Ladies and gentlemen, good day and welcome to the conference call of Amber Enterprises India Limited to discuss the manufacturing collaboration with OPPO Mobiles India Private Limited. As a reminder, all participant lines will be in the listen-only mode, there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. I now hand the conference over to Mr. Jasbir Singh, Executive Chairman and CEO and Whole-Time Director of Amber Enterprises India Limited. Thank you, and over to you, Sir. Good morning, thank you all for joining the call. On the call today, I'm joined by Mr. Daljit Singh, our Managing Director, Mr. Sudhir Goyal, our Group CFO, and Mr. Ravi Kharbanda, our Investor Relations Head. I trust you have had the opportunity to review our exchange filings. Amber Group has entered into a manufacturing collaboration agreement with OPPO Mobiles India Private Limited, executed on June the 18th. OPPO's decision to partner with Amber reflects the confidence that a global brand of significant standing has placed in our manufacturing capabilities, quality infrastructure, ability to deliver at scale, and operational consistency. It marks our entry into India's mobile phone market, the second-largest mobile phone market in the world, at a particularly compelling juncture as the Government of India continues to drive domestic value addition and import substitution with renewed intent and policy momentum. This is also fully consistent with our stated strategy of maintaining the right balance between high-margin, value-added businesses and asset-light, high-volume, low-margin businesses. This collaboration meaningfully diversifies our revenue profile and, importantly, reduces the seasonal concentration inherent in our room air conditioner business. Let me walk you through the key operational parameters of this arrangement. On the scope, this agreement covers three brands, which is OPPO, OnePlus, and Realme. Facility side, the manufacturing will be carried out at an existing facility under a sublease arrangement with OPPO India. This structure does not require any Press Note 3 approval. On the capital outlay, consistent with the asset-light nature of this collaboration, CapEx requirements are very minimal. On the timelines, we expect trial production to commence in quarter four of FY 2027, with commercial production to start by quarter one of FY 2028. On the scale side, we expect to begin with around eight million units in year one, followed by a calibrated phase-wise ramp-up. If everything goes as scheduled, we expect to touch the volumes of around 13 million- 15 million in the second year of operations. On the value addition side, we will commence with assembly first and SMT operations with a clear roadmap to progressively deepen our value addition into components such as high-density interconnect printed circuit boards, and then gradually increase local value addition over the next five years. On the margin side, returns will be in line with the industry standards at the commencement, with margin improvement anticipated as operating scale and local value addition increases. Capital efficiency. The business is structurally low on working capital intensity and asset light in character, both attributes that are conducive to healthy and improving returns on capital employed. On the path ahead, we view this as the beginning of a longer relationship with OPPO. Together, we will explore additional avenues of collaboration aligned with the government of India's vision of Atmanirbhar Bharat, focusing on increasing local value addition. This milestone marks a significant inflection point in Amber's evolution. We began as a predominantly room air conditioner-focused company. We have since expanded meaningfully into electronics and railways, and today we enter the mobile phone segment, one of the highest volume consumer electronics categories in the world. We are energized by the opportunities that this next phase of our growth journey presents for Amber, for our shareholders, and for our partnership with OPPO India. Now, let me hand over to Operator to open for Q&A, please. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. 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 are requested to keep the questions to today's discussion itself, and we request all the participants to limit their questions to two each per participant and can rejoin the queue for any further follow-up questions. Your first question comes from the line of Sumit Sinha with Macquarie. Please go ahead. Yes. Good morning. Thank you. A couple of questions here. First is, if you can just talk about the economics on a per unit basis. Are we talking about you recognizing revenue on a gross basis, like an ODM? But it seems like this is a manufacturing relationship, so you'll probably recognize revenues on the value addition only. If you can confirm that. The second one is, how does Amber develop the expertise for this? As you mentioned, you're going to sublease the facility from OPPO. Are you going to use their expertise, their people, and so pay for the OpEx? I think those are the first two questions. Thank you. Thank you, Sumit. First, I'll answer your second question on the capability side. Currently at IL JIN, we are already manufacturing nine to 10 million of smartwatches every year. We do about more than close to about 50 million of printed circuit board assemblies for various applications. On the bigger boxes side, which is air conditioners, we do about more than 5.5 million boxes every year. Scale side, assembly side is not a problem at all for the group. Since we will be subleasing the existing facilities, we don't anticipate any issues in going through the learning curve. I think we have kept the first three months as the learning curve period. That's why we want to go slow in the quarter four of this current year. Commercial production will begin from the quarter one of the next year. On the commercial arrangement side, it all depends on OPPO India, whether they want to go for the sale purchase agreement or they want to go for a complete job work basis. It will completely depend, but the margins are in line to the industry. If we consider minus the PLI part of it, normally the industry is operating at 1.5%-2% of EBITDA levels, depending on which model do you make. If it is a higher-end model, the EBITDAs will be about 1.5%, 1.7%. If it is a lower-end model, the percentages will increase. The arrangement is on the bottom line side, not on the top-line side, basically. We have a flexibility on the top-line side. Got it. I have other questions, but I'll join the queue. Thank you. Thank you. The next question comes from the line of Santhosh Seshadri with Avendus Spark. Please go ahead. Hi, Sir. Good morning. Thanks for taking up my questions. My first question is on the PLI opportunity. Since there are revised incentive in a potential framework, possibly focusing on value addition rather than pure assembly. What are the focus areas of Amber in backward integration apart from HDI Interconnect facility? Well, it's very early statement to make right now because we don't have even the draft of the second PLI, which is being talked about. I'll rather restrain commenting on the structure of the PLI, which is coming up, until unless there is some kind of a draft notification or some public document available on that. It is being speculated that it is local value addition. In case the local value addition happens, we are already doing SMT in-house. We have printed circuit boards with us. Of course, the arrangement is such that we can go for higher value addition. OPPO India will help us to bring more suppliers to India for other components also going forward. Thank you, sir. My second question is on potential of working with other brands. Since OPPO is part of this BBK group, does this open door for working with other brands of BBK group as well? Yes. It covers all the three brands, Realme, OPPO, and OnePlus. Any possibility of working with Vivo? Vivo, we don't have any arrangement at the moment. This is our first endeavor to get into the mobile phone manufacturing. I think we will go slow, take baby steps. I think we have a good task of about touching eight to nine million phones in the very first year. Taking this number to 14 million-15 million next year. Once that is achieved, then we will think about adding any other brands. Thank you, Sir. I will come back in the queue. Thank you. Your next question comes from the line of Dhruv Jain with Ambit Capital. Please go ahead. Thanks a lot for the opportunity, Sir. My first question is that, to do this arrangement, did you have to look at some other technical ODM JVs that we've seen in the space over the last two or three years, like Longcheer? Or do you think that will not be necessary and we will closely work with OPPO at this point of time? Dhruv, at this moment, we are starting with OPPO India, we don't have association right now with Longcheer and all. As OPPO is deeply engraved and embedded in the whole ecosystem of mobile phone and with other products also. This arrangement is a long-term arrangement, and of course, we are going to build up on this arrangement as we move forward. My second question is on scalability, right? If you look at the scalability of the phone market, the market's not grown over the last four or five years now. I know that it's a larger opportunity, but in the past, we've seen that Amber looks at categories which offer a lot of growth. Just want your sense as to what is the scalability beyond OPPO here, because you'll hit your TAM possibly in the next two years? Dhruv, there are two ways to look at it. One, yes, you are right. On the volume side, domestic number of phones getting sold in the country are almost the same. As the average selling price is going up every year, people are moving towards high-end phones, that's what is driving the replacement market. What we see as Amber is on the local value addition. The industry is at just 10%-12% of local value addition right now. Everybody is doing only assembly part. Some of them are doing assembly plus SMT. We will start with assembly and SMT, and in year two, sorry, not year one. Year two, we will be adding our HDI when our HDI plant will be ready. That is our first foray, then we can take this local value addition to 35%-40% in next five to six years, depending on which category to add. That is where the endless TAM comes in. Got it, Sir. Thanks a lot, and all the best. Thank you. The next question comes from the line of Praveen Sahay with PL Capital. Please go ahead. Yeah, hi. Thank you for the opportunity. Sir, my first question is, as you are targeting nearly around 20% of OPPO India volume, nearly around eight to nine million, and you are also talking about the subleasing of their own facility. How is the capacity, how big the capacity as the manufacturing facility which you are leasing for? Secondly, that they have already a partnership with some other EMS players. Where you are placing yourself for the way forward, the volume growth or the backward integration in this all collaboration? See, we are not disturbing their existing ecosystem with other manufacturers. As far as the catering to 20%, 25% or 30% of OPPO's volume is concerned, they have a very big compound where the manufacturing happens, and the lines are very dedicated industrial premises made in a way where easily it can be subleased with exclusivity arrangements. That is what we are going to do at the moment. Okay. Sir, next question I have with Ascent, which you had acquired the remaining stake. Also the MD has resigned, who was the owner earlier. Who is now going to Head the entire PCB manufacturing for you? Can you give some way forward, how you are looking at, because now you are a majority holder there, and a lot of CapEx also you are doing in that particular entity? If you can give some. Yes. Earlier, we acquired 60%, now we own 98.5%. Yes, because of the arrangement in the agreement, Mr. Manjunath had to step down because he is no more a shareholder in Ascent. We continue to have a good relationship with him. On the heading side, the whole division, PCB division, will be headed by Mr. Santosh. He has 25 years experience in the printed circuit board category. He was earlier heading AT&S, which was earlier the largest PCB company. Now Amber has become the largest PCB company with Ascent and Shogini in our fold. He is already with us from last one year. Okay. Thank you, Sir. I have some more questions, I will come in queue. Sure. Thank you. Ladies and gentlemen, we request all the participants to restrict the questions to current business development. Your next question comes from the line of Indrajit Agarwal with CLSA. Please go ahead. Hi, Sir. First of all, congratulations on embarking on a new business division. Thank you. I have a couple of questions. First on how the organization will structure within our entity. Will it be part of IL JIN or a different entity altogether? Indrajit, right now, there's a lot of flexibility, but as we move ahead, we'll give a clarity on that, whether it will come directly in Amber or it will go in IL JIN. At the moment, on the face of it, because we are doing smartwatches, hearable wearable, it looks that will be there, but we will not be able to define it right now because we have other shareholders also in the IL JIN cap table. We'll let you know once the decision is taken before start of the commencement of operations. Sure. That's helpful. My second question is on management bandwidth. Would you have a different team, different CEO heading that business? Or the Head of the hearable wearable team would actually be heading that business? Certainly, it requires a very dedicated efforts, certainly, there will be a senior-most management dedicated to this sector only because assembly is something which we are definitely starting with, but our eye and our long-term goal is to penetrate into the component business of the mobile phone, that is where the growth and the margins are. Sure. I have more questions. I'll come back in the queue. Thank you. The next question comes from the line of Aniruddha Joshi with ICICI. Please go ahead. Yeah. Thanks. Congrats team for the acquisition. Sir, Amber Enterprises India has always worked with high-margin products. This is probably among the one large product with a relatively very low margin. Again, how will be the working capital requirements? What will be the ROC that can get generated on this business? If you can share more details on the financial aspect of this transaction. You are right, this is a low margin business, but very high volume business, similar to what we do in smartwatches. We took a step of smartwatches about four years back, and now we have reached to one million watches every year. Oh, sorry, 10 million watches in a year. We see a very good ROCs. Generally, these are very ROC accretive. If you take this on a standalone basis, the ROCs will be more than 30%-35%. Of course, it will add up in the ROC of whole Amber profile. If we talk about the component side, where our goal is, the PCB, we work in the range of 15%-16%. If you add on other components on the mobile phone ecosystem, there are good, decent margins in that whole component ecosystem. We'll keep on adding. I would just take you back into what we did in air conditioners. 25 years back when we started air conditioners, we were just giving a sheet metal of air conditioners, then we started assembling air conditioners. Every three years, we used to add one component as a backward integration. First, we added heat exchangers. Second, after another three years, we added injection molding. Then we acquired a motor company, then we acquired a inverter PCB board company, then we entered into fans and blowers, and we touched about 70% of bill of material. Our objective is to go gradually, and we will continue to balance the volume and the value play. We are starting with low margin, high volume business, but over a period of five to six years, we'll keep on adding components to increase our margins. Okay, sure, Sir. The working capital requirements? It's very minimal working capital requirements. Normally, this sector operates on a net working capital days of- almost four, five days, maximum 10 days. Okay. Sure, Sir. This is very helpful. Thanks. Thank you. The next question comes from the line of Mr. Achal Lohade with Nuvama Wealth Management Limited. Please go ahead. Thank you for the opportunity. I think broadly questions got answered. Just one clarification. In terms of the investment, eventually, if everything goes well, what is the kind of investment we are looking at? Is it multiples of INR 1,000 crores or it is more of INR 200 crores eventually, let's say, in four or five years' time, assuming picture-perfect scenario? To start with, on the assembly and SMT, we are not putting in any CapEx. It will be minimum. It will be below INR 50 crore to start with. Once we touch 14 million- 15 million number, then we'll add the component side. On component side, it depends on which category of components you want to get into. If you want to get into camera modules, or you want to get into display, or you want to get into metal casings. There are so many components. We are already putting up CapEx in the printed circuit boards. There will be no duplication of the CapEx. At the moment, I think very minimal CapEx will go up. Got it. Like you said, we haven't decided yet in terms of which segment it will be part of and whether we'll recognize on gross or just the job work charges. Have I understood right? Yes, that's right, because it will depend on OPPO India's team. Some of the models may come on a gross side and some of the models may come on the opposite, but the bottom line is going to be intact on the absolute number. Absolutely. Thank you so much for the clarification. Thank you. Thank you. The next question comes from the line of Aditya with Investec. Please go ahead. Hi, good morning, Jasbir Singh. Morning, Aditya. Good morning, Sir. My first question is on the ramp-up that you spoke about. FY 2028, as we start the commercial production, should we anticipate eight million units to be getting done in that particular year? Yes. Is it more like eight to nine million units? That's right, yeah. Eight to nine million, you can consider on a conservative side, eight million number. By FY 2029 or FY 2030, we should be hitting 13 million- 15 million unit run rate. That's right. Maybe more, we are taking a conservative number of about 14 million- 15 million number. Understood, Sir. You also spoke about that existing relationships of OPPO will not be changed. Does that mean that all the EMS companies that OPPO is currently working with, it continues to work with those companies, but possibly there will be no ramp-up in those relationships? See, we have requested them not to give others' business to us. That is not Amber's model. I believe it will continue in the shape and form which is happening right now. Something to look at there is that because we are getting more into component side, going longer basis, we may end up supplying them components. Understood. You mentioned that besides PCB, of course, you will be doing straightaway, but besides PCB, you will be mainly focusing on domestic value addition. Is it likely to be done in-house, things like camera modules, chargers, display modules, or is it that we will be open to be having other suppliers supplying to us? Any thought that you have given to it? Aditya, to begin with, you see, we don't want to open up too many fronts because this is a new product category for us. First two years, we will focus on SMT and assembly. Second year onwards, we will add HDI. After third year, we will add another component. I think we still have to make a roadmap, but our objective is how to bring in the value addition to about 30%-35% in over next five to six years. That roadmap is still to be formalized. Understood, Sir. That's a very inspiring development. Congratulations. Thank you, Aditya. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we will take this as the last question for today. I now hand the conference over to Mr. Jasbir Singh for closing comments. Thank you everyone for joining on the call. I think we've been able to answer all your queries. In case, still if you have any further information or any query, please contact our Head of IR, Ravi or Rohit, and Strategic Growth Advisors, SGA, for our Investor Relations Advisors. Thank you. Have a great day ahead. Thank you all. Thank you. Ladies and gentlemen, on behalf of Amber Enterprises India Limited, that concludes this conference. Thank you everyone for joining us. You may now disconnect your lines. Thank you.