about yourself or the entire Gabriel? No, ma'am. Gabriel is already in the top five, right? I'm talking only Gabriel India. So if... Yeah, like you rightly pointed out, if I add all the Gabriels that are present in the world, we would be in the top five. But I'm talking only of Gabriel India. So we are right now, right now in the top ten, for sure. More... It is difficult because many have not published figures, but we should be around the number eight, around that figure. What kind of sales would that be, sir, if we are looking, I mean, if we rise to top five, say, last fifth? Well, top five will have to get into a billion-dollar sale. which you are aspiring to do by 2025, according to your last call, right? Yeah, we had... See, just to clarify on that, we had done that Vision 25 before COVID, okay? So obviously, COVID has taken two years away from all of us. But we have not changed the vision in terms of the aspiration, because we felt let it still be aspirational. So it may, yeah, it may get... It may be delayed by a couple of years, maybe two years. Yeah, yeah, that's right. Because, you know, those COVID years, as you know, we are back to currently, even this year in 2022, 2023, we'll not even reach, you know, 2018, 2019 figures. Okay. One more question on two-wheeler sales. Since in 2016 or 2017, if I remember the numbers correct, we had hit a 20 million mark on total sales on two-wheelers, and post that, I don't think we have touched that mark. Do you think the industry is matured, even if it's, if we go to, say, EV two-wheelers, there will be a cannibalization, and we won't be hitting that, the 20 million mark in, say, a year or two? Yeah, it looks difficult. I mean, we had in fact gone higher than 20 million as an industry. But yeah, going back to that is looking difficult. I mean, even if you add the EV two-wheelers, it still is not coming close to that. We are looking at maybe 18, 18 at best. It will take some more time, and, you know, the issue has been the continuous increase that has happened in the basic price of the vehicle in ICE two-wheelers, of course. So and, and, and the COVID also has played a spoilsport in terms of the psychology of, you know, the rural buyer. I think it'll take a year or two. We, my view is we can definitely cross 20, 20 billion as a country, maybe in two years' time. So, our strategy would be focusing more on TVS or two-wheeler- Yes. Or how we are, like, just looking? EV, EV two-wheelers, of course, is a focus, and that's helping us. The base is still small, but, you know, it's obvious people are going to convert to EVs. I think economic- Sorry, sir, my question was, our strategy is more looking towards passenger vehicles now- Uh. Or it's still towards two-wheeler EV and? I don't know. Our focus is... I know, again, our focus is on all segments, to be very honest. That's why we did this segmentation of the business. We have an EV view, we have a two-wheeler view, we have a commercial vehicle and railways view. So focus remains on each segment. Having said that, passenger car is something that we want. We can see a much better upside. We want to do more on passenger cars. Coming to two-wheelers, there are some, let's say, market dynamics by which we cannot increase much in IC engines, so we have taken the focus in EV two-wheelers, and it's bearing us fruit. So these would be the key key strategies, and that's what we're working towards. The third, as I said, is, you know, the exports, which is a more longer-term strategy. Okay, and one last question, sir. We are sitting on, say, INR 250 crore plus of cash. Other than the routine CapEx or the CapEx which have, we have spelled out, are we thinking of doing something else? Yeah, we are actively scanning for, you know, opportunities of acquisitions. You know, we did actually, you know, even did a visits to a couple of them, but we did not find them to our standards in terms of all the packages. But that search continues, so certainly, we would look at an organic growth for sure. And that's why... As you, as you saw in the vision, one of the key basic fundamentals by which we can achieve that is through an acquisition. See, in India, we would be number one? Overall, yes. Overall, definitely number one. Okay. That's all from my side, sir. Best of luck for future. Yeah. So, just to the moderator and Jigar and Rishi, I unfortunately will have to drop out of the call today, because there's a customer visit, and the customer has already come, which is why I have come to Gurgaon plant. So I'll drop off. Rishi, you can certainly take the questions. Sorry to you know, do this because I had scheduled it up to 12, and he's arrived a bit early, and I have to leave them. Nevertheless, thank you. Thanks for this opportunity, and I just take this opportunity to wish all of you a very, very happy, safe, and, you know, joyful festive season. So that's all from me, and thanks for your support. Stay safe, stay healthy. Thank you. I'll turn off now. Rishi, you can take it forward. Yeah. Thank you. Thank you. We'll take the next question from the line of, Pankaj from Affluent Assets. Please go ahead. Thanks for taking my question. Am I audible? Yeah, Pankaj. Well, most of my questions have been answered. Just wanted to understand, what is the scenario as far as, CVs and railways is concerned? Pankaj, well, while we have shared this view many times. With railway, what happens is essentially it's tender-based business, and it's getting quite competitive there. In order to increase the focus as well as the bandwidth there, we've actually sort of tied up with some experts of the industry. We are seeing some fruits of that now, and with regards to the current year budget, we are on track. As far as commercial vehicle is concerned, again, we are pretty much aligned with the industry, given that we hold such a large part of the market share, and as well as the export piece to DAF, that is also running on the budget. So going forward, as CVs segment is expected to do well, do we expect to gain market share or maybe, increase our, kit per, or value per kit, sorry, value, in the vehicles? So, again, in the commercial vehicle, it's a little sort of a typical way. Most of these commercial vehicles, the moment it's bought, they tend to remove the shock absorber and put in an additional leaf in order to be able to load the vehicle with a higher capacity. So, in terms of increasing the content, well, I don't see that much happening. Yes, there are, if the CV overall volume goes up, we are deeply entrenched in it, and corresponding to that, our volumes will as well go up. In terms of the pipeline, well, whatever is being floated, none in the last quarter, actually, but for the previous year, whatever was RFQs have come, we've been able to win that. Okay, my last question: Do we have any plan to enter into any other product which is exclusively for EVs, other than shock absorbers? ... Exclusively for? EVs, other, other than shock absorbers. Passenger car, you said, right? Sorry? Other than passenger car, you asked, or other than electric? Other than shock absorbers in electric vehicle, either two-wheeler or four-wheeler. Well, in terms of the overall basket of, you know, ANAND Corporate, we are managing with one product of shock absorbers. Having said that, we won the PLI scheme. In the PLI scheme, we are progressively looking at, sensor as a product, and we just mentioned in terms of where we are on that. So if we are able to go ahead with that, then, the next product, which will get added to the, including electric vehicles as, on two-wheeler, as well as passenger side, would be sensor. What is the tentative timeline for the same? Well, right now, we are, we've done the market mapping. We've done, the understanding of the product, what's there, what's been there, what's currently, the volumes being clocked, as well as what's the supply chain, and, what typically the OEMs are looking at, because there are various categories of sensors which are there in the market, as well as which are gaining more and more, sort of content per vehicle. The next phase of the study is to start looking at the, sort of filtering down to the product that we would like to venture and look at, in terms of technology, in terms of capacity, in terms of other fact, other financial parameters. So, give and take, I think, a quarter or little more is what we would take to kind of arrive at a conclusion. Just wanted to understand, are we not—I mean, are we tying with anybody else for the product, or are we going on our own? As we—I mean, sensors are already present and there is competition already present and has forayed into this market long back. Yeah. Your question is right. We would be tying up with somebody for technology. Within our own group, we do not have that technology available, and that's all. That evaluation also is a part of the project. Okay. Thank you. Thanks a lot. Thank you. We'll take our next question from the line of Chetan Gindodia from Alf Accurate Advisors. Go ahead. Hello, sir. So wanted to, firstly, I wanted to understand on the passenger vehicle side, you mentioned that we are adding new models with Maruti. Also, on Mahindra side, also, we have orders from Stellantis and Volkswagen Group. So if you can share some quantitative data on, you know, what kind of annual revenue can these new orders bring us? Or, are most of these replacement orders, you know, just some colors on, you know, what is the annual revenue that we can generate from new orders. I'll give you a broad perspective, while because we are not sort of supposed to share volumes of these new programs, based on the contract that we sign. In give and take, currently, we are at 22% of the total top line. We aim and target to reach in the range of 25%. With regards to replacement, Maruti, some of the programs that is going to get launched in this year and the first quarter of next year, they are replacement. But for Volkswagen, Stellantis, as well as for Mahindra, they would be new programming. Okay. Okay. And secondly, wanted to understand on our EV market share. So currently, our market share in two-wheeler EVs is, as you said, around 60%. So given that we understand a lot of established players did not participate in the market earlier, and now going ahead, we'll be doing so. Do we expect some moderation in our market share going ahead, or do we feel given our strong customer relationships and our product technicality, we'll be able to maintain our market share? The endeavor is to maintain, if not improve. Yes, there will be competition, but we already have the first mover advantage. And now, with Hero Electric coming in as well, it's going to actually improve our market shares, as far as EV is concerned. Okay. Okay. Sir, just lastly, wanted to understand, you said we are also looking for acquisition. So what is our intention behind the acquisition? Is it product diversification, or are we looking at incremental higher market share in the same shock absorber product? And what is our, you know, ROI, and will we be open with even EPS dilutive acquisition? So some guidelines on acquisition side, if you can share. So we have sort of a range of what we call as the cornerstones or decision-making factors when we look at any targets. The broad ones being that it has to be in the mobility space. Can it be a different product? The answer is yes. Can it be suspension and allied products? The answer again is yes, we are open to that. It can also include backward integration. One of the targets that we evaluated and had also had a visit last time was towards that, which unfortunately did not fructify. But so we are open to that. Upward obviously can't happen because we have OE, so downward is quite possible. Domestic as well as international is an option that is available. If you have any specific with regards to the sort of financial numbers, obviously it has to make sense when we gonna buy. We don't want to be a financial investor. We want to be a strategic partner in that acquisition we will be running. So a lot of synergistic values needs to be present when we are looking at such acquisitions. Otherwise, just, you know, for the purpose of buying and product diversification, if we are not able to add value, that currently is of less interest. Okay. Got it. Got it, sir. Thank you. Thanks a lot for your insight. Thank you. Thank you. Our next question is from the line of Sonaal Sharma from HDFC Securities. Please go ahead. Hi, sir. Good afternoon. So just want to understand that, I mean, what is your expectation for FY 2023 volumes for two-wheeler, electric two-wheeler? Because last time, I think you have guided for 600,000 units, just post the fire incident. So how are you thinking that, for, for full year, how it will pan out? Well, A, you know, given that we already have the capacity in place and for the electric, we'll be sort of adding something more to that. In terms of volume, it's a little difficult right now to gauge, given, you know, some recent developments. But, the previous number that you mentioned, we continue to believe that, that we will be able to clock that. Okay. And just adding to the previous participation, participant question, that regarding to the first mover advantage that you have said, that you have in the shock absorber. So other than this, is there any technological advantage or any sort of patent or any sort of moat that you have, that no of your competition can copy? No competition, copy. No, that advantage is not there. But in terms of technology, specifically for Ola, we've developed an inverted front fork, as well as the shock absorber is a monotube shock absorber. So that's a unique proposition that is there with Ola. These products and programs have a long sort of a validation cycle. So, given the fact that we have partnered with them along with their own journey, the sort of possibility of getting replaced with some other organization apart from Gabriel is low. But yes, I mean, obviously, these are all driven by cost and performance. Okay, sir. Thank you. That was my question. Thank you. Our next question is from the line of Viraj from SiMPL. Please go ahead. Viraj, could you please- My question has been answered. So just a suggestion on the service charge, which you, you know, talked about the parent charges, and the explanation was quite comprehensive. Just a suggestion, instead of charging a percentage of sale, why not, you know, charge a percentage of profit? I mean, that's what the approach a lot of other MNCs and other domestic companies in the similar space they have. So it's kind of more aligned to, you know, the other minority investors. So just a suggestion. Thank you. Suggestion noted. We also need to evaluate when we are thinking on these lines, whether this tantamount to dividend or not. But nevertheless, suggestion was noted last time also, so we are, we'll think through it. Thank you. Ladies and gentlemen, that was the last question. I now hand over the floor back to Mr. Rishi Luharuka for closing comments. Over to you, sir. I'd like to take this opportunity to thank everybody for joining the call. I hope we've been able to address all your queries. For any further information, kindly get in touch with us or SGA, our investor relations advisors. Thank you. Stay safe. Stay healthy. Thank you. On behalf of Gabriel India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.