Rane Ltd — Q3 FY26

Rane (Madras) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=JiQHLbPIjas Published: 2 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Ran Group Q3 FI26 earnings call. As a reminder, all participant 0:09 9 seconds lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance 0:17 17 seconds during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being 0:26 26 seconds recorded. I now hand the conference over to Mr. Diwakar Pinglay from EY. Thank you and over to you sir. 0:34 34 seconds Uh thank you very much. Uh good afternoon, good evening uh to everyone. 0:39 39 seconds Welcome to the Phil S56 Minister Call of Ramen Group uh to discuss uh the results and answer your questions. Today we have 0:48 48 seconds the management team from RA group represented by Mr. President financing group CFO, Mr. J. I'm an executive vice 0:55 55 seconds president finance and CF for Ronnie Holdings and Mr. S. Prasad associate vice president corpor holdings. Uh just 1:04 1 minute, 4 seconds a brief update I think uh a couple of quarters before uh when Ronnie was trying to do uh earnings call only for 1:12 1 minute, 12 seconds two quarters we got a feedback from the investors for having regular quarterly calls. So we kind of shifted back to a 1:20 1 minute, 20 seconds quarterly call uh format. uh since then uh with a small uh caveat that Harish did mention to for the school that he 1:28 1 minute, 28 seconds would join the calls on the half yearly and the annual calls and the rest of the quarters the uh top exit management of 1:36 1 minute, 36 seconds RA would possibly give the upgrades. Uh so in keeping uh with that uh in this particular call Harish is not available. 1:44 1 minute, 44 seconds I just wanted to be posted on that. uh uh the results in the presentation has already been revealed to you and you can also view it on the company's website. 1:54 1 minute, 54 seconds In case anyone does not have a copy of the presentation or you're not ming your name, please do write to us at either 2:01 2 minutes, 1 second IR team and we'll be happy to send the PL to you. Before we start, I'd like to say that everything that is said on this call that's interesting out for the 2:09 2 minutes, 9 seconds future or which can be construed as a forwarding statement must be viewed in conjunction with this uncertainties that we face. These uncertainties at this are 2:18 2 minutes, 18 seconds included but not limited to what we mentioned in the prospect and subsequently in the post you can find on our website. With that said, I'll hand over the call to uh over to you. 2:31 2 minutes, 31 seconds Thank you Data. Good afternoon ladies and gentlemen. 2:36 2 minutes, 36 seconds Thank you for dialing in. I would like to welcome you all for this teleconference. 2:41 2 minutes, 41 seconds I'd like to start with a few comments on the industry. 2:44 2 minutes, 44 seconds India's automobile sector recorded a strong recovery in the third quarter supported by timely GST rate reductions during the festive season, healthy 2:53 2 minutes, 53 seconds retail momentum and disciplined inventory management across segments. 2:58 2 minutes, 58 seconds The improved performance was driven by a combination of policy-led demand stimulus, easing financing conditions 3:05 3 minutes, 5 seconds following report rate cuts and strengthening consumer sentiment during the festive period. 3:12 3 minutes, 12 seconds Improved affordability, adequate financing availability and a healthy pipeline of new product launches further supported demand across categories. 3:22 3 minutes, 22 seconds The passenger vehicle segment delivered the strongest performance in the recent times. 3:28 3 minutes, 28 seconds Growth was driven by fat demand, enhanced affordability resulting from GST reductions and tax relief measures, 3:37 3 minutes, 37 seconds lowering finance costs and sustained positive buyer sentiment. 3:45 3 minutes, 45 seconds Utility vehicles continue to lead the segment, reflecting an ongoing structural preference for SUVs among consumers. 3:54 3 minutes, 54 seconds The commercial vehicle segment witnessed growth led by stronger freight movement and consumption-driven demand during the 4:01 4 minutes, 1 second festive season. Higher industrial activity, continued infrastructure execution and increasing formalization 4:09 4 minutes, 9 seconds of logistics supported fleet expansion thereby driving CV purchases. 4:15 4 minutes, 15 seconds The two-wheeler segment recorded steady growth supported by robust scooter and motorcycle demand in urban markets. 4:24 4 minutes, 24 seconds Scooters continue to outperform motorcycles on a year-to-ate basis while the moped segment remains subdued. 4:31 4 minutes, 31 seconds Growth is increasingly skewed toward premium and mid-capacity motorcycles with the 150 to 250 cc category emerging 4:40 4 minutes, 40 seconds as one of the fastest growing segments following a strong turnaround in the second half of the year. 4:48 4 minutes, 48 seconds The tractor segment delivered robust performance during the quarter supported by the recent GST reduction, favorable 4:55 4 minutes, 55 seconds monsoon conditions, strong agricultural sentiment and improving rural income. 5:00 5 minutes Overall, the quarter reflects a broad-based recovery across segments, positioning the industry for sustained momentum in the near term. 5:12 5 minutes, 12 seconds I'll now move on to key highlights. 5:16 5 minutes, 16 seconds RML's total revenue was rupees,9.1 cr for Q3 of financial year 2526 5:25 5 minutes, 25 seconds compared to rups 840.5 cr in Q3 financial year 2425. an increase of 21.3%. 5:33 5 minutes, 33 seconds I'm also happy to share that we won new business worth rupees 130 crores across product categories in the quarter. 5:41 5 minutes, 41 seconds The recent announcement of the India US trade deal including tariff reductions is a positive development for global trade flows. Though we await further 5:51 5 minutes, 51 seconds details on the duties, we see the trade deal provide clarity on the strategic direction and is expected to enhance competitiveness and help us progress on 6:00 6 minutes the conversations with the customers more positively. 6:04 6 minutes, 4 seconds During Q3 of financial year 2526, EITA margin improved by 106 bits from 8.2% to 9.3%. 6:16 6 minutes, 16 seconds During the quarter, our associate entity ZFrani Automotive India Private Limited has made a one-off warranty provision of 6:23 6 minutes, 23 seconds around 230 crores. Net of tax, it's around 172 crores. Related to product recall liability towards quality and 6:31 6 minutes, 31 seconds safety related issues in certain products manufactured and sold in prior periods that may require corrective 6:38 6 minutes, 38 seconds action, including voluntary and regulator mandated recall. 6:43 6 minutes, 43 seconds There were few complaints of unlatching of seat belt buckles in the Hundai Palisade SUV when the tongue is inserted slowly inside the buckle in some of the 6:52 6 minutes, 52 seconds vehicles in certain North American markets under extreme climate conditions. 6:56 6 minutes, 56 seconds The customer is planning to carry out invehicle inspection for the vehicles sold in North American markets to replace any defective parts. We will 7:05 7 minutes, 5 seconds keep you updated on further developments as we move into the final quarter of financial year 2526. 7:13 7 minutes, 13 seconds We carry forward strong momentum and expect demand to remain steady, continued policy tailwinds and stable macroeconomic conditions while remaining 7:22 7 minutes, 22 seconds vigilant to evolving geopolitical risks and external uncertainties. 7:28 7 minutes, 28 seconds The near-term environment remains supportive with the policy continuity on the union budget post GST 2.0 and the 7:38 7 minutes, 38 seconds stable interest rate environment collectively strengthen affordability, financing comfort and overall demand sentiment. 7:45 7 minutes, 45 seconds With these remarks, we will now open for any questions that you may have. 7:54 7 minutes, 54 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press 8:01 8 minutes, 1 second star and one on their touchtone telephone. If you wish to remove yourselves from the question queue, you 8:08 8 minutes, 8 seconds may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will 8:16 8 minutes, 16 seconds wait for a moment while the question cue assembles. 8:24 8 minutes, 24 seconds The first question is from the line of Abraal from Vision 8 Investments. Please go ahead. 8:33 8 minutes, 33 seconds Hi, this is Abhaya. So just wanted to understand how you see the recent orders like uh up to 135 crores in Q3 and the 8:42 8 minutes, 42 seconds Mexico facility 250 crores pipeline from Ford, GM and Honda impact our 2627 8:49 8 minutes, 49 seconds revenue guidance. given the 21 21% Q3 growth from Rani Madras. 9:01 9 minutes, 1 second Yeah. So this 130 crores orders are for future businesses, right? So they are not going to start in the immediately. 9:10 9 minutes, 10 seconds So the other thing which you have mentioned about what is that related to the 250 crores that that portion of it is not very clear. 9:19 9 minutes, 19 seconds Okay. 9:20 9 minutes, 20 seconds So, so 250 kores from we don't have any clear like visibility because those are pipeline orders from Mexico, right? 9:30 9 minutes, 30 seconds So, no I I'm not able to actually fully gather your uh 250 cr question related to Mexico. What what is that? Because 9:38 9 minutes, 38 seconds the the orders that we have actually won in this quarter is about 130 odd crores particularly for Ran Madras. 9:48 9 minutes, 48 seconds Okay. And over this entire year if you look at it from for the last three quarters we have won about 650 crores of orders for Rani Madras. 9:59 9 minutes, 59 seconds Okay. Okay. And how this will impact the 2627 and further you know 2728 revenue 10:07 10 minutes, 7 seconds and AIDA guidance given the stupendous growth in this quarter. 10:13 10 minutes, 13 seconds We don't give guidance for the future quarters in terms of EITA but uh we could I would say that we are moving the right direction. If you notice that 10:21 10 minutes, 21 seconds during this quarter itself there is a uh improvement in the EITA numbers and uh we are making a lot of uh efforts for 10:30 10 minutes, 30 seconds cost reduction. We are doing a lot of cost reduction initiatives which we are hopeful that will uh reprods 10:41 10 minutes, 41 seconds going forward. uh in this coming quarters as well as the coming financial year. Okay. Thank you and all the best. 10:50 10 minutes, 50 seconds Thank you. 10:55 10 minutes, 55 seconds Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask the question. The next 11:04 11 minutes, 4 seconds question is from the line of Sil Kotari from Unique PMS. Please go ahead. 11:09 11 minutes, 9 seconds Yeah, thank you for opportunity. Uh sir my question is normally uh in the past many times we mentioned that whenever we 11:18 11 minutes, 18 seconds grow double digit high double digit then we can expect double digit more than double digit epa margin. I would like to 11:25 11 minutes, 25 seconds understand with this restructuring merger getting over now everything almost benefits also must be coming and 11:35 11 minutes, 35 seconds we have grown year on year quarter on quarter subially why it is not converting in a better 11 12% margin 11:43 11 minutes, 43 seconds which always running group aspired to achieve so if you can in detail explain what is stopping us from getting this 11 11:52 11 minutes, 52 seconds 12% evita margin See like we mentioned in the past calls also Sunil we are taking a lot of 12:00 12 minutes initiatives wherein we are expecting quarteron quarter improvement in our EITA numbers and as you have seen in the last quarter uh we have shown an 12:09 12 minutes, 9 seconds improvement in EIA numbers and you will also be aware that uh we had a a new labor code coming in and uh we have also 12:16 12 minutes, 16 seconds made a one-time provision for that uh uh additional any positive expenses on account of the labor code that is also 12:24 12 minutes, 24 seconds contained in this uh P&L for the quarter. So in spite of that we have grown in the IITA numbers and uh due to our cost reduction initiatives we are 12:33 12 minutes, 33 seconds fairly confident that in the coming financial year uh we will touch double digit AIA numbers for me as well. So sir 12:41 12 minutes, 41 seconds what steps yet we are taking to improve our beta margin because now fortunately we are moving towards the double digit 12:49 12 minutes, 49 seconds topline growth but to improve substantially I beta margin what other measures are we taking which other benefits are yet to come of merger if 12:58 12 minutes, 58 seconds you can explain little bit in little bit see see one is on the direct material front uh this merger has offered us an 13:06 13 minutes, 6 seconds opportunity to look at uh areas where we can uh do uh ordering collectively and that can uh help us in reducing the 13:14 13 minutes, 14 seconds cost. On indirect materials also we see a lot of opportunity for uh cost reduction and on flight and logistics 13:22 13 minutes, 22 seconds also we are looking at uh uh areas for cost reduction on uh warehousing also there is a scope for cost reduction. So 13:31 13 minutes, 31 seconds it is across the board. Kunel on multiple areas consequent to this merger. We are hopeful that we will be able to synergize this and then ensure 13:39 13 minutes, 39 seconds that overall there is a reduction in cost and since these are all activities which take time to consummate. We are hopeful that in the coming quarters we 13:46 13 minutes, 46 seconds will constantly see uh improvement in the margins. 13:50 13 minutes, 50 seconds Okay. Thanks. One more thing is about uh debt reduction. We already I think uh got some uh fund from the lend sale and 14:00 14 minutes we were also expecting some more uh lend sale by March. So if you can a little bit uh explain in detail how much we 14:08 14 minutes, 8 seconds already repay what type of repayment we want to make of a debt by March and any other land sell parcel planning going on something more on that. 14:19 14 minutes, 19 seconds Um see on the debt front uh see one thing uh that has happened is in spite of 14:27 14 minutes, 27 seconds uh capture investment of close to 100 crores we have kept the debt at overall debt at more or less the same level 14:35 14 minutes, 35 seconds which means uh had we not got this uh land uh parcel sale related advance 14:42 14 minutes, 42 seconds money we would have gone for another uh close to 100 cr debt which we could avoid by using those funds for our capex 14:50 14 minutes, 50 seconds expansion and uh going forward also our our clear uh uh thought process is that we want to bring down the debt uh 14:58 14 minutes, 58 seconds substantially and uh we are hopeful that with further amounts which as we receive uh towards this land sale we'll be using 15:07 15 minutes, 7 seconds it towards debt reduction so that that's that's brief to you by by looking at a substantial reduction 15:14 15 minutes, 14 seconds over the next 12 to 18 months as already indicated. Mhm. So by by when we are getting those amounts remaining pending amounts 15:22 15 minutes, 22 seconds uh these are all milestone payments spread over the next uh year or so. So as and when uh we reach milestone we'll 15:30 15 minutes, 30 seconds be getting this payment spread. So uh consecutive quarters we'll see some deer reduction happening as we move on. 15:37 15 minutes, 37 seconds Sir last question on this uh recall at JF. 15:42 15 minutes, 42 seconds I think unfortunately or whatever reason many in every each of our uh manufacturing units we are getting this 15:51 15 minutes, 51 seconds type of accidental uh outcome which is happening non-stop I mean somewhere engine wall sometime running matras 15:59 15 minutes, 59 seconds previously it was NSK what steps are we taking now to I mean mitigate this type 16:06 16 minutes, 6 seconds of accident in future what what measures because now you have t with JF also and Yet this is happening. So what happened 16:14 16 minutes, 14 seconds and what we are trying to do which removes this risk from in future. 16:23 16 minutes, 23 seconds Yeah. So u prasad here I'll answer it in two parts. The first part is specific to 16:29 16 minutes, 29 seconds this u uh warranty issue that we have with the ZF run. So this issue is pertains to a particular model uh that 16:38 16 minutes, 38 seconds we have been supplying to the global market and uh this is happening in a specific extreme climate conditions in 16:45 16 minutes, 45 seconds terms of very cold climate conditions and uh and this is not happening on all the vehicles uh that has been there and 16:54 16 minutes, 54 seconds this is due to an environmental specific uh conditions and we have estimated the number of vehicles and uh this is again 17:03 17 minutes, 3 seconds related to NHSDA recall and the customer has actually decided to go in that route and we have actually made the provision to this. 17:14 17 minutes, 14 seconds However, uh one thing that we wanted to actually clarify is related to our relationship with our customers and uh 17:22 17 minutes, 22 seconds which remains very strong and uh we continue to win new businesses and uh 17:28 17 minutes, 28 seconds the way in which we have been able to uh demonstrate and quickly move on in terms of clarifying the necessary inputs for the customer to take these calls. 17:41 17 minutes, 41 seconds reissues our relationship with a with a customer and we continue to win new businesses across uh geographies with 17:49 17 minutes, 49 seconds this specific customer here and um given the safety critical uh nature of these 17:56 17 minutes, 56 seconds uh parts and we were in this kind of a recall kind of a scenario. All right. So 18:05 18 minutes, 5 seconds this is again not specifically related to a part that is manufactured by us and 18:12 18 minutes, 12 seconds this is being uh supplied to us through uh uh one of the company. You will be able to actually identify this company 18:19 18 minutes, 19 seconds because this is a public information as well uh related to a plastic um injection molding part. Right. So we 18:27 18 minutes, 27 seconds have we have been able to learn from our um way in which we were able to deal with some of these um suppliers and we have actually taken corrective uh 18:36 18 minutes, 36 seconds measures. So in substance the relationship with our customers uh continue to be strengthened and then we continue to win new businesses and we 18:45 18 minutes, 45 seconds have been able to strengthen our um overall supply development quality and other operation related uh measures 18:54 18 minutes, 54 seconds and we don't have any insurance. Sorry to interrupt Mr. Gotari. Please rejoin the key for more questions. Yeah, thank you. 19:02 19 minutes, 2 seconds The next question is from the line of Manish Goyel from Think Wise Wealth Management LLP. Please go ahead. 19:10 19 minutes, 10 seconds Yeah. Uh thank you so much sir. Uh so as we were discussing I would like to continue on the same topic. Uh so uh 19:19 19 minutes, 19 seconds what probably Sunil was asking that in terms of insurance do we have insurance coverage? Number one. Number two sir if 19:26 19 minutes, 26 seconds you can just repeat what is this pertaining to you said that it is part which is not manufactured by us. Uh so 19:34 19 minutes, 34 seconds uh what what product is it related? I I missed the initial comment if you can provide us. And uh third thing is that 19:42 19 minutes, 42 seconds have we made sufficient provision that uh it may not not require any further provision at your end. 19:50 19 minutes, 50 seconds Yeah, thank you. 19:53 19 minutes, 53 seconds Um Manish uh this uh I I'll answer on the insurance and sufficiency of the 20:00 20 minutes provision. Uh yes, we do have uh insurance the normal insurance we have. 20:05 20 minutes, 5 seconds It may not be to this extent but we do have an insurance but it's very preliminary for us to make any conclusion on this because this is a 20:12 20 minutes, 12 seconds lengthy process. We'll make all attempts to ensure that we mitigate the overall loss on this account. Uh as far as uh uh 20:20 20 minutes, 20 seconds the adequacy of provision is concerned again it's very early to comment. We will be reviewing it sometime in uh uh 20:28 20 minutes, 28 seconds March April of this year and uh at that time we will have a better idea if this 20:35 20 minutes, 35 seconds amount is sufficient or any additional provision may have to be made. 20:41 20 minutes, 41 seconds Yeah, man. In terms of the part, okay, this is a seat belt, right? And uh a 20:48 20 minutes, 48 seconds buckle for the seat belt. So, there is a a plastic injection molding part which 20:54 20 minutes, 54 seconds is actually where the um seat belt is inserted right onto on when we are actually driving. This is on 21:02 21 minutes, 2 seconds on our left side. That is where this is getting inserted. And there is a potential problem which has been 21:09 21 minutes, 9 seconds identified as the uh tongue is being inserted slowly or it is being released 21:17 21 minutes, 17 seconds um under the extreme um exposure to extreme weather conditions. 21:25 21 minutes, 25 seconds So, oh okay. So, like um so this is basically we are exporting to uh ZF 21:33 21 minutes, 33 seconds group and uh uh so this product was not tested for such uh extreme cold climate 21:40 21 minutes, 40 seconds conditions earlier. Uh just want to get a sense that probably this this is something which we would have been manufacturing under that technology transfer. Right. 21:53 21 minutes, 53 seconds Yes, this is this is this is a part that we actually supply to um the Hyundai, right? And this is a global program that 22:01 22 minutes, 1 second uh we have been nominated to supply by uh the ZF group. 22:09 22 minutes, 9 seconds Okay. So, so is there a case like what we probably had that because it's not uh 22:16 22 minutes, 16 seconds pertaining to uh manufacturing issue at our end, we should be getting compensated uh going forward like what 22:24 22 minutes, 24 seconds we saw in the case of uh NSK. 22:32 22 minutes, 32 seconds Yes, this is a very uh this is a big this part is being supplied by a very small supplier, right? So uh we don't 22:40 22 minutes, 40 seconds know how we will be able to um um recover it from them right. So 22:48 22 minutes, 48 seconds and uh this is like as a countermeasure we have actually changed the source and u move to another uh global supplier. 22:59 22 minutes, 59 seconds And are we are we the only company which has faced this issue in uh ZF group or any other company has also faced this problem uh because of this vendor? 23:12 23 minutes, 12 seconds No, we are not aware of uh that. 23:17 23 minutes, 17 seconds Okay. Okay. Fine. I'll probably uh move to other set of questions. If you can sir within like uh uh ZF Ran, if you can 23:27 23 minutes, 27 seconds give us the revenue breakup for steering and the safety products uh uh and what is the uh domestic and exports number uh 23:36 23 minutes, 36 seconds that should be helpful. That was one question. And second question within Rani group sales probably what we see is 23:43 23 minutes, 43 seconds that uh uh in your revenue breakup sales by product lines the other segment uh 23:50 23 minutes, 50 seconds revenue share has been given as 7% which is probably as compared to last 23:57 23 minutes, 57 seconds quarter at 1%. So want to know what what product is got categorized over here. uh that was one thing and third thing on 24:06 24 minutes, 6 seconds Ran Madras you you replied to Sunni's question that we should see a double digit margin so ideally by when should 24:13 24 minutes, 13 seconds we see it over a period of next three to four quarters uh that are the set of question thank you 24:20 24 minutes, 20 seconds yeah so I'll I'll go from the uh reverse one so in ranometers I think it is consistent to what we have actually told 24:28 24 minutes, 28 seconds in our earlier call so we are looking at a 12 to 8 month 18 months kind of a window is what we have actually set out 24:35 24 minutes, 35 seconds and um that 11 12% kind of an AIDA is what we are actually targeting and with 24:42 24 minutes, 42 seconds respect to the ZF run sales breakup for the Q3 the steering uh division actually 24:51 24 minutes, 51 seconds accounted for about 37% of the revenue and uh occupant uh safety division accounted for 63% of the revenue and in 25:01 25 minutes, 1 second terms of uh domestic domestic and exports. Domestic is about 78% and exports is about 22%. 25:13 25 minutes, 13 seconds And one more thing which you asked related to the um 25:20 25 minutes, 20 seconds the overall uh yeah the other 25:27 25 minutes, 27 seconds the aftermarket um products So as you know we have actually have a 25:37 25 minutes, 37 seconds um post uh the merger we have a separate uh unit which is called aftermarket products business right 25:45 25 minutes, 45 seconds so that is actually tagged under others okay this is largely reflected to Rana 25:53 25 minutes, 53 seconds Madrat sorry to interrupt Mr. Go please rejoin the for more questions. Sure. Thank you so much. 26:03 26 minutes, 3 seconds Thank you. The next question is from the line of Saja Kumar Vanatan from RK Investment. Please go ahead. 26:14 26 minutes, 14 seconds Hello. Hello. Can you hear me? Yeah, we can hear you. Good afternoon. 26:20 26 minutes, 20 seconds Yeah. Good afternoon. Thanks for the opportunity. Uh sir just uh two three questions. So the first question is uh this there is a small dip in the IITA 26:29 26 minutes, 29 seconds margins of uh Rani steering and the RNA automotive. So is it due to the labor code provision or is there anything more uh sitting there? 26:41 26 minutes, 41 seconds See uh in steering systems labor code yes uh that is uh having uh impact on the margins and also like we have 26:49 26 minutes, 49 seconds mentioned uh uh for the next 12 months or so the margins will be subdued in case of granite steering systems mainly 26:58 26 minutes, 58 seconds due to some low pricing at which we have accepted some orders a few years back. 27:03 27 minutes, 3 seconds So that is also playing a role. Uh so due to poor product mix uh and as well as the labor code both have contributed 27:10 27 minutes, 10 seconds to a low margin in case of for steering systems. So what is the amount s if you can quantify for steering with the labor 27:19 27 minutes, 19 seconds code position as well as Ronnie automatic 27:29 27 minutes, 29 seconds it's about 1.8 8 crores and for ani automotive automotive is around 1.18 crores. 27:42 27 minutes, 42 seconds Okay. 27:43 27 minutes, 43 seconds This is our share 49% share. It's overall 2.4 crores but our share is 1.18. 27:51 27 minutes, 51 seconds Okay. Got it. And and second thing sorry to labor on that warranty uh provision. 27:57 27 minutes, 57 seconds Uh so basically I want to know do you expect a similar kind of a provision in the upcoming quarter or you think you 28:04 28 minutes, 4 seconds have made a reasonable estimate uh of the provision and uh and continuing on the same question uh do you expect any 28:13 28 minutes, 13 seconds further remediation cost or any uh you know pressure on margins because of this 28:21 28 minutes, 21 seconds u see as far as adequacy of provision like I mentioned earlier it's a bit early to uh commit right now because uh we are still in the process of reviewing 28:30 28 minutes, 30 seconds it. So by April May we will have a a better idea whether this provision is sufficient or any more provision is 28:37 28 minutes, 37 seconds required. So we'll come back to you during the next call on on that aspect and uh margins that is as per the orders 28:45 28 minutes, 45 seconds that we are preparing the margins will be there this particular aspect will not have any any impact on the normal order procurement margins which we have been getting. 28:55 28 minutes, 55 seconds Okay. And sir, if I understand R in RNA automotive, you're paying royalty to ZFS. So will this uh not be covered by 29:03 29 minutes, 3 seconds your royalty agreement whether they will not be picking up a significant uh you know portion of this warranty uh similar 29:11 29 minutes, 11 seconds to what the NSK has done in you know in that other J. 29:18 29 minutes, 18 seconds This is a a manufacturing related uh issue as it is because of joint venture they are they'll be bearing 51% of this 29:26 29 minutes, 26 seconds uh cost in any case we'll be bearing only 49% of this 29:32 29 minutes, 32 seconds okay thank you thank you next question is from the line 29:42 29 minutes, 42 seconds of Krishna Kumar S from Lion Hill Capital please go ahead Yeah. Uh good afternoon sir. Uh congrats 29:49 29 minutes, 49 seconds on a good set of operating metrics on the uh onas. Uh uh uh if you can just clarify sir on the warranty provision. 30:00 30 minutes Uh do we have an idea of the total number of vehicles which are having this problem or that's an ongoing uh thing 30:08 30 minutes, 8 seconds that uh will keep coming up sir as we encounter problem. uh any vehicle part that you have in mind sir? 30:17 30 minutes, 17 seconds Are you referring to uh seat belt? Yeah. Yeah. 30:22 30 minutes, 22 seconds Okay. Yes. Uh see in uh North America u we have around 5 lakh 67,000 vehicles in 30:31 30 minutes, 31 seconds USA and around 44,000 vehicles in Canada. uh but overall for the entire program it is around 9 lakh 60,000 30:39 30 minutes, 39 seconds vehicles where uh supplies have been made to North America, Europe, Middle East and Australia. So this covers the 30:48 30 minutes, 48 seconds entire program whatever number of vehicles for that program which is around 9 lakh 60,000 vehicles the provision has been made for that 30:57 30 minutes, 57 seconds which is made for full uh full uh uh sub program basically. So there can be a potential fight back sir if things 31:07 31 minutes, 7 seconds aren't as bad as we expect. It's a bit early to comment Krishna maybe by next 31:14 31 minutes, 14 seconds call we'll be having a better clearer position on the Ramen Madras sir is it possible 31:22 31 minutes, 22 seconds to give some color in terms of how uh uh you know the growth have been uh on on on the uh different segments like you 31:32 31 minutes, 32 seconds talked about different brakes engine parts and uh uh steering so uh can you 31:38 31 minutes, 38 seconds give some color on uh the profit price growth sir yi is that possible and also on exports how they move s yi growth. 31:51 31 minutes, 51 seconds Yeah. So um product wise if you look at it so steering and linkages business we have a um good growth both in uh 32:00 32 minutes domestic as well as uh exports and however if you look at it from other 32:07 32 minutes, 7 seconds uh segments particularly the light metal castings we had a growth but it's not comparable to the steering and uh 32:15 32 minutes, 15 seconds linkages in terms of aftermarket we have um Um good set of numbers um good 32:23 32 minutes, 23 seconds traction that we are seeing in the market and um as we have integrated all the aftermarket businesses into one 32:31 32 minutes, 31 seconds entity we are actually um building lot of uh synergies and then uh we are 32:38 32 minutes, 38 seconds actually consolidating the one approach of uh working and uh there has been lot 32:44 32 minutes, 44 seconds of synergies there and uh in terms of u engine components. 32:52 32 minutes, 52 seconds Um we we we face some challenges in terms of the uh exports particularly because of uh 33:00 33 minutes the tariff situation and um the brake components also we are having a good 33:06 33 minutes, 6 seconds traction across uh the segments both uh domestic as well as uh rails and um the exports. 33:18 33 minutes, 18 seconds Thank you. Thank you very much sir. All the best sir. 33:24 33 minutes, 24 seconds Thank you. The next question is from the line of major secure equestms. Please go ahead. 33:33 33 minutes, 33 seconds Yeah. Thanks for the opportunity. Am I audible? Yeah. Yeah. So first question uh is on debt. 33:40 33 minutes, 40 seconds Uh can you uh call out gross debt across the entities uh RML, RSSL and ZF? 33:51 33 minutes, 51 seconds RML is uh 764 crores. 33:58 33 minutes, 58 seconds RSSL is 175 crores. Yeah. Me. 34:08 34 minutes, 8 seconds Yeah. On ZF ZF combined is 722 crores. 34:19 34 minutes, 19 seconds Okay. Okay. And on RSSL margins, so uh you've been highlighting that incremental business is being taken at 34:28 34 minutes, 28 seconds uh high single digit margin maybe closer to 7 8%. 34:32 34 minutes, 32 seconds So my question is how many quarters will it take to uh improve the console margin 34:39 34 minutes, 39 seconds maybe uh towards mids single digit uh in RSS? 34:45 34 minutes, 45 seconds um it will be maybe in the year of 207 28 onwards we can start seeing 34:52 34 minutes, 52 seconds improvement. We'll require at least another 15 months for uh this to stabilize. After that uh once the new uh 35:01 35 minutes, 1 second program starts that will help uh in overall improvement. So I would say 27 28 onwards uh we can see a improvement in the EIA numbers. 35:13 35 minutes, 13 seconds Okay. Okay. And just a clarification uh the provision which we have made in quarter 3 is uh for all the 9.6 lakhs vehicles right? 35:21 35 minutes, 21 seconds Yes. Okay. Okay. Thank you. 35:30 35 minutes, 30 seconds Thank you. The next question is from the line of Mel Sha from NSFO. Please go ahead. 35:37 35 minutes, 37 seconds So my question pertains to Rani Madras. 35:40 35 minutes, 40 seconds uh in our uh earlier calls we have mentioned that uh by Q Q4 exit we would be inching towards 10% a beta margin at 35:49 35 minutes, 49 seconds the exit that is one question and second is on debt reduction so in Q2 call we had mentioned that uh the first half KPX 35:58 35 minutes, 58 seconds was on a higher side at 94 crores and we had received 115 crores from land sale and third quarter numbers are much 36:06 36 minutes, 6 seconds better than first two quarters and capex intensity is going to decline significantly in second half. So are we 36:14 36 minutes, 14 seconds on track to achieve 150 200 crores of debt reduction uh by end of March 2026? 36:23 36 minutes, 23 seconds Not not by March 2026. Uh we've been always maintaining that it'll take 12 to 18 months for this to happen. So maybe u 36:33 36 minutes, 33 seconds March of 27 we will see that kind of a number reduction because this is in transit we are receiving it. So while uh 36:41 36 minutes, 41 seconds we are using currently most of the money for without additional borrowing handling the capital uh for the absolute 36:50 36 minutes, 50 seconds number of debt to come down it may be March 27th. 36:55 36 minutes, 55 seconds So in that case your working capital has increased significantly because even before the land sale we were assuming 150 odd gross of debt reduction in 37:03 37 minutes, 3 seconds financial year 26. So this 21% growth has come with lot of working capital addition. 37:12 37 minutes, 12 seconds See during this year there has been a slight increase in working capital partly due to conscious inventory buildup but uh going forward this 37:20 37 minutes, 20 seconds working capital optimization you will see from quarteron quarter so that will start reducing this was uh uh for a 37:28 37 minutes, 28 seconds short period of time because of conscious inventory buildup this is showing that will come down. 37:35 37 minutes, 35 seconds So is it now fair to assume because see what happens is every quarter we are changing the guidance actually. Okay. 37:42 37 minutes, 42 seconds And so if I put like financial year 27. 37:46 37 minutes, 46 seconds Okay. So by end of financial year 27 uh your gross debt in Ranimadas is close to 764 crores. 37:54 37 minutes, 54 seconds Yes. 37:54 37 minutes, 54 seconds Right. So that should come down to close to 500 crores by end of financial year 27. 38:01 38 minutes, 1 second Uh cr to 600 crores. No, but see because see 38:08 38 minutes, 8 seconds we will be do we we will be increasing our EIT also we'll grow also and we will perhaps receive the balance amount of 38:16 38 minutes, 16 seconds land right and the capex intensity is going to be somewhere around 150 odd crores and you are mentioning that working capital 38:24 38 minutes, 24 seconds intensity would also come down so I'm assuming only 250 crores debt reduction in financial aid 27 38:33 38 minutes, 33 seconds uh we we track the debt to capital employed and debt to equity. Uh from that standpoint there will be quantum 38:42 38 minutes, 42 seconds improvement. But in terms of absolute debt that is also a function of the new business that we are uh procuring and the investment that is required for the 38:50 38 minutes, 50 seconds new business. That's why uh while the debt to capital employed will substantially come down uh because of 38:59 38 minutes, 59 seconds the good performance and uh uh the numbers that we will be seeing going forward as as far as absolute debt is 39:07 39 minutes, 7 seconds concerned I would say 600 cr 150 cr reduction is something we can look for over and above the capex investment 39:15 39 minutes, 15 seconds which we'll be doing from our own fund based on this. So last question then in that case what is our capex for 26 27 28 39:23 39 minutes, 23 seconds on a consult basis for Rani Madras it'll be around 200 crores for each year. 39:35 39 minutes, 35 seconds Yeah. 39:36 39 minutes, 36 seconds So 26 so it will be total of 600 crores or for 26 27 28 39:44 39 minutes, 44 seconds 25 26 to 27 28 those three years correct. So 600 crores for 3 years. Yeah. 39:51 39 minutes, 51 seconds Okay. Thank you. Thank you very much, sir. 40:00 40 minutes Thank you. The next question is from the line of Chaitan Chera from Pragya Equities Private Limited. Please go ahead. 40:09 40 minutes, 9 seconds Hi, can you hear me? Yeah, we can hear you. Thanks for the opportunity. 40:16 40 minutes, 16 seconds See one common upgrade we see in successful auto component company is entering in IPC and engineering and 40:23 40 minutes, 23 seconds component sector for example industries like aerospace and defense. Do we have any plan or thoughts on pursuing this? 40:35 40 minutes, 35 seconds Um no. So currently we are focusing on uh exploring opportunities in the automotive sector. 40:46 40 minutes, 46 seconds Yeah, because it's this all generally entering is a very time consuming job. 40:51 40 minutes, 51 seconds So if you start early, you can you can get some orders after few years. So is there any plan is any what what we want 41:00 41 minutes to see ourselves in 3 to 5 years down the line. 41:03 41 minutes, 3 seconds Yeah. See right now uh we we have a significant order book that is one with respect to our existing businesses and 41:11 41 minutes, 11 seconds all our products are uh power train agnostic and then we see a good headway in terms of uh our uh uh traction in 41:20 41 minutes, 20 seconds terms of our products. The second thing is in terms of new products we continue to evaluate multiple opportunities 41:28 41 minutes, 28 seconds um in terms of both inorganic as well as uh new products from our own thing and we strongly believe that uh given the 41:36 41 minutes, 36 seconds position of automotive sector in India we strongly see lot more opportunities for playing out in uh automotive sector 41:45 41 minutes, 45 seconds for the next 3 to 5 years. Of course uh we we have u an experience of um 41:52 41 minutes, 52 seconds supplying to aerospace in the past and we might look at other non-automotive segments in future. So right now uh there is no plan. 42:04 42 minutes, 4 seconds Okay. Thank you. 42:11 42 minutes, 11 seconds Thank you. The next question is from the line of Saky Kapoor from Kapoor and Company. Please go ahead. 42:23 42 minutes, 23 seconds Your line is unmuted please. 42:24 42 minutes, 24 seconds Yes ma'am. Thank you ma'am. Uh namast hope I'm audible. 42:28 42 minutes, 28 seconds Yeah yeah you're audible. So, so when we look at the consolidated performance for RNA holding excluding the performance of 42:36 42 minutes, 36 seconds Ran Madas that is the consolidation of Ran Madas the the profitability and the margins are on the lower side 42:44 42 minutes, 44 seconds I'm talking about before the share of profit uh from JV when we look at Rani holdings console number for the quarter 42:52 42 minutes, 52 seconds it stood at 44.78 crores and whereas Rani Madras numbers for the quarter were 42:58 42 minutes, 58 seconds at 43 crores the PBT. So uh excluding the Gan Madas members the other JVS uh 43:06 43 minutes, 6 seconds and the other subsidies are not performing. So is it only because of the product profile which you just alluded to the earlier participants that is uh 43:14 43 minutes, 14 seconds that these are not contributing or what what are the key reasons and when are we going to see the uh contribution from other uh other subsidies also? 43:27 43 minutes, 27 seconds RML RSS see currently RSL consolidates RML and RSSL 43:34 43 minutes, 34 seconds and RML as you have seen the performance has been good during the last quarter. 43:39 43 minutes, 39 seconds Rani steering systems as we already mentioned it has a issue with respect to margin which we are correcting in the 43:46 43 minutes, 46 seconds next 12 to 15 months and so for the next 15 months this uh challenge will be there in the RHL consolidated results 43:53 43 minutes, 53 seconds post which we expect uh uh RNA steering systems also to contribute to the bottom line of gran holdings limited. 44:01 44 minutes, 1 second Okay. And sir, can you go further when is it the nature of the order booking with some some uh cost escalations or 44:09 44 minutes, 9 seconds the product? What is the reason why uh why uh this is the state of affair for RFS? 44:16 44 minutes, 16 seconds This we also mentioned the past calls that some orders have been booked at very low margins a few years back and 44:23 44 minutes, 23 seconds then since that program is still continuing till the end of that program this talent will be there. In the meanwhile, we have booked some new 44:30 44 minutes, 30 seconds orders uh at a higher margins that will start uh uh production sometime in 2728. 44:37 44 minutes, 37 seconds So from 2728 year onwards we we are hopeful that uh uh Rana steering systems also will start contributing to Rana 44:46 44 minutes, 46 seconds holdings bottom line. Okay. And just a second point to it sir post this restructuring this is is this the final 44:53 44 minutes, 53 seconds uh capital structure for both the because having this separate entity of RN madras uh been trading separately and 45:03 45 minutes, 3 seconds uh and Rana holding separately uh does this will will run holding valuation ascribed properly or will it always 45:11 45 minutes, 11 seconds trade at a discount because of a holding company uh uh market perception. 45:18 45 minutes, 18 seconds So are we done with this exercise or going ahead uh so in order to create value we can look forward for further uh 45:25 45 minutes, 25 seconds uh changes in the capital structure at this juncture keeping in mind our uh 45:32 45 minutes, 32 seconds u company profile within the group we felt that this restructuring is uh good for us to reap all the synergies and uh 45:41 45 minutes, 41 seconds so as we stand this is the structure we are looking at uh which we feel will help us reap all the synergies of this merger and going forward improve our margins as well. 45:53 45 minutes, 53 seconds Okay. And last lastly on the JF Rani automotive uh part. So you mentioned about that plastic component being 46:00 46 minutes sourced. So that is being sold from the JF uh money facility or who are the suppliers can you uh and you have also 46:09 46 minutes, 9 seconds changed that uh I mean now we have take the taken the course correction also the changing of the supplier for the plastic component molding which you just 46:17 46 minutes, 17 seconds mentioned hello 46:28 46 minutes, 28 seconds sorry you want to know Sir yes the the name of the entity from where we have sold this plastic moldings which you have mentioned 46:36 46 minutes, 36 seconds micro tech polymer okay they are not in the listed space right they are not in 46:45 46 minutes, 45 seconds thank thank you sir for the clarification I've joined the quiz thank you 46:53 46 minutes, 53 seconds thank you ladies and gentlemen a reminder to all the participants if you wish to ask a question please press star and one. 47:02 47 minutes, 2 seconds The next question is from the line of Rajakumar Vanatan from RK Investment. Please go ahead. 47:10 47 minutes, 10 seconds Yeah, thanks for the followup. Uh uh sir my question is on this warranty provision which you said you will 47:17 47 minutes, 17 seconds revisit by April May and then kind of finalize the number. So the question is is there a risk of this provision 47:24 47 minutes, 24 seconds continuing for uh two three more quarters similar to the way we we saw it in NSFK JV or uh do you think by April 47:33 47 minutes, 33 seconds May we'll be able to uh kind of come with a firm number because I just wonder whether it's going to be a long-term pain or it's more a short-term pain. 47:44 47 minutes, 44 seconds uh we believe that by April May we should be able to come out with the final number as far but again as I said it's very preliminary we will based on 47:53 47 minutes, 53 seconds the experience and the review in April May we will definitely get more clarity on this 48:00 48 minutes okay sir thank you so much thank you a reminder to all the 48:08 48 minutes, 8 seconds participants that you may press star and one to ask a question. 48:16 48 minutes, 16 seconds The next question is from the line of Hershit Bora, an individual investor. Please go ahead. 48:23 48 minutes, 23 seconds Good afternoon sir. Uh uh I just wanted to understand what kind of sales are we expecting from the 600 crores Apex that 48:32 48 minutes, 32 seconds we are going to do in Ramy Madras in next 3 years. What should be the approximate asset turnover for this capex and how much of it is growth capex versus maintenance capex? Thank you. 48:44 48 minutes, 44 seconds Um it's very difficult to give one single number because uh each business 48:52 48 minutes, 52 seconds uh has its own uh ratio of uh fixed assets turnover. 48:58 48 minutes, 58 seconds So it varies from business to business and uh overall numbers currently uh 49:06 49 minutes, 6 seconds ballpark numbers we have picked it up and we feel it'll be around 200 crores peranom. 49:12 49 minutes, 12 seconds Uh so so I mean uh if I uh would want want a a broad understanding of uh uh 49:20 49 minutes, 20 seconds where the company thinks itself you know in terms of topline uh in next four to five years uh what would that number be? 49:31 49 minutes, 31 seconds Yeah. So as you know this is our uh typical uh planning cycle that we are underway now. So we'll be able to come 49:39 49 minutes, 39 seconds back to you maybe in the once we close out this quarter and then when we meet next time we should be able to actually give you a directional number by then. 49:49 49 minutes, 49 seconds So we most of our businesses are undergoing the planning exercise now. So okay should be able to come back to you probably next time. 50:00 50 minutes Okay. Thanks a lot sir. 50:05 50 minutes, 5 seconds Thank you. The next question is from the line of sake Kapoor from Kapoor and company. Please go ahead. 50:12 50 minutes, 12 seconds Yes sir. Sir when we look at the presentation slide number nine and the performance for Ran steering systems for 50:19 50 minutes, 19 seconds Q1 and Q2 the the AITA was at 18 cr and the margins were at 3.9 to 3.7%. 50:28 50 minutes, 28 seconds So uh is it only the labor code provision that led to the drop in margin as you were mentioning that the orders 50:35 50 minutes, 35 seconds uh old old orders at lower margins were there. So what what explains this 2% reduction in AITA margin uh Q on Q. 50:46 50 minutes, 46 seconds So in u in the last financial year um there were some reversal of uh in the last two quarters there were some 50:54 50 minutes, 54 seconds reversal of provisions which uh also helped in improving the EIA. There was also a price increase which we got from 51:03 51 minutes, 3 seconds RC retrospective price increase that also helped in improving the margins. So those were some on-off items which 51:11 51 minutes, 11 seconds helped improve the AITA in the previous two quarters and in this quarter uh labor code has further brought the AITA down. 51:21 51 minutes, 21 seconds Okay. But the price increase will be yeah please sorry sir that's why there are two factors the previous two quarters and this quarter 51:29 51 minutes, 29 seconds is not comparable mainly because there there were some provision reversals and here we have a additional provision made in this quarter. 51:40 51 minutes, 40 seconds Yeah. Yeah. Because the top line has improved from 480 to 5 520 K that is a 10% they increase wherein the margins 51:49 51 minutes, 49 seconds have. So that is your explanation. 51:54 51 minutes, 54 seconds Yeah, that's why I was mentioning that uh the AITA numbers are still at a low level. It is just that the two quarters previous two quarters because of some 52:03 52 minutes, 3 seconds provision reversals it helped otherwise the AITA numbers around this range only and it further got impacted due to the labor code which is a one time thing. 52:13 52 minutes, 13 seconds Okay. And for uh s RSSL uh are we running at the utilization capacity utilization levels are at optimum level 52:21 52 minutes, 21 seconds or if you could just give a number or to the same One second. 52:39 52 minutes, 39 seconds Yeah, we have we are we are running around uh 80 to 85% uh capacity utilization. 52:46 52 minutes, 46 seconds Okay. Enter we we have mentioned about the order win to the tune of 345 cr I think. These are long-term programs sir 52:53 52 minutes, 53 seconds and not one of uh item that we orders that we have won. This will this program will continue over a period of time. 53:01 53 minutes, 1 second Yeah. Yeah. So each of these orders will be for a reasonably 5 six year time frame and uh some of it is replacement programs etc etc. 53:14 53 minutes, 14 seconds Okay. And taking this into account that we are also contemplating any capex for RSL also going ahead with with the tie with this order win 53:23 53 minutes, 23 seconds and at running at 80 85% utilization level 53:30 53 minutes, 30 seconds there will be some limited capex in RSSL also considering the new orders they have got around 40 crores 53:38 53 minutes, 38 seconds is the expected capex of okay and here we have only one product that What are the steering as as the 53:46 53 minutes, 46 seconds name speaks? So or what are the key product profiles? 53:50 53 minutes, 50 seconds We we have uh manual steering column which is predominantly to the commercial vehicle segment and the column electric 53:59 53 minutes, 59 seconds power steering which is for the passenger vehicle. 54:04 54 minutes, 4 seconds The electric power steering is the major predominant uh portion of that uh revenue. 85% of the revenues And lastly sir a very small suggestion. 54:16 54 minutes, 16 seconds Sorry to interrupt Mr. Kapoor. Ma'am please. Yeah yes yes yes ma'am I'll do that. 54:25 54 minutes, 25 seconds Thank you. The next question is from the line of Radha from BNK security. Please go ahead. 54:33 54 minutes, 33 seconds Hi sir. Am I audible? Yeah you're audible. Hi sir. Thank you for the opportunity. 54:39 54 minutes, 39 seconds Uh so because of the frequent warranty provisions it uh becomes kind of difficult to find the sustainability in 54:46 54 minutes, 46 seconds earnings. Uh so please help us understand what are the steps that we are taking and how seriously are we thinking about curtailing uh these kind of provisions in future. 54:59 54 minutes, 59 seconds Yeah. So I think it's um an unfortunate thing for us to swell. uh we continue to uh strengthen our uh key processes 55:08 55 minutes, 8 seconds across uh supply chain, our manufacturing everything and the one thing that we can 55:16 55 minutes, 16 seconds assure is this has actually not affected any of our customer relationship and we 55:23 55 minutes, 23 seconds continue to be winning new businesses as I have actually told earlier as well, right? And um 55:31 55 minutes, 31 seconds these are some of those things which are not um available in the entire even even along with our joint venture partners 55:40 55 minutes, 40 seconds when we actually look at it. Um we don't have a these kind of scenarios. These are more like a one-off very very uh low probability kind of a scenario. Right. 55:52 55 minutes, 52 seconds So uh this our our strength is in terms of our quality and processes and the 56:00 56 minutes nature of engineering that we do. So those things remain consistent. So that is that is being reassured by our 56:08 56 minutes, 8 seconds customers themselves um in terms of providing us with new opportunities etc etc. 56:18 56 minutes, 18 seconds All right. Hope this actually gives you an answer. 56:23 56 minutes, 23 seconds Uh yes sir. Uh secondly is the guidance of 11 to 12% AITA margins that you have given for RNA madras. Uh what are the 56:32 56 minutes, 32 seconds plans for AITA margins for RNA holdings overall and and uh by when do you expect to achieve that? 56:39 56 minutes, 39 seconds See RNA holdings as you know is the investing company and uh it's basically uh Rani Madras and Ran Steering Systems. 56:49 56 minutes, 49 seconds These are the two companies which will contribute to the overall major. Rani standalone has very limited activity. 56:59 56 minutes, 59 seconds So it'll more or less match the whatever combined IITA of Rana Madras and Rani sharing systems. 57:08 57 minutes, 8 seconds It's very difficult to give an EITA margin for Rana holding separately because on a standalone basis it doesn't do any manufacturing. It is only 57:16 57 minutes, 16 seconds investment companies. basically the consolidated revenues and of the component subsidiaries of brand 57:25 57 minutes, 25 seconds 11 to 12 yeah 11 to 12% for Madras uh can be achieved next year next year 57:32 57 minutes, 32 seconds yeah 11 to 12% we are hopeful by 27 March 57:38 57 minutes, 38 seconds understood thanks and all the best thank you the next question is from the line of K moan, an individual investor. 57:50 57 minutes, 50 seconds Please go ahead. Hello. Hello. Yes. Hello. Am I audible? 57:58 57 minutes, 58 seconds Yeah, you're audible. 57:59 57 minutes, 59 seconds Yeah. Thank you. I'm sorry that I thought that we are at the end of the 58:06 58 minutes, 6 seconds bad uh bad luck period, whatever you call it. So, Ran because five years we suffered through the warranty problems of RMSS. 58:17 58 minutes, 17 seconds And now this problem with ZF run. But can you I'm sorry I probably might have 58:24 58 minutes, 24 seconds missed a part of the explanation for the warranty on ZF running. Is it a quality problem or is it a manufacturing defect? 58:37 58 minutes, 37 seconds This is this is a problem manufacturing defect. No no this is a manufacturing defect. 58:44 58 minutes, 44 seconds This is with respect to one of our parts that we source from the tier 2 uh um injection molding company. 58:54 58 minutes, 54 seconds So the loss is close to I think60 crores or so. So are we going to get everything 59:01 59 minutes, 1 second from the sourcing company or is this going to be shut? Nothing we can possibly do to recover from the sourcing company. 59:12 59 minutes, 12 seconds probably it is it's a plastic component. So it must be very low value component. Is that right? 59:19 59 minutes, 19 seconds Yeah, it's a small company. 59:23 59 minutes, 23 seconds It's a small company and um so well it's quite unfortunate and I'm I'm a little 59:32 59 minutes, 32 seconds disappointed that I thought we had come to the end of ours anyway. So and again you're saying that 59:40 59 minutes, 40 seconds only by March or April you'll be able to assess whether the further provision needs to be made or not because we've 59:48 59 minutes, 48 seconds made a sizable provision of I think 120 crores. So and that okay so it is not a 59:55 59 minutes, 55 seconds a sourcing problem. So there is no way in which we can blame the collaborators the provider like in the case of the 1:00:03 1 hour, 3 seconds previous complaint in RMSS he would get something out of the uh msk joint venture being a design problem but here 1:00:12 1 hour, 12 seconds there's no such possibility exist is that am I right in understanding that yes sir 1:00:24 1 hour, 24 seconds okay okay And once again my my I'm sorry for what's happened and I can understand 1:00:31 1 hour, 31 seconds the pain that the company is suffering and all of us share her bearing but may I just wish 1:00:39 1 hour, 39 seconds luck for the company going ahead. Thank you. 1:00:46 1 hour, 46 seconds Thank you. The next question is from the line of Manish Roy Goyel from Then Wise Wealth Managers LLP. Please go ahead. 1:00:56 1 hour, 56 seconds Yeah. Uh thank you sir. There are a couple of questions on Rani Madras. So in your uh earlier uh remarks we said 1:01:03 1 hour, 1 minute, 3 seconds that Rani Madras has won 650 crores of business new business in the current uh year till date. Uh so sir does it mean 1:01:13 1 hour, 1 minute, 13 seconds that this will be the new incremental business uh which will probably get added in uh coming year sir? Uh that was 1:01:22 1 hour, 1 minute, 22 seconds the first question and second question on the revenue mix. Now we see that exports for last two quarters are 1:01:29 1 hour, 1 minute, 29 seconds picking up uh and the revenue share is roughly 25% uh ranging between 25 to 27% 1:01:37 1 hour, 1 minute, 37 seconds and after market is roughly uh 18 to 19%. So how should we see it going 1:01:44 1 hour, 1 minute, 44 seconds forward that uh growth of exports and after market uh uh can it be doubledigit growth going forward? We do. 1:01:56 1 hour, 1 minute, 56 seconds Yeah. In terms of uh the new orders, one this has a combination of both uh the replacement business which is for our 1:02:04 1 hour, 2 minutes, 4 seconds existing one as well as the new business right and these will actually mature probably like one and a half to two 1:02:11 1 hour, 2 minutes, 11 seconds years later right so that is that is one and second thing is in terms of the mix I think um given the growth in domestic 1:02:20 1 hour, 2 minutes, 20 seconds market from a volume perspective across uh uh segments starting from um passenger vehicle, commercial vehicle 1:02:27 1 hour, 2 minutes, 27 seconds and in fact um uh form tractors. So we see the domestic growth is robust and 1:02:34 1 hour, 2 minutes, 34 seconds our aftermarket growth is also um we are anticipating it to be a um growth driver 1:02:41 1 hour, 2 minutes, 41 seconds given uh the share and penetration that we have. I think we have we can definitely grow 1:02:48 1 hour, 2 minutes, 48 seconds that uh business. So given the higher growth that we are actually expecting in these two segments, the mix of exports is likely to be in a similar uh levels. 1:03:00 1 hour, 3 minutes And however when the um when we actually have this growth across the segments when we look at it 1:03:08 1 hour, 3 minutes, 8 seconds we are looking at it a very similar uh percentage uh for the maybe one to two years. 1:03:18 1 hour, 3 minutes, 18 seconds Sure sir. Thank you so much. 1:03:26 1 hour, 3 minutes, 26 seconds Thank you. The next question is from the line of Kan Changi, an individual investor. Please go ahead. 1:03:33 1 hour, 3 minutes, 33 seconds Thank you sir. Uh I just have two questions. One is on the land sale. Uh just just help us understand whether the current amount to be received is about 1:03:42 1 hour, 3 minutes, 42 seconds 230 crores. Is that correct? And is that expected in FI27? 1:03:48 1 hour, 3 minutes, 48 seconds Uh there are milestone payments. Yes, the overall uh amount is 230 crores said to be received but it also depends on 1:03:56 1 hour, 3 minutes, 56 seconds certain milestone payments which you have agreed as and when we reach that milestone this amount will start coming. 1:04:03 1 hour, 4 minutes, 3 seconds Okay. And the the second question was if I heard you correct in the beginning of the call is there a possibility of any insurance uh to be received against the 1:04:12 1 hour, 4 minutes, 12 seconds claims at uh ZF running or that that's not uh the case. 1:04:18 1 hour, 4 minutes, 18 seconds Yeah, we do have a um product liability insurance and ZF running but like I said it's a bit very early to comment on 1:04:27 1 hour, 4 minutes, 27 seconds that. Maybe as we progress if there is any further development we'll keep you posted. 1:04:33 1 hour, 4 minutes, 33 seconds Okay. Okay. Sure. Thank you, sir. 1:04:40 1 hour, 4 minutes, 40 seconds Thank you. The next question is from the line of sake Kapoor from Kapoor and Company. Please go ahead. 1:04:48 1 hour, 4 minutes, 48 seconds Well, only a humble suggestion to conclude we we find that uh Ran Madras numbers are generally declared earlier 1:04:57 1 hour, 4 minutes, 57 seconds much earlier than the holding. So if the gap can be concluded in terms of the board meeting and things can be aligned 1:05:04 1 hour, 5 minutes, 4 seconds in a way that these two companies post their numbers in in in the lesser gaps and then the con is also held 1:05:12 1 hour, 5 minutes, 12 seconds accordingly uh in that time frame. So that will suffice lot of uh our questions and the time period also a 1:05:20 1 hour, 5 minutes, 20 seconds more long longer time elapsed uh between Ran Madras members and holding. So will that get me corrected here? If there's 1:05:28 1 hour, 5 minutes, 28 seconds any if there is any way by which these can be reduced that would suffice lot of investors uh interest and the timing 1:05:36 1 hour, 5 minutes, 36 seconds will also be shocking. Sir from my it will be very difficult to reduce that uh time gap because uh see Rani holdings is the holding company of Rani Madras. 1:05:48 1 hour, 5 minutes, 48 seconds So after the Rani Madras results are approved the same has to be taken into consideration by Rani holdings and then they have to finalize their financials. 1:05:58 1 hour, 5 minutes, 58 seconds So this reasonable gap will continue to be there at least a week's gap. 1:06:04 1 hour, 6 minutes, 4 seconds Okay sir. Fine. Thank you and all the best for the teams. Thank you. 1:06:14 1 hour, 6 minutes, 14 seconds Thank you. The next question is from the line of Mit Raj from Equirus PMS. Please go ahead. 1:06:22 1 hour, 6 minutes, 22 seconds Yeah, thanks for the followup. Uh sir, on this seat belted thing, so what would be the content per vehicle for this 1:06:28 1 hour, 6 minutes, 28 seconds particular Yundai model uh for this product? 1:06:45 1 hour, 6 minutes, 45 seconds We don't have that number uh with us. 1:06:55 1 hour, 6 minutes, 55 seconds Okay. Okay. 1:07:03 1 hour, 7 minutes, 3 seconds Uh Mr. Rash, do you have more questions? No, that's all for my s. 1:07:10 1 hour, 7 minutes, 10 seconds All right. Thank you ladies and gentlemen. We will take that as the last question for today. I now hand the conference over to the management for closing comments. 1:07:22 1 hour, 7 minutes, 22 seconds Thank you all for uh taking your time out and be available for this uh investor call. Thank you. 1:07:33 1 hour, 7 minutes, 33 seconds Thank you very much on behalf of Rani Group. That concludes this conference. 1:07:38 1 hour, 7 minutes, 38 seconds Thank you all for joining us today and you may now disconnect your line.