Endurance Technologies Limited (ENDURANCE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Endurance Technologies Q4 FY '21 Earnings Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital. Thank you, and over to you, sir.

Thank you. Thank you, Stanford. Good morning, everyone. So welcome to Q4 FY '21 Earnings 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; Mr. Raj Mundra, Treasurer and Head of Investor Relations; and Mr. Sunil Lalai, our Company Secretary. I'll hand over the call to Mr. Jain for his opening remarks, post which we can have Q&A. Over to you, Mr. Jain.

Thanks a lot. Good morning, everybody. I would like to share details of how we have done in the financial year FY '21 and then also in quarter 4 of FY '21. In India, in FY '21 as per the CM data, the 2-wheeler industry sales degrew by 12.1% compared with the previous financial year. Scooters degrew by 20.6%, and motorcycle degrew by 9%. The automotive industry in India had a degrowth of 13.5%. The automotive sector as a whole saw such a degrowth largely due to the quarter 1 FY '21, complete lockdown and also a few subsequent sporadic lockdowns in FY '21. In Europe, in FY '21, there was a decline of 19.4% in the European Union automotive sales. Our European sales had a degrowth of 18% in euro terms. In quarter 4 of FY '21, there was a growth of 0.7% in the European automotive sales. And our European operational sales has a growth of 3.4% in euro terms in quarter 4. On the financials, I will briefly talk to you about the fourth quarter of FY '21 first and then for the financial year of 2021. During quarter 4, as compared to previous year same quarter, our consolidated total net income grew by 32.6% from INR 16,142 million to INR 21,398 million. Consolidated EBITDA grew by 32.8% from INR 2,553 million to INR 3,390 million. Consolidated EBITDA margin was at 15.8%. The profit after tax grew by 75.3% from the previous year and was INR 1,873 million at 8.8%. The consolidated ROCE was at 23.6% and ROE at 23.3%. There was no consolidated net debt, and the company had a positive cash flow of INR 3,153 million. During quarter 4, our stand-alone total income grew by 14.6% from INR 11,390 million to INR 16,015 million. Stand-alone EBITDA grew by 58.7% from INR 1,509 million to INR 2,394 million with an EBITDA margin of 15%. Stand-alone profit after tax grew by 93.6% and was INR 1,391 million at 8.7%. The stand-alone ROCE was at 31.5% and ROE at 23.5%. There was no net debt, and the company had a positive cash flow of between INR 1,547 million. I will now bring you on the financials of the financial year as a whole FY '21. During the financial year FY '21 as compared to the previous financial year, our consolidated total income degrew by 5.6% from INR 69,653 million to INR 65,777 million. Consolidated EBITDA degrew by 9.1% from INR 11,784 million to INR 10,709 million. Consolidated EBITDA margin was at 16.3%. The profit after tax degrew by 8.1% and was INR 5,196 million at 7.9% after considering the Maharashtra state incentive for megaproject amount of INR 872.18 million. During the financial year FY '21, a stand-alone total income degrew by 3.8% from INR 49,748 million to INR 47,866 million. Stand-alone EBITDA degrew by 4.3% from INR 7,785 million to INR 7,451 million with an EBITDA margin of 15.6%. The profit after tax degrew 8.3% and was INR 3,922 million at 8.2% after considering the Maharashtra state incentive for megaproject amount of INR 872.18 million. The above financials for FY '21 were impacted by the very low sales business in quarter 1, which was affected due to complete lockdowns and subsequent sporadic lockdowns. In FY '21, we are happy to inform you that the credit rating agency, CRISIL, has given a higher rating for long-term bank financials of AA+/Stable outlook from the earlier rating of AA/Positive outlook. We are informed this is the highest rating for any Indian auto component company. For short-term bank financing, we have the highest rating of A1+. We'd like to again mention that Endurance is focused in both Indian and European operations for a profitable growth and on growing high-value industry growth. The detailed financials are available with the stock exchanges and on the Endurance website. I would now like to share certain key points for the financial year FY '21. 72.7% of the consolidated total income, including other income, came from Indian operations, and the balance, 27.3%, came from our European operations. In India, INR 6,380 million of new business was won from OEMs, which included HMSI, which is Honda two wheelers, Royal Enfield, Hero MotoCorp, Hyundai, Kia, Yamaha India, Tata Motors, and our new OEM client, TVS. I would also like to mention that in addition, we are today INR 15,000 million worth of request for quotes from various OEMs, which are being discussed. Our focus is to supply all our key product -- area products to all OEMs in the next few years. I would also like to mention that Endurance is focusing on more value-add and a profitable product mix in its future business, which includes 200 cc plus motorcycle brake and clutch assemblies with the help of our acquisition of Adler and Grimeca. These are both Italian companies which we acquired in the year 2020. Paper-based clutch assemblies replacing the cork-based clutch assemblies for motorcycles. Focusing on getting orders of continuous variable transmissions or an automatic clutch for spices. Anti-lock brake systems or ABS for the 150 cc plus motorcycles, which is with our collaboration [indiscernible] industries. 200 cc plus motorcycle inverted front forks and adjustable rear mono shock absorbers as well as front fork and shock absorbers electric 2-wheelers and 3-wheelers. This is with the help of our collaboration partners, KTM AG. We are working with KTM AG to increase supply of both on-road and also start with the off-road motorcycles, higher technology, inverted front forks and rear mono shock absorbers, of which we are together with [indiscernible]. We are also focusing, as you know, on fully finished machined castings as compared to semi-finished casting for 2- and 3- and 4-wheeler casting business.

Excuse me, this is the operator. I'm sorry to interrupt. Mr. Jain?

Hello. Sample.

Raj, are we disconnected?

I can't hear the operator. I was just checking.

Completed. Just connecting Mr. Anurang Jain on the other line.

We have Mr. Jain on line [indiscernible]. You may go ahead.

Okay. Should I start?

Yes, please.

As disc brake assembly business is growing with addition of Bajaj, TVS, Royal Enfield, Yamaha, Hero MotoCorp and HMSI new business, we are increasing the disc brake assembly capacity from the existing 285,000 brake assemblies a month to 570,000 brake assemblies a month. And the discs from 375,000 numbers a month to 675,000 numbers a month by August 2021. A new plant at Waluj is being set up in order to increase the volumes. On 2nd February 2021, we started operations at our new plant at Vallam near Chennai to supply machined aluminum castings for Hyundai, Kia, Royal Enfield, and we are now in the process of acquiring new business from this existing as well as new OEMs. We are also setting up an aluminum cylinder head, low pressure, die casting plant at Pantnagar, Uttarakhand for 720,000 numbers per annum, and operation will start in quarter 2 of this financial year. We are happy to inform you that the supply of 2-wheeler ABS assembly should start by October 21 of this financial year as we are in the final stages of testing and validation. As you may be aware, competition is mainly from Bosch, which controls approximately 85% market share in the Indian ABS motorcycle market, which approximately required 3 million ABS assemblies [indiscernible]. This is a very large business opportunity for Endurance as there are very few suppliers, and we have mainly only foreign companies to supply due to the high technology requirements. In October 2020, in our oldest die casting plant in Aurangabad, which we started in 1985, our company announced a voluntary separation scheme for 86 confirmed workmen with a onetime payout of INR 112 million. This has led to an annual wage cost saving of INR 48.7 million per annum and additional savings in canteen, welfare and insurance related to these 86 workmen. On 3rd May 2021, which is for this financial year, in our Chakan plant in Pune, we announced a voluntary separation scheme for on-road workmen also. This is with the aim of improving operational sustainability in our plant operations. We also focus on supply of our products for EV basis. We've already started supplying the brake assemblies, suspensions and aluminum castings for electric scooters and 3-wheelers. As you may be aware, in financial year '21, total 238,000 EVs were sold in India, including 144,000 two-wheeler EVs, 88,000 3-wheeler EVs and 59,000 4-wheeler EVs. Our focus is to supply our EV products with 2-wheeler OEMs, both existing and new [indiscernible] electric, and new startups funded by the OEMs. Due to increased orders from Bajaj and Yamaha India, we are increasing our capacity of alloy wheels from 240,000 numbers per month to 320,000 [indiscernible] numbers a month in our existing Chakan plant near Pune. And the production will start in quarter 3 of this financial year. As far as Europe is concerned, in FY '21, we acquired EUR 19.3 million of new business with Audi, Daimler, Volkswagen, Fiat Chrysler and Maserati. As mentioned in previous investor calls, I would specifically like to point out that in the last 2 years, EUR 110 million of business has been won for electric and hybrid cars, which have started in FY '21 and will reach peak volumes in FY '24. Therefore, 50% of our existing total Europe business value has already been won by us. Out of the EUR 110 million value, EUR 30 million of business won is for electric cars for Audi and Porsche. And EUR 80 million of business has been won for hybrid cars of Volkswagen, Daimler, BMW, Fiat Chrysler and Maserati. As mentioned earlier, [indiscernible] our overseas company, Endurance Overseas Srl, acquired 99% stake of the 2-wheeler company, Adler S.p.A. and 100% stake of the 2-wheeler brake company, Grimeca. Both these acquisitions include all know-how, patents, brand and trademarks, which has helped Endurance to enter the 200 cc plus motorcycle clutch assemblies and brake assemblies market for the first time, which the production will start in quarter 3 of this financial year. We've already got orders [indiscernible]. I want to inform you that both Adler and Grimeca companies have been our technology partners in the past and a very important part of our journey of growing our clutch and brakes business in India. I would also like to point out that Endurance, both in India and Europe, is actively pursuing its focus on gaining access to new technologies and also focusing on new product organic and inorganic growth. We hope to finalize at least one of these projects in this financial year. I would like to mention that Endurance has also entered 2 backward integration product areas, which are import substitutes also. First is aluminum forging axle clamps, which are required for our inverted front forks. Endurance has entered into a technical collaboration with a company, FGM Italy. And the production will start at our Aurangabad plant in July '21. We've already received orders go completely in [indiscernible]. The second product is wire braided hoses, which are required for ABS brakes. Already, we have won the orders, and this will start on 1st June at our Aurangabad plant. Both these other projects will help us in our profitable growth and business. The aftermarket business, which is our B2C business in India, was almost 6.5% of our net sales in the financial year FY '21. The aftermarket sales grew by 4.7% from INR 2,977 million. In the previous financial year, it was INR 3,116 million in FY '21 in spite of the quarter 1 almost being lost to COVID-19 lockdowns. We have a very large focus on our profitable aftermarket business, which we are targeting to reach at least 10% of our domestic net sales value [indiscernible] 6.5%. We are exporting also to 29 countries, and we are in the process of adding 5 more countries while exports of aftermarket in this financial year. We have also started trading in 2- and 3-wheeler tires -- let me repeat, we have started trading in 2- and 3-wheeler tires for both exports and for the Indian market. In India, we have a network of 377 distributors and an additional 97 for tires. As you all know, the COVID-19 pandemic gave rise to a very challenging and difficult situation here in FY '21. In most of quarter 1 of FY '21, our plant operations in India and Europe were suspended, ranging from 30 to 50 days due to lockdowns. At Endurance, we took this as an opportunity to become leaner in terms of people, and we focused to lower our monthly fixed cost amounts, variable cost percentage to sales in our plants, direct and indirect material costs as well as CapEx. Since the middle of April '21, unfortunately, we have seen lockdowns against in various states, which are affecting our sales in India. But our team, again, is taking full measures on fixed cost, variable cost, raw material and CapEx controls, with full focus on positive cash flows. On the environment 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 forests and driving use of natural gas and LPG in place of electric power and furnace oil. We are also focusing in lowering hazardous waste generation and to achieve zero waste through landfill. On the human resource front, we have implemented an agile and lean structure across our plants and corporate departments in financial year '21. We have implemented a new performance appraisal with a standardized balanced scorecard and a competitive payment. We have a very large focus on development of high-potential employees as we like to promote and grow employees from within the company at the [indiscernible] culture. We are also focusing on a succession plan for all key roles and recruiting capable candidates. Every year, we also implement sustainable actions on feedback of the employee engagement survey we conduct every year and track if the Net Promoter Score is increasing in different plants and functions, which means better employee satisfaction at Endurance as the Net Promoter Score goes higher. 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 everybody. Thank you very much.

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

Congrats on the performance in the quarter and the year as well. Firstly, was there no subsidiary in the quarter?

Sorry. I couldn't hear you.

I'm asking, was there no subsidiary in the quarter from Maharashtra government? First quarter, I'm saying?

You're talking about the first quarter?

This fourth quarter. Was there no subsidiary in the fourth quarter numbers?

Yes, yes. You're talking about the packets [indiscernible] of incentives?

Yes, yes, Maharashtra.

If we are getting from the Maharashtra...

Yes, yes, yes.

No. In fact, it is a very small amount. I would request Mr. Ray to reply to this.

Yes. In quarter 4, we received -- we booked INR 690,000. So you're right, it stayed positive [indiscernible].

INR 690,000.

Okay. And sir, the stand-alone performance during the quarter despite industry kind of declining, we have posted good growth on quarter-on-quarter basis. So which segments drove the performance on quarter-on-quarter versus in India?

Sorry. Is this growth?

If you look at the Q-o-Q, we have grown revenues. Industry was -- declined, basically. So what led to this outperformance versus industry, which segments, especially we saw growth on quarter-on-quarter basis?

Yes, yes. The largest, I think, growth is from the front fork and shock absorber segment. Suspension segment, I think, has the -- had the highest growth. Even aftermarket grew. The -- and I'm saying the percentage was the same. Brakes grew a lot, but because of the overall growth, brakes was the same, I would say, percentage of the overall sales compared to the previous year. But I would say suspension and the aftermarket grew the maximum.

Okay. And was suspension -- what aftermarket revenue around INR 120 crores in the quarter?

Sorry, For the quarter, can anybody answer that for the quarter?

Yes, you're right. It was around INR 119 crores, if I remember.

It was -- quarter 4 was about INR 1,199 million. Out of it, export was, I think, INR 347 million. Okay. So it's quarter [indiscernible].

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

My question pertains to the outlook for FY '22. I mean obviously, we are in a similar situation as first quarter last year. What are you hearing from our OE customers on the context being that demand was weaker than before, the impact of lockdown came in and inventory in the system being high? So what is the outlook or production schedules which OEMs are sharing with you? And how should one look at it from India business perspective?

Yes. See, what I would say that, like I mentioned, we are INR 12,000 million of business in the last 2 years, which has already started, acquired [indiscernible] as a new customer. We have always been in profitable growth and hard margin in industry growth. And that's why you saw quarter 4 being so good. We have the same expectation in FY '22. Unfortunately, we were hit by the huge surge in COVID-19 cases, which reached 200,000 in April. And that led to lockdown starting from Maharashtra, then Delhi and in various states. This also led to dealerships being closed, which affects the OEM plant operations. We also started shutting down up to 2 weeks or slightly higher. So definitely, there will be -- April, I would say, quite all right. May, of course, will be impacted. June, we have to wait and watch, looking at what will be the lockdown rules in June, whether the dealership will be allowed to open. If we are allowed to open, then, of course, I think it will be very good. Because like we saw last year, there was a pent-up demand built up. And the way we saw July '20 going up, it was unbelievable. So I'm an optimist. So let's see how -- what are the lockdown measures announced by states from June 1. It will more depend on that. But to be honest, FY '22, we have a great business plan because we have a lot of business.

Right, right. And second question pertains to you talked about tire distribution. So has that business already started? And the aftermarket revenues, which we indicated for FY '21, how much would have come from tires?

Okay. The business started basically last year in a very small way. But I think in this year, we are planning to sell approximately about -- I will just get this figure. [indiscernible] so the total sales is about INR 25 million we are planning in this financial year is what I remember. I don't have the exact figure right now. But I will come back to you later in the -- when I just see it.

Sure, sure. You said INR 25 million approximately for FY '22?

It is about INR 25 million in this financial year.

Okay. Okay. So that's primarily very small at least to start with? Okay.

INR 25 million was in FY '21. It is about INR 530 million in FY '22. Sorry. I stand corrected.

Sorry, you said INR 30 million for FY '22?

No, I said FY '21 was INR 25 million. And in '22, how much? Okay. So it's about INR 530 million in FY '22.

Okay. INR 530 million, that's a very sharp improvement. Great, sir. And last question pertains to European operations. So a, first, can we share European revenues and EBITDA in euro terms for fourth quarter and full year FY '21? And secondly, with respect to the European market outlook, given that most of the European and U.K. markets are now coming out of lockdown, what kind of growth we expect in euro terms for our European operations for FY '22?

I'll request for Director and CEO of the European Operations, Massimo Venuti, to answer this question. Massimo?

Yes. Okay. So in the third quarter of the fiscal year 2020, 2021, sales of new passenger vehicle in the European Union grew by 0.7%, considering also U.K., compared to the same quarter of the previous year. In terms of 12 months, there was a reduction of 17.7%, 19.4% considering also U.K. And at Endurance Overseas, we grew 3.2% compared to the previous year. And more or less, the reductions in 12 months was 18%. So the last quarter was -- the total turnover of the European market was posted it grew compared to a reduction in the total market. If we speak about the profitability in the last quarter 2021, it closed with 18.6% in terms of percentage and EUR 11.4 million in terms of EBITDA total amount. The net result was EUR 5.5 million and with 8.8% in terms of percentage. If we speak about the total financial year 2020, 2021, we closed EBITDA with EUR 37.7 million, 18.2%; and with a net result of EUR 14.6 million, 7.1%. Regarding the [indiscernible] market in terms of volume, in the month of April, yesterday, we received the official number. The month of April was more or less 218% higher compared to the previous year. But as you can imagine, April 2020 was very low for the lockdown. But if I compare the total registration of April 2021 compared April 2019, we are speaking about a reduction of 24%. And so let me say, in this moment, we are not coming back to the previous COVID situation. But apparently, for the next month, the volume are positive. Frankly speaking, the situation in terms of COVID-19 is improving due to the vaccine campaign. In this moment, all the OEM and European markets continue to suffer for the shortage of semiconductor, and this is the major problem in this moment in Germany and also in France and Italy.

Okay. Because most of your customers are talking about very strong growth in CY '21 as such, obviously, it's on a low base. But are we seeing improvement in our order book or production schedules which are shared with you?

No, if we speak about order book, as Mr. Jain told you, in 2020, 2021, we closed more or less EUR 20 million, EUR 19.5 million of year-over-year business. In this moment, the expectation to grow from our OEM is due to the fact that compared to the previous year, for sure, the situation is completely different. And they are starting with the full production capacity in 5 days per week with 18 shift. And this is positive compared to the previous year. But as I told you before, if I compare the normal financial year as 2019, 2020, in this moment, we are 20% less compared to the normality. So my expectation for sure is to grow in the next month, but in my opinion, it's very difficult to predict when we will come back to the same level of volume of 2019, 2018.

Sure. That's understandable. Massimo, can you share revenues as well for European operations for fourth quarter and full year FY '21?

Sure. In the fourth quarter, the total revenue was EUR 61.4 million compared to EUR 59.5 million of the previous financial year with an increase of 3.3%.

Right. And for the full year?

Full year, the total turnover was EUR 207.2 million compared to EUR 252.7 million of the previous financial year with a reduction of 18% versus a reduction of 19% of the market.

Understood. Understood. And lastly, a clarification on the order book for EVs and hybrids, which we shared. About EUR 80 million order book is for hybrids is what we have indicated. Any sense on the split between mild and plug-in hybrids of this EUR 80 million?

Unfortunately, it's very difficult to have this info because, apparent, I can tell you that more or less EUR 80 million of the total turnover is EUR 55 million with Volkswagen Group for the 1.5-liter engine where we produce the upper cylinder head. I can tell you that this EUR 55 million, more or less 50% is mild hybrid. This is the only info that we have in this moment. And also because apparently, they are developing other -- they will use this range of product in 100% of their segment. So they are modifying the line in order to assembly this engine and probably will be 100% mild hybrid in the mid or long term.

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

Anurang, I slightly missed your opening remarks when you were talking about the new Waluj CapEx. Could you please just repeat that? So there are 2 lines in that for the drum brake assembly and disc brake. Is that what I -- that's what I heard, right?

Yes. So I didn't talk about the CapEx. I mean I only said that the new plant at Waluj.

I meant, yes, the expansion, if you can talk about...

The expansion of disc brake assemblies will go up from 285,000 to 570,000 per month. And this will go up from 375,000 to 675,000. This is because of new orders, one from ABS, Hero, HMSI, RE, Bajaj. And also -- because here, the major competition is only [indiscernible].

Right. So this is over and about the Pantnagar new disc brake plant, which we spoke about last year, right?

Yes. So this includes a volume of 45,000, which is in Pantnagar. The expansion of 570,000 includes the 45,000, which is actually in Pantnagar, which already has started, actually. So the Pantnagar -- so I would say, technically, this plant will be from 285,000 to 525,000. But the disc will be total 360 -- 375,000 to 675,000. All -- this will be made in Waluj.

Okay. Right. So the Pantnagar expansion is actually -- we have shifted back to Waluj? Yes.

No, they're not going back to Waluj. It will remain there, but the capacity is going from 285,000 to 570,000, out of which 45,000 is in Pantnagar, which has already started. And 525,000 will go, like I said, by August, we are trying for earlier, which will be in the new plant.

Sure. And the disc brake is over and above in Pantnagar?

Yes, yes, yes. And this will be 375,000 to 675,000. That will be in the new plant, the expansion, the total. That is not in Pantnagar.

Sure. Got it. Got it. So yes, the other question I had was on the raw material side. Now we have seen a very sharp increase both in aluminum and steel cost. So can you help us understand how has that started to pass through both in our top line and the gross margin side? So have you seen -- already seen some impact in the last quarter? Because I think it's more of a pass-through, so it will be an optical impact on the margin.

See, if you see quarter 3 -- see, the major increases have been in the aluminum alloy price as well as on steel prices. If I see quarter 4 -- we started from quarter 3, actually. And you know that, in fact, RMC percentage in quarter 3 was about 63%. And quarter 4 went up to 64.3%, which was really due to aluminum alloy price going up by more than 10%, from almost INR 130 to INR 143. And steel prices went up by 12% from INR 70 per kg to INR 79 per kg. So they increased the RMC by 1.2%. Now the question is definitely large part was passed on. But in the supply, if you know all the steel producers, and all were very, very tough with us from quarter 3, they were not willing to supply. But they have a huge market for exports in China and I believe other places. So we had to do spot increases. So this margin, which we did, and as you know, that EBITDA was 15.9% in quarter 3 and quarter 4 was at 14.9%, this was impacted with 1.3%, but it was also due to the spot price increases, which are going to pass on to revenues. And of course, quarter-to-quarter, the pass on was there. But sometimes we give spot increases because to do a higher sales is better than to take -- it's better to take a cost increase and sell more than to worry about whether a customer will pay. So we had to take this on the spot cost quarter 3 and quarter 4.

Got it. And do we expect further increase in Q1 as well? I mean are similar increase being seen in Q1 as...

Yes, the increases are there, but that will be passed on. We've already reached understanding. So that will be passed on. The increases will be there.

Perfect. And sir, finally, I mean, we have generated free cash flow even in this year despite a very weak first quarter. So just wanted to understand the CapEx plan now given the expansion is already announced. So what would be the India and Europe CapEx for FY '22?

I would request Mr. Ray, our Director and CFO, to answer that. But I just want to add one thing here before Mr. Ray speaks. See, because of this lockdown, we are also trying to postpone some CapEx, which is really not required. So it is a bit flexible because when we had done a CapEx plan in March, we didn't know about the lockdown in the second half of April. But I'll request Mr. Ray to answer.

See, when we sat down on the drawing board before the second wave came in, our plans were definitely upwards of INR 300 crores. But as the -- this COVID sweeping the country, we would just hold our hospice for the time being and see. Last year, we spent a tad below INR 200 crores. That was primarily due to the fact that first 4 months, I mean, industry didn't see much movement. So therefore, right now, it's probably a little premature to give you a number. We will just wait until June to see how things are sort of working out. Then again come back and decide what would be our CapEx for the year. And on Europe CapEx, I'd request Massimo to elaborate further.

Yes. For the European market, the gross CapEx recorded in the last 12 months was about EUR 24 million, of which EUR 20 million specific for products and product capacity. The main project, Volkswagen, EUR 4 million; [indiscernible], EUR 6 million; and Daimler, EUR 5 million. Regarding the 2021, 2022, in my opinion, we can maintain more or less the same level of investment. But please consider that in this financial year, we will install the production capacity for Audi and Volkswagen for the new hybrid and electric solution. And so this will be another important year in terms of investment, more or less EUR 20 million.

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

Sir, firstly, if you could just give me the -- how have your key customers like Bajaj, Royal Enfield, Honda, Hero and TVS, what is the kind of growth rates they've reported in FY '21? Or TVS, I suppose, will be the new customer. So probably if you can give me the revenue number over there, if [indiscernible].

You're talking about [indiscernible]?

No, no. For all your 2-wheeler customers, you have Bajaj, Royal Enfield, Honda, Hero. How have they grown in FY '21? How much have they grown?

See, I'll tell you a few. Like Bajaj Auto, there was a degrowth number of minus 13%, okay? So we grew only minus 4%, 4.3%, just to give you an example. HMSI was a degrowth of 22.5%, but we grew 1.8%. Then Hero MotorCorp, they degrew by 9.7%. We degrew by 5.8%. Yamaha degrew by 14.5%, but we degrew by 6.2%. Now people like Hyundai, which has the 2 wheelers, so like the 2 wheels, 3 wheels, of course, it's a low base, we grew to 58% in spite of the degrowth. And Kia and Hyundai saw definitely a growth of 107%. And Suzuki, on a smaller number, degrew 33.6%, where they had a de-degrowth. So I mean, we have done, like we've always maintained -- we have done better than industry because we are adding a lot of new business. And like I said, our aim is to supply all other product areas to all the OEMs. Let's go for higher value-add products, which I mentioned. So all that is helping us to [ prove ourselves ].

I just missed out on the Royal Enfield number. How much have you grown there this year?

No. Royal Enfield was similar. We degrew with them at about 9.1%.

Fair enough. Fair enough. And Yamaha, you said you declined by about 6.2%. But still, there was an outperformance versus their production.

Yes. Yes. They degrew by 14.5%.

Got it. Perfect. Sir, what would be the breakup of your aftermarket revenues between exports and the domestic number? Can you just give me the aftermarket export number?

See, normally, I don't give the split up, to be honest. And normally, I don't give the split up, but I can still say it's not a -- see, the exports -- if I see FY '21, that's really a [indiscernible]. I'm looking at FY '21. The -- what we did was INR 97 million. So we grew out of a total of INR 312 million approximately. So INR 90 million out of INR 312 million was exports, INR 90 million out of INR 312 million.

Got it, sir. And sir, just on this -- the last question was on this rationale for entering the tire trading segment. While the ROEs in this particular business will be fairly high because it's a trading sort of a business, but I just wanted to pick your brains on what has led to this particular decision of getting into tire trading. What is exciting about it?

See, the thing is, I think this helps the aftermarket for a good growth -- as a good, profitable business. So don't ask me what is the margin, I will not tell you. But I would say it will lead to a good, profitable growth based on the tie-ups which we have with the manufacturers. And the quality and all is well in place.

And these tires, these are getting manufactured or are we importing them?

No, no, no. We are not manufacturing tires. That's -- again, we are trading in tires. [indiscernible] dropped by us 2 years ago, which you know what happened. So there is no manufacturing, only trading, buying and selling and we making money on it and ensuring quality control. That's all. And I think the reason is that we have a strong brand image in the aftermarket vendors. So we are selling under the Endurance name. So -- and I must tell you that the 97 dealers already joined us. I mean, this is a good business in trading. And why we should not have a profitable growth in tires? Because like I mentioned already, we have INR 97 million that is growing and like I said profitable. And I think you would look at [indiscernible] 2.5 years after we mentioned it to you. So definitely, I'm not joking with you, on a lighter note.

The next question is from the line of Nitin Arora from Axis Mutual Fund.

Sir, just on the electric side, we saw declare already here setting up a plant, I'm talking about Ola, you mentioned in the opening remarks. You also saw [indiscernible] have done. Then in your experience, how we are approaching this setup? So all of the OEMs are also about to launch their electric vehicles in the next 2 years. And plus, Ola is a big guy that has come in the market there. So I'm sure you would have also approached for some products for them. But generally, wanted to get a sense how you are now approaching given 3 years next with the launches, you would be having a negotiation with all the vendors. So what kind of a product pipeline and where we can grow in the electric, if you can elaborate that? That's my first question. Then second, a bookkeeping question, where you're talking about outperformance in the 2 wheelers and all. I just want to know only one bookkeeping number is, what was the total 4-wheeler revenue in FY '21 for you? Those are the 2 questions.

So I would say the 4-wheeler revenue in India, I'm talking now, 4-wheeler was about -- you can take 6% of our revenue of -- I'll just tell you what was the total sales. It was -- India was INR 47,856 million, correct? INR 47,856 million into 6%. And this is -- we are growing with Hyundai, Kia, Tata Motors. Mahindra, like I said, we just got a tractor order, which we'll be starting now for tractors. And we're already working with Sundram Fasteners, Maruti, many new OEMs in the Chennai belt and also [indiscernible] casting because you see, there are very few players in this market of machine castings, especially for components. There is the Sundaram Clayton. There is Jaya Hind. There is Sunbeam Auto. There are very few. There are few players, so the opportunities are huge. But we have been very selective. So we are looking at machine castings, which are by [indiscernible]. And so that's to answer your first question. And the second question is, you see, last year in, I would say, 2020, our focus was on the existing OEM and OEM-funded companies. And you must have heard me say that on investor calls. Now we changed our tilting towards the new OEMs like Ola and [indiscernible]. So -- and there are others. I don't want to name them. There are some confidentiality things. But we are looking at existing OEMs, new OEMs and companies funded by them, is what is our strategy, given we -- that they have the technology, we have the financial strength, we have very good control on the vendor base on the pricing front. So these are the reasons right now, but these things change. Tomorrow, we may go with more. We'll see about -- what happens in the future. And just to let you know, Bajaj, we are involved in all the platforms of scooters and 3 wheelers. TVS Motor, we are in touch with them for the scooters. Could you hear me, what I said?

I can, sir. I can.

So Bajaj Auto already, we believe, on the order takeup, we have started with suspension castings for them. 3-wheelers will be starting. When they start, we have won orders for both their engines. So TVS Motor, we are in touch with those scooters. We will get the -- the [ deal ] has come. Mahindra Electric was a tandem master cylinder for the 3-wheeler brake assembly, already started supplying 800 per month. So we are engaging. See, we are not talking too much, but we are fully aligned to existing and new OEMs and companies funded by them because we feel they will succeed better. But we are not going with everybody, I'll be honest about it. But yes, Ola is there and we engage with them.

So is it Ola -- sorry, just to clarify. Ola, you're engaging, but is there some revenue potential on a product that has been selected there? Or you're still in the negotiations there? I know that the vendor base is finalized. So I just wanted to ask you straight away.

So that's why what I said earlier, we were not focusing on the new OEMs last year. We lost out in the first phase. We lost out in the first phase basis. But in the new phase, we do hope to get there because we are a leader on these products. And we are a cost leader and technology leader. So I'm very confident there because you've seen our strategy. And to be honest, last year, I didn't know that [indiscernible]. I'll be honest, I didn't know that. And they'll be funded by SoftBank in a big way. So we didn't know that. So things change, things also change. And we are focusing on a lot of new business we are getting from TVS, INR 2,000 million of business. So we are focused on so many things. So we have kept it a bit [ out of cycle ]. So now with this big announcement, of course, we will be happy to be a part of it. We'll do our best to get the order...

The next question is from the line of Hitesh Goel from Kotak Securities.

Congratulations on winning a lot of orders in this tough environment. Sir, I just wanted to get a sense where I see your outlook, you are actually going to gain a lot of market share on the wheels, disc brakes and ABS, which will be the key growth over and above the industry growth that I can see, right? So can you give us some sense on what is the revenue potential from this additional -- apart from the normal growth that you see in the industry? Because why I'm saying that is you need to understand how your growth will be higher than the 2-wheeler industry, right? So these are substantial orders. So if you can give us some sense on these 3 buckets, basically.

See, the problem is I've never given forward-looking figures because I've always said uncertainty is the new normal. I maintain that. I never give forward-looking figures. I've always said since the IPO, higher than industry growth. I've also told you profit growth of only INR 12,000 million of orders in the last 2 years, we have INR 15,000 million of request for ports. You've seen our performance in the financial year '21. It was a very tough year or the toughest we've ever had. So I cannot give you forward-looking figures, but I think there's a sense that you will have to get to how well we can.

So sir, when you're talking about 12,000 orders, so what does that mean? That is the annual order you can win or it is over a period of the vehicle life?

In the last 2 years, where the peak will be FY '22, '23, the peak, because it includes orders even for Hyundai and Kia. And there are some projects of brakes which will start only end of this financial year. Because given brake orders from everybody, from Hero, HMSI and...

So there's a peak annual revenue, additional annual revenue from Hyundai, Kia and other customers, INR 1,200 crores, over and above the industry growth. That is how your future looks like.

No. No, I didn't [indiscernible] this. I mean, these are orders which we have won, okay? So these are orders we have won now. I don't know which vehicles the OEMs will phase out, which new vehicles they will get, which new variants they will get. I'm only making a statement that I have won these orders, and I have always performed higher than industry growth and profitability.

So basically, it's a combination of the existing programs and the new program that you have won basically, right?

Yes. Yes. Yes, absolutely. Because I'm sure you would appreciate these future vehicle numbers, how the OEMs will do, what will be the uncertainty? We have no idea. So -- and we have seen how things have gone in the past, right, from global financial crisis and demonetization and COVID now. So we are focusing on constant goals on our margins, consolidating our plants, making up -- launching multiproducts with lower fixed costs. I mean, we are doing a lot of strategic things. We're outsourcing to our vendors. We have our own Endurance vendor appreciation. I mean, we have done a lot of work last 11 years to reach this stage. It's not easy to make this kind of margin win when your price is lower than the competition. All my prices are lower than competition, most of them.

So sir, just on my last question. On this, if you like look at the stand-alone performance, the gross margins have deteriorated this quarter. Is there a lead lag in terms of passing to the OEM? Or this is the kind of gross margin we should see for the first half?

Okay. I would request Mr. Ray to answer this.

Yes. This question actually was answered by Mr. Jain a little while back because -- I would like to answer this way, that our RMC percentage quarter 3 was 63%, which became 64.3% in quarter 4. You would remember that mega project incentive booking in quarter 4 was next to nothing. It was only INR 6 lakh 19,000, whereas in quarter 3, it was INR 23.4 crores. So if you knock that off, you would get an RMC percentage of 63% versus 64.3%. This was primarily driven by increase in aluminum, which went up by 10.3% and 12.1%, if I take a weighted average of the kind of steel that we use in our products. So this explains that 1.3%. But what Mr. Jain said a little while earlier is very important that there were spot increases. Because steel, crazy things were happening. Steel producers were not willing to supply, unless you get the spot increases. Some of that cannot be passed on. So therefore, that explains the question -- I mean, gives you the answer to why the gross margin came down between quarter 3 and quarter 4.

The next question is from the line of Pramod Amthe from InCred Capital.

This is again a follow-up related to the raw material cost pressure. Considering the fact that both the aluminum and steel have a different behavior in terms of cost and the way you can pass on, what is the mix in your cost basket in terms of aluminum and steel, please?

Sorry, what is the...

Mix of your cost in terms of aluminum and steel based on your component? Is it like 70% aluminum versus 30% steel? Or they're equal proportion of your raw materials?

I don't have the answer to that right now.

I also don't have this answer because die casting products would, by and large, have aluminum. So I can't give you a precise number now.

Because aluminum is used both in proprietary products as well as on like castings have it. Manifold castings and shock absorber castings have it. Brake castings require aluminum. So Pramod, we don't have that breakup. I'm sure we have it, but [indiscernible].

Sure. Maybe I'll take it up separately. And second, again, related to the cost pressure, how do you see in terms of competition behavior in the sense that these are like unprecedented type of cost hikes we are seeing? And you -- as you said, you have relatively better balance sheet. And hence, you opted for better production versus losing out on the margins. Do you see this helping out in the medium term for you to gain market share versus competition and also in terms of winning new orders as and when you open up in a much better way?

Definitely in the last many years, I mean, we have seen price has been one of the most important factors. One is, of course, the technology. One has to have the technology and the price before you enter a new product. And then, of course, is the quality. Quality has the highest win rate. You have to maintain your customers in place based on aesthetic fitment and function as well as the warranty should be [indiscernible] on the field, okay? But it's your price and it's your technology that gets you. Today, I think on both technology, I've already mentioned, we have always fast-tracked to the first year [indiscernible] I mean not [indiscernible]. And we are trying to give first time by product. We have advanced engineering, sales, [indiscernible] R&D products areas. Plus [indiscernible] technology and prices because, like I mentioned, we have done a lot of work on our Endurance vendor association, on our outsourcing of our internal operations to them. We have done a lot of operational efficiencies. We have consolidated plants. Many plants have shut down and transferred business to other plants like Pune became from 4 plants to 3 plants, mandatory shutdowns. We did a [ BRS ] in our first die casting plant in Waluj. Plus, we are going for multiproduct plants, for example, our Pantnagar plant. All of our product areas, if their sales go down, my big spot is [indiscernible] and I don't lose so much of money, do you know what I say? So there have been many strategies whereby you see that when the sales go up, we do so well. And this is a continuous focus, which we are doing. So going forward, as the sales increase, as the new business increases, we are definitely very confident. But of course, there's only one rider I must tell you that if the R&D percentage of sales is going up, it does affect the EBITDA margin percentage. That's mathematics. I may not lose money except for the spot increases, which are demanded. But definitely, it will affect the EBITDA margin percentage, if the RMC percentage to sales keeps going up in the future.

And sir, the other question is with regard to the EVs. Do you see -- as you expanded your customer base now to even look at the newcomers, what are the type of parts you thought might be -- will u supply to EVs 1 year back or 2 years back? And has that scope expanded multifold? Would you be able to give us some color on it?

Yes. So definitely, our suspensions, brakes and castings are there already. Clutch will not be there. But to be honest, like I said in my opening remarks, we are looking at inorganic and organic growth. That's also for the EV products. But I will not tell you the product. I've said in the past investor meetings, when we are ready to go, we will tell you.

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

Sir, my question is European operations. So like are we seeing improvement in the European market volumes on a quarter-on-quarter basis so that for us, revenue in this quarter will be higher than the March quarter?

Massimo?

Yes. Could you repeat the question, please?

So my question is that are we seeing improvement in the volumes in the European market on a quarter-on-quarter basis sequentially, so that our revenue in Q1 would be higher than what we delivered in Q4?

For sure, because in the Q2 2020/2021, we closed with EUR 56 million; in the Q3, EUR 59 million; in the Q4, EUR 62 million. So we are growing. We are coming back to the normality. But for sure, if I compare this figure compared to 2018/2019, we are more or less 15%, 20% less compared to the normality. But in this moment, we are working 5 days per week. We are working 18 shifts. Even if, as I told you before, a lot of OEM had a problem of a shortage in semiconductor, even if there was, for sure, an impact also in the next months due to the COVID-19, we are coming back in the normality. So my expectation for the next quarter is to continue to maintain the stability of the last 2, 3 months.

And on April, a better month versus March in -- as far as the industry volumes are concerned?

No. More or less, it was the same. But as I told you before, for sure, now in this quarter, it will be very difficult to compare the figures compared to the previous year. For this reason, we are trying to compare these figures with 2019. And as I told you also, also the month of April closed with minus 24.5% compared to 2019.

I'm not talking about versus last year. I'm talking about March '21 versus April '21. So was April better than March on industry volumes?

It's more or less the same, considering the working days. But we are working at the same level of March and also February.

Okay. And sir, lastly, on Indian operations, like we said that in brake assembly, we said last quarter that our market share will probably improve from 30% to around 55% in this year. So will that improvement will be on an average for the full year? Or did you see the higher impact in the Q4 or second half?

I couldn't understand the question. What is 30% to 55%?

So last quarter, in the conf call, you said that in the brake -- disc brake assembly, our market share is around 30% currently. And in FY '22, we are looking at almost like 55% market share based on orders that we had as we are expanding or doubling capacity.

Yes. I mean, that was a calculation which was done based on the number of vehicles sold. And that will be at the peak, the ultimate peak, once I reach the peak level.

Okay. So major impact of that basically will come through in the second half or fourth quarter of this year, FY '22.

Yes. Yes. So right now, disc brakes is around 30%, and the discs is at about 45%, discs only. And as you know, this time, going from 2.75 -- 375,000 to 675,000 by August. And brakes, we are almost doubling. So there's no reason we should not do this business. So I don't like to give forward-looking figures, but you are right. You have got me there, but that is the plan, for sure.

So in FY '22 -- okay. So in FY '22...

FY '22 peak, I can reach that figure, yes.

I got it. So my other question is in FY '22, for us as a company in India, will higher growth come from brakes? Or your suspension also will grow?

I think brakes, suspensions, machine castings, these 3 will be the largest growth areas.

Okay. Okay. So even the three...

And then there was brakes. We also have the ABS starting. We have, of course, all these brakes, disc brakes assemblies and disc suspensions. We have inverted front forks, shock absorbers. The business is only increasing with new customers like TVS. And we're going to [ link this ] to casting for the 2-wheelers, 3 wheelers, scooters. So there, we have higher value-add coming with those. And of course, we have a big growth plan for our aftermarket, big growth plan for aftermarket.

The order that we had got from Kia and Hyundai...

[Operator Instructions] Sir, we've got a few more questions in the queue. Shall we take them?

Yes. Yes. Yes, of course. We'd like to answer all the questions.

We take the next question from the line of Jay Kale from Elara.

So my first question was on your European business. So you mentioned about your orders in EVs and hybrids. If you could just talk a little about the products that you've supplied to the EVs and hybrids, how complex or how different are they than the existing ICE products? And what would be the competitive intensity in those EV kind of products that you are supplying? Would they be the same players that are currently supplying the ICE products in the die casting business?

Okay. I will -- yes, Massimo.

The products in terms of process and technology are the same of the past. We are speaking about basically a transmission component and also some engine components. If we speak about hybrid technology, it has engine cover vehicle and also some [indiscernible] for the transmission. In -- if we speak about the process, for sure, there is a different alloy. In some cases, we are using primary alloy due to the fact that they have to respect some technical rules. And so the technology is going back -- from the secondary alloy to the primary alloy, as for the structural part. In some cases, we are speaking about component for the chassis, as brake system for the chassis. But if you speak about our position compared to the historical competitor, we are, for sure, in a better position compared to the market due to the fact that in this kind of business, you have to invest in bigger pressure die casting machine. And as you know, this is one of the point of strength of Endurance overseas because a lot of the foundry, a lot of the machining company in European markets are focusing the small machine. And for this reason, in this moment, we are more appeal compared to our competitors.

Sure. Just a clarification. You mentioned about the hybrids. But would it be similar for the EVs? Because I guess in the EVs, it would be more of battery casing, housing and maybe some other components. The engine components wouldn't be there. So the complexity and...

Yes. I tell you which is the difference. Because in this moment, for the electrical vehicles, the transmission is completely electric, okay? And so with the normal component of -- in a pressure die casting. For the hybrid technology, the process and the components are the same of the internal combustion engine because for the hybrid solution, in a car, they are assembling the electrical engine and also the normal internal combustion engine. And so we are continuing to produce the same part also for the hybrid technology.

The next question is from the line of Sonal Gupta from UBS.

I just had a couple of questions. One, just following up on the EV side. I just wanted to understand, I mean, like for your existing products like suspension brakes, et cetera. I mean, does the value, let's say, compared to, say, an active -- does the value really change as you go to EV, I mean, plus or minus? I just wanted...

No. See, what happens in casting, there are different types of castings. So if you talk about aluminum castings, like you don't have cylinder heads or cylinder blocks on a price basis. So you may have battery housing, case extensions. Then there are some plates. You have some modules. So the -- some terminal base casting. So what is happening is that the size and shape is changing. But in terms of pricing and profitability, we don't see any change. And the existing die casting machines can be used with different pooling. So we don't see that in casting. As far as brakes and suspensions -- hello? And as far as brakes and suspensions are concerned, you see the products could be slightly different, looking at the inputs we get from the customers, like suspension in terms of damping force, value of compression and tension. So it could differ. But in terms of pricing, we don't see much. But it could be plus/minus. But it doesn't depend upon the type of shock absorber, the type of front fork or the type of brake which is required. But we don't see that much of a change in brake suspension and casting.

Okay. Great. And sir, could you just share what is the percentage revenue that you have from like the charge for the year and Royal Enfield and some of your other large customers?

See, normally, I don't give this breakup. I do not like to -- I have done it in the past, but I don't like to do this, to be honest. But of course, Bajaj is the largest, as you know. So if you see the top 5, you have Bajaj. You have HMSI. You have Volkswagen, and you will have RE. And you have the Fiat Chrysler, and now it is called Stellantis with the tie-up with Peugeot. So these would be our top 5. And of course, we are doing a lot with Yamaha, RE, TVS, of course, which is new. So we're doing it with everybody. But Bajaj is the highest. I think that is what I tell you now.

Ladies and gentlemen, we'll take the last question from the line of Chirag Shah from Edelweiss.

Am I audible?

Yes. I can hear you.

Sir, I had a question on the tire distribution side and what is that thought process? Also, how do you decide on the aftermarket and why only tire distribution? Your point is absolutely valid that it helps in overall growth, but you could have chosen some [indiscernible] to you as an aftermarket tool. And what more products or areas you would be looking to add in this aftermarket business as a distribution or a trading business?

Yes. So already, we are trading in some other products also. We call them value-add products, which I think like -- I think connecting rods are there. And we have a few other items which we found value-add, where we can make money, where we have good suppliers. As far as the tire was concerned, it is a high-value business. We could make money. We have a very good growth potential for our aftermarket business. And that's why we chose it. And tires has got a very good replacement market, as you know. It's very strong in autumn. And before Endurance has a good brand image, it has been received quite well. And fortunately, we could get the good suppliers to supply us. And the quality controls are done by us also, do you know what I'm saying? So we ensure that the quality is maintained in all the value-add products we do. So tire was a new addition we started last year. Like I said, about INR 25 million we did last year and INR 560 million this year. So some of the products which we are doing value-add, just to let you know, are like wheel rims, control cables, charged shocks, rocker arms and connecting rods. And here, we make money, you know what I'm saying? So aftermarket business is 2 phase: One is our products, and second is the value-add products. So tires come as a part of the value-add product trading, right? And it's got a high value. So even if the margin percentage is of a certain amount, the value of profit I make is high on a time because it's a high-value product.

Yes. And any more products you are evaluating for aftermarket? And aspirationally, what kind of revenue percentage you would like to have from aftermarket, including suspensions...

[ 10.5% ] of domestic sales. We would like to reach 10% of domestic sales, but it depends on domestic sales also. We are really growing. The both grades, we are really growing. So to reach that 10% is not that easy, but that is our target.

And you -- more products you are looking to add over there in the aftermarket, sir?

See, right now, I will not be able to tell you. But we are exploring the products, but I'll not tell you which products. The ones I'm doing, I'll tell you.

Yes. And sir, I had a follow-up question on the disc brakes. You indicated that at peak, you could be around 55% market share. I presume that probably would be the highest market share for most of your products, 55%. So that would be the peak market share across products you would be having?

Yes. Yes. Yes, because here, the major competition is only Brembo. And with the help of Grimeca, we have entered a 200 cc-plus brake market, which is giving us a much more higher value-add. And a new market is opening up from this year for us. So this is an estimation. Now please don't catch me on future investor call in that 55%. It will be plus/minus that. But yes, when I'm going -- but when I'm going from 285 to 570, that answers. And today, I'm at around 20% to 30% market share on brake systems. So from that angle, I get 55% looking at the overall volumes, because India is a market which of FY '19 brings about 24 million, 24.46 million 2 wheelers in FY '19. Of course, it went down in FY '20 to 20.9 million and 18.4 million last year. But I see no reason why I should not come to 24.4 million. Not that I have taken 24.4 million in this financial year. But looking at the growth and looking at the opportunities from so many OEMs and derisking of people like TVS from a Chinese supplier to us and new orders from Hero, HMSI, so I don't see any reason why we should not be at that figure. So this was an estimated figure, which I gave you in my last call.

Yes. Perfect. And sir, last thing, suspensions, what would be your estimated market share according to you? If I have to do a like-to-like comparison with brakes, what would be different in terms of market share?

It is about 40%.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments.

Okay. Well, I don't have any closing comments, except to just tell you that, like I said earlier, April was quite good. We are caught up in this lockdown scenario, which is definitely affecting our sales. But like I said, we are optimistic from June, the recovery should take place. Like last year, it happened from July, maybe. So I'm an optimist. There would be pent-up demand. And definitely, we'll have -- we'll control whatever costs we can on fixed variable materials as well as on CapEx investments. So we'll -- and luckily, we have learned a lot from this last year's experience. So I just want to tell all the shareholders here, the investors here that we'll continue to do our best for a profitable growth. But external factors are beyond our control. We can do it. And I would to like to thank everybody for their support and their confidence in Endurance. So that's all from my side.

Thank you very much, sir. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.