Endurance Technologies Limited (ENDURANCE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '20 Results Conference Call of Endurance Technologies Limited, hosted by Axis Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital. Thank you, and over to you, sir.

Thank you so much. Good morning, everyone. Welcome to Q4 FY '20 Result Conference Call of Endurance Technologies. From the management team, we have with us Mr. Anurang Jain, Managing Director; Mr. Ramesh Gehaney, Director and COO; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Satrajit Ray, Director and Group CFO; and Mr. Raj Mundra, Treasurer and Head, Investor Relations. I will now hand over the call to Mr. Jain for his opening remarks, post which we can have Q&A. Over to you, Mr. Anurang.

Thank you very much. Good morning to everybody. I'm Anurang Jain, Managing Director of Endurance. I would like to share details of how we have done in quarter 4 and on the whole financial year of 2019/'20. In India, in the year 2019/'20 as per the CM data, the 2-wheeler industry sales degrew by 14.4% compared to the previous financial year. Scooters degrew by 16.4% and motorcycles degrew by 12.8%. The automotive industry in India had a degrowth of 14.8%. The 2-wheeler sector saw a degrowth for the first time since the global financial crisis in 2008. In Europe, in 2019/'20, there was a decline of 5% in the European Union automotive sales. Our European sales had a degrowth of 2.7% in euro terms, partly also due to the fall in aluminum alloy prices. On the financials, I will briefly talk to you first about the fourth quarter of 2019/'20, and then I'll take you through the financial year of 2019/'20. During quarter 4 as compared to previous year's same quarter, our consolidated total net income degrew by 15.3% from INR 19,060 million to INR 16,142 million. Consolidated EBITDA degrew by 22.7% to INR 3,302 million to INR 2,553 million. Consolidated EBITDA margin was at 15.8%. The profit after-tax degrew by 28.1% from the previous year and was at INR 1,068 million at 6.6%. During quarter 4, our stand-alone total income degrew by 15.3% from INR 13,449 million to INR 11,390 million. Stand-alone EBITDA degrew by 28.9% from INR 2,120 million to INR 1,509 million, with an EBITDA margin of 13.2%. Stand-alone profit after-tax degrew by 34.8% and was INR 719 million at 6.3%. I will now brief you on the financials for the financial year 2019/'20. During the financial year 2019/'20 as compared to the previous financial year, our consolidated total income degrew by 7.6% from INR 75,375 million to INR 69,653 million. Consolidated EBITDA grew by 2% from INR 11,568 million to INR 11,784 million. The consolidated EBITDA margin was at 16.9%. The profit after-tax grew 14.2% and was INR 5,655 million at 8.1% after considering the Maharashtra state incentive for megaproject amount of INR 874 million. The consolidated ROCE was at 21.7% and ROE at 20.3%. For the first time, there was no consolidated net debt, and the company had positive cash of INR 361 million. The asset turnover was 1.98x. During the financial year 2019/'20, our stand-alone total income degrew by 8.4% from INR 54,337 million to INR 49,748 million. Stand-alone EBITDA grew by 4% from INR 7,482 million to INR 7,785 million, with an EBITDA margin of 15.6%. The profit after-tax grew 19.5% and was INR 4,277 million at 8.6% after considering the Maharashtra state incentive for megaproject amount of INR 874 million. The stand-alone ROCE was at 24.3% and ROE at 19.5%. There was no net debt, as stand-alone operations had positive cash of INR 100 million. The asset turnover was 2.09x. We would like to mention that Endurance is focused in both its Indian and our European operations for a profitable growth and on growing higher than the industry growth. The detailed financials are available with the stock exchanges and on the Endurance website. I would now also like to share certain key points for the financial year 2019/'20. 71.4% of our consolidated total net income, including other income, came from Indian operations and the balance 28.6% came from our European operations. In India, INR 5,860 million of new business was one from OEMs, which included HMSI, Royal Enfield, Hero MotoCorp, Hyundai, Kia and our new OEM client, TVS. 50% of this business will be starting from quarter 2 of this financial year. I would like to mention that in addition, we have INR 12,770 million worth of request for quotes from OEMs, which are being discussed. I would also like to mention that Endurance is focusing on a more value-add and profitable product mix in its future business, which includes 200cc plus motorcycle brakes and clutch assemblies with help of our acquisitions of Adler and Grimeca Italy in the last 3 months; paper-based clutch assemblies, replacing the cork-based clutch assemblies for motorcycles; continuous variable transmissions on the automatic clutch for scooters; antilock brake system, or ABS, for 150cc plus motorcycles; 200cc plus motorcycle inverted front forks and adjustable rear mono shock absorbers and front forks and shock absorbers for electric 2- and 3-wheelers, this is with the help of our collaboration partners, KTM Components; and fully finished machine castings as compared to semi-finished castings for 2- and 3- and 4-wheelers, which we do right now. As far as Europe is concerned, in 2019/'20, we have acquired EUR 42.66 million of new business with Audi, BMW, Porsche, Volkswagen, Fiat Chrysler and Maserati, including for electric and hybrid cars. I would specifically like to mention -- point out that in the last 2 years, EUR 110 million of business has been won for electric and hybrid cars, which has started in this year and will reach peak volumes in 2023. Therefore, 45% of our existing total European business value has already been won by us. Out of this EUR 110 million value, EUR 30 million business won is for electric cars for Audi and Porsche and EUR 80 million of business won is for hybrid cars for Volkswagen, Daimler, BMW, Fiat Chrysler and Maserati. Also, a further EUR 45 million business is being discussed with Volkswagen for the electric and hybrid cars. As mentioned earlier, our overseas company, Endurance Overseas Srl, has in the last 3 months, acquired 99% stake of the 2-wheeler clutch company, Adler Spa and 100% stake of the 2-wheeler brake company, Grimeca. Both these acquisitions include all know-how patents, brand and trademarks, which will help us mainly in our Indian operations but also the European operations to get new business for 200cc plus motorcycle clutch assemblies and breaks. I want to inform you that both Adler and Grimeca companies have been our technology partners in the past and an important part of our journey of growing our clutch and brakes business in India in the last 15 to 17 years. I would also like to point out that Endurance will continue to focus on technology-oriented and new product organic and inorganic growth. I would also like to mention that Endurance has also entered 2 backward integration product areas, which are import substitutes also. First is the aluminum forging axle clamps required for inverted front forks. Endurance has entered into a technical collaboration with FGM in Italy, and production will start at our Aurangabad plant this October. The second product are wire-braided hoses, which are required for ABS brakes. We will start the production of these hoses this August. Both these of our projects will help us in our future profitable growth. Our aftermarket business in India was almost 6% of our net sales in the financial year 2019/'20. The aftermarket sales grew by 10% from INR 2,707 million in the previous financial year to INR 2,977 million in 2019/'20. As you all know, the COVID-19 pandemic gave rise to a very challenging and difficult situation. Our plant operations in India and Europe are suspended, ranging from 30 to 50 days due to lockdowns. At Endurance, we took this also as an opportunity to become leaner, and we have focused to lower our monthly fixed cost amounts, variable cost percentage to sales in each of our plants, direct, indirect material costs and lowered also our capital expenditure. This cost containment is helping us as we are restarting and getting operations back to the pre-COVID-19 normal sales. Our company has a strong balance sheet with a consolidated net worth of INR 30 billion and 0 net debt as on March 31, 2020. I would like to inform you that on 29th May 2020, CRISIL has reaffirmed our credit rating of long term as AA with positive outlook and short term with a high rating at A1+. I also wanted to update you that our new Vallam plant near Chennai for supplying machined aluminum castings to Hyundai, Kia and Royal Enfield will start operations this October. We are also targeting to supply our ABS brake systems in quarter 4 of this financial year. With these opening remarks, I would like to invite questions from all of you. Thank you very much.

[Operator Instructions] The first question is from the line of Ashutosh Tiwari from Equirus Securities.

Congratulations on decent set of numbers considering environment. And sir, my first question is that in this current environment, we probably are -- a few companies which are net cash company and we're probably in a better position to also capitalize to again market share in different segments. So what is your strategy and the product segment that we are looking into in terms of gaining share in the products basically? And also, some light on ABS and 2-wheeler alloy wheel segments where we can do better? And what's your current status over there?

See, as you know, fortunately, 78% of our India sales is mainly for the 2-wheeler industry. And if you see from -- even from quarter 3 to quarter 4, if you see our share of business in front forks, clutch assemblies, brake systems has increased. In fact, our front fork has gone up from 31% to 40% in quarter 4. The reason being the product being changed for a company like Honda, which I've been saying that scooter front fork replace the shock absorbers, where we have an order of 2.86 million, which would now reach -- it had already started reaching its peak in February, March. But with COVID-19, it has been postponed. But they will be, I think -- starting in second half, they will be, I think, hopefully, next to normal. As far as the product mix is concerned, see, we have always focused, like I mentioned, the list of items. We are getting into paper-based clutch assembly, 200cc plus motorcycle brakes, clutches, which we are not largely there right now. We are into 200cc -- already, we are supplying inverted front fork and shock absorbers. So these bikes are increasing, not only with Bajaj or KTM, it is also increasing with Honda and with other OEMs in India. So we want to focus on the 200cc plus market for brakes, for clutches, for front fork shock absorbers, also going to fully machine castings for 2- and 3-wheelers and for transmission, go more for the paper clutch assemblies. And as we speak, even the combined braking system, we are increasing our customer base by starting supplies to TVS and Honda in the next quarter. And ABS, like I said, our target is to start in quarter 4. So these are our strategies which we are taking forward. And we have already, in the last 3 years, almost spent INR 10,000 million on CapEx, and we don't have to do much CapEx in this year. The CapEx will be not more than, I think, say, INR 1,500 million this year. And that is 60% is for expansion because of some new projects. I told you about the backward integrated projects of wire-braided hoses and forgings and some other project -- our new plant in Vallam, which is coming up for Hyundai, Kia and Royal Enfield. So we're in a very strong position, I would say. And I think the product mix is going to be the kind of products which I mentioned, which will give us much more value-add, higher profit margins. Even the backward integration, which our import substitutes, will help us to increase our profit margins. And having said this, I would also like to add that things are -- in fact, things are looking much better than expected going forward. Somehow, I think the 2-wheeler industry is, I think, doing much better than what we expected. And we hope for a very good quarter, too, compared to what we had expected, looking at the schedules we are getting from all the OEMs. So I think we're in a good space being 78% of our India sales for the 2-wheeler industry. So I think a quicker going back to normal -- of course, I can't read the future, but quarter 2 is looking much better than what we expected. And with the new product mix, I think, I'm quite optimistic.

So in like June and July, what kind of production level we are looking at in terms of pre-COVID?

See, in June, we will be at about, in India, 50% to 55%. Overseas, I think Mr. Venuti can speak later on that. And of course, in -- I mean, in July, we -- I mean, we'll see a good increase. Don't ask me for a figure. I can only say -- tell you it's much better than expected.

The next question is from the line of Ronak Sarda from Systematix.

Congrats on good set of numbers. Sir, first question, just a clarification on the financials. We have seen some reversal of government grant. If Mr. Ray can specify where this has been adjusted? Is it part of other income?

Okay. So I will request Mr. Ray to answer this question.

Yes. So you know that we book megaproject incentive, which have been -- which we've explained over the last 4 quarters, that's part of Maharashtra state government incentive. So during the current year, over the first 3 quarters, we had booked megaproject incentive, amounting to INR 94.4 crores. But in quarter 4, we came to know that electricity duty benefit for our Aurangabad plants forms a part of this megaproject incentive. So then we were obliged to reverse this electricity duty benefit right from the start of the incentive till March '20. That amount came to INR 70 million. So that's the reversal that you're finding. And this is contained in the revenue from operations, not in other income.

Okay. So it is reduced from revenue from operations directly?

That's right.

Okay. Sir, first question then on cost rationalization efforts, which you've undertaken during the last few months. If you can highlight what measures we have taken? And what kind of benefit which we can see over the next 12 months as the revenues ramp up?

See, basically, we are focused on fixed cost amounts. I mean, whether -- it's all our corporate expenses. It could be professional fees, could be travel expenses. It could be many, many OpEx expenses. Also, we have tried -- in fact, we've also frozen the increments for this year, which is part of the fixed costs. So what we have done is [Foreign Language] in this year, we have tried to lower our fixed cost amounts. So when -- as we are going back to normal, these fixed costs will increase, but they will not go back to the levels of March '20, number one. Second is on the variable cost percentage. If you see, we focus on each and every expense of the variable costs. These are basically manufacturing operational costs. And we have lowered the percentage by 10% of that cost as a target to all the plants. Some have already achieved it when we restarted in May. And this is something which we want to sustain. Because what happens when things are going well, you don't look at so minutely many of the expenses which you do in a situation which we are experiencing. So we're going to do every detail. Thirdly, we have renegotiated our material cost, both the indirect materials, your consumables, et cetera, spare parts, for machines, I mean, all the indirect and also your direct by going to best cost vendors, doing some clean sheet costing, again, getting alternative vendors in. So a lot of work has gone, I would say, in the 75 days of lockdown where we were at home. And also the CapEx, we have reviewed, and we have brought down to, like I said, INR 1,500 million. So a lot of work has gone in this period to become a leaner company. And of course, I'm talking about India. Mr. Venuti will throw light more on the overseas operations. But the whole idea is that as we go back to normal, we don't lose some of the edge, which we have got, which -- kind of effort, which I would say, our whole team at Endurance has made in this lockdown period.

Sure. Sure. Okay. Sir, second question then on the CapEx. You highlighted the number. I mean, if you look at it, the lowest number in last 3 years where we have gone through a pretty large CapEx cycle and to congratulate you, we have -- I mean, now like 11 years in a row, we have generated [ SPS ]. So sir, how -- what's our cash deployment strategy right now? I mean, are we looking for new products? Or will we increase our dividend payout? How do should we see the net cash generation now?

See, of course, it will also depend on the sales, which takes place. Like I said, it's quite encouraging the kind of figures we are getting from July onwards. And -- but only thing is right now, our focus is more of the back end on cost controls, including the CapEx controls. And at the same time, we are definitely looking at new inorganic and organic growth opportunities. Even a time like this, in our overseas operation, we acquired both Adler and Grimeca who have been our partners. In fact, Adler since 2001 who was the major technology partner for our clutch assemblies and CVTs for scooters. And Grimeca was -- you may not know was our partner from 2004 to 2009. We started the brakes business with their support. There were not many companies giving brake assembly technology. And it's a great feeling to own these companies now in Endurance. And we have not got it at a very high value. So the question is that we are looking at -- we are being sensible. Of course, our focus is to safeguard cash, especially till we get back to normal, okay? We are cautious. We don't want to lose our edge period in the last 10 years. So we are going to spend in a sensible way, whatever is required. We have got a stable cost, CapEx and look at opportunities which makes sense for us for the future, which we feel can add value for the future is worth spending right now. But just spending for the sake of spending to increase our sales, we are not going to do.

Sure. Sure. Sir, and final question on the Hyundai and Kia business. I think you mentioned the plant would start in October. Is there a delay in the start of...

Yes, yes, yes. There is a delay from July. It is going to be in October. Because of the lockdown and Koreans also have their standards. They've also gone through COVID-19, a second wave has come up there. So -- and plus, I think the lockdowns also. I mean, the guidelines even in India. Even Tamil Nadu announced lockdown on 19th June also in industrial estates. Now of course, it's back to -- now they have taken back their order for the industrial estates. So Hyundai, Kia, Royal Enfield are back in production. So I would say it's more true for the COVID-19 that there has been a postponement. But from what we know, Hyundai, Kia, Royal Enfield are fully committed to do these volumes and gain their market share in India. And we are starting in October.

But my question was, are we supplying right now from any other plants or...

Yes, yes, we're already supplying from our existing plant in Chennai. Already, we are supplying. So the growth is going to come in the new plant, which will start in October and not July.

Okay. Sure. But the ramp-up is already happening for the orders in...

Yes, yes, the ramp-up is already happening in our existing plant. The ramp-up actually started late last year.

[Operator Instructions] The next question is from the line of Aditya Jhawar from Investec.

Aditya Jhawar from Investec, your line is unmuted. Please go ahead with your question. Aditya Jhawar from Investec, please unmute yourself from your handset and ask your question. Due to no response, we'll move to the next question. The next question is from the line of Nitin Arora from Axis Mutual Fund.

My first question is on the Europe overseas margin. We saw a very strong performance. And though just to put it in the context, we also saw the decline in the gross margins and so in the employee cost and the other expenditure, I'm talking about quarter-on-quarter. Can you explain what is this strong performance pertaining to? It is more of new project deliveries getting on higher margins? Or it's more of also led by in-sourcing versus outsourcing projects and deliveries? If you can throw some light on that? And just a direction on the margins?

I'll request Mr. Venuti to answer this. Massimo, please go ahead.

Yes. So in the last quarter 2019/'20, we have had an increase of EBITDA compared to the previous year in terms of percentage from 24% of the previous year to 22%. And this is due to the fact that we are producing different mix compared to the previous year. We are increasing an important way the business with Volkswagen with -- part with different a big value compared to the past. But in this quarter, there was also the impact due to the lockdown because starting from the first week of March, we closed 1 plant in Bione in Brescia, Endurance casting. So in the cost of material consumed, you see the reduction of stock. And so the percentage of cost of material is higher compared to the previous quarter due to this reduction of stock. The profitability is growing due to many factors. As I told you, the different mix with Volkswagen and also we started with the third line of the [indiscernible] for Volkswagen. In fact, also in the quarter, you will see an increase of depreciation of EUR 1 million because we closed 100% of the investment for this specific part. Another important impact in quarter was the reduction in the labor cost because as you can see that compared to the previous year, we have had an increase of percentage, but a reduction in the total value, due to the fact that we are starting with the outsourcing activity in the foundry. This is due to the fact that, as you can imagine, when you have a reduction of 60%, 70% of volume, it's more convenient to buy from the market if we have to work only 1 shift per day or 2, 3 shifts per week. And so this is an effect also of outsourcing policy that we are making in our plants.

This is very helpful. Just second question on the same geography. If you remove the way China has normalized in terms of their -- whatever it is the pent-up demand or the actual demand, U.K. opened late, but Europe also late got opened then U.S. So tell me, what's the sense you're getting from the OEMs in Europe and U.K.? So it's more of a lag, which can be -- which can really surprise the end market growth versus the China? So how the production scheduling there happening? And if you can talk about from your OEM perspective, that will be really helpful.

Okay. First of all, as you can see at the end of '19/'20, we have had an important reduction of export to United States into China due to the trade situation over the previous year. In fact, with the customer as BMW and Daimler, we lost more or less 20% of our turnover due to the fact that, as you know, they produce the SUV vehicle in the United States and they export from United States to China. Today, the situation after lockdown, frankly speaking, the situation is really tough because a lot of OEMs are trying to buy components from China because they started 1 month ago and when we were in lockdown. And so for sure, for the future 12 months from a point of view, there will be a lot of pressure on price due to the fact that in the European market, there are a lot of production capacity. At this moment, the level of saturation is more or less 40%, 50%. But from my point of view, this could be an opportunity for Endurance for many reasons. First of all, because unfortunately -- let me say, unfortunately, there are a lot of companies in financial problem this moment, there are a lot of companies in bankruptcy. So soon or later, the government will decide to close and to reduce the production capacity with this company. Because in this moment, there are no volume on the market in order to saturate 100% of the company. And so this could be an opportunity because we are receiving a lot of requests for several customers basically for the German customer because it is really stressed compared to the past, but in this moment, the main problem are in Germany. We are receiving a lot of requests in order to move business from this company with financial problem to new company. This is an opportunity because, for sure, we can increase the volume, but it's also an opportunity due to the fact that we can evaluate inorganic growth. Because in this moment, the governments are available to support the company if you are able to save the labor -- the people. Because, as you can imagine, in this moment, in Europe, the major problem is unemployment rate. In fact, all the governments in European markets, also in Italy and also in Germany, are put in pressure in order to avoid furlough. You can't fire people till -- in Italy, till the end of August. And those in Germany, they are supporting the company with an incentive, the contribution in order to pay the salary, but you can't reduce people. And so you can imagine if the company are not able to do the restructuring plan, the only way is to guarantee the volume. And the only way is to reduce the production capacity on the market. For this reason, I don't believe that these effect that we are receiving from China can create problem in terms of profitability for the next period of time. Also because the volume, as you have seen in the month of May, there was an increase of 12% compared to the previous year. The volume in China are growing and so soon or later, they will dedicate the production capacity for the internal market.

This is very helpful. Just the same question, just last question from my side for [Audio Gap] If you look at from a perspective of scheduling, like you said that June is 50% in terms of production scheduling, given what has happened both in the 2 -- in both 2-wheeler and passenger vehicles, the kind of spot we are seeing at the retail end, there's no -- the supply has been very constrained, do you see a scenario directionally that Q3 -- by Q3 end or, let's say, Q3 mid, we would be -- eventually from a production level from an OEM, we would be at a pre-COVID level? That's where the direction should -- we should look at it?

To be honest, I won't be surprised if it goes to the pre-COVID normal level in quarter 3. I won't be surprised the way things are looking up. But I'm always very cautious. I don't know whether there's pent-up demand, which is making this growth next few months, I don't know. But I know one thing that it's going to be a monsoon. And if the -- and the rural sector is almost 2/3 of the 2-wheeler market. Financing is no problem for the -- especially for 2-wheelers. And especially the lower-end 2-wheelers though -- even the higher end is doing quite well, I must say. But I think -- I'm very optimistic on the 2-wheelers, the way I'm seeing the plans. So to answer your question, I won't be surprised if we are back to normal in quarter 3.

The next question is from the line of Vimal Gohil from Union Asset Management.

Congratulations on a very good set of numbers in this environment. Sir, if you could just highlight how your key accounts have done? And by key accounts, I mean, Bajaj, RE, Honda, Yamaha and Hero? What is the growth that you have achieved in FY '20?

No. FY '20, in fact, in -- I think all the cases, there has been a degrowth because for the simple reason that as far as Bajaj is concerned, they have degrown, as you know, 6.8% in motorcycles and almost 15% in 3-wheelers. HMCL has degrown overall 18%. If you see HMCL, they've degrown 14.7%. TVS, of course, we've just started. So I will not count them. Yamaha has degrown 16%. So there has been no growth with anybody. And that's the reason why we have also degrown in India by, I think, by 8.3%. So going forward, looking at the new businesses and all, definitely, we have always maintained, we'll do better than industry. So we have done better than the industry when the 2-wheeler was down 12.8%, we have been down 8%, approximately. So that's all I can say for now.

Sir, would you be able to highlight what -- so what I meant was actually your -- whatever your revenue, how much has it degrown in these accounts? Would you be able to share that number?

No. See don't -- I do not normally share for each customer. It's not correct. Normally, I don't do it. But overall, you can see a degrowth. But I just gave you the figures of degrowth of each of these important OEMs for us. So just to let you know, we have not grown with anybody last year. We have degrown less than what they have degrown in production or sales. But we have also degrown. And that's why you see the overall degrowth.

Right. Right. Sir, my second question was on -- you highlighted the CapEx for India business, which will be INR 150 crores. What would be the same for your European business? How much is the CapEx expected there?

Euro business, I will request Massimo to speak on the European business.

Yes. So first of all, we closed the previous financial year with more or less EUR 35 million of investments in the last 12 months, of which EUR 22 million for Volkswagen Group and EUR 1.5 million for FCA and EUR 0.4 million for Daimler. Basically, the main investment was for Volkswagen. Regarding the 2020, 2021, we are trying to reduce the investment, and we will do only the ongoing activity plus specific investment for the new business acquired during the previous financial year. As Mr. Jain told you, in the last couple of months, we acquired more or less EUR 42 million of new business. This business will start in 2022 and ready may will be in 2023. And for this reason, we have to start to implement the production capacity for Audi. We acquired with them a new project for electrical vehicle, with 860,000 parts per year, more or less EUR 15 million turnover. We have to install the production capacity within September 2024. So it means that there will be, for sure, an impact for the -- in this financial year. But in this moment, our target is, first of all, to reduce the fixed costs in order to reduce the breakeven point; and second, to reduce and to save our cash. At the end of March 2020 for the first time, we reached a surplus of cash. We closed with EUR 3 million, and we haven't net debt, and we want to try to make cash profit also in this financial year, even if the condition of the market is not so positive, but it's absolutely important to reduce and to maintain the EBITDA, but also to reduce the investment. And for this reason, we are trying to make synergy and to understand, as I told you before, it is more convenient to do activity of outsourcing compared to produce with inefficiency inside our clients.

Right.

Yes. Actually, I'm -- in fact, there's one clarity I wanted to give you. That's to your previous question, we did grow by almost 9% with Hero, and we grew about 40-odd percent with Hyundai, okay? Just to give that to you. And in fact, one more thing I'd just like to add that the -- as a share of our India business, HMSI has increased quite substantially compared to the previous year. So they are at now almost, I think, 13% compared to 8% in the previous year of our India business. And this is largely because of the scooter front fork shock absorber, which started in quarter 4, front fork replaced the shock absorbers and...

Right. Sir, if you could just highlight qualitatively then, how is RE and Yamaha are doing for you, qualitatively? I mean...

See -- no, they have been -- see, as far as RE -- RE and who else?

Yamaha.

Yes. So they have slightly gone down as a percentage of the overall business.

But you're still picking up share in terms of -- still is it in your content...

Yes, yes. See, because RE, we have started brakes in a big way. So RE, the brakes business will increase for them. And as far as HMCL is concerned, with the Halol plant, increasing the production for whom we have set up a factory for them in Halol. So that business will increase. And we hope to supply clutch and CBTs in future to them, which are at advanced stage. We tested. We have started this for them already for Hero MotoCorp. So according to us, we will -- we hope to grow, but as a percentage to total, it depends how much we grow in each. So I cannot tell you that figure. But if you talk about '19/'20, RE and Yamaha has slightly gone down and HMSI has gone up quite substantially.

Okay. Okay. And in HMSI, what led to the growth? Which product led to growth in Hero side?

Basically, the scooter front forks, which replaced the shock absorbers, almost 2.76 million per year. Of course, this started only in quarter 4. So they replaced the shock absorbers in the front, all the scooters -- most of the scooters. So that has what has led to this higher value-add. And also, we started the disc business with them.

Okay. So Honda and the Hyundai are doing particularly well for you?

Yes. So that is -- I'm saying, '19/'20, they have increased. But I'm not saying in '20/'21, others will not increase. I'm only saying, '19/'20, your question was specifically '19/'20. And earlier, I said that we had degrown this all, but with Hero and Hyundai, we have grown. And HMSI, the share of business has gone up as a total.

The next question is from the line of Niket Shah from Motilal Oswal Asset Management.

Congrats on a decent set of numbers in a challenging time. I think in your initial remarks, you mentioned that last year, you had won about INR 586 crore worth of new business and this year, you have inquiries of INR 1,270 crores. Is that number correct?

Yes. Yes. We have requested for quotes for INR 1,277 crores, INR 12,770 million, yes.

Sure. So sir, typically, what is the conversion rate that one should really think about? I'm just trying to understand that a time like COVID, does it...

One can safely take half that figure, half.

Right. So essentially means that a time like COVID, is there a situation where you're gaining substantial market share then because if you -- if I take half of that, it's still higher than last year, right? So that essentially fill the gap for the degrowth in the existing business. So essentially, in that sense, you might still end up with a kind of a growth assuming you normalize from the third quarter?

Yes. So of course, I mean that is our target to have a growth over last year looking at how things go. So definitely, look, we want to grow higher than last year from quarter 3, for sure.

Sure. Sure. And sir -- yes, sorry, go on.

But the business, which we are going to win this year, will only start most probably in the next financial year. The business which we've won last year, like I said, 50% will start from quarter 2 of this financial year.

Absolutely. Absolutely. That's encouraging. And sir, 1 final question is on the -- given the disruption in supply chain that we have seen across the board, any opportunity for getting inroads into the 4-wheeler category with the market leaders?

I think the biggest opportunity is with Hyundai and Kia. Tata Motors, we are taking a lot of business, but they are not doing too well. But Hyundai and Kia, I would say, in terms of aluminum machine casting, is the biggest opportunity, where INR 2,790 million of business we've already won last year for both Hyundai and Kia. So if you see in the 4-wheeler space, this is opportunity on the exports. We are hoping that GETRAG, which is a transmission marker for Ford, those volumes we're seeing increasing from next month onwards. And as we speak, we are looking at other OEMs for exports of machine castings. So as far as passenger car goes, which is today, only 6% of our India business, overseas is all passenger cars and commercial vehicles. But this will depend on -- this growth will depend on the opportunities we have on the casting space, I mean, the machine casting space, aluminum castings.

The next question is from the line of Priya Ranjan from Antique Limited.

Just...

Sorry to interrupt you, Mr. Ranjan, you're not very audible, sir. Can you please speak a bit louder or come closer to the phone?

Sure. Is it fine now?

This is better.

Yes, I can hear you.

Yes. So just a couple of things on, I mean, to say as a business, can you just reaffirm what is your China business in, say, Bajaj and RE at this point of time? I mean, in FY '20, if I say?

See, as far as Bajaj is concerned, if I see consolidated, it is at about 38%, okay? And as far as RE is concerned, I think it is consolidated, that figure, I'll just tell you. I'll give you. As far as RE is concerned, consolidated is at 6%.

Okay. And Hero, have we reached around 10%? Or how is it, I mean, it's...

No, no, Hero is a long way to go as we are going. Right now, it's low. It is about -- it's about 3%. I'm saying consolidated. These are consolidated numbers, looking into Europe. 28.5% is all overseas business.

Sure. Sure. Sure. And in Europe, I mean, similarly, I mean, around half of the business earlier used to be, say, Fiat Chrysler. How is it now? I mean, because we have gone significantly from VW.

Yes. So if you see Volkswagen Group, including Porsche and Audi, has become #1. So it's overtaken Fiat. Fiat, when we acquired the company, was at more than 70% of our business, Fiat Chrysler group, so now Volkswagen with Porsche and Audi is the highest, then it's Fiat Chrysler and then it's Daimler.

Okay. Okay. So how -- I mean what will be the European share of business between these 3?

See as far as the share of business, I would request Massimo to speak on that. But I think it was -- what I remember in Europe only, Volkswagen Group is about 28%, Fiat Chrysler is 27% and Daimler is at about 15.5% to 16% and the Case New Holland at 7% And PSA and all is about 4%. But the way we are getting orders from Volkswagen Group and Porsche, that will go much higher in future.

Okay. And given that -- I mean, this is on the European operation, given the way the German government has actually started giving incentive to more of electric and so and there has been some trend in the electrification post COVID in Europe because of whatever has happened and there has been some benefit from the government side as well. So do you see some risk of your old orders of, say, VW and all?

Okay. This, I'll request, Mr. Venuti to reply to this.

Okay. Yes. After the removal of lockdown and containment measure, the situation should gradually improve and some positive expectations are looking for the incentive that many governments, not only the German government are introducing, also in France and also in Italy. Those incentives are, at the moment, focused on electrical vehicle and hybrid vehicle. But considering the still low incidence of this technology, more or less 3.1% in the market, we hope, incentives will be extended in the most efficient internal combustion engine [ Aero 6 ]. And in this case, we don't see particular problem in our product range because, as Mr. Jain told you before, in this moment, considering EUR 250 million turnover, we have already acquired in our product portfolio EUR 110 million of business linked to the electrical and hybrid solution. For sure, we hope that the government change approach because in this moment, one of the major problems that we have in Europe is that the dealer are poor or [ unsold ] car. And so these are with, for sure, different technology, not with hybrid and electrical solution. And for this reason, we hope that will expand this incentive also to this kind of vehicle. Otherwise, the dealer has no money to buy new cars. If they don't reduce the stock on the market, the production will remain with a low level.

Okay. That's good to hear. And on the domestic business, I mean, so in terms of -- I mean, can you just highlight any development on, say, ABS...

Yes. See, ABS, there was a delay of 4 months on the testing. That's why -- but right now, we are working very closely to get this clearance, and that's why I said quarter 4 is what we are targeting to start the SOB for the ABS. We're very closely working with the challenges on the travel. The overseas people from the U.S.A. are not able to travel to India with the flight cancellations. But we are doing a lot of work through video conferencing and doing the collaboration testing based on their feedback on our test track in Aurangabad. So there have been challenges. So that's why we are targeting quarter 4 of this year to start the ABS.

[Operator Instructions] The next question is from the line of Kashyap Jhaveri from Emkay Investment Managers.

Just 1 question. What is usually the maintenance CapEx for you on yearly basis. All other questions have been answered.

See, normally, generally, if you see last 2 years, the -- just give me a minute. I mean, normally, the CapEx for expansion is around 70%. And if I see the other CapExs, which includes, say, dies, that's about 11% to 12%, die is for die casting. Then you have quality process, efficiencies around 5%. And you have routine CapEx, if you talk about that as a maintenance CapEx, then it is at 4%. And R&D expenditure is another about 4% to 5%. Sometimes, it has gone up to 10% also. So...

Sir, you said CapEx for expansion is 70%?

Normally, it's 70%. But going forward, this year, it will be not more than 60%.

Right. And dies and efficiencies are about...

So dies and quality process, efficiency, some routine CapExs, these -- I mean, together in this year, at least, would be around 30%. Even R&D expenditure would be higher at 6% in this year approximately. I'm just giving you approximate figures.

The next question is from the line of Pravin Yeolekar from CGS-CIMB.

Sir, my question was on this acquisition. So just wanted to understand how this new acquisition of Adler and Grimeca will benefit our Endurance Indian operation? And what was the rationale for this acquisition? Hello?

Ladies and gentlemen, we lost the line from the management. Request you to please stay connected while we join them back. Thank you. Ladies and gentlemen, thank you for patiently waiting. We've have the line for the management reconnected. And sir, we have Mr. Pravin Yeolekar in the question queue.

Yes, yes, yes.

Yes. So my question was on acquisition. So for the recent acquisition of Adler and Grimeca. So my -- just wanted to understand how are these going to benefit our Indian operation in the next 2 or 3 years?

Yes. See, what is happening is that both these companies, like I said, have been our collaboration partners, Adler since 2001, Grimeca was there from 2004 to 2009 and again from 2015 to 2020. They have very good -- I would say, we -- I mean, their brands are very good. They're very well known in Europe, even in India. They have very good technology, mainly on the 200cc plus bikes, the motorcycles. This is an area where we have not been present in a very large way since we started. We have been more in -- up to the 150, 180cc bracket. So the technology which they bring in, if I talk about the clutch assemblies in terms of lever comfort or driving comfort or a better takeoff or more stability of the vehicle, the technology, which is coming in, for which anyway I was paying collaboration, technical [ fee ]. Now with this acquisition, things become much easier. So they've very good technology. They have good patents, which they have acquired over the years, both the companies. If I talk about Grimeca, they've been supplying right the range from motorcycles from 50 to 1000cc. And if I take scooters, from 50 to 500cc scooters. So the question is that the technology which they bring in and the thing is because they were collaboration partners, we understood what they had. Apart from the brand and trademarks, we knew that what technology they had. And that was the reason why we have gone ahead, and it makes it much easier for us to get into the larger bike business for clutch and brakes. So that is the rationale of acquiring the companies to grow our India business, at the same time, we are, of course, for the clutch assemblies, taking new business also with clients in Europe and brakes, we also want to do it in future.

Okay. So when do we expect the new product to start from this acquisition?

So it will start in '21/'22. In fact, in India -- in fact, it will start in '21/'22, not with just 1 customer, I think, at least 3 clients because already, we have got the orders.

[Operator Instructions] The next question is from the line of Bhagyesh K from HDFC.

Bhagyesh here. Hello?

Yes, yes, yes.

Sir, the broader question about the company is this, see, Bajaj Auto has a policy which they do import from China, not directly, indirectly. Point is our size is big enough, so for the India unit over a bit of next 3 to 5 years, obviously, it takes time, the validation and the testing. What is the opportunity that we can displace these Chinese import content in India? And for the European unit, is there any similar kind of opportunity or that is not the case that Europeans would mostly in Europe. What are the thoughts, sir, about these 2 questions?

I will talk about India first, and then I'll request Mr. Venuti to speak about Europe. As far as India is concerned, we have seen a clear-cut opportunity on the brake systems, which is an import substitute from our Chinese supplier. And I don't think it's right to mention a large OEM, but this opportunity has come to us because they want to derisk the Chinese company. And this business, we'll be starting from next month. And it's complete brake assembly with the disc, the master cylinder caliper. It's a complete system. And this business will grow. So one opportunity we are seeing is in the combined braking system. Second opportunity we are seeing, and I'm very confident, is in the aluminum alloy wheels. And I'm very sure that there would be a lot of derisking happening going forward on the aluminum alloy wheels, where I think we're going to -- most OEMs, we completely switch to Indian suppliers. Now it could be Chinese suppliers also who are in India. So I'm not saying that. But they will buy from local companies in India. I think the imports from China business -- so as much we are concerned, the 2 immediate opportunities which we are seeing, already happening, is on brakes and aluminum alloy wheels.

Okay. Regarding Europe, in this moment, we are, as I told you before, evaluating possible acquisition in terms of organic growth, but also strategic opportunity for organic growth because it will depend from the market. As I told you before, if they want to reduce the production capacity for us, it's better, as you can imagine, because we can start from greenfield and we can invest in our plant. But at the end of the day, if there are some companies with potential from the product portfolio point of view and also from the customer portfolio, we are available to evaluate the possibility to grow with specific customer. Our target in this moment is to understand which will be the situation in terms of volume for this financial year because the situation is to close with minus 25%, minus 30% in the European market compared to the previous financial year. So the target in this moment is for sure to guarantee the profitability and the cash profit in our company, managing the situation of the cash flow. But we are completely open also because, as you know, we are -- in the last 2 years, we have done an important funding activity in order to be able to catch some opportunities in the market.

Okay. So this is regarding the aftermarket business of the company, is there some kind of opportunity to substitute the [ keep carrier ], sir? At least, the Kia industry has made some success with the government, some restrictions have come. So what are the parts where some opportunities there for our replacement market business after spares there?

See, see, if you ask me 1 area which is a huge opportunity is the shock absorbers. I don't know whether you know, we, in fact, did INR 100 crores of only shock absorbers sales last year. That's in India, okay? And if you ask me, this is an area? And if I talk about in 2021, we are planning to do a very good business of shock absorbers for mainly customers like Honda in both South America and countries like Indonesia, Southeast Asia, there's a business which we've already got for exports. And I think this is where Chinese were present. But we may be at higher price, but still people are willing to pay that extra price. The same strategy which Bajaj did in Africa. Their prices are higher, but the value which they give is much more than the Chinese product. The Chinese product, they say don't last more than 1 year. So our strategy is to be slightly higher than the Chinese, but give very good quality because quality I cannot compromise. So just to let you know, we've already got orders for both South America and for Indonesia, I mean, the Southeast Asian market for the shock. So if you ask me, shock absorber is a very good area to really expand.

[Operator Instructions] Members of the management, we have 3 questions in queue, sir, would you like us to take all of them? Should we proceed with the Q&A session?

Yes, yes, I can take any amount of questions. No problem.

The next question is from the line of Ashutosh Tiwari from Equirus.

Sir, you talked about that this Honda's [ HMSI ] share in our sales has gone from 6% to 13% in the current -- 8% to 13% in the current year. But this front fork was started only in Q2...

In quarter 4, in quarter 4.

Yes. So this is substantially in this year the share of business onto your side for...

See, see, what has happened is -- see, we have also started the disc business with them. The clutch business also increased as SOB, plus the business as SOB was increasing from quarter 2 onwards only. So though the scooter front fork shock absorbers started in quarter 3 -- I'm sorry, quarter 4, the business with HMSI, in spite of the degrowth last year, was already increasing as SOB. But the growth was substantial in quarter 4 because scooter front fork is almost 3x cost of a shock absorber. So you can imagine what it does. And it has almost reached peak in February, March till this COVID-19 hit us. But we are hoping that now, looking at the second half, hopefully, should go back to normal. I mean, the same levels of quarter 4.

Okay. And like you said that Bajaj is 38% of consol revenue, what it would be for HMSI?

HMSI, I think, slightly more than 8%. Now don't ask me any more of these SOB figures. I don't give it normally. [Bajaj and HMSI are our largest customers in India.

Okay. No issues. And lastly, on this 2-wheeler alloy wheel, I mean, what is your capacity right now? And in terms of inquiries from different OEMs, is it increasing right now?

Yes, yes. In fact, it is increasing. In fact, hard to take a call to invest more. See, my capacity is 1.2 million sets with 2.4 million wheels. I can stretch it slightly more, 10% more. But I'm really thinking, let me see how this policy stabilizes vis-à-vis China, then I'll think of expansion. Right now, I'm not thinking of any expansions, though the opportunity is there. And I'm very confident what I've said earlier. Alloy wheels will be only bought locally.

Okay. Okay. And how it is like, say, in terms of margin profile, how is this business? Is there any improvement? We should be low margin...

No, no, no. And I would say it's quite good.

The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.

My question pertains to, firstly, on the European operations. You talked about increasing orders from EVs and hybrids. So can you throw some light on -- based on your entire product portfolio for Europe, what would be the content offerings in EV and hybrid versus ICE? Would it be similar or substantially higher given that some products would not be relevant...

I request Mr. Venuti to answer that.

So the content of these components are very similar compared to our product portfolio. There are no change. The only difference is that in this moment, the carmakers are trying to reduce the number of platform in order to make synergy and economy of scale. And so it means that with this new business, the volumes are really higher. This could be an opportunity for us because, as you know, we are specialized in the high level of automation. So we have a good cash situation, and we are able to invest in an important way because the volume will be very high compared to the past. Only due to the fact that they are trying to reduce, as I told you, the number of parts, the number of engines and also the technical solution is going in the direction that there will be only one transmission for several different cars. And this is completely different compared to the past. But from my point of view, the only risk could be that, as you know, in this moment, more or less 80% of our project portfolio, we are only supplier, the sole supplier. In future, probably this will be not possible because we are seeing about million or million of parts because they are investing in the hybrid and electrical solution for worldwide. So it means that they will produce the same transmission and the same engine around the world, in United States, in Europe, in East Asia and so on. But from the technical point of view and also for the typology of the machine that produce this part, there are no changes compared to the past.

Okay. So if I've understood correctly, even with the loss of content and transmission in that way or content is similar in EVs and hybrids versus ICE?

If you speak about the number of piece, for sure, the electrical solution has a reduction in terms of number of piece, but...

No, I'm talking from value perspective, value per car?

No, no. In terms of aluminum, there will be a growth compared to the past, for sure. In terms of percentage of incidence, the content of aluminum in the car will be higher compared to the past.

Got it. Got it. Okay. And second question to you, Mr. Jain. You talked about value-added business, which we have been focusing upon. So can you throw some light on what it is currently as a percentage of our India revenues, ballpark? And what is your focus and target to take it to over the next 3 to 5 years given that so many value-added products have been -- we are focusing upon right now?

See, the way which I would put it -- see I don't have exact figures for each product segment. I normally don't give it. But what I'm saying is on 200cc, if you see inverted front forks and shock absorbers, we are mainly doing it for, say, Bajaj, KTM, a bit for maybe Hero, HMSI, we'll be starting now. RE, we are doing, of course, for ages now for higher cc. Harley-Davidson, we are doing. And we have had a collaboration with KTM components since 2008. So front fork shock absorbers, 200cc already the journey started. And this business is really growing. This business is really growing. So we're in a good space. When it comes to brakes and clutches, these 2 acquisitions are very important from technology and brand because these are very good brands as well as good technology. So in the 200cc plus space, we were not really present. Now as this was happening, we were already in touch with our major customers. And the good news is we've already got most of these orders, which are starting in '21/'22. In fact, as soon as we -- as I said, we are going ahead, we already got RFQ finalized, the orders. So we are now entering a new space of 200cc, which I think is at least 15% to 18% of the 2-wheeler market in India, which is not bad. If I talk about a normal of 25 million, okay, normal should be 25 million. So this is a good market and a very high-value add market. So the one area is that future, we will see good larger brakes and clutches to supply. And in the clutches, there would be the cork. From cork, it will go to paper, so higher value add. Next is the ABS, which is coming in. CBS already has come in with rare breaks; CBS, both for front and rear. So combined braking system as an add-on for below 150cc bikes generally and the rear breaks already started from last year, which is additional business. And ABS is something which quarter 4 we are targeting in this financial year. Then we come to machine castings, if I -- which today, we were doing semifinished largely in 2-wheelers, 3-wheelers, 4-wheelers. With Hyundai, Kia, we started fully machine castings. Some of the 2-wheeler companies have already started, fully finished in certain areas, but we want to go 100% by '21/'22, only doing fully machine, it's full value-add. And then these castings directly go on the assembly line. There's no need for finished machining at our OEMs. So these are the kind of value adds which we are looking at, plus also a new product mix getting into continuous variable transmission for scooter, which is like an automatic clutch. This is something we want to start also. So these are the plans which we have right now on the 2-wheeler space.

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

My question is for European business. If you see the OpEx line item, there is a reduction on a Q-on-Q basis of almost 15 percentage points despite the revenue being slightly lower, and that actually drove the margin expansion despite negative operating leverage. So what actually happened in the OpEx number for the European business? And what could be the percentage of run rate on a quarterly basis?

I would request...

Can you repeat, please, because I didn't understand, I'm sorry.

All right. So as you know, for our European business, the operating expenditure declined about 15% as compared to the previous quarter, that is December quarter and that actually resulted in the EBITDA margin expansion on a Y-o-Y basis. So what drove this reduction in operating expenditure?

I think that you are speaking about the other expenses that we have in the profit and loss, there is an increase compared to the previous year, in the Q4 of EUR 5 million is correct? Is this the question?

Yes. Sir, the question is reduction in the total expenses...

It's only due to the implementation, as I told you before, of the new line of Volkswagen. In the last quarter of 2019/2020, we started with the third line, and we have had an impact in the depreciation due to the investment that started in January and February 2020. And in the other expenses, all the implementation of this new line.

Okay. So I'll take this question offline. Moving on to the India business. Anurang, you mentioned that the outlook provided by OEM is very encouraging. You mentioned that it's about 50%, 55% as compared to the pre-COVID level, but is it that next couple of months, we are expecting it to go back to about 80%, 90%?

Yes. We are -- sorry, sorry, and I didn't hear the last part, actually. Please, can you repeat? I'm sorry.

Yes, yes. So as we speak, we are at about 50% of the pre-COVID level. And you mentioned that the outlook provided by OEM is quite encouraging. Is that the expectations are pretty low and we are happy that 50%, 60%, and that is an encouraging sign? Or are you expecting that next couple of months, we will go back to pre-COVID level?

No. I don't think quarter 2, we will go to the pre-COVID levels, but I am quite optimistic about quarter 3 to go back to the -- at least I'm optimistic based on Endurance business and our share of business with the customers.

Okay. Okay. And the final question is, given the lockdown situation in Tamil Nadu, [indiscernible] supplies to Royal Enfield, the progress is as per schedule? Or is there some disruption in the supply to Royal Enfield?

No. In fact, it was there when it was announced from 19 June. But then 3 days ago, there was a meeting, I think, with all the OEMs and government authorities, the collector and all, and I think now they are back. So they've all started again, the production, 3 days ago. So now the volumes will be going up.

Okay. So it's back to normal, the supply is back to normal?

Back to normal meaning, I mean, they have started their operations, and they will slowly going back to their target figures what they had planned.

We'll take 1 last question, which is from the line of Rajit Rajoria from Angel Broking.

Sir, congratulations for the good set of numbers in such challenging times. Sir, my question is regarding market share-wise, means what is our market share in our key products? And where we stand? And who are the major pillars in those segments? And how much market share does Chinese players are having in our key major products?

See, as you largely know, we supply mainly to the OEMs. Chinese, except barring alloy wheels, which is a good share, but like I said, I think, by end of this year, imports on China should be 0, is what I feel, is my personal feeling. But so as far as alloy wheels are concerned, that's my feeling, I know there are a lot of electronic items being bought from China. So because I'm not involved in that, I cannot comment. So in our products, to be honest, except alloy wheels, the share of Chinese is practicall., 0. I mean, it's not really a competition because our products are very technology oriented, and these are assemblies for brakes, clutches, suspensions, many are safety products. So as far as we are concerned, like I said earlier, also, quarter 4 saw good share of business increase. So we are almost between 34% to 40% for our front fork and shock absorbers. For transmission, we are at around slightly more than 16% of the market. And brakes, we are at about 25%, of the brakes used on vehicles, because every vehicle will not have a hydraulic brake. They also have -- many like scooters have only some mechanical breaks. So of the brakes used, our type of brakes used, we have 25% of the market. So this is the market we want to grow as we grow SOB. I mentioned about 200cc plus clutch and breaks, that will help us. Our suspension increases for 200cc plus, that will help us. Scooter front forks for HMSI will increase our front fork share of business, for sure. So -- and getting into HMSI for the new CBS, we are starting within 2 months, I mean, quarter 3. TVS, we are starting break systems. We've got a large order. So all these things will help us going forward to increase the SOB.

Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to Mr. Nishit Jalan for closing comments.

Thank you. On behalf of Axis Capital, I would like to thank Endurance's management and all the participants for joining the call today. Mr. Jain, if you have any closing remarks or we should just conclude the call?

No, I think -- I mean, I think all the questions were good, which we have answered. So my opening remarks is what I said, that's enough.

Okay. Okay. Thank you.

Thank you.

Thanks a lot. Thank you very much, everybody. Thank you.

Thank you. Take care. Bye.

Thank you. On behalf of Axis Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.