Fiem Industries Limited (FIEMIND) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of Fiem Industries Limited, hosted by Monarch Networth Capital. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Sahil Sanghvi from Monarch Networth. Thank you, and over to you, sir.

Thank you, Sam. Good evening, everyone, on behalf of Monarch Networth Capital. I welcome you all to the Q2 FY '25 Conference Call of Fiem Industries Limited. We will start the call with an initial comment about the results and the future outlook of the company. And then we'll open the floor for the question and answers. Please note that this conference call may contain forward-looking statements about the company, which are based on the opinions and expectations of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are [indiscernible]. So now I hand over the call to Mr. Jagjeevan Jain, Chairman [indiscernible] the company. Over to you, sir.

Thank you. Good afternoon, and welcome to the Q2 FY '25 Earning Call of Fiem Industries. Joining me on today's call are Rahul Jain, Joint Managing Director; Rajesh Sharma, Joint Managing Director; Vineet Sahni, CEO and Director; Arvind Chauhan, Company Secretary; O. P. Gupta, CFO; and other members of the finance team. The investor presentation and the results have been published on both the company website and the stock exchange. I do hope that all of you have reviewed the same. I am delighted to announce that Q2 FY '25 has been a milestone quarter for us, with our company posting its best ever quarterly results. Our sales has grown by 20% year-on-year, showcasing our strong execution capability. Net profit of the company rose by 19%, underscoring the effectiveness of our strategy, initiatives and operational systems. In Q2, FY '25, the Indian 2-wheeler industries demonstrated a strong growth, with production volume reaching 6.3 million units, which is a 12.5% year-on-year increase. This growth is largely fueled by a resurgence in the rural demand and a strong consumer sentiment. Our close partnerships with the leading OEMs have been instrumental in enabling us to scale our production and capture this demand effectively. We anticipate continuous growth in 2-wheeler industries for the remainder of the fiscal year, supported by the sustained demand momentum. Our new product pipeline remains exceptionally strong and robust. During the quarter, our valued customer, TVS Motors, has launched the new premium Jupiter scooter incorporating our advanced LED lighting technology. This model features front and rear combination lamp equipped with our unique micro-optic [ colimeter ] technology, a first in the Indian 2-wheeler market. This innovation not only enhance visibility, but also bring a distinctive look, adding significant value to the rider experience and setting a new standard in the scooter styling. During the quarter, we worked closely with Yamaha for the launch of their YBR-150 models now being exported to Brazil. In passenger car segment, we are making a steadily progress with several advertising initiatives. Our second project with the Mercedes has been successfully delivered, and we are now in the final stages of the third project. I am delighted to inform you that we have received orders from Mahindra & Mahindra for the number plate lamps for their Thar, Scorpio, Bolero and other models. The start of production of these orders will be coming from January '25. This is an important milestone towards our progress in the passenger car segment. We are actively collaborating with a major OEM to develop proof-of-concept solutions tailored to the Indian market, reinforcing our commitment to the innovation and the new technologies. With this, I hand over to Mr. O. P. Gupta and the finance team to update on the operational performance.

Thank you, sir. Good afternoon to everyone. I am presenting quarter 2 and H1 numbers for FY '25 in comparison to the corresponding period of previous financial year. In Q2, the company has registered a sales of INR 607.5 crores against INR 505.85 crores in the opening quarter. For this financial year, we did an increase of 20.08%. For H1, the company has registered a 20.94% increase in sales to INR 1,181.05 crores as against INR 976.56 crores in the corresponding H1 of previous financial year. EBITDA for quarter 2 stand at INR 80.27 crore with a margin of 13.21% as compared to INR 66.36 crores, that is 13.12% on corresponding quarter previous financial year. For H1, the EBITDA stand at INR 159.04 crores with margin of 13.47% as compared to INR 128.02 crores, that is 13.11%, PAT for Q2 is INR 49.83 crores as INR 41.91 crores in corresponding quarter of previous financial year, which is higher by 18.9%. For H1, the PAT is INR 99.03 crores as against INR 78.35 crores in the corresponding period of previous financial year, which is higher by 26.39%. During the quarter 2, the company has made a CapEx of INR 43.42 crores, and total CapEx in the first half of current financial year is INR 71.84 crores. With this, I end the financial brief. Now the floor is open for question and answers.

[Operator Instructions]. First question is from the line of Viraj from SiMPL.

Congratulations on good set of numbers despite a challenging environment. Yes. Sir, just a couple of questions. If you see in the first half, we have incurred a CapEx of [indiscernible]. And I think in the last few calls, you've been talking about INR 200 crores to INR 300 crores in [indiscernible]. So what is driving this increase? And is there any change in terms of guidance in terms of CapEx spend, if you can just give some color on this?

Yes. So our CapEx guidance remains the same. If you see in FY '24, we did a CapEx of INR 85 crores. YTD, we have done INR 72 crores. We expect to do another INR 50 crore in H2, which will be approximately INR 120 crores to INR 125 crores for the year. And our target for next year is another INR 80 crores to INR 100 crores. And hence, if you look at it, it is going to be ballpark between INR 250 crores to INR 280-odd crores. That's the number which we had guided for. This is for expansion of capacity. You will see our revenue growth and our future revenue growth target. So we continue to be well -- want to be well positioned for future growth.

Got it. And this would include the CapEx for the PV lighting unit as well, right?

This is the broad CapEx plan for the next 18 months right now, yes.

Yes. But it will be inclusive of the CapEx for PV lighting segment?

That's correct.

Okay. Just one or two more questions. See, if you talk about lighting, the competitive landscape in [indiscernible] has seen the holes and hole in the Indian lighting space catering to the auto segment. And I think in the last few calls, you've been talking about us -- plan to enter through [indiscernible] new technology offering, but targeting this segment of lighting in the PV space. [indiscernible] question here. One is how large is each of these pockets? And in terms of competitive landscape, can you just give some color? So is the market still catered by your same players who are then in the headlamp, taillamp category? Or these are kind of catered to by imports? And the related question is that in PV, you are seeing a very high hypercompetition with realization in the pressure. So in terms of margin structure, will it be similar or lesser compared to 2-wheeler? Or any color you can give on these aspects?

So maybe Vineet can address the PV sector.

So we are working on various new technologies with specific OEMs. And to answer your question on competitive landscape, the answer today is we are the only players who are working on specific technologies with OEMs. That is making us different. And OEMs also engaging with us very deeply to bring these technologies. So at this moment, we cannot reveal what kind of technology because they are pretty unique and very futuristic, but we are working on different technologies with the customers. On the second part you said on margins, the margins are similar in PV as they are in 2-wheelers.

Sir, just one follow-up. Can you give some perspective on what is the addressable opportunity for each of those applications which we are targeting, I mean outside of headlamps and taillamps. And just again, on competition part, say, someone like a Lumax [ to IAC ], we have kind [indiscernible] but a lot of orders from Tata Motors and they also have seems to be inroads in Mahindra. You are primary two-wheels, we are also targeting for entry in PV lighting. So just perspective on size and also competitive landscape, is it primary import players or also the same players who are catering in headlamps and taillamps, just any perspective?

So at this moment, we cannot tell you and quantify the size of the market because it would depend on what kind of technology is finally adopted by the OEMs. The kind of technologies they are working, they are not necessarily [ advantaged in them]. There are many other technologies which have come into [indiscernible] cars. And we understand what the competitive landscape is doing. We are also in the market. And therefore, I said that we are working on certain unique technologies. And if we get the breakthrough, that will be unique and that could open up new markets and new segments in the industry.

The next question is from the line of [indiscernible] from NVEST ANALYTICS ADVISORY.

Congrats for a decent set of numbers. My first question is on the margin side. Q-on-Q basis, there is a slight dip in the margin. So is there any specific reason for that, sir?

Yes. So there is no specific reason. We continue to guide for the range that we have, which is 13% to 14% odd. That there is always a change in the quarter because sometimes there are some price markers come. In another quarter, they may not come. So overall, if you see normalized base will continue to be around the margin level that we maintained.

Understood, sir. And sir, like in last con call also you mentioned about the industry outlook. So 2-wheeler industry is doing [indiscernible] in the recent time. So how do you see the industry outlook shaping up in next, say, near to medium term? Is there any kind of risk that we may encounter in the coming quarters?

No. Overall, we continue to believe that at least H2 is looking very decent. And overall, they are industry numbers. We are yet below the all-time peak that we have had. So there is enough room for us to grow. So we continue to be fairly positive over the next 18 to 24 months, but looking at a large opportunity here for growth.

Secondly, sir, on the diversification side, like we are looking to enter into PV segment. So by when do we expect like something material will be coming to our top line from this segment?

So we ask -- given the indications in the past that it takes a long lead time, and we had indicated a 3-year period in our last investor call as well. So we maintain the same thing.

The next question is from the line of Rohit Singh. The line for Mr. Rohit Singh has dropped. We move on to the next question. The next question is from the line of Jatin Chawla from RTL Investments.

Just carrying on, on the first question from the first participant on the competitive intensity side. We heard a couple of players talk about the competitive intensity rising on 4-wheelers. I think you addressed that. But I wanted to check if on the 2-wheeler side also, are you seeing any change in the competitive intensity? How is that carrying on?

Yes. 2-wheeler market has also been growing. And definitely, there is a chance of so many new opportunities are there which is being implementing not only headlight, taillight, there are certain lights which will be soon will be in the market, and that will also be launched same as like PV.

I meant in terms of competitive intensity part, are you seeing more competitive intensity which could put some pressure on margins going forward?

[indiscernible].

Got it. My second question is, when I look at your Q-o-Q numbers, there is a big pickup that we have seen on TVS from almost INR 145 to broadly INR 175 crores. Is this largely driven by Jupiter? Or we are seeing traction across other models as well?

So there is not only Jupiter. Yes, Jupiter new launch, premium launch [indiscernible], and that is one of the major factors wherein other models also have increased their volumes like 3-wheeler and other [indiscernible] models get a very good market during last quarter.

And on the other side, we have seen a decline, reasonable decline on a quarter-on-quarter basis. Is this largely driven by the leading EV player or is it more driven by some of the smaller players not getting PLI subsidy and hence their volumes declining?

Now you are talking about the other category, right?

Yes, where revenues have come down from like INR 70 crores to...

That other is a mix of everything else, including some EV players and some of the others. So that makes you are aware in terms of there has been some shift in the EV volumes. EV volumes have been low in the current quarter.

And for Yamaha, how do you see things panning out? You mentioned one launch has happened, but I think you had earlier said that there are a number of other launches lined up as well. So how do you see that account shaping up for us?

Yes. Yamaha, as we already disclosed, 7, 8 models are already under [indiscernible] right now. And there may be chances by next quarter or next, next quarter for the launch to [indiscernible].

The next question is from the line of [ Tanuch Goyen ] from [ Group Gravy Train Capital ].

So one question was regarding the hub motors project, which we developed for Gogoro, I guess. So what is the status of that project? And if it goes through, then what are the projections we see in terms of volumes, pricing and profitability?

So the project with Gogoro is currently facing some headwinds. Gogoro has seen some management change, significant management change internationally at the head office. So they will need to sort of refocus and then make a strategy around India. At this point of time, that technology transfer has happened, machines have come, but the outcome in terms of where Gogoro is going to the market remains uncertain for the next 2 quarters. [indiscernible] at least for Gogoro. For the other, we do have a certain plan in mind for going after the [indiscernible].

Okay. So have we approved our existing client, Ola Electric for the same, for hub motors?

No. We are working with many OEMs.

Okay. And another question was regarding the growth which the company sees from the 4-wheeler segment, since we have just started it. So other than lighting, are there any other segments in the 4-wheeler market which we intend to pursue? And also just to add on to this question, in terms of profitability and cash conversion cycle, vis-a-vis the 2-wheeler market, how is the 4-wheeler market for us?

So I will take your question. We are currently focused on our core product, which is lighting. We are not diversifying because first, we have to focus on our core strength. So we are pursuing lighting with 4-wheeler. And your second question was on, I think, margins, which we have handled before. They are similar to the current status.

Just one last question. Though there has been a decent improvement in financials of the company, however, there has been a significant stake sale by the promoter group in June. So is the promoter group looking for any other business avenues? Or I mean what exactly is the reason for a significant stake sale?

No. First of all, let me correct. It's not significant. This is the first ever sale by the promoter of any size. [ Negative ], so there is absolutely not a significant number. It was intended for personal use, and PE do not have any plan at this point of time for more sales.

The next question is from the line of [ Shiv Shah ] from [indiscernible] Capital.

Sir, I have two questions. First is, can you say the LED contribution for the quarter or in first half and also the proportion of LED in order book?

So for the second quarter, the LED has remained 57%. In Q1, it was 55%. And for H1, it is 56%.

And with regards to the projects, it is 98% is LED.

Understood. And this a follow-up question on earlier asked margin question. I think there's a slight decline in gross margin for this quarter. Is that any raw material price situation? Or is it [indiscernible] transient?

We explained that there are the marginal uptick, minor here and there, happens every quarter and normalization happens as we go along with the OEM prices. So there is no reason in for specific reasons, and we continue to guide for our margin, which between 13% and 14%, we expect to remain and that will remain. So there is no specific reason for this quarter. And our raw material is all pass-through, it comes back.

The next question is from the line of Vinay Nadkarni from Hathway Investments.

Just one [indiscernible], your replacement market is pretty low, 5% to 7%, [ always ] between that. Any particular reason why it is so low? Isn't that a big segment? Or is there too much competition there?

Basically, with the introduction of more and more LED, the domestic market will definitely go down because the life of the LED is much, much higher because the normal conventional light is 2,000 hours, whereas the LED lighting is 25,000 hours. So only when there is accident, the change is there. So the aftermarket is going to be a little less in LED lighting.

The conventional lighting, we won't be able to supply? Isn't the margins in the replacement market more than the OEM market?

[indiscernible]. But the conventional market is not growing like the LED market is growing. So that's why our share is higher there and there is a [indiscernible].

And also, there are -- we are in agreements with OEMs. There is a contract with certain OEMs where we refrain from selling [ in a market ].

Secondly is on the capacity utilization. Can you just give us some figures on that? What kind of capacity, because you're growing at 20%? I just wanted to check out on what is the capacity utilization.

Yes, it is close to 80% during the second quarter.

Okay. And with 20% growth every year-on-year, your CapEx is also keeping in place with increasing the capacities, I presume?

Yes. This is increasing steadily by the CapEx we are making.

Okay. Can you just spell out the order book, I'm sorry, I didn't get that number, which we have as on date?

[indiscernible]. Order book, we have already informed that we have more than 10 --, 100 projects lying with us, with the work out to be INR 1,200 crores.

Okay. And this would be what time line for deliveries?

Maybe next 1 or 2 years. Depends on the launch of the [indiscernible].

This pipeline [indiscernible] started 2 years back might be launched now. And RFQ which has being converted into orders may take another 2 years' time. So it is a cycle.

Yes. Just one thing which keeps bothering me when I look at your market client base, your concentration with 2-wheel is very high. It's almost 57% with only 2 companies. What is the moat that we have with them that we won't be losing them anytime, because a loss there would be a big rip?

So first of all, if you see the 2-wheeler market, 5 players essentially capture the whole market. And our concentration risk is very, very distributive. None of them is more than -- the top most, Honda, is 28-odd percent. So I think given that the overall market has only 4, 5 players, we'll have to be with all of them, right.

And what would -- your share with Honda? Honda's share with you, I can understand, but how much of Honda's requirement are you providing?

See, on the overall basis, we can say more than 70% or 75% of the total.

Depends on the model.

And it more depends on the models and the items.

Okay. overall 70% to 75. And TVS would be how much?

I think you will be better served to look at our last [indiscernible] report there to give out [indiscernible] model-wise numbers. And I don't think we should look at the broad number of 70, 60 in this manner. If you look at each model and then see the share, that's a better way and more accurate.

The next question is from the line of [ Mihir Bora ] from [ Kekura Securities ].

So basically, just one question on that are we present before in TVS for Jupiter? Or is this a new product we are doing?

[indiscernible] base model, we were there [indiscernible] for all the lighting. And this premium model which is being launched in the last quarter is 100% with us, and during this quarter, they did 70% plus production of premium model wherein 30% is of base model.

Okay. But in this, we are both in the base and the premium one, right?

Yes.

And sir, any update on the Hero thing, like we were expecting some orders from Hero?

Hero, we are already working on 8 or 9 numbers of what -- we are just waiting for there are 2 new models which are already being developed and ready for the market. It is [indiscernible] to get the go-ahead for SOP from [indiscernible]. And then we'll continue that. As of now, [indiscernible].

All right. All right, sir. And congrats on this Mahindra win. So basically, just wanted to know whether it is from like we have a separate plant for PV? Or will it be from our existing plants on the supply to Mahindra?

So at present, we are continuing using our capacity of the existing plant. So it will be from the existing plant for Mahindra.

And like would you be open to share the share of business there for those models? Like overall, what can we look at?

I think it is a little premature to share because in some models, we have entered as a second source. And in some models, we have entered as the first source for future models.

The next question is from the line of Rohan Advant from Prad Capital.

Congratulations on a good set of numbers. Sir, my first question was on Honda. If you see Q2 versus Q1, we were flat. So how is H2 looking for Honda, any orders in the pipeline, any launches that we would be supplying to?

Yes, there all models. But as of now, we cannot disclose, but there are models always in pipeline which will be launched in subsequent quarters, years to come.

Okay. Sir, and with respect to the passenger vehicles where we are trying to get imports and we've had some logos that have opened up for us, I understand in the initial time frame these would be small in value. But over a 3-year period, sir, how much do you think can passenger vehicles contribute to our overall revenue by FY '27 or FY '28, around that time line?

So as indicated in our previous investor call, we would like to still hold on to these numbers. As you are aware, we are exploring various possibilities and it will take us some time to put a proper business plan, revenue growth, everything. So kindly have patience, and we will definitely talk once we are ready with that.

The next question is from the line of [ Krishna Hod ] from Electrum PMS.

One question, sir. Are you onboarding [indiscernible] as of now?

Yes, we, as of now working with so many other customers, too, and [indiscernible] is one of them. We will disclose once we get some business from customers. Of course, we will be always be announcing this thing during the call.

Okay. And so one last question, sir, how is the overall EV space standing out for us in terms of the new model [indiscernible], so we are participating in that?

So we are present with almost every major EV player. However, you are aware that the EV volumes for the quarter have been fairly low. The total volumes are less than 150,000 for this quarter. So EV sector is facing some headwinds [indiscernible] subsidy or other challenges. We feel that they will sort that out in the next couple of quarters and they'll come back to growth. When they do, we are very well prepared because we are working -- we have relationships with almost all of them.

The next question is from the line of [ Ankur Agarwal ] from [ Akari Services ].

So I wanted to ask that there has been a fire incident in the month of June last year. Okay? So you filed an insurance claim of around INR 20 crores, right? Out of [indiscernible] you received INR 30 crores and like rest was [indiscernible] I think.

Yes, yes. So I think you please read our full disclosure in the quarterly results itself. This is under process and with the survey for the assessment. So we'll update as and when this development comes. We already received INR 30 crores as of date.

Okay. So right now, like there's no further liability after that?

Yes.

The next question is from the line of Krushi Parekh from Pentacle Family Office.

Just a few questions back, you mentioned that most of your raw material cost is passed through. I wanted to understand, is it pass-through in terms of percentage to enable us to maintain the margins or it's like on rupee cost-to-cost basis?

This is cost-to-cost basis. [indiscernible] all the buying costs, and that is being passed through by customers.

Okay. So with the raw material increase or decrease, the margins can also fluctuate a bit because the pass-through is largely on the cost-to-cost basis. Okay. Also, you mentioned that you are working with the OEMs on some of the newer technologies. So can you help us understand that what can some of these new technologies enable for the OEMs and can result into their adoption? Like, for example, you mentioned that LEDs have a life of about 25,000 hours versus the 2,000 hours for the traditional life. So what can some of these new technologies enable for the OEMs for them to adopt?

So I will take this question. So we will not be able to disclose the technology, but we can always tell you that we are working towards more of safety of riders and co-passengers. We are working towards communicating the -- communicating lighting. So we are working on these features which will enhance not only the decoration, but also the safety features in the passenger cars and 2-wheelers.

We have a follow-up question from Viraj from SiMPL.

Just a few questions. You said that Gogoro got kind of put on hold and reviewing plans for India, given a change in leadership at the top. But in your technology, say, either hub part or MC, has that been fully transferred and absorbed at our end?

Yes. Entire plant set up everything which is being required for hub motor, and motor controller is already being placed at our end. People from Gogoro will be visiting to install. And very soon, we will start talking with other customers also based on the facilities available with us.

Earlier, when you enter into this arrangement with Gogoro, the thinking was that this will largely remain for supply to Gogoro. So is there any licensing [indiscernible] so that we can start catering to other players?

These facilities or manufacturing facilities which can produce or which can manufacture any kind of wattage which is being required for any [indiscernible] customer.

Basically, it is common. So it is not specific, but that technology is [indiscernible] from the Gogoro.

Okay. Got it. So there will be some royalty or license fee when we kind of start supplying to other players?

Yes. Once the [indiscernible] will be ready, we will be -- discuss and we'll disclose these royalty factors also.

Okay. Second question is on the employee cost front, I think the kind of increase we've seen for the last few quarters are higher than what [indiscernible]. So just trying to understand, is there anything -- what are you driving at?

So if you compare the last quarter, the quarter 1, it was 14.05%. And this quarter, it is 13.78%. So there is no increase, in fact. It will remain in this range only.

The next question is a follow-up question from [indiscernible] from NVEST ANALYTICS ADVISORY.

I think in the opening remarks, you were talking about some innovations happening at TVS. Can you please elaborate on it? Like I missed that thing from you.

Your question is specific to the TVS Jupiter order?

No, I think you were talking about some technology innovation first time in India.

Yes. So we are working on new technologies which are currently not being used in any of the passenger car or 2-wheeler segment. So we are trying to work alongside customers to bring this technology to India. And there, our team is working on innovations and new technology.

This is towards the 2-wheelers and 4-wheelers both?

Yes, it is for both.

The next question is from the line of Praveen Motwani from Bank of India Mutual Fund.

I have just one question. Could you please just help us to understand the development on the 4-wheeler side? It's around 3.3% of our revenue, and how are we planning to ramp up? And who are all of the clients and in domestic and international, if you can just help us to understand that, please?

Yes, sure. I will brief you and it was also in the Chairman's speech. So we are working alongside many clients in 4-wheeler. And we successfully delivered 2 projects of Mercedes. We are working closely for the third. We are going into start-up production for Mahindra & Mahindra number plate lamp, which makes -- it's a small lamp, but it goes across all models, where in some models, we are setting source. And in some, we are now outsource also. And in other customers, we are also working on new technologies engagement where we are developing proof of concepts so that we also follow the technology route, which is a very strong way to enter this segment. And there, we are getting good response from customers. So these are the various activities which we are working on in 4-wheeler.

Okay. Understood. Sir, when you talk about the -- you're working with multiple clients. But you said on the Mercedes piece, 2 projects have been delivered and you're working on a third project. So this is just a trial period or it's actual delivery you will start doing to...

So we -- as explained in earlier investor calls, we are engaged with them for development projects, the development cars. This is the stage 1. So there are small volume projects are developed with them and delivered to them. [ We can use for ] their development cars. And then once we have deeper engagement, we go on [ deeper ] production.

Okay. Okay. And sir, any number, like in next 2 years or 3 years, what is your target, like how we should see the mix changing from 2-wheeler to 4-wheelers? We are at 3.3% right now. How does -- how it will change over the next 2 years? Any number on that, kind of your thoughts?

So as explained in the previous questions, many, it is little premature to talk about this guidance. Kindly have patience. We will definitely work this out. We are working on several streams. So any number we give will be pretty premature. So we will definitely come out with the number at appropriate time.

The next question is from the line of Ankur Shah from Quasar Capital.

So can you just outline the contract scale-up size with Mercedes, like what kind of eventual contract be?

So as I said, we are not targeting the revenue. These are small volume development projects. It is more towards developing the technology for 4-wheelers alongside Mercedes, getting to know their systems and developing the trust with them because the very fact that we are on the third project, it makes us feel proud because you can be awarded third project only once you are successful in the first 2. So that is the step-by-step process. So at this moment, revenue will be a wrong measurement at the way we are proceeding. At appropriate time, we will give you the indication of revenue then.

The next question is a follow-up question from [ Shiv Shah ] from [indiscernible] Capital.

Sir, I wanted to clarify on the cash received for -- from the fire insurance. How will the accounting for it work?

INR 30 crores we received as interim payment. And it is subject to final assessment because this policy is on [ rail ] statement basis. After final assessment from the survey, the final settlement [indiscernible].

So it is not yet reflected in our financials, is it?

It is -- you were asking about the [indiscernible]?

The treatment.

So this is the book [indiscernible] has already written off. We've given a complete disclosure in the quarter itself.

Okay. Understood. And the second question, is there any specific revenue guidance for your growth guidance for FY '25?

We generally don't give specific, but our long-term agenda remains medium term, 15% to 20% growth is something we [indiscernible].

The next question is from the line of [ B.F. India ], from individual investor.

This is [ B.A. Sinda ]. My first question is that what percentage of your total R&D investment is allocated to each of your key segments, like 2-wheeler, 4-wheeler or any. And can you highlight any specific R&D initiative or technology platform that you consider to be important towards your future growth in each of these segments?

So -- so let me split your question. First is about the numbers. Our R&D spend is on a consolidated basis for the old lighting products. And it is coming around -- light is coming around 1.5%, you can see in the balance sheet and [indiscernible]. And in future, it is going to be increased substantially. And then again, your second question, what kind of new technologies, all this we already explained, I think, in the product when we talked about the Jupiter. And at 4-wheeler passenger vehicle side, Mr. Sahni has already informed about the new technologies.

So I will just add on, all technologies that we are working, they are pretty significant, both for passenger cars and 2-wheelers, and also significant for auto industry in India. So it takes time, but some of the technologies will certify shortly and we will keep you informed.

Okay, sir. And my second question is, sir, as my earlier participant has been asked, but I want to know that the objective of growing the 4-wheeler business to a significant level within the next 5 years, what is we do in long-term strategies for balancing growth between 2 and 4-wheeler segment? And how will the company address the competitive dynamics and customer acquisition challenges in the 4-wheeler segment, sir?

So I think it's a good question, and we have been talking about technology. The very fact that we are pursuing technology is to have a long-term presence in 4-wheeler market. And we, as company management, will ensure a proper balance and focus is maintained in both the segments that will be done. So that's more of a management part of it, but the technology is very futuristic. And that is the way where we can maintain and increase our market share and grow our revenues.

And we are very much hopeful to have a very good substantial amount in next 5 years in 4-wheeler segment.

Okay, sir, got it. And I know, sir, just you're putting a good number, then your margin percentage and this EBITDA percentage is, I think this is conservative or we can assume more, sir?

We are hopeful for the better.

The next question is from the line of Krushi Parekh from Pentacle Family Office.

I would want to follow up on my previous question on the new technologies that we are looking to have adoption of. So have we seen these new technologies being adopted already in some of the other markets by other players, and how the penetration has been in those markets? So if you can help us understand that.

Yes. So these technologies, we can divide into 2 sections. Some of the technologies are already present globally and adopted by certain players internationally. We are trying to bring back to India. That's section one. And second is that even globally, all players are working to introduce their technology. And we are also one of them to bring back to India and that will be like -- if it is -- if it gets launched in Europe, it will be getting launched in India. So it is very contemporary. So we are working on both businesses.

Okay. And are any of these are as a result of regulations that have evolved in the other regions? Or it's just that OEMs want to offer the better features to the customer?

It is a mix of both.

The next question is from the line of [ Devang Med ] from Eagle's View.

Sir, are we currently exploring any opportunity for [indiscernible]?

Do you want to repeat your question, please?

Sir, are we currently exploring any inorganic growth opportunities, given we have [indiscernible] balances?

No, we already have identified a few segments, like we explained our foray in to passenger vehicles, our foray to what hub motors can do. So I think those are near-term areas that we are working on.

The next question is from the line of [ Ram M ], an individual investor. There is no response from the line of Mr. [ Ram ]. We will move on to the next question. [Operator Instructions] The next question is from the line of Ankur Shah from Quasar Capital.

Sir, just one question on this premiumization trend which is playing out, and all these OEM manufacturers, I think they have significantly increased their premiumization launch strategy. So with this respect, sir, does the value or the kit size differ significantly like on normal -- versus a normal sort of a launch?

Yes. Premium technology means some additional costs, and that is being identified as a base model to premium differences also. And [indiscernible] is an additional cost, which is being used in raw material as well as in processing costs also.

And also the new features.

Sir, like are we actually seeing the volume intensity pick up in that manner? Because obviously, rural sales and all being a part of it, I don't think so. But is the premiumization trend very clear in [indiscernible] also?

Yes, it is very clear because we started from 50cc motorcycle and now we are running on 500cc too. So this is a premium -- already, we are working on that area only. So in our segment also, we are working towards that deal.

The next question is from the line of Abeer Katyayan from Neo Wealth Management.

So the question I had was in terms of NAV growth that we saw this quarter, roughly north of 25%. Apart from Jupiter, let's say, Classic 350, are there any other significant models that contributed to this growth?

Yes, there are models like [indiscernible], Rider, [indiscernible] there, which has given this significant [indiscernible], and all in LED models.

Okay. Understood. Another question that was confounding me is when like the premiumization story we all see. But when eventually, this LED gets to a particular scale, do you think like LED won't be considered as a premium product anymore on the value of the overall market segment that you are targeting. Might actually be affected in, let's say, the coming 3 or 4 years?

LED will be definitely a part of that [ on deep ]. Along with LED, what all premier -- premium thinks you can make it in your design, that is the styling and customer aesthetics, and we are working on that area.

Because everybody wants new feature, new things. So this is also a part of it.

The next question is from the line of Saurabh from Multi-Act.

This is Akshat here. Congratulations on good numbers, first of all. And I had 2 questions. So my first question was historically, we've been saying that the difference between halogen and LED is in the range of 2 to 2.5x. Now when you look at the new Jupiter which is launched, you're -- and we've also discussed on the call that the technology is the newer technology, which we've used. So as we are moving ahead in the LED adoption, is this gap even increasing further in terms of the content premiumization? So is it like higher than 2, 2.5x now? Or we continue to trend on that line?

Basically, it is similar. Only the features are added new.

Okay. So we continue to maintain the 2, 2.5x realization as compared to halogen once the full LED adoption is completed?

Yes, it is.

The second question was on the new wins that we have had in TVS Jupiter and [indiscernible] Classic 350. So both these model,s, were they fully ramped up in the quarter 2 or the production will be fully ramped up from the third quarter onwards?

This is continuing. As of now, the projections which we received from [indiscernible] are in a similar case.

Okay. But they were there for all 3 months of quarter 2 is what I was trying to understand?

Yes, -- all 3 months of the quarter 2.

Thank you. That was the last question. I would now like to hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital.

I just wanted to thank the management for patiently and [indiscernible] answering all questions. Also on behalf of Monarch Networth Capital, I wanted to thank all participants for joining the call. Jag sir, are there any closing comments?

Yes, I would like to thank everyone for participation in today's conference call. I hope that we have adequately addressed all your queries. If you have any further questions, please don't hesitate to contact us. Thank you, and have a good evening.

Thank you.

Thank you. On behalf of the management and Monarch Networth Capital, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.