Ladies and gentlemen, good day and welcome to Dixon Technologies earnings call hosted by DAM Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhumika Nair from DAM Capital Advisors. Thank you, and over to you. Warm good evening to everyone. Welcome to the Q4 FY23 earnings call of Dixon Technologies (India) Limited. We have the management today being represented by Mr. Atul Lall, Managing Director and Vice Chairman, and Mr. Saurabh Gupta, Chief Financial Officer. I'll now hand over the floor to Mr. Lall for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir. Thanks very much, Bhumika. Good evening, ladies and gentlemen. Gupta. This is Atul Lall. We also have on the call today our CFO, Saurabh Gupta. Thank you very much for joining this earnings call for the quarter ending March 2023. Coming to our overall performance for the fourth quarter, consolidated revenues for the quarter ending March 31, 2023 was INR 3,070 crores against INR 2,955 crores in the same period last year. This is growth of 4%. Consolidated EBITDA for the quarter was INR 158 crores against INR 128 crores in the same period last year. That's growth of 32%. Consolidated PAT for the quarter was INR 81 crores against INR 63 crores in the same period last year. That's growth of 28%. We are pleased to report a strong performance in the margins in the quarter with a 110 basis points improvement. The margins have improved up to 5.2% in the last quarter. This has been led by change in sales mix, operating leverage, cost optimization and efficiency measures across all businesses. Continued implementation of strategic price hikes across our various ODM businesses. Coming to our overall performance for 2022–2023, consolidated revenues for 2022–2023 was INR 12,198 crores against INR 10,701 crores in 2021-2022. That's growth of 14%. Consolidated EBITDA for 2022–2023 was INR 518 crores against INR 383 crores in 2021-2022. That's growth of 35%. Consolidated PAT for 2022– 2023 was INR 256 crores against INR 190 crores in 2021, 2022, which is growth of 34%. Another highlight was a strong cash generated from the operations of INR 726 crores in 2022, 2023, which was used in funding the CapEx of almost INR 450 crores and reduction in gross debt of INR 275 crores, resulting in further strengthening our balance sheet with gross debt to equity of just 0.14. There has been huge focus of the team on cash conversion cycle and working capital management. Working capital days stood at -2 days at the end of March 2023. Our balance sheet is strength and enough credit lines from banks enable us to invest in the long-term development of our business. Our basic approach to capital policy always has been on return on invested capital and financial stability, and we have successfully improved our ROC and ROE to 33.4% and 22.4% respectively as on March 31, 2023. We feel confident the same would keep improving in the upcoming quarters and years on account of improved earnings and working capital efficiency. We strongly believe that we have a platform to sustain a strong revenue growth moving forward due to strengthening in the overall demand environment and acquisition of new customers, more specifically the large accounts in the mobile business. I'll share with you the performance and the strategy in each of the segments going forward. Consumer Electronics. Revenues for the quarter was INR 981 crores with an operating profit of INR 37 crores and 3.7% operating margins, which is a significant improvement over quarter last year. Operating profit margins have expanded by 90 basis points year-on-year on account of operating leverage and continuous focus on backward integration and offering our own design solutions. Despite a year-on-year volume growth of 13% and 15% in Q4 and 12 months, 2022–2023, the revenues were lower by 3% and 17% in the same period year-on-year due to significant downward correction in the prices of open sale in the international market. We have closed the ODM sub-licensing rights, with Google relating to Android and Google TV, which will open up a lot of opportunities for us since 65% of the Indian market is on this operating system. We have also tied up with Samsung for Tizen operating system. With the combined solutions rollout, a large part of Indian market through Dixon ODM solutions we'll be able to service. We'll soon be starting injection molding and have also invested in LED bar SMT line, in line with our continuous focus on backward integration strategy to deepen the level of manufacturing in India. We are also exploring newer products such as commercial displays, for which we have already received trial orders used in public advertisements and information display and interactive boards for use in educational institutes and offices. Lighting. Revenues for the quarter was INR 270 crores with an operating profit of INR 26 crores and operating margin of 9.7%. This is an expansion of 260 basis points year-on-year, achieved through a combination of reduction in input prices, calibrated pricing action, inventory planning, value engineering, and significant initiatives in better sourcing. Apart from sluggish demand, reasons for lowering revenues year-on-year is reduction in commodity prices, freight rates, and migration of LED bulb technology from driver-based to COB, which are approximately 25% lower priced. Since LED bulbs is the single largest category in lighting, it has a major impact on the revenue growth. We have very aggressive plans for new product introduction in Q3 and Q4 of FY 2022–2023, and will continue the momentum with the launch of strip and rope lighting in Q1 of FY 2023–2024, and professional lighting products in the course of 2023-2024, besides the launch of new LED bulbs, fittings, and downlighters. After getting export orders from new customers in UAE in Q3 and Q4, we have received our first export order from Germany, which will be executed in Q2 of current fiscal. We are also in advanced stages of discussions with potential customers in U.S. and U.K. New smart lighting products based on Bluetooth mesh technology that we acquired from iBahn Illumination will be launched in Q2 of current fiscal. We have met our threshold investments in FY 2022–2023 under PLI for LED lighting components in line with our backward integration strategy. It will make us even more cost competitive. The new plant for the LED lighting components in Dehradun has already started operations in the current month. The capital employed in this business has been significantly reduced by INR 175 crores year-on-year on account of huge focus on current debt management, which has resulted in improvement in ROC to 29% from 22% a year ago. Home appliances. Revenues for the quarter was INR 281 crores, which saw a robust growth of 20% year-on-year and 15% quarter-on-quarter. Operating profit of INR 31 crores also witnessed a strong growth of 67% year-on-year and 23% quarter-on-quarter, with expansion of operating profit margins to 11%, led by passing on the impact of commodity costs and exchange rate fluctuations to our customers, improved operating leverage and cost opt-optimization measures. ROC in this business has improved 30% from 18% a year ago. A new state-of-art facility for semi-automatic machine in Dehradun will be operational by July 2023. In line with our backward integration strategy, we have set up our own tool room for in-house mold manufacturing. The order book in this vertical for the upcoming quarters looks very healthy. Mobiles and EMS business. Revenues for the quarter were INR 1,410 crores with an operating profit of 59% and 4.1% operating margin, which is an expansion of 50-60 basis points, both on year-on-year and quarter-on-quarter. We have got large orders from Jio for which manufacturing has already started. For Nokia, our volumes have already increased significantly. In addition to this, we are very, very close to finalizing two large relationships with largest of global brands in India. These relationships with one of the brands will join manufacturing, and we are likely to start operation in next 5-6 months in the current fiscal, for which a new facility of 320,000 sq. ft. in Noida is in the process of being set up, which will become operational in end of Q2. Security Surveillance Systems. Dixon's 50% share of revenues for the quarter was INR 124 crores with an operating profit of INR 4 crores. We've expanded the capacity from 10 million–14 million per annum in a new 200,000 sq ft facility in Tirupati. It got operational on May 15th in the current month. Operating profit margins are out both year-on-year, mainly due to shifting expense and duplication of fixed cost structure. Next, telecom and networking products. Revenues in this segment for Q4 and FY 2022, 2023 was INR 126 crores and INR 311 crores respectively. Our separate facility in Noida got operational in December 2022, and we achieved the thresholds of CapEx and minimum revenue in the first year under PLI scheme. We have bagged large orders of LTE set-top boxes from Airtel, and mass production should start by end of Q2 in the current fiscal. We have won another business of Android set-top boxes in partnership with Global Odin. The development work has started, and mass production will start from Q4 of current fiscal. This has potential to grow even to the other geographies outside India for exports. We are in active discussions with some large global brands for existing and new product categories and building a joint team for R&D with our partners. Today, we have already emerged as one of the largest manufacturers of ONT and Wi-Fi routers for Airtel in the country. Next vertical is laptops and tablets, IT hardware. Revenues for this segment was INR 92 crores in Q4 and INR 155 crores in total 2023. This is for our major anchor customer, Acer. The government has recently announced revised PLI scheme for IT hardware products. Soon with a much higher incentive payout. We are studying the contours of the scheme, and we'll definitely be participating in this government initiative, which has tremendous potential. In addition of Acer brand, whose order is increasing monthly, we're in discussions with some large global brands, and for one of the brands, the production should be starting next month. Rexxam Dixon Electronics Private Limited for our AC control board business. This is a 40/60 JV with Japanese company, Rexxam, to manufacture inverter controller boards for air conditioners, and is based out of a new manufacturing facility in Noida. It has started operations in July 2022. The JV company achieved the revenues of INR 79 crores and INR 139 crores in Q4 and FY 2022/2023 respectively. The revenue potential in this business is huge with healthy margins and 100% ROC. The JV company is a beneficiary under the PLI scheme and will make a total investment of INR 51 crores over a period of 5 years. We have achieved the CapEx thresholds under PLI scheme of 2022/2023 and will continue to invest in to improve the operations. Wearables and Hearables. The revenue for this segment was INR 65 crores and INR 300 crores in Q4 and FY 2022/2023 respectively. We have an extremely healthy order book in this vertical. We are targeting to almost double our 50% share in revenues in this current fiscal on account of not only higher quantities for existing SKUs of TWS and neckbands, but also new SKUs like Bluetooth speaker and smartwatches in a new factory which has been set up in Noida, which is in 50/50 JV with Imagine Marketing, and they are the brand owners of boAt. In line with our strategy to deepen the level of manufacturing, the SMT for PCBA will also be invested for. In addition, we have started manufacturing TWS and smartwatches for Samsung and a dedicated plant for mobile phones for Q4 of this current fiscal. Refrigerators, the construction is underway on 20 acres of facility in Greater Noida. We are creating a capacity of 1.2 million direct cool refrigerator. This is in the capacity range of 190 liters, 235 liters with multiple features and different star ratings. We have already finalized and with some brands in the final stages of finalizing the tie-ups. These are both global and national brands. The production is expected to start in the quarter OD of 2023/2024. I would like to stop here now, and me and Saurabh are there to respond to your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. First question is on the line of Mahesh Agrawal from Agrawal Family Office. Please go ahead. Mahesh, your line is unmuted. Request you to please unmute your line and proceed. Seems there's no response from the line of Mahesh. We will move to our next question. That is from the line of Renu Baid from IIFL Securities. Please go ahead. Yeah. Hi, good evening, sir, and congratulations for good performance. I have four key questions. First, on mobile phones, you did share, quite a few developments and two, I mean, two large brands, coming on board in the next few months. Can you help us with, how does the guidance on the mobile segment look for FY 2024/2025, based on the timing of these clients coming on board and the new factory getting operational? Good evening, Renu Baid. You know that mobile is going to be our largest trigger of growth. We are in the processes of concluding with two of the largest brands present in India, global brands. Mm-hmm. The new capacities are being created. I'm hopeful, if not in Q3, or in all probability by mid of Q3, the manufacturing for these brands is going to start. Okay. A large revenue, I don't want to put a number to it, is going to come in from these two brands in this business. It will be very, very large. Sure. The guidance for FY 2024, how should we look at the mobile PLI and the overall revenue stack up? Should be close to INR 6,000 crores or how will the numbers stack based on the pipeline of orders that you have from existing and new clients? In 2023-2024, the government guideline is for INR 6,000 crores. Mm-hmm. Which we are confident of meeting. We feel confident that there's going to be a significant overflow above INR 6,000 crore. Got it. Secondly, given that various of PLI incentives and other programs have been operational across segments. Can you share what was the incentive income booked in fiscal 2023 by Dixon across our key different verticals and in total? Yeah. Renu- Hi. There are only two incentives which have been booked across two PLIs. Incentives across two PLIs. One is of course mobile, where we are absolutely, our incentives up till December 2022 we have received. Our share of revenues for FY 2022, 2023 would be somewhere around, INR 9-9.5 odd crores. Apart from that, we have also received and achieved our thresholds for the telecom PLI, which is a JV with Bharti Enterprises. There, my sense, the JV, revenue would be somewhere around 3, around, INR 2.5-3 odd crores. Okay. And this number should substantially ramp up next year, given the growth across all these entities coming through. That's right. Next year we will start getting the incentive of IT hardware, which we'll start booking. Also for our Rexxam JV on inverter controller boards with Rexxam, whereby, whatever revenues we do, we will get an incentive on that. And also on the lighting components PLI, we have done the CapEx. CapEx has already been done under the inverter controller JV with Rexxam. CapEx has already been done on the lighting components PLI, I think. Those incentives will start flowing in the current financial year. Sure. Sir, thirdly and lastly in this case, in consumer electrical television, if you see, margins are very strong this quarter, 3.7%. Overall improving the margins for the year. How should we look at the margin going forward in 2024, especially that now the ODM mix in the revenue, will substantially improve compared to fiscal 2023. Any inputs on this side would be appreciated. You're right, Renu. The large part of revenues in television segment is also coming from the ODM stream. The margins are going to be almost in similar range, in the range of 30-40 bits ± for what we have achieved currently. Approximately three and a half% plus minus range that it comes to. Yeah. Yeah. Yeah. Yeah. Yeah. Renu, yeah, it'll hover between three and a half to 4 odd%. Got it. Thanks. I have couple of more, but I will get back in the queue later. Thank you so much, and all the best. Thank you, Renu. Thank you. The next question is from the line of Ankur from HDFC Life. Please go ahead. Yeah. Hi, sir. Good evening. Thanks for your time as always. Two questions. One was on the overall end market demand itself for durables, you know, specifically TV, lighting, home appliances. We've obviously seen a slowdown, you know, and we keep on hearing of the same from, you know, different companies. If you could help us understand, you know, what are your clients/customers telling you in some of these segments? How is your, you know, pipeline or order book, you know, when you look at, say, the next 6 months or so? Ankur, it's been a mixed kind of a bag. Mm-hmm. In certain businesses, the order book is flattish. Mm-hmm. In certain businesses, the order book is strong. In our case also please appreciate that being an outsourcing company, also what makes a difference is that what is the share of wallet you are able to extract from existing customers, and how is your customer acquisition initiative being pursued. Coming to specifics, first 1.5 months or so, I find the demand in consumer electronics and lighting to be slightly flattish. Mm-hmm. Fortunately, last 2 weeks I'm seeing an element of positivity and things turning around. Mm-hmm. In any case, from next quarter we're heading towards the festive period, so things are looking better. Mm-hmm. In the case of mobile, the order book is very healthy. We have new customer acquisitions, we have already started manufacturing for Jio. We have much larger share of wallet of our existing customers. In our existing anchor customer, Motorola, has showed up a larger order book including exports, so it's looking much better. Similarly, in telecom devices, the order book from Airtel is very healthy, and they're really pushing up their broadband initiatives. In the case of hearables and wearables, the order book is very good. In fact, we have been pushed by our anchor customer to double our capacity from 1.2 odd million to 2.5 million in next one and a half, two months. Mm-hmm. It's a mixed kind of a bag, but I feel in the forthcoming quarters, in a month or two, the things are gonna look up significantly. That's what my sense is. Okay. Also in washing machines, sir, I think that's one segment. Washing machines, if you see last year we've grown from 1.1 million in semi-automatic to almost 1.5 million, which is a 29% growth. Also in the case of FATL, fully automatic top loading, since the base was low, we have grown from practically nothing to 1.6 lakhs. This year our internal plan is to grow from 1.5 to 1.75, and in the FATL to grow to almost 250k. We have an aggressive growth plan. Sure. You know, if you could just also remind us of your FY 2024 overall sales and margin guidance, if any you can share. I think on the last call, I think the number was closer to INR 18,000 odd crores for 2024, if I you know, kind of remember correct. For 2024, if you could just help us with that. Ankur, I don't want to give any specific guidance here. However, I want to assure the stakeholders that the growth is going to be aggressive. It's going to be much ahead of the industry. Okay, fair. Fair. Just last one would be if you could share the volume details by segment for FY 2023, please. Yeah. Hi, for Saurabh this side. The volume numbers for TVs was... You want for the quarter or for the year? Quarter would be great. Year would be great, yes. Yeah. On TVs, we did a volume of almost 3.43 million as against 3 million last year. That's a growth of 15 odd%. Mm-hmm. On LED bulbs, broadly, we did a volume of almost LED bulbs, patterns, downlighters and other SKUs put together, we did around 17 million. INR 70 odd crores, sorry. INR 70 odd crores. In semi-automatic washing machines, we did INR 1.5 million. Fully automatic washing machine, we did INR 1.6 lakhs. Smartphone outside Samsung, outside Samsung was around INR 35.4 lakhs against INR 25.3 lakhs last year. There's a growth of 40 odd% there. Feature phones, we did around INR 55 lakhs as against INR 30 lakhs. There's a growth of 82% there. On Samsung smartphone, we did a number almost INR 94 lakhs as against INR 84 lakhs last year, growth of 12%. Samsung feature phone, we did INR 82 lakhs as against INR 109 lakhs, so INR 1.09 crores last year. There's a decline of 25% in Samsung feature phone. Samsung, as you know, has taken a call to shut down the feature phone, exit out of the feature phone business. Right. On CCTVs and DVRs put together, we did somewhere around INR 74 lakhs as against almost a similar number, INR 74 odd lakhs last year. It's a flattish kind of a number. Sure. set-top boxes, it's around INR 14 odd lakhs. TWS and neckband put together, we did almost INR 57 lakhs for wearables and deliverables, yeah. Understood. Got that. Okay, great. That's very helpful. Thank you and all the best. Thank you. Thank you, Ankur. Thank you. The next question is from the line of Aditya Bhartia from Investec. Please go ahead. Hi, sir. Good evening. My first question was on margins that you record on JDM contracts and consumer electronics business, are they meaningfully better than the EMS part? They are. They are definitely, Aditya. Could you share some range? How much better could they be, and how are you expecting the JDM proportion to be moving in this business? If you see our. Basically, if you look at Aditya, our contribution of the ODM business in TV has significantly increased from, if you look at the, from quarter 4, if you look at our consumer electronics or LED TVs, the ODM share revenues have gone from 5% to 38%. At a yearly level, it has gone from 4% to 23%. This is one of the reasons why the margins have expanded because of higher share of ODM, own design solution revenues coming in, which is of course at slightly better margins than the average margins for the portfolio. Also, if you look at continuously, we are migrating more and more to backward integration and the portion of backward integration. The portion of PCB is being done for customers like Samsung, for Xiaomi is increasing. We are also now increasingly we're going forward focusing on more backward integration like injection molding plastics for TV, apart from panel assembly as well as the motherboards of TV. In the second half of the year, we have already ordered the line. We are also looking to do LED bars of TV. Clearly the focus is to migrate more and more on backward integration, focus more on designing. Clearly we have got a large order from Samsung. Once the Google solution comes in from second half of this financial year, those will also have a positive impact on the margin side as well. Clearly the more than the volume play in this business, I think the margin profile has been very positive and we'll continue to make efforts to drive higher margins in this business. Understood. From H2, you mentioned, what exactly would you start doing? We'll roll out a solution from the Google and Android TV. Yeah. As an ODM, we are the only Indian Google licensee, and in the smart television segment. Ladies and gentlemen, thank you for patiently waiting. We have the management line reconnected. Sir, over to you. Aditya, may I request you to please repeat the question? Yeah. We were discussing about the JDM part of the business, and you kind of indicated about the margin benefits that may accrue. Just confirming. From H2, you mentioned that you'll start doing LED bars. Did I hear it correctly? Aditya Bhartia, as we were explaining, the whole focus of television strategy is migration to more and more our own design solutions, which we have already launched for our anchor customer. Further, the rollout of the Google TV, for which we are the only ODM licensee in India, and also Samsung's Tizen operating software solution is going to happen in H2 of the current fiscal. In addition to this, our backward integration strategy is being pursued vigorously. Our mechanical plant, that is injection molding plant, is going to become operational any day now. Also we are committed to make investment in LED bars, and this will also be installed in the second half of the current fiscal. The strategy is migrating more and more to our ODM solutions and backward integration and generate operating leverage through scale. Further, we are also improving the product mix. We are in the process of launching our commercial display, for which we have already received trial orders, and the commercial production is about to start, and also interactive TV for education institutes. That's the strategy we pursue for consumer electronics. Perfect. That's it, sir. You spoke about Jio phones in the mobile phones division. If you could throw some light on how large the contract is, what exactly are we doing on that front? We already started manufacturing the 4G phones for Jio. The manufacturing has started in the current month, and the order book is fairly healthy. At present, the order book is almost of a million units, half a million units a month. Understood. Lastly, sir, did we see any margin benefit due to RM costs coming down in the ODM business, given that typically the pass-through happens with a bit of a lag? If you see in our ODM business, there has been a margin improvement across all our ODM businesses. That is the result of value engineering, generating operating leverage because of the scale, improving the productivity and having a control on the cost. A part of it is also passing on the increase to our customers. Understood. That's it, sir. Thank you so much. Thank you. The next question is from the line of Abhishek Ghosh from DSP. Please go ahead. Yeah, hi, sir. Thank you so much for the opportunity. Sir, just in terms of the television segment, how should we look at the volume growth, and what can be the share of ODM, over the next 12 to 18 months? How are you looking at it? Abhishek, if you see, our 2021, 2022 numbers for televisions were around 2.9 million. In the last fiscal, we have grown to 3.4 million, which is 15% growth. Please appreciate this kind of volume growth has happened in spite of the industry not growing. Our internal budgets for the current fiscal are around 3.8 million, which is a growth of around 10%. That's what we are budgeting for the current fiscal. How should the share of ODM move from currently 35% in the current quarter? How should that look over the next 12 to 18 months? We feel that the ODM is gonna be almost 45%-50%. Okay. Okay. Large part of the ODM-led margin benefit has already got reflected in the current quarter. Is that a fair assumption, sir? Well, actually there's going to be a further trigger when the rollout for our own ODM Google solutions are going to happen. For that to ramp up, it's going to take some time. Got that. Great. Sir, in terms of the lighting segment, while you did allude to a point that, you know, that because of the lower raw material and change in product mix, and the change in technology as well, revenues have been muted. Just in terms of volume also, and you had also spoken about the competitive intensity in the earlier quarters, how has that been panning out? Is that also a reason for a slightly, you know, sluggish top line? Just a comment there, sir. Thanks. Yeah, you are right. The market has been flattish because of change technology has happened, and also the competitive intensity is there. In Dixon’s case, our large revenue generator has been SKUs like LED bulbs, wherein the growth is not happening. One, of course, lot of initiatives has happened on expansion of the product portfolio. One, more and more product rollouts on the ceiling and downlighter side is happening. Second, a new product category for ropes and strip lights has been rolled out, and the commercial production is just about to start, which is again gonna add to our revenues. Our professional lighting solutions are also gonna be rolled out in second half of the current financial. Monetization of the smart lighting, which we had acquired from Ibahn Illumination, will also start happening in the current fiscal. These are certain, concrete steps being taken up by the team for the revenue growth. Okay. Sir, just one last thing in terms of you mentioned, you know, the couple of large clients whom you're likely to sign up and their factories are getting constructed. I just wanted to get some clarity around that. Do you start doing the CapEx even before the final deal is signed, and how does it work and how should we look at it? Please appreciate, we have been sharing the progress for 2 quarters. These large customer acquisitions take their own time because the discussions happen both on the technical and the commercial tangents. We are almost at the final stages of conclusion The commercial production for one of them is about to start soon. For another one, I think it's gonna take two to three months to start. We are at very, very advanced stages of concluding that. We're almost there. That's what I'm in a position to share at this stage. My only point is, sir, you're committing the CapEx in anticipation. I'm assuming you have fair amount of visibility. That's the reason you're going in and committing that. Yeah, yeah, absolutely. See, otherwise, no CapEx can be... Sure. Is Tinno arrangement somewhere helping you? Sorry? The arrangement with Tinno that you had done sometime in February. Tinno is an entirely different product, which to start with, is for exports to US market. Got that. Got that. Okay, sir, thank you so much for answering my questions and wish you all the best. Thanks. Thanks,. Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, I have a question with respect to lighting, right? You mentioned with respect to, you know, the export starting to Germany, et cetera, and, you know, some of the technological changes that have happened in this space. How should we look at the growth in this vertical, say, in FY 2024 and 2025? What is the internal target that you are setting yourself? You had some issues internally in the team, so have they been resolved? As I shared that, the domestic market has been kind of flattish and sluggish. We are pursuing the product expansion, getting into new SKUs, getting a new category. We are expanding in lighting as a category in the current fiscal year also. Dhruv, is the question answered? Yes. I have one more question. If you could just indicate what would be the CapEx for 2024 and 2025. Thanks. Sure. CapEx would be in the range of INR 400 crores. It'll be around right, for 2024, 2025? Sorry, 2023, 2024 I'm sharing. It's gonna be around INR 400 crores. All right. Thank you. Thank you. The next question is from the line of Dhananjai Bagrodia from ASK. Please go ahead. Just wanted to ask you, maybe I missed this for consumer electronics. What would be the open sale prices and realization just for the year? Dhananjai, if you look at the consumer electronics, our selling prices for the quarter 4 was around, average was around INR 11,700. Similar to last year's average was around INR 14,000. Clearly it has come down. I'm talking about the weighted average selling prices of all the complete categories after you put together. The major reason for that is the decision of open sale from INR 16,400 from last year, it has come down to INR 11,500. Sorry, sir, your voice is breaking. We are unable to hear you clearly. I am saying at a full year level in 2021, 2022, the selling prices for us at a total level was around INR 16,400, which has now come down to around INR 11,500 for 2022, 2023. Clearly there has been a pricing, the value being lower by 30%, mainly on account of the open sale, where the prices have corrected in the international market. Open sales would the price decrease be exactly conglomerate to this? Almost. Almost like that, yeah. Okay, sure. Another question here. Are the expenses as a percentage of sales has been declining? Would it be fair to assume that this would be steady state or there's scope for more improvement from here? Clearly, all the other expenses, depreciation, finance cost as a percentage of revenues will keep coming down. The only expense which will more or less be in the similar lines, of course, that has been a reduction here in this period as well will be cost of material consumed, which is gross margin. Sorry, sir. Again, your voice is breaking. We are unable to hear you clearly. Basically your observation is right. All the expenses as a percentage of revenue, whether it's employee expenses, other expenses, depreciation or finance costs, as a percentage of revenue will keep coming down. We have got some significant operating leverage benefits in some verticals. In some verticals it will kick in in this financial year, and overall it will start reflecting in. Your observation is absolutely right. It should keep coming down. Any guidance in terms of what could be the base case or anything of that sort? Hello? If you look at the operating profit margins, we've expanded by 50-60 basis points and gone up to almost 4.2%. My sense is, clearly, this year also there can be a possibly margin expansion of around 20-25 basis points. One has to wait and watch, on the whole demand scenario, which of course, should pick up ahead of the festive season. Sure. This 5.1, this quarter would, this will be obviously on the higher end and, this is something which you see. Obviously, our Q4 is always better. How should we look at that? Actually, we got dropped off and the call has been transferred to the mobile where I think so the reception is not that clear. If you just allow me 1 minute, we go back to our intercom. Just give us 1 minute, please, and then you can ask the question there, please. Sure, sure. Thank you. Hello? Nanjan, yes, please go with the question. Okay. Yeah. I'm not sure where I dropped off, but I was asking this 5.1% OPM which we have this quarter, this would be a little on the high side, and you mentioned that 4.2%, 4.3% is what you think would be sustainable for FY 2024-2025, right? Yeah. The point that I wanted to bring about that last year, 2021, 2022, our margins went up to as low as 3.6%, mainly because there's a big supply chain impact, commodity prices impact, which has now been completely settled. We have clearly expanded the margins to 4.3%. We think with the benefits of operating leverage coming in, migration to ODM that we are focusing on in most of the verticals, and also more and more backward integration, clearly we see that some kind of margin expansion is possible in this 4.3%. Broadly, you should look at a range of almost 4.3%-4.5%, 4.2%-4.5% kind of a range for this financial year. Okay. If I could squeeze in one question. I know guidance will be a little tough to give, approximately any, apart from mobile phones and maybe in somewhat in washing machines, any other segments where you see double-digit growth going ahead? I've shared with you the volume growth in televisions. Yeah. Now unit value is also increasing because the open sale price has already gone up by almost 15%, so there will be a value growth. There would be definitely a significant growth in washing machine. I've shared with you our current plan, which is almost 20% more than the last year. Sure. There will be, of course, large growth in mobile side. In lighting, I've talked about the growth of 15%. In the new categories of wearables, where the base was low and the order book was extremely high, the growth is gonna be extremely aggressive. The new vertical of telecom devices, again, the growth is gonna be good because the base is low. In Rexxam JV, the order book from Daikin is very healthy. The growth definitely is gonna be much, much ahead of industry growth. We're fairly confident about it. Okay. Sure, last question is booking question. In our mobile phones, ex-mobiles the other businesses, what margin would they be approximately? Yeah. Other businesses, the margin profile would be better as compared to mobile. If, if on an average, we have done a, say, margin of 4.1, so broadly, those margin profile will be upwards of 4.5% in other businesses. They will be. Other businesses in EMS is gonna be around 30, 40 bits more than mobile. Okay, sure. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead. Yeah. Onkar My question. Yes. Please go ahead. I was asking about in an interview you had given a guidance of around INR 23,000 crore-INR 24,000 crore of revenue by FY 2027. If we calculate that from current INR 12,000 odd levels to INR 23,000-INR 24,000 crore, it's almost a double in, say, in next 4 years from 2023 to 2027. That is around, say, 15%-17% kind of growth in the revenue front. Which is much lesser than which the growth which you were talking about earlier, say 1 year back, say growth of around 25%-30%. What has exactly changed? That was my response to an overall number when the anchor asked me over four to five years timeframe. Here I'm very specific in responding to you that the growth is gonna be much ahead of the industry growth. I don't want to put a number to it. Okay. What is the current industry growth? Across various businesses, it's different. Correct. As you are saying, it will be much larger than the industry growth. You would be knowing, right? What kind of growth- I don't want to get into specifics answering that question, please. Okay. The internal target is at least to double the revenue in next 3, 4 years. That's right. Mr. Onkar, I request you to join the queue for any follow-up questions as we have several participants waiting for their turn. Thank you. The next question is from the line of Sonali Shah from Emkay Investment Managers. Please go ahead. Sonali, your line is unmuted. Please proceed with your question. It seems there's no response from the line. We will move to the next question that is on the line of Pulkit Patni from Goldman Sachs. Please go ahead. Thank you very much. Sir, thank you for taking my question. Sir, just wanted to understand the landscape of mobile EMS right now in India. You know, there was a news flow around Wistron possibly exiting India. How are we looking at the whole Apple business? Is there something that you can share on that account? How are the Chinese companies doing in terms of, you know, own manufacturing? Are any of them planning to do more in terms of outsourcing where we could benefit from? Just to understand the broader landscape on mobile EMS and where we are. It's an extremely pertinent question. I would like to respond it at 2 levels. Undoubtedly, Apple is the flagbearer of mobile manufacturing story in India. That's on a high growth path. I would compare it to the Maruti Suzuki story, which gave a flip to the auto industry back in eighties and nineties. That component ecosystem, that devices manufacturing ecosystem is on a very, very high growth path. Whether the opportunity exists for the Indian players there, we are of a firm conviction, yes. It's going to take some time. It's gonna happen through partnership routes. Definitely there will be a large opportunity for mobile Apple ecosystem for Indian manufacturers, definitely. The second is the EMS story. One of course is dominated by the global players, which are kind of focused on Apple and Samsung. Second is the Chinese brands. Please be rest assured, more and more Chinese brands are looking at outsourcing as the way forward. It's not only gonna be devices manufacturing, it's also gonna be the creation of the component ecosystem, it's also gonna be deepening of manufacturing, and hopefully at some point of time, apart from Apple, India possibly will emerge as an export hub. That's at the broader level, one is trying to respond to your question on the landscape for mobile manufacturing in India. Sure, sir. That's useful. Maybe I'll slip in one more. Sir, I know you're not giving any guidance, but mobile is a very large part, and any delta there could be significant. Since you're putting in CapEx for the two new customer.s, you'd have some visibility on their contribution for FY 2024. If you could just talk about how much could those two new customer.s be in terms of contribution, because that will help us sort of understand the revenue trajectory there. You see, any new customer acquisition, ramping up production, stabilizing production takes some time. To give some kind of firm number to it is slightly difficult because the stabilizing of operations takes time. However, I feel that these two new accounts, on a combined basis can generate INR 4,000–5,000 crores of revenue in this current fiscal itself. That's useful. Thank you. Thank you. The next question is from the line of Nikhil Agarwal from VT Capital. Please go ahead. Good evening, sir, thank you for the opportunity. Sir, I had a question on the mobile phone division. Last quarter, you had guided for INR 8,000 crore of revenue, if I'm not wrong. Now you are guiding for INR 6,000 crore of revenue for FY 2024. Any reason for this cut? I've not cut anything. I've not given any guidance for this year. What I had responded to Renu was that upward ceiling for our PLI, and also there is an overflow provision in the PLI scheme is INR 6,000 crores. We're assured of that. We're confident of surpassing that significantly. If you listen to the answer which was given in the previous question clearly, and what was given, in the last call, I think so those numbers are almost similar. Okay. Got it. Sir, one more question. It was, like, in the last quarter, you had mentioned that you would be acquiring a large customer in March. Like, any update on that in the mobile segment? This is what I just shared in responding to last three, four questions, and that we are at a very, very final stage of closing down on a couple of customers. The manufacturing for these customers should start in the next three to four months. A new factory is being set up of 320,000 sq. ft., which will be operational by July, August. Okay. Got it. Thank you so much sir. That's it from me. Thank you. The next question is from the line of Aditya Bhartia from Investec. Please go ahead. My question was on the CapEx number, wherein it seems that we have done roughly INR 170 crore of CapEx in Q4, given that you had indicated that CapEx stood at INR 280 crore for nine months. Is it mainly on the mobile phone facility that we are speaking about or there's something more to it? So- Sorry. Yeah. Aditya, one, of course, we have done some part of the CapEx on mobile, but that large part of the CapEx will happen in Q1. It's currently happening, both on the new plant as well as the machineries or the lines required for those potential customers. I think so the Q4 CapEx that you're talking about of INR 170 crore, a significant portion has gone into a refrigerator plant, which is now hopeful of we will be live with that plant by November. A lot of advances, machinery, construction of the 20 acre facilities is happening at a very fast pace now. Significant portion of that INR 170 crore has gone to refrigerator. Mobile is also part of it, and also a semi-automatic washing machine we are having... We'll be coming out with a new plant in. We have taken a new plant which will be operational by July. Construction on that, machineries, all put together, yeah. Understood. Just one clarification. For JioPhone, you'd mentioned 0.5 million order book per month. Did I hear that correctly? That's right. Yeah. But there is, there's not a continuous business. The Jio orders come in project forms. The current order book is of this kind. Understood. Overall, we have the order book for maybe two to three months. Something like that. Understood, sir. That's very helpful. Thank you so much. Wish you good luck. Thanks. Thank you. The next question is from the line of Alok Deshpande from Nuvama Institutional Equities. Please go ahead. Yeah. Good evening, everyone, and thank you very much for taking my question. My question was a little bit long term. You know, if you look over the next, maybe three to four years or five years, are there any categories within electronics which are completely untapped, in the sense that which you're currently not at all, have not at all entered? Any color you can give on that? We feel that, you see in Dixon’s case, our growth journey has been, of course, growth in the existing businesses. In existing businesses, getting the larger share of existing customers and also acquiring new customers. Apart from that, you know, building on our core competence of electronics manufacturing, every year practically we've been venturing into new businesses. We started off only with television, lighting, washing machines, air conditioning components, refrigerators, mobiles, telecom devices, set-top boxes, TWS, smartwatches. We feel, this is the current opportunity pool, particularly after the PLI Version 2 has been rolled out by the government. A large opportunity can be IT products. The team is studying the contours of the new PLI scheme. We feel there's a large opportunity for us. Yeah. That is what I see as of now. Many, everything is electronics. Many, many things will come the way of the industry and Dixon will not lose any kind of opportunity. As of now, what I see in front of us, apart from existing businesses, is the IT products. Sure. Understood. Just one clarification on this, the two new potential customers that will come in on the mobile division. Last time when you had given the guidance of mobile revenue going up from INR 4,000 crores to INR 8,000 crores, I presume you were assuming that, you know, the commercial production there would start probably in the Q1 of FY 2024. Now that getting pushed out to Q3, do you still see that kind of quantum of revenue coming in in FY 2024 or you are largely indicating the quantum that can potentially come on an annual basis? You see, any start of a new large account has its own challenges. I'm not commenting on any number. However, at the same time, we as a team in Dixon are fairly confident of generating that number. Sure. There has been a small change. Till last time we were talking about two customers, including Tinno, which we have already announced. Now we're including Tinno, we are talking about 3 customers. Also we are talking about Jio, which is already operational. Nokia increased quantity. That has given us more confidence that despite these new customers only running for six months of operations, we can still achieve those kind of numbers with that we had guided for all year. Understood. Very clear. Just one very small question. The margin improvement that we have seen in Q4, sequentially and as well as year-over-year. A lot of the drivers that were mentioned, at the start of the call seem very structural to me, in terms of strategic, price hikes, cost efficiencies, et cetera. Is it fair to assume that now this, not at the overall level but across segments, these, margin levels become the new normal for this year, coming year? Please appreciate in Q4, the margins have expanded by 110 basis points to 5.2%. Are they sustainable? I think we should be conservative. On an annual basis, the margins are around 4.2%, which increased from 3.6% on an annualized basis. We feel that from 4.2% there is a possibility of improvement by 30–40 basis points. Let's see. Sure. Thank you. Thank you. It's very helpful. Thank you. Thank you. We'll take the last question from the line of Kayur from ICICI Prudential Life Insurance. Please go ahead. Thank you, and congrats for good set of results. Sir, the question is on lighting and washing machine. Despite all the initiatives in lighting, it is about new category additions of, say, commercial lighting, rope lighting and one more driver of export. On the other hand, washing machine, we are adding fully automatic. Earlier we have talked about export opportunity as well. Despite that, overall growth numbers are in line with what industry is growing or slightly higher than that. What has happened? Is it because of the industry slowdown? Because earlier we were talking about new customer additions as well in washing machines. Just to get an idea where what's happening on the export side, because that was considered a big opportunity in lighting, and more customer addition in fully automatic washing machines. Just your thoughts on despite all these drivers, why slightly not say muted, but moderate growth guidance. Responding to your question on washing machines, we started with our anchor customer, Bosch, and more and more new customers are being added. Please be rest assured. This customer acquisition is being pursued very aggressively, and it's also maturing. We are the only large ODM/FATL player in the country. The growth is gonna be good. Launch of any new solutions with a new customer on a complex product like fully automatic top loading, it takes its own time. That's the reason the indicative number is slightly conservative. On the lighting side, whatever, undoubtedly the market, the domestic market has been flattish. Also the unit price in certain SKUs like LED bulbs and batons have been significantly declining. We are trying to build the volumes there. The main growth is gonna come through addition of new categories, like expanding the product portfolio of ceiling lights and downlighters, launching the strip light and rope light for which the commercial production is just about to take off. Launch of professional lighting for which our R&D team has been strengthened significantly and rollout is on the way, and then exports. I have guided for around 12%– 15% growth in lighting, which I feel that with unit price decline is an aggressive target. Okay, understood. No doubt, sir. Thanks a lot and all the very best. Thank you so much. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference back to Ms. Bhumika Nair for closing comments. Thank you and over to you, ma'am. Yeah. On behalf of DAM Capital, I would like to thank everyone for being on the call and especially the management for giving us an opportunity to host the call. Thank you very much. Wishing you all the very best, sir. Thank you everyone and thanks, Bhumika. Thanks very much. Really appreciate it. Thank you everyone. Thank you, Bhumika. Thank you very much. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.