Sona BLW Precision Forgings Ltd — Q4 FY26

Sona Blw Precision Forgings Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=_qGqvzqgHS8 Published: 13 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to Sona Konstar's Q4 FY26 earning group conference call. Please 0:10 10 seconds note all participants line are in the listen only mode. As of now, there will be an opportunity for you to ask question after the presentation 0:18 18 seconds concludes. Please note that this call is being recorded. We request you that you place your lines on mute except when asking a question. 0:29 29 seconds Some of the statements by the management team in today's conference call may be forward-looking in the nature and we request you to refer to the disclaimer 0:38 38 seconds in the earnings presentation for further details. The management will also not be taking any specific customer related 0:46 46 seconds questions or confirm or deny any customer names or relationship due to confidentiality 0:53 53 seconds reasons. Please refrain from naming any customer in your question. Now I will hand over the floor to Mr. Kapil Singh, 1:02 1 minute, 2 seconds deputy head of research India and lead autos analyst at Nomura. Capil, please go ahead. Thank you. 1:09 1 minute, 9 seconds Yeah, thanks Nha. Uh good day everyone. 1:12 1 minute, 12 seconds Uh once again it's my pleasure to host the management team from Sona BLW. 1:18 1 minute, 18 seconds Uh we have with us Mr. Vive Vikram Singh MD and group CEO. Mr. Vikram WHMA uh CEO 1:25 1 minute, 25 seconds Driveline business. Mr. Sat mohan Gupta CEO motor business Mr. Pravin Raalo group CTO Mr. Rohit Mandanda group CFO 1:34 1 minute, 34 seconds Mr. Amit Mishra head railway business Mr. Pratik Aaral head investor relations 1:40 1 minute, 40 seconds and Mr. Pratik Sachan head strategy and M&A now I will hand over the call to Mr. 1:47 1 minute, 47 seconds Vive Vikram Singh for his opening remarks and presentation Vive over to you please. Thank you Bakil and uh 1:56 1 minute, 56 seconds welcome everyone. Q4 was the best ever quarter across the board. The quarter 2:03 2 minutes, 3 seconds saw us hitting our highest ever revenue, highest ever packed BE revenue as well as BEV revenue share in the history of the company. 2:15 2 minutes, 15 seconds But as I'm as always in our policy uh when talking to our shareholders, we'll begin with the challenges 2:23 2 minutes, 23 seconds first. Uh inflation has hit the industry pretty hard. Over the last 5 months, all 2:30 2 minutes, 30 seconds major commodities for us, steel, aluminum, copper, have continued to move up. 2:37 2 minutes, 37 seconds This has been further amplified by a sharp increase in freight, packaging, and energy prices. Frankly, almost 2:45 2 minutes, 45 seconds everything linked to petrochemicals has become more expensive. 2:49 2 minutes, 49 seconds And while a large part of this commodity inflation is passed through, one some parts are not passed through. And two, 2:58 2 minutes, 58 seconds there is always a lag and that lag along with the arithmetic impact on both revenue and cost will put pressure on 3:06 3 minutes, 6 seconds our margins which we expect to continue seen in the foreseeable future. 3:14 3 minutes, 14 seconds The second headwind uh if you will is the increase in minimum wages which was announced by the Hana government effective 1st April 2026. 3:24 3 minutes, 24 seconds This will have some cascading impact on our labor cost. 3:28 3 minutes, 28 seconds However, uh we are working to mitigate it through productivity improvement through tighter control in headcount addition and better workload management. 3:40 3 minutes, 40 seconds Since we are a high growth company, we believe we have some levers to absorb part of this impact over time because 3:47 3 minutes, 47 seconds whenever we add manpower, we can be more prudent in having less manpower growth 3:54 3 minutes, 54 seconds as compared to the revenue or production growth. 3:59 3 minutes, 59 seconds Lastly, gas availability has been a challenge as all of you would know. We have partially mitigated this by shifting part of our gas requirement to 4:08 4 minutes, 8 seconds electric heating by optimizing gas flows and modifying certain processes. 4:14 4 minutes, 14 seconds These initiatives have helped us to reduce our gas requirement by nearly 20% uh at a company level. And the key point 4:22 4 minutes, 22 seconds to note is that despite this constraint, we did not have any production loss at all so far. 4:32 4 minutes, 32 seconds Now coming to the good news which is as is usually the case it far outweighs the 4:38 4 minutes, 38 seconds bad news. So first electrification is clearly back in focus. 4:45 4 minutes, 45 seconds War of course is always always deeply tragic and there is no positive way to 4:52 4 minutes, 52 seconds look at the human cost of war. But one evident outcome is the renewed urgency towards energy security and electrification. 5:03 5 minutes, 3 seconds We have started seeing this in the data as well. So in March BV sales grew by nearly 45% year on year in EU. 5:13 5 minutes, 13 seconds In India, electric cars and true wheelers grew 65% and 45% respectively year on year in March 5:21 5 minutes, 21 seconds and both are trending above 50% in April as well. So we think it's a sustained trend of electrification growth across 5:29 5 minutes, 29 seconds the board. Even North America saw its best monthly BEV run rate in March ever since the US subsidy cuts for EV which 5:38 5 minutes, 38 seconds had been a setback for that that subset of the industry. 5:43 5 minutes, 43 seconds So all in all after a period of weak EV sentiment the EV narrative is shifting again and 5:50 5 minutes, 50 seconds as all of you would know we are fairly well positioned to gain from this. 5:56 5 minutes, 56 seconds Secondly, our anti-fragility thesis has started playing out. We've always believed that we've built a business 6:03 6 minutes, 3 seconds that tends to emerge stronger from periods of disorder and Q4 is evidence 6:10 6 minutes, 10 seconds of that thesis. We won four new drive line orders. Uh this is significant for 6:17 6 minutes, 17 seconds two reasons. First, we've won three drive line orders from European OEMs in a single quarter. This is the highest we 6:24 6 minutes, 24 seconds have ever done in a single quarter from Europe. 6:28 6 minutes, 28 seconds Frankly, this is the first EV order win from Europe in almost four years. 6:33 6 minutes, 33 seconds This gives us confidence that the current global reset in supply chains can open meaningful opportunity for us and have market share gains in Europe which are meaningful for us. 6:45 6 minutes, 45 seconds Also, uh order wins were not limited to be. One of the four orders this quarter was for a hybrid platform which 6:53 6 minutes, 53 seconds reinforces our views that hybrids are an opportunity and not a risk. So whichever path electrification takes in whichever 7:02 7 minutes, 2 seconds geography we have the capability to participate and to win. 7:08 7 minutes, 8 seconds Third uh we are entering FI27 with the strongest balance sheet we've ever had. 7:15 7 minutes, 15 seconds We closed the year with nearly 1270 crores of cash and our cash generation remains strong. Our FCFO upon EIT 7:24 7 minutes, 24 seconds remains at a high level and this financial strength gives us valuable optionality. 7:32 7 minutes, 32 seconds Optionality to invest, optionality to grow at a time when others may be constrained in a volatile world. I mean 7:41 7 minutes, 41 seconds this is what makes our business more anti- fragile. 7:45 7 minutes, 45 seconds Fourth, now this has always been our strategic priorities ever since our IPO, but I want to press upon diversification. 7:55 7 minutes, 55 seconds So this quarter, if you saw North America PV sales were clearly weak while Europe had the best quarter in four 8:04 8 minutes, 4 seconds years. Now because we are meaningful players in both, the net effect was in a way mitigated because of this. In fact, 8:13 8 minutes, 13 seconds the difference between North America car sales and Europe car sales was one of the narrowest difference I have seen 8:21 8 minutes, 21 seconds apart from the COVID and semiconductor crisis here. 8:25 8 minutes, 25 seconds But what I have to comment on and what truly stood out was India uh passenger vehicles, commercial vehicles and 8:32 8 minutes, 32 seconds electric two wheelers all hit their best ever quarter in Q4 and India's share in our mix has now crossed 50% for the full year. 8:42 8 minutes, 42 seconds And this goes to show that our geographic diversification is working and weakness in one market does not 8:52 8 minutes, 52 seconds materially affect the overall growth trajectory for the business. 8:57 8 minutes, 57 seconds Lastly, we are making strong and consistent progress in R&D for our newly acquired railway business. This quarter 9:05 9 minutes, 5 seconds we received approvals to supply two new products, electric panels and HVAC 9:11 9 minutes, 11 seconds systems. So in a short span of almost 10 months, we've expanded our railway product offerings beyond safety critical brake systems and couplers. 9:23 9 minutes, 23 seconds Now it includes products that enhance passenger comfort and not just safety. 9:31 9 minutes, 31 seconds We've supplied the first batch of electric panels for locomotive applications and we will start supplying HWAC systems this quarter. So new 9:40 9 minutes, 40 seconds product development remains a foundational growth driver across all of our business. 9:48 9 minutes, 48 seconds Now I go to our financial performance in the last quarter. uh revenue grew by a 9:54 9 minutes, 54 seconds fairly strong 47% yearonear while eenta and net profit increased by 32% and 17% respectively. 10:05 10 minutes, 5 seconds Here I want to reiterate that our business recovery has been fairly robust and well to be candid it's well ahead of 10:12 10 minutes, 12 seconds our own expectations. If you'd met me in the end of June and asked me if this is the quarter that we will have in Q4, 10:20 10 minutes, 20 seconds uh I think I would have been very happy and would have thought you of being more optimistic than I am. So I want to thank 10:28 10 minutes, 28 seconds my entire team. Uh all of them have done very well to enable us to bounce back so quickly. I'll also touch upon BEVs. This 10:37 10 minutes, 37 seconds was a best ever quarter for both BE revenue as well as for BEV revenue share which has reached 39%. 10:45 10 minutes, 45 seconds B revenues grew 22% yearonear and this is despite EV sales in the US declining by 28% year on year in Q4. 10:55 10 minutes, 55 seconds The mix as I said is the highest ever at 39%. And this this kind of goes to show that EV business is 11:04 11 minutes, 4 seconds not overly dependent on anyone market, anyone category or anyone customer and that is what we have been trying to 11:12 11 minutes, 12 seconds build. Yes, there will be years and quarters in which you will have blips and setbacks but overall the strategy is 11:19 11 minutes, 19 seconds working and working well for the full year. Uh we 11:27 11 minutes, 27 seconds I'll say this was a tough year. Uh there's no way we would have wanted to 11:34 11 minutes, 34 seconds end up here if you'd asked me 15 months back. 11:38 11 minutes, 38 seconds But if you see how demoralizing the lows of Q1 were for us professionally to the 11:46 11 minutes, 46 seconds loss of San in Q1, the US tariffs, uh the magnet ban that happened in Q1 11:54 11 minutes, 54 seconds and an increasingly challenging and volatile geopolitical environment, I'd say we as a team have had to endure and 12:01 12 minutes, 1 second overcome a lot both personally and professionally. 12:06 12 minutes, 6 seconds And yet we have delivered 26% revenue growth, 13.5% AIA growth and 11% pack 12:13 12 minutes, 13 seconds growth with sequential improvement across all metrics. 12:18 12 minutes, 18 seconds I think it's it's uh fairly reinforcing of the belief I have in our business and in our teams. 12:27 12 minutes, 27 seconds And despite consolidating the lower margin railway business or having a high growth from the lower margin traction 12:35 12 minutes, 35 seconds motor business, we have still managed to end FI26 with a full year margin of 24.7%. 12:44 12 minutes, 44 seconds [snorts] 12:45 12 minutes, 45 seconds Now I'll come to electrification. Uh message is simple. momentum is back and it's strengthening every quarter. 12:56 12 minutes, 56 seconds While folio BV revenue declined marginally, that is due to that extremely weak quarter one that we had. 13:04 13 minutes, 4 seconds Since then, they have improved consistently and we've ended Q4 with the highest ever B revenue. The revenue share has also followed a very similar 13:13 13 minutes, 13 seconds trend. We also continue to add to our EV order book. We've added three new EV programs and one new hybrid program. And 13:23 13 minutes, 23 seconds importantly, we also added two new EV customer in Q4. So, at the end of FY26, 13:29 13 minutes, 29 seconds we have 67 EV programs across 35 customers. 37 of them are already in production and 30 are yet to enter 13:38 13 minutes, 38 seconds production. Uh, which gives us a healthy pipeline for future growth. 13:44 13 minutes, 44 seconds Now, let me spend a minute on the new wins because they're directionally important. The amounts may not be very 13:52 13 minutes, 52 seconds large, but directionally they're a very good signal. First, we added a new European customer for differential gears for their EV program in North America. 14:04 14 minutes, 4 seconds Second, we won an order for EV differential assemblies uh from a luxury PV OEM in Europe. Uh third, we received 14:14 14 minutes, 14 seconds a new order from an existing European OEM. Uh this is for hybrid differential assemblies. And fourthly, here we supply 14:22 14 minutes, 22 seconds to a tier one where this EV differential assemblies program is in India which will supply to both Indian and European 14:32 14 minutes, 32 seconds OEMs. It's a shared program and both of them are existing customers of solar pump. 14:39 14 minutes, 39 seconds Now these events matter I would say beyond the numbers because they show that our business development efforts are bearing fruit especially in Europe 14:48 14 minutes, 48 seconds and across power trades EVs and hybrids and across geographies Europe North 14:55 14 minutes, 55 seconds America India and this is exactly the kind of diversified growth platform that we've been trying to build for the last decade. 15:07 15 minutes, 7 seconds So this is our obviously our scorecard at the end of the year on how we have done in business development. Uh if you 15:14 15 minutes, 14 seconds remember in Q2 we had done a significant corre correction to the order book because of one particular model. 15:23 15 minutes, 23 seconds Despite that we have ended FI26 with fairly similar last year levels and this is despite the growth we've 15:32 15 minutes, 32 seconds achieved during the year. During the year, we won 31 new programs and added three new customers, which of course 15:40 15 minutes, 40 seconds validates our relevance in the broader automotive as well as the EV ecosystem. 15:50 15 minutes, 50 seconds Coming to the order book, uh I've covered the EV programs already and I also wanted to highlight the non-EV wins because there were quite a few. So in Q4 15:58 15 minutes, 58 seconds we won seven non-EV differential gear programs and all of them from existing customers uh which total 300 billion rupees of addition to the order book. 16:11 16 minutes, 11 seconds The remaining order vins came from either segments like starter motors and railways. Uh 16:19 16 minutes, 19 seconds basically the order momentum is broad-based. It is across power trains across geographies and across customer type. So at the end of Q4 FY26, our net 16:28 16 minutes, 28 seconds order book stands at 237 billion with EVs accounting for 70% of the order. 16:38 16 minutes, 38 seconds Moving to a fourth fourth priority which is diversification and we made uh I'd say meaningful 16:46 16 minutes, 46 seconds progress here. When I wrote about our lookie strategy in the annual report, it wasn't just words or a long-term theme 16:54 16 minutes, 54 seconds that would play out uh over years. It was a it was a statement of deliberate 17:02 17 minutes, 2 seconds effort to broaden our focus as well as footprint in new geographies. And you can see that the results are already 17:09 17 minutes, 9 seconds visible. Eastern markets contribute 60% of revenues in Q4 compared to 40% in the same quarter last year. 17:19 17 minutes, 19 seconds This also proves that we can diversify without compromising on growth or margins. 17:25 17 minutes, 25 seconds And the same trend is visible on the product side. So one takeaway that I will give you last year our top four products contributed 86% of our revenue. 17:37 17 minutes, 37 seconds This year that same 86% of revenues actually spread across top eight products. So double the number of 17:44 17 minutes, 44 seconds products to consume the same percentage of revenue which means revenue base is becoming broader and less dependent on a few products. 17:56 17 minutes, 56 seconds If you look at the product growth story, it was fairly encouraging. Uh sequentially the fastest growth came from traction and suspension motors 18:04 18 minutes, 4 seconds followed by differential assemblies and differential gears. 18:08 18 minutes, 8 seconds And it's always good to see our uh newer products gaining scale. But it's very heartening to see our old horses are 18:18 18 minutes, 18 seconds legacy products which are differential gears and differential assemblies continuing to keep growing and keeping pace with our new products. 18:26 18 minutes, 26 seconds uh the market segment analysis is broadly the same as at the end of time months. So with this I'll turn to our 18:33 18 minutes, 33 seconds group CTO PV uh to update us on the technology road map. Over to you PV. 18:41 18 minutes, 41 seconds Welcome everyone. 18:44 18 minutes, 44 seconds Uh the year began with significant enhancement to our product portfolio with the addition of railway products to 18:51 18 minutes, 51 seconds the road map. Uh this also marked a significant step in our journey to diversify from pure automotive space to 18:59 18 minutes, 59 seconds being a player in the wider fast growing mobility space. It has also added capability in domains such as brakes, 19:08 19 minutes, 8 seconds suspensions, couplers and railway electronic systems. 19:13 19 minutes, 13 seconds Our foray into other mobility domains was further strengthened with an MOU with Neuro Robotics of Germany. 19:22 19 minutes, 22 seconds This has truly opened opportunities in the space of cognitive robotics, AMRs and humanoids. 19:30 19 minutes, 30 seconds On ADAS front, we are progressing well on industrializing our first ever incin 19:38 19 minutes, 38 seconds radar solution for a passenger car application. Likewise, we are in advanced stage of development of 19:46 19 minutes, 46 seconds exterior radar solutions that can support Indian commercial vehicles in meeting the upcoming ADAS regulations. 19:55 19 minutes, 55 seconds We continue to commercialize new products. The latest addition in the fourth quarter being electric control panel and HVAC systems for railways. 20:05 20 minutes, 5 seconds Both these products demonstrate our strong capability in design, development and commercializing complex electronics, 20:15 20 minutes, 15 seconds electro mechanical and electronatic systems including the hydraulic motor controller 20:23 20 minutes, 23 seconds that we announced earlier. This year we commercialized three new products. 20:29 20 minutes, 29 seconds Uh in summary, we at Sonar Comstar continue to innovate, strengthen our 20:35 20 minutes, 35 seconds road map, align with rapidly changing market conditions and continue to provide value to customers, be it components, subsystems or full systems. 20:49 20 minutes, 49 seconds With this, I turn to our group CFO Rohit to update us on financials. Over to you, Rohit. 20:57 20 minutes, 57 seconds Thank you Provin. 20:59 20 minutes, 59 seconds A very good day to you all. It's my pleasure to present our fourth quarter and fullear results for the financial year 26 period. 21:08 21 minutes, 8 seconds Our revenue for the quarter was 1,272 crores which is a 47% growth over the same quarter last year. 21:16 21 minutes, 16 seconds BEV revenue was 359 crores which is 22% growth over fourth quarter and it was 21:22 21 minutes, 22 seconds 39% of our automotive revenue. IIDA for the quarter was 311 Kes which is a growth of 32%. 21:31 21 minutes, 31 seconds IDA margin was 24.4% which is lower by 2.7% compared to the same quarter last year. In this there is 21:40 21 minutes, 40 seconds a base effect of 1.9% due to fullear PLI income accured in the fourth quarter. 21:46 21 minutes, 46 seconds Balance8% impact is due to product mix and commodity price inflation. 21:52 21 minutes, 52 seconds Profit after tax was 192 crores which is a growth of 17% over last year. Pat 21:58 21 minutes, 58 seconds margin was 14.7% which is lower by 4.1% compared to last year. Of this 4.1% nearly half was due to lower AIDA. 22:10 22 minutes, 10 seconds There was the 3.4% effect uh because of lower net finance income due to deployment of funds in railway business 22:18 22 minutes, 18 seconds during the year. And then there was a net positive impact from lower depreciation and higher tax close to about 1.3%. 22:27 22 minutes, 27 seconds Coming to the fullear performance, our fullear revenue was 4,475 crores which is a 26% growth over FY25. 22:36 22 minutes, 36 seconds BB revenue was 1,154 crores which was 34% of our automotive revenue but it was 22:43 22 minutes, 43 seconds lower by 6% compared to the previous year. Aida for the year was 1,17 22:50 22 minutes, 50 seconds crores which is a 13% growth. Margin was 24.7% which is lower by 2.7% compared to the 22:57 22 minutes, 57 seconds same period last year and that's mainly on account of change in product mix and in [clears throat] to some extent higher 23:04 23 minutes, 4 seconds fixed cost profit after tax for the year had a one-time impact of 30 crores uh after 23:13 23 minutes, 13 seconds tax from new labor code adjusted for this one time exceptional cost our PAT was higher by 11% at 670 23:23 23 minutes, 23 seconds Adjusted BT margin is lower by 2.2% that's mainly due to lower aida margin and lower net finance income. 23:32 23 minutes, 32 seconds Coming to the cash flows during the year we generated 659 crores of cash from operations. Net of capeex spend of 369 23:41 23 minutes, 41 seconds crores we generated 290 crores as free cash flows. Apart from these other major cash movements include nearly 1,800 23:50 23 minutes, 50 seconds crores of aggregate amount which we used for purchase of railway business. Uh additional land that we purchased for 23:58 23 minutes, 58 seconds about 110 crores and there was a payment for last of acquisition of Nove shareholding. Besides this, we 24:05 24 minutes, 5 seconds distributed about 200 crores as dividend to the shareholders and we added some short-term borrowings 24:12 24 minutes, 12 seconds of about 226 crores and 86 crores of interest income. These were positive cash inflows. As a result of all these 24:20 24 minutes, 20 seconds items, we ended the year with a cash and investments of,269 crores. 24:28 24 minutes, 28 seconds This brings us to the last slide on uh on the key ratios. uh as I had explained in the last two quarters also the newly 24:36 24 minutes, 36 seconds purchased railway business has a different cost structure and even the working capital cycle is also structured differently. This has flown through some 24:45 24 minutes, 45 seconds of our key ratios in this year and uh that is why you see dip in some of the ratios namely value addition over employee cost and working capital 24:53 24 minutes, 53 seconds turnover ratios. In case of return on capital employed, uh this has come down mainly due to the fresh equity which we 25:01 25 minutes, 1 second raised in September of 24. We expect we expect it to start improving over the medium term as only part of the capital has been deployed so far. 25:11 25 minutes, 11 seconds In case of return on equity, it has already started to improve if you compare it with the previous two quarters as the deployment of capital in 25:20 25 minutes, 20 seconds the railway business continues to bring incremental positive impact over finance income which it substituted in the P&L 25:26 25 minutes, 26 seconds account. Fixed ascent to turnover ratio has dropped this year to 2.9. That's primarily because of new capitalization 25:35 25 minutes, 35 seconds and purchase of land that we've done in this year. uh however we expect it to also start improving as the new capex 25:42 25 minutes, 42 seconds done in this year will start to generate revenue in the following financial year. 25:47 25 minutes, 47 seconds That would be all from me. So we have come to the end of our earnings presentation. I'll now hand over the floor back to the Nura team. 26:01 26 minutes, 1 second We will now open the floor for Q&A sessions. If you wish to raise question, please use raise hand function located at the bottom right of the WebEx page. 26:10 26 minutes, 10 seconds We will unmute your line and prompt you to speak or you may submit your question via Q&A chat box addressing to all panelists. 26:19 26 minutes, 19 seconds Please be reminded to keep your questions to maximum of two questions. 26:23 26 minutes, 23 seconds If you have more questions, please return to Q. Thank you. 26:30 26 minutes, 30 seconds We have question from J Kali. J you can go ahead. 26:53 26 minutes, 53 seconds J you can go ahead please. 27:00 27 minutes We will move on to the next question uh from Adita Zawar. 27:08 27 minutes, 8 seconds Thanks for the opportunity. Uh couple of questions from my side. Um so in the previous uh call we had talked about 27:16 27 minutes, 16 seconds bankruptcy of some of the peers in Europe and we understand that the largest company in that is acquired by somebody. If you can throw some light 27:25 27 minutes, 25 seconds that uh what are how are we seeing the situation is there any opportunity that we are seeing from the remaining two companies that is my first question. 27:36 27 minutes, 36 seconds No so dity uh some of that has already started flowing in you saw some of the new wins. 27:44 27 minutes, 44 seconds Okay. 27:45 27 minutes, 45 seconds Other one which is the third asset which has got acquired by somebody. uh obviously we can't comment on that and 27:53 27 minutes, 53 seconds how they will do in the future is up to them. Our conversations will be with the customers directly and whatever 28:02 28 minutes, 2 seconds opportunities come we will keep reporting uh as and when we win but 28:09 28 minutes, 9 seconds overall I don't think it is a material change in the opportunity set that Europe presents for us. I think it'll 28:17 28 minutes, 17 seconds still be a fairly good place to win a lot of business over the next 12 months or so. 28:24 28 minutes, 24 seconds That's uh that's good to know. Um second question is on Noville. We understand that they are setting up you know 28:32 28 minutes, 32 seconds manufacturing in Tamil Nadu. Uh so how is the you know progress uh in terms of engagement with customers? Any sense you 28:41 28 minutes, 41 seconds can give? What could be the potential kit value? And in the past you had indicated that you'll be also you know interacting you know targeting US and 28:49 28 minutes, 49 seconds Europe initially with noik. So you know with geographies are we targeting any update on that? 28:56 28 minutes, 56 seconds Sure. So uh on the manufacturing and production thing I can have sat answer that on the overall opportunities Europe 29:06 29 minutes, 6 seconds continues to look good because next year is when uh in cabin safety has to be part for getting the NCAAP 29:15 29 minutes, 15 seconds certification. So it was moved by a year. So what would have been a great year of in 26 now that's moved to 27. So 29:22 29 minutes, 22 seconds that's on plan. uh what they're doing in India s if you are there you can deta 29:33 29 minutes, 33 seconds I mean uh for no India we have set up the entity in India and uh we have started the uh the launch process for 29:41 29 minutes, 41 seconds one of the customer uh the SOP is going to be uh end of this year uh the lines are already set up uh 29:50 29 minutes, 50 seconds because it's a sensor assembly it. So we have assembly line in house and uh we'll be using that assembly line. 30:00 30 minutes Any sense on you know kit value or the quant I mean just ballpark how should we think about the ramp up? 30:07 30 minutes, 7 seconds As you know one we don't use the phrase kit value because to be honest I don't understand it. 30:14 30 minutes, 14 seconds [laughter] 30:14 30 minutes, 14 seconds I don't understand what it is there. I mean we supply a sensor that is the part. Uh second uh giving away pricing 30:23 30 minutes, 23 seconds information is a competitive disadvantage. Fair enough. Fair enough. 30:27 30 minutes, 27 seconds Not appreciate it. And before you go for all those on the call, I think Aditya and Invest have launched a pretty good initiative. So if you have children 30:36 30 minutes, 36 seconds between the ages of [laughter] 12 to 18, he's organizing a trip to China to see 30:42 30 minutes, 42 seconds the automotive ecosystem, see robotics. 30:48 30 minutes, 48 seconds If you have the time, please do take them. I think children of India need to look at what's going on in the rest of the world because we do need technology in this country. So good job. 30:59 30 minutes, 59 seconds Yeah. Thank you. Thank you so much. All the best. 31:07 31 minutes, 7 seconds Yeah. Next question is from uh Vijay Pandi. Vijay, you can go ahead. 31:20 31 minutes, 20 seconds I think he got disconnected. So we will take next question from Amin Pirani. 31:30 31 minutes, 30 seconds Amin you can go. Yes. 31:35 31 minutes, 35 seconds Hi. Uh sorry am I audible because I had some issues. Okay. Uh yeah thanks for the opportunity. Um uh actually my uh 31:44 31 minutes, 44 seconds question is something that we had discussed uh you know a few quarters back. Uh while in Europe the EV you know penetration continues to rise I think 31:52 31 minutes, 52 seconds part of the EV opportunity I think you will agree is also a Chinese OEM opportunity because the Chinese are gaining market share in Europe. So uh 32:01 32 minutes, 1 second while we're winning orders from the European OEMs and which is obviously you know great uh any uh you know updated thoughts on how do we approach the China 32:10 32 minutes, 10 seconds opportunity not just in China but even outside of China which is becoming bigger and more important for the Chinese OEMs themselves. 32:18 32 minutes, 18 seconds It's a good question I mean uh it is a question that we frequently ask ourselves. The only way to grow will be 32:28 32 minutes, 28 seconds for now right with the customer. So if you do know we supply to one large uh Chinese EV customer. 32:39 32 minutes, 39 seconds So we are in the parts that obviously they sell domestically but also the ones they export. What is a constraint right 32:47 32 minutes, 47 seconds now is that unless they move production entirely to either Europe or North America, they will continue to rely on 32:54 32 minutes, 54 seconds the Chinese supply chain and that is much harder to break into. So let's see how it evolves. So if you go back into 33:01 33 minutes, 1 second history and look at the 70s model when Japan was just exporting their cars. So what is happening today with China has happened before. Japan did that first 33:10 33 minutes, 10 seconds time and then because of geopolitical reasons, protectionist policies, they had to shift production to the countries in which they were selling. 33:22 33 minutes, 22 seconds Only then did opportunities for local suppliers actually come about. So it will take a bit of time. So the shest 33:31 33 minutes, 31 seconds way is to get in in the China for China supply chain for the current model. Over time as these guys set up in Europe or 33:39 33 minutes, 39 seconds US then we will be competitive because of duty reasons in the China for China supply chain it is harder uh to do that now. 33:51 33 minutes, 51 seconds Okay. Uh thanks for that and uh any update on how is the tariff situation now because obviously there was a deal 33:59 33 minutes, 59 seconds and then there was a Supreme Court decision and now all of this is happening. So what is the latest on what 34:06 34 minutes, 6 seconds is the tariff if at all and have things changed, improved, remained the same? You know any any update on that? 34:14 34 minutes, 14 seconds Uh you know this is a question a lot of people will not know the answer to but 34:22 34 minutes, 22 seconds section 25 which covers a large part of what we export continues to remain the 34:29 34 minutes, 29 seconds same. The Supreme Court ruling did not have a bearing on section 25 because that's under uh another national 34:37 34 minutes, 37 seconds emergency act which Supreme Court did not actually uh pass any judgment on. 34:44 34 minutes, 44 seconds The remainder has obviously become easier uh and the tariffs have become lower because the country tariffs are 34:51 34 minutes, 51 seconds kind of gone. But that again my answer I mean is the same I gave in Q1 of last 34:58 34 minutes, 58 seconds year which is tariffs are paid by importers and not by exporter. So importers have to figure it out what 35:07 35 minutes, 7 seconds that tariff is. And if the section 25 tariffs are 25% for everybody, which is what the case is, then you are not worse 35:16 35 minutes, 16 seconds off or better than before. As long as our pricing or tariffs are lesser than 35:22 35 minutes, 22 seconds China, it is a good thing. Second, there is a five-year I think almost concession 35:29 35 minutes, 29 seconds given to OEMs with a certain percentage of domestic value addition in the US to claim back the tariff impact. So you 35:38 35 minutes, 38 seconds would be more or less covered within that. Okay. Okay. 35:46 35 minutes, 46 seconds Tell a story way better than ever can. 35:48 35 minutes, 48 seconds Right. It is [clears throat] the end of the year. Our revenue hasn't materially come down from the US at all nor have 35:55 35 minutes, 55 seconds margins. Uh I know there were a couple of analysts who wrote that are aida will drop from 25 to 12 and a half etc etc on 8th April. 36:05 36 minutes, 5 seconds But as most things hastily done are it was a halfbaked and uninformed analysis. 36:11 36 minutes, 11 seconds It doesn't work that way. Things are usually binary in decisions. They either happen or not. Now that a whole year is gone, you can see what is the real 36:20 36 minutes, 20 seconds impact. The secondary impact that I alluded to back one year back that it 36:26 36 minutes, 26 seconds will have impact on demand because it is after all inflationary in nature, right? All tariffs are inflationary. Yeah. 36:34 36 minutes, 34 seconds Prices go up, demand will go down and you can see the S that they talk about full year full year car sales numbers 36:42 36 minutes, 42 seconds between now 16 to 16 and a half. 1 million cars have been lost due to this inflationary impact. 36:49 36 minutes, 49 seconds And that unfortunately everybody who supplies to that market will suffer from. Yeah. Yeah. Understood. 37:00 37 minutes Uh we have next question from J K. Am I audible? Yes. 37:07 37 minutes, 7 seconds Yeah. Uh thank you. Thanks for taking my question. Uh so my first question is regarding the uh BEV commentary. Uh you 37:14 37 minutes, 14 seconds know 3 four months back we had seen uh major global OEMs taking huge write downs on their global EV investments. Uh 37:22 37 minutes, 22 seconds and then of course in the last two three months we've seen uh you know new uh uh revival of this category. uh you as a 37:29 37 minutes, 29 seconds supplier you know what are your mitigation strategies given that you know this you know even today global OEMs are talking of monitoring the 37:36 37 minutes, 36 seconds situation based on the west crisis to really go all out and say that this is a sustained demand momentum coming back uh 37:45 37 minutes, 45 seconds so you know when when the customers are not able to project long-term trends you suppliers how do you allocate capital uh 37:52 37 minutes, 52 seconds to these businesses and mitigate either not underinvesting or overinvesting in this category you know going ahead. 38:00 38 minutes So ch one one one fundamental uh I would say input is this that write downs which 38:09 38 minutes, 9 seconds are balance sheet writedowns of prior investments have really no bearing on suppliers because if you have invested something 38:18 38 minutes, 18 seconds in R&D or capex and now you're taking a write off how will that impact the number of parts you have bought from us 38:25 38 minutes, 25 seconds or not does it affect demand if a model is discontinued of course it Last year we saw the full impact of that right we 38:33 38 minutes, 33 seconds lost 300 cr from one customer alone and that can happen but does it happen 38:39 38 minutes, 39 seconds frequently not really second is what is the level of abstraction you're at so if you apply the same product you produce 38:48 38 minutes, 48 seconds you supply to multiple customers you are far more d-risisk if you do it across 38:55 38 minutes, 55 seconds geographies also your d-risking is even higher but I I don't even think uh I 39:02 39 minutes, 2 seconds mean two quarters back when the pessimism was at the peak would be the right time to ask this question. Now J 39:09 39 minutes, 9 seconds the tide shifting uh very very fast and in the opposite direction I would say 39:16 39 minutes, 16 seconds I don't think there is much concern we have but on your second question in capital allocation 39:24 39 minutes, 24 seconds as much as you can try to invest in funible capex that that same capex can be used for producing parts for another 39:33 39 minutes, 33 seconds customer. This is a problem that happens when lines or investments are so specific that they can only be used for one model of one car maker. 39:46 39 minutes, 46 seconds Those are the ones where uh capital allocation become very very tricky. So if you put capacity like we have for 39:53 39 minutes, 53 seconds example for traction motor we have a million electric motor capacity overall more or less that with a little bit of tweaks you can use it across customers. 40:06 40 minutes, 6 seconds So as long as overall electrification continues to progress that decision will 40:12 40 minutes, 12 seconds bear fruit and that is why one fungibility of capex second diversification of customer and program 40:20 40 minutes, 20 seconds base these are the two things one can do as a supplier. 40:28 40 minutes, 28 seconds Next question is from Nitin Aurora. Nin you can go ahead. 40:34 40 minutes, 34 seconds in my question. Um the first question is on uh a product of uh what we have is 40:41 40 minutes, 41 seconds suspension motors. um if you can talk about that how is that progressing um with respect to specific I think China 40:50 40 minutes, 50 seconds launch was there um and how big you know uh you're looking to cross-ell let's say 40:58 40 minutes, 58 seconds in this reset which you talked about in Europe or in any other areas how big opportunity this can become to you u 41:06 41 minutes, 6 seconds that's my first question and second on the railway business how are we looking at uh growth next 41:14 41 minutes, 14 seconds uh you know uh if you can talk about that. 41:18 41 minutes, 18 seconds Sure. So first question I would let Sat answer but my oneliner is suspension motor is going to be the fastest growing 41:27 41 minutes, 27 seconds business by uh by far I mean triple digit growth is not really common. So it 41:35 41 minutes, 35 seconds has also got the advantage of small base but it will be very very good because the customer we supply to their model 41:43 41 minutes, 43 seconds has had an amazing launch and the product uh performance and the product 41:49 41 minutes, 49 seconds acceptance is genuinely overwhelmingly good but s over to you on suspension motors. 41:57 41 minutes, 57 seconds Sure. Uh I mean we launched the suspension motor last year and uh though I mean it was on one of the model of the 42:05 42 minutes, 5 seconds customer. uh during the year uh uh the vehicle has done very good and uh so the 42:12 42 minutes, 12 seconds customer has now launched on their other uh premium models and the volumes are going uh very good uh and uh uh the 42:21 42 minutes, 21 seconds product is perceived uh both in China and rest of the world uh uh with a very 42:28 42 minutes, 28 seconds good uh uh quality ratings and also with the uh performance uh of the motor and 42:35 42 minutes, 35 seconds the complete system. So the opportunity is high. I mean uh we are looking at very high volume as V said I mean three 42:43 42 minutes, 43 seconds to four times growth compared to the last year. Uh the acceptance of the product uh in China market as well as uh 42:52 42 minutes, 52 seconds uh it's being perceived in European market also. So our end customer is 42:58 42 minutes, 58 seconds working with uh others in the Europe and uh it has the wild acceptability in automotive sector. 43:10 43 minutes, 10 seconds Yeah. So Nan hard to say because it's so high that it's hard to put a number on it. It could be a very big material part 43:20 43 minutes, 20 seconds of our revenue. I mean this year at the end of this year it'll still be single digit. next year maybe it even touches 43:28 43 minutes, 28 seconds double digits is that's that's the amount of growth you can have in that product but depends a lot on where the 43:35 43 minutes, 35 seconds next customer is and the ability of our customer clear motion to win the next customer 43:42 43 minutes, 42 seconds and on railways obviously Amit uh Amit will answer that question 43:49 43 minutes, 49 seconds then uh you know we don't give guidance on growth uh for say year by year. So I 43:57 43 minutes, 57 seconds will look at more like next 3 to 5 years where we do we see growth coming from railways. 44:04 44 minutes, 4 seconds There are multiple levers. First is even today there is more demand than what we are servicing. So first is by improving 44:12 44 minutes, 12 seconds our own process improvement working with supply chain we can do more than what we are doing. 44:18 44 minutes, 18 seconds Second there are gaps white spaces even in our existing product. So we talk about brakes, couplers, suspension but 44:25 44 minutes, 25 seconds even there there are wide spaces. We are not covering every subsegment and every part of these uh systems. So uh we are 44:34 44 minutes, 34 seconds working on them. We don't talk call them as a new product when we talk about new product but we are working on variants to cover new types of rolling stocks 44:42 44 minutes, 42 seconds where we are not present today. I think that will be the second major driver. So next 3 years I think these two I think 44:51 44 minutes, 51 seconds will be the major driver. When we are looking at 3 to 5 years there are new products which are also we are bringing them to the market. We are getting 45:00 45 minutes approval. This quarter we announced HWAC and electric panels. There are other products where we are developing and we 45:07 45 minutes, 7 seconds believe those products will become significant drivers in 3 to 5 years. So for next five years I think these are 45:15 45 minutes, 15 seconds what we have identified as growth opportunities. One to improve supplies improve capacities at our end. Second is 45:25 45 minutes, 25 seconds uh filling white space within brakes, couplers and suspension. And then the new products I think they will become significant drivers in 3 years time. But 45:33 45 minutes, 33 seconds overall we are confident about good healthy growth over next five years in railway business based on products which 45:40 45 minutes, 40 seconds are already and under development and not counting any other products that we may add in future. 45:49 45 minutes, 49 seconds Thanks Amit. Anything else? 45:56 45 minutes, 56 seconds Thank you. Thank you team. Thanks a lot for the answers. Thanks a lot. 46:03 46 minutes, 3 seconds is from Gungjin. Gungjin, please go ahead. Um, just a quick followups from my side. 46:10 46 minutes, 10 seconds Um, I think just continuing on the railways question that um, Nitan asked. 46:14 46 minutes, 14 seconds Um, Amit, can you quantify the uh, the market size of some of these new uh, products that you mentioned added in this quarter as well as the last quarter 46:23 46 minutes, 23 seconds I think electric control panel, HWAC etc. Any idea on the market sizing for these products? 46:32 46 minutes, 32 seconds I see HWAC uh and electric panel both are large segments or large market. Uh 46:39 46 minutes, 39 seconds HWAC is about between 2,00 to 2500 cr market size and electric panel is also 46:45 46 minutes, 45 seconds about 1,500 cr. So in the context of the size of our railway business these are two large segment. Uh but then this is 46:54 46 minutes, 54 seconds covering all types of rolling stock. So both electric panel and HVAC have applications from locomotives, passenger coaches, 47:02 47 minutes, 2 seconds train sets as well as in metro. Today we have made a start. We have entered [clears throat] these segments. In electric panel it will take us 12 to 15 47:12 47 minutes, 12 seconds months to cover all types of rolling stock because there our development is more advanced. In HVAC it will take at least 3 years for us to cover all types 47:21 47 minutes, 21 seconds of rolling stock especially in the segments where we want to play. uh because the approval cycles are very long. Field trials are much longer 47:29 47 minutes, 29 seconds there. So yeah market opportunity is very large but it takes about 18 months to three years between two products to 47:38 47 minutes, 38 seconds cover the entire range of rolling stocks and that's why in the answer to the question asked by Nathan I said new 47:46 47 minutes, 46 seconds products will become a meaningful driver from third year onwards in the next two years it will be more operational 47:53 47 minutes, 53 seconds improvement as well as uh our existing products where we are trying to fill some white spaces 48:00 48 minutes Okay, got it. Um, useful. And uh just second question uh you know is on the commodity impact that we saw in this 48:08 48 minutes, 8 seconds quarter about 80 basis point. Uh is it more to do with the uh the lag in the pass through to the customer and we 48:16 48 minutes, 16 seconds should see this normalizing or is you know how do we think about it or is it you know the some of the commodities are elevated like energy cost etc have also 48:24 48 minutes, 24 seconds gone up. Is that something that uh we absorb for now and you know we'll wait when it sort of normalizes. So how do we 48:32 48 minutes, 32 seconds think about the commodity cost uh going ahead? 48:36 48 minutes, 36 seconds Sure. But gun it's not 80 bips for commodity 80 bips is commodity and 48:43 48 minutes, 43 seconds product mix and as you know fraction motor has been the highest growth driver where the margins are lower. 48:51 48 minutes, 51 seconds My bet I don't have the breakup. Rohit can answer better but majority of this 80 bips would be product mix related not 49:00 49 minutes commodity related but Rohit if you can answer for last quarter or 49:07 49 minutes, 7 seconds what would it look like this year? So Gujan uh this 80 is actually almost half 49:14 49 minutes, 14 seconds uh for the mix and half for the commodity prices and uh you're right most of this would be for the material 49:23 49 minutes, 23 seconds price and uh that is a pass through with a lag. So it is largely because of the lang effect 49:31 49 minutes, 31 seconds but you also have to recognize that the commodity prices continue to trend up. 49:35 49 minutes, 35 seconds So it's not as if you know this has stopped. So till the prices stabilize this I think commodity price inflation 49:44 49 minutes, 44 seconds margin impact and you also know there is a numerator denominator effect also wherein the percentage margin gets impacted. So to that extent you know 49:53 49 minutes, 53 seconds historically also since you've also been tracking the company now for a fairly long time you've seen that in a commodity inflationary cycle the 50:01 50 minutes, 1 second percentage margin tends to sort of take a dip so margin may not get impacted. So I think uh till we have a commodity price 50:09 50 minutes, 9 seconds inflation uh you will see this impact one way or the other. 50:15 50 minutes, 15 seconds Okay. Got it. No that's helpful. And just coming back to you on on the um on the traction motor. Sorry this is last 50:22 50 minutes, 22 seconds question. um the on the traction motor uh is there any um change in the business pipeline you're seeing because 50:31 50 minutes, 31 seconds of the whole um you know the the noise around EV seeing more fa you know more um favorable policy support from 50:40 50 minutes, 40 seconds government and in that sense OEM's trying to build uh more around it is there any pipeline change that you're noticing in traction motor and how would 50:49 50 minutes, 49 seconds you sort of you know talk about the growth in traction motors over the two three years like you said suspension will be the fastest growth. Uh does this 50:57 50 minutes, 57 seconds also sort of second fastest? Yeah, traction will be the second fastest because it already has a decent base. 51:05 51 minutes, 5 seconds It's almost 10% of our revenue. Now uh suspension motor is smaller. Hence it will have tripledigit type of growth 51:13 51 minutes, 13 seconds rates. This will have high doubledigit growth rates actually maybe yeah very high double digit growth rates for some time. 51:23 51 minutes, 23 seconds The reason is this and Goj I'll just like to replace one word not the noise the signal around uh electrification. So 51:30 51 minutes, 30 seconds one is where we are already there on the programs the volumes are going up uh I would say slightly more than what we had 51:39 51 minutes, 39 seconds assumed on existing uh programs and we are obviously seeing new inquiries so it's both 51:48 51 minutes, 48 seconds policy wise also GJ I think there is a growing growing concern in the government as you 51:56 51 minutes, 56 seconds know our country if you look at all India I'm not talking about automotive. 52:02 52 minutes, 2 seconds It's about 8020. That 80% is prochemical based or oil and gas based energy and 20% alone is electrification. 52:14 52 minutes, 14 seconds There is a very high need for electrification to increase from 20% to cover and I'm talking across not just automotive. 52:23 52 minutes, 23 seconds And I think you should see over the next 18 months a lot more policy push to reducing a country's oil and gas 52:31 52 minutes, 31 seconds exposure. This is also the reason currency remains weak. So there is a very very high realization of how this 52:40 52 minutes, 40 seconds dependence is uh bad for us and a lot of work should happen in the next 18 months from policy side. consumer demand side 52:49 52 minutes, 49 seconds also. I expect that as more and more people realize that the TCO in a 52:57 52 minutes, 57 seconds inflated diesel and petrol price environment the TCO is so much better for electric vehicles especially if they 53:05 53 minutes, 5 seconds are for any economic use if it's used as an economic assets. So three-wheers delivery, two wheelers, electric LCVs, 53:13 53 minutes, 13 seconds buses, I think the pace of electrification is going to go up significantly. 53:24 53 minutes, 24 seconds Okay, got it. No, this is helpful. Thank you so much. I'll join back to you. 53:30 53 minutes, 30 seconds Uh Vive, we have some questions in the chat box. So I'll just read out a few of them. Uh 53:36 53 minutes, 36 seconds so one is how is Sona progressing on rare earth magnets? Maybe you can give us an update on the whole situation. 53:47 53 minutes, 47 seconds Yeah, no update as of now. Uh as you know there is a policy that has been uh 53:54 53 minutes, 54 seconds released by the government and when we have anything that is uh material and 54:00 54 minutes reportable we will report it. For now, we do not uh use any heavy rare earth 54:07 54 minutes, 7 seconds magnets in any of our products. So that's where we are as of today. 54:14 54 minutes, 14 seconds Okay. On the order book, there is a question, what proportion has clear volume visibility and pricing stability 54:22 54 minutes, 22 seconds over the next two to three years? And how should we think about conversion into steady revenues and margins as these programs ramp up? 54:31 54 minutes, 31 seconds uh uh 100% has volume visibility and pricing stability but uh 54:40 54 minutes, 40 seconds it is just impossible to answer how volatility will affect next two three 54:47 54 minutes, 47 seconds years. So as you know in our industry there no such thing as firm commitment 54:53 54 minutes, 53 seconds volumes are indicative volumes only you take your call. So when we put orders in order book, we take a call on how much 55:00 55 minutes to discount the volume projection given by customer we have been doing this for a while. So we do have a fair idea of 55:09 55 minutes, 9 seconds you know how much uh to adjust by. But then there are years like the COVID year, semiconductor chip crisis here. uh 55:18 55 minutes, 18 seconds right now there is frankly in EV and going back to Gund's previous question we don't have a demand problem actually 55:27 55 minutes, 27 seconds we have a problem or well not we our customers they are not able to produce enough to supply the demand right now 55:35 55 minutes, 35 seconds and that is not because of us it is because of weaknesses in the supply chain where certain suppliers are finding it hard to ramp up that quickly 55:45 55 minutes, 45 seconds so this works both ways that there are orders in the order book which when eventually converted will be far higher 55:52 55 minutes, 52 seconds and there are some which will be lower but over time it uh it pans out and it is pretty much around that same number. 56:04 56 minutes, 4 seconds Okay. Uh one more question is on the railways. 56:08 56 minutes, 8 seconds How should we think about steady state asset turns margins ROC versus your core EV business and will this growth 56:16 56 minutes, 16 seconds structurally improve or dilute overall returns? 56:21 56 minutes, 21 seconds It will improve returns because from a return perspective they have very very high return uh businesses. It may be 56:29 56 minutes, 29 seconds slightly dilutive on margins but return-wise it will be much higher. 56:36 56 minutes, 36 seconds Okay. Uh then this question is on BYD. 56:40 56 minutes, 40 seconds Uh have you tracked recent decline in BYD sales following removal of EV purchase tax exemptions? Automakers that 56:48 56 minutes, 48 seconds build their strategies around budget PHEVs and BEVs seem to be have uh hit hardest given that 70% of Sona's order 56:57 56 minutes, 57 seconds book consists of BEVs and PHEVs. Do do you view this shifting subsidy landscape as a structural risk? 57:09 57 minutes, 9 seconds Short answer, no. Uh because most of these orders are already in geographies where there are little to no subsidies. 57:19 57 minutes, 19 seconds US, Europe, uh India also I think subsidies are on their way out almost. 57:28 57 minutes, 28 seconds So yeah not not really is the answer. I don't know Ro you want to add because I don't know what to say in this one. 57:39 57 minutes, 39 seconds No sir actually I think this is more if we had a huge exposure to China or one particular guy or something but we don't 57:48 57 minutes, 48 seconds and I it isn't uh I think pertinent. 57:55 57 minutes, 55 seconds Okay. And then cash on books. Is there any M&A potential in pipeline? 58:06 58 minutes, 6 seconds Nothing that is uh reached a stage which is worth sharing or reportable. 58:14 58 minutes, 14 seconds We are always evaluating M&A opportunities at any given time. Over the last 3 years, we would have 58:21 58 minutes, 21 seconds evaluated over a 100 opportunities and frankly acted on one. 58:26 58 minutes, 26 seconds So that process is always going on. Of course, having cash means that yes, we are always looking very very 58:35 58 minutes, 35 seconds aggressively with focus on opportunities that could add to us. But that doesn't also mean that if you just have cash, 58:43 58 minutes, 43 seconds you do M&A just for the sake of deploying capital because that kind of pressure as I mentioned before that 58:51 58 minutes, 51 seconds anything done hastily and without prudence does lead to bad results. Uh so no we have cash but it's not to burn. It 58:59 58 minutes, 59 seconds is very hard earned cash. It's shareholders cash. It is uh our duty as a responsible company to deploy it only 59:07 59 minutes, 7 seconds when we get an opportunity that is amazing and passes all four of our filters that we have already spoken 59:14 59 minutes, 14 seconds about that whatever we put it in we must be able to be confident that the product will last 59:23 59 minutes, 23 seconds for the next 15 years. Second whatever we do we must be able to take top five position in that category. If not, it's 59:32 59 minutes, 32 seconds not worth doing. Third, we should make good money and good financial returns from doing so. And fourth, that it 59:39 59 minutes, 39 seconds should be good for humanity. If all these four conditions are done, that is only then do we even consider an opportunity? 59:51 59 minutes, 51 seconds Okay. Um is worst of commodity pressure behind or should we anticipate increasing pressure before pass through 59:59 59 minutes, 59 seconds happens and margins improve or stabilize? 1:00:04 1 hour, 4 seconds That is a multi- trillion dollar question uh in some sense because if you can figure out when the war will end and 1:00:12 1 hour, 12 seconds when oil and gas and all these things will go back to normal uh yeah you'll be far more wise than I am. I have no idea. 1:00:24 1 hour, 24 seconds Vive on this front you know we have historically talked about 24 to 26% margins so would you like to give an 1:00:32 1 hour, 32 seconds update on that are we comfortable with that band no I'm not we had already said that it 1:00:38 1 hour, 38 seconds will be 23 to 25 after the railway acquisition so that is the band 24 to 26 1:00:46 1 hour, 46 seconds was the band prior when we with our core business I I think now it is 23 to 25 1:00:53 1 hour, 53 seconds and that I think we can say we should be able to continue being in that band. 1:01:00 1 hour, 1 minute Okay, great. Uh how are things shaping up on the non-automotive front apart from railways? 1:01:09 1 hour, 1 minute, 9 seconds When will we see any developments on robotics and evol? 1:01:14 1 hour, 1 minute, 14 seconds So development soon. But if the question is when will you see meaningful revenue assumed if your investment horizon is 1:01:23 1 hour, 1 minute, 23 seconds less than 3 years none of this has any meaning for you as an investor. It will 1:01:29 1 hour, 1 minute, 29 seconds only come after if we can go back in time I think 2021 is when we announced that 2021 we were won the suspension motor order right? 1:01:42 1 hour, 1 minute, 42 seconds Yes. 1:01:43 1 hour, 1 minute, 43 seconds Now 2026 is the first year that it will be in hundreds of cr. So it takes four 1:01:51 1 hour, 1 minute, 51 seconds to five years for anything which is new product and if you're doing it organically to actually get there. 1:01:58 1 hour, 1 minute, 58 seconds Usually first 0 to 3 years you don't actually earn any money. You actually spend more money than you are. Year four 1:02:06 1 hour, 2 minutes, 6 seconds you start making some money. Your first bit of revenue starts trickling in which was the last calendar year for suspension. 1:02:13 1 hour, 2 minutes, 13 seconds and then you get to hundreds of Kes and if God is kind and your job is good and you've made a good product then you get to the thousands of K same thing 1:02:21 1 hour, 2 minutes, 21 seconds happened with EV differential assembly we started in 2016 till 2018 I don't think we made meaningful money 2019 1:02:29 1 hour, 2 minutes, 29 seconds started becoming meaningful and now it's as you know uh fairly meaningful that's the trajectory any new product 1:02:37 1 hour, 2 minutes, 37 seconds development cycle will take I think Amit also answered for when he was asked about HWAC and electric control panels. 1:02:46 1 hour, 2 minutes, 46 seconds It is a three-year cycle. It is not magic that we make something and then immediately we start selling it because 1:02:54 1 hour, 2 minutes, 54 seconds our process is B2B. Second, we make safety critical or mission critical parts that have very long testing and 1:03:02 1 hour, 3 minutes, 2 seconds safety cycle and we are not in a rush to cut that just for financial gains and actually endanger our reputation. 1:03:11 1 hour, 3 minutes, 11 seconds uh trust that has been built over decades. So we will always play it this way but developments you will keep 1:03:18 1 hour, 3 minutes, 18 seconds hearing as and when we develop you will see the progress that we are making on each of those fronts. 1:03:28 1 hour, 3 minutes, 28 seconds Ladies and gentlemen that was the last question that we had. uh on behalf of Tamura I thank all of you for joining 1:03:35 1 hour, 3 minutes, 35 seconds this call and to the team of Sona comstar for giving us this opportunity to host you. Um we can say how we can close the call. 1:03:46 1 hour, 3 minutes, 46 seconds Thank you. 1:03:48 1 hour, 3 minutes, 48 seconds We will now conclude this call. If you have any follow-up questions, please feel free to email your Numura sales representative or corporate tax system. 1:03:56 1 hour, 3 minutes, 56 seconds Thank you so much. Thank you everyone for your time. You may now drop off the line. Thank you.