Good day, and welcome to the Tube Investments Q2 FY 2024 earnings conference call, hosted by IIFL Securities Ltd. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anupam Gupta from IIFL Securities Ltd. Over to you, sir. Yeah, thanks, Andrew, and welcome everyone to Tube Investments Q2 FY 2024 results conference call. From the management, we have Mr. Vellayan Subbiah, Executive Vice Chairman at TI; Mr. Arun Murugappan, Chairman at TI; Mr. Mukesh Ahuja, Managing Director; Mr. Meyyappan, Chief Financial Officer; Mr. K.R. Srinivasan, President and Whole-Time Director for Metal Formed Products business; Mr. Murali, President at Tube Products of India; Mr. U. Rajagopal, Senior VP at TI Cycles; Mr. N. Govindarajan, CEO for 3xper Innoventure Limited, and Mr. K.K. Paul, President of TI Cycles. To start off, I'll hand it over to Mr. Subbiah for opening remarks, after which we'll have the question and answers. Over to you, sir. Anupam, thanks so much, and, good morning, everybody. So I'll just go through the results quickly. In terms of standalone results for the quarter, the revenue was at INR 1,970 crore, as against INR 1,906 crore in the same quarter, same period for the previous year. The PBT, before exceptional items and tax, was INR 245 crore as against 226 in the same period previous year. And the ROIC annualized was at 67% as against 62% in the same period. Free cash flow for the quarter was INR 108 crore. I'll just go through a quick review of the businesses. In engineering, the revenue was at INR 1,274 crore compared to INR 1,192 crore, and the PBIT was INR 169 crore as against INR 165 crore in the corresponding quarter. Metal form was at revenue was at INR 400 crore, compared with INR 371 crore in the corresponding quarter, and PBIT was INR 53 crore for the quarter, compared to INR 48 crore. The mobility business, the revenue for the quarter, this is our bicycle business, was INR 177 crore compared with INR 226 crore in the corresponding quarter, and the last was INR 3 crore as against a profit of INR 10 crore. That business is going through a bit of a slump in terms of demand. Other businesses were at INR 207 crore compared with INR 188 crore, and PBIT was 17 compared to eight in the corresponding quarter of the previous year. In terms of consolidated results, our consolidated revenue for the quarter was INR 4,306 crore as against INR 3,767 crore in the corresponding quarter. The profit before the share of profit of an associate joint venture exceptional items in tax for the quarter was INR 493 crore as against INR 435 crore in the corresponding quarter of the previous year. CG Power and Industrial Solutions, a subsidiary in which the company holds a 58.05% stake, registered a consolidated revenue of at least INR 2,002 crore during the quarter, as against INR 1,675 crore in the corresponding quarter of the previous year. PBT, before exceptional items for the quarter, was INR 303 crore, as against INR 237 crore in the corresponding quarter of the previous year. Shanthi Gears, in which the company holds a 70.47% stake, registered a revenue of INR 135 crore for the quarter, as against INR 109 crore in the corresponding, and PBT was INR 30 crore, as against INR 23 crore in the corresponding quarter. Commenting on the results, Mr. A. M. Arunachalam, the Chairman of TI, said that the company displayed strong performance in a challenging business environment, sustaining growth in profits and profitability. The bicycle industry continues to suffer from contraction in demand, and our bicycle business continues its cost reduction initiatives and improving operational efficiency through Kaizen. Despite muted performance for the bicycle business, the company registered a 27% growth in PAT, with strong performance from engineering and metal form product divisions. The performance of our subsidiaries, CG Power and Shanthi, has also been very encouraging in both strong top line and bottom line growth. I think broadly, just to give you a sense on revenues, there is also a movement because of lower steel prices compared to the same period last year. Let me stop with that, and I'd be happy to take questions from the audience and as will all the rest of us on our team. Thank you. Thank you so much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Jinesh Gandhi from MOFSL. Please go ahead. Hi, sir. Congrats on good numbers. Quickly, on you indicated about the impact of steel prices and other commodity prices impacting revenue growth. Any sense on how volumes would have grown for both engineering and metal form business? Yeah, Mukesh, do you just want to answer that? Yes, the total volume growth is about 13%-14% in engineering and steel together. Sorry, engineering is 13%-14% volume growth? Both put together, we think 13%-14% volume growth in the volumes. For both the businesses. Got it. Got it. And particularly for engineering business, we were seeing some challenges in exports till last quarter. I mean, is export business now stabilizing? There is some signs of recovery in previous quarter as well. Are you seeing sustenance of those factors? Has exports started to grow or not yet? Yes, compared to previous quarter, exports have grown, and we see that the trajectory is going in to see the improvement in coming quarters as well. Okay. When you say previous quarter, well, on QoQ basis, exports have grown? Yes. YoY, would it still be lower because last year's base was high, so that would have declined still on YoY basis, right? Yes. Okay, okay. Got it. And lastly, before I fall back in queue, on the electric three-wheeler side, we are yet to see material ramp up in our supplies. We are still doing about 200 units a month. Any sense on how do we see this ramping up, where we are in terms of, I mean, what are the challenges today, given that we are gradually in three states as things stand? Is it production side issue, or we are just waiting for proper feedback from the ground before we start ramping up our production? Can you throw more light on that, please? Yes, certainly. Paul, would you like to answer, and I can add on? Yeah, I think, on the electric three-wheeler side, month-on-month, we are improving the volume. This month will also be better off than the previous, month. Cumulatively, you know, we are actually doubling up the volume each month. That's what's happening now. There are challenges in the supply chain that we are ironing out, and, the order book that we currently have is for a month and a half, and we are expanding our dealer network. So all in all, we should be doing better and better in the coming quarters. Okay, okay. We are still in three states, right? We have to expand beyond the three certain states. No, we have now actually expanded in north. So we are doing shop openings in Kanpur, Dehradun, Delhi, and other locations up there also. And we started some suppliers to up there also. And we started some suppliers to north as well. So gradually we are expanding. By the end of the year, we should be at about, we should have a dealer strength of around 72-73 dealers as against the current 40. Sorry, against current, you said it's 40? Current 42 numbers. 42. Got it. Got it. Great. Thanks, I'll fall back in queue. Thank you so much. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Rishabh from RBSA Investment Managers. Please go ahead. Yeah, hi, sir. Good morning. So just wanted to understand, as per your estimates, what could be the adoption levels for EVs as a percentage of industry across your three-wheeler, HCV, and tractors at the end of three years from now? I think it's very difficult to make predictions, and we don't, we don't want to be in that business either. We obviously, I think the broad data that most people have seen is kind of on the overall global predictions, twice they've already been revised upwards, in terms of EV adoption. You know, we continue to be very bullish about, you know, potential in India, but, obviously, we don't want to kind of predict any specific numbers. We're obviously overall very bullish on the levels of adoption that we think are going to happen in the next year. Sir, secondly, just a clarification. We understand that the new businesses in the Tier 2 bucket would have a 40%-50% success rate. So would the success rate be sufficient so that the company, on an overall basis, achieves the, you know, say, 20%+ profit CAGR over the decades? Yes, definitely. I mean, I think that definitely, I mean, I think the success rate will be a bit higher than that, but definitely even with that success rate, we will get the profit CAGR as we can. Okay. Just the last question from my side. Any potential sector or identified a target company in the Tier 3 bucket? Since it's been almost three years since we looked at CG now, I was just checking if there's anything. No, as we've said, we continue to monitor different targets, but right now, valuations on most things are very high, and, you know, we've been very clear that we don't want to overpay or even kind of pay, you know, for any assets that are kind of, you know, that are not. We prefer Q3 assets, basically. Right, and so we don't see too many assets in a reasonable valuation range right now for Tier 3. Just last question from my side. So since you're expanding in the, you know, out of southern markets right now, any, you know, specific strategy that we have to pursue differently getting out of the southern market, since, you know, we have a certain home advantage there on, let's say, brand building or distribution side, or the strategy is the same across markets? Hello, Mr. Rishabh, I'm really sorry to interrupt here. Okay. Could you just hold on to your question for a moment because the chairman, Mr. Arun Murugappan, has been disconnected. Okay, sure. I will get him connected. Ladies and gentlemen, please stay on the line while I get the chairman connected. Yeah. But anyway, we can continue, I think. Hello, can you hear me, Rishabh? Yes, yes, yes, yes. Okay. Yeah. So I think, as far as, you know, you're asking if for three-wheeler, we're taking a different strategy or not, is that your question? Yeah, three-wheeler and tractor, general basis, both, for both. For EV in general, right? Yes, yes. Paul, do you wanna just answer, take your answer? Ladies and gentlemen, I've got, Mr. Arun Murugappan, the Chairman, connected. You may please continue. Yeah. By and large, the overall branding strategy, et cetera, will remain quite consistent in the way that we are building the brand. But in terms of practically how many dealers to have, where to have, that would be different for different segments. For the tractor, the first launch will be between July and August. So we look at the selected markets that account for large shares of that range, and therefore launch the product in those markets actually. So that's how it would pan out as we move forward. Okay, thank you so much. Thank you. Thank you so much. A reminder to all the participants, you may press Star and One to ask a question. The next question is from the line of Sunder, from Avendus Spark. Please go ahead, sir. Hi, thanks for the opportunity. My first question is for Mr. Mukesh. So one clarification here is that we've grown at about 13%-14% in terms of volume, while the underlying category growth, specifically the industry, is not been to this number. So what's really led to this outperformance in terms of volume growth for us? I agree with you that two-wheeler is not growing, but if we see, passenger vehicles has done pretty good, as well as commercial vehicle industry and the three-wheeler also are getting a pretty good strong growth. As well as our focus on the non-auto segment, as well as the exports, as well as to the growth of, growth of around 13%. Would you be comfortable in quantifying the export percentage? As of now, it is hovering around 14%-15%. Okay. This would be very similar to what we had in the past, the 14%-15%. The overall growth in domestic market, what I said in non-auto as well as commercial vehicle and three-wheeler are pretty strong. So this, that's why growth percentage get explosive. Volume is also in the game. Anything to add on the railway segment, sir? Railway, we have to pick up, we are also working on our capability building things, and we have three coming quarters, we should be able to do better in trains. Sir, one other bookkeeping question in terms of steel price pass through, you indicated a couple of quarters back. It's It's different other two quarters. Is the complete price pass through done with? In commercial? Steel price pass through, sir. Should we agree that the complete price pass through is done with, is over? So we don't normally explain, like, well, like that, we don't predict what is going to happen to the price, but we have an arrangement with our OEMs and the customers on base work, whether it will be increase or decrease scenario, we are able to settle with our customers accordingly. Right. And just one other point that I wanted to talk to Mr. Vellayan to action out here, which is from a larger scheme of things, specifically on the EV, HCV segment. Because there were a few news articles that had mentioned that there was an order book of about INR 1,000 crore on the HCV segment, which was about a couple of years ago. So what really happened in the HCV segment? Would you be comfortable in quantifying in terms of the revenues, how much is HCV, how much is HCV? Any color there, sir? Yeah, so the HCV, you know, so just to give you a perspective, the order book that you're talking about was kind of, you know, when they were predominantly being pitched in an OpEx mode, right? Basically being sold in an OpEx mode. Whereas we have moved it to a construct where we have a strong preference to sell them, and are only selling them right now in a CapEx mode, right, which basically somebody pays for the entire asset up front. So the process and the second thing we've done is kind of spend a lot of time reengineering the product as well. We have started shipping the product in the last quarter, and volumes are kind of just started ramping up. So, you know, basically it'll take at least a couple of quarters, because first, customers want to trial the product. So in a CapEx mode, the, the sales cycle tends to be longer, because first customers want to trial the product, then they buy one or two of them. And when they start, working well for them is when they start scaling up their buying. And so we basically changed both the sales process and the product there, and it's just starting to ramp up in the new structure. So just a continuation with that, interestingly, in the last annual report, you had mentioned that you'll be also exploring the other models. But, but have you finalized that only on the CapEx model? ... Yeah, we're initially going to sell them in the CapEx model, that is correct. Right. So and, and one last question from my side is that, on the EV, obviously, there is another pending investment that is about another INR 1,000 crore by, by March of 2024. Any progress that you would like to share on that front, sir? Sorry, you said? On the TI CMPL side- Right. You said about another INR 1,000 crore of investment by March 2024. I think many investors is what you are targeting on that overall- In process. We're in the process of a raise in that, in that, in that segment. Right. We are going. We're in the middle of a raising process. A bit cheeky here, but, but is there going to be valuations how are looking from the previous round of increases? So we obviously can't comment on something that's in process, but you know, at that point, we've indicated how we would go about it, and we are not veered from that. We're still taking the same approach we've indicated then. Perfect, sir. Thank you, and all the best, sir. Thank you. Thank you. The next question is from the line of Vipul Kumar Shah from Sumangal Investment. Please go ahead. Hi, sir. Thanks for the opportunity. Can you comment on the progress of our EV tractor and this EV heavy-duty truck? What is the progress? What is the sales volume, and what type of CapEx we are looking for these two divisions? So I just talked about the EV heavy-duty truck, so I don't think I have to repeat that. I just kind of answered the question on the heavy-duty truck. On the tractor, we have said, and we continue to maintain, that we'll basically get it homologated in the Q1 next year, and then basically, you know, it will start selling. Yeah, so homologated in the first calendar quarter, and then, we, we'll start selling it in the first fiscal quarter. So January, February, March is when we will submit the first model, which is a 27 horsepower equivalent for homologation, and then it will go into, say, start of production in April, May, June. So directionally, if for a few quarters or we will see EBITDA losses increasing as the sales volume increases in all three EV products, sir? Yes, that is correct. That is correct. Okay. Okay. standalone or consolidated. Obviously, that doesn't come in the standalone numbers. It's part of the consolidated. Yeah, yeah, consolidated numbers. Okay, and sir, we are investing in- On EBITDA losses, you know. So we don't think that they will increase significantly. They're kind of more or less steady state, and we maintain them at steady state is where we're at. And so with more and more of the plant build-outs done, right? So basically, most of the plant build-outs are done with the exception of the small commercial vehicles. So once the plant build-outs are done, you know, the products should be more or less steady state in terms of, you know, where our EBITDA losses are. This quarter's EBITDA losses should be taken as a baseline? This is, Yeah, it is around INR 52 crore, if I remember correctly, for EV products. Yeah, so I mean, if you leave CapEx and some of the other things out of it, obviously, we won't kind of show EBITDA, but directionally, I believe that's correct, yeah. And so lastly, we are investing in so many initiatives from CDMO to EVs. So don't you think even if all initiatives succeed, TI will be a holding company, and generally, market gives a substantial discount of 50%-70% to the holding company. So your thoughts, please, on this particular aspect of regarding valuation of TI? Yeah, so we've discussed this idea on kind of capital structure before. So what we have said is that, you know, first, let's kind of the businesses grow, right? So I mean, there are two things here. This is, one is we are first more focused on business growth than on valuation. So first, we want to focus on getting the business growth story right, and then we'll think about capital structure after that, right? But I don't think it makes sense to optimize only for capital structure, because first we have to be focused to get on business growth. Okay, sir. Thank you, and all the best. Yeah. Thank you. Thank you so much. Before we take the next question, a reminder to all the participants that you may press Star and one to ask a question. The next question is from the line of Abhishek Ghosh from DSP. Please go ahead. Hi, sir. Thank you so much for the opportunity. So my first question is for the engineering division. Now, that's a division that used to be earlier very heavy on two-wheelers, and as an industry, we have seen that, you know, growth in underlying two-wheelers has been fairly muted. So given the diversification that you have done in terms of exports, non-auto and other things, what is the, you know, growth rate that one should assume on a sustainable basis from this division, given the diversification that you have done? Sir, any thoughts? So we are likely, including the last call, we can give you a growth rate of around three to five years, about 12%-15% in growth. Okay. Are there any scope of market share gains here, or does that still exist, or have we kind of, our market shares are fairly elevated here? Any thoughts? No, we are continuously working on that. Even this quarter also, there are some gains in shares, which is reflecting in the quarter volume growth. So wherever the opportunities are there for the new product development and any participation, we'll do an individual, participating there, and, we continue to work on that. Okay. Okay. So we've also seen a healthy margin improvement in the current quarter. Is that because of mix, or is it because of operating leverage or the cost initiatives? Any, any thoughts on the same? So it's a combination of three, four things. Like we indicated earlier, we are working on the carbon initiatives, which is adding to the operating efficiency. Also, product mix is a continuous focus, and participating new initiatives like light weighting, which is one of the new industries, and the export focus continues to where margins are much better. So it's a combination of three, four things. It's not one leveraging anything, and we are focused on all four sides. Okay. Okay, that's very helpful. So just coming to the metal form division, you spoke about railways still hasn't kind of picked up, but there are some tenders which are supposed to be ordered out. Any update on that, and how should one look at the outlook on that? Because railways overall, we are seeing an improvement in the overall CapEx cycle, so how should we look at this aspect? Like your observation is right. Railway has these tenders, and now we are participating in those tenders. In coming quarters, we see that railway revenue should grow. Okay. Okay. And have we added any new client as far as the door frame part of the business is concerned? Any new client addition that has been done in that? Arun, you will take this? Yeah, as far as door frame is concerned, we are likely to participate in the western region project of Vande Bharat, which has already been published in the media. So we'll be actively participating in that. That's a new project. Okay. Okay, that's helpful. And just about on the EV part of it, you mentioned about some supply chains challenges. Has that got resolved? What are the learnings, how we are implementing? Some software will be helpful. I think it's this call here, I think it is getting resolved. We are working very closely with the concerned vendors to get the TCU replaced. So our central quality R&D, we are all working together along with the vendor to see that the TCU is here. And we are making substantial progress. Yeah, and the cost what was there will be in the Q1 versus the cost at the end of Q2 in terms of the material cost, this coming down. And we have a clear roadmap to get there, because we have individual contribution targets for the different products, and we are working on a very focused manner now in terms of getting that organized. Okay. Okay. So you don't think that can be a constraint for the ramp-up of the monthly volumes that you are doing? You think that should get resolved over a period of next couple of quarters, given the kind of work that you're doing with the vendor? Monthly volumes also we are adjusted to that. That's number one. Number two, as I told you, you know, at number one. Number two, as I told you, you know, at least in the three years where we are ramping up now, we are able to ramp up the volumes significantly month-on-month, you know, in terms of this. So that gives us the confidence that we will overcome this challenge in relation to the plan that we are making. That's number one. Taking on from this learning, we are working proactively on the tractor bill of materials, you know, for the variants that Mr. Vellayan talked about, that we'll be launching, so that, you know, we at the launch time, we are, you know, having a matched BOM cost to the selling price. That's how I answered you. Yes, sir. Thank you so much for answering in such a detailed manner. So just one last question from my side is, if you look at your broad cash flow, you know, you're generating almost about INR 300-400 crore of cash flow in the first half. So broadly, annual cash flow will be of INR 700-800 crore. How should one look at the allocation there in terms of CapEx and any other things? If you can just broadly articulate that, that would be helpful. Thanks. Hey, I think we've talked about this a bit in the past, which is like, you know, like, you know, we've announced the expansion for engineering, and that will come into the cash flows and kind of usage of cash this year. So broadly, we're going to use it for... Right now, it's getting, you know, used more for TI 1 and TI 2 opportunities, and that's the focus right now. And, you know, the and which opportunities we targeted at is gonna be based on where we see the best return option. Strategically, the sectors we want to be in as we take a longer-term horizon to it. I think that this is fundamental to, you know, what I would call this reshaping of TI, where we said we wanted to diversify away from the an auto supplier. So I think that, you know, if you're asking for specifically where will we deploy that cash, I think it will vary. We have a list of pipeline opportunities that we have as potential areas where we want to deploy the cash, and we constantly keep evaluating based on the best options, which are both given the financial returns and strategic movement in terms of where we want to move the company in the future. Okay. So would it be fair to assume that TI 1, TI 2 will broadly consume about INR 300 crore-INR 400 crore of annual CapEx? Would that be a fair assumption? It could be, I mean, between-- Yeah, it could be even more, no? Okay. Okay, okay. And sir, one of the areas you had, you know, mentioned, where we are seeing a lot of traction in terms of the overall, electronics manufacturing or the, you know, the mobile-related, you know, the mobile-related value addition. Any progress? Because we are hearing a lot of these, localization happening, a lot of the, development there. So any thoughts on that, sir? Yeah, we continue to focus on it. You know, but we continue to explore and are identifying what we think will be the right first step to take in that segment. And when we are ready, we'll basically and talk about it. Thanks for asking the question. Great. Thank you so much, and wish you all the best. Thank you, sir. Thank you. Thank you so much. A reminder to all the participants, you may press Star and One to ask a question. The next question is from the line of Mr. Anupam Gupta from IIFL. Over to you, sir. Yeah. So firstly, if you can talk about the, the optic lens business, any update on that in terms of, ramp-up, what's happening, from the client side perspective? Yes, Anupam. I mean, we've got product approval from the first customer, and now we're still in midst of discussions with them in terms of what volumes they can take, and, and pricing. And once we have that finalized, we'll start manufacturing product. Let's say if you look at this possibly in terms of the existing capacity which you have and possible customer additions beyond the first one. Also, what sort of, let's say, if you look at two-three years horizon, what sort of contribution can the business have to TI? No, if it, I mean, if it scales, you know, what we said was kind of what we built was, you know, a fairly low CapEx investment at that point in time. So if it, if it starts scaling, we will have to invest more in it. So that's why I don't want to comment on it first, till we have a successful customer. So I don't want to get into any of that till we first show customer success and product success. Okay, understand. And sir, on your other initiative, which you had taken earlier, so the truck body building or the TMT, any thought of... So since those are not scaling, I assume, based on whatever we understand, what is the thought process on those businesses, and how do you take a call on what to do with, with those? Yeah. So definitely, what we will do is those businesses we will evaluate. My sense is by the end of this year, we will have kind of a final answer on what we're going to do with them. So we'll come back to that. Okay, fine. And, if you can talk a bit more, about the Lotus and the CDMO businesses. So CDMO, I understand you are in the process of setting up the plant, but, I understand you will be also talking to the customers. So if you can just give some picture on what's happening on CDMO and then also on the plan for Lotus. Mukesh, is Dinesh also on the call? CDMO, you know, I'll let Govind give you a quick update. Is Dinesh also on the call? If not, Mukesh, one of us can give an update on Lotus. First, maybe, Govind, you can just give a quick update on where we are on CDMO. Sure. I think First, the lab is getting ready, and, in fact, we are waiting. We have applied for the company to operate, and that should approve in the next week or so, like a week or maximum 10 days, 10 working days, and then we should be able to commission the lab. The objective was to first to start the API business. Already the customer meetings are on. I think as we are speaking, our business development forces are in the market. And, we also, paid for a 20-acre plot in Hyderabad, and we have got the confirmation letter, and we are waiting for the allotment letter. Already finalized engineering consultants, and once the allotment letter is there, we'll be ready to move in with the project team and start the construction. So that's the plan as of now. Okay. And any, sir, any specific? So you said AP, but any specific niches that you are targeting or how we look at beyond once you start the plant? So, the strategy here is to ensure that we would be doing both the contract manufacturing as well as a certain percentage of the business will also do certain APIs. And we are also introducing certain degrees of differentiation by introducing platform technologies. We are already tied up with a player on continuous process for pharmaceutical products, and we have also, like, signed an MOU for enzyme biocatalysis and enzymatic process. So these platforms would be utilized for both positioning ourselves and getting contract manufacturing, as well as we would pick up certain traditional APIs and make it more cost-effective using these platforms to go to the market. So that's the plan. And the product development would start as soon as the land or the permits are obtained, and we are starting the lab. Okay. And, just one last thing on hiring, what sort of employee base you have created at this point of time? The lab would house around 120- 130 people at the peak. At this venture, we are having around 15, 16 people who have been onboard, already on board. And once the lab gets commissioned as the business progresses, we'll be increasing those things as far as the lab is concerned. The plan as we progress with the construction, will increase the manpower as we move towards the commissioning aspects. Thank you. Yeah, coming to the Lotus, as you are aware, we said in the earlier call, as far as acquiring these businesses, we can increase the share of business in Indian markets, followed by we'll be concentrating on the export markets. And the domestic team are fully focused on how we can do more penetration on the supplying to more nursing homes and do the penetration of more geographies in India. That work is on, and last quarter was pretty good. We've grown almost close to 30%+, compared to last quarter. And this work will continue, and we are also seeking to do some backward integration to increase the operating margins for this product. That's answer your question. We've also seen an improvement already in operating margins. Both in operating margins and in revenues. But QOQ, it doesn't visible, it's not visible in the numbers, especially because if you look at the numbers, it's actually QOQ, the revenues appear to be flat. If I take the 10th May sort of acquisition date, and margins are actually looking down QOQ. So that's why the, what's happening there and what's the plan? Because it is two months only in the quarter. Yeah. So that's why. So once you adjust for that, it appears to be flat. That's what the thing was. But that's fine. Just one last question on Lotus. Will you need to do CapEx there again for expanding capacity to cater to the market, which you are talking about? Yeah, Vellayan, do you want to do this? Sure, sure. So for doing current volume and the market penetration, we don't need any CapEx. But however, we want to take care of the total supply chain. In that, we'll be doing some CapEx in the coming quarters. Okay. Fine. And so just one question on the Cycles business. So this obviously is struggling, given the weak demand domestically. And earlier, you had talked about the export opportunity, if you are able to get your costs down. So what's the progress on the Cycles business at this point of time, and how will you... So I understand it's a cash positive business, but still, what's the call on a very long-term business? So our focus, see, basically, the whole business now needs to get reoriented, right? The only scalable solution for that business in the long term is for India to become an alternate export hub, right? And I think that there's legs for that, given that, you know, China Plus One is now kind of beginning to play out, and people have, a lot of people appear to have, you know, either anti-dumping duties with China or basically want to curb the amount they import from China. So that requires a whole turnaround in positioning, which we're focused on. But again, it's gonna be a journey that takes time because we have to get, you know, we have to start ramping up on the export side, and it's not gonna happen overnight. It's a journey we are focused on. Let us go through that process first before we, Okay. Just one question. You had responded to Abhishek's question for Electronics, that you are looking at various opportunities there. What will be the model we are looking to do? Will it be, let's say, a more manufacturing base, where you are looking for technology-based acquisitions? So once we've got it finalized, we'll share it with you. I mean, I think that we're evaluating obviously right now. I don't want to comment on it till we... Once we finalize, we'll share it with you. Sure. Sure. That's all from my side. Thank you. Thank you so much. A reminder to all the participants, you may press Star and One to ask a question. All right. So, ladies and gentlemen, as there are no further questions from the participants, I would now hand the conference over to the management for the closing comments. Over to you. Yeah, no, I think from our perspective, we continue to be focused on, you know, the, you know, both in the core financial metrics in the core business and on the TI 2 efforts and ensuring that, you know, they are driven to success. And, you know, we continue to be very bullish both on, you know, what we, the initial green shoots we're beginning to see on the EV side and on some of the new growth businesses. And, so we're very encouraged and bullish overall. So I think that's it from my side. Thank you so much, sir. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you. Thank you. Thank you all.