Endurance Technologies Limited (ENDURANCE) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Endurance Technologies Q3 FY '21 Investor 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, Lizan. Good morning, everyone. Welcome to Q3 FY '21 Results 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'll now hand over the call to Mr. Jain for his opening remarks, post which we can have Q&A. Over to you, Mr. Jain.

Thank you, and good morning to everybody. I would like to share details of how we have done in the third quarter of FY '21 and the first 9 months of this financial year. In India, in the third quarter of FY '21, as per the SIAM data, the 2-wheeler industry sales grew by 14.4% compared to the previous financial year. Scooters grew by 4.7% and motorcycles grew by 17.7%. The automotive industry in India had a growth of 10.5%. In Europe, in quarter 3, there was a degrowth of 7.6% in the European Union automotive sales. On the financials, I will briefly talk to you about the third quarter of FY '21 and then the first 9 months of FY '21. During quarter 3, as compared to the previous year same quarter, our consolidated total net income grew by 23.9% from INR 16,524.6 million to INR 20,467 million. Consolidated EBITDA grew by 31.4% to INR 2,724.3 million to INR 3,579.7 million. Consolidated EBITDA margin percent is 17.5%. The net profit grew by 53.2% and was INR 19,000.5 million at 9.3%. This quarter 3 consolidated financial includes the Maharashtra state megaproject incentive of INR 234.17 million. The consolidated ROCE was at 24.3% and ROE at 22.8%. There was no net debt as there was a positive cash available of INR 13,057 million. During quarter 3, our stand-alone total income grew by 30.8% to INR 11,708.5 million to INR 15,320.5 million. Stand-alone EBITDA grew by 51.5% from INR 1,737 million to INR 2,632.9 million with the EBITDA margin percent of 17.2%. Stand-alone net profit grew by 66.9% and was INR 15,005.5 million at 9.8%. This quarter 3 stand-alone financial includes the Maharashtra state megaproject incentive of INR 234.17 million. October 2020 recorded our best-ever net income of INR 5,564 million for Endurance stand-alone operations, with a growth of 34.5% over the previous year. Quarter 3 has been the best-ever quarter in the history of Endurance stand-alone business. Also looking at our OEM schedules, quarter 4 in India is also looking very good. The stand-alone ROCE was at 32.5% and ROE at 23.9%. There was no net debt as there was positive cash available of INR 486 million. Now for the 9 months. During the first 9 months of FY '21, our consolidated total net income was INR 44,379.6 million as compared to INR 53,511 million in the first 9 months of FY '20. Consolidated EBITDA was INR 7,318.8 million as compared to INR 9,230.7 million in the first 9 months of FY '20. Consolidated EBITDA margin percent was 16.5%. The net profit was INR 3,322.8 million at 7.5%. This includes the Maharashtra state megaproject incentive of INR 871.09 million. During the first 9 months of FY '21, our stand-alone total income was INR 31,850.6 million as compared to INR 38,357.7 million in the first 9 months of FY '20. Stand-alone EBITDA was INR 5,057.2 million as compared to INR 6,276.4 million in the first 9 months of FY '20 and there was EBITDA margin percentage of 15.9% in the first 9 months of this year. Stand-alone net profit was INR 2,530.9 million at 7.9%. This includes the Maharashtra state megaproject incentive of INR 871.09 million. We, at Endurance, are happy to inform you that the credit rating agency, CRISIL, has given a higher rating of AA+ with stable outlook as compared to the earlier AA with positive outlook for our long-term financing. We are informed that it is due to a well-diversified OEM base, both in India and overseas. It will help us in future in better-than-industry sales growth, good financial strength and risk profile and improving use of our assets and operating profit. This is the highest rating for an Indian auto component company. We are told that only Brakes India has the same rating. The detailed financials are available with the stock exchanges and on the Endurance website. I would now like to share certain other key points for the first 9 months of this financial year. The first 9 months of FY '21, 71.8% of our consolidated total income, including other income, came Indian operations and balance 28.2% came from our European operations. But in quarter 3 of FY '21, 74.9% of our consolidated net income was from Indian operations and 25.1% from our European operations. In quarter 3, more than 20% business growth was experienced from each of these OEMs, such as HMSI, Bajaj, Royal Enfield, Yamaha India, TVS and Kia Motors. We practically grew with every OEM in this quarter. During quarter 3, our factories in India and Europe did not face any mandated lockdowns. We continue to do our best to ensure a safe workplace for our people. In India, in the first 9 months of FY '21, INR 4,440 million of new business was won from OEMs other than Bajaj, which included HMSI, TVS, Hero MotoCorp, Hyundai, Suzuki and Yamaha. This business will reach its peak sales in FY '23. I would also like to mention that we have INR 11,450 million worth of request of quotes from OEMs, and we hope to win business from these RFQs. As our disc brake assembly business is growing with addition of Bajaj, TVS, Royal Enfield, Yamaha and HMSI new business, we are increasing the disc brake assembly capacity by more than 90% from the existing 2.85 lakh brake assemblies a month to 5.7 lakh brake assemblies a month. And also, the discs will increase from 3.75 lakh number a month to 6.75 lakh number a month, which will be reached by August 2021. A new plant at Waluj is being set up for this increase. And I think we have 10 acres of land, and this will start by August FY '22. We are also setting up a cylinder head low pressure die-casting plant at Pantnagar, Uttarakhand for 720,000 numbers per annum, and operations have been slightly late, and now it will start in quarter 1 of FY '22. In October 2020, in our older die-casting plant at Aurangabad, our company announced a voluntary separation scheme for 86 confirmed workmen with a onetime payout of INR 112 million. This will lead to an annual wage cost savings of INR 48.7 million per annum and additional savings in canteen, workforce and insurance related to these 86 workmen. In the next financial year, we will also start supplies of brake assemblies, suspensions and aluminum castings, including the battery housing castings for electric scooters and 3-wheelers. As mentioned earlier, we are focusing on getting business from OEMs and OEM-funded companies because of their financial strength. Due to increased orders from Bajaj and Yamaha India, we are happy to inform you that we are increasing our capacity by 1/3 or 40,000 sets a month of alloy wheels to 160,000 sets of alloy wheels a month in our existing Chakan plant at Pune. And the production is going to start in quarter 3 of the next financial year, which is FY '22. I would again 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 acquisition of Adler and Grimeca in Italy in 2020; paper-based clutch assemblies replacing the cork-based clutch assemblies for motorcycles; supply of continuous variable transmissions or automatic clutch for scooters; anti-lock brake systems, or ABS, for 150cc plus motorcycles; inverted front forks and adjustable rear mono shocks absorbers for both domestic and export OEMs, this is with help of our collaboration partners, KTM AG; fully finished machine castings as compared to raw and semi-finished castings for 2-wheelers, 3-wheelers and 4-wheelers. For our European operations, in the first 9 months, we have acquired EUR 12.6 million of new business from Audi, Maserati and Fiat Chrysler. This business will start from the next financial year onwards. The consolidation of our foundry activities from 2 plants to 1 plant in Italy, which will lead to a saving of EUR 600,000 per annum has been completed. Both the Adler and Grimeca acquisitions, which included all the know-how, patents, brand and trademarks, has helped our Indian as well our Italian operations in getting new business for the 200cc plus motorcycle clutch assemblies and in India for brakes also. And these 2 businesses will start from the financial year 2022. I would also like to especially point out that Endurance at present is actively involved in technology-oriented and new products, both organic and inorganic growth opportunities in India as well as in Europe. I would also like to mention that in India, Endurance is entering 2 backward integration product areas, which are import substitutes also, as I mentioned earlier. First is the aluminum forging axle claims, which are required for a growing business of inverted front forks. As you know, we have won business of HMSI and Hero MotoCorp also. Endurance has entered into a technical collaboration with FGM Italy and production will start in Aurangabad plant in the first quarter of FY '22, which is next financial year. The second product is wire braided hoses, which are required for ABS brakes systems. These operations will start from this month. We've already got the business. Both the above projects will help us in our future profitable growth. In the first 9 months of FY '21, our aftermarket business in India was almost 6% of our stand-alone India sales. The aftermarket sales were INR 19,017.1 million in the first 9 months of FY '21 as compared to INR 2,146.8 million in the first 9 months of FY '20. So we are seeing a large growth in the aftermarket business, both for supplies in India as well as overseas. I also want to update you that our Vallam plant near Chennai for supplying machine aluminum castings to Hyundai, Kia, Royal Enfield and other OMEs and started operations on the 2nd of February, which is in this month. We are also in the process of acquiring new business from other OEMs for our Vallam plant. We are also at an advanced stage of testing clearance for our ABS brake assembly project, and we will start operations definitely in the next financial year. We have been already allotted with the motorcycle for which we have to supply. And it's taking a bit of time, but we'll definitely start in the next financial year, for sure. On the environmental front, I would especially like to mention that Endurance is striving to be carbon-neutral in its plants by effective use of solar power and wind power, creating carbon sinks by driving tree plantations and thereby creating dense forest, and driving use of natural gas and LPG in place of electric power and furnace oil. Also, low hazardous waste generation has been achieved by us by switching from painting to powder coating operations in our plants. Hazardous waste generated like paint sludge is sold to different cement plants and our grinding dust is converted to iron oxide required for the paint industry. We, at Endurance, are focusing to achieve 0 waste to landfill. At Endurance, it will be a continuous endeavor to grow through organic and inorganic growth, with a focus on technology upgradation, quality improvement, cost and environmental health and safety. We will do our best to fulfill all our stakeholder expectations by following our 5 values of customer centricity, integrity, transparency, teamwork and innovation. 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 Aditya Jhawar from Investec Capital.

Congrats on a good set of numbers. My first question is on Europe. If you can tell us that what was the share of electric vehicles in overall registration? And at the same time, was there a drag in margin because of that exceeded in the previous quarter?

Massimo, it's a question for you. Massimo?

Yes. Yes. So in the previous quarter of the financial year 2021, the market will be more or less 25% of registration in electrical vehicle and also hybrid vehicle. So there was an important increase compared to the previous year. And if you can repeat the last question because I didn't understand it, sorry.

Yes. So sorry, Massimo, what we wanted to understand in the previous quarter, you had explained it very well that because of sudden shift to electric vehicles, the...

I'm sorry, but I don't understand. I can't hear you very well, sorry.

Let me repeat the question. So in the previous quarter, that is September quarter, you had mentioned that because of the sudden shift towards electric vehicles, there was a drag on margin. I'm trying to understand that while we are seeing -- there is a sequential improvement in margin, but as compared to last year, margin for Europe vehicles have fell down about 200 basis points.

Yes, now I understand. So in the quarter, there was EBITDA contracted by 13.5% compared to the previous year, even if we reached 18.3% in terms of percentage of EBITDA, but this reduction is not due to the electric mix, let me say, or component. The reduction is due to the tooling that are different compared to the previous year for more or less EUR 2.5 million due to the new business already acquired. So the reduction of the profitability is not linked to this effect of mix. At the contrary, in the last quarter, we have had a positive EBITDA compared to the previous year in Germany, where we are producing electrical components. As you know, in this moment, we are producing more or less 1,400 per parts per week. That was an important increase compared to the previous year. In terms of mix, if you analyze only the result of Endurance [ last month, ] we have had the benefit of more or less EUR 1 million in terms of profitability compared to the previous year. And certainly that, for sure, as I told you in the past, from my point of view, there we see a reduction in terms of profitability due to the electric technology, due to the fact that they are increasing the number of platform and also the volume. And so it's normal that the customer will ask to the supplier, sacrifice reduction in terms of price. And this can affect our profitability. But frankly speaking, if I consider the 9 months of 2020/2021, the reduction in terms of EBITDA is not linked to this situation.

Okay. Okay. That's quite helpful. And maybe going to the India business, what was the share of proprietary business in this quarter as compared to same quarter last year?

You are talking about share of the proprietary business?

Yes. Yes, Anurang.

Yes. So total share, definitely, I mean, if you ask me, it would have increased by, say, about 2%.

Yes. So Anurang, the question here is that if there is an increase in the share of proprietary business, that is not reflected in gross margin on the stand-alone business. Is it that because of the commodity inflation that we are seeing now? Is it something to do with that, the gross margin...

Yes. Yes. Yes. So I'll explaining to you, it is mainly because of the unprecedented rise in the steel and aluminum alloy prices. It is unprecedented. I've never seen a price increase like this. It's just crazy. I don't understand really what's happening. It's only because of that reason. There is no other reason for this. But let me tell you, also, I'll add 1 more point, that the margins for our casting business are also substantially improving. And to us, frankly, in future, you don't want to see a difference between proprietary and casting business margins? That is our focus because for us every business is important and we have to make money, okay? And because of our strategies on the product mix of castings, on the machine castings, going into 4-wheeler castings, all this is helping us. And you will see this. So what you see, the increased margins are also because of castings growing. That's worked very well in quarter 3. But to answer your question, the gross margin is only because of the steel and aluminum unprecedented increase. There is no other reason.

And we are thinking of passing on that impact, maybe it will come to the lag?

Yes. So we are hoping for a lag because we cannot stop the production. So we are given spot increases right from October onwards to our suppliers because we can't stop supplies because business growth is very important for us. You've seen the kind of business growth. But I'm sure it will come with a lag, how much I cannot say, but we are working very actively with our OEMs on this.

Yes. Sir, my final question to Mr. Ray. What should we expect on the tax rate into Q4 and going into next year? There was abnormally low tax rate in this quarter.

You take a marginal rate of 25.2% for India.

The next question is from the line of Varun Baxi from Equirus Securities.

So my question is regarding the Europe business. So in January, we have seen that a lot of OEMs are facing challenges in terms of production schedule, I mean because of the semiconductor shortage. So is it seeing some impact on our production schedules also for this quarter in Europe typically?

Yes. So we closed, the month of January, the market closed with an important reduction compared to the previous year. Italy closed with a reduction of 14%; Germany, minus 31%; France, minus 6%; Spain, minus 50%; and U.K., minus 40%. This is due to the different reasons. First of all, for sure, as you know, the -- all the OEMs had some problem with their supply chain, with the specific part from a supplier, European supplier. But apparently, they are solving the problem. And starting from the third week of February, the situation will come back to the normality. The month of January was very low due to the fact that at the end of December 2020, a lot of incentive stopped. And so the month of December was very high, considering the COVID period compared to the previous year. I believe that this reduction in January is due to the fact that considering also the first week of holiday for the Christmas period, this is -- let me say, this is a normal reduction. For sure, it's also affected by this problem that OEM had in the last 2, 3 weeks. But regarding the volume for the month of February and regarding the volume for March, apparently, we are seeing the same reduction compared to the previous year in terms of leverage, more or less from 10% to 15%. I can tell you that the month of January for Endurance was more or less aligned compared to our expectation.

Okay. And sir, my next question is regarding this PLI scheme, how are we -- I mean, how are you positioning ourselves to take benefit from the PLI scheme? And what are our strategies to leverage that?

So I think I'd like to answer that. See, if you know the first PLI scheme, which was, I think, 2013 scheme, we have already availed INR 4,660 million approximately of incentive. And this comes back to us in way of cash back from the government against the high GST credit. And now the GST collections are good, so we'll start getting the money. But there is also a 2019 scheme. So if you spend INR 3,500 million in 5 years, next 5 years, we can get that money back also in the next 7 years after that. And that's why you see, I have announced brakes plant in Waluj. So more than 90% increase is going to happen in Waluj itself mainly, and we get incentive for investment. So for us to do INR 3,500 million in 5 years is no problem. So that's how we will use even the next scheme. So I would say, Maharashtra is doing a very good job. Fortunately, Aurangabad is treated at Zone B, backward area, so which is a really good thing for us. So that's how we are using the past deal. When we have already received the eligibility certificate, we'll get that money in 7 years. And the other is a 2019 scheme, which we have applied in May of 2021.

Okay. And also on the disc brake, like you have mentioned that we are seeing more incremental disc orders from HMSI, Yamaha, Royal Enfield and TVS. So is it fair to assume that it is because of the import substitution that we are getting these orders? Or it's more of the new business entirely for the new models and all?

See, I think one is, I think for TVS, I believe it is import substitution. We already have orders of about 1 million brakes in a year, already started, will reach peak, I think, next financial year end. And the other is based on our technology acquisition of Grimeca, a strong R&D, which is there. Our price, which is very, very important, we're cheaper than the competition. All this helps us. So we are getting business because of that. And of course, and not to forget, the regulation of CBS and ABS has also helped us a lot to supply the -- I mean, disc brake assemblies. This has become mandatory as you know for existing -- from -- for the new ones from '19/'20 and from 2021 for the existing also. So the regulation has helped us to increase the brakes business also.

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

My question on Europe business has been answered. Just a couple of data points, which I may have missed. If you could just give me the incentive number for Q3 and 9 months for the India business? And what was your aftermarket growth in the same period?

Mr. Ray, would you like to give the exact figures for the...

Yes. Sure. On India business, quarter 3 incentive booking megaproject incentive under package scheme of incentive, Maharashtra, in quarter 3, we booked INR 234.17 million and YTD December, the total booking has been INR 871.49 million.

Fair enough. And sir, your aftermarket revenue?

Yes. So aftermarket, I will answer. Quarter 3 saw a 28% growth in aftermarket from INR 807 million to INR 1,034 million. But if I see the 9-month period, the value went down from INR 2,146 million to INR 1,917 million, which is about 10.7 basis points less -- 10.7% less. But that's because of the first quarter, as you know. We did hardly 26% of sales in the first quarter of this year. So 10.7% is a decrease in 9 months, 28% is the increase in the quarter 3. This trend will continue, the way we see it.

And sir, your -- is it possible to give us what would be the trend of incentives going forward, I mean, for the next 2, 3 years, how much are we expecting to get?

Mr. Ray?

I would request you to get in touch with our Investor Relations department and have a chat with them. Because right now, we had originally got INR 367 crores. That was subsequently increased by INR 99 crores. This typically flows over 7 years and not exactly from April to March, because 1 year, we started in August, so the last year would be up to July. So there's a calculation around it. So for further details, you can get in touch and they will help you with the numbers.

And one question for Mr. Massimo. Sir, what was the total production growth in Europe this time around? Probably, it will help us compare our performance with the overall industry growth. And if you can just break into electric and normal ICE vehicles, that will be great, if it's possible?

So first of all, I can tell you, which is the trend of our sales compared to the registration, not for the production. Because if you know, in 2020, there was a reduction in terms of production higher compared to the registration. But I can tell you that in the 9 months, there was a reduction of 24%. And in the last quarter, 8.3%. As Endurance, we closed the first -- the previous quarter with a reduction of 4.8%. And so we have done better compared to the market. In terms of 9 months, we reduced that to another of 24.7%. And so we are more or less aligned compared to the market. But please consider that we are speaking about production of Endurance compared to registration of the market. And so we have to consider that there was an important reduction of the stock to the dealer starting from June 2020 after the lockdown.

We'll move on to the next question that is from the line of Jinesh Gandhi from Motilal Oswal Financial Services.

Congrats on good set of numbers. First question pertains to European business. So I just want to clarify, are we seeing a 10% to 15% decline in revenues or decline in orders for March '21 based on the trend so far?

Sorry, a reduction of? Can you repeat, please? I'm sorry...

March '21, we are indicating 10% to 15% Y-o-Y reduction in order book or revenues?

Yes.

And this is entirely...

This is -- let me say, the expectation for the month of February and March, reduction of more or less 10%, 15% compared to the previous year. Please consider that in the month of January, probably in this moment, we haven't leveraged the total impact of Europe. But as we told you before, Italy closed with minus 14%, Germany 30%, Spain 50%. And so apparently, the level -- this total market in Europe closed with minus 15%, minus 20% in January. The expectation is to maintain more or less the same reduction 10%, 15% also for February, March, I'm speaking about registration. But as you've seen in the last quarter, as in U.S., we performed well compared to the market, which was with minus 4.7% compared to a reduction of 8.3% of the market. And certainly, more or less 50% higher compared to the reduction of the market.

Okay. And this reduction is primarily because of the supply side issues or anything else? And if that comes...

For sure, let me say that, the situation of COVID has affected the situation that I'm speaking also because, as you know, there are a lot of countries still in lockdown, let me say. And so the situation of the production is not so good compared to the previous year. These are the effects for sure. We closed the previous financial year 2020 with 13.8 million of cars sold on the market compared leverage of the last 5 years of 16.8 million. So a reduction of 3 million of cars. From my point of view, 2021/2022, for sure, will be better compared to the previous year. But it's not feasible in this moment to understand when we can come back to a situation pre COVID.

Understood. Understood. Okay. And second question pertains to the India business. Sir, any update on orders for CVT, anything on that front that you can throw light on?

Yes. See CVT, we are actively ranged with basically HMSI and Hero MotoCorp. And it is taking time as -- I would say, it's more of 1/3 source for this, that's why it's taking a bit of time. But we are very actively engaged. And we -- in fact, the testing is on. So we are focused. It's taking time like it did in ABS. But we hope to get these clearances we're hoping by next financial year. So we are actively working on the CVTs.

Right. And on the alloy wheels, that was one of the businesses which we were not very actively or aggressively focusing on. And now given that there is lucrative business opportunity, we are expanding the capacity. Are we also now open to looking at alloy wheels for passenger vehicles?

See, right now, we have not looked at passenger vehicles because the processes are different. We are just watching, but I think in the 2-wheeler space, there is so much of opportunity. We look at the CapEx. The CapEx is high for this. While we are doing expansion in Chakan, that incremental CapEx will not be that high for you to go for a new building. Fortunately, we have land behind of 7 acres. We're expanding there. And we will expand in Chakan because it's better to expand from an existing facility from point of view of economies of scale, point of view of incremental investments. And definitely, we are going to make money in this business. So we are increasing our capacity by 1/3, mainly for Bajaj and Yamaha and slightly more high-end models. And there are opportunities out there. So we'll go step by step. I don't want to jump into it fast. But this is a good opportunity for future, for sure.

Right. And any idea about what's the proportion of alloy wheels, which are still imported, considering that there is a good amount of utilization than over the last couple of years?

I don't have the figure. But I know some suppliers, I don't know whether China is still coming or they stopped. But I think with us starting by August, September, I think everything will stop from China is what I feel. Some premium models are coming from there. I think that will completely stop. That's what I know. I think that's what I feel will happen. Because they are going to be with China, only the process started last year. So this will carry on. And that's why the Indian suppliers are being brought up for the last 2 years by getting extra orders. And so I think it will be stopped. Mainly, it's China only by the second quarter of next financial year. Is -- I mean, that's what I see.

[Operator Instructions] The next question is from the line of Aditya Makharia from HDFC Bank.

This is Aditya from HDFC Securities. Congrats on a strong number. There is a lot of noise around 2-wheeler sales moderating. We saw that festival also while was flat, but many companies reported a decline in terms of the retail. And also, if you saw the numbers which came out yesterday, there was a 10% decline in overall retails. So I just wanted to know your thoughts, how you are reading the trends in 2-wheeler sales? And what is actually happening?

See, the way I see the market, to be honest is slightly different. See, if you see in FY '19, the total sales, both in India and exports -- domestic and export, was 24.5 million. That was actually in FY '19, sorry. So already, there's a market of 24.5 million in terms of 2-wheelers being made in India and is exported or sold in India. This went down in FY '20 to 20.9 million. And with the COVID situation in FY '21, we saw what happened. But then, I don't know it was pent-up demand or it was festive demand, but I think, if you ask me, there is no reason why FY '22 cannot go back to 24.5 million or more, because if you see whether you see a good monsoon, you see the MHP coming in, the government is assuring the farmers and economy coming back from really a downside in FY '20 as well as the COVID situation, I don't see why we cannot go back to that 24.5 million figure. So for me, I don't know what is happening today in terms of -- I know it's 10% less in terms of -- but I'm an optimist. I see no reason why FY '22 should not be 24.5 million, barring some external factor, which like COVID or something else, where that's not in our hands. But I'm very optimistic of the going back to the FY '19 figures of 2-wheeler weighted India of 24.5 million. If you see Endurance, we are fortunate to supply to a company like Bajaj, whose 45% sales are exported and to more than 70 countries. That's going very well, as you know. The challenge is more in domestic than in exports. Exports is growing. So that's a good sign for us with a large wallet share for all our businesses at Bajaj. But I don't see in general a reason, I don't see any kind of markers. Now with the vaccine coming out next 6 months, 8 months, which should be a lot of Indian people taking the vaccine fully. So I think the sentiment can only go up. I don't see any factor going down. So I think the FY '19 sales in the production of 24.5 million should happen FY '22. So that's the way I see it, if you want to ask my thinking. It's my personal thinking.

Right. No, fair point, sir. And just one housekeeping question. You mentioned you have INR 4,441 million of new business in this quarter. And what are the RFQs you said?

No, I said INR 4,440 was won in the first 9 months because in the first quarter, we didn't do much. There's hardly much of a business. And the RFQs, I think I told you INR 11,450 million. None of which, I think at least -- we are hoping to at least get 1/3 of that for sure. If not in all RFQs, in few RFQs we'll win. But we are very close to winning of these businesses, at least 1/3 of this.

We'll move on to the next question, that is from the line of Arvind Sharma from Citi.

Sir, 2 questions, one on India and one on the European business. On the India business, could you please share some more thoughts on the replacement of imports and how it impact Endurance? And if possible, can you give the breakup between the various segments, that is casting, suspension, transmission, braking?

See, actually, the segments, we'll not be able to share, but -- we normally don't share that.

No problem, sir...

But see how much import substitutes which is really helping us to grow our profitable business and high-value business. I think, brakes is one. I mentioned TVS. We believe it's an import substitution. We have lower prices also. Surprisingly, compared to China, we are lower. And number two is on alloy wheels. These 2, we clearly see as very good opportunities going forward. And we have been approached by many OEMs on this. And brakes, so we are just going all out. We are just doubling the numbers. We have a very large, I would say, product area for us for next year, very large, which is going up. And alloy wheels, I see a good future. Passenger car is a good idea, a good thought. We will think about it. It is not idea to think of it and approach some of our OEMs. But we can think on that, that's not a bad idea.

Sure, sir. How would China imports be in alloy wheels in terms of percentage of consumption in India?

See, I don't know those figures. But at one time, I know up to 1.5 years ago, there were major of our imports. But I know slowly there have been derisked because other players have come in, in place of them. I know that. And we have been slowly growing. But now we are growing in a bigger way. So -- and so I think we are more going with the Indian players now as an import strategy. This is not just one -- I think it's a general player for all the OEMs. So I don't have a percentage to answer your question. I don't know what was. I know the majority in FY '20 was imported from China.

Sure, sir. That's helpful. Sir, on the European business, if you could just talk more about the exposure to electric vehicles. How many -- or what percentage of order, what's the trend there, if not the numbers, trend that Endurance has in terms of exposure to electric vehicles? And sir, the general housekeeping question about European revenue, EBITDA and PAT in euro terms?

Okay. No -- so I will request Massimo to answer that. But like I mentioned in the past, we have already won EUR 120 million of business. However, EUR 30 million is for EVs, mainly for Porsche and Audi, the Volkswagen group, and the balance EUR 90 million is with various customers, apart from Volkswagen Group, even for Maserati, for Daimler, for Fiat Chrysler Group. So we have already won this business, which will start, I think, within a year or 2 years. And I think Massimo can throw more light on that. So Massimo, would you like to answer this question?

Yes, absolutely. So as Mr. Jain told you, in the past 3 years, we already acquired more or less EUR 120 million for hybrid and electric technology for the new car that will enter on the market in the next 24 months -- in the next 2, 3 years. But please consider that in this moment, more or less 80% of the new projects that we are quoting are for electrical and hybrid vehicles. Apparently, in this moment in the European market, we are seeing a forecast for 2030, where more or less 40% of the total market will be for electric and hybrid solution. And so there will be, for sure, a reduction in the powertrain. This moment, all the OEMs are developing new engines in the powertrain division only to assemble these engines with electric technology. And so starting from, in my opinion, the next 3 years, 100% of the business bought by the supplier as Endurance overseas will be for the hybrid technology. And so I'm hoping it's because in this moment, they are investing billion of euro in this technology. And for sure, as a strategic partner of our customer, we will be involved in this acquisition.

Just that the euro terms revenue, EBITDA and PAT thing?

Could you repeat, please?

Sorry. Revenue, EBITDA and PAT in euro terms, if possible?

See, what's in euro terms be revenue, EBITDA and PAT for what quarter 3 do you want or 9 months?

Sir, quarter 3 would be good, sir.

Quarter 3? Okay.

Yes. In the quarter 3, we have closed with EUR 59.1 million turnover; with EUR 10.8 million EBITDA, 18.3%; and with a net result of EUR 4.5 million, 7.7%; with an increase of 5%, 6% compared to the previous year. We closed the previous financial year with 6.9% in percentage of net result in this financial year 7.7%.

The next question is from the line of Nikunj Gala from Principal AMC.

Sir, my question is on PLI scheme. I think the -- in one of the participants, when you answered for PLI with respect to 2013 and '19 policy, that was with respect to the state government, Maharashtra state government policy, right?

Yes. Yes, absolutely.

Yes. Sir, just my question is on the center PLI scheme, which they've announced, where they've kept -- you set aside INR 57,000 crore of incentive for auto OEM and auto components. So are we looking at any opportunity in that? And if yes, what kind of opportunity you see in that scheme of things?