Alicon Castalloy Limited (531147) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Q4 FY '21 Earnings Conference Call of Alicon Castalloy Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Vaswani from CDR India. Thank you, and over to you, sir.

Thank you, Lizanne. Good day, everyone, and thank you for joining us on Alicon Castalloy Limited's Q4 and FY '21 Earnings Conference Call. We have with us on the call today, Mr. Rajeev Sikand, Group CEO. Mr. Vimal Gupta, Group CFO; Mr. Shekhar Dravid, COO at Alicon; Mr. Andreas Heim, Managing Director of Illichmann Castalloy; and Mr. Rajiv Gupta, Head of Domestic business at Alicon Castalloy Limited. Mr. Vimal Gupta will start the call and cover the financial performance for the quarter and year, following which Mr. Dravid will walk us through the operating highlights. In order to share a more granular view of initiatives towards both the global domestic markets, we also have Mr. Andreas Heim and then Mr. Rajiv Gupta to provide insights on these areas. Mr. Sikand will then cover business developments, following which we will have the forum open for a Q&A session. Before we begin, I would like to point out that some of the statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with all of you earlier. I would now like to hand over the floor to Mr. Vimal Gupta for his opening remarks. Over to you, sir.

Good morning to all our investors. I hope that all of you and your near and dear ones are safe and well, given the severity of the second wave. Thank you for taking out time to join our earnings call. The Alicon team drives immense gratification that despite lots of lockdown-induced business volumes in the first half of the year, we were able to record growth in the second half, that there is an effect of the deep recession in the first half. We ended the full year with healthy contributions from the Indian operations and our European subsidiary. We have delivered a robust performance this quarter as total revenues from the operations on a consolidated basis was at INR 323 crores in quarter 4 FY '21, higher by 63% on a year-on-year basis. Even on a sequential quarter basis, total revenue from operations grew by 20%. I am pleased to share that this has been the highest ever revenues reported by Alicon in a quarter. The growth during the period was driven by improved volume growth supported by healthy realizations and richer product mix. Volumes were driven by strong performance in our domestic auto business, robust pickup in international business and improving contribution from the EV segment. Before this, our strongest quarter was Q4 FY '19. And we have been able to realign our performance to our longer-term growth objective, which is a reflection of all strategic measures that we have undertaken over the last several years. Domestic revenues during quarter 4 FY '21 were higher by 66% year-on-year basis, while international revenues including those from our European subsidiary, Illichmann, grew by 56% year-on-year basis as OEM customers scaled up their production schedules. In Q4 FY '21, exports and international business accounted for 23% of our revenues, while 77% was contributed by domestic revenues. Our auto business contributed to 92% of the total revenues for the quarter, and revenues from our non-auto division stood at 8%. During the quarter, our subsidiary company, Illichmann, received a retrospective sales price claim of INR 2.5 crores from customer-related revision in sales price. Having demonstrated the ability to ramp up volumes, this customer has given us enhanced supply schedule in the coming months at this higher price. This order puts us in a good position to showcase our technical capabilities to other customers in Europe who are pursuing, increasing the share of electric vehicles in their portfolios. The EBITDA for the quarter was at an all-time high of INR 49.07 crores, growing by 283% on a year-on-year basis and by 26% on a sequential quarter basis. EBITDA margin was 15.2% in quarter 4 FY '21, higher by 872 bps year-on-year basis. The quarter 4 FY '20 EBITDA was muted on account of lockdown announced in March 2020 and 270 bps on a quarter-on-quarter basis. Our savings and cost optimization initiatives coupled with adjusted mix and uptick in sales volumes helped us record this healthy EBITDA margin. As we look ahead, we hope that this improvement in our sales mix, our profitability metric would be sustainable, and as we continue our trust on export market and new products. The value addition which was at INR 130 per kg in FY '18/'19 increased to INR 138 per kg in FY '20/'21. The -- as activity level rebound, our margins should continue to be supported by the savings and belt tightening that we have implemented at the cyclical lows. Profit after tax for quarter 4 FY '21 stood at INR 25.33 crore with a margin of 7.8%. This has improved substantially compared to the loss of INR 5.84 crore in quarter 4 FY '20. Owing to the lockdown announced in March 2020, we have also reported very strong growth in PAT on a sequential basis and it has more than doubled from quarter 3 FY '21. Another heartening feature of our performance that I would like to share with you is that our focus on managing our working capital efficiently has paid rich dividends. The fact that we were able to achieve this in this pandemic year, which was net severe disruption has been confident boosting. The slightly higher level of inventory has been offset by the reduction in receivables. We were able to reduce working capital by INR 29 crores on a year-on-year basis.

Sorry to interrupt. Sir, your voice is breaking up. Hello?

Yes. Now, it is clear?

Yes, sir. Thank you.

Closing receivables at March -- as of March 31, 2021 were marginally lower than March 31, 2020, despite the increase in sales in quarter 4 FY '21 by 63% on a year-on-year basis. This has led to improved cash flow in the backdrop of a highly challenging year. This efficient management of working capital helped us reduce our overall net debt by INR 30 crore. The net debt stood at INR 297 crore on 31st March '21 compared to INR 327 crore last year, resulting in a marginal improvement in net debt equity ratio to INR 0.9 crore as against INR 1.04 crore in FY '20. On a proposed equity rate, we are in process of taking this initiative forward and the documentation and application is progressing within the time line prescribed by the regulators. The fund from these proceeds will support our growth initiatives and will also enhance our liquidity and balance sheet position. As we look ahead, we are concisely following a measured and calibrated capital allocation strategy. With imminent strong business momentum and solid new wins accompany -- coming our way, the focus is first on efficiently utilize our current installed capacity of 42,000 metric tonne per annum at optimal level before undertaking any new expansion. In order to optimally utilize our casting capacity, we will also have to appropriately scale up our melting and machining capacities and may have to undertake investments in developing capacities for special purposed equipment and process improvements, depending upon customer requirements. The company will be concisely rebalancing its existing capacity in a phase manner in the next 3 to 4 years so as to achieve optimum output across all focused areas from the present capacities. Our agenda is to emphasize our investments where there is a healthy value acceleration in the longer run. So while we will continue to pursue all the defined strategic initiatives and growth opportunities, our CapEx spend will always be within a set financial discipline criteria. In line with the strategy, our CapEx spend during FY '21 stood at INR 46 crores as against earlier -- and [ with sales ] plan of INR 57 crores and lower than the CapEx spend in FY '20 of INR 61 crore. This will allow us to elevate our return ratios set in FY 2018/'19. Our return on capital employed and return on net worth were healthy at 19% and 17%, respectively, while absorbing the shift disruption in recent quarters, our focus continues to be on improving issues over these receivables. As the operating performance rebounds and we accrue the benefits of better product mix, healthy profitability, streamlined working capital cycle and improved balance sheet metrics. We will aspire to take our system ratios above the benchmark set in FY '19. The combination of levers to support the EBITDA margins combined with a more efficient balance sheet set the course for us to surpass that previous higher -- previous highs in return capital employed and return on net worth. Unfortunately, as we speak, India is experiencing a second wave of the pandemic, which is more virulent than what we saw during the first phase and various states across the country have imposed lockdowns while trying to balance that with considerations of life and livelihoods. As the spread of the second wave is contained and macro environment in India normalizes, we are positive that our domestic operations will add to the current robust volumes that we see in our overseas business. On that note, I would like now to hand over to Mr. Shekhar Dravid, who will talk about operating highlights for the quarter.

Thank you, Vimal. Greetings to all. I trust all of you are well and staying safe. I will share with you some of the trends witnessed in the quarter 4. On the domestic auto front during the quarter, sales across OEMs witnessed a rebound from a low base with a strong demand emanating from a pandemic-driven preference for personal mobility and the new launches. Passenger vehicles and 2-wheeler sales continued to report healthy improvement in sales on a month-over-month basis. Commercial vehicles also saw increased sales on the back of improved sentiments, steadier freight rates and improving demand from road construction and mining. The major pain point has been higher fuel costs. On the international front, most of our key export geographies in the U.S. and Europe reportedly healthy auto sales despite lockdown constraints in some of the parts of Europe during the quarter due to the concerns surrounding the second and third wave of COVID cases. We are quite encouraged to have a report -- I have reported a strong performance in the fourth quarter. There has been a lot of efforts undertaken over the last few quarters and we have to position ourselves where to capitalize on the growth trend in the global auto industry. The results that we see this quarter and the momentum of the quarter ahead has been contributed by our 5 key strategic growth pillars. The first being our auto business, this segment witnessed improved volumes during the quarter, with healthy client engagements coming in from domestic and export regions. During the period, we added 8 parts from Dana in domestic and -- Dana Corporation in domestic and 13 parts from the OEMs like Ashwoods, MAHLE Behr, Eaton in exports. So overall in FY '21, we added 39 parts from 13 existing customers in domestic and 42 parts added from 9 existing customers in exports. These orders will amount to lifetime sales value of INR 190 crores, while in average yearly sales of INR 39.2 crores. Amidst the pandemic, personal transportation in the domestic market has gained considerable importance with 2-wheelers being the preferred mode of transportation, especially in the rural and semi-urban area. On the urban area side, we are witnessing improved sales across both 2-wheeler and 4-wheeler categories. Additionally, we are also seeing some supportive reform, favorable policies announced such as performance-linked incentive and vehicle scrappage policy will usher in long-term benefits and growth opportunities for the industry, which will further create demand for new vehicles thus boding well for the Indian auto industry. Coming now to the second of our growth pillars, which is an electric vehicle division. The continuous global focus on climate change has ensured that all mainstream automobile players have focused their energies on the EV space. Technological improvements have narrowed the cost of ownership between the IC vehicle and the EVs. In the international market of U.S. and Europe, we have seen growing production and adoption of the electric vehicles, especially in the last 2, 3 years. Closer home too, we are steadily witnessing a pickup in consumption of e-mobility. Several auto components which in present combustion engines are in carbon and steel fabrication or similar composite materials, we believe will get converted into aluminum or other more density material like aluminum or in -- such as aluminum, magnesium alloys in electric vehicles. Aluminum and other low-density material enable a great reduction of a component as much as to the 46% enabling EV efficiencies. We are already supplying battery housings to Samsung, who supply onward to JLR in the EV space. This is one of the examples where we have capitalized on the opportunity provided in this space. We believe our experience in aluminum castings will provide us an opportunity to become one of the front runners in the EV space. Recently, we also provided OEMs with thermal engineering solutions for the e-mobility sector. Let me provide a brief overview of the applicability of these solutions. EV components like motors and batteries generate lot of heat during the operations, which impact the end product performance in order to -- performance. In order to elevate this impact, through our European subsidiaries, we prepare ourselves to cater towards this segment and divide the technology solution for electric vehicles. This thermal engineering solution is a value-add and seamless offering which gives us competitive technical know-how. We have already partnered with Bosch and Samsung for this thermal management solution and have gained significant exposure in the European market. We are leveraging our IP and are now partnering with Dana Corporation to develop products embedded with ready-to-use technology. A few years ago, we were ramping up our process and R&D capabilities. And now we have successfully demonstrated a niche solution offering and look forward to capitalizing on more such opportunities from our customers in EV space. During the quarter, we have received orders from Dana Corporation that is TM4, Mahindra & Mahindra, Graziano and Ashwoods for the e-mobility platforms. These orders being amount to a lifetime sales value of INR 26.3 crores, which is average yearly sales of INR 5.3 crores. EV as a segment is now looking more promising than what initially anticipated. Our target is now to clock towards -- upwards of 25% from the electric vehicle division on growing revenue growth by FY '25, '26. With this [ strength ] in EV space, our target is to increase the contribution of EV into this portfolio. Now on to the third growth pillar, being the technology agnostic platform. We are steadily adding to the proportion of the parts we offer that we required in each vehicle irrespective of the technology platform. Various aspects of the vehicles remain common across both IC and EV platforms and would remain relevant should there be emergence of any alternative technology, too. Our aim is to ensure that we gain relevance in interesting and accretive niche around these products by leveraging our core competencies. For example, previously, components such as the chassis and suspension components in combustion engines were reinforced steel, but an increasing focus over the lightweighting driven by electric mobility, these components are now changing over to aluminum. This brings in another growth opportunity for Alicon. In addition, we are also getting increased inquiries from other OEMs for development of frames and control arms following successful completion of order with JLR for the same product booked for basket I'm happy to share that we have also received RFQ for the new generation vehicle of JLR. On the non-auto segment, we are witnessing healthy growth in demand across sectors such as defense, aerospace, agriculture and energy, and we expect this momentum to strengthen in the quarters ahead. During the quarter, we have received orders from Honeywell Automation India and ABB India as they expand their business in the domestic and the export markets. We also got a repeat business win from [indiscernible] for supplying their products in the China market. We are also expecting an order from BEML for supplying cylinder head for 10,000 Tatra trucks this is also indigenize and developed and is now in a ramp-up phase. The fifth growth pillar is our focus on increasing customer wallet share. We at Alicon have positioned ourselves as a solution provider to our customers. This is actually demonstrated by our recent thermal engineering solutions to our existing customers in the e-mobility space. This will enable us to be the preferred partner of choice for our customers across their IC and EV initiatives. We are also diversifying and expanding our product portfolio to include several niche and value-enhancing offerings. We are working towards increasing the proportion of machine components or ready-to-use components. Overall, [indiscernible] has improved by 6% during the year. All our strategic growth initiatives position us to capitalize on the opportunities that the economic revival will provide. As already shared by Mr. Gupta, we are witnessing a second wave of the pandemic in India, and I would like to share with you the steps we are taking to counter the localized lockdowns. In accordance with the break-the-chain guidelines shared by the government of Maharashtra earlier, our offices and plants in the month of April we are operating with a scale down level of manning to meet requirements of our customers. While in quarter 4, we returned to optimum levels of operations. The ongoing lockdowns and restrictions may impact operational efficiencies in quarter 1 of FY '21. However, with the actions undertaken by the government, we are hopeful the second wave will be controlled. Across the company, we remain committed to employee safety and continues to follow strict adherence to social distancing, hygiene protocol and safety. On this note, I would like now to hand it over to Mr. Andreas Heim to throw light on our global business.

Thank you, Dravid. A warm welcome to all of you. I will briefly cover the development on our international business. This quarter, Illichmann Castalloy has enhanced its contribution in the group financial performance. Those of you who are familiar with the Alicon story would know that Illichmann merged into the Alicon Group in May 2010. Illichmann was originally founded in 1929 in Austria and have plant in Slovakia from where it serves market clients across Europe. Since the European market has been more readily accepting of electric vehicles development and this market has witnessed a head start. There is a greater acceptance of these and better infrastructure is present. The Illichmann facility is catering to demand for Samsung, Bosch and [indiscernible] which has helped scale up the volumes in this quarter. Further, some of the leading OEMs like JLR have been very aggressive in the EV adoption and stated the target to be 100% electric by '24, '25. It's likely to unlock more opportunities for Illichmann in the coming months. This will be a key contributor to the vision of the group to increase the contribution of the EV in this portfolio. In quarter 4 '21, we have had 3 new parts from 4 global customers, such as Flextronics, Ashwoods, MAHLE and Eaton. And in financial year '21, we have added 42 new parts with 9 global customers, with 3 new logo additions from Flextronics, Ashwoods and Mercedes. International business, including sales from Illichmann, contributed to about 23% of our total revenues in quarter 4 '21. The appointment of global representatives in U.S. and European market namely [ TBS ] in U.S. and in [indiscernible] Europe has helped Alicon to penetrate in the global business more effectively, and now has started showing results on the directions in business wins in these regions is gaining pace in line with our global business strategy. Having these teams in closing proximity to customers has elevated connectivity with existing customers and opened up opportunities, combine new customers for future business. The path of the increased penetration with European customers, the entry into global supply chains enhanced their project for proximate markets. We are working on partnering with [ PSI ] in U.S. entering in the markets in Mexico and Brazil as well as delivering our entry into the Japanese market with Flextronics. Further our engagement with players like Flextronics and Eaton has lead to development programs for the Indian business. In addition, there are niche opportunities emerging in the Middle East, China and South Korea to significantly elevate the global footprint in the group. On this note, I would like now to hand over to Mr, Rajiv Gupta, who will cover development in the domestic business for the quarter.

Thank you, Andreas. Good day, everyone. The domestic auto industry saw a sharp rebound, with sales volumes increasing 27% year-on-year in quarter 4 FY '21. Across the industry, most OEMs are now operating at near-normal utilization level despite raw material inflation. From an industry perspective, sales of tractors, 2-wheelers, passenger vehicles and commercial vehicles remained strong during the quarter. Now coming to the performance. The overall positive momentum in the domestic auto industry has had a favorable impact on the domestic volume offtake. Alicon was able to grow the domestic sales by 66% year-on-year in quarter 4 '21, outpacing the growth of the domestic industry. We have made good progress in building up volume, sales to commercial vehicles, other 3-wheeler customers in addition to our stronghold of 2-wheelers and 4-wheelers. During quarter 4, we added 8 parts from a leading domestic customer. And in quarter -- in fiscal year '21, we have added 39 new parts with 12 domestic customers and 3 new logo additions. So on the whole, we have reported an encouraging growth in the domestic auto segment during the quarter, led by improving demand on account of pent-up sales, festive push and higher preference towards personal mobility. We are witnessing a good level of inquiries and bookings in the market and are hopeful that improving macros will further support that momentum. The scrappage policy, PLI-linked scheme and improved allocation toward road infrastructure augur well for auto sector and will help boost consumption going forward. On this note, I will now request our group CEO, Mr. Rajeev Sikand, to share with you in perspective on Alicon performance.

Thank you, Rajiv. Thank you. I welcome all our investors. Thank you for joining the call. I hope you and your family members are well and safe. My colleagues have shared reviews and details of our performance and perspective on the operating environment. I would just like to add that apart from the impact of the second wave, we are very confident on our growth potential. And the opportunities across the auto, non-auto and the e-mobility space in near to medium term. These are [ proved times ] of sustain revival in demand and inquiries across markets driven by augmented customer sentiments. Improvement in finance, availability and a gradual pickup in business and economic activities. Better micro along with the stabilized raw material environment should help build further momentum and boost consumption. I would also like to state that my deep thank you to my own team, Alicon, who has stood at this juncture, when the situation in March '20 was of a sheer desperation. However, team Alicon showed resilience and led all of us to the inspired journey to cross the mark, new milestone in 31st March '21. At the company level, our impetus has been on encouraging the adoption of 3R mindset, which stands for reflection, resilience and reimagination, across our organizations. This approach, even in a difficult year, has enabled us as an organization to adapt to the new normal. In this year, despite unprecedented challenges, [ all over ] Alicon within our growth areas continued on this cumulative journey to build and create a stronger company undertaking strategically significant initiatives to solidify the trajectory of the growth. Our multipronged focus towards strengthening our existing customer base, adding new clients across markets and ramping up of our product basket continues to drive business momentum. We also expanded our bouquet of products towards high-margin and value-add categories to serve the need of our customers, both in domestic and export markets. During the year, we announced significant order wins with multiple OEMs which provided healthy growth visibility for years to come. Our business fundamentals are strong and intact, and we are proactively engaging with the customers to ensure we pass that scale up performance going forward. We are also ensuring that all our people, all our blue collar, white collar, are well taken care of in this extremely challenging environment, and are having a deep communication with all of them on a virtual daily basis. As we look forward in the promising and opportunistic future, our objective at Alicon will always lead to us making ourselves future-ready, while also being consistent, trustworthy and reliable partner through our strong and growing customer base. We strive to achieve this by effectively leveraging upon our comprehensive product portfolio, strong innovation and R&D capabilities, agile manufacturing abilities and strong reference base, both in domestic and global markets. On this note, we will be happy to take your questions now. Thank you all.

[Operator Instructions] The first question is from the line of Saurabh Jain from Sushil Finance.

First of all, I hope all of you and people around you are safe and doing well. Secondly, many congratulations for the wonderful set of numbers. I have a few questions, sir. First is looking at the results. Hello? Am I audible?

Yes.

Yes. Looking at the results, Illichmann has done quite well this quarter. The top line of almost INR 40 crores and EBITDA margin above 18%, this is probably the first time we saw that numbers as against a little over 11% in the previous quarter. So what got us to reached these levels, both on top line and margin? And is there any one-off in this? How much of that is sustainable going forward?

Thank you, Saurabh. So about the Illichmann, first of all, this was a special quarter when we started the major supplies for the EV segment. And there was initial higher level of demand from the customer. So that has given us improved bottom -- top line as well as the bottom line. So on the going forward, the volumes are increasing, and we are hoping that in the coming year '21, '22, we'll see improved bottom -- top line levels as well as on the bottom line. Definitely, this was a special quarter that in our notes also, we have explained a special price given by the customer around INR 2.5 crore that has impacted the results for the Q4. But overall, when we see that improvement in the top line of Illichmann, so definitely, there is an improvement in the bottom line and the margins also. And if you see the previous years of Illichmann performance, so up to that level, they were at almost at breakeven. So after that, when the volumes grows, so definitely, there is a good improvement we see in the bottom line, in the margins. I think I've answered your question, Saurabh.

Okay. Yes. So how much of this INR 43 crores, INR 44 crores of the revenue came from this new EV business?

Approximately 40% is from the EV.

Okay. Okay. Sir, the same is true for the stand-alone business as well. We recorded highest ever margins. And can we assume that we can sustain this 15% kind of margin for the full year and perhaps to improve next year from these levels?

Yes, definitely. If you remember that in our earlier calls also, we are explaining that when we are taking off and moving towards the new businesses, the margins are high. So that is the start now from the quarter 4 of 2021. So definitely, there will be improvement in the margins in the upcoming quarters that we will see when we have the normal size of the business.

Okay. I have a couple of more questions. So I'll get back in the queue.

We'll move on to the next question. That is from the line of Rohit Ohri from Progressive Shares.

Sir, 2 questions, which are related to the developments at the property at Khed, if you can just give us a highlight as to what exactly is happening there?

So at this moment, we have kept on hold because what -- now we are more focused to utilize our existing facilities, and because you also know that when we go to a new location. So for that, in the new location, we have a lot of fixed cost and investments in the nonproductive equipment, means like land and buildings, such type of things we have to develop. So at present in the current year, we are more focused on to utilize existing facilities and improve our -- the output from the present facilities.

So you feel that there is still more time and you are able to sweat the assets, which are with the current plant and the current capacity utilization is ample enough for you to not go to Khed and go and explore that property?

Yes, at this moment. Yes.

And what is the current capacity utilization that you have?

Our current capacity utilization is around 70% from -- in 2021. But looking at the capacity utilization for the plant, we will be around 80%. We will reach it by the next financial year.

Okay. And sir, your presentation speaks about a program to reduce the interest cost. So can you elaborate what exactly are you trying to do? Or what is on your schedule that, that you have chalked out to get the margin slightly higher from here despite the new product launches that you have done?

Yes. You see that to reduce the interest cost mainly -- our main focus is on the investment side how to optimize our existing facilities. And second side on the -- you have seen that in the last year, how we are more focused to reduce the working capital. So now furthermore pressure we are putting to renegotiate our payment with the customers where the money is stuck, all these things. So further, we will see improvement in the working capital cycle as well as on the investment side. And second is now the interest rates because we are renegotiating with whatever the opportunities are there to reduce our interest rates, so that we are putting pressure to the lenders. So all the efforts wherever opportunities are there, we are putting up all these things.

Okay. So this is the kind of a long shot. Are you looking at any fundraising plan as such to kind of boost the operations of the 4 plants or maybe the property at Khed as well?

For the property at Khed that we have already explained, a little bit it will take time. But already, this fundraising is in the plan. And you know that already, AGM we have held and this [indiscernible]. So that is in progress.

Okay. This property is owned by us, right? The property at Khed is in the books of Alicon and they are the owners, right? It's not on lease?

Yes, yes.

The next question is from the line of Pritesh Chheda from Lucky Investment Managers.

Yes, sir. The utilization number which you gave for FY '21 at about 70%, does it mean that quarter 4 was actually 100% utilization for us?

It was not -- basically, as you know, last time also we had discussed at any point of time, we are working with a 20% of spare capacity. And our utilization has been improved because of the multiple things what we have taken up in last year that the multi-cavity tools using the output per machine has been increased. So all these have given us output from the existing capacity. So still, I will maintain that in the quarter 4 also it's within the range of 70% to 72%.

So sir, the annual cannot be 70%, right? If quarter 4 is 70% at INR 320 crores.

Yes, [indiscernible] other quarter was not normal.

So when you were referring to the utilization number, you're referring to quarter 4 utilization, that's what you were mentioning?

Yes. Yes.

Okay. So then that explains the confusion. My second question is on the order wins that we have got and we have announced in the past calls as well, what would be the progress there? And how much of those new order wins would be executable in '22 and '23 in terms of value?

Basically, as far as the...

Yes. In quarter 4, we have added some total of 21 parts, which will give us average sales of INR 38 crores. And the project value for these parts are INR 190 crore.

No, sir, that's not my question. My question is whatever order wins we have announced so far in the last 1 year, there were different orders. They were Toyota and there was [indiscernible] and a lot of orders, and there is a lifetime value of those orders, and you would have got something in quarter 4 also. I just wanted to know how much of those new orders in terms of annual execution is slated in FY '22 and '23 by value? So basically, new order executable in '22 and '23, if you could share that number.

Yes. In '21, '22, with these new businesses what we have bagged, we are projecting to sales INR 382 crore. And in '22, '23, this will realize to INR 605 crore.

So you're saying that you will execute INR 400 crores of incremental business in FY '22 and you will execute INR 600 crores of business incremental in FY '23, that's how we are putting it?

Right.

Sir, this number differs from what it was, let's say, a call which was done on 18th December, where it was mentioned that the -- out of the total orders that we have got, INR 80 crores is executable in '22 and INR 160 crores is executable in '23. I'm asking for the annual execution of new orders, sir. I'm not asking for the lifetime values. So whatever orders were not there in '21 becomes a new order, right?

The projections which we talked in December call, those were based on the plans which customer has been given at that time. But as the situation has changed, the projects which were previously, which we have developed, which were in ramp-up and got delayed at customer end, the customer has ramped up this in this year. And hence, we are seeing a growth of this value from that point of case. Also, the new businesses what we have added, those businesses also going into a ramp-up in '22, '23. So business will pick up in '21, '22. So that's why this cost of the total of INR 380 crores what we are looking into. So these are the total overall business -- on the businesses which we have captured in last 2 years and gone up into development center ramp up.

So I should add this INR 400 crores of new business on INR 800 crore of revenue that you have done in '21, right? So you can do about INR 1,200 crores of revenue in '22. And then it goes to something like INR 1,400 crores, INR 1,500 crores of revenue in '23?

Yes.

Okay. My last question is, sir, in the quarter 4, we see your company outpacing the volume growth of the...

One minute. Please hold on.

Yes. And of course, this is only takeaway is that it depends on what will be the localized lockdown, which we have now seen. So Rajiv is giving basically on the figure, which would be a normal business here. Yes, so that much only will be a differential. Thank you.

Yes, sir, yes. On the quarter 4 outpacing of the vehicle growth, so we are exposed to PV and CV to a large -- 2-wheeler and CV to another extent. So what explains this outpacing of the industry growth? Any specific comments that you have when we look at the auto growth and when we look at your revenue growth, Q-on-Q or Y-o-Y, whichever way is completely different. So any comments there?

Yes, if you talk about the quarter 4 performance. As Rajeev said, we were above the industry growth. The industry has witnessed a growth of 27% and we were at 54%. And the reason we were able to perform better from the industry was a new business, what we have added. And this has helped us to grow the momentum and regain our businesses.

And secondly, the takeaway as of the increases in this quarter with wherever we have the issue mostly we have a single. So we worked on flexibility and enable this by providing this flexibility to our customers.

The next question is from the line of Deepak Poddar from Sapphire Capital.

I just wanted to understand, what is the capacity...

Sorry to interrupt, Mr. Poddar. Sir, we are not able to hear you clearly.

Just wanted to understand, sir, what's the capacity utilization we will be targeting in FY '22?

It is around 75% to 77%.

75% to 80%?

Not 80% because it will be between 70% to 75%...

Actually, below 75%.

And in the quarter 4, capacity utilization was 70%, if I heard it correctly, right?

72%.

72%. Okay. Okay. Fair enough.

The next question is from the line of Raghunandhan N. L. from Emkay Global.

Congratulations, sir, wonderful performance. Q4 earnings is higher than the full year FY '21 numbers. Sir, just a couple of questions. Firstly, on sales to EV customers. How much is the share of revenue currently for EVs? And if you can give some color on what is the pending order book? Just wanted to better understand how you see the contribution rising in FY '22, '23 now that we have set the figure of 25% over the next few years?

Yes. So talking about EV, the last year, the contribution was 8%. This year, we are targeting 9%, and eventually it's going to increase over the years. Particularly to talk about volumes, in India, EV is still -- the contribution is very low. Yes, we have gained that momentum with our European subsidiary, wherein the dealer has picked up very well. So very closely, we're watching how the trend is changing in EV and IC. As per the result, what we know at this moment, the EV contribution is 30%. By '25, it will reach up to 30%. So we have defined very clearly. And last quarter also, we have good -- last year also, we have done quite well in the EV space. We're getting a lot of businesses in this particular space. So yes, we have defined and we have revisited our targets because we have noticed that the market is shrinking and there's a lot of disruption coming up. And in EV, we are getting high-value addition. And as we mentioned about the U.S. piece, about the thermal engineering, which these solutions we are giving to our customers, and this will help us to grab our share in this particular area.

Wishing you all the best. My second question was on working capital. Receivables have been reduced, but receivables still stand at about 139 days. Just wanted to understand how -- what is the comfortable level? And what is the expected target for the company? I remember you had indicated that you are working towards a few pending settlements with customers and can also use discounting as an option to reduce the working capital level. So Vimal, sir, if you can comment a little on that?

Yes, definitely because now we are more focused on this. But on the other side, we have to see the sale -- we are growing in the export market. We have always -- the payment terms are longer. But definitely, from these, whatever we are having. So we are focused maybe in the range of 110 to 115 days at least for this year, we are targeting.

Just one clarification. Would you be able to share the volume and the missioning ratio for FY '21? If you have it handy, otherwise, I'll take it later.

We will give you later.

The next question is from the line of Aditya Makharia from HDFC Mutual Fund.

This is Aditya from HDFC Securities. I just had one question. You did mention that the use of aluminum in the 2-wheelers, which is 2-wheeler EVs will go up from 5 kgs to something like 12 to 13 kgs. Now I wanted to know will the realization come down because of the aluminum usage will go up so much?

Basically, working -- as you know that we are working with Ather where this is realized that we are supplying around 17 kgs for vehicle now from whatever the developments we have done it so far. And looking forward, at this moment, whatever the orders we captured, the percentage of that, we are in a good stage where we are acquiring more and more components for this, it will be very difficult from the point of view to quantify at this moment for the other sectors. But definitely, we are working on, and this will increase the aluminum content in India and that's -- it is an opportunity created for Alicon.

Yes. No, no, I get that. Obviously, the -- you are going to get more orders. But the per kg realization, will it be lower in the case of EVs compared to ICE because if you're supplying 5 kgs of aluminum component that goes mainly in the engine for an ICE vehicle. But perhaps for an EV, the aluminum content may be used for chassis and other products, so the realization will come down, is what I was understanding.

No. There is -- these parts qualify in a certain segment, which we have defined inside our group. And these are the segments where the value addition as Vimal had explained earlier, the value addition per kg is moving up. And so this comes in that kind of a basket where the whole movement is -- move slightly up year-on-year.

Okay. Got it. So we can maybe take a little off-line later as well.

Ladies and gentlemen, that is the last question. I now hand the conference over to the management for your closing comments.

So thank, everybody, once again for joining us today and wish you all -- you all are safe, your families are safe, and let's hope the whole pandemic -- the intensity reduces. We are seeing in Maharashtra over the last 3 weeks, it has reduced. The testing rate showing low [indiscernible] . And hopefully, so in other states it will show sooner or later. And I wish you all the very best for the day. Thank you very much.

Thank you. Ladies and gentlemen, on behalf of Alicon Castalloy Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.