LMW Limited (500252) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to LMW Limited Quarter 4 of financial year 2024-'25 earnings call hosted by NSDL. [Operator Instructions] Please note that this call is being recorded. This is Sameer from NSDL. We have with us Mr. V. Senthil, Chief Financial Officer; and B. Dhanalaxmi, Associate Vice President of the company. And over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining the LMW Earnings Call for Q4 FY '24-'25. We will have a brief about the overall performance of the company for the quarter and the year ended March 31, 2025, followed by an interactive session. I would also like to clarify that certain statements made and any discussions in the conference may -- may be forward-looking in nature. To begin with, let me explain the overall performance of the company, then we will proceed with the segment performance and then consolidated performance. The financial results have been posted on the company's website and hope you have had an opportunity to go through the same. I would like to share that the company has achieved a turnover of INR 2,807 crores as against the previous year turnover of INR 4,520 crores, which is 38% down. At a consolidated level, it is INR 2,909 crores as against INR 4,118 crores during the previous year, which is a reduction of around 37%. The PBT stands at INR 155 crores for the current year as against INR 480 crores for the previous year. And on a consolidated basis, it stands at INR 151 crores for the current year as against INR 482 crores for the previous year. I am going to the division specifics now. TMD revenue for the current quarter stands at INR 493 crores as against INR 667 crores in the previous year similar same quarter. For the full year, the turnover stands at INR 1,840 crores as against INR 3,575 crores for the previous year same quarter. This is a decline of around 48% in the Textile Machinery division. The ratio of OEM sales, domestic exports versus spares stand at 65% for OEM, exports at 13% and 22% of spares. In TMD division, the net result of -- is the last incurred of around INR 16 crores during the current year as against the profit of INR 314 crores for the last year. Currently, we hold an order book to a tune of INR 2,900 crores, out of which 75% are active orders, which are lined up for execution. And the export order book stands at around INR 260 crores. We have seen in the last 6 quarters, the downtrend order intake, which is reflected in the order book question. And it also continues so in the current quarter. The impact has resulted in a sharp decline in both the order booking and the machine offtake. Now I will move to LMW China. With respect to the wholly-owned subsidiary in China, we have clocked a turnover of INR 67 crores for the year compared to INR 28 crores for the previous year, and there is a loss of INR 6 crores incurred during the current year as against a loss of INR 13 crores during the previous year. With respect to LMW global operations, the company actually has a turnover INR 148 crores during the current year as against INR 249 crores during the previous year. The challenges in specific markets in export very much remains in place and it has resulted in a lower order book even in export market. This we see as a business challenge for export market for a couple of quarters still to come. We'll get into the details during the discussion. We have also announced a reduction in the number of working days in the month of May '24, and currently, TMD continues to work at 5 days because of lower capacity utilization and so does our foundry, which is also working lesser number of days. Now going on Machine Tool division. The revenue stands from -- the revenue stands at INR 1,003 crores compared to INR 1,049 crores for the previous year. And for the quarter, the revenue stands at INR 275 crores compared to INR 293 crores for the previous year Q4. The division's profit stood at INR 59 crores as against INR 74 crores from last year. With respect to the ATC division, the revenue for this division is up by INR 9 crores from INR 160 crores to INR 169 crores during the current year. The profit at ATC division stands at INR 17 for the current year as against INR 14 crores during last year. The export contribution in ATC division stands at 90% of its turnover, and within this, the metallic division of ATC contributes to 80% of the turnover. The order book for ATC continues to be upwards of INR 400 crores, which are executable over next 24 months. With this, I hand this back to the moderator. Back to you, Sameer.

[Operator Instructions] We have Mr. Manish Goyal, ready with his question.

Sir, a couple of questions, sir. Like you did mention that probably we're seeing weakness in order inflow. Maybe if you can throw some more light as to like how is the situation, like are we seeing any improvement, because I believe yarn industry is seeing some improved traction and even in the textile industry is also expected to see some more better traction. So if you can give perspective on how do we see going forward? That was the first question. Second question is also like we saw a decent improvement in margin recovery that TMD actually showed some profits. So if you can also give us perspective on profitability going forward? And also, like you did mention that overseas business is witnessing challenges. So maybe if you can throw some more light, as you alluded that a couple of quarters looks somewhat challenging. And if you can also give us a revenue breakup for TMD for quarter 4, that would be very helpful, sir. This were some set of questions. I have one more question on MTD, machine tool, how do we see it going forward? And over there also, is it possible to see margin improvement, sir?

Thank you, Mr. Manish for set of questions. So I'll take first the textile scenario. A lot has changed. I think it has been very interesting and very dynamic as such, I should say, between the last meeting and the current meeting. I think the tariffs issue has set in motion certain things, which will take a bit of a shape. So yes, there has been FTA signed by -- with U.K. as well. So there are definitely changes which are happening as we see. And these things probably will take a bit of a time. So the advantage of -- definitely, there's an advantage of FTA. Definitely, there's an advantage to our customers' customer with the garment -- with the end product perspective. That will take a bit of a time to have the traction back to -- from the customers, that is our customers, that is the spinning mills to get aligned, right? Very correct that the spinners today, the inflation levels are very good, profitable as well. Of course, profitable, not at a very high level, but at least, it is profitable as we speak currently. So these 2, 3 things which are happening in the domestic segment, which points to an increase exports of garments, et cetera, would really help. Do we see that in the immediate -- in the quarter, which has gone by in terms of increased order inflow? Definitely no, we have not. And as we see the quarter we are talking quarter about is January to March, but the current quarter, it is going to -- also going to be a challenge because all these changes are happening as we speak. But we feel that definitely, this would happen probably another 2 quarters, this traction should come in. With respect to the -- what we are doing in the meantime. So this has been going on for almost 18 months, right? So we have actually, for the last 18 months, the dip and the continued dip in the order inflow has happened for 18 months. So the reason for us to clock in the profitability on TMD was basically we have taken a lot of actions inhouse in terms of curbing our costs. I think we have done that to some extent, and that process of cost control will continue for some more time because it is quite challenging as we see from our order books. And of course, it could be -- even though it could be better off in a few quarters from now, we have done a lot of the activities internally to reduce our overheads, and that is what is reflecting in those numbers. Now coming to the export market. If you look at what is happening in Bangladesh or Turkey, both has been our strong markets in the past. In fact, we do still have good orders and customers there as we speak, and there are certain open orders. But the challenges of these 2 countries continue, and it is not very easy for us to do the same amount of business what we have done in the past in these 2 countries because of basically the economic challenges, which these countries in itself face. What's happening because of that? There is a lot of activity -- new activity which has what triggered in the African subcontinent. And that is where the focus today is going on. So there is a shift of business, people are looking at little bit more, I would say, a more stable or favorable tariff locations also. So for example, within the tariffs what we saw, perhaps Egypt and Turkey were actually having a very good tariff proposal from U.S., in the sense, I think they were at 10%. So we are seeing businesses move. We are seeing people not only in Turkey, but also China. So there are a lot of movements. Thereby we are seeing spindleages also coming up in new locations. So that's where we said, when these things happen, it will need again a couple of quarters where in this new locations, these orders would definitely come up and we need to work towards getting these orders. But our 2 large markets have been under quite a strain, and that is the reason we have not been able to clock the numbers of export what we have been doing in the past. Now coming to the split of this for the current quarter and as what you have asked, the domestic stands at 70%, spares at 18% and exports at 12%. That is the split of the domestic, spares and exports. Now coming to Machine Tool division. Machine Tool division has maintained almost status quo in terms of turnover, but we have -- like we have said, this -- 2 things have happened. One, the mix of business is changing and we are seeing changing in the numbers, what we see. So the machine centers are becoming a little bit more. The automotive sector is as our share in our sales is kind of coming to its 40% mark, and nonautomotive sector has taken over the larger share of the business where we sell to. Within the nonautomotive sector, a lot of traction we see in defense, we are seeing traction in aerospace industry and general engineering. And I think that, in itself, is giving us enough confidence that these investments what we have done in the past year -- in the year -- the year before on setting up these facilities for the new Unit 2 of MTD would be put to full use during the current year and the next year and the years to come. So that way, Machine Tool business, I think we have a very positive outlook. And there are so many things happening there. We have EMS in a large way that's coming in. In general, engineering sector is also doing quite well. So there we are quite positive. Back to you, Mr. Sameer.

We have our next person with the next question ready. We have with us Mr. Sanjay Shah. [Operator Instructions]

To understand some detailed understanding about the division, what you mentioned right now, how are we doing the capacity-wise in MTD, ATC and -- sorry, in TMD and MTC? And what additional capacity we are sitting on since you cited an optimist view on MTD side. So what are the new opportunities you see? Because as you said rightly about the spinning industry, which is -- which has a good potential, but still there is a time for the order to flow in, but when we talk to certain textile industries, they are very bullish about the cotton spinning and the industry per se. And many of companies have thrown CapEx also last year. So what happened to our company? Where we have lost market share? Or can you explain this, please in detail?

Any other questions, Mr. Shah?

Yes, this was my question. And some highlights if you can do on the ATC side also.

Okay. Actually to understand the background to where we are now, sir, if you look at 2 years back, right, we were getting in orders -- order flow, which is close to almost INR 6,000-odd crores is the orders what we got. What that has done is a lot of mills have gone in project mode and they've put a lot of capacity over the last couple of years. And we had our best years also, which was the year 2024 -- year ended 2024 and the year before that, 2023. Now that is all new capacities, which came in. Why? Because, again, if you go back to 2020 during the COVID, quite a few capacity -- old capacities are shut down and the new capacities had to be brought in, and that is where it came in. The current situation is, you are absolutely right, and that's what I also mentioned the capacity utilization of the current spinning mills and our customers are quite good. If you -- our assessment is probably it is upwards of 90% with respect to the utilization of all the mills here. Are they profitable? Our assessment is absolutely yes. Today, it's -- they are in a good position because -- probably at the start of the year, and I mentioned also in the previous call, probably at the start of the year, there was some loss-making happening. So as such the utilization is good on our -- with our customers. It is profitable. It is only -- the question is about further investment. So what is happening instead of projects, the customers are going in for modernization. So which is effectively not a brownfield or a greenfield, but replacement of existing machines because modernization and that is the way we also expect it to be. When mills are doing well, they will go in for modernization. They will change, it will help them to reduce their energy costs, it will help them to reduce their manpower dependency because today, for example, the card, we have -- the wider with card will reduce. Instead of 2 machines, you can -- with the 2 machines, you can replace 3 machines of the older generation cards. So this is what would happen, and this is what we see is also happening currently. Now what we see is that there is lot of good things. Like I mentioned, the FTAs, that's a good traction. The tariff advantage is a good traction, which obviously would mean that our customers' customers are also doing well. So that is where being in CapEx. Generally, what we see is when things go back, CapEx is the first one to stop. When things are going well, the offtake, the lag is a little bit longer. So now with all the positives what we see in this particular business, and it is -- we have always maintained -- so long the garmenting people are doing well, of course, our customers are bound to do well. And of course, that will have an impact on us. So that is where we see a lot of good things happening that is we'll have to wait for at least a couple of quarters to see the uptick for us. Now with respect to the capacity utilization in TMD, we are closer to 50% for the units. That's where I mentioned also that we are shut for some days during the month. And with respect to machine tool business, our capacity utilization stands at around 70%. We have added an additional facility last year, which is basically a second unit for our machine tool business. So we have there possibility to grow from our existing turnover by 30% with all the existing facilities as is or with whatever investments what we have done. So we don't require any investments to enhance the capacity there in Machine tool division as well. Now coming to the ATC, the ATC, we have -- again, when we speak about ATC, we have to speak about 2 things. One is metallics and composites. Metallics division is doing well. I think what we see the turnovers, they're all -- 80% is coming from metallics and it is profitable. It's doing well. It has stabilized over the last 2 years. In ATC division, as we stand, like I mentioned, there is an order book for metallics also for next 24 months to 36 months of order book is also available and is also visible. Only thing the way this business works, there is always a possibility for the customer who is an OEM or a Tier 1 to an OEM to either pull in that is asked for some more products to be delivered or to push out. So that is the only challenge in this business, but it is a very clear where the product is priced and then we've got visibility at least for the long-term order book there. The focus for ATC business is for us on the composite side because composite side, we have -- we are in the process of moving not only to serve the Indian government sector, but also on the private side. So that focus is yielding us some results. It will happen -- probably by this year, we should see some more traction, which is happening in the ATC there. But again, with respect to capacities in ATC, almost 60% to 70% capacity is available on the composite side. Our utilization on the composite is quite low. There's enough capacities available on the composite side for us to gain traction. On the metallic side -- we are probably closer to around 80%, 85% utilization on the metallic side. I hope I answered that question. Back to you, Mr. Sameer.

We would like to go ahead with the next person who has the question ready. We have with us Mr. Rithwik Shet.

Two questions from my end.

Mr. Rithwik, your audio is very low. Can you speak up, please.

Okay. Is this better?

No. You have to speak up little further.

Sir, can you give the status of auto-coner winder and the air jet?

Okay. Next question.

Sir, MTD, you mentioned that we have 30% to 40% runway from current revenue, right? Did I hear that right?

Capacity, yes, 30%, yes.

30%. Okay. And also on the ATC, do we need to add more customers and capabilities to get the business [Technical Difficulty] for the composite segment to ramp up the utilization.

Okay.

And finally, one clarification on the order book. If you can just give the order book for TMD segment, I might have missed it. So please, if you can just [Technical Difficulty] that confirmation of the order book, active order book and the export order book, please.

So with respect to the order book on TMD, what I had mentioned is the order book is around INR 2,900-odd crores. The active order book within that is around 75%. This doesn't include the export. Export order book stands closer to around INR 260-odd crores is the export order book as far as TMD is concerned. As far as auto-coner is concerned, we are going as per our plans. The machines have been there. It is giving us confidence with what we see in terms of the results on these machines. With respect to the question on capacity availability at MTD, yes, I think I've answered it is 30% is what I mentioned is capacity which is available for us to ramp up without any challenges. It's completely provided for infrastructure, all cleared, people deployed. So yes, we have got that done. With respect to ATC, on the capabilities and also ramping up, how would it happen? I think I missed your voice, but I think the question here is, do we need to invest more to get higher turnover to ramp up our capacity. Now like I said, on the metallics, where we are already at 85% utilization, yes, we would -- and that is, again, specific to projects what we see and what we would like to take. We will invest as and when needed as far as the metallics is concerned. As far as composite is concerned, we have invested already in the processes. It is only -- the first step would be a matter of trying to get the business from the nongovernment sector. And to that, we are again approaching our own existing Tier 1 customers to OEMs or to OEMs directly, where we already have the relationship, and it is only a matter of getting ourselves into their supply chain on the composite side. So we don't see a requirement right now on the composite facilities what we have because that is something we have to use. On the metallic side, yes, we see a requirement that for us to ramp up the numbers even further, there will be CapEx. But again, it is not going to be just carte blanche CapEx. It will be project specific. It will be specific to a particular order which we will have to execute. Thank you. Back to you, Mr. Sameer.

We have with us Mr. Dipesh Agarwal.

I have just one question. So for EMS ecosystem, a lot of CNC machines are required. And I think you were also working on qualifying for some of these machines. What is the status on those projects? Can we see in next 1 or 2 years, we could start supplying to some of the EMS players, the CNC machine?

Any other question, Mr. Dipesh?

No, that's it.

Okay. The EMS is a good segment, and we are not supplying right now to the EMS ecosystem as far as -- these are small machines, not very large machines, but we are part of this ecosystem and we are supplying. We are also in the process of qualifying because there are certain requirements about qualifications of these machines. We have got our machines qualified in the past as well. I understand that this is an ongoing process. So yes, we are very much there in this ecosystem. And EMS is a very large ecosystem and developing ecosystem in the sense that the tools and dyes, which goes into these EMS machines which make this component, all of them are requiring similar size of machines. So absolutely, yes, we are in that space, and we have got machine models to address to this particular requirement. It's a growing segment. Back to you, Mr. Sameer.

Next, we would like to go ahead with Mr. Kush.

So my question was more on this machine tool industry. So broadly, as an industry, do we see any macro tailwind in terms of import substitution that is happening in India? So what we hear is, I think Chinese is only on a low level of competition, the low value-add machine, whereas I think 3-, 4-axis onwards, people are starting to prefer the Indian players. So do we see that kind of traction, just a broad industry overview I wanted.

Okay. I mean, I would like to take it a little bit more philosophically the answer to this. See, we have to be paranoid, Mr. Kush. We have to be paranoid to be -- when you're dealing in this particular industry because when you say Chinese machines are low lower level of this one, we have been in China. We are in China, and we do not see that as a scenario. If you actually see the amount of volume of technology and innovation, which is happening in China, it is very difficult for us to simply paint it with a brush saying it all low-value machines, sub-2, 3-axes only are coming out of China. I don't think that would be right. I think what is more important is that we are paranoid that China today is so large, the CapEx machines or the machine makers are so large. So our entire Indian capacity in terms of numbers would be actually supported only with 2 suppliers out of China. That is the capacity you are looking at. And I'm just talking about machine tool industry, right? And if you actually look at our textile also as an example, and if you look at spindleage in China, it is 2.5x or definitely 2x that of India. So I think China is not, probably was, but currently not a place where you could simply say that only low capable machines are coming out at the system there. But to answer, are people looking at Indian players? I think the answer to that is because of localization, 100%, yes. There is a clear mandate in certain cases where they are asking the companies which are to localize internally with the Indian ecosystem. And that ecosystem is also to get developed. So if you take machine tool, for example, you've got certain critical parts. Now machine tool critical parts, we have actually ask us to see how much of it is actually manufactured here and how much is actually getting imported here. So while we can look at an Indian machine, but the question obviously is can every part be manufactured out of India. And today, the situation doesn't -- is not -- the situation is not such that every part is manufactured out of India. There is an import content and a significant import content. Only thing those imports do not perhaps come from one country, it comes from various countries. So to answer that from an industry perspective, this is pure industry perspective, yes, there are various types of machines. You can't paint them as low-value, low-spec machines. They do have high-spec machines. And we ourselves to make a complete Indian product within the Indian context is going to be a challenge in the immediate. Probably definitely in a couple of years, if we are able to make all the components of machine tool business in India, it is probably possible. But as of today, if you say, can we make completely Indian machine, it's going to be a challenge. Back to you, Mr. Sameer.

Going ahead with the next question, we have with us Mr. Vrishant Gandhi.

And my question was on the cash and cash equivalents that are there on the balance sheet. So I see that there are INR 1,300 crores to INR 1,400 crores of cash that the company is holding. So is there any plan of the management to distribute this to the shareholders and to improve the return ratios in the balance sheet? Or how does the management plan to utilize the excess cash available with us?

Any other question, Mr. Gandhi?

No, no, this is it.

Yes, I think we have declared a dividend also. I think this time we have declared a dividend of 300%, and we'll make sure that the management and the Board is clear that we have to continue here, even though the current situation is a bit challenging, which as far as last year. We will ensure that we continue with policies what we have. Board will take an appropriate decision on the utilization of cash. And yes, we will also be deploying this in new markets like we just now mentioned at the start, there are new markets which are getting created. We will definitely be developing in these new markets, and that's where this deployment of cash would be done. Back to you, Mr. Sameer.

Next, we have Mr. Manish Goyal once again. He probably has a follow-up question.

Sir, first, on the auto-coner, sir, you did mention that we have been getting encouraging results. So when are we planning to do commercial launch? And what kind of capacity we are creating, sir, in auto-coner? That was first question. Second question, you mentioned that a lot of opportunities coming up in African subcontinent. So over there, like earlier, we have done a couple of entire spinning mill projects. So are we seeing similar opportunities? Maybe if you can give some perspective what kind of opportunity you are seeing value-wise? And when do we really start getting orders? And my third question, sir, which probably left unanswered on the MTD, on the margin, sir, how do we see margins going forward, sir?

So Mr. Manish, our plan as far as auto-coner is concerned is on track. I think I would like to only restrict myself to mentioning that. With respect to capacities, I think we will come out with the capacity, but we are new. It will be a slow launch within a particular context and then it will continue. So I think I would like to restrict myself to that. But like I said, our results are encouraging, and I would like to keep it like that. With respect to the African subcontinent, what I was mentioning basically was this because of the geopolitics what we see, we are seeing customers move to Egypt, for example, or a few other African countries. So there are new spindles which are coming up there. The Chinese are actually also moving to Africa, especially on the spinning side. So these are all -- again, what we did on the single project was more country-to-country line of credit project, but I'm not talking about those kind of projects. I'm talking about regular private investments, which are happening when people from Turkey or our customers from China or customers from Bangladesh move to this country. So there's a lot of private investments. In terms of volume, again, there the size starts from 25,000 upwards of complete project, 25,000 spindles upwards of that is what -- as what we see currently in terms of our visibility and our discussion. With respect to MTD margins, the current MTD margins are probably in the range of around -- it is 9% is what in terms of around 9%. We will be able to cross the 12% once we are able to hit the threshold of around run rate of around INR 240 crores a quarter. I think that is something which we are looking at. And that's where I said we have got capacities. Our costs are already added on that. It is only that once we get that run rate, then we'll get this operational efficiency kick in there. I think that's what we are looking at. Back to you, Mr. Sameer.

Next, we have with us Ish Chaddha, who would like to proceed with the next question.

My question is with respect to the CNC machines. So how many machines were sold in FY '25? What is our capacity? And what is the range of realization offered by the company depending on the number of axis offered? And how is the competitive landscape here? What is the capacity in India as per your estimate?

I think from the range perspective, what we are able to make could be anywhere from -- so from a range perspective, of course, we can -- we have up to 4 axis, and we have also a 5-axis machine. But in terms of 5-axis, it's very specific to 2 models is what we have. But if you look at turning centers, you'll get a complete range. Range, when I say you're talking about table size, you're talking about XYZ axis. So there's a complete range of machines within a particular turning center. So we make turning center, we make machining center. And in the machining center, we can go maximum up to 5 axis. And these are machines which we have recently also in the exhibition in January. IMTEX January, we have displayed them. We'll be happy to share or you can go on to website and you can see these machines. In terms of the competition landscape, yes, we are quite well entrenched and well present in the turning center. Then you've got the vertical machining center and the horizontal machining center. In the vertical machining center, our market share is in more on a single-digit number, close to around 6% to 7%. That is something which we have started going into that market in the last 4 years where we have started entering with our vertical machine center. In the horizontal machining center, we have started introducing models. This is a large landscape. Within the Indian context, there are quite a few players, a handful, I would say, of players in the Indian context, which are Indian machine manufacturers, all play, all within this particular segment. Our shipments in terms of numbers would be closer to 3,600-plus machines, which we have shipped out last year. I hope that answers your question.

Also, what is the capacity? How many maximum machines can we make?

I think you have to divide it by 0.7 and you'll get. Again, when we talk about capacities, it depends on the size of these machines. Some machines are -- when we talk about turning centers, they are small machines. When we talk about machining centers, they're really large. We are talking in terms of a price range. You're talking a price range of INR 20 lakhs to INR 1.5 crore kind of price range is what we are talking about. But in essence, you can take the value of it, what we have done, and we are able to scale up another 30% in terms of value. Machine specific, it would be very difficult for me to explain in this as to what spec of each machines I can kind of -- would be our existing capacity. This 3,600-plus machines what I mentioned is a combination of both vertical machining centers and turning centers.

Sir, we as of now have no more questions. Okay. We have Kush again probably with a follow-up question.

My second question was more on the competitive landscape. So how do we see competitors in India? How are we placed against them in terms of market share? Just more on a broader view, like who do we see as our like-to-like serious competitors in our machine tool industry or the textile machine industry?

I think it's a very broad question, Kush. From the machine tool -- I mean, from the textile machine industry, let me take it because it's the easier part. I mean there's clearly four competition and all of them are in India. We compete both in India and globally on the same footing. And the way to look at textile machinery is that the product which comes out of our machine is basically the yarn, right? And the yarn has around -- it's a commodity and the quality of it is universally same. So every machine, which sold either us or competition, if there's a particular quality requirement, that quality has to come out of that machine. That is the way this particular industry works on the textile machinery side. So there are globally 5, I'm excluding China because China has its own market. It's a 10 million plus spindle market in very, very good year. Even otherwise, it's around 4 million to 5 million -- 4 million spindle market in a normal year. So excluding that, there are a few players there who are all in India. With respect to Machine tool division, I think what we need to understand is, this is an international business. We've got a lot of imports which come in and almost 60% in value terms will be imports which are coming from other countries. And the Indian machine tool manufacturer caters to around 40% plus/minus plus of the industry. And our current range -- at least from LMWP perspective, our current range extends up to, like I mentioned, 5-axis machines. Again, in machine tool division, there are lot many competitors. And like I was mentioning in one of the previous questions, I think it was you who had asked about low-value machines in China, et cetera. And I was explaining to you that there are a lot of imports. So this particular industry, what is important in your machine is the reliability of what we can give on the machine and the repeatability of what we have to give on the machine. These machines produce thousands and thousands of parts a day. So it is important that the machine has to be reliable and repeatability should be there. And that is where we excel in the way we assemble and the way we manufacture the parts. So for that, in our case, we have a back-end foundry which works. So we have integrated foundry for the machine tool business. So that's an added advantage is what we see it. And we have to compete, again, at a global level. So when I'm talking about 60% imported business, imported machines coming in, there are very unique, very large machines, which we do not make. Those, of course, we don't compete in. But if you're talking about a 3-axis or a 4-axis machine, we have to also compete with the international standards of these machines which come in. So all of us have to increase our level of quality as to when we deliver these machines. So it's a lot of engineering which goes into these machines, a lot of precision which goes into these machines when we deliver them and we compete globally. In our case, at least for machine tool business, predominantly still domestically, but we are in the process of selling these machines globally as well. We have started exporting these machines to UAE, where we have established our holding company. So in this particular business, you have to compete with companies which are from both East and the West. I hope that answers the question.

Sir, just one last question. In terms of pricing, how are we placed with the competitors internationally and domestically? Are we at a discount or similar or premium?

Very good question. Domestically, we are at a premium as far as our machines are concerned. Like I said, you will be -- again, I don't want to repeat in terms of repeatability, reliability and quality. This is what we'll have to deliver to the customer. And yes, from a domestic point of view, we are definitely at a premium. But internationally, if you see, yes, the foreign machines on top of machine tool segment, by the way, when we are competing with the machines, the competition machines from other countries, yes, we will be a little bit at a discount. Ultimately, we also have to sell the brand, India and the performance of the machine, both has to be sold. It is not just the machine performance alone. We have to sell the concept of both the brand India and the machine as well. Back to Mr. Sameer.

You mentioned that in the machine tool division, we can reach a 12% margin at a particular turnover. Was it like INR 240 crores that you mentioned because we're already doing that kind of run rate right now?

Probably yes, I mean, a consistent turnover of that with a particular product mix, yes.

Okay. With a particular product mix as well. But currently also, we are doing that INR 240 crore run rate, but the product mix is not favorable.

Sir, with this, we have no hands raised. This brings us to the end of all of the questions.

Thank you. Thank you, everyone, for joining. See you next time. Bye-bye.

Thank you so much. All of the people who asked the questions. Thank you so much, Senthil sir, for answering those questions. Thank you so much, everybody, for being a part of this meeting. Thank you so much. Thank you.