Ladies and gentlemen, good day, and welcome to Gabriel India Limited Q2, second quarter financial year, 2024 call, 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 guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants will be in a 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 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, and good afternoon, everybody. Very warm welcome to this call. So I'm joined on the call by Rishi Luharuka, our CFO, and Nilesh Jain, our Company Secretary, and our IR advisors, SGA. So of course, I mean, all of you must have had a time, a time to look at the results that we published after our board meeting this morning for the quarter ended 30 September 2023. So what I'll do is I'll take you through the presentation, and also while I go through the presentation, I might also speak a bit on the industry as well, and try to give a context of where, where overall the industry is heading in terms of the automotive, I mean, segments of automotive industry. So coming to, slide five, this is, you know, I mean, of course, the summary slide for the quarter that went by, which is, you know, July, August, September. We've got revenues of INR 865 crores, with EBITDA of INR 75 crores and PBT of INR 60 crores. So as you can see, we have, sustained our... Request everybody to keep it on mute because I'm hearing some disturbance. So thank you. So yeah, I mean, our EBITDA margin and percentage has improved from 8.6% in Q1 to 8.7% now, and similarly, you see the same improvement in PBT from 7.2% to 7.3%. Moving to the next slide, slide number 6. This is again for Q2, H1. Let's go to the H1. Yeah, if you see slide 7, which talks about H1, since we finished half year, our revenue was INR 1,670 crores, so the highest ever revenue for a quarter. Growth compared to last half year was 9.6%, and I'm happy to share that the EBITDA improvement for the same half year is 31.4%. This is what, you know, we have been trying to do, as we have discussed in several calls earlier, trying to improve our margins, you know, quarter-on-quarter. Coming to slide number 8, which is, you know, the, again, the financial track record in terms of, you know, quarter-on-quarter and FY is listed there. I'm not repeating the figures, but just to share that, you know, our Core 90 savings program, which me and Rishi have shared with you all along, that is going on strong. EBITDA margin has increased by INR 6.3 crores, and net margin increase is 5.3 crores. Moving to slide 9, which is, you know, the, again, trend in the graphical format. So margin trend is very clear there, and so is the ROC. So ROC for this quarter was at 38.1%. Coming to slide number 11, again, you know, the financial numbers in, again, a graphical format. And slide number 12 is the key ratios. But the important thing here is, of course, we declared our interim dividend today at INR 1.5%, which is almost 24% payout ratio. This is, as I said, the interim dividend for the year. Slide number 13 shares the segment mix. You know, this is, I mean, you can see clearly that the passenger car segment mix has improved. It has gone to 25%, and two-wheeler has reduced to 61%. This is more by the way of improved, you know, share of business in passenger car, as well as overall passenger car market doing well. You know, since we are on this slide, I'd like to share that the market has, you know, passenger car market is holding steady and showing really robust performance as far as the industry is concerned. In the first half, we have already done 2 million cars, and the main growth is in, as was seen earlier, main growth is in the SUV segment, where Gabriel is also very strong. So we have seen almost, you know, almost a 7% growth in terms of the passenger car and with a robust, pipeline or waiting list or order book for passenger cars, we are very sure that this year, for the whole year, we'll see another record for the passenger car segment, in India. Two-wheelers is more or less flat, while there was a thought that this might improve, in terms of, the overall sentiment, since the market has absorbed the price increase that has taken place and the rural segment is... The sentiment is coming back, but we are still yet to see strong numbers in two-wheelers. And coming to electric vehicles within the two-wheelers, I mean, the scooters are, you know, steadily selling around 60,000 per month, which had come down to 45,000 after the FAME II was removed in May, but it's coming back now to 60-63. And this month, obviously, we are expecting and the whole industry is expecting really record sales in all segments. I mean, the stock levels for passenger car are around 50-55 days at the dealers. This is more in terms of in expectation of the, you know, solid demand that everybody is seeing. And even in two-wheelers, the stock demand is pretty robust. Coming to commercial vehicle, which is 12% of the segment mix, as you can see from the slide 13, that segment also has done well with more than 10% growth, and we are actually seeing an increased buying by commercial vehicle manufacturers, you know, in the last couple of months and last month and this month and going forward. As you know, what we are being told is there is a revival of the replacement cycle by the fleets. So this is helping improve the commercial vehicle pickup in the industry. Now, on this slide, you know, in terms of the channel mix, 86% is OE, 12% is aftermarket, so that remains more or less unchanged. Slide number 14 is on the balance sheet. I think you have had to look at the figures. Cash flows also, slide number 15. The debtor days and the inventory days have reduced, which is what, you know, our focus on cash is, continues to be very strong, and we will continue to try to improve this further. So this is, you know, in terms of, slide number 16 is our cost reduction drive, our core initiative, which, you know, is helping us immensely in terms of improving our margins. That continues. And 17 just recaptures the vision, which is to be among the top 5, based on 4 founding blocks, the exports, domestic dominance, M&A, and technology. Now, slide 19 is the slide on exports. Yes, the quarter did see a dip in exports, mainly because our exports to Colombia were very low because they had stocked up earlier. The production should revive in this quarter. Definitely, it may not come to the level of INR 31 crores, which we had in Q1, but it will be, you know, close to that. Coming to the individual segments, this is slide number 21, is on the two-wheeler and three-wheeler segment, where our market share is now 32%. We have, I mean, we have got, you know, the business award for the HMSI commuter segment, which is Shine 100. That continues to do well. In addition, of course, we have on the new platform of Ola, the S1 Air and the Gen 2, both, Gabriel continues to be 100%. We also got some new orders, I mean, from Gogoro and Ather, et cetera, including the TI, the Tube Investments, you know, vehicle as well. Going forward, if you go to slide number 22, which is the, you know, which is a good story as far as Gabriel is concerned, our penetration in EV two wheelers is very strong, and our share of this is almost 80%. Because now, in fact, all the top manufacturers use Gabriel suspension. So you, be it Ola, TVS, Ather, except Bajaj there, I mean, all of them, you can see on the slide number 22 in the box, use Gabriel suspension. So that is good news. Slide number 23 is on the bicycle, e-bicycle suspension, which I had shared in several last calls. This is some, a new foray as far as we are concerned. We have given the first 1,000 front forks in Germany, and in fact, our team members were there in Germany to understand first-hand feedback from the dealers. The feedback is quite positive. As far as quality is concerned, we only have to improve further in terms of the weight, which is being addressed, and we are going to give a, you know, even lightweight suspension and, you know, see how it goes from there. Coming to the next important segment, which is passenger car, where we saw the improvement as per segment mix is concerned. This is mainly because the UV segment grew at 30%, and we have got, you know, the Maruti Jimny, the Grand Vitara, the Toyota Hyryder, Thar, XUV700. All these vehicles are with Gabriel, so this definitely, and, of course, the Brezza, the Maruti Brezza is also with Gabriel. So all this translated into good sales, and thereby we improved our market share also, and overall segment mix of passenger car is improved. We also won a new platform from Maruti Suzuki, which is again, a SUV segment car. And there is also, I mean, a plan of Maruti of making Jimny, I mean, making Maruti India a base for the Jimny exports. So this will also improve our, you know, they have revised the Jimny production upwards for next year. This is also good news for us. And yes, this slide number 24 shows the pictures of all the SUVs. I did miss mentioning the Volkswagen... and the Škoda SUVs, which are also doing well. We are 100% source to them as well. Coming to slide 26, which is the commercial vehicle, where we have a dominant market share, that I mean, of course, mirrors the industry. And we are looking at some breakthrough in export orders in terms of commercial vehicles, building on the PACCAR, the DAF order that we have already got in terms of cabin dampers. We already got the RFQ for some axle dampers from DAF of Netherlands. So that should definitely add to our overall content per DAF truck going forward. Railways, I mean, nothing new to share here, other than to say that, yes, we are there on everything that railway needs, Indian Railway needs, and, you know, also the volumes are doing little better than what we had expected. I would say even for this year, the same trend should continue. Aftermarket, again, good growth. We have achieved 9% growth over Q2 of last year. And even if you see H1, half year to half year, it's 11% compared to last year. Yes, the aftermarket as such is getting a little difficult in the current months, but we will continue to maintain this good growth portfolio, good growth trend in aftermarket as well. In terms of M&A, which was one more, you know, key foundation block of our vision. As you know, we have done the Inalfa Gabriel Sunroof Systems in Chennai. Happy to share that we have already dispatched our first sunroofs assembled in our factory in Chennai, and they have been supplied to Hyundai. These are, of course, first samples, the fitment trials, et cetera, is happening. So, but, you know, so I mean, happy to share that the line, including the robots and the PU encapsulation machine, et cetera, everything, including the people, after being trained in Korea, are all ready now, geared up fully for start of production in January. Also, I had shared last time that we had opened a, we have opened a Gabriel Europe Engineering Center, called GEC. We call it GEC. These are the actual pictures that you see of our engineering center. The two photos that you see are actual engineering center photos. You can see some of our team members also there. And this has already started functioning. We have two expat employees on board, and the plan is to keep on improving this. This is located in Genk in Belgium, right next door to the Ford Proving Track, which is, you know, a very strategic location, when we have to do the testing for the vehicles that, you know, that we will do. This is particularly working in the area of Semi-Active Suspension, where you develop the four-wheeler as well as the two-wheeler. The trials are, you know, going on. Yes, and the tech center I'd already shared, so I'll not, I'll not share further on the presentation. Now it's, you know, I'll hand it, hand it over back to the moderators, and keen to listen to your questions, your inputs and suggestions. Thank you. Thank you very much. We'll 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 then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll now wait for a moment while the question queue assembles. The first question comes with Mamukh M. Mandlesha with the company of Anand Rathi. Please go ahead. Yeah. Thank you so much, sir, for the opportunity, and happy festive season to the management. Sir, starting with just a few questions on the results, sir. The gross margin was lower QnQ. Should it be because of the lower aftermarket and export share, sir? And if I can ask further, the employee cost also had jumped by 9% QnQ. Any reason for that? And what could be sustainable number for the employee cost? Mamukh, we are not able to hear your question. Can you take the receiver a little away from your mouth, please? Yeah, it's now clear, sir? Better, sir. Yeah. So, I was asking, is that the gross margin was lower this quarter, QnQ? Should the adverse mix the reason for the lower margin, because the aftermarket export was lower QQ? And also, on the employee cost, which has jumped 9% QnQ, any reason for that? And what would be sustainable numbers for the employee cost going ahead? So the gross margin, if you see, is... Oh, you're talking of QOQ? Yeah. Not YOY, right? Okay. Yeah, so that, that is obviously, you know, just the mix. Yes, exports is, as, as I said, the exports is a little down. It's a factor of the mix, that has happened to some extent. Sir, what was your second question? So, employee cost has jumped 9% Q-o-Q. Any increase, any reason for the increase, sir? Yes, sir. Okay. I am assuming you're saying more of the employee cost, right? Yeah, employee. Yes, employee cost. Essentially, we've done some amount of restructuring in terms of the compensation structure, and as a result, there has been little extra cost in this quarter on account of actual valuation. So that is what is impacting the employee cost. So this number can be a sustainable number, right, sir? Or- Yeah, more or less, it should be in that range. Got it, sir. And sir, in three. Almost inaudible backing up. Okay. Better, sir? Now, sir? Yeah. Yeah. So I was saying, sir, three-wheeler EV share, which is around 8%, currently. And so what would be plans to ramp up that, as the three-wheeler EV also seeing good potential, sir? Three-wheeler EV share, we are actually, you know, if you see the organized players, we are very well entrenched. So the Kinetic Green and the Mahindra Treo and the Bajaj EV three-wheeler, I mean, all three are with us. So these are the main, main players. But if you see even the, there's a mix of, you know, many players that also a little happening there. That's why, you know, we, we, we might, we are a little low on, on the 3V compared to the two, two-wheeler EV segment. Right, sir. And sir, on the suspension business, sir, how are we seeing some of the competitors in both India and overseas, a place in terms of profitability? Do you see opportunity of acquisitions in the suspension area? I'm not sure. I mean, yes, of course, I can, I cannot be specific, but yes, there are there are definitely opportunities globally. And in fact, we had looked at you know one opportunity earlier, but you know, for obvious reasons, we cannot said. But yes, there are... To answer your question, there are definitely are opportunities in the globe, and as we discussed, we are scanning you know for any possibilities. Got it, sir. And just lastly, on the sunroof side, any new update on the order win, sir? And also, on the suspension side, you have mentioned about the Gogoro. So can you talk about the potential of this new order win, sir? Well, Gogoro, I'll come back to that. It, the order is not very big, but yeah, we won the order. I'll just come back to you on the figure. On the Sunroof side, you know, our focus, of course, is currently to get this, you know, SOP, where we've got the order from Hyundai, you know, started. Parallelly, as I had shared, we have discussed with several Indian OEMs. So we have got, I can only say that we have got some RFQs, and we are in discussions and responding to those RFQs as of now. So no new order wins, but yes, our discussions are on. The good part is, starting only, we announced in the month of May, and we already have got couple of RFQs. Just on the Gogoro, sir, and- Gogoro, Gogoro, is the peak sale value is INR 20 crore, annual sale. Okay, sir. Thank you so much for the opportunity, sir. Thank you. Thank you. Thank you. Once again, if you wish to ask a question, you may press star then one on your touchtone telephone. The next question comes from the line of Viraj with the company SiMPL. Please go ahead. Yeah, hi. Thanks for the opportunity. Hello? Yeah. Yeah. Hi, thanks for the opportunity. Just couple of questions. First is on the employee cost, just a clarification, you said that the run rate of INR 50 crores is what we should kind of revert to back in Q3, right? Yeah, I mean, at a similar volume. Yes, Viraj. Yeah. So I think there is roughly around INR 4 crore of impact because of revision in gratuity. Yes, and there are also increases in the minimum wages. That has also been taken care of. Okay, got it. Second, so, second question is on the, you know, the engineering and R&D center in Europe. Just to give a perspective, you know, what kind of investments you would have to make, you know, on an annual basis in terms of P&L? Right now, the investment is, you know, not much. I mean, we are not putting any big investment there than other than some, you know, testing equipment, that will also come, mostly in the next financial year. It'll be more of, you know, people cost, that will be there, because we'll be engaging people, and, we don't want to duplicate the test facilities, both in Gabriel Chakan, as well as there. So we'll do a minimum investment model, and, you know, do all the main testing in, in, the tech center in Chakan. Okay. So once, you know, the center is full-fledged, up and running, any, do you have any particular, you know, budget in mind in terms of how we're looking at it? Is it more of a cost center, or we would also kind of- Yeah, as of now, that is the model, but, we, I mean, if you want to— So, Viraj, essentially, it's a center that is going to only work on the future technology. The idea here is to generate, intellectual properties, whether registered or not. So effectively, whatever we are going to spend, either in Belgium or whatever counterpart we are going to create or we have created in Pune, tech center facility, that is going to be a part of the patent cost. So it will be a capitalized value. Roughly, given our plans, INR 10 crore-INR 12 crore a year is what we are looking at in terms of investing every year towards this. Okay, so that will be capitalized. Okay. Second question is largely on the Inalfa JV. So you said that we have commercialized, so we have kind of, the plant is ready and we have started with the segment trials. So the initial capacity would be 400,000 units, right? Two lakh. Sorry? 2 lakh, INR 200 thousand. We earlier talked about setting up two lines, one each of 200,000 unit. 200,000 would be the capacity currently. Okay, and in terms of ramp up, how should one really understand? Well, we'll start from the month of January, and the ramp up will be steep in terms of INR crore. Well, we really cannot be sharing those figures. So, effectively, you know, each line is 200,000. We are currently starting with 1 line, and depending upon the future orders, we'll be adding more lines. The first year itself, we would be utilizing roughly around 60, 70, 60% of the capacity. Understood. Just any update you can give in terms of the other new product initiatives? I think, what we talked about is in the second half, we may have something in terms of probably one more product addition or, you know, any, you know, anything on those lines? So we have mentioned. Any of this. Next fiscal is what we are planning the second part, because we just, you know, integrating this Inalfa right now. And as I said, in terms of new product addition, we have started the e-bicycle front fork. That is also something that we have started. So, yeah, you got to wait for the next discussion. Okay, fine. Sure. I'll come back in here. Thank you. Thank you. The next question comes from the line of Amit Hiranandani with SMIFS Ltd. Please go ahead. Hello, team. Thanks for the opportunity, and congrats for a good set of numbers. Sir, first on the CV side, so we are happy to see that Gabriel India has high market share in the CV segment. Can you please help us with that secret ingredient of maintaining such a high share? And how much of the same is sustainable for the next five years? And also, you know, if you can highlight who are the existing competitors in this category. Yeah, Amit, thanks for your remarks. So on CV side, you know, we have held this kind of market share for quite some time, and as you know, there have been players in this segment, you know, but it's a mix of several things. One is the experience, mainly in terms of understanding the CV market, having the, you know, competence in terms of development of the products, which offer value to the commercial vehicle customers, and while keeping in mind, the cost also is important. You know, so that experience resides with us. And you know, yes, of course, the customer relationships. And the other part is in CV, it's a high variety and low volume game. It's a little different when compared to passenger car or... I mean, obviously, I'm not comparing the two-wheelers, which are high volume. This is high variety, low volume game. So that is something that we, you know, we have learnt and, you know, we do well at it. So these are some of the factors, that, you know, hold us in good stead as far as CV is concerned. And, yes, our response, our service levels in terms of quality, cost, delivery, have been excellent. In terms of product development, I'm happy to share that just a couple of weeks back, we won the Technology and Innovation Award from Volvo Eicher, competing with the best in the technology, competing with, you know, Bosches and Continentals of the world. Gabriel was awarded this, you know, Technology and Innovation Award, for our product—not our, for our product, in proprietary products, in fact, in the entire space of proprietary products. So all this put together, Amit, I think this whole, this, it, you know, augurs well for us. Okay, happy to hear that, you're winning new innovation award, competing with the global players. So my- Not only, not only the current, you know, business, but we are winning, we are developing new products for them as and when they want. And, as we speak, we are working on new products to address the global CV industry as well. And your other question was on going forward five years, whether we'll be able to hold the market share. Well, I think, you've done that for so long, so I would dare say that, yes, we should continue. Great. Sir, my second question on the sunroof business. So, just curious to know, you know, why Gabriel is little slow in sunroof capacity expansion?... the company is setting up only 200,000 units capacity, whereas, you know, your competitor, Webasto, already has 500,000 capacity and is going to near double to 950,000 units in the next, you know, coming few years. So just your remark on this, please. Yes, so Webasto has been here for some time. You know, Webasto has been here for at least, I mean, over two years. So we have just announced this venture in the month of May. So, as I said, important thing would be first to get this one line fully utilized, and parallelly, we are working on the second line. And, you know, of course, yes, so working to get new business orders from, you know, the other, you know, other than our Hyundai Kia customers. So- Okay. Okay. Sir, continuing with this, so approximately, our estimated sunroof industry size is about 13-14 lakh units in FY 2024. And I just wanted to know if you have this data out of this number, how much percentage roughly is exported from India? And if you can, you know, name few of the models which get exported with sunroof. You're talking sunroof exports or the, the- Yes. The car with the sunroof, which get exported from India. So, Amit, unfortunately, I don't have that figure, but yeah, I mean, OE-wise, it is different, so it's difficult for me to, you know, revert on that, but we'll get back to you. Okay. Sir, just last one question on the two-wheeler side. How much more is the price of one shock absorber in electric two-wheeler? Or if you can, you know, throw some percentage, how much is, you know, the realization is higher in the EV? So yeah, Amit, we answered this earlier, in the sense that, there's practically no difference between EV and non-EV shocks, especially in two-wheelers. So the price also, in fact, our realization may be little better in two-wheelers, because, you know, these are new players. So realization is better, but as far as product is concerned, it's pretty much the same. No, I mean, the comparison with the EV two-wheeler versus EV, sorry, two-wheeler IC. Yeah. So, the two-wheeler EV shock absorber price is little bit higher, right? It is higher, but the product remains more or less the same. Okay. Okay, sir. Thank you. I, I'll come back to you. Sure. The next question comes from the line of Akshay Karwa with Amit Hati. Please go ahead. Hi, sir. Good evening. Thank you so much for the opportunity. Sir, a couple of questions from my side. Sir, could you talk about the industry performance in H2? How do you see the growth for the two-wheeler industry, passenger vehicle, and commercial vehicles? Any production schedule that has been shared with you, which will help with the growth, sir? Yeah. So, like I mentioned, the CV order book looks to be quite strong. You know, the CV players are going for replacement demand, I mean, the fleet replacement cycle. So CV order seems to be quite strong. Coming to passenger car, yeah, I already mentioned the order book is come down slightly at least, and now you have vehicles available when you go to buy. The waitlist has come down. But order book is strong, so even PV should definitely fall in the range of, you know, 8, 8-10%. E-CV will be definitely 10%+. Two-wheeler is what I mentioned, that while there's expectation that it should improve, but we are still seeing a very flat kind of good sell. I'm talking ICE, ICE two-wheelers. ICE two-wheelers. Got it, sir. And sir, lastly, sir, on the electronic air suspension, so, just a basic question. So when do you think the average Indian customer would want to move towards such kind of suspensions? How do you see this market evolve from traditional suspensions that we have today to electronic air suspensions? Like, where do you see. When do you see such kind of a shift happen? And, what would be the approx price difference today, sir, between the same? So, you know, the electronic suspension is, even if you see globally, it does not come in mass market cars. So, where the average price of a car itself is very high, you know, Europe or U.S. or, or Japan, the developed nations. Even in those places, the percentage of active suspension or semi-active, basically electronic suspension, is pretty low. I mean, less than 10%. So in, for that to come to India in a mass market is, you know, will be a most difficult one. Nevertheless, you should have the product in your portfolio as far as, you know, technology is concerned. And, many a times it so happens that the higher variant or the highest variant will have the air suspension. They may give an option at an additional cost. You know, simply because the cost of this is so high, in some models, it is given at an additional cost. You want active suspension, you will get it at additional cost. Got it. And what would be the approx price difference, let's say, if your traditional suspension is one X, so how much could be electronic air suspension would be of that? Like approx, ballpark number, sir. It will be more like 2.5-3x. 2.5, 3x. Okay, sir. Thank you so much, sir. That's all from my side, and wish you all the best, sir. Thank you. Thank you. The next question comes from the line of J.K.L. with ELara Capital. Please go ahead. Yeah, good evening, and thanks for taking my question. So my first question is regarding, you know, your orders. So if you see, you've got a pretty decent share and increasing share in two-wheeler ICE, similar with two-wheeler EVs, and also in the passenger vehicle, in the UV side, you are getting decent orders. Could you comment a little more about your order outlook for passenger vehicle EV side? Because, you know, typically now, you know, probably in next 12-18 months, you will see a lot of EV being, EVs being launched by the legacy OEMs in India. And, you know, the development time would be closer to at least 2-3 years, or maybe at least 24 months. So, any color you can throw on that piece of the business? And is the order wins, getting order wins in that piece a little more difficult or easier? Or if you can just throw some light on how the competitive landscape is different in that segment versus your other three pieces? Yeah. Yeah, Jay, so if you see the EV passenger car, the penetration is at 1%, and again, while there was a good improvement somewhere in Q4 of last fiscal, the volumes are more or less, you know, if you see last four to five months, it's around 7,000, in that range, 7,000-8,000. So it will still take time because, one, the cost is still high, and people still don't buy it as a first car. It is all, it's still a second car consideration. So it'll still take some time for that market to really, you know, go, penetration to improve in terms of EV four-wheelers. Having said that, our penetration or share of business in EV passenger car is low because the main player there is Nexon. Nexon is, you know, the Nexon EV itself is about 70% of the overall EV market in passenger cars, so that's why, where we are not existing. However, we have got a new model of Tata Motors, which we are developing currently, which will go on the EV as well. It has got both ICE and EV, so we are there, so that will definitely start. We are there on it. It's a very small volume, but the Peugeot Citroën eC3 that has been introduced, we are there on that model. That is 100% with us. And we are not there on MG. So these are the main, I would say, the main three, EV players in India, and the fourth is Mahindra XUV. Again, that platform is not with us. It's the same suspension, so, so your other related question was, you know, I mean, how, is it, is, is it something different, or are there some different considerations? No, I don't think so. It's just a tuning of the shock absorber, has to be done differently. It's pretty much the same technology, and the same product. Only it has to be engineered, to meet the ride and handling characteristics, which are needed to be changed because the EV weight distribution is totally different, and the battery, it's all heavy at the bottom. So to that extent, it changes. Having said that, we are also investing further in our tech center in noise testing equipment, so that we are, you know, very well prepared to ensure that our suspension is as silent as it can be, because the in-cab noise is obviously going to reduce as we go along. So that's what I had to share as far as EV four-wheeler is concerned. Understood. This is helpful. And second, on your margin side, you know, we've now come to a steady state, 8.5-6% margin, at least in the last couple of quarters. You had historically mentioned that, you know, your target is to reach, you know, 10% or double digits, irrespective of the commodity scenario or the mix scenario. It's more about your internal cost efficiencies. You know, we have seen some bit of benefit on the commodity side, probably in the last couple of quarters. So, how should one think about your margins in the next 1 or 2 years? Are we on track to reach that double digit with, you know, without the commodity benefit coming in? So, Jay, actually, on the contrary, this quarter, you're seeing a bit of an impact on the gross margins. That's on account of a different index being used by different customers and on the supplier side. So close to a 0.3% impact is on account of, sort of commodity rather than a positive effect. So, in line to what we have been saying, that, irrespective of the commodity, we have the endeavor of reaching the double digit. We are on that track. We have, sort of exhibited in the last two quarters. The plan is to continue with this, with this trend. And again, in terms of what will be the secrets of, well, Core 90 is the answer, which is essentially encompassing all the projects that we have planned to undertake to reach the double digit. Great. Thanks, and all the best going forward. Thank you. Thank you. The next question comes from Nikhil with SiMPL. Please go ahead. Yeah, hi. Good evening. I hope I'm audible. Yep. Yeah, congratulations on a good set of numbers. Just two questions. One is continuing on this margin trajectory of double digits. Now, when we had met last time, you had mentioned that if we categorize our margin across buckets, an increase in TV spend contribution actually puts a pressure on our margins. Now, in order to reach that 10% or double digit, how would the mix between the different categories have to play out? So which of these categories or segments would you say have to scale up? So that even though our PV order mix keeps on increasing, our margins can reach that double digits. That is one. And second was, I'm just curious to understand, see, we have a very strong R&D center in Chakan, which we had visited, and we have done a lot of work on the R&D side. Why did we put a R&D center in Belgium? Was it like on behalf of our customer, or what, what strategic advantage does this give us? You talked about Japan, which was that name? Sorry. Sorry? You said there's some Japan, so I didn't understand—I didn't get the name. I didn't say anything on Japan. So I said, why did we put a R&D center in Belgium while we have a center in Chakan? So just wanted to understand what advantage does it provide? Oh, it is. It's not Chakan. It's Chakan. Yeah. Okay. Sorry. I heard it as Japan. Okay, so, I'll come to the first question, Nikhil. So thanks for the compliment. As far as our EBITDA margin, yes, certainly the mix has to play a role there. That's why we are targeting, you know, obviously, adding products to the aftermarket, using our range, hitting the three areas. But I think products are also traded, you know, like, using the people, you know, brand name of... That is one part. The second is the railways. So we have developed all the products for railways. So railway, while the top line is not very big, I've always maintained, but it does contribute to the bottom line, and it will definitely play a part in terms of margin improvement towards product mix. The third would be exports, where we're working on. As I said, you know, we have now the DAF, where we are supplying the cabin dampers. Now, finally, we have got, you know, as what we had planned for, we have now got the axle damper RFQ as well. So exports will also play an important role in terms of margin improvement and sustenance. So these would be the areas whereby we will try to, you know, address it through the mix part. Having said that, passenger car, we did mention it is the most, I mean, competitive market. But nevertheless, we have, you know, as we have discussed, we have been pursuing with OEMs for some compensation. Yes, we are also looking at, you know, some improvement in terms of the realization as far as passenger car is concerned, even in the current scenario. So that was, that was for the first part of margin improvement. The second, you asked about, I mean, yeah, why we are set up in Belgium. Now, this center has been developed, set up mainly to address the passenger car segment. You know, mainly also, to get some expertise on the semi-active suspension, which is mainly in the passenger car. Two-wheelers also use to a very small extent, and we are working, we actually developed our first two-wheeler. It, you know, we ran it in a test track in Belgium, already last week. But, you know, the main focus is for semi-active suspension in passenger car segment. And that is where the skill and the competence resides. You know, Europe is, as you know, Europe, the technology levels of Europe definitely are, as far as passenger car is concerned, we all would agree it is among the best, and that knowledge does not reside in India for sure. I mean, we actually don't even have anybody with that experience in India. And we hence, you know, we have narrowed down on, you know, geography, which is right next door to the Ford Proving Track, which gives easy access for, to, us to do the testing. Second, it is also a good area, very close to Netherlands, close to Germany, close to France, you know, so it is very easily accessible, for us to, you know, locate somebody there and, visit any customer within, you know, literally a three-hour drive, one hour to three-hour drives. And the third point is, there are a lot of good universities around that area, you know, where we are able to access some good talent as well going forward. So all these three put together, I mean, it was to be in Europe, so we finally narrowed down to Belgium. And the facility there is also quite a beautiful facility at a very, very reasonable price. Based on this technology, R&D investment which we are doing, is there any related product which you can develop and probably try to enter a similar product to a suspension or a related or ancillary kind of a product? Because we are investing like INR 10 crore every year behind this R&D. So is it only for one product, or do you think we can develop more products using this technology advantage? And secondly, on the margin side, if exports, aftermarket and the other pieces have all to add up, would you say that these three or four segments have to become like 20-25% of our business for us to? Reach a double-digit margin? Yeah, absolutely. So, you know, we have, we have clearly said, you know, long-term ambition also has been to take e-exports and aftermarket to that range of, you know, 20%-25%. Definitely, that's, that's the plan. I think if there's any other product, no, right? Will be mainly, for, for, This will not, as we see this help in any other product, but, you know, once you have a footprint in Europe, it opens up doors. You know, it definitely opens up doors. We've already seen, you know, some benefits, in terms of some new opportunities have come up. You know, unless you have feet on the ground, you know, things don't happen. The next question comes from Rajit with Individual. Please go ahead. Good evening, sir. Congratulations on a good set of numbers. I just had a few questions. One is on the utility vehicle segment. Utility vehicle segment has been outperforming the other segments of the passenger cars for quite some time now. Do you think the trend is sustainable, and do you see similar kind of growth going into FY 25 as well? You mean, the utility vehicle share of the market? Yeah, the share of the market as well, and your growth within the utility vehicle segment. Yes, yes, definitely. I mean, we are definitely seeing this UV. See, currently, the UV forms about, you know, 52, 53% of... 52%-54% of the overall passenger car pie. It is expected to reach to a level of 60, 60%-65% in India. So there's definitely, you know, room for it to grow further. Entry-level sedans, as well as, you know, the hatchbacks are the ones that are taking a beating. So this will, the UVs will definitely improve. And as far as we are concerned, I mean, Gabriel, we have a good order pipeline for the UVs. So let's say we are now working with Volkswagen for the current UVs. We already have got the new platform nomination. We have got a new SUV of Maruti. That order also is with us. And there's also one Tata Motors vehicle, which is with us. So yes, certainly we see, you know, a good, good traction with regard to Gabriel and SUV segment. Right, sir. Thank you. Another question on, going back to the, the JV for the sunroof. Earlier, I think there was an estimate or a number which was shared, of a peak turnover of more than INR 1,000 crore. Yeah. I mean, I believe that would include both the lines, the 400,000 lines. Now, we are saying initially we will only focus on the 200,000 capacity. So does that mean for now we are looking at a peak turnover of approximately INR 500 crores? And a related question actually is, I mean, recently, another industry participant signed an LOI to set up a JV for sunroof. So does that have anything to do with them, I mean, looking at a lower number? No, no, no. It's nothing to do with that. We had turned on this number earlier itself, not today. So thousand crores was with two lines, yes. You know, it's all, it all, as I said, it takes time, though we have been lucky that we got a first order, quite soon. I mean, we, you know, we have put up the plant in July, and we are supplying from, you know, January. It doesn't happen normally, but that's, you know, due to the partner and the, the order that we have with, Hyundai, Kia. So initially, it's, it's, you know, uh, I mean, the first line you have to stabilize, and then the second line will come. I mean, I don't think that we are taking any... Let me put it this way, we are not going to leave any opportunity unanswered as far as sunroof is concerned. And if it calls for us, if the demand is so that we have to put up one more line, let's say even in a different geography, we are completely, you know, ready for it. Okay. Thank you. Clarify, we are not changing the numbers that we had shared earlier. We are saying that as of now, we are stabilizing the first line, and thereafter, we're gonna follow it with the second line. Right, sir. Great. Thank you. Thanks a lot. Thank you. Next question. The next question comes from Viraj, with SiMPL. Please go ahead. One of the, you know, the first line which we set up. So I think 60%, you know, if you look at targeting 50% in the first, it's a very good scale of which we are looking at. So in the second line, you know, what is it typically a lead time for one to establish it, either at existing or any other new location? Sorry, Viraj, can you repeat it once more? Yeah. So I'm saying that, you know, for us, looking at, say, around 60% utilization in the first itself is a very good target to, you know, achieve. But if you were to look at adding second line, usually what is the lead time for one to do that, either at a new location or existing? No, existing locations, we have ensured that we have enough space to put one more line. I mean, that's how we have planned it, you know, in that Chennai factory itself. So putting up a new building is not required. But getting the new line, that development period would be close to 30, 30 odd weeks. Okay. And, the supply ramp-up, which we are looking at, would include both Hyundai and Kia as well? Because I think even for Seltos, we were earlier looking at. Hyundai and Kia. Not Seltos, but, the other model of, Kia. Okay, so this would include. The 60% would include both the OEs. No, it will only include Hyundai. This is only Hyundai. The Kia one will kick in from January 2025. It'll take this utilization even higher. Understood. And once the operation kind of stabilizes, I think earlier we had shared of a double-digit operating margin after a djusting for all the royalty payouts. So this still holds true for the business? Yes, it is. Okay. Last question was on the CapEx part. You know, we earlier shared about +100 crore CapEx on the standalone entity. But if we look at the first year half, you know, we've kind of spent around INR 35 crore. So, are we still? Is there any revision, or are we still looking at that kind of a CapEx out here? We have, I mean, INR 120 crore of the CapEx on standalone, was, sort of the total commitment that we do, that, that we will do. The cash flow will be obviously different in different parts of the year. Our rough estimate still stands at INR 100 crore. It can be a little, sort of, the payout can happen, or flow in the 2024, 2025 as well. Understood. Okay, fine. Okay. Thank you. Good luck. Thank you. The next question comes from Amit Hiranandani with Smith Limited. Please go ahead. Hi, sir. Sir, any talks with the group for reducing the royalty payment? We did discuss when we met last time that, you know, we of course have noted all your inputs. Is all that we can say right now. Okay. Sir, how much royalty Gabriel has paid to its technology partners in FY 23? What figure is that? In FY 2023. Amit, I'll come back to you. It's around, yeah, it's around INR 40 million. I'll come back. About INR 4 crore, but that's there in the annual report as well. Yeah, it's in the annual report. Yeah. Okay. So just last question on the FSD tech. So any client addition or product wins on this FSD side? Yeah. So we are working with two clients, two other OEMs, you know, who like this technology. Not yet resulted in a business, but we have developed the suspension. We are actually fitting it on their vehicle and testing it out. Sure, sir. Thanks a lot. Thank you. The next question comes from Srihan, our private investor. Please go ahead. Thank you for the opportunity. Hello? Yeah. Yeah, go ahead. Yeah. So just want to understand the competitive landscape in the PV segment. You are at 25% share. How much would be the other players? So number one is Tenneco. They have, I would say, close to 40%. And the other player is Mando, who is Anand Group JV company only. They address the Hyundai and Kia, which is about 25%. Okay. Thank you so much. So Motherson is not in this space? Yeah, they have a JV with, you know, it's Motherson Magneti Marelli. There's only one plant, which mainly does exports, you know, to back to Italy. Fine, sir. Thank you. Thank you. Thank you so much. Thank you, ladies and gentlemen. This concludes our question and answer session. I would now like to hand the conference over to Mr. Manoj Kolhatkar for his closing comments. Please go ahead. Yeah, thank you. So thank you, thank you all, for those interesting questions and your opinions. So yeah, we, we, we are quite, you know, happy that we have been able to deliver on what we have been telling in terms of margin improvement, in terms of sequentially, you know, growing ahead of market. Yes, and we are very excited with this new JV and the new sunroof plant. And yeah, I was there last week. It was very heartening to see, you know, the first new products being dispatched to our customer. So, so yeah, I think it's, it's, it's a good note for all of us to, you know, start the festive season. So all I can wish everybody is very, very happy and, you know, a safe Diwali and a prosperous new year, and look forward to meeting you in the next call. So thank you. Thank you so much. On behalf of Gabriel India, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.