Ladies and gentlemen, good day, and welcome to Alicon Castalloy Limited Earnings Conference Call. As a reminder, all participant lines 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 this 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. Mayank Vaswani from CDR India. Thank you, and over to you, Mr. Vaswani. Thank you, Neeraj. Good day, everyone, and thank you for joining us on Alicon Castalloy Limited Q1 FY 2024 Earnings Conference Call. We have with us on the call today Mr. Vimal Gupta, Group CFO; Mr. Veera Babu, Group COO; Mr. Shyam Agarwal, Chief Marketing Officer at Alicon Castalloy; Mr. Andreas Heim, Managing Director of Alicon Castalloy; and Mr. Rajiv Gupta, Head of Domestic Business of Alicon Castalloy Limited. Mr. Vimal Gupta will cover the financial performance for the quarter, following which Mr. Agarwal will walk us through the operating highlights. Thereafter, Mr. Andreas Heim and Mr. Rajiv Gupta will provide insights on developments in the global and domestic markets, respectively. Mr. Veera Babu will then share a brief summary on key focus areas, after which we shall open the call for the Q&A session. Before we begin, I would like to point out that some of the statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings documents that have been shared with all of you earlier and have been uploaded on the respective stock exchanges. I would now like to hand over the call to Mr. Vimal Gupta for his opening remarks. Over to you, sir. Good afternoon to all our investors. Thank you for taking the time out to join our earnings call. I trust that all of you have had a chance to review our earnings documents, which were shared yesterday. As we have indicated earlier in 2018- 2019, it was the best year in the last few years for the global auto industry. Our assessment is that in quarter one of FY 2024, the domestic industry has reached a performance level of approximately 81% of the baseline in quarter one of 2018- 2019. For the international auto industry, the rate achieved in April to June of 2023 is about 84% level of the production in April to June of 2019. At Alicon, our revenue performance in the first quarter is around 120% of the benchmark that we had set in the corresponding period in FY 2018-2019. This clearly shows our performance when we compare to global and domestic auto industry. It has been driven by the addition of new parts as well as new customers. When we done business transformation involves a strategic focus on multiple revenues for growth, which we have categorized into five pillars. These pillars are: continue to scale strategic production in the IC business, addressing the opportunities from carbon neutral technology, including battery electric vehicles, hybrid electric vehicles, fuel cell, and hydrogen cell technologies. Opportunities from structural parts, technology, agnostic parts, which remain consistent no matter which fuel technology is used to power the vehicle. Non-auto business, surpassing opportunities from sectors such as defense, energy, telecom, to name a few, where our competencies can be leveraged. Enhance customer wallet share through value-add and combining products to offer our customers a one-stop solution. There are some key themes for investors to monitor and to evaluate our progress, and to understand the areas in which Alicon has transformed the business model. The first step that we had communicated and which is visible in the business is the mixed product mix. The share of PV and CV in our revenue mix has been steadily decreasing as we have focused on scaling up business from these segments, as well as carbon neutral technologies and technology agnostic parts. Their share of business from these segments will grow at a faster pace than from two-wheelers, leading to better product mix. Secondly, the customer profile is changing, and there has been addition of some multi-global names to our customer list. There has been a considerable increase in the number of leading global OEMs and Tier One suppliers that we cater to. Thirdly, the component of business that is emerging from expertise in design, research and development and value engineering is increasing. Earlier, the key levers for business wins were reliability and cost competitiveness. Today, Alicon is winning business due to capabilities and design engineering, which is contributing to the changing nature of the business. Customers now look at us as a solution provider rather than a source of lower-cost components. Against that backdrop, I will now run through the financial performance for the quarter under review. In quarter one of financial year 2024, total income stood at INR 355 crore, as compared to INR 344 crore in Q1 of FY 2023, higher by 3% on a year-on-year basis. More importantly, on a sequential quarter basis, we have delivered a revenue growth of 11%. This has been driven by production, commencement of new parts and new customers. Some of our customers witnessed longer than expected demand, resulting into increase in volumes. There was also some benefit of two-wheelers volumes as OBD regulations, which kicked in from April, contributed to volumes which spilled over from quarter four. As a result, we have witnessed a slight increase in utilization level for plant in India and Europe, which operated at a utilization level of around 65%. The gross margin for the quarter, which was 50.42% in quarter one of financial year 2024, compared to 47.48% in quarter one of FY 2023, is higher by 294 basis points on year-on-year basis, largely due to a more favorable product mix. There has also been a slight contribution from the stabilizing of alloy prices at lower levels. On a quarter-on-quarter basis, the gross margin has reduced from 51.6% in quarter four FY 2023 to 50.42% in quarter one FY 2024. This quarter, we consumed higher cost inventories, which have now fully passed through the system. There has been a sharp rise in employee costs, which are higher by 20% year-on-year and 13% over the immediate preceding quarter. This is due to increasing in minimum wage, as well as the effect of the increments which have kicked in from April onwards. Lastly, there was the impact of the ESOP cost of around INR 3.3 crore, which is a non-cash charge. Other expenses were lower on a quarter-on-quarter basis, as we have focused on cost cutting initiatives as well as at all levels of the organization. Moving on the profitability front, EBITDA for the quarter stood at INR 40 crore, against INR 38 crore in the corresponding quarter of the last year. Margins for Q1 2024 stood at 11.3%, as compared to 11% in the quarter one of FY 2023. I am pleased to share that despite the increasing costs, we have reported an improvement in the EBITDA margin by 13 basis points on a year-on-year basis and nearly 100 basis points on a quarter-on-quarter basis. Importantly, if we adjust the non-cash charge for the ESOP cost, the adjusted EBITDA margin is 12.2% this quarter. This is an increase of over 100 basis points on a year-on-year basis and close to 200 basis points on a sequential quarter basis. Some of you would recall our earnings call in the prior quarter, where we had indicated that we will increase the EBITDA margin by 100 basis points in FY 2024. We have done more than that in the first quarter itself and are going to build up on this through the year. We remain confident about the general forward direction in margin given improving product mix. We are on the cusp of launching our captive solar plants in India and Europe, which will contribute to assured power while helping to ease the power and fuel costs. In the prior quarter, we had indicated that we had incurred upfront costs due to the initial stabilization requirements of new products, which have now been stabilized and are contributing to enhanced unit contributions. Finance costs were higher by 33% on year-on-year basis, from INR 7.1 crore to INR 9.5 crore, in line with the increasing in interest rates. We also witnessed an increase in the depreciation, which was higher by 23% on year-on-year basis from INR 15 crore in quarter one of the last year to INR 18.4 crore in the quarter one of the financial year 2024. The increase in depreciation has been driven by two factors. One, we have taken some machines on lease, and as per accounting standards, we have to factor the maximum useful life of five years, which results in a higher depreciation cost. Secondly, we reevaluated and shortened the useful life of some other assets, which has also contributed to the increase in depreciation. As a result of higher finance costs and depreciation, profit after tax for the quarter one of FY 2024 stood at INR 9.5 crore, as compared to INR 10.8 crore in quarter one of FY 2023, lower by 12% on a year-on-year basis. On a sequential basis, sequential quarter, PAT was lower by 2% from INR 9.7 crore to 9.5%. It must be noted that PAT in quarter four of FY 2023 included a reversal of a deferred tax of around INR 6.85 crore, thereby elevating the base. I'm pleased to share that our board of directors has approved a final dividend of INR 3.75 per share of a face value of INR 5 each, which equals to 75% rate of dividend. In addition to the interim dividend declared earlier, the total dividend for the financial 2022-2023 comes to INR 6.25 per share of a face value of INR 5 each, which equates to 125% rate of dividend. This is substantially higher than the dividend paid in the prior years, which reiterate our focus on shareholders value creation. On the CapEx front, we have deployed INR 50.6 crore during the quarter and continue to have a target CapEx deployment of around INR 90 crores in FY 2024. Coming to outlook, with a strong start of the financial year and a healthy pipeline of SOP of new products and new customers, we are poised to take the business to new heights. We aim to deliver a revenue of over INR 2,200 crores by 2025- 2026, against the earlier estimates of INR 2,000 crores. This equates to a CAGR of over 16% over a period of three years. Our confidence stems from the new orders which we have received and the discussions with the customers on new technologies and solutions. This will be accompanied by an improved margin profile, and we aspire to take the margin to around 14%, and we have already attained a registered limit of 12.2% in quarter one of FY 2024. Which we will look to build up, build on further. Lastly, we are looking to drive efficiencies across the balance sheet and working capital, which will contribute towards enhanced return ratios, too. On that note, I would now like to hand over to Mr. Shyam Agarwal, who will talk about operating highlights for the business. Thank you, Mr. Vimal. Greetings to all of you. As Vimal has indicated, we have started the financial year 2023-2024 on a positive note. We have performed well in new markets and new products. The industry backdrop remains mixed, with some segments reporting good momentum and others witnessing challenges due to supply chain issues. Despite this, we have delivered good revenue growth, especially on a sequential quarter basis. During the quarter, we have added 17 new parts from 11 customers, including two new logos. This includes three parts from the EV, six front parts from the ICE, three parts from the non-auto, and five parts from the structural segment. Out of the 17 parts, 10 parts are for international business and seven parts are for domestic business. During the quarter, we have added a new part under the eHighway segment with a prominent European customer. We also added a new part in a new market for autonomous driving with Volkswagen Commercial. These businesses will showcase capacity and capability to both existing and potential customers. Alicon has also won its maiden order amounting to 90 crores per annum, requiring application of the friction stir welding technology from a European customer for a EV application. The FSW technology can be a key enabler for us to increase the EV business two folds by 2025-2026. In the ICE segment, we have added a new subcategory of products with our existing customer, Daimler. We have increased the wallet share from Maruti Suzuki with the addition of new cylinder heads. In the non-auto business, we have added business in the existing portfolio and are in active discussion with existing customers for further addition of parts. During Q1, FY 2024, Alicon has booked new orders aggregating yearly average sale of nearly INR 10 crores. With this, our total order booking has reached to INR 8,500 crores, which is executable over a period of six years from 2023-2024, up to 2028-2029. The other aspect to highlight is the improving product mix. From the new business won, about 52% are from the carbon neutral business, which is a value positive. Further, 90% of new business during the quarter is for four-wheelers, which we will look to enhance the product mix further. The commencement of supply for these orders, along with the start of production across our aggregated orders booking, will contribute to the revenue momentum. We remain cautiously optimistic about our prospects, even as forecasts for the global auto industry indicate possibility of a sluggish second half. Another focus area for our value creation approach is to increase the value addition mix from our products for four-wheeler and the EV segment. In carbon neutral technology, we are in discussion with existing customers to increase the scope and our portfolio. Our focus remains on passenger vehicles, commercial vehicles, and export opportunities, as we see a greater scope of value addition in these areas. The focus is to continue to build the position of Alicon as a consistent and reliable supplier with a solution-driven approach. Customers should understand that Alicon will offer unique solutions while leveraging newer technologies. We had talked about 3D sand casting in the prior quarter and have made good progress in friction stir welding, too, with our maiden order win. These applications will enable us to offer parts for the future, which are light, strong, and of high quality. On that note, I would like to hand it over to Mr. Andreas Heim to throw light on the global business. Thank you, Shyam. A warm welcome to all of you. I will briefly cover the developments on our international business. The international business has done well, and we have surpassed our targeted production for the quarter. European operations are gradually emerging from the challenging situation witnessed last year. Gas prices have stabilized and energy availability has improved, which combined with some cooling in the oil prices, is providing our customers confidence to start ramping up their activity levels. In our existing business this quarter, we witnessed an increase in EV products for Samsung, which is a Tier One supplier. As explained by Shyam, we have added five new parts from two new logos this quarter in the global business. We have added a part from Volkswagen Commercial Vehicles for autonomous driving application. Sorry to interrupt. Sir, there's some kind of sound from your side. Let me just try and reconnect. Participants, please stay connected while we rejoin the management line back. Ladies and gentlemen, thank you for your patience. We have the line from the management reconnected. Sir, you may go ahead. Thank you for reconnecting me. As explained by Shyam, we have added five new parts from two new logos this quarter in the global business. We have added a part from Volkswagen Commercial Vehicles for autonomous driving applications. While we have done work for the passenger vehicle business for Volkswagen, this is the first time we are working for the commercial arm. We have added four parts with some prominent European OEM, leading to additional another marquee logo for us. We have also been invited to work on development for a prototype for path-breaking project. This emerges development of eHighway for electrification of highways. This will be achieving by providing overhead lines, as it done in the case of railway lines. The key challenge for electronic commercial vehicles in the size and life of the battery, the eHighway concept that is being prototyped, which will enable commercial vehicles to recharge on the move, which will solve for the challenges of battery size and infinite charging infrastructure. We are also in discussion with a marquee global customer for a new part on the category of structural or technology agnostic parts. The order, which we have received from Taylor last year, is progressing well, with involvement of the best technology and resources, both locally and overseas. As we had indicated last quarter, the end of the winter has added demanded for two-wheelers, and we have seen that reflected in increased volumes for BMW and KTM, which picked up as indicated. The global business contributed to 23% of the global revenue during this quarter. It's slightly higher than the contribution from quarter four, 2023, as well as the previous financial year. On our initiative to reduce costs, we can share that we have commenced installation of solar panels. We expect this to be activated in quarter three, which will lead to reduction in energy costs and reduce the carbon footprint. The outlook remains mixed, the stabilizing of energy costs and commodity prices can improve prospects. The forecast for the auto industry indicates softening of demand over the course of the year. Against our original expectation of 5% growth for the global auto industry in calendar year 2023, we now anticipate a growth rate between 4%-5%. On this note, I would like now to hand over to Mr. Rajiv Gupta, who will cover the developments in the domestic business for the quarter. Thank you, Andreas. Good day, everyone. In quarter one, FY 2024, domestic automobile market with just 3% growth on a year-on-year basis, driven by 7% growth in the passenger vehicle, 1% growth in the two-wheeler segment, and 2% decline in the commercial segment on a year-on-year basis. The domestic passenger vehicle industry volumes grew by 7% year-on-year in quarter one, amid ramp up in the production and continuing interest in the SUVs. Domestic two-wheeler industry was expected to benefit from a spillover in the demand from quarter four, FY 2023, due to the impact of OBD regulations. However, there was only marginal increase in the volumes due to supply chain issues with dealerships. Two-wheeler exports also remained weak on year-on-year basis. The domestic commercial industry volumes declined by 2% year-on-year. The sequential decline was sharper than usual due to seasonality and some postponement of demand in quarter four, FY 2023, because of the RDE and the OBD2 norms that coming into effect from April 2023. As explained by Mr. Shyam earlier, on new business, we have added seven parts from six customers in the domestic business. These are largely existing customers for whom we have experienced expansion of portfolio. We have increased the portfolio with Maruti Suzuki with addition of a four-wheeler cylinder head. Further, we have added a new subcategory, cylinder block, in a prominent domestic customer, resulting in increase in the content per vehicle for us. In a domestic two-wheeler customer, we have increased the portfolio with addition of a new part and will also contribute to increase the content per vehicle. In the non-auto business, we are working on the tenders for the two products. One is for the supply of wheels for the battle tank, and we are also in line to win the order for a cylinder for the heavy-duty defense truck, which will come into production in the coming quarters. On this note, I would like to now request our Group COO, Mr. Veera Babu, to share his perspective on the performance for the quarter. Thank you, Rajiv. Good day, everyone. It's a good performance this quarter, a good performance compared to the domestic and global industry. We are actively working on certain initiatives to further build on the momentum. In order to further elevate our manufacturing excellence and process expertise, we are actively implementing digital process controls. This will ensure that our production process is elevated by an additional layer of supervision through mission intelligence. This will also provide us data which will help us actively manage the operation, as well as provide inputs for better decision-making going ahead. Secondly, we have taken the initial steps in our automation journey. A detailed roadmap has been drawn of elevating the areas in which automation can be introduced in our process. We are working on assessing the advantages and the efficiencies which will bring, and various parts are being demonstrated into those that can be fully automated versus those parts that can be only partially automated for now. As a forward-thinking organization, we are seeking yet protect ourselves from any risk to the competitiveness from rising manpower costs. As we progress on this journey, we are confident that automation will bring a noticeable benefit across the process excellence and product quality in addition to cost benefits. We have significant aspirations to build the business further and have elevated our people processes. The focus is to acquire rich talent with the right technical experience. As we seek to increase customer value share and enhance the share of value addition, it is essential to add the right talent, which will enrich organization potential. We are actively adding associates with casting expertise and leading expertise to our global teams. In order to better deal with the complexity, we are adding experts from Europe, who possess skills in design and tool development. By placing these experts in our European operations and leveraging the global teams for prototype development for our global customer, we are ensuring that we are closer to the customer and are contributing to shortening the timelines for development. As we shared earlier, we are actively working towards increasing our sustainability footprint. Our captive solar plant in India has been commissioned and will begin contributing to energy consumption and contributing savings in the current quarter itself. The installation of solar panels at our facility in Europe will be completed in this quarter and begin contributing in the third quarter. These initiatives will be meaningful transformation our energy mix. On this note, I would like just to moderate to open the forum for any questions or suggestions that you may have. Thank you. Thank you very much. We now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their customer 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. Participants, you may press star and one to ask a question. The first question is from the line of Raghunandhan N L from Nuvama Research. Please go ahead. Thank you, sir, for the opportunity and, good to see you guys. Your sound is little distant, may I request you to speak a little closer to the mic? I hope it is better now. It is heartening to see that the revenue target has been increased to INR 2,200 crore. On my questions, firstly, can you give some color on execution of new orders in FY 2024? Would you expect revenue to be over INR 1,600 crore this year, sir? Raghu, for this, we are expecting to reach around the INR 1,600 crores, because there we, the second quarter will be the most critical, means second half of the year will be the most critical, because we are going to implement the various new projects. The delivery will start, and there is a ramp-up in the volumes for the new projects. Let's see the market, but we are expecting to reach that level of INR 1,600 crores. That is the target we are having in this year. The ramp, which you are talking about, can you call out which would be the main one? Would it be JLR, Toyota, and PSA Group? Yeah. The ramp up we talk about, the major contributors would be Toyota. Everyone knows Toyota is doing quite well. The vehicles which they have launched, the Hyryder 1.5 L, and also Hycross, and this is added with the launches even declared by Maruti, because it's the same platform which the vehicle will go. Toyota has given an official indications to relook on the capacities to support in the quarter two and quarter three. The main contributor is, yes, Toyota. Second is PSA, yes, which you all know, they have already invested in a plant in Bangalore, and SOP have just started. This also will productionize. We are expecting numbers to add from next month. The good thing is, this is for the domestic as well as the French market. We know the vehicle which they have launched, Citroën C3, is checking quite well, and we have good response from the French market on that car. Third more contributor would be Maruti Suzuki. As we have explained, we want to increase the portfolio in the passenger vehicles, especially in the markets and area where we were not there. Cylinder being a very critical and good week, high. I mean, this showcase our capacity and capability, and that we are aiming and which we have noticed in last quarters, we are expecting additional businesses with Maruti. Yes, we have these parts going into supplies now, and we are expecting one more Cylinder will join in the coming quarters. For, month three, we are expecting a good jump in the volumes in the coming quarters, especially from the quarter three, in the second half. Got it, sir. On JLR side, you know, like, the company announced that they will be starting the bookings of their upcoming electric vehicle from October onwards. Even our supply should come in? This JLR eAxle, which we were announced, I think it was in October, sorry, August last year. The business, what we have backed it in for a platform which will come in 2024, 2025. We are working in a right pace on that project, and even we have given them an option where even JLR first time is working on that model of a critical development of a eAxle, where they have done various iterations. Here we are on right track, but this will come in SOP in next year, not this year. We are seeking to get support, major jump in 2025- 2026 from that project. Got it, sir. To add, to add on, basically on the previous point, even we are noticing on EV, the demand increase for Tata Motors. And we have explained last time, two of the motor housing we have already added, and this is now gaining a momentum. Also, we are coming across from customers that similar platforms are also exploring to other OEMs. This is a very good opportunity where we get immediate volume increase for a start what we developed. Also DANA, which we added, is now doing quite well. These are some of the main contributors which, basically drivers, which we think will support us to boost. Let's keep our fingers crossed, because we know market is still volatile. What we understood from markets, especially on global, first half, it noticed a growth of 10%. We noticed in the second half, the increase, what we are expecting is 1% or 2% only. That's because the U.S., we know the interest rates have, it's at the peak, and other challenges in economies like China and so on. Yes, we are ready on those term. Also, we are exploring Plan A, Plan B, just to see that we don't fall back with the capacities, what we are putting for these members. In addition to this, like, the ramp up of the new projects, as well as what we are seeing, that there is a shift of business, like Eicher, what they are sourcing from China. They are shifting to India, and we have almost finalized their one big business with Eicher. Hopefully from quarter three, we, that, supply, we will be able to start. Which was the company, sir? Tata AutoComp. Component for the Tata Group. [crosstalk] That's fine. Thank you, sir. Thanks so much for the detailed response. Vimal, sir, on the ESOP cost, the INR 3 crore cost was there in Q1. Is this expected to remain even in the subsequent quarters? This is for this year. From the next year, it will be very small amount. Only, this amount is coming to, for the current year. This is a normal cost. all things remaining constant, Q2 onwards, we should see margin around 12%, then? Let's see. Yes, sir. The captive solar plant in India and Europe coming in Q2 and Q3, Mr. Veera Babu spoke about it. What kind of cost benefits can it provide? In India, almost we are expecting to make a saving of around INR 4-5 crores in a year. Got it. In Europe also, let's say, I think, four plants, let's say INR 8-10 lakhs, not a big jump, big savings, they are also bill for this solar power. Got it. For the full year, yeah, is it fair to assume around 12% margin, or would you see any risk for that? Yes, sir, we are hopeful that we will be able to deliver this and much maybe better. Yeah. It depends on the performance, because the kinds of so only this, what we are seeing the second half, how this overall economy performs in global markets, especially. Otherwise, we have very strong order book, demands are there, and we are seeing improvement in operations, costs are going down. Let's see. Got it, sir. The journey from 3.2% of gross margin in Q1 going towards 15% margin by 2025. Is it right to assume that, one, scale benefits, second, mix improving towards more value-added and overseas products, and third, your cost-saving efforts like automation, you know, like, what do you think would be the top two, three factors which will take you to 15% over the medium term? The main is, the most important is the product mix. What we are watching. Especially as you are aware that our contribution from the two-wheeler that was higher than earlier studies started going down year-on-year basis. Right? That we used to have more than 50% the year back. Now we have reached up to 43% this quarter. That is one. Second is the cost down projects, what means our efforts to reduce our cost. The third is, like, in last on-call, we've explained about the stabilization cost of the new projects. Hopefully, that's new projects have started stabilizing, so Production cost have started going down. Another benefit, generally, we get that economy of scale. Got it. These are the factors those are going to drive to improve our margins in the coming years. Got it, sir. To add on, we are working with a concept where we can increase our sales per machine. The reason we are exploring more towards the bigger and bolder part, which will give us more revenue over the traditional parts where we went to. If parts are small, we are working in a model where we can offer customer a multiple tooling solutions, where again, with the aim to increase our sales per machine. Got it, sir. Thank you so much for that. Last two questions from my end. Sir, on the debt side, how do you see the reduction in net debt? I mean, we are planning a CapEx of INR 90 crores, but given the kind of growth we are seeing, we should be generating positive free cash flows. How do you see the trajectory of debt reduction over the next two years? Let's see. Based on estimates, I think, at this moment, we are near to INR 300-INR 290, or INR 295 crore, in that range, INR 300 crore. Hopefully, in next two years, I think INR 10-INR 20 crore, we should be able to reduce our debts. Got it. Last question on the tax rate, what rate should we work with, sir? Around 44%-45%, would that be a fair assumption? New rate design, we have now started following, so this will be coming in the range of 24%-25%. Got it, sir. Thank you. Thank you so much. Very useful. I'll come back to you for more questions. Thank you. Thank you. Next question is from Saurabh Jain, from Sunidhi Securities & Finance. Please go ahead. Thanks for the opportunity. I have a couple of questions. First, to begin with, sir, you have upped your revenue guidance by almost 10%. That's quite good. This proves our confidence and, you know, the momentum in the orders. I just wanted to know, would you still call it conservative, as we had been mentioning that INR 2,000 crores is a conservative number? Yes, uh that actually in our speech, I've already explained that we have now improved our guidance from INR 2,000 crore-INR 2,200 crore, to 2025- 2026, so approximately a CAGR of 16%. we, as I was explaining to Raghu, that we have a lot of opportunities are coming up, especially one we are talking about the development of the new parts, because that needs little time for the ramp-up coming and converting into the volumes. another good thing is that we are receiving lot of inquiries, and we are in discussion with various OEMs or the Tier One suppliers about the shift business. the resourcing of those parts, either from China or from other vendors or other countries, that is, got it started. hopefully we will be able to revise our guidance for 2025- 2026 in the next quarter, maybe next coming six months on the other side. That's great to hear. Sir, my next question is on gross margins. On sequential basis, our margins have built. What is the outlook going forward? Do we see margins improving with metals stabilizing now? The metal is almost stabilized. Definitely our focus is more on the improvement of the margins. We are working on each and every area of how we can improve this. Like major focus is from the change in the sales mix. The product mix is going to happen. We have already explained the order book size, the new orders, what we are getting from the new customers or new parts or from the existing customers. That is happening and more, and we are going for the new businesses. We are really focused on the margin side and ROC. That is definitely in the coming year that we will be able to improve our margins. Okay. For last couple of quarters, it was below 49.5%. Now this quarter it is at 50.4%. Like, can we assume like around 51% for this full year and onward? We hope so. Totally depends on the product mix, but definitely, our assumption is also that it should improve. Okay. My last question, sir. What number should we work with for depreciation and finance costs for this year, since these numbers are on the higher side this year? Like interest cost, one is, then that has impacted our, what we call, interest rate increase. That is the last year's happened. Hopefully, because we don't know, but at least we are hoping that as stabilized, there will not be any further increase in the interest rates in the coming period. On the other side, now we are more focused how to reduce, because some opportunities like the export is increasing. More focus on the like PPSC, so take that benefit and reduce our interest cost. Another little bit, interest, increase in interest cost is from the, our lease assets. Depreciation is also increased, like, when we generally, our life of an asset, we consider 12, 10 years or more, so for the depreciation side, but for the lease assets. That has also impacted on our depreciation of approximately around INR 40 lakh-INR 50 lakh this quarter. We have also made some corrections in the life of assets, because based on what expectations of the utilization of those assets, that also impacted around INR 70 lakh-INR 80 lakh in this quarter. Should we work with this, INR 18 crore of depreciation on a quarterly basis for next quarter? Around that, yeah. That's all from my side. Thanks for all the help, sir. Thank you. Thank you. Next question is from the line of Yash Dalal from Sushil Financial Services. Please go ahead. Hi, firstly, congratulations to the management. Sushil, your audio is coming very. Sorry, Yash, your audio is coming very little. Yes. Can you hear me now? Hello. Slightly better. Slightly better? Yeah. Yeah. Hi, firstly, congratulations to the management on a better set of numbers and stronger margins, and thanks for this opportunity. Just a few questions. First, you mentioned the introduction of a new technology, friction stir welding. What exactly is this technology? Like, what are the opportunities? Could it be a game changer? Also, you've received an INR 90 crore order for this, I believe, from your commentary. Yes, thanks for the question. Friction stir welding is a solid-state joining process. It has lots of applications in the EV, and it has lots of advantage as compared to the current processes which are in the industry right now. We have got the new order for this technology from a European company that is worth INR 90 crore. We are in discussion with couple of more customers for this technology. I hope we will be in a better state to give you further update in next two quarters, once we will finalize the next orders from the new customers. To summarize, we see a good opportunity in the field of FSW to bring new orders and improve our product mix. This is a great opportunity, what we are seeing at this moment, because we are new and this is a patented technology that we have brought in India, and there is a huge demand for this product. This is the initial start. We are not in a position to give some guidance on this, the numbers. Big opportunity we are seeing here. We will be able to give more clarity in the coming quarter, maybe next quarter or next six months. Yeah. To add to this point, basically, the opportunity to increase value addition is there when we give assembly parts, when we talk about EV. This is again one of the tool which will help us to give a assembly part to a customer and fetch a higher revenue. Basically, what we gave, what we At this moment, these technologies are there in Europe and China, very limited in India. We've become a first mover with this technology, and we are quite sure with the production of this technology, a lot of RFQs and requests will come from the existing prospective customers, which is in line with our strategy to increase our portfolio in the carbon neutral footprints. Okay, that's clear. Just another question. JLR is setting up a battery manufacturing plant in UK, and supposedly supply the battery housing and motor housing. Once this plant is set up, what are the opportunities and prospects for Alicon in this? Yes, we also came across this news in last week, where Tata and JLR are coming up with a plan maybe in central of England or maybe Spain also they're exploring. Yes, at this moment, we are focusing on the bigger factory of battery manufacturing. One is, we still will have an opportunity to supply battery housing. As you know, we have already developed this battery housing from a European entity, and this where we have given a solution over a traditional way of making a battery packs. Yes, one is, the eAxle part, what we added will demonstrate our customer also handling such a big and critical part, add on, what we have applied. Yes, we are in close discussions and will be in close discussions to seek further opportunities under this project. Okay. Okay. Okay, thank you so much Thank you. Other member press star and one to ask the question. Next question is from the line of Suhas Nair, from CRL Capital. Please go ahead. Hello. Yes, go ahead, Suhas. Yeah, thank you. Congratulations to management on the good set of numbers. I have a couple of questions. One is on the new areas. There are two areas which you talked about. One, you made a big mention of defense, entering defense. Could you talk a little bit about what is the opportunity that we are looking at in defense? This is the first area. The second area you talked about, you know, on the road charging, I just want to understand where is the opportunity for us in this area? Could you just give us some idea about these two areas? Yeah. Suhas, thanks for your question. In this defense, we are already supplying the parts to CVRDE, that is the India Defense, which is situated in Chennai, and we are already supplying the road wheels for the Arjun tank. We are quoting the new tender, which will be for the next three years, and it's a big order for Alicon. That is the first one. Secondly, we are already supplying the cylinder head for the defense truck to BEML, and right now we are getting further tender of a much, much bigger quantity, so which we have already quoted to them. We are the single source for all these two customers. We see the revenue will increase, and the orders we will be get, that will be for next three-four years. Okay. What could be the rough indicative size of these orders be approximately? These orders value will be roughly in the range of 15- How much? INR 15-20 crores per year. Okay. Okay. The other question, you know, very broadly, we are actually, as you said, 52% of the orders would be coming from the newer areas, the technology. Why, why are we only assuming a 15% growth? It looks like all our efforts by you over the last few years, you are at kind of an inflection point now. At least that's what we heard from. I kind of heard through all the leaders in the senior team. Why are we just keeping ourselves to a 15% growth? You have rightly pointed this point from your side. What we are noticing, earlier, there were dominant players in the market, even the development cycles or development lead time or project life of our products were very high. Now, there are a lot of competition in the market, and the project life have come down. That we are factoring below, like earlier part, which was developed, will continue for 10-15 years. Like, for example, Maruti Cylinder, which we developed for the 800, where we were supplying till around 30-35 years. This has come down. Also we are noticing some of the projects we developed and some even don't click in the SOP. Those things we are keeping in mind, and now, even new technologies are coming up from IC to EV. We know very well in EV also, a lot of transformation will come. Like, for example, we came across one article where Toyota is working on a new technology. It's a solid-state battery, which can run 1,200 km in one stretch, and the batteries can charge in just 10 minutes. We know very well a lot of companies are working in different adjacent technologies to grab the market and dominate the market. With those parameters, we are keeping our fingers crossed. Point that opportunities are there. We are at this moment just a little bit on the conservative side, when things move, when we reach a very advanced stage, then we start revising our guidelines. Lastly, on the margin front, we have said 14% is what we are aiming for 2025, which is quite a good margin from where we are right now. Is there a feeling there actually in terms of, because I know there is a huge operating leverage? We are just 65% utilization right now, so operating leverage itself should take the margins to that 10%-14% kind of a range. Apart from that, you're saying we are shifting from a two-wheeler, which is a low margin, to, most of the products now will be in the high margin category. Put all this together, and you're working on technologies where the by itself there will be a better pricing. Taking all these into consideration, is there a feeling of 14% out there in terms of margin at this utilization? For this, let me because you may have explained that we just work on the conservative side. Let's see, because earlier also we were not expecting that the kind of margin growth in the quarter one. With the kind of projects we are doing for the cost reductions and change in the product mix, hopefully we should be able to deliver better. Thank you. Thanks a lot, and all the best. Thank you. Thank you. You may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. I now hand the conference over to management for closing comments. Thank you. I hope we have been able to answer all your questions effectively. Should you need any further clarifications or would like to know more about the company, please feel free to contact our team or CDR India. Thank you once again for taking the time to join us on this call, and we look forward to interacting next quarter. Thank you very much. On behalf of Alicon Castalloy Limited, this concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.