Endurance Technologies Limited (ENDURANCE.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the Endurance Technologies Q2 FY '26 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital Limited. Thank you, and over to you, sir.

Thank you so much. Good morning, everyone. Welcome to Q2 FY '26 Post Results Conference Call of Endurance Technologies. We are pleased to host the management team of Endurance. Today, we have with us Mr. Anurang Jain, Managing Director; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Rajendra Abhange, Director and COO; Mr. Raja Gopal Sastry, Group CFO; and Mr. Raj Mundra, Treasurer and Investor Relations. I'll now hand over the call to Anurang for his opening remarks, post which we can start the Q&A. Over to you, Mr. Jain. .

Thank you very much. Good morning, everyone. As we close quarter 2 of FY '26, India's economic backdrop remains strong even as global uncertainties persist. Domestic economy continues to show strength as we move into the second half of the year. The RBI has revised its FY '26 growth forecast from 6.5% to 6.8%. It has lowered its CPI inflation forecast for FY '26 to 2.6%, down from 3.1%. These, along with the steady repo rate, reflect a supportive macro backdrop for demand and investment. . World Bank, too, has raised India's GDP growth forecast of FY '26, but have cut their FY '27 forecast to 6.3%, citing headwinds from the recent 50% U.S. tariffs impacting Indian exports and slower global demand. We are hopeful for a better and amicable settlement on the trade tariff issue. A major domestic policy move of the last quarter is the GST rationalization implemented from 22nd September 2025, which simplified the rate structure into fewer slabs and lower rates for many consumer goods, farm and manufacturing inputs and for most automobiles and auto parts. This is expected to support growth of the automotive industry by improving affordability and consumption across segments and the robust festive season sales were also attributed to such lower cost of ownership. In the automotive sector, as per [indiscernible] Two-wheeler sales reached 6.9 million units in quarter 2 FY '26, up 10.3% year-on-year with motorcycles at 9.6% growth and scooters at 12.4% growth. Passenger vehicle sales increased by 2.4% to 1.3 million units, while 3-wheeler sales rose 21.4% to 0.4 million units. Endurance, in its stand-alone financials for quarter 2 FY '26, saw a year-on-year growth of 16.2%. In our European Union, new car sales saw a year-on-year rise of 7.7% in quarter 2 FY '26, while our Endurance total income growth was significantly higher at 32.5%, with definitely consolidation. If we remove the impact of Stöferle consolidation as well as the tooling sales our total income grew by 7.8%. In quarter 2 FY '26 industry volumes, there was a 17.4% share of battery electric vehicles, 10.2% for plug-in hybrids and 34.3% for hybrids in Europe. On the strategic growth front, we are pleased to share key updates. As you are aware, the central government had issued a draft guideline mandating ABS for all vehicles sold after 2025. We announced a capacity expansion increasing our ABC -- ABS capacity by 2.4 billion units per annum, which is a fivefold increase along with a significant increase in disc brake systems and break disc also. Our new ABS capacity of 2.4 million ABS per annum will be installed in 2 phases, with the first line of 1.2 million will be operational in quarter 1 FY '27 and the second line will be linked to the timing based on the final guidelines, which is expected in this month. Since ABS was already mandatory for more than 125 cc 2-wheelers, we expect much of the incremental demand to come from 125 cc or lower 2-wheelers with a single-channel ABS. For a dual-channel ABS SOP. 1 OEM will start SOP next month at the second OEM by January 2026. So the run rate of 640,000 UBS per annum capacity we have, will be reached in quarter 4 of this financial year. For the large increase in volumes of single-channel ABS, we are aligning our backward integration of steel blade hoses, valves and ECU assemblies. We also plan to reinsource part of the ECU printed circuit boards leased through our SMT line. We have started stable work for setting up our new plant for disc brake systems which includes the [indiscernible], Talliber, break disc and pray houses, where we expect SOP in quarter 2 FY '27. Here, we will produce 3 million disc brake assembly systems per annum and 4millibrake disks per annum -- this will be part of the total 7.6 million disk systems and 8.6 million brake disks at Endurance, which is planned at Endurance. This will help us not only to serve better our OEM customers in South India, like TBS, Yamaha and [indiscernible], as we'll be close to them, but also help create space for our new ATS expansion in our existing brakes plant at Chh. Sambhajinagar. As you are aware, we are also setting up a new integrated R&D facility for brakes, which will be double the size of the existing ones. The new R&D facility will be ready and commissioned by quarter 4 of this financial year and will completely integrate 2-wheeler breaks as well as the ABS R&Ds with space provision for 4-wheeler brake SMBs also. Here, we are also adding a great parameter measurement lab. We continue to position our new AURIC Shendra facility as a key point of critical machine castings for 4-wheeler and non-auto applications. We are therefore equipping this plant with highly sophisticated machining and finishing equipment. In the past, we have mentioned about orders from Marquee U.S. and U.K.-based OEMs and also orders from value for electric platforms of Mahindra. And now we have added Yazaki as a customer taking the total sales close to INR 388 crores per annum at peak. SOP for both the U.S. and U.K. OEMs will start in quarter 1 of FY '27, and we will reach peak sales in FY '28. The SOP for the AURIC Shendra plant is going to be in January 2026. At a new 2-wheeler alloy plant at AURIC Bidkin, the SOP has already started in October for Bajaj Auto, while supplies for Royal NPL will start in next month. and Suzuki alloy deals will start by the end of quarter 1 FY '27. This plant will have an annualized sales of more than INR 600 crores by quarter 2 of FY '27. As you are aware, the plant has an installed capacity of 3.6 million bills per annum, which has been entirely booked with orders from OEM clients. Our Chakan alloy wheel plant is also running with a capacity of 5.5 million wheels per annum. For our battery pack manufacturing facility near Pune, key imported machinery shall be installed by next month. SOP will be from January 2026 for a leading 2-wheeler OEM in India. Once this battery pack cylindrical line is installed, we are confident of getting back in pack business for other 2-wheeler and 3-wheeler programs. We will also focus on battery packs for high potential sectors like inverters, telecom and battery energy storage systems. With respect to the INR 300 -- INR 300 crores per annum business on from a leading 2-wheeler OEM, the [indiscernible] samples have been submitted in this quarter, which is in line with our SOP, which is planned in January 2026. In half 1 of this financial year, our only owned subsidiary, Maxwell, achieved a record turnover of INR 73 crores as against INR 70 crores in the full year of FY '25. We are now supplying battery management systems for scooters, 3-wheelers tractors, construction equipment for a European company as well as for telematics along with motor control units. Our strong R&D and innovation sale at Maxwell has helped us to optimize and value entity of the battery magnet system products across 2 wheelers, 3 wheelers and tractor segments. We are also focusing now on a high-voltage battery management system for 4 wheelers and e-buses. Respective season demand was met by products rolling out of a highly owned automated surface-mounted technology line at Chh. Sambhajinagar, where we have now a capacity of 44,000 battery management systems per month. We will be adding another 44,000 better margin systems per month on the second assembly line by March 2026. In half 1 FY '26, at [indiscernible], we have got INR 21 crores of new business which has taken the total cumulative orders run to INR 209 crores per annum, which will peak in quarter 3 of FY '27. The orders won are for 2-wheelers, rickshaws, e-bikes electrical construction equipment and for airline buggies. Create Natural have now a strong pipeline of RFPs of INR 137 crores. We are the clear market leader in inverted front forks, and this business has grown steadily over the years with rising demand from multiple OEM customers. We have started supply of inverted front forks and mono shocks to TVS, where the front fork has been upgraded with adjustable features and with both side cartridge systems. The SOP for another OEM Hero MotoCorp is planned within this financial year, while SOP for a leading Chinese 2-wheeler OEM is expected to start in quarter 1 of FY '27. This will take the total number of OEMs using our inverted front forks to 6. Our overseas OEM client, ATM, has also started increasing schedules for inverted front forks, which should cross a total of 650,000 inverted front fork sales in this financial year. As you are aware, our aluminum forging business, which has a technical collaboration with FGM in Italy, started as a backward integration for supplying aluminum forged axle clamps for our inverted front forks. This large inverted front fork growing business is a captive use opportunity for our aluminum forging axle clamps. We already have 4 aluminum forging presses, which we will move to a new forging facility in quarter 1 of FY '27, along with the fifth aluminum forging press, which has already been ordered. For aluminum forging business, we have now won export orders of INR 5 crores per annum for new parts from a German OEM. SOP is planned in quarter 1 FY '28. As you are aware, we have orders for aluminum forging from Jaguar LandRover of INR 27 crores per annum, which business will start in quarter 4 of this financial year. We have also won aluminum forging orders from Royal Enfield of INR 12 crores per annum with SOP in quarter 1 FY '27. Our line of sight for aluminum forging business next year is around INR 140 crores. Sale of the first set of containers carrying export consignment of solar dampers took place in quarter 2. We are building a new infrastructure in our Sanand plant in Gujarat to cater to the large volume orders for these solar dampers. This business value won from a Spanish OEM is INR 200 crores, which will be executed by FY '27. There is a tremendous opportunity to increase this business. We are in the process of finalizing business with another global client. In quarter 2, we started supplying also of our assistance slip clutches to Royal Elpis and Kawasaki, introducing Atlas technology to the Indian market. SOP for Bajaj Auto is expected in the next quarter. As mentioned earlier, we have started on vehicle testing for our first 4-wheel Driveshaft order. We expect to commence SOP in quarter 4 FY '26 -- in view of multiple 3-wheeler orders across 5 OEMs and expected growth in the 4-wheeler business, we plan to set up a separate 4-wheeler dry shop SME line during this quarter. As informed in the previous call, we completed the acquisition of a 60% stake in Stöferle entities in Germany in the beginning of quarter 1 of this financial year with a line of sight of acquiring the remaining 40% in 5 years. Stöferle has an annual turnover of approximately EUR 80 million from April 2025, Stöferle financials are consolidated in the Endurance Group financials. We had mentioned earlier that under the Maharaj PSI 2019 scheme. We received an eligibility certificate of INR 600 crores for CapEx incurred to September 2025. Under this 2019 scale, we will now apply for an additional eligibility certificate of CapEx up to full FY 2026. Based on INR 66 crores certified by the authorities we have recorded a PSI incentive of INR 33 crores in quarter 1 and INR 37 crores in quarter 2 of this financial year. You will recall that we have got almost all our amounts totaling INR 446 crores under the PSI 2030 scheme and have collected cash to the tune of INR 350 crores. Let me now give you a gist of orders won during half 1 of this financial year. Please note that the business value from new orders are without including orders from Bajaj Auto. Overall order win in the half on FY '26 in India business was INR 909 crores per annum, of which INR 903.8 crores is new business. This includes the new business of INR 300 crores per annum for the battery pack at [indiscernible] plant and INR 21 crores new order of BMS at Maxwell. Our 4-wheeler business win in half 1 FY '26 is INR 355.8 crores, which is 61% of the total business win won this year. This includes INR 103 crores of EV casting business for a leading U.S. EV OEM and INR 146 crores aluminum casting orders from Hyundai and Kia Motors. SOP is in FY '27, which is next year. We've also won the portal energies for the scooters, the alloy wheel business were INR 31 crores with a 100% share of business for the new upcoming plant at [indiscernible] at Chh. Sambhajinagar. Cumulative India business orders for the EV segment till date stands at INR 1,012 crores annum and with Bajaj Auto disclosure is INR 1,195 crores per annum. So the total orders won since FY '22 is INR 4,671 crores per annum out of which INR 3,953 crores is new business. We expect INR 3,500 crores per annum out of this to peak in FY '28. We have a total of INR 4,209 crores worth of RSUs in hand. We expect to win both INR 1,500 crores of business in the next 12 to 18 months. In our Europe business, we have booked orders worth EUR 12.7 million during half 1. These are orders for machine casting from the Volkswagen Group, machining orders from Stöferle and EV component orders for a specialty plastics unit in [indiscernible]. The aftermarket is a strategic priority for us. We have set ambitious growth goals till 2030. We are focusing on secondary demand generation with retailers and mechanics for the domestic business. We have appointed a new domestic head and value-add products head for the bought out products we buy. We have developed discrete actions plans for 78 district clusters and defined unique value propositions for 39 countries. We're the first in our industry to launch a global rewards program, which is a tiered loyalty program for our channel partners. We're also driving a holistic development program to build capability of our sales team and to empower them with the right tools and skills. Coming to our financial performance. The information has been uploaded at the stock exchanges last evening, along with our presentation explaining the numbers. I will, however, highlight some key numbers. During quarter 2 FY '26, the company recorded a stand-alone total income of INR 2,692.2 crores on a year-on-year growth of 16.2% from INR 2,317.1 crores in the previous year. The EBITDA grew 6.3% from INR 316. 1 crores to to INR 335.9 crores, with a margin at 12.5%. The PAT grew 1.5% from INR 184.8 crores to INR 187.6 crores. the EBITDA drop of 1.16% on total income is largely contributed by raw material cost increase led by aluminum alloy, which forms 55% of the total raw material purchases. Around INR 10 crores is due to investment in people for future business growth in the areas of strategy, R&D, aftermarket and [indiscernible]. A further around INR 10 crores is in 2 special projects, which are for the aftermarket profitable growth and the sourcing savings with a leading global consulting firm which is an investment of profitable growth as well as cost control, and this will continue until quarter 4 of this financial year. In quarter 2 FY '26, our consolidated total income grew 22.6% over quarter 2 of last year from INR 2,939 crores to INR 3,603.8 crores. The EBITDA grew 21.9% to INR 408.5 crores to INR 497.8 crores. Our margin was at 13.8%. The PAT grew 12% from INR 203 crores to INR 227.3 crores at 6.3% PAT margin. With diversification and business growth, our HR department continues to play a key role as an enabler in shaping the business outcomes. Our focus remains on strategic workforce planning and talent ramp-up with emphasis on strengthening the mid-management layer to build a balanced organizational pyramid. AHR digitization has been actively leveraged to enhance efficiency and improve ease of business. To build future-ready capabilities, we have also launched the LEGS, which is a learn, earn, grow and succeed program with a customized scale development program for a blue collar employees. Alongside, we continue to strengthen our leadership and capability building agenda through multiple flagship programs such as the Endurance leadership program. On the sustainability front, we made significant progress this year towards our ambitious goals by FY '30. We achieved a 48% carbon-neutral percentage we lowered specific electrical and thermal energy as well as specific water consumption, while water recycling and hazardous waste recycling, both stand at 98% each. We also enhanced our renewable power share from 23% in FY '24 to 25% in FY '25 and now we have increased it in quarter 2 of this financial year to 28% through expanded rooftop solar and wind power agreements. It also contributed 300,000 kale of water through water augmentation projects. CRISIL has increased our ESG rating for FY '24 to 59%, up from 56% in FY '23. While another agency, SES has increased our rating to 74%, up from 68% in the previous year. [indiscernible] plant has been awarded the prestigious CII Green code Gold rating. At Endurance, we see CSR as a way to create real and lasting impact. Our approach is centered on lowering in equity, one community, one child, one individual at a time. This is how we create impact that endures well beyond the tenor or scope or CSR work we are doing. I'm pleased to share that our CSR arm, [indiscernible] has transformed 61 schools with solar energy and hygiene-based focused facilities, enhancing attendance as well as outcomes, while training over 900 adolescent girls in health and skills. With sustainable agriculture training, our pharma empowerment program has benefited over 4,900 people and ECO, our votes training center at Chh. Sambhajinagar has been parted training to over 2,300 youth, securing over 85% employment. Our health work has reached 42 villages, serving 19,000 people and we have built 2,300 toilets to improve sanitation. Our [indiscernible] program 2 has been successful, providing treatment to 43,000 animals in 47 villages. This quarter, we have started work on the biggest gas Forest project covering 25 acres land with 2.5 lakh plants plantations. I'm happy to inform you that we have won the quality excellence award from Tata Motors at their annual supply Conference in September 2025. I'm also happy to inform you that in October this year, our Endurance overseas plants supplying to Stellantis Group was recognized as a top supplier in the global supplier awards 2025. Now with this open remarks, I would now like to invite questions from all of you. Thank you.

[Operator Instructions] The first question is from the line of Manish Ostwal from Nirmal Bang Sector Private Limited.

And I have a question on the Slide #12 of the presentation. The scooter segment has seen a decline of 4.4%. In the last quarter, there was a very strong growth. So any spillover effect? And can you comment on this line item, why there is a decline in this particular quarter?

Yes. I think this decline is mainly due to the decline of -- on the motorcycles and scooters. As you know, they've had a degrowth. I think that is the major reason for this. .

I mean industry volume is 12.4% in your presentation and your income growth is negative 4.4%. .

Yes. So the reason for that is that HMSI is the second largest OEM customer. When they get impacted, we also get impacted. So that's the main reason. So obviously, the previous financial year when they really grew, we did very well. So it does have an impact because as you know, HMSI is a market leader for scooters.

The next question is from the line of Aditya Jhawar from Investec. .

Congrats on a resilient quarter. My first question is on the stand-alone business India business, where we saw a Y-o-Y basis margin compression. If you can explain that if you can quantify what could be the impact of aluminum pass-through? And what would be the other variables to drive this Y-o-Y margin compression? .

Yes, I will request Raja Gopal Sastry, Group CFO to answer this. .

Aditya, thanks for this question. So we did get the flavor of that when the Managing Director spoke -- so we did have a compression in margin, and we are trying to compare that with our sales product on product sales, and that is close to a 1.36% increase in material costs. And this is coming predominantly about 35% of that or 40% of that is coming from aluminum increase. And then we have seen a few other topics where strategically we have been spending some -- consuming some material for our R&D projects because we are getting a lot of suspension orders and also we are getting ready for the upcoming legislation. And there have been some seasonal effects where generally, we have this benefits in terms of turnout discount. And in the last year, in the same quarter, we had in the first half. This year, they have been moved to the second half of the year. So there have been some seasonality effects. In effect, I would say that close to 14%, 15% of that is from the commodity side. Some part of it is the additional consumption due for our R&D projects, and some of it is the seasonality aspect of some onetime effects in the last year same quarter and some of them which have been postponed to the upcoming quarters in this year. So this is largely the main reason. And the other aspect is, which was also mentioned by the Managing Director, in his opening remarks, this is the employee cost. So we have spent a bit on the employee cost for strategic reasons, and this will have a gestation effect -- gestation impact, where all these additional people in the sourcing is the strategic functions, in the R&D functions, which are important for our upcoming growth plans. And the third one is on the special project in other expenses, we did spend a bit for the consultant cost and associated travel and other deployment cost of the strategy to reduce the material cost and also to increase the aftermarket sales. And this again, this would can the next 2 quarters at least. So we are seeing the impact of some of the initiatives which we are taking for future growth and also on the future cost competitive and that is impacted this quarter.

Yes. That's good to know. So do we expect that in next financial year, we'll be back to historical margin trajectory for the standalone business? Is it fair to assume that some of these headwinds might no longer be get. .

Yes. So we are very, very focused on that, and we'll put all our efforts to improve the product mix also. And so that's clearly our target as we go forward. As we believe in only profitable growth, but I think there's no material cost increase and these 2 special projects as well as our investment in people for the future was very, very important for us. So here, we don't look at just the margin percentage, we look at the future of the company. And that's very, very important for us going forward. .

And next question is on our ABS expansion plan. So -- where are we in terms of the -- if you can remind us of all the expansion plans and incremental discussion with customer, what kind of time lines you are anticipating for the regulation to get implemented? Just a quick update on EBS. .

So right now, we have a capacity of 640,000, which I said will reach in quarter 4 based on the line of sight we have on schedules from our customers by quarter 4 of this year. We have ordered a 1.2 million capacity ABS line, which will be coming, which we'll install by April, what I would say, quarter 1 of next financial year. On this line, depending on the guidelines. Of course, we believe there was a meeting which took place, but it will not be good for me to speculate anything on this call. So we expect the guidelines to come in this month. . And based on that, looking at the lead time, which is there to -- I mean, implement these new guidelines, based on that, I think the line which we have ordered the capacity -- I mean, use on that will depend on that. But today, definitely, we have a line of sight to use that line, but we'll have to see that what is the time line, which comes under this new guideline. And so -- and the second 1.2 million lives we will order based on this guideline, which we get in this month. So 2.4 million, we were very clear to place the orders. after we got the draft guidelines, so 1.2 million ordered already beyond 640,000 and 1.2 million we will wait for the new pipeline. But we are talking to all the OEMs on the ABS, and there are not many players. So we are very, very optimistic of this new business for sure, going forward.

Okay. The next question is on the 4-wheeler suspension business. Has there been any discussion with customers? And what is the initial sense we are getting on the 4-wheeler suspension side? .

Yes. I will request Mr. Rajendra Abhange, our Director and COO, to speak on this. .

Yes. Thanks for this question, Aditya. So you already know, we have made some inroads into 4-wheeler proprietary products. It's been already spoken in last couple of investor meetings. Suspension is very much on our cards, and we are very close to getting into one of the OEMs now. As you know, it's a technology product. and OEMs will only take it when you do your competency. We are very close to getting into one OEM, major leading on India. The second well is also in the queue. So as we get closer to it and we get a letter of intent you will anyway come to know about it. But there is -- there can be an exciting news in the near future. .

That's good to know. And my next question is for Massimo. If you can give outlook for the European business, medium-term outlook, and any impact of this Expedia chip issue that they are anticipating on the production line? .

Okay. So the situation in Europe, the quarter growth, with an increase of 7.7% in terms of volume, in terms of registration. But if you analyze the production, the production continues to go down. So it means that in this moment, the market is growing only because they are reducing stock with important discount. The expectation for the future months is to maintain more or less the stability in this situation as Endurance, we are performing online compared to the market with an increase of 7.8% without Stöferle compared to the previous year. And this is not stock, as you can imagine, but is more production at the previous year, and we continue to be more or less optimistic for the future 2 quarters because the expectation is to maintain stability. Everybody in Europe, we are awaiting the position of the government or the new rules of the green deal in June 2026. And from a point of view, till the date, the situation will have been more or less stable. Speaking about the situation of the shortage of components and so on in this moment, no particular issue from our customers. We received an official position already by the [indiscernible] and also Volkswagen Group, more or less 50% of our customer portfolio. And so at this moment, we don't see a particular problem. .

That's good to know. That's it for my side. .

[Operator Instructions] Next question is from the line of Viraj from Sinton.

Just a couple of questions for don't about getting some on the. is it more point of new technology areas like active active? Or to the March tax side. So I the question there if you see the right now

Mr. Viraj, can you please speak in the handset mode?

Yes, I'm already on handset .

Sorry for that, because I don't understand your question, .

I can repeat. What technology we are setting for the business in cosuspension -- and second is the corporate entity is quite high, and there are players who are coating business and mid-digit margins or no margin. So how should we understand profitability in this segment for us?

And with competition cutting lower prices, how do we see the profitability in this business? .

Yes. Let me tell you, the question is very good. It's a tough business to get into. Let me honestly admit that. We are a late entrant, rather, we have not entered the 4-wheeler suspension as yet. There are already established players in the market. But as you know, we always strive to give best value to our customers. By way of the frugal technology, as we told you in the last time, we already have a technology partner from Korea, who is very formidable. And we feel their technology will be highly suited for the Indian smaller cars, especially the small-sized cars. And we will definitely bring some value. Our engineering is also equally strong in suspension. As you know, we are market [indiscernible] so there will be a lot of horizontal deployment from the learning of 2-wheelers. And we are pretty sure that we will crack into certain major markets, major customers in the passenger vehicle and also made decent kind of the profitable proposition to the company. So we are confident about it. .

Okay. Second question is on the over super you talked about [indiscernible]. What will the market there just to get a perspective and what is the adoption we are seeing in the industry? .

Yes. So I don't -- to be honest, I would not know the market share. But definitely, it is -- I mean, it is a high majority, I can say that. I don't have that, but I know onetime that in front [indiscernible], we are, I think, at 43% of the market -- and in shock absorbers, we have 37% of the market. This is a quarter 2 -- sorry, 44% in quarter . But the innovative for Would be higher. So inverted cost is definitely higher because there are very few players in this. We had the first mover advantage with our technology with KTM in 2008. And like I said, we are also -- one is we have Bajaj Auto, of course, also increasing its requirement as well as we are seeing -- Also, I said we are starting with Motor pop as well as with the Chinese OEM in quarter 1 FY '27. And we are in touch with almost every OEM on this inverted front .

Last question on the solar main talked about us into further new larger OEMs. Any color you can give sales. There a discussion and how big the business can be for us in like say, 3 to 4 years? .

Okay. So this can be replied by. .

Okay. So this is relatively a new addition to our portfolio. And as 2 or 3 investor calls before, we already declared that we are going to get into it. And the good news is we already started bulk supplies to this market as 1 of the fastest entrant into this segment. We know there is a competition in this segment as well. But I think the way we have gotten into it has been well appreciated by the customer, the confidence has gone up. So we will grow this business very rapidly. This is point number one. Last time I told the market potential is huge, without telling any -- floating any number, I can tell you it can be a very significant part of our total business. It all depends upon how well we are able to garner this customer suppose. And there are multiples tiers in this. One is already is a Spanish company who is already with us. Now we are going to get another 2 companies. We are in deep discussions. If that happens, the size of business business could be very significant.