IKIO Technologies Limited (IKIO.NS) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the IKIO Technologies Limited Q2 and H1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Suyash Samant from Stellar Investor Relations Advisors.

Thank you. Good afternoon, everyone, and thank you for joining us today. We have with us today the senior management team of IKIO Technologies Limited, Mr. Hardeep Singh, Chairman and Managing Director; Mr. Sanjeet Singh, Whole-Time Director, CEO and CFO, who will represent IKIO Technologies Limited on the call. The management will be sharing the key operating and financial highlights for the quarter and half year ended 30th September, 2025, followed by a question-and-answer session. Please note, this call may contain some of the forward-looking statements, which are completely based upon the company's beliefs, opinions and expectations as of today. These statements are not a guarantee of the company's future performance and involve unforeseen risks and uncertainties. The company also undertakes no obligation to update any forward-looking statements to reflect developments that occur after a statement is made. I now hand over the conference to Mr. Hardeep Singh.

Okay. Thank you all for joining the Q2 and H1 FY '26 earnings call. Our presentation has been uploaded on the stock exchange, and I hope you have all had a chance to look at it. I would like to highlight a few key developments before handing over the call to Mr. Sanjeet Singh for further details. In Q2 FY '26, we continue to diversify our business mix while maintaining overall revenue momentum, achieving a strong 31% year-on-year and 37% quarter-on-quarter growth to INR 164 crores. This growth was primarily driven by a broader customer base and expanded product portfolio. The growth trajectory in the other businesses segment remains strong, rising 71% year-on-year and 42% Q-on-Q to INR 115 crores in Q2 FY '26 and up 54% year-on-year to INR 197 crores in H1 FY '26. So our main aim -- the new products categories such as wearable and hearables are gaining traction, supported by the new clients' order, sustained demand and momentum. Geographically, growth was led by strong demand from Middle East, particularly Dubai. The company has successfully diversified beyond Home Lighting ODM business sustainable growth. I will request Mr. Sanjeet Singh to provide his thoughts on the quarter and discuss the financials. Thank you.

Thank you, Hardeepji. Let me take you through the key strategic initiatives implemented during the quarter and the half year ended to accelerate growth, along with positive updates on the strong progress we have achieved. As mentioned earlier, we have entered the Gulf market under the Product Display segment, witnessing encouraging traction and achieving profitability in the very first year. Sales in the Middle East continue to gain momentum. In the U.S., while exports from India were temporarily impacted due to the prevailing tariff situation, our subsidiary, Royallux LLC, which is in the U.S., continues to perform well. We are closely monitoring potential trade developments that could benefit exporters like us. Overall, revenue from outside India rose to INR 37 crores in Q2 FY '26, which is up 127% year-on-year and 30% quarter-on-quarter, contributing roughly 23% to H1 FY '26 revenue. Also, we have forayed into new product categories such as hearables and wearables like TWS earphones and smartwatches, both of which have been well received in the market and continue to show strong traction. Coming to our greenfield project, our new 5 lakh square feet manufacturing facility is progressing well. Block 1 of 2 lakh square feet, which was commercialized in May 2024 and civil construction for Block 2 of 2 lakh square feet is currently underway and nearing completion. We continue to strengthen our focus on backward integration to enhance margins and maintain quality standards while also driving cost optimization and operational efficiencies across business functions. Now coming to our financial performance and the utilization of our IPO proceeds. Our growth momentum remained strong in Q2 FY '26 with revenue increasing by 31% year-on-year and 37% quarter-on-quarter to INR 164 crores. For the first half of FY '26, revenue stood at INR 284 crores, registering a 13% year-on-year growth. For Q2 FY '26 and the first half FY '26, gross profit margin was maintained in the range of 35% to 36%. EBITDA for the quarter stood at INR 18 crores, reflecting a 63% quarter-on-quarter increase with an EBITDA margin of 11.2%. Profit after tax came in at INR 11 crores in Q2 FY '26, marking a sharp 358% quarter-on-quarter growth with the PAT margin at 6.6%. Cash PAT for the quarter stood at INR 18 crores, recording a 94% quarter-on-quarter increase. As we continue to scale up and prepare for the future, we have proactively front-loaded certain strategic expenses, which are currently higher than our historical levels. These investments are aimed at fueling the next phase of growth. We expect costs to normalize over time as operations scale up and the benefits of economies of scale start to flow in. On the IPO proceeds, the repayment of debt was completed immediately after the IPO. Block 1 is now operational. For Block 2, civil construction is nearing completion. We have now deployed around 78% of the IPO funds and are on the course to complete deploying the rest within the time line we set for ourselves. In summary, our continued focus on diversification, global expansion and strategic investments positions us well for the next phase of sustainable growth. With this, we conclude the presentation and invite the moderator to open the floor for questions.

[Operator Instructions] Our first question comes from the line of Sanjay Sood, an Individual Investor.

Congrats for the good sales growth. My question is you are -- you have started selling hearable and wearable, these smart watches and some other products. Now who are your -- which brand you are basically supplying? And are you in a position to reveal that or it's confidential?

Actually, we can say all Indian leading brands, we are working with them, all of them. But because we have signed INDs with them, we cannot disclose their names publicly. But most of the…

Most of the brands in India who are into the hearable wearable segment, which like products like Bluetooth speakers, smart watches, TWS, earphones. So I would say the best of the brands in India, we are supporting them in terms of production.

Okay. And so what is the contractual value for the entire year in case you can tell this number?

So there is no such contractual value. It is similar to the way we work in our lighting division. So we get tentative plans, I would say, let's say, for the next 6 months or a year, what is the outlook of the overall business that we are looking at with a respective customer. And basis on that, the products are finalized. We start getting the planning for, let's say, in the next 3 months. It's very similar to the way we work for our ODM lighting business in terms of planning. But the good thing is that within a very short span of time, we have onboarded the best of the customers in India and we are seeing very good growth momentum within this category.

Okay. Yes, I remember last time we were talking about Honeywell order. Honeywell did we start?

Yes.

You have started that, okay. And what is the value of that order?

So again, Honeywell, we are doing different kind of products for them like we have fire alarm systems. We have certain sensors that we have made for them. And then also, we have developed certain PA systems. So already business has started with them. And again, this is, again, very similar to the way we work for the lighting division where we design, develop products for our customers. And then obviously, before designing and developing, we do have an idea of the market and what is the prospective outcome of the kind of products that we are developing. But then again, this -- all of this is based on the planning that we get from our customers. So like this is a very new customer and production has already started. We've been successful in developing and supplying these products. So it's -- as time passes, the volumes will start to grow within this segment as we see a lot of potential with this category and obviously the customer as well.

Because these categories are all very typical kind of categories. So there are certain stages like some products have gone already in the market and we get the supplying orders. Some products are under the -- in the market for the market survey and quality checks, some are under development. So down the line, I think 1 or 2 quarters, you will see the multiplied growth in that segment.

Okay. And your new capacity, you have started utilizing your new capacity, that 5 lakh square feet. Now how much capacity you are still left with? Of course, once you complete this entire project, then capacity will be different. But right now, how much capacity you are having to fulfill any further requirement which comes to you?

So right now, as you know that we are doing this greenfield project in phases. So there are total 3 phases. The first phase of 200,000 square feet has been commercialized. And honestly, if I talk of -- because the second phase is in construction and third is yet to come. So out of the 5 lakh square feet, the first 2 lakh square feet, which is already commercialized, we are using -- I mean, it's right now in the phase of gaining business, customers, all of that. And in fact, in the previous quarter, we did our -- in terms of the revenue from this particular plant, I would say, a reasonable figure. And -- but as of now, we have not even utilized more than -- I don't think the capacity is still under 20% if I talk of capacity...

15%, 20%.

Around 15% to 20%. And every quarter, if I would have given this number probably 6 months back or 3 quarters back, then this would have been somewhere close to around, let's say, maybe 3%, 4% and most of the -- I would say, the production was also for the captive requirement. But now customers have -- we have onboarded the customers because all the products that -- product lines that we are into, they are all technical products. So there is always a timeline attached to it, developing a product, getting the certifications, validations and then the product goes into the market, there is an evaluation process there as well. So we've crossed those barriers for a lot of clients. And in fact, in the next month, that is December, we will be starting one more category, which is the automotive lighting. We've been talking about that since a couple of quarters now. And we've crossed all those, I would say, barriers. And by December, we'll start that as well. So another 2 quarters, this number should probably double in terms of capacity utilization.

And we still have a lot of capacity and we are working on the different areas to develop, because like you can say, the first 1.5 years was gone to develop all the infrastructure. Now the infrastructure is ready to move. So you will -- you can see from the results that we are now...

And that is sort of showing in the results as well as our expenses compared to the previous quarter have been utilized, I would say, a little more efficiently in this quarter, and we expect this trend to continue as the volumes start increasing now.

Okay. I have 2 more questions, small questions. I read in one of the business newspapers that smart watches demand is reducing in India. That is why every company is targeting for exports. So are you also planning to export smart watches?

Actually, we are moving -- like as you have correctly said, the demand for smart watches is not much in India. So we are working on like more on the audio. So audio demand is huge in India. So we are -- we have already started audio products like sound bars and the headphones and all. So that is our strength also because we are into this field for many years. So those products now we are developing as an ODM partners with all the brands.

And the customers that we have, for them, it's part of the package. So they do smart watches, they do Bluetooth speakers, TWS ear phones. So all these products come under an umbrella. So like you said, we also came to know that the market is -- sort of demand is not, I would say, declining, but yes, it's I think plateauing. But because we are new and all these new customers are coming in, so for us, the growth momentum is very well in place in terms of the products that we are doing. It's a large category that we are into.

Okay. But for smart watch there is no plan for export?

Right, because we are working for other brands. So once they export, we don't know if they are exporting or they are using in India. But we are not exporting directly.

If they have plans, we have teams in-house to get whatever certifications if required for any geography around the world. But if they have plans, we are well placed to serve them for this requirement as well.

Okay. And my last question is any guidance for the sales revenue target for this financial year?

I think in the beginning of the year, we just gave a very, I would say, an idea regarding where we'll end this year and we are on track with that. So basically, we are expecting somewhere around a growth of -- just give me 1 second. Somewhere around a growth of 15% in the top line and we are on track with that. The second quarter, the revenue came in from all verticals. In fact, our new verticals are now performing much better. So if you go through the presentation, you will see that most of the growth also came from the new verticals. So that is, I think, one positive for the way the company is now performing. So this is basically the -- I mean, the basic idea that we gave early in the year and we are on track with that.

In lighting also from single customer to now we are entered with all the major Indian brands. So those things will also -- the process has been started and all the samples are evaluated. Now it is on the verge of starting that big win.

[Operator Instructions] Our next question comes from the line of Sagar, an Individual Investor.

Sir, I just wanted to know the revenue break-up. So INR 115 crores of revenue you did in 2Q for the new -- for the other business. So how much is that variable and how much is that hearable, if I may know?

So in fact, I don't have the exact number of that particular vertical if I talk of the overall. But I mean, if you look at the way the business is developing, more than 50% of the growth came from the new verticals that we have started. That is hearables and wearables, that is the Dubai subsidiary that we have where we are doing display lighting products for a lot of brands. So there also, we've seen very good growth in the first half of this year. And in fact, some of -- like Mr. Hardeep was mentioning that we've added some more Home Lighting ODM business clients. So there also, although it is relatively small as of now, if I talk of the Home Lighting ODM business from the new customers, but revenues have started. So that is a positive sign. And all of these sort of contribute to the overall momentum. So if I have to give you a rough idea, in the second quarter, out of the overall revenue, just give me one second. I think hearable, wearable contributed close to around 13% to 14% of the overall revenue. And this is just a little over a year old vertical. So it's...

Yes, great. Sir, recently, your ODM business has also done good in home lighting quarter-on-quarter. So I was shocked on this. So except for Philips, do -- whatever the new clients that you add in ODM, do you consider that revenue segment, the new...

Sorry, if you could repeat your question. I lost your voice in there.

Yes. So your Home Lighting ODM business, right, it's majorly, I think, Philips and you are adding new clients you said in the ODM space. So you consider their revenue into the ODM segment revenue or it comes into other business?

So right now, it is coming into other business. So just to avoid any confusion with the investors, we are keeping the business vertical as of now in the same way. So the new customers that are being added, they are not being added into the IKIO Technologies Limited. It is being added into one of the subsidiaries, which is IQ Solutions. So the business that you're seeing in the standalone numbers that you see, that is pertaining to -- so that it is comparable to what has happened in the quarter 1 or quarter 4 of last year.

[Operator Instructions] Our next question comes from the line of Piyush Kriplani, a Retail Investor.

I have a couple of questions. My first question would be that the operating or the EBITDA margins, which were like around 22%, 23% in September '23, they have reduced to -- so there is an improvement, but they have reduced to 11% in September. Is there any reason why the EBITDA margins are reducing? And how much do we expect -- in a couple of years? Are we going between the range of 9% to 12% in EBITDA or do we expect it to increase to maybe near 20% in future?

Thank you, Mr. Piyush, for asking this question. So basically, the -- so I'll come to the first part of your question that why the EBITDA margins are reducing. Although like you said, they are now -- if you look at past the 3 quarters, they are improving quarter-on-quarter. The reason why from 20%, we came down to -- even in quarter 4, we were around 5%, which was the lowest point. And just quarter-on-quarter, if we compare from last year to this year, last year, it was somewhere around, I think, 17%. So the reason why EBITDA margins were sort of going down, although now they have started picking up is because of onboarding of expenses. So we've been talking about this in all our investor calls trying to explain the reasons for that because as you know that we've started so many different verticals. In fact, this greenfield project that we have started. So you need the team from day 1. So all the development that is happening, the product development. In fact, you need to have your entire lines aligned in order to make those samples for the customers to see those lines and the products the way they need to be made. So these expenses, we've been onboarding since a very long time. And as now the efficiencies are starting to come in, the growth is starting to come in. So you will see this trend going forward as we become more and more efficient with these new verticals. And on top of that, when we start a new vertical, our buying cost is also relatively high, which also affect the gross margin. The reason for that is we don't have the volumes to begin with. The order volumes are small. We start small and then we start building up on the volumes. And that is how the -- even the gross margins should slightly improve going forward. And the employee benefit cost, these are the 2, I would say, major areas where the EBITDA margin is sort of -- had sort of shrunk during the past couple of quarters. So they will start then becoming more and more efficient as the volumes start to pick up. And the second part of your question?

I think you were about to answer the second part.

Yes. So the second part of your question, I did came across a similar question I think last or last to last quarter. And so the way we are looking at the business progressing, the different verticals that we are now targeting, different product categories, I think it is safe for me to say that once we achieve the efficiencies that we are looking for, it might take a few quarters, but we should be close to around 16% to 18% in the coming quarters. And then thereafter, maybe it will be a better time for me to talk about the EBITDA margins going forward into the long-term.

Okay. So my last question is maybe it also has 2 parts. So there are a few things. You told -- you were saying that the expected sales guidance would be around 15% for this year, okay? Now short-term, I won't be judging you by short-term, but what do investors expect maybe 3 to 5 years? Why I'm asking this question is because the capacity which we are getting, which is 2 plus 2 plus 1, which is like 200,000 is already done and another 200,000 would be maybe next year, April '26 and maybe another 100,000. So if you are guiding a 15% growth, then do we need this capacity? Because -- and if this capacity is actually increasing, will the sales guidance be increasing in next 3 to 5 years or do you expect this 15% CAGR over the next 3, 5 years? Because with this increased capacity, we're actually bringing more and more sales, maybe more than 15% or how is the plan going forward?

So absolutely, absolutely. So in fact, thank you for asking this question. So it makes -- questions like these, in fact, help us to give a clear clarity to the investors. So like you mentioned, obviously, 15% growth is what we are targeting for this current year where all the new business verticals are just starting to mature. So it takes time. So let's say, if we start a new lighting customer today, the target that we set for the account, let's say, it's X amount for which we might -- which we...

For the first year.

Yes. So let's say, the total highest figure is X amount, which we will achieve in the next 2 to 3 years. But the first year generally is always slow when a new vertical is started. And then automatically, the sales start to pick up. And whatever verticals we are discussing as of now, the new verticals, this is just something that we have already started or we are in the verge of starting business. Apart from them, there are a lot of other product categories, product lines, different customers that are in the pipeline. But because we don't want to talk too much about the future and don't want to give any forward-looking numbers, so that is why we sort of restrict ourselves in informing the investors where we are today. But you rightly said, the amount of expansion that we are having in terms of the floor space are historically our asset turn has always been close to around anywhere between 4.5 to 5.5 and the investments that we are making. So that is obviously the target with the investments that we are making into the new plant. And we also have a plan in line with this. But it will take time, like you said, 3 years, 4 years down the line, but that is what the target is. And we are, in fact, moving towards that and in the right direction.

Okay. So in terms of percentage, it would be difficult for you to give any guidance other than the current year?

Sorry?

So it would be difficult for you to give any sales revenue guidance for the coming couple of years?

So that, like we do always, so I think for next year, it will be better for the investors and for the company too if we give the number in the fourth quarter or the first quarter of next year so that you will have a clear picture of how the trajectory of the business is going.

Okay. Can I ask the last question?

Yes, please go ahead.

Yes. So I have been like been there with the company since IPO and it has been below its price for a long period of time. So keeping in mind, there is every -- so much product expansion and so much capacity expansion happening, is there any plan for you to buy some part of it because it has been like almost more than 2 years it is below the price? Is this really -- I don't know if you're comfortable, is there any plan to buy back some part of it because you have at least 72.5 which gives some leverage to buy some more. Is there any plans as such?

So honestly, we haven't really planned as of now, but thank you for putting that thought in our heads. So I'll discuss this with Mr. Hardeep and our consultants and the team. But as of now, we have no plans, but we'll think about it.

[Operator Instructions] Our next question comes from the line of Kanishk Shah, an Individual Investor.

Congratulations on good set of numbers. So I just wanted to ask on our other business segment. So there has been a very good growth this quarter and consistently we have been growing. So just wanted to understand what are the main drivers for this growth in our other business segments? And are we expecting to grow at a similar level or at a higher level or at a considerably lower level? Like, some suggestion on that as well.

Yes. Thank you, Mr. Kanishk, for the question. So like I mentioned earlier also, so the main growth driver for this quarter, some part of the growth came from the standalone business, if you compare quarter-on-quarter. And apart from that, majority of the growth came from our new verticals. And also because this is the season time, if I talk of certain verticals that we have like the display lighting or in-store lighting business. So because of that seasonality also, so we saw good growth. But if we compare the same numbers to last year, even considering the seasonality impact of the conventional business, we still saw much better growth as compared to last year. So that was one part of it. And then coming back to, again, the new verticals, so hearable, wearable and the business that we are doing in the Middle East, the subsidiary that we have in the Middle East is growing exponentially. So the percentage is really high for that business as well in terms of growth. And that growth momentum over there, definitely, we'll be able to maintain as we are seeing a lot of demand in -- we are right now in the retail store lighting segment. But apart from that, there are other segments also where the demand is coming in and we'll pretty soon we'll enter those categories as well in the Middle East. So the growth momentum will continue. Apart from that, although the export business from India got affected due to the prevailing tariffs between India and U.S. But a major part of that, we were able to negate due to the strong demand in the Middle East. So this business was not practically there last year. So I think we are very lucky with the timing when we started this particular business. Earlier, our export unit was majorly selling or the revenue that it was generating was from the U.S. market. So I think we've been very lucky with the timing. But if I talk of our subsidiary there in the U.S., so that is also performing well, well in line with our expectations, and there was a slight growth in that as well. So all these factors contributed to the growth. And if I have to tell you in percentage, the conventional business and the new verticals, I think around 40% growth came from the conventional business and around 50% to 60% of the growth came from the new verticals. So even if I put aside the seasonal [Technical Difficulty]

Ladies and gentlemen, please stay with us, the management line seems to have disconnected. We reconnect with the management. Ladies and gentlemen, we thank you for your patience. We have reconnected with the management. Over to you, sir.

Yes. So I was answering the question asked by Mr. Kanishk. Are you still there online, Mr. Kanishk?

Yes, yes, I'm there.

Yes. Sorry about that drop. So basically, I was referring to the growth pattern. So even if I take out the seasonal impact, then also we are on the right track with our new verticals also expanding and growing. And because they are new, so we expect the growth trajectory to continue. And even in the conventional business because of the addition of new geographies and new customers, that will also continue to grow. So we expect a similar, I would say, if you look -- compare it to the Q1 numbers, so we expect, I would say, similar growth patterns going forward.

Understood, sir. Understood. And also, sir, I just wanted to understand, in total, how many products do we have in hearable and wearables?

There are actually for each brand like 4 to 5 products and we have 5 to 6 brands.

So approximately around 40 products. But if you look at the number of SKUs, they may be higher than those.

Okay, okay. And are we planning to enter any new products or any new geographies?

So certainly, I mean, if you look at the product, then definitely, that's a constant, I would say, endeavor that we continue to evolve within the same existing conventional businesses as well and also the new customers. So if you look at the development team, then we are always having anywhere between 30 to 40 or maybe more products always under development. And it's sort of a pipeline where we keep on pushing new products for development. And that is how we've been constantly evolving our business and not relying on a single vertical or business model.

Understood. And sir, are we working on smart sunglasses or something like that?

Not right now. That is a very new market. So it's evolving from what I can also see, but no plans as of now.

Okay, understood. And sir, I just wanted to understand on the new geographies, are we targeting any geographies, new countries, is what I'm trying to understand.

So yes, Middle East is something we are definitely expanding. I would say, every quarter, we are adding a country or 2 when it comes to our business because Dubai being our hub, then from there, we are catering to that part of the world. In fact, in certain customers or brands, we recently got requirements or approvals for countries, Asian countries as well like the Philippines, Vietnam, Indonesia. So 6, 7 countries, Malaysia, Singapore. So that is something that will happen automatically. Since the customers we are making, they have requirements in different -- if I talk of the in-store lighting division, they have requirements in different parts of the world, if I talk of those brands, so they open stores everywhere across the globe. So that is something that will automatically happen and it's now happening because now we have a set base outside of India. So they are also comfortable working with companies who have a good logistics system, have their teams, designers, everything. So that is sort of helping. And going forward, we have plans for certain other geographies also, but maybe in another 2, 3 quarters, we should be in a position to reveal more about those geographies as well.

Again, I assure you, things are moving -- all the things moving in the positive direction.

We have a follow-up question from the line of Sagar, an Individual Investor.

Sir, just wanted to know what's the gross margin across all the segments, that is, hearable, wearable, export and ODM, if I may know?

Yes. So basically, if you look at the consolidated gross margins, we are currently in the range of 35% to 36%. And like I said earlier, that is -- there's been -- although we've been able to maintain it, if you compare it to the previous quarter, but there's been a drop if you look at our gross margins historically. And like I said, because the new verticals, smaller volumes, initial pickup of the raw material components is generally higher in terms of pricing. So that is sort of impacting, which we believe will sort of start improving in a quarter or 2, you will see that sort of improvement. But if I have to talk of -- I can only give you an idea where the gross margins -- how the gross margins are placed across our verticals. So standalone, you can definitely look at the numbers. It's right in front of you. But apart from the standalone figures, if I talk of the other business verticals, the Dubai vertical, the gross margins are relatively slightly better than the consolidated figures that you see. And the hearable wearables have a slightly lower gross margin than the consolidated numbers. And likewise, the other ODM customers that we are now building will have a similar gross margin compared to the ODM lighting business in the standalone figures that you see. So the way we are evolving and the way we are maintaining our different verticals and product categories, some of the verticals because hearable wearable, although we know that it's a lower gross margin business, but the volumes are there and we are not trying to reinvent anything. It's a similar setup that we have. So if we look at the CapEx that is being involved compared to setting up something completely new for that matter. So for us, in that particular vertical, the ROCE is what matters. And that is why we chose that vertical to begin with and it has now started giving the results. And going forward, we will continue to make these verticals more efficient as much as possible so that we strive to improve the gross margins going forward.

Sir, a question on business strategy. So you have expertise into lighting. And so when you enter into wearable and hearable and when you approach a client, right, the client has already a supplier. So how do you approach the client and get them in your -- and convince them for your product? And why would a client shift to you other than their increasing share with already supplier? So I just wanted to know -- have a perspective on that.

It is all the -- with the infrastructure we have created and the BD teams what we have and the relationship because we are into this industry for a long time because before LED lighting, we were into the DVD players and everybody knows that we are from the audio side. So we are -- that is why we are focusing mainly on the audio right now.

And if you come and see the facility for yourself, so that is where the customers got the trust with us. And if you look at our -- historically, our journey of more than 3 decades into manufacturing, before LED also, we've always been into electronics. So I keep telling everyone that the reason why we've been successful in all these verticals is because of our strong understanding of electronics and the backward integration that we have developed over the past 10 years. So that, again, was a journey that we started 10 years back of developing everything in-house. So whenever these customers, they visited, they look at the presentation, what the company is doing. When they visit and see for themselves the infrastructure that we have created, so it becomes very easy for them to understand that we are not just a lighting company. And in fact, that was the only reason why we went for the name change as well for the parent listed company, just to avoid that confusion in the market. And that is where the trust comes into. In fact, that is where they realize that going forward, Make in India is going to be one big parameter when it comes to products being imported to India or being sold in India. So they see that value add with us of the infrastructure that we have created, and that is how the selection then becomes very easy. And in fact, within a very short span, we've been able to add most of the prominent brands in India.

Yes. So do you have the whole totally vertically integrated facility, like 100% is production is done in your own facility or how much of the value-added is produced in your facility.

Our first aim was to get hold of all the customers. Now with the interaction with those customers, we have already started Indianizing the product, already started that.

So the same thing we did in lighting as well. So always the idea is to bring the customers in and show them the capabilities that we have. And because they already had an existing product line, product base, so we didn't want to disrupt that. So we started with what they have. And now with each customer, we are discussing the new products that we can sort of Indianize or add value to that. So it's going to be a journey again, the same way we did for lighting. In lighting in our first year, I still remember, we started with just 2 SKUs. I'm talking of way back in 2012. And in lighting alone, if I talk of all the different verticals put together, I think we have more than 1,500 to 2,000 SKUs and more than 90% or 95% of the products are manufactured in India. So whatever is possible in India in lighting, we are already doing that. So that is how we look at this vertical also. But obviously, it will take time, but that is the whole plan.

Right. And can you tell me your growth in U.S. market in this quarter? So there has been tariff disruption. So how it impacted? And once the tariff issue is resolved that we can expect a good growth from there, right?

So if you look at the presentation also, although there was a growth, if I look at the business which is outside of India, so from -- there was a growth of around 30% quarter-on-quarter and 127% year-on-year, if I look at the business which is outside of India. But that is -- that growth mainly came from the Dubai subsidiary, the Middle East subsidiary. And if I look at the U.S. numbers, we are still doing well with our subsidiary, which is there in the U.S. So we planned a lot of stock. And in fact, the business that we are doing from the U.S. subsidiary, that is still progressing well. But the exports from our Indian subsidiary to the U.S. market have really shrunken. But again, the silver lining and the good timing about our business in the Middle East is very well showcased in our presentation that we are still growing when it comes to business outside of India. But we are waiting for the situation to settle down. And hopefully, this is not a permanent state. And as and when the things start improving in terms of the tariffs, in fact, we are also not stopping ourselves. We are in discussion with a couple of really big clients there in the U.S. market, and they have, in fact, already visited us, and they have seen our strength, and we are already discussing business with them. It's just a matter of time till things relating to tariffs settle down and we can start again.

Sir, last question on automotive. So you are entering into a very great segment, I mean, automotive lighting. So have you done the R&D? What kind of -- so are you doing the R&D in your products or can you just tell us what's going on there, right?

So all like sampling, approval, discussion with the brands, everything is already over. So we are now in the stage of making the packing and everything. So in a quarter or 2 quarters, you will see the results where we are.

Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to Mr. Hardeep Singh for closing comments. Over to you, sir.

Thank you all for making it to our quarterly earnings call for Q2 FY '26. If there are any further queries, please feel free to reach out to Stellar IR Advisors. Thank you all, and have a nice day. Thank you very much.

Thank you. Thank you so much.

Thank you. On behalf of IKIO Technologies Limited, we conclude this earnings call. Thank you all for joining us. You may now disconnect your lines.