Ladies and gentlemen, good day and welcome to Sandhar Technologies Q2 and H1FY25 earnings conference call, hosted by Dolat Capital. As a reminder, all participants' 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 any assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is now being recorded. I now hand the conference over to Ms. Shailly Jain. Thank you, and over to you, ma'am. Thanks, Shailly. Good morning, everyone. On behalf of Dolat Capital, I welcome you all to the second quarter and H1FY25 conference call of Sandhar Technologies. From the management side, we have with us Mr. Jayant Davar, Chairman, Managing Director, and Chief Executive Officer. Along with him, Mr. Yashpal Jain, Chief Financial Officer and Company Secretary of the company. We thank the management for providing us the opportunity to host the call. Now, I hand over the call to management for their opening remarks, followed by the question-and-answer session. Over to you, Jayant sir. Yeah, good morning, everyone. Thank you all for taking time to be with us this morning. I also want to thank Dolat Capital and Shailly for organizing this call. On behalf of Sandhar, let me just start with some remarks, and then we are very happy to answer any queries that you may have. First of all, you're all aware that we have gone through a night of prosperous Diwali, and Diwali has been kind to the automotive industry. Most of the companies have done record numbers in terms of their Diwali sales. As far as Sandhar is concerned, you are all aware of the results that we released yesterday. But just for convenience again, we achieved a total income growth of 11.5% versus quarter of 2024, and 10.9% versus first half of financial year 2024 at a consolidated level. We expect to continue the growth momentum over the last year's numbers, depending, of course, on the geopolitical situation, demand in the market, growth in the auto sector, and other related events. In terms of margin, our consolidated EBITDA, you'd be happy to know, registered a growth of 110 basis points year-on-year basis for the quarter, and 10.6% in quarter two 2025 versus 9.5% in quarter two 2024, and 90 basis points year-on-year for half-year, which is 10.2% in first half of 2025 and 9.3% in first half of last year in comparison. I think this is, again, brilliant news for Sandhar and for all of you who've been asking us when we will reach these numbers. In fact, as you've seen, we've reached these numbers faster than what we had explained in our last call. In terms of joint ventures, I'm happy to inform you that our joint ventures are growing fast and consistently improving the performance. Six of our joint ventures are PAT positive now, and one of the joint ventures, Kwangsung Sandhar, is marginally in losses and expected to turn around in due course. This has been possible with the consistent efforts towards cost control, localization, better business synergies, and we expect that the joint ventures will continue with our growth trajectory. All joint venture companies taken together register a total income of INR 179 crores with an average EBITDA of 10.26%. In terms of overseas business, our Romania plant is gradually moving towards maturity and expected to be break-even by the end of this financial year. Partial CAPEX has been incurred on the project, and the remaining set of machinery shall be installed in the next financial year. In terms of new expansion projects, the company's expansion projects in Pune for cables and fabrication and die casting are expected to commence commercial production by the end of January 2025. You'd be happy to know that our EV arm has started commercial production of battery chargers and is getting a very positive response in the market. The customer base is gradually increasing with more and more customers being added. The motor controller and the DC-DC converter are in testing phase and expected to go live in the next financial year. I also want to mention here our efforts on CSR. Over the years, we've dedicated ourselves to sustainable business practices that tackle economic, environmental, and social challenges. Our efforts go beyond mere business concerns, creating positive effects on the communities that we serve. Our CSR activities focus on key areas, including healthcare through Sandhar Healthcare Centre, which is in village Begampur Khatola in Gurugram, education through Sandhar Ki Beti and Sandhar Centre of Learning at Deoli, Sangam Vihar, skilling and vocational through Swabhiman program, senior care through Adopt a Grandparent program. Environment, we have a program called Go Green through the Peenya Industrial Park, Bangalore. The company is focusing on diversity and creating equal opportunities for gender neutrality. The company's social programs are dedicated towards underprivileged, unserved, and weaker sections of the society. Going forward, we as a company are looking towards certain focus areas, one being working towards ESG and SDG, which are sustainable development goals to attain carbon neutrality in the coming years, diversification of our product portfolio, expanding customer base, and increasing content per car. We will focus on generation of more free cash flows and deleveraging of the balance sheet. We will continuously improve our return on capital employed and return on investment, and of course, we will continue our focus on consolidation of our overall operations. That being my opening remarks, I'm very happy to take questions. With me today is Mr. Yashpal Jain, who's the CFO of the company, and he will assist me and take a lead on any questions regarding finance and other things in terms of strategy or anything. I'd be happy to take calls from all of you. Thank you very much, and look forward to your questions. Thank you once again, Dolat Capital. 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 the touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question we have is from the line of Pritesh Ch heda from Lucky Investment. Please go ahead. Yeah, hi, sir. So my question is with respect, specifically with respect to the sheet metals and cabin and fabrication business, where we have a lot of capacity being put up for TVS over our clients. So they're in the quarter two and H1. What would be the growth of these two divisions? That's my first question. Okay. Okay, you want us to answer the question first and then move on to the second question, or you want to ask? Whichever way you are comfortable, I may ask every other question or however you want to. We'll ask the other questions so that we can respond together. The other question is, if you could call out in your H1 and quarter two, what would be the volume-led growth, and if there is any price? All right. Okay. Yashpal, do you want to come in with those numbers? Yeah, definitely. So coming for the TVS project, your specific question was about TVS projects. So let me tell you, as far as we put up three projects for TVS, one was in Attibele, another was in Hosur, and third was in Nalagarh. Nalagarh is already operating at a level of monthly revenue of about INR 12 crores per month. And if you take year-on-year for the half-year, at that point of time, it was operating roughly at a INR 6 crores per month, INR 5-6 crores. So it just doubled. This is the growth for Nalagarh plant. As far as Attibele is concerned. Attibele is operating at a monthly level of INR 17-18 crores against earlier level of INR 9-10 crores. Similar to the case with Hosur, Hosur is picking up because there has been some issue with the riders' volume, the premium product of TVS, which was supposed to be done from Hosur. So presently, Hosur is at a level of close to INR 12-12.5 crores against a level of INR three crores in the corresponding half-year. I hope that this satisfies your answer. Question? Sir, I believe the line for the participant got disconnected. We will proceed with the next question, which is from the line of Ajay Sharma from Maybank. Please proceed, sir. Yeah, hi. Actually, I just wanted to get a sense on how do you see both the top-line growth as well as margin turning out over the next two, three years? And I'm wondering why, I mean, typically auto components companies have higher margins, higher return on capital. What is in your business which actually prevents you from achieving those sort of levels? Can you ask that second part again? I mean, generally, auto component companies worldwide, even in India, the margins and returns on capital are much higher. And I'm just wondering what is in the nature of your business, or is it the low-value-add kind of work you're doing that the margins as well as the returns are pretty suboptimal? I would say, so first of all, let me respond to the second question. Our margins are hybrid margins between different kinds of businesses. As you know, we now operate about 45-odd plants, and in 45 different plants, there are different kinds of technologies that are in place. Several of the components that are under development, which will open up new avenues of technology going forward, are in nascent levels at all points of time. If you look at our established businesses, which is, let's say, locks, mirrors, castings, and so on and so forth, I don't think we are in any way less. In fact, in many cases, we are higher than our peers and competitors. As we have said, we've made a lot of investment in the last few years, and as it matures, our margins are likely to go up on a sequential basis. I think this is the guidance that we had given in the past calls as well, where Yashpal, you had mentioned a 50 basis points improvement, right? On. Yeah. You want to respond to that? Yeah, I would respond. So last year, we closed at a margin of 9.95%. This year, we have given a guidance that we'll be improving by 50 basis points, followed by 50 basis points in the coming FY 2025-26. So we expect the margins to be hovering around 11, 11 and a half%. I think these are decent margins given the situation when you are into a core manufacturing activity. There can be higher margins in the other years, but it depends on the nature of activity, whether they are core manufacturing or they are trading or they are reselling the products. Secondly, as far as the revenue growth is concerned, we have given a guidance that this year we'll be closing something between INR 4,000-4,100 crores. For the next year, we have a guidance around INR 4,500-4,600 crores of revenues that we'll be generating at a margin of close to 11%. This is our revenue guidance for next year along with the margin. Okay. And on the EV business, how big do you expect that to become in the next few years? And how will the ramp-up look like starting from next year onwards? It's a difficult question. I don't think it's more a strategic call if you ask me. It depends on the establishment of EVs as a permanent category in the automotive industry. You're aware that there are several technologies at play with alternate fuels as well as the existing IC engines now becoming almost pollution-free in the new avatars that are going to come. So while we as a company are in tune to supply the components, which is DC-DC converters, which is chargers and motor controllers, these are for the two-wheeler industry. And we believe that as the two-wheeler industry is one of the sectors which is likely to grow faster than the others, we should benefit. In terms of value, the three parts that we are going to manufacture have a total value of something in the region of INR 12,000-INR 13,000 per EV. And therefore, it is a calculation as to what percentage of the market we'll be able to gather and garner. The big advantage that we have versus a lot of peers is that all our products and all the inputs in our products are all locally made. There are many other companies that are importing it from China and other places. And therefore, with the government bent on making everything in India, we do believe that we have a superior edge to moving forward and faster in this particular area. But in terms of the actual revenues, we have not taken those in our business plans either for this year. And we will reconsider that when we make business plans for next year as to what percentage of our revenues will come from EVs. Okay, and lastly, how much CapEx do you need to incur this year and next year? This year, it is at INR 90 crores. And we are finishing up with some expansion plans as well, as mentioned in the opening remarks, the two plants at Pune. And we have some commitments over the last year that have been carried forward for the sheet metal projects that we have put up in the last two to three years. And nevertheless, starting next year, we have a policy. I mean, earlier also, we were having a policy that normally our annual CapEx charge is equal to our depreciation, which is close to INR 150-165 crores per annum. While this year, it might be around INR 250 crores because we have INR 100 crores of carry-forward commitments, which we need to settle in this year for the expansions that we took in the past. Okay. Thank you very much. Thank you. Thank you very much. Before we take the next question, we would like to remind participants that you may press star one to ask a question. We have Mr. Pritesh from Lucky Investment back online with us. Yeah, sorry, sir, my line got dropped. So I don't know if I asked the third question or not, actually. You were asking for the growth from the TVS business, if I correctly remember. Okay. So first question was specifically in the cabins and the sheet metal business, where we have put up a large capacity for the key client, and there's a wallet share gain possibility. So what is the growth in H1 and Q2 for these two divisions? My second question is if you could decipher the H1 and the quarter two growth in terms of volume and price deflation, if any, because the base metal prices were different. And my third question is, empirically, considering your wallet share gain and considering the two-wheeler growth, you should have grown and the revenue growth, you should have grown faster, a lot faster than the two-wheeler growth. So if there are any divisions where there is any missed on growth and if there is any course correction that you guys have planned. So these are my three questions. So everything on the revenue side. Because we start with the TVS project, let me tell you, in cabins and fabrication, we haven't carried any expansion in the past three years. It's a normal CapEx that we have been put up, and cabins and fabrication will be closing above a mark of INR 550 crores for the current financial year, so we haven't put any CapEx for the cabins and fabrication, especially the growth CapEx, except the one, the expansion which is going into Pune, which is already the premises owned by us, and we will be spending total INR 18 crores, nearly INR 18 crore rupees to install some setup much in the revenue there. As far as sheet metal business is concerned, we set up three plants for TVS in the past two to three years of time, starting 2021. Presently, they are giving us a monthly revenue of INR 40-45 crores in between from TVS side. If you ask me the year-on-year growth, last year, at the same time, the situation was that they were on a consignment level generating a revenue of close to around INR 18-20 crores. They have just doubled because Attibele and Nalagarh are operating at the volumes that were pre-planned, and Hosur will be picking up in due course of time because order volume has been down. That's the reason the volumes have been down, and it's operating close to INR 12 crores a month. I hope this answers your question. Can you give the H1 growth for both these divisions? As I told, it's INR 40-INR 45 crores. H1 comparison with. I'm giving you the H1 comparison year-on-year. It has just doubled from INR 20 crores to INR 40-42 crores. This is for Sheet Metal? Yeah, this is for sheet metal. On a monthly basis? Only three plants for sheet metal which has been put up for TVS. No. If you could give for the segment, including everything. Apart from that, we have only one plant which is for Hero, which is in Behrampur in Gurugram. It is going to a growth of 10%-15%, which Hero is generating. Okay, and what would be the growth in the Cabin and Fabrication part of the business? Cabins and fabrication is growing at a level of 10%-12% because we haven't put up any capacity, nor the plant has been set up in cabins and fabrication. They are already at the maximum capacity that we could supply to the customers. It's operating above a level of INR 550 crores. That's the maximum we could do from that business. Perfect. This answers the question one. Question two on volume and price, if any? The items are such. They go into the pieces and numbers, so exact volumes, I may not be able to give. Any indicative guesswork is also fine. Was there a deflation? There was no deflation? Very honestly, no guesswork can come. Oh, okay. As far as price settlement is concerned, you must be aware that the customers have taken up a uniform policy. They have identified the raw material sourcing sources. They have a consolidated contract. So we are not affected by the only price increase or decrease. It is settled on a monthly or quarterly basis, depending on the customer cycle. We have identified the vendors. We have a well-contracted vendor, and we are taking materials from them. No problem. This answers the second question. And the third question, sir? On the overall growth, empirically, should be faster than two-wheeler if there are any divisions which are. So, to see the two-wheeler growth has not been even a double digit, if I'm right, right? So it is what number we see? It's a double-digit volume, so that's why. Last year, it was. There is no double-digit growth in two-wheeler. 9.8% last year, if you see. We were above 20%. This year, these are the two quarters that we have summed up. It's 11.5% year-on-year. Quarter three and four are normally good quarters in the auto industry. We expect that we have set up a target of around INR 4,100 crores for this year. We would be able to achieve that turnover figure. Secondly, when the product ups and downs, we have a mix of construction equipment, also cabins and fabrication, which will be picking up in third quarter. At the same time, the car segment is not working proper, although we enjoy a small share in car segment. Still, any downwards in the car segment affects the entire, I would say, the growth of the organization. Still, we are at a comfortable growth. Okay. Thank you very much and all the best, Jayant Davar. Thank you. Thanks a lot. Thank you, sir. Thank you. Thank you very much. We have next questions from the line of Abhilasha from Quantum. Please go ahead. Thank you for taking my question. So you just mentioned that we are expecting around INR 4,100 crores. So I'm supposing that we are then guiding for around 15%-16% year-on-year growth for the second half. So can you just elaborate what will drive that? Because two-wheeler, again, we are expecting the similar higher double-digit or mid, sorry, higher single-digit or mid-single-digit number for the industry. So in the first half, if you have not grown substantially higher than the industry growth, then what is it driving in the second half? That is my first question. And secondly, let's say for the next year, we are guiding for INR 4,500 crores. I suppose if the industry continues to grow in tandem, then, and if we have always guided that we can grow double the industry growth, then why are we guiding for just 10%-12% growth for the next year when our cabin and fabrication business also will be run? So why we are guiding for the subdued growth for the next year? Can you just explain? Let me answer that question in a different form. We have outperformed the industry, and we will continue to outperform the industry on account of new businesses that we added in the last few years. I think this could have a relation to the question that was asked by the gentleman before as well. In terms of sheet metal, the new business that we had generated, our capacity utilization at this point stands at somewhere in the region of 55% to 82%. So that gives us legroom to be able to grow this. And the orders are in place. So development activity is on, and the start of production for these will begin in the second half of the year on a graduated basis. And that is the reason why Yashpal is saying that that would be a trigger of growth. Irrespective of the growth of the industry, we are quite certain that with these new developmental and these new product lines being added, our trigger for higher growth is already in place. In terms of locks, the Suzuki order, which was the order to do smart locks, has been delayed from November to January now. Again, in the next quarter, you will see that that will start adding along with some other componentry, which will bring on growth. The third aspect is that the last quarter is always the heaviest quarter if you go back and see in history of the automotive industry. A large part, so if we actually divide this and we say that 40% of our revenues in the past and by historical patterns comes in the first two quarters and 60% comes in the second half of the year. If you were to balance both these, I see no reason why there should be any change to that particular guidance. And that is why it becomes, we feel we are very, very confident that whether the industry grows or doesn't grow, with the growth patterns that are already inside with the existing orders, we should be able to deliver the revenue that is being suggested right now. We may be a little conservative right now, but we feel being conservative is a little better. And to assure you that whatever we are saying is kind of a hunch. Okay. Sure. And the similar outlook, can you give for the next year? I mean, yeah, I understand that we are conservative, but then in that case, what could be the upside from where the upside could come to our prediction? In the next financial year, obviously, it's too early for me to say right now. But from my gathering, like I said, we have spare capacities available. We have new capacities coming up. Yashpal just mentioned that we have two plants that are now on the anvil. One plant is being set up for cabins and fabrication. The other one is being set up for die casting in Pune. These two will add to capacity utilizations for orders that we already have in the books. So there is a certain element of revenue that is already kind of guaranteed for next year. We also believe that even in the sheet metal that I mentioned, this will continue to grow for the utilization of the capacities that we have. So we are quite confident that there should be a healthy premium growth over the industry growth in the next financial year as well. Sure. Thank you. My last question is on the working capital and debt. How do we see that if some of our incremental business coming at incremental working capital? And how do we see that for debt movement going forward? So I'll answer, Abhilasha. So as of September, we have a gross debt of INR 620 crores and a net debt of INR 581 crores. And we expect that we will not be reaching a level of INR 700 crores. As of now, we are operating at a working capital of around INR 30 crores. That's the utilization that we have done for as far as working capital is concerned. As to the term loans that we have taken to fund our expansion plans, which are mostly complete now, and they started generating the revenues, and the repayments are already in process. I think there should not be any concerns regarding the reaching of the debt levels that we have internally set. And we are generating sufficient cash flows. Even in the past year also, it's close to INR 142 crores that we have generated the cash flows, which are sufficient enough to fund our expansion plans also. Yeah. So that I understand. So do we have apart from whatever the regular repayments do we have that we see the debt repayment accelerating because the cash flows will be good? No, we will not be going with any accelerated repayments. It depends on the situation. At the time, if some better opportunity comes, we will be following the normal repayment period instead of going for accelerated repayment over that. Okay. Sure. Thanks. Thank you. Thank you very much. We have next question from the line of Jay from Dolat Capital. Please proceed, sir. Hi, sir. Very good morning and thank you for the opportunity. So my first question is, on your current debt level, so sir, could you just let us know what would be the peak debt and how would be the payment schedule going on? This is regarding debt level? Debt level, yeah. So our gross debt is INR 620 crores as of September. Net debt is INR 581 crores. As I said in the earlier slide, we have a capital commitment of close to INR 250 crores in this year, which includes INR 100 crores of carry forward. At the same time, we are generating about INR 140 crores on a half-yearly basis of internal cash generations through the operations. So I think we will not be reaching a level of INR 700 crores in the debt given the situation after paying off our all expansion and the commitment for the past projects and the current projects that are ongoing. Secondly, as far as repayment is concerned, we are well within the schedule, and the repayment has already started as per the plans that have been submitted by the lender. And we are not going for any prepayments today because prepayments come with a commitment cost. At the same time, we require money to fund our expansion plans now. See how we plan to keep the debt level. Okay. Thank you, sir. So my another question is, in locking system, could you just give us some guidance? How does the growth look ahead, especially for the new orders? As you said, your Suzuki order has been delayed. So sir, could you just give more further light on it as well? So as I said, I responded to Abhilasha in the previous question. Suzuki products will be starting in Q1 and Q2. There are two different products, smart locks and the shutter locks. So once that starts, there will be increase in the revenues because obviously the smart locks are much pricier than compared to the traditional mechanical locks. But that is something which will be happening in quarter four and starting next financial year. So obviously, the growth will be coming up in locks and mirrors and, I mean, in the smart lock segment. But again, it depends on the adoption by the market. So let's see how it performs in the market, I mean, especially the Suzuki model. Sure, sir. Sure. So that's it from my side. Thanks a lot for the questions and all the best. Thank you. Thank you. Next question we have is from the line of Ankit Mi nocha from Aditya Ventures. Please proceed with your question. Yeah. Hi. Good morning. So this is specifically with regard to margins for H2. I mean, if you look at the current raw material costs in terms of commodities and also we look at the capacities that are coming on board, do we still feel confident that the delta growth that will come in H2 will come both from margins and volumes? So would we expect margin expansion above the current 10.6%, or do we believe that it's coming to be more a function of volumes or other? Ankit, it is a mixture of both because obviously we operate in hybrid segments. We have four different further segment ranges that we are operating, verticals largely. What happens is that all the verticals have their different set of margins, right? We have given a guidance at the beginning of this year that we will be improving by 50 basis points. From 9.95%, we have a target of 10.45%. It is because that we are executing some new expansion plans also, and there are a lot of expenses initially when we start up those plans, especially in terms of development costs and other costs, which we are charging out through the P&L account. I think the guidance that we have given is valid. Taking together the average of the second half at the year end, we would be achieving what we have given as an increment of 50 basis points in a range of 50 basis points from 9.95% to 10.45%. It will be cleaner. Okay. And what's the outlook on the current scenario with the commodities and the commodity prices? In commodities, in the major raw materials, they have been like what I would say, OEMs or customers. They have made a contract with the suppliers. They are deciding the prices, and they are passing the same to us. We are not affected by the increase and decrease because they are setting up the price and the same prices they give us to explain it. Okay. Understood. And secondly, I mean, my second question is more with regard to the on-ground demand that we see in the two-wheeler industry. So looking at the festive season and also looking at the scenario ahead, I mean, if you look at different factors like the inventory levels that are there at the production floors or in the dealerships and overall, what is our outlook on demand? Does demand seem to be stronger than last year, or would it be the same or lesser? I won't be able to answer that question in great detail except to tell you that FADA, which was projecting low pickup of vehicles, is bullish again now with the demand that seems to be coming from the rural segments of the country, and therefore, that demand will lead to maybe lower CC of motorcycles, but the volume is probably going to be higher. It is also being exhibited by the fact that the inventory levels now within the showrooms have dropped down to less than 30 days, which is probably the first after several, several, several quarters, and that, I think, is good abatement to the fact that we should continue with production till there is seasonality and there is place in the market to absorb even a higher inventory. So I would imagine that at this point of time, as we sit, we seem to be in a comfortable position. Right. Thank you. Thank you very much. Gentle reminder to all participants who wish to ask a question, may please press star and one at this time. We will take next questions from the line of Saurabh Jain of Sunidhi. Please go ahead, sir. Hello. Good morning, sir. Many congratulations for healthy set of numbers. I have just one question left. My other questions have been answered. But if you can provide us with the capacity utilization numbers in each of our reporting segments on fully expanded capacities, including these two plants in Pune, which were earlier scheduled to commence production by September 24, one for die-casting and one for cabins and fabrication. So I'm just looking for a ballpark capacity utilization number, including the recently expanded capacities and the capacities which are coming on board in the near future. This is a question that needs more deliberation. And the reason for that is where assembly businesses are concerned, whether it is locks or mirrors or even cabins for instance. Cabins, for example, need space, but they do not need too much of capital investment. Where locks and mirrors are concerned, they need more manpower, but the assembly spaces and the capital investment is comparatively lower. Where die-casting and sheet metal are concerned, these are CAPEX-based businesses, and therefore, capacity utilization is measured easily. In the die-casting business, with the new plants coming online, I think we will have close to 25%-27% capacity, which is likely to be added to the entire portfolio other than the organic business. In sheet metal, I did mention that our current capacity levels are between 55% and 82%, depending from plant to plant. Those we believe could be utilized with the orders that we have in hand, which will start rolling out of our production lines in the next few months. If I may ask it differently, once we have these capacities ready for commercial production by the end of this fiscal year, then what kind of top end can be achieved from the existing by March capacities? I think by March of 2025, you're saying? Yeah, yeah. That I think we've already given you that March of 2025, we've said that 40% business comes in the first half, 60% comes in the second half. It's an easy calculation for you to be able to do. No, no. Of course, sir. I got the top line growth, but I just wanted to know with the capacities in place, what can be achieved? No, no, no. These capacities are also for next year. So it's not as if we will utilize the entire capacities up to March. We are saying this is the capacity utilization. There are businesses that are being developed right now. There are parts that are under development, which will come online perhaps in the next year, even in the sheet metal. I'm not saying all of them will start rolling out in this year. Some of them will spill over into the next year. But as an overall entity, if you were to ask me on a ballpark basis, I would imagine that our capacities that we have within the plants can afford at least a 20%-25% higher output than what we will have in this particular year. Okay. I got it. That answers my question. Thank you so much. I wish you all the best. Thank you. Thank you. We have next question from the line of Raja from BNK Securities. Please go ahead. Thank you for the opportunity and congratulations on the performance. My first question is that with Honda, we have added Honda Shine as a customer. And in that, are we supplying only locks or are we supplying locks and mirrors as well? Also, are you expecting to add more models with Honda and more products also with Honda? You're talking of Honda Motorcycle, right, Raja? Yes, sir. Yeah. So Honda is yes, Honda. We started with locks. We are now waiting for their uptake of the smart locks that will begin shortly. But besides that, a large chunk of business is being added to our portfolio of casting. So I understand that we are close to about INR 100 crores of casting, and this is an area that's also growing. So Honda will become a substantive. Honda two-wheeler will become a substantive customer for us as we go forward, as we discuss with them other opportunities within the other segments that we operate in. All right. Are we also looking for any new models in Honda or only for the Honda Shine? Any new model from now on, we will participate. All right. So just from Honda, in the next two years, what kind of revenue are we looking at? Well, like I said, it's difficult to say right now depending on what parts are included for the additional stuff. But in terms of what we are looking at on the orders in hand, you're aware that the lower CC motorcycle is doing quite well, where we supply 100% of their lock sets. And with the smart locks, that will get added. Those volumes are small to begin with, but the value of that is much higher than mechanical locks. So in the locks business, I would anticipate a growth of about 25%-30% in terms of pure value for Honda in the next year. All right, sir. Secondly, the domestic die casting and sheet metal business is witnessing a strong growth. This is just like you had guided us earlier. So please throw some light on which are the products among these two segments that are gaining more traction and any new product launches that are expected in these two business verticals? Yeah, Raja, thank you for that question. So one, you are aware that we had bought over the machining business of all TVS lines from TVS. So while the machining foundry end also came through, there were several casting businesses that have been added to the portfolio. And therefore, you have seen a quick ramp-up on the revenue growth of the casting business to an extent that we have been forced into setting up a new plant that we are doing right now. In fact, one in Chennai for die-casting and one in Pune. So with these two additions, these will lead to capacities which will be close to 25% or 30% from our existing capacity. With them getting filled, you can easily calculate the volume growth that we will get out of these new facilities towards the existing customers, as well as from new customers that have been identified and are being spoken to, and some parts are already being developed. All right. So last question is just a clarification to one of the responses to previous participants. You mentioned that customers have made a bulk contract with the supplier and they are setting up the prices. Could you please elaborate a bit on this and how is this for us versus the peers in the industry? Yeah. So this is, I think, yes, as we had already mentioned. When you say bulk contracts, this is a routine process in the industry where every quarter prices are banked up so that for us, commodity prices are a pass-through. Now, within that framework, so let's assume that we have aluminum selling at INR 100 in the 1st of April, and then over the quarter, the prices change from INR 100 to INR 105 to INR 110 to INR 120. The mean price is taken, which then becomes applicable from the 1st of July. So there is a lag of three months, but otherwise, commodity prices for us, for the entire automotive industry and supplier community, is matched up every quarter. Okay. Okay. Understood. Thanks. All the best. Thank you. We have next question from Aditya Kondawar from Complete Circle Capital. Please proceed. So first of all, great execution by Team Sandhar. My first question was, can you just give some color on the EV two-wheelers that we are working with, especially the startups? What kind of volumes are we seeing from them and what kind of a ramp-up do we expect from them? And number two, on the new product portfolio or new customers, I understand that the legacy products are very difficult to break into. So how are we approaching this side of the business? Thank you. We personally believe that while there are many, many, many new EV players that have entered the market, it seems that the legacy players who have entered this particular area, whether it be Bajaj or whether it be TVS or whether it be Hero, may finally get to rule the roost because they have established R&D centers. They have a lot of money that can be thrown behind these new products, and they are waiting largely for the market to kind of mature. You are aware that the market is still very patchy in some sense. And from what I understand, and I'm sure all of you have seen, the statistics say that 56% of the people who bought electric vehicles don't want to buy electric vehicles any longer or again. So it's a mixed bag right now. However, having said that, there are players in place, the new ones. You've heard of Ola, you've heard of Ather, you've heard of Simple, you've heard of a few others who seem to be doing well, but we'll have to wait and see how these kind of pan out. Obviously, I don't think there is going to be space for 50 new EV players who can establish and come out with model changes that are required in our industry at this speed, which requires much higher levels of investment. We will have to wait and figure that out. In terms of our plan, like I said, we have a premium product that is localized completely, and that is a big attraction for the OEMs to play with. So we are in discussions. We've already started supplying to three customers. We are also in discussions with several others, and we are hopeful that over a period of time, the EV player that we are in will start to have a significant revenue percentage as a part of our entire industry. Thank you, sir. Thank you very much. We have next question from the line of Pavitra Godara from Mahadev Road Carrier. Please go ahead. [Foreign language]? Yes, sir. Yes, sir. Look, if we look at our revenue, then the highest revenue comes from our two-wheeler segment. So in the two-wheeler segment, our clients are TVS Motor Company, Hero MotoCorp, Honda Motorcycles, Suzuki Motorcycles. These are all our two-wheeler customers, from whom our maximum revenue comes, approximately 63% of the revenue comes from all of them. In addition, we also supply to construction equipment, JCB, from there approximately our 8% revenue comes. In addition, we supply equipment to Honda Cars, locks, mirrors, etc., from there revenue comes. And approximately our revenue 15%-18% comes from overseas, from foreign operations, where we supply to four-wheelers, meaning passenger cars. So this is our revenue breakdown. [Foreign language]. [Foreign language]. [Foreign language]. [Foreign language]. Thank you very much. We have next question from the line of Udit Gupta, who is an individual investor. Good morning, sir. Sir, how are we doing in terms of the four-wheeler business? Like on an earlier call, you had said that we had won some orders from Hyundai. How is that progressing? Yes, Honda is going through. Again, I think there was a delay in the product that we have. It's a very good product, which was supposed to launch off in November and December. That was the initial target. We've now been told to start pilots in the month of March, which means the effect of that revenue will come in the next financial year. Sir, any plans for capital raising or to retire debt? Nothing so far, but we are looking for opportunities. As far as debt is concerned, of course, Yashpal will supplement me. We do feel that while we are comfortable enough to be able to service debt, we are looking for other opportunities, some inorganic or otherwise, or other growth channels, which will then necessitate the need for additional capital when we will look at those particular opportunities to be available. Yashpal, you want to answer? Yes, sir. Perfectly right. As I said, the debt repayments are going as per the schedules, but yes, if we are looking for some growth opportunities, it might be inorganic. That time, we'll be thinking of raising some capital. And sir, how is the export business doing in terms of the ramp-up there, and how is the growth there? You are referring to the overseas operations? Overseas sorry. Not the export, the overseas. Overseas, like the first half, we're a little bit, I would say, stagnant. But second half, we are projecting that it will be showing us a growth of around 12%-13% over the last year. The margin in the overseas business, sir? It's a double-digit since inception. The EBITDA margin is close to 9.98% in this half year. The challenge is the Romania plant that in the initial remarks also sort of told that by the end of this year, we expect it to be break-even. So earlier, we used to operate an EBITDA level of 13.5%. And once the Romania plant breaks even, I mean, it achieves a break-even point, we might go back to the real level. Thank you so much, sir. Thank you very much. Participants, we would like to remind you that you may press star and one to ask a question. We have a question from Shailly Jain from Dolat Capital. Please go ahead. Hi, sir. Sir, can you please give me the performance of all of our subsidiaries and how are we looking ahead? Subsidiaries, if you see the difference between a standalone and the remaining revenues coming from Subsidiaries, sir, the total revenue from the Subsidiaries for this half year is INR 482 crores. Sir, what is subsidiary-wise performance? So, subsidiary-wise performance, like the business subsidiary in operations is Sandhar Engineering, which is taking care of the sheet metal business, the new business that we have set up. So Sandhar Engineering has done fairly well compared to the year-on-year, I mean, the comparison. So for this half year, it has registered an income of INR 192 crore, versus 87 of the corresponding. So it's just, you can see the growth is more or less a double growth. And as far as the EBITDA is concerned, they are well at the, I would say, breakout level. They have already achieved an EBITDA of 7%. And going forward, when the volumes ramp up in the Hosur and the Halol plant, the double-digit margin that we have projected will be achieved. So this is how the sheet metal is working, Sandhar Engineering. Then overseas operation, as I just said, overseas operation by the end of this year, once Romania plant stabilizes, might see a turnaround, and we might go back to earlier levels of 13-13.5% EBITDA margin. For this half year, they have given us an income of INR 234 crores at an EBITDA margin of 10.98%. So these are the two biggest subsidiaries, and the third one is the machining business. It is going as per the schedule and as per the margins that we have projected. Yes, sir. That was helpful. And what is our current level of localization, and what are we planning for it ahead? Localization in terms of? I mean. Yes. We are procuring components and materials locally only, except we also have a small, I would say, import content. Otherwise, we are largely procuring locally made items. Okay, sir. I would imagine, Shailly, that 98% of our or even 99% of our procurement is local, whereas less than 1% or 2%, which is imported for some of our locks for the four-wheeler segment. But beyond that, everything is local. Okay. That was helpful. Thank you. Thank you, ma'am. Thank you, sir. As there are no further questions, I would like to hand the conference over to management for closing comments. Thank you once again to Dolat Capital, to Shailly and the team and the facilitators. Thank you to the audience and to the investors who took time out to participate in our con call this morning. We, as a company, are very, very bullish with the new areas that we've entered, with the new investments we've made, and we are very prudent in ensuring that all investments that are being made, that have been made, will be utilized to their full extent in the shortest time possible. We are also very, very hopeful and bullish on improvement of margins, as we will see in the coming times. With that, I want to wish you all a very happy new year, to you and your entire family. God bless you all, and thank you once again. Thank you. On behalf of Dolat Capital, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.