Ladies and gentlemen, good day, and welcome to the Dixon Technologies Q4 FY 2024 earnings conference 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 Limited. Thank you, and over to you, ma'am. Yeah, thanks. Good evening, everyone, and welcome to the Q4 FY 2024 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, CFO. I'll now hand over the floor to Mr. Atul Lall for his initial remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir. Thanks very much, Bhumika. Good evening, ladies and gentlemen, this is Atul Lall, and we have on the call today our CFO, Saurabh Gupta. Good evening, everybody. Thank you very much for joining this, this earnings call for the quarter and year ended March 2024. Our company has delivered yet another year of strong performance. First, coming to the overall performance for the fourth quarter, consolidated revenues for the quarter ended March 31, 2024, was INR 4,675 crores as against INR 3,007 crores in the same period last year. That's a growth of 52%. Consolidated EBITDA for the quarter was INR 199 crores as against INR 158 crores in the same period last year, a growth of 36%. Consolidated PAT for the quarter was INR 97 crores against INR 81 crores in the same period last year, which is a growth of 20%. Coming to overall performance for the fiscal year ended March 2024, consolidated revenues for the year ended March 2024 was INR 17,713 crores, against INR 10,198 crores last year, which is a growth of 35%. Consolidated EBITDA for the year is INR 720 crores against INR 518 crores last year, which is a growth of 39%. Consolidated PAT is INR 375 crores against INR 255 crores, which is growth of 47%. Another highlight for the year was the strong cash generation from operations, which is approximately INR 584 crores, which was used for funding a CapEx of INR 569 crores in the year 2023-2024. With a strong capital allocation discipline, effective working capital management, and earning improvement, we were able to expand our RoCE and RoE to 38% and 25.2% respectively, as on 31st March 2024, and further strengthen the balance sheet with gross debt to EBITDA ratio of just 0.09. Working capital days stood at eight days. Our balance sheet strength enables us to direct growth capital swiftly and enables us to invest in the long-term development of our business. We strongly believe that we have a platform to sustain a strong revenue growth moving forward, addition of new customers across all businesses, including some very large accounts in the mobile business. Now, I'll share with you the performance and the strategy in each of our businesses, verticals going forward. Mobiles and EMS business, revenue for the quarter was INR 3,091 crore. It is a growth of 119% year-on-year. Operating profit was INR 105 crores, which is a growth of 78% year-on-year, with an operating profit margin of 3.4%. Revenues for the year were INR 10,919 crores, a growth of almost 109% year-on-year. Operating profit in this business was INR 355 crores, a growth of 113% year-on-year, with an operating profit margin of 3.3%. In the last fiscal, we had already touched a significant milestone of manufacturing 15 million smartphones and 38 million feature phones. Now we have created a capacity of 45 million smartphones and 40 million feature phones. That's approximately 50% of the capacity pool in this business. We have been making incremental investments in this business in order to meet the increased order book of our customers. We expect a strong growth in the volumes of Motorola smartphones, including a growth in export orders, a ramp-up in Xiaomi smartphones business is shaping up well, and we'll clock around 300,000 per month from May onwards. We are expecting a significant ramp-up in the coming months ahead of the festive season. Manufacturing for a global brand through Compal is expected to commence by September 2024. With Longcheer as our ODM partner, we are starting manufacturing for Realme, which is the brand of Oppo, and we are clocking around 450,000 volume in the current month of May, with a substantial uptick in volumes month-on-month going forward. We expect to add one more large global brands in the coming months. On the Ismartu deal, approval of the Competition Commission of India is awaited, and both parties are working on the deliverables for the consummation of transaction. We feel fairly confident that we should start consolidating the financials from Q2 of the current fiscal. Such large order win showcases that practically we are now having all the top six brands except for one large global brand as our partners. And this has been a major, major positive for us in the last fiscal, on which we have to consolidate in the coming quarters. Another important thing which I would like to share with the stakeholder is, in line with our strategy, that once we acquire a large scale, the next phase is the deepening of manufacturing. So we are looking to manufacture display modules, and we have already finalized the technology partner. The details will be shared shortly. We are also looking at getting into precision components and mechanicals, and the same is under deep study. So these are going to be the next level, significantly steps forward to consolidate our mobile business. Consumer electronics. The revenues for the quarter were INR 897 crore, with operating profit and margin of INR 30 crore and 3.4% respectively. Annual revenues were INR 4,048 crore, with an operating profit and margin of INR 141 crore and 3.4% respectively. Our first ODM-based TV solution from 42 inches to 85 inches were rolled out in the current quarter, and we have encouraging response from our customers. Manufacturing and the partnership with Samsung for the Tizen operating system is expected to be rolled out in the current quarter. In addition to interactive flat panel displays, we have now started manufacturing digital signage solutions from 65 inches to 100 inches. The order book in both these categories are decent. A state-of-the-art R&D center for display devices has been set up in Noida for superior product developments in televisions and in IFPDs and signages. We are actively exploring manufacturing of industrial, institutional and automotive displays. Home appliances. The revenues for the quarter was INR 294 crores, with an operating profit of INR 30 crores and operating margin of 10.2% and annual revenues of INR 1,205 crores. Operating profit for the year is INR 231 crores, which is a growth of 20% year-on-year. Mass production has already commenced in our new facility in Dehradun, which has an installed annual capacity now of 2.5 million. In line with our backward integration strategy, our tool room is now fully operational, and all a large part of our mold requirement is done in-house. Manufacturing with BSH in semi-automatic category and Panasonic and Lloyd in fully automatic category has already started. Pilot productions for the brands for Reliance in both the categories is completed, and mass production will be starting in the current month. Lighting. The revenues for the quarter were INR 97 crore, with an operating profit of INR 14 crore. Annual revenues were INR 787 crore, with an operating profit of INR 59 crore. We have launched the professional product, floodlights, in Q4 of the last financial year. Further new product introductions in ceiling light and extension of professional lighting range are planned in Q2 and Q3. We are getting into backward integration for mechanicals, with injection molding for ceiling lights in Q1 and extrusion for battens Q2, to achieve better cost optimization for ceiling lights. We are working to expand our product basket by moving to high value and premium products. We will achieve the thresholds for investments and also incremental revenue under the PLI of 2023-2024. Telecom and networking products. Revenues in this segment for the quarter and the year under review were INR 228 crores and INR 655 crores respectively. We're adding one more facility in Noida to meet the increased order book from our customers. Mass production is now ongoing for telecom, GPON ONT routers, and Android set-top boxes for Airtel in partnership with various local ODMs. We have started pilot production for Airtel for 5G fixed wireless access devices, and also mass production is expected to commence from June, July current fiscal. We have signed an agreement with Nokia to manufacture 5G fixed wireless devices, and we see an extremely good order book in this particular domain. In this particular category also, we made the thresholds both for PLI investments and revenue. Laptop, tablets, and IT hardware products. Dixon, through its 100% subsidiary, Padget, is now the beneficiary in IT PLI 2.0 under the hybrid category. We have committed an investment of INR 250 crore. We already have now the contracts with Lenovo and Acer. We are targeting to start our production by September in the current fiscal. Wearables and hearables. The revenues for this segment in the last quarter were INR 72 crore and INR 747 crore on the year basis, with healthy operating margins. In line with our strategy of deepen the level of manufacturing, we have started the PCBA operation and we're looking at injection molding within India. Security services. Dixon's share, 50% share of revenues for the quarter, and the year was INR 179 crore and INR 673 crore respectively. The government has come up with with a PPO and PR for adding the domestic value addition and also the domestic designing, which as an entity we are pursuing. Rexxam Dixon Electronics Private Limited is a 40/60 JV with Japanese company, Rexxam, to manufacture inverter controller boards for Daikin. The JV achieved the revenues of INR 94 crore in Q4 and INR 362 crore in 2023-2024, with extremely healthy margins. in a strong RoCE. We have a strong order book in this vertical. In this business also, we've achieved the thresholds for PLI, both for CapEx and revenues. Refrigerators, we have created a capacity of 1.2 million direct cool refrigerators, which is more than 10% of Indian requirement under various tier categories, from 175 liters - 235 liters. We have started mass production. We have an extremely healthy order book. In the current month itself, we are targeting to produce almost 60K, 60% of our production capacity. The season is looking good. We have our anchor customer in Voltas and various other customers, and some other large brands we're going to be acquiring and servicing them in the next quarter or so. This is one of the most backwardly integrated and automated plant in the country, and I think our team has done a great job setting it up. I'd like to stop here, and Saurabh and I are there to address your questions, please. 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Aditya Bhartia from Investec. Please go ahead. Hi, good evening, sir. Hi, Aditya. Hi, sir. So you spoke about vertical integration in the mobile phones business. It would be great if you could share some more insights into this. What exactly are we planning? What kind of an opportunity would it be? What kind of margins it could entail? Anything that you can share around that. So the specific component that we are pursuing vigorously, and hopefully we should be able to conclude, is display module for a smartphone's, Aditya. We are targeting in phase one to create a capacity of almost 25 million in the Delhi NCR area. We are almost at the closure of a technology partnership and possibly people partnership with a technology provider. So we are putting the resources in place. The CapEx in this is going to be almost $30 million without land and building. And, yeah, so that is the contour. The exact numbers are still being finalized, but I'm just giving you the basic idea. This will likely be in a JV kind of a form. Does that also mean that we are incrementally becoming more open and more excited towards getting into the component ecosystem? Yeah, absolutely. Absolutely. Sure. In the last conference call, sir, you had also referred to the opportunity on the PCB assembly side, with one of the large, global customers from whom you have received, RFQ. Any details that you can share around that? So that is what we are pursuing. We are going to be setting up a campus, a new campus, in which the non-consumer side of PCBA will be housed inside. That RFQ is being pursued, and we are very optimistic that we're going to secure the business. Understood. Sure, sir. And sir, my last question is on the kind of acquisition that we did with Ismartu. Do you think this kind of an acquisition could pave way for more such deals, especially with customers who have their own manufacturing facilities? So I think Ismartu is extremely positive, strategic acquisition for us, and it's a, it's a larger relationship, which goes for years and years. We are pursuing those kind of relationships. At present, but we are pursuing, and we are pursuing vigorously. Let's see where we reach, but we'll keep updating you, Aditya, as and when we have significant tangible developments there, but we are going to be pursuing. Sure. Thank you so much, sir. Wish you all the best. Thank you, Aditya. Thank you. The next question is from the line of Ankur Sharma from HDFC Life. Please go ahead. Yeah. Hi, sir, good evening. Thanks as always for your time. First question on the cell phone segment, slightly softer revenues this quarter, but, I'm assuming, your things will start ramping up over the next few quarters. I think you mentioned you have about 45 million smartphone capacity, is what you created. By when do you think you can actually fully utilize it? Is it like a two year, three year time frame, by when you think you can actually fully utilize that capacity? So, Ankur, the ramp-up is happening, to share with you in the current month itself, and here I'm talking about without Ismartu, we are at a level, in the current month, of approximately 1.5-1.6 million. Okay. If I add the Ismartu volumes, that's another 0.7-0.8. Mm-hmm. We are already at 2.3 million a month... Right? And we'll keep it to it. So, yeah, let's see. I feel that this year itself, we should be somewhere around 28-30 million. I'm sorry, 20 million, you said, sir? Sorry? Around 28-30 million, excluding Samsung. Samsung is. Not Samsung, maybe. Samsung display. Sure. Samsung would be over 10 million. Right. But without Samsung, we should be at somewhere around 28 million. 28 million. Got that. Sorry, my bad. Okay. Okay. Okay, and, if you could also just share the, volume numbers, the annual volume numbers for your category, TV, washing machine, lighting, so on and so forth. Yes, sure, Ankur. Just give me a minute. Yeah. Yeah. So, so I'm sharing you the annual numbers. Yeah. So on LED TVs, our volumes was around 3 million. Mm-hmm. LED bulbs, so volume was 94 million. Mm-hmm. Ceilings, 20 million. Downlights, 2.5 million. Mm-hmm. Other lighting products, which is other products which they fall under other categories, other SKUs, is INR 79 million. Okay. Semi-automatic washing machine was 1.7 million. Mm-hmm. Fully Automatic Washing Machine was 1.6 lakhs... 0.16 million. Mm-hmm. Smartphones, excluding Samsung, was around 6.5 million. Okay. Feature phone was 38 million. Okay. Samsung smartphone was around- Mm-hmm. 8.6 million. Mm-hmm. And yes, so we are pretty much, these are, these are numbers. You want it for security reasons and all other products? Sure. But that's okay. I think this is what it is. Great. I think that's also my time. Yeah, thanks. All the best. Thank you. Thank you. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead. Maybe just one first to start off, just a bookkeeping question. Anything in other income that you see that you have had- Sir, may I request you to use your handset, sir? Your audio is slightly muffled. Yeah. Is this better now? Yes, sir. Please go ahead. Yeah, maybe just a bookkeeping question first. Anything in other income that you've seen a sharp jump this quarter or anything that sort of is one-off or any PLI or anything that is booked over there? No, so clearly, so basically this, because this includes, we have done, we have got a large FX income in this quarter for exchange gain of almost 10-odd crore, and then INR 6-7 crore to INR 8 crore is the sum of the liabilities which have been written back. But mainly it's on account of FX income. The PLI income booked in revenue this year for the full year, what is, what was it for last year? Yeah, so PLI income for the full year is around INR 70 odd crores across four PLIs, excluding IT hardware. Sure, and the corresponding number would be closer to INR 9 crore last year, if I remember correctly. Last year it was a number around INR 10-11 odd crore. Sure. Sir, maybe just on, smartphones, given that we sort of have this tie-up with Longcheer as well, how are we looking at, you know, the ability to add further customers? I think you sort of indicated one large customer is the potential, but in terms of... And further, just for the year, how are we looking at the overall ramp-up? Because you've given a number of closer to, you know, 30 million smartphones, but if I look at, is, the ramp-up already from the beginning of the year, or should we assume that Ismartu comes in and that's a larger kicker that kind of comes through full to queue? So as I shared with you, Ankur, we appreciate that, we have now, top 6 brands except one large mobile brand in our customer portfolio. And, one more large mobile brand, we're going to be adding in next 3-4 months. So practically, we have, we have all the brands dominating in the Indian mobile scene. And, we are ramping up. Ramp-up takes some time, but, we feel confident that quarter on quarter, this volume keeps, will keep on increasing. And definitely what you're saying is absolutely right, that, the Transsion number, the Ismartu number, this is going to be an extremely important kicker in this. Sure, sir. Those were my questions, and best of luck for future quarters. Thank you. The next question is from the line of Girish from Morgan Stanley. Please go ahead. Thanks for the opportunity. I had a couple of questions. When I look at consolidated cash flow for the full year, you know, we were at INR 726 crore last year, and this year we were at INR 584 crore post-tax. Can you explain? Because your net working capital is minus eight days for the three line items, so what exactly has led to a reduction in cash flow from operations? Yeah, so basically last year, if you look at the cash flow, there was a INR 275 crore working capital positive change for us, which got generated mainly on account of the good work done on the lighting business, where our working capital density in a year prior to last, last year went up high. So we got a lot of money released in the working capital and the lighting business, and also in the mobile business. Because initially, those were an initial years in mobile business, and initially, whenever a new business starts, working capital gets stuck, which we are able to correct in the last financial year. So that 726, broadly, we should attribute it to out of the INR 276 crore coming from working capital broadly. So if exclude that INR 276 crore, we are talking about INR 450 crore of cash flow, which got generated last year. That INR 450 crore has actually gone up to INR 580 crore, because this year there is no working capital generation. There is a small INR 9.9 crore negative working capital. So broadly, that's how you should look at it. And so I also see an increase in payables of INR 1,621 crore. That is offsetting the receivables and other financial assets and inventory, et cetera, receivables and all of that. So is this the way it will be now going forward, that the payables will continue to increase at the same pace at which receivables? And because- Yeah. How fragmented is this payable basket? Like, is it concentrated? How is it like? Can you probably provide some color around sustainability of these payables? Yeah, so this is sustainable because clearly large part of this payable is attributable to our mobile business. So if you see the whole revenue breakup, 62% of our revenues are coming from mobile business. And we have two business models: OEM business model and ODM business model. In a prescriptive business or OEM business model, clearly there is an understanding that when the customer, we, we, we will pay to the vendors only when the customer pays us. So there is a negative working capital. So for every receivable that you see, there will be correspondingly payable, which is there. And that's the whole reason why both receivable and payable are looking on our side. It's mainly attributable to the mobile business, and also what our team has done, that increasingly, on account of better scale, size, our teams keep getting, they keep negotiating with the vendors and get the trade greater days pushed, get better credit days from the vendors. So but mainly, it's largely attributable to the prescriptive part of the business, and also within prescriptive, it's attributable to the mobile business. Business model has been defined like this, that the deployment in the current decade should be absolutely minimal. Hmm. Okay, my second question was on CapEx. So we incurred, net, INR 569 crore this year. So, what are we penciling in this year, given that we have some expenditure on display also going in? And if you can provide some high-level breakup of that CapEx for fiscal 2025, 2026. Yes, so these numbers are being worked out, but clearly, one of the numbers we have, which Mr. Lall also mentioned in his remarks, is the $30 million on the mobile display. This in itself is to INR 40-odd crore. Then there are certain committed CapEx under the PLI, under the lighting components PLI, under the IT hardware PLI that we have to do, and also on the inverter controller board, where we have a JV with Rexxam, some part of CapEx. So my, our first impression is, I think, so broadly, I'll have that number by, in the next 7-10 days, but broadly, if on the opportunities that exist today, I think so it should be lower than the current financial year of INR 570-odd crore. But yeah, things are dynamic and lot of, lot of opportunities are coming to us. But as of now, I, we, we believe that it should be lower than this INR 570 odd crores. Yeah, because all CapEx in mobile has already been front-ended. A large part of our CapEx last year happened on refrigerators and washing machines. So those capacities have already been created. So some balancing CapEx more has to be done, but large part of CapEx has already been front-ended. New CapEx will happen only in some new products and some PLI commitments. Okay, let me ask, on the land side, have you incurred any number, can you share in FY 2024? And is there any land, CapEx that is required to be done in 2025, 2026? If you have any estimate on that. See, two land parcels that we bought, one for a mobile plant, where the construction is happening. We are creating almost 1 million sq ft facility there. So that land payments have been done there, and also the refrigerator plant is now operational. So the other large land parcel is also the refrigerator plant, where doing the payments. So the only investment that we foresee so can be in Chennai there. Either we can go and take a lease model there, or go on a landed premises for our EMS business, which also was mentioned by Mr. Lall, and or otherwise, yeah, we can potentially buy some land and construct it, but as of now, those things are not signed up. But most of the other things have already come into the system. Okay. And the customer acquisition on the margins for mobile side, outside of this display, obviously, they are prescriptive, so you have been running at 3.4-3.5, including the PLI. But the new acquisitions that have come through on customer side, are they margin accretive? And if you can qualitatively say, like, how will the mixed margin for mobile segment look for FY 2025? Yeah, so I can clearly say that these new customers are definitely margin accretive as compared to our earlier anchor customer. And also secondly, if you look at once you get an operating leverage into the system, you generate that extra margin, so there will be clearly operating leverage benefits which come in. And as mentioned, we're also now looking into the backward integration of mobile display, and also at some point of time, getting into the precision components and mechanicals, so both of them will also add to the margins. Sorry, last question on lighting margin. We used to have, you know, close to 8%-9% margin. Now, the margins have trended down a little bit for the last couple of quarters. I understand the devaluation aspect on the revenue. What I wanted to understand was that with the PLI benefits also flowing through, is there any one-off in the second half this year on lighting margins, or are these likely to sustain going into next year? Yeah, so please appreciate, Girish, there's always a level element of fixed cost in any business. So when the volumes fall or when the revenues fall, but you need a certain level of minimum fixed expenses to run those operations. So that is majorly attributable for the margin fall that has happened in the lighting business. Okay, thanks, and wish you all the best. Thank you. The next question is from the line of Mayur Patel from 360 ONE Asset. Please go ahead. Yeah, thanks for the opportunity. You know- May I request you to use your handset, sir? Your audio is muffled. Am I audible? Yes, sir. Please go ahead. Yeah. Yeah, thanks for the opportunity. While the company remains on a very strong growth path, driven by mobile phones, but on the other segments, like consumer electronics and lighting, we saw 10.9% decline and around 27% year-over-year decline. Just if you can share some thoughts around how do we see where this can settle in terms of bottoming out and start to grow? That's question number one, and then I'll ask the second question. Thanks. Please appreciate, let's first talk about the television business. In television business, as far as the outsourcing opportunity is concerned, we have almost 60%-65% market share, so that opportunity pool is not going. That is the reason one is leading to this kind of a situation. So what are we doing to address that issue? We are basically doing three things. One is going in for backward integration. So we have already invested in the injection molding plant, and the mechanicals for televisions are happening in-house now. This should add to our margins. We have also started the manufacturing of LED bar, which should add to our margins. The second step we have taken is to migrate more and more to JDM and ODM. So the contribution of JDM, ODM is increasing, and we have successfully launched the Google solution, and now the TiVo solution is also being launched in this fiscal, which we should be able to acquire more customers, and it's more margin accretive. The third thing is that within the same infrastructure, with the balancing CapEx, we increase or we enhance and expand the product portfolio. So that's what we have done by launching first the IFPD. That is an interactive flat panel displays. The production is already started with some large global brand, and we will keep on expanding. And the second is to get into digital signages. So that's what we are working upon. And please also appreciate that in this particular space, we're 5x our next in penetration, and we're fairly confident that we hold on to that pole position. So that's where it is. In lighting, the industry has gone through significant distress. So what are we doing? One, we are trying to build up a larger product portfolio. We have entered into professional lighting. The floodlights and the panel lights have already been launched. The streetlights are going to be shortly launched. Further, we have got into our own toolings of downlights. We have also set up an infrastructure for extrusions for battens. This should make and build a more competitive strength into the company. Third, we are also looking at some new customer acquisition, and we've been successful. Now, we have some large anchor relationships with some large brands in India who have moved out of insourcing to outsourcing, and we are going to be their anchor suppliers. So these are some steps taken, and internally, we have also restructured the organization. So I see an improvement in the order book in the current quarter. Hopefully, it should keep improving. I think it's going to take a couple of quarters more. Sure. Is it fair to assume that, you know, going forward, at least you'll be flattish to get into some positive growth trajectory in these two businesses? I'm not able to hear you. The voice is not clear. Is it fair to assume that this decline would be arrested in a quarter or two, and we would be in a positive growth trajectory in these two businesses? Yeah, I feel that, in lighting, the growth will happen, and, the number is going to be better from the current quarter itself. And, in television, I feel that, from the second part of Q2, the numbers should start getting better. Sure, sir. So just one more question, if you may allow me, on like, we have delivered very robust growth across top line, EBITDA and PBT, but for the year, the operating cash... Sorry, if you have already answered this, I joined a bit late. Operating cash generation has declined year-on-year, and this increase in, is it because of working capital, and is it temporary in nature because of the ramp up in mobile phone, or is it structural, any change in the working capital structure, working capital days, thank you? As Saurabh was explaining, in 2022-2023, we corrected the working capital situation, and because that time it was a ramped up, the mobile phone business was a ramped up phase. We had invested a lot of capital in our Motorola business and also in our lighting business. So we corrected that working capital, and by that we generated almost INR 276 crores. So working capital today, if you see the operating cycle today is eight days, is almost at an optimal level. So there was no more scope of improving the working capital situation. So we removed the INR 276 crores. In 2022-2023, the cash generation was approximately INR 450 crores. And in this year, I think, Saurabh, it's INR 580 crores. So the cash generation from operations this year is higher than 2020-2023. Sure. So you think the negative working capital cycle can be sustained in this mobile ramp up trajectory in- See, in the company, we have a huge, huge focus on our operating cycle, on our current assets. Day in, day out, the team work on it. So there can be some challenges in near term, you know, for a quarter or so, with some new customer acquisition, because it takes time to stabilize. But on an overall basis, there'll be no dilution of this focus. Sure. Thank you. Thank you very much. I'll give that back to you. Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Thanks. Thanks for the opportunity and, congrats for, a good set of... So generally, for the- Sorry to interrupt you, sir. There's slight disturbance from your line. May I request you to please use your handset? Yeah. I'm using handset. So, just generally, you give guidance about the next year at the fourth quarter. So any guidance in terms of the growth for FY? The line is not clear, sir. There's a lot of disturbance from your line, sir. Is it okay now? Yes, sir, you can go ahead. Yeah. So, sir, just the guidance for if I quantify in terms of revenues as well as margin, if you can share, please, at the consolidated level. Yeah, thanks. We have not been giving guidance now. So we are not in a position to share the numbers and guidance at this stage. But please be rest assured, the growth is gonna be robust. A new customer acquisition has taken place. New verticals have a very decent order book, so we are confident about our growth numbers. So means, obviously, yes, but, any ballpark figure that you would like to share, like, means, let's say 30%, 40%, or any range, if you can at least guide? Because there are too many moving parts and, means innovate the guidance could be much more, helpful to the entire investor and analyst community also, and also on the EBITDA margin. Yeah, just a kind request. Yeah, thanks. I can't give the growth forecast, but what I'm reiterating is that the growth is gonna be extremely, extremely healthy. Very, very good. Anirudh, on the EBITDA margins, you can assume a similar level- Yeah ... of some 4%, 4%, because a large part of our growth will come from mobiles, which is inherently a low margin business. Of course, the margin levers for us will be operating leverage, more backward integration and designing wherever possible. But yeah, so margin-wise, you should assume the same level what we have achieved this year. But, we will refrain from giving any guidance. Okay. Sure, sure, sure. Yeah. Thank you. Thanks a lot. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Yeah. Sir, thank you for taking my questions. So a couple of them. So first one, I want to just understand, you know, predictability of our mobile phone revenue, because, you know, while we've been winning a lot of orders, even on a QOQ basis, our revenue hasn't grown. Now, you've spoken about, you know, few numbers, not guidance, but effectively, you know, how many million you expect to do. How predictable is it? Is the customer going to decide it two months ahead of schedule, whether you make it, or is this sort of carved in stone that the 27, I think, 27, 28 million you spoke about, is something we should be able to do next year? That's my question number one. So, Pulkit, how does it work? We are an extended arm of the principal. We have to create capacities for them. As per their internal business plan, they ask us to create capacity. They give a quarterly breakup of their expected requirements. Now, is that cast in stone? No. Can there be a variability to it? Yes. But largely, what they share, it's broadly in that range, there can be a variability of 10%-15%. So that's one aspect of it. The second aspect of it, please appreciate that what are we trying to do? Last year, our smartphone numbers were 6.5 million, including Ismartu, we're talking about 28-30 million. Now, these are new customers, complex SKUs, complex models, NPIs, launch plans. The ramp up can get delayed, so that can have an impact. That's how it is. Understood, sir. So that's very clear. Pulkit, also to add to it, I think one of the reasons why our Q4 numbers are also lower is because we ramped down on the Jio Bharat 4G business and the ramp up of the other businesses with the customer acquisition has taken some time. But now we feel confident with the numbers that we mentioned, and we also gave you a visibility of the current month numbers. So we feel more confident in the numbers that we have just mentioned to you on the annual numbers or on the monthly numbers. Now, there can be delays of couple of months here and there, but broadly, we feel more confident. We have a deep discussion with our customers. We have built those capacities for them, we have done those capacities for them. lot of models have already been approved. We feel more confident here about the- Or, anything can happen. For example, let's say consolidation of Ismartu. Now, the final approval is lying with CCI. There can be a couple of weeks delay, so that might have an impact on those kind of situations. Okay? Sure. Sure, sir. No, I think the good thing is that at least the year has started off well in terms of general mobile phone shipment. So my second question is again related to the margin bit. Now, obviously, we've created so much capacity in the last 12 months on the smartphone side, I would have guessed there would be some part of that capacity, which in FY 2025 should have given us better operating leverage as we ramp up volumes. So I'm just trying to understand, is the margin number you're giving bit on the conservative side, or the contracts are negotiated in such a way that 4% or sub-4% is the number that we should keep in mind? Just trying to understand that aspect again a little better. So let me share with you the new customer acquisitions are, are better margins. So let's see how it emerges, because there are so many customers, so many SKUs around blended basis or it evolves. So that's the number that, Saurabh has given you on the basis of his internal calculations. But, there are new customer acquisitions are, are margin accretive. Yes, Pulkit, you will see definitely we feel there will be an improvement in margins in our mobile business, from the earlier years. So even if you look at, this year also, of course, this mobile and EMS factors into account the margins of other businesses. So mobile business margins are slightly lower than the 3.3% that we have shown for the combined category, mobile and EMS. So please be rest assured, those numbers of mobile business margins would actually grow this year. And clearly, the points that you have mentioned, the capacity, larger scale, benefit of operating leverage would kick in. And some of the better commercials that we have for the new customers that we have gotten board. Sure, sir. Thank you. Thank you. The next question is from the line of Nikhil Agrawal from VT Capital. Please go ahead. Good evening, sir, and thank you for the opportunity. So as you said, our mobile business margins would improve, and the newer customer acquisitions are more margin accretive. But since Compal is one of the acquisitions that we did, they are also contract manufacturers themselves. So I do not really understand, like, are the margins for Compal on the, on a higher side, on a higher side? Or, I mean, if you could just throw some light on that. So, it's not prudent for us to give the customer-wide breakup. Mm-hmm. I'll not be able to share those kind of details, please. But more so, our point was not meant specifically referring to Compal. It was more referring to the other acquisitions that we have had. Okay. So, but our margin for Compal would be slightly on the lower side compared to your average? No, but it's not- We can get into those kind of- We won't be sharing any customer-specific, margin side. Okay. Overall, yeah, broadly, we have given you a direction where the margins can be. Okay. And, sir, could you just repeat the annual TV volumes for Q4? Three million. I missed that. Q4, okay. You wanted of Q4. Annual volumes of Q4. Okay, yeah, I just... Q4 was INR 6.65 lakhs. Okay. And so your open cell prices fell down quarter-on-quarter in Q4? Sorry? Did the open cell prices fall down further in Q4? No, no, open cell prices are increasing. They are on an upward trend, open cell prices. So that's why the drop in volumes is lower as compared to the overall revenue drop. Okay. Okay. Understood, sir. That's it from me. Thank you. Thank you. The next question is from the line of Keyur Pandya from ICICI Prudential Life Insurance. Please go ahead with your question. Thank you. Congratulations to the team for good set of results. First question is on mobile side. You mentioned about 28-13 million kind of smartphone volumes. You can just break it up into from, let's say, current level of 0.3 million for Xiaomi, 0.4 million for Realme. What kind of peak revenue we should see, say, in FY 2025 or FY 2026, till whatever time you have the visibility? You mentioned last year that 0.5 million for Xiaomi, that is what the visibility we have. Yeah, so that's the visibility we have. And, when we putting together the numbers of Motorola, Xiaomi, Realme, Ismartu brands, that's TECNO, itel, Infinix, the new brand that we are in the process of acquiring. Mm-hmm. And also Compal. Yeah, we should be hitting on a consistent basis after the ramp up has stabilized, somewhere around INR 2.2 billion-INR 2.3 billion a month. That is in FY 2025 itself, right? That's right. Okay. Okay. Second, now with, and lot of brands at various price points, what would be our average realization for smartphone? So now, averaging comes between 8,,000-9,000 Okay. Okay. Understood. Sir, thanks a lot. I'll get back in with you. All the best. Thank you. The next question is from the line of Ruchita Ghadge from I-Wealth. Please go ahead. Hello, sir. Good evening. My question was regarding the partnership that we've had with Dassault. Just wanted to understand a little bit about that, like what kind of benefits that we'll be getting through this, and what is the additional cost that we'll be spending? So, see, Manufacturing Execution Systems, MES, is an extremely important tool that gives us the real-time data and also automation on our manufacturing lines to improve the production efficiency. So Dassault is a global conglomerate, which has a lot of strength in this tool. We have partnered with Dassault to, to launch Dassault Platform MES. We start with in our mobile plants, from the Motorola plant- and also the other plants. And this tool will be used for mobile production and also for our IT products production. So the total, in the CapEx, or our total spend on this Dassault, would be somewhere in the range of around INR 78 crore? Yes, INR 70 crore. Okay. So this will lead to how much cost benefit for us? Well, the cost benefit, we have not put a number on that, but this is an extremely important tool for enhancing the productivity, for getting the yields right, for reducing the reaction level, for getting the data points to analyze on the quality, on productivity, on manpower efficiency. Yeah, so this is an extremely important tool, which globally, all the major electronics manufacturers, not only electronics manufacturers, across the whole manufacturing industry, they use. So we had the first partner in Siemens. So our Siemens MES platform has been rolled out in our TV plant, in our fully automatic top loading plant. For our production of Xiaomi and Realme, we're using Longcheer as MES. For our other products, we're using Dassault. Okay. Okay. Understood, sir. Thank you. Thank you. The next question is from the line of Abhishek from DSP. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. So just two questions from my side. First is that in terms of some of the other initiatives that you have spoken about, in terms of the EMS capability, including thing that you wanted to get into. Any you know any kind of breakthrough there or any traction on those segments? We are talking about the other EMS space, right? Yes, sir. So the PCBA and the other opportunity that you had kind of articulated in an earlier call, that you want to get in there, any kind of incremental traction on those segments? So, in my response to Aditya's question, I already explained in detail that we are very optimistic of securing some large contract in the EMS space from a global player. I also shared that we are setting up a campus down south in Chennai, and where this is going to be housed. We are in discussions in automotive electronics space and also the industrial electronics space. But can I put a number to it? At present, it's in a very, very formative stage. So are we going to pursue this aggressively? Yes, we're going to pursue. But can I put any numbers and budget to it? No, it's too early. Sure. Sure. We should see something in FY 2022, some contribution coming in from there? That's the way one should look at it. Next fiscal, yes. Current fiscal, to put a number to it, is difficult. Fair. Fair enough. So the other thing is in export of lighting, any kind of breakthrough there that Dixon has been pursuing for a long time. So how should one look at that segment? So we are exporting. We are exporting to Middle East. We are also exporting to Europe. We are working on some contracts in U.S. But, yeah, but we are still waiting for that significant breakthrough. I know that I've been talking about it, but to be very candid, I'm still waiting for that breakthrough. Okay. I wish you all the best for that. And just one other thing, you know, now that you've spoken about trying to deepening the overall manufacture process and where you are spending in mobile phones, about $31 million, how should one look at the return on capital on these incremental investment? It will be very similar to what you have been doing, or will it be slightly diluted? Any sense around that? So the ROC is going to be high, the margin profile is going to be better. It's going to enhance our stickiness with our customer. It's going to be- ... margin accretive. Yeah, it looks good, at least as of now. Yeah. Oh, okay, sir. Thank you so much, and wish you well. Thank you so much. Thank you. The next question is from the line of Yash from Stallion. Please go ahead. Hi. Thank you for the opportunity. Am I audible? Yes, sir. Please go ahead. Yeah. Thank you. So I just wanted to understand that, since you increased the capacity in your smartphone, from 30 million to 45 million, what is the sort of the utilization level you're looking at, broadly on average in FY 2025? So we feel that we should be. The capacity is around 40 million. We should touch around 28-30 million. That's what we are budgeting. Okay. Okay, got it. And I just wanted to confirm the blended realization number per smartphone. Is it average about INR 8,400? Yeah, somewhere between 8,000-9,000. Okay, got it. Got it. So just one thing, so in, in your, you know, Q4 results, I see a big jump in other expenses. It went up 81% year-on-year. I think it's about INR 170 crore. So I just wanted to understand, the, what are the components there and, and why would there was such a sharp jump? Yeah. So, this is basically the ramp-up that has happened in the mobile business, where you basically have people on board, on the contractor side, on the wages side. And currently, initially, the utilization levels are lower, but yeah, on the standing costs, on the consumer goods, whenever new businesses comes, NPI happens, those costs increases. This is basically the ramp-up costs. Ramp-up costs. When you are inducting a new principal and a new SKU, it takes time to reach the optimal level of efficiency, and that leads to the higher cost. It's once you reach the optimum level of efficiency, it normalizes. That's the reason for this increase in expenses. And so many customer acquisitions and so many launches, have happened are on the pipeline. That has led to this. Got it. Got it. And so just one, one last thing. The realization number that is mentioned, is net of GST? Net of GST. Net of GST. Okay. Okay, got it. Thank you. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi. Thank you for the opportunity. A couple of questions. Can you highlight what was the mobile phone export number for FY 2023? And of the 28-30 million overall sales that we are going to do next year, what proportion can be exports? The export number was 1,200 and- INR 1,250-odd crore. So broadly, basically for an Apple customer only, to North America market, so the volume number would be somewhere around $1.25 billion for this, for the 2023 report. Now, for 2024, 2025, and we are still working on the contracts for export, but my sense is that this should be around 60%-70% growth from this. Sure, this is helpful. Second, on the laptop manufacturing part, right? So if I recall correctly, we earlier guided for tablets in April and laptops in September or somewhere around there. Do those timelines still hold, or the laptops are moved back to September as well? Tablet production, commercial production, has still to start. The trials have happened. Yeah, the laptop production is targeted for our large facility in September. Still the same. So any ballpark revenue that you are targeting, maybe if not for one year, in the next three years, cumulative revenue that we are targeting in this segment? I think let's wait for some time. It's still in the formative stages. All right. And last one, if I may. So in this PLI for IT hardware, the government has put a lot of emphasis on localization of components. So is there something that you are exploring over there as well in-house component manufacturing, or those will be done by domestic manufacturers, but not yourself? Part of it is going to be done in-house, and a part of this is going to be, with the local partners in India. One second- When we are looking at display module, display module is also going to be the notebook and tablets. So display will be extended with the technology partner or for notebooks as well. Sure. That's all from my side. Thank you so much. Thank you. The next question is from the line of Onkar Ghugardare from Shree Investments. Please go ahead. Yeah, hello. Am I audible? Yes, sir, please go ahead. Yeah, my question was regarding now you are venturing into so many new ventures. What kind of capital expenditure would you need, need doing, and any need for requirement of capital for that? As you have already mentioned, if need arises, we will go for it. That's the first question. Please go ahead. Speak. So, to answer the second question first, I think so we for the CapEx requirements, we have now reached a stage whereby we don't need any CapEx funding. It will be funded completely from the internal revenues, from the earnings of the company. And concerning this financial year, all I can say right now is it should be lower than the INR 570 crores that we did in 2023-2024. So we are working on those numbers, but it should be lower than that. Yeah, any, it should be capital? ... May, may I request that you use your handset, sir? You're not clearly audible, sir, on the platform. Yeah. Am I audible now? Yes, sir. Please go ahead. So as of now, we don't see a reason to raise any equity. Okay. All right. The second question is on, you have said that you would be differing from giving any guidance, but directionally, where can you see the revenue headed, like you say, next three, four years, so many opportunities? CEO, we're not able to hear you clearly, please. Mr. Onkar, may I request that you use your handset, sir? Am I audible now, sir? Yes, sir. Please go ahead. Yeah, I was asking, with so many kinds, so many new opportunities coming up, what kind of revenue potential you can see in next three, four years? It's okay if you are not giving any guidance, but just directionally, qualitatively, or we want that. I think in this year and in 2025, 2026, the growth is gonna be very, very heavy. That's what we can foresee. We have given everybody on the call a lot of numbers on the mobile side, which will be the largest driver for our growth. One can actually- One can add up those numbers. You'll come to the number. You'll come to the further number. Yeah. Thank you. Sorry to interrupt, sir. May I request that you return to the question queue for follow-up questions? The next question is from the line of Abhineet Anand from 3P Investment Managers. Please go ahead. Yeah, just on this PLI part, for within the INR 71 crore, how much is for the mobile segment? Yeah, so mobile segment will be around INR 52 crore. Okay. And, based on the projection, as per the PLI, you know, what they were, how much that numbers for FY 2025, what will be our number of, in terms of INR crore? See, that will be the- Overall share. Yeah, we will not share, but at the end of the quarter, as and when asked, we will share this number. Okay, okay. And just last bit, I think as you rightly said, you know, growth in 2025 and beyond also, mobile is going to be key, right? And we can probably back work on the numbers that you gave. So mobile is working at... Mobile plus EMS is working at 3.3, others at around 5-5.5, so it takes around 4.1 as a composite. You know, a simple math also, probably if this 3.3 grows at whatever, 70%-80% because of the numbers that you stated, and the other part isn't growing much, it was a decline this year, probably grows by 10%-15%. Still, there could be 20-25 basis points impact, negative impact on the margins. If you can just comment on that. Well, no, I don't think so. On a blended basis, we feel confident it is going to be in the range of what, Saurabh just shared. It is going to be somewhere around 4%. Broadly, even this financial year, we have revenue contribution for mobile is already 62%. Yeah. Even, even the other verticals like telecom, we have a strong order book. Other verticals, we are looking at to get into new verticals, of course, they will start effectively next, next financial year. So my sense is 62 will become 65, 70%, but broadly, the other, other positive drivers for margin expansion will also be continue to play, which is operating leverage, which is backward integration, which is also the, the designing wherever possible. So by senses we feel confident, yeah, 10, 15 basis points here and there, that's fine, but broadly it should be somewhere around 4, sub-4% or slightly higher than, marginally higher than 4%. Thank you. That was my question. Thank you, sir. Thank you. The last question for today is from the line of Sankarshan Mehra from Premji Invest. Please go ahead. Hi, sir. Thank you for the opportunity. I just wanted to understand on this display manufacturing, what would display be as percentage of the BOM cost for the smartphone, and, you know, what precent of value addition are you looking to capture with this query? I'm not able to hear you, please. Is this better? Mr. Mehra, I request that you speak a little louder, please. Sure. Is this better? Yes, better. Yeah. So just wanted to understand, so on this display module that you're doing, what would be the cost, you know, the percentage of cost of the display in the overall BOM of the smartphone? And what would be the value addition that you're looking to capture, you know, with this backward integration? The display module is almost 10%-11% of a smartphone BOM. Sure, sir. Is there a PLI that, we, you know, we benefit from there yet or, is there none? There's no PLI on this. Got it. Sure. Thanks, sir. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Bhumika Nair from DAM Capital Advisors Limited, for closing comments. Yeah, thank you, everyone, and, particularly thanks to the management for answering all the queries and giving us an opportunity to host the call. Thank you very much, sir, and wish you all the very best. Thank you. Thank you, Bhumika. Thanks, everyone. Very appreciated. Thank you so much. Thank you. Thank you. Thank you. All the best. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.