CEAT Limited — Q3 FY26

CEAT Limited Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=oRaYKgrcaX4 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the CF Q3 FY25 conference call hosted by IQ Securities Private 0:08 8 seconds Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:18 18 seconds Should you need assistance during the conference call, please signal an operator by pressing start then zero on a touchstone phone. I now hand the 0:26 26 seconds conference over to Mr. Mihir Vora from Aquirus. Thank you and over to you Mr. Mihir. 0:31 31 seconds Uh yeah, thank you Rutuja. So good afternoon everyone. On behalf of Equir Securities, I welcome you all to the Q3 0:39 39 seconds FY26 post results conference call of CET limited. From the management side, we have with us Mr. Arnab Banerjee MD and 0:48 48 seconds CEO and Mr. Kumar Subaya CFO. So without further ado, I now hand over the call to the management for the opening remarks. 0:56 56 seconds Over to you, sir. 0:59 59 seconds Good afternoon everybody and happy new year to you and all your near and dear ones. Welcome to C's Q3 26 earnings 1:07 1 minute, 7 seconds call. I will be taking you uh through the business updates for the quarter and then I shall hand over to Kumar for his 1:13 1 minute, 13 seconds remarks on financial performance post which we will take all the um questions. 1:20 1 minute, 20 seconds The Indian tire market delivered an upbeat finish to the calendar year 2025 supported by GST revision um which has 1:29 1 minute, 29 seconds improved affordability and overall consumers uh sentiment. Reforms have also led to broader participation across 1:36 1 minute, 36 seconds urban as well as rural markets both for OEMs as well as aftermarket ter after market for tires. Overall, we believe 1:44 1 minute, 44 seconds that supportive tax policies, increasing EV adoption, and ongoing premiumization trends are likely to position the tire industry for a healthy singledigit growth through FI31 next 5 years. 1:57 1 minute, 57 seconds Overall demand outlook um the outlook for auto sector continues to be supportive. Macro tailwinds like 2:04 2 minutes, 4 seconds RBI reducing repor rate in December is a positive. Robust rubby sewing and completion of curry harvest has also 2:11 2 minutes, 11 seconds supported disposable disposable cash flows and rural demand. Additionally, OEM price hike expectations have helped 2:18 2 minutes, 18 seconds maintain near-term purchase activity. In the near term, we expect replacement demand for NFCBS to be mid to high 2:26 2 minutes, 26 seconds single digit. Any further upside could could come from the annual seasonality during the summer months. For two-wheeler, demand has been 2:34 2 minutes, 34 seconds consistently encouraging and growth could be high singledigit. Um, in OEM, uh, MSCV is showing signs of recovery 2:43 2 minutes, 43 seconds post GST rationalization. Growth has been robust in Q3, high double digit. LCV growth is expected to be similar. 2:51 2 minutes, 51 seconds Increase in e-commerce and QC commerce activity would uh result in better sales of three wheelers. In passenger uh 2:59 2 minutes, 59 seconds segment near-term growth is expected to be in double digit with strong revival aided by consumer preference towards smaller vehicles easing financing 3:07 3 minutes, 7 seconds financing access. Growth rates in two wheeler um strong and expected to be in double digit. However, we have to wait 3:15 3 minutes, 15 seconds for couple of quarters to see how the impact of GST will pan out. In international business, demand uh for 3:22 3 minutes, 22 seconds radial uh CVS offhighway tire and PCU is strong. Uh where India is emerging as an uh as an alternate and credible sourcing 3:32 3 minutes, 32 seconds base for these tires on back of improved brand credibility with global OEMs and replacement distributors. 3:40 3 minutes, 40 seconds C performance Q3 FI26 we are a good Q3 where we grew 20% plus YI on standalone 3:47 3 minutes, 47 seconds basis. The standalone Aida stood at 557 crores rupees. Volume performance growth 3:54 3 minutes, 54 seconds momentum continued during the quarter over last year 20.9% volume growth. 3:59 3 minutes, 59 seconds Replacement uh segment has grown uh in about mid- teens for us uh where demand came in strongly post GST 4:07 4 minutes, 7 seconds rationalization in September. In OEM we had a base effect or last year base was uh not very high. So OEM has grown well 4:15 4 minutes, 15 seconds as well and international business has grown um in the 20s um because of channel access improving in several 4:24 4 minutes, 24 seconds geographies. In replacement passenger segment uh grew well very strongly. 4:30 4 minutes, 30 seconds Two-wheeler continues to do well over the quarters and with support coming from from both urban and rural clusters 4:37 4 minutes, 37 seconds and grew in high teens. OEM volumes grew strongly yi basis across segment in PCU 4:44 4 minutes, 44 seconds we had a low base effect so growth was optically very high in OEMs in two-heer we continue to have a good share of 4:51 4 minutes, 51 seconds business growing in high single digit farm growth in OEM was also strong where um uh there was a demand revival and uh 5:00 5 minutes growth was very strong double digits truck and bus uh radials also saw also saw a very on 5:08 5 minutes, 8 seconds double digit growth in international business. We saw growth across segments 5:15 5 minutes, 15 seconds uh passenger car tires um um uh and two three wheelers as well as in farm uh in 5:22 5 minutes, 22 seconds US tariff headwinds persisted preventing us from growing faster. We have been making steady improvements across steady 5:29 5 minutes, 29 seconds all segments and categories in replacement market. Share of business was positive across truck bus radial 5:36 5 minutes, 36 seconds across motorcycle and uh there was some marginal uh drop in share in scooter and 5:44 5 minutes, 44 seconds in passenger which is uh much less than 1%. In OEM our share grew across passenger truck in uh international 5:54 5 minutes, 54 seconds business share of exports grew across all categories. Coming to margins, our Q3 standalone gross margin witnessed a contraction of about 109 basis point Q. 6:05 6 minutes, 5 seconds This was primarily driven by increase input cost from appreciated USD. Uh we 6:11 6 minutes, 11 seconds expect commodity prices to be benign and uh maybe a mild increase in Q4 which gives us an opportunity to achieve a 6:20 6 minutes, 20 seconds consistent margin profile over time. A standalone AIDA stood at 14.1% 6:26 6 minutes, 26 seconds standalone net profit was 191.6 cr which accounted for the effect of provisioning related to compliance with new labor 6:34 6 minutes, 34 seconds codes. Coming to uh cameo the business transition is progressing smoothly with key sales hiring completed and planned 6:41 6 minutes, 41 seconds operations running steadily. On the sales front the C team is currently taking over direct customer relationships from Michelin. uh majority 6:49 6 minutes, 49 seconds of existing customers have approved the business transfer ensuring uninterrupted continuity of operation. 6:56 6 minutes, 56 seconds A further ramp up of operation for the current 50% utilization is expected to take another um um a few quarters post adequate changes in the marketing mix. 7:09 7 minutes, 9 seconds CAMSO PNL has experienced some one-time transition cost which will not recur quarter 4 onwards. Operating profit was 7:18 7 minutes, 18 seconds in double digits as per expectations after absorption of all operating costs. 7:23 7 minutes, 23 seconds It will take three to five quarters more to control the entire value chain at the purchasing end and the sales end and exit transition. Margin profile shall 7:32 7 minutes, 32 seconds keep improving uh and volume traction shall increase also. 7:37 7 minutes, 37 seconds commenting on uh the uh other uh trends future trends electrification international business premiumization 7:45 7 minutes, 45 seconds and digital and AI during Q3 on electrification seat consolidated its leadership with 30% plus share in OEM 7:54 7 minutes, 54 seconds PCU EV segment and it maintained um the two-heer EV share at about uh 20%. We 8:02 8 minutes, 2 seconds continue to invest in products um in these two categories and we continue to get approvals for new OEM vehicles 8:10 8 minutes, 10 seconds international. Despite uncertainty surrounding the US trade agreement and pricing pressure from Asian competitors particularly in European market, CF 8:18 8 minutes, 18 seconds speciality business delivered its strongest performance to date in Q3 um FI26 8:24 8 minutes, 24 seconds growing uh strongly in uh mid 20 20% and um uh year-to- date growth also has been 8:32 8 minutes, 32 seconds high teens. During Q3, we introduced 32 plus new off tire SKUs and we continue to expand our product portfolio to serve 8:40 8 minutes, 40 seconds as a one-stop shop for our customers. In non-specity, we clocked high 20s uh 8:47 8 minutes, 47 seconds growth on Yi basis um in the overall non-speciality business with strong 8:54 8 minutes, 54 seconds growth coming up in passenger segment as well as in uh truck bus radial. Europe has been a strong geography for us along 9:01 9 minutes, 1 second with Latam and Africa. Um coming to uh Sri Lankan operations, market challenges persisted in Q3 as 9:10 9 minutes, 10 seconds cyclone DWA affected operations and local competition further intensified particularly in two wheel and this year 9:17 9 minutes, 17 seconds categories. Focus is uh here to hold on to our already high market shares in all categories and maintain our market leadership. 9:26 9 minutes, 26 seconds uh overall salency of internal b international business was about 19.4%. 9:33 9 minutes, 33 seconds And if we consider the camso turnover which is actually consumed uh in international markets this figure uh technically works out to 23%. 9:44 9 minutes, 44 seconds Premiumization we continuously uh are building upon our cutting edge technologies in premium categories. OEM approvals in high volume premium 9:52 9 minutes, 52 seconds vehicles are building the foundation for future replacement demand. We are investing significantly to ramp up the mix of larger rimsiz tires and we 10:01 10 minutes, 1 second continue to see gains in market share for our premium car tires across both replacement and OEM segments. Our two-wheeler premium portfolio comprising 10:10 10 minutes, 10 seconds of motorcycles, steel radials and fabric radial as well as motorcycle tires for 250 cc plus bikes continue to see uh traction and increase in market share. 10:20 10 minutes, 20 seconds Digital and AI as at seat we are committed to becoming an AIE organization. To achieve this, we are planning to embark on a centralized data 10:28 10 minutes, 28 seconds lake initiative that brings all enterprise data into one place providing a solid foundation for AIdriven use cases across the valley chain. 10:36 10 minutes, 36 seconds Additionally, we are preparing to migrate to SAP rise which will enable next generation AI cap capabilities and help achieve cost efficiency while 10:45 10 minutes, 45 seconds unlocking advanced analytics and automation. To amplify this transformation, we are automating our entire budgeting process using a IML. 10:54 10 minutes, 54 seconds During Q3, organic traffic website increased 12% while premium tire sales through leads grew 64% over the same 11:02 11 minutes, 2 seconds period. Positive sentiments for the brand moved up by 36% with 24% increase in average interactions per post YI. US 11:11 11 minutes, 11 seconds tariffs um as we speak auto component duty on India continues to be 25%. So onroad tires TBR and PCR fall under this 11:19 11 minutes, 19 seconds category. For off highway tires total duty continues to be 50%. Sri Lanka is currently facing a 20% tariff and has a 11:27 11 minutes, 27 seconds temporary advantage while we wait for India US agreement to reach its finality. 11:32 11 minutes, 32 seconds Capeex overall um capacity utilization is around 80 to 85%. Our capex guidance 11:39 11 minutes, 39 seconds remains constant as uh shared with you over the last few quarters. 11:45 11 minutes, 45 seconds Sustainability at seat we remain committed to net zero journey. We recently partnered with cleanmax to develop 59 megawatts of hybrid wind 11:54 11 minutes, 54 seconds solar projects provided our manufacturing facilities at hal and chennai with renewable energy. This marks a significant step in advancing 12:01 12 minutes, 1 second our aim towards achieving approximately 60% clean energy share in operations by FI27. 12:08 12 minutes, 8 seconds Also during Q3 CF A surn plan for offhighway tires was awarded the gold medal at the 11th India green manufacturing challenge. 12:17 12 minutes, 17 seconds Overall Q3 closed on a strong growth note with a jump in margin in the standalone business, strong product 12:25 12 minutes, 25 seconds pipeline and a more confident customer and we look forward to continue this momentum heading into the new year. With this I would like to hand over the call to Kumar for his remarks. 12:36 12 minutes, 36 seconds Thank you Arnab. Good afternoon ladies and gentlemen and thank you for joining our quarter 3 earnings call. I'll share 12:43 12 minutes, 43 seconds some financial data points with you all post which we can enter the Q&A session. 12:49 12 minutes, 49 seconds Now overall financial uh topline performance or consolidated net revenue for the quarter stood at 4,57 12:57 12 minutes, 57 seconds crores with a year-on-year growth of about 26%. Aided by strong volume growth across all segments. We are happy to 13:06 13 minutes, 6 seconds share with you that the company crossed a milestone number of rupees 4,000 crores of revenue for the first time in a quarter and the revenue reported in 13:15 13 minutes, 15 seconds quarter 3 has been the highest achieved so far. While OEM and international business grew by more than 20% 13:23 13 minutes, 23 seconds replacement grew in mid- teens during the quarter supported by positive momentum in domestic sales post drop in the GST rates in the month of September. 13:32 13 minutes, 32 seconds I would like to bring it to your attention that consolidated yearon-year and quarteron quarter numbers 13:39 13 minutes, 39 seconds uh are not comparable as camso revenue numbers were not part of the previous year's uh quarter 3 numbers and with 13:47 13 minutes, 47 seconds respect to the previous quarter the revenue of camso was considered only for a month as the acquisition of the business happened effective from 1st of 13:55 13 minutes, 55 seconds September 2025 the standalone revenue numbers which are more comparable for the quarter stood at 3,957 14:03 14 minutes, 3 seconds crores translating to a growth of about 20.1% yearonear and 6.91% quarteron quarter. Hence the financial 14:12 14 minutes, 12 seconds insights that I will share with you today would focus more on standalone numbers. 14:17 14 minutes, 17 seconds Coming to operating margins, our consolidated debit for quarter 3 stood at rupees 568 crores translating to 14:26 14 minutes, 26 seconds 13.7% margin. It's a 13 basis point improvement sequentially and 317 basis points improvement yearon-year basis. 14:36 14 minutes, 36 seconds While our standalone aida stood at 556 crores translating to a margin of about 14.08% 14:44 14 minutes, 44 seconds a 39 basis point improvement quarteron quarter and 364 basis points improvement year on year. A standalone gross margin 14:53 14 minutes, 53 seconds for the quarter stood at 39.9%. A marginal contraction of about 109 basis points sequentially largely arising from 15:02 15 minutes, 2 seconds uh drop in finished goods inventory and also drop in other income along with some impact on raw material cost. Coming 15:11 15 minutes, 11 seconds to raw materials during quarter three our raw material costs were in line with our costs in quarter two. The crude prices remained stabled and moved in the range of $60 to $65 during the quarter. 15:23 15 minutes, 23 seconds And the crude derivatives which go into the manufacturer of tires also remained within the same small range. While 15:30 15 minutes, 30 seconds natural rubber prices remained around $1,700 per ton. However, it has moved up to $1,800 per ton in the later part of 15:38 15 minutes, 38 seconds the quarter. Considering our raw material costs are based on a combination of imports and local material prices with linkage to import 15:45 15 minutes, 45 seconds parity, the depreciation of rupee from around 87 to US dollar in the beginning of the quarter to around 91 to US dollar 15:53 15 minutes, 53 seconds now would have some impact on our cost going forward. We expect the margin impact to be in the range of about 1 to 16:00 16 minutes 1.5% uh in quarter 4 and beyond. While the overall cost environment is broadly favorable, we continue to keep a close 16:09 16 minutes, 9 seconds watch on raw RM that is raw material situations. 16:13 16 minutes, 13 seconds Uh coming to capex during the quarter we spent about 254 crores. Uh and till date 16:19 16 minutes, 19 seconds we spent about 673 crores. In addition, we have also had an outflow about 236 16:26 16 minutes, 26 seconds crores in quarter 2 towards intangibles at the time of acquisition of Cam. So we expect our normal capex outflow 16:34 16 minutes, 34 seconds excluding the intangibles that I just now mentioned for the current year to be in line with our earlier estimate of around,000 for the current financial 16:43 16 minutes, 43 seconds year. Our standalone working capital continued to remain negative marginally negative. Our inventory saw a drop of 16:51 16 minutes, 51 seconds about 212 crores during the quarter in line with our plan and payables also dropped by a similar amount. Our 16:59 16 minutes, 59 seconds standalone gross debt stood at rupes 2,954 crores against rups 2,944 crores as of 17:07 17 minutes, 7 seconds end September. During the comp quarter, the company raised about 250 crores of NCD that is non-convertible debentes 17:16 17 minutes, 16 seconds from the market and retired about rupees 100 crores. Both are part of the current debt. 17:23 17 minutes, 23 seconds Our debt to uh debt to EIDA on a standalone basis stands at a healthy level of 1.252x 17:30 17 minutes, 30 seconds which compares favorably with 1.65 that we reported for the previous quarter and our debt equity also improved from about 17:39 17 minutes, 39 seconds 65 to 63. Coming to operational expenses the standalone employee costs during the quarter moved up from rupes 244 crores 17:48 17 minutes, 48 seconds in quarter 2 to rupes 252 crores. The marginal increases largely on account of higher level of operational activities. 17:57 17 minutes, 57 seconds We leveraged scale and that helped to manage our other expenses well during the quarter. Overall, we kept tight controls on cost which helped in our 18:06 18 minutes, 6 seconds operating expenses in quarter 3. Quarter 3 to be at the same level as quarter 2. 18:11 18 minutes, 11 seconds However, in absolute terms, it remained constant. In percentage terms, it came down from 20.7% to 19.4%. 18:20 18 minutes, 20 seconds translating to margin expansion on our standalone profits and also after absorbing the drop in gross margins. 18:27 18 minutes, 27 seconds Depreciation uh during the quarter remained at same level as that of the previous quarter. Interest during the quarter increased by about 17.88 crores 18:37 18 minutes, 37 seconds largely on account of increase in the average debt level. While debt has not moved between quarter two, end of 18:44 18 minutes, 44 seconds quarter 2 and end of quarter 3, uh the borrowings in the previous quarter moved up in the month of September. However, in the same level of debt we maintained 18:53 18 minutes, 53 seconds during the quarter that led to interest cost for the quarter going up by about 18 crores and uh we would like to bring 19:01 19 minutes, 1 second it to your attention uh during the quarter we made a provision of about 57.81 81 crores arising out of 19:08 19 minutes, 8 seconds notification of new labor codes by the central government. While the changes in rules are still under review, the company made an estimate based on the 19:16 19 minutes, 16 seconds understanding of new definition of wages applicable for graduity and leave and cashment entitlements of the employees 19:24 19 minutes, 24 seconds as on 31st December 2025. This is reported in our financials as an exceptional line item as the cost 19:32 19 minutes, 32 seconds relates largely to the past period of service of the employees. Overall, the consolidated profit after tax for the 19:39 19 minutes, 39 seconds quarter stood at rupees 155.4 crores compared favorably with rupees 97 crores reported during the same period of last 19:48 19 minutes, 48 seconds year and rupes 185.7 crores reported in the previous quarter. Our standalone profit reported a higher number of about 19:57 19 minutes, 57 seconds 191.59 crores which compares favorably with 95.97 crores that we reported in the same period of the previous year but 20:05 20 minutes, 5 seconds marginally lower than rupees 202.23 crores that we reported in quarter 2 the profit after tax for the quarter would 20:12 20 minutes, 12 seconds have been higher but for rupes 5 57.81 81 crores provision that we made towards new labor codes that I just now 20:21 20 minutes, 21 seconds mentioned. We're also pleased to announce that board of directors in a meeting yesterday approved rupees,314 20:30 20 minutes, 30 seconds crores of capeex for our Chennai plant which would add additional 35 lakh tires of passenger car tire capacities. We 20:39 20 minutes, 39 seconds expect this capacity addition to be progressively completed by the second half of financial year 2028. The capex 20:47 20 minutes, 47 seconds would be funded with a mix of debt and internal approvals as we have been doing in the past. While executing the proposal, we would continue to monitor 20:54 20 minutes, 54 seconds our monitor our leverage levels and ensure that balance sheet continues to remain strong. During the quarter, the 21:01 21 minutes, 1 second credit rating agency care carried out an annual surveillance and reaffirmed credit rating of double A for long-term 21:09 21 minutes, 9 seconds with a positive outlook and A1 plus for short-term. With this uh we can end the call and over to Q&A. 21:21 21 minutes, 21 seconds 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 the touchtone telephone. 21:30 21 minutes, 30 seconds 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 21:39 21 minutes, 39 seconds and gentlemen, we will wait for a moment while the question queue assembles. 21:58 21 minutes, 58 seconds The first question is from the line of MUK Mandlesa from Anandraati Institutional Equities. Please go ahead. 22:05 22 minutes, 5 seconds Yeah. Uh thank you sir for the opportunity and congrats on the good growth uh during the quarter. Uh sir firstly to Kumar sir u uh sir so you uh 22:13 22 minutes, 13 seconds you said going ahead uh there could be a uh 100 to 150 dips kind of impact on the uh raw material increase uh due to 22:22 22 minutes, 22 seconds natural rubber prices going up and INA dep is it right sir is that right got it could come in coming two three 22:30 22 minutes, 30 seconds quarters right sir yeah I see look largely you know uh we have visibility and cover in advance 22:38 22 minutes, 38 seconds okay but going into the future Considering the rupee has depreciated and little bit of movement in in the prices of uh natural rubber particularly 22:47 22 minutes, 47 seconds international rubber it could come in due course of time. 22:53 22 minutes, 53 seconds Got it sir. Uh and sir on the labor code impact uh uh so this 50 cr was mainly for the past period. So anything from 23:02 23 minutes, 2 seconds the Q3 and going ahead how much one should factor the impact sir? See the uh this is predominantly on account of change in the definition of wages. Okay. 23:13 23 minutes, 13 seconds And uh earlier you are aware that graduity and leave and cashment entitlements were calculated on basic 23:20 23 minutes, 20 seconds salary. So with the revision in the definition of wages it's mostly relating to the past period but for the future 23:27 23 minutes, 27 seconds there will be an impact. Okay. Uh [clears throat] our estimate is for a quarter is coming to very small number. 23:33 23 minutes, 33 seconds So it's not very significant going into the future. It's there is an impact. 23:38 23 minutes, 38 seconds There's an impact in terms of incremental provision but the impact is small less than two about a maybe a core or two per quarter. 23:51 23 minutes, 51 seconds Got it sir. Uh uh and sir uh on the on the Camzo side uh can you share how was the Q3 financial performance for the 23:59 23 minutes, 59 seconds Camzo uh in terms of revenue and sir? 24:04 24 minutes, 4 seconds So Amit is here with us. Amit is heading the uh division specialtity division. I think Amit will share a few details. 24:14 24 minutes, 14 seconds Yeah. Uh so the operating runway are as expected. Uh uh so the the top line uh 24:23 24 minutes, 23 seconds is is as per expected what we are trying to do is is what what we are doing is we're getting the relationships transition from Michelin to CAD and as 24:32 24 minutes, 32 seconds Arnab uh informed in his call earlier that uh that that's trending as per expectations and uh the top line for the 24:41 24 minutes, 41 seconds uh uh for the quarter is is roughly at uh uh is roughly ly at uh 20 million USD 24:51 24 minutes, 51 seconds which is 182 183 crores and sir I think double evida margin 24:58 24 minutes, 58 seconds operating profit right sir yes got it sir and on the s US market how's 25:05 25 minutes, 5 seconds the sales going there sir uh and uh has the Michelin or basically they have taken the price uh to pass on this duty 25:14 25 minutes, 14 seconds sir yes sir uh So necessary price increases have been taken uh in the market but as 25:22 25 minutes, 22 seconds as you're aware that Sri Lanka has a favorable tariff compared to India it's at 20% versus 50%. So uh right now uh 25:31 25 minutes, 31 seconds the necessary tariff increases have been passed on to the consumer and how's the demand sir in US market 25:41 25 minutes, 41 seconds demand remains cyclical as the industry is progressing uh uh whatever is the cyclical impact and the tariff impact is 25:48 25 minutes, 48 seconds seen but uh again as I said earlier that uh uh it's it's it's tracking as per expectations. 25:58 25 minutes, 58 seconds thought thank you for this. Uh sir Kumar sir further this new 13 billion capex for the PCR uh sir how would be split of 26:07 26 minutes, 7 seconds that capex in 27 and 28 and s going for next year uh uh do you see any more capix planned uh other than for PCs? 26:17 26 minutes, 17 seconds No see uh largely we have factored in whenever we had shared our own outlook for the next two or three years. See 26:25 26 minutes, 25 seconds look uh we our current annual capex is about 1,000 to,50 crores rate. Uh that is what it is. As we are scaling up you 26:34 26 minutes, 34 seconds you've seen in the first 9 months our volume growth has been over 15%. And uh year on year the growth was even 20% for 26:43 26 minutes, 43 seconds the quarter but full year basis. So uh from capex uh capacity creation point of view we need to take into consideration 26:51 26 minutes, 51 seconds the volume growth on a higher base. So it's likely that capex estimate from the next year onwards uh would move from 900 27:01 27 minutes, 1 second to,000 crores level to maybe 1,000 to,00 100,200 crores level. We are in the process of completing our annual plan. 27:08 27 minutes, 8 seconds We'll make sure that this capacity expansion related capex outflow is within that threshold uh within that 27:15 27 minutes, 15 seconds overall number. As of now we are in the process of completing passenger car capacity expansion at Chennai to take 27:23 27 minutes, 23 seconds the capacity to 30,000 tires which is under progress. Okay. And this uh about 30,000 to 40,000 tires uh capacity 27:31 27 minutes, 31 seconds expansion will get completed in the second half of FA28. Along with this we are also expanding our Nagpur factory uh 27:39 27 minutes, 39 seconds taking the capacity from 80,000 tires to 100,000 tires uh per day. So these proposals uh these that have been 27:47 27 minutes, 47 seconds approved by the board uh would get imple implemented and capex follow would be or capex would be in line with the number that I indicated to you. 27:57 27 minutes, 57 seconds Okay. Got it. Great sir. Thanks for this opportunity. Thank you. 28:03 28 minutes, 3 seconds Thank you. The next question is from the line of Rashi Bora from Kotak Securities. Please go ahead. 28:11 28 minutes, 11 seconds Uh yeah uh thank you for the opportunity. Uh my first question is on the replacement uh segment in the domestic market. Uh we have seen a a 28:20 28 minutes, 20 seconds very strong growth uh you know and uh obviously this month this quarter has been even stronger than what we have seen in the uh in the last few quarters. 28:28 28 minutes, 28 seconds So uh is it something to do with general filling or post GST cut you are seeing uh uh you know certain resurgence in the replacement segment demand and how 28:36 28 minutes, 36 seconds should we think about this category growth going into FI27 overall replacement uh yes there was 28:44 28 minutes, 44 seconds some channel filling uh because the channel downstopped in September uh but the growth is much more than channel 28:52 28 minutes, 52 seconds filling there's a genuine improvement in sentiment especially for farm and two wheeler tires but also witnessed in the 28:59 28 minutes, 59 seconds other categories which is passenger car tires and in um in truck bus radials. 29:05 29 minutes, 5 seconds How long this will last whether this is just a pent-up demand coming through uh we will know after a couple of quarters 29:12 29 minutes, 12 seconds but my view is that there will be a positive impact on demand overall and replacement. 29:18 29 minutes, 18 seconds Uh so at least for 27 should we continue expect at least high singledigit growth to sustain? 29:25 29 minutes, 25 seconds I think so we can expect high singledigit growth in replacement through FI27. 29:31 29 minutes, 31 seconds Understood. Uh and uh my second question is on the uh CAMSO bit right because uh last last to last quarter you know when 29:39 29 minutes, 39 seconds uh uh the management had highlighted that the CAMsO annualized revenues is roughly around 140 to 150 million uh 29:46 29 minutes, 46 seconds dollars and at least basis this quarter seems like the annualized run rate is around $80 million. So you know what has happened you know why the revenue you 29:54 29 minutes, 54 seconds know has uh you know further collapsed uh you know what are the factors for the same and when should we expect at least uh the quarterly run rate to reach the 30:04 30 minutes, 4 seconds uh you know the earlier annualized run rate and the second question on the margins of chem so if I heard it correctly you said this quarter margins 30:11 30 minutes, 11 seconds were double digit but if I just do concern minus standalone then the ieta margins is coming out to be around 3%. So what is the discrepancy over there? 30:19 30 minutes, 19 seconds Can you just explain? I'll explain the top line part first. 30:24 30 minutes, 24 seconds Yes, we have been saying it is 120 25 million actually. Uh it's slightly down from 140 million odd but that's the full 30:32 30 minutes, 32 seconds turnover when we realize the full turnover in terms of net sales realization from the customer. Right now in the transition phase we are selling 30:39 30 minutes, 39 seconds to Michelin who in turn is uh incurring the cost of distribution and keeping a small margin transparently with us and 30:47 30 minutes, 47 seconds selling it to customers. So the markdown realization is around uh you know around 30:54 30 minutes, 54 seconds 100 uh 90 100 a specific instance last quarter was a cyclone which has resulted in some disruption of operation which 31:02 31 minutes, 2 seconds will be made up. It's a supply chain disruption. So essentially if you uh calculate then it will trend to around 31:09 31 minutes, 9 seconds 90 9500 in terms of the reduced off tech price in the transition period. So it is trending as per our expectation. There's 31:16 31 minutes, 16 seconds no discrepancy there. As far as the margins are concerned the in the operating part of the margin yes we have 31:24 31 minutes, 24 seconds recorded double digit and it includes one-time transition cost as well as some recurring uh IT costs which were 31:32 31 minutes, 32 seconds incurred in quarter 3 which will which will stop incurring from quarter 4 and uh below operating uh I think Kumar you 31:40 31 minutes, 40 seconds can uh explain uh the situation in council see uh I think your question was on the oper 31:48 31 minutes, 48 seconds operating margin side. Okay. Uh yeah. So from that point of view uh we have two line items. One is that normal operating 31:57 31 minutes, 57 seconds margin that is what uh Amit mentioned to you on the double digits which is what we realized. Okay. Because in the we are 32:04 32 minutes, 4 seconds in the first initial uh phase of uh acquisition and change management. There are some IT costs we incurred in this 3 32:14 32 minutes, 14 seconds or 4 months time and some other transitionary expenses which are called as which we are booked as normal expenses. Okay. So there those costs are 32:22 32 minutes, 22 seconds more relating to quarter three and maybe in the first month of the operations. 32:28 32 minutes, 28 seconds Okay. So whenever we do an internal management uh reporting or performance reporting at that point in time we remove what what 32:37 32 minutes, 37 seconds is not what is specific to a one particular quarter more a transitionary is removed for the purpose of evaluating an operating performance. So if you 32:46 32 minutes, 46 seconds remove it it is a double-digit number and most of those costs have been already incurred. Okay and we should be able to sustain a double digit kind of a 32:55 32 minutes, 55 seconds margin going into quarter 4. But when we reported these numbers on a consolidated basis, we have taken them as expenses. 33:01 33 minutes, 1 second We have not called them out as a separate exceptional line item. And therefore when you read it, it appears as a single digit margin. 33:09 33 minutes, 9 seconds And uh so when should we expect a normalization like FI27 hopefully should be then a normalized year in that sense? 33:18 33 minutes, 18 seconds Some of the onetime costs relating to it transition etc. uh I think we have done and dusted as of 31st December. Okay. 33:26 33 minutes, 26 seconds And uh but going into uh January onwards those expenses will not be incurred. 33:33 33 minutes, 33 seconds So at least the margins the reported margin should also trend towards double digit by 27 low double digit. 33:38 33 minutes, 38 seconds So no I think you will see that from quarter four onwards resultant reported margins. Uh we'll be we'll be in line. 33:45 33 minutes, 45 seconds See I just ignore one more point before you follow up with another question. Uh in the P&L of uh that particular entity 33:53 33 minutes, 53 seconds also has two other elements of cost. One is the depreciation cost and another one is interest cost. Interest large part of 34:00 34 minutes the interest cost uh uh it is also accured in our books. See at India books and consolidated it'll get netted off. 34:07 34 minutes, 7 seconds We have given in in the current capital structure. Okay. uh uh reasonably large amount is taken as a debt in their 34:15 34 minutes, 15 seconds books. Okay, keeping in mind repatriation part of uh flexibility, we will recast it maybe by end of quarter 4 34:23 34 minutes, 23 seconds and depreciation cost is still at an estimated level. I think in the quarter 4 we in the process of assessing the life of the assets to ensure that the 34:32 34 minutes, 32 seconds depreciation that we take into books is based on real assessment of the life of the assets. Those are below operating line items point of view. But coming 34:41 34 minutes, 41 seconds back to your question, I think you would be able to see that margin visible in the reported numbers in from quarter 4 onwards that double digit kind of a 34:49 34 minutes, 49 seconds number because we are unlikely likely to incur those costs starting from January. 34:54 34 minutes, 54 seconds Understood. And when would this complete transfer from Michelin take place? So like today you said that there is a markdown which happens. So when should we expect that business transfer to happen? 35:04 35 minutes, 4 seconds So that transfer is at two ends. So one is the customer transfer and one is the raw material purchase that we do. So the 35:12 35 minutes, 12 seconds raw material purchase that we do will stop when we erect our mixer and calendar which will take another uh 3 to 35:18 35 minutes, 18 seconds five quarters um to to completely come to us on the front end. Customer transfer has started. We have already 35:26 35 minutes, 26 seconds started looking at a few customers in this quarter. It will accelerate in quarter four and maybe by quarter 1, quarter two we should be done with it. 35:34 35 minutes, 34 seconds So then realization should normalize by second quarter next year. From the front end it will do faster. Yeah, you're right. Correct. 35:42 35 minutes, 42 seconds Understood. Understood. Thank you so much sir. All the best. 35:48 35 minutes, 48 seconds Thank you. The next question is from the line of Mir Va from Aquir Securities. Please go ahead. 35:55 35 minutes, 55 seconds Uh yeah thank you for taking my question. So sir my question is a bit clarificatory in nature. So in July we had announced a capeex of around 450 cr 36:04 36 minutes, 4 seconds on the passenger car tires capacity in Chennai itself which was roughly around 35% of the capacity then. So that is 36:12 36 minutes, 12 seconds roughly 20 24 lakh tires assuming. So now we have announced another 1350 cr. 36:19 36 minutes, 19 seconds So is this including the 450 K or that is a separate one and this is something which is separate. No this is independent of that. Okay. So 36:28 36 minutes, 28 seconds what we announced in the month of July was taking our capacity uh to about 30,000 tires uh per day. Okay. So uh and 36:38 36 minutes, 38 seconds that is under implementation. We hope to complete that execution in the coming financial year by quarter 3 or quarter 4 36:45 36 minutes, 45 seconds of coming financial year. This 30,000 tires to 40,000 tires is over and above that. Okay. Which will get completed maybe a year later. 36:55 36 minutes, 55 seconds Right. And sir, so basically when we do the back of the envelope calculation here the cost the ton uh turn per day 37:02 37 minutes, 2 seconds cost the capex cost per TPD comes out to be higher this time. So what is changed in the you know in the cex here. 37:12 37 minutes, 12 seconds Okay see this this translates to about 140 tons a day. Okay. And uh uh passenger car radial tires average 37:20 37 minutes, 20 seconds weight is uh progressively going up. So therefore we expect our incremental requirement uh to have a higher level of 37:29 37 minutes, 29 seconds weight of the tires. We'll have all the flexibility to produce more number of tires should the upstream capacity being higher uh and average weight of the tire 37:38 37 minutes, 38 seconds being lower. Okay. And uh what we intend to do is that so this if you really look at the total capex and divided by the 37:46 37 minutes, 46 seconds tonnage that I just now mentioned to you it'll be broadly in line uh broadly in line with what we have uh incurred so far. 37:54 37 minutes, 54 seconds All right. All right. Okay. Okay. And the just a follow up on this like our capacity expansion in the PCR category 38:02 38 minutes, 2 seconds has been quite strong compared to our peers. So uh what steps in terms of even you know in terms of market in terms of 38:09 38 minutes, 9 seconds pricing would we be taking like to utilize this capacity and you know basically what growth are we expecting here because the industry would be 38:17 38 minutes, 17 seconds growing at say 6 to 7% in terms of OEM but our capacity expansion has been in a strong double digit. 38:24 38 minutes, 24 seconds Yeah. So um we are looking at growth in all three uh verticles. Um international 38:32 38 minutes, 32 seconds is uh growing strongly as we keep getting uh consolidating our market share in several countries where we play 38:39 38 minutes, 39 seconds latam uh Europe and the US is yet to play out. So we are experiencing strong growth. Uh in domestic OEM as I 38:47 38 minutes, 47 seconds mentioned we had exited several vehicles over the last 2 three years. So our base was low last year. we are getting 38:54 38 minutes, 54 seconds entries in several vehicles high volume vehicles from um across OEMs including some EVs. So uh that growth is coming up 39:04 39 minutes, 4 seconds and most of that growth is coming in the OEMs in the higher rim sizes. So when that happens the average tire weight as 39:10 39 minutes, 10 seconds Kumar explained goes up and therefore in terms of tonnage we need higher capacity in terms of numbers of course we need higher capacity. We think we have some 39:19 39 minutes, 19 seconds headroom to grow our share in um OEM even now much as we are growing in this year over a low base of last year. 39:27 39 minutes, 27 seconds Coming to replacement uh we are at the third rank now behind two more players 39:34 39 minutes, 34 seconds and uh there is a gap of about 3 and a half to 4% between us and the market leader. So in the next uh 3 to four 39:44 39 minutes, 44 seconds years we expect to bridge this gap gap uh over a period of over a period of this time and our ambition is to 39:51 39 minutes, 51 seconds definitely go for market leadership in this segment. Uh we have been doing well. The premiumization journey [clears throat] is going well. In terms of pricing, we will act we are actually 40:00 40 minutes uh introducing uh many higher technology tires such as the foam tire which is the calm tire, the ZR rated tire, the uh run 40:09 40 minutes, 9 seconds flat tire and taking the average trying to take the average realizations up in this category. The selling price of the dealer to the consumer is also trending 40:18 40 minutes, 18 seconds up and over a period of time with volumes the margin profile will should actually improve. 40:26 40 minutes, 26 seconds Right. Okay sir. Okay that answers my question. Thank you. 40:31 40 minutes, 31 seconds Thank you. Participants who wishes to ask a question may press star and one. 40:39 40 minutes, 39 seconds The next question is from the line of Sai Pande from Noama. Please go ahead. 40:46 40 minutes, 46 seconds Hi sir. Thank you for taking my question. 40:49 40 minutes, 49 seconds A couple of questions sir. So when you say double digit uh margin for cancer is it like 40:57 40 minutes, 57 seconds uh should we expect it to be around 10 12% or is it high teens uh or more than 15%. 41:06 41 minutes, 6 seconds Because uh camsu in general uh when we will have the full business that will be at around 20% a bit margin right. 41:16 41 minutes, 16 seconds Yes. So uh when we said in quarter three what was it? It was uh just about teens low teens u without any improvement too 41:26 41 minutes, 26 seconds much improvement in the business traction which is the volume traction after the onetime costs etc are removed gradually it will trend towards mid- 41:34 41 minutes, 34 seconds teens and we did talk about 20% and above that will come when we take complete control of customers as well as 41:42 41 minutes, 42 seconds the material supply at the back end and we start improving the capacity utilization of the factory which is currently standing at 50% when the 41:50 41 minutes, 50 seconds volume traction comes yes uh it should move up from mid- teens to around 20%. 41:57 41 minutes, 57 seconds Okay. And sir uh now in terms of coming to the domestic market uh how do you how 42:04 42 minutes, 4 seconds are you seeing uh the growth in the fourth quarter for all the segments especially on the heat 42:12 42 minutes, 12 seconds placement side. If you can just briefly help us map the so yeah fourth quarter seasonally is a 42:20 42 minutes, 20 seconds mixed quarter January is usually low because of winter in north and east I'm talking of replacement whereas March is 42:27 42 minutes, 27 seconds usually high uh because of the onset of summer so it's a mixed quarter Jan Feb March usually uh however we have the positive impetus due to the GST 42:36 42 minutes, 36 seconds reduction uh the growth has been pretty good in the month of in in quarter three we have to see if If it sustains if it 42:44 42 minutes, 44 seconds sustains we'll have a very good quarter again in Q4 otherwise it may moderate a little but the net positive impact of GST will remain 42:53 42 minutes, 53 seconds and in terms of channel inventory they are still at nominal level or for the 43:01 43 minutes, 1 second channel inventory has normalized completely. 43:05 43 minutes, 5 seconds Okay. Okay. And lastly sir um 43:10 43 minutes, 10 seconds in terms just wanted to just if you can clarify 43:19 43 minutes, 19 seconds uh in terms of uh the components about the raw materials. So uh because international rubber prices has 43:27 43 minutes, 27 seconds increased. So uh how is the domestic rubber prices looking and other components like carbon fiber and other 43:35 43 minutes, 35 seconds oil derivative products? If you could just clarify those prices. 43:40 43 minutes, 40 seconds Okay. See uh local prices are in the range of 185 to 190 rupees per kg. Okay. So no major change in the last 3 months. 43:50 43 minutes, 50 seconds It's been up and plus or minus in that range only. uh international prices have moved up by about $100 per ton. It's 43:58 43 minutes, 58 seconds hovering about 18 $1,800 $1810 per ton at this point in time. The impact of currency is there on the uh imports. Uh 44:07 44 minutes, 7 seconds so therefore uh the little bit of adverse impact. Carbon black prices are expected to be little lower in the current quarter because the average 44:16 44 minutes, 16 seconds crude level prices were lower in quarter 3. uh generally the previous quarter movement of crude and and the feed stock 44:24 44 minutes, 24 seconds that goes into carbon black is called a CBFS remain little on the lower side. So therefore that is where it is generally 44:31 44 minutes, 31 seconds we have one quarterly price for carbon black synthetic rubber prices and uh beginning to end of the previous quarter 44:39 44 minutes, 39 seconds particularly something called as butadine that determines the synthetic rubber prices okay remained and uh in a particular range it started uh average 44:48 44 minutes, 48 seconds price towards the end of the quarter or the end end of the quarter price was little lower than the beginning of the quarter and therefore average uh for 44:57 44 minutes, 57 seconds quarter 4 is likely to be little lower than quarter three. Okay. And steel and other prices we don't expect any major change to happen in quarter four. So 45:06 45 minutes, 6 seconds considering you know synthetic rubber also has import parity kind of a pricing some portion of this imported etc. Currency could have an impact on on it. 45:14 45 minutes, 14 seconds So overall our assessment is 1 to 1 and a half% sequentially the raw material uh basket cost could move up. Okay. It is 45:23 45 minutes, 23 seconds subject to you know recipe subject to categories and things like that is what our initial estimate is. 45:31 45 minutes, 31 seconds I'm sure this one to one and a half% headwind is probably because coming from the currency side or 45:38 45 minutes, 38 seconds yeah correct currency see currency impact is about uh average about 3%. 45:43 45 minutes, 43 seconds Okay. uh some feed stock prices have moved up some of them down and considering we have already covered some portion of the raw materials 1 to one 45:52 45 minutes, 52 seconds and a half is is largely currency and little bit of natural rubber. Okay. Okay. Thank you. 46:07 46 minutes, 7 seconds Thank you. The next question is from the line of Nitan from JM Financial. Please go ahead. Hi, thanks for the opportunity and congratulation on a good set of 46:16 46 minutes, 16 seconds numbers. So my question is regarding the demand in the international market especially for OC and agree. So where do you see the demand panning out for say next quarter or going into FI77? 46:29 46 minutes, 29 seconds Uh see we have a uh uh uh our big markets for agri remain uh Europe uh Canada uh South America where we supply 46:38 46 minutes, 38 seconds to some OEMs as well as Australia, South Africa. So, so we we continue to trend on these markets. Uh from a tariff point 46:46 46 minutes, 46 seconds of view, US u we have little exposure in the US not significant and uh so so apart from US all these markets that I 46:54 46 minutes, 54 seconds mentioned are the markets that we shall continue to focus on uh for the agri business. 47:00 47 minutes Okay. So uh we we can see stabilization and going uh uh like slow single digit growth in those markets uh those 47:08 47 minutes, 8 seconds categories. Yes, we expect that. Okay. Okay, that's it from my side. Thank you. 47:16 47 minutes, 16 seconds Thank you. The next question is from the line of Mtor Sha from PCAPL. Please go ahead. 47:23 47 minutes, 23 seconds Yes sir. Thank you for the opportunity and congratulations on all your strong performance. Uh first I'm sorry to interrupt you Mr. Sha but we are unable to hear you that clearly. 47:34 47 minutes, 34 seconds Hello. Am I audible? 47:37 47 minutes, 37 seconds Yes, please go ahead. Yeah, thank you for the opportunity and congratulations on a strong performance. Sir, my first 47:44 47 minutes, 44 seconds question is on replacement demand for the quarter. If you can help with uh some ballpark number for industry for 47:51 47 minutes, 51 seconds various segments for replacement like CV, farm equipment, PCR and related to this uh want to understand how much 48:00 48 minutes would be contribution of the restocking in this as we heard from the channel check that during the GST related 48:08 48 minutes, 8 seconds challenges initially inventory used to be 15 to 20 days which went down to about 2 three days and post GST again 48:17 48 minutes, 17 seconds restocking started. So what would be the number in terms of the inventory at the beginning of October and at the end of December approximately? 48:26 48 minutes, 26 seconds Thanks sir. This is the first question on replacement side. 48:30 48 minutes, 30 seconds As I mentioned the inventories have normalized. So if you have picked up 12 to 15 days of inventory in retail that's 48:36 48 minutes, 36 seconds the level of inventory roughly uh at the end of the quarter 3. So the downtocking of September was made up in the month of 48:44 48 minutes, 44 seconds October itself and then we witnessed a good offtake which was replenished. So uh there is no further uh delta that we 48:53 48 minutes, 53 seconds expect in inventory going forward. So I had mentioned during my um during my initial u uh address that um replacement 49:02 49 minutes, 2 seconds replacement demand has been strong for MSCV high single digit uh and two-wheeler has been constantly um uh 49:10 49 minutes, 10 seconds almost doubledigit kind of growth in two-heer especially in scooter tires and passenger had been lukewarm in uh in the 49:18 49 minutes, 18 seconds first half but uh quarter 3 has been also mid to high single digit for uh passenger passenger car tires 49:27 49 minutes, 27 seconds and do we expect trend to continue at least for one or two quarter for replacement? 49:33 49 minutes, 33 seconds Uh we have to wait and see. I wouldn't stick my neck out and uh say that these trends will continue but there will be a 49:40 49 minutes, 40 seconds net positive impact. I think overall uh quarter four will be better than first half. 49:47 49 minutes, 47 seconds Okay. Answer second question on the cancer side that in this quarter how much would be the gross margin benefit 49:56 49 minutes, 56 seconds not asking exact absolute number but directionally and going forward also how do you see considering the gross currency impact as well as all other raw 50:04 50 minutes, 4 seconds material related parameters gross margin for Q4 for chem 50:12 50 minutes, 12 seconds gross margin uh is again moderated because we are in a transition state. So in the transition state whatever gross 50:20 50 minutes, 20 seconds margin uh we had expected by and large it is trending barring one adjustment for uh steel steel prices uh where uh we 50:29 50 minutes, 29 seconds have taken a hit on gross margin and we are aware of that but this will be again made up by passing on the prices to um 50:37 50 minutes, 37 seconds to the customer over uh quarter 4. So we'll be back to normal kind of gross margins as we expected before the deal closed. 50:45 50 minutes, 45 seconds Yes sir. Thanks and all the best. Thank you. 50:50 50 minutes, 50 seconds Thank you. The next question is from the line of Agnesh Ayar from Sequent Investments. Please go ahead. 50:57 50 minutes, 57 seconds Uh hello. Uh just uh one uh clarification I wanted uh I heard you say that there is a one-time expense uh 51:05 51 minutes, 5 seconds that we incurred in Cam. So in this quarter which is not expected to repeat in uh quarter four. So can you quantify the amount of uh aspending that we did? 51:18 51 minutes, 18 seconds Okay. See look uh overall uh for the quarter uh it would have been about four to 5% uh of the revenue was the kind of 51:28 51 minutes, 28 seconds expenses that we incurred on quarter 3 that we wouldn't incur in quarter 4 onwards. Okay sir. Yeah that was. 51:37 51 minutes, 37 seconds Yeah. Yeah. 51:40 51 minutes, 40 seconds Thank you. The next question is from the line of Mahir Mahir Vora from Equa Securities. Please go ahead. Uh 51:48 51 minutes, 48 seconds yeah, thank you for taking my question again. So sir, just uh some idea on the truck bus, radial or uh the commercial 51:57 51 minutes, 57 seconds vehicle segment, we mentioned that we had grew around mid single digit in the MCV category. But going into the segment, how are we seeing the demand 52:06 52 minutes, 6 seconds sustaining going ahead and color on the sub segment or how are we seeing the tonnage shifts happening here? Is it moving toward higher tonnage or still we are there into the hlet segment only? 52:17 52 minutes, 17 seconds Some color on that as well. Are you talking of replacement market? Yes sir. 52:23 52 minutes, 23 seconds Yeah. So replace both the OEM and replacement both the color. 52:28 52 minutes, 28 seconds Yeah. So, OEM uh it is uh the it has shifted towards 16 wheelers as you know and the demand is concentrated in 16 52:36 52 minutes, 36 seconds wheelers in MSCV and uh there's a good demand from LCVs and small commercial vehicles also because of e-commerce and 52:45 52 minutes, 45 seconds growth in quick commerce. So that segment is witnessing very strong growth as well high double digit in fact um in 52:52 52 minutes, 52 seconds OEM in replacement as well the tires for small commercial vehicle light commercial vehicle as well as the full 53:00 53 minutes range of MCV um overall is growing at a high single digit and we expect this growth rate to accelerate because you 53:09 53 minutes, 9 seconds know um the summer season is is the big season for this so March to June this growth should hold at this level if not 53:17 53 minutes, 17 seconds if not more. So we expect this to uh grow and MHCV have been uh very tepid in 53:25 53 minutes, 25 seconds the first half in OEMs. It has come alive in quarter 3. So it may moderate a little but uh this cycle should last uh 53:33 53 minutes, 33 seconds a few more quarters maybe two to three quarters up to June definitely is what I think right sir and uh so basically on the 53:42 53 minutes, 42 seconds replacement front also now that because of GST we may see fleet utilization improving so are we seeing that traction also on the ground that trucks are 53:51 53 minutes, 51 seconds coming in for replacing the tires and going ahead what do we think there specifically on the MCU yeah in replacement also So we have seen 53:59 53 minutes, 59 seconds some traction in the demand of tires uh in quarter 3 which is usually a down quarter because of onset of winter 54:07 54 minutes, 7 seconds whereas we have seen traction in Q3 to be better than quarter 2. So which is obviously because of the GST rate reduction and um how much this will 54:15 54 minutes, 15 seconds sustain we'll have to wait and see Q3 and Q4 uh Q4 and Q1 uh but as I mentioned we should have a net positive 54:24 54 minutes, 24 seconds effect visa v first half that is before the GST uh decrease happened all right okay sir thank you that's all 54:31 54 minutes, 31 seconds from myself thank you ladies and gentlemen as there are no further questions from the 54:39 54 minutes, 39 seconds participants I now hand the conference over to management for closing comments. 54:45 54 minutes, 45 seconds Yeah. So, thank you. Happy new year once again and uh this is the last quarter. 54:49 54 minutes, 49 seconds Uh so, we hope to see you at the end of the year with a full year performance uh review and we shall share that with you. 54:56 54 minutes, 56 seconds Thank you very much. 54:58 54 minutes, 58 seconds Thank you on behalf of Equir Securities Private Limited. That concludes this conference. Thank you for joining us.