LMW Limited (500252) Earnings Call Transcript & Summary

Good day, and welcome to Earnings Call of LMW Limited for Quarter 3 of FY '24-'25 hosted by NSDL. [Operator Instructions] Please note that this call is being recorded, and this is Sameer from NSDL. We have with us Mr. V. Senthil, Chief Financial Officer; and Ma'am B. Dhanalakshmi, Senior General Manager of the company. And over to you, sir.

Thank you. Thank you, Mr. Sameer. Very good afternoon to everyone, and thank you for joining the LMW earnings call for Q3 FY '24-'25. We will have a brief about the overall performance of the company for the period ending December '24, followed by an interactive session. I would like to clarify that certain statements made in the discussion of the conference will be forward-looking in nature. To begin with, let me explain the overall performance of the company, then we'll go into segment-wise and consolidated performance. The financial results have been posted on the company website, and I hope you had an opportunity to go through the same. The revenue for the quarter ended December '24 is INR 710 crores as against INR 750 crores for September '24, which is a decrease of around 5%. For the 9-month period ending December '24, the revenue stands at INR 2,120 crores as against INR 3,645 crores for the similar period for the last year. The PBT for the quarter stands at INR 36.8 crores as against INR 38.2 crores for the immediate previous quarter. And for the 9-month period, it stands at INR 92.5 crores as against INR 393 crores for the 9-month period for the previous year. I would like to explain the exceptional item of around INR 132 crores during the quarter. This is a profit which has been booked on account of transfer of 100% shares owned by LMW in LMW Textile Machinery (Suzhou) Company Limited, which is our Chinese subsidiary and LMW Global FZE, which is our Dubai subsidiary to LMW Holding Limited, which is again a wholly owned subsidiary of LMW. The sales consideration which was paid net of the cost of investment has been reflected as profit in the stand-alone books. However, since these are within the same entity, these are knocked off at consolidated level. Now going to division-wise detail. The TMD revenue stands at INR 450 crores for the current quarter as against INR 456 crores for the previous quarter. And for the 9-month period, the turnover was INR 1,347 crores compared to INR 2,908 crores for the same period during the previous year. This is a reduction of around 54%. The overall loss for this division in the current quarter stands at INR 3 crores. And period-to-date, the loss is INR 22 crores as against a profit of INR 270 crores during the last -- similar period last year. With respect to the order book, currently, we hold an order book of INR 3,100 crores, of which the actual orders are around INR 2,300 crores. With respect to the sales, which has been clocked during the 9-month period, the ratio of domestic versus export and spares stands at 71% of this turnover is domestic, 7% exports and 22% is spares. As we have mentioned earlier, and we continue to mention, we have gone into a 5-day working as far as Textile Machinery division is concerned, and so is foundry, and this would continue to be so in the current quarter as well. But this is on account of lower capacity utilization, which is sub-50%. And this trend would be continued to be monitored and depending on the order flows, we will take a decision otherwise. Now with respect to LMW Global, the turnout for the 9-month period stands at INR 75 crores as against a comparative number of INR 250 crores for December '23. The profit for the current period is INR 1.47 crores as against the previous period profit of INR 12.98 crores and the order book in LMW Global stands at INR 80 crores. In LMW China, for the 9-month period ending December '24, the turnover stands at INR 54 crores and the comparative period last year, it stood at INR 18 crores. The order on hand -- the order book on hand in China is INR 22 crores. Now I move to Machine Tool Division and Foundry. The revenue in Machine Tool Division and Foundry stands at INR 728 crores per 9-month period ending December '24, as against INR 756 crores for the corresponding previous period; out of this, around 11% relates to the Foundry division, the balance is towards Machine Tool division. With respect to ATC, the revenue for 9-month period stands at INR 123 crores for the 9-month period as against INR 133 crores for the corresponding previous period. At a consolidated level, the revenue stands at INR 2,300 crores for the 9 months ended December '24 as against INR 3,238.53 crores during the corresponding previous period and profit at INR 90 crores as against INR 395 crores during the corresponding previous period. With this brief, I would like to continue to the interactive session. Over to you, Mr. Sameer.

Thank you so much, sir. Next, we would request the people in the attendees to please raise your hands to raise questions. The people in the attendees, can we have you raising your hand so that we can proceed with the questions, please. So we've got Mr. Nirav. Mr. Nirav, you have been unmuted. And we can also have your video turned on, if you like, and we are ready for your questions.

Good afternoon, sir. This is [ Nirav from ESK ] here. Question is pertaining to the demand outlook. So I understand that we are a very dominant player. We are a very strong player in the spinning and yarn machinery, but it looks like the demand scenario is not in our favor. Based on your assessment when you are interacting with your customers, how do you see the demand scenario? And what we are seeing is 2 major tailwinds. Can China plus one and now with Bangladesh plus one, both turn in our favor? What -- and by what time are we expecting any major turnaround in the utilization which can eventually result in increased demand for spares leading to ordering activity as well?

Any other questions, Mr. Nirav, so that I take it [indiscernible]

Maybe can I ask on the Machine Tool Division after this question, please?

You can give me the question, I'll answer it.

Sir, in Machine Tool Division, we are a decent player in the CNC machines. So have we seen any kind of a slippage from the customer perspective because we are hearing that the CapEx is not getting canceled, but it is getting postponed. So has there been any scenario where any customer has extended the delivery period. And third, with regards to advanced machinery tools, like what we are seeing if I look at the data from last 4, 5 years, there has been no major [ offtake ] or I can say no major growth that we are seeing despite the defense ordering picking up at a very, very brisk pace in the last couple of years. How do you see the outlook there? Is there any change in strategy? And more importantly, this was partial defense. But if I look at from the civilian aviation space, we -- some of the companies which recently got listed, they are getting big time into MRO and other activities. So do we also intend to get into that -- those space as well?

Okay. I think it covers quite a lot. So let me try and take...

That's what I was trying to ask one-by-one...

That's the way we do it, I like it like this. So no issues, so I will do one-by-one. So with respect to the spinning TMD segment first, a couple of positives and negatives on what we see is kind of happening. Of course, I should say that this kind of a slowdown, what we have kind of experienced over the last year, 1.5 years, probably sets a record in terms of the longest slowdown what we have seen. But now what is perhaps unique is that this is happening across the globe across various country segments. And you are absolutely right, China -- India being where we are a dominant player. There are a couple of factors which is really not helping the Indian spinners at the moment, right? The effect remains that the cotton prices are a little bit on the higher side. So the spread between cotton and yarn is not great. And right now where there were property losses earlier part of the year, now they are probably making some margins. And ideally, what's happening is that they take some time to come back to making CapEx investment. So what we have, order books are getting pushed out longer and longer. I mean, that's the way it is. Now the reason -- of course, there is some expectations, and we can't comment on what is going to come in the budget, whether the duties are going to be relooked at, whether they're going to allow cotton to come in or other fibers to come in. I think it all waits to be -- we will have to wait until what's going to happen. But currently, the -- if you look on the volumes, with respect to Bangladesh plus one, we really don't see that the volumes have significantly come down as far as our yarn going into Bangladesh is concerned. Bangladesh is one of the very large customer, a very large market for Indian yarn. China plus one, we have been -- actually, it is almost 4, 2021 to now 3 years and still things have really not moved as much as what we have expected because structurally, we need to have large capacities to counter China plus one and perhaps similarly with respect to Bangladesh plus one as well. Nirav, both of it would happen only if the raw material mix, raw material price has to be reasonable. And I think there's a lot of industry associations, which are making that pitch at the right -- to the government, I suppose, so there are challenges there as to when the investment cycle will pick up and it is down to these factors. And if you see within, for example, in South, Tamil Nadu, for example, there is an electricity charge, which the cost of electricity going up is definitely a bit of a challenge. But again, we have maintained that the current scenario with a lot of PLI schemes, PM MITRA Parks, the Gujarat policy or whatever the policies of various state governments, for example. I think we are -- whatever could be done to the best of abilities has already been announced and been out there. It is perhaps the challenges on perhaps something like raw material getting addressed, that would trigger the demand. That is point number one. Point number two, again, if you go back and see, we are talking about nonprofitable spindles having reduced. So what is the running spindles are running for the full capacity. So if you look at mills, it is not that mills are running at lesser utilization. Most of the customers are running at full utilization, probably the margins what they are making are not very comfortable. There has been a loss which has happened in the past, which, of course, they will have to recover. So the capacity utilization is to a very large extent, it is happening. So this would -- certain spends is going out of the market would also help in the utilization part. And when there's a pickup, it will definitely come back. Again, what we have learned post COVID is V and K and W growths, but we definitely feel we can't judge or we can't comment as to how -- what kind of a pickup, would we see something what we see in '20 late, post COVID where all of a sudden, there was a huge uptick in demand because again, since I said 1.5 years, there has been a slowdown, whether it is going to all of a sudden come back, that is -- these are all things which we can't predict, but we do know that these scenarios do exist, right? What our government has done with all the schemes, like I already mentioned, are already in place. So a few factors turning around would help now come -- this is with respect to India. Now we are also having similar challenges globally, right? We are talking about Bangladesh, which has a foreign currency issue, where shipments are still happening, products are still getting shipped, but of course, they do have a foreign currency issue. Turkey has got an interest rate issue. So today, if we speak to Turkish customers, I mean their logic is that government is backing up -- it's a very high interest they give. Even bank deposits, we understand from our customers gives you 40% interest. So their point is why we agree because the inflation is so high and things like that. So the point what they ask is why would you want to invest when we can keep the money in the bank and get a higher interest rate and government is trying to have that -- back up those banks. So their point is why would I want to run and make 10% when I can keep it in the bank and make more interest than that. So there are certain issues there. But at the same time, certain new markets are growing. African market, to some extent, is starting to grow. So predominantly, we do have an issue across the globe as far as textiles are concerned. And we -- it is very difficult to judge considering the fact that now with Trump's new set of, what we call, these tariffs going to be announced, we really have to wait and see as to how these things are going to change the textile -- the demand from various manufacturing hubs. I think that would be with respect to the Textile Machinery Division. With respect to CNC machinery manufacturing, the CNC machinery, generally, yes, what your observation is right. It is not on account of any slippage of customers pushing out deliveries. We generally, in CNC business don't have too long a waiting period. It is 1.5 months of order book is what we -- at any point of time, hold. It has more to do with a slight slowdown in the industry and there was a dip. But again, if you go back last 2 years and see, it would be pretty much similar dip in the third quarter and followed again by an uptick in the fourth quarter. So -- but the trajectory of continued growth as far as this segment is concerned, is very clear for us. We are not anticipating any significant dip because here, China plus one has really taken off quite well, I would say. There is a lot of things happening, especially on the engineering side from the manufacturing side in India. So we are positive that the long-term trajectory still stays; a quarterly dip really doesn't matter significantly for us. With respect to the advanced technology center, see, I think the question was very clear as to whether we are part of the domestic defense segment and what has been structurally the changes. And if you actually go back and see our numbers. For us, we were making a consistent loss and we have taken a clear call that we would like to focus more on the international customers, where the strategy for us is to go deep and expand their spend with us. So that is the change what has happened over the last couple of years, and that is where the turnaround specifically has happened with this sector. So for the -- sorry, for this division. So currently, we still do 90% of our business only on the export side. But point taken and noted that with respect to the defense, we do work with defense, in domestic, defense companies as well but still a smaller percentage. But over a period of time, yes, it will grow, we will be investing. And as what is required would -- as you know, we have got both composite and metallics business in this. So we will be trying to focus more and more for our composite business also towards the domestic defense and see how that works. But currently, over the last 3 years, we kind of -- we have restructured to cater to the international customers than the local defense segment. We are -- with respect to MRO, now the idea is to supply components, parts, et cetera, and not to get into an MRO business. That's a totally different business altogether. We are not focusing on getting into MRO or maintenance of aircraft and things like that. I hope I answered the question back to you Mr. Sameer. I think he's -- yes, he's got some follow-up question. It looks like Mr. Sameer.

So basically, sir, in defense, what I was trying to understand is that like when an engine is getting designed you need to get into the ecosystem, get the customer at the designing phase itself if you want to scale up the advanced technical center, and gradually, when these engines start getting into the rollout phase and when the MRO activities come, that is where we become the exclusive supplier. So are we in any kind of a -- what I would say, as we are trying to turn around this ATC center, have we got any significant breakthroughs with any of the global names because they are also looking at India as a very strong alternative from the sourcing perspective. And with regards to the machine tool division, I wanted to understand, can we get into like 4XL, 5XL machines because that is where, as we are seeing the EMS division, even EMS companies are setting up really mega Cap-Exes and they require these kind of machines on a very larger scale. And one more question, which is specifically pertaining to machine tools. We are going to see massive CapEx of semiconductors in India. Are we trying to have any kind of a joint venture or any kind of an activity to address that particular market segment, considering our technical understanding in the machineries?

Okay. I think with respect to the long-term contract on ATC, right, I mean, you're right, there's a possibility for a company to participate in the development phase. But what then happens is that you're looking at iterative design and development phase with a very long lead time, right? Our focus today is basically to be not in that segment because then what happens is we are investing a ton of time, ton of money and then it's going to take a long time for us to get back our [Technical Difficulty]

I just wanted to confirm if Senthil Sir is visible or audible to...

No. His line is lost. His line is lost.

Got it. Got it. I just confirmed the same with the technical support who has joined us. I just wanted to confirm that.

I could not get anything from the second conversation that was started.

Sure. I will just inform Senthil, sir, that this has happened once we have them connected to the call again. Senthil Sir, sorry to barge in and interrupt. Sir, we lost you for the couple of like last minute I guess.

Sir, entire conversation was missed.

Okay. I'll just repeat that. See, what I meant was, what I was trying to say is that the -- our -- the strategy, what we have adopted is to be part of the existing running programs of customers, OEM customers, not to head into a new program with international customers because of the lead time and the amount that we'll have to spend just to be part of the tender program. Rather we are keen to partner with them, work with them, expand our production, expand our offer to them. And then at some point, perhaps we should look at this. But having said that, from the Indian context, we are part of the GTRE where I think you can look up that information, which is available online as well, where the development GTRE development, the engine development of GTRE, we are part of it. That is the way ATC works. Now coming to the EMS segment, yes. And we are 100% in line with what you have mentioned Mr. Nirav, that the manufacturing requirements in India are going to be very large scale, and we have developed machines for EMS, we are supplying machines for EMS segment as well. And we are not giving -- we have not, in any way, taken away of the scope of our supply for the EMS segment. But with semiconductor segment, no, we are not making any machines for the semiconductor segment at the moment. And perhaps if that is, if we do that, we'll definitely keep you informed once we start launching these projects. But at the moment, semiconductor is not part of our profile of machines, what our machines can go into and would be supplied to. I think I hope I answered your questions.

Yes.

Back to you Mr. Sameer.

[Operator Instructions] We have Mr. Manish Goyal joining us. [Operator Instructions]

Sir, on the TMD side, sir, if you can also probably give a perspective as to what I recollect is that in last call, we did mention that we are seeing some sequential improvement in order inflows. So if you can probably give more perspective as to -- is that trend continuing? And at least we are able to book orders equivalent to the revenues book? Or how is the scenario? Number one and number two, within that, are we seeing any project-based orders or it is largely from unitary machines? That was one thing. First question. Second question, what is the export order book? So like what you mentioned about LMW Global of INR 280 crores, is it the export order book or it's a separate from the subsidiary that I wanted to know? And third, on the clarification on the revenue breakup you mentioned, 71% for domestic and so on. It's for quarter 3 or it was for 9 months because this number is very similar to quarter 2 numbers. So I just wanted to clarify on that aspect. These are the first 3 questions on the TMD. And maybe if you can also give a perspective as to how is the progress on the launch of our new product, Autoconer. I have a question for Machine Tool, I will probably come back on that.

Okay. The -- from the order book perspective, it has not improved. We are -- are we replacing enough orders from the new orders? Order inflow, no. What we're getting executed is basically coming out of the existing order book and the new orders are not replacing the order inflow -- not replaced by the new order inflow. The export order book of INR 280 crores is exclusive of the INR 2,300 crores because that is pure Indian order book. And now with this LMW Global, which we have established, we are -- all the orders of exports are under this subsidiary, which is the LMW Global and that is excluding the -- had nothing to do with the INR 2,300 crores, which I already mentioned, and with respect to the ratio, this ratio is a 9-month ratio. It's a cumulative ratio for 9 months with 71%, 7% and 22% is cumulative ratio.

It is basically very similar to what quarter 2 was?

Actually, yes, you're absolutely right. I think what has -- and that's what I was mentioning when I was answering Mr. Nirav in the previous question as well. Generally, as what you know we do 50, 25, 25 or something similar to that. The export order books are -- countries where we are supplying the order books are really gone down and the supplies have got pushed out. More than the order book, it is I think the supply push outs have happened, and that is what it is reflecting in the -- in this ratio. And the Autoconer, yes there will be some supplies, I think, by end of this year. This quarter, basically, I think there will be some supplies will be there. I think there will be a launch and things like that, we'll let you know. I think definitely, next quarter, we'll let you know how many machines got supplied, but it will be a limited launch somewhere in a few specific markets. It will be -- and you will come to know as soon as we launch it. But yes, there are some machines rolling out in the current quarter.

Right now, what would be the market size for Autoconer? In past it used to be almost INR 1,000 crores per annum. So...

It is still, I mean in a weak market, like what we see today, even in this market, it would be -- I think we just internally myself and Madam Dhanalakshmi are just looking at the numbers, even in a weak market like this, we will be closer to INR 600 crores. So in a good market, definitely, it will be INR 1,200 crores to INR 1,500-odd crores, definitely, I think.

Sorry, how much, in the good market, how much, sir?

Market like this, definitely INR 600 crores to INR 700 crores; in a good market, definitely INR 1,200 crores to INR 1,500 crores is what I would say it is, but it will start rolling out. This quarter, I think, machines we will roll out to customers. Yes.

That's quite interesting, sir. And on the machine tool like, sir, again, just wanted to get a perspective as to, are we still seeing slowdown from the auto sector, because last quarter, you mentioned that auto sector contribution has almost reached 40%, while non-auto engineering segment is doing quite well and is growing. So how is the scenario right now? Are we probably seeing any improvement in the demand side? Number one. Number two, on the margin side, sir, like it continues to remain quite depressed. So how do you see it going forward also in perspective that now there has been further rupee depreciation, and there has been quite a lot of imports for machine tool. So how do we probably look forward to improving margins? Is it a possibility that we can probably take price hikes to compensate for the cost increase. How should one look at it, sir?

Any other question, Mr. Manish on the ATC? So that I'll take it down if it's okay.

No, sir, in ATC just want to know probably like how is the order book? It used to be INR 300 crores to INR 400 crores. So just want to know how is the order book building up? And do we expect execution to improve in ATC going forward?

With respect to the segment, the auto segment, again, I'm talking about 9-month period now, the auto segment is now closer to 45% followed by general engineering, industrial machinery, pump and valve tool, electronics, I think that's the way it is, of course, made up of many things, but auto segment has actually gone up by around 5% compared to last time. The margins. With respect to margins, I think we -- there are 3 things within this margin when you look at this number, right? One is, there is a foundry, which is 11% foundry, and that foundry because of the overall lower capacity utilization, there is, it is just below breakeven, right? So that is also part of this. But on a stand-alone basis, we should also understand that now VMCs, which are part of the machine tool business, they are at a little bit of a lower margin because of the right thing, what you mentioned, the costs. The costs are increasing. Most of it is imported components. We are not looking at any price hikes because we have done a price hike in the month of May 2024. So at the moment, we are not looking at any price hikes as far as the segment is concerned. Only requirement, what we are trying -- what we're pushing for is that -- and we have already committed our CapEx, and we actually spend the CapEx on this division for closer to INR 1,200-odd crores of turnover and our capacity utilization has to go up. I mean it's a very simple straightforward mathematics where we are pushing for better utilization of the plant and higher turnover from this particular division because having expected a surge post China plus one and a lot of manufacturing coming into India, we have all -- most of us in this particular business have taken a call that things are going to look better and we have invested, but we are not getting that number. I think that is the reason we are seeing a little bit of a dampener on the margin side. But otherwise, yes, I think we should see margins improve as the turnover goes up. With respect to the currency, we have seen currency depreciate in the recent past. We are keeping an eye on it because it does have a direct impact on our product cost, but this will be an industry-wide phenomenon, and we will take a call appropriately. When it comes to that, when this update is -- and we sit and discuss as to what happens with the future pricing of the components. With respect to order book, yes, the order book is pretty much the same range, around INR 400-odd crores over the next 2.5 years as far as ATC is concerned. With respect to the execution part, there is still a little bit of an uncertainty with respect to the order book, I would say, more of a 15%, 20% kind of uncertainty in all the orders getting executed because these order books are slotted at various points in time. We do get a visibility for the next 2.5 years with the existing order book. But because of the push and pull of these orders from the customers side, we are certain with almost 80% to 85% certainty. We are clear of exhibiting these orders that's with respect to ATC. But the order book is building up in ATC. Thank you. Back to you, Mr. Sameer.

Mr. Manish, I believe he has got another follow-up question.

Sir, I just want to clarify. You mentioned in MTD, have we done INR 200 crores of CapEx, which can offer us INR 1,000 crore revenue?

No. No. I said INR 1,200 crores of revenue is possible with the CapEx, what we have already done over the last 2 years. That's what I meant.

[Operator Instructions] We have got Mr. Aditya. Aditya, we have already connected you to the audio.

Sir, my first question was on the ATC division. So if you could just help us understand what kind of products do we provide to international OEMs? And what is the end use of these products? And secondly, sir, if you look from a 3- to 4-year perspective, what would help this business grow to INR 300 crores, INR 400 crores kind of a turnover. So do we need to get new OEMs or we can increase the market share from the existing OEMs only, and we can help scale to INR 300 crores, INR 400 crores of turnover. So if you could just provide some qualitative aspects, what would lead to the turnover increasing 2 or 3x in this division? Then second was on MTD division. Now we were in talks with Apple to get into their manufacturing division to give -- supply machines to their manufacturing partners. So what is the status of that, if you could just help us understand that? And are we in talks with any other major OEMs like Samsung and all to provide our machines to some of the manufacturing partners?

Okay. See, with respect to ATC, what we have -- what the company has done is we have got 6 verticals, right? We make engine parts, we make structural parts, we make sheet metal, we make special process, we have assembly and tooling and we have composite. Obvious, the predominant business, the turnover comes from engine parts, composites and the other, the structural shipment but all smaller ones. Now our existing CapEx, what we have already invested so far would in itself give us closer to INR 200 crores of turnover. Plus, we should also understand that at least 40% -- 30% to 40% of the turnover is basically coming out of pure value add, nothing to do with material cost because we get free issue of material. Especially the entire supply of the OPLF for the PSLV, that is the Nose Cone assembly, which you have done and supplied, if you see was at 0 material cost to us with pure value addition being done. So the way we look at the business is that, see, for me to get to INR 300 crores, if I were to simply buy the material, I'll still make INR 300 crores per day. The idea basically is that we need to have a mix of free issue of material because in this particular business, the material purchase is -- has longer lead time because the materials are all controlled by the customer as to where it should be procured from, et cetera, the idea is to have both a mix of value-add alone, less a mix of with material. So -- but doing that getting to a higher turnover, we don't see much of new CapEx getting required because we -- like I said, we have got CapEx to -- existing CapEx will get us to INR 200-odd crores. But we are also working on having useful utilization on the composite facility today, our composites generate closer to 15% to 20% of the turnover. But with respect to where they can go to from currently where we are on composite, we are at, let us say, around INR 20-odd crores of turnout in the current turnover for the 9 months. They technically can on its own, come to around INR 80 crores, INR 90 crores. So we are pushing for utilization on the composites. And in this process of reaching INR 300 crores or INR 400 crores, there are, like I just mentioned, one way to do it and the way what we kind of prefer is to work with the OEMs and get into more and more parts for them, right? It is not about going into newer OEMs and trying to establish, but in existing -- because these are all, as you know, very large OEMs having a variety of parts for us. And we ourselves are structured, like I just now mentioned, under the 6 verticals. So any part in an OEM, we'll be able to service. I mean, we'll be able to produce and supply. So be it a special process, be it the shipment of requirement, be it an assembly requirement, that is the way we are kind of structured to grow the business. Very much we believe that this would be the way to do, that take OEM, expand the scope of our supply to the OEM and that way get more and more parts from them. And investments will not be very huge, and they're on project based. So we get -- as the OEM starts wants us to produce more and gives a specific order, we're trying to then procure and go into CapEx. And whilst keeping all this in mind, we are also very conscious of the fact that we don't commit any CapEx to a specific customer where you can -- the asset is nonfungible, right? So that asset has to be fungible enough for us to produce a similar part or some other part for a different customer because this business, it is things are clear, but if there's a push out, all of a sudden, you don't want to be stuck with that asset and just be dedicated in that case. That's what it is. With respect to the Machine Tool Division, I did mentioned that the project for the EMS machine, what we are basically talking about EMS machine, we call it the JD1 is one of the models, and there's a series of models for the EMS segment. We are supplying, I think, as we speak, there is a large exhibition which is happening in Bangalore. It is called Imtex. I think at the end of it, we will know what more new customers have come in to pick up these machines. But yes, we are actually pursuing this segment also. And there's a lot of demand. You're absolutely right on the supply chain, when the segment gets established, it is not only the product in itself, but there are toolings which gets supplied to the product. There are other machines which have to get manufactured to make this product. So there is a whole ecosystem which gets created and we are very much part of the ecosystem of supply into the EMS segment. I hope that answers your question. Back to you, Mr. Sameer.

Sir, at the moment, we once again have no raised hands. We would once again request the people in the attendees to please raise your hands. I think Mr. Aditya has a follow-up question.

Sir, I had 2 follow-ups. So in that ATC division, what is the construct currently like? So how many OEMs would we currently supplying to? And how concentrated it is? So is it like the 70% to 80% of our revenue comes from 2 to 3 OEMs or it is pretty diversified currently. And sir, secondly, on the machine tools. My question was, have we got approval from Apple or we are still in the process of negotiating with them. And if I look at your listed peers as well in MTD division, you mentioned that there is some slowdown in MTD division. But when I look at the 2 listed peers in the MTD division, their growth has been pretty fast as compared to us. So sir, just related to the industry or we are absent in some of the segments and which is hampering our growth? So if you could just clarify on that, that would be helpful.

Yes. So ATC, we are concentrated with probably 60% to 70% from a couple of probably few, I wouldn't say a couple, which would mean two, but at least a few OEMs. I think that is the way it is. With respect to Machine Tool Division, the machine as far as we have initially discussed on the project, it is approved. But however, having said that, the orders what were placed and of course, we did not get the order for the first set of machines, which was placed. But that's what I mentioned also that, that machine what we have developed for the EMS segment is something which is being supplied to the ecosystem within the EMS segment. I think that's what it is. So did we get a direct order from the customer? No, we did not get a direct order from the customer. With respect to the listed peers and the growth, I mean, we can't comment. Only thing what I can say is that with respect to the, are we present in all segments? That is definitely the effort. As what you can see, the Machine Tool Division is split in two segments, at least what we are, right? I don't want to go from the overall segment, but at least within the CNC machine segment, it is Turning Centers and Machining Centers. Whilst we are a significant player on the Turning Centers, Machining Centers has been a growth story for us over the last 3, 4 years because our Machining Centers, both vertical and horizontal, and more so on the vertical side have only started last 3 years, and we are making a reasonable amount of progress as far as Machining Centers are concerned. So our focus is on Machining Centers. Turning Centers, we have been there. We are there and with a fairly significant market share in the Turning Center. So there is a growth opportunity for us in the Machining Centers, which is both vertical and horizontal. And that is where we need to grow, and that's where the investments also keep going in too. Back to Mr. Sameer.

Sir, with this, I believe we have no more raised hands and hence, we have no further questions.

Good. Then do we then wind up?

Sir, would you want me to wait a little further for more questions? Or would you want us to conclude this meeting?

Yes. Probably we can wait for a minute and then we can wind up then.

Sure, sir. Sure. So for all the people in the attendees, we would like to wait for another minute so that we have any questions or follow-ups on the questions, we can have the hands raised. So Mr. Manish has a follow-up question.

Sir, just I have one question on the spares business. So sir, you did mention that the mills which are operating at full capacity. So I really just want to know that the spares business is also seeing a significant decline despite if machines are operating at -- mills are operating at full capacity. So what is it that is probably hurting the growth in the spares business? And how should we look at it going forward?

Actually, Mr. Manish, the spares, domestic spares at least, has not seen significant declines; very, very marginal right, for us. Of course, to some extent, there is information that some amount of spindleages have come down and which I also mentioned initially, probably that is the only impact. But otherwise, even if you look at our own numbers, and I'm sure you have the numbers of the last years as well. And if you look at -- if you convert the percentage to value, it does not significantly reduced, it is still there. What basically happens is that as what we always see in a market like this, when the margins are very tight, the long-life spares, the spindles and et cetera, probably get pushed out a little bit more instead of working for 6 months further where they may say, okay, can we push it for 1 more year. Already it would have been closer to the end of the life, but they may still be able to push it for a few more quarters to ensure that at least they are cash positive and things like that, but that has been the scenario. We don't -- we have not seen a significant dip as far as spares are concerned. Okay. I think there are no other raised hands, Mr. Sameer, then we can close it.

Sure, sir. Since we have no raised hands, this brings us to the end of all of the questions from all of the attendees. Thank you so much, everybody, for joining us. And especially thank you so much, Senthil, sir, for answering all of the questions asked through the entire of the meeting. Thank you so much, sir. Thank you.

Thank you. Bye-bye, everyone.