CEAT Limited — Q4 FY26

CEAT Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Ry_hxJDMy3A Published: 2 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the CSQ4 and full year 26 earnings conference call hosted by JM 0:09 9 seconds Financial Institutional Securities Limited. As a reminder, all participant lines will remain in the listenon mode and there will be an opportunity for you 0:17 17 seconds to ask questions after the presentation concludes. 0:21 21 seconds Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. 0:32 32 seconds I will now hand the conference over to Mr. Nathan Agraal from JM Financial Institutional Securities Limited for opening remarks. Thank you and over to you. 0:42 42 seconds Thank you Ryan. Uh good afternoon everyone. On behalf of JM Financial, I welcome you all to Q4 and full year 26 result conference call of Cat Limited. 0:51 51 seconds From the management side, we have Mr. 0:53 53 seconds Ara Benedy, managing director and CEO and Mr. Kumar Subas, chief financial officer. I would now like to hand over the call to Anir for his opening remarks. Over to you, sir. 1:05 1 minute, 5 seconds Good afternoon and welcome to CF's quarter 4 uh earnings call. I'll be taking you through the business updates 1:12 1 minute, 12 seconds for this quarter and then uh I shall hand it over to Kumar for his remarks on the financial performance and then we'll 1:18 1 minute, 18 seconds have the Q&A for the industry. FI26 was a year of uh two halves. While the first six months were moving along at a normal 1:27 1 minute, 27 seconds pace and we had doubledigit growth in first half as well. Late September proved to be a decip turning point with the GST rate reduction. 1:35 1 minute, 35 seconds uh this meaningfully reduced the effective tax burden across tire categories improving overall affordability and the sentiment across aftermarket and OEMs. 1:45 1 minute, 45 seconds Coming to demand outlook, near-term demand would be shaped by multiple variables while annually seasonality during summer months as well. The 1:54 1 minute, 54 seconds broader demand environment remains clouded by the West Asia conflict and related fuel price expectation. recently 2:02 2 minutes, 2 seconds uh concluded har rai harvest should however improve cash flows and sustain rural demand in the near term. As of now 2:09 2 minutes, 9 seconds as we enter FI27 demand looks good uh in aftermarket in OEMs but there is also an 2:16 2 minutes, 16 seconds attendant uh steep promal price hike which we can discuss later. 2:22 2 minutes, 22 seconds Um overall demand outlook is expected to moderate out therefore but broadly may remain supportive in the near term. We 2:29 2 minutes, 29 seconds expect replacement demand for NHCV uh to be in high double high single digit rising out of increased economic 2:38 2 minutes, 38 seconds activity, positive seasonality and an aging fleet. For two wheeler demand has been encouraging with consumption levels surpassing precoid levels. 2:48 2 minutes, 48 seconds Uh our passenger tire demand has been somewhat muted in replacement but may increase in the coming years post an increase in OE sales in the last year. 2:58 2 minutes, 58 seconds in OEM MS series witnessing continued strength post GST rationalization growth has been robust in Q4 in high double 3:06 3 minutes, 6 seconds digit light commercial vehicle growth is also strong in passenger cars uh near-term growth is expected to be 3:13 3 minutes, 13 seconds healthy singledigit uh with passenger car SUV SUV MPV categories looking stronger uh than than 3:21 3 minutes, 21 seconds sedans per se in international business we are seeing signs of recovery in multiple segments 3:29 3 minutes, 29 seconds particularly across CVS in US and Europe. Uh passenger car tire business is also strong particularly in Europe. 3:37 3 minutes, 37 seconds However, geopolitical uncertainties remain a key monitorable uh sales to uh Middle East obviously have been severely impacted in quarter 4. 3:48 3 minutes, 48 seconds Um as inflation u as we are in in entering a steep inflation zone in quarter one um we will see moderation 3:57 3 minutes, 57 seconds and demand by the end of quarter 1 moving into quarter two but the basic fundamentals otherwise remain strong 4:07 4 minutes, 7 seconds as far as our financial performance goes we had a good quarter four where our revenue grew 18.2% 2% Y on a standalone 4:14 4 minutes, 14 seconds basis. For the full year, we have been maintaining that we are looking at an overall double-digit growth. Happy to share that on a full year standalone basis, we grew by 14 15.5%. 4:25 4 minutes, 25 seconds Also, standalone AIDA stood at 587 cr uh significantly crossing the 500 cr milestone and also the 2,000 cr milestone in uh in a year. 4:38 4 minutes, 38 seconds Growth momentum continued in quarter 4 last year. uh we had an 18.2% value growth. Replacement grew in mid- teens. 4:45 4 minutes, 45 seconds OE also grew around mid- teens and international business had a very strong quarter in quarter 4. We have grown uh 4:54 4 minutes, 54 seconds in offway tire and passengers category tire in Western Europe very well. In replacement, two wheeler continues to do 5:02 5 minutes, 2 seconds well and uh grew uh strongly in the mid20s in quarter 4. Truck bus and farm 5:10 5 minutes, 10 seconds also came back strongly in quarter four where growth win growth where uh growth rate was in low teens. Replacement PCU 5:17 5 minutes, 17 seconds grew in uh mids single digit in quarter 4 but on a full year basis the growth was slightly better. OEMs uh we had a 5:26 5 minutes, 26 seconds healthy growth uh passenger car segment saw very high growth where we had a lower base as well um and uh very strong 5:35 5 minutes, 35 seconds doubledigit uh growth with significant share in premium vehicles in two wheeler we maintained our strong uh singledigit 5:43 5 minutes, 43 seconds growth even in this year farm growth in OEM continued to show resilience again uh strong double digit growth here Trump 5:51 5 minutes, 51 seconds bus saw low double-digit growth Um um in quarter 4 international business um it came back very strongly across segments 5:59 5 minutes, 59 seconds uh passengers cars uh tires in western Europe, US uh across across the markets very strong growth. Two three wheelers 6:08 6 minutes, 8 seconds again uh we ventured into new markets and the base is small so growth looks very impressive. Farm was also pretty 6:17 6 minutes, 17 seconds good in quarter 4. So overall across farm two three-wheeler and passenger the growth was very very strong. Um in truck 6:26 6 minutes, 26 seconds bus radial also we had a decent growth but not as strong as the other three segments. 6:33 6 minutes, 33 seconds Share of business uh during quarter 4 on a fullear basis. In replacement market our share of business was positive across categories. uh in PCU about half 6:42 6 minutes, 42 seconds a percent up in motorcycle about 1% up in scooter it was uh flattish over quarter and quarter uh in compass radial 6:50 6 minutes, 50 seconds also about half a percent up in replacement uh in OEM's in quarter 4 we grew in 6:57 6 minutes, 57 seconds scooter in terms of share uh and we were slightly down in passenger car uh segment uh less than about a percent 7:06 7 minutes, 6 seconds down and about a percent down in motorcycle but these are minor adjustments in terms of models uh and uh 7:13 7 minutes, 13 seconds production ramp up and the fitments that we have in those models. Um in in truck bus radial also it was slightly down for 7:23 7 minutes, 23 seconds the same reason. Quarter four margins gross margins were almost similar to quarter 3 about 19 basis points down Q. 7:32 7 minutes, 32 seconds uh our raw material uh prices u uh in Q4 was slightly higher than Q3 but in Q1 it 7:39 7 minutes, 39 seconds will shoot up to 15% plus in uh in by end of Q1 we may reach closer to 20%. So 7:47 7 minutes, 47 seconds this is a steep increase over a span of 3 months and we are uh we are the outlook is that we can manage only a 7:55 7 minutes, 55 seconds small portion of it through cost optimization. So price increase is an imperative in um in OEM. The price 8:02 8 minutes, 2 seconds increase comes with a lag. So 1 July we'll get a big increase. We have got a small singledigit increase uh in quarter 8:09 8 minutes, 9 seconds one. In uh replacement we have already taken uh in between March and April and by April end we will be about 5% up. Uh 8:19 8 minutes, 19 seconds we need to take another at least 5% price hike through the month of May and June which we are uh planning. In international business we have been 8:28 8 minutes, 28 seconds taking up prices in stages uh adding up to close to 10%. But there is a order base which we have which is at least 8:35 8 minutes, 35 seconds about 30 days. So the pass through uh in terms of execution and realization will take some time. Uh in quarter 4 our eida 8:44 8 minutes, 44 seconds margin uh stood at 14.6% 13.4% 4% uh for the full year and we have been uh pretty 8:52 8 minutes, 52 seconds much uh consistent through quarter 2, quarter 3 and quarter 4 as we always try to be. Uh our standalone net profit in 9:00 9 minutes Q4 was 283 crores and 812 crores for the four years. 9:06 9 minutes, 6 seconds Uh as far as cancer is concerned um uh the operations are continuing smoothly. 9:12 9 minutes, 12 seconds The production was affected due to non-availability of fuel uh locally for some time in Sri Lanka and uh overall 9:20 9 minutes, 20 seconds revenues for CAMSO was similar to quarter 3 down about 5% from quarter 3. 9:26 9 minutes, 26 seconds Uh as you are aware uh the CAMSO business is in transition and will continue to be in transition uh for at least four more quarters. At the outset 9:35 9 minutes, 35 seconds we had said four to six quarters and two quarters are gone. By end of FI27, the entire value chain may be under our 9:43 9 minutes, 43 seconds control. By end of first half, the sales side which is the customer interface should be in our control. However, the 9:50 9 minutes, 50 seconds purchase site where we are buying compounds will come to our hands only when we erect the upstream equipment of calendar and uh mixer which is expected 9:59 9 minutes, 59 seconds to happen by end of quarter 4. So that's how it is uh in uh in uh uh in CMSO. Um 10:08 10 minutes, 8 seconds as far as the other trends are concerned, electrification, international business, premiumization and digital uh I shall brief you shortly 10:17 10 minutes, 17 seconds on that. We continue to focus on uh market shares in OEM on electric vehicles. In passenger we are sitting at 10:25 10 minutes, 25 seconds about 29% share and in two-heer it's about 18%. And uh we are participating in almost all the new launches that are 10:35 10 minutes, 35 seconds coming up in four-wheeler and two-heer in the domestic market. 10:39 10 minutes, 39 seconds In international uh markets, our salency has improved from 19% to 20.4% in quarter 4 which is on a standalone basis 10:48 10 minutes, 48 seconds and along with CAMSO it has gone in excess of 23%. And this is an important metric for us as uh I have mentioned 10:55 10 minutes, 55 seconds that this is market descriptive business for us. About 130 plus new offs were launched which uh gives robustness to 11:04 11 minutes, 4 seconds our product portfolio. We have set up overseas entities and branches in Germany, UK, France and Poland to build 11:11 11 minutes, 11 seconds a more permanent localized presence in these and and adjust adjacent market in 11:18 11 minutes, 18 seconds the nonh specialtity business. We have uh clocked uh high growth in the 20s in 11:25 11 minutes, 25 seconds quarter 4 on Yi basis in the high 20s. U this was despite the fact that substantial headwinds this year we faced 11:33 11 minutes, 33 seconds from US tariffs initially and the recent geopolitical unrest in the in the Middle East. 11:42 11 minutes, 42 seconds uh for premiumization uh we have been continuously focusing on 17in plus uh sales of uh passenger vehicle. The 11:50 11 minutes, 50 seconds salency and market share in that segment has significantly improved in Q4 over Q3. Our sales in the two-heer premium 11:58 11 minutes, 58 seconds segment which is 250 plus c 250 cc plus vehicles uh has been also in increasing 12:05 12 minutes, 5 seconds consistently and Q4 reached a new high in terms of these uh uh premium sales as well. In truckbasial also we have 12:13 12 minutes, 13 seconds started premiumizing which we have uh and we have launched couple of absolutely top-of-the-line uh premium 12:20 12 minutes, 20 seconds products which gives a lower TCO to our customers. 12:25 12 minutes, 25 seconds Digital and AI our digital transformation continued to advance in Q4. Uh building our AI capabilities are 12:33 12 minutes, 33 seconds focus is on democratizing the AI uh capability across the enterprise and driving value at scale. We want to make 12:40 12 minutes, 40 seconds it accessible and practical and embedding it into day-to-day workflows and decision making. To enable this shift, we are strengthening our data and 12:49 12 minutes, 49 seconds capability foundation. Q4 uh included a kickoff of our centralized enterprise data lake, linking core data 12:56 12 minutes, 56 seconds onto a single govern platform alongside the initiation of a transition to SAP rise, SAP rise to unlock advanced 13:04 13 minutes, 4 seconds analytics and AIT uh efficiencies. We are also instituting a data governance council for responsible and compliant 13:11 13 minutes, 11 seconds use of AI and setting up an AI labs as a center of excellence to anchor innovation uh uh innovation and upskill 13:19 13 minutes, 19 seconds our workforce. Together this initiatives will support a structured and scalable approach to a adoption across the uh 13:26 13 minutes, 26 seconds across the organization. US tariffs uh uh on in uh in on-road tires which is 13:34 13 minutes, 34 seconds PCU and truck bus radial our tariffs continue to stay at 25% incremental uh plus the original tariff of around 4%. 13:43 13 minutes, 43 seconds In uh in u uh in OT uh it was it has been reduced from 50% uh now uh to 10%. 13:52 13 minutes, 52 seconds And uh uh as as we know there's a court order in terms of refunding this tariff. 13:58 13 minutes, 58 seconds So we are following up to see what happens in OST. No such refund etc are applicable to onroad tariffs because uh 14:05 14 minutes, 5 seconds that was section 232 tariffs which are not reciprocal tariffs. CEX are about capacity utilization is on the higher 14:14 14 minutes, 14 seconds side right now. Um in 85 to 90% range across the categories. Um uh looking at the current uh situation in quarter 1, 14:23 14 minutes, 23 seconds we are we are uh uh going with absolutely mandatory capex about maybe 200 to 250 crores. We for our growth 14:31 14 minutes, 31 seconds capex plus our normal capex we need about 1,300 to 400 crores 1,400 crores capex during the year. We'll calibrate 14:38 14 minutes, 38 seconds our approach as we go along quarter to quarter. Sustainability. We have received SBTI validation for companywide emission reduction aligned with science 14:47 14 minutes, 47 seconds B based net zero targets focusing on energy efficiency, clean energy adoption, responsible resource use and continuous performance monitoring. 14:56 14 minutes, 56 seconds During Q4, our HAL plant was formally awarded SA 8000 certification which is concerned about social accountability. 15:04 15 minutes, 4 seconds Gradually we'll cover the other plants also with this uh certification. 15:09 15 minutes, 9 seconds We achieved S&P global ESG score of 69 on 100 in 2025 corporate sustainability 15:16 15 minutes, 16 seconds assessment which places us in the top 4% of companies in APX autoco component industries globally. Overall FYI 26 15:24 15 minutes, 24 seconds proved to be a robust uh growth year and a good year for profitability as well. 15:30 15 minutes, 30 seconds As we enter FI27, while input cost inflation presents a near-term headwind, structural demand drivers remain in 15:37 15 minutes, 37 seconds place providing the resilience and momentum needed to navigate this phase and sustain future growth. With this, I 15:44 15 minutes, 44 seconds would like to hand over now to Kumar for his remarks. 15:51 15 minutes, 51 seconds Thank you. Uh good afternoon ladies and gentlemen. Uh thank you all for joining our quarter 4 FI26 uh earnings call. 16:00 16 minutes I'll share some uh further financial data points with you all post which we can enter the Q&A session. 16:08 16 minutes, 8 seconds So coming to overall financial performance uh we ended the year uh and quarter with some key milestones 16:16 16 minutes, 16 seconds relating to revenue. uh considering our consolidated numbers for the current year include our acquisition of Camso business during the course of the year. 16:27 16 minutes, 27 seconds Now I would like to call out our standalone financial numbers uh in parallel so that the comparison of our performance versus last year come out 16:35 16 minutes, 35 seconds more clearly to you all. Our consolidated revenue for the quarter stood at rupes 4,219 crores and standard 16:44 16 minutes, 44 seconds revenue stood at rupees 436 crores. Our standalone revenue grew by 18% 16:51 16 minutes, 51 seconds yearon-year basis. We would like to inform you that our standalone revenue crossed an important milestone of rup 16:58 16 minutes, 58 seconds 4,000 cr in a quarter for the first time in the preceding quarter. 17:03 17 minutes, 3 seconds Our full year consolidated revenue stood at 15,678 crores and the standalone revenue for 17:10 17 minutes, 10 seconds the year stood at 15,215 crores and a standalone growth was about 15.5% on a 17:18 17 minutes, 18 seconds full year basis. Here again our standalone revenue crossed an important annual milestone of crossing rups 15,000 crores for the first time during the 17:27 17 minutes, 27 seconds year. It is for important for everyone to know that our revenue grew in double digits in all the four quarters of the year. The growth in the second half of 17:36 17 minutes, 36 seconds the year was higher than the first half of the year as Arna mentioned largely benefiting from the drop in GST rates for vehicle manufacturers particularly 17:45 17 minutes, 45 seconds two wheelers and lower in passenger cars and also reduction in GST rates on tires from 28 to 18% for most of the tire 17:53 17 minutes, 53 seconds categories and except in case of form tires where the rate reduction was from 18% to 5%. 18:01 18 minutes, 1 second The growth was driven by a combination of both volume and price. During FI26, 18:07 18 minutes, 7 seconds the replacement business delivered a double-digit growth while international business came back strongly in the 18:15 18 minutes, 15 seconds second half of the year delivering high teens and over the same period over the last year and OEM registered a 20% plus 18:23 18 minutes, 23 seconds kind of a growth laying a healthy foundation for the future replacement demand. Coming to margin, uh, our standalone gross margin for quarter 4 stood at 39.7%. 18:34 18 minutes, 34 seconds The marginal contraction of about 19 basis points sequentially while raw material prices went up toward the end 18:41 18 minutes, 41 seconds of the year. Uh, the raw material cost for the quarter more or less remained in line with uh the previous quarter and 18:49 18 minutes, 49 seconds also as uh shared by with us shared by us with you in the last quarter in terms of our own forecast. 18:57 18 minutes, 57 seconds Now coming to uh EITA margins are consolidated AIDA for quarter 4 stood at rupees 4 rupees 598 crores translating 19:05 19 minutes, 5 seconds to about 14.2% in margin percentage terms and our standalone aid stood at 19:12 19 minutes, 12 seconds rupees 587 crores. It's a 51 basis points expansion sequentially and expansion of 299 basis points year-on-year basis for the full year. 19:23 19 minutes, 23 seconds Our consolidated EITA stood at rupees 263 crores translating to 13.2% margin. 19:30 19 minutes, 30 seconds Our standalone EITA stood at 242 crores which is a 214 basis points improvement versus FI25. 19:38 19 minutes, 38 seconds This marks a significant moment for us as our continued effort and prudence purple has passed rupees 2,000 cr IDA 19:46 19 minutes, 46 seconds milestone for the first time. Coming to raw materials, Arab had already shared the details at a very high level. Uh 19:53 19 minutes, 53 seconds during the beginning of the quarter 4, the crude prices were hovering around $65. However, it's surged past $100 per 20:02 20 minutes, 2 seconds barrel mark by the beginning of March and continue to operate at these elevated levels. As we speak, the crude is currently hovering around $107. 20:13 20 minutes, 13 seconds Unlike previous quarters where volatility was driven by sentiment, we are now navigating a scenario of actual 20:20 20 minutes, 20 seconds and physical disruption. With regard to natural rubber, while the international prices remained subdued at around $1,700 20:28 20 minutes, 28 seconds in the previous quarter, however, in the current quarter, it started with $1,800 level and gradually now uh hovering 20:36 20 minutes, 36 seconds around $2,50 to $2,00 per ton. With the linkage to import parity in the domestic 20:43 20 minutes, 43 seconds prices of natural rubber and also on account of depreciation of rupee the natural rubber prices in India has gone 20:51 20 minutes, 51 seconds up from rups 190 rupees per kg level in the beginning of quarter 4 to around 245 rupees per kg as we speak now. Rup has 21:01 21 minutes, 1 second remained volatile and further depreciation in quarter 4 from around 90 rupees to 91 rupees to a dollar to 21:08 21 minutes, 8 seconds around 94 to a dollar now would also have additional impact on our cost going into quarter 1. During quarter 4, our 21:16 21 minutes, 16 seconds raw materials were broadly in line with quarter 3 as mentioned earlier. We benefited from lower cost inventory during quarter four. The full impact of 21:24 21 minutes, 24 seconds the recent increase in raw material costs will materialize in quarter one of the current financial year which we 21:31 21 minutes, 31 seconds would try to manage through combination of price increase and cost management in the first half of the year. While we 21:38 21 minutes, 38 seconds remain vigilant in our procurement strategies, the combination of new geopolitical risk premiums and physical 21:46 21 minutes, 46 seconds supply constraints require us more rigorous monitoring all of these developments on a day-to-day basis. 21:53 21 minutes, 53 seconds Coming to capeex working capital and debt uh as Arno mentioned our planned capacity utilization are uh levels are 22:00 22 minutes high at 90% plus level we stepped up our capex in quarter 4 to 407 crores for the 22:07 22 minutes, 7 seconds quarter higher than around 200 to 250 crores of flow in the previous quarters 22:14 22 minutes, 14 seconds overall our capex was about76 crores in year FI26 the capex was higher in quarter 4 was to ensure en sure that our 22:23 22 minutes, 23 seconds capacity additions happen in line with our demand in the current year as the utilization levels are high. In addition, we also had an outlay of about 22:31 22 minutes, 31 seconds 236 crores in quarter 2 towards uh acquisition of intangibles with respect to cam. So on a standalone basis, the 22:40 22 minutes, 40 seconds working capital increased by about 108 crores as compared to uh quarter 3. On a fullear basis, the operating working 22:47 22 minutes, 47 seconds capital moved from minus 31 crores in the beginning of the year to plus uh plus 108 crores and increase of 139 22:56 22 minutes, 56 seconds crores. This is mainly on account of accumulation of some GST credit balances in two of our states to the tune of 23:03 23 minutes, 3 seconds about 120 crores plus some increase in receivables on exports due to longer cycle time involved in exports and increase in use from some state governments with respect to incentives. 23:13 23 minutes, 13 seconds We are taking necessary support uh steps to ensure that we get back to negative working capital zone soon. Our 23:21 23 minutes, 21 seconds consolidated debt stood at 3,1 crores and standalone debt uh stood at 2961 crores very similar to the level uh that we were in as of the end of quarter 3. 23:32 23 minutes, 32 seconds Our debt to IITA on a consolidated basis stands at comfortable level of 1.46 46 down from about 1.58 as of quarter 3 and debt to equity is about6. 23:44 23 minutes, 44 seconds Our balance sheet is strong enough to provide and continue to provide growth capital to the business. Coming to operational expenses operating our 23:53 23 minutes, 53 seconds standalone employee cost declined marginally in quarter 4 compared to previous quarter and consolidated increased by about 18 crores largely 24:01 24 minutes, 1 second attributable to additional manpower hiring that happened at during quarter 4. other expenses as a percentage came 24:07 24 minutes, 7 seconds down from 19.6% to 18.5% translating to margin expansion on our profits. The drop was also an absolute basis as it 24:16 24 minutes, 16 seconds decreased by about 34 cror sequentially due to lower outsourcing and other operating expenses. Overall we kept 24:24 24 minutes, 24 seconds tight control on cost which helped maintain our margin profile during quarter 4 despite inflationary scenario. 24:30 24 minutes, 30 seconds Depreciation and interest um at consolidated level for the quarter remain at similar levels as that of the previous quarter. Consolidated and 24:38 24 minutes, 38 seconds standalone interest came down by about 20 crores largely on account of lower interest on security deposit and also on 24:45 24 minutes, 45 seconds account of average debt level being lower in quarter 4. Overall profitability uh overall consolidated profit for the 24:54 24 minutes, 54 seconds quarter stood at 243.8 8 crores which compares favorably with rupes 98.7 crores during the same quarter of last 25:01 25 minutes, 1 second year and rupes 155.4 crores in the previous quarter. The standalone profit for the year stood for the quarter stood 25:09 25 minutes, 9 seconds at 283.6 crores again compares favorably with rupees 100.4 crores of that we reported during the same period of 25:16 25 minutes, 16 seconds previous year and rups 191.6 crores that we reported in quarter 3. A quarter four profit after tax included amount of 25:25 25 minutes, 25 seconds after adjusting an amount of rupees 10 crores of exceptional item towards voluntary retirement scheme option provided to our employees in one of our 25:34 25 minutes, 34 seconds factories. Overall the company reported a profit after tax on a fullear basis rupes 812.72 25:41 25 minutes, 41 seconds crores on a standalone basis and rupes 697.24 24 on consolidated basis 25:47 25 minutes, 47 seconds translating to an EPS of 201.17 per share on a standalone basis and 25:54 25 minutes, 54 seconds rupees 172.78 on a consolidated basis respectively. We're also pleased to inform you that our board of directors 26:02 26 minutes, 2 seconds in the meeting uh yesterday recommended a dividend of 350% for the financial year 2025 to26 which translates to 26:11 26 minutes, 11 seconds rupees 35 rupees per share. The dividend would be paid post obtaining the formal approval of shareholders. Thank you once 26:18 26 minutes, 18 seconds again all. With that, we can now open the floor for Q&A. 26:24 26 minutes, 24 seconds Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a 26:31 26 minutes, 31 seconds question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, 26:38 26 minutes, 38 seconds you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and 26:45 26 minutes, 45 seconds gentlemen, we will wait for a moment while the question Q assemble. 26:51 26 minutes, 51 seconds We take the first question from the line of Sedartha Barra from Nura. Please go ahead. 26:58 26 minutes, 58 seconds Yeah, thanks for the opportunity sir. Uh so first question is on the commodity side. So you mentioned 15% uh RN cost 27:06 27 minutes, 6 seconds increase in the first quarter. uh possible to highlight. I mean that uh does that fully reflect the current RM 27:16 27 minutes, 16 seconds which you said about rubber being at 250 and crude being at 110 or what level does it represent and if we 27:24 27 minutes, 24 seconds look at the current commodity prices how much more do you think can happen on the cost side for our basket maybe in the next one or two quarters. 27:35 27 minutes, 35 seconds Okay. you know uh first of all would like to clarify u that situation is dynamic okay just now we mentioned food 27:41 27 minutes, 41 seconds is 107 if we have had this call a week back we would have also said food is 95 or 94 so therefore it's a dynamic uh 27:49 27 minutes, 49 seconds situation uh considering we buy raw materials or cover ourselves uh on an average over a period of next 3 months 27:57 27 minutes, 57 seconds including imports okay our visibility uh with with respect to our current quarter is generally our uh is reasonable. So 28:06 28 minutes, 6 seconds based on you know inventory that we are carrying uh and including both raw materials and finished goods plus uh the 28:14 28 minutes, 14 seconds raw materials that we have ordered okay we feel that raw material cost increase in quarter one could be to the unit of 15%. Okay and uh uh but if you were to 28:23 28 minutes, 23 seconds take a replacement cost of raw materials today okay the number could be little higher than 15%. But it I think we 28:30 28 minutes, 30 seconds should wait and watch uh beyond quarter 1 in terms of what impact would m to have but it entirely depends on how things unfold during the balance part of 28:39 28 minutes, 39 seconds the current quarter for us to get a visibility of quarter two. 28:43 28 minutes, 43 seconds Understood sir. And on the price increase if you can uh also talk about uh uh till now what has been the 28:52 28 minutes, 52 seconds cumulative price increase uh maybe uh in uh till June you look to take I mean you 28:58 28 minutes, 58 seconds talked about 5% uh uh or mid single digit uh till April and another 5% by June. So that does that mean in quarter 29:07 29 minutes, 7 seconds one we can potentially take till the end about a 10% price increase? 29:13 29 minutes, 13 seconds or you think it will be more staggered and visible over the next two quarters. 29:18 29 minutes, 18 seconds So uh we need to take overall 10% with March out of that in replacement out of 29:26 29 minutes, 26 seconds that about 5% uh can be considered as taken already between March and April that leaves a balance of 5% which will 29:35 29 minutes, 35 seconds be staggered through May and June. It won't be one shot. It could be um it is also dependent on how the competitive 29:43 29 minutes, 43 seconds situation plays out, how the demand plays out. So we need to take another 5% and we intend to take another 5%. So 29:51 29 minutes, 51 seconds that's what is being said in a staggered manner through May and June. In OEM it is index. So we have got one index price 29:59 29 minutes, 59 seconds hike which is a lower singledigit kind of price hike. This is the index in on 1st of April. on 1st of July we will get 30:07 30 minutes, 7 seconds a heavier price hike hopefully based on the index so there will be a lag and in international business again we are 30:14 30 minutes, 14 seconds trying to cover up the entire 5% in terms of announcements but the pass through and execution and realization 30:21 30 minutes, 21 seconds will take uh 30 to 45 days because of the order base that we keep holding so it will not again be a single I think we 30:29 30 minutes, 29 seconds have already taken 3 to 5% in international another 5% announcement is being made in a maybe one or two weeks 30:37 30 minutes, 37 seconds time. So it will gradually pass through over over the till the end of quarter one uh hopefully to the extent of around 30:45 30 minutes, 45 seconds 8%. We'll have to see what is the order base and what is the pass through. So that's the plan. 30:50 30 minutes, 50 seconds Understood sir. Uh second question is on CAMO. I mean uh we have seen we probably some of the education getting stretched 30:59 30 minutes, 59 seconds out. Uh if you can give us some color in terms of the revenue ramp up. uh I mean we earlier expected maybe second half we 31:06 31 minutes, 6 seconds do see a stronger pickup uh as uh we would have been operating now for for around a year. So when should we expect 31:15 31 minutes, 15 seconds some of that revenue ramp up to happen and uh and maybe in FI28 what are the uh production levels you are targeting uh 31:25 31 minutes, 25 seconds for cancel and similarly on margins do you expect a double digit sort of margin uh target achievable by the second half or 527 or that may also take longer. 31:37 31 minutes, 37 seconds Yeah. So um the cancel business is with us right now in transition phase. So let 31:44 31 minutes, 44 seconds me just uh re refresh what is the transition phase. In transition phase we sell the goods to Michelin and not to 31:51 31 minutes, 51 seconds our customers and Michelin sales team is selling it to the customers. So about 25 to 30% margin of the overall value chain 32:00 32 minutes is sitting there. Then at the back end we are not buying the raw materials. We are buying compounds from Michelin 32:07 32 minutes, 7 seconds because the plant uh as we acquired didn't have the upstream uh equipments of mixer and calendars. This will take I'm first talking about the back end. 32:18 32 minutes, 18 seconds This will take at least six quarters four to six we have been saying. So which means we took it took over the business in September 25. We will be able to complete this job by March 27. 32:31 32 minutes, 31 seconds So that is roughly about six quarters. 32:34 32 minutes, 34 seconds and the front room the activity will accelerate further faster. We are planning to take over the customer u 32:42 32 minutes, 42 seconds interface to the extent of about 90% by September 26 which is by the end of quarter 2. Now 32:51 32 minutes, 51 seconds what we can look forward to therefore once we take over the customer uh interface the entire sales and marketing setup 32:59 32 minutes, 59 seconds will be in our hand. We have we are almost done with setting up the field force. More recruitments are still being made. So that is a time when we can look 33:08 33 minutes, 8 seconds at uh interacting with our customers in aftermarket and OEM and taking up the uh turnover. The volume increase and the 33:15 33 minutes, 15 seconds value increase can only happen therefore in the second half and not prior to that when Michelin is handling the customer. 33:22 33 minutes, 22 seconds Uh within aftermarket and OEM, we expect to stabilize and grow in after market faster. In OEM as you can understand 33:31 33 minutes, 31 seconds we'll have to do the new product development get on to the new vehicles of the OEM. So it'll be slightly later 33:37 33 minutes, 37 seconds maybe in FI28 the growth of OEMs will start coming but after market should start happening in the second half of this financial year that is as far as 33:46 33 minutes, 46 seconds growth goes the fixed costs are norally more or less fixed when we top up margins we have started activating the 33:53 33 minutes, 53 seconds marketing campaigns we have started setting up uh the the network which is warehousing and local field people in 34:01 34 minutes, 1 second Europe and in US we have also started recruiting as I said the sales guys we have started recruiting the R&D guys 34:08 34 minutes, 8 seconds also. So all these costs we will start incurring even now when sales is not going up so that we are completely prepared in the second half to take 34:17 34 minutes, 17 seconds sales up and finally at the end of this year in FI26 when the equipments are also established in the factory we'll gain that part of the value chain also. 34:27 34 minutes, 27 seconds So to to turnover will start increasing in second half of this year margin will start getting impacted by FI28. 34:37 34 minutes, 37 seconds Got it sir. I commend that. 34:42 34 minutes, 42 seconds Thank you. We take the next question from the line of Ragu Nandan from Nuama Institutional Equities. Please go ahead. 34:51 34 minutes, 51 seconds Uh good evening team. Thank you so much for the opportunity. Uh few clarifications. Uh firstly for Q4 FI26 35:00 35 minutes standalone. Uh sir can you please share the volume growth via bike and also the growth for OEM replacement and exports? 35:12 35 minutes, 12 seconds Uh volume growth is close to um uh volume growth yi is close to 20%. 35:19 35 minutes, 19 seconds Overall right while quarter four to quarter four and uh the growth across the segments have been uh uh have been 35:29 35 minutes, 29 seconds pretty much uh uh uniform little higher in international business uh mid20s 35:36 35 minutes, 36 seconds and uh it is uh about you know mid- teens to 20s for replacement and OEM. 35:45 35 minutes, 45 seconds Got it sir. Thank you. And uh second on uh uh cancel uh would the US tariffs now be at that same rate of 10%. 35:56 35 minutes, 56 seconds Or uh should there be a different tariff? 36:00 36 minutes No, it will be the uh tariff will be at 10% and the metals part of tracks which 36:07 36 minutes, 7 seconds is uh which is a little metal clip that goes on the under surface of the track that will be tariffed at 50%. 25%. 36:19 36 minutes, 19 seconds Notice sir, thank you for that. But but uh uh tax would be what percentage of revenue sir for cancer within us? 36:28 36 minutes, 28 seconds Tax track tax tracks is roughly 50%. 36:32 36 minutes, 32 seconds Noted sir. Uh got it. And uh in terms of uh uh uh export markets, how much would 36:40 36 minutes, 40 seconds be our Middle East exposure? uh would you expect that to be a overhang for growth in FI27 or would you expect double digit growth to continue for 27? 36:54 36 minutes, 54 seconds Yeah. So uh Middle East is about uh 15 odd% uh for us. So that will be little 37:01 37 minutes, 1 second uncertain. It was uh practically zero in quarter 4. At the end toward the end of quarter 4 it's also um it may not be 37:08 37 minutes, 8 seconds zero but it won't be 15%. But as I mentioned our uh international business basket is widely diversified uh towards 37:16 37 minutes, 16 seconds Southeast Asia, Europe, US and also LATAM. And uh if you look at the global potential we are a very small player in 37:24 37 minutes, 24 seconds that perspective. So we have tremendous potential for growth. If we had Middle East the growth would have been higher but I think we will be able to make up 37:33 37 minutes, 33 seconds Middle East like we did in quarter 4. uh quarter one outlook quarter base wise looks good after completely discounting Middle East. So whatever comes from Middle East will be a bonus. 37:45 37 minutes, 45 seconds Noted sir that's good to hear. And for FI27 what would be the total uh console capex expected sir? 37:55 37 minutes, 55 seconds Okay. uh no see console cap India uh overall I'm excluding cams u we our 38:03 38 minutes, 3 seconds capex would be about 25% more than what we had incurred last year which is about,76 was our last year so it it should be [clears throat] in the range 38:11 38 minutes, 11 seconds of 1350 to,400 crores for India uh we would be um frugal and careful in quarter one considering current 38:19 38 minutes, 19 seconds situation and we'll scale up uh as we go by once things normalize but this is a kind of a number that we have in mind so 38:27 38 minutes, 27 seconds that we are able to create capacities to meet our demand and uh uh as far as uh capsule operations are concerned uh I 38:36 38 minutes, 36 seconds think we had shared it in the past uh and just now innab also in response to another question spoke about creating an 38:44 38 minutes, 44 seconds upstream uh facility to be ready by March next year we had estimated that capex to be around $30 million 38:51 38 minutes, 51 seconds approximately okay and out of that maybe uh 3/4 of that we would be spending in the current year for uh in terms of cash 38:59 38 minutes, 59 seconds flow uh in the in that range. So that will be in addition to this number and the number relating to upstream as part 39:07 39 minutes, 7 seconds of our KX uh estimate uh in the business case itself. 39:14 39 minutes, 14 seconds Noted sir this is very helpful just the last question uh and thanks so much for answering all the questions and for the 39:22 39 minutes, 22 seconds detailed answers. Uh just a last question, how are you seeing the competition scenario in terms of price 39:28 39 minutes, 28 seconds increases given that industry is going through tough times? Are you seeing players across categories taking price 39:37 39 minutes, 37 seconds increases or uh uh is there any worries that uh there could be delays in the price hike? 39:45 39 minutes, 45 seconds So uh the market is competitive. Uh it's difficult to predict. However, so far what I have observed is that price 39:53 39 minutes, 53 seconds increases are coming through uh much delayed by some competitors but at different uh categories at different 40:02 40 minutes, 2 seconds dates uh some price increases have definitely come through uh in the month of March and April. 40:11 40 minutes, 11 seconds Noted sir. Thank you so much. I'll fall back to the Thank you. We take the next question 40:19 40 minutes, 19 seconds from the line of Mumakesha from Alanati institutional equities. Please go ahead. 40:25 40 minutes, 25 seconds Yeah. Uh thank you sir for the opportunity. Uh sir generally represent market we have seen in past grow in the single digit high single digit. Uh in Q3 40:34 40 minutes, 34 seconds we had the post postponement demand from Q3 but in Q4 of Q4 also was sustained very strong demand. Is it partly sir due 40:42 40 minutes, 42 seconds to some reason like uh because there was price expected in Q1. So there was some prequelment of demand or or generally you saw better demand uh due to GST. 40:54 40 minutes, 54 seconds No that uh I can answer categorically there was no impact of expected price hike in quarter 1 on quarter 4 sales um 41:04 41 minutes, 4 seconds and quarter even March and price hike was uh not like 5% it has been staggered through the month of March and April the 41:12 41 minutes, 12 seconds entire 5% that I talked about. So it is uh the GST decrease momentum that has carried forward from quarter 3 to 41:21 41 minutes, 21 seconds quarter 4 also this is this is true because it is across category and it is across markets. So it's a secular demand 41:30 41 minutes, 30 seconds increase and not something which is particularly fixed on a certain geography market combination. So it is because of that momentum. 41:39 41 minutes, 39 seconds Got it sir. And sir now in the Q1 uh in April month sir with the war environment and uh and with kind of price hikes 41:48 41 minutes, 48 seconds happening sir I mean do you did you see any change in the pattern uh is it become more softer now sir? 41:55 41 minutes, 55 seconds So quarter 1 usually is a good quarter in terms of consumption of tires especially in the commercial segment and 42:02 42 minutes, 2 seconds then by end of quarter 1 with the onset of monsoons the passenger segments also pick up. So generally it is a good quarter demand wise. Um uh so the 42:11 42 minutes, 11 seconds momentum of Q3 Q4 continues into quarter 1 exactly like it was. So that's number one. However, because of the steep price 42:20 42 minutes, 20 seconds increase the the uh of raw material we we have been able to pass on only half of that right even that little bit of it is happening in the last week of April. 42:31 42 minutes, 31 seconds So the full impact of price increase has not yet been experienced by the markets as it experiences 5 to 10% price hike 42:39 42 minutes, 39 seconds through quarter 1. We expect some moderation of demand. 42:43 42 minutes, 43 seconds Got it. So great to hear the demand continues. Uh so just on the camu side uh because of the lower duty sir uh in 42:50 42 minutes, 50 seconds the end market are you seeing a better demand trend and also just want to understand how this uh raw material inflation impacts the camso margin sir 42:59 42 minutes, 59 seconds uh how that pass through would happen and anything on the freight cost increase there also freight cost increases two to three 43:08 43 minutes, 8 seconds times in several markets normally that is recovered through a freight search charge which which we are which we are doing across categories is the lower 43:16 43 minutes, 16 seconds demand uh uh the lower taxes uh resulting in higher demand in uh US market is not very much evident to us 43:25 43 minutes, 25 seconds because we are not handling the customers directly as I mentioned. So uh once we start handling the customer interface directly I think we'll be able to leverage such uh changes much better. 43:37 43 minutes, 37 seconds So right now it is not very much apparent right and just on this RN inflation for 43:44 43 minutes, 44 seconds TAMU how would the margins uh uh would be passed through sir to the so that h that happens more like the OEM 43:52 43 minutes, 52 seconds sales there is a periodic assessment index wise material index wise and that is how the pricing is adjusted between 43:59 43 minutes, 59 seconds us and mistr on on both side because we buy compound from them we also sell them the finish 44:07 44 minutes, 7 seconds code. So on both side adjustments happen. Understood. Understood. Got you sir. 44:12 44 minutes, 12 seconds Thank you so so much for the opportunity sir. Thank you. 44:17 44 minutes, 17 seconds Thank you. We take the next question from the line of Rishi from Kotak Securities. Please go ahead. 44:25 44 minutes, 25 seconds Uh yeah. Uh thank you for the opportunity. Uh just a follow up on the pricing scenario in the industry right 44:32 44 minutes, 32 seconds and uh particularly uh you know just talking about the leader MRF you know at least so far what I have picked up is 44:38 44 minutes, 38 seconds they have taken select segv and maybe farm segment but nothing much have been taken in two wheeler PCR and 44:46 44 minutes, 46 seconds CV segment. So is that understanding correct and let's say if in next quarter let's say next couple of months also if they don't take price increase will it 44:54 44 minutes, 54 seconds be easier for us or you know we'll also re uh you know rethink our strategy on pricing because at least on the two-heer side uh you know they are the let's say 45:03 45 minutes, 3 seconds two wheeler and uh you know uh series they are the like top player right so what's what's our thought on this 45:10 45 minutes, 10 seconds so couple of corrections MRS has taken price increase in all the segments to the best of our knowledge including two 45:17 45 minutes, 17 seconds wheeler and passenger. They took it in a staggered manner but it has come through. 45:23 45 minutes, 23 seconds Okay, understood. So and and what will be the quantum of that? 45:36 45 minutes, 36 seconds Ladies and gentlemen, we have lost the line of the management. Please stay connected while I reconnect the management. Thank you. 45:43 45 minutes, 43 seconds [music] 45:48 45 minutes, 48 seconds [music] 45:49 45 minutes, 49 seconds I' been a while. 45:55 45 minutes, 55 seconds [music] 46:06 46 minutes, 6 seconds [music] 46:09 46 minutes, 9 seconds Heat. Heat. 46:15 46 minutes, 15 seconds [music] 46:23 46 minutes, 23 seconds [music] 46:29 46 minutes, 29 seconds [music] 46:34 46 minutes, 34 seconds [music] 46:41 46 minutes, 41 seconds [music] 46:47 46 minutes, 47 seconds [music] 46:53 46 minutes, 53 seconds [music] 47:01 47 minutes, 1 second [music] 47:06 47 minutes, 6 seconds Ladies and gentlemen, thank you for your patience. We have the management line reconnected. Rishi, uh if you could please repeat your question. Thank you. 47:14 47 minutes, 14 seconds Sure. Uh just sir, uh clar on the MRF uh question, sir, do you by any chance do you have idea what quantum of price increases they have taken so far? 47:25 47 minutes, 25 seconds uh about I think uh 3 three and a half% they have taken roughly I don't recall category wise but that's a good estimate. 47:34 47 minutes, 34 seconds Understood. uh secondly just you know uh let's say just uh thinking about demand from let's say beyond first half uh you 47:42 47 minutes, 42 seconds know if we take a 10% if you're able to take a 10% price increase and especially in the CV segment which is uh relatively more price sensitive now how should we 47:50 47 minutes, 50 seconds think about demand because second half the base will also become you know pretty high for us given that for second half of FI26 we have seen a very strong 47:58 47 minutes, 58 seconds healthy double-digit growth uh is there a risk that you know the industry itself may uh you know decline in second half 48:06 48 minutes, 6 seconds uh given 10% or whatever quantum of price increase plus the base itself uh on the replacement side. 48:14 48 minutes, 14 seconds So um on the replacement side uh the reduction of GST is uh is a tailwind definitely towards uh in all categories 48:23 48 minutes, 23 seconds number one. Number two, the vehicle park is increasing significantly because of higher sales of OE vehicles, right? And 48:31 48 minutes, 31 seconds in in uh in the truck bus segment as you would appreciate the replacement uh the life cycle of the tire is much shorter 48:39 48 minutes, 39 seconds unlike the passenger segment. So if the overall goods movement which is again dependent on the GDP growth is overall good segment is not impacted too much. 48:50 48 minutes, 50 seconds If there is the fuel prices price hike is moderate. So there are many things 48:56 48 minutes, 56 seconds that that are involved right. So if if the trucks are plying if the rates are holding the remuneration rate for the 49:04 49 minutes, 4 seconds truckers they will replace tires. So we expect moderation in demand but it's not like we don't expect a degrowth in bus 49:12 49 minutes, 12 seconds radial tire even after a 10% price hike but definitely it will slow down. 49:17 49 minutes, 17 seconds But sir, what explains such a strong growth in second up right if if GST is the trigger where there is a 10% uh 49:25 49 minutes, 25 seconds reduction in prices and effectively now we'll be reversing the GST cut right with the price hike. So uh you know uh 49:33 49 minutes, 33 seconds shouldn't there be some normalization over there because if GST and obviously the uh normal replacement cycle then the ideal uh let's say the normalized growth 49:41 49 minutes, 41 seconds has to be 6 7% and what we have witnessed at least over the last couple of months is uh you know 15 to 20% growth. So you know what explains this 49:49 49 minutes, 49 seconds and if if the price increases do happen then uh shouldn't kind of demand uh normalize back to the you know 5 6% levels. 49:58 49 minutes, 58 seconds You're right. So I think you are talking of the OEM uh demand if if I understand you correctly. Yes, that would not 50:05 50 minutes, 5 seconds definitely come down to single digit the fresh truck sales. I was not talking of the truck tire sales. Uh so so the 50:14 50 minutes, 14 seconds vehicle part so I won't repeat my answer. I think you understand sorry sir I was talking only about replacement not OEMs. 50:25 50 minutes, 25 seconds Yeah. So okay so replacement uh demand will be in single digit in truck truck truck bus radial. So there will be a 50:32 50 minutes, 32 seconds moderation single digit may fall to low single digit also which we are used to in truck bus radial if the uh 10% dry 50:40 50 minutes, 40 seconds cycle is not adjusted in the market but it all depends on how fuel prices behave how the overall GDP sentiment moves if 50:48 50 minutes, 48 seconds if there is a demand for movement of trucks tires will need replacement and tires will be replaced uh the demand 50:56 50 minutes, 56 seconds will come down but it won't turn into negative territory that's what I was trying to say understood And any comments on how the growth should look for PCR and two 51:04 51 minutes, 4 seconds wheeler replacement like in the second half and beyond? 51:07 51 minutes, 7 seconds Yeah. So PCR PCR as you are aware was not great even in last year. The market grew by hardly 1 to 2% in replacement 51:15 51 minutes, 15 seconds right but again vehicle park is coming in but here the replacement cycles are long. So we expect a gradual improvement 51:21 51 minutes, 21 seconds in PCR not like uh PCR going to 10% or 15%. maybe from 1 to 2% it can go to 3 51:29 51 minutes, 29 seconds to 4% or 5% at best. In two wheeler we have had good growth especially in the scooter segment the scooterization the 51:36 51 minutes, 36 seconds EV uh and uh it's supported by growth in both urban and rural markets. So uh some moderation could happen because of price 51:45 51 minutes, 45 seconds increase but it should stay as for our expectation uh in singledigit high singledigit kind of growth uh across uh 51:54 51 minutes, 54 seconds across this year as well. That's the expectation in replacement. 51:57 51 minutes, 57 seconds Understood. Thank you, sir. And just last thing on finance cost and other income, right? Finance cost. How should we think about going into FI27 with uh 52:05 52 minutes, 5 seconds like it's a 3,000 cror and uh you know 89% is the uh interest cost, 78% is how we should think about the uh annualized 52:14 52 minutes, 14 seconds finance cost and what drove the sharp increase in other income this quarter. 52:20 52 minutes, 20 seconds Okay. Now two things uh with respect to finance cost. See generally the the finance cost includes interest on our 52:27 52 minutes, 27 seconds debt as well as some security deposits that we have uh our uh of our dealers and distributor. That interest is also 52:36 52 minutes, 36 seconds part of our uh uh finance cost in addition to some you know u banking related uh expenses. Uh our debt level 52:46 52 minutes, 46 seconds more or less remained around 3,000 crores. Okay. uh for the last three quarters September we were close to 52:53 52 minutes, 53 seconds about little over 2,900 crores December also similar levels and March also I'm talking about standalone consolidated 53:01 53 minutes, 1 second also not very different from that standpoint so uh that is one of the uh reasons so going into the next year uh 53:09 53 minutes, 9 seconds of course you have to generate enough cash to sustain debt level if you have to manage our capex program as we have 53:16 53 minutes, 16 seconds just outlined and we'll continue to be responsible with respect to leverage ratios in terms of you know while looking at our capex decisions and also 53:25 53 minutes, 25 seconds at the debt level uh uh in the normal course uh at we could have afforded a 53:32 53 minutes, 32 seconds 1,400 crores kind of a capex uh for Indian operations okay without too much of impact on uh debt maybe another 200 53:40 53 minutes, 40 seconds 300 crores but much higher absolute level much higher revenue level is what we would have done in the normal course 53:48 53 minutes, 48 seconds considering that you Quarter one looks a little uh challenging with respect to cash that we will be generating and the margins standpoint. We will try to keep 53:57 53 minutes, 57 seconds our debt levels at least in the current quarters similar to the level at which uh we entered in the previous three quarters. So then an absolute amount of 54:06 54 minutes, 6 seconds interest remains uh same and we will we'll step up our capex and uh uh and if 54:13 54 minutes, 13 seconds that means you know uh debt level has to little bit go up we will do so uh in a normal uh margin scenario which we hope 54:21 54 minutes, 21 seconds you know we'll start from quarter two onward. So, so therefore you can assume you know uh you know your model uh 54:29 54 minutes, 29 seconds current level of debt for one more quarter slightly higher level of debt in the subsequent quarters for the purpose of finance cost assumptions. Okay. And 54:38 54 minutes, 38 seconds uh uh with respect to other income I think it has some component uh a little bit of a royalty income on on u uh 54:47 54 minutes, 47 seconds cancel part of the operations which uh a small amount is there and uh some amount is also there with respect to you know 54:56 54 minutes, 56 seconds uh hedging related income. Okay. uh as we had exposed we had hedged all our exposures uh with respect to raw 55:05 55 minutes, 5 seconds materials uh and other revenue related expenses considering that you know uh currency depreciated there was some kind 55:12 55 minutes, 12 seconds of a hedging income which is also classified as other income I wouldn't say 62.5 crores of other income we have reported in on a standalone basis as a 55:22 55 minutes, 22 seconds sustainable number I think what we had reported in the previous quarter average would be the right correct representation of our other income last quarter had more to do with the fact 55:30 55 minutes, 30 seconds that we had uh currency related uh gains which is taken as other income. 55:38 55 minutes, 38 seconds Thank you sir for the clarification and all the best. 55:42 55 minutes, 42 seconds Thank you. We take the next question from the line of Vijay Pande from Access Capital. Please go ahead. 55:50 55 minutes, 50 seconds Hi sir, thank you for taking my question. Uh so a couple of questions. 55:55 55 minutes, 55 seconds First I wanted to check about the inventory days. So for consolidated business it has slightly gone up. So if 56:04 56 minutes, 4 seconds you can just highlight what is driving that uh the working capital cycle and pays. 56:12 56 minutes, 12 seconds Uh you want to respond on consolidated or standalone? 56:17 56 minutes, 17 seconds um both standalone consolidated consolidated it has gone up that is what 56:24 56 minutes, 24 seconds I see I think in the standard name it's broadly flat yeah standalone is flat you see um uh 56:32 56 minutes, 32 seconds generally our inventory level is the lowest on the 31st of March in general okay and uh normally March is our best 56:40 56 minutes, 40 seconds month okay and uh and therefore from our standpoint we generally end the finished goods point of view inventory at the uh 56:48 56 minutes, 48 seconds lowest level and we have been maintaining at around uh about 24 to 27 days kind of a range is our finished 56:56 56 minutes, 56 seconds goods inventory in general as far as uh India Indian operations are concerned consolidated uh we have little higher 57:04 57 minutes, 4 seconds amount of inventory at campso um as we are taking over operations directly uh we have to produce and keep that inventory with us for the purpose of 57:12 57 minutes, 12 seconds servicing the other geographies but the impact is not much I think it's about 1,000 press uh in Cam. So uh raw 57:19 57 minutes, 19 seconds material inventory was higher as of 31st March. Uh it was higher uh little over 200 crores. Okay. And it was done uh as 57:28 57 minutes, 28 seconds the war was breaking out uh in the month of March. Okay. From uh supply security point of view, it we decided that we 57:36 57 minutes, 36 seconds will keep some extra physical inventory uh to make sure all our factories run on all the days and we were also 57:43 57 minutes, 43 seconds anticipating some increase in raw material cost or availability of raw material and therefore uh we decided to keep uh inventory in physical form with 57:52 57 minutes, 52 seconds this and therefore about a 200 crores kind of a raw material inventory uh increase that we saw as of 31st March or 31st of December. Generally our 58:00 58 minutes inventory of raw material is also very similar anywhere between you know uh 24 and 26 days in physical form including 58:09 58 minutes, 9 seconds all of that including our you know work in progress in factories and things like that and uh maybe uh 3 4 days extra inventory was there as of 31st March 58:17 58 minutes, 17 seconds more as a supply security okay uh sir about the cancel business so uh 58:26 58 minutes, 26 seconds between uh I understand that uh we'll the margin expansion probably from the 58:32 58 minutes, 32 seconds FI28 majority of it but what is your expectation for FI27 because you also 58:40 58 minutes, 40 seconds have a high commodity inflation and uh so if you can just help us understand the expectation on the terms of business. 58:50 58 minutes, 50 seconds See I think when we took our business we did share about the potential of that particular business and at our operating 58:58 58 minutes, 58 seconds level of margins uh the seller was operating and we thought we would get some benefit in terms of you know uh 59:05 59 minutes, 5 seconds being part of us closer to our part of the world okay and there will be some synergies and things like that I think uh in the beginning of the conversation 59:13 59 minutes, 13 seconds and also to a question okay I not shared in terms of what we are doing is that entire value chain is not with us date. 59:20 59 minutes, 20 seconds Okay. And we expect an entire value chain to be with in the form of entire manu control over manufacturing as well as in terms of ability to service the 59:30 59 minutes, 30 seconds customers from our own warehouses over a 12-month period of the current financial year. By end of the financial year, I think one part you know customers would have would be serviced by us directly. 59:41 59 minutes, 41 seconds By beginning of next financial year, we would be most likely producing all the products uh in our own factory including 59:48 59 minutes, 48 seconds you know upstream related. That's where we see in terms of our plan. Uh and during the interim period, okay, it is proposed to have the infrastructure 59:56 59 minutes, 56 seconds ready, people ready, uh and different locations, warehousing to do a local servicing, people to take care of sales 1:00:04 1 hour, 4 seconds and therefore uh this could be called as a transitionary period and therefore during this period uh we would like to have that flexibility and freedom to 1:00:13 1 hour, 13 seconds operate as as it is necessary for the purpose of business. we stick we'll still stick to the underlying margins based on which we acquired the business 1:00:22 1 hour, 22 seconds during the len period there could be little bit of fluctuation as we go into the current year we'll keep updating in terms of our own view as of now I think 1:00:30 1 hour, 30 seconds I don't think there's any change over what he has already communicated as uh on the tech side so the 1300 to 1:00:40 1 hour, 40 seconds 1400 is for standalone and additional we expect around uh 1:00:48 1 hour, 48 seconds like around 50 to 100 kores on the camps of upstream business right this will 1:00:55 1 hour, 55 seconds entirely come in 27 or part of it will go also in 28 okay no uh we had kept it like $30 1:01:04 1 hour, 1 minute, 4 seconds million for cam so uh for the purpose of upstream particularly mixers calendars uh I think it it won't be 100 crores it 1:01:12 1 hour, 1 minute, 12 seconds will be higher than 100 crores our estimate is maybe about uh $25 million 1:01:18 1 hour, 1 minute, 18 seconds uh could be an outflow 20 to $25 million as far as camso goes from our standpoint I think we we shared with you 1350 1:01:27 1 hour, 1 minute, 27 seconds crores to 1400 crores as our requirement for the current year to ensure that we have adequate capacities to meet the demand in quarter one we'll be little 1:01:36 1 hour, 1 minute, 36 seconds more careful okay and uh subsequent quarters if things normalize that is the kind of capex that we would like to uh incur during the course of the year. 1:01:49 1 hour, 1 minute, 49 seconds Okay. Thank you, sir. All the best. Thank you. 1:01:56 1 hour, 1 minute, 56 seconds Ladies and gentlemen, if you wish to ask a question, please press star and one. 1:02:03 1 hour, 2 minutes, 3 seconds As there are no further questions from the participants, I now hand the conference over to the management for their closing remarks. 1:02:11 1 hour, 2 minutes, 11 seconds Thank you very much for your interest uh in SEAT and uh we have uh come off one very good year and we are entering a 1:02:17 1 hour, 2 minutes, 17 seconds prevalent quarter. So we'll do our best and see you on the other side of Q1. Thank you. 1:02:25 1 hour, 2 minutes, 25 seconds Thank you on behalf of JM Financial Institutional Securities Limited. That concludes this conference call. Thank you for joining us and you may now disconnect your line.