Good evening, everyone, and a warm welcome to the Q3 FY 2025 Earnings Call of Dixon Technologies Limited. We have the management today being represented by Mr. Atul Lall, Managing Director and Vice Chairman, and Mr. Saurabh Gupta, Chief Financial Officer. At this point, I'll hand over the floor to Mr. 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, Bhoomika. 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 the earnings call for the quarter ended December 2024. Despite a dynamic and challenging macroeconomic environment, the company has delivered another quarter of robust performance. Our diversified revenue streams have insulated us from segmental volatility. Consolidated revenues for the quarter ended December 31, 2024, was INR 10,461 crores as against INR 4,821 crores in the same period last year, a growth of 117%. Consolidated EBITDA for the quarter was INR 398 crores, against INR 187 crores in the same period last year, a growth of 113%. Consolidated PAT for the quarter was INR 217 crores, against INR 97 crores in the same period last year, a growth of 124%. Besides leveraging industry tailwinds, we are scaling up across segments by taking a higher share of wallet from our existing customers, our new customer additions, and superior execution by managing the operations efficiently. Foraying into components will further increase the value addition with improvements in margins. With operational excellence, strong capital allocation discipline, higher asset turns, and effective working capital management, we are able to expand our ROCE and ROE to 42.6% and 33.3%, respectively, as of end December 2024, reflecting consistent value creation for the shareholders. Our asset turnover ratio remains among the best in the industry, reflecting efficient utilization of resources to drive revenue growth. Despite ongoing investments and capacity expansions, we have managed to keep our gross debt-to-equity ratio at a comfortable level of 0.15, underscoring our commitment to maintaining a low-leverage business model. We continue to maintain a healthy liquidity position with cash and cash equivalents balance of INR 222 crores, reflecting our disciplined cash flow management. Our focus on optimizing working capital, with a cash conversion cycle of negative three days, has ensured sufficient liquidity to support our growth initiatives. We want to invest in our capacities, backward integration, 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 excited about the opportunities ahead and confident in our ability to continue leading as India's premier electronics manufacturing services company and consistently achieve revenue and profitability growth. Now, I'll share with you the business performance and insights in each of the segments. Mobile phones revenue for the quarter for mobile was INR 8,089 crores, which is a growth of 176% year-on-year. We have strengthened our partnership with leading global smartphone brands, reinforcing our position as a trusted mobile manufacturing partner. We have added one more new facility in Noida, in addition to the six state-of-the-art manufacturing facilities, now capable of producing over 60 million smartphones natively. Ismartu, subsidiary of Dixon Technologies, has acquired land, building, plant and machinery for INR 133 crores to support scaling up of Nothing smartphone brands and Transsion brands like Infinix, Tecno, and itel, including the 3 million export volumes that have just been given to us to African markets for next financial year. We expect to export around 0.5 million to 0.6 million units in February-March this fiscal itself. For Motorola, we've been consistently clocking a volume of more than 1 million per month, and the order book looks healthy in coming months, including some decent export orders. We have been witnessing a consistent increase in mobile volumes of Xiaomi and expect this momentum to continue in the coming quarters. We also have a decent order book for Oppo. We have successfully dispatched the first lot of production for a large global brand through Compal in December 2024, and the order book for coming months looks very promising. We have entered into a binding term sheet with Vivo for a proposed joint venture, with Dixon holding 51% of the shareholding for manufacturing of smartphones. Vivo India shall transfer its manufacturing assets to JV. The transaction is subject to the execution of definitive agreements, completion of customary conditions precedent, and receipt of applicable regulatory approvals under the foreign trade controls laws of India. We have finalized the location of manufacturing of displays in partnership with HKC. We expect to start the manufacturing by Q1 end or Q2 beginning of the next financial year. We are also looking to further deepen the level of manufacturing and look to get into precision components, mechanicals, and camera modules, and also battery packs in the component sector. A very senior source and a team under him has already been recruited to execute foray into the component sector. For strengthening our backward integration, we are in active discussion with a global technology partner. Sorry to interrupt. The line for the management has been disconnected. Please stay connected. Ladies and gentlemen, the line for the management has been reconnected back. Yes, sir, please go ahead. I'm extremely sorry the line got disconnected. I'll repeat. Possibly, you have missed out the last bit of what I was sharing. We have finalized the location for manufacturing of display modules in partnership with HKC. We expect to start the manufacturing by Q1 end and Q2 beginning of the next financial year. We are also looking to further deepen the level of manufacturing and looking into partnerships for precision components, mechanicals, camera modules, and also battery packs. For this, a senior resource has been hired, and a team is being built to execute these projects, and we are keenly awaiting the rollout of component PLI by the Government of India shortly. For strengthening our backward integration capabilities and also servicing the large requirement in the industry and also creating a huge moat for Dixon, we are in active discussion with a global technology partner for setting up a world-class display fab, which is critical components. It's a fab in mobiles, IT hardware, and consumer electronics segment. Currently, India relies heavily on import for displays, and our foray into this segment will aim to localize production and bring greater control over supply chain and cost efficiencies. This will significantly enhance our value addition. This is a complex project. We are in discussion with our partners. We are awaiting the rollout of policy guidelines under Ismartu by the Government of India to take this project forward. So this is a big, big step forward for us at Dixon. Consumer electronics, that is LED TVs and refrigerators. Revenue for the quarter was INR 633 crores, with an operating profit and margin of INR 22 crores and 3.5%, respectively. Out of this, the revenue for refrigerator business was INR 166 crores. LED TV market has faced slower growth due to subdued consumer demand. We have onboarded a few multinational brands on our TV OEM solutions, like Hisense and Acerpure, on Google TV and NX platform. We're working closely with Amazon Fire TV Solutions and LG for webOS, which is expected to be rolled out by Q1 of next fiscal. We have also got some export inquiries. In addition to the interactive flat panel display, we have now started manufacturing digital signage solutions from 65 inches to 100 inches, in which we have a decent order book. Further, we plan to invest in CKD and plan to set up a robotic panel assembly line for these products. We are also in discussion for partnerships with manufacturing, industrial institutions, and automotive displays. Refrigerators, within the first year of operation, we have been able to capture around 8% of the Indian market in direct cool categories, going to the trust shown to us by our brands over execution and quality. We have also started exports to Nepal and actively exploring Sri Lanka and UAE markets. Order books for Q4, Financial Year 2025 and 2025-2026 looks very healthy. We are also expanding our capacity from 1.2 million per annum presently to 1.5 million per annum. We have backwardly integrated many production processes, and also we're going to be adding and expanding our product portfolio by including deep freezers, visi coolers, wine chillers, along with two door frost-free and side-by-side in this particular category. Home appliances, that's washing machines. Revenue for the quarter was INR 315 crores, a growth of 9% year-on-year. Operating profit was INR 32 crores, a growth of 7% year-on-year. We are now regularly clocking monthly revenue volume of 25k units in FATL, which is 100% growth year-on-year, and more customer additions are in pipeline. We are now exploring the addition of new product categories like robotic vacuum cleaners, water purifiers, chimneys, and other large kitchen appliances in this particular business. In addition, we have initiated many new designs in both the categories, which is expected to be launched in Q4 of FY 2025. Lighting revenue for the quarter was INR 201 crores, with an operating profit of INR 14 crores. In the outdoor lighting range, we have received orders for floodlights and streetlights from large brands. Backward integration of backlight is expected to operationalize in Q4 Financial Year 2025, which will bring in more cost-effective changes leading to improved margins. Telecom and networking products revenue in this segment for the quarter was INR 977 crores, which is a growth of 48% quarter-on-quarter, and we're looking for more than 4x growth in revenues as compared to last fiscal. Our new Noida facility commenced production in November 2024 to meet the increased order book for our anchor customer. We've also ramped up 5G FWA outdoor and indoor for the domestic market and plan to double the capacity for the same to meet the customer requirements along with access points, GPON ONTs, and internet set-top boxes. We have successfully completed the NPI IPTV set-top box, and mass production has started. In line with our strategy for backward integration, we have localized certain components like mechanicals, adapters, and working on localizing more components to drive cost efficiency and margins. With a healthy order book and a strong portfolio, we expect this vertical to be a key driver of the company's growth in coming years. Laptops, tablets, and IT hardware products are dedicated IT hardware product manufacturing units, engineers almost ready for production, and trials are going to be starting in February 2025 and mass production Q1 of 2025-2026 for HP and Asus. Mass production for Lenovo has already started along with the Acer and Android unit. We are in final discussions of entering into a JV with a large global ODM and largest supplier to the global brand to expand our portfolio in high categories of notebooks, servers, and other IT products. The revenue for this segment was INR 129 crores for the quarter, with healthy operating margins and good ROCE. We have a decent order book in this business. Rexxam Dixon, our AC component JV with Rexxam Japan, we achieved revenue of INR 103 crores in this quarter. We are exploring business deals for setting up a manufacturing facility in addition to Noida and Sri City, Andhra Pradesh, for meeting our anchor customer requirements. I would like to stop here. I and Saurabh are there to address your questions. Thank you. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Surya from Unicorn Assets. Please go ahead. Hi, sir. Am I audible? Yes, sir. Please. Yeah. Hi. Good evening. So my first question would be on the smartphone side. So we did see some ramp-up in Q2, but I think Q2 and Q3 volumes are the same. Could you give a highlight? Sorry, sorry, sorry. You want to know the volumes of Q3? Yes, sir. Yeah, yeah. For smartphones feature, and if you can segregate between Ismartu, Samsung, and non-Samsung. Yeah, so I can tell you the local smartphone volumes for Q3 and nine months, excluding Samsung. So in Q3, we did a volume of almost 8.3 million. And in the first nine months, we have done a volume of almost 21-odd million, 20.5 million too. And Samsung is over and above this volume. Okay. This 8.3 is including Ismartu? 8.3 is including iSmartu, yeah. Okay. And feature phone? Feature phones, we did a volume of 9.3 million in quarter, and overall, nine months, we have done a volume of 25 million. Great. And some insights I wanted on the camera module. So we were highlighting that we are getting into camera modules. So can you share the market size and currently who are the players, who are the large players in the segment, and what are we aiming here? We never mentioned camera modules in our opening remarks. No, not in this, maybe previous call. At this point, are we getting into camera modules anytime soon? We are pursuing camera modules as a part of a component strategy. We are in discussions with the potential partners who are large suppliers to our existing customers. That's a part of a component strategy. Camera module, in all probability, is going to be also a component which will be getting the PLI under the new component policy of the Government of India. That's a path being pursued, but it's still in the works. Okay, okay. Thank you. I'll come back for the next. Thank you. Thank you. The next question is from the line of Vikram Srivastava from PhillipCapital. Please go ahead. Hi, sir. I'm audible, right? Yes, yes, sure. Please. Right. So firstly, on the Vivo tie-up with Dixon, so I mean, is there any PLI sharing happening with Dixon, with Vivo for this tie-up? So that's something commercially confidential. It's not really possible to share those contours at this point. Sure, sir. Sure, sir. No issues, sir. So secondly, I mean, with the mobile phone PLI ending in FY 2026, which is the last year, and recently, Tata Electronics also came up with an announcement regarding phone manufacturing. We have other players like BYD, Networks, all wanting to enter phone manufacturing. So how is Dixon seeing the competition shaping up post the mobile phone PLI ending? Please appreciate that our business has grown from INR 5 million crores to almost INR 28 million crores to INR 30 million crores in the current fiscal. Right. The order book that we have and in the Android ecosystem, we have all the brands as a customer, top eight brands as a customer. And also, the order book we have is we see that it should be enhancing to almost INR 40 million crores to 45 million crores, and then going up to INR 60 million crores. That's almost 65% to 70% of the outsourcing opportunity in India. Right. Further, we are investing huge resources in automation, robotics, and taking the efficiency level to the best in the world. Further, we are investing heavily into the component space, which, coupled with the PLI advantages, is going to put us ahead, we feel, of the competition. So that's where we stand. Sure, sir. Sure, sure, sir. Sir, last question on the long-term deal with Oppo, Realme, and all these guys. So Oppo currently has a INR 60 million crores manufacturing facility in India, which is owned by them. So I mean, and Oppo in India annually sells around 20 million to 25 million phones. So I mean, what's in it for Oppo to share volumes with Dixon for their mobile phone manufacturing? Here, what we are offering to OPPO is a long-tier ODM design solution, which are always going to be in outsource mode. Okay. Right, right. So I mean, what kind of volumes do you expect to get? I mean, any targets you have to get from Oppo because it was the largest player in mobile phones? So we feel that in the next fiscal, we should be somewhere around INR 7 million crores to INR 8 million crores, something like that. Okay. Fair enough, sir. If I'm allowed to ask the last question, on the display fab, which Atul Lall told in the opening remarks, so I mean, obviously, it's a very capital-intensive industry, and you already have HKC for display modules, right? HKC also owns display fabs in China. So isn't it a likely possibility that you might actually tie up with HKC for these fabs, or you will get a different partner? We are going to be pursuing with our existing partner, and let's say it's a large project for any company, and so is the case for us. Right, right. We will be pursuing with HKC, and yeah. Right. Okay, okay. Thank you, sir. Thanks a lot. The next question is from the line of Aditya Bhartiya from Investec. Please go ahead. Hi, good evening, sir. So my first question is on the KHY acquisition. In respect of that acquisition, you spoke about some export order. Could you just kind of explain how large is the opportunity? What are we looking for? Is it just capacity expansion that we were aiming in Ismartu facility, which is why we kind of acquired these assets? As I said, in Ismartu, we're going to be starting exports of smartphones. We are targeting to export almost 3 million phones. It's a big leap. It is going to generate a revenue for us of almost INR 1,500 crores to INR 1,800 crores. The exports start from next month onwards. So we need to add capacity to existing Ismartu capacity. Also, please appreciate that there's a migration from 4G to 5G phones, wherein the component count and the product configuration requires additional capacity. Then in Ismartu, we also acquired a new customer, Nothing, which is the high-end phones, IP68 transparent enclosure, for which also we require this capacity. So that's the reason we are buying this asset, and it is coming to us at a very reasonable cost. The actual value of the asset is much higher, and there is more than adequate cash lying in the company in Ismartu to make this the case. So that's what this transaction is all about. Understood, sir. So my second question is on the fab manufacturing facility. Just a couple of quarters back, we had started speaking about display modules, and now we are speaking about complete fab. What has really changed? What kind of CapEx may be required for this facility, and do we get any kind of soft indications from customers as to what their offtake could be? So I think the electronics manufacturing industry in India, let's say, has reached a level of maturity as far as the device and product creation is concerned, manufacturing is concerned, and now, for that to sustain and grow, definitely a component ecosystem is required, and we had shared with the stakeholders that our first foray is into the non-semiconductor side, wherein we have already launched the display module, which is going to become operational in the next two to three quarters, and also mechanicals and other modules. Now, we feel, and we've had active discussions with our potential partners, that Indian industry and Dixon should be looking at a fab for displays to actually create the moat for the industry, but everything has to align with the business case and financials. Also, we are awaiting the government guidelines for the Ismartu for this fab. The earlier Ismartu guidelines were 50% capital subsidy from the center on a pari-passu basis, 20% from the state government, certainly state governments on a pari-passu basis. The number crunching, please be rest assured, I don't want to share more details as of now. It's slightly premature. It's an extremely attractive product with a huge margin-accretive and a very fast payback period. And we are seeing that this is globally competitive. A large part of it, it adds value to us through captive consumptions in mobiles, in televisions, in our notebooks business. And of course, it's going to be offered to the other players in the market, and also, it's going to be globally competitive. So that's the reason at a conceptual level, we are deeply diving into it, and we are building a team to take it to the next level. Sure. So that's very encouraging to hear. Any rough details that you can share about the kind of CapEx that would be required and the kind of bill of material that we'll be able to service through it? So the CapEx is to the tune of around $3 million. And a display in a television is almost 60%, and mobile is almost 12%-15%. In a notebook, it's again around 12% to 15%. So it varies, but it's a high EBITDA market business globally and for us also. Now, obviously, it's dependent on the government scheme rollout. So we are awaiting that. We are expecting ISM 2 to be rolled out, but we are internally within Dixon putting in a lot of thought, a lot of working in pushing this product. That's great, sir, and just one last bit on this aspect. Is there an obsolescence risk also in a fab facility? Pardon my ignorance, looking at this part of the equation for the first time. Sorry, just come again, Aditya? No, Aditya, I think f or all the future technologies like the MicroLED, t he OLED, the microLED technologies will be part of this. It will be ensured that the project sees any technological evolution is going to be built into this infrastructure. That's great to hear, sir. So my last question on our foray into PCBA business, which is what we had started thinking of as an isolated vertical as well, besides the backward integration that we do for our existing verticals. Any progress that we have seen over there in vertical in segments like autos and industrials? Our teams are in discussions. We are in advanced stages of discussions with a large industrial buyer, and that's the first focus that we have. It's going to take some time, but I'm fairly confident that we're going to have a breakthrough there for Noida campus. Sure, sir. Thank you so much. Thanks, Aditya. The next question is from the line of Madhav from Fidelity. Please go ahead. Hi, good evening. Thank you so much for your time once again. I just wanted to check that when I think you had mentioned that we can be 60%-65% of the outsourced part of the manufacturing of mobile smartphones in India. I'm just thinking from a supply diversification risk, like one or two years out, wouldn't brands at some point think that they need to diversify their risk? Because even in other sectors, like if you look at pharmaceutical, the chemical, any other sector in India globally, generally, they would want to keep two or three vendors at least to kind of hedge their risk. So is that a risk that you think for our volumes two to three years out that they might want to diversify? And Tata, etc., probably are credible vendors as well in the market. Just that's my first question. So your question is very pertinent, and that's the way it should be. Now, it's for us in Dixon to be most efficient. It's for us to be in Dixon to be absolutely customer-obsessed and create value for him. I know there are going to be challenges, but that's what we will build within Dixon to be most subservient, obsessed with customer and deliver to him what he expects, nimble in new product introductions. I think if we are able to achieve what we are aspiring to, then I think we'll be able to cover a lot of ground and protect our turf. But the first thing is to have a large share of our market. Yeah. Okay, okay. And the second question I had was on the display part. Did you say $3 billion for INR 25,000 crore CapEx? Did I miss or did I mishear that? Yeah, so Madhav, you heard it right, but please understand a large part of that CapEx, as Mr. Lall mentioned, will also be subsidized by the government. So we are reaching the policy guidelines under the Ismartu, which will come out guidelines for the display fab. So a large part of that CapEx should be subsidized by the government. So our share of CapEx contribution should be lower. But yeah, the overall CapEx requirement for a display fab is around $3 billion. Okay. Understood. Great. Thank you. Thank you so much. Thank you. The next question is from the line of Siddhartha Bera from Nomura. Please go ahead. Yeah, thanks for the opportunity, sir. So the first question on this display CapEx, over what period do you think this will be spent? And even if you assume, say, a 13% share of ours, the investment, do you think can be funded through internal accruals, or do you think there can be other funding requirements we may look to sort of close this? The gestation period for setting up this project is around three years. Okay. We are awaiting the government guidelines under Ismartu to take this project forward because there's an essential piece for execution of this project. This will entail a requirement of internal accruals, funding by internal accruals, and also support by the stakeholders. Got it. Got it. And second, for the mobile side now, if you can just highlight how much smartphone volumes we did in the quarter, and as we go in the next few years, how much do you think the volume ramp-up can be? And same for some of the other bigger customers like Xiaomi, where are we seeing in the next few years our number in that too? Yeah, iSmartu, I don't have the number right now with me, but broadly, out of this 8.3 million number, I think so, iSmartu volumes will be somewhere around 1.7 million, 1.8 million. And yeah, so basically, Siddhartha, we have done a volume of almost 20.5 million. And the last quarter, also, we hope the order book that we have across Motorola, Xiaomi, Oppo, and iSmartu, and also the large global brand through Compal, I think so, we should be doing another 9 million to 10 million kind of volumes. So we should be around 30-odd million by the end of this financial year, for this financial year. Got it. Sir, for the next year, what are the numbers we are thinking about right now? Any internal estimates? Given that Vivo is also sort of ramping up, so some color there, if you can share? So it's going to take some time to arrive at Vivo numbers because please appreciate Vivo transaction requires regulatory approvals from the government. It requires approval under Press Note 3, which takes some time. So it's difficult to predict how those numbers are going to come into the company. But otherwise, apart from Vivo, we'll have a significant growth, the kind of order book that we can see. Understood, sir. Lastly, sir, on the CapEx side, if you can share what are the numbers for this year, and given the new acquisitions we have closed, what is any initial guess of what is the ballpark number for next year we are looking at? Yeah, so we have done a CapEx of almost INR 620-odd crores in the first nine months, and we should hopefully close at around INR 800-odd crores. For INR 50 cores to INR 60 crores, this is the monthly going rate right now. And yeah, the next year budgets, Siddhartha, are being worked out. I think so, I'll have a better visibility in the next couple of months. But broadly, yeah, you can assume a similar number of anywhere between INR 600 crores to INR 700-odd crores. So that should be the rate. But yeah, we will have a better visibility in the coming months on the budgeted numbers for next year. Okay, sir. Got it. Thanks. I'll come back in a few. Thank you. The next question is from the line of Indrajit Agarwal from CLSA. Please go ahead. Hi, sir. Thank you for the opportunity. I have two questions. First, going back to the display fab, globally, what kind of ROCEs these entities generate, these facilities generate? And does it make sense for us to go for it if there is no government subsidy? Government subsidy and support is essential for taking this project forward. What would be the ROC s o just to be sure on that. Sorry? What would be the ROCE broadly without any global examples, if you have done any study on that? So if the government support is in line with what was there in the first ISM, then the ROC is extremely high. It's extremely margin accretive. And the payback period is very, very short when we're awaiting the government guidelines. And that's the way the project is being conceptualized. Sure. Now, secondly, sir, you mentioned that mass manufacturing for a couple of brands in laptops has already started. Have we recognized any revenue from laptops in this quarter, or will it all come in 4Q? So we have started recognizing, but it's a very small number as of now. We have started supplying to Lenovo, and we have already been supplying to Acer. But these are trial productions. The commercial productions in a small way have started. The volume buildup will take some time. The actual commercial production is going to start, the trials in February, and the commercial production in April for the other larger global brands, that's HP and Asus. Sure. And does the delay in import restriction change your timelines of the revenue that you had forecasted on a five-year horizon, or does it still remain intact? We are still maintaining that. As we shared in the opening remarks, we are very close to signing a JV agreement with one of the largest ODMs globally in the IT product range. That will give a very significant flip to our revenues in this particular business and also expand our product portfolio. Sure. My last question is TVs. What kind of volumes or top line we did in this quarter, and was it significantly down? Why broadly? Yeah, so Indrajit, TV volumes are definitely down. So we did a volume of 3.8 lakhs in this quarter. And in the nine months, we have done a volume of 19.4 lakhs. So there is a degrowth both in nine months and quarter three. So yeah, if you exclude, in our presentation, we have shown that the refrigerator revenues have contributed INR 166 crores out of that INR 650 crores. So broadly, if you remove that, the TV revenues for quarter three was around 470-odd crores. Sure. This is helpful. Thank you very much. That's all from my side. Thank you. The next question is from the line of Pulkit Patni from Goldman Sachs. Please go ahead. Sir, thank you for taking my questions. A couple of them. So first one is on PLI incentive. There was an article in newspaper a few, I think a couple of weeks back, which spoke about some difficulty in receiving these PLI incentives. So could you just talk about, A, since inception, how much is the total incentive that you have booked versus how much is the incentive that you have received thus far? That's question number one. The detailed numbers our team's Saurabh can share with you separately, I request. However, our incentive on mobile up to December 24 has been cleared. Our incentive for telecom for last fiscal has been cleared. For lighting and PC components, we are expecting to receive our PLI for the last fiscal in the current quarter. That's what the status is. For January to March quarter of mobile is under process. That's what the status is. The exact numbers Saurabh will be able to share with you. So approximately, what would be the receivable on PLIs? So PLI, our portion of receivables, which we have booked as an income. Yeah, basically, to the extent of almost INR 200-odd crores, yeah, if you include all the four PLIs, excluding IT hardware. This is just for the fiscal, or this is cumulatively so far? This is basically our share of income which has been booked in the P&L. Okay. And receivable out of this? Receivables basically would be this receivables, of course, would be a slightly bigger number because there's always a kind of a sharing also. Receivables number will be slightly bigger. Yeah, so that number will be almost INR 1,000-odd crores. Yeah. Okay. My second question is on other expenses. If I look at sequentially, our revenue is slightly down. Let's assume it's even flattish. But we've seen other expenses come down by almost about INR 60-odd crores. Just wanted to know, were other expenses higher last quarter? Is it under absorption last quarter? Because it's fallen from about INR 298 crores to about INR 227 crores in this quarter. No, no. Other expenses is around INR 155-odd crores. I don't know where you're looking at last quarter, you mean to say? Yeah. I'm talking about sequentially. Just sequentially, our revenue, I'm saying it's fallen a little bit, but it's almost flattish. But other expenses sequentially are down quite meaningfully, Saurabh. So I just wanted to understand, is it a quarterly phenomenon? Is it just that last quarter there were startup costs? No, no. It's basically a quarterly phenomenon. A lot of our operator wages cost gets booked under this head. So definitely, if you look at quarter two, we had a revenue of INR 11,500 crores this year. This time, it's around INR 10,400-odd crores. So accordingly, the wages cost, the power cost, and so would be the case of other overheads also would be slightly lower. And also, there's some exchange income which is also booked. Last quarter, we had some exchange loss. And this quarter, we have an exchange income. So that is also kind of positively reflecting, which is having a positive impact on the expenses as well. So part of the exchange income is booked under the other income, and some part of the exchange income is booked under the other expenses. It's netting of the other expenses, basically. Okay. Now, this makes sense. Thank you, Saurabh. Thank you. Thank you. The next question is from the line of Renu Pugalia from IIFL Securities. Please go ahead. Yeah. Hi. Good evening, sir. Firstly, I would like to congratulate for the way the business has ramped up. Pretty impressive. If you see last five years, revenues have probably been almost 10x. Profit will be almost 6x to 7x. So my bigger question to you is, if you look at the diversification that you have announced and the existing growth in mobile EMS space, in the next three to five years, both for core portfolio as well as new diversification, what are the growth contours that you're looking in terms of size and scale of the business? Obviously, you've highlighted you would also look for probable equity funding for growth capital. And how are you investing in people and talent for these new diversification initiatives? I think that in India, in electronics manufacturing domain, we are sitting on a very, very large opportunity. The first phase, because of the prudent government guidelines and also our team delivering fairly well of devices manufacturing and building large scale, has already happened. The second phase is to make this much more efficient, much more cost-effective, have the factories which are world-class, even more frugal, more automated, and robotized. That the government intervention, which has been through PLI, we are able to stand on our own feet and be most competitive. That's what partially has been achieved and in future is going to be achieved. Also, along with this, the whole endeavor was to build a very large scale to generate an operating leverage because electronic manufacturing service industry is a low-margin industry and requires a large operating leverage. Then we have always played extremely conservative in our capital allocation and management of operating capital and managing the balance sheet. Now comes a large opportunity. It has to be again aligned with the thinking in the government that the future is going to be the component ecosystem. And that's what we are foraying into. We have already got into the display modules, and we are working on the other parts like mechanicals and the other parts. We also see that now is the time, the kind of scale that we are having, and also India is having, that display fab is the future. So with the multiple businesses, large scale, foraying into components, foraying into a possibility of a large investment again in components through what I just shared, certain products to have the design capability, and India and Dixon to become globally competitive, that's the future. I think the numbers are going to be very, very large. Your question was extremely relevant that that requires a talent pool. We are working on. Slightly different talent pool compared to what we have inducted over the last five years. That's right. So it has to be of a different order. For our component foray, we have already brought in a very senior resource from the industry. We've also recruited some expat talent. We're going to be building on much more expat talent. So that's the way it's going to be. So I think India and Dixon sits on a large opportunity. What those numbers are going to look like, yeah, we have our internal numbers, but I think it'd be slightly premature to share it with the stakeholders at this stage. But we are working on a larger picture. Got it. And just a small bookkeeping for Saurabh. If you look at ref portfolio, which is a part of consumer electronics, while revenue numbers are shared, how does the profitability of the ref business look as in today and now? When do we expect it on profitable? Because on a blended basis, margins of ref should have been much better than the television portfolio. So just trying to compare the margin mix and its impact of the business turning profitable. No, Renu. The margins are profitable. We are already profitable in the first six months or nine months, sorry. We have done a volume of almost 0.6 million on the total capacity of 1.2 million. And because of the order book, we are further expanding our capacity. It's a 100% ODM business. We have 100-odd models across 190 liters to 235 liters. We're getting into new categories also. So we did a turnover in nine months of almost INR 500 crores. And it delivers to us a margin of around anywhere between 9% to 9.5%. So it's delivering very good numbers. And the working capital is also pretty much in control. And yeah, the gross procurement costs are higher, but the margin profile looks very promising. And we are now looking to get into other categories as well. Within a short period of time, I think so eight months, I think so we have been able to acquire some large marquee brands and take a large market share in the Indian market. Got it. Thanks much and best wishes, team. Thank you. Thanks. Thank you. Thank you. Thank you. The next question is from the line of Bhumika Nair from DAM Capital. Please go ahead. Yeah. So just a couple of questions. One is on the TV segment. If I look at it, the volume decline has been quite severe. So here, you can talk about what has been the reason for this volume decline. Is it just purely demand or market share loss? And if I net off the profitability that Saurabh just spoke about in terms of refrigerators, and the margins also seem to have fallen. So if you can just clarify firstly on that. Undoubtedly, this particular category, Bhoomika, the demand has been subdued. And also, this year, Diwali was at a different time zone. So that has also had an impact. So it's a combination of both these things, which has had a significant impact on this business. So when the volumes fall, obviously, there is a loss on the operating leverage side, and the margin is impacted. So that's the state of this business. Okay. Okay. So what kind of volumes can we look at for the full year? So we have done. So we have done around a volume of 19 lakhs, Bhoomika. And I think so we should close at somewhere around 2.4 or I think 2.4 million or something. Yeah. Okay. Okay. Fair point. So the second is on the clarification on the PLI that you spoke about, where INR 200 crores kind of a PLI across all our schemes has been accounted. Now, is this for the nine months or for the full year? This is for nine months, Bhoomika. In this, how much would be only mobile? So mobile will be a large part, almost to the extent of INR 150-odd crores, yeah. Okay. And we said till December 24, our dues have been cleared for this money. Yeah. So we have 24% elevated money, but I think the disbursement is about to happen. And the January to March 2024 should hopefully also get concluded in the next one month or so, hopefully in this quarter, yeah. So sorry, till December 2023, it has been cleared. So the fourth quarter of 2024 is yet to be cleared. Is that understanding correct? That's right. That's right. Okay. Okay. Understood. Understood. When you are accounting for the INR 200 crores or the INR 150 crores of the mobile PLI, that is for the current year volumes that you're doing, c orrect? Correct. Next year, once we complete the year, then we will give in for the processing and everything. Next year, we will actually get the money for the same. Yeah. That's the way it works. That's the way it works. In this, as mentioned earlier, there's no Xiaomi-related PLI that we have booked. Yeah. In October, December, we have not. Yeah. We have taken a view to not. We have taken a view not to book it as of now. Understood. So the other thing was on the display fab that you spoke about. Can you give some color on what kind of asset turns, margins, and return ratios that business could have, possibly? So Bhoomika is still in work. What we are looking at, 8.6-generation technology. We are looking at 60,000 substrates a month kind of capacity. And this will be churning out products for the whole range of televisions, mobiles, laptops, tablets, automotive displays. It entails a CapEx of almost $2.7 billion to $3 billion. It can generate a revenue of almost $1.7 billion to $2 billion. It has a very decent operating margin. Yeah. So I'm not in a position to share more details. Yeah. Let it. But Bhoomika, it will be double-digit. Double-digit. Yeah. It will be double-digit margins, yeah, so. And similar profile of return ratios that we have in our core business as of now. Absolutely. That's right. Yeah. Okay. Great. Thanks so much. I'll come back and see. Thank you so much, sir. Thank you. The next question is from the line of Ankur from Shri Investments. Please go ahead. So if you look at the FY 2025, it was all about a mobile and EMS division. So can we safely assume that for 2026 and 2027, this will be the biggest driver for growth for the next two financial years at least? Mobile undoubtedly is going to be the largest piece. Please appreciate it has the largest addressable market. Apart from that, we are also focusing a lot on IT products. As we shared with you, we are pursuing a potential JV with one of the largest ODMs. Also, telecom devices is a very high-growth business. Please appreciate this is a JV with Airtel. This is a business, and we generated a revenue of INR 700-odd crores in 2023, 2024. We're going to close at almost INR 3,000 crores in the current fiscal, and we hope to double it in the next fiscal. New capacities have already been created for that. Similarly, refrigerator is already at INR 600-odd crores. We are going to generate almost INR 800-odd crores in the current fiscal. We are adding our capacity in two phases. In the first phase, we're going to take it up from 1.2 million to 1.5 million, and then we finally want to take it up to 2.2 million, adding new products in this particular business, so these are all drivers of growth, and then, of course, we are looking at the component area very deeply. The first project of display module is already in the works. The factory construction is happening. We hope to start production by Q2 of the next fiscal, and in that, we are planning and looking very seriously at expanding the product portfolio, so these are all drivers of growth for Dixon, and yeah, but obviously, mobile is the largest piece. Okay. With the plate being so full, I mean, what kind of funds you would require to support that kind of growth? I mean, looking for any fund requirement, you had a proposal to raise, but you haven't applied for it. Just wait, please. Okay? Yes, Ankur, does that answer the question? Yeah. Thank you. Yeah. Thanks. Thank you. The next question is from the line of Amarnath Bhagat from Ministry of Finance of Oman. Please go ahead. Yeah. Hi. Am I audible? Yeah. Please. Hello? Yeah. Yeah. Please. I just wanted to have two questions. Yeah. Yeah. It's from the investment fund. Just two small questions. One, you can see this revenue is growing, but then quarter- on- quarter, also on a nine-month basis, why our margin profile is slowly going down? And operating margin is also nine-month basis came down from 4% to 3.5%, 3.7%. Also, EBITDA margin is slowly coming down. Anyway, our margin profile is very keen. Any particular reason why this profile is slowly deteriorating? Yeah. So basically, it's on account of the mix. So if you look at a large part of our growth, it's coming from mobiles as a vertical, which is relatively a lower gross margin, lower EBITDA margin business. And almost 70% of the revenues are now being contributed by mobiles. So that is the reason why, because of the mix change, the margins at a company level look lower. But if you look at all the other parameters apart from the margins and absolute growth of revenues and profitability, the ROCE expansion, the current assets management, all of them have been very, very positive. That's true. I'm just trying to understand the trend because basically, most of your revenue comes from mobile. And it seems that the same trends continue. So how will it look going forward with this margin trajectory? How will it look like? It will be slowly going down in the way it is happening. Overall, the absolute numbers may be growing, but this margin profile will go down. Is this the trend we look for, or do you have a plan to change the product mix so that at least you maintain this 4.7%-odd margin? Yeah. So as we mentioned, we are investing in backward integration. So display is already narrowed down on a partner. And we are also looking for investment in other backward integration projects of precision components, mechanicals, fasteners, camera modules. So all these backward integration projects are generally double-digit margin accretive. They are mostly double-digit margins. So once they start reflecting in the numbers, you will see the margin expansion. So we feel confident that in the next 24 months to 36 months, our margins in mobile segment, which is the largest play for us, can expand by almost 100 basis points on account of this backward integration. And this display project will further be margin accretive. So you should see that margin expansion happening every year starting H2 of next financial year. Okay. The second part of the question we're looking to now, we are focusing on. Mr. Ankur, can you please come back in the question queue? Yes. Thank you. The next question is from the line of Keyur Pandya from ICICI Prudential. Please go ahead. Thanks for the opportunity and congratulations on consistent performance. A couple of questions. First, on the mobile segment. So FY 2026 being the last year of PLI incentives, post that, in that segment, what kind of profitability that you expect in terms of margin? And I agree, probably the absolute EBITDA would grow based on the increased volume. But so how do you see, say, financial metrics changing in the mobile segment? That is the first question. Yeah. So as I mentioned, our investment in backward integration, even after netting of that PLI income that we are booking, we feel confident that margins will expand in the next 24 months in this business. It will start reflecting in the numbers from H2 of next financial year as we get into the display business as well. So please be reassured that margins in this category will expand because of this backward integration project. So I've already mentioned that there is a possibility that margin can expand by 100, 120 basis points over the next 24 months to 36 months in mobile business. So a lot of work is being done on the manufacturing excellence side on automation robotics. Operating leverage is kicking in this business on account of higher volumes and also the backward integration. So combination of all these factors, the margin should expand in this category. Okay. Just one follow-up to this. You have mentioned Q2 FY 2026 as the period for commissioning of this project. Now, this being a critical component and we being new entrant, I mean, with approval cycle, when should we assume, say, real ramp-up in the volumes, revenue profitability from this segment, display module? So we feel that they should come in by 2026, 2027. See, this is a complex product. It requires approval from the customer side. It has to be aligned at the POC stage for every model, every SKU. So 2026, 2027, it should start kicking in. And you see any period in between before sunset of the PLI and the increased contribution from display module? That may be a short-term period, but it just impacts our profitability. Or you are factoring that in and saying that there won't be such drop? It's not fair to look at it from that quarter-to-quarter angle, please. Fair enough. Fair enough. Just the second and last question on the laptop side. So with, I mean, government support or I would say some resistance from the brands on the import restrictions, you mentioned five-year timeline more or less remains the same. But over the next two years, what kind of ramp-up do you see? The number we have quoted in earlier concalls, the TV interviews, any change from those numbers? So FY 2026 or 2027, what should we expect from laptop segment? So we still stand by this. We maintain those numbers, Keyur, and hopefully, this potential JV that we are targeting with a large global ODM, the numbers has the potential to increase from there. But yeah, one has to wait and watch. But yeah, we at least stick with those numbers that we had guided earlier. I mean, there is a lot of confusion to just say next year or next to next year, any ballpark number? Yeah. So next year, Keyur, I think so, which is 2025, 2026 financial year, I think so, we should be somewhere, if not more, we should be somewhere at least around INR 2,500 crores to INR 3,000-odd crores. Thank you. The next question is from the line of Achal Lohade from Nuvama Institutional Equities. Please go ahead. Yeah. Good evening, sir. Thank you for the opportunity. So first question, just on the PLI, just a clarification. There was a media article about companies which have exceeded the target, are also entitled for the unclaimed or unutilized PLI quota. If you could help us giving some clarity there, what kind of quantum, if it was to be approved, what additional PLI we could be entitled for? So there is a provision in the mobile PLI of overflow, and that's what we are pursuing in line with. And yeah, so we are pursuing with the government for that particular reimbursement. So that is it. Any quantum you could indicate, or? Quantum and all, you can separately discuss this sort of. Sure. Sure. The second question I had with respect to ISM 2, if you could help us with the revenue, EBITDA, PAT for the quarter because we see the minority interest has jumped quite a bit during the quarter. I presume that is partly driven by this particular entity. So we have mentioned that in our investor update as well. So in the quarter, we did a revenues of almost INR 1,900-odd crores for Ismartu out of that INR 8,900-odd crores mobile revenues. INR 8,000-odd crores. So revenues from Ismartu was around INR 1,800-odd crores. Thank you. The next question is from the line of Niraj Jain from BNP Paribas. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. So first question is on the Vivo JV. I mean, I want to check how much is the current outsourcing percentage right now for the Vivo India, considering they have their own manufacturing facility. And the press release mentioned that only part of the outsourced orders would be translated to this JV. So any ballpark figure that you can share as in what is the current outsourcing percentage and what can Dixon expect in this JV, like the volumes for next two years? So as per the term sheet signed with Vivo, 67% of what Vivo sells in India would be manufactured in this JV. Does that answer your question, please? Yeah. Yeah. Great. Thank you, sir. That was very helpful. And so this JV is expected to ramp up from 2H, FY 2026. Is that right? Yeah. Hopefully. So basically, this JV will require an approval under the Press Note 3 as a new JV entity with the shareholding in which, yeah, in Vivo would also hold 49%. So as in when that approval comes in, the JV would get operationalized, and then the manufacturing should start. Yeah. So broadly, you can take around six to seven months from here onwards. Sure, sir. And sir, just some bookkeeping questions on the volume. So is it also possible to share the Samsung phone volume for this quarter and the home appliances, how much were the volumes for the semi-automatic and fully automatic machines? Samsung volume for this quarter was around 17 lakhs, INR 1.7 million crores. The semi-automatic washing machine volumes for the quarter was around 3.6 lakhs, and fully automatic was 0.8 lakhs. Thank you. The next question is from the line of Natasha Jain from PhillipCapital. Please go ahead. Thank you for the opportunity. So firstly, congratulations on the brilliant scale-up of your portfolio brands and within this dated timeline. I have two questions. One is, until Diwali, there was slight cheer in the market, but post that, we've seen slowdown in all the white goods categories, barring room air conditioner. Now, you're not there in RAC, definitely. But on the other side of the white goods category, sir, what are you hearing from your customers in terms of the near to medium-term demand? How is the market shaping up? Natasha, the market is still slightly subdued. There has been some positivity in the current month as compared to the last quarter because the last quarter was post-Diwali. But still, the buoyancy that will excite us is still awaited. Understood, sir. And so my second question is, a couple of weeks, rather a month ago, we read on the secondary sources that Apple is now looking into diversifying its supplier base for component assembly, especially on the non-iPhone portfolio. So Dixon has always maintained a stance that we want to become leaders in the non-Apple category or the non-Apple ecosystem. Firstly, are we still maintaining that stance? If not, are we in talks with Apple or any of their partners for AirPods or all the other non-iPhone categories? Natasha, I'm sorry. We have never said that we are going to be leaders in the non-Apple category that you're talking about. What we had said was that we have pursued, and we have been fortunate to build a large portfolio in the Android category. So that's all what I can say. Any other thing it will not be prudent for me to comment on, please. Please appreciate it. Yeah. All right. Thank you so much, sir, and all the best. Thank you. Thank you, Natasha. The next question is from the line of Deepak Krishnan from Kotak Institutional Equities. Please go ahead. Hi, sir. Am I audible? Yes. I just wanted to check on a follow-up from Pulkit's question. You indicated close to INR 1,000 crores of receivables while you indicate for PLI, but you've indicated that you've got money till December of last year. I just wanted to double-check. Is this number correct, the INR 1,000 crores number that you're indicating? That's right. So that number is correct. But this INR 1,000 crores is also to be passed on to the customer. And the cash is passed on to the customer only when we receive the money. Yeah. So there is no working capital challenge with that. So the net impact would be just say 33%, 40% for us. That INR 200-odd crores. That INR 200-odd crores that you mentioned is our share, basically. That's the number. Sure, sir. I maybe just wanted to sort of understand. I think you've sort of given a good insight into the display fab, the cost, the asset turns, all of it. But when we're sort of looking at doing this, how are we looking at outside the PLI period? Assume we get 70% to 75% PLI incentives. We set it up for the first five, seven years. That works. But how do you look at this business? Because the real risk is essentially generating ROCE even after the incentives go out. So just wanted to sort of understand your viewpoint on it. This is not an operational PLI. This is a CapEx subsidy. Yeah. So yeah, it's similar to the OSAT facilities, all of that. You get that 70% CapEx subsidy comes through. That's for the first, whatever, 60,000 substrate that you indicated. But what happens after that? How do you look at incremental investments beyond the PLI period and ROC? Oh, no. It's not a PLI period or anything. Because the costs were compared significantly, and your payback is amazingly fast. And in any case, you're producing a product. You're producing at a cost which is produced anyway anywhere globally. So that's the max. It's not dependent on PLI. It is dependent on the government's CapEx support. Yes, sir. Sorry. I'll probably take it offline with Saurabh because I understand the INR 3 billion crores, you will get 70% subsidy. But say you go for the next round of CapEx, how do you sort of catch that? Essentially, that was my question. But if not, I'll take it offline with Saurabh also. Oh, sure. We can discuss it. Yeah. Thank you. The next question is from the line of Shrinidhi Karlekar from HSBC. Please go ahead. Yeah. Hi. Thank you for the opportunity. Sir, would it be possible to comment on the telecom business profitability for the current year, and how is it likely to improve as you aim to double that business? Yes. Broadly, the margins are similarly or slightly better than what we do in the mobile business, which is around 3.5% to 4% kind of an EBITDA margin business. And the revenues you mentioned that we did almost INR 1,000-odd crores. We have a strong order book, so that INR 1,000 crore run rate should continue. In fact, it should get better in the upcoming quarter. So you can broadly assume a 3.5% to 4% kind of an EBITDA margin business in this. Yeah, that's it. Thank you. And second, sir, you alluded to the OPPO volume being around seven to eight million next year. These are just OPPO volume, or these include OPPO plus Realme? Those are basically Realme. Realme volumes. Right. Okay. And the last one, if I may, so would it be possible to tell us the broad range of investment that you would be making to acquire 51% stake in the Vivo manufacturing JV? If you don't mind, there's slightly. As of now, I said it's confidential. At an appropriate point of time, we will definitely disclose that. Very well. Thank you for answering my question and all the very best. Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to Ms. Bhoomika Nair for the closing comments. Yeah. I would just like to thank the management for giving us an opportunity to host the call and all the participants, and thank you very much, sir, for answering all the queries. Thank you very much, sir. Thanks, Bhoomika. Thanks to all the participants. Really appreciate it for your support. Thank you so much. Thank you, everybody. 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.