Ladies and gentlemen, Good day and welcome to the Q2 and H1 FY27 earnings conference call of Tenneco Clean Air India Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the business update concludes. Should you need assistance during the call, please signal an operator by pressing star followed by 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Roopali Singh, General Counsel and Company Secretary of Tenneco Clean Air India Limited. Thank you, and over to you, Ms. Roopali. Thank you, Vikram. Good evening, ladies and gentlemen, and a warm welcome. Today from management side, we have with us Mr. Arvind Chandra, Whole Time Director and CEO, Mr. Mahender Chhabra, the Chief Financial Officer. A detailed presentation on the financial performance is available on the company's website and on the website of the stock exchanges as well. We will begin with Mr. Chandra providing a business update, followed by Mr. Chhabra covering the financial results. We expect the updates to take around 15 minutes, after which we would open the floor for the Q&A session of about 45 minutes. Before we proceed further, I would like to draw your attention to the cautionary statement which is already included in the presentation. With that, I hand over the call to Arvind. Thank you, Roopali. Uh, good afternoon everyone. Thank you for joining us for Tenneco Clean Air India's Q2 and H1 FY27 earnings call. Before I begin, with Diwali around the corner, I would like to take this opportunity to wish all of you and your families a very happy and prosperous Diwali. May the festive season bring happiness, good health, and prosperity to everyone. I am pleased to report another strong quarter, Q2 and H1 FY27, for the company, building on the encouraging start we made to the year. The first half of FY27 has been marked by healthy growth across our businesses, continued market share gains, and several important customer and technology wins. This performance reflects the strength of our portfolio, our strong customer relationships, and consistent execution across both advanced ride technologies and clean air and powertrain. During the second quarter, our value-added revenue grew 32.2% year on year, supported by volume growth of 25.4%. For the first half, value-added revenue grew 25.3%. Compared to volume growth of 20.7%. This growth has been supported by our continuous demand— by continued demand across our served markets, new program launches, and increasing content per vehicle. Beyond the financial performance, I am particularly pleased with the progress we continue to make in strengthening our competitive position. According to the CRISIL Research report, Our market share in clean air solutions for the commercial truck segment increased further to 59% in H1 FY27 compared to 58% in FY26 and 57% in FY25. In passenger vehicle shock absorbers and struts, also known as the ART business, we continue to maintain a strong leadership position with market share of approximately 55%. You would recall that just a year and a half ago, that share was only 48%. Let me now talk about some of the developments across our businesses during the quarter. In Advanced Ride Technologies, we continue to see strong momentum across both existing and new customers. We secured content on 3 new vehicle platforms with a leading Indo-Chinese joint venture. We also made an important entry into the fast-growing 3-wheeler segment. Where our— where we won suspension business with the leading Indo-Korean joint venture. This opens up another addressable market for our suspension portfolio and further broadens our customer base. We continue to build on the momentum behind our unique Da Vinci technology as well. During the quarter, we started production for 3-door Thar suspension program. We also secured 2 generation— next generation models with an existing leading Japanese passenger vehicle OEM and are further expanding our engagement with a Vietnamese OEM. With the introduction of 3 new platforms. Another important highlight is the commercialization of advanced suspension technology in India. We supplied India's first locally produced semi-active CBSAE marking a very important step in our localization journey and demonstrating the strength of our local engineering and technology capabilities. Turning to our Clean Air and Powertrain business, we made progress across commercial vehicle, alternative fuel, and ignition applications. During the quarter, we introduced a new hot-end commercial vehicle exhaust program with the leading Indian commercial vehicle OEM for bus applications. We also made a strategic entry into the CNG market through a cold-end assembly program for a European passenger vehicle application. In Powertrain, we further expanded our share of the business with an existing customer through a new spark plug award from a European passenger vehicle manufacturer. Taken together, these wins demonstrate that our growth opportunity is not dependent on any single product, customer, or end market. We are expanding across platforms, applications and geographies while continuing to build on our existing customer relationships. Let me now spend some time on our order book, which provides us with very good visibility into our future growth. At the end of the first half, our lifetime order book stood at approximately INR 165,000 million. This represents more than 100% coverage of our FY2030 revenue target, giving us good visibility towards our longer-term growth ambitions. Exports accounted for INR 8,750 million of the total order book. Exports continue to form an important part of this opportunity. Our export order book now provides 50% coverage of our target FY2030 export revenue. The strength of this order pipeline is also driving our investment priorities. We continue to invest in capacity expansion, localization, and technology to support future customer requirements. This includes another new clean air manufacturing facility in West India. With an investment of approximately INR 450 million. Innovation and localization remain equally important to our long-term strategy. We continue to invest in local engineering capabilities to develop in-house solutions for our OEM customers. Now, beyond financial performance, we remain committed to sustainable and responsible growth. We were honored to receive the Best Manufacturing Brand Award from ETH and the National Green Future Leadership Award from the National CSR Leadership Congress. These recognitions reflect the dedication of our teams and our unwavering focus on operational excellence, innovation, and sustainability. As we look to the second half of the year, we remain encouraged by the underlying momentum across our businesses. The combination of a robust order book, continued customer wins, and technology-led growth increasing export opportunities and investments behind our future capacity gives us confidence in our longer-term growth trajectory. At the same time, the external environment continues to present challenges, particularly from inflationary pressure— pressures. including commodity-related cost increases. We remain focused on addressing these through productivity, commercial discipline, and rigorous execution across our operations as part of our P3 People Performance Pride Culture and Operations framework. Overall, I believe the first half demonstrates the resilience of our business model and the progress we continue to make in strengthening our competitive position. With that said, I will hand it over to our Chief Financial Officer, Mahender Chhabra, to take you through our financial performance in greater detail. Thanks, Arvind. Good afternoon, everyone. As we enter the festive season, I would like to extend my best wishes to everyone for a happy Diwali. May the occasion bring joy and happiness to you and your families. Now let me take you through the financial performance for the 2nd quarter and first half of FY27. As always, we use value-added revenue, or VAR, as our primary operating performance metric. As it excludes pass-through substrate costs and provides a more meaningful view of the underlying operating performance and profitability of our business. This is consistent with how we have reported our financial performance in the past. We delivered another strong quarter, building on the momentum from the start of the year. Revenue from operations increased 34.2% year on year to INR ₹17,183 million, while value-added revenue grew 32.2% to INR ₹15,229 million. For the first half of FY27, revenue from operations stood at INR ₹32,633 million. growing 27.2% year on year, while value-added revenue reached INR ₹29,044 million, an increase of 25.3% year on year. Looking at the performance across our businesses, our growth remained quite broad-based. Clean Air and Powertrain Solutions delivered value-added revenue of INR ₹7,218 million in Q2 FY27. growing 26.6% year on year. For H1 FY27, value-added revenue stood at INR ₹13,843 million, representing growth of 17.8% year on year. This growth was supported by healthy underlying volumes and the continued ramp-up of the programs across our Clean Air and Powertrain portfolio. On the other side, Advanced Technologies continued to deliver strong growth with value-added revenue of INR ₹8,010 million in Q2 FY27, an increase of 37.8% year on year. For H1 FY27, value-added revenue reached INR ₹15,201 million, growing 32.9% year on year. The performance was supported by strong production volumes, ramp-up of new programs, and the increasing content across customer platforms. This performance reflects the continued scale-up of our business and execution against our existing export programs. From a profitability perspective, EBITDA for Q2 increased 20.7% year on year to INR ₹2,616 million, translating into EBITDA margin of 17.2% on value added. The way we talk. For H1 FY27, EBITDA increased 14.1% year on year to INR ₹5,085 million with an EBITDA margin of 17.5% on value-added revenue. Moving further, profit after tax for the 2nd quarter stood at ₹1,734 million, representing growth of 15% year on year. And for H1 FY27, Profit after tax stood at ₹3,386 million, growing 6.2% year on year. EAT compared with EBITDA during the first half should be reviewed in the context of a one-time interest income benefit of approx INR 254 million net of tax. Related to the sale of MotoCare entity, which was recognized in H1 of previous year and therefore created a higher base for comparison. Excluding this one-off item, the PAT would have been in line with the EBITDA growth. Our profitability during the period was impacted by inflationary headwinds, including commodity costs arising from geopolitical environment, increase in the minimum wages in couple of states, weakening currency and the premium fleet, plus the cost associated with operating as a publicly listed company. Despite these pressures, the impact was partially offset through commercial recoveries, productivity improvements, and disciplined cost management, enabling us to maintain healthy profitability. Our operating performance continues to benefit from the maturity of Tenneco's P3 operating model, which is people, pride, and performance. This framework remains deeply embedded across our operations and continues to drive improvements across safety, quality, delivery, inventory management, and cost competitiveness. Our balance sheet remains strong, supported by capital-efficient operating model. We remain debt-free and continue to maintain a net cash position. Our cash conversion cycle stood at negative 22 days. Reflecting disciplined working capital management and strong cash generation efficiency. This enables us to fund our capital expenditure and growth requirements through internal accruals while maintaining financial flexibility for future investments. Uh, we booked business already covering more than 100% of FY30 revenue plan. We have strong visibility on the medium-term growth trajectory. Supported by domestic as well as export programs. We continue to invest ahead of these commitments through planned capacity expansion across the country, including a new plant for cleaner in West India. This new clean air plant will generate additional capacity of 12 to 14% for hot ends. To summarize, Q2 FY27 saw strong growth and continued momentum across both our business segments, resilient profitability despite inflationary headwinds, and a strong balance sheet. We remain focused on disciplined execution, commercial rigor, operational excellence, and proactively manage— proactive management of external risks as we continue to pursue sustainable and profitable growth. With this, we'll now open the floor for questions. Thank you. Thank you, Mahender. We will now be moving to the Q&A session. Uh, we would request the participants to kindly limit the questions to 2 at a time. If you have any additional questions, please rejoin the queue. I would now hand over the meeting to the moderator to commence the Q&A session. Thank you very much. Thank you, ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Radha from Motilal Oswal. Please go ahead. Hi team, thank you for the opportunity and congratulations on good performance. So my question was regarding the margin compression in this quarter that has happened in the subsidiaries. which majorly contains the suspension and other businesses, from 14% levels to 11.6% in this quarter. So wanted to understand how much of this is due to commodity pass-through lag, and by when do you think it can be recovered back to previous levels? Yeah, thanks for the question. So, uh, as we know, this quarter, uh, was impacted by the inflationary headwinds, uh, which is mainly on account of the Middle East situation. Where the prices of commodities had gone up, which included steel and non-steel items like lube oil, plastic, rubber, and all. Now, before some of these commodities like steel, we do have an arrangement with our OEMs. Where we recover this money from the OEMs. There could be a time lag of a quarter or so, but for the other items, uh, like lube oil, plastic, and rubber, these are the non-deduct items, and we kind of keep on discussing and negotiating with the OEMs to recover as much as we can. We have been able— we have been successful in recovering a part of that, and the discussions with the customers are ongoing. And as and when we are able to recover that amount, it would be part of the P&L. Okay, so by when can we expect it to reach back to previous levels? Because considering the product mix is also improving for the company in this expansion. So that should help cushion the margins. Yeah, so like I said, these are non-index items and this is all subject to our discussions and the outcome of those discussions. So the discussions are in progress. Difficult to commit a timeline for that, but yes, I mean, we will keep on having these discussions with our customers. Okay, uh, second question, sir. What will be the dividend payout policy? Is there a plan to start paying out dividends from this year? Well, we do have a dividend policy and it's there on the website. Uh, we would be taking a decision at the right time. So we do have good amount of cash and we are generating good amount of cash. I mean, even for the— this half, we generated a good amount of cash. Now, yes, we need to invest that cash. So we have been exploring the various opportunities, uh, where do we invest this cash. So this could be in terms of the investment. One is the investment within the business. Like we have— we had— we already announced 2 plants earlier and we have announced one more plant. So one is to invest behind the growth. That's one of the top priorities. Then we are also looking for any other growth opportunities where we can invest this money. And of course, dividend will also be one of the considerations as we move on. So difficult to say at this point of time how much dividend and when we would be declaring it, but yes, there is a dividend policy and we do have a capital allocation policy, and dividend is one of the considerations in that. Okay, sir. Thank you and all the best. Thank you. Thank you. Before we take the next question, a reminder to all the participants. If you wish to ask a question, please press star and 1. We will take the next question from Pradip Pandey from Axis Capital. Please go ahead. Yeah, hello sir, thank you for taking my question. My question, uh, was on exports. So if I recall correctly, sir, uh, in say at the end of FY26 the order book stood at about ₹12,400 crore, and you had indicated that the export order book would have stood at about 14 to 20% of the total order book. Uh, but in this quarter, the number seems to be in the ballpark range of 5 to 6% because it is about ₹800 crore on a base of ₹16,000 crore. Uh, so just like to just would like to understand, uh, uh, what has changed in 6 months and, and is it something that I'm reading wrong? And, uh, then another question on Accordingly, we will resultate the data maybe. Yeah, hi Pradeep, uh, thanks for your question. Uh, yeah, so, uh, last— you're right, FY26 with ₹12,400 crores order book. Exports came in somewhere between 14 to 20%. This quarter has been a bit less for a variety of reasons. I think one is the Again, when we export, we export to third-party OEMs as well as internal Tenneco to Tenneco, right? Tenneco India to Tenneco US and Europe. So the end-market OEMs, uh, the The market has been a bit soft in Western markets. They have slowed down specific to Western Europe and Americas. They have GDP contraction. And some of the vehicle deliveries themselves have stopped. And that's also made worse because of the China OEM successes that they've had with Chinese vehicle exports into those regions, slowing down the Western OEM production, right? Uh, it's especially acutely felt in Germany, France, UK, and even in the US. The second one is the US tariffs. There's a lot of uncertainty around the US tariffs having a negative or spooking effect on many OEMs, including as recently as mid-September when Trump threatened to have 100% tariff on India for buying Russian oil. All that spooked the market. So I think some of it just slowed down because of uncertain tariffs and also things like the oil prices going up, freight costs going up. So the business cases that we had before, everything got a little bit uncertain because of that. The EV adoption rates have also increased in some of the Western markets. And specifically to our order book, right, some SOP launches or startup production launches got delayed or even canceled due to the war, the uncertainty, tariffs, etc., as well as freight cost increases. So making some of the business cases worse. The other reason from a ratio standpoint is our domestic order book has been very, very strong, right? So we— our order book has been way more, way in excess of what we could have ever anticipated. Right. That's the other reason. Right. So having said that, I wouldn't worry about exports so much simply because, look, it's a cycle. And now with this yesterday's news about the midterm elections in the US, completely swaying away from the Trump administration. We're hoping that some of the things around like Iran war, just, you know, stopping the war, bringing oil prices back to what they were, bringing the freight costs back also. You know, getting rid of all the tariffs, at least what the Democrats have promised, should kind of ease up on some of these export concerns that they have. So I look overall, yes, it's low. Optically it looks low. But I think if you look at the grand scheme of things over time, knowing that India, Tenneco India, has such a strong labor cost advantage and also because of technology equalization, right? Whatever we are selling to, for example, Mahindra, Tata, and Clean Air Powertrain, and even let's say suspension systems like Da Vinci and semi-active suspension, the same product also sells in Europe and the US and so on. So when you have technology equalization, when you have India that has a strong labor arbitrage. We believe that the long-term conditions for export will remain strong, and many OEMs themselves are pushing more and more as many OEMs are struggling with their own profit margins in Western countries, they are demanding that a lot of that business be moved to India over time. So it's a, it's a little bit of a long-term journey here. So I'm not super concerned about this, this particular quarter export as a percentile of total order book. Yeah, thanks. Yeah, yeah. So as the base case, 800 to 900 crore would be the lifetime export order, sir, as of now? Yeah, I think it's 8,750, I believe. I didn't look at the number, but yeah, that's sort of the lifetime revenue. And, uh, okay, yeah, correct. Okay, okay. So just another question on the 3-wheeler suspension. Uh, congratulations on entering the segment. Uh, and what would the suspension be? Would it be passive in nature? And what shall be the content per vehicle? In 3-wheelers, because, uh, the passive in PEs are generally at the ballpark range of ₹5,000 to ₹6,000 per vehicle. How materially different or similar would it be in 3-wheelers? And when do you expect to make— when does that go into production? Right, well, great question. So first of all, we are very happy to see that after the success of the 4-wheeler suspension, especially Da Vinci and the SemiActive, Uh, there's one is there's been a FOMO, like a fear of missing out, with other OEMs beyond Mahindra. So everybody is coming to us asking for this, right? So there's a big disruption expected to happen in Da Vinci and CVSA are helping us get there. And you can see just by the sheer number of programs we're winning. Remember, a year and a half ago, our market share was only 48%. Now we're at 55%, which for the automotive industry is very, very strong, uh, um, you know, disruption, if you will, of that market itself. Now, hearing the news of 4-wheelers, even the 3-wheeler OEMs and the 2-wheeler OEMs are coming to us asking us, hey, can you do something? Can you Da Vinci this? Can you do that? So Right now we are winning a combination. I won't specify what exactly is the technology. We haven't announced it yet, but, uh, with both with Indo-Chinese OEMs, JVs, and also Indo-Korean, Indo-Japanese all of these other combinations of OEMs that also want to set up shop in India, they realize that Tenneco has a much better technical product and performance product, right? So The 3-wheeler is a good example of getting into that business. At the right time, we will announce the— obviously the customer name. We have to get the permission of the customers for that. But it will be a combination of conventional slowly moving into Da Vinci, and then that slowly moving into semi-active solution. Now, because it's a 3-wheeler kind of a EV, it probably means that it will start off as conventional but move into Da Vinci over time. Because Da Vinci, remember I said even the last time, the delta cost is not so much. But the advantage in terms of comfort is, you know, it takes you 80% of the way there, right? So just bear with us. Quarter over quarter, you will notice that our foray into 3-wheelers 2-wheelers, also with, you know, all these JVs coming in, especially with Chinese OEMs. I would like to win more and more with Chinese OEMs. I think that, that would be a huge advantage for us. Okay, thank you so much, sir, and congratulations on a good set of numbers this quarter. Thank you so much. Thank you. Next question is from the line of Viraj Sanghvi from Ambit Capital. Please go ahead. Hi, uh, thank you for taking my question, sir. Uh, my question is on the clean air and powertrain, uh, business where growth has kind of recovered this quarter almost after 3 quarters of underperformance. It has been tracking the segmental auto production growth this quarter. So I just wanted to understand what is the outlook over here in terms of growth. Do you think you'll kind of going forward grow in line with the auto production volumes at least? And the capacity expansion over here also, is that for the large PV OEM with whom you are not present earlier? So that's my first question. Great question. Thanks so much. So look, like we always believe that, see, clean air and powertrain business you have to look at the, the whole world as our market, right? And and because of a very strong order book, a lot of those order books are being, uh, are being converted to production, right? So clean air— see, right now, what is our clean air issue, right? So we are serving all the markets, right? Passenger vehicles, commercial truck, off-highway, and we have very high market shares. Now the only thing is we are not present in Maruti right now, but you know, in the future we will be there in 2029, as we said in the earlier quarter, you know, press releases. And because of the advent of EV, right? But despite that, if, for example, now if you were to take out EV, we'll take out Maruti, we are actually doing much better in terms of volume-to-volume comparison. The industry production volume without EV, without Maruti, grew by, let's say, about 13.3%. And our Tenneco sales volume for clean air grew by 18-plus percent. So we are growing market share. Through Tata, through, you know, through Volvo I-Share, through Ashok Leyland, etc., right? But having said that, now let's talk about exports. So exports also, now we recently had a very successful Euro 7 POC, proof of concept, at the leading Western truck OEM in Europe. And that means that we are BS 7— sorry, we are Euro 7 ready even before BS7 was announced. And BS7 recently got announced, right? You know that the passenger vehicles will be 2029, the light commercial vehicles will be 2030, and then heavy commercial vehicles will be 2031. So we are ready and we believe that we have a superior product. So we think that the growth rate for clean air and powertrain will continue to grow. Not just in domestic markets but also in export markets. Because here's the other thing, right? As the market's moving to electrification, many of the OEMs that are still selling ICE vehicles— and by the way, ICE is going to continue for a very long time, both petrol and diesel and in all forms, right? CNG, biodiesel, all kinds of combinations, ethanol. What's happening is many of the OEMs want to source exhaust systems of the future from India. And this is where we are ready because we are technology ready. OEMs have the desire to source more out of India, and I think that's where we will come in. So overall, I think that growth will be maintained. Of course, I cannot forecast what that's going to be, but it will be a good growth. When you take the full global market into consideration. Got it, sir. Uh, secondly, sir, uh, the orders inflow— both the orders inflow and the revenue growth in your suspension business has been very good, almost upwards of 30% in first half as well. But, uh, so the EBITDA growth, uh, in, uh, X of Clean Air Solution business is almost only 10%, uh, YOY in the first half. Uh, I understand there would be some bit of commodity pressure and conversion cost pressure over here, but just the scale benefit, the operating leverage doesn't seem to be coming in over there in the suspension business. So how should we look at the margins going forward over there? Okay, I'll start and then maybe, Mahender, you can add more detail. So look, suspension is a technology game, right? Over time, as our— as we are disrupting the market as DaVinci and semi-active suspension start creating their own niche, um, the profit margins will increase because that's the way new technology works, right? And we are clearly the market leader. So as these technologies proliferate and and penetrate the market in bigger numbers, the mix of higher margin DaVincis and semi-active suspension should increase as a percentage of the total, right? Right now, you know, 90% of the Indian market is still running on conventional suspension, but that is drastically changing. Look at Mahindra, for example. Mahindra has decided that they don't want to have conventional suspension anymore. That's it. Once the, once the consumer has tasted DaVinci, anything else sounds very, very tepid. And that too, DaVinci can even now go on an A-segment vehicle. You know that last time we announced last quarter that We have now come up with a smaller diameter damper to also meet the needs of an A-segment vehicle. So we can go down as much as, you know, 5-6 lakhs even if you have— if you had to, in terms of the vehicle cost, the MSRP of the vehicle. So with DaVinci having that kind of a market impact, as it starts disrupting, the margins will improve. I cannot tell you what that exchange of margin will be over time, but definitely it's moving to a higher margin plateau as the conventionals are getting replaced. And the battle is only internally, just for us to be able to keep adding capacities. We've already announced a new suspension plant in west of India, and guess what? That plant's also going to run out of capacity very soon. So we will keep on adding plants just to meet the sheer crazy growth of the suspension business and that too the growth is all happening in technology, right. So I think that's how it'll be. Maybe, Mahender, if you can address the commodity impact for now, at least for the Q2? Yeah, so I mean, if you look at the current quarter and likewise the previous quarter, we know there was an impact of the commodity prices increase. Like I mentioned, mainly oil. Like oil, we have about 330 ml that goes into one— this thing. So about 1.2 liter oil goes into all the 4 suspension systems in a vehicle. And there has been a huge increase in prices of the oil. Now since it is as of now a non-indexed commodity, we are discussing with the OEMs to recover that. And, uh, as and when we are able to recover that, because as of now, since it is not a, uh, it's not a non-indexed item and not a contractual commitment, we can't take that into the P&L till the time we have a confirmation from the OEMs. So as and when our discussions kind of move in the positive direction, then we have some positive kind of, uh, response from the OEMs. We'll see the benefit of that coming to the P&L. Sure, sir. And, uh, Mahendra sir, lastly, if you could just help us with the export revenue in first half and the CAPEX target for the full year. Uh, that would be my questions. Thank you so much. Yeah, so as far as CapEx is concerned, we had given a guidance of about ₹350 to ₹450 crore INR for this fiscal year FY27. We, as at September end, I think we have invested close to ₹120 crore, and we should be on track to cut off the— meet the numbers that we had indicated earlier. In terms of export, like, it's about 7% of our revenue for the current quarter. Sure. Thank you so much, sir. Thank you. Thank you. Next question is from the line of Himanshu Singh from Baroda BNP Paribas. Please go ahead. Yeah, hi sir, thank you for the opportunity. So my question is on the order book. Uh, we have seen the export order book actually falling by almost 50% on a YOY basis. So, uh, can you just highlight what is the reason? Have we lost any customer or what has happened? Um, thanks, Himanshu, for the question. Uh, yeah, I think I already answered it a little bit earlier. Just to kind of reiterate, right, this— I, I don't worry about it so much simply because this is a just a one quarterly number. Uh, what has actually happened is the end markets have slowed down, and in Western markets, GDP contraction declining vehicle production, and also made worse because of the Chinese influx. Chinese OEMs have been entering those markets. Of course, US is trying to put bans and tariffs, and so is Europe, on Chinese OEMs. But that has had a damper on order book. I think the main effect is more to do with threatening of US tariffs, you know, the Trump administration threatening 100% tariffs on India for buying Russian oil, freight costs going up due to the Middle East crisis, oil prices going up. So all the business case, everybody sort of put a few things on hold, on hold, just to see, wait and see, wait for the midterm elections to see if there will be any change. I strongly suspect that after the news of the last 2 days, things will loosen up. One is the war hopefully will come to an end. The tariffs will come down to something that's reasonable and those GDP contractions will stop. You're already seeing some sort of rally across the world. For us, you know, some of the SOPs got delayed and also cancelled, again, all related to the war uncertainty and also because of tariffs and so on. So I think this is a temporary thing. I think over time we will catch up. We do have very strong labor cost arbitrage. We have excellent technology, which means we are on par with technology that is being sold in the US and Europe, for example. It's not like we are lagging behind when it comes to technology or equalization. So we are able to do that, plus with our labor cost arbitrage, we are able to export across the world. I strongly suspect in areas like clean air and powertrain that will actually accelerate, mainly because many of the OEMs over there, Western OEMs themselves who are not making very good profit, are really pushing for India to be an export hub for them. So that thing— Over time, you'll notice that it'll come back. The other thing is, from a ratio perspective, our domestic order book was very, very strong, right? Way stronger than what we thought it would be. So exports as a, as a percentage of the total order book looks on a percentage basis small, mainly because your denominator has increased on the domestic side. Hope that answers the question. Yeah, sure. Was the cancellations from our own group entities or direct to order customers? No, actually, in the end, intercompany also, finally they sell to a third party, right? We are a Tier 1 supplier. So yeah, in the end, it's third-party OEMs. Many off-highway customers, for example, said that, wait, we're going to delay the production of this particular model or we're going to cancel it and wait for it to come up next year. So that's the other reason. So I think, look, all of this is a temporary lull. There's been a lot of political uncertainty, especially around the Americas, and a little bit of that is affecting Europe as well. So I think once those things are— they settle down, I think our exports will come back because our basic formula for exports hasn't changed, right? We have the technology at the, at the Western OEM level, right? We have the quality, we have the ability to deliver. We are already doing that across over 14, 15 countries today, and we have a very strong labor cost advantage. that nobody can beat us on, right? क्वेश्चन क्वेश्चन या वगैरह कैंसलेशन साथ में इंटर कंपनी और थर्ड पार्ट I think that, that still remains. Sure. And just last question on the new CapEx which we have announced, the hot-end CapEx which is operating at 99% utilization. So will we see a mix kind of deteriorating towards cold-end in the meantime until the new CapEx comes online? Look, hot end is way more profitable than cold end. So I'm very happy to have more and more CapEx and new plant additions where we're focusing on hot end because the profit delta is significantly better for hot end. Why? Because hot end obviously has the 3-way catalyst, or it has the, you know, OxyCat, you know, particulate filter, SCR, and so on. So because we have mixers and So the fluid flow on the hot end and the technology and the science that goes on the hot end is way more than that of a cold end, which is basically a pipe and a muffling device, right? So I think look at it from a profit mix standpoint. So as our hot-end business grows, from a mix standpoint, that also helps us vis-à-vis the cold end. Right, right. So my question was like, we have— we are already utilizing 99% of our capacity and the new capacity will take some time to come online, right? So will we see the mix deteriorating towards cold end? Or no, will we do a debottlenecking and will increase the capacity? How do you see? No, we, we are, we're not going to be bottlenecked by it. So what we're doing is we're adding a new plant in the west, west of India for clean air with a ₹45 crore investment just to deal with this additional volume. So somewhere around, let's say, ₹300K or hot-end systems will get added on top of the existing base that we have somewhere around 2 million, right? So we're just basically adding more capacity via a new plant. To support our customers in west of India. So these are obviously the Tata Mahindras of the world. So it's good, it's all good. We're just adding a plant and again that plant is going to also get filled up very quickly. That's the way we're doing it in a way where we have maximum utilization. You know that in one of the earlier calls I mentioned that we have a very, very unique standardized and modular way of working, which means we are able to run very high volumes of basic Lego parts that can come together, and that explains why we are sort of asset right now. Asset turnover is very high, our return on capital employed is very high. So for clean air, that's a very huge advantage for us. So with very— with depreciated assets, with a very standardized module on the same line, the canning line, we can run multiple parts. So this, the same canning line can run a Kidloskar generator exhaust system. It can run an Ashok Leyland big, you know, heavy-duty exhaust system. It can also run a Mahindra vehicle, like a diesel engine exhaust system, right? So you can run all of that in the same line. So all that has an advantage. So that, that gives us the ability to have a very good ratio of revenue to the CapEx intensity. Sure, sir. Thank you so much. Thank you. Next question is from the line of Rajat Agarwal from Nilgiri Advisors. Please go ahead. capacity addition announcements which were made in February and May. And the reason I'm asking is the announcement that was made in May, it said the capacity of hotend products is 1.97 and you were adding around, uh, 250K of hotend product systems. And the current announcement says the capacity is 2 to 2.2. So has, has that been commercialized? Hi, uh, thank you for taking my question. Just staying with the capacity, uh, could you, uh, advise the status of the 2 Yeah, so, uh, so we have 4 plants for clean air which we mentioned, which we have mentioned earlier as well. The plant that we announced earlier which is coming in the northern part of the country, that would be should be up for SOP starting March 27th. Now in terms of installed capacity, to some extent it varies on the product mix as well, whether we are doing hotend production for commercial vehicles or for PV. So the capacity is close to 2 million, but it could slightly go up and down depending on the product mix. Okay, so the cold end product expansion and the hot end product expansion announced in February, the SOP will begin in March of 2027, right? Yeah, that's right, roughly. Yeah, yeah, roughly around that. And so the North India plant will have both hotend and coldend capacity increases. Um, I'm again, I'm eyeballing it, but 10% increase. And this plant in the west of India, that adds another 12 to 14%, something like that, capacity increase. And that's more focused on the hot end. And like I said, mix-wise, we are delighted because that gives us a much better margin mix, right? As the— as we add plants that are more hotend-focused, then the margin mix is better for us. Right, and the capacity addition announced in May for 2.1 million both front strut and rear shock absorbers. It said it'll come up in 2 phases, one in FY27 and another in FY28. Does that still, as in the status stays the same or is there any change? Yeah, so we're basically doing it half and half, right? So we'll probably add a million by July. And again, it's more about getting the full annualized value of that, right, because we will be starting to add capacity only like mid-year. 1 million this year, next million, uh, next year another million. So it will give you another 2 million shocks of capacity, uh, on top of the 19 million we have, uh, which is the basic, uh, base capacity across the many plants we have. Got it. Okay, so the next question is on, uh, related to the FY30 revenue target that you have referred to in your presentation. So is there a number to it? Uh, what the number that you're looking at? I mean, I couldn't find that number anywhere, so I might have missed it. Yeah, so we don't disclose obviously future revenues, but I think what we're trying to do is to just provide comfort that our, uh, our order book is so healthy that it gives us very strong conviction that we will have a nice healthy double-digit growth that takes us all the way through FY30. So FY30 revenues are fully covered. So whatever we have planned pre-IPO that's comfortably covered, um, by, uh, for the year FY30. You recall that in earlier quarters we said, okay, FY28, we are probably, you know, 80-90% and then finally 100% covered. But now we have enough confidence to say that by FY30 also, the FY30 revenue number will be 100% covered. But if you just stack all the order book lifetime revenues year after year in terms of the start of production, the ramp up, peak, and then ramp down, that gives us a lot of confidence and comfort that it's going to be a good growth for us in the future. Right, just a small clarification to it. I— you're saying the order book covers the revenue or total revenue, cumulative revenue up to FY30? Not just the FY30 revenue. No, FY30, right, so if you take just the bar FY30 revenues, right, whatever that is, let's say that's X, that was planned, we're very happy to report that all of that X we're able to cover now. Good. So that is for 1 year and not just cumulative for 4 to 5 years? Yeah, just for that 1 year, which means, you know, next year we'll be able to probably say that, hey, we can even probably do FY31 at this. So now obviously FY31 probably will be at a lesser percentage coverage because, you know, there's a lead time because we have a long sales cycle, there's a lead time to it. But by next year, with the continued success of our, our business, we will be able to provide more comfort on the Uh, coverage of a particular year, if that makes sense. Right, got it. Can I add a quick question? Yeah, sure. Do you share the total number of customers as on 30th September? Is it possible? And the same number for FY26 end? We've not, uh, announced. I think we just did that during the RHP. After that, we haven't said that. But I think all I'll give you comfort is that, you know, once we have a customer, we never lose them. We We've got 30-40 years with some of these customers and all we're doing is growing with them. And in fact, like, like you saw in today's, uh, the announcement, we are picking up customers that we never had before. Which is fantastic. I'm delighted to have Indo-Chinese, Indo-Korean, Indo-Japanese, all possible, uh, you know, coverages we are okay with, especially by the white space that we still don't have. So that's the reason why we keep, uh, picking up market share across the board, and we're quite happy with that. Right, no, it's, it's very heartening to, uh, to know and hear about the customer additions. And that's precisely why I was asking, because you've been adding so many customers and so many, uh, you know, uh, you're increasing your wallet share as well. Anyway, thanks a lot for your time. Thank you. Thanks, thanks, Rajiv. Thank you. Next question is from the line of S.A. Narayan from Capricorn Research. Please go ahead. Uh, I understand you are putting up 3 new facilities. Where are these to be located? Yeah, sure. So the clean air facility that we announced first, that's located in, in the north of India, obviously supplying to supply Maruti and Mahindra and some of the others in the north. Then we announced the suspension plant for ART, Advanced Ride Technologies, that's in west of India. That was the second announcement we made in our prior quarter. And this quarter we are saying we are adding one more clean air plant also in west— western India. Obviously, when you say West India, Mahindra and Tata, that, that's sort of the center of gravity, center of gravity there. So look, this is all because of our order book, right? And as you can see, our order book is stronger and stronger, and it— because of the health of our order book, you can be sure that we'll be adding many more plants in the future. So these are in nearness to the OEMs, right? You are, you are taking care of logistics there. Sorry, if you're asking, is— are these for Indian OEMs? Yes, Indian OEMs, but also a portion of exports will also, uh, figure in there. Yeah, fair, I understand. When will these facilities go live, all 3 of them? When will they go commercial? So the first plant that we said clean in the northern part of the country, that would be— the SOP should start sometime in March. 27, close to that. Then for advanced technologies, which would be in West India, that should kind of begin SOP sometime in July 27th. And the plant that we announced like yesterday, today, uh, the clean air plant in West India, there we are expecting the SOP to start around September 27th. All in calendar year '27. That's right, as of now, yes, we all these should start in next— give it a plus or minus a couple of months here and there, right? It all depends on the customer volumes, etc. So it'll be again, it's approximate a month. Yes. Okay, and what finally, what is the payback period for these facilities, units? This is— without giving you the answer, we can say with a smile on our faces that this is a great story for us, right? We are— our asset utilization and efficiency is among the best in all of India. And, and that explains why, you know, last— as of March 31st last year, last financial year, our ROCE was 94%. Think about that. And, and even fixed asset turnover is upwards of 8:1, right? So I think 9:1. So I think As we deploy our capital, see, we have the advantage of using depreciated assets. We also buy assets at fair market value from our sister divisions in Europe and US. So as their volumes are declining, there's a lot of capital PEX that's sitting around, uh, that we want to buy, right, at a much lower cost. So, I mean, we can tell you the fixed asset turnover that we have. So whatever we have been investing, uh, we generate revenue of, let's say, 3 to 4x on a gross block. To start with, it can be 3, and as we keep on utilizing it more and more, we reach the optimum capacity utilization, it can go up to 4. So from investment, you can figure out how much. Yeah, I think And then we bring it in, and that also gives us an advantage of a lower CapEx base. And of course, because of our standardized modular nature of how we manufacture stuff, the efficiency is very high. So multiple plants can make the same product. The same line can make multiple segments at the same time, which is very, very efficient from that standpoint, right? Fair enough. Nice of you. Thanks for responding. All the very best to you and great Diwali to you and your team. Thank you so much, Mr. Narayan. Thank you. Next question is from the line of Shabham Agarwal from FIL. Please go ahead. Hi. Hi, Arvind. Thanks for the opportunity. First question is on— you've mentioned that there have been 2 next-generation model wins in Japanese OEMs for the ART business. Uh, can you give some more color on this? Is this for DaVinci or the passive suspensions or FDD? Um, it's a combination of both, um, because Um, like for the existing customer base, most of them want the DaVinci, right? They want to upgrade. But for new customers where we have not had business historically, they want a mix of both, right? They're like, okay, on the maybe AB segment we want this, the basic conventional suspension, and on the new ones we want DaVinci. So there's a— there's like a pecking order and a sequence to these things. They also want to feel comfort that, okay, here's a new supplier, even though we're quite well known, you know, 55% of market share means more than 1 out of 2 cars and SUVs in India have a Tenneco shock absorber. But having said that, there's still that remaining white space that we are trying to go after. And so these business wins are a combination of conventional and DaVinci. And DaVinci also is like, you know, we, we have to set up the capacity, right? We also have to kind of bring the piston line in-house, you know, localize it, automate it, and things like that. So there is— there's going to be some gestation period to that. But the demand is huge. The demand is way more on DaVinci than we can supply today. So that's the reason why we are scrambling to create space in Hosur in our plant to allow for that DaVinci growth to happen. And a lot of that legacy commodity, let's say shock absorber lines from Hosur and Bangalore. Some of that we'll move to West India in this new plant. So that's it. We're just kind of playing little, you know, we're juggling chairs around to allow for this new technology CapEx to be created in Hosur. Hosur is our pillar plant because Hosur is where also our engineering center is located for the ART business. Okay. So to summarize, what I understand is that these 2 next-generation model wins for the Japanese PV, they're a mix of both Passive as well as DaVinci, in short, right? Right. And as the comfort grows, there'll be more and more DaVinci replacements because the delta cost is so small. You know, they will see that there's value, right? A few thousand rupees where a delta cost for an 11 lakh rupee car, right? You know, there's no— it's a no-brainer. Right. Yeah, that is the story across— that is the story for the whole DaVinci to go forward anyway. But just specifically for the Japanese PV OEM wins, this is a mix at this point of time. So you have some DaVinci wins also. So Japanese OEs will be introducing DaVinci is my understanding. Yeah, at some point. So don't forget that, you know, I mean, Maruti Toyota, we have very high— at Maruti Toyota, we have very high share of business. So I, I can't say what's going to be launched when because it's still a discussion we're having, but, uh, It will happen at some point. Okay, uh, my second one is on the margin pressure in the subsidiary. Uh, the margin pressure out here in the subsidiary is quite high compared to the standalone business. Uh, while we've mentioned commodity being the key headwind and we also see that in gross margin, consol, but can you give more color on what's leading to this sharp drop in subsidiary Uh, profitability, because yeah, it's large. Yeah, no, it's largely on account of the commodity prices. Uh, there are no other reasons for that. And like I said, commodity prices could be bifurcated into index and non-index. Uh, index we have been able to recover from the customers. Non-index is something which is subject to discussion. So there's no other reason. When I say, uh, when I say the impact of this commodity price, it also includes the forex impact, which again we have been kind of discussing with the customers to kind of compensate us for that. So it's largely on account of the geopolitical impact on the price. So, uh, fair to say that the proportion of non-indexed costs is significantly higher in the subsidiaries? Uh, I mean, some— one of the— in some subsidiary it could be, yes. Yeah, it could be oil, plastic, rubber, and yes, the forex impact that I mentioned about. Okay, and, um, And can you, uh, can you give some more in-depth color on what are those commodities like? Is it plastics? Is it more forex-oriented? Is Yeah, it mainly always Okay. Just to— sorry, but just to pull this thread forward, in the standalone business, we're not seeing any kind of margin pressure at this point of time, but we're seeing that So in the standalone, we don't have— we've already passed on all the commodity increases that have come. Is that fair? Oh yeah, that business has most of the kind of components are intact. That part of our business. All right, so it's mainly the steel here, so which is an indexed commodity. Okay, but in the— I'm so sorry to interrupt, Shubham. You may please rejoin the queue for follow-up questions. Thank you. Yeah. Next question is from the line of Adesh Gosalia from Spark Capital. Please go ahead. Hello, uh, hello, am I audible? You are audible. Yeah, you are audible. Yeah, uh, so firstly, congratulations on a good set of numbers. Uh, Uh, actually I missed, uh, some part in between, and if— sorry if I'm repeating the question, but, uh, it was mainly on the subsidiaries, uh, साइड डेट मार्जिन्स इन द एआरटी सेगमेंट्स सिंपली लोअर सो जस्ट वांटेड अ क्लेरिफिकेशन दैट ऑफ़ वेदर दे द आर रिलेटेड कमोडिटी ओनली बिकॉज़ पास थ्रू और इज़ दैट समथिंग एल्स बोलता है। So it's mainly on account of the commodity price, like I mentioned about the oil, low oil. So there has been a steep increase. Yeah, that's one of the main commodity which is impacting the profitability of the Advanced Blade Technology. Okay, okay, thank you. Thank you. Thank you, Iqra. Ladies and gentlemen, thank you so much for your continued interest in our company. We appreciate the time you have taken to participate in the meeting and look forward to meeting you in the next quarter as well. On behalf of the entire Tenneco India team, I wish you and your families a very happy Diwali. Thank you and a good evening. लेडीज एंड जेंटलमैन, दैट वाज़ द लास्ट क्वेश्चन फॉर टुडे। आई वुड नाउ लाइक टू हैंड द कॉन्फ्रेंस ओवर टू मिस रुपाली फॉर क्लोजिंग सिंह, जनरल काउंसल कमेंट्स। एंड कंपनी सेक्रेटरी Thank you very much. On behalf of Tenneco Clear and Clean Air India Limited, that concludes this conference. We thank you for joining today's call. You may now disconnect your lines.