Ladies and gentlemen, good day, and welcome to Gabriel India Limited Q4 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 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 of Gabriel India Limited. Thank you, and over to you, sir. Thank you. Good morning, and a very warm welcome to everybody present on the call, and thanks for joining. Hope you're all doing well. Joining me today is Rishi Luharuka, our CFO, and Neeraj Jain, our company secretary, and our investor relations agency, which is LGA. As you all must have seen, we already uploaded our results for the full year and quarter four and full year annual presentation yesterday on the stock exchange. So all of you had a chance to go through the same. And of course, we did have a special call after our JV announcement in early May, on May 10th, if I recall it. So this is actually the second call for the full year results. So I'll give a brief overview of the company's performance and take you along slide by slide on the presentation, and then, you know, open it up for any questions and clarifications. So if you refer to the presentation, I think the first few slides, I think straight we can go to slide number five, which captures the quarter performance. We did a sale of INR 737 crore. It's been a healthy quarter, and of course, not as good as Q2. As you all know, Q2 is the festival season quarter. That is always the best. Second is this quarter, which is in line with that, so INR 737 crore of sale, with an EBITDA of 7.1% and PBT of 6.1%. If you come to slide six, you can see that, you know, again, the same, same figures here, but just to share that the cash position is now improved to INR 300 crore and the cash flow from operations, you know, has improved to INR 115 crore as compared to INR 31 crore in the corresponding quarter last year. We incurred a CapEx of INR 37 crore in the quarter. So this is for the quarter. If you come to the next slide, which is for the full year, you know, we had, of course, the best year, like many others in the auto industry, in terms of fabulous year for the auto industry as a whole. We did INR 2,972 crore, so we just missed 3,000 by a small margin, which is a growth of 27% compared to last year. And EBITDA, we posted a growth of 46% compared to last year, and PBT, 40.7% growth compared to last year. Again, the cash flow has been good, PBT of INR 136 crore compared to INR 95 crore in the previous year. CapEx incurred for the period is INR 106 crore. So going forward, we are of course expecting that we'll deliver a strong quarter again, I mean, in terms of, you know, the industry. So So far as holding on to numbers, there was a bit of concern due to the implementation of OBD2. However, April and May have been okay. Of course, yet this year, as an industry, just to give you a perspective, we are expecting it not to be as strong as last year. It will be a growth year, but more in a single, in a high single digit is what is the overall expectation of the industry. So we are also happy to announce that the board has recommended due to last year's performance, you know, the board has recommended final dividend of INR 1.65 on the face value of INR 41. And this is subject to the approval of shareholders. So the dividend payout ratio is maintained, in fact, maybe a little much higher at 28%. Coming to the industry, while I'm speaking on that, you know, there was an overall industry growth of 22%. You know, each segment has done well, despite the inflationary pressures and the, you know, continued semiconductor issues. We still saw a good growth because there was a good pent-up demand, and that still holds on. As you all know, if you go to buy a car today, I think no car comes without a waiting period, and some cars, particularly SUVs, you know, come with a waiting period of as high as even 18 months. So, even two-wheelers did post a growth of about 8%-9%. Passenger cars did very well in terms of growth compared to last year of 27%. Commercial vehicles, by 34%. Tractors also had a record year. Of course, we don't supply the tractors, but as they form part of the automobile industry, they also did very well, almost hit a million figure in 2022, 2023. And three-wheelers, you know, because of the schools opening up and the commuting coming full-fledged after the COVID years, it grew a fantastic 87% year-over-year. And as you all know, you know, Gabriel has a good market share in three-wheelers. Overall, the industry sales of passenger cars was you know, almost 3.9 million vehicles, which is the highest ever for the industry. The previous record was in 2018, 2019, which was about 3.3 million.... So it's a significant growth over the highest period, which we saw pre-COVID. So that's really a good sign, and we surpassed Japan to be, you know, to become the third highest automotive passenger car market in terms of sales. Again, the various factors did contribute. One was, you know, the pent-up demand following the pandemic. A lot of new models and really, you know, cutting-edge technology and features being offered by each OEM. So this really, you know, created a lot of interest among the buyers. Improved availability of semiconductors, while they improved, it's clear that it is still not behind us. What we hear is that the semiconductor chip supply for auto industry will continue to remain a challenge for at least another two years. This is what, you know, the OEMs, some OEMs have shared with us. We are also seeing some shifts, like, you know, the entry-level segment is actually facing a challenge in passenger cars, but the higher ticket size cars, especially SUVs and the premium-end models within those, you know, are selling much higher, and they're growing much higher. So which is, again, good news for us. In terms of CE, last year, we saw again a fantastic growth of 34%, on the back of the infrastructure projects of the government. And again, this we feel the growth will continue, but definitely not at this rate in this year. And the bus segment rebounded very well, which was mainly because the schools opening up, as I mentioned, and three-wheelers as well. There was some pre-buying that happened in the March due to this OBD2, you know, norms coming into place and, you know, the price hikes that happened in two-wheelers and commercial vehicles and passenger cars as well. So there was some pre-buying, but nevertheless, demand is still good. Two-wheelers continue to remain a challenge while we saw good growth. But again, this year, there are some, you know, as we are reading, there is El Niño effect, which is going to play some role in a little bit below normal monsoon, while it will still be okay, but it is supposed to be 95%-96% of the average rainfall. So we'll have to see how that unfolds. Of course, the price increase that has happened in two-wheelers continue to, you know, pose a challenge and, of course, add to that the fuel cost increase. So we'll have to see, two-wheelers, but again, the prediction of the industry is it will be a growth in the range of, you know, 7%-8%, for this year. Exports, particularly in two-wheeler, which is a big, big part of, you know, each, each OEM, also saw a lot of challenge, due to, you know, some issues in the African continent, which, you know, hopefully should, ease out in the coming year, and that should, that should start some recovery. The good part and the bright part is, of course, the EV, the electric two-wheelers, three-wheelers, and in fact, even passenger cars, for that matter. As an industry, we crossed 1 million sales totally in EV. So that's one big milestone to start with. And, you know, the sales are continuing to be robust, and, I mean, I'll of course come to the EV story when I come to the slides. So overall, I think, you know, it's been a good year. Now I'll come back to the slides. We are, you know, right now, we had left at, I was at slide seven, when I got into, you know, the overall industry. So I'll just come back to the slides. If you come to slide eight, which is more of a financial track record. Again, the figures are there, where you will, you must have gone through the figures, but strengthened network, better ROIC, and, you know, after the net working capital also, we improved our FY-21. So that's, that's also good. And, you know, ROCE as we go as you see forward, it's almost 31%. That is on the slide nine, which is slide nine which you can refer to that right now. So the ROCE is at 31.5%. Coming to slide 10, which is again the P&L statement, which I already shared, so I'll move on to the next slide 11, which captures in summary all the key financial parameters. I did mention on the ROCE and the good ROCE. In fact, among the highest ROCE that we have seen in the past, you know, in fact, the highest ROCE that we have seen. EBITDA also, while we have discussed in several calls in the past, and we've been working on several initiatives to improve our EBITDA, you can see the trend reversing from the last two years, and we are, you know, hopeful of, you know, maintaining the strength and improving it further. Slide number 12 is the key ratios, dividend. I already did share. You know, it's totally INR 2.65, which is INR 0.90, which was declared as interim, and INR 1.65, which we declared extra. So totally INR 2.65, which is a dividend payout of 28%. In terms of coming to slide 13, which shares the revenue mix. The good part is, you know, the passenger car has really improved in terms of our sales and overall industry sales. I'll come to the shareholding slide later. So our overall two-wheeler share is now at 59%, passenger car is 27%, and commercial vehicle is 12%. In terms of the channel mix, you know, OEs, the demand was very, very strong. So that's why that is 85%, and to that extent, well, we had an excellent year in aftermarket as well. We did close to INR 380 crores of sales in aftermarket, which is again a record performance and also a very good growth compared to last year. Our oils, oil demand has been very strong, so that's why you see the channel mix, reflecting that. And now if we come to slide number 15, you know, and we'll get into each of the areas shown there. So first is the exports part. Exports, we once again, for the second year in a row, crossed INR 100 crore sale. In fact, we had the highest exports. The figure is marginally higher, I mean, higher than what was last year. But the good part is we are able to cross INR 100 crores. And why I say it is good is because we, as you know, we had a challenge that the entire Volkswagen Russia sale has become zero, due to the ongoing conflict there. Volkswagen, as you must have read, Volkswagen has shut shop in and actually sold it to a Russian outfit. So we are working with Volkswagen on some other export models, but however, that will take some time to fructify. So despite this setback on exports, we still did cross INR 100 crore, so that's the good part. Coming to the second part of this business driver is the domestic dominance. On two-wheelers, as I mentioned, you know, our traction with all players has been increasing, and our market share is now at 32%. The same market share exactly a year back, when we did the presentation after last year, I mean, 2021-2022 fiscal year performance, was at 25%. So we have, I mean, very clearly gained market share, mainly through, you know, of course, our ICE engine penetration and our some of our customers are doing extremely well, of course, thanks to them, and electric vehicle penetration. We continue to win good orders in with our customers. In fact, currently, as you all know, we had one, and we are currently in the production stage of the Shine 100, the 100 cc model, which HMSI is getting big on. So that is currently also getting some good bookings, so we are hopeful of a good demand out there. Coming to slide 19, which shares the EV story. Our market share is, you know, in Q4, has actually gone up even higher to 80%, and we are there, you know, with every top player. You know, Ola, of course, as you know, is 100% with us, TVS is 100% with us, Ather, Anteater and Yato now also. So all the top players actually, you know, have vehicle suspension. So we are. We continue to do extremely well. And this slide, which is slide 20, this was a new foray. You know, we, we have selectively chosen this e-bike because, you know, one, there is a huge growth of e-bikes predicted to happen in the European geography, particularly, owing to all the climate, you know, activists, and also more and more sensitization of each and every individual, which is actually a good thing. The growth of e-bikes is supposed to continue at the rate of, you know, almost 20% in the European market. It's a very high growth area. Here, we have developed the first front fork and given it to Hero Cycles, and they are exporting it to their German arm. So we have dispatched the first lot, and we are, of course, waiting, you know, the performance and, of course, the feedback of the model in the market. And we intend to develop this further and look at some other options as well of supplying to some good e-bike makers. So this is a good new, you know, new chapter and ensuring that our portfolio further is diversified and is in line with the environment initiative, so that, you know, we do not miss on bikes which are growing due to the sustainability, you know, improvement that is happening. Coming to slide 21, which is passenger cars. Again, here we saw market share increase compared to last year. All our SUVs, you know, which we are supplying to Maruti and also being shared by Honda, that is doing well. We also have got a good order from Tata Motors and Volkswagen. You know, we have started supply 100%, so that is also improving. All models of Volkswagen and Skoda, which are being made in India, are being supplied by Gabriel now. So we'll see improved volumes going further. And Mahindra, of course, the XUV700, which is doing extremely well, the Thar, both continue to do well. So this is the utility vehicle. This is slide 22. You can see, you know, all the utility vehicles which are shown as pictures here. You know, the point is, our traction in utility vehicle is very strong, and that is the segment that is growing in the passenger car space. So we are in the right space at the right time. Maruti Jimny has recently been launched. So you know, the early information that we have into booking are good, so we'll have to see how that performs. Slide 23 is on commercial vehicle, where, you know, we are practically the single source to the entire country, and we continue to, you know, work with every OEM, supply all the varieties, you know, just in time as the OEM desires, and that continues to be a good stronghold for us. Railways, I already mentioned that this is, you know, small. The growth is still not there. We are still not back to pre-COVID levels. But the good part is we are now expanded into high-speed trains and also locomotives, where we were not there earlier. It is a good development. So obviously, when the volumes do start growing, we, you know, are ready with our products. Slide number 25 is an aftermarket. Again, you know, here, I already mentioned on the good growth that we had compared to last year. We are once again kind of relaunching the tire and tube business. And again, the sales have been good in the past couple of months, so we hope to build on this, you know, the new relaunch that we have done and, you know, capture this part, especially in, rather mainly in two-wheeler and three-wheeler segment. The M&A part, which we have been, you know, telling that we were working on a couple of them. One did not come through. But one, which is very important and very significant and a very high growth area, has come through, which we already shared on our call, on May 10th. This is with Inalfa for the roof systems, the number- two player in the world, for sunroof systems. We have got the order from Hyundai and Kia, so we are setting our plant in Chennai. And we already have a lot of interest from, you know, all the other OEMs, to look at developing their several kinds of sunroofs. So yes, we have to, of course, first cater to Hyundai, Kia and build on it. But again, just to mention that it's a right product, and there's only one other player, so we are the second more, so we'll definitely get, you know, good traction in this high growth area. Then coming to technology, we continue to, you know, reinforce our technological development. As you know, we have, you know, opened our new Tech Center for four-wheelers and commercial vehicle and railway in, with a small sub-stack as well in Chakan. So that is doing well, and we also hired a couple of expats who are experts in electronic suspension. So we have developed our first, you know, electronic suspension, semi-active, which is quite good. I mean, incidentally, I did try it myself last week, and the response has been really good, and the product is really good. We'll be offering it to OEs very shortly. So we are expecting, you know, some good movement in that space as well, which was not, it was actually, you know, a blank as regard of our product portfolio, so now we filled it up. We have 60 R&D specialists, and we have filed 75 patents, so that's also a, you know, a very good indicator of our commitment to technology. We also know that we are amongst the highest spenders in R&D within the Indian auto conference, and we continue to do so. The board remains committed towards this particular initiative. These are some pictures of on slide 31 and slide 32, we have already discussed. So I would actually, you know, end the presentation part here. And, you know, now we are open to questions and comments and your inputs. So over to you. Thank you so much. Should we open the floor for questions? Yes, please. Thank you. We will now begin the Q&A session. Anyone who wishes to ask a question, may press star and one on the 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. The first question comes from the line of Mumuksha Mandlesha from Anand Rathi. Please go ahead. Thank you so much, sir, for the opportunity, sir. Just on the financial first, gross margin were lower sequentially. Any reasons for decline, sir, this quarter? Mumuksha, can you repeat the question? Yeah. The gross margin was lower sequentially this quarter. Any reason for decline, sir? One is clearly some changes in the product mix that causes that decline, but if you look at the overall picture, including the other income, the profitability is better than the previous year. Okay. And there's no major change in RM costs, right? In terms of increasing RM cost, sir? Increasing, which cost? RM? RM. No. Okay. And, sir, how do you see the demand impact on the, you know, e-two-wheeler volumes, purchases, FAME subsidy reduction? Any indications from the OEM, how they plan to their end, I mean, look at the production numbers? Well, I mean, obviously, there'll be a little bit of correction, but what we have spoken to OEMs, in fact, you know, many of them have already, you know, like it's only logical, you cannot make your business case purely on subsidy. So everybody has, you know, actually, everybody knew that the subsidies at some point of time are going to be, you know, tapered down and even at some stage, withdrawn. So I would say that, you know, Ola is definitely, that's one OEM that we have feedback. They have said that they seen it earlier only, and, they don't see any change in demand as far as their product is concerned, and you can see by the numbers that they continue to do well. Because it's finally even, even at that price, it's still a compelling proposition. You know, as more and more people use EVs, the sheer comfort, the low cost, zero maintenance, and, and the features, you know, they become so compelling that the people will only shift and gravitate towards, you know, more and more EVs. Cost becomes, is not, you know, a key driver. Because cost is surely a driver when it comes to rural segment, and anyway, in rural segment, you know, the EV traction is still yet to, yet to pick up. And look, I speak to users, so I don't see any big, you know, there'll be some immediate reaction, but I don't see any big change in terms of the demand. Perfect, sir. This is related to sunroof, and the initial investment which we are making. So what are the components initially company will be localizing, and what would be procured from the other suppliers? Related to that, just what a sense on the sunroof industry, like, how many OEMs would be currently importing this sunroof? Would these be supplied by the current local supplier? Maybe I didn't get your first part of the question. Can you repeat that first part? Yeah. Yeah. So, I mean, related to the sunroof investment, which we are making initially, what, which part of sunroof we would be localizing by ourselves, and what would be procured from other suppliers? Okay. So yeah, so sunroof, of course, we have made, again, a detailed plan of localization. You know, the, the glass, of course, we'll be buying from the local glass makers. So that's one big, big part that we'll be localizing soon. And yes, there is also, a value addition that is done in-house in terms of, you know, the PU encapsulation. So that, for that, the machine is already ordered, and it should come in the month of July or August. So that will also be, a good value addition, which is localized, and it will be a localization as far as the OEM is concerned, naturally. You know, there's a significant, you know, item, A- category item being localized. Your second question was, you know, how are our OEMs currently buying it? Many are still importing. There is only one player, Webasto, of Germany, who has a shop and who has a plant in Pune. They're also opening a plant in Chennai. So we will be the second player, who will be, you know, opening up the sunroof systems in India. So the demand is very good. The traction, you know, that people want only the high- end with the sunroof, as far as the EV particularly is concerned. So we see enough and more demand, and OEMs very keen to localize this part. Thank you so much for the opportunity, sir. Thank you. Next question comes from the line of Priya Ranjan from HDFC AMC. Please go ahead. Thank you. Thank you. Congrats, Manoj and Nishi. So my question is two or three. One is on the market share front. So, one is you have gained meaningful market share in two-wheeler, and what do you see the scope if the electrification continues to ramp up and, with the new order wins, et cetera? So in next couple of years, where do you see the market share in two-wheeler, three-wheeler as well, in passenger car segment, going forward? That is the question number one. Question number two is on the suspension part on the technology front. So are we looking more for, say, predictive maintenance, predictive suspension, and all with more electronics and motors, controller, et cetera? Is that one of the area where we should focus on, or is the company at least looking at those areas to foray into and going forward? And third part is if you, I mean, third question is mostly on the... You have mentioned about the CORE 90 cost reduction program. So if you can highlight some of the features and outcome you expect out of that. Okay, thanks, Priya, for the compliment. Thanks for that, you know, giggle. So, you know, coming to your question on market share, we've seen some good improvement, as I shared with you the figures in the slides. The two-wheelers, we are at 32%, so we definitely would—I mean, this is also a mix of electric vehicles, but within electric vehicles, which is a high growth area, we are at 80%. Yes, obviously, retaining 80% market share is going to be a challenge. Naturally, being the first mover, we have this advantage now. So, so we are working on, you know, continuously looking at some, you know, technology improvements within this space so that we are able to, you know, give some unique USP to the EV and sustain this market share going forward. In ICE two-wheelers, we were, you know, rather our key customer, HMSI, is, you know, I mean, has a very good, you know, relation and impression with Gabriel. We won their award, won an award recently in their vendor meet. In fact, we were also asked to present to the entire vendor forum in the vendor meet this time. So, just to say that, you know, the relationship is very strong. So they have given us this motorcycle model of 100 cc, which is a commuter segment, high volume segment for HMSI, on a 100% share of the business. So this is the first time that they're doing a 100% business share. And TVS also is going strong. Similarly, Suzuki also is doing well. We have recently won the Suzuki electric two-wheeler business, a new model that they're going to launch in 2024. So for that, they have already nominated us, so that will improve our EV traction further. So, overall, yes, this market share, from, you know, what we are at 32%, including EV, can definitely, you know, go more towards, you know, 40%+. And coming to passenger car, we are at 23%, and we have clear plans of going to, you know, 30%+ in the passenger car as well. Three-wheelers, we continue to be a dominant player, and, you know, it's a preferred, it's a very strong brand in the market. So there, again, I would say, you know, more than 60% market share in three-wheelers, in ICE as well as in EV. We are already with Kinetic, we are already with Bajaj, and we are already with you know, the Minda trio. So we are already quite well entrenched even in the EV three-wheeler space. So that's on you know, the market share. Your second question was on the technology. So good question, Ranjan. So in fact, we are right now working on semi-active. So semi-active is you know, as far as the industry is concerned, the semi-active itself is a very good proposition and a big cost increase compared to your passive. A fully predictive is a long way away. A fully predictive is offered in very, very limited models, even in Europe, which is the most developed market in the world. Just to share, you know, if you see, if you, let's say, the Mercedes GLE, the thing which is over INR 1 crore, there you get a fully active suspension, even in Germany, at an additional cost of EUR 5,000. So you have to, you have to actually pay an additional premium when you, book your car if you want a fully predictive suspension. So it's a very high-ticket item. I don't think, you know, that will be coming to India. So it's a good technology to have, and we will look at developing, but it's not on, you know, as far as the immediate plans are concerned. We definitely are, you know, developing our semi-active, which is, you know, as, as I already mentioned, is going on the right path. And we, we expect to, you know, introduce in some of the OEs and earliest in India. Now, your third part was Core 90. Sorry, let Rishi respond to the Core 90 initiative. Hi, Ranjan. Good to talk to you. So, I mean, Core 90 being something of, you know, tw- pronged. One is to sustain the kind of cost that we have in order to sort of match the inflationary pressures of any increases and other cost increases, we have to do year-on-year to maintain the efficiency of that. So previous year went into maintaining that. This year, we are targeting, a little more aggressive in terms of our Core 90 program, and, which is in line with our double-digit, endeavor. So, broadly speaking, we are looking at, 0.5%-1% or little more than that as well under the Core 90 program this year. Sure. Just an extension of the previous, the technology part. So if you go from, say, semi-active, I mean, from the normal suspension to semi-active and then predictive, so what is the kind of, the content increase happens, for the OEM on the pricing or the cost? In terms of percentage, not, maybe not than the absolute number. Yeah, good to cover. Well, it's a big figure. You know, the figure is, I mean, actually several times, I'm not able to share the figure right now because it, you know, it depend on scope, you know, depend on the number of sensors that the OEM wants, they want your ECU, your ECU, or their ECU. So the configuration also differs. It's difficult to answer that question, but suffice to say that it is in multiple of the passive suspension. Sure. I think that, I mean, as the semi-active also introduced in models is going to put a lot of cost pressure. So it's not going to be a high volume, but yet it's a good technology which, you know, is expected, and that's why we are, you know, developing this in our product book here. Sure. So globally, have you seen the excess semi-active is more on, say, INR 3 million to INR 4 million rupees of car, or it's more upward of that? Yeah, it's totally on, I mean, I would say definitely INR 30 lakh+ premium cars. So you can see, even if you see the cars being offered today, the high end, let's say, the starting of high end, you know, let's say, the A- class, the C- class, the most, the BMW 3 Series, even the 5 Series or the Audi Q4, Q3 and A3, A4, none of them have semi-active. Got it. And just coming to the sunroof part. So now you have got the customer as well, so, and you have got the technology partner as well. So have you started the discussion with the other OEMs? I mean, because now this is a one of the must-to-have kind of features in most of the cars. And I think the penetration from the 20%, it will keep going up. I mean, some forecast is talking about 40%-50% penetration in few years timeline. So what is the receptiveness of the other customer beyond, I mean, your existing orders, if you have spoken with them? Very, interested is what I can say.... Sure. Okay, thank you. That's all from my side. Best of luck! Thank you. The next question comes from the line of Nikhil from Nippon India Mutual Fund. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. So few of my questions have been answered. Just quickly, if you can also share, I mean, say, three year down the line, what type of targeted share of revenue you are looking for from passenger cars and then two-wheeler, three-wheeler, and then from CVR. I mean, this is inclusive of the fact that they'll be starting this converting as well. So say three year down the line, where do you see ourselves? Your voice was a little feeble. Couldn't get you. Can you be a little louder? Yeah. Is it better? Yes,. Yeah. So, sir, I wanted, like, say, three year down the line, where do we see ourself in terms of share of various segments, basically passenger car and then two-wheeler, three-wheeler, and c, CVR? In terms of car or segment mix? Yeah. Okay. So, you know, if you see this quarter, like I mentioned, we are at roughly, you know, 59, 27 and 12 is what at, at Q4 we were. So going forward, I would say it would be more towards, yeah, in 55, 30, you know, between passenger car and two-wheeler, in that range. 55 and 30. Basically, 55, what do you, passenger and two-wheelers mention? Two-wheelers. Two-wheeler and three-wheeler. We actually report the- Yeah. Two, three-wheelers. Right. Hopefully, we should be adding a little small bar on bicycles, e-bicycles also. Okay, numbers are too early to say, but hopefully we should be able to add some. Okay, okay. Sir, we have also started focusing on international geography. So in terms of export and OEM as well, if you can give what type of share you are looking at, say, two years from now? Export right now, we have like, if you talk of the overall exports, we are doing, you know, just about 4% as. Right. As of total. So we have, you know, always told that we want that to be in double digits, 10%. You know, so we, we are working on the technology, the semi-active, which we are developing, obviously will be more, I mean, more traction might be there in developed markets. So we, we still maintain that is our aspiration and target of getting to that figure. Okay. Sir, last question. Yeah. It will take time, though. I mean, you know, your exports definitely take some time. Got it, got it. So last question, if you can just throw some light on the railway part as well. I mean, how is it moving now? Last quarter, you indicated that things are moving slow, but how is it now and where do you see? What part? Railways. Railways. It is improved, I mean, you know, but the recovery is still and the figures are still, you know, not near the pre-COVID levels. I mean, it still is a very small growth that we are seeing there. Okay. So it won't become a big share in our revenue, so... We don't expect that. Okay. But yes- So, yeah. We have, we now also have developed the locomotives, which are not with us. So that should add, you know, of course, some size, yeah. Okay, sir, that's all from my side, and thank you so much. Thank you. Next question comes from the line of Chetan, Chetan Sindoria from ALFA Credit Registries. Please go ahead. Hello, sir, and congratulations for a very good set of numbers. So I want to understand, last two years, we have seen very sharp improvement in market share and thereby very strong growth ahead of the industry volumes. So going ahead, also, given that we have high share in the leading models of Maruti and also Volkswagen, Mahindra, and also good share in—should we see, you know, mid-single, mid-double digit kind of, you know, sharp outperformance over the underlying industry volumes? It doesn't say, yeah, we have seen that improvement. We have basically, you know, as I said, coming to passenger car, we had the right products in the three segment, and which is growing, so that is helping us. Yeah, so I mean, clearly, we the target is to outperform the industry, you know, be ahead of the industry. In two-wheelers, through, you know, improving our market share in EVs, which is happening. In PC to three wheels and also getting into EVs, we still are not on EV. Our first EV in passenger car is the Citroën, you know, C3, which has been launched. And we are also working on a model with Tata Motors for EV platform, which will be in 2025. With that, you know, passenger car, you know, market share will at least continue to be ahead of the market, is what the plan is. Okay, okay. So on the margin side, earlier, we are aspiring to be double-digit margins. Then you had also hinted in last call about increasing competitive intensity also. So given all this scenario, should we expect improvement in our EBITDA margin? Going ahead into the next, you know, medium terms, and what are your aspirations about it? Again, for sure, I mean, that's the plan I shared, you know, that ratio just shared on the core 90. And so we think that we're doing so. Clear plan is to improve it up going forward in this year itself. And aspiration is, yes, you know, to move into double digits. That may take some time, but in this year itself, we are looking at improvement over it, for sure. Okay. So we should see a 50-100 basis point improvement. That is what might be our expecting? So, you know, I've always said we don't give that specific guidance, but yeah, I can tell you on improvement. Yes, you'll see that. Okay. Great, sir. Thank you and good day. Thank you. Next question comes from the line of Viraj Kacharia from SiMPL. Please go ahead. We've lost the line. Next question comes from the line of Mr. Pankaj. Please go ahead. Hello, even? Yeah, Pankaj. Hello. Okay. Well, thanks a lot for taking my question. So first thing I just wanted to know, the order book for Vande Bharat is out, and we being the market leader in the suspension. And as I understand, one Vande Bharat train costs around 120-odd crore INR as per the tender. And this, the railway minister has time and again showed the efficacy of the suspension, which has been implemented in the train. And as we have 80%+ market share in railways, are we not vendor to these, I mean, railways or the companies which are developing these too, producing these trains? And secondly, in the same, the cost is INR 120 crore, and you have earlier mentioned that each train, rather, in LHB bogies, which we used to supply, there used to be 16-odd suspensions instead of 4-odd, which were used in earlier trains. So just wanted to understand what is the total addressable market for us and whether we are present with these producers or manufacturers of the train or not? Yeah, Pankaj. So, just, try to answer your question. So on the railway, we have two or three new orders that we have got. But these are development orders. We still do not have a, you know, the bulk order that will come through, you know, once, the development order is completed and it performs well, which is what, I mean, we are expecting. It should not be a problem. So one is, you know, after LHB, which had 18 shops, 18 shops per coach, we have now, you know, the Train 18, we have also entered the electric locomotive, and we are in the Vande Bharat. So all these three are new additions for railway family. And each of these has 20 dampers to a coach, like a coach or Vande Bharat. So there are 20. So the figure of 18 actually becomes 20. So to that extent, there is an increased content per coach. Now, you know, the tendering, we are, we are still not in the production space, so we, I cannot give a figure of that as of now. But, on the tendering part, it is again shared between, you know, various players. So that's how it will go. Sir, if 1 train costs around INR 120 crore, there are 16-odd coaches in each train. So can I and that, does the value of each coach be around INR 7.5 crore to INR 8 crore. So can we assume, and then when it is produced, manufactured, can we assume, and this suspension being critical part of the ride quality out there, so can we assume substantial share of the 7.5-8 crore per coach as a total addressable market, total share for suspension? Incidentally, say around INR 50 lakh- INR 1 crore per coach. Unfortunately, no. You know, the biggest ticket size in a coach is actually the rolling stock and then the braking system, and then the electricals that are there, and the air conditioning and the door systems. So largely, the big ticket items are these. The suspension definitely is not in that scale, but yes, the value per coach of the suspension is significantly higher compared to, let's say, what we give in passenger car, etc. No doubt about that, but it is nowhere near, nowhere near INR 1 crore or something that you mentioned, INR 30 lakh. Sir, my second question- Sorry, the volume, you know, while it brings a good bottom line, but the volume point of view, it's still a very small, you know. And now that we are doing almost 3,000 coaches, it's still is a very small part. So we don't even report it in the segment level. It's actually quite small. Sir, second question, regarding the margins. So if you compare our top line somewhere in FY 2018 or 2017, I suppose, we had a top line of INR 1,500 odd crores and PAT of around INR 156 crores. Over a period of time, we have practically doubled the top line, but our PAT has just grown by 33%. And in this period, we have implemented the Core 90 program. It seems that the whole program, though it was a success, but it has not contributed anything to the bottom line. Well, Viraj, a good observation, but like we told you, the commodity increases have taken away, even if you do a simple, even if you get a full compensation, you know, they have taken away almost 2.5%, arithmetically, you know, if you look at that in terms of growth. So, you know, so figures, if we had not done the Core 90, figures definitely could have been adverse, much adverse. It might be, you know, super high, in terms of, you know, not looking, you know... And, and like I mentioned, you know, now we, we are looking at several programs to improve our margins, which you have seen over the last three years. There's an There's an improvement, at the last three years, if you see, so that should continue. So can we expect anything in this term? Yeah, like I mentioned, in this year itself, you know, while we don't give any guidance in three years, but there will be an improvement in EBITDA for sure. My last question, if I can, if I may, please. Why are we entering into the tires and tubes segment? I mean, this is another commodity which, I think we are diluting the value of Gabriel brand by entering into this segment. No, Jiten, contrary to that, actually, you know, the brand is. That's why, if you see, we have not selectively chosen the segment. We are not, we are not going into the commercial vehicle and the passenger car, okay? So we are only going into three-wheelers and two-wheelers. Particularly three-wheelers, where our brand name is extremely strong. So that, in fact, it adds to the dealer overall product basket, and, you know, they have a wider range to offer as far as Gabriel is concerned. And, tire also has been chosen because it is around the suspension. You know, it's the part which is distinct from suspension, it's an adjacent part, and actually both, you know, kind of play a role in each other's performance. So that's why tire, you know, it's definitely does not dilute the brand. We have selectively chosen this segment, and, you know, the pull from the customer also is good. The other part is, you know, this is the only part, a tire that is sold over the counter. You know, it's not like, you know, you have tire sales shops only doing that, like passenger cars is. It's It's over the counter, any retailer is free to sell and recommend the brand. So that's why we have chosen this particular segment, and as I said, it's doing well. So the idea is, we have a strong brand name, you know, we need to leverage the brand name. Again, carefully, I mean, carefully choosing, not doing everything, and also maintaining the quality. Your question is very right, when it comes to maintaining the quality. We have carefully chosen the supplier. We do quality audits. We have engaged advisors who have been from the tire industry very seasoned people, to ensure that quality is maintained. How much is the capital employed for the same? Zero. Practically zero. It is a very normal for a tire model, practically zero. So ROC point of view, you know, excellent point. Sure. Thank you. Thanks a lot. Thank you. Thank you. Next question comes from the line of Tiril from Philip Capital. Please go ahead. Yeah, good afternoon, sir. Thanks for the opportunity. So my question is again relating to the Core 90 program. So how much of the benefit of the Core 90 initiative, according to you, is reflected in FY 23 margin? It's 1%, 2% or 1.5%. How much, sir? You are talking about 1%. 1.5%. Sir, your voice is not audible. 1%-1.5%. Okay. Sir, how much of the cost inflation we are able to pass on to the customer? As you know, as MB, sir, said that, you know, we have been impacted by almost 2%-2.5% because of the rise in the cost of raw materials. So how much we have passed on, you know, to the customer, and how much we are expecting in FY 2024? The commodity pass-through is almost 95% in our case. We have, you know, fully passed on whatever the cost inflation we have seen been there? If you do the calculation, the mathematical impact of commodity in the previous year is almost 1%. Even if you do a 100% pass-through, the margins would go down because of the mathematical denominator effect of 1%. Okay. And sir, on the sunroof business side, as MB sir said that we are looking to localize a categories of items. So how much this constitute to the total RM basket? So, you're talking of sunroof, right? Yes, sir. Obviously, I'm certainly not able to disclose that, but, we are going by, you know, first the glass, because logistically, it's a big item. Cost is also, it's a, a big part of the RM. So it made sense to localize the glass first and some other parts, and we have drawn a detailed plan of localization over the next, you know, actually three years, because it can be done in phases. There is validation also, so that's important. Okay. And so what is the CapEx for FY24 as a business as a whole? So we're targeting INR 150 crore, cash flow should be in the range of INR 100 crore to INR 150 crore. So this includes this, sunroof also, or we are talking about only Gabriel channel only? Including sunroof. Okay. Thank you so much. Thank you. Next question comes from the line of Shashank Kanodia from ICICI Securities. Please go ahead. Yeah, good morning, sir. Just wanted to check, are we touching with Simple Energy, which launched an electric two-wheeler yesterday evening? Simple Energy, I don't think so. Actually, we keep tracking. I'll come back on that, because there are so many two-wheeler EV manufacturers, so, you know, over 200 of them. So we are actually carefully choosing the ones that we actually develop, because we also do a kind of a, you know, a check on the, I mean, a kind of due diligence also on the maker. Otherwise, you know, there's a huge amount of development effort that goes. So Simple Energy, we are making samples for them, but I don't know whether it's in the model that has been shared yesterday. Okay. And secondly, sir, in early in the calendar year, there was, you know, media articles mentioning about the Front Forks taking a non-fit Ola Electric scooters. So just wanted to check, are we at fault in any case? And Ola has offered to replace it free of cost for the customers. So is there any financial implications to us? If you read the article, it came; there's a clarification also, which came in this. So it is clearly said that the fork arm is what that failed. It is not the front fork suspension. Unfortunately, when we talk of fork, everything comes to front fork. It is a casting which connects the front fork with the wheel. Okay. It is not supplied, which is bought directly by Ola. We don't supply this part to them or to anybody. It's not our scope. Understood. So So we are not at fault by any chance. Fine, sir. That's all from my side. Thank you. Thank you. Thank you. Next question comes from the line of Dewaan Patel from Samiksha Capital. Please go ahead. Sir, my questions are around CapEx. What is our peak revenue potential from current capacity? And so the next few years, what kind of brownfield or greenfield expansion do we need to do, which is, yes, what kind of asset turns? So we are planning some brownfield, you know, in both in Khandsa and Sachin, we are doing some minor expansions. I mean, these are maybe just INR 20 crore or INR 20 crore-INR 30 crore in terms of capacity in machines, as well as also increasing the store area, LG area, etc. So increasing the land and the building, because we already have land. So these are the things that we are planning in terms of brownfield. Greenfield, yes, looking at the growth, we surely will have to add a plant in the right geography. We are evaluating the geography, but let's say in south, while we are in Hosur, we don't have anything in Chennai region. So that is one area. And we are also, you know, in the Sanand Gujarat area, we had a plot of land in Tata Motors Vendor Park. So we are also now taking the adjoining plot as well. We are in discussion with Tata Motors based on the business that they have offered. So that will be some additional, you know, you call it, well, it's a brownfield or a greenfield. It's an additional plot, so adjoining plot, yes. What is our peak revenue potential from current capacity? Well, from the current capacity, easily close to INR 4,000 crore, a little less than INR 4,000 crore. And, uh- Not including the sunroof, the sunroof is different. This new greenfield, we get what kind of asset turns from that? And what would be the tentative size? So again, the asset turn, in the first year, obviously, is going to take a little bit of a hit as compared to the 6.6 that we see currently. But, with the speed utilization, I would safely assume that in the range of 6, asset turnover should be around 1. Okay. Sir, and secondly, on, you know, negotiating with our OEM partners for price increases. Now, we've already hit 31% price in FY 2023. Does that somehow dilute our, you know, negotiation efforts? So now we didn't get the question, can you repeat? What about 31% you said? We already have this 31% ROIC with these margins. Does that, you know, somewhere, you know, hinder our, you know, negotiation with OEMs on getting, price increases? Yes, that's still, especially we have got, we have got the price increase back to back on the RM. So most of that is done and concluded, practically everything. So we are also, of course, looking at some, you know, process cost increase because everything has gone up, including power, fuel, I mean, wage cost, et cetera, you know, the minimum wages, et cetera. So we are also looking at some, process cost increase with OEMs. Those discussions are still, in process. Okay. Sir, and on sunroof, what will be our outplay in terms of equity? And when do revenues from that JV start? The revenue is supposed to start from the Q1 of the next calendar year, which is Q4 of the current financial year. In terms of the share capital, we are looking at in the range of INR 56 million-INR 60 million. That's all from my side, sir. Thank you. Okay. Thank you. Thank you. Next question comes from the line of Viraj Kacharia from Finpal. Please go ahead. Yeah, hi, hello. Viraj, I'm not able to hear you clearly. Am I audible now? Yes, better. Yeah. So basically, first question is on the gross margin. Now, if you look at our mix broadly in terms of business, say, aftermarket or the export piece, or even the CE, you know, these are typically in terms of margin hierarchy, these are the highest margin businesses for us, and in the year they have done quite good. And in terms of share increases also, they've been a healthy increase. Similarly, in terms of EV, you know, in, say, two-wheelers, where the value addition or the margin structure is a little better, that's also seen a reasonably healthy flow for us. But when you look at the, you know, gross margin for the year, and especially, say, if I say even in Q4, we're still around that 23.5%-24% band. So I understand the numerator denominator, element, but just purely in terms of the margin structure, you know, when you say that 250 basis point 50, gap, what will drive that gap? Because the mix is already in your, favor. Incrementally for last few quarters, we've already seen the RM softening or stabilizing. So from a contribution margin perspective, how should we understand, you know, the journey of, say, 250 basis points or 300 basis points increase? And, you know, what will that entail for us? So Viraj, good question. To summarize it in a simple form, let's look at, say, 80 basis points to 100 basis points on the operating leverage, and the remaining should come from the gross margins. Gross margins will have various levers, including Core 90, which is renegotiating the suppliers, renegotiating with customers on some price increases. It's also to do with some softening of commodity having a full year effect now, given that last year did not have the softening for the full year, and we still saw a lot of increases coming through to the extent of 0.8%. Last year, the commodity impact was there on account of denominator and around 0.2 on account of underrecovery because of the other businesses where there is no underrecovery indexation. So those benefits are going to come in this year, as well as we are looking at some product mix changes as well, which will help us support the improvement in the gross margins. Just to add further on this now, if you look at our localization, say, in our passenger vehicle segment or, you know, two-wheeler, and this is in relation to, you know, if you look at the contribution margins which some of the other competitors they own, say, in a PV by Tenneco or, you know, you have, in other two-wheeler, MNC and local player. Even after this improvement, which we're expecting, it will still be a sizable amount of gap versus what they own and what we own. So is there scope in terms of further localization, increasing the value addition, you know, in the existing business structure? So how are we thinking on those lines? On the, say, on the passenger car side, we are fairly competitive. If you were saying about Tenneco, we are aware of the numbers to some extent. Again, everything was known to us, but, and we compete in the same market, so we are fairly aware of what kind of numbers do they work with. And, I must say that we are better than that. Yes, in terms of two-wheeler, three-wheelers, two-wheelers especially, we have some scope of improvement, and that's where we're going to sort of, look at, maybe a backward integration in order to reduce our overall cost. Okay. So in terms of the base margin, you know, let's say the contribution level for this, business suspension business for us, you know, after all the initiatives and, you know, RM price has remained stable, then that should be somewhere around, say, 25%-26%. I mean, indicatively, I'm not saying by when or... It also depends on a lot of other elements. But generally, in terms of, you know, try to just understand the base margin in this business for us, given the mix and everything. We answered this question already, given that, we are looking at 2.5%, and of which, say, assuming 0.5%-1% operating leverage, the remaining should come essentially from gross margins. Okay. And second question is on the, you know, CapEx, which you said around INR 150 crore for this year. Correct me if I said it wrong. That will be, you know, including the INR 50 crore investment which you'll be making in the JV, right, sir? No, that is excluding that. Okay, so this INR 150 crore is primarily towards what major buckets, I mean, if you can provide some perspective? Give or take, we do INR 30 crore-INR 40 crore on routine maintenance CapEx. Remaining will be in the field of technology, number one. Number two would be automation. Number three would be backward integration. And number four would be the capacity enhancements as and when required for specific programs. Okay. You know, even in this year, I think there was some INR 13 crore of purchase of intangibles. I'm assuming this is pertaining to the technology which we have acquired. It's what technology we have acquired, as well as the technology that we are developing. Okay. So post these investments, you know, in the past, we talked about having some gaps in terms of technology versus some of the MNC competitors. So post these investments, would we by and large be... You know, how should we look at our overall portfolio coverage versus some of these competitors? Yeah. So it will definitely, as far as technology is concerned, you know, we'll close the gap on semi-active. But having said that, you know, we also, the passive suspension also still remains the mainstay of business. We'll have to continuously keep working on, you know, newer technologies. Like we introduced the FSD in on the Mahindra XUV700, which has been, you know, received very well. We will continue to work on passive. And the second part is, you know, while we will fill up this technology gap, the important gap to be filled also is, with respect to global business, is, you know, getting and acquiring global customers. Which is why, you know, we are also investing in, you know, hiring of experts. We already done that. With that, we'll open up some global customers as well. So we will then close both the technology gap and the global customer relationship gap. Okay. Last question was on the cash part. You know, despite the CapEx or the investment which will be put in the JV, the cash position will just keep on building up, you know. Any thought process on, you know, how we're looking to use that? Any thoughts on the buyback or the distribution, dividend distribution policy? Look, we've been wanting to have the inorganic piece come live, which we have now done with one of the JVs. The target is to pursue this journey further, which is the largest utilization of the cash balance. We may need to even lever if the target remains big. Second is on the organic growth that we already have, including backward integration. Certainly, the cash flow generations for the year would be utilized towards that. So the way I see it, from this, the build-up is actually going to be healthy in terms of, you know, giving us an opportunity to look at a bigger ticket size in terms of organics. Okay. Wish you good luck, sir. Thank you. Thank you. Thank you. Ladies and gentlemen, due to time constraint, we have reached the end of Q&A session. I would now like to hand the conference over to Mr. Manoj Kolhatkar for closing comments. Please go ahead. Thank you. So thank you once again, you know, for those really interesting questions and also feedback and some compliments as well. So we will continue to, of course, increase and improve our market share, the share of the market in some way. And glad to, of course, share the new diversification that we have done in sunroof. We are all very excited about it. Clearly, this gives, you know, a whole new energy in the entire system. And just to say that this is, you know, the first significant move that we have done, and we will continue to scan for a positive. It's not this is one-off, but this is part of a larger strategic plan, and we will continue to work on this and, hopefully, do conquest one more in this fiscal or next fiscal. So that's, that's on the diversification part. As regards the industry, I've already shared, this year will be little more muted than what we saw and the high growth year, last year. Nevertheless, it's improved year. And overall, the, the economy of the country is in good hands and looks to be on a path of growth only. So we don't have any immediate reason to worry as, as regards the overall economy. So, you know, look forward to a good year and your support as always. Thank you so much, and that's all from my side. Thank you. On behalf of Gabriel India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.