Schaeffler India Ltd — Q4 FY26

Schaeffler India Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=fGhL88IT7iE Published: 13 days ago

0:01 1 second Ladies and gentlemen, good morning and welcome to the Shaur India Limited Q1C26 earnings conference call. As a reminder, 0:10 10 seconds all participant lines will remain in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should 0:18 18 seconds 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. 0:29 29 seconds I will now hand the conference over to Miss Glory Kanekas for opening remarks. Thank you and over to you. 0:36 36 seconds Thank you. Good morning everyone and welcome to Shetra India Limited's earnings conference call for the first quarter ended 31st March 2026. Today we have with us from the management Mr. 0:46 46 seconds Harshakadam our managing director and chief executive officer and Miss Hidevi Vazirani our director finance and chief financial officer. Mr. Kadam will first 0:55 55 seconds take us through a short presentation on the results after which we will open the floor for questions. Thank you and over to you Mr. Kadam. 1:04 1 minute, 4 seconds Thank you Gabri and uh good morning to all of you and a very warm welcome to this earnings call of Sheffle India Limited the motion technology companies. 1:15 1 minute, 15 seconds I would like to briefly take you through uh my presentation and as I always do I would like to start my presentation uh by asking the question why are we here? 1:27 1 minute, 27 seconds We are here because of our customers and what a right way to start the presentation by sharing with you the 1:37 1 minute, 37 seconds accolades and the awards that we got from our customers in the first quarter of 2026. 1:43 1 minute, 43 seconds So I draw your attention to slide number three of the presentation where in the quarter we were bestowed with six awards 1:52 1 minute, 52 seconds from six of our prestigious customers starting with uh one from John Deere partners excellence partner level 2:00 2 minutes excellence award that was given for or strong engagement right from the product development stage till the securing of 2:08 2 minutes, 8 seconds the business and series suppliers fundamentally in the applications of transmissions predominantly the product portfolio being clutches. 2:18 2 minutes, 18 seconds We also got an award from uh TVS mobility uh where this is under the vehicle 2:27 2 minutes, 27 seconds lifetime solutions vertical of our business and here again uh they awarded us uh for engaging with them as a 2:35 2 minutes, 35 seconds strategic partner and uh this award is to commemorate the beginning of a good journey with TVS mobility going forward as such. 2:44 2 minutes, 44 seconds The third award I would like to draw your attention to is from rail analysis and this is a agency that covers the 2:53 2 minutes, 53 seconds railway sector specifically and for the first time we have been awarded as a very valued supplier uh for the Indian 3:02 3 minutes, 2 seconds railways as well as for the metros. Now specific to point here is our offering 3:10 3 minutes, 10 seconds uh in the under the category of innovation in underframe components and engineering. Uh specifically pointing to 3:19 3 minutes, 19 seconds the insulation coated bearings that we have been uh supplying to Indian railways and the metro applications as 3:26 3 minutes, 26 seconds such. Uh this enables superior performance and higher reliability of our products there. 3:34 3 minutes, 34 seconds The next I would draw your attention to is a customer, the largest customer in India which is Adani Power. And uh we 3:43 3 minutes, 43 seconds were uh awarded for a extensive engagement uh with strong ongo on the ground 3:51 3 minutes, 51 seconds engagement and the deeper distributor robust distributor network uh along with technical engagement with Adani power 3:59 3 minutes, 59 seconds for their thermal power plant that was set up in Mundra and we were recognized for the innovative product that we were able to offer here. 4:08 4 minutes, 8 seconds The next in line is a valued supplier award coming from Elen and uh Elen uh which is an earthwilt 4:18 4 minutes, 18 seconds company. Now here again uh what Elen manufactures generators for the wind turbine applications and we have been uh 4:27 4 minutes, 27 seconds awarded for outstanding contribution for quality as well as uh you know valued 4:33 4 minutes, 33 seconds partnership engagement and this is a testimony of the reliable products that we offer to the uh wind sector as such. 4:43 4 minutes, 43 seconds Last but not the least, another award from John Deere again in the vehicle lifetime solution space which is the 4:49 4 minutes, 49 seconds aftermarket space uh for uh outstanding performance and making sure on-time deliveries towards John Deere in the 4:58 4 minutes, 58 seconds aftermarket space. So on the strong uh platform that we have set with good equations with our customers and 5:07 5 minutes, 7 seconds credentials with our customers. Uh let me move on now to take you to the next three items on my agenda of presentation 5:15 5 minutes, 15 seconds and I would like to throw some light on the current econ economy and the industry situation. I asked you to refer 5:22 5 minutes, 22 seconds to slide number five here. And what you see on slide number five is the economic snapshot of the country. And clearly the 5:31 5 minutes, 31 seconds overall outlook of the first quarter for 2026 in India is one of a resilient dem 5:37 5 minutes, 37 seconds domestic growth in spite of all the economic uncertaintities, the geopolitical conflicts that prevailed in 5:46 5 minutes, 46 seconds West Asia and also the uh prevailing trade pressures that were there. Uh, interestingly when one if one were to 5:54 5 minutes, 54 seconds look at the combined index of the eight core industrial sectors that increased 6:01 6 minutes, 1 second by 4 percentage point in January 26 compared to the same index if one were to look at the Jan 2025 numbers. So the 6:10 6 minutes, 10 seconds production of cement, steel, electricity and fertilizers and coal recorded a very 6:17 6 minutes, 17 seconds positive growth in January this year. It says automotive has been on a strong trajectory of growth thanks to the uh 6:26 6 minutes, 26 seconds steps taken uh by the government in last year uh pertaining to the GST 2.0 that was rolled out. All in all, inflation 6:36 6 minutes, 36 seconds has crept up. However, it is still at manageable levels and I'm sure uh the the the fundamental building 6:44 6 minutes, 44 seconds blocks for to continue to uh you know deliver the numbers that are there in terms of uh clearly points to the 6:52 6 minutes, 52 seconds resilience in the economic situation of the country. Yes, the currenc sensitivity with the depreciation of the Indian rupee uh while it reduces the 7:01 7 minutes, 1 second overall GDP size in dollar terms uh you know it affects the global rankings but nevertheless uh what is important is to 7:09 7 minutes, 9 seconds ensure the stability of the growth rate in the country and I think there it is well poised and we are seeing strong traction coming from many sectors 7:18 7 minutes, 18 seconds as we continue that said let me move to slide number six which is going to throw some light 7:25 7 minutes, 25 seconds as I already mentioned u you can see here the cement production grew by 8.4% steel growing by 7.6 in the first 7:34 7 minutes, 34 seconds quarter and coal more or less has remained at the same level uh where the high focus is on the renewable energy by 7:41 7 minutes, 41 seconds the government of India and the electricity generation also grew by about 3%. All in all, all the core 7:50 7 minutes, 50 seconds sectors showing a positive direction of growth and thereby enabling manufacturers like us to leverage the 7:58 7 minutes, 58 seconds growth momentum and we continue to reap the benefits of that and the results of the last quarter's performance is a testimony to that. 8:09 8 minutes, 9 seconds I move to slide number seven and I would like to throw some light on the automotive sector performance which has 8:17 8 minutes, 17 seconds been on a strong traction footing in this quarter as well. As you can see the numbers the two and three wheelers the 8:24 8 minutes, 24 seconds production volumes have significantly gone up. 2.5 million two wheelers produced in the month of March alone. 8:31 8 minutes, 31 seconds Yeah. And passenger vehicles too. More than half a million cars produced in the country in the month of March alone. uh 8:38 8 minutes, 38 seconds which has been a clear increase over the preceding uh over the last year, same quarter uh same month if if one were to 8:47 8 minutes, 47 seconds look at the numbers. Talking of commercial vehicles which was languishing last year, you can see month after month strong production numbers 8:56 8 minutes, 56 seconds coming out there as well. Tractors on the other hand also have seen much stronger traction and thereby if you see 9:03 9 minutes, 3 seconds the automotive sector as a whole as posted robust growth story for India compared to the last year as such. 9:15 9 minutes, 15 seconds I move to the business highlights and here I would like to draw your attention to slide number nine. 9:22 9 minutes, 22 seconds Now as you can see here we have been able to post a robust growth performance and deliver 257 9:30 9 minutes, 30 seconds crores in the first quarter which was a clear 18.8% more than Q1 2025. 9:40 9 minutes, 40 seconds However, compared to the preceding quarter, we did have a drop of 5.1% uh compared to Q4 2025. 9:49 9 minutes, 49 seconds While this was the situation at the top uh on the top line, we did have we did some course corrections in some of the 9:57 9 minutes, 57 seconds sectors as we had to uh calibrate the top line versus the bottom line deliveries as well. So there was some 10:06 10 minutes, 6 seconds calibration exercises that we have carried out and the result of that is you see that drop in the top line. Also 10:14 10 minutes, 14 seconds some of the sectors we have seen some liquidity crunch in the market as a result of which the demand uptake came 10:22 10 minutes, 22 seconds down a bit in the in these specific sectors. But that said you would see the 10:29 10 minutes, 29 seconds Aida performance has remained well on track. As you can see, we have been able to deliver 483 crores in the quarter and 10:39 10 minutes, 39 seconds uh staying at 19% AIDA. As such, the profit after tax bringing in 319.7 10:46 10 minutes, 46 seconds crores again remaining compared to the first quarter which was 12.8%. 10:52 10 minutes, 52 seconds and uh stronger free cash flow generation as well. Although it does reduce compared to the previous uh the 11:00 11 minutes preceding quarter of Q4 2025 as well as Q1 but nevertheless there has been a positive cash flow into the system. 11:09 11 minutes, 9 seconds While we have judiciously moderated our capex spend looking at the market demand and the portfolio demands but it does 11:18 11 minutes, 18 seconds not mean that we are going to cut down our capex. It's just a timing phase that we moderated for the quarter. However, 11:26 11 minutes, 26 seconds as the customers projects begin to take uh and evolve, we are going to continue our investment um initiatives. 11:36 11 minutes, 36 seconds So overall I must say it has been a reasonably good quarter performance from our point of view in spite of strong 11:43 11 minutes, 43 seconds headwinds on the supply chain area particularly with the Middle East crisis that uh evolved into the supply chain 11:51 11 minutes, 51 seconds getting impacted. We have been able to weather the headwinds and continue to deliver and create value for all our stakeholders. 12:01 12 minutes, 1 second I move to slide number 10 which I always pride upon has been our pipeline of 12:07 12 minutes, 7 seconds continuity of the business. What you see on the slide number 10 are the business development activities that we pursue 12:15 12 minutes, 15 seconds diligently and in the quarter I am proud to say that in the automotive space a lot of new businesses that we have 12:22 12 minutes, 22 seconds secured in the quarter particularly in the transmission application and heavy duty clutch applications as well as the hydraulic cam phases. 12:33 12 minutes, 33 seconds On the aftermarket side as well, we have continued to uh expand our uh uh 12:41 12 minutes, 41 seconds portfolio of offerings particularly on many of the new products which we have to had to bring in which had to conform 12:49 12 minutes, 49 seconds to the BS6 requirement as the market demand went up. Bearings and industrial solutions too. We had large big winds in 12:58 12 minutes, 58 seconds the quarter particularly in the spherical roller bearings and in the housings area some of the large TRBs as 13:06 13 minutes, 6 seconds well as the CRBs the raw material sector. So we have been able to secure strong business wins in the bearings portfolio as well. 13:17 13 minutes, 17 seconds I move to now the financial highlights and I ask you to refer to slide number 12. our revenue revenue from the 13:26 13 minutes, 26 seconds operations as you can see in the first quarter as I already mentioned uh 257 13:32 13 minutes, 32 seconds crores coming in was a clear 18.8% 8% year-on-year growth, but over the preceding quarter, we dropped 5.1%. 13:41 13 minutes, 41 seconds And split the revenue that came in between automotive technologies and the four business divisions that we operate. 13:49 13 minutes, 49 seconds Uh what you see is the automotive which encompasses the IC engines and the electric mobility both put together. Uh 13:57 13 minutes, 57 seconds the first quarter performance grew by 30.8% 28% when compared to Q1 2025 while 14:04 14 minutes, 4 seconds over the preceding quarter we did have a marginal drop of 1.3%. Vehicle lifetime solutions also posted robust 14:11 14 minutes, 11 seconds double-digit numbers at 18.1% over last year but a marginal 6% drop when compared to the preceding quarter. 14:20 14 minutes, 20 seconds Bearings and industrial solution on the other hand we had we did some recalibration here and as a result you 14:27 14 minutes, 27 seconds see over the preceding quarter there has been a significant drop uh which is about 14.3% however compared to the last 14:36 14 minutes, 36 seconds year's quarter you would find we have still done 4.2% growth. Exports also posted very robust uh numbers as you can 14:45 14 minutes, 45 seconds see 32.5% compared to last year and 6.6% 6% over the preceding quarter. Now with this 14:54 14 minutes, 54 seconds growth the way our demography of the sales mix looks and uh looks like the pie chart what you see with automotive 15:01 15 minutes, 1 second technologies at at about 37% bearings and industrial solutions at 35% the vehicle lifetime solutions at 12 and our 15:10 15 minutes, 10 seconds IC exports intercomp exports registering about 16% of the total sales. So all in 15:17 15 minutes, 17 seconds all the snapshot message here is we continue to sustain the doubledigit overall growth momentum. Yes, we did do 15:26 15 minutes, 26 seconds some small calibrations in some specific sectors on specific product portfolios uh which was a planned activity that we 15:33 15 minutes, 33 seconds have done so as to ensure that we continue to deliver the top and bottom line in spite of the strong headwinds 15:41 15 minutes, 41 seconds that we have seen on the supply chain front due to the geopolitical situations. 15:48 15 minutes, 48 seconds I move to slide number 13 which talks about the earnings quality and um as you can see the first quarter our EIDA we 15:56 15 minutes, 56 seconds brought in about 483 crores at 19.3% AIDA and uh the year-on-year growth has 16:03 16 minutes, 3 seconds been 18.6 6 the quarter on growth there has been a drop uh to 4.5% drop now 16:10 16 minutes, 10 seconds where has this aida come from the 483 as you can see it's clearly come in from a gross margin improvement has brought in 16:18 16 minutes, 18 seconds 165 crores into the system and while we had some employee cost as well as some other incomes which were marginally 16:26 16 minutes, 26 seconds smaller numbers that dropped the profit after tax obviously has improved to 319.7 7 crores at 12.8% 16:36 16 minutes, 36 seconds which is again registered a strong year onyear growth marginal drop when compared to the preceding quarter and uh 16:43 16 minutes, 43 seconds uh you you know we continue to keep the focus with all the counter measures and the corrective actions that we are 16:50 16 minutes, 50 seconds registering is exactly in line with what we plan. We continue to sustain and deliver the positive value to all our stakeholders. 17:01 17 minutes, 1 second I move to slide number 14 which talks about the working capital in the capex situation and I must say that we have 17:08 17 minutes, 8 seconds been able to uh do much better in uh terms of the working capital management as a percentage to sales we have 17:15 17 minutes, 15 seconds registered at about 17.9% and uh we will continue to keep our focus and efforts on our inventory levels as well as uh the working 17:24 17 minutes, 24 seconds capitals to make sure that we stay healthy uh talk about capex as I said we had marginally reduced the investments 17:32 17 minutes, 32 seconds but nevertheless close to 80 crores still continue to be the investment within the quarter and as a percentage to sales we are at about 33% 3.1%. 17:43 17 minutes, 43 seconds Talk about pre-cash flow we had a positive cash flow into the system of about 137 crores coming in in the first 17:50 17 minutes, 50 seconds quarter compared to the Q1 of last year where it was about 237 crores that came in. we will uh this was a little bit 17:59 17 minutes, 59 seconds impacted with some of the liquidity crunch that we have been hearing from our customers in the marketplace as well. 18:09 18 minutes, 9 seconds I move to slide number 15 which throws light on the performance indicators. I already touched upon the revenue and uh 18:18 18 minutes, 18 seconds what you see here is the revenue growth of year onear at 18.8% 8% and an EIDA 18:25 18 minutes, 25 seconds margin at 19.3% uh with an EIT margin of 15.8% and a profit after tax of 12.8%. 18:35 18 minutes, 35 seconds Uh I think we have done a reasonably good result uh that has been delivered by the team here. That said, let me move 18:43 18 minutes, 43 seconds to slide number 16 where I would like to throw light on the consolidated financial results of Shaffla India 18:49 18 minutes, 49 seconds Limited as well as KRSV Innovative Auto Solutions Private Limited. KRSV on the 18:56 18 minutes, 56 seconds other hand delivered a revenue of 78.7 crores in the quarter. Uh still has to break even when it comes to the 19:03 19 minutes, 3 seconds profitability side and it has registered an AIDA of minus3.4 4 and then a bit before exceptional items is 15.1%. 19:14 19 minutes, 14 seconds And the earnings before taxes is minus 19%. Overall the consolidated result 2585.6 19:22 19 minutes, 22 seconds crores uh revenue 19.1% on the EIDA registering and 15.6% EBIT margin um at a consolidated level. 19:37 19 minutes, 37 seconds Moving on, I move to my last slide. Uh, slide number 17 which is summarizing uh year on growth, yearon-year growth, 19:45 19 minutes, 45 seconds double-digit growth momentum we have been able to sustain. Uh, we have seen 19:52 19 minutes, 52 seconds mixed sectoral speeds, growth rates, automotive performing very strongly in the market. The demand is super strong 19:59 19 minutes, 59 seconds there. Uh, vehicle lifetime solution as well. We have seen strong demands. 20:04 20 minutes, 4 seconds Export has really come back again very strongly. Industrial while the market is definitely positive we had to do some 20:12 20 minutes, 12 seconds course corrections along the way and uh this has helped us to also register a very sustained earnings quality 20:20 20 minutes, 20 seconds performance and uh we have also increased our localization levels and our localization levels have reached up 20:27 20 minutes, 27 seconds to 80% and we continue to keep the focus on capital efficiency going forward as well. I already touched upon the working 20:35 20 minutes, 35 seconds capital levels. We will continue to sustain these good levels and the capex remains on track. We will monitor the 20:43 20 minutes, 43 seconds market demand versus the product portfolio readiness and accordingly uh keep switching the tracks to make sure 20:51 20 minutes, 51 seconds that we invest in the right portfolio to the right market going forward. And as an organization, as a motion technology 21:00 21 minutes company, we are committed to continue to keep delivering, creating and delivering the value that we promise to our 21:08 21 minutes, 8 seconds stakeholders. With that, I come to the end of my presentation. I open it up. 21:15 21 minutes, 15 seconds Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 21:24 21 minutes, 24 seconds touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants 21:31 21 minutes, 31 seconds are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 21:41 21 minutes, 41 seconds We take the first question from the line of Ragu Nan from Nama Research. Please go ahead. 21:50 21 minutes, 50 seconds Thank you sir for the opportunity. 21:52 21 minutes, 52 seconds Congratulations once again on stellar numbers. Uh firstly on the demand side uh for the industrial space can you 22:01 22 minutes, 1 second indicate how do you see the outlook for CY26 and how do you expect key categories like uh wind, railways, off-road and others to do for you? 22:14 22 minutes, 14 seconds Yeah, thank you for that question uh Rau and uh as I said uh in spite of these strong headwinds that we are facing on 22:22 22 minutes, 22 seconds our supply chain front due to the evolving situations in the Middle East and West Asia. Uh we have uh continued 22:32 22 minutes, 32 seconds to keep our focus. uh we started off a crisis management team meetings on a daily basis to secure the the supply 22:40 22 minutes, 40 seconds chain continues to stay intact. Now that said uh will the situation continue in 22:47 22 minutes, 47 seconds the succeeding quarter? Well, I think it's a crystal ball question uh the way it is evolving. uh all I can say is that 22:55 22 minutes, 55 seconds as an organization me and my team we are prepared well prepared to ensure that we continue to manage uh and sustain the numbers that we have been delivering. 23:06 23 minutes, 6 seconds Our focus will remain there. Uh as we see we do not see major concerns in terms of delivering the numbers that we 23:14 23 minutes, 14 seconds are committed to deliver this year. uh of course it would require a lot of uh uh monitoring as well as agility on our 23:21 23 minutes, 21 seconds part and I can assure you that our team is well prepared and they are fully aware of this current situation. 23:31 23 minutes, 31 seconds noted sir uh my on the automotive technology side uh we've had a extremely 23:38 23 minutes, 38 seconds strong growth at 31% and uh when we compare with the underlying automotive production growth which is at uh 15% 23:48 23 minutes, 48 seconds uh there has been a strong outperformance uh the you have been increasing your uh uh valid share content per vehicle any 23:57 23 minutes, 57 seconds specific uh drivers which you can call out which is helping you in this outperformance uh which should which 24:04 24 minutes, 4 seconds should continue to uh help uh in that outperformance continuing for CY26. 24:14 24 minutes, 14 seconds As I already said the traction in the automotive sector has been very good and strong and uh since we are present in 24:23 24 minutes, 23 seconds the all all platforms all kind of technology platforms whether it is the ice engine or the hybrid technology or 24:31 24 minutes, 31 seconds even in the e-mobility uh we have our portfolios pretty active uh I must say when one looks at the ice 24:40 24 minutes, 40 seconds uh you know application or the ICE engine application. Uh I think all almost all the product portfolios are 24:48 24 minutes, 48 seconds done very strong in the first quarter for us. Clearly pointing to a good traction in the automotive space. Uh uh 24:55 24 minutes, 55 seconds so hybrid 2 has definitely done well. Uh clearly we see that the automotive sector demand trend should continue the 25:04 25 minutes, 4 seconds way it is and we believe that it will remain robust going forward as well. So we are optimistic on that front when it comes to the automotives sector. 25:16 25 minutes, 16 seconds Noted sir. Uh last quarter during the earnings call uh uh you know the expectation on exports were more 25:24 25 minutes, 24 seconds moderate at 5 to 10%. But uh good to see that we have started exports on a very strong growth of 30%. Uh so how do you 25:34 25 minutes, 34 seconds see the outlook? Is the outlook improving? Is it surprising you on the positive side? How do you see the full 25:41 25 minutes, 41 seconds year given that there are all these geopolitics issues? 25:48 25 minutes, 48 seconds A very good question. So if yeah if we see year on year quarter we see uh over 30% growth but if we see over Q4 because 25:57 25 minutes, 57 seconds we ramped up significantly last year from Q1 to Q4 uh the growth is at 6.6%. 26:05 26 minutes, 5 seconds And uh very likely uh if we go um run rate of the full year we will be close to 10 to 12%. 26:17 26 minutes, 17 seconds Uh understood. Thank you for that. Uh on the uh uh uh uh cost side uh you know 26:26 26 minutes, 26 seconds there has been an increase in the commodity cost. uh uh is there a pass through uh based on indexation which happens automatically with the 26:35 26 minutes, 35 seconds customers? Is there any increase in any of the other expenses like power cost, freight cost, insurance cost? Uh 26:43 26 minutes, 43 seconds anything you can comment that whether we should be aware of any cost increases which can impact in the coming quarters. 26:53 26 minutes, 53 seconds Rau as you are aware with the situation in the west Asia clearly has resulted in 26:59 26 minutes, 59 seconds choking up the supply chains for the uh fuel. So LPG, propane and some of the 27:06 27 minutes, 6 seconds fuel items which India relies heavily on imports has been impacted and the prices definitely have gone up there. So that 27:15 27 minutes, 15 seconds means our input cost when it comes to usage of these certain category of fuel has certainly gone up. Uh what we have 27:24 27 minutes, 24 seconds done is uh we have looked at alternate sourcing routes. We have also looked at 27:30 27 minutes, 30 seconds uh stocking up some of these items. Uh we have also exploring the possibility 27:37 27 minutes, 37 seconds of uh looking at uh compensations coming from our customers. However, I think this is early days because uh it's just 27:44 27 minutes, 44 seconds been a month and a half since the inflationary increases have happened. I guess time will tell us how successful 27:51 27 minutes, 51 seconds we will get in terms of adjusting these cost increases or accommodating these cost increases or [clears throat] getting compensation for these cost increases. 28:03 28 minutes, 3 seconds Thank you sir for the details. Uh uh I would request you to please come back into the queue for follow-up questions. 28:10 28 minutes, 10 seconds Sure. Thank you so much. 28:13 28 minutes, 13 seconds Thank you. We take the next question from the line of Mkesh Saraf from Aventes Park. Please go ahead. 28:21 28 minutes, 21 seconds Yes sir. Good morning and uh thank you for the opportunity. Um just looking [clears throat] at the bearings uh business especially in the industrial 28:29 28 minutes, 29 seconds segment. Uh I say I mean last few quarters it's kind of remained at this level. Uh it's been kind of flattish to 28:37 28 minutes, 37 seconds maybe single digit growth or single digit decline. uh if you could kind of give some sense um is it just weak end 28:44 28 minutes, 44 seconds markets itself or is there some competitive intensity uh going up with more localized industrial bearing capacity getting built in the country. 28:53 28 minutes, 53 seconds Uh you had also kind of in your opening remarks mentioned about some calibration exercises in the bearing space especially. So uh is this is this also 29:02 29 minutes, 2 seconds related to that? Uh so would help in getting a perspective on this. 29:08 29 minutes, 8 seconds Thank you Mesh. I guess you asked the question and answered it yourself as well wherein uh you said multiple causes 29:15 29 minutes, 15 seconds which are contributing to it not one rightfully yes what you said is our localization effort still continues 29:21 29 minutes, 21 seconds because we believe we want to be closer to our customers when we make the product so that still continues and I'm 29:28 29 minutes, 28 seconds happy to share that our localization percentage has actually gone up to 80% now uh so we are on the right track 29:37 29 minutes, 37 seconds there however Ever while we are on this journey, we also look at the product mix, the market mix, the application mix 29:44 29 minutes, 44 seconds and as I said uh we want to continue to deliver the value that we commit to our uh stakeholders and if we have to do 29:51 29 minutes, 51 seconds that calibration is always a part and parcel of the game. So we will be continuing to do this. So we decided to do this in the quarter first quarter 30:00 30 minutes right at the beginning of the year so that you know the rest of the quarters we are able to sustain the deliverables 30:08 30 minutes, 8 seconds that we commit that's the intent so uh uh just a follow up on this the calibration is because of uh pricing 30:16 30 minutes, 16 seconds pressures in the industry u are you seeing uh say u uh either imports I mean are competition importing and and 30:24 30 minutes, 24 seconds supplying at lower cost are they producing locally and supplying at for pricing. So uh and is there a general pricing pressure and hence you're calibrating? 30:35 30 minutes, 35 seconds Uh well that is one of the reasons as well that we see uh our competition is also intensifying their activity within 30:43 30 minutes, 43 seconds India and hence it is important that we recalibrate our portfolios as well. 30:48 30 minutes, 48 seconds where do we want to focus and how do we continue to sust the growth as well as the profitability development for our 30:56 30 minutes, 56 seconds organization. So this is something we do every year and this time we did it a little more concerted way that we 31:04 31 minutes, 4 seconds decided to do the correction at the beginning of the year itself. 31:09 31 minutes, 9 seconds Got it. Got it. Uh in your opening remarks you also mentioned that some sub sectors saw demand oftake coming down. 31:16 31 minutes, 16 seconds Uh would you like to call out some specific end markets uh say cement, iron, steel or or something of that sort 31:24 31 minutes, 24 seconds or is that a very general comment that you made? 31:28 31 minutes, 28 seconds It it was a general comment. Uh fundamentally when you look at the mining sector we have not seen much traction on the mining sector whereas 31:35 31 minutes, 35 seconds some of the other sector like infrastructure growth is good. So anything related to infrastructure industry is doing good. uh we are seeing 31:44 31 minutes, 44 seconds some traction in the cement and steel related to infrastructure obviously so the energy sector we have seen some ups 31:52 31 minutes, 52 seconds and downs we are seeing renewable energy still going strong so uh there's mixed bag there 32:00 32 minutes can be better if the if all the sectors were firing on all cylinders which is not the case 32:06 32 minutes, 6 seconds got it got it and just lastly um I mean we are supplying the axle uh to the Tata Harrier as you had mentioned last year 32:15 32 minutes, 15 seconds in one of your presentations. Uh we also noted recently Tata Auto Components is having a JB now with Bosch uh to work on DVD axles. 32:24 32 minutes, 24 seconds uh you know is this uh you know something that you worry about in terms of future uh product supplies uh to your 32:32 32 minutes, 32 seconds existing customer u or uh you have enough on your plate in terms of working with other OEMs on the EXON and and uh you wouldn't worry too much about that. 32:44 32 minutes, 44 seconds Well my answer to that would be that yes the computation is what it is out there. 32:51 32 minutes, 51 seconds What is more important is do we n navigate through and still keep our strategic goal and focus and continue to 32:59 32 minutes, 59 seconds drive along and I think we are well placed with the kind of offerings that we bring. Yes. And we will continue to 33:07 33 minutes, 7 seconds keep our focus on innovation so that we continue to differentiate our offerings with our customers. We do that. So we 33:14 33 minutes, 14 seconds are well aware of what's happening in the marketplace. Of course we have a strategy also to manage that as well. 33:23 33 minutes, 23 seconds Got it. Got it. Great sir. Uh thank you from this and all the rest. 33:28 33 minutes, 28 seconds Thank you. We take the next question from the line of Ankur Sharma from HDFC Life Insurance. Please go ahead. 33:36 33 minutes, 36 seconds Uh yeah. Hi, good morning sir. Uh thanks for your time again. Uh just going back to the uh you know previous question on uh you know the slowdown that we've seen 33:44 33 minutes, 44 seconds on the bearing side. uh so just trying to get my hands around it. So one of course you said there was some supply chain issues you also mentioned uh some 33:52 33 minutes, 52 seconds pricing pressure also uh because of you know uh higher local capacities from a fear uh would also one of the reasons be 34:01 34 minutes, 1 second that demand itself is slowing down. So one is of course a supply other's competition but just trying to understand has demand also slowed down here on the industrial bearings and if 34:10 34 minutes, 10 seconds yes uh which segments are you seeing that we have seen a bit of demand slowdown in 34:18 34 minutes, 18 seconds the aftermarket side of the industrial business surely and uh there appears to be a liquidity crunch in the market as a 34:27 34 minutes, 27 seconds result of which the cash flows to our distributor community has been impacted in this quarter. So surely that is 34:35 34 minutes, 35 seconds something that we are aware of. So that is one of the business sectors where we have seen some slowdown that has 34:43 34 minutes, 43 seconds happened. Yeah. Amongst of course some small slowdowns that have happened in some specific sectors could be in the 34:50 34 minutes, 50 seconds power transmission or uh railways has been pretty good as such. There's been no slowdown there as such. And fundamentally where when it comes to 34:59 34 minutes, 59 seconds bearing portfolios this this is where we see a different we have seen a little bit of a shift. It could be a temporary situation because what we have seen in 35:08 35 minutes, 8 seconds the past in our past experiences any liquidity crunch issue is a quarter issue the next quarter it gets corrected. 35:17 35 minutes, 17 seconds Yeah it is seasonal. It is seasonal. It is seasonal. Fair. 35:21 35 minutes, 21 seconds Okay. Understood. And just uh on the export side uh you know while you know uh what was mentioned was uh you know Q 35:29 35 minutes, 29 seconds on Q the growth rate uh you know obviously is down to about 68% 6 to 7%. 35:35 35 minutes, 35 seconds uh just if you could talk about some of your key end markets uh you know how are you seeing those shape up more in the context you know for example uh you know 35:43 35 minutes, 43 seconds the whole AP pack Southeast Asia getting affected a lot more because of this whole uh you know spike in crude prices and uh resulted impact on demand. So if 35:52 35 minutes, 52 seconds you could just talk a little bit more what are you seeing on the ground in terms of exposure some of your key geographies? 36:00 36 minutes So uh our key geographies that we serve are Europe, China, uh some uh Southeast 36:07 36 minutes, 7 seconds Asia countries uh and Americas and uh uh we we do not see uh right now 36:16 36 minutes, 16 seconds any dip in the demand. U the order book is for the year is solid. Currently it's 36:22 36 minutes, 22 seconds showing 10% growth minimum 10% growth uh that we are likely to register. So at this point of time we do not uh see any 36:31 36 minutes, 31 seconds challenges. In last two years we have focused um uh on Southeast Asia business development uh in exports and it is bearing fruits now. 36:43 36 minutes, 43 seconds Okay great that's very helpful. Thank you and all the best. 36:49 36 minutes, 49 seconds Thank you. We take the next question from the line of Bala Subramanya from Aliant Capital. Please go ahead. 36:56 36 minutes, 56 seconds Uh very good morning uh thank you so much for the opportunities. Uh sir and madam and that uh battery management system side uh I think uh the order 37:05 37 minutes, 5 seconds veins it's a concrete success. Are these standalone BMS controller veins or they bundled with ex sale or thermal 37:13 37 minutes, 13 seconds management models and what is the average uh content uh uh per uh PMS uh in that vehicle per vehicle. 37:24 37 minutes, 24 seconds So Bala the battery management system as you rightly pointed out today it is a 37:31 37 minutes, 31 seconds standalone unit that we all are selling to the customers. Yeah. Now are we integrating this in the EXL? I don't 37:39 37 minutes, 39 seconds know if that's your question you're asking. as of today? No. But I think going forward when the as as the Eax 37:47 37 minutes, 47 seconds businesses start to evolve, it would probably get integrated within the uh you know the complete scope of 37:55 37 minutes, 55 seconds offerings. Yeah. But as of now, yes, we are selling it as a unit and that's what the customers of want us to do. I don't know if I answered your question. 38:06 38 minutes, 6 seconds Yes sir. And so average content per vehicle sir that the battery management systems uh well we cannot measure just with 38:14 38 minutes, 14 seconds battery management isn't it? because we'll have to look at what all do we offer on a vehicle. All the products whether it is bearings, whether it is uh 38:22 38 minutes, 22 seconds engine transmission parts, whether it is if it's an uh battery electric vehicle, is it a motor, the reducer, the power 38:31 38 minutes, 31 seconds electronics that goes with it, the sensors, everything. So, we need to total it up. Correct? And that's how we measure. Correct? So and I am not able 38:41 38 minutes, 41 seconds to measure it combining both the ICE and the battery electric vehicle technology. 38:46 38 minutes, 46 seconds We need to split them as separately. But it goes without saying while on the ICE engine we supply a lot of component 38:54 38 minutes, 54 seconds level offerings. On the battery electric vehicle we are the capability to offer a system level which is the Eaxis complete 39:02 39 minutes, 2 seconds with the motor, the reducer gearbox and the power electronics that goes with it. 39:07 39 minutes, 7 seconds Now which obviously means in value terms when you supply a component with supplying a system level in value terms 39:16 39 minutes, 16 seconds the system level offering is at a much higher value probably running into five digits correct whereas here at a 39:24 39 minutes, 24 seconds component level it could just be ranging from two digits going up to four digits. 39:30 39 minutes, 30 seconds That's the way I would explain uh try and answer your question. 39:35 39 minutes, 35 seconds Yes sir. Sir my next question execution exceeded uh CY25 projections which is 39:42 39 minutes, 42 seconds enabling next phase of localization but the same time uh the cheaper imports from Europe under the U EU FDA uh would 39:51 39 minutes, 51 seconds lead to revisit localization decision for components where local suppliers are lacking. I just want to understand uh uh 39:58 39 minutes, 58 seconds which are the specific uh top component categories are the most at risk uh and being switched back to imports because 40:06 40 minutes, 6 seconds some of the components local supplier they are superior uh some of the components local supplier they they might be lacking just want to understand 40:14 40 minutes, 14 seconds and uh uh you you can share your thought process on that so for the uh e-mobility or the eaxles 40:24 40 minutes, 24 seconds uh offerings that we give to our customers because our supply chain route through China not so much from Europe. 40:32 40 minutes, 32 seconds So to that extent we are pretty competitive on the Indian market space. 40:36 40 minutes, 36 seconds I hope that answers the first part of your question. But if one were to look at some of the uh you know child parts 40:44 40 minutes, 44 seconds that we have to import because within India the supply chain doesn't exist for the special parts could be magnets for 40:53 40 minutes, 53 seconds example we are still relying on sources from outside of India. Yeah. While our 41:02 41 minutes, 2 seconds localization in terms of manufacturing and producing the EXEL is well underway. 41:07 41 minutes, 7 seconds We are already into the phase two of our localization activity. 41:12 41 minutes, 12 seconds One of the important steps that we are also working on is the local supplier development to start to source locally 41:22 41 minutes, 22 seconds and cut down our imports as we move forward. So that too I would like to say is happening and it is clearly a part of 41:30 41 minutes, 30 seconds the phase two of the localization of the EXLs. So while we are setting up the manufacturing line here, we are also 41:38 41 minutes, 38 seconds developing a supplier base to locally supply locally produced parts. So both are happening. 41:46 41 minutes, 46 seconds Okay. Sir, there any specific Well, I would request you to join back the queue for follow-up questions. Sure sir. Thank you sir. 41:54 41 minutes, 54 seconds Thank you. 41:55 41 minutes, 55 seconds We take the next question from the line of Harit Patel from Aquarius Securities. Please go ahead. 42:01 42 minutes, 1 second Hi. Thank you very much for the opportunity. Uh so firstly continuing uh from the last question uh since we have 42:09 42 minutes, 9 seconds already begun phase two of the EX and localization at the supplier level. Uh where do you think uh we would reach 3 42:18 42 minutes, 18 seconds to four years down the line in terms of the local value added in India? Uh will you be able to manufacture the entire 42:25 42 minutes, 25 seconds system almost 100% localization in next few years? 42:32 42 minutes, 32 seconds Uh our intent clearly is to source as many child parts as possible from within 42:40 42 minutes, 40 seconds India which means our supplier development activities are in full swing. 42:45 42 minutes, 45 seconds uh of course it also means that we will have to handle our suppliers uh to meet 42:52 42 minutes, 52 seconds the engineering specifications that we as a German with the German technology that we come to India have to comply 42:59 42 minutes, 59 seconds with. So that's clearly a mandate that we have. Uh so while we are on this journey are we going to get into 43:09 43 minutes, 9 seconds assembly to get into modules from our suppliers? Well, that is something we can always explore going forward. 43:17 43 minutes, 17 seconds Nothing to stop us from evaluating a different business model going forward. 43:21 43 minutes, 21 seconds Correct. Uh it all boils down to the competency and capability of our supply base in India. As soon as they gear up 43:28 43 minutes, 28 seconds and get to those levels, I don't see any reason why we cannot also modify our business model. 43:37 43 minutes, 37 seconds That's good. Uh second question uh on the exports uh we have posted arhat I'm sorry to interrupt you but 43:44 43 minutes, 44 seconds there seems to be some static coming in from your end. Uh is your handset this is better. 43:51 43 minutes, 51 seconds Yeah sure. Thank you. So secondly on exports uh we have posted an extremely strong growth in 1q26 43:59 43 minutes, 59 seconds itself and we have also upgraded our outlook uh for the whole cy26. 44:06 44 minutes, 6 seconds So could you explain what has changed here in terms of end market, user industries, new business? Why is it that 44:14 44 minutes, 14 seconds uh we are able to grow faster than what we anticipated earlier? 44:25 44 minutes, 25 seconds Yeah, I mean it is just you know our exports is mainly to our group companies and if they are having the better demand 44:33 44 minutes, 33 seconds we get the better order book. So apparently it seems and it is not just one region it is all around 44:40 44 minutes, 40 seconds as I spoke earlier from Europe from um Americas from Southeast Asia from China. 44:47 44 minutes, 47 seconds So it is uh we are uh we are getting a good order from our intercomp partners and this is what is leading to the better outlook. 44:58 44 minutes, 58 seconds Understood. Uh thank you very much for answering my questions. I'll come back in. 45:05 45 minutes, 5 seconds Thank you. We take the next question from the line of Abhishek Kosh from DSP Investment Management. Please go ahead. 45:13 45 minutes, 13 seconds Yeah. Hi, thanks for the opportunity. Uh so three questions. First in terms of the outperformance that we are seeing in the automotive technologies. Uh is that 45:22 45 minutes, 22 seconds also to do with the integration that we have had with PESCO or the benefits of that are yet to come? 45:30 45 minutes, 30 seconds No, the benefits of that are yet to come. It is purely our own is technology product in the space of uh uh clutch 45:40 45 minutes, 40 seconds systems and engine systems. It is purely from that. 45:46 45 minutes, 46 seconds Okay. And uh so over the next 12 to 18 months should one see uh you know some benefits of Vitesco to come through. I'm 45:53 45 minutes, 53 seconds just saying because now you guys have been uh uh you know working as a as a as a one entity for some time now. So just 46:01 46 minutes, 1 second in terms of timelines how should one expect? So globally working as one entity. 46:09 46 minutes, 9 seconds However in India we are still two separate legal entity. Um we can 46:15 46 minutes, 15 seconds leverage on their competencies um um on electronic side. Um however, Shappler 46:23 46 minutes, 23 seconds India limited the standalone is still to leverage on those u uh competencies. Uh we will see in coming quarters maybe 46:32 46 minutes, 32 seconds that um on e-mobility side we will have more uh synergies 46:38 46 minutes, 38 seconds um and time will tell. However, there is there is no legal integration on cards as yet. 46:48 46 minutes, 48 seconds Okay, got it. And just in terms of uh uh you know in terms of the cost increase that one is seeing in terms of uh how 46:56 46 minutes, 56 seconds does one see uh with the lag one should see you are able to pass it on to your customers. How have been your past experience been? 47:08 47 minutes, 8 seconds We talk about the price excellence that means we try to pass on um the the input price increases. It takes somewhere 47:16 47 minutes, 16 seconds between 6 months to 18 months to have the full recovery. We had first batch of 47:24 47 minutes, 24 seconds price increases uh uh realizing uh from uh Q2 onwards. However, for the full 47:32 47 minutes, 32 seconds realization it takes close to six quarters. 47:36 47 minutes, 36 seconds Okay. And just in terms of your P&L, I see some amount of change in inventory. 47:41 47 minutes, 41 seconds So, is there a inventory buildup that has happened towards the end of this quarter? uh because we don't have the balance sheet for this quarter but uh 47:48 47 minutes, 48 seconds any any thoughts on that because of uh there has been built up as the 47:56 47 minutes, 56 seconds outlook for uh coming quarters is better. 48:01 48 minutes, 1 second Okay, thank you so much and wish you all the best. Thank you. 48:06 48 minutes, 6 seconds Thank you. We take the next question from the line of Wun Jan from Dollar Capital. Please go ahead. 48:14 48 minutes, 14 seconds Uh yeah uh hi sir. Uh so I have a couple of questions. Uh so starting with uh you said uh the bearing localization has 48:22 48 minutes, 22 seconds reached 80%. So uh is this the what is this localization percentage for spherical roller bearings and 48:31 48 minutes, 31 seconds cylindrical roller bearings and this 80% which you said how what is the upper bound of where localization can go? Can it be like 100% or so? 48:45 48 minutes, 45 seconds First and foremost 80% localization is uh our total revenue we are talking and not just industrial within industrial 48:54 48 minutes, 54 seconds space we might be around 60% or so um and there is still uh enough room for us 49:01 49 minutes, 1 second in the industrial space uh specifically bearings uh to localize uh it can never 49:08 49 minutes, 8 seconds be 100% in my opinion as as the technologies evolve uh initial volumes 49:16 49 minutes, 16 seconds for example EXL initial volumes are lower uh we cannot uh bring a complete 49:23 49 minutes, 23 seconds line only for handful of bearings so uh I don't think in a growing economy like 49:30 49 minutes, 30 seconds India where we are participating very actively at double digit growth it can ever be that we reach 100%. 49:39 49 minutes, 39 seconds Uh okay. and uh this uh UK clutch line which you relocated to osu when will it uh begin uh production and what is the 49:49 49 minutes, 49 seconds pace of uh ramp up you'll see for this 49:57 49 minutes, 57 seconds the land okay well uh the process is ongoing right now 50:04 50 minutes, 4 seconds as uh I speak the we are already now contemplating to build a second hall in the Shuligiri plant which is the you 50:13 50 minutes, 13 seconds know new green field project that we started correct so we are on track in terms of uh the transfer of the lines 50:22 50 minutes, 22 seconds correct and uh the machines have started to come in as well yeah uh what is of 50:29 50 minutes, 29 seconds course needed is to expedite the process in terms of the business acquisition side more we'll have to do there and 50:36 50 minutes, 36 seconds that is something we are focusing on right now more to be acquired Uh okay. Okay sir. And just last 50:44 50 minutes, 44 seconds question. So I'm a little new to this company. So just uh do you guys issue guidance and if you do like can you give 50:51 50 minutes, 51 seconds us some uh revenue and margin guidance for CY 27 and 28 if possible? 50:59 50 minutes, 59 seconds No Warun we do not issue a guidance as such. 51:04 51 minutes, 4 seconds Uh okay. No. uh any indication of uh anything like any color even if it's not like formal percentages anything 51:13 51 minutes, 13 seconds the only color I can add is that we want to we remain committed to deliver the numbers that we say we want to deliver so we value our investors we'll make 51:22 51 minutes, 22 seconds sure we won't let them down okay okay sir okay thank you and all the best 51:31 51 minutes, 31 seconds thank you we take the next question from the line of Mahesh Hendray an individual investor. Please go ahead. 51:39 51 minutes, 39 seconds No, no. Uh I'm from Eliz Mutual fund. Uh sir, my questions have been answered. Thank you so much. 51:46 51 minutes, 46 seconds You thank you. We take the next question from the line of Sud Kyia from Value Wise Capital. Please go ahead. 52:01 52 minutes, 1 second Sudir, please unmute your line and proceed with your question. 52:09 52 minutes, 9 seconds Since there is no response, we'll move on to the next question which is from the line of Vira from SIMPL. Please go ahead. 52:16 52 minutes, 16 seconds Yeah. Hi. Uh thanks for the opportunity. 52:18 52 minutes, 18 seconds Uh in audible yes uh just couple of questions uh first starting with the industrial uh wearing 52:26 52 minutes, 26 seconds solution business. Uh see you mentioned four reasons for the uh weakness in your 52:33 52 minutes, 33 seconds business. Uh one is the supply chain. Uh second is the economic crunch in aftermarket and demand slowdown or also 52:41 52 minutes, 41 seconds us exiting uh you know uh some categories which are not profitable as what we think uh is our threshold. uh 52:50 52 minutes, 50 seconds but if I look at two aspects right uh so typically you know when you look at the times of stress you know when the 52:58 52 minutes, 58 seconds industry is having either supply issues uh in the market or uh uh 53:07 53 minutes, 7 seconds V I do apologize to interrupt you but your audio is not clear 53:16 53 minutes, 16 seconds yeah is it better now this is Huh? 53:19 53 minutes, 19 seconds Yeah. Should I repeat the question or uh should I Yes, please. 53:24 53 minutes, 24 seconds Yeah. So, my question is you know in times of uh you know stress uh usually you see the business moving to the 53:31 53 minutes, 31 seconds leaders right? Uh but what we are seeing here is uh you know us uh seeing an editative underperformance 53:39 53 minutes, 39 seconds uh in the industry piece. Uh so I'm just trying to understand because even from a localization point of view you seem to be much ahead of your MNC peers. uh you 53:48 53 minutes, 48 seconds know so so in that sense from a cost standpoint uh from a large you know being a large group uh from a supply chains or liquidy 53:56 53 minutes, 56 seconds point you you would be much better placed compared to else in the market. 54:00 54 minutes So uh wider you know uh so in that perspective you know how should one understand you know our performance. 54:12 54 minutes, 12 seconds So uh see see first of all when we uh the performance of industrial compared 54:20 54 minutes, 20 seconds to the last quarter is lower. We have to understand that first and foremost Q1 specifically industrial distribution the 54:28 54 minutes, 28 seconds aftermarket part is always lower because this is the time on 31st March when there is liquidity crunch and they are 54:36 54 minutes, 36 seconds correcting the inventory levels. So that is the first thing. Second thing is even though our performance of the market 54:45 54 minutes, 45 seconds appears um lower but overall our capacity utilization are not impacted because we are compensated through 54:54 54 minutes, 54 seconds exports. We export specifically the industrial bearings. So it there is as 55:01 55 minutes, 1 second such no cost pressure because the utilization of lines is happening effectively and at this point of time 55:07 55 minutes, 7 seconds with localization close to 80% the capacity utilization of plant is well above 80%. 55:17 55 minutes, 17 seconds So if one has to understand to put it differently if one has to understand versus various end markets you know what are the kind of growth rate uh so forget 55:26 55 minutes, 26 seconds about the quarter gone by but if I have to look on annual basis uh say aftermarket uh dispersion fees or railways when the major segments which 55:34 55 minutes, 34 seconds we participate what is the kind of growth rate we would have seen in the industry and how would have been comparable for us. So that is one and 55:42 55 minutes, 42 seconds second is any comment you can give or any color you can give in terms of the uh uh market shares or the competitive dynamics in each of the strength. 55:58 55 minutes, 58 seconds So uh you know let me take the first part of the question. uh there are some specific sectors obviously with the 56:06 56 minutes, 6 seconds strong localization that we have uh we have been growing better than the market as well right there have been some 56:14 56 minutes, 14 seconds sectors we believe when uh the traction is good when the demand is also strong it is also good to do the corrections or 56:22 56 minutes, 22 seconds recalibration as I used the word earlier uh so that we set the course for a long-term growth story profitably so it 56:31 56 minutes, 31 seconds It is important that we revisit our portfolios and also try and correct the course which we decided to do. We 56:39 56 minutes, 39 seconds started off this activity sometime last uh year the Q4 of last year which now has kind of culminated into it. So this 56:48 56 minutes, 48 seconds is a wellthoughtout strategic step that we take. uh we have capacities but we 56:55 56 minutes, 55 seconds need to use them in the right area and use it to our strengths where we are more competitive and where we can 57:03 57 minutes, 3 seconds generate more value that's the strategic purpose here just because I have capacity cannot mean that I go out and 57:10 57 minutes, 10 seconds do business wherever we want even if it is going to destroy the profitability we won't do that correct so this is a 57:18 57 minutes, 18 seconds recalibration effort we have done apart from the fact that there have been some sectors like uh as Davy already pointed 57:24 57 minutes, 24 seconds out or uh industrial aftermarket saw some lower traction in the quarter and uh we have generally we see in the first 57:33 57 minutes, 33 seconds quarter of the year uh there's always a slow start and then it builds up correct so but this year we have been a little 57:40 57 minutes, 40 seconds we have seen a little more lower traction than what we used to see before and primary reason for that is the 57:47 57 minutes, 47 seconds liquidity crunch in the market. So, so if we keep the distribution piece aside, uh for the other portfolios where we 57:56 57 minutes, 56 seconds have done the recapation due to concerns on profitability uh what is driving this uh in the 58:03 58 minutes, 3 seconds marketplace because from a cost standpoint uh given that we are much ahead of uh competition in terms of 58:10 58 minutes, 10 seconds localization, we would have a far better cost proposition uh than anyone else in the market. Correct me if I'm wrong in 58:18 58 minutes, 18 seconds my thinking. Uh so in that sense if we have to recalibrate uh the concerns on profitability what is driving that 58:26 58 minutes, 26 seconds behavior and who is gaining that share in the market. 58:29 58 minutes, 29 seconds Obviously one of the strategic inputs there is the competition is also intensifying. So it is not that the competition is sitting quiet as well and 58:38 58 minutes, 38 seconds we will have to accordingly try and correct correct the course that we are going on right. So this is a normal 58:46 58 minutes, 46 seconds activity that we do and we did it in this quarter. We try and do this on a smaller basis you know at individual 58:54 58 minutes, 54 seconds account levels we try and do it along the year but this time we wanted to do a major correction across it was required 59:02 59 minutes, 2 seconds if we have to stay the course of delivering both the top line and the bottom line numbers that we promised. So 59:09 59 minutes, 9 seconds we took that strategic course direction when we do s when we take such decisions obviously we would look at what is the 59:16 59 minutes, 16 seconds market situation what is the uh competitor situation everything is factored in and we make such decision 59:24 59 minutes, 24 seconds but but just to just one follow up on this uh has the share gone to other MNC players or is it more towards local 59:31 59 minutes, 31 seconds players uh or the unorganized per se I mean any color you know in ter of competitive dynamics you can share And in which segments are these? 59:41 59 minutes, 41 seconds We invest efforts in growing our business. So which competitor is taking it or which competitor is growing is not 59:48 59 minutes, 48 seconds my forte. I think that you should do the check to yourself. Okay. Thank you. Good luck. 59:56 59 minutes, 56 seconds Thank you. We take the next question from the line of Nidali Gopani from Unique PMS. Please go ahead. 1:00:04 1 hour, 4 seconds Uh yeah. Hi. Thank you for the opportunity. Uh so question is on exports. Uh when we look at the last two years, uh the exports growth rate has 1:00:12 1 hour, 12 seconds been very very high and when we say about calendar year 26 or 10 to 12% of growth rate. So over a little longer 1:00:21 1 hour, 21 seconds term, how should we look at exports? Um is this a one-off and we expect the growth to pick up over the next few 1:00:28 1 hour, 28 seconds years? Um uh just a little broader picture will be very helpful. 1:00:35 1 hour, 35 seconds Um when we talk about our export force it is a as I said earlier it's a lot of dependency on our intercomp partners the 1:00:44 1 hour, 44 seconds related parties who are actually booking the orders and reselling we don't export directly uh to the end 1:00:53 1 hour, 53 seconds customers um if the order book is good since we have been doing lot of localization and 1:01:00 1 hour, 1 minute uh uh the products uh specific Specifically when we talk about bearings uh the capabilities in India have 1:01:07 1 hour, 1 minute, 7 seconds improved uh thereby we see more and more order book coming uh from all the all 1:01:14 1 hour, 1 minute, 14 seconds the economies of Europe, China, Southeast Asia etc. And uh we don't uh 1:01:21 1 hour, 1 minute, 21 seconds have kind of a export strategy to focus only on export growth. Whenever there are idle capacities those are utilized by intercomp partners. 1:01:32 1 hour, 1 minute, 32 seconds um uh for uh uh for increasing the ex our export. So it is all depending on the order book that we get like current 1:01:40 1 hour, 1 minute, 40 seconds year's order book is in in the in the space of like around 10 to 12% increase and uh we will continue to do so uh by 1:01:49 1 hour, 1 minute, 49 seconds utilizing our capacities uh for the global demands right so I was coming from a similar 1:01:58 1 hour, 1 minute, 58 seconds perspective right is there a focus to shift manufacturing to India or source more from India and over a period of time we expect that to pick up or there 1:02:07 1 hour, 2 minutes, 7 seconds is no such strategy and it's only based on the capacity and the demand that uh that our inter company has. 1:02:15 1 hour, 2 minutes, 15 seconds So the group looks at uh um the local demands first. If local demands are 1:02:22 1 hour, 2 minutes, 22 seconds better then the lines are shifted to India and then the global market is served out of India. So it is basically 1:02:30 1 hour, 2 minutes, 30 seconds several factors. What is the market demand? what and we are the best cost country ultimately. So it benefits the 1:02:38 1 hour, 2 minutes, 38 seconds group from that perspective also. But it is not from the for the only intention of export. It is mainly the first focus is localization and the local demand. 1:02:52 1 hour, 2 minutes, 52 seconds Thank you. We take the last question from the line of Rosita Fernandez from Neo Asset Management. Please go ahead. 1:03:02 1 hour, 3 minutes, 2 seconds Uh yeah, thank you for the opportunity. 1:03:04 1 hour, 3 minutes, 4 seconds Actually my questions are answered though I wanted to know if there is any color for the capex uh for this year 2026. 1:03:14 1 hour, 3 minutes, 14 seconds Um so it will be in the range of what we uh had earlier 400 to 500 crores um 1:03:22 1 hour, 3 minutes, 22 seconds investment this year. Um this is the trend which was there um year before last year. Last year we had rationalized 1:03:31 1 hour, 3 minutes, 31 seconds a little bit but this year again we will be picking up and going in that range of 500 crores. 1:03:38 1 hour, 3 minutes, 38 seconds All right. All right. And uh on the exports front uh so the total exports are from the inter groupoup company is what I understand by the conversation or 1:03:47 1 hour, 3 minutes, 47 seconds your right. Okay. Thank you so much. 1:03:53 1 hour, 3 minutes, 53 seconds Thank you ladies and gentlemen. With that we conclude the question and answer session. I now hand the conference over 1:04:00 1 hour, 4 minutes to Miss Gori Kanekar for her closing comments. 1:04:04 1 hour, 4 minutes, 4 seconds Thank you everyone. Thank you for joining us today. If you have any further queries do reach out to me at gudi.kanikarshafller.com. 1:04:12 1 hour, 4 minutes, 12 seconds We can now conclude this call. Thank you once again. 1:04:16 1 hour, 4 minutes, 16 seconds Thank you on behalf of Sha India Limited. That concludes this conference call. Thank you for joining us and you may now disconnect your lines.