Ladies and gentlemen, good day and welcome to Tube Investments Q2 FY25 earnings conference call hosted by IIFL Securities 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 presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anupam Gupta from IIFL Securities Limited. Over to you, sir. Yeah, thanks, folks. Good morning, everyone, and welcome to the second quarter call for Tube Investments of India. From the management, we have Mr. Vellayan Subbiah, Executive Vice Chairman for TI, Mr. Mukesh Ahuja, Managing Director, Mr. A N Meyyappan, Chief Financial Officer for TI, Mr. Shivdeep Singh Jamwal, VP, TPI, Mr. U Rajagopal, Senior VP for TI Cycles, Mr. N. Govindarajan, CEO for 3xperts, Mr. Anurag Vohra, CEO for the Clean Mobility Business, and Mr. S. Gopalakrishnan, CFO for the Clean Mobility Business. To start off, I'll hand it over to Mr. Subbiah for the opening remarks, and for that, we can have the Q&A. Over to you, sir. Yeah, thank you. Thank you so much. Revenue, so let's go through standalone results for the quarter, and then we'll open it up to Q&A. So revenue for the quarter was at INR 2,065 crores compared with INR 1,970 crores for the same period last year. PBT was at INR 225 crores, which is lower than what we were last year at INR 245 crores. ROIC annualized is at 45% for the quarter compared with 67% for the same period in the previous year, and free cash flow for the quarter was at INR 60 crores. In terms of the individual businesses, engineering revenue was at INR 1,323 crores compared with INR 1,274 crores in the corresponding quarter of the previous year, and PBIT for the quarter was INR 162 crores, as against INR 169 crores in the corresponding quarter. For metal formed products, revenue was at INR 404 crores compared with INR 400 crores in the corresponding quarter of the previous year, and PBIT was INR 46, as against INR 53 in the corresponding quarter of the previous year. For our bicycle business, revenue for the quarter was INR 168 crores compared with INR 177 in the corresponding quarter, and loss before interest and tax was at INR 0.36, as against INR 3 crores in the corresponding quarter of the previous year. And all other businesses, revenue was. Mr. Vellayan Subbiah, the line for the management seems to have disconnected. Please stay connected while we reconnect the management. Thank you. Thank you for waiting, participants. The management is reconnected. You can continue with the presentation. Hi, sorry about that. So for others, the revenue for the quarter was at 243 crores compared with 207 crores in the corresponding quarter previous year, and PBIT was at 9 crores, as against 17 crores in the corresponding quarter of the previous year. And TI's consolidated revenue for the quarter was at 4,925 crores, as against 4,306 crores in the corresponding quarter of the previous year, and the profit for the quarter was at 426 crores, as against 499 crores in the corresponding quarter of the previous year. CG Power, a subsidiary in which the company holds a 58% stake, registered consolidated revenue of INR 2,413 crores, as against INR 2,002 crores in the corresponding quarter, and profit before tax was at INR 294 crores, as against INR 303 crores in the corresponding quarter. Shanthi Gears registered a revenue of INR 155 crores, as against INR 135 crores in the corresponding quarter, and PBT was at INR 34 crores, as against INR 30 crores in the corresponding quarter of the previous year. So let me stop with that, and we'll be happy to turn it over to you for questions. Thank you. We will now begin the Q&A session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. We will wait for a moment while the question queue assembles. The first question is from the line of CA Garvit Gohil from Nvest Analytics Advisory LLP'. Please go ahead. Hello. Anupam Gupta, are you in? Yes, sir. Yeah, please go ahead. Good morning, sir. My first question is, in the last quarter, you mentioned about double-digit growth that we are seeing at a consolidated level. So when I look at actual numbers this year, we are up by 16% Yo Y in revenue terms, right? But if I look at the bottom line, that is declining due to fall in the margins. So can you comment, how do you look at this scenario, and do you see we will be able to improve our margins from here on and the top line as well in hand-in-hand in near to medium terms, sir? So that is my first question, sir. Yeah. So we do expect a better second- half. In terms of specific terms of margins, Mukesh Ahuja, do you just want to walk us through kind of what we see and kind of what happened? Yeah. On the standalone business, in the engineering business, the margin has grown, but particularly we had the one-time expenses in this quarter, which is one time, and they'll get corrected. Like Mr. Vellayan Subbiah said, that Q2 we expected to be much better. In terms of metal form division, we are facing issues with the railway business, and there we are to take some post-correction in terms of product development for the cost control, which team is on the job, and hopefully Q2 and Q3 will be better for the railway division. Like in the bicycle business, you see the losses are under control, and we are operating at a break-even. And we see now some export orders are coming in Q3 and Q4, and we expect those things will also be better going forward in the standalone business better. As far as at the consolidated level, even CG Power has done pretty well. Shanthi Gears has also done pretty well, and TI Clean, we all are aware that it's a growing business, which we will have some losses going forward, but at long-term basis, we are very, very bullish about this business also. That one-time expense you talked about, what is that? What is the nature of the expense? It is operational expenses, which are one-time. To just indicate numbers, it looks like a flat in the engineering division if we take care of those operational expenses one-time. So are you saying in H2 we will be witnessing improvement in the margins from here on, right? Yes, that's right. Fine. And secondly, sir, how many dealers do we have for electric three-wheelers right now? Currently, 83 dealers are operational. I think we were having a target of 150 by the end of this year. Is the target intact, or are we facing any challenges? Yeah, yeah. We will be on target. Basically, the team is in the process of appointing dealers in North, East, and West. The work is going on. We have also issued invoices for a number of dealers. By end of March, we'll be reaching the target as we planned. Lastly, sir, do you see any near-term risks in our segment, like engineering, power, and metal form products? No, no. We don't see a risk on those things. Rather, we are working on the simplicity of the auto industry. Plays like this, like you've seen in this quarter, PV and HCV both have not done well. So we are looking for maybe some initiative, how to further level supplying from the non-auto or some other initiative. So we don't foresee any risk in engineering as well as Metal Form. Understood, sir. I don't like the queue, sir. Thank you very much, and all the best for the future. Thank you. We would like to remind all our participants, if you wish to ask your questions, you may press star and one on your touch-tone phone. The next question comes from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah, hi. Thanks. I quickly want to check a clarification for the engineering business. You mentioned margins would have been flat if one-time expenses were not there. We would be second quarter of last year at about 13.3%. Is that the right understanding? Yeah, if we see this year quarter- on- quarter, maybe it's flat, and if we compare with the last year quarter, maybe let's see it's slightly down because of the one-time opex, and we are hopeful to get back in the next quarter itself. Okay. Okay. Got it. So sequentially, it would be flat margins if one-time expenses are not there. Secondly, if I look at the engineering business revenue growth, that seems to be much lower than what we have seen growth for the underlying industries, which it caters to two-wheelers and PVs in that context. Any reason why growth has been muted? I believe exports also have seen a recovery. So what is that I'm missing over here? So, Jinesh Gandhi, let's say, let me go segment by segment. Exports have done pretty well in this quarter. We have very high- double-digit growth here happened in the exports business, and two-wheeler also has done pretty well because the industry was supported, but as you are aware, PV and HCV industry didn't do well, so those segments, because of the market issues, which were beyond our control, but exports as well as two-wheeler, we have even gained shares as well as exports. We are bullish about it going forward. Okay. So exports for engineering are now close to 20% of engineering revenues, or still lower than that? That's right. It is 20%. Okay. Got it. And similarly for metal form business, how big railway business would be now? I believe that business has been not growing for some time now. So the share of railway now quite small for metal form? So, railway, basically, I mean, we are facing issues on the pricing side. So that's why margin is coming under pressure. But other parts of the business, whether it's auto chains or fine blanking, they're doing pretty well. So, railway, now we are controlling it. There's no point in quoting for the tenders, which are going to have an impact on the margin. So that business, but it is not very large. Maybe you can say about 15% of MFD revenues are coming from that division, and we need to take some actions going forward. Okay. The reason I'm asking is, again, this segment has seen a muted growth. I'm presuming this would be largely because of PVs being weak. Would that be right understanding? Yes. Like PV is weak. That's why maybe we are doing well in MF Auto also, which is door frame business. But like you said, that's because PV was almost leading to a negative growth. But margins were very well maintained in door frame business. Issue was basically railways. Right. Got it. And third question is on the electric mobility segment revenues, which grew 25% first quarter. If I look at the volumes for electric three-wheelers, they have gone up by more than 2x on sequential basis. So is that beyond electric three-wheelers, revenues have declined substantially in Q2, and hence overall e-mobility business growth is just 25% despite e-two-wheelers wholesales growing more than 100%? Jinesh, can you just repeat the question, please? Your voice is not clear. Can you? Oh, sorry. Is it better now? Yes. Yeah. So if I look at our electric three-wheeler wholesales in Q2, we are close to 3,800 versus 1,750 in Q1. Despite that, our e-mobility business revenues have just grown by about 25%. So is that business beyond electric three-wheelers has declined on sequential basis by a material amount? No. Sequential basis, there is a growth in the three-wheeler business. Yeah. Selected. See, in Q1, in three-wheeler, we sold around 1,063 vehicles. In Q2, we did around 2,033 numbers. So sequentially, if you look at the turnover, it went up, actually, from INR 68 crores to INR 79 crores in three-wheeler business. In IPL Tech also, we sold around 29 vehicles in Q1. In Q2, it was 42 vehicles numbers. So there also, the turnover went up INR 33 crores to INR 46 crores. So overall, if you look at the consolidated turnover, it has gone up from INR 117 crores to INR 146 crores in Q2. Got it. Any update on the existing markets in South India? How are market shares been trending on the three-wheelers in the markets where we have been present for some time now? How is the market evolution? How has been our market share evolution in those markets? Anurag ji you would like to answer? Yeah. Jinesh Gandhi, as far as the three-wheeler is concerned, in the southern markets where the first month was down, and we are growing our market share. We are still sustaining the high market share also in the southern region, which is almost close to 24%-25% plus. So that's how it has been, and beyond southern markets also, the volumes are now growing across the country. Okay. Sorry, I missed that number. You're saying southern markets have market share is 44%-45%? Did I catch that number properly? 24%-25%. Okay. Got it. Got it. Great. I have a few more questions. I'll come back in queue. Thank you. The next question is from the line of Anoj Frederick from Sundaram Mutual Fund. Please go ahead. Hi, sir. Thanks for the opportunity. Sir, my first question is on exports. So can you help me understand the share of exports apart from engineering, sir, like metal forms and others? Engineering, I understand, is 20%. Apart from that? Overall, it is 16% sales for this quarter. On the overall sales, 16% is exports. On overall sales. And sir, what's the outlook like if we are hearing some softness across multiple ancillary players? So what is your sense of export outlook? So we are participating more and more on the geography. But, like you said, Europe is going through a little bit. Those markets are softening. So we are alternatively trying the South Asia and the U.S. markets. And we hope to continue this momentum going forward. Okay, sir. Got it. And sir, the second question is on the subs. So on CDMO, what are the plans for scaling this up? Because it has been sequentially where it has been. So just some thoughts on the plan going forward. Just to share on the medical business, like you are already aware, CDMO, going due to take it because medical. Going? Yeah. Are you able to hear me? Yes, sir. Yes, sir. Very clear. Okay. On the CDMO, we have commissioned our lab, and we have already started working with the customers. So far, we are serving around 30 customers, and we've served around 44, 45 projects so far. And so far, most of the customers are continuing with us, I mean, coming with more and more number of projects. These customers include certain innovator companies directly, certain innovator companies through Scientist.com, apart from certain specialty chemical customers as well. As far as our plant is concerned, our Pilot Lab is already commissioned. And as far as the semi-commercial plant is concerned, we are planning to start our batches by end of November. And if everything goes, we are also waiting for one permission from the government in terms of environmental clearance. If that also happens within time, we'll be able to find one or two products by the end of first quarter after a few months of stability. Got it, sir. That's helpful, sir. So on medical, sorry. Mr. Anoj Frederick, please go ahead. Hello. Can you hear me? Can you hear me? Yes. Sir, got it. That's helpful. And sir, the final question is on the domestic growth outlook. We understand railways is under pressure, and PV and CVs are also under pressure. So apart from this, what gives us the confidence of generating the volume growth we are expecting from the growth side, sir? So one of the things, maybe let's say for TI, particularly engineering division, as well as MFD, we are fully diversified for all the segments of the auto industry. And parallelly, we are working on the non-auto applications like large and all these things. So this gives us a confidence that maybe it will keep on happening. Some segments will not do well. Some segments will do well. But total diversification for all the segments in the auto industry and the push on the non-auto as well as export side of the story gives us a confidence we will be able to grow going forward. Got it, sir. We are back in the queue. That was very helpful. Thanks. Thank you. A reminder to all the participants, if you wish to ask your questions, you may please press star and one on your touch-tone phone. The next question comes from the line of Anupam Gupta from IIFL Securities. Please go ahead. Yeah. Morning, sir. So the question first is on the clean mobility business. So while you are expanding your dealerships, what we have also seen is that in terms of the overall landscape, clearly Bajaj has emerged very strong, and they are now almost leading with Mahindra and Mahindra. So what is our plan, at least, especially in the three-wheeler side of it, to accelerate the sort of volume share there? And what can actually support that sort of volume growth to compete with the two large incumbents who are there? Can you repeat? Yeah. So Anupam Gupta, thanks for this question. See, what's happening is we are scaling up as we are going across the geographies. The product acceptance has been quite good in the market. The feedback from the customers is exceptionally well. And we are today now looking at how do we keep increasing the numbers. So as we grow, right now we are present, as we spoke about, close to around 80 + dealerships are there across 60, 65 cities. But as we keep growing on an all-India basis, we are improving our numbers, and we hope to also improve our market shares. Acceptance is good on the market. Okay, and especially the three-wheeler side of it, how soon will you be able to launch the cargo version as well? So cargo version also would be coming in the next couple of months. It will be there. The prototypes that we are testing, validation, customer trials are all going on. We will be also introducing the products in the next couple of months. Understood. Okay. And quickly, can you just update on the other launches? So let's say the SCV as well as the tractor, which are scheduled for this year. Both the other launches, which is the small commercial vehicle and the farm tractor, would also be coming in this quarter or next quarter. In the next, as I said, in the next couple of months, both the products would be there. Both the products are, as I said, the testing part, the photo testing, the beta testing, the customer testing, the field validation is in the progress. We hope in the next two to three months to bring both the products in the market. Okay. Okay. And just lastly, in the clean mobility side, sir, last quarter, you had said that you have seen improving traction for the IPLTech truck side of it. So any update there? And also what we have seen is Ashok Leyland has also launched a competitor for exactly the same segment. So how do you see that segment scaling up in terms of customer acceptance as well as, let's say, the competition coming in? Yeah. There again, it's taken a while for the customer to first accept the truck, then realize the economics from the truck. And now the customer confidence is very high. We are sitting on a good number of orders to be fulfilled in this quarter and in next quarter. And it's the segment-wise solutional approach which we have taken up. And customers, when they themselves realize the benefits of using an EV truck, though it's an expensive truck, a high CapEx, but then we have seen the operational economics and also the environmental benefits once we have realized. So I think it's a good confidence which we are getting from the customers. Understood. That's helpful, sir. Just one more question. Any update we have for Moshine business? We had mentioned that we were doing some trials with a few customers. Any update there for Moshine and what's the path ahead for that? I thought the trials were being done for the CMOS business, which is a lens business as a part of Auto. We are working on the, let's say, capability building to do larger lenses on that. And the work is in progress. We hope to finish it by next quarter. And so that we are trying to do development of alternate customers in that business. And we expect it to get completed by next quarter. Okay. Okay. Understood. So you said that is for the optical lens business? Optical lens business coming to Moshine. Maybe let's say they make the mobile camera business. And there, you are aware, the entire supply chain is controlled by China. And there is hardly any control in the ecosystem, particularly in India. So we continue to operate as of now, and we'll let you know going forward how to handle this. Sure. Sure. That's helpful, sir. I'll fall back in the queue. Thank you. Thank you. The next question is from the line of CA Garvit Gohil from Nvest Analytics Advisory LLP'. Please go ahead. Sir, my question is answered. Thank you. Thank you. The next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead. Yeah. My second question is on the industrial chains new plant, which we indicated is reaching its full capacity. So is the business momentum strong there? Do we need to invest in expanding the capacity now? How do we see that opportunity? So industrial chain, whatever greenfield plant we have put up, that is fully running, and we have a capacity available to further ramp up the business. Basically, we are targeting the segments, Agri as well as conveyor and lifting chains. So those development work is on. But the plant is fully commissioned and operational. And it's operating at full capacity or there is going to increase? Ramp- up. Ramp up is going to be okay. Got it. And lastly, the medical devices business that's just about 4% growth YoY. Is there any challenge in that business, or it's more of a timing difference leading to just 4% growth? So it's just a timing issue. We are doing pretty well in the domestic market. Even the last quarter growth was high double two digits in that business, around 18%-19%. And like you are aware, for exports market in the medical devices business, you have to follow a process of CE registration and all those processes are on. We expect another one quarter or two quarters, that process will be over. Then we'll see a good momentum going forward in the export business also. Got it. Got it. Great. Thanks and all the best. Thank you. The next question is from the line of Abhinav Ganeshan from SBI Pension Funds. Please go ahead. Good morning, sir. Thank you for taking my question. I just have two questions for you specifically on the electric three-wheeler business. So just wanted to understand, have we received the PLI benefits or have we applied and have we got the PLI certification for our e3W that we have launched? We don't have PLI, okay? So this is really on the same subsidy. We don't have PLI for it. Okay. Second part is, sir, I'm seeing that we are having a very good dominant market share in the south market. So can you give some more color on how we are going to look at non-home markets for you, vis-a-vis east, west, and north? Anurag, you will take this. Yeah. See, Abhinav Ganeshan, it's like this. You come out with a product which is giving one of the best grades, one of the best stock, the best headroom, legroom comfort to the customer and to the owner of the three-wheeler. So what has happened in South, I mean, gradually that is something is also getting accepted in the Northern markets. So our ambition and our dream is to replicate what is happening in South, similar in the Northern markets. As we are expanding, we are doing so not only with the product, but with the complete customer solutioning also which we are providing to the customers. Okay, sir. That was helpful. And can you give some more color on the cargo launch indicative timeline and how we would approach that? I just mentioned another also question was there in the next couple of months. The cargo version of the three-wheeler would also be there in the market. We are already very close touch with the customers and the end customers for the product. Some control trials have already happened, and we are confident to build volumes and market share and the product acceptance of the cargo version. I think that is really helpful, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Niket Shah from Motilal Oswal AMC. Please go ahead. Yeah. Thanks for the opportunity. I just had one question on the e3W business. Given the way the RM prices have been correcting on the battery side, assuming everything remaining constant from a selling price standpoint, shouldn't the profitability improve meaningfully over the next six months to one year for our EV business? I'd say two things. Niket Shah is obviously a very bright business, right? We see in three-wheeler, basically the business continues to get intensely competitive on pricing with Bajaj and Mahindra. But it will potentially help things on the truck side. Okay. Okay. Got it. So broadly, I think the scale benefits as in when it comes up, along with the RM benefit, you will start slowly and gradually seeing margin improvement rather than a far more quicker margin improvement because of RM decline. Absolutely. Got it, button. Okay. Perfect. Thank you. Thank you. A reminder to all the participants. If you wish to ask your questions, you may press star and one on your touch-tone phone. We would like to remind all our participants, if you wish to ask your questions, you may please press star and one. As there are no further questions from the participants, I would now like to hand the conference over to management of Tube Investments for closing comments. Yeah. I think from outside, I think the broad perspective is that we do understand that it has been kind of, we've not had basically profit improvement this quarter. Our current outlook is that there can have to be better, and we continue to basically stay bullish about our other businesses as well. Thank you. The management. On behalf of IIFL Securities Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you. Thank you. Thank you. Thank you. Thank you.