Ladies and gentlemen, good day, and welcome to the Q4 FY 2023 and FY 2022-FY2023 Earnings Conference Call of Sandhar Technologies Limited, hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I will hand the conference over to Mr. Abhishek Davar from Dolat Capital. Thank you, and over to you, Mr. Davar. Thank you, Michelle. Good morning, everyone. On behalf of Dolat Capital, we welcome you all into the fourth quarter FY 2023 Conference Call of Sandhar Technologies. From the management side, we have with us Mr. Davar, our Co-Chairman and Managing Director, and Mr. Yashpal Jain, CEO of the company. We thank the management for providing us the opportunity towards the call. Now I hand over the call to management for opening remarks, and then we'll have the question and answer session. Over to you, Davar sir. Okay. Good morning, everyone. Thank you all for being here. Let me begin by, first of all, giving you a good side of what has been happening. As promised, and as we had anticipated, we achieved a revenue growth of 25% in the financial year 2022-2023 at a consolidated level, and we expect to register about the same level of growth in the next year as well. Of course, keeping in mind that everything in the market and the geopolitical situation has stayed stable. Our consolidated EBITDA is about 10%. With production being ramped up and various cost control measures, we lost almost INR 37 crores as a bottom line based last year on account of these losses. The good news is, all of those loss-making units have now turned around, so this will not be something that we will have to carry forward in the future. We expect a healthy improvement in our consolidated EBITDA margin for this financial year. In terms of the auto industry, while you've seen that all the sectors of the industry barring two-wheelers are in a very dreadful mode, we do expect that with the news that we have from two-wheelers, with two launches being done, there is action that is going to happen. The auto industry, especially in the two-wheeler segment, is looking at some positive cheer in this particular year. I'm going to leave it there and then answer as your questions come along, which are directed specifically, to different parts of the business. I also have with me here today, Mr. Yashpal Jain, the CFO of the company, who would be happy, to clarify any questions you might have in terms of financials or numbers or so on and so forth. With that, thank you all once again, for being here this morning. Thank you very much. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may press star and one to ask a question at this time. We have the first question from the line of Saurabh Jain from Sunidhi Securities. Please go ahead. Good morning, all. A very healthy set of numbers. Congratulations for that. I have two questions. You have given a very nice product roadmap for battery chargers, motor controllers, and DC-DC converters. Is it possible to quantify in terms of revenue, what kind of opportunity could these three products bring to us in coming years? When can we start seeing this flowing to our revenue? Okay, let me answer this question. Obviously, I will not be able to give you a proper projection in which would be against the stipulated laws. What I can tell you is that we have, at this point of time, four products which are ready. One is the DC-DC converter, which is isolated and non-isolated. This is developed. The ICAT approval of this has also been done. There is the EV charger, where this has been done with a technical collaboration with a partner. The proto readiness is done, the performance validation is done. At this point in time, we expect that in these months as we go on, the ICAT approval is under process. We have the motor controller in 1 kW, 2 kW, and 4 kW. Again, the proto readiness is there, performance validation is done, product validation is being done, which is also expected to go in for ICAT approval between August and October. We have the hub motor, which is already ready, but the cost of that is higher as we see at this point of time, so we are exploring different variations to the technology for more. For our EV business, well, a new company has been incorporated. This is called Sandhar Auto Electric Solutions Private Limited. The premises have been identified, infrastructure development in this progress, and the company expects to go for trial run in the last quarter of this year. We've executed technical collaboration agreements with two providers. We are working very closely with them for the development of products as per the customer's requirements. That's the kind of input that I can give you as we sit today. Obviously, this financial year, the first production will begin only in the last quarter. The numbers will be very small or insignificant. We expect to ramp up numbers from next year onwards. I hope that answers your question. Yeah, and that was helpful. If you could share, what was our revenue share from EVs during FY 2023? Of course, you won't be able to quantify the contributions from, or the opportunity from these new products, but if you could give a rough idea that in next 2- 3 years, what kind of, what percentage of our turnover would be, you know, consist from this, these products? Okay. Yes. The way we are looking at it is, at this point of time, we already supply to the EVs. In fact, we supply to almost all the EV manufacturers that there are in the country. The items that we supply or the products that we supply currently are our regular range of products, which could be locks, which could be mirrors, which could be sheet metal items, which could be plastic items and castings and so on and so forth. The products that I spoke about earlier are the products which are specifically for electric vehicles, for their powertrain. At this point of time, Yashpal is here, he might be able to tell you, what is the current revenue that we get from the EVs in terms of numbers. Going forward, from the EV-only products, the powertrain products that we've developed now, we expect the revenue, very difficult to give you a range, but if you were to ask me in percentages, we would expect that in the next couple of years, the revenue of this could be between 5%-10%. Great. That was helpful, sir. Sir, in one way, Yashpal can give you the number right now, if you want. Yashpal, would you like- Yeah, yeah. the number of? Yeah, yeah. Yeah, so for exhausted products, which has been supplied to the EV company, the figure is around INR 25 crores of items we have supplied to the EV companies, our existing products. In the last financial year? Yeah. In the last financial year. Last one. Thank you. Thank Thank you, Yashpal. Any more questions? Yeah. sir, in one of the past conference, you had talked about keyless smart locks, that is a very big opportunity for us. Our return realizations will go up from INR 300-INR 400 to INR 1,600-INR 2,000. When can we, if you could give us some road map with respect to smart locks? Okay, let's just put it like this. Well, I did say INR 1,600, I did say INR 2,000. The first orders that we have in hand now, range from INR 3,600- INR 4,400 that we've already received. We're happy to know that one of the product lines, especially in the EV sector, has already launched our product with the smart lock. I'm also happy to tell you that we have an order from a Japanese manufacturer. I can even name, is Suzuki, where the price line is about INR 3,700, but the product will go online in, I think if I'm not mistaken, it's May or June of next year. That's when we go into mass production of this particular sensibility. I'm also happy to tell you, while I cannot name the customers, because we are not in a public domain yet, we have two other customers where we are likely to be able to announce soon the introduction of the smart lock. I do believe that in the next five or six years, a large portion of the industry, both IC engines and EVs or any other powertrain mechanisms, will all be on smart locks. Does that answer your question, sir? Yeah. I have a follow-up one. Sir, roughly 19% of our turnover comes from locks. What percentage of that would be a smart lock? Do you see that this 19% share going up substantially in next 2-3 years because of these high-range locking systems coming in? To answer that question, I will not be able to give you a percentage, because you would obviously understand that INR 300 or INR 400- INR 3,700 is a big price jump. The volumes that we have going forward, are 50,000 sets, 100,000 sets, and so on, which are still small comparatively in the next financial year. As we go forward, this percentage is likely to go up, but let us not take away from the fact that all the other, you did say locks are 19%. The other 81% is also growing very, very aggressively. Maybe not as aggressively as this price change would happen, but I would imagine the other, proportions of the business are also growing dramatically. If you look at sheet metal, where we put up four new plants, obviously, this is all new, you will see a big jump in that percentage in this financial year. Castings are growing very, very rapidly. We have gone in for electrochromic mirrors, which again, there is a significant change in the price point. The idea is that the, not just the wallet share, but the value addition in each one of these product lines is rated to go up dramatically. That's wonderful, sir. Sir, Sir, what was the contribution from new projects? Mr. Saurabh, I'm sorry to interrupt, sir. I have a request to kindly rejoin the queue. Okay. Yeah, sure. Thank you, sir. Thank you. Thank you, Saurabh. A reminder to all the participants, anyone who wishes to ask a question may press star and one now. We have the next question from the line of Abhishek Jain from Dolat Capital. Please go ahead. hello, good morning, sir. Congratulations on the strong-. Good morning, Abhishek. Good morning. Congratulations on the strong number. Just, sir, as you mentioned that, there is a 26% growth, you are targeting FY 2024. What would be the key drivers, if you can explain in segment-wise growth in the each segments? Yashpal Jain, you will have the numbers of different businesses. Would you like to answer Abhishek? Yes. Thank you. Yes, sir, I will answer. Abhishek, like, as you see, our MD has said that we will be witnessing a growth of near to 23%-25% in the coming year. The large part of the growth will be coming from our new projects, which were lastly the four projects in sheet metal space. That will see a major growth in revenue terms. It will be around 70% of their existing revenues in the coming financial year. Other segments will be contributing around 21%-22%. That's all, including Barcelona. How much incremental revenue will come from the sheet metal business in FY 2024, sir? We expect the revenues incremental will be around INR 307 crores, sir. INR 300 crores. It is from the primary end business. There are multiple customers. We have seen a sharp jump in revenue and margin from overseas business. There was a 50% quarter-over-quarter growth in the revenue. What is the reason of sharp growth in revenue and margin in overseas? Yeah. Thing is that, the Romania plant is in operation in the last week of the third quarter. Third quarter witnessed a higher cost of, I would say, commissioning for the Romania plant. That was the reason the margins are down. Fourth quarter onwards, we have started the business, and the demand is also good in Europe. In the coming year also, we'll see all the four plants in extending overseas. That will give a good jump in terms of growth in revenues and margins also. What would be the contribution of the Romania plant in the revenue growth, sir? It will be around INR 150 crore in the first quarter. On quarterly basis or annual basis? Quarterly basis. Romania plant will. Sorry, I'm telling you a consolidated Barcelona operation, overseas consolidated. Overseas, and what would be the margins there? Margins, like, we are having a bit of 13% in the overseas business. That will continue. In the cabling and fabrication business, we have seen a very strong traction towards the margin concern earlier. What's the current progress on the margin and the top line growth, sir? Like the commodity prices are stabilizing, you know, the cabling and fabrication is largely dominated by the commodity prices. That was one of the reasons for the drawing down the margins, sir, but now it's improving. We expect that it will continue with the 8% and our margin, a better margin in the coming year. My last question on this ADC segment, we have seen a very strong traction in overseas as well as domestic business. How is the current, what is your revenue growth margin in ADC? Plus, are you looking for any capacity in ADC? As of now, just the capacity for earlier planned for new projects, that would be something because we have done the capitalization in the last financial year. The outflow will be taking place in the current financial year. As of now, if you ask me, no new projects are under ADC. The growth, if you ask me, in the die-casting business, we'll be expecting around 23%-24% of the growth. The margin? Margins will be above 9%. Depending on the customer demands and all other factors. Thank you, sir. That's all from my side. Thank you. We have the next question from the line of Radha from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity, and congratulations on good performance. Sir, given that we are expecting 25% revenue growth, so if we take on a cash back basis, we are expected to generate around INR 250 crores, of stability next year, and with limited working capital requirements, which will reduce significantly in this year and then in the next year. What is your debt repayment schedule next year and capital allocation policy for the next two years? We have taken up seven new projects in last one and a half years. Largely, capitalization is complete, except the Mysore project, which will be commissioned in the current quarter. That is true, certainly. As of now, we have around INR 100 crores of payments to be done to various vendors, which is this Mysore and other projects that we have done. As far as the debt level is concerned, presently, we close at INR 547 crores of absolute debt. We don't expect any increase in the debt. In fact, we have planned a repayment schedule in terms of the term loan installments also. This will be coming down in the current financial year. CapEx-wise also, we'll be doing the working capital that is required to upkeep the plant and run the operations. If you see last year, we have generated a cash inflow after payment of actual INR 308 crores at console level. With our cost saving measures and other control measures that we have taken, we expect to continue to generate healthy cash flows to take care of our needs in terms of CapEx and OpEx model. Secondly, on the EV side, could you give us an understanding that, how much, we have deployed, just on the, development of new products on the EV? How much are we expecting to deploy for the next two years? Yeah. As of now, we have started the development of EV, as Radha told that the site has been identified. We are in the process of spending. Currently, roughly, we'll be spending around INR 9 crore-INR 10 crores in setting up the facilities. As the business grows, we will see how much is required to be spent on the EV side. Radha, let me just expand a little bit on this. That might be a question coming up from several others. We are keeping the manufacturing infrastructure and development costs very lean. You asked what the expense was. A lot of this has been developed in-house over the last few years, and therefore, this has been consummated in the R&D expenses that we've been doing. We hadn't specified that this was for TVS per se. That's already been done. What Jain is referring to now is the line setup for the effective production, where the development, where the, you know, payment to PCs and so on and so forth is largely being approached. Thank you, sir. Lastly, wanted to understand, as of now, what is our market share in the locks business? Given that we are expected to supply to Suzuki, also could you confirm if we are expected to supply to Honda Activa H-Smart and Dio, which are the two models in the smart locks? If we are expected to supply to that, and other, smart technologies for the next two years, what would be our market share in locks, in the next 2-3 years vis-a-vis now? As I've, Radha, you must be aware that we are the largest producer of lock sets, especially in the two-wheeler segment in terms of volumes, where mechanical locks are concerned. Smart locks is new. I've already announced the Suzuki business has already been awarded to us. I am not at liberty to announce the other customers, but I would want to leave that message that development of this is on. As and when we get clearance from the OEs to announce their names, we will do that. I see no reason why the leadership position that we have in locks will not continue going forward, even in the smart lock space. Just on the Suzuki, you mentioned that you'll be supplying from next year. Just wanted to understand, what are the models that we are targeting? Well, there are two models. One is mechanical locks as well. All mechanical locks will be supplied by us, where and all Smart Locks will be supplied. This is a 100% change of our business. I do not have exact model numbers, but from what I understand is that the volumes of two-wheelers for mechanical locks is about 700,000 odd. For the Smart Locks, whatever Smart Locks we use in whatever vehicles, it could begin with something like 50,000 vehicles perhaps, so which will move on to Smart Locks on an immediate platform. That is, over a period of how many years? No, that's annual, annual numbers. Okay. Okay. Thank you, sir. It's been lovely. Thank you. The next question is from the line of Nitin Agarwal from SBI Mutual Fund. Please go ahead. Yes, sir, thank you for taking my question. Sir, firstly, when you say that, you know, in Europe you are expecting a 30% margin, currently we are just about 10%. What is the margin driver that we are thinking in this margin expansion. I'll answer this question. Like, we are maintaining a margin of around 13% up in our overseas operations. As I mentioned, we commissioned the Romania plant in last financial year, right in the third quarter. There was an initial startup and a development cost that we have charged to our P&L account. Because of that, we are seeing a margin of around 10%, which won't occur in the current financial year. We'll be maintaining our momentum of 13% and nearby margins in the overseas operations. In the overseas business, the margin has remained impacted from Q3 of 2022. Just because of energy and raw material prices, which has completely normalized right now, and the 10% margin is building in only the startup cost, which I understand is correct? Yeah. Largely, the startup cost is, in building, which has reduced our margins. Otherwise, all the raw materials and input costs have been normalized over there. This startup cost is expected to stabilize from 1Q itself, next quarter? Exactly. Because the plant has been commissioned initially, as you know, we need to get the validation from customer. A lot of expenditure has to be done in development, testing, et cetera, that phase. While the fixed cost continues, the development cost also continues, but this will be over from the current quarter. On the standalone business, would you want to give a clear guidance of, you know, where can our margins go from here? Well, as you see, in the standalone also, we have shown a good improvement in our margins. For fourth quarter, like of the current financial year, we are close at a 9.6% of the margin. As Mr. Davar has explained that in the loss also, we are expecting new businesses with good margins. I think we will be improving these margins in this current financial year. Yes. Okay. sir, we see that, you know, losses from JV has turned profitable this quarter. Are there still any JVs where, you know, we are seeing losses or where we can see more turnaround opportunities are still pending, or more or less, most of the JVs have turned profitable? Yeah. Let me answer that question. This question may be asked by several others as well. We have in a lot, seven JV that were commissioned in recent times, in the last few years. There was the Hella JV, which was Sanganer, which you saw has suffered losses. I'm happy to announce that in the last year, we did a revenue of over INR 50 crores, and we are now not just positive on EBITDA, but we also have a PAT positive of almost INR 2 crores. There are others which are Winnercom from Sandhar and Sandhar Han Sung Auto Technologies. There again, between the two of them, they had a revenue of INR 74 crores. Again, PAT positive. Sandhar Han Shin Technologies registered a sale of about INR 54 odd crores. Again, PAT positive of about INR 2 crores. Jinyoung Sandhar registered a sale of INR 47 crores. On an operational side, it is pro-profitable, but there were some setbacks on account of Forex fluctuations. Then we changed over from a dollar mechanism to a KRW mechanism. In the future, we expect this to be better. Kwangsung Sandhar, started commercial production, registered a sale of INR 25 crores. Operationally profitable, but there was a Forex liability that has been restated, and therefore, it is showing a loss. Sandhar Whetron is EBITDA positive already, and we expect the business to grow in 2024. That is the list of the seven JVs that we have. In current year, as we said, we expect no losses from any of these. I have said that, but a substantial profit, coming, to the bottom line of the standalone unit on account of, what we've been suffering has been taken away from our main profit and loss account this year. Okay. Do you want to add something, Yashpal Jain? No, that's fine, sir. Yeah. Thank you, sir. That was pretty elaborate and helpful. If I may just squeeze two more questions. One is, you know, can you give us some trends on, you know, what are the new order wins with the four-wheelers? You know, how are we seeing that segment to pan out? Well, what I can do is I can give you a percentage analysis of the overall thing. Yashpal Jain will add it to where our volume comes from and what percentage comes from. Unfortunately, I will not be able to tell you about the wins that are projected and anticipated in the current business plan. Suffice to say that our existing relationships with the whether it's four-wheelers or two-wheelers or tractors or commercial vehicles or even construction equipment, is strong. The existing customers obviously are coming to us with all the new models in play. In fact, there is also a share of business expansion which has started to happen to us over and above the volume 50%. If you look at it, the list will be exhaustive, in the fact that we supply to almost 78 different OEMs. It's very, very difficult to give you an individual list of where the new order wins are coming from. If you look at any model, if you look at the, whether it's a TVS or whether it's a Hero, or whether it is a Honda Motor, or whether it is a Toyota's or Mahindra's, all of them are working with us, and all new models are now being taken in for development, and some of it will start their volumes and production in the year that we are living in right now. Okay. Sir, when we are, you know, taking a 20%-25% revenue growth, what sort of industry, two-wheeler industry growth are we building in these assumptions? To be honest with you, we have not taken any industry growth for two-wheelers in this particular year. We are being very, very conservative. Yes. at What we are looking at is the share of business going up. What we are looking at is the wallet share increase with new kind of components. What we are looking at is the utilization and optimization of the capacities that we have. All the new businesses that have been set up, which is basically migration of business from our competitors to us. That's where this is coming in, and this has been established. These production lines are now being ramped up. You are aware that all these investments were made on the basis of the customers transferring businesses from other peers to us. This is. We haven't taken any growth in the industry. If there is growth in the industry, that obviously will be a positive for us in the upward arena of where we are. Okay. Okay. That's really great to know. Just one last question from my end, is, you know, if you see the receivable days or, given the absolute numbers in letters, there's been a lot of volatility. In our 2021 and 2022 days, the, our data days going up significantly high, and then it has corrected again in our 2023. Can you remind what happened, and is this the normalized level in the 2023 where we are running in it? Yes, Rajeev. Yes, please. If you see that in the current financial year, our average receivable collection at console has been 43 days compared to 52 days. Right. With the commodity prices being stabilized, we settlements were done from the customer side, because what happens, we get one quarter lag in terms of price settlements. That has been done. There has been some renegotiation of payment terms with some of the customers, although I cannot name them due to the confidentiality. That has also helped us to, I mean, reduce our receivables collection period. I think we will be able to maintain the same levels in the current financial year also. Okay. Okay. That is also my side, sir. Thank you. The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead. Yes, sir. I just wanted to check on this, INR 100 crore business you have done in the last two, three years and there's another INR 100 crore line up. I think the total CapEx is a fairly large amount for this. At what asset run have you put this CapEx at, and, which are the core, business areas where this large CapEx has gone into? This large CapEx has gone into the sheet metal business largely and the casting business. Except the Mysore plant, remaining plants are in production, and the volumes will be seen significantly in the current financial year. INR 100 crore is the balance amount that we need to spend out in terms of cash outflows, three of the CapEx liabilities and two in some of the CapEx required to finish up the Mysore plant. That's all. Our asset chain has been quite good. We are about 3x of the total investment in terms of asset chain. If you take the effective CapEx versus the, I mean, the turnover giving units, it is going to improve in the current financial year with the new projects starting up the business. When do you think that you will hit the peak utilization of this asset? Well, in terms of our existing assets, we are already at peak utilization. In terms of the new projects, in the current year, we will be getting to mass production, so the timeline. Except Mysore plant, all other plants will be hitting the mass production by May of this month, which has already been started off. still does it in full capacity for your understanding. Our businesses are such in a way that small incremental CapExes increase have the propensity to increase volumes by a large number. For example, if we are doing lofts, once the infrastructure is in place, you have a building and you have common facility, a small line set up could expand the capacity by several times. In this line, which we have displayed in our presentation, any product line which is not, you know, is at a risk to a EV transition? No, none. None whatsoever. None whatsoever. They are very agnostic to the powertrain technology, sir. How much is this ADC overseas is all exports, and that's the only portion of our business, which is exports, which is 15% of sales? Well, that is our international revenue. There is some exports that we do from India, especially in the current business and so on and so forth. Yes, in terms of foreign exchange earnings, the bulk of it comes from our overseas operations and overseas plants that we have. Okay, thank you very much, sir. Thank you. The next question is from the line of Arjun Khanna from Kotak Mutual Fund. Please go ahead. Thank you, sir, for taking my question. My first question is, while you have articulated the JV businesses opportunity, et cetera, could you let us know what is the capital deployed in the business, including loss funding, which is mentioned in? Yes. Capital fees? Yeah, for joint ventures. Yes, sir. It is INR 87 crores we have invested in joint ventures as of now, including all funding, loss funding, et cetera. Sure. When we look at ROC, so when do we envisage at least getting or going above that for these joint venture business? I know this quarter has been extremely positive. Do we see this trend continuing in the next couple of years? Could we see significant ROC from this business? Yes, we are hopeful as per the plans that we have got from JV partners. We expect that the ROC will significantly improve in the current financial year. From next year onwards, we are also expecting a double-digit ROC from our JV investments. Sure. Thank you. In terms of our debt, this year, our debt levels are pretty similar to the previous year. Going forward, while we should have our capital requirements are lower, do we envisage that current year's debt would be the peak debt, unless we have some major cases? Yes. You can take it. Yeah, the INR 557 crores of peak debt. We expect, unless there are new some projects coming up, new business coming up, we expect that it to be reduced significantly in the coming two years of course. Sure. Is there any projects you are getting out in terms of debt reduction? Some normal repayments will be there for the term loans. As of now, you see INR 300 crore in crores of cash flows we have generated. Last year, largely INR 250 crores we have spent on the CapEx. The requirement will be lesser this year because having said that, INR 100 crores of liabilities we have in terms of cash budget. Some amount of maintenance capital we would be requiring. We expect that at least the debt should be coming down in terms of normal repayments. We don't see it as a peak debt that we considered at INR 550 crores. Sure. Lastly, in terms of, the EV, projects that is currently under development, if we have to scrutinized a lot of them, what would be the CapEx that we envisage for the same? Our address like development cities we have done, all the lines will be required to set up, so that we'll be doing in a phased manner. In the current year, while the plants will be set up, each plants will be set up, we expect something to spend around INR 90 crores, INR 10 crores. Then gradually in the next year, depending on the customer's business, the requirements, whether we require to expand those lines or to continue, that depends on the schedules that we are getting by this year end. Sure. There would be no major, large greenfield CapEx for the same? As of now, nothing. No major CapEx around the parts. Sure. Thank you. Thank you. The next question is from the line of Kunal Gupta, an individual investor. Please go ahead. Good morning, sir. My question is that with models like the Honda 110 cc motorcycle being launched, is it a problem for us, or are we supplying to Honda these models also? We might lose some share to models like this. Well, to answer that question, I think it's a matter of pride for us that the first Honda lock business that we got was this 110 cc. We are the single source supplier, where we set up our lines in our existing Bangalore unit, and we supply from there completely, for this new model that has just been launched, the Shine. It's not a threat to us then, I guess. Well, it's not a threat. Both of them supplying, we supply to both of them. It's fine. That's what we are looking at. I get it. Sir, last quarter you were telling us that you were looking at 2-3 deals in the four-wheeler business. Has any of that happened or, like, we are in process? What? Please tell me. Can you repeat that question? Last quarter, sir, on the call you had said that you were working on 2-3 deals in the four-wheeler space. Yes. Yes. Yes. Is there any progress on that front? Well, we have got an order from Hyundai already, which is now under development. This is again, a large order, a supplier which will begin from the next financial year. Sir, the start-up costs, so that we are still incurring, sir, will the last of them be in the June quarter, or are we expecting some in the quarter as well? It will be down. It will be down. Yeah, Yashpal, go ahead. Sorry. Yeah, sure. Yeah, we expect to settle it down in June quarter. Thank you so much, sir. Thank you, sir. Thank you. We have the next question from the line of Saurabh Jain from Sunidhi Securities. Please go ahead. Yeah. Thank you for the opportunity again. What was the contribution from new projects, six new projects between two for FY 2023? What kind of turnover can we see from these new projects at the peak utilizations? Like to touch upon the turnover from these projects, as we mentioned, that they were in the development phase in the financial year. Largely, they were development costs. The revenue was very insignificant. It was got to around INR 80 crore of the revenue that we generated from these projects. Coming like, out of these four projects of sheet metal, three will be in mass production in the current fiscal year, while Mysore will be coming in mass production by third quarter of the current financial year. That's all. Okay. Sir, if you could give us broadly, what was the capacity utilization in company overall and as well as JVs? So that you of course, Jayant sir has given the numbers on JV front, but actually, if we get the utilization level, it will be, you know, quite good to understand what headroom of growth do we have. Sir, you would like. Well. Yeah. If you were to look at all the joint ventures, the seven of them that you have seen, we have basically just touched the top and the two line. These are not very heavy investment JVs as Mr. Yashpal has just said. We have invested, as he said, so far our investments have been to the tune of INR 87 odd crores. I would expect that an add returns of 5x to 6x is probable in the calculating the utilization. INR 87 crores is our portion, which is 50%. Obviously, if you look at the joint ventures per se, the numbers are much larger because the other 50% has been invested by our partners. Okay. Thank you so much, sir, and wish you all the best. Thank you. Thank you. The next question is from the line of Sailesh Raja from B&K Securities. Please go ahead. Thanks for the opportunity. Jayant sir, I recently visited your Hosur, Tigadi, and Bangalore plants. It's very, very good infrastructure with a lot of automations, and your things are really great up there. Sir, I have three questions. In the lock, there are so many parts going inside the product. 30%-40% of the parts we are outsourcing. Any plans to reduce the outsourcing parts in the future? No, we d on't have any such specific plans to cut down outsourcing, because you have to understand that in some of the locks, the number of parts that go in are almost 150. Now, these constitute almost all kinds of technology, which is, castings. Again, within castings, you have aluminum, you have zinc, you have magnesium, you have several kind of specific plastics, you have rubbers, you have steel, you have other kinds of materials that go into it, you have springs. You know, if you were to add all those up, they add up to almost the entire scenario of the manufacturing industry of every kind. While we have taken a lot of this inside in terms of large componentry, in terms of, let's say, castings, for example, we do not anticipate that we will go into fine production of almost all the technologies that there are. We do find unless and until there is scale, it doesn't make sense for us to get into every element of manufacturing. Outsourcing of parts will continue. We will do a per chart analysis as to which are those parts which bring value to the organization, and if there is cost merit analysis, we always continue to see that. At this point of time, I don't see any major initiatives from us in terms of bringing outsourcing of these component parts within us. Yes, in terms of smart locks, for example, as you see, is a large portion of our growth strategy. The manufacturing of the PCBs has already been considered. We've already set up where we will be doing what there is. Okay. Okay, then, sir. My second question, could you please talk about the steel wheel rim business? What is our plan here as industry is slowly shifting to alloy wheels? Is there any plans to scale down the business? What is the margin- Not at all. Not at all. Not at all. In fact, it's the other way around. The aluminum alloy wheels that came in almost 12 years ago, when our volumes kind of dropped. But it sustained itself. It went up to a level of almost 90% of the industry, and it's rolled back to 70%-75% of the industry. Because of the onset of specific models, where they felt that there was a legacy, tradition, and design which needed these steel rims, the business actually began to kind of grow. Also the fact that we are one of the few ones who had the coating facilities. We haven't seen much competition in this area, and our capacity is... In fact, we've grown capacity in the last few years. Incremental capacities have been grown, both in terms of plating and output and so on and so forth. At this point of time, the way we said, we absolutely see no parts of the business to the steel wheel rim project. My last question, could you talk about our new machining business? Recently, we have taken lot of business from GPS. What was the revenue we have recorded in the year 2023, and how much we are calculating? Well, the business of machining that you're saying has been taken on two counts. One is that we have taken all the machining business of SCL, which means that every kind of castings that go into SCL would now be routed through us. We have taken this business only on a job work basis. The reason to that, again, is we wanted to cut down on the capital employed in the business, whether it was working capital and so on and so forth. The business as it stands, we expect a revenue of close to INR 70 crores in this particular year, with a healthy margin of somewhere in the region of 30%+. That's what we are looking at with the machining business. The other element of the machining business is that while we do castings as machining ourselves, such precision casting as are being done, we will be acquiring almost 400 machines, a part of which or let's say a major part of which has already been brought into our facility. The balance will be brought in in the next quarter or so. This gives us an opening into a huge space that we are going for. We haven't started any yet. We are still pricing the business for the Indian customers, but going forward, we see that to be a huge revenue and a profit for us. Sir, in job work business, any other projects you are planning for other, in addition to this INR 71 crores? No, there is whatever has already been advised and the plants have been commissioned. I said there is a movement of machines that still have to move from SCL to us, and there is a spillover capacity we have to pay, which has already been adjusted in the numbers that were given to you earlier. Yashpal Jain, you want to add something here? Yes, sir. Total outflow, we are expecting all together to finish up the Mysore and with the remaining portion of these capacities, INR 100 crores in India. That's the amount we will be spending current year in terms of cash outflows. To the equivalent capitalization, we will move the books for the remaining. That's all. I mean, the final figure. Yeah. Okay, sir. Thank you, sir. Thank you. The next question is from the line of Ashish Gautam, an individual investor. Please go ahead. Thank you, sir. I have two question. One is, in EV space, what is our total value per scooters or per four-wheelers, passenger four-wheelers? Well, it is anti-situation right now. I can tell you on the products that are ready with us, one is the DC-DC converter, the EV charger, and the motor controllers. All three of them bulked up, depending from model to model, could range from anywhere between INR 13,000-INR 20,000 per vehicle. Okay. That is for both four-wheeler as well as two-wheeler? I'm only talking two-wheelers. Four-wheelers, we are in the process of establishing, where the cost of, let's say, just the motor controller alone is around INR 60,000-INR 70,000. Okay. Approximately it would always be around, say, 15%-20% of the value of the product? It depends again, on the vehicle. If you are looking at four-wheelers, for example, if the cost of the vehicle is INR 20 lakhs and you calculate INR 60,000, it works out to a much lesser number. If you look at two-wheelers and you look at all these products put together, then, yes, the number you're saying is correct. Got you. We have Suzuki is a client in two-wheelers. They are not our clients in four-wheelers, but...? Right now, no. Do we intend? No. add them into our- Well, well, we do supply to them, but we don't supply directly yet. We supply, let's say, some of the electronic parts that were established in the last two years have already started going. We are looking to talk to them, and we are already talking to them of development of new parts, but at this point of time, we supply relays to them, which is supplied through another Tier 1. Okay. With regards to, do we take EV, overall, our product range, contributing to our total sales, that would be of EV and how much would be normal? At this point of time, it is very insignificant. At this point of time, like Mr. Yashpal Jain just said, our sales to EVs in the last financial year was to the tune of about INR 25 odd crores. That came from our legacy products, which is our locks and [Inaudible] resorts. resorts. In terms of EV products itself, we are in the process of setting up lines, as we speak, in the name of the new company that I said, Sandhar Auto Electric Solutions Private Limited, which is a subsidiary. The production of this will begin sometime in the last quarter of this year. We are not anticipating revenue coming from this in this year. Yes, once the lines are established, production starts, it will form some portion of our revenues in the next financial year. It will be 100% to EV? Yeah, 100%. 100%, absolutely. Thank you, sir. Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead. Hi, welcome again. sir, is it significant to mention that you are not factoring in any industry growth in the 25% growth that we are expecting? One of the key reasons for growth is increasing conventional vehicles, which give you the two-wheeler players. You also mentioned INR 15,000-INR 50,000 for the new EV products in pipeline. Sir, with respect to this, could you draw a roadmap for us, how the conventional vehicle was, since we started in 19 two-wheelers, and how is it now, and what would you expect it to be in the next 2-3 years? Well, Radha, it is not a simple question. It is a good question, however. Let me try and answer it in some form or the other. You see, what happened was, let's say, if you go back, 10 years ago, our contribution to, let's say, a Hero motorcycle used to be in the range of INR 900, which today is perhaps INR 2,000+. If you look at TVS, for example, there are certain models in which when we started out, we only supplied them with a lock of INR 300. Today, in some of the TVS vehicles, our contribution is as high as INR 11,000-INR 12,000 per vehicle. All of this has come with not the same parts, but with an addition of parts, and that expansion of the wallet share of that is increasing continuously. As we said today, I mentioned, and I think another gentleman asked that question, our lock system goes from INR 300- INR 3,000 in case it's a smart lock, for example. That's a 10x expansion on the value addition that you're putting into the picture. The same is happening with mirrors, for example. We now have two kinds of electrochromic mirrors, which are completely different, where the price is again more than 10x. It is happening with every product in one category or the other. The other thing is in terms of, for example, the TVS lines or the two new plants in, these are products which we were not supplying earlier. They were either being supplied or needed not there, or if they were being supplied, they were supplied by a competitor. Obviously, because we were found to be more viable, more competitive, better in terms of technology, we've got those businesses, and this process and this strategy of the company will continue. That is the reason why we continue to grow, despite the fact that in two-wheelers, we are not really taking any market growth for that particular segment. Even in the last year, if you look at it, the entire market grew at 12%, but we as a company grew at 25%. I don't know if that answers your question, Radha, but I tried my best way to explain it to you. Yes, sir, thanks so much. Just lastly, can you give us two-wheeler keyless locking system penetration in the industry as of now, and what do you expect it to be in the next 2- 4 years? Secondly, sir, since the cost of two-wheeler have gone up significantly, like you mentioned in the last two phone calls, with this keyless locking system penetration expected to increase further, I mean, do you see this jump in keyless locking system two in three significantly, despite rise in prices of two-wheelers? Radha, again, a very good question. I mean, the answer to that is very simple. You saw that in 2019, we as a company sold about 32 million two-wheelers, which fell down to 13 million-14 million. The market dropped down, a large part of that drop was not only on account of COVID, but also on account of the price increase. If you look at price increases in the two-wheeler segment, they've gone up from 40% or in some cases, 90% over what the numbers were in 2017. Obviously, the market went in for a shock, there was not so much of an ability to pay for these new lot of prices. Having said that, over a period of time, because of the cyclic nature, because of the replacement cycle that also comes in, people knew that they would have to. Add to it the fact that there has been a huge increase in the interest cost, and you are aware that a lot of vehicles are bought on EMIs. When that EMI goes up because of the increase in interest rates, the overall impact of cost of ownership went up dramatically. What happens is, over a period of time, people get used to that idea, but we are still not at 2019 levels, even today. What we are anticipating is that we will see very minor increase in the volume. There is a fact that a company like Hero, for example, is probably launching 20 models in this year, something like that. Every company is coming up with new models to attract the different segments of the market. We will have to wait and see how that goes up. For us, our strategy continue. We will add to value addition, we will add to the market share, we will add to the wallet share. All of these are put together in terms of newer technologies that are either being mandated from comfort perspective, safety perspective, or from a key perspective. All these three put together is bringing in new technologies, new technologies will continue to add cost, for us, as a company, it makes sense even if the market doesn't grow as a sector. Understood, sir. Thank you. All the best to the entire team. Thank you very much, Radha. Thank you. Ladies and gentlemen, as this was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you very much, Michelle, for putting this together. Thank you very much, Abhishek, for getting everybody together. Me and Yashpal Jain tried to answer your questions to the best of our ability. However, feel free to reach out to us, and we will try and clarify whatever questions we can take under the allowed guidelines. We are very bullish for the company. We are sitting solidly on the order book, and unless there is some world event that happens or there is something unusual that happens, I see no reason why the growth that you have seen in the last year will not continue. We also are confident of the expansion in terms of our margins. We will continue to work on the reduction of debt. We will continue to work in improving the operational efficiency and reduction in costs. We are very much conscious on the control of new CapEx, and as many people mentioned, make sure that we do the maximum utilization of CapEx that's already being incurred. We are looking at integration of some of the manufacturing plants. We continue on the diversification of our product portfolio, the expansion of the customer base, and like many of you said, increase content per vehicle. That is our mantra. That's what we are trying to follow, and we are very, very hopeful that this will lead to very, very pleasing results for all of us. Thank you once again for joining this morning. Thank you once again, Dolat Capital. Thank you, Michelle, for being the moderator. Thank you very much. Thank you very much, sir. On behalf of Dolat Capital and thank you. Conference, thank you for joining us. You may now disconnect your lines. Thank you. Have a great day. Thank you.