Endurance Technologies Limited (ENDURANCE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Endurance Technologies Q1 FY '25 Results Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that the 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, Lizan. Good afternoon, everyone. Welcome to Q1 FY '25 Post Results Conference Call of Endurance Technologies. We are pleased to host the management team. We have with us today, Mr. Anurang Jain, Managing Director; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Rajendra Abhange, Director and COO; Mr. Raja Gopal Sastry, Group CFO; and Mr. Raj Mundra, Treasurer and Investor Relations. I'll hand over the call to Mr. Anurang for his opening comments, post which we can start with the Q&A. Over to you, Mr. Jain.

Thank you very much, and good morning to everybody. I would like to share certain details of how we have done in the first quarter of this financial year. In India, first quarter of FY '25, as per the SIAM data, the 2-wheeler industry sales grew by 19.8% compared to quarter 1 of the previous financial year. Scooters grew by 27.9%, and motorcycles grew by 16.5%. The automotive industry in India had a growth of 16.3%. In our overseas operations in quarter 1 of the financial year, EU and the U.K. market saw an increase of 4.1% in the volume of passenger cars sold, while our European sales, including tooling income grew by 16.8% in euro terms. I will now brief you on the financials of the first quarter of FY '25. During quarter 1 of this financial year, as compared to previous year's same quarter, our consolidated total net income grew by 15.9% from INR 24,666 million to INR 28,593 million. Consolidated EBITDA grew by 28.8% to INR 3,378 million to INR 4,079 million. Consolidated EBITDA margin was at 14.3%. The profit after tax grew by 24.68% to INR 1,635 million in the previous year to INR 2,038 million, and the PAT was at 7.1%. This included the income from Maharashtra state Mega project incentive of INR 227 million. There was no consolidated net debt, and the company had a net cash available of INR 6,127 million. During quarter 1, our stand-alone total income grew by 16.26% from INR 18,361 million to INR 21,346 million. Standalone EBITDA grew by 19.74% from INR 2,409 million to INR 2,884 million with an EBITDA margin of 13.5%. Standalone profit after tax grew by 24.76% and was INR 1,628 million at 7.6%. This included the Maharashtra state Mega project incentive of INR 227 million. There was no net debt and there was a standalone net cash available of INR 5,818 million. I would like to mention that Endurance is focused in both its Indian and European operations for profitable growth. The detailed financials are available with the stock exchanges and on the Endurance website. I would now like to share certain key points of the first quarter of FY '25. In quarter 1 FY '25, 74.8% of our consolidated total income, including other income, came from Indian operations, and the balance, 25.2% came from our European operations. In India till date in FY '25, INR 1,843 million of new business was won from OEMs other than Bajaj Auto, which included TVS, Hero MotoCorp, Mahindra & Mahindra, Kawasaki, Piaggio and Tata Motors. These included INR 1,061 million of electric vehicle business won, which includes INR 795 million business from Mahindra & Mahindra for their EV 3-wheelers. INR 300 million of suspension business won from HMSI, which is the new business for our 160cc motorcycle. INR 257 million worth of brakes assembly business won from HMSI and Hero MotoCorp. INR 87 million casting orders, aluminum casting orders from a Japanese multinational for Mahindra 4-wheeler application. And INR 68 million business won for TVS electrical vehicle 3-wheelers for suspension, brakes and driveshafts. Despite the volumes are low for this TVS vehicle, this is a very significant view from a future perspective. I would like to mention that we have INR 17,705 million worth of request for quotes from OEMs. Since FY '21 in India, INR 36,774 million of business has been won, out of which INR 28,364 million is new business and replacement business is INR 8,410 million. Out of this INR 28,364 million new business, INR 24,425 million will reach peak sales by FY '27 and it will be mainly for our product areas of suspension, castings and brakes. Our TVS business has reached a cumulative of INR 5,389 million, and this business is growing. The business won has been for brakes, aluminum alloy wheels and suspension. The INR 5,389 million sales will reach peak sales in FY '26. The total business win for electric vehicles till date is INR 8,421 million. This orders are mainly from HMSI, Ather Energy, Bajaj Auto, Hero MotoCorp, Mahindra & Mahindra, Tata Motors, TVS and Ampere. This is apart from the res INR 4,242 million business won by a subsidiary company, Maxwell. The significant new business, which will start in this financial year are INR 719 million of new business from TVS in FY '24. Out of this INR 309 million was for inverted front forks and rear mono shocks. The INR 404 million was for the TVS Raider and the HLX bikes, and this was a front fork and shock absorber business. So these SOPs are planned from this year in October 2024 onwards. In FY '24, we also won the Hero MotoCorp new business, where the inverted front fork, the business win of INR 240 million, the SOP is planned from next month, which is from September 2024. The disk brake assembly new business of INR 263 million has already started from April 2024. And also the front fork and rear shock absorber business wins at our Halol plant of INR 900 million has also started from April '24, and this will reach peak by quarter 4 of this financial. Also the Suzuki new scooter front fork business, which was won earlier, we has been won in FY '24 INR 253 million is in addition to the INR 1,400 million front fork business, which was won earlier. And both these combined SOP business value of INR 1,653 million will start in quarter 3 of this financial year. We also won the HMSI disk brake assembly new business of INR 294 million in FY '24, and SOP is planned in quarter 3 of this financial year. Also the Royal Enfield alloy wheel business of INR 960 million in FY '24, the SOP has started in April of this year. The 35-dia suspension inverted front forks was supplied to KTM Austria will also start by quarter 3 of this financial year. And the value of the business is INR 400 million per annum, and it will be directly exported to KTM in Austria. We also won INR 876 million per annum business from Hyundai in FY '24 for aluminum castings, which SOP is in quarter 3 of FY '27. HSMI has also awarded us 2 new businesses in quarter 4, which had 100cc shine motorcycle front fork and rear shock absorber business for INR 343 million per annum, which SOP in February 2025. Second is the first electric vehicle scooter of HMSI for the front fork rear shock absorber business, which SOP is also in quarter 4 of this financial year. As far as electronic vehicles market is concerned, it offers a very significant opportunity for the future and the growth in the auto components sector. And as you know, Endurance has executed a share subscription and purchase agreement for acquiring 100% of equity share capital of Maxwell Energy in a phased manner by FY '27. So 61.5% is the stake in Maxwell, which we have recently increased in July from 56% and which is as per the agreement. And as you know, Maxwell is in the business of advanced electronics, particularly in the battery management system, for 2-wheeler EVs and for battery packs. At Maxwell, we have won the battle management system business of INR 457 million till date in this financial year and we have a pipeline of RFQs of INR 1 billion. Till date since FY '22, INR 4,242 million business has been won by Maxwell. Despite the latest strength in the EV market, we believe that these orders will help us achieve a sale in excess of INR 2,500 million in FY '27. I'm happy to inform you that in Maxwell, we have recently won an order of INR 344 million for motor control units, and the SOP of this will be in March 2025. We are in touch with a lot of customers who secure business for various electronic products. So with the current order book, the order pipeline and our technical strengths between Endurance and Maxwell, we are confident of achieving our goals in this electronics space. This big assembly business is growing with addition of Bajaj Auto, TVS, Royal Enfield, Yamaha, Hero MotoCorp, Ather as well as HMSI new business. Our second plant at Waluj, Aurangabad has been already set up for increase in volumes and has already started the SOP last year. We've already started disk brake assembly supplies to Hero MotoCorp in April in this year, and supplies will now start to HMSI from quarter 3 of this financial year. So with this new plant, our disk brake assembly volumes have increased to 6.2 million numbers per annum and brake disks to 8.1 million numbers per annum as well as our 3-wheeler brake assemblies to 1 million numbers per annum. And we hope to reach these volumes in this financial year from these 2 plants. We are also working on the product and process technologies to manufacture high-performance braking systems for catering to more than 350cc motorcycle market. We are planning to start this business by March 2026. As you're aware, the supply of 2-wheeler ABS assemblies to Bajaj Auto and Royal Enfield has started. We have reached a run rate of 400,000 ABS assemblies per annum. As you know, the competition is mainly from Bosch and Continental, which controls a major market share in this market. We are now in the process of supplying dual channel ABS from next month onwards, and we have scaled up additional assembly lines by 240,000 ABS assemblies per annum, which has taken the total capacity to 640,000 ABS assemblies per annum, which run rate we will reach in the quarter 4 of this financial year. We are further planning to increase these volumes to 1.2 million single and dual channel ABS assemblies by 2026. We've already started manufacturing both the stainless steel braided hoses and the ABS valves in-house, which has helped us in lowering our cost and stop the dependence on imports. Due to increased orders in aluminum alloy wheels from Bajaj Auto, Yamaha, India, TVS, and now Royal Enfield, we are now at our 2 plants at Chakan, going to supply at a run rate of 5.5 million wheels per annum from this quarter onwards. In FY '25 till date, Europe business has won orders of EUR 3.1 million, including the first Volkswagen business win for a specialty plastic component for a hybrid series. In the last 9 quarters, out of EUR 118 million order won, EUR 61 million orders are for the battery EV business and EUR 37 million is for the hybrid business. In the calendar year 2024, the battery EV penetration in Europe has been at 13% and hybrid is at 36%. We are, therefore, well placed in terms of securing orders for this growing segment. Also in the EV segment, growth is slow. We have existing ICE segment orders, which will continue. So there will be no loss of business for our overseas operations. Earlier this year, our Italian subsidiary acquired 100% stake in Ingenia Automation Srl. This is a very strategic acquisition as this bolsters our strength in the industrial automation space, which will help us in our existing ongoing business as well as in our future expansion, which will happen at the plant. I would also like to point out that Endurance, both in India and Europe, is actively pursuing its focus on gaining access to new technology and focusing on new product organic and inorganic growth. So as I had mentioned earlier also, our future focus will be on the following projects for a better product mix and better profit margins, increase our 4-wheeler share of consolidated business from 25% to 45% by FY '30. This increase will come from aluminum die castings, aluminum forgings, as they will be increasingly used for lightweighting and also from proprietary products through acquisitions, joint ventures and technology agreements. We are also focusing on increasing share of business for premium bikes greater than 250cc for brake assemblies and ABS, suspension, clutch assemblies as well as alloy wheels for upgraded product technologies and process. We'll focus on increasing business for electric vehicle existing and new products. We will increase our embedded electronics business by becoming a significant player in the battery management systems and electronic products required for electric vehicles as well as other listed applications. We will be focusing to grow our aluminum alloy wheel business in future. We will focus on nonautomotive business, which has large opportunities, especially in aluminum castings. We are in the process of setting up a new plant at AURIC industrial area in Aurangabad, the SOP will start in FY '26. And this will focus on 4-wheelers as well as non-automotive aluminum casting business. As far as our aftermarket is concerned, our focus is to reach 10% of India sales by FY '28. In quarter 1 FY '25, aftermarket sales grew by 14.94% from INR 922.25 million in the previous year to INR 1,060 million in quarter 1 of FY '25. We are now exporting aftermarket parts to 37 countries with addition of Costa Rica in June of this year. So aftermarket sales growth will always be a large focus area for us and we are targeting a good growth in this financial year. 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 forest and driving use of natural gas and LPG in place of electric power and furnace oil. We have reached our carbon neutral percentage of 35% till date in FY '25, and our aspiration is to reach a carbon-neutral percentage of more than 50% by FY '30. We're also focusing in lowering hazardous waste generations and to achieve zero waste to landfill. In Endurance, it will be our continues endeavor to grow through organic and inorganic growth with a focus on technology upgradations and product in process, quality improvements, costs as well as focus on our environment, health and safety. We will do our best to fulfill our stakeholder expectations by following our 5 values of customer centricity, integrity, transparency, teamwork, and innovation. We are very positive about the future outlet in both in India as well as in Europe, and we are really excited about the future. With these opening remarks, I would like to invite questions from all of you. Thank you.

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

I have 2 questions. One is when we look at our India business for 4-wheelers, we are seeing some decline. So if you look at last 1 year FY '24, it's reported a decline of about 13-odd percent. Even in this quarter, there is a decline of 3%. So if you can help us understand that is there any specific customer-specific issue? That is one. And also you can add on that, if you look at our cumulative order book, say, about, say, INR 37 billion, what could be the proportion of 4-wheelers in that? That is question #1.

Yes, so if you see the new order wins, the 4-wheeler business, which has been acquired is, I think, about 15% to 18%. I'll just give you that figure, which is there, which is for mainly the customers, we're supplying this Hyundai, Kia, Tata Motors and Mahindra & Mahindra. There's also in our Punch Powertrain, which is for a tie-up with TACO. And so if you see -- so if you ask me right now, you may see a decline because the -- I mean, 4-wheeler business on the whole has increased, but you see a decline as far as the percentage is concerned because the other businesses are growing very much faster. So if you see...

Sorry, so here I am talking about absolute. I understand that percentages would decline. But when you look at absolute numbers, from INR 600 crores in FY '23 on standalone, it has come down to about INR 511 crores in FY '24 to an absolute decline of 13%. And even in this quarter, the absolute number is down by about 3%.

So you're talking about quarter 4 to quarter 1?

No, no. No, no. So firstly, first question is full year FY '24 versus FY '23 India 4-wheeler revenue?

Okay. So if you see the full year revenue, and you see the run rate of that, then yes, we are down, mainly because of the decline in sales in Ford GETRAG. That will be the major reason because of the slowdown there in Europe, so that has been the main reason for that.

Okay. Okay. And even in this quarter, that was a drag?

Yes. Even in this quarter, it's a drag, and I think this drag will continue. As far as the exports are concerned. I'm talking about the export to Ford GETRAG. That's been the major reason.

What would be the proportion of that roughly?

What is the proportion of Ford GETRAG, exact number.

Sir, we don't have that exactly. But in the India business, we have not lost any share in the 4-wheeler market.

But that figure, we will tell you later, the figure for GETRAG, what difference it has made.

Sure, sure. Perfect. Second question is that this FREEDOM 125. What could be Endurance's content per vehicle in FREEDOM 125?

I would say, it's -- I can only tell you it's large everywhere. I cannot give you -- I can't give you these figures. But Endurance, we are normally the first choice for all our products. So it's sizeable. So it will make a big difference, for sure.

Yes. Okay. Now final question is on the forging business.

It's for all our product area. It's for all product areas.

Yes. Okay. Okay. Perfect. My final question is on the forging business. So if you can help us understand that now we have commissioned our fourth press. So out of the total capacity that we have set up for forging, what would be roughly for internal consumption for a backward integration? And what would be for external sales. And since the fourth press has come on stream, what could be the peak revenue potential from this capacity?

Okay. That figure of aluminum forgings, do we have it? It's a backward integration? What is the total sales figure? Yes, I am only talking about the aluminum forging. Okay, that figure, I will get back to you. So you want the figure for this year, right, for the coming year?

Yes. So my question is that if you look at, if I say fourth press coming on stream, so what could be the total revenue potential of forging? And out of that some would be, say, 15%, 20% could be for internal. So just wanted to understand that split.

No, no. One thing is very clear, the aluminum forging business has been set up as a backward integration for our inverted front forks. Not only to be cost competitive to get new business, but to derisk imports. So apart from the Jaguar and Range Rover order, which we got, which is about, I think, INR 260 million or INR 290 million, which will be starting in this financial year itself. Apart from that, everything as of now in the fourth -- including the fourth press will be done as a backward integration for our inverted front forks, for axle clamps required for inverted front forks. And now we are getting to hydraulic pre-load adjusters, which also require aluminum forging. So it is more to, I would say, sustain and be competitive and grow our inverted front fork business. But like we quoted Jaguar, Range Rover business, now we are getting RFQs and opportunities from others, especially in the 4-wheeler field. We also got in the 2-wheeler field, 2-wheeler grow this business. But to answer your question, this is largely as a backward integration, the aluminum forging.

[Operator Instructions] The next question is from the line of Jinesh Gandhi from Ambit Capital.

A couple of questions from my side. One, can you talk about again on the passenger vehicles and the non-auto business on the aluminum die-casting given that has been the focused growth in the aluminum die-casting business. How has been the order wins from these subsegments for us?

No, see, right now, we are in the process of acquiring orders, both for the nonautomotive and 4-wheeler for AURIC as far as this new project is concerned, we have a separate deal for that. And maybe I think -- let me see if I can try and -- I mean, in this call, it won't be right to share anything right now. But I think I should be in a better position to share the kind of order wins, which we are getting for both nonautomotive as well as the 4-wheeler in the next call. But we are highly focused and there are many projects, some are resourcing, one is new business. So there are quite a few things happening there on that front. But I think there'll be more specific by the next call.

Okay. Okay. But clearly, there, we are on track for increasing share of business for the next 3 to 5 years; obviously, last -- quarterly basis, things will be different?

We are very committed here to -- because this will be a part of our foray into 4-wheelers, okay? It will be a step-by-step journey. But this is a focus, which I said from now to FY '30, to reach that 45% consolidated share of business. And of course, there could be along the way some inorganic growth because it cannot just happen by greenfield, as you know. But this is one of the steps as a part of our future growth journey to increase our share of consolidated business to 45% for 4-wheelers.

Got it. Got it. And second question is on Maxwell. So congrats on first LOI for MCUs. So can you talk about how would be the content difference between BMS motors and motor control unit, if you can talk about that.

Content between the?

BMS and motor control unit.

Majorly, it's a BMS.

Yes. Obviously, currently BMS. I'm saying what would be, say, ASP of BMS versus MCU LOI, which you've got?

Content difference of the vehicle price, you're saying?

Yes, or absolute on per unit basis, how much does it -- would be our content there?

Are you saying is the MCU better than a BMS?

That's what I'm trying to understand, is MCU content higher than BMS, how it would be?

No, I can tell you that MCU will be a good profitable product for us. The total value is what I -- you want the total value, which I mentioned?

Yes.

MCU value will be less compared to the total sale of Maxwell. The main business is going to be BMS.

Is this the answer to your question or you want to have something else?

I'm trying to understand per unit, say, ASP of MCU versus BMS?

I cannot give you the per unit value or what is a percentage of the vehicle if you want to know that. I know the total value, which I mentioned was about INR 343 million plus -- it's about INR 340-odd million per annum, which is starting in February '25.

And it is just starting, by the way.

We are definitely -- I'll just tell you one thing about Maxwell. We are -- like I said, we have -- we're looking at INR 1 billion of RFQs, which we are discussing. Not discussing, I mean, looking already won -- I mean a good part of it. And we are looking at other products. BMS, a motor control unit, we have been working, but now we just announced it to you after the order win. Like this, there are other products and we really engage with different customers. So basically, the whole idea is that this has to have a profitable growth, you know what I'm saying. And Maxwell was a strategic acquisition, as you know, in July 22 because we wanted to be a part of the EV journey. And I'm sure the EV journey will continue. It will increase. We want to be a part of their journey. There are not many players what we are doing. There are not many players. Our advantage is the whole -- the technology and process product is in-house. It's not a collaboration. That's a plus point. But we were a bit later in the day. But slowly, slowly, we are showing our, I would say, strengths to our customers and slowly getting in and getting the businesses. So it's been a bit of a slow start, but you will see that in future, you will see a lot more of this.

Got it. Of the order book of Maxwell, can you talk about the client concentration in that order book, how much would be coming from the new players or the players who have the lower market share today versus the incumbent?

But today, our biggest customer is Hero MotoCorp for 2-wheelers. They are our largest customer. But going forward, of course, there will always be a large customer, but we have a lot of things in the pipeline going on. Basically, this company started with them and certain exports to battery pack makers as well as to 2-wheeler companies as well as in India, battery pack makers. But the larger share of business today is Hero MotoCorp. And let me tell you that since last month, there's been a very good improvement. And really, the volumes are now really going up from this month onwards. [ And fine with Africa, ] but it's going to do well.

Yes, yes, that's visible. And last question is on the European business. So a 2-point question over there. One is, obviously, you have seen a very good growth in the European revenues. But is that partly because of aluminum cost inflation? Is that the reason for such a strong growth? Or we have seen actually a very strong growth in the core business itself?

The aluminum is the same part of the previous quarter, no difference. So the increase of turnover compared to the previous year that is more or less EUR 11.5 million, 16.8% is due to the business for 50%, and the increase of more or less 8% is tooling due to the important investment we have done. And certainly, considering that the market grew 4.1% in terms of registration compared to the previous quarter, the quarter 1 of the previous financial year, in Europe, double considering the production and 4x considering also the tooling.

Okay. Okay. So in that context, our margin performance has been, I would say, relatively weaker considering the strong revenue growth? I mean, there has been a Q-o-Q decline in margins despite having a strong revenue outcome. And Y-o-Y also, it's just about 40 bps improvement in margins. What would...

So my question is, what would be your expectation? We have done, how much, 16.5%. So what is -- your expectations in a market like this.

No. Mr. Jain, my question is, I mean, you have seen a sequentially strong volume growth and that business has a reasonably good operating leverage, would not there be benefit of that? Just that's what I'm trying to understand.

No, let me say, considering the total value of EBITDA we closed in this quarter with EUR 13.3 million compared EUR 11.1 million the previous financial year. So we grew 20%, 20.2% in terms of EBITDA with an increase of turnover of 16.8%. In terms of net results, we've closed with EUR 4.9 million compared to EUR 4.2 million the previous year and with the same percentage of 6.1% in terms of net result. But please consider that we are changing completely our organization in Europe. We started in January of this financial year with a new plant from zero for Stellantis, where we will produce 850,000 clutch housing per year. And certainly that the fixed cost is not at the same level of the previous quarter. And certainly, the benefit in Endurance overseas will be clear in the next 2 years, when we will reach the maximum production capacity. So we are doing EUR 50 million investment per year. So the structure of our profit and loss is changing completely apart. But I repeat, the profitability in this moment is higher 20% compared to the previous quarter.

But to be honest, Jinesh, we are quite satisfied in all in this whole challenging environment, which is there in Europe. We are quite satisfied. Our hope is to keep improving.

Yes. No, obviously, the new plant fixed cost explains for this relatively lesser expansion. And lastly, we have talked about this specialty component, specialty plastic component of order from Volkswagen. So can you talk about the kind of investments we need to make on the capabilities and capacities for this business? Can there be a material new technology for the European business? How do you think about this as an opportunity?

No, the technology is the same that we have in our hand with other customers as Stellantis and also Maserati, who is a front-end customer. The important news is that it's the first order as Tier 1 platform for Volkswagen Group in the plastic injection molding. And in this moment, let me say, importantly for us, there are a lot of problems into the plastic market due to the increase of raw material and a lot of companies are in financial trouble. And this was an important acquisition for us because this is the first acquisition, but we are discussing for future growth, and we can use the existing production capacity for this business. For this reason, it is absolutely strategic for us. We have spent about EUR 22 million, but is 20% of the total turnover of the company. So you can imagine, which is the potential for the future.

Okay. So the specialty plastic is already 20% of the turnover today? Is that what you mentioned?

In this moment, the total turnover of the Endurance Engineering is more or less EUR 10 million plus. We're pleased to remind to you that we bought Endurance Engineering as technical conversion from aluminum to plastic of specific products for the higher part of the engine. And we are moving now in component for the hybrid vehicle -- for the vehicle also in the plastic component. .

So to answer your question, Jinesh, this is a small value. This business is about EUR 12 million. So it's a small value in our overseas scheme of things, it's about 5%. So when you win a EUR 2 million order from a customer like Volkswagen, it opens up many new opportunities for a profitable growth in this business. That's the point.

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

So continuing on this European business, some of the manufacturers, especially Porsche and the others have guided for a very soft next quarter. Will it have what type of repercussion for you? .

So in this moment, we have seen a reduction of volume in the electric component in Taycan and specific with the Porsche. We are compensating this reduction with increase of volume in internal combustion engine technology. And so frankly speaking, it's true that they had a problem and you can read in all the newspapers, which was the issue with a specific supplier. But in this moment, Volkswagen and Porsche are confirming more or less the same volume of the previous quarter also for the next 2, 3 months. And so we don't see a particular problem. Probably, the major problems in their assembly of the car and not in the powertrain and transmission division.

Sure. Second one is with regard to India business. When you look at these alternative powertrains, especially like CNG bikes, does your content per vehicle drastically increase? Or is it the same as any other ICE vehicle?

It is the same.

Okay. And the third one is with regard to your car ambitions. Considering that there is a GM plant being now acquired by Hyundai and Hyundai is anyway your existing client, do you see more scope for you to add more components because you already have a ready capacity available. So how do you look at this opportunity?

It's a very good opportunity. It's next to our plant at Chakan, which is doing 4-wheeler parts, including for exports. These are very similar parts. So it's a very, very good opportunity, I mean, for us.

So you will continue with the same products, sir? Or do you have an opportunity to add more components, content per vehicle?

We have the opportunity, but it's not finalized, but we have the opportunity.

Okay. And would you be able to indicate which line you are looking at? Is it still being the metal forming or...

No. This is in aluminum die casting.

Okay. So which is like an existing line and you are...

Yes, whatever existing in our Chennai and Vallam plants, probably similar.

Okay. Sure. But you have headroom capacity or you have to add capacity in the existing plant?

Talking of capacity, so we'll look at the business quantum which we'll get. Based on that, we'll take a call whether existing capacity is enough or we need to add new die casting machines.

The next question is from the line of [ Divya Agarwal from FIMCOM ] Family Office.

So my question is regarding the aluminum die-casting business. So I just wanted to know what proportion of the total order book would be in the aluminum die-casting?

Do we have that figure? And do tell them the figure, total business win. You are talking about since FY '21, which we have done, which has not gone into the production.

Yes. Right now how much -- whatever the total order which we have, what would be the proportion of aluminum die-casting in that?

So we have the data year-by-year. So it will take a while for me to give you a cumulative number.

No, you want for the last 1 year or you want right from the beginning?

Right from the beginning.

Right from FY '21?

Yes, yes.

Okay. Then we have to come back to you on this. We don't have that figure right now.

Okay. No problem. And secondly, regarding the order wins in the -- new order wins in the aluminum casting, I actually missed the part of you in that, and for the new order wins that you got in aluminum casting. So can you repeat that?

In the aluminum castings, the orders -- mainly, the orders are, one is for the aluminum alloy wheels, which we have got. We have -- then we have got castings from various customers, right, from HMSI to Hero MotoCorp to Royal Enfield. And except for Royal Enfield, all the other customers, it is with machines because we are only taking orders from machining. Then of course, we have the Punch Powertrain business, which I've been saying the last 2 quarters, which is an order of about INR 1,000 million. It started in a small way, but it will pick up now in future. And there are other opportunities coming also with Punch Powertrain as we [ go in this thing a lot. ] And of course, I told you about a big Hyundai business of about, I think, it was INR 830 million odd -- or INR 870 million, that would start in FY '27 only, which is there. And see, the business which I've talked about is non-Bajaj. So in Bajaj, what happens is any new business comes for new products, new growth. And there are also very, very, I mean, there are also structural casting items, like subframes, you have structure with bearings, you have swing arms. So one is alloy wheels, one is crankcase, which covers machine. Then you have parts for EVs with the Chetak growing. There are a lot of parts for EVs, which we are doing for them. So Bajaj is one part, which is growing. But for the other customers, it's some of the points which I told you, which come to my mind immediately. So the combination of alloy wheels, question of castings largely with machining for 2-wheelers, 3-wheelers and 4-wheelers for different customers.

Okay. Sir, got it. And in regards to the domestic competition in the aluminum casting itself, so I mean there are players, listed players, who are the sole providers in the cylinder heads to Toyota, Maruti, and many other OEMs. So do we have any kind of relationship like a sole provider to any OEMs?

Yes, so we have for many segments of, say, 2-wheelers, mainly for, I would say 2-wheelers. 4-wheelers also, there may be there are a few segments for Hyundai and Kia, and for Mahindra also maybe. I have to check that. But we are 100%, because see the 100% supply depends basically on the volume of business per year. So our volumes beyond -- say, the volumes per month are beyond, say, 10,000. Then there would be a single source. I'm just taking one example. Just as an example. Then beyond a certain volume, they will have 2 sources, in general. So we have a combination of both. And the one thing I'll tell you on the aluminum die-casting business that today in the last, I would say, 35, 36 years, we have been there. We have got a very strong, I would say, operation in die-casting in terms of a good engineering center where a lot of value engineering is happening, the development is happening, the whole tool room. And of course, a very strong based on our experience, technology and product itself, process and product itself. So we're in a good space. And to be honest, we don't see so much of competition for us in India as of now. There has been a consolidation over the years. But there is a lot of business if you ask me to take. Die casting is a CapEx-intensive business, we are quite choosy about it.

The next question is from the line of Akshay Karwa from Anand Rathi.

Sir, my first question is regarding the 4-wheeler segment. In the other comments, you mentioned that you expect the 3-, 4-wheeler segment to reach 45% in the next -- by F '27, F '30. Sir, what type of margins this would generate on EBITDA margins? So what -- as in when we move to more aluminum die-cast products, so would there be -- what margins will -- what would be the margin profile at this point in time?

See, I can only tell you the margins will be higher. The margin will be higher. I mean, I can't put a figure to that. But the margins will be higher and that -- so we are getting into 4-wheeler for 2 reasons. One is to derisk from the 2-wheeler industry in India as well as to improve the profit margins. And this, like I said earlier, they don't happen only from organic growth. AURIC Shendra is our first step apart from growing our existing 4-wheeler businesses, which we mainly do in the aluminum die-casting in our Chakan plant and the 2 plants in Tamil Nadu. . But it will happen also from inorganic growth opportunities. We are looking very actively in Europe as well as in India. So it will happen by that time. But we have to choose the right product where we can really grow. It's a technology product. There are few players, like I've said, it is EV-agnostic. So there are some of the criteria. So it may be taking some time. I know I've been saying this for the last 3 quarters. It may be taking time. But when it happens, you will know immediately. You know what I'm saying?

But sir, with the business wins that we have had recently with Jaguar and all these, Hyundai and the big players, so by FY '27, '28, I just wanted to get an idea, like by what -- which year?

See, the thing is the percentage will definitely increase. Our focus is on that 45% consolidated, today it's at 25%. So this will definitely increase, both India as well as Europe. But of course, it will happen from inorganic also in a large way. They will not just happen from organic.

Sir, my second question is regarding Europe business. I just wanted to know the top line number in euro terms, the revenue number? .

Yes, we closed the first quarter with EUR 80.3 million of turnover compared to EUR 68.8 million of the previous financial year, an increase of 16.8%. In terms of EBITDA, we closed with EUR 13.3 million compared to EUR 11.1 million the previous year, and sequenced 20.2% of increase compared to the previous year. And the percentage of EBITDA was 16.5%. In terms of net result, we closed with EUR 4.9 million compared to EUR 4.2 million in the previous financial year with an increase of 15.7%. The percentage of the profit was 6.1%.

Mr. Karwa, are you done with the question?

Yes.

Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for their closing comments.

No, I don't have any further comments. I said what I had to in my opening remarks.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.