Lumax Auto Technologies Limited (LUMAXTECH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Lumax Auto Technologies Limited Q2 and H1 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Jain, MD from Lumax Auto Technologies. Thank you, and over to you, sir.

Thank you. A very good afternoon, ladies and gentlemen. A very warm welcome to our Q2 and H1 FY '24 Earnings Conference Call. Along with me on this call, I have Mr. Sanjay Mehta, Mr. Vikas Marwah, Mr. Naval Khanna, Mr. Ashish Dubey, Ms. Priyanka Sharma, and Mr. Ankit Thakral from Corporate Finance, along with SGA, our Investor Relations adviser. The results and presentations have been uploaded on the stock exchange and the company's website. I hope everybody has had a chance to go through the same. The Indian economy has been expanding rapidly, robust manufacturing and rapid credit expansion are likely to fuel GDP growth of more than 6.5% this quarter. This will result in heightened customer spending and thus the demand outlook in general will remain positive. On the industry landscape, government initiatives, including substantial spending and supportive schemes, like FAME and PLI, have significantly contributed to the recovery of demand in the sector. The emphasis on green mobility has led to major OEMs planning multiple EV launches in the upcoming quarters. Additionally, the introduction of these schemes has fostered the emergence of start-ups in the green mobility sector, further encouraged by the favorable environment. With 4 crore jobs and a significant economic contribution of approximately 7% of the nation's GDP, the automotive sector is vital to the nation's program. The Honorable Prime Minister has recently emphasized the industry's pivotal role, envisioning its contribution to propel India from being the fifth-largest to the third-largest industry globally. Speaking of the performance of the automotive industry for the quarter. The quarter gone by has witnessed robust growth with multiple OEMs reporting highest-ever monthly volumes in the past few months. On a segment-wise basis, passenger vehicles continue to be robust and is at its highest level on the back of increasing demand, high disposable income and aspirational value. The premiumization trend is playing out well, giving us an opportunity to increase our wallet share across product categories. The overall passenger vehicle dispatches from automakers to dealers were up by 4.7% in Q2 of FY '24 compared to the same period last year. The demand for two-wheelers has not fully recovered, as anticipated, primarily due to inflation and rising prices of the lower-CC models. Nevertheless, a new trend is emerging mirroring the premiumization seen in passenger vehicles, with major brands introducing high-end bikes featuring top-notch specifications. Overall, the premiumization trend seen in passenger vehicles and 2-wheelers with high-end specifications require constant innovation and high-end engineering and technological capabilities. This gives us a huge opportunity, and our endeavor is to increase our content per vehicle with our wide range of products under one group. The electric vehicle segment has been seeing an unprecedented rise post-COVID, especially on the 2-wheeler side, led by emergence of new-age players and focus of traditional players on EV 2-wheelers. Currently, the industry is highly fragmented, but eventually only a few players with robust infrastructure and technological capabilities will be able to strive. We are in touch with all the major OEMs in this industry. The growth in 4-wheeler EVs also has been robust with a handful of major OEMs dominating the industry. However, the industry is still in its early phase and would only be an alternative to ICE vehicles once the costs related to manufacturing come down. Going forward, we anticipate the second half of the year to outperform the first half on account of the festive season and multiple new model launches in the pipeline by the OEMs. The transition to electric mobility, energy efficiency, lightweighting of vehicles as well as alternate fuel usage are some of the outcomes of the emerging trends. Leveraging our decades of experience and strategic partnerships with global players, we strive to maintain a leading position within the industry. On the financial front. For Q2 FY '24, our consolidated revenues grew by 44% on a year-on-year basis and stood at INR 700 crores. Our EBITDA stood at INR 99 crores, up by 67% year-on-year with an EBITDA margin of 14.2%. Speaking of entity-wise, the stand-alone entity caters to the integrated plastic module business, aftermarket business, chassis and swing arm business for 2-wheelers, trailing arm for 3-wheelers under the metallic business and the 2-wheeler lighting. The stand-alone entity has contributed 48% of the total consolidated revenues for H1 FY '24. IAC India, the recently acquired 75% subsidiary, which is a Tier 1 interior systems and components supplier to key automotive OEMs in the country, including Mahindra, Maruti Suzuki, Volkswagen India and Volvo Eicher commercial vehicles. The entity has contributed 31% of the total consolidated revenues for H1 FY '24. The IAC management team, along with Lumax, will certainly continue to drive the business growth going forward. The Board of Directors of IAC India has approved the scheme of merger with its holding company LIV on August 4, 2023, with effect from the appointed date of March 10, 2023. Further, the scheme has been filed with the honorable NCLT Mumbai bench on August 28, 2023. Lumax Mannoh Allied Technology, the 55% subsidiary which manufactures manual, AMT and automatic gearshift systems and as the market leadership position, contributed 13% to their total consolidated revenues. Exports business of automatic gear shifters for a global platform is on track and is performing well. We are also working in tandem with a joint venture partner to increase our reach to newer markets. The company is sitting on a healthy order book of around INR 60 crores. Lumax Cornaglia Auto Technologies, the 50% subsidiary manufacturing air intake systems and urea tanks, commanding 100% share of business with Volkswagen and Tata Motors, contributed 6% of the total consolidated revenues. The joint venture holds a strong order book of INR 80 crores. And keeping in mind of the same, the company's new facility is expected to commence from quarter 4 with the addition of plastic fuel tank as a product. Lumax Ituran Telematics Private Limited has successfully commenced supplies of the telematics parts to Daimler India in the current quarter. The volumes are expected to grow significantly in the remaining part of the financial year with the addition of new range products. Lumax Alps Alpine India Private Limited, the 50% subsidiary for the manufacturing and sale of electric devices and components, including software related to the automotive industry, has contributed 1% of the total consolidated revenues. However, we have aggressive targets for this joint venture and are in discussions to make India a global production base for a few components. Lastly, on the order book front, the company has a healthy order book of INR 1,050 crores, out of which 93% is new business, and the EV contribution is 40% of the total order book. Now I would like to hand it over to Mr. Sanjay Mehta, Director and Group CFO, to update you on the operational and financial performance of the company.

Good afternoon, everyone. I will brief on the operational and financial performance for Q2 and H1 FY '24. For H1 FY '24, Integrated Plastic Modules post-IAC business contributed 47% of overall revenue, followed by aftermarket at 14%, gear shifter at 13%, fabrication at 8%, emission at 6%, lighting products at 5% and others at 7%. For the first time, share of passenger vehicle has overtaken 2- and 3-wheelers with EVs at 47%, 2- and 3-wheelers at 24% to overall revenue, aftermarket at 14%, CVs at 9% and others at 6% for H1 FY '24. For more detailed operational highlights, one can refer our investor presentation uploaded on the exchanges and company's website. With respect to financial highlights. The consolidated revenue for Q2 and H1 FY '24 stood at INR 700 crores and INR 1,332 crores, respectively; up by 44% and 47%, respectively. Revenues for IAC India stood at INR 419 crores, and EBITDA stood at INR 77 crores. EBITDA margin stand at 14.1% for H1 FY '24 as against 11.9% for H1 FY '23. Absolute EBITDA for H1 FY '24 stood at INR 187 crores, a growth of 74% on a year-on-year basis. PAT after minority interest for the half year stood at INR 49.5 crores as compared to INR 50.9 crores in FY '23. PAT margins stood at 3.7% for H1 FY '24. The lower PAT with respect to last year is because of higher interest costs on account of long-term debt of INR 400 crores and higher depreciation of intangible assets on account of acquisition of IAC India. The net debt as on H1 FY '24 is INR 88 crores. The CapEx incurred during H1 is INR 41 crores and full year estimated is INR 100 crores to INR 110 crores. Now I invite for question-and-answers.

[Operator Instructions] We take the first question from the line of Resham Jain from DSP Asset Managers.

So I have 3 questions. First one is on the base business itself. If I just remove IAC acquisition, it seems that the base business has seen almost like a flat or marginal degrowth. And within that, I think the run rate of aftermarket has the kind of growth, which we saw in the last 2 years, '22-'23, we have seen a significant kind of momentum loss in that in terms of growth. So if you can just share your thoughts around it. Then I'll ask other 2 questions.

So thank you. You're absolutely right. I think if I look at H1 without the IAC business, the revenue compared to last year is almost flat. The key reasons is, as I further bifurcate, the joint ventures have actually grown by almost about 20%, 25%. However, the stand-alone entity, which is largely the plastic business and the chassis business, that has degrown by about 8%. And the reason for that is largely Bajaj Auto's business of the frames has degrown along with some of the business of the plastics for HMSI. These are the 2 fundamental reasons why there has been a degrowth. And again, there are certain models which we are catering to for the frames business of Bajaj has actually degrown by almost 35% to 37% on a year-on-year basis. And that's the single largest reason why that impact is coming in the stand-alone entity. Referring to aftermarket, the growth in H1 has been about close to 5%. However, that is primarily because there was a little bit of a cash flow crunch in the aftermarket business from recoveries from the channel partners. And we were very clear that, for us, the cash flow realization is equally important. But for the last couple of months, we had seen a pretty good recovery on that aspect. And going forward in Q3 and Q4, we're actually looking at a much robust growth. And aftermarket for the whole year is still likely to grow somewhere around 15% or north of that.

Okay. So basically, second half looks like 20%-plus kind of growth in aftermarket?

Yes, for sure. And for H2, aftermarket would definitely grow upwards of 20%.

And just a follow-up on your answer to stand-alone business. So are you seeing any improvement over there or any alternative plans to utilize capacity? Because some of this volume lost, if it has not come in the last 6 months, and if you're not seeing momentum, can you utilize that plant for some alternative customers also?

These are dedicated plants, for example, and the lines are dedicated for the particular models. So the frame business is anyways consolidated between 2 plants, which is in Aurangabad and in Pune. And just to give you an example, we are a single source on one of the export models of Bajaj, which is called BM, and that has degrown by 36%. We are single source, so it's not like we have lost this share to our competition, but the overall volumes have declined by 36%. Also, the Platina model of Bajaj Auto has declined in Aurangabad by almost 33% on a year-on-year basis. We're, again, single source of this model. So there is not much we can do in terms of utilizing this asset for other -- production of other things. However, we are in talks with Bajaj Auto to try and get certain new businesses for their premium pipes of Triumph and also for some of their forthcoming electric vehicle models in terms of getting the overall frames as well as certain painting parts. So that is still in discussions, but that will still take some time to fructify. I still expect probably a degrowth in the Bajaj frame business, even continuing in H2.

Understood. Very clear. Second is with respect to the acquisition, there has been a good uptick in terms of the overall revenue since you have acquired. Should one expect similar momentum in the coming quarters also?

So I think in H1, if you look at IAC, we did about INR 419 crores revenue. I expect a slightly, maybe a single-digit incremental growth in H2 compared to INR 419 crores which we clocked in H1, largely because, again, Mahindra is the single-largest customer there. And I think Mahindra by itself is pretty much strapped on their capacities. So by the -- because we are pretty much very strong 80%, 85% presence in Mahindra across models. So as long as Mahindra's output continues to increase, the revenue for IAC will also continue to increase. But having said that, in the forthcoming year, FY '25, I think we're sitting on a pretty strong order book of around almost INR 650 crores for IAC India. And again, a lot of the models of Mahindra & Mahindra as well as Maruti Suzuki, we have acquired businesses which will fructify in FY '25 and FY '26.

Understood. And the last one is with respect to your comment on electric devices and software business, which is just 1% as of now. And you said you are looking to manufacture certain product for global requirement. So if you can explain what exactly is this business? And what kind of business you are expecting from this one?

So fundamentally, the joint venture of Lumax Alps Alpine is obviously to make foray and go deeper into the Indian market, which continues to remain. The joint venture has also acquired certain recent new order books to the tune of approximately INR 60 crores to INR 70 crores, again, by Indian OEMs. And we are getting into not just expanding switches, but also the sensors business, and also talking to certain OEMs for certain in-vehicle entertainment -- in-vehicle infotainment devices. So these are very high in electronics, they're very high in embedded software and technologies. But this is the first strategy for the domestic presence and expanding the domestic presence. The second strategy under this joint venture is also to relocate the production base for some of their components which they make globally, relocate those facilities or the assembly lines and the entire production to India. Of course, this would be sold to OEMs globally through our partner internationally. So while we will utilize the cost efficiencies of India and relocate the production here, the joint venture will clearly get a huge headway in terms of the revenues and obviously operating margins as well.

The next question is from the line of Mr. Aman from Carnelian Capital.

Congrats on a good set of results. My first question was on just, we have been doing 18% kind of EBIT margins for the last 2 quarters. So like would this be the regular run rate for this business? Or like how should one think about a consistent margin for this business now?

Well, if you look at our EBITDA, the total EBITDA reported in H1 is 14.1%. So I'm not sure what is the 18% you're referring to.

Sir, I'm talking about IAC India, the acquired business.

So IAC India EBITDA, yes, has been consistently at about, give or take, 18.5% in quarter 1 and quarter 2. I think going forward, we do expect some marginal correction because there are certain product mix which will change in quarter 3 and quarter 4, but we do not expect more than 100 bps change going forward as well. So I definitely feel that anywhere, 17% to 18%, 18.5% should be a sustainable EBITDA for IAC India, at least in the subsequent quarters.

Understood, sir. Secondly on IAC India business again. Like after acquisition, like how have been our talks with other OEMs? And also, increasing share with OEMs, like Maruti, like, how has that talks been progressing? If you can touch a bit on that, sir?

So the talks have been very -- we have had very strong engagement with specifically 2 OEMs, Maruti Suzuki and Tata Motors. We did a technology show in both OEMs, which was attended by not just the top management and the senior leadership team of both Maruti Suzuki and Tata Motors, but almost more than 400 footfalls were there right from engineering and sourcing teams. I think we already have a business relationship with Maruti Suzuki, though it is on certain models, and it is for more of consoles and certain other products. I think the intent here is to try and become a full service supplier to get into certain other parts, like door panels and perhaps even the cockpit. So Maruti has also visited our facilities in Chakan to evaluate further how IAC India can expand its wallet share with Maruti Suzuki's forthcoming models and specifically the new plant in Kharkhoda. Tata Motors also similarly, we have had some very strong engagement, and the engineering and marketing teams are continued -- hold continued discussions for their forthcoming models on the Avinya platform.

Understood, sir. Sir, next question was on the [Technical Difficulty].

I'm sorry, I lost you. Could the moderator could intervene and -- I cannot hear, maybe it's a poor...

Hello? Aman, sir, can you hear us? Sir, if you are unable to hear me, I would request you to rejoin the question queue. We take the next question from the line of Abhishek from Dolat Capital.

Sir, what is your revenue guidance for Lumax Auto Technologies excluding IAC India in FY '24?

So the guidance will be about a single-digit growth for Lumax Auto Technologies without the IAC. Again, if I were to give you 2 buckets, I think the joint ventures in totality will still have a strong growth of 18%, 20% or even more beyond that. But the stand-alone entity, for reasons which I've already explained, largely being Bajaj Auto and HMSI, where we are expecting a very flat or a degrowth, because of that, there is likely to be not much of a growth in the stand-alone entity despite aftermarket, which is expected to grow maybe 15% or north of 15%. So overall, I would say a single-digit growth is what I'm looking at for this year for Lumax Auto Technologies without IAC.

As two-wheel export volume is expected to improve from the fourth quarter onwards, so can it be a positive for you as well?

Well, we are hoping that the export volumes recover, but this is something which we will have to wait and watch. As I mentioned, these are, again, business dynamics. When the domestic volumes were down about 1 year, 1.5 years ago, the exports were thriving and that was a time when we continued to have some handsome rewards. So again, this is just the dynamics of business, but one will have to wait and watch. But as I said, for the long term, we are trying to derisk our portfolio with Bajaj by entering even the premium spaces. KTM is something which we have already entered. And as I mentioned, Triumph is something which we are under discussions with.

Sir, your depreciation rate is very high, around 11.3% of gross book. And EBITDA growth is very much impressive, around 76%. But most of the growth was offset by the higher depreciation and interest costs. So from which quarter we can see some normal depreciation rate, around 7% to 8%?

So actually, at the time of acquisition of IAC, we have created the intangible assets of almost around INR 213 crores, and that will be depreciated over the period of 7 years. So the depreciation will be there for, I mean, a reasonable period more. But definitely, that advantage we are getting in the tax, et cetera, will accrue after the merger of IAC with the LIV. So far interest is concerned, because we have taken a debt of around INR 400 crores, and there's a lock-in period of 18 months. So after post merger, the debt is going to be decrease on the basis of the accrual. But if you see, the net debt that is only INR 88 crores at the group level -- I mean at consolidated level.

Okay. So what is your debt repayment plan?

0.5x is the debt-equity ratio at present, which will reduce I think after 1 year. In the next financial year, it will be going in the downtrend.

Okay. And sir, tax rate is a very higher side in the first half, around 30%. So what would be the attractive tax rate for the full year '25 and FY '25?

Sir, tax rate is at 25% because of interest portion, which is the LIV is bearing. And some of the JVs are having the losses where the auditors will not allow to create a deferred asset, which will be created in the next year. So the tax rate for the next year would be down by almost 4.5%. So right now, it is at 30%. The next year will be in the range of 25% to 26% post-merger.

Okay, sir. And my last question on the revenue from the Lumax Industries that is consistently going down. So what is the reason? Because of the more captive work they are doing, or what?

So I don't think that is our core business. And I think that over the next few quarters or perhaps in FY '25, will possibly strategically continue to decline. And again, the idea is to be a more Tier 1-oriented system supplier and not a Tier 2 for [indiscernible].

So is there -- will be there any impact on the aftermarket because of this strategic movement?

No. The Lumax Industries business has nothing to do with the aftermarket. This is a pure business which we do for the lighting segment. And as I mentioned, strategically, this is a noncore business area for us.

[Operator Instructions] We take the question the next question from the line of [ Harshil Shah ] from [ AM Investments ].

Sir, my question is about the potential of the exports from the Alps Alpine that you mentioned. How big can it be, sir? Just rough cut, like whatever you -- whatever indication you have.

Well, the first product which we are talking about, if we are able to get the global production base, we're looking at somewhere upwards of 3 million units per year with an annual business of approximately close to between INR 150 crores to INR 200 crores annual revenue, and this is just for one product. And again, if it is successful, then it would open doors to discussions on multiple other products. So as I mentioned, I think Lumax Alps Alpine joint venture, I think the partner has a global presence with very strong technological products. And I think if we are able to establish this strong base of manufacturing footprint in India, it will definitely open doors for further growth within the partner's other subsidiaries and presence across the globe.

Okay, sir. And can you expect it by next year, like if we break through?

So I think the SOP of this would be somewhere around quarter 3 of FY '25 or perhaps quarter 4 of FY '25. So FY '26 I believe should be the first year you should be trying to get some significant revenues out of this.

And Anmol, have you started relocation of the plant? Is it done? Like...

No, so the current relocation discussions are ongoing between our partner and the OEMs. As I said, this is a relocation for Alps globally. So once the OEMs -- in principally, the OEMs have been informed, but I think now the teams are working on doing the more feasibility. And again, one of the key factors is the geopolitical aspect. A lot of this production will be moved out of China into India. So again, just to derisk from China supply chain, the OEMs are pushing the partner to relocate it to elsewhere. And India is the front contender, as I mentioned, for this global production.

Okay. And Anmol, in the presentation, you have mentioned that like -- not in the presentation, in the results that company has given guarantees to JOPP to raise money. So is the subsidiary ready to contribute from Q3, and what is the size, if yes?

So I'll let Vikas take that.

So referring to your question. JOPP has passed the significant order book with its first customer being Maruti Suzuki. Typical product development time for this is 12 to 18 months to get into SOP, and the models awarded are for the new Kharkhoda facility that are coming. So the revenue will not fructify in, let's say, to that extent in the next 2 to 3 quarters. But this is the FY '26 preparedness as Maruti has rolled out plans for its 4 million readiness. So that is where JOPP joint venture has made a very strong entry now as they shift to our supplier.

Okay. And sir, on Ituran also, can you just elaborate? Like what is the kind of revenue we did and can we do in this year, FY '24?

Yes. So we went into the -- so there are 2 products that are cleared for SOP with a major commercial vehicle customer this year for Lumax Ituran joint venture. One product went into SOP in the month of May. The second product is currently under initiation, and we hope to start recording monthly run rate revenues for it with effect from December. And we will have 3 months of the SOP volumes coming in this financial year and then thereby going ahead further. This is a very highly advanced telematics product. And currently, the guidance for the Lumax Ituran joint venture continues to be upwards of INR 30 crores based on the current indication for the current year.

Okay. And Vikas, sir, anything -- any other subsidiary can start contributing from the current financial year? Like in the second half, we can expect INR 100 crores from other subsidiaries which are not contributing anything right now?

So there are 2 subsidiaries or the 2 joint ventures, which are already at a significant run rate. Of course, one being Lumax Mannoh and Lumax Cornaglia. Alps Alpine and Ituran would be ramping up towards [Technical Difficulty] for sure in the coming year. That is the growth path at which they are.

Okay. But any -- like Yokowo, or anything that can contribute in the second half?

I think these joint ventures have a good order book, but in terms of a significant contribution to the revenue and profitability, I would say that FY '25 should be the base year. FY '24, we have done very nominal revenues from these joint ventures. And as Vikas mentioned, the gestation or the lead time for development, right from discussions to engineering, at least is about 12 months. So we are sitting on an order book on all these joint ventures, a healthy order book, but they would only fructify in FY '25 onwards.

Okay. And Anmol, what do you think will be -- will FY '25 look like? And suppose we end this year at INR 2,800 crore, INR 2,900 crore types or INR 2,700 crores, so where do you think FY '25 can be? Given the current situation, the stand-alone business will grow at a slower pace, Mannoh and Cornaglia are becoming slightly like towards mature subsidiaries. So what will the FY '25 look like?

So I think FY '25, if you were compare to FY '24, whichever, I think, yes, I mean, anywhere around INR 2,700 crores, INR 2,800 crores, INR 2,850 crores, that's what we are probably expecting for the full year. But again, next year, I think 2, 3 major change points. I think number one, we will have the joint ventures grow significantly again, largely because of some strong order books, which were there in -- across joint ventures in Lumax Cornaglia, Lumax Mannoh, as well as Ituran, as I mentioned, the supplies would start and we will get some full year revenues, as well as Alps. So the joint ventures will definitely grow -- continue to grow at a much faster double-digit growth rate. In terms of stand-alone, I think aftermarket, as I mentioned, I'm still very bullish. We will continue to grow at around 15% to 20% on an annual basis. The stand-alone, which has the other business, that is, particularly on Bajaj and HMSI, I do expect growth to come back in next year. It may not be a double-digit significant growth, but definitely close to perhaps 7%, 8% growth is likely. And on IAC, we continue to have a very strong focus. As I mentioned, there is a very strong lineup of new models, both from Mahindra as well as from Maruti Suzuki, for which IAC enjoys the healthy order book of almost INR 650 crores. So with that and certain organic volume increase, I think IAC India will continue to grow in double digits for next year as well.

Okay. And sir, margin, like IAC margins declined by 100, 150 bps. On the company level, can we maintain like 14%-types margin?

Yes, definitely. I think at an overall consolidated level, we will be able to sustain the current margins of 14%, give or take, at an EBITDA level.

Okay, sir. That's it from my side. And one more thing, sorry. Is there any one-off in the employee cost, it's too high, it's too steep, INR 94 crores like?

You're talking about the overall employee cost?

Staff cost in current quarter is INR 94 crores, so -- which was INR 84 crores in the last quarter.

No. So there would not be any significant onetime impact barring just maybe a few people who had been given certain annual performance bonuses, but that's not a significant amount. But IAC, as I said, continues to have a manpower cost of around 15%, and that's probably why you're seeing a significant increase in the manpower in Q1 and Q2.

But IAC, the total cost of employees last year was INR 72 crores and our's was like INR 50 crores employee cost. So if we add up -- our's was like INR 200 crores, sorry. So if you add up, it comes to around INR 270 crores. And even if that goes up by 10%, it should be around INR 300 crores, INR 325 crores. Now this is like, at the half year level, we are at INR 175 crores. So that translates to some INR 350 crores. Like...

Harshilji one more factor, if you recall the Lumax Metallics has been merged with this company. And earlier in Lumax Metallics this particular head comes in the legal and legal charges. So after merger, that cost has now been clubbed in the employees cost, and same thing in the other expenses [indiscernible]. There is another factor where you are seeing this...

It's just an accounting change. It does not impact the bottom line. But yes, you're right, if you look at particularly our line item of manpower, it would go up. And if you look at the corresponding amount in other expenses, it would have gone down.

[Operator Instructions] We take the next question from the line of Nitin Gandhi from Inoquest Advisors Private Limited.

Two questions. Can you share with us, what's the sourcing done from China by Alps parent, our partner? That's the question number one. And the second is, what's the maximum revenue potential of all JVs put together, if you can share individually or collectively, whichever way you are comfortable?

The number one question is we are not doing any sourcing from China in Lumax Alps Alpine. There are other ASEAN regions, Japan and, let's say, Thailand and Vietnam and Indonesia. We are doing some imports across the different joint ventures from these regions, but we do not have any specific import directly into the JVs from China. What I was referring to is that Alps, our partner, has a presence in China where they manufacture this product for the requirement of global OEMs. And as a strategic call, they are wanting to relocate the production out of China into another region, and that is the global production which we're talking about getting in India under the Lumax Alps Alpine joint venture. So that's answering to question number one. The second part of your question, which is what is the joint venture's potential put together? I mean, it's a very difficult question to answer because, again, across the 9 joint ventures, the wallet share which we enjoy is very, very different. Case in point, like I said, Lumax Mannoh, where we already have the market leadership position, the growth would come out of organic volume growth or geographical expansion into export territories or technological changes. We already are seeing that, but I think the growth would definitely be not the same as some of the other joint ventures like Lumax Alps Alpine or Lumax Yokowo. It's very difficult to give you a specific figure. But I think, without IAC, all the joint ventures are right now doing close to about INR 150-odd crores on a quarterly basis. Easily, I would say that the potential would be to probably go at least 20% to 25% growth in FY '25. And probably that growth momentum should continue on an annualized basis.

Just let me reframe the Alpine issue. What is the Alpine sales at China at this point of time over last year?

Well, Alpine is a very large $8 billion company globally, and they have multiple production facilities across the globe. So I would not have the exact number as to what is the contribution of China within the Alps global portfolio. But I think -- and that probably, to me, is relevant for Lumax Alps Alpine because, for Lumax Alps Alpine, as I said, the strategy for Indian joint venture is to penetrate the Indian markets, joint venture is primarily to service the Indian market. This just happens to be an additional business because of relocation of a global production hub.

We take the next question from the line of [ Jiya Shah ] from [ Wealth Securities ].

My question is, post the IAC acquisition, what are the potential synergies we have observed? And how has that been reflected in the financial numbers in terms of revenue growth, margins, customer acquisition and product addition?

I think there are various synergies. Number one would be clearly the customer expansion. And again, as I mentioned earlier, customer expansion does not happen overnight, but there is a very strong engagement now both at the top level as well as the working level, specifically with Maruti Suzuki and Tata Motors, who are the, let's say, focused customers for IAC India, to grow our wallet share with them. So I do expect that in the probably next 2 years, give or take, we should have a significant order book from both Maruti Suzuki as well as Tata Motors. This again would be clearly one of the key reasons why we got into this business of expanding the portfolio of customers. The second synergy is also, of course, with respect to the sourcing. So we are a large plastic consumer. And again, to optimize the cost synergies with these global raw material suppliers because of scale and again, the synergies would work both ways, from IAC India into Lumax or vice versa. And we've already started to see some of that sourcing synergies play out, not just in raw material, but even the Tier 2 sub-suppliers, which remain common in certain regions. The number three strategy is, again, at a group level, more for the lighting piece, the interior lighting. So while it is not related in this company, at a group level, that synergy still holds true. And number four, again, the idea is we do a lot of components into multiple joint ventures today. So for example, we do power window switches in one joint venture, we do gear shifters in one joint venture. We also do, let's say, certain other interior parts, like the air conditioning vent in the stand-alone entity. How can we package this as a full service supplier to the OEMs, along with IAC, and give them as a complete module? So that -- this is the third synergy which is being worked out and talked about with OEMs. I don't think it's possible at this point to give you a revenue and a margin outlook because of synergies. But I think, as I mentioned before, the order book for both IAC as well as the non-IAC business continues to look very positive for the future.

The next question is from the line of [ Ravish Shah ] from [ Opal Securities ].

Am I audible?

Yes, go ahead.

So my first question is on -- what is the CapEx one during H1 FY '24? And what is the total CapEx guidance for FY '24 and FY '25? And where these funds be deployed, like this CapEx be deployed?

So H1, we did a CapEx of INR 41 crores, which largely about INR 10 crores to INR 12 crores was in IAC India, and about a similar amount went into the Lumax Cornaglia. And about INR 6 crores to INR 8 crores went into the frames business of Bajaj Auto. These 3 would be the largest contributor of INR 41 crores. As indicated earlier, the outlook for the full year is estimated to be anywhere around INR 110 crores to INR 128 crores. And again, this would go into -- across multiple entities, from IAC India as well as to the others. IAC would be the biggest pie of it, but again, Lumax Cornaglia and even the gear shifter business and the mechatronics business would add almost close to, let's say, INR 12 crores to INR 15 crores of outlay for the current year. FY '25, still too premature to give you a CapEx guidance. But to give you a very different scenario, we're sitting on a INR 1,000 crore-plus order book, as I mentioned earlier. And to deliver that, I think over the next 2 to 3 years, because FY '25 is almost 45% of this order book would get realized and in FY '26, it would be another 30% and then FY '27 would be about another 25%. So we do expect, in the next 2 to 3 years, perhaps our asset turns would be much better compared to what we have traditionally been doing.

Understood, sir. I have one more question. So how much does M&M contribute to IAC India's business? And what other major customers does it cater to such as that? And also the major customer additions in IAC or Lumax business for the current period?

So Mahindra accounts for almost 70% to 75% of IAC India business. The other 3 customers which are there are Maruti Suzuki, Volkswagen and Volvo Eicher. So these are the 4 customers. We do also very nominal business with Force Motors and we do a lot of design and engineering revenue even with Tata Motors, but not at a product component level SOP yet. As I mentioned, that is the next step on how do we get into a full service supplier understanding with the likes of Maruti Suzuki and Tata Motors. And what was your second question? I mean...

My second question was, any major customer additions in IAC or Lumax business for the current period?

We do not have any major customer addition. We have gotten into different product lines, but the customers remain the same, which is the same. So we don't have any this thing, but the only other customer addition for Lumax Technologies would be Hero MotoCorp, where we started the plastics business in our Pantnagar facility.

Thank you, sir. As there are no further questions, I would now like to hand the conference over to Mr. Anmol Jain for closing comments.

Well, I'd like to take this opportunity to thank everyone for joining into the call today. We will keep updating the investor community on a regular basis for updates on your company. I hope we have been able to address all your queries. For any further information, please get in touch with us or Strategic Growth Advisors, our Investor Relations advisers. Thank you once again. Have a good day. And I also take this opportunity to wish to all of you on the call and your families a very happy and prosperous Diwali. Thank you.

Thank you. On behalf of Lumax Auto Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.