Ladies and gentlemen, good day, and welcome to Sandhar Technologies Q1 FY 2025 earnings conference call, 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 now hand the conference over to Ms. Shaily Jain from Dolat Capital. Thank you, and over to you. Yes, thanks, Aditya. Good morning, everyone. On behalf of Dolat Capital, I welcome you all to the Q1 FY 2025 earnings call of Sandhar Technologies. I thank the management for providing us the opportunity to host the call. From the management team, we have with us today Mr. Jayant Davar, Chairman and Managing Director, and Mr. Yashpal Jain, Chief Executive Officer, Chief Financial Officer, and Company Secretary of the company. So as we do always, we will start the call with brief opening remarks from the management team, followed by a question and answer session. So with that, over to you, Jayant, sir. Okay, good morning, everyone. Thank you all for joining this investor call. I'm very happy and pleased to announce that Sandhar, your company, has continued its progress through the first quarter. All of you are aware that in our industry, the first quarter is typically the slowest quarter and the weakest quarter of the year. But, I'm glad to say that Sandhar, despite the headwinds that were there, continued its progress, and our total income grew by 10% versus the corresponding period of last year. We have, in terms of PAT, our EBITDA registered a growth of 75 basis points on a year-to-year basis. It now stands at 9.85% in the current quarter versus 9.1% in quarter one, 2024. You're aware that the automotive industry, while it is doing well, we as a company feel that going forward in this particular year, while two-wheelers will probably reach and cross to some level the 2019-2020 numbers, the growth is typically going to be in the range of about 10% or so. Passenger vehicles, we believe, will grow anywhere between 6%-8%. The commercial vehicles also will grow, low single digits. Tractors is a pain area right now. So we will have to see whether we will be able to match last year's number. Construction equipment, on account of focus on infrastructure, continues to grow, and we do see a healthy- Sorry to interrupt, sir. Line from the management has been disconnected. Line from the management has been connected. Yeah. Hi, Shaily, and hi, others, once again. I don't know where I got disconnected. Can somebody just remind me where I was? You were briefing us about the industry update from construction equipment. Yes. So construction equipment, with government's focus on construction equipment, we expect that segment to do well. I'm also very happy to announce that all our joint ventures have become positive at the EBT level. This will mean that our stress of the last few years in terms of joint ventures, especially after COVID, is now out of the window, and these will now start adding to our bottom line as we go forward. On our overseas business, the overseas business registered satisfactory performance, with Barcelona and Mexico operations totally registering an overall EBITDA of 12.66%. The Romania plant is ramping up production facilities and will soon move to large-scale production. The company's expansion projects in Pune for cabins and fabrication and die casting are in final stage of commissioning, and we expect to start commercial production by September 2024. In terms of EV products, I'm thrilled to announce that a big milestone in the electric vehicle segment with us inaugurating and commissioning of our manufacturing facility, which is Sandhar Auto Electric Solutions Private Limited. This is located in Bahadurgarh, Haryana. We believe that this is poised to revolutionize the EV product line with its exceptional range of motor controllers, battery chargers, and DC-DC converters. We have started commercial production of battery chargers, and the other two products, namely motor controller and DC-DC converters, will follow soon, probably end of this month or early next month. This new facility is a part of our ongoing expansion efforts to enhance production capabilities and meet growing demands of the EV sector. It obviously aligns with our long-term growth plans and is expected to significantly contribute to our operational efficiency and business development. Those are my opening remarks. I'm very happy to take questions. With me today is Mr. Yashpal Jain, the Chief Financial Officer, and he will be able to answer most of your queries in terms of numbers. In case there's anything strategic that you would want me to respond to, I'm available as well. With that, thank you once again very much. You can start the question/answers. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask question may press star and one on the 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. Our first question is from the line of Saurabh Jain from Sunidhi Securities. Please go ahead. Hello. Good morning, sir. Congratulations for the wonderful set of numbers. You have been a consistent performer for the last several quarters now. Sir, I have a couple of questions. My first question is, you know, we saw in the presentation, various new product projects, where mass production readiness status shows beginning in subsequent quarters of this current fiscal only. So could you please throw some light in the orders in hand for these projects, and what kind of addition do we see in this fiscal and next fiscal? Are new expansion products. We currently have... Hello, can I be heard? Yes, sir. Very much. Okay. So one of the company's expansion projects is in Pune for cabins and fabrication business. I did mention in the beginning that this business was growing quite rapidly, and as we were running out of capacity, what we did was we had one step- Sorry to interrupt. The management line got again disconnected. Just wait, shall be connected again. Line from management has been connected. Please go ahead, sir. Yeah, I'm sorry this line is getting disconnected for some reason. I was talking about the new expansion product projects. I did mention that cabins and fabrication is an organic growth. As we had run out of capacity in Pune, our customers continue to grow volumes. And the plan for cabins and fabrication, as I mentioned in the beginning, for the year, looks at more than a double, mid-double digit kind of, a number. And to make sure that we deliver to the customers, we believe that this new facility will help us in meeting those numbers, as well as, allow for further expansion in the next years. The second facility in Pune is for die casting. Again, we have new customers. We did not have a facility of die casting, but several of our customers in other regions wanted us to set up a facility. We believe that this facility, in turn, will also give us depth to grow our business in Pune for die casting to a range of anywhere between INR 200-INR 300 crores in the medium term. We do expect this facility to start in September of 2024. So these are two immediate facilities that we are looking at. The third facility that we are siting to start construction on is in Halol in Gujarat, where you are aware that Hero has a large facility. We had set up a small facility there to cater to their export demand. This export demand is now likely to grow. We are now setting up another facility in Halol to take advantage of the business that is being offered to us. I hope that answers your question. Yes, sir. And on the EV readiness, side, could you throw some light? Now we are getting ready for the mass production, so any orders in hand or some kind of color to the top line growth, which these products can add it in this fiscal and next fiscal? Yeah. So this fiscal, we haven't taken any, business or any turnover in our business plan. However, we have started commercial production already. Right now, we are catering to four customers. We are now in active talks with several others. While our internal calculation says that we will do a business anywhere between INR 5 crore-INR 7 crore in this year, it is insignificant, more in terms of pilot lots. So it is only in the next financial year that we will be able to take any substantial numbers of this business. Suffice to say, whatever we have produced and sold has got a good feedback, brought good feedback to us, and we are, like I said, we started with the battery charger, where dispatches have already begun, and for motor controllers and DC-DC converters, we expect to roll that out quickly within the next few weeks. Can it be like 100-150 crore next year, sir? I will be able to speak more once our, our complete basket of these components is ready and supplies begins. So I might be able to give some indication maybe in the call after the next quarter. Okay, and that's helpful, sir. So my last question: Any light on the recent industry data from FADA, which shows some slowdown on a month-to-month basis in the recent months? Also, the inventory levels at the dealer level are quite high now. So how do you see this trend in the auto industry in the coming quarters? Well, it is a mixed bag. You are aware that in the month of June, sales had dropped, but July again, sales picked up. So we've seen some very positive numbers in July. You're absolutely correct that the inventory levels in the dealerships have gone up. In the case of passenger vehicles, it's gone up beyond its normal state. I think it lies close to 65-70 days. However, the situation in two-wheelers is markedly... Can you hear me, guys? Yes, sir. Yes, sir. Okay. Two-wheelers are satisfactory so far. The uptick in the two-wheeler industry is certainly there, and like I said, we do expect a number higher than 10% in the market, for two-wheelers. Line from the management has been disconnected again. Just a minute. I'm sorry. I have now taken. No, sir. Please go ahead again. Not yet. Yeah. Yes, sir. So I was telling you about the inventory in the market. The passenger vehicle market inventory is definitely higher than it should be, but I think the two-wheeler inventory in the market is kind of satisfactory. We do expect that with the festival season now about to begin, that should bring much more prudence in the market. And with what we've seen in July, where sales have gone up, June, everybody spoke about how the market was kind of getting weak, but I think July is showing that despite rains and monsoons, every segment has done well. So I would expect that the weakness, anticipation and worry should be out of the window, and we should be back on track to the kind of growth that I had spoken in the beginning. Okay. Thanks, sir. That's all from my side. Wish you all the best. Yeah. Thank you, Saurabh. Thank you. Ladies and gentlemen, a reminder to all participants, you may press Star and One to ask questions. Our next question is from the line of Aditya from Complete Circle. Please go ahead. Hi, sir. Just two questions. Number one, you know, in the last con call, we had said that, we will pay, we'll pay around INR 100 crore of debt. So I just wanted to ask, is that on track? And number two, you know, any conversations or any tie-ups for smart locks? I mean, just wanted to get a sense on how the industry is thinking about smart locks. Thank you. Well, I will let Mr. Yashpal Jain answer your question on debt. To my understanding, our debt levels have gone down despite CapEx, which has been done, so I think Mr. Yashpal Jain will comment later. On your second question, you said what? What was the question? Just some color on how the industry is thinking about smart locks. Like, have you had any conversations? Yeah, Smart locks, like I said, I'm endorsing the same thing. We will be- Yeah. -the first ones to go in for mass adoption of locks. We expect our first batch to start end of October, early November, for two of the largest customers that there are in the market. We are all ready. The validations have all been done. These models are going to be launched October, November, so you will see that revenue from that particular segment for us will start growing from then on. On the first question, Yashpal, do you want to come in and talk about the debt level? Sure. So, Aditya, if you can see, like, at the end of March, we were at a net debt of INR 592 crores, while for you, for this quarter, we have closed at a debt of INR 549 crores, reduction by INR 42 crores. We are very well on the target to reduce our debt level by INR 100 crores. The, in keeping into the CapEx plans and the completion of the existing projects, which our MD has just, I mean, in the beginning of call, he has stated us. Thank you, and all the best. Thank you. Thank you. Our next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead. Yeah, sir. Thank you for the opportunity. Sir, one question on the revenue growth for this quarter, which is at about 10%. So if you look at your key clients, where there was a market share gain possibility in terms of wallet share and all, that client has grown about 14% in volume. So I'm just wondering, which part of our business has grown slow, is slower, to understand this 10% revenue growth that you reported for the quarter? Yeah, a very good question. See, three things. The wallet share, if that particular customer has grown 14%, we've probably grown higher. It is several other areas. For example, construction equipment, like I said, this is the slowest period, because of monsoons and so on and so forth. That particular segment goes down and is likely to pick up in the second half of the year. It has started growing a little bit already, but you will see all of that drop in the value addition come in the second half of the year. Whatever we have said is on track, and if I actually, if you look at it, I think we had released a chart in the investor presentation on comparative financial performance year-on-year, for the last four years. Quarter one, financial year 2022, we were at INR 410 crore, at 2023, we were INR 675 crore, at quarter one, 2024, we were INR 830 crore, and quarter one, 2025, we are at INR 930 crore. You would see that many of our peers have actually dropped in terms of revenue, but we've continuously grown, and this 10% has largely come from areas other than our organic business, which is basically the increase of wallet share. I hope that answers your question. Just to further the conversation, the key client would have grown what number for us? It's not about key clients. I mean, you know, TVS, for example, is now at, I think, 30% of our revenue. I don't have it. Mr. Yashpal Jain will probably be able to give you a snapshot, but our dependence, for example, on Hero used to be much larger. While we continue the same business with that customer, for us, has now dropped to almost 18%-19% levels. Okay. So, can you tell us two-wheeler as a segment for us has grown at what rate? So my guess is it's to do with Hero, where the growth would have come off. No, I'm saying that while whatever segment that you see, even in two-wheelers, we have grown, if not at par, higher than that particular segment. If you could- If you look at the overall industry, if you look at the overall industry during this particular period, the entire industry, including the ones that all the segments that we operate out of, including construction equipment, has probably grown a little over half of how much we've grown. You're saying that two-wheelers has grown for you 50% more than the industry volume growth? Yes. Is what you're referring to? Last year, last year, we were double of the industry growth. Effectively, we do hope that by the end of the year, we will be double of the industry growth. Okay. Okay. So, just from the mix perspective, if you could tell us, two-wheeler, what has it grown and the other sub-segments, let's say, Pacer or the construction equipment, what have they grown in the quarter on a YOY basis, to just, you know, close the loop of our analysis? Two-wheeler total out of our total revenue, two-wheeler stands at 61% in this quarter. Normally, two-wheeler used to be 55% of our total revenue. What is the growth, sir? Growth, in terms of figures you are asking or how you are- Yeah, just the growth, sir. What is two-wheeler growth for you? One is the mixed number that you're trying to give, which is there in your presentation. I wanted to know the growth. So what this segment for you has grown what? Two-wheeler has grown how much, Pacer has grown how much, and construction equipment has grown how much on a year-over-year basis? When we have said, I mean, telling our overall growth of 10%, and out of which we are saying that four-wheelers and construction equipments have not registered that much of growth- Mm-hmm. Obviously, two-wheeler grow 10%, for us in this quarter. Yeah, I can understand that, but if you could just quantify it, then it would be helpful, sir. Well, it's about 10%. That's what I can say, because we are not comparing it with in the volumes with the corresponding quarters, sir. We have compared with the annual figures. The volume has changed for the two-wheeler, but in my opinion, it will be higher than 15% for this quarter in case of two-wheeler. Then passenger car and construction equipment, they are a little bit down because in the first quarter, the peak is like down. Passenger cars are 2%-2.5% in the similar case as the construction equipment in terms of our revenue mix, and so, and that has been contributed by the two-wheeler segment. So that's the reason our revenue is growing, but- You're saying two-wheeler has grown 15%, passenger car has grown 2%, and construction equipment has declined on YOY. As growth, passenger car is down by 2%, and the same is the degrowth in terms of construction equipment, and that has been compensated by two-wheelers. There's a reason- Let me just come in and add one particular aspect of this. See, the sales that you see in a quarter of the OEMs is actually a lag over the supplies that the component industry does. So it is never a like for like. That's okay. I hope you understand that, right? Oh, yes. So what we are building today is likely to be sold in probably the next quarter in many cases. So it's never a like-to-like question that we can answer. It is a question, again, on the value and the volume. While you are calculating the volumes of the industry, we are looking at the value that is being delivered in terms of the sales. I hope you understand what I'm saying. Understood. So basically, considering the market share gain possibility with TVS, is it fair to assume that, you know, we will be growing higher double digit in revenue growth as we move towards the future quarters? Yes, I would expect so. Right, you will expect. And on the margin side, on the POQ margin side, there is a 50 basis point shrinkage on gross margin and some shrinkage is coming from employee costs. So anything to read there? Because, we were talking about a percentage point increase in margins every year, as we move forward. Yes. Any change there on that comment? No, no, no, no, there is no change. If you look at our EBITDA numbers, we have a 75 basis points growth over the corresponding quarter of last year. So this depends on the weakness of the quarter, and like I said, typically, Quarter One is always the weakest. However, if you look at it again in the last four years in terms of our operating profits, from 2022, Quarter One of 2022, we were at INR 9 crore. Quarter One 2023, we were INR 29 crore. Quarter One of 2024, we were INR 41 crore. Quarter One of 2025, we are at INR 50 crore. So the growth is continuous, not only in the value numbers but also in the margins. Okay. And lastly, what is the capital expenditure number for this year? Mr. Yashpal Jain would be able to answer that question. Okay. But in Quarter One, I think we spent around INR 40-odd crores. Yashpal, please tell them. Quarter One, we have spent INR 44 crore, and we have kept a plan of around INR 250 crore, within INR 250 crore range this year, which includes the... Regular. Yeah. What plants are going to start, where? Two of the plants, as our MD has said, in Pune, will commence by September 2024. One is related to die casting business, another is related to cabins and fabrication. Both are expansion, because existing facilities are short of space. EV, in, in terms of one product, has already started, and everything will also start by September. Okay. Lastly, sir, the Mysore facility, what is the progress there? It's going good, as per our plans, and this year will be the full-year of its operation, because last year, part of the year it was operational. So it's going as per the plan and generating a good revenue for us, good business also for us. Okay. Thank you very much, sir. Thank you. Thank you. Ladies and gentlemen, a reminder to all participants, you may press star and one to ask questions. Our next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead. Thank you for taking my question. So the first question, just to continue on the CapEx side. So while you say INR 250 crore this year, do we have a sense what we are looking for, FY 2026? Because if I remember, we are coming closer to the end of our announced CapEx schedule. So if you could, clarify on that. Yeah. Basically, 250 crores we have kept because we have last year's spillover cap also in terms of, cash outflows. But, as the beginning of the future, I have just said, we will improve their expansion plans by September 2024. So in terms of major CapEx, in terms of creating of facilities, that would be over. But yes, as we know, there is always a time lag between the incurrence of CapEx and payment of CapEx to the vendors. So I think the coming 2026, we will have a routine maintenance CapEx, but in any case, it will, we have kept a target that to be equal to depreciation, and we have annual depreciation, 100 crores. Sure. Very helpful. So, just to understand, generally when we have high targets for growth, and we have never been in such a situation. So, any thoughts in terms of M&A activity or next growth drivers for us? This is a question which is very difficult to answer, Arjun. Largely because these opportunities, when they fall on the table, is when you can take a call. We are open to looking at something which is a strategic fit for us. However, there is nothing on the plate right now as we speak. As and when that happens, we want to be a healthy balance sheet to be able to support whatever comes our way. Sure. Sir, when we talk of 100 basis points margin improvement, are we looking at domestic business or on a consolidated level? Because if one sees Europe, margins have actually been in a range over the last period of time, and it's around 12%-13% of top line. So in a sense, how do we look at profitability going forward? I look at it from both angles. You are aware that our Romania facility, when it was new, because of the Ukraine war, it had a little bit of a setback, where we were running losses. We expect that facility now to start producing more in the second half of the year. So you will see a distinct improvement in the margins there, as well as margins, because of consolidation in India, are likely to improve. So you will see an overall holistic improvement in margins that will bring the, wholesome hybrid margin of the entire company, to the upward moment that we've spoken about. So, the guidance you've given us, say, 100 basis points. Last year we did 9.7. So essentially you're saying 10.7 on a consolidated level is what our goal is, aspiration is, at this point in time? Yeah. Yashpal, what had we given you? Yeah. So if you remember, we have given a 50 basis points improvement in EBITDA margin for this fiscal and 50 basis points for the next, next fiscal. Right. So I meant FY 2026. Sorry. You're right, sir. We have kept, I mean, we closed at 9.95% in last financial year. Accordingly for this, it is a target of around 10.45 within a range of 10.45, and next year, by 2026, we will be very close to 11%. Sure. And sir, in terms of our JVs associates, any new tie-ups on the annual, it's been a period since we actually announced, I think it was many years back. Some have actually matured also. So any new projects essentially been with these JV partners in terms of newer technologies and newer products? Again, Arjun, it is very difficult to say today. When you saw a slew of JVs being signed by Sandhar, it was towards its movement towards electronification. And while those are now established, we are continuously looking to upgrade. There are several technologies available with our current JV partners, which will throw out products for growth in the Indian case scenario in the coming years. But again, we continue to look at opportunities. As and when that opportunity matures, we will keep you in the loop, and we will announce whatever is necessary. Sure. So my final question, if one looks at the new EV products, I understand a large part of it would be assembly. So while they would have very high ROCE, return on capital, they would be margin dilutive. Is that the right way of understanding these products? No, not at all. Okay. The difference between several others and us is that most of what we are doing is not just assembly. We are, we localize a lot of the BOM within these, parts that we are making, which is different from several of our peers. And therefore, we would imagine that the margins, of course, in the beginning, because of high setup costs and low volume, are likely to be lower. But on a maturity basis, I would probably expect margins to be maybe if not the same, maybe even higher. Sure. Thank you and wishing you all the best. Thank you. Thank you. Our next question is from the line of Gaurav from the Garner Houses. Please go ahead. Hello. Good morning, sir. Yeah, morning. Hello. Yeah, so, could you please tell the key features of your smart lock, which you are going to roll out? Well, if you understand smart locks, so smart locks can carry many features. At the ultimate end, it can allow for 13 odd features, but it depends on the customers. Smart lock with 13 features would cost close to INR 10,000. But what we are launching in the market right now is probably half the number of functions, and with those functions, we expect the cost of these to be anywhere between INR 4,000 and INR 5,000 to begin with. Of course, as volumes grow in the future years and mass adoption happens across the industry, the prices of these are likely to come down. But that is the broad scenario where smart locks are concerned. Could you tell me about the functions which you are offering in the 3,000-4,000 range? Well, it is a mass. I don't know if everybody around the call would be interested in technicals, but suffice to say that whether it is the start, whether it is the locking scenarios, whether it is the ignition scenarios, all of them get covered in these smart locks. Okay. Could you tell the volume of the mechanical locks which we sold in the FY 2024? I don't know if I have that number right away. We concentrate. While it would be available in the system, I may not have it front-end. But again, if you were to calculate the volume of the industry or the output, and the fact that we do close to 70% plus in the two-wheeler space, then you will be able to get that number. Okay. Assuming that we have done something in the region of 4.5 million two-wheelers that have been sold in the industry in the quarter, you would be able to calculate what that number is. I think it would be close to 3 million or so on and so forth. Okay. Because since we will be rolling out in FY 2025, the smart locks, in FY 2026, what% do you think the mechanical locks will be converted into smart locks of our sales, which we did? Well, I would say the volumes are going to be small this year. We would expect that in the market, the volume is likely to be in the region of 2%-3%. But in effect, in the next year, that number could go up from that small percentage to double digits. Okay. Thank you. That's all my side. Thank you. Thank you. Our next question is from the line of Himesh Desai from Dolat Capital. Hello, am I audible? Hello, am I audible? Yeah. Yes, you are, Himesh. Hi. Just a couple of questions on my end. Could you elaborate on the performance of the JVs and subsidiaries individually? Yes, I can. So if you look at the JVs, there is Sandhar Amkin, which is the one that produces the helmets, where our quarter one sales are INR 16 crores. Our EBITDA is INR 2.5 crores, and our PAT is INR 1.13 crores. And Winnercom, where we make shark fin antennas, this is INR 14.51 crores, with a PAT of INR 0.66 crores. Sandhar Hans hin, INR 6.3 crores, correspondingly 0.71. Sandhar Hans ung Technologies, 14.52, and 0.62. Sandhar Whetron, 3.74 and 0.15. Jinyoung Sandhar, 13.11, 0.42. Kwangsung Sandhar, 14.44, and a PAT of 0.44. In all, on our share, the revenue is INR 82.72 crores and EBITDA of INR 9.85 crores. I think that gives you a number of 12-13% or around 12%, and PAT of INR 4.13 crores, which is about 5% off. Okay. And, my next question was, how has the overall performance been across different geographies? And are there any specific markets which are showing stronger growth or that you are planning on focusing? Come again? I didn't understand that question. How has the performance been across different geographies, and are there any specific markets performing better than the others? Well, it is difficult for me to talk to you about different markets. Suffice to say, our overseas business, with the influx of new orders which start deliveries in the second half of the year, the business, in Mexico, Barcelona and Romania is likely to get a big flip. In India, if you look at it, we expect the construction equipment to start improving and be much better again in the second half of the business. That's the sentiment that the business carries in every particular year. Of course, the festival season is extremely important for everyone, and therefore, we do see, that the, schedules that we have received from our existing, customers is up, starting from next month to the tune of about 20% from the, schedules that we have in the previous month. So overall, I think the movement towards growth, and the trigger, is already in place. Okay. Thank you. That's all from my side. Thank you. Our next question is from the line of Jyoti Singh from Arihant Capital Markets Limited. Please go ahead. Yeah. Sir, the question on the market share side, if you can just tell us, the Sandhar in locking system for two-wheeler, how much market share it has? Well, Yashpal, do you want to come in? This is OEM, right? You're talking of OEM. Yeah, two-wheeler. Two-wheeler. You want to know the market share in locking? Yes. Yeah. We operate at about 70% of market share in India's locking market. Okay. Thank you so much. Yeah. Thank you. Ladies and gentlemen, a reminder to all participants, you may press Star and One to ask questions. Our next question is from the line of Samir, an individual investor. Please go ahead. Yeah, good morning, sir. My question is related to smart locks. So let's say after 2-3 years, this business is evolved and into mass production. ... Since this is a premium product, what kind of a margin this product can generate? Sameer, right now, volumes are low and margins are high, so therefore, the contribution of this segment will probably be lesser. As we go forward, there is expectancy that the prices will moderate a little bit as large volumes come into play, but the impact on the bottom lines will become much larger in terms of volume of profit per unit to the company. Okay. Thank you. Thank you. Our next question is on the line of Himesh Desai from Dolat Capital. Please go ahead. Hello? Yes, Himesh, go on. Yeah. Hi, so, what are your thoughts currently about the commodity prices, and how would they be affecting our margins going forward? Himesh, it's a question that's asked almost in every call. You are aware that commodities have been volatile for the last few years. There was some kind of stability that one had seen in the last quarter, but I see that volatility with coming again. There have been weeks where we see the trend to go up and then trends going down. But as a company, all I can say is that as is a part and parcel of our business, this volatility in our pricing will continue. And what we expect is that besides the lag that happens with our costing with the customers, the costing of this or the price of this in our overall scenario is a pass-through. So whether it is aluminum or sheet metal or zinc or plastic, this is a pass-through which is passed through to our customers. But of course, this is done at the end of each quarter, and sometimes the prices have gone up. We do have to suffer the lag for that period of time. Okay. Just another question. Could you just help me with the customer-wise revenue breakup and who are our top customers through across different segments? Yeah. Yashpal, you have the list? Yeah, I have the list. I'll just... So TVS remains our largest customer. We have a share of over 32% with TVS. Total of our revenue of, I mean, 32% of our total revenue comes from TVS. Close to 19% is coming from Hero, and 8% is coming from JCB. These are our three major customers for us. And then we have a list of overseas customers, which includes Bosch, Autoliv, TRW. Altogether, gives us a revenue of around 9%-9.5%. Honda motorcycles is close to 4%. So these are the major customers for us. Okay, and just to follow up on this question, out of these customers that you just mentioned, which of these customers' orders will you be catering to from the Pune plant? Pune, like JCB, is one of the customers for the CFD business. Okay. The die casting business is concerned, these are a new set of customers, which will be reflected in coming period of time. Okay, thank you. That's all from my side. Thank you. Thank you. Our next question is from the line of Sudip Banerjee from ICICI Securities. Yeah, thanks for very basic question, might be repetitive also, but just for my understanding. As you said, almost 70% market share in the two-wheeler lock system. How much is the smart key penetration within two-wheeler currently? And where do you see your market share in that segment as you are entering? Well, Sudeep, let me answer this question. You will see mass adoption begin from October, November, with two of the largest customers, and both of these are being supplied by us. Okay. And, so this is just trying to understand that, mass adoption, by that you mean what? More than 50%, from current, When I say mass adoption, I mean the initiation of smart locks in the Indian context of the market. Which is not... Which is to say, there could be small players today who started EVs and stuff, and some of them put in smart locks, but those are insignificant volumes. So volumetric-wise, if, let's say, you reach a level of maybe 20,000, 30,000, 50,000 a month, that according to me, is mass adoption. That happens in premium vehicles, and as you are aware, as soon as you have something in premium vehicles, it, it does down very, very quickly to the regular models and to even the low-cost models in a few years. So that journey is beginning now in October, November. Sure. Similar to the mechanical lock, you expect to be the market leader post this mass adoption? Yes. If you can, broadly take me through the pricing differentiation and, per-unit profitability differentiation. Well, in terms of pricing differentiation, the pricing differentiation right now is large. A mechanical lock typically is anywhere between 300-500 INR. A mechanical, a smart lock is anywhere between 4,000-5,000 INR. Over a period of time, in the next few years, we expect smart locks to drop down to a level about 3,000 odd INR vis-a-vis the mechanical locks, which, because of low volumes, their prices are likely to go up, is what my understanding is. In terms of margins, you are aware that our locks business typically operates, the mechanical locks operates at anywhere between 12%-16%. We expect that the smart lock business will also contribute a similar scenario as we go forward. Sure, sir. And last question, if one looks at the OEMs today, even the, especially the EV-based OEMs who are grappling to make margins or face the subsidy reduction or face shifting, disc brakes to drum brakes to reduce cost, so where this INR 400-INR 500 moving up to INR 2,500-INR 3,000 rupees, so what marginal, benefit the user will be getting to justify that, two thousand, twenty-five hundred rupees excess, cost, if you can highlight that? Well, you know, see, technology has to keep up. If you look at two-wheelers, Sudeep, you would appreciate that the same two-wheelers that is sold at INR 100,000 or INR 80,000 was being sold at anywhere between INR 45,000-INR 50,000 four years ago. But the changes in technologies, the changes mandated by comfort, by regulation, and so on and so forth, have increased prices. So the expectation is that a typical customer would be, would, could easily afford to move up that value chart. And the up-gradation in whatever is happening around the world becomes typically in every country, including in India, and India, you're aware, is the largest producer of two-wheelers in the world anyway. So it takes time for some of these new product lines to make way for themselves. But what they... Once they do, they are adopted very quickly by the entire ecosystem. Sure, sir. Thanks. Thank you. Ladies and gentlemen, a reminder to all participants, you may press star and one to ask questions. As there are no further questions from the participants, I now hand the conference over to Mr. Jayant Davar for closing comments. Well, thank you, Dolat Capital, for putting this together. As always, thank you all the participants, today, for their patience. I hope that the company's been able to answer some of your questions, or most of your questions. In case there is any other question, you can feel free to write to us, for any answers, and we'd be happy to respond to you in even greater detail. In closing, all I want to say is that the company keeps to have, to keep its direction in the focus area it's chosen, which is generation of more free cash flows, de-leveraging of the balance sheet, improvement in return on capital employed, improving operational efficiency and reduction of costs, control on new CapEx and maximum utilization of CapEx, which has already been incurred, integration of our manufacturing plants, diversification of product portfolio, expanding customer base, increasing content per vehicle, and we also, concentrate hard now on working towards the ESG and SDGs, which is sustainable development goals, to attain carbon neutrality in the coming years. So with that focus, we are very, very hopeful and, excited, to be on this new journey that we put together after the trigger of what the automotive industry is offering us. With that, thank you all once again, and look forward to speaking again, after the next quarter results. Thank you very much. Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.