Good afternoon, ladies and gentlemen. Good day and welcome to Sona Comstar Q4 FY23 Earnings Group Conference Call. Please note all participant lines are in the listen-only mode for now. There will be an opportunity for you to ask questions after the presentation concludes. Please note this call is being recorded. We request you that to place your line on mute except when asking the question. Some of the statements by the management team in today's conference call may be forward-looking in nature, and we request you to refer to the disclaimer in the earnings presentation for further details. The management will also not be taking any specific customer-related questions or confirm or deny any customer names or relationship due to confidentiality reasons. Please refrain from naming any customer in your question. I will now hand over the floor to Mr. Kapil Singh, Head of Consumer & Digital Commerce Research India and Lead Auto Analyst at Nomura. Kapil, please go ahead. Thank you, Diana. Good day to everyone. To take us through Q4 FY2023 results and to answer your questions, we have with us Mr. Vivek Vikram Singh, MD & Group CEO. Mr. Kiran Deshmukh, Group CTO. Mr. Sat Mohan Gupta, CEO of the Motor Business. Mr. Vikram Verma, CEO of Driveline Business. Mr. Rohit Nanda, Group CFO. Mr. Amit Mishra, Head Investor Relations, and Mr. Pratik Sachan, DGM Corporate Strategy and Investor Relations. I will now hand over the call to Vivek for his opening remarks and the presentation. Over to you, Vivek. Thank you, Kapil and Diana, welcome everyone to the earnings call of what is once again, been our best quarter ever. I think I've said it a few times, but I hope I never get tired of saying this. Best quarter ever and the best financial year ever in several aspects of our business. First, as is our policy when talking to the company's owners, our shareholders, we will begin with the challenges. Although inflation seems to be cooling in general, there hasn't been much change on the cost side on our largest purchased commodity, which is alloy steel. It remains at elevated prices, hopefully that too shall correct soon. Apart from that, as highlighted in the previous call, the EV two-wheeler industry, there was a requirement to get the vehicles homologated again due to the new battery standards. There is a challenge around lack of clarity and uncertainty on phase two subsidies, and that too is a constraint to growth. On the positive side, I guess there is a lot more of that this time. In financial terms, we achieved our highest revenue, EBITDA and net profit in the Q4 FY2023. We closed the financial year with a stronger order book, with the addition of several new programs, new customers and new products. This gives us the confidence to sustain growth momentum in FY2024 and beyond over the medium term. We've also made substantial progress on our technology roadmap by developing four new products in FY2023 alone. We're also working on several exciting and innovative products for our customers across motor and driveline businesses. We are obviously excited to add sensors and software as a third pillar of growth and hope to close the NOVELIC transaction before the end of this quarter. On the ESG front, we've made some credible progress by developing and implementing an innovative solution in our forging plant at Gurgaon that helps us recycle and save around 12,000 liters of water per day. This of course is a great achievement, and we'll talk about it at the end of our presentation. Before proceeding, I would like to add that we don't consider ourselves macro experts at all, but to preempt your questions about the markets we serve, here are a few observations. The U.S. market was positive on a year-on-year basis in Q4 and continues to look good. The Indian market did well across all three categories of PV, CV and off-highway and continues to be fairly strong. Europe also had a positive quarter on a year-on-year basis, which is very gladdening to see that it's continuing to improve over the recent quarters. Asia, which is our smallest market, remains volatile because of the uncertainties of the post-COVID reopening in China. Let's see when that recovers. Coming to the numbers, we again had good sequential growth, but more importantly, and perhaps the only important metric for us, a year-on-year basis, our revenue grew by 35%, while EBITDA and net profit increased by 49% and 54% respectively as we continue to improve on our margins. Battery electric vehicle segment revenue grew by 37%, and for the first time we've crossed the INR 200 crore mark from that segment. EV revenue share also increased to 28%. For the full year, like every year, we would like to report our performance scorecard as managers to you on our 5 KRAs that we've consistently since our listing been talking about our financials, our progress on electrification, our progress on business development, diversification, and new product development. Beginning with financials, we continue to do well on all three indicators growth, margins, and returns. Our revenue, EBITDA and PAT are up by 36%, 25%, and 28% respectively. Another quarter of strong operating performance has increased our EBITDA and PAT margins to the middle of our usual range. I think we've always communicated our range of 25%-27% for EBITDA and 14%-16% of PAT, and I think now we've come bang in the middle of that. Returns, too, have been and continue to be strong. As I think I said last year, too, while showing a similar slide, any company's performance is meaningful only when seen in the context of the industry it operates in. The best benchmark for us is global light vehicle sales, relative to that, we continue to rise against the tide. We've more than doubled our revenue in a market that has declined by 7% during these three tough years. Having done this organically is a remarkable feat for our entire team. Another aspect I wanna mention, but actually repeat, is that while this chart shows a linear growth of over 25% each year, it doesn't mean that each quarter had 25% growth. The real world is seldom linear, as ours is a company which grows mostly through new programs, growth comes in steps. As you may have noticed, in the eight quarters since our IPO, our growth has been less 0%-10% twice, between 10%-20% twice, between 20%-50% twice, and over 50% twice as well. If you look at the data scatter, there is not much of a meaningful pattern on quarters. However, when you look at years, a meaningful pattern does emerge. Also, please forgive me for perhaps reminding everyone of the obvious, but if you look at the last two years that we've been publicly listed, we've grown by an incredible 70% while maintaining our margins. This is despite, I would say, unprecedented headwinds like COVID, semi-conductor chip shortages, extreme inflation, and even a war in Europe. Apart from the tremendous team that I mentioned, our unrelenting focus on technology, innovation and the lens by which we see how much value can we increase rather than just looking at pure volume, I think these are the reasons for our resilient performance. Coming to our second KRA, which is on electrification. Our battery electric vehicle revenue has grown by 33% over last year in absolute terms and stands at INR 670 crore, which incidentally is close to our total revenue just four years back. We added 12 new EV programs during the year and strengthened our EV order book further. In Q4 specifically, we added one new EV program from a new EV customer, which we'll talk about in the next slide. Here I wanted to mention that we often ask all of you for specific and actionable feedback. This is in actually response to one of those that we received from Gunjan and Anuja of BofA. We've updated our EV program split because they kept saying that everything seems to be order book. Now, earlier we used to only show two categories, fully ramped up production and in order book. What we've done this time, and for the sake of more transparency, is we made it in three categories. One is fully ramped up mature programs. Second, started production but in ramp up phase. Last, not yet in production. If I were to do that for this at the end of FY2023, we have a total of 20 programs in production, out of which 10 are mature and completely ramped up. Other 10 are in ramp up phase. The remaining 22 are not yet in production and will start either during this year or the following years. I hope this brings more clarity and transparency, and we hope to also continue to improve with more feedback from you. Yes. To now talk about the new order win that we just had. This was from a North American New Age OEM of commercial vehicles, and we are proud of it and are highlighting it for three reasons. This order is for a bundled product offering, which includes obviously our highest selling EV product, which is the final drive differential assembly and two completely new products, intermediate gears and input shafts. All these combined complete all the major moving parts in an EV gearbox. This obviously has been a stated ambition of ours, I'm glad that we've got there fairly early. This would be our first commercial vehicle differential assembly ever. This marks our entry into the EV gearbox parts for a new market segment, which is electric commercial vehicles. Specifically, this program for Class 4 and Class 5 trucks. The increase in revenue potential in a vehicle. I wanted to mention that point that all research we kind of read about the automotive industry, every market segment and the focus seems to be on volume of vehicles sold. We prefer, as a company, to look at market segments from a value perspective. I think it is due to this strategic lens that we've been able to move step by step in the last six, seven years from a $15-$20 differential gear set for an electric car to a driveline system with $600-$900 revenue realization per vehicle in terms of an electric Class 4 truck. Next slide, please. There's not much to talk about in this slide. We keep it for the sake of continuity and because it's a good visual representation of the geographic diversity of our electrification mission. The only change is the addition of a new program as well as a new customer in North America. On to our third KRA, which is business development. This year was our best year of business development. We landed INR 80 billion worth of orders during the year. This came from 35 new programs and seven new customers. Primarily, our revenue growth this year came via the consumption of INR 51 billion from this order book. As I explained earlier, in an industry that is not actually growing, the only source of your growth would be your ability to get orders and then consume them fast enough in order to maintain your growth. That's what happened. Taking that out, the net addition to the net order book was INR 29 billion. Which brings us neatly to our net order book, which at the end of FY2023 stands at INR 21.5 thousand crores or around $2.4 billion. As visible here, almost all our sequential growth in this quarter came from the consumption of the new orders, while the EV contribution, and that's the second takeaway from this slide, has increased to 77%, which is quite a big number now. Fourth KRA is around diversification. Now, again, as every time, the trend of increasing electrification and decreasing ICE dependence continues unabated as we keep developing new EV products and benefit from this EV mega trend. Geographically, we've seen a shift in our revenue mix this year. North America has contributed 43% of our revenue in FY2023, which shows an exceptionally strong growth backed by new programs mostly. Very heartening to see that after dropping to merely 11% revenue share in Q1, Europe market has also recovered. Because of that, we have almost got back to the same percentage we used to be last year from Europe. If you look at absolute revenue, because this is against a fairly high growth of 26%, we have seen a YOY growth in absolute revenue from Europe. Not much change in product mix or vehicle segment mix, to be honest, from the last quarter, except that on an annual basis, the revenue share from traction motors for electric 2 and 3-wheelers has grown significantly. This revenue share that stands at 4% today used to be almost 0%-2%, 2 years ago and 1.5% just last year. With that, I come to the end of my update. I turn to our Group CTO, Mr. Deshmukh, to update us on our technology. Over to you, sir. Thank you, Vivek. Good evening, ladies and gentlemen. I'm pleased to present our technology roadmap as we continue to break new ground in innovation. The development journey from idealization to commercialization is exciting, and we visually represent every time by transitioning a product from white area to blue on our technology roadmap. I'm delighted to report that we have successfully transitioned four ground-breaking products into the blue zone over the past year alone. In recent quarters, we have proudly commercialized the NexShift spiral bevel gears and the electronically controlled locking differential for the EDL. Our spiral bevel gears testify to our pioneering efforts in precision forming in this product category. Meanwhile, our EDL represent the first-ever complex differential specifically designed for electric vehicles. Both these are further solidifying our commitment to sustainable innovation. Building on this impressive momentum, we have added two more products, the input shaft and intermediate gears, to the blue zone this quarter. These advanced products enhance our capabilities in precision forming and machining and bring us one step closer to developing a comprehensive EV gearbox. Consequently, we have reinforced our position as leaders in providing higher value addition for electric vehicles. With that, I invite Rohit to provide you with an update on our financial performance. A very good day to you all. It's my pleasure to share our fourth quarter and full year results for FY2023 with you. Vivek already mentioned, Q4 was our best quarter on all three parameters of revenue, EBITDA and PAT, being INR 744 crores, INR 201 crore and INR 120 crores respectively. Our BEV revenue grew by 37% this quarter, whereas our non-BEV revenue also grew by a robust 35%, which is more than 3x the underlying growth in our key markets of North America, India and Europe. Our EBITDA grew by 49% as year-on-year margin improved by 2.5% to 27.1%. EBITDA margin improvement was primarily due to operating leverage and better product mix. Our adjusted PAT for the quarter was INR 122 crores, which is higher by 57% compared to the adjusted PAT of INR 78 crores in the comparable quarter last year. There was a better margin transmission from EBITDA PAT due to lower net interest costs and depreciation combined as a percentage of revenue. This quarter, our PAT has been adjusted for exceptional expenses pertaining to acquisition-related diligence work, whereas PAT for the comparable quarter last year was adjusted for one-time tax-related impact. For the full financial year, our revenue grew by 26% to INR 2,676 crores. Our BEV revenue grew by 33% to INR 671 crores. It was 26% of our total sales. Our non-BEV revenue grew by 23%, while the underlying light vehicle market grew by only 2% in our three largest markets of North America, India and Europe combined. For the full year, our EBITDA grew by 25% to INR 696 crores. We had a positive impact on our EBITDA margin from operating leverage and product mix. On the whole, however, our margin percentage was lower by about 30 basis points because of increased RM prices, despite cost pass-through due to arithmetic effect. Our adjusted PAT for the full year grew by 29% to INR 398 crores compared to the adjusted PAT of INR 309 crores last year. Lower net finance costs led to improved margin transmission between EBITDA and PAT for the full year as well. As I've already explained, the PAT adjustment for FY2023 pertains to diligence expenses related to acquisition, while PAT adjustment for the last year, for the full year pertains to one-time tax-related impact and reversal of IPO expenses. We now move to the cash flows. During the full year, the company generated INR 535 crores as cash from operations and INR 200 crores as free cash flows. We thus managed to fund our entire CapEx spending of INR 335 crores from cash generated from operations. Besides this, we also distributed dividend of INR 120 crores during the last financial year. Next one, please. With this, we come to the slide on our key ratios. The first one, there is value addition to employee cost, which has further improved from 5.7 times last year to 6.4 times this year, which reflects continued improvement in our marginal value addition relative to change in the total employee cost. Our return ratio of ROCE and ROE continue to be strong, with ROCE above 30% and ROE above 26%. These are somewhat lower from the last two year levels, primarily due to ongoing CapEx expenditure. Besides, in case of return on equity, there is also an adverse base effect due to primary equity raised during the IPO. Our net debt to EBITDA continues to be below zero as net debt number is continuing to be negative. Working capital turnover ratio has improved to 4.2 times. Our fixed asset turnover ratio has declined a bit to 3.9 times, which is mainly on account of the new capitalization that we did during the year. With this, I'll now hand it over to Vikram, who will be sharing an interesting ESG case study, which showcases our efforts towards a better environment. Over to you, Vikram. Thank you, Rohit. Good evening, everyone. As you know that, the Driveline Business is more concentrated with the forging as a process, and the forging requires a lot of power and water. In the forging process, a die lubricant is used for both lubricating the die and cooling of the die. In the process, this the water evaporates and then condenses and extra water goes through into the pit that is normally disposed of to a proper channel, authorized channel. This used to be the process earlier. Now, the team at the forging plant has done an exceptional job of putting a system through which we can recover water, which is around 75% of the water is now recovered and put back into the system. This is a cycle which is being used and this process is probably done first time and hence it should help many of the forging industry in the country. The whole idea of showing this, and we will share this to the community, that how we can, how each one can use this process for improving actually the uses of water. That's something which we are very proud of to share with the whole community opposing industry. I think that brings my end of this presentation, and I'll now ask Nomura team to go ahead with the next session. Now we are at the Q&A session of the presentation. we will now open the floor for Q&A. If you wish to raise a question, please use the Raise Hand function located in the bottom right of your Webex page. I will unmute your line and prompt you to speak. Or you can submit the question via Q&A chat box addressing to all presenters. Please be reminded to keep your question to a maximum of two questions. If you have more questions, please return to the queue. Thank you very much. I'll now go to the first caller, Mr. Gunjan. Your line is unmute. Please go ahead with your question. Hi. Thanks team for taking my questions and thanks Vivek for incorporating the feedback. It's pretty useful. I have two questions. Firstly, a little bit generic one on the industry. Now, clearly, the most topical thing has been the, you know, the price aggression or the price cuts that we're seeing in the industry. In general, there is a fear that this eventually percolates down to the suppliers as well in terms of, you know, looking at the cost structures or renegotiations. Has there been any renegotiations at your end or relook at the contract values? Maybe if you can share some color around how should we be thinking about this change in competitive landscape that we've seen on the EVs? Thank you, Gunjan. I think, we've answered this question in different ways, over the last three quarters, but again, I'll answer it, with a Hindi phrase that I've used often that Okay. Got it. Okay, maybe just another question that I have is on your slide 10, you know, where you talk about the new customer. You put out an interesting, you know, how the rise, you know, the content value has been rising with the addition of these new products with every passing quarter. I just wanted to understand the original differential assembly that we, you know, we were giving to the customers was essentially just the differential- assembly. There was no intermediate gear, there was no final reduction gear, right? If you can just give, you know, give some color, how does the value enhance by going from, you know, the basic what you were supplying earlier to now adding this Intermediate Gear and, what is it that is pending for us to supply the, you know, like, you know, like it so mentioned that, you know, we are one step closer to supplying the final product? What is it that is still missing in this portfolio for us to do that, you know, $700, $600-$700 Differential Assembly? Yeah. The integrated unit. Maybe I'm just little confused here. No, no. Gunjan. I mean, for a non-technical person, it's a good enough question. If you look at the parts, the bundle value, like I said, is already between $600-$900, right? However, the thing is, it's not just the value of the product, it is also for what vehicles. Differential- assembly also, just the differential assembly, the second item from the bottom, yeah, that can range from $30-$600, just that, without the final gear also. If you go from a small hatchback car to a large, you know, Class 7, Class 8 truck. The range is quite. It's not just the product, it is the product in what vehicle, which is what we've been trying to, I think, say. Even by the way, in the gears, the cheapest gear we've sold as a unit is INR 45 and the most expensive INR 4,500. The range is very, very wide. It isn't just what is the cost of this product or the price of this product, it is the price for that application. For what kind of vehicle, what kind of load, what kind of torque. That's the thing. It is two factors at play. Are you growing? Which is why we made that slide, and it's, it'll be in the appendix. What segment of the market are you addressing, and in that, how much? Second part of your question, which is far more interesting, is what is remaining. If you look at the whole EV drive unit, what is remaining, and I'll let Vikram also add, is, of course, we are not putting it together, right? Even now. We are doing all the different parts of it and letting the OEM assemble it. I think the bearings we are not doing in this, and we are not doing the thermal- management. The cooling, whether it be liquid, whether it be oil-based, we are not doing that. We are still not gone to that level of system integration of the whole gearbox. Vikram, you want to add to that? I think you answered. I mean, if the question is what next is the gearbox in which all these parts have to go will require bearings, require seals, the thermal management, there is a big housing and a lot of sensors going into it. Beyond that is also the product has to have motor also and inverter also. I mean, I think in the roadmap, this that's shown shows that that was our final goal, so this is still an intermediate before we reach there. Correct. Gunja, in short. We just keep moving forward, and every time we move forward, we transparently share it with all our shareholders. We move one more step. The goal is still a lot more to do. Final reduction we are doing right now, that's not the gap in the portfolio anymore. That we've been doing. That's actually at the third stage. Final reduction. Mm-hmm. here on the differential assembly, I think that we've been supplying since 2019, Vikram? 18, 19. Yeah. 18, 19. That's been a while. The fourth one, which you see is for the tri-motor architecture, that's the single reduction at the wheels, the spool gear. EDL was what we showcased, I think, last quarter. This is the first time. Mm-hmm. we're doing intermediate gears and shafts. We've never done these products before. This also required actually for us to do a little bit of cold forging knowledge and capability, which is what we are building. I think we've been often asked that what else are we adding? Well, this was always on the map. I don't think people asked us about it, but yeah, this was always an obvious adjacency within the gearbox. Okay, got it. I'll just last question, and I'll join back the queue. If you can just update us on where we are on the PLI, if anything accrued in this year and, you know, just what is it, you know, that needs to be given to the government to get the incentive? Yeah, I'll let Rohit answer that. Just philosophically, I think we, for the last two years, maintained that we will do our business without planning for any government intervention or subsidy, because that is, I think, the right way to do it. If they come, they come. If they don't, they don't. We have never accounted for it. We've never given much about it. Rohit can answer that. He's far more on top of these things. PLI, we, like all the other players, we've also moved our application and all for the product approval. Based on the current status and all, our understanding is that for FY23, actually, there may be no PLI. Okay? The year gone by, I'm talking about. FY24 onwards, it should be there. I mean, there are many things which are yet to become clear. In fact, the government has come out with a SOP towards end of April only, we are still studying it, trying to sort of understand the process and all. Currently, I think for everybody it is that everyone has applied for the product approval and that is still everybody's in the, in the queue in terms of approvals. Okay, got it. Thank you so much. Thank you. Thank you very much. We now go to the next caller. Vimal Gohil, your line is unmute. Please go ahead. We have two questions. Good set of numbers. My question is to Rohit. Rohit, we've seen our gross margins actually have been almost 60% at one point of time. Obviously, we've averaged around 57, 58. We're currently at 54. There is some softening of raw material costs that we see at this point in time. What's the outlook over there? Question to Vikram. Your, your outlook on the starter motor business. It's been a bit soft. What would be our outlook over there? Thanks. Okay. I think you meant me, Vivek. Vikram handles. Okay, sorry. the business. I'm so sorry. I'll let Sat answer the starter motor question since he is in charge of the Motor Business. First, Rohit, the question is to you. Raw costs, I think apart from the alloy steel, I think we've seen softening of material prices over the last one year, I would say. If I were to look at the alloy steel prices, I think they are still higher than where we ended the last financial year. I mean, it's hard to predict. Generally, steel prices have come off, but not the alloy steel prices, I mean, alloy steel that we consume. In fact, April, we saw a price increase. After that, there have been two decreases in July and then October. They've been insufficient to even set off the increase that we gave in April. In a way, we are actually for the full year, like I mentioned in my part of the commentary also, I think the alloy steel price that we paid this year was still higher than the last year, and that's the largest commodity that we consume. In terms of outlook, it's hard for us to really say anything because logically speaking, even alloy steel prices should have come off given that general steel prices have come off significantly from their highs. No predictions as such, I would say. Sat, on starter m otors. Yeah, I mean, starter m otors, I mean, we did a good job in the FY2023, and our volumes were quite stable. Though, I mean, a little bit lower than what we projected earlier due to the U.S. and the European market. Overall, it's looking still good in the FY2024, and we will continue to do that. I think beyond that, Vimal, I don't think any of us know, and like I think also mentioned, we humbly state that we are not experts in macros. We are not experts in predicting the future, and if anything we have learned in the last four years is we all need to be perhaps more humble. The world is far more dynamic and uncertain than we think it is. I think what we can do is focus on our business and be always ready and agile and move fast. Predicting the future doesn't seem to be something we are very good at, and we'll continue to not do that. We can see the bigger trends. We see how things move in, I'd say 10-15 years. You know, one or two years is just harder to get certainty. Okay, we'll go next to Kapil Singh. Kapil, please go ahead with your question. Few questions. Firstly, on order book, we have seen $28 billion of order book consume this quarter. Any major product you can highlight which has gone into production? I'm sure it would not be fully ramped up in the Q1 itself. That'll be too specific, Kapil. Because, see, it is only one or two programs that do that. If I answer that's almost answering in the behalf of another customer, so no point. Yeah, you know how a business is. I think it's a very good sign if you see this periodic up and down, because that means that the order book is not just something which we were asked, I think, earlier that it's something that is far in the future. These are things that this is how growth comes. Yeah. I mean, there is no new product in this. It's all new customers only. That's why I'm not answering it. No, what I was trying to understand is whether this would not be fully ramped up right now. Right? No, it should be. I mean, the impact on order book is larger than the impact on revenue. That's what I was trying to understand. It always is that way. Yeah. It always is that way, because what you're trying to do is take out something, and one is also one of the programs is hit already or full peak. Right. Now any additional is zero. You take out from... How it works is, let's say you were 10% off peak, but now this 10% goes out from the next 40 quarters. There is a large value. You take $28 billion, you divide that by the number of quarters remaining, and you'll get it. Actually, the math is very simple, and you'll realize that almost all our growth is because of that. There's been nothing else happening. Yeah. Yeah. When you say something, some orders are fully ramped up, what does this mean? If you could take example of, I'm saying, any general product in the market so that we can understand. Let's take any standard, biggest product with a venture assembly, and the vehicle maker has projected and has planned to build 100,000 vehicles a year from that program. How it starts is initially, in the initial phases will be 10,000, let's say, for the first year because it might not be a full year. Next year, it goes up to 60, 70. By third year, usually it gets to 100, which is the peak. After that, it'll stay at 100, and then it'll start declining. That's usually the curve any product cycle follows. When we say fully ramped up, it means it has reached the peak volume set by the customer. Of course, there can be plus minus 10% in this every year if suddenly a lot of demand comes. If peak stated at beginning assumption is reached, we take that out of order book. Okay. Also, on the order book, do you assume any market growth or this is just, the growth, the new products basically which is what is reflecting here? We never assume market growth for anything we do. Our budgets are based on zero basis because, again, Kap... You know this, Kapil, I was made CEO four years ago. I've never seen market growth. I still believe it was- You've seen a market decline, actually. Yeah. We don't assume all that. We assume zero because again, like I said, we're not macro experts, so we don't know any better. We just say, "Let's assume everything will remain the same as it is today," and then plan around that. Order book has nothing to do with the market and growth. It is customer projection and program ramp-up projection. Okay. If, if, you know, let's take a longer lead product like a tractor, for example, you or a truck, you know, in those, basically you're not going to assume any growth in those when you build your order book, basically. Correct. When growth does come, you will see growth. Actually, order book we will still not grow because you can't solve for 10 years that thing. Your base will suddenly go up though. Even without consuming from the order book, your revenue can grow sequentially quite a lot. Understood. We are fervently hoping for that day to come. It hasn't yet, hope it will return as well. Just one last question on slide ten, the new product that we have. You know, the lead time for this is quite small. You know, Q4 start of production. Is this, can you throw some color? Because generally we have longer lead times. Our cycles are longer. Is this a new customer and why the lead time is smaller than usual? Also what does this mean for future other segments, for example, cars, you know, gearbox or other segment trucks? Just some color on that as well. Yeah. Development- cycles are shortening. That's a fact. What does it mean is a lot more pressure on our engineering teams. This is something we really are concerned about, that every customer seems to be in a far more hurried thing. Which obviously is good from a shareholder's perspective, that profits and revenues come faster than they used to. There is a lot of pressure and a lot of time pressure. I guess, it will continue till this EV trend and the EV transformation stabilizes. I think we are in the midst of a large disruption in the industry. We are obviously beneficiaries of it, but there is a lot of hard. What does it mean for other segment and other gearboxes? Kapil, we always say only what we mean. Whatever we have said is all there is to it. There is not much more to read. We have made these new products, and we have been able to secure a customer. We will always keep trying, keep striving to grow that business, keep trying to sell to more customers, and it will take a while. The capability curves are long. Often we've been asked about others, and we have always commented that we don't talk about others because our race is our race. Our product roadmap is transparently shared with all of you, including with all our competitors and customers and everyone. This is what we intend to do. We are not hiding what we intend to do. Our race, our milestones are there. If it is on our roadmap, we will do it. There is no question about that. I think in the last two years, we demonstrated that many times. If it requires that we will be taking some things that other people have been doing, other people, other companies, well, so be it. We don't define ourselves by competition. We do not define ourselves by finite mindedness. It is completely transparent. Whenever there is something more, let's say we sell it to another commercial vehicle guy, we share it. If we take those parts and do it for a passenger vehicle, we also share it. Okay. Thank you very much. Thank you, Kapil, for your questions. We are now going to Nitij Mangal. Nitij, your line is on mute. Please go ahead with two questions. Motors in the context of the uncertainties in electric two-wheelers, and also, any sharing incrementally on the development of the magnet-less motors. Nitij, I couldn't quite hear you clearly. I think what I caught was something around magnet-less motor, but I didn't get much more. Can you please- Yes, yes. How are you thinking of the ramp-up of the traction motor business in India? Give some certainty around the FAME regulations. Also, anything incremental on the development of magnet-less motors? Sure. We are, obviously like everybody else, subject to the markets we operate. If the overall demand of our customer or the production plan of our customer is lowered, so do we get it lowered. We are not thinking too much about it. We are ready with the products. We should still see growth. What would happen is then that growth will come from incremental market share addition rather than growth in the industry. I am too, I would say unaware to comment on what will happen of FAME II or what will not. I will leave that. I believe, and I think we've had this conversation, Nitij, that any industry or any business model that is dependent on government subsidies like PLI, like FAME, that will always be prone to far more risk than a business that exists without it. We have always kept away from that. We did not plan our business around those subsidies, even with while quoting to our customers. That's how we will continue. If the market comes, great. If it doesn't, it doesn't. We can't control that. It's uncontrollable and also we again, very humbly say we don't really know what is going to happen on fuel. We can't answer much. Checking on magnet-less motors, Sat, you or Mr. Deshmukh can give a update. Although if any of you attended Auto Expo, you would have been able to see one of those in action. Sat, sir. Uh, uh- Sat, you want to share an update on the magnet-less motors? Or Mr. Deshmukh. I don't know. Sure. On the magnet-less motor, I mean, we are working with and we have also shown one of the motor with our partner in Auto Expo. Right now it's in development and validation phase, and we will come back on the status maybe in the next investor call with you guys with a more firm information and the data. Right now it's in the validation phase and we are working on some of the options. Just to add to what Sat just now said, we are working on several technologies for magnet-less. Currently in our technology roadmap, those products are in the white- zone. Moment they are ready to be commercialized, they will move to the blue- zone. We will share that in this forum. As any other R&D projects, these are all in the development stage, and depending upon the results and the outcome of the validation tests, we will be in a position to say which technology we will go for, et cetera. Okay. I have one more question. Vivek, when you see your order book flowing into revenues, let's say over the next three years, I believe the share of EVs can probably get to like 45%, 50% or so. How do you see your customer concentration within EVs, let's say three years, three years down the line? See, even today, if you look at our overall customer concentration, there is no customer who's over 20%, right? Even now, even at the time of IPO, that was the same thing. 3-5 years later, also a similar type of thing should exist. In fact, it is one of our priorities that, you know, top two customers, how do we bring it to a manageable level. Of course, our goal is that no customer should be higher than 15%. We are already at 20. I think we will maintain this good practice. 3-5 years, Nitish, if we ask to see, there'll be a lot more. Dependence on which customer is not really the thing. It is which customer of ours does well in the market, which is the harder part to predict. Who sells how many cars is not something we can control. We will do our best for every single customer first, right? How they perform in the market is not something which is a controllable factor that we have. Our job is to get as many customers and as many programs. We are already with 26 customers. We will keep adding to this list. How they perform, you know, that's up to them and to the end customer who's the king after all, who decides which vehicle to buy. That person, he or she decides the fate of all of us. Got it. Thank you, and all the best. Thanks, Nitij. We go to the next caller, Sonal Gupta. Hi, Sonal. Your line is unmuted. Please go ahead. Hi. Can you hear me? Yes, Sonal. Please go ahead. Hi. congrats on a great quarter, and I think, what's more heartening to see is that every quarter you innovate and come up with new products for which, you're winning orders. I think, kudos to the team on that. That's very impressive. Just a couple of questions from my side. One, I would just wanted to understand, like, what are the CapEx targets that you're looking at over the next couple of years. Also, I mean, we have the Inflation Reduction Act in the US, will that sort of imply that you also look at some sort of a U.S. facility given that it's your largest market? Thanks, Sonal. Second part I'll answer that, we are always actively considering new facilities anywhere. The Inflation Reduction Act is not, it's actually more of an opportunity for us than otherwise. That's not that much, the first one, CapEx, I'll let Rohit answer that question. Generally, we save a particular time of revenue. Yeah. We're getting about INR 900 crores of CapEx over three years. I think for the next three years, the number would be more around INR 1,000-1,100 crores, because of some of the new orders and all. That's the three-year number in terms of CapEx. INR 1,000 crores-INR 1,100 crores? Yeah. Got it. Just, like, I mean, any thoughts around, like, I think, Nitij asked the question, like on the India traction- motor side, right? Like, because there's been a change in regulation and some customers have been impacted as well. How do you see that part of the business sort of moving ahead? It's 4% of our right now. I hope it grows, but like I said, what will happen with FAME II. That's why we are, I mean, forgive us, but it's our experience that we don't know which way the government and the regulation is going. We can't take that call. However, rest assured, I mean, it is the smallest market segment that we have. Hopefully it grows. We will keep trying to go in other directions in traction- motors also. Got it. I mean, just a follow-up on, with Rohit. On, like, on the commodity cost side, have we seen all the benefit other than the alloy steel, which where we have not seen any benefit, but for others like copper, et cetera, I mean, like, I mean, would we broadly say that, all what needed to be passed on to us has been done? You know, on the commodity prices, whether it is with the vendors or with the customers, there are no periodic cycles. You know, it could be a three-month, six-month settlement cycle. For example, copper could be LME. That's only link is to know the price will automatically adjust. Understood. Yeah. I don't know if Rohit was so clear. It wasn't very clear to me. Basically, all of these price are through mechanisms of pretty well fixed and are contractual in nature. They are usually linked to one or the other index, one or the other global index like LME or the Gadha index. It's very transparent. If it happens, it comes through. There isn't much, I would say, things to worry about there. Copper and aluminum have softened a little bit, so that benefit must have already come in, but not that much by the way. Got it. Great. Thanks a lot for taking my question. Thank you. Actually, alloy steel, sir, why different is because it's. We buy all our alloy steel in India. Now there are geographical disparities. Steel may cost different things in different geographies. It's not very usual. Usually it's lockstep and all commodity move in tandem. This is a slight difference, right? Okay, great. Thanks a lot. Okay, we go to the next caller. Caller is Jyoti. I think he. Yeah, Jyoti has dropped off the line. We'll take Hitesh. Hitesh Goel, your line is unmute. Please go ahead, Hitesh. it's Hitesh. Diana Yeah. Congratulations on a very good set of results, actually. Thank you. My questions are basically, first is on this, PLI incentive, you know, which our firm is one of the biggest beneficiaries. Can you give us some sense, have you started getting in, those incentives as yet or what is, where is the, you know, where are we on that right now? You know, so I don't think anybody's got it, but so neither have we. Rohit can answer that better. Hitesh, our understanding is that nobody is going to be getting, I'm talking of only auto PLI right now for FY23, because I believe it's now been linked with the product approval and product approvals are all in the pipeline. You know, now it should kick in only after the products are approved. The government has recently come out with the SOP, which they've been drafting. We are also going through it. But like I said, our understanding is for FY23, probably nobody is getting it. Going forward, once the products are approved for each of the participant, that's when you start to get it. Do we get it for the retrospective basis or only for, say, FY24? My understanding is FY24 onwards. These things are still, I mean, I would say early days, my broadly, my understanding is that it will be with a prospective effect, not with retrospective effect. I think Hitesh, just as we do in our company from the analyst perspective also take the most conservative view because I don't think it's a area we want to be optimistic on. These things seldom pan out in the most optimistic fashion. Yeah. Great. My second question is, just a housekeeping one also on this. You know, there's other income which comes in the fourth quarter, right? In standalone. Which is, you know, that's why standalone PAT is higher than consolidated PAT. Can you tell me what it is, Rohit? Just so that- It would be intragroup dividend, which Sona would have received from subsidiaries. Okay, okay. That comes in the Q4. That's why there's a skip. It's not necessary, but yeah, normally it comes in the Q4. Your observation is right. Okay. Okay, okay. Thank you. All the best. Thank you. Thank you, Hitesh. Thank you very much, ladies and gentlemen. We are now at the end of the session, and we would like to invite Mr. Vivek to do a quick closing remark. Sure. I hope there is nobody whose hand is raised and we have not answered. I would love to take all questions, but if there isn't, well, thank you. Thank you again for giving us your valuable time and attention. If you do have anything which is specific and actionable and can improve our performance or our communication, please do send it to us. Yeah, see you all in the next quarter. Thank you. On behalf of Nomura, I thank you for joining this call. I thank the management of Sona Comstar for taking out time. Diana, we can close the call now. Thank you very much. Thank you. Certainly. Thank you everyone for participating. Have a good evening. I think there are questions in the Q&A chat. Actually, there were. I didn't know how to see it. Yeah, there were several questions. I just opened it. Okay, we should have answered them, but it's okay now. We've kinda logged off so. Amit, I think you can respond to them individually. Yeah. Okay. Bye everyone. Mr. Deshmukh, I'll see you in the evening. Yeah. as you. Bye, Diana. Goodbye. Have a good evening. Thank you so much. I'll send the question over to Hitesh and then we will take it from there. Thanks, Diana. Thank you. Thank you. Thank you, Diana. Thank you.