Endurance Technologies Limited ($ENDURANCE)

Ladies and gentlemen, good day, and welcome to Endurance Technologies' Q4 FY '26 Earnings Conference Call, hosted by Axis Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital. Thank you, and over to you, sir.

Good morning, everyone. Welcome to Q4 FY '26 Post Results Conference Call of Endurance Technologies. We are pleased to host the senior management of Endurance today. We have with us Mr. Anurang Jain, Managing Director; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Rajendra Abhange, Director and COO; Mr. Raja Gopal Sastry, Group CFO; and Mr. Raj Mundra, Treasurer and Investor Relations. I'll now hand over the call to Mr. Anurang for his opening remarks, post which we can start with the Q&A. Over to you, Mr. Jain.

Thank you, and good morning to everyone. As we close quarter 4 of FY '26 and reflect on the full financial year, the global environment has become more complex. The escalation of conflict in the Middle East and disruptions in key shipping routes have led to volatility in energy, logistics and supply chains with implications for input costs and availability of raw materials and energy sources. On the domestic front, India's economic performance has remained strong through FY '26, supported by steady consumption and investment activity. The GST rate rationalization implemented in September 2025 continue to support demand across the automotive sector in the second half of the year. Inflation remained within the RBI's tolerance band through most of the year. The RBI lowered the repo rate by a cumulative 125 basis points during FY '26 to 5.25%, and in April 2026, kept the rates unchanged. India's trade engagements also progressed during the year. Free trade agreements were signed with the U.K. and the European Union, and an interim arrangement was entered into with U.S.A. These measures are expected to improve market access over time. In the Indian automotive sector, as per CM, 2-wheeler sales reached 7.2 million units in quarter 4 of FY '26, up 25.4% year-on-year, with motorcycles at 19.8% growth and scooters at 37.1% growth. The 2-wheeler EV scooters grew 53.9% from 220,000 units to 339,000 units -- 339,000 units in quarter 4 FY '26. Passenger vehicle sales increased by 14.4% to 1.6 million units, while 3-wheeler sales rose 32.2% to 0.3 million units. While end users look for more options, OEMs have targeted higher market share by way of product launches and pricing actions even as the transition towards electric vehicles continues. In the European Union, new car sales saw a year-on-year rise of 4% in quarter 4 FY '26, with Italy and Spain recording high single percentage growth, while France recorded a degrowth. In quarter 4 FY '26, new car volumes in Europe, there was a 19.4% share of battery electric vehicles, 9.5% share of plug-in hybrids and 38.6% share of hybrids. So roughly 2 out of 3 vehicles being sold in the European Union are either electric or hybrid. In Europe, the operating environment was perhaps even more challenging with sharp increase in energy costs, uncertainty around policies regarding electrification and localization, and rising presence of Chinese OEMs. In the current geopolitical and economic environment arising out of the Middle East situation, efficient management of operations required closer coordination across the supply chain, continuous monitoring of availability and cost of the raw materials, and regular interactions with customers to update them on input cost increases, including gas and oil. Having spoken about the macro environment, I will now take you through key updates at Endurance. As you are aware, a draft guideline was issued by the government in June 2025 to extend ABS requirements to lower engine capacity vehicles. In line with this guideline, we had announced expansion of our ABS capacity, adding 12 lakh units to our existing 6.4 lakh units per annum. Work has commenced on this expansion of 12 lakh units per annum with SOP expected in September 2026. This project is being implemented irrespective of the final regulations as increasing customer preference for safety will continue to drive adoption. Instead of ABS, if the industry transitions towards hydraulic CBS, there would be increase in our addressable market of hydraulic braking system comprising master cylinders, calipers and brake discs. For a dual-channel ABS, SOP will start in June 2026 for Bajaj Auto with a sale of 120,000 units per annum and another program of 120,000 units is scheduled to start in quarter 2 FY '27. We are enhancing our product offering with the integration of new features such as traction control for improved stability and select applications, in line with evolving OEM requirements in the premium segment of 160 cc to 250 cc motorcycles. From a backward integration and profit margin perspective, we have started in-house SOP of the electronic control units for single-channel ABS. The dual-channel ECU will start from dual-channel ABS SOP in June 2026. This will help strengthen the value add in the ABS braking business. At our new Chennai site for disc brake assemblies, the civil construction is at a fairly advanced stage. This new brakes plant will be in close proximity to certain important OEM customers. In the first phase, we are transferring most of the assembly and machining equipment from our [ Varnusch ] plant. From this plant, SOP for Royal Enfield is planned in July 2026, but that is in the plant of Chennai, and for other OEMs from quarter 3 of this financial year. This will help better service the south-based OEM customers and also lower our freight costs. The Chennai plant will have a capacity of 3 million disc brake assemblies per annum and 4 million discs per annum, which is part of our total 7.6 million disc brake assemblies and 8.6 million brake discs per annum planned at Endurance. Our integrated R&D facility for brakes at [ Varnusch ] Chhatrapati Sambhajinagar is fully operational. The facility enhances our capabilities across 2-wheeler brakes and ABS while also supporting 4-wheeler brake assemblies with strengthened in-house testing and validation. We also established our assembly line for 4-wheeler passenger vehicle drum brakes for Tata Motors. Samples have been submitted and are currently undergoing testing at the OEM end, with SOP expected in quarter 2 of this year. We are also progressing with the planned increase in our 3-wheeler brake assembly volumes, which will double from 0.6 million to 1.2 million units per annum by end of this year. In view of our plans to manufacture electronic control units for ABS and with higher volumes of battery management system needs indicated by our OEM customers, we have ordered a new surface-mounted technology line at Sambhajinagar plant, which is expected to be installed in June 2026. For our AURIC Shendra plant, we continue to win new business. Cumulative orders will translate into peak annual business potential of INR 513 crores. These orders are from a large U.S. EV OEM for automotive as well as non-auto applications from Jaguar Land Rover as well as from [ Yazaki and Valeo ] for electric platforms of Mahindra and Tata Motors. SOP for key programs are expected to be staggered between quarter 1 and quarter 3 of this financial year with peak sales being reached by FY '29. This plant has new OEM clients with highly sophisticated aluminum casting machines and surface treatment process and equipment. In parallel, we are building depth across our existing casting operations. At our Chennai plant, we have secured orders for hybrid models of Isuzu with SOP expected in quarter 3 or quarter 4 of this year. Various orders won from Hyundai and Kia will have SOP in quarter 4 of this financial year and in quarter 1 of FY '28. For this expansion, a new [ 1,600-tonne ] die casting machine has been planned. The presence of multiple global OEMs in this region enables deeper engagement, and we are in active discussions with new OEM players for which the plant is undergoing audits and evaluations. At our [ Vallam ] plant also in Tamil Nadu, we are seeing ramp-up in volumes from Ather Energy. At our [ Chakhand, Pune ] die casting plant, we are expanding our business for machined aluminum castings across existing and new programs of Tata Motors and Mahindra. We are seeing strong traction at this plant with demand from these OEMs increasing by approximately 34% to 40% in this year. At the Auric Bidkin alloy wheel plant, the focus during the quarter has been on being ready and ramp-up across multiple programs. We have completed key customer validations. In January 2026, we crossed 100,000 wheel sales, marking an important milestone. In addition to Bajaj, Royal Enfield, TVS and Yamaha, we will also be now serving new OEM customers such as Honda Motors and [ Scooters India ], Ather, Suzuki and Piaggio from our alloy wheel plants, both in [ Chakhand ] and Auric Bidkin. The total capacity in these plants is now 48 lakh wheel sets of front and rear wheels per annum. During quarter 4, our battery pack manufacturing program near Pune progressed into the final validation phase. Comprehensive regulatory compliance testing at the certification agency was successfully completed for the battery pack. During this phase, key improvement points identified through customer reviews were systematically addressed, leading to further enhancement of product performance, technical robustness and overall product maturity. In parallel, significant progress was made towards infrastructure and SOP ramp-up planning to support the upcoming SOP. Manufacturing process was further stabilized and preparations for manpower and supply chain were aligned with the planned SOP time lines. Going forward, with regulatory approvals and customer validations nearing completion, we are planning to start the SOP in week 4 of this month. While our first product is for the 2-wheeler EV, we will continue to leverage this capability to pursue opportunities across 2-wheelers, 3-wheelers and other high-potential segments. In FY '26, our wholly-owned subsidiary, Maxwell, achieved a record turnover of INR 162 crores as against INR 70 crores in FY '25. We have supplied 350,000 BMSs for scooters, 3-wheelers, tractors, e-bikes and construction equipment in FY '26. Beyond our current portfolio of battery management system, motor controller units and telematic units, we have also won our first order for a DC/DC converter, which will see SOP next month in June '26. We are also focusing on a high range -- we are also focusing on a range of high-voltage BMS for 4-wheelers, commercial trucks and buses and are in close engagement with a key commercial vehicle OEM. In the beginning of FY '27, Maxwell achieved SOP with another leading 2-wheeler OEM for motorcycle BMS. The program has a peak annual business potential of approximately INR 15 crores. At Maxwell, we have won INR 56 crores of new business in FY '26, which has taken the total cumulative orders won to INR 247 crores per annum, which will peak in quarter 2 of the next financial year. Further, we have a strong pipeline of RFQs of more than INR 300 crores for trucks and 2-wheelers. We continue to see strong traction in our suspension business, particularly in inverted front forks and mono shocks, with growing adoption across OEMs and a steady expansion of our customer base. With increasing offtake by OEMs, we are adding assembly lines, which will take our monthly sales of inverted front forks from 60,000 units to 75,000 units per annum by -- per month, sorry, by June 2026, and to 100,000 units per month by the end of FY '27. This is a huge increase. In oil and gas wheel mono shocks, demand is also increasing with platform transitions from twin shocks oil and gas wheel shockers to mono shocks in the 150 cc to above bikes. Our aluminum forging business continues to scale in view of higher captive consumption due to growth in our inverted front fork business and our aluminum forging component product supplies to Royal Enfield, Jaguar Land Rover and a leading German OEM. We are progressing with the addition of a fifth aluminum forging press. All our presses will be set up in a new forging plant at Chhatrapati Sambhajinagar, which will start SOP in quarter 3 of this financial year. On the business front, execution is underway across key programs. Supplies to Royal Enfield will begin in June 2026, which is next month, while supply to Jaguar Land Rover is scheduled for August 2026. For a leading German OEM, samples have been submitted and the SOP is expected towards the end of this financial year. These programs will support expansion of our customer base in the aluminum forging business. In the nonautomotive segment, the solar damper business continues to remain steady. We have won business of solar dampers from a Spanish client and won business for solar dampers and solar actuators from a U.S. client. The total business won is INR 118 crores for solar dampers and INR 227 crores for solar actuators, totaling INR 345 crores of business. The solar actuator business will start from half 2 of this financial year from our new building, which is at our [ Sanand ] plant in Gujarat. In the transmission segment, we have expanded our presence with the introduction of the assist-and-slip clutch assemblies for Kawasaki in quarter 3 FY '26 and for Royal Enfield in quarter 4 FY '26, introducing our Italian subsidiary, [ EOSri ] Technology into the Indian market. The SOP for Bajaj Auto is expected in quarter 2 of this financial year. In our 4-wheeler driveshaft program, we have installed the assembly line and completed internal validations. The SOP for Tata Motors will start next month in June 2026. For 3-wheeler driveshaft, we have won business from Bajaj, Mahindra, TVS and ICA Motors. With the above, the driveshaft business will cross INR 100 crores in this financial year. A key focus area of our FY '27 CapEx budget is automation. We are undertaking these targeted investments across existing plants to enhance quality, improve consistency and drive operating efficiency. Our India CapEx in FY '26 was approximately INR 800 crores, compared to INR 600 crores in the previous year, which is FY '25, and was driven by new plants and investments in new growth areas. We expect capital expenditure in FY '27 to remain similar to FY '26. Under the Maharashtra Package Scheme of Incentives 2019 scheme, we had received an addendum taking our incentive up from INR 600 crores to INR 858 crores. These incentives will be availed through the industrial promotion subsidy by way of a state GST refund broadly over a 7-year period. We are uniquely placed to avail more incentives with several of our plants located in Chhatrapati Sambhajinagar and serving OEM customers within the state of Maharashtra. Let me now give you a gist of orders won during FY '26. Please note that the business value for new orders is without including new orders from Bajaj Auto. The overall order win in FY '26 in India business was INR 1,596 crores, of which INR 1,579 crores is new business, so it's largely new business. This includes the business win of INR 300 crores per annum for battery packs at our [ Talega, Pune ] plant and INR 56 crores per annum of new business wins at Maxwell. Our 4-wheeler nonautomotive business win in FY '26 stands at INR 743 crores. It is almost half of the total order intake. These wins include orders from Tata Motors, a large U.S. 4-wheeler EV OEM, Hyundai, Kia, Isuzu, Mahindra, [ Graziano ] and the 2 clients in the non-auto solar space. During quarter 4 FY '26, we won INR 316 crores of new business, of which INR 227 crores was in the 4-wheeler and nonautomotive space. These customers included Tata Motors, Mahindra, a large U.S. EV OEM for 4-wheeler castings, Ather Energy and [ Greaves ] for 2-wheeler brakes, and Royal Enfield and Piaggio for 2-wheeler alloy wheels, and the 2 clients in the solar space for dampers and actuators. Cumulative India business wins for electric vehicles in the conventional product areas stand at INR 1,185 crores without considering Bajaj Auto order wins. This reaches INR 1,368 crores per annum of orders if we include the Bajaj Auto business -- EV business. The total electric vehicle business win is INR 1,724 crores per annum if we add Maxwell and the battery pack business. The overall total orders won now in products other than Maxwell and battery pack orders since FY '22 stands at INR 5,323 crores, out of which INR 4,593 crores in new business. And this will peak by FY '29. In Europe, the industry continues to operate in a challenging environment, shaped by the Middle East crisis, high energy costs and interest rates, duties imposed by U.S.A., increased competition from Chinese OEMs and muted automotive market growth. In spite of this backdrop, our European operations have continued to sustain profitable growth through both the existing business as well as through M&A. Our acquisition of Stoferle was completed in April 2025. So in our Europe business, we have booked orders worth EUR 15.8 million in FY '26. This includes large machine casting orders from Volkswagen and Porsche, and certain plastic injection molding parts or EVs. Aftermarket business in India is a strategic priority for us. We have set ambitious growth goals for 2030. We have prepared a comprehensive long-term capability focused blueprint incorporating the voice of our team, our channel partners, retailers and mechanics. We are focusing on building long-term partnerships with distributors who have the right mindset and are aligned to Endurance's vision. In addition, we are driving secondary demand generation with retailers and mechanics for the domestic business. We have launched a mechanic loyalty program, conducting trainings with certifications on [ BS-IV to BS-VI ], trainings on EVs as well as product fitment, organizing health camps and providing scholarships to children of our top mechanics. We are the first in the industry to deploy AI-enabled tech platform to drive secondary order maximization. We have understood the voice of our stakeholders in each country we are present in and have created a unique value proposition. Our customized offerings provide us a competitive edge in each geography. Our teams are based locally in each continent to be in close proximity of our key stakeholders and to build capabilities to meet the changing requirements. We are also driving a holistic program to build capabilities of our aftermarket sales team and to empower them with the right tools and skills to become strong business leaders. Coming to our financial performance. Of course, the information has been uploaded at the stock exchanges last evening, along with our presentation explaining the numbers. I will, however, highlight some key numbers. During the full year FY '26, the company recorded a stand-alone total income of INR 10,696 crores, a year-on-year growth of 20% from INR 8,913 crores in the previous year. EBITDA grew 11% from INR 1,218 crores to INR 1,351 crores with a margin of 12.6%. The profit after tax grew 8.1% from INR 679 crores to INR 734 crores. The profit after tax was at 6.9%. In the full year FY '26, our consolidated total income grew 26.1% over last year from INR 11,678 crores to INR 14,720 crores. The EBITDA grew 25.3% from INR 1,668 crores to INR 2,090 crores, and our margin was at 14.2%. The consolidated profit after tax after the impact of the new labor codes in India and on the Indian operations grew 13.8% from INR 836 crores to INR 952 crores at a 6.5% PAT margin. During quarter 4 of FY '26, the company recorded a stand-alone total income of INR 2,975 crores, a year-on-year growth of 31.1% from INR 2,269 crores in the previous year. EBITDA grew 13.7% to INR 326 crores to INR 371 crores with a margin of 12.5%. The PAT grew 20.5% from INR 174 crores to INR 210 crores. The PAT was at 7.1%. In quarter 4 FY '26, our consolidated total income grew 37.3% over quarter 4 of the previous year from INR 2,998 crores to INR 4,116 crores. EBITDA grew 30.8% from INR 457 crores to INR 598 crores. Our margin was at 14.5%. The consolidated PAT after the impact of the new labor code on the Indian operations grew 12.8% from INR 245 crores to INR 276 crores at 6.7% PAT margin. The company's growth during the year was supported by a continuous focus on strengthening talent, capability and organizational depth. Through hiring for key positions, succession planning, job rotation, we are building a future-ready talent pipeline. We accelerated capability building across technical, managerial and behavioral domains with a focused emphasis on shop floor and mid-level management to improve execution and productivity. We also strengthened our performance management framework through sharper KPI alignment, enabling closer linkage between individual contribution and the organizational priorities. Continued investments in employee engagement and well-being supported improved retention, including lowering in white collar attrition. Progress on gender diversity remains steady with increasing representation across roles and a continued focus on building an inclusive workplace. In parallel, we worked on adoption of technology-enabled learning platforms, enhancing organizational agility, people analytics and overall employee experience. On the sustainability front, we continued to make progress during the year in line with our long-term goals. We have committed to the science-based targets initiative, which is SBTi, aligning our decarbonization road map with globally accepted standards. We have achieved a carbon-neutral percent of [ 50.62% ], supported by our renewable energy share of 28.22%. We continue to improve resource efficiency across operations. We lowered specific electric and thermal energy as well as specific water consumption, while hazardous waste recycling stood at 98% during the year. Fourteen of our plants have achieved zero waste to landfill status with third-party certifications. Three of our plants, the [ K120 Walu ] suspension plant, the [ K22652 Walu ] disc brake plant and the [ Pannagar ] plants have received the prestigious CII GreenCo Gold ratings. This is reflected in the improvement in our ESG ratings during the year. NSE has assigned us a score of 69, up from 64 earlier. SES has rated us at 74.9, up from 70.4. And CRISIL has revised our score from 56 to 59. Our CSR work also continues to focus on improving quality of life across the communities we engage with, with sustained progress during the year across education, livelihoods, health care and environmental interventions. During FY '26, our health care work supported more than 5,000 beneficiaries through medical camps and mobile health care van, while our mobile veterinary services treated over 8,000 animals. Over 2,000 individuals benefited from education and skill development work, including school infrastructure upgrade and vocational programs. We also provided bicycles to 105 students to improve access to education, and trained over 300 youth through ECO, which is our vocational training center in Chhatrapati, [ Tambajanaga ]. More than 700 farmers were supported through training and agriculture inputs, contributing to improved productivity and income opportunities. Our environmental efforts included planting over 4 lakh trees, leading to 2 dense forests across 37 acres. We also provided 100% rooftop solar system to 2 villages in Chhatrapati Sambhajinagar. Basic infrastructure across villages was strengthened through water management and sanitation interventions, including construction of household toilets and soak pits. In response to the floods in the [ Maharathata ] region, we have also supported over 600 families with essential supplies, and assisted farmers with seeds to help restore their livelihoods. During the year, the company continued to win recognition from customers and industry forums for quality, performance and operational excellence. Key recognitions include the Quality Excellence Award from Tata Motors and recognition as a Top Supplier at the Stellantis Global Supplier Award Conference. Our K120 suspension plant and the driveline plant at Chhatrapati Sambhajinagar are also recognized at the Frost & Sullivan India Manufacturing Excellence Awards. In March 2026, we won an award for [ quality assurance T and Support ] from Honda Motorcycles and Scooters India Private Limited at the Annual Supplier Convention. And in April 2026, this year, we won the award for the Best Delivery at the Suzuki Annual Supplier Convention. With these opening remarks, I would now like to invite questions from all of you. Thank you.

[Operator Instructions] First question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Congrats on strong results. Sir, we have seen a notable growth of 30% Y-o-Y and also up 13% Q-on-Q on the consol revenue. I just want to check any onetime impact on the revenues in both stand-alone and Europe? Anything to call out, like something like price hike, which impacted the numbers?

Yes. So of course, I'll talk about the stand-alone and then Massimo can talk about the overseas. So of course, stand-alone was driven by commodity inflation. If I talk about -- I think I'll talk about the whole year. So if I see the whole year, the raw material increased by INR 160 crores, which is, in absolute terms, 1.5%, the RMC increase. So if you see our RMC percentage went up from 65.3% to 66.82%. This I'm talking about the Indian operations. If you see INR 73.70 crores out of this was for aluminum, alloy and steel increase, which is a non-value-add increase. We don't make any money on this value-add increase. And we had INR 31.3 crores from outsourcing cost due to large increase in volumes, as you know, post GST guidelines. We never expected such growth, to be honest. But with the 10% lowering of GST, the volumes really went and we did not have enough capacity in-house. For example, for products we do in-house like bottom cases for our front forks, so we had to outsource them at higher prices. That was an impact of INR 31.3 crores. INR 13 crores, we had a quarter lag in the proprietary business, especially from Bajaj, which was started first time. That means the previous 3 months used to get in the next 3 months. This had an impact of INR 13 crores. INR 25 crores, there were some one-timers like you asked me, which was last year, which was in a conversion cost increase, which was about INR 13.2 crores. And there was also a INR 12.3 crores reversal of a cost provision due to a higher pricing by existing OEMs. That was about -- so totaling about INR 25 crores. So it was for conversion cost increase as well as price correction by some of the OEMs. It was INR 25 crores, which did not happen this year, I mean, in FY '26. INR 9.5 crores were corrections due to decrease in price due to some adjustments in components like springs, for example. And the INR 5.2 crores were the impact of the new plant at Auric Bidkin, which is for 2-wheeler alloy wheels. But I cannot consider everything as RMC impact. If I just take the INR 73.7 crore impact of alloy and steel, which is completely a non-value-add, so if you see the numbers from that angle, our EBITDA margin instead of 12.6% should have been 13.3%. So just to give you some idea what has happened.

Got it. Got it. So in a way, sir, this RMC INR 73.7 crores was the -- also on the top line, it would have impacted that much percentage.

Correct. Correct. Absolutely. Absolutely. So if you take that out and you take our margin divided by net of that for the year, then the margin would look at 13.3% instead of 12.6%.

Got it. Sir, I was checking on the PPP, electricity gas cost in Europe has gone up. And do you see any further increase on it? And also, how is the pass-through happening, sir?

So as you know, the government has increased control in diesel prices this morning as well as the LPG. I'm sure that you heard about that. Of course, this will impact us. We are in touch with all our customers for these increases -- on these conversion cost increases. You know conversion cost increase is not very easy to get from customers, but we are doing our best because these increases are quite high. Fuel prices already have gone up by 50%. So this is something we are engaging with every OEM as a price increase for this. So as far as conversion cost is concerned, that's the reason. As far as the aluminum alloy, where we've been largely affected also since March '26 has been on the aluminum alloy. Apart from shortages, there have been large increases in the rupees per kg cost March as well as April. This we are totally engaged with the OEMs. Many OEMs have already confirmed to raise rates. Some have given the e-mails or PO amendments. Some are still awaited. It's a challenge when you ask for such large increases from customers, it's not that easy. So it's a WIP, I would say. But we are quite confident that our customers will be fair and we would get these increases. On the conversion cost, we'll put our full efforts, but that's not a normal thing to get conversion costs. But these are very, very abnormal increases. And this is something we are assertively ask all the OEMs to give these increases to us. Yes, Europe. So Massimo, about the gas and aluminum.

Okay. So first of all, I answer to the first question regarding the turnover of Europe. In the quarter, the European company closed with EUR 106.9 million of turnover, compared EUR 80 million of the previous financial year, with a growth of 33.6% in terms of turnover. Speaking about the year-to-date, the total financial year, Europe closed with EUR 391.7 million, compared to EUR 303.9 million of the previous financial year. Please consider that the company grew 28.9% total financial year. And also without consider the acquisition of Stoferle during in the quarter. In the total financial year, the company grew compared to the previous year. The market, as Mr. Jain told you, closed with 4% of increase compared to the previous year in the quarter 4 and 3% total year. But please consider that, without consider the imports from other countries, the market was more or less stable. And so also in this financial year, Endurance Overseas overperformed in terms of turnover compared to the previous financial year. Speaking about the energy, for sure, we have had an increase in the last 2 months due to the war in Iran. But as you know, unfortunately, if we compare the situation compared to the previous year, also in the previous year was very bad due to the war in Ukraine. So every day, we fight with this kind of problem. But I repeat, despite the increase of energy cost in the previous quarter in Europe, due to the important increase of volume, we have been able to optimize the EBITDA and we closed with EUR 21.9 million, so it means 20.5% of EBITDA in the quarter, and with an increase of 4.1% compared to the previous year. This was the best quarter of Endurance Overseas in the history. And speaking about the year-to-date, we closed with EUR 72.4 million of EBITDA. It means 18.5% with an increase of 41.7% compared to the previous year. So in this moment, despite the situation and, generally speaking, the environment is not positive, we are performing very well.

Massimo, sir, just basically, so I mean, you are able to basically manage it through the growth and also some pass-through, right, the energy cost?

Yes. We are managing the situation and we are discussing for the customer for the future months. For sure, if the situation continues like this, we have to ask support of them. But in the past, we received from [indiscernible] to discuss, we are optimistic. And let me say, in the quarter, in the previous quarter, if I compare the energy cost of the quarter compared to the previous financial year, we are -- there was an increase of 5%, nothing special. We are managing the situation, more in the gas compared to the energy. The big increase was in the month of March. April in this moment is more or less under control.

Got it. And just on this quarter, we have done a very good margin, more than 20%. Anything to call on, sir? What drove -- is it more for the revenue growth, sir?

I explain to you why the margin was positive in Europe, because usually we try to do an analysis of the turnover compared to the registration. But in this case, it's not -- it's important to analyze the volume compared to the production. What does it mean? That in the previous quarter, compared to quarter 3, the production in Europe was higher more or less 6%. So that even if the registration up 2% compared to the previous quarter, the production was 5.7%. And this is the reason why in the European market, we grew, compared to the previous quarter, 15%. And this is the reason why we increased the EBITDA in an important way because with stable fixed cost. This is the demonstration that we see in Europe, we have volume, we can make a lot of money with good profitability.

I just want to check on the EV side, sir, if you can help us for the EV, does it indicate what kind of revenues we are doing currently, sir? And with the dual-channel SOP starting, sir, how one should see revenue for next year, sir?

ABS, what we have planned, the ABS in FY '26, we had about [ 280,000 ] ABSs, which were single channel. This year, we are doubling, but we feel this figure will go up also looking at the line of sight and looking at the dual channel, which we are starting, which I mentioned from July. So I think the growth will be -- it can be 100% to 150% compared to last year. Of course, we went ahead with the 12 lakh, 1.2 million ABS line, looking at the draft guidelines. But we believe, and the sense which we are getting from most of the OEM customers, many of them will anyway go ahead and implement the ABSs. So of course, we -- I mean, it will not be fully used, this INR 12 lakh per annum line. But definitely, our plan is to see how fast we can fill up the capacity on that line. That's our focus with single channel and dual channel. So just to give you an idea. And the value of business was how much -- okay. I mean, I can't give the value because you know the price. So I can't give you the value, I'm giving you the numbers.

Sure, sure. So basically, on ABS, in terms of the volume side, without the regulation, we can double in FY '27?

It will be more than double.

Got it.

[ 50% to 150% ] is what we are planning.

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

Congrats on a great set of performance. A couple of questions here. Number one, if you can just talk us through that, the 4 greenfield facilities. What are the time lines of them coming on stream? And when is the export to U.S. EV OEM and JLR expected to start? And a related question to this is that, in terms of our 4-wheeler revenue, it was about 6% in '26. How should we see this number in the next 2 to 3 years given the order book is about 60% of the share of 4-wheelers in FY '26? That is the first question.

Aditya, I didn't get the last part you mentioned, the 60%.

No. When you look at our order book, order won in '26, 60% are for 4-wheelers. So how should we see that number, 6% of revenue, from 4-wheeler in '26 going in the next 2 to 3 years?

Okay. So as far as the 4-wheeler business is concerned, already this is -- I just want to tell you is both for aluminum castings, which includes our plant at [ Chhindra ], which also includes Hyundai, Kia, Isuzu in South India, as well as Tata Motors and Mahindra at our [ Chakhand ] plant in Pune, which is growing, I said, between 37% to 41%. So it includes castings, largely casting. As far as proprietary is concerned, I said the foundation brakes for Tata Motors is starting in June. The driveshaft business is starting in quarter 2. That's also for Tata Motors. And so this is what we are starting with. The non-auto is a solar damper and actuator business. The solar damper, I said, we have INR 118 crores of orders, okay? And for the solar and the actuator, it's INR 240-odd crores. That will start in half 2 of the next year. So the way I would like to put it is that the 4-wheeler orders which we have won, of course, the peak will be, like I said, for the AURIC Shendra, we won INR 500 crores. But this is not all the business we won last year. So if your question is pertaining only to last year...

No. I think just when you look at our 4-wheeler contribution, it's about 6%. Putting all the things into perspective, how that 6% will look like in 3 years down the line?

Okay. Three years down the line. Okay. So definitely, our plan is to reach 10%. But the question in the 10% is because it may look at a lower number, but the sales are also growing. I mean if you see the sales growth, which we have planned in the next 3 to 5 years is very large. So today, if it's 6%, 10% will be -- if you want a figure from me, that's a figure I have to think and tell you later, okay? But the percentage I have is that, because it depends on the sales number, which I do want [indiscernible] which I know, but I'd rather not talk about the future 3 years from now. But definitely, you will see with AURIC Shendra, with Tata, Mahindra, with our plants in [ Chennai and Vallam ] and the proprietary business, you will see a very good traction towards the 4-wheeler percentage. That's for sure.

That's very good to know. And the first part of my question, that the timing of the 4 greenfield facilities and the start of commercial production for U.S. EV OEM and JLR.

Yes. Okay. So as far as the Auric Bidkin facility for 2-wheeler alloy wheel is concerned, it started in October 2025, okay, already operational. I think it will reach peak sales by end of quarter 3 or beginning of quarter 4 of this financial year. And when I say sales, I think it's around INR 600 crores per annum, is what we are looking at, because there are many platforms of Suzuki, Ather, which will be coming. Till then -- right now, we have started only with Bajaj Auto, so this is one plant which we have started in Auric Bidkin. The second plant is the AURIC Shendra plant, where we have won business from this U.S. EV 4-wheeler OEM, which the SOP -- which SOPs in which month [Foreign Language]. So the SOP is in June 2026. This is for the U.S. EV OEM. And for JLR, it is, Jaguar -- JLR is between, I think, July, August of 2026, for Jaguar Land Rover. And then of course, we have other businesses of [ Valeo and Jaganaki ]. So just to let you know, we are planning to cross INR 200 crores this year from AURIC Shendra plant. It's a profitable business, I'll not give you the margins, but this is what is our plan for this year for the AURIC Shendra plant. Now coming to the next plant is a battery pack plant, where we have got an order from a 2-wheeler EV OEM. That plant is starting from the last week of this month. This is an order which is approximately, I said INR 300 crores, but I think it's about INR 350 crores, INR 360 crores per annum. And of course, this order will go up to INR 600 crores per annum by next financial year based on the commitments of the customer. And so this is starting end of this month, week 4 of this month, the battery pack. The Chennai plant, there's a large plant coming up in Chennai for brakes, which will cater to the South Indian customers of TVS and Royal Enfield, for example. That will be starting first with -- we are starting in July. And then I mentioned the customer name also in July -- just a minute. So there's one customer in July. I think it's Royal Enfield. Royal Enfield is in July. And the balance customers will be in quarter 3, is what I mentioned. Okay. So these are the 4 plants coming up.

Perfect. Just a final question. From a stand-alone margin perspective, we understand that FY '26 had a few headwinds, like the start-up cost of the new plant that you talked about, the consultant charges that you had mentioned in the previous calls. Are these largely behind? And FY '27, should we see a much more normalized margin trajectory?

Well, I would say that quarter 1 will still be a bit volatile because as the war goes on, the prices are not going down, whether it's oil, whether it's gas, whether it's alloy. They continue to rise. So we will see a bit of volatility. I don't -- I'm not at all this thing concerned about the growth, but I'm definitely concerned about these cost increases in raw material and gas and oil and to be able to pass those on to our customers, which I said earlier that we are being very, very assertive on that. And I think -- I mean, I hope this war ends by next month at least. And then I think once the war ends, it will take some time to normalize, but I see much better numbers from quarter 2. But that doesn't take away the fact that we are focusing on profit improvement. So those actions are already on.

Next question is from the line of Arvind Sharma from Citigroup.

Sir, first on the domestic business, as you highlighted, energy costs and gas availability, what are the situation right now in terms of both availability and the cost of the gas? And will it impact the first quarter FY '27 numbers?

See, today, I think our dependence on gas has gone down. Because when the gas availability issue happened in March, we have switched not only our plants, but even our Tier 2 supplier plants from gas to furnace oil and diesel oil. So our dependence on gas to that respect has gone down. But of course, we need gas for our surface treatments. So gas is still required. But I don't think the availability are concerned as far as the industrial gases are concerned. But I think the main concern is on the cost increases and how we can pass them on to our customers. I think that's a concern which we are really speaking to our customers and working with them.

Got it, sir. Sir, staying on India, Maxwell margin this quarter, is there something that impacted the margin this quarter?

I'll request Mr. Raja, our Group CFO, to speak on this.

So we had inventory in our books, and you must have noticed that there was a recent decision, the resolution process for [ Hero Electric ] had failed. And the inventory pertaining to Hero Electric, we have taken a provision using the right accounting standards. And that's a onetime impact which is impacting the EBITDA this quarter.

So sir, in terms of gross margin, it's fairly okay?

Yes. Gross margin is safe, and this is a number of INR 6.5 crores. Go ahead.

And sir, one last question on the European front, if I could ask. Very strong margins this quarter. Massimo did talk about it. But the sustainment of the margins from the current numbers? And if you could the Stoferle revenue and EBITDA, is it possible to share that?

Yes, for sure. So quarter 4 of Stoferle was EUR 21 million in terms of turnover, EUR 4.9 million in terms of EBIT and EUR 2.6 million in terms of net result. And speaking about year-to-date, the company closed with EUR 82.1 million of turnover, EUR 17.9 million of EBITDA and EUR 8 million of net result. So completely aligned with our expectation, better compared to our expectation, 1% more in terms of EBITDA. The company performed very well, not only from the income statement point of view, but also speaking about the cash because they did more or less EUR 20 million of cash in the year. And regarding the total result of Endurance Overseas, I repeat the quarter was the best of our history. If you ask me regarding the sustainability in the medium and long term, I can tell you that April was apparently a good month. We don't see particular problem if, for sure, we maintain this level of volume. If the market grow and the production grow, we are able to optimize our contribution margin to improve our EBITDA. For sure, energy continues to be a problem. Please consider that if we compare compared to the previous year, more or less we are in the same sort of [ issue ], 5%, 6% more. But I remind to you that if I compare with 2021, we are paying the energy 3x, EUR 140 per megawatt compared to EUR 44, and the gas at EUR 42 compared to EUR 13, 3x compared to [ 2 ] years ago. But every day we are [indiscernible] unfortunately, in Europe, last year was the war in Ukraine and now there is also the situation in Iran. So we have to try to overcome this problem in some way, making efficiency and increasing the productivity on our cost. In the last quarter, we have been able to do this. For the future. I'm not worried about the situation of the market, I'm worried about the situation of volume. So this is for sure.

Next question is from the line of Pramod Amthe from InCred Capital.

Congrats on a good set of numbers. So this is with regard to the aluminum casting business. You operate in Europe substantially and the way you scaled up your profitability post the merger. And also now you seem to have won good business from India for the global brands. But I was keen to know, and some of them is to U.S., would you any time in the future look for entering into U.S. territory for manufacturing considering the cost of energy is very high in Europe? That's one. Second, the way the margin profile has improved in Europe, does it still make sense to export from India considering that energy costs anytime in the future ease off in Europe? Or you look at a derisking strategy from India supplies to the global market?

No. Firstly, let me tell you, the customers who are coming to us are part of the China Plus One strategy. And they want to buy from India. They don't want to buy locally, whether it's in U.S. or in Europe. They want to bring that down. This is more of a China Plus One strategy what they are coming in. So our focus will be to supply from India. And that's why this new plant at AURIC Shendra has been set up. And our aim is to really grow the business. We have enough land there. In fact, we can expand in the existing 11 acres and we can have another 24 acres of land where we want to expand here. And this is our focus. We do a good job of supply and quality. There's a tremendous potential of growth in this business. And that's how we are going about it. So we have no intention to put up any plant in U.S. or Europe because this is not what the customers are looking at. They are looking at a best cost base in a country like China or India. And we become a part of the China Plus One strategy, which is being -- they have already planned and they're going ahead.

Sure. That's useful. And second, considering the wide fluctuation in the raw material cost, how do the cost escalation clauses are different for India versus European business if you have to get the nitty-gritty right?

As far as castings is concerned in India, the same quarter increases we get. The question is the negotiation of what we pay to suppliers versus what customers sometimes think the price should be. But that is a negotiation which normally we do arrive at the right solution. So that is the same quarter. The issue happens in the proprietary products now with Bajaj, like I said, with a quarter lag, which has impacted a bit of our cash flow also, is that the 3 months we get in the next 3 months. So here, what we are requesting the customers are for the spot increases because the fluctuations are very high. We cannot wait for 3 months to get these increases. So that is where the work is on right now. Some have agreed, some are still to agree.

And similar contracts work for Europe or they are different?

Europe, Massimo?

Yes. In Europe, it's more or less the same. As you know, we have a clear view with our customer, and we change the price quarter-over-quarter considering the leverage of the price of the previous quarter. So it means that in our profit and loss, we have an impact only if the price of aluminum continues to grow. But at the end of the day, it's rolling. So we have a particular impact, and we try to fix the price with the same index also with our suppliers. So in this moment, absolutely it's not a risk. The only problem is that, as you know, if the market -- if the price of material continues to go up only for window pricing, let me say, the percentage of EBITDA go down, but in total value, continues to grow. So no particular issue.

Next question is from the line of [ A. Sriram Paladipal ] from [ Aitor PMX ].

In coming years, can we expect a similar order book run rate similar to FY '26? And when we mentioned peak sales, does it mean the complete realization of sales orders?

Yes, yes. When I say peak sales, it's a complete realization. If I say INR 513 crores in AURIC Shendra in FY '29, that's a peak sales. But that doesn't mean that we are not taking more orders. So to answer your question, the run rate, I mean, our target would be to have the same run rate, and we will do our best for that. Because like I've said in the past, that we have to also supply all our product segment now with electronics included, which includes BMS and includes the battery packs also. We have to supply to all the customers, which we are not doing today. So that itself is a growth driver for us. And apart from getting more share of business, also when you look at the technology products like ABS, inverted front forks, braking systems for the high cc bike, this is really on the growth. So there you have higher sales, the margins are good. And also, if you see, if I just have to throw some numbers of FY '26, I've always said we are higher than industry growth. These factors which I told you is what is helping us to grow higher than industry, what I just told you, which you want to sustain. For example, if you see Bajaj, they grew, I think, 11.56% last year, we grew 16.1%. If you see Honda, 16.9% was our growth versus 7.86%. For Royal Enfield, we grew 32.7% versus their 23.9%. TVS, against their 21.17%, we grew 29.1%. It's because we are entering new products, increasing share of business. And this is happening because of our strength of technology, our experience in these products, and the comfort which the customers have for us to do the investment for them and to supply these products to them. Because most of these products, we are there between 15 to 25 years, whereas you say brakes, suspensions mainly, castings for 35 years. So to answer your question, yes, I mean, that's our focus, to keep growing, keep growing higher than industry.

Understood, sir. And I'm asking this for a better understanding, sir. Isn't some OEMs themselves backward integrating battery packing, and even in [ BMS ], the market looks fragmented. So what edge do we have in these segments, sir?

See, I think our edge is the technology we have, which we have. And I think we connect with the customer, the trust we have of the customer. So even if it's a new product, they would depend on us compared to others, which I'm saying. And let me tell you, in both battery packs and BMS, there are very, very few players, very few. There will be a handful.

Next question is from the line of [ Raj Agarwal ] from [ Niveshaay ] Asset Management.

We have mentioned that we have received this INR 300 crores order on the battery pack side, and we have received this from a customer. So we also mentioned a few calls back that basically this is a very different way of basically doing this even CCS wire-free battery pack. So how novel is this technology? Is anyone else doing this in India?

Sorry. Hello? Can you just repeat it? Please, I'm sorry, can you just repeat the question?

Our battery pack.

Wire-free technology, I wanted to know if anyone else is doing it in India.

Yes. Okay. So I will request Mr. Abhange, Director and COO, to answer that.

See, this has been always the impression about the investor community, that what is so great in making the battery pack assemblies, because the cells we -- everyone imports it and then we do the pack assembly. The differentiator that we bring here is, first and foremost, that our product is highly reliable. It is produced on a full automatic line. In the battery pack, you must understand, it's a safety product. It has got the fire hazard situation. And if the product manufacturing is not reliable, it can lead to problems in the field. So that we have, first of all, taken care of with completely untouched production of the battery pack lines. The second part is, as you know, the pack is nothing but an assembly of cells done in a battery box and then you have to connect it with the busbars. And the design of busbars is the key to the battery design. So our design is very special. It has got a couple of patterns into it. That means it has a very low possibility of getting into a fire-like situation because of the heavy current densities into certain parts of the battery pack, and our products are superior in that context. This is our know-how, this is our development, and this is our IP. So these 2 parameters differentiate us from the other battery pack manufacturers who are in the country. Hope this answers your question.

Yes, sir. Just one more thing on this. Sir, did you develop this with someone? And basically, does OEM demand this solution? And basically, are you also going to talk to other OEMs just holistically on it?

So this is fully in-house developed solution by our R&D team. We have a sizable number of R&D engineers in the battery pack business, which are best of the best from the industry. And this is our IP. And nobody in the industry currently can offer this kind of IP to the OEMs. The product is yet to go to the market, and we will prove it once it goes to the market.

Sir, on this, are you talking to other OEMs as well? And other OEMs demand this solution?

Yes, we are talking to other OEMs. Yes.

OEMs demand this solution?

No. See, this solution is for this OEM we are supplying to. There could be different solutions being asked by different customers. So it won't be the same. It won't be the same. It may be the same, but it may not be the same also.

Next question is from the line of Mihir Vora from Equirus Securities.

So most of my questions are answered, but just one question here. In terms of Europe order book, we do see some kind of stagnation there. But there also we are not including the Stoferle order book. So is it possible to quantify what order book would Stoferle be having here and how we see the European revenue growth ahead?

Sure. So speaking about the quarter, as I told you before, the total turnover in the quarter, the company grew 33.6%, compared to the previous year. But without Stoferle, 7.4%. Speaking about the quarter. If I speak about the total financial year, the company grew 28.9% compared to the previous financial year, and 2% without Stoferle. But please consider that this 2% is the total increase of volume -- total increase of turnover. But considering only the part, without including, the increase of turnover was 6.4% compared to the previous year.

Sir, my question was on the order book front in terms of Stoferle. Can you quantify that number, sir?

The new business acquired for Stoferle in the previous financial year is more or less EUR 7 million with [indiscernible] customers, Magna and BMW.

And when we had acquired the company, it had an annual run rate of around EUR 70 million to EUR 80 million.

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

Well, no, I've just said everything in my opening remarks. I have no further comments to make. I'd just like to thank everybody for their time for this call, which we've just had. Thank you.

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