Ladies and gentlemen, good day and welcome to the Dixon Technologies Q1 FY 2025 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 the star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from DAM Capital Advisors Limited. Thank you, and over to you, ma'am. Yeah, good evening, everyone. A warm welcome to the Q1 FY 2025 earnings call of Dixon Technologies. We have with us 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. Atul Lall for his opening remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir. Thanks very much, Bhoomika. Good evening, ladies and gentlemen. This is Atul Lall, and we have on the call today our CFO, Saurabh. Good evening, everyone. Thank you very much for joining this earnings call for the quarter ended June 2024. We are pleased to have commenced the year on a strong note. First, coming to our overall performance for the first quarter, consolidated revenues for the quarter ended June 30, 2024, was INR 6,588 crores against INR 3,274 crores in the same period last year, which is a growth of 101%. Consolidated EBITDA for the quarter was INR 256 crores against INR 135 crores in the same period last year, which is a growth of 90%. Consolidated PAT for the quarter was INR 140 crores against INR 67 crores in the same period last year, which is a growth of 109%. With earnings improvement and effective working capital management, we were able to expand the ROC and ROE to 38.4% and 27% respectively as of 30th June 2024, with further strengthening of the balance sheet and gross debt-to-equity ratio of 0.1 and cash conversion cycle of negative 7 days. We continue to invest in our capacities and diversify into new product categories to support long-term growth opportunities with huge focus on quality manufacturing excellence and consistently meeting the needs of our principal customers and strengthen our position as a key player in the industry. We are well poised to capture the upcoming opportunities and be a part of India's long-term growth story and to write the country's robust consumption narrative and Make in India initiative to achieve industry-leading growth. Now, I'll share with you the performance and the strategy in each of the segments going forward. Mobile and the EMS division, revenues for the quarter were INR 5,192 crores, growth of 189% year-on-year. Operating profit was INR 171 crores, which is a growth of 223% year-on-year with an operating profit margin of 3.3%. The ROC in this business has expanded to 69% in the end of June 2024 as against 32% a year ago. We're continuously making the incremental investments in order to meet the strong order book from other customers, from our customers. Now, we have created a capacity of 45 million smartphones, and another 10 million-12 million is going to be added after Ismartu acquisition, which is around 55%-60% of the opportunity pool in this business. Further, we have a capacity of 40 million feature phones, which is again almost 65%-70% of the capacity required for the feature phones in this country. There is strong growth in volume for Motorola smartphones in monthly order book of almost INR 9 lakhs-INR 10 lakhs per month, including decent order book on exports. Xiaomi business has also now ramped up, and now we are clocking around INR 7 lakhs per month from July, and higher volumes are expected in coming months of the festive season. Manufacturing for another global brand through Compal is expected by September 2024. With long-term OEM partner, we're already clocking around INR 4 lakhs-INR 4.5 lakhs volume, which is a substantial uptake, which I think will go up to almost INR 7 lakhs a month going forward. We are expecting to add one more large global brand in the coming month. On the Ismartu deal, we have received the approval with the Competition Commission of India in this month, and we will start consolidating those financials, I think, in the next 4-7 days, post the completion of CPs. In line with our strategy that once we acquire a large scale, the next phase is going to be deepening of manufacturing, wherein we have finalized a technology partner for display modules in HKC, and we expect to start the manufacturing the next fiscal. We are also looking at getting into precision components and mechanicals and various other modules. Our endeavor is to deepen the value addition, to be a part of a significant part of non-semiconductor form of mobile and IT products, which is going to be more margin accredited and create a more durable business. Please appreciate we'll have the largest capacity in the country. We'll have all the banks who are the largest in the country in the Android ecosystem, and the focus then is to deepen the value addition, which we feel we now have the financial bandwidth and also get in the process of acquiring technical bandwidth on our own and also through partnership group to create a huge moat for us in this business. Next vertical of consumer electronics, revenues for the quarter were INR 855 crores with operating profit and margin of INR 29 crores and 3.4% respectively. Manufacturing under partnership with Samsung for their Tizen operating system is already rolled out from Q1 of current fiscal. Our first ODM-based Google TV solutions from 32 in- 85 in were rolled out in Q4 of last fiscal. It has met with an encouraging response from our customers. In addition to our existing product portfolio, we have added interactive flat panel display and also digital signages to our TV product portfolio. These are the solutions from 65 in- 100 in. The order book in both these categories looked decent. We are also actively looking into exploring for partnership from manufacturing of industrial, institutional, and automotive displays. Home appliances revenues for the quarter were INR 305 crores, a growth of 18% year-on-year. Operating profit was INR 32 crore, a growth of 14% year-on-year. In line with our backward integration strategy, our tool room is now fully operational, and most of the tools are being manufactured in-house. Our infrastructure footprints in Tirupati and Dehradun are now NABL-compliant and accredited, which is strengthening our competence and reliability for deepening relationships with our customers. We have a very, very heavy order book, and we are targeting a significant double-digit growth for this business. Lighting revenue for the quarter was INR 227 crores with an operating profit of INR 15 crores. Both revenues and operating profits have grown quarter-over-quarter. Despite continued challenges with the pricing pressures and decreasing demand, we expect the momentum to continue in Q2. Post the launch of professional series last quarter, we further increased the basket by extending into the DOB range of floodlights and streetlights, which is expected to be rolled out by Q2. We have started the backward integration process and the injection molding for ceiling lights and enclosures for battens is planned in the coming quarters to achieve better cost optimization and acquire a larger competitive stance. We are working towards expanding our product basket by moving to high-value premium products, that is, high-voltage battens and COB downlighters. The next vertical is telecom and networking products. Revenues in this segment for the quarter and the year-end review was INR 418 crore with a steep growth. We're enhancing our capacities and have multiple facilities in Noida to meet the increased demand for our customers. We have started mass production of 5G fixed wireless access devices along with access point GPON, ONTs, and internet set-top boxes. We have started manufacturing 5G fixed wireless access devices, both ODUs and IDUs for the domestic market for Nokia, and we have a healthy order book. Laptops and IT hardware products, we have already finalized contracts with Lenovo and Acer. We are already manufacturing for Acer, and we started the NPI process for Lenovo for notebooks, and the mass production for Lenovo will commence in Q3 of this fiscal. We've also got two new customers, which are the largest global brands for notebooks. They're in the process of signing the definitive agreements. We target to start production for these two global brands in Q1 of next fiscal. With these four customers with us, we have the top four customers out of top five global brands operating in the country. For this, a new campus is being planned in Chennai. The site has been identified. The resource has been acquired, and we target to start this Chennai facility in the next 8-10 months. So this is also going to be a very significant engine of our growth in the coming years. What we, as a team, have been successfully able to execute on the mobile front, we aspire to do the same in the IT products. Wearables and hearables, revenue for the segment was INR 143 crores for the quarter with healthy operating margins and high ROC. We have a decent order book in this business. Security surveillance system, we have sold our 50% stake in AIL Dixon to our JV partner, Aditya Infotech, and in return, we are taking 6.5% stake in Aditya Infotech, which will be going for IPO. Aditya Infotech is a highly profitable company, and we'll be going for an IPO by Q4 of this fiscal or Q1 of next fiscal. This entity will be increasingly focused on more backward integration and designing, and we feel that this relationship is going to be hugely value-accretive for your company. Rexxam Dixon Electronics Private Limited, it's a 40-60 JV with Japanese company Rexxam to manufacture inverter controller boards for air conditioners. This JV achieved a revenue of INR 114 crore this quarter with healthy operating margins and very strong ROC. We have an extremely healthy order book in this business. We're exploring the possibility through more investments under the recently announced revised scheme of PLI for white goods by DPIIT. Refrigerators, the team has done an amazing job. We have an extremely healthy order book. We are clocking production of almost 80,000 refrigerators a month, which is 80%-85% of our capacity. So the project has taken off very well. Now we are planning another capacity extension because the order book seems to be significantly increasing. Also, we are expanding our product portfolio by adding 100 L category to the product portfolio, and we're also exploring investment for frost-free. We have backwardly integrated many production processes and will be further investing towards injection molding. So that's what I wanted to share. I would like to stop here, and me and Saurabh are there to address 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 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 Sanidhya from Unicorn Assets. Please go ahead. Hi sir, good afternoon. Great set of numbers. Many, many congratulations for that. Firstly, on the EMS side, so other EMS which you were saying in the Chennai plant, is it related to the IT hardware I am expecting? Is it the same? That's right. Okay, so I heard in a TV interview you were around INR 4,000 crore we are expecting revenue from it in the, I think, next fiscal, not this one. Just wanted to understand what's the total opportunity size and how much of that are we willing to grab and how are we looking for the capacity size to build up in the next, not this fiscal, but next two fiscals, FY 2027? So this Chennai campus should be operational, I think, by Q4 of current fiscal or Q1 of next fiscal. The first phase of acquiring large global brands with our customers has already been achieved. You see, the addressable market for IT products is almost $10 billion. It's almost INR 80,000 crore, with the production value is around INR 50,000 crore. We aspire, and that's what we've submitted to the government, almost INR 47,000 crore-INR 48,000 crore of revenue in six years. So it's going to take some time, but finally, I feel that on an annualized basis, we start with a touch around INR 3,500 crore-INR 4,000 crore, and then it's going to ramp up. Okay, perfect. So you didn't answer the capacity size we are trying to build, and how much time will it take and what would be the CapEx we are looking for that? So initially, the capacity is going to be almost 1.5 million units per year. And the CapEx for the plant is going to be somewhere in the range of around INR 150 crore. Okay, and what's the total, so you mentioned about INR 45,000 crore addressable market, which we are looking to grab. What's the capacity, what's the number of units would be for that? So finally, starting with 1.5 million, it's going to be taken up to 3 million-3.5 million. Let's see how the business pans out. Initial phase is going to be 1.5 million, but I think in a couple of years we'll have to double it. Okay, great, perfect. And on the, you mentioned in the starting statement that 55 million-60 million units for the phones, that is including Samsung or excluding Samsung? Excluding Samsung. So this is excluding Samsung, this is basically everything including the new Ismartu acquisition that we did. So 45 million, excluding Samsung, and 10 million gets added on account of the Ismartu acquisition. Okay, so 55 million for the non-Samsung and something about 10-15 would be Samsung in the smartphone space total. Samsung is around 10-12. Great, great, great. And lastly on the. Sorry to interrupt, sir, could you please fall back in the question queue for further questions? Sure, sure. Thank you, thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participants. If you have a follow-up question, we request you to please join back the question queue for further questions. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead. Hi sir, I hope I'm audible. Yes, yes, you're audible. Yeah, just wanted to understand if there is any PLI incentive or any amount booked in the mobile segment this particular quarter, and if there was a similar amount last year as well. So last year, yeah, so this quarter we have booked almost INR 40-odd crore as PLI incentive for mobile users. Sure, and same number last year? You mean to say same number exactly in the same quarter last year? Yes, yes. My sense it could be a smaller number because clearly Xiaomi, Oppo, Realme have come in much later and Motorola numbers have also expanded, but probably it should be—it would be somewhere around INR 4 crore-INR 5 crore maybe last year. I can separately tell you that number. I don't have that number right now with me. Sure, that should be totally fine. Just, I wanted to understand production numbers this particular quarter across brands in the mobile segment, if you can kind of highlight to whatever details you can kind of highlight, and is there a potential that we will have to revise up our 25 million-30 million number that we have for the full year? No, I think it's not possible and prudent just now to give the customer-wise and demand-side number. What I can give you is the total smartphone numbers. Sure, that also works, yeah. That will give you a, yeah, that will give you probably a run rate for what we are talking about for the entire year. There are smartphones we did almost, so excluding Samsung, we did almost INR 41 lakhs, 4.1 million. And Samsung was around 11-odd lakhs, sorry, 1.1 million. And feature phones? Was around 6.6 million. Sure. Okay, sir, those are my questions. I'll get back to you. Thank you. The next question is from the line of Natasha Jain from Nirmal Bang. Please go ahead. Thank you for the opportunity and good evening, sir. So my first question is on the home appliance segment. We've registered a strong top line of approximately 18%. I understand this could be the primary order booking for the upcoming washing machine season. What I don't understand is why are we flat at margin level? Is there a steep competition even here? Is there ASP compression happening? And if so, can you call out in which category is it? Is it in the front load, top load, or semi-automatic? First question is that. So Natasha, if you see the reduction in margin is 0.4%. It has gone down from 11% last year to 10.6% in the current quarter. Quarter on quarter, if you see, there's an expansion of 0.4%. Now, the reason there has been this margin compression is because the freight increases. The sea freight increases because the Red Sea crisis. There is some time taken for passing on any increase to the customer. In any case, it's not very significant. This is a part of normal business. So we are in the range of 10.5%-11%. And that's where we have been. Understood, sir. So my second question is on the lighting segment. Now, while I understand there's been value compression happening in this segment, we've been on the commentary that we've been making premium lights or lights more in terms of value accretive. So I'm just wondering, when is that expected to slow through in our margin for lighting? So a lot of operational corrections and also expansion of product mix has already happened. We have, to a large extent, restructured the business. We have optimized our cost structures. We have invested in the backward integration. We are further going to invest in polymer processing, both on injection molding side and extrusion side. There's going to be operational in a quarter or so. The professional lighting products like floodlights have already been, and panel lights have already been rolled out. The street lights are going to be rolled out very shortly. So all that is happening. Now, is it going to be hugely margin accretive? No, it's going to be accretion on a positive side. So that's the way this business is going to pan out. Understood, sir. And sir, just one last question, if I may. We recently heard the commentary that basic customs duty on mobile phones has been reduced. Sir, just want to understand how does this impact you and other EMS players, and what could be the rationale of reducing the customs duty on fully assembled mobile phones? That's it. Thank you, sir. So Natasha, please appreciate the seasonal imports of mobile phones is minuscule. If my numbers are correct, the total imports in a INR 300,000 crore market is nearly INR 7,000 crore-INR 8,000 crore. So I think the government wants to send a message globally because there has been some kind of observations from the pundits that customs duty structures in India should be rationalized. So it's in that direction. Now, is it going to impact anything on the manufacturing ecosystem mobile phones in India? We have a huge conviction, no. There is already a significant arbitrage, plus there is a PLI benefit. So no brand which is manufacturing in India, and I think 97%-98% of the mobiles sold in India and manufactured in India is going to take any decision which is reverse of this local manufacturing. So on the ground, there is no impact. Understood, sir. Thank you so much. All the best. Thank you. Thank you. The next question is from the line of Bhoomika Nair from DAM Capital Advisors. Please go ahead. Yes, sir. Sir, just wanted to understand in terms of our backward integration on our display modules, we were looking to commission the plant by the year-end of 25 million capacity. Is that on track, and how do you expect for the first year of operation, which is FY 2026, how will it scale up? What kind of revenues and margins we can possibly see on that, and how do we expect further backward integration in this space? So the project teams, Bhoomika, are working on it. The project plans are being laid out. The talent acquisition is happening. Site hunting is still happening because it's a complex site plan. But we are still trying our best that sometime in end of this fiscal or Q1 of the next fiscal, we should start rolling out the production. In phase one, it's going to be 2 million units a month. We have sounded our customers, and they're open to it. In fact, they are extremely positive for this local manufacturing because it saves them the inventory cost. And also, there are certain cost advantages. The numbers are being done. Now, what is going to be the first year revenue? That is slightly difficult to state because the approvals, these are complex technical approvals by each brand. They're going to take some time. But from year two, it's going to be good, extremely good margin accredited product. Let me show you on that. So this is on the display modules, Bhoomika. On the other side, we are working very hard, and we are at advanced stages of discussions through collaborative partnership. We are exploring to get into the non-semiconductor side of the mobile components, and that's also going to encompass the IT products. So here, we are exploring various components, and we're in advanced stages of discussions with our collaborating partners who are large globally. This is on the mechanical components. This is on the die-cut. This is on the precision components. This is also for flexible PCBs, connectors, and cables, and various modules. So this is a basket of products. Please appreciate the balance sheet is strong, and we feel that now we have the financial bandwidth to explore these products. And the financial metrics of these products are different, but definitely the margin profile is of a different order. So that's what we are working on. Sure. So sir, with this, what is our current value addition, and where do you see yourself with these various collaborations to broadly get to in a period of, say, three to four years? So we feel that, please appreciate mobile assembly, mobile manufacturing. It's a low-margin business, but it's an extremely high ROC business. It's an extremely high asset-to-turnover business. Whereas when you venture into the component space, it's much more margin-accretive, but the asset-to-turnovers are relatively lower. So we want to get into a right kind of a blend. Please give us some time. We're going to come back to you exactly with the blueprint that's how it's going to pan out. What I'm sharing with you is that strategically, this is the direction in which we are moving, and we are moving at a very fast pace. Sure, sir. So just one last thing in terms of Xiaomi and also Ismartu. You spoke about the volume scale-up out here with Xiaomi at about 0.7 million per month right now. How do you see that scaling up over the next couple of quarters as also for Ismartu? So I think this 0.7 should start hitting 0.9 or something like that. Let's see how the market pans out and post the value-out pans out. But we're going to have a very large share of their wallet. I'm referring to Xiaomi. And when we talk about Ismartu and their current volumes, around 0.7 million of the smartphones, yeah, this is going to get consolidated in our numbers once the acquisition is concluded, which hopefully is going to happen in the next 7 to 10 days. Sure, sir. Thanks so much. Thank you. The next question is from the line of Aditya Bhartia from Investec. Please go ahead. Hi, good evening, sir. Hi, Aditya. Hi, sir. It's my first question is on the consumer electronics segment. If we exclude the refrigerator revenues, it appears that TV revenues are falling by 18%-19% this quarter versus the same quarter last year. What would that be on account of? And also a related question on margins in the refrigerator business. Given that it's an ODM business with significant CapEx, we were anticipating quite high margins in this product category. But it seems at least in the first quarter, which may be because of teething issues, those margins haven't really come through. So if you could just explain how exactly we should be thinking on that front. On the LED TV side, the market has been extremely slow. There is a decline in volume. There is a decline in volume by almost 17%. That's being reflected in the Q1 numbers. As far as the refrigerator is concerned, it's only the ramp-up phase. The initial ramp-up cost has been into these numbers. But finally, the numbers which have been earlier on the sharing, the operating margins are going to be in the range of around 8%-9%. Understood, sir. As we are moving towards the peak season for TVs, are you seeing order books looking a lot better? So, sir, the current month, we're going to close around 250,000. August order book looks very good. It's going to be around 400,000. And we see that September also is going to be 400,000-450,000. So, 1 million. Understood. And, sir, my second question is on mobile phone PLI scheme. Given that the current scheme is going to end in almost two years, how are you seeing the landscape changing post that? And are you anticipating another incentive scheme from the government side maybe to incentivize domestic manufacturing on the component side? So, I would say, geez, mobile manufacturing has been extremely successful for the country, for the government. We feel that the government will keep supporting the mobile manufacturing in the country. But the format of the scheme is going to change. Now, this is my understanding. And they're going to incentivize more value addition. They're going to incentivize the component manufacturing because they have been interfacing with the government on the industrial decision side. That is what the talks have been. Post 2026, when the scheme goes away, it will be replaced by a scheme focusing on value addition and components. Strategically, that's what we're trying to do in Dixon. That we are strategizing, and we are deeply getting involved with the component ecosystem. Perfect. That's great to hear, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Dhruv Jain from Ambit Capital. Please go ahead. Hi sir, thank you for the opportunity. Sir, I have two questions. One question was on the mobile phone export side. If you could just tell us what was the contribution of exports in this quarter? How do you see it panning out over the next two or three years? So domestic using fairly successful. So how are you thinking about mobile phone exports in the next two or three years apart from Motorola and customers, any color that you can give there? So at present, though, the mobile phone exports is largely for Motorola. We feel that almost 25%-30% of Motorola production is going to be for global markets. And that's a significant chunk. For the other brands, as of now, it's for domestic market. But for certain entities that we have acquired or in the process of acquiring, we're working deeply with our partners to look at export opportunities. However, it's, I think, premature, and I'm not able to share with you any tangible numbers. So as of now, mobile exports is confined to Motorola. Hello, Mr. Dhruv. Does that answer your question? Yeah. Okay. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, good evening, sir. Thank you for the opportunity. Two questions. First, on mobile phone, as you mentioned, you'll be doing somewhere close to 25 million-30 million handsets this year, and maybe that number grows much faster next year. Post that, where do you see this number evolving? And what are the growth opportunities we have? Because we are already working with some of the top brands. Do you see this business saturating for us? So we feel that we should be, in the next couple of years, reaching around 45 million-50 million units. We also feel that there are going to be some breakthroughs for global markets, which are going to increase the volumes. Then the growth engine is going to come through participation in the component ecosystem. And then a significant driver of our revenues we are working upon for the IT products in the segment. So in this particular domain, these are the growth drivers. Sure. Thank you. This is helpful. Secondly, on IT products, is there any delay that we are facing in having the products rolled out? Because if I recall earlier, our target was tablets by April and laptops by September. So we are now hearing more like third quarter of this fiscal. I understand these are small key issues, but are there any bigger concerns that are there in this business? So laptop Acer production is already on. The trials and also the commercial production for Motorola tablets has already been done. And the NPI for Lenovo has started, and we feel that the commercial production should start by Q3. The two new accounts that we have acquired, we are targeting for one account in Q4 of this fiscal, and another account will get productionized in Q1 of the next fiscal. So there might be some small delays here and there, but it's largely as for the production plan. Sure. And one last question, if I may, any progress on the industrial EMS front? So industrial EMS footprint is going to be again in the Chennai campus. We are in advanced stages of discussions with a very large semiconductor equipment brand, global brand, for servicing its requirements of PCBs and also some certain mechanical products. We hope it fructifies. And we are also in advanced stages with one partner for automotive electronics. So they are progressing well, but they are new to this domain, so it's going to take time. Sure. Thank you so much. That's all from my side. Thank you. The next question is from the line of Onkar from Shree Investments. Please go ahead. Yeah. Am I audible? Yes, yes, you are. Yeah, please. Yeah. My question was, in last year's AGM, I'm not able to hear you. There's some echo in your voice. Sir, could you please use your headset? Mr. Onkar? Yes. One sec. Is it clear now, sir? Yeah, better. Yeah. In last year's AGM, the company had made a statement to venture into several other categories, including EVs and other three, four categories. So I mean, just now you mentioned in two years from now, other categories would be the growth drivers for the company. So where are we in terms of that? So as I shared with you, that we are making an attempt for both industrial electronics and automotive electronics. We are seeing traction. That's what we are working on. Please also appreciate that in the last two years, we have added many, many product lines. We have added wearables and wearables. We have added telecom devices. In telecom devices, we have got routers. We've got fixed wireless devices. We've got Android set-top boxes. We have made very large investments in creating capacity for refrigerators. And now we're looking at IT products. And very significant investments are going to be made in the component sector for electronics on the non-semiconductor side. So there's already a lot on our plate. Does that answer your question? Yeah, partially, yes. But I mean, only the time will tell, right? I mean, every quarter it will be giving updates on that. So for the timing, that is fine. Yeah. The second question is on, in overall scheme of things, in the overall revenue of Dixon, I mean, in a couple of years of time, overall the component ecosystem, how much it can contribute to the overall revenue of Dixon? I mean, how big is the opportunity? It's too early to share those numbers. Okay. But I mean, you can just give directionally how big the opportunity is. That's it. Not any specific. It's too early to share those numbers, please. Okay. All right. Thank you, sir. Thank you. The next question is from the line of Madhav from Fidelity. Please go ahead. Hi, good evening. Thank you so much for your time. I had two questions. The first one was on the part where you spoke about the partnership that we can have with the automotive electronics side. Is that for PCBA, essentially, or for any other type of product? Sorry, I'm not able to make out your question. Can you be more clear? So automotive is largely for the automotive electronics. It's for PCBs and electronic modules. PCBs and EV. Okay. Okay. Got it. Understood. And the second question I had was that, given that exports is like for your medium-term growth driver for the company from mobile phone perspective, what kind of value addition is required to be done in India before we sort of, as a company or as a country, become competitive to export some of the smartphones in the export markets? Is there any, how do we kind of look at that entire construct? That would be helpful to understand. Thank you. So we feel that once the component ecosystem has been created in India, India is going to keep on acquiring the competitive strength. And that would help in becoming globally competitive. So I think that journey has already started. We are a couple of years away where India is going to stand on its own feet to compete in the global markets. And the Indian solutions, Indian-led manufacturing of the smartphones, would be servicing the global markets. All right. Thank you. Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Thanks for the opportunity. Sir, we have seen historically, after Q1 results, you also tend to give guidance for the full year coming. With so many moving parts, also so many new businesses which are expected to undergo changes or start, will you indicate any guidance for FY 2025 in revenue as well as EBITDA? So we have not been given guidance now for almost two years. Yeah. So Aniruddha, we have not been given any kind of guidance for revenue. But there are too many moving parts. So how should we look at the overall growth rate, etc.? So please appreciate the growth rate is going to be extremely aggressive. But we are resisting from giving any guidance. So Aniruddha, you can easily make out certain numbers that last year, basically the largest opportunity or the largest growth driver for us is mobiles. And in the next few years' time, it will be IT hardware. So we have given you visibility on the kind of potential numbers we have done in Q1 and the kind of potential numbers that we will do for smartphones this year. And you can look at those numbers and compare with the last year's numbers. So you can have some kind of numbers for yourself. Okay. Sure. And margin-wise also, or I mean, somewhere around 4% level. Margin it will be, of course, somewhere around 4% level. It's in the similar range. Similar range. So 3.9%-4% kind of level, yeah. Okay. Understood. And anything on the CapEx for this year? Yeah. So CapEx, I think so last year we did almost INR 550 crores. We expect a similar run rate of INR 550 crores, anywhere between INR 500 crores-INR 600 crores this year. Okay. Sorry. Thank you. Thank you. The next question is from the line of Vipraw Srivastava from InCred Research. Please go ahead. Hi. I'm audible, right? Yes. Yes. Yeah. Just two questions. So first, on the telecom business, so the two major players, Nokia and Ericsson, what they are saying in their phone call is that they'll be focusing more of their energy on chip design and will be outsourcing the manufacturing part. And currently in India, a lot of 5G devices which Nokia sells have been imported from China. So how do you see this opportunity developing? I mean, you already have a foot in the door with Nokia. So do you see this becoming big in the coming years? Any thoughts on this? So we have now a very large leadership with Nokia for the telecom devices side. This is confined to start with for the CPE products. So when I'm referring to CPE, it's basically routers and fixed wireless devices. The business is scaling up. So this is the first level of relationship. However, with Nokia as of now, we don't have any relationship on the networking eq uipment side. It's the consumer product side, yeah. Fair point. The second question on the component part which you're discussing, so if you look up at your technicalities, a significant part of the component is the chip, right? I mean, the chip is the main cost of the BOM, a lot of material. And the fab in India is still coming. I mean, obviously, the government has given order to Tatas, but that will still take some time. So don't you think that the fab, the foundries have to come to India first before this ecosystem picks up for components? Or is my understanding incorrect? No. Please appreciate the semiconductor contribution to the BOM is 50%-55% in the iPhone. The balance 50% is the non-semiconductor part, which consists of mechanicals, displays, modules, PCBs, connectors. That's a very large portion. And that is more doable. Okay. Got it. Got it. Right? And that's where we want to participate. Please appreciate that even in China, the large contribution to value addition is coming from the non-semiconductor side. Fair point. Fair point. Noted. Just last question, sir. So this mobile and the TV space, durable space, I mean, the industry as a whole is not growing for the last three years. I mean, if you look at the TV volume and mobile volume as a whole, the industry is not growing. I mean, although Dixon is a very relatively smaller market for the mobile space, so do you see this? How do you see this industry evolving? I mean, the volume level growth is not happening. So do you see that will change in the coming years, or does Dixon look on diversification in the coming years to counter that? So in Dixon, because we are solely a B2B company, in any category, our growth comes in from three elements. One, of course, if the industry growth is buoyant, then we are a part of that growth story. The second growth is coming that if you acquire more and more customers. And that's what we are trying to pursue, and that's what's leading to positivity in our mobile domain. The third is that if we are able to get the larger share of the customer's wallet. So across all our categories and all the more in mobile because that's the largest opportunity pool for us, that's what we are trying to pursue. I think we have been fairly fine or successful in that front. So that's how our growth is coming. And that's what we'll keep on pursuing. Fair point. Thank you a lot, sir. Thank you. Thank you. Thank you. The next question is from the line of Arpit Shah from Stallion Asset. Please go ahead. Hello. Hi. Yeah. Yeah. I'm audible. Yes, yes. I just wanted to know what was the consolidated profit number for Ismartu in FY 2024? Yeah. So Ismartu did almost INR 8,200 crore of revenues and INR 320 crore-INR 325 crore of EBITDA. And a part of, yeah, broadly, a PBT of INR 280-odd crore and a part of around INR 240-odd crore. Got it. And what kind of growth are you all expecting from Ismartu in FY 2025 and FY 2026? So I think so the first objective for us is to close the transaction, which we should be able to do in the next 7 days. We'll also see how the CPGs need to be concluded. And then both of us will sit together and make a plan for this financial year. So we will have a better visibility. But broadly, yeah, we can assume that they typically sell almost, on average, around 1.2 million feature phones a month and 0.7 million-0.8 million kind of a 0.7 million kind of a smartphones per month. So that should be the run rate for the balance part of the financial year as w ell. Got it. And we will be consolidating about eight months of numbers for the company for FY 2026. That's right. That's right. That's right. Got it. That has happened already. Yeah. Y eah, depending on what period it closes in August, yeah, but probably anywhere between 7-7.5 weeks. Got it. Thank you so much. Thank you. The next question is from the line of Girish. An individual investor. Please go ahead. Hello. Yeah, please. Yeah. Hi, sir. Girish from Morgan Stanley. Sir, thanks for the opportunity. I had a few questions on this mobile component business that you are exploring. So obviously, it's an exploratory stage right now. Just wanted to understand what could be the typical asset turns that you could have in that part because I would imagine that it may not be the 10x number that you see right now in the EMS part because we see PCBA probably being below 2x. So if you could probably clarify on that. Typically, I know it's blended number may not be possible, but what is the range of EBITDA margins also here that is possible? Girish, one venture in component size we have already taken a leap, and that's the display module. In that case, the EBITDA margins are significantly higher, and they are in double digits, mid double digits. Also, the asset turns are higher. When we are looking at the mechanical component side, the asset turnovers are going to be somewhere in the range of 1:3 or 1:4. EBITDA margins are going to be closer to almost double digits. That's the financial metrics. On the other components that I mentioned, the financial metrics are still being studied. Okay. Then in terms of just one clarification, if I may ask, the mobile scheme obviously will end in the next couple of years. So are you likely to see that mobile component scheme gets introduced just prior to the scheme ending, or is it in the next few months because there's a lot of media articles which suggest that the component scheme on mobiles might be announced in the immediate distant future? So any color that you can, based on your feedback that you've had in the industry, can you share what could be the typical timeline and effectiveness of that scheme? Would it be effective next year, or will it be after two years where it might be introduced just prior to the mobile scheme getting completed? Thanks. So it's very difficult to say that when the scheme is going to be rolled out and when it's going to be effective. But from the industry side, we are deeply interfacing with the government, and they are extremely receptive to roll out a package for component industry. What timeline is very difficult to say, but I think it should happen in nine to 12 months, something like that. I feel it should happen if it is rolled out. Very difficult to confirm, but if it is rolled out, it's going to happen before the culmination of the PLI scheme for mobiles, which happens in March 2026. And last clarification, if I may ask, the display module part, obviously, you have a JV partner. For the other components, would the same method be applied in terms of getting into a JV, or there could be some technology fee arrangement also or a mix of both? If you can directionally say, what could be the possibilities here? But when we are looking at equity participation, it will be a JV partnership kind of a concept only. Okay. Thank you so much, and wish you all the best. Thank you. Thank you. The next question is from the line of Kunjal. An individual investor. Please go ahead. Good evening, sir. Congratulations for a great set of numbers. So my question is, if you compare the Indian manufacturing phone and Indian mobile manufacturing sector, and if you compare it with China, what is the percentage cost difference, if I may ask? You have to declutter this question into different layers. When you look at the cost of manufacturing, the cost of manufacturing in India will be, I feel, more efficient. But when you look at it on the holistic basis, because of the lack of component ecosystem, those are the disabilities which come into the picture. So I reiterate that per se manufacturing cost in India with the kind of efficiency that is aligned to application. So on the component side, what would be the difference? 2% or lesser? That is difficult to place a number, but I think it's going to be 4%-5%. Got it. So that answers my question. Thank you very much, and all the best. Thank you. Thank you. The next question is from the line of Sanidhya from Unicorn Assets. Please go ahead. Hi, sir. So just a follow-up. So one on the Motorola side, so you said that almost 30% would be going to the U.S. market of the total Motorola production that we are doing. Is there any risk of new import restrictions or anything if there is any kind of government change in the U.S. or anything like that? Just want to understand the kind of agreement we have with Motorola. Motorola is really pushing for exports from India for North America, for U.S. As of now, it looks good because we have optimized various execution capabilities of our infrastructure, which has made it more attractive for them. Now, is there going to be any change because of the evolving geopolitical situation, and I presume the ramping for the presidential election and all? I don't think so. I think the way it's emerging, evolving, it's going to be only better. Yeah. We feel it will be only better for India and for the mobile industry. Okay. And lastly, on the inverter control board for air conditioners, so what's the revenue for this quarter or maybe profitability, some kind of number you want to give for the whole year maybe if not that? Since we are looking for manufacturing for ICBs for Daikin, are we also looking to getting into some kind of partnership to manufacture the AC completely or maybe some other components and anything else on AC front, ODM or AC? So this is a joint venture between Dixon and Rexxam. We have 40%. They have 60%. And it's a completely Daikin-centric business. In this quarter, we have done around INR 140 crores. This is INR 350 crore-INR 400 crore of business, profitable highly, and a very high ROC. And we are exploring the possibility of starting exports of inverter controller boards from India to Daikin and various global entities. Let's see how it pans out. We're also working with a JV partner for making more investments and capacity expansion under the extended PLI scheme for white goods. T hat's it. Now, are we planning to enter some other AC components? No, not as of now. And AC manufacturing as a whole? Oh, no. We're not looking at it. Okay. Okay. Thank you. Thank you. Thank you. The next question is from the line of Abhishek from DSP Mutual Funds. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, could you share the volume? I'm sorry to interrupt, sir. Mr. Abhishek, your volume is very low. Is it better now? Yes, sir. Better. Yeah. So if you can help us with the volumes for washing machine, lighting, and the television part of it for the quarter? Yeah. Abhishek, so LG TV, we sold around INR 5.9 lakhs. Washing machine and semi-automatic was around INR 4.3 lakhs. Fully automatic was INR 0.5 lakhs. And on the lighting side, we sold almost INR 3 crore LED bulbs and INR 60 lakhs battens and INR 29 lakhs downlighters. Okay. So your growth in washing machine is fairly decent from that perspective. We missed the number. Yeah. So we have grown by 10% in volumes on semi-automatic. And fully automatic, of course, we have tripled our numbers. Got it. Okay. And this volume growth, what you have seen in non-mobile part of the business, that is likely to be the trend going forward as far as volumes are concerned. So washing machine as a category, because a large part of the growth will come from fully automatic. So as a category, we expect a double-digit growth in that category. So semi-automatic will grow at lower double digits, but the fully automatic will grow at a much faster pace. Combined, both put together, yeah, it will be a high double-digit kind of growth. Okay. And just one last question on the competitive landscape. Any change that you see in the lighting competitive landscape? I know you have introduced many new products and other things, but from a core lighting perspective, any change in the competitive landscape? We feel that the competitive intensity, which has become a bit too intense, is kind of stabilizing. And the prices are also stabilizing. If there are significant upturn in the business, I would say we are moving step by step towards it. The business is going through a consolidation thing. The company has completely restructured the business. We have restructured our product portfolio, our cost structures, and we are also seeing some kind of stabilization in the pricing front. That's where we are. In Q1, if you see, Abhishek, the numbers have grown by 15%. So clearly, we feel that the worst is behind us as far as the pricing is concerned and the competitive intensity is concerned. So it can only get better from there. If not better, at least we should maintain this kind of run rate. Great, sir. Thank you so much, and wish you all the best. Thank you so much. Thank you. Thank you. The next question is from the line of Nirransh Jain from BNP Paribas. Please go ahead. Yeah. Hi, good evening, sir. Congratulations on a good set of numbers. Sir, I just have one question on Nokia on the mobile phone side. So as far as my understanding is, currently, Dixon is mainly manufacturing feature phones for them. But recently, HMD has also announced that they are looking to double their exports from India, with Dixon being the key partner of them. I was just wondering, so do we have any export opportunity immediately from the Nokia front? Since you mentioned that currently, you have a visibility only from the Motorola but not from the other brands. So just wanted to check on that. So we are doing 100% of not 100%. We are doing almost 95%, 96% of what Nokia sells in India, both on feature phones and the smartphones. In fact, 100% of their smartphones, both on the Nokia brand and HMD, are done by us. We are already manufacturing for exports for them. Exports have already started on the Nokia brand. And we've had deliberations and discussions with Nokia. And we'll be expanding capacity for Nokia for doing their exports from India. Okay. So just a follow-up on that. How much of the volume of smartphones are we doing right now for Nokia? It's relatively a small number. Yeah. So it's a small number. In the first quarter, it was only 10,000, 11,000 kind of a quantity. But on the feature phone side, yeah, we did almost 2.6 million, which includes exports. Got it. That's it from my side and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I would now like to hand the conference over to Ms. Bhoomika Nair for the closing comments. Yeah. Thank you very much, sir, for giving us an opportunity to host the call. Wish you all the very best. And thanks to all the participants for being on the call. Thank you very much. And any closing remarks from your side, sir? No. Thanks very much, Bhoomika. And I really want to thank all the participants and our stakeholders. We from Dixon are absolutely committed to create value for you. Thanks so much for having faith in us. Really appreciate it. Thanks so much. Thank you so much. Thank you. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.