Ladies and gentlemen, good day and welcome to the Varroc Engineering Q4 and FY 2025 post-result conference call hosted by ICICI 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 and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vivek Kumar from ICICI Securities. Thank you, and over to you, sir. Thank you, Shruti. Good evening, everyone, and welcome to the call. From the management side, we have with us Mr. Tarang Jain, Chairman and Managing Director; Mr. Arjun Jain, Full-Time Director and CEO of Business Unit One; Mr. Dhruv Jain, Director and CEO of Business Unit Two; Mr. Mahendra Kumar, Group CFO; Mr. Bikash Dugar, Head IR and Finance Controller of Business Unit Two; and Vishal Raval, Group Finance Controller for Business Unit One. We'll start the call with brief opening remarks from the management, followed by a few. I would now like to invite Mr. Tarang Jain for the opening remarks. Thank you, and over to you, sir. Thank you, Vivek and team ICICI Securities for hosting the call. Good evening to everyone. Tarang Jain here. As you all know, India has now become the fourth-largest economy, and the GDP had a steady growth of 6.2% in Q3 of FY 2025. Softening of inflation in the last few quarters and the interest rate reduction globally encouraged our central bank to reduce repo rate by 50 basis points in their last two Monetary Policy Committee reviews. Weak growth in consumption on top of global and regional conflicts and an uncertain tariff regime may impact discretionary spending, which can have an impact on the automotive industry. However, we remain confident about the medium to long-term growth prospects of the automotive industry. During Q4 of FY 2025, all the segments registered a moderate growth on a year-on-year basis. Two-wheelers grew by 5.8%, passenger vehicles grew by 5.2%, commercial vehicles grew by 3.1%, and three-wheelers grew by 9.5%. On a quarter-on-quarter basis also, almost all segments other than the two-wheelers reported strong growth, as normally Q4 is a strong quarter for India's automotive industry every year. The two-wheelers did grow by 1.2%, three-wheelers grew by 3%, passenger vehicles grew by 20.4%, and CVs grew by 20.9%. Now, before discussing the operational performance of the company, I would like to highlight a few other aspects which will help the company to become more sustainable and enable value enhancement for the stakeholders. In FY 2025, we filed 25 patents and were granted more than 10 patents. That is, the total filings made now add up to more than 120 for the company, which will further strengthen the intellectual property of the company and help in developing technologically advanced products at an affordable cost. Secondly, we also completed the sale of our stake in the China JV and realized the net proceeds of CNY 290 million during May 2025. Thirdly, our sourcing of electricity from renewable energy has been increasing throughout FY 2025 and was around 31% for FY 2025, as against 13% the previous year. For the month of March 2025, it reached around 45%. We are also working on commencement of phase two of the renewable energy project, which will further improve this to greater than 50% in the coming year. These initiatives will boost our ESG credentials as well, besides giving us savings in our electricity cost. Now, coming to the operational performance, during Q4 of FY 2025, the company registered a consolidated revenue of INR 21 billion, with a growth of 11% year-on-year on a like-to-like basis, with Indian operations growing at 13%. Our EBITDA for the quarter was around 10.2% on the back of improvement in the gross margin and benefits of operating leverage. Our PBT before exceptional items and JV profits was over INR 1 billion, or 4.9% of revenue in Q4 of FY 2025. As you all know, we have been working on structural changes like the merger of Varroc Engineering Limited and Varroc Polymer Limited and exiting from the China JV. We had to recognize certain one-time exceptional items primarily relating to these initiatives, which will simplify our operations and also improve our financial performance going forward. We continue to strengthen our balance sheet and return ratios. The net debt of the company in FY 2025 reduced by INR 2,348 million, and as a result, the net debt to equity reduced to below 0.5x at the end of FY 2025 from 0.64 x at the end of FY 2024. The absolute net debt figure was at INR 7,480 million. ROC before tax for FY 2025 was at 28.8%, and the free cash flow generation was also healthy at INR 3,116 million, or 3.8% of revenue before growth capex in land. Looking at the free cash flow generation and lowering of debt, the Board of Directors have recommended 100% of the face value as dividend for FY 2025. In FY 2025, we also achieved net new business wins with annualized peak revenues of INR 11,734 million, with EV models constituting more than 55% of this. It is more heartening to see business wins in our overseas operations also, which will improve profitability from financial year 2027 onwards. Our continuing focus on revenue growth, improvement in gross margin, control on our fixed costs, and optimization of capex and working capital will enable us to generate healthy free cash flows in the future also. With this, I will now ask MK, our Group CFO, to walk you through the presentation and give more insights into the financial performance. We have uploaded the investor presentation to the stock exchanges as well as on the website. Thank you, Tarang. Good afternoon, everyone. Let me take you through the highlights for Q4 of FY 2025. Now, before I start, I just want to highlight one point that there were certain special items during this quarter and this year because of the structural changes which we discussed earlier also in the investor calls. For that reason, the numbers are not directly comparable to previous periods. I would like to explain the reasons also. First of all, this year, we carried out a couple of important changes to the group structure. One is exiting the China JV and recognizing the impact as an exceptional item. The second one is also the merger of Varroc Polymer with Varroc Engineering, which again has certain one-time cost impacts. These things have been recognized. One more important point to be noted here is last year, during Q4, we also had a significant amount of government incentives in the base, which was actually pertaining to two financial years, which we received in one quarter. If you adjust for these differences in the base and excluding these exceptional items, if you look at the financials, the Q4 revenue at INR 21 billion had a growth of 11% year-over-year, with India operations registering a strong growth of 13%. Now, this needs to be seen in the context of a moderate growth in the industry also, which was a moderate single-digit growth during Q4 for the industry. Similarly, for the full year, if you really see at INR 81.7 billion, it amounts to a growth of 8.5% year-over-year, with India operations registering 11%. Coming to profitability, Q4 PBT was at 4.9% versus 5% in FY 2024. Again, the 5% in FY2024 had the incentive impact. EBITDA was at 10.2% versus 11.1% last year same time. Net debt reduced by INR 2.3 billion. Now, it stands at INR 7.5 billion as of March. Subsequently, we got the inflow from China divestment, so that is not taken into account here. That inflow was received only in the month of May. Considering the performance, the Board of Directors recommended the dividend of INR 1 per share for the year FY 2025. In terms of the order wins, the new lifetime order wins were INR 60.5 billion, with annual revenue potential of INR 11.7 billion. Revenue from supplying to EV customers continues to be strong. It crossed 10% last quarter, so it's at 10.3% during Q4. If you take full year, it is pretty close to 10%. As we explained and announced in the past, pursuant to the arbitration verdict, the investment in China JV was categorized as set held for sale, and the exceptional loss of INR 8.1 billion was recognized for the year March 31, 2025. The sale of stake in JV has now been completed, like I explained, and the amount of INR 340 crore, which is the net profits after deduction of withholding tax, was received. One more highlight of this year is the free cash flow generation. We had a strong free cash flow generation of INR 312 crore. This is, of course, without considering the growth capex on land. It amounts to 3.8% of sales, which is pretty close to our PBT percentage also. Return on capital employed also strong at 20.8% before tax. Another important highlight is, like how CMD just explained, the renewable energy sourcing for the full year was at 31% against 13% last year. By end of March, we even touched 45%, and it will go beyond 50% once we implement the phase two also. In terms of patents, we filed for more than 20 patents in FY 2025. Now, coming to the automotive production, if you see the industry trends, during Q4, two-wheelers had only a moderate growth of 5.8% year-over-year. Three-wheelers, of course, had a strong growth of 9.5%. Passenger vehicles had 5.2% growth. If you see sequentially, two-wheelers had a degrowth, maybe also because of the festival advantage impact in Q3. Three-wheelers grew by 3%, but passenger vehicles registered a strong 20% growth. EV two-wheeler volumes grew by 5.5% sequentially. If you take full year, two-wheelers grew by double digits, 11.3%, three-wheelers by 5.4%, and passenger vehicles had a moderate growth of 3.3%. Now, coming to the consolidated financials for Q4, EBITDA was at 10.2%, which translates to almost close to 5% PBT for the quarter. Like how we explained, if you adjust for the INR 866 million or INR 87 crore of additional government incentive in the base revenue of last year, the growth was actually 11% this year compared to Q4 of last year. Within this, India business grew strongly at 13% despite a moderate market growth. On top of the volume growth, the cost reductions and forex gains also enabled improved profitability versus what we saw in the previous quarter. I will explain in detail some of these exceptional items in the subsequent slides. Then, coming to the full year numbers, the reported PBT before exceptional items and before JV was 3.8%. Again, if you eliminate the base impact because of government incentives, the growth was about 8.5%, with India business growing by 11.2%. The depreciation and interest burden came down significantly compared to last year, which also enabled improvement in the year-over-year profitability. Coming to the exceptional items, basically, there are three categories here. The first one is relating to sale of investment in China JV operations. We updated the investors in the past that the arbitration verdict required us to sell our stake to the JV partner. Finally, after significant delay, because we could not see any progress also, we had to enforce the arbitration verdict in the British Virgin Islands courts, which ruled in our favor. With that, we could actually sell our stake to the JV partner. After deduction of withholding tax, we realized about INR 340 crore. Out of this, nearly about INR 181 crore we brought into India and repaid loans in India as well as abroad. The balance amount is parked in foreign currency, which we will be using in the coming months or weeks. In relation to the arbitration cost, there is about INR 44 crore of cost, which was awarded by the tribunal, which we need to pay. This amounts to about close to 56% of the total cost, which seems to have been incurred by the JV partner. We are still studying the claims and the details, and we are also checking the legal options regarding how we can contest the cost if we are not convinced. The second category relates to the major expenses of Varroc Engineering and Varroc Polymer. We took some impact in the previous quarter also, but we provided for something more because the stamp duties and other related costs were difficult to predict. Most probably, in the next two to three months, this will come to finality, and if there is any excess provision, we will reverse it at that time. For the time being, we are being conservative, so we provided for totally about INR 19.6 crore for the full year. Another development was relating to KTM. There was a court-admitted insolvency proceeding, which required us to go for a haircut. The cost of that haircut was close to INR 3.1 crore. Being an exceptional item, we provided for that also as an exceptional item in the overall financials. That adds up to close to INR 147 crore, which is an exceptional item. Now, out of this, if you really see about INR 750 crore, which is related to the impairment adjustment, which we took in Q3, is not actually a cash impact. It's more like a book adjustment, which we need to recognize the value of the investment. Out of the remaining amount also, some of these are provisions, not exactly cash outflows. As we progress, we can update and let you know the status on what will be the actual cash outflow with our books. Coming to the overall net debt level, we're happy to inform you that we brought down the net debt level further down to INR 7.48 billion as of March 31. This is without considering the inflow from China stake sale, which came in subsequently. With an equity of INR 1,594 crore, the net debt equity is pretty strong already at 0.5, which can improve further after the debt reduction using the China proceeds. Net debt to EBITDA also, eve n at the March levels, stands below one. The subsequent slides, of course, these are the same slides, similar slides which we explained earlier also. This gives the business composition. In terms of the lifetime order wins, it was about INR 60.5 billion for the year FY 2025, with annual peak revenue potential of INR 11.7 billion. In terms of the mix also, you can see that the share of four-wheeler and others is increasing compared to the revenue mix of 25% that we have. Similarly, the share of Bajaj in the overall pie of order wins also is significantly less than the business mix that we have in revenue. Similarly, EV as a percentage of total also is significantly high at 55%. With this, let me stop here. We are happy to take your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 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 a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Ajay Sharma from Citigroup. Please proceed. Yeah, hello. Really thank you for taking my question. Two questions from my side, sir. First of all, on the employee expenses, there has been a reduction. What are the reasons for that? Yeah, so a couple of reasons. One, of course, this is the year-end, so we take a realistic assessment of the variable pay levels and other things. On top of that, we also did a restructuring exercise last quarter. The benefit of that for part of the quarter was realized in Q4 itself. Got it, sir. This should be the ongoing run rate from here on? Yeah, of course, there will be a salary increment impact also from April, so it will be slightly up. Yes, from this base, we will have to build on. The second question would be on the sale of stake in China JV. The INR 3.4 billion that would be an inflow which you have highlighted, that would be an exceptional gain in one Q1 FY 2025. Isn't that, Channing, correct? Yeah, it is more like a cash inflow. This is like sale of investment. It is not actually a P&L benefit, but it is more like a cash inflow for sale of investment. Okay, it will not be reflected in FY 2026 or Q1 FY 2026 P&L. That has already been accounted for, is it? The benefit of that will come in. For instance, using this money, if I repay the loans, when I repay the loans, the interest benefit on that will obviously come into P&L. Got it, got it. It is not an exceptional gain. It is more a cash inflow. Yeah, correct. Sir, if you could just share the CapEx guidance for FY 2026 and 2027, if possible. Yeah, it could be in the range of INR 225 crore-INR 275 crore, including some of the spending that we do for expanding capacity. Plus, we may also go for some land purchase also in and around Pune. That may be maybe another INR 100 crore plus kind of gross. This is FY 2026. Correct. The land is set at. This year, before the next seven to eight years, we bang a big parcel of land in Pune. This will be kind of a one-time CapEx for us. Other than that, I think we're maintaining what Mahendra said, between INR 225 crore-INR 275 crore will be our CapEx year on year. Got it, sir. Thank you so much for answering the questions. That's all from my side. Thank you again. Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Vishal from Swan. Please proceed. Thank you for taking my question, sir, and congrats on decent set of numbers in such a challenging business environment. Thank you. Sir, just wanted to know, there has been an elevation in inventory and trade receivable. Is this some kind of change in the policy we have adopted, or there is some one-off there? Can you throw some light on that, please? Yeah, so inventory, of course, broadly, it is because of the increased scale of operations also. But yeah, there are certain actions to be taken to bring it down, which we'll be working on. As far as the receivables are concerned, there are a combination of factors here. For instance, last year, that is in FY 2024, we actually discounted and pulled ahead some of these receivables collections into the previous year just to reduce the overall interest costs. Because of that, the opening balance of receivables was small. That increase is reflecting here. Plus, on top of that, there is a general increase in the overall scale of business also. Like what I mentioned, there is a 13% increase in India revenue. That also has an impact on the overall receivables. Plus, there is also a change in billing methodology in one of our subsidiaries overseas, IMS Italy. Earlier, we used to bill only for the conversion cost. Now we are billing for the total cost, including total value, including material also. To that extent, the receivable content also will be more. It is a combination of factors. There is nothing to worry about. Okay, sir. Sir, regarding the proceeds of INR 340 crore, which we will be accounting in the current quarter, is there any adjustment there which has to be made in terms of cost or something like that? Or will the INR 340 crore fully be realized? Yeah, no, the INR 340 crore is already realized. We received the money, as I explained, in the first week of May. As far as the P&L impact is concerned, that was already taken in Q4, sorry, Q3. A little more towards these arbitration-related costs is what we recognized in Q4. That way, the P&L impact is already taken. Okay, okay. Sir, my third question is regarding there is a fundraising you have noted in the ESE, a non-convertible debenture of approximately around, I think, INR 500 crore. Yeah, it is more of an enabling resolution. We are not going to go for any immediate borrowing. Okay, okay. Great, sir. That is all from my answer. In case I have any additional question, I will call back in a few. Thank you. Sure. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Saksha from IPRU. Please proceed. Thanks for the opportunity. I just have one question. Do we merge in receivables factoring because our finance cost looks very high for the net debt which we have? Yeah, we do. If you can give a breakup. Sorry, go ahead. If you can give a breakup, how much is factoring cost and how much is merging? Yeah, I think we explained it in the previous calls also. We typically discount about INR 700 crore-INR 725 crore worth of receivables at any point in time. That is at a cheaper cost compared to the borrowings that we have. That is the reason we continue it. In future, once we repay all the debt, and that is the last one to be attacked. At that time, we will reduce it. For now, yes, this level of discounting will be there. Okay, right now, let's say for our net debt of around INR 750 crore, the finance cost here would be around 10%. Out of INR 160 crore, INR 75-INR 80 crore? Yeah, it turned out to 9%. What you need to do is you need to take gross debt, not the net debt. We have about INR 200 crore of cash also. Gross debt as of last year-end, when Q4 end was about INR 950 crore. Of course, that will come down with the China inflow and all gradually. For your computation purpose, you need to take the gross debt. Okay, so we can expect at least INR 80 crore worth of relaxation eventually going forward from the finance cost as finance cost goes down and debt goes down. Yeah, I mean, I want to give a guidance here. Last year, we ended with INR 170 crore. So somewhere around, I'll put it around INR 120 crore kind of a number. We will, of course, try to reduce it further. Got it. Great. Thank you so much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Rahul Kumar from Vaikarya. Please proceed. Yeah, hi. Yeah, hi. What is the share of revenues from EV and how much of that is from Bajaj? No, so share of EV revenue, like how we had spent, was 10.3% during Q4. Full year, it was 9.8%. Most of it is from Bajaj only. Okay. Okay. What is the target on the debt by FY 2026? No, again, like I explained, last year, we generated free cash flow for more than INR 3.00 crore, more or less. That is the kind of direction we will continue to take in the coming year also. There will be some land purchases of more than INR 1.00 crore plus, like our CMD explained. There is a China inflow of already INR 1.80 crore reduction of debt which we did in the last couple of weeks. Broadly, maybe around INR 4.00-5.00 crore is what we should safely assume. Okay, okay. Thank you. Thank you. The next question is from the line of Meer Vora from Aquarius. Please proceed. Yeah, thank you for taking my question. So some of my questions are that now with the China deal is now on. Based on that, how do we work ahead on the technology front? There will be some tech we will be working with the deal. Now going ahead, what will be our technology roadmap in the lighting space? How are we looking at gaining market share now with the lighting getting more advanced? Any some color on the lighting space. Yeah, I think from a technology perspective, of course, China definitely brought a lot of technology to the table. However, I think for really the requirements of India, we have always been self-sufficient. I think further in terms of having the right partnerships in place to develop or to drive further advanced engineering, I think this is a practice that, again, we've had in place for the last three years, and we expect that to continue. To summarize, I don't see any major impact in India as a result of the China JV dilution. Sir, currently in terms of lighting in India, what would be your max average two-wheeler would be how much of this and four-wheeler would be how much? Of the total lighting revenue, I would expect two-wheeler is probably around 60% and passenger car is 40%. Are we seeing some traction on the passenger side as well now, or will we continue to be more going towards two-wheeler? I think the focus is in both. And I think we continue to win businesses also in both. I mean, I won't say the focus is one way or the other. We believe we have product based on what our customer needs are. We believe we have product that services those needs. And I think against those needs, we win further business as well also. Okay. Okay. And then my second question is just aftermarket, basically in the quarter seems to be weak as such it looks like. And based on my number of times seen, it seems to get around 7% of the revenue, which used to be around 8-9, like 9-10%. So any callout here and what is our aftermarket strategy? No, so there's no specific deepening or anything. The overall base is also increasing. Obviously, the aftermarket business generally grows in high single digits. The overall base grew in double digits. Because of that, there was some dilution. All right. Okay. Thank you. That is all. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Jyoti Singh from Arian Capital Markets Limited. Please proceed. Yeah. Thank you for the opportunity. I just wanted to understand largely on the macro side. Like India and you, what is your outlook on that? Also, if you talk about the European margin, plus what is the outlook for 2026 during this uncertainty time period? Apart from this, like any other new product that we are targeting in the coming years, and what will lead to growth in the upcoming years? Thank you. I think from a macro standpoint, I can probably talk about India. I think really I would say some of the macro trends that we focus on is an increasing desire and need for localization, which we look to take advantage of, given that we are already for our core processes, we are already localized. Also from a design perspective, we're already localized. The further trend that we look to leverage is the movement and greater penetration of EV as well. I think both these trends together, I think, create enough opportunities for us to be able to drive content growth in the vehicle. What was the second question? Second question, sir, on the European margin outlook and plus FY 2026 outlook. No, this we explained in this call also. What we are currently focusing on is building the order book. We already had some good order wins in the previous quarter, which we announced and talked about also. That journey continues. We'll continue to build the order book. There will be some gap between the order booking and the sale. That will take anywhere between 18-24 months. Most probably, we'll see a good recovery. We should see a good recovery in FY 2027. For now, we will continue to have good tight cost control and manage the business. Okay. Thank you, sir. Sir, just wanted to know your overall outlook on the recent development that is done by Bajaj Auto on the KTM support. Basically, it will help them in a longer term to unlock globally. How we will going to benefit if you can talk about it? No, sir, I think especially from a two-wheeler perspective, I think KTM vehicles is where we generally deploy the highest levels of technology we have. KTM doing better is only an extremely positive signal for us, right? One, of course, from a sales standpoint, but also, like I said, really from a technology deployment standpoint. Just to add, now that Bajaj has taken control over KTM and related brands of KTM, Husqvarna, etc., we see a much greater opportunity for sales growth with KTM in Europe. We see also opportunity not only in products we do today like lighting, but also on some of the other products where I think probably we will try to drive more sales. Bajaj also being in control may be more open to Indian suppliers having a greater contribution in the KTM motorcycles being made in Europe. That will also help probably the overall BOM cost also for Bajaj. We are going to anyway be trying to discuss with Bajaj in this regard, whether there can be greater opportunities of the products we supply in India or otherwise also for KTM in Europe. That is the big opportunity we see with this development. Okay. Thank you so much, sir. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Vishal Raval from Klan. Please proceed. Thank you for taking my question again, sir. Sir, regarding the strategy in exports, post the exit from Visteon and even in China JV, we have actually struggled in exports. Any strategy change in the team or scale up in the product line or offerings? If you can discuss, share some thoughts on that, how we are proceeding and to scale up this business. Also, just to see today, our exports is around 4% of our revenue, which we, of course, definitely are not very excited about. We definitely want to first reach a double-digit percentage of overall revenues being export. Also for the reason that exports, we are able to realize slightly better margins also. Our efforts are on. We have also a focus group focusing on a lot of our metallic products which are going. We want to penetrate more there, some of also electronics. This whole effort is in process. Probably the next two to three years, we would definitely like at least 10% of our revenues coming from export. This effort is on. We are extremely focused in trying to realize this particular objective of ours. Great, sir. Sir, my second question is regarding this quarter, there has been improvement in the margins and notably so there has been strict cost control you have done in other expenses as well as employee costs. From here, should we see or do you target some kind of meaningful improvement as well? Or you are satisfied with this kind of do you see some scope from here on as the scale improves, BICS improves? See, the main focus of ours is sales growth. Like we said, we want to grow 6-8% more than the market. That is always going to be our objective going forward. India now, at the moment, almost 90% of our revenues is coming from India. Here, definitely, we would like to have high double-digit growth in FY 2026. That is what we are aiming for. I think the profitability and other things also is based on us realizing the revenues. Today, I think we have a good order book. I do feel that if the market really in a way is growing, April was not a very good month, as you know, overall for automotive. I mean, other than four-wheelers which grew at about 5%, I think all other vehicles did growth. We are just hoping that the markets at least are at the same level as last year. I think we can expect a good growth. If the growth is good, we can definitely expect a good margin. Abroad, like what our CFO said, Mahendra said that this coming year, we have won a lot of good business abroad also. All those businesses will start getting realized from the second quarter of FY 2027. Till then, of course, in the abroad businesses, we will have to kind of see, I mean, keep focusing on cost controls till that time. Yes, FY 2027 onward, second quarter onward, we will start seeing that there is a growth in sales. Of course, then the return of profitability. That is for the abroad business, which is about today 10% of our revenues. But of course, there we see also a good level of business wins in this year, which will help us also going forward in overall sales growth. Perfect, sir. Thanks, sir, for answering my question. And all the best for the next financial year. Thank you, sir. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Aksh from Raj Financial. Please proceed. Yeah. Sir, I just wanted to have a question on electrical, electronics, and lighting components. And that we have seen over a 26% decline in electrical overseas revenue. What is the reason for that? Yeah. You're talking about the business two. I think there, I think, as you know, generally the conditions in Europe are quite weak. Even in Vietnam, we have not had the expected sales because the major customer there continues to be Piaggio. Piaggio globally, actually, unfortunately, the volumes have dropped. That is the reason that there has been no growth. Having said that, we have won some good businesses from some two-wheeler players in Europe. We are actually also driving hard to win some businesses with some Japanese OEMs, big OEMs. I think that going forward, I think we do expect from FY 2027 a good level of revenue growth coming in from two-wheeler lighting. Also, we expect that the electronics capacity, which today is running at quite a low level of about 20%. There also, we see, like I said, that from the second quarter of FY 2027, we will start seeing the return to higher revenues and profitability as we have already won the businesses. We've already won the businesses. We continue to win also more business for electronics, two-wheeler lighting. Also, going forward, even we will focus on four-wheeler lighting. Okay. Sir, because we see even if we had a, there was a big growth in that particular segment. It was my concern about that. What's your outlook on metallic division? Because even there, we have seen some muted growth of under 5%. Yeah. I think when it comes to metallic, we are quite choosy, like I said, because it's a very high CapEx and a little bit lower ROC business compared to our other products. We are picking and choosing the kind of businesses we want to enter. We are also focusing on a full capacity utilization because we still have some capacity underutilized. We're trying to see how we can also fill up those capacities. Yes, compared to electrical, electronics, lighting, or our plastics business, we are obviously a little bit more conservative when it comes to growth in the metallic business. Not to say that we will not grow, but it will not be the level of growth we see in our other products where our focus is obviously more because they are not also as much CapEx, high CapEx businesses like in metallic. Okay. Okay. Got it. Thanks. Sir, about the land parcel, what is it related that we are investing? Like you said, it would be there for the next seven, eight years. We are investing in some land parcel. Any glimpse you want to share, sir? Here, see, in the Pune region, we are running out of, we have about seven factories and largely more in the Chakan area in Pune. Here, we are running out of space. Of course, it's not that immediately we're running out of space, but I think it's not easy to get a land parcel. We are looking at a bigger land parcel this time so that we don't have to worry too much because it's not that easy to get land parcels, as you know. Therefore, we are now focusing on, we are in discussions, and we are trying to get a big land parcel, which will be in excess of INR 100 crore for sure, seeing the land cost today. I think once we are, and we're looking at it in the next probably couple of months to kind of close that transaction. Once we have it, then I think that the kind of land parcel we are looking at, I think we should be okay for the next seven to eight years in the Pune region, which is a region which is also growing very fast for us. Right. Right. Sir, lastly, what would be our utilization rate? Now, I think utilization rate would be how much? Average maybe 70-75%. It varies from business to business. Electronics may be on the higher side. Yeah. Yeah. I think 70-75% is fair. I think we have been disciplined in terms of increasing capacity. Yes, there are places like NKZ, like electronics, where we have to drive capacity increases now. Right. Sir, sorry for one more question. What would be our approximately margin compared to in EVs compared to the traditional ICE or the delta, if you can share? We do not give that product-level margin data. Yeah. But it is competitive. It is not that the margins or the percentage is so much higher or something. Because nowadays, I mean, even a lot of the technology products and everything, I mean, it is competitive. It is as competitive as the ICE engine. It is only that because of the content, you have a very good revenue growth coming out of such EV products. That is the good part. But the margins are competitive. I mean, I do not think it would be something higher or something like that. Maybe one-odd product may be higher, but generally, it is similar. Okay. Okay. Got it. Thanks a lot. Thanks for that. Thank you. Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Vishal Chauhan from Jyojit BNP Paribas. Please proceed. Yeah. Hello. Audible? Yes, sir. Yeah, Vishal. Yeah. So just one question. The question pertains to our overseas subsidiaries, that is the Romania, Vietnam, and the lighting plants over there. So could you just provide, I mean, how was the year for them? What kind of revenue did we do there compared to the last year? Yeah. In terms of the overall percentage, it's around 4% of the total revenue, which is coming from these overseas markets. What was your question? Outlook? Just the revenue number, if you can provide, or the YOY growth, degrowth that you would have done in our lighting subsidiaries across Vietnam, Romania, Italy, and also the Romania electronics. Basically, see, we have got two-wheeler lighting plants in Vietnam, Romania, and in Italy. We also have an electronics plant in Romania. Compared to the previous year, there was a degrowth when it came to the sales, which was in a very challenging atmosphere. The two reasons I said were that one is the challenging environment in Europe. When it comes to Southeast Asia, in a Vietnam plant, a larger customer is Piaggio there also. Piaggio, if you see the last couple of years, there has been a degrowth in their volumes. Having said that, I mean, we have been winning businesses with other customers in Vietnam, whether it is European or Japanese. That is something which will start getting realized only from FY 2027 onwards. Till then, I think we are going to be challenged when it comes to the sales. If you talk about FY 2026 and let's say even the first quarter of FY27, we are not going to see any kind of sales growth from current levels. It could be probably similar or a little lower only. I'm talking about the plants abroad. Right. Got it. Got it. And sir, secondly or just one more? Just one second. Just one second. Yeah. Yeah. Maybe just to add a little bit to that, I'll just try to also summarize from my side. Yes, last year versus this year, there has been, I believe, a sales decrease of between 25-30%. The reason, of course, is one is the macroeconomic trends in Europe not being the best, and also this customer dependency that we've had for the Romania locations as well as the Italy and Vietnam locations. What we also announced in the last call is that we've had some significant business wins that will bear fruit in terms of sales in FY 2027. Yes, there is this decrease in revenue, but there is a light at the end of the tunnel from our perspective. We can expect a good level of growth from FY 2027 second quarter, as we have already won businesses for these plants abroad. Got it. Got it. Secondly, on the domestic electric two-wheeler side, I think what we've seen is the pace of growth has been slowing down. I mean, this year, probably the volume grew by around 20%, whereas last year, we saw like a 30% growth in volumes. Coupled with that, we're also seeing a lot of OEMs going towards a lower price or more value kind of value-price models. In that scenario, probably the value growth is even lesser for electric two-wheeler industry as a whole. I mean, how do you see this play out going ahead, and how excited are we in this electric two-wheeler segment as a whole as a component supplier? I would say, right, I mean, really, I think for an electrical, electronic component supplier like us, it is really the ultimate opportunity from a content growth perspective, right? The amount of content we would put into a comparable EV scooter versus the comparable ICE engine scooter, I think the content growth is almost 5-6x. Now, further to that, fortunately, the content growth is not necessarily driven by the bells and whistles on the vehicle, but is really driven by the core vehicle powertrain, right? Of course, the price point pressure at an OEM level, even at a component supplier level, exists. The content that we have is not possible to do away with, right? I mean, you need any powertrain, you need a BMS if the vehicle has to be EV. We continue to be extremely bullish around it from the perspective of our growth. Yes, maybe the growth rate has moderated a little bit, but I do not think that we see it is not a trend that we see going away anytime soon. Basically, to add, we are very excited about the penetration of EV in two-wheelers. Today, we see the penetration more happening in scooters, and it will continue for sure. I think this optimization of the cost in these various models is necessary for a higher adoption. That is in the right direction. Maybe, I mean, there could be some little bit ups and downs, maybe in a quarter or something like that. The direction is very clear on the EV transition. I'm not saying it's going to be 100% of all scooters, but definitely, there is going to be a good level of growth in the scooter segment. Even I think going forward, I think we can see also EV adoption in the motorcycle segment. That is also something which I think probably will happen going forward. I think we are very well placed also. Recently, also, we have increased the product portfolio that we added the BMS also a few months back in our portfolio. Plus, we are also adding more customers. Today, let's say we have Bajaj. We are also in discussions with other customers. We have already won some businesses with other customers. We are pretty much excited about, so whatever the level of growth may be, it's going to grow. I think that we are definitely, as Varroc, we are definitely going to benefit with our strong presence already as an early starter in the EV game, especially on the powertrain side. I think you can see a good level of sales as a percentage increasing for Varroc in the years going forward. Great, sir. Thank you. Thank you for your answer. Thank you. The next question is from the line of Rahul Kumar from Vaikarya. Please proceed. Yeah. Hi. So sir, can you give us some guidance on the operating margin or EBITDA margin for next year or something like that? No, we do not give any guidance like that. You can broadly say we will try to improve it from now on. Like how our CMD explained, growth will be the major focus for us. On top of that, we are also working on cost reductions and margin improvements. All this should translate into improvement from the current levels, but it also has a seasonality factor to it. Not all the four quarters are equal for the auto component industry, as you know. There may be some ups and downs, but yeah, the journey continues to improve it further. Okay. The quantum of the improvement which we are seeing in this quarter versus, let's say, last year, that quantum would obviously reduce, right? I mean, that is all. We cannot predict or we do not want to give any such guidance, but yeah, we will try to improve from here. Okay. Thank you. Thank you. Participants who wish to ask a question may press star and one at this time. As there are no further questions, I would now like to hand the conference over to the management for the closing comments. Thank you and over to you, sir. I just want to thank everyone for joining the call and for all of you for your continued support to the Varroc Group. Thank you. Thank you. Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.