Precision Camshafts Limited (PRECAM) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to earnings conference call to discuss operational and financial performance for Q2 FY '22 of Precision Camshafts Limited. [Operator Instructions] Please note that this conference is being recorded. Today, we have with us on the call Mr. Karan Shah, Whole-Time Director, Business Development; and Mr. Ravindra R. Joshi, Whole-Time Director and CFO. I now hand the conference over to Mr. Karan Shah. Thank you, and over to you, sir.

Thank you very much. Good afternoon, ladies and gentlemen. I'd like to thank you all for being a part of this Precision Camshafts Q2 FY 2021/2022 Earnings Con Call. I'll start with an overview of the automotive industry and then get to the company's performance. The automotive industry has been going through some very difficult times starting with the COVID pandemic and, more recently, the supply shortages on semiconductors and higher commodity prices, which has put pressure on the global automotive OEMs and all ancillary businesses, including ours. While experts predict that the constraints in the supply chain should ease by the end of next year, it will be difficult to predict when things would actually get back to normal. Throughout these difficult times, we continue to take care of our employees and our facilities around the world to ensure the highest levels of safety and also ensure readiness for customer demand. I'm happy to share that, despite these challenging times, your company has delivered a 17.8% growth in revenues at a stand-alone basis and a 16% growth in revenues at a consolidated level compared to Q2 of the previous financial year. Beyond the growth in top line, your company has delivered a 16% PAT at a stand-alone level and a 9.33% PAT at a consolidated level despite all the above-mentioned challenges. Just to give you in absolute numbers, the company has delivered profit after tax on a consolidated basis of INR 21 crores in just this quarter compared to a consolidated PAT of INR 2 crores in the entire FY '21. The management of the company has taken major steps to cost control in these times while also focusing on the growth of the business. The parent business, PCL India, has stabilized over the last year, posting consistent results and growth in top line as well. PCL has been awarded several new businesses over the last 4 years, which will help in strengthening its position. As informed in the 29th Annual General Meeting of the company, PCL has won new business from Ford of USA, Renault Nissan India, Kia Motors India, Tata Motors, Fiat Europe, Jaguar Land Rover and Royal Enfield over the last 2 years. These businesses will justify the max volumes in the coming 2 years. The company has also started work on setting up a 15-megawatt captive solar plant, which will further insulate the company from growing power costs in the future. In summary, PCL India as the parent company continues to enjoy healthy margins and is poised for growth in the coming years. Coming to MEMCO. The company has seen consistent demand in the last 4 to 5 months, owing to the pent-up demand in the CV market in India. This, along with some new business development from customers, has helped the company achieve circa 20% EBITDA margin in this quarter. Our objective at MEMCO is to diversify our product portfolio as well as customer base going forward. Significant measures to reduce costs have also been taking place at MEMCO, including the commencement of a rooftop solar plant installation. Now coming to our group company, MFT, which is based in Germany. The company has seen stabilization of business during these difficult times. However, we still see challenges ahead due to the increasing COVID situation in Europe as well as the long-lasting impact of the semiconductor shortages. The new management team at MFT will steer the company to better times in the coming years. In summary, the group's automotive component business is now well diversified in terms of product as well as customer base wherein no single customer contributes to more than 23% of revenues and the automotive components business is showing consistent growth in top line and in margins. Now…

Sir, sorry to interrupt. Your voice is breaking.

Can you hear me now?

Yes.

What was the last that was heard? Could I...

Sir, just the last statement.

Okay. We're now coming to our e-mobility subsidiary, EMOSS, based in the Netherlands. The company has registered significant growth in business over the last 2 years. Since we have completed the 100% acquisition of the company in July 2020, we have focused the business on addition of new customers and technologies to the company. While the traditional business of retrofitting medium and heavy commercial vehicle continues, we now look forward to an exciting new journey as we partner with several niche OEMs across Europe to provide them with ready-to-assemble electric driveline kits. The company EMOSS has posted a top line of circa INR 45 crores in Q2 of FY '22 compared to revenues of circa INR 36 crores in Q2 of '21. The company, ladies and gentlemen, for the very first time, has posted a positive EBITDA margin of 10% and a PAT margin of 7.5% for Q2 of FY '22. All the exceptional hits taken on the balance sheet pertaining to the previous financial year were completed in Q1 of FY '22, and all this is behind us now. We now look forward to a very exciting and a promising journey ahead at EMOSS. To tell you a little bit about the e-mobility drive in India, over the last 1 year, the company has retrofitted a midsized passenger bus into 100% electric bus in India. This vehicle is a major milestone for the PCL Group as the electric driveline was designed and developed in the Netherlands but built ground up in India. The company has already localized 60% of the electric driveline in the very first order indigenized in the upcoming basis. The team in India has also grown from just 2 to a size of 8 full-time personnel working on electrification now. On the October 18, 2021, the management of the company had the opportunity to present its e-bus and other electrical vehicles to the government of Maharashtra. [ Prince Arad Praval, President of MT Group ], Uddhav Thackeray, Honorable Chief Minister of Maharashtra; Shri Ajit Pawar, Honorable Deputy Chief Minister of Maharashtra; [ Shri Ajit Takre; Shri Sanjay Pande; Shri Ashish Kumasi; Shri Avinash Patney; ] and other officials were present at this meeting and gave the management a very patient hearing. The honorable audience appreciated all the work done by PCL and EMOSS and would further engage in discussions once more vehicle data is available from our side. The company also signed an MOU with the Solapur Municipal Corporation on the 3rd of November '21 to provide SMC with 3 fully homologated electric light commercial vehicles on a free-of-cost returnable basis. The vehicles will be provided to SMC by the end of 2022. Based on a successful outcome and final validation of these trial vehicles, SMC would float an e-tender on them as for the pilot vehicle specifications for additional vehicles. These vehicles will be used for waste collection application within the city. Solapur Municipal Corporation itself has 250 such vehicles, and the numbers will be multifold across Maharashtra and India. The various meetings to officials give the company great confidence in the future of its e-mobility offerings in India. While the company hopes to grow the India business in the coming 3 to 4 years, our focus very much remains in the European market where the demand is consistently growing, and we see great visibility in the order position until 2023 and beyond. I thank you now for joining this call, and I will hand over to Mr. Ravindra Joshi, our Director and CFO, for providing financial updates. Thank you.

Thank you very much, Karan, for the detail about our company's future priorities. Now I will go to the financials. First, I will brief about the PCL. PCL sales for the first half year is INR 223 crores. India's export is [ INR 104.48 crores ] and domestic [ INR 99.23 crores ]. The EBITDA is 31%. PAT is 14.3%. And loan component is INR 37.31 crores [ as element of ] working capital. And we have as a bank balance, bank deposits of INR 14.58 crores in the bank and mutual funds INR 207.08 crores, so total is INR 240 -- INR 250 crores ] [indiscernible] bank and the investment and deposit. And we have given a corporate guarantee of INR 55 crores to Bank of Baroda, U.K. and INR 30 crores to Citibank for that other loans statement. Now next company is MEMCO. MEMCO sales is [ INR 254.96 crores ] because I'm talking about first half year after October. EBITDA is 21.8%. PAT 11.8%. Working capital loan is INR 3 crores. Term loan, INR 4.11 crores. And a [indiscernible] mutual fund of [indiscernible] [ INR 2.9 crores ]. Now we are coming back to the MFT. MFT sales is [ INR 87. crores ] 7.3%. EBITDA 10.7%. PAT minus 1.84%. Working capital INR 21.4 crores taken from the bank. And term loan, INR 46.28 crores taken from the bank. And in [indiscernible] INR 94.33 crores. EBITDA INR 3.32 crores. PAT 0.25%. Working capital yield, bank loan yield. Now turning back to the total loan components. PCL India has [ 137.31% ]. I'm talking about the group. PCL has taken for the acquisition of the company. It is INR 29.9 crores. MFT is INR 57.92 crores. Total INR 139 crores, including working capital. And now future investment. As Karan has already reported, Solapur project. PCL India has initiated installing its own power plant [indiscernible] with the capacity of 15 megawatts while captive convention, considering the continuous increase in the power cost of electricity. The total cost of project's going to be around INR 56 crores, wherein the retail we'll be saving approximately INR 9 crores per annum on power cost. And also, there's a benefit of income tax. Now we are going to set up a green plant in Solapur which is until we are up to [indiscernible] INR 22 crores, wherein the [indiscernible] cost will be reduced substantially. And in [indiscernible] component reports [indiscernible] investment having equipment to support the requirement of [indiscernible] industry. The third investment would be around INR 120 crores. The MEMCO, the company has initiated in selling the rooftop project. The cost of the project would be around INR 1.6 crores, and the company will be saving around INR 4 lakhs -- INR 48 lakhs per annum. The MFT, no investment proposed as we are expecting fully [indiscernible] expanded capacities [indiscernible]. And EMOSS, there is no capital investment required. Only additional [ cost ] required is available on rent for additional business. Now I will tell you about the reasons for EBITDA. You see there is impact on EBITDA on detailed financials due to abnormal expenses like foreign exchange loss incurred in Q2 and exchange loss during the first quarter [indiscernible] and the cost of raw materials is also one of the reasons for decreasing EBITDA margin. MEMCO is due to the increase in raw material cost, the EBITDA margin for Q2 has decreased from 23% to 20%. MFT there is abnormal income of INR 300 crores [indiscernible] for development of [indiscernible] retail. Hence, the EBITDA has increased to 12.26% from 9.25% at September '21. EMOSS, the EBITDA for Q2 stood at 9.9% compared to 11%. The negative [indiscernible] particularly was due to decreasing our revenue because of semiconductor issues. And one more thing I want to highlight here is that we still have recognized the intangible asset while acquiring subsidiaries. These intangible assets are amortized over a period of 7 years. The amount of [ amortization ] is around INR 60 crores to INR 70 crores per annum in the consolidated financials or PCL India. This is just a notional entry and no tax load is [indiscernible]. Right now, we're already in -- we have already taken a hit of INR 56 crores over a period of 3 to 4 years. Now only INR 30 crores to INR 40 crores remainder, which is up to '22/'23. This is from my side. And now anybody can ask questions on this.

[Operator Instructions] The first question is from the line of Yash Agarwal from JM Financial.

Yes, congrats on a good set of numbers. My first question is on the stand-alone business. So what was the utilization of the stand-alone business on the second quarter? And how do we see it going ahead? We've been hearing that from December onwards, Toyota and all these global EV majors have guided for record production. So how is the order book looking? And how do we see our utilization panning out in the third and the fourth quarter?

You see currently, our capacity utilization, the first -- in second quarter is 56% at cost -- sorry, machine 56%, at cost 64%, in future, machining stands at increase to 65% and at cost may go up to 70%. This [ will be ] because of semiconductor issues.

So that increased utilization will in the third quarter itself or [indiscernible]?

Again, depends on the semiconductor issues. [indiscernible]

That is very, very difficult to answer that question because we have no clarity at this point of time based on how the COVID and the semiconductor situation continues to play out. So I think it is -- we have to be patient and watch. In terms of readiness, we are ready to cope with additional demand whenever there is, but at this point of time, very difficult to say what the utilization will be in the next quarters.

But it would be better from what it was in the second quarter, right? I mean, is that something which you'll be hoping better day by day?

We hope so. We hope so.

And my second question is on EMOSS. So I think I heard correctly, did semiconductor issue impact the revenue for the second quarter? Was it right?

Sorry. Can you repeat that question?

In EMOSS, was there any challenge -- supply side challenges which impacted the revenue? Or this was a normalized quarter for EMOSS?

Fairly normal quarter, but I think there is a slight perhaps a very small different top line compared to Q1, and that's purely because in the month of August, most of Europe is on summer vacation. And a lot of the production as well as demand is reduced in August, which is why you see a slight dip perhaps. But I think this is very normal at this time of the year. Other [indiscernible] to have some supply chain constraints due to the semiconductor shortages, but I think we are trying to manage this in the best way we can.

Okay. And have you got any orders from the Indian market for EMOSS?

No. No orders so far. We are better in the process of development. So it's -- we are not looking at saying that we are pushing for orders right now, but want to make sure that the product that we get to the market is of the highest quality, the most reliable one and one that actually works.

And we are operating at an annualized revenue run rate of INR 180 crores or something in EMOSS at the moment. So what do you feel -- what is the conservative year guidance for FY '23 or maybe 2 years down the line? What -- how much could EMOSS scale up in your assessment?

Yash, you know I can't answer that. I'm sorry, but I can't provide you with forward-looking numbers. Sorry.

Sure, sure, sure. My last question is, what was the total one-off component of one-off expenses in the EBITDA in the first quarter on a consol basis? Just the one-off components that we spoke about.

Ravindra, if you can answer this.

I'm not able to understand his question, Karan.

Were there any one-off expenses in quarter 2 at a consol level? And if there were any , can you please let him know.

Yes, I told you that is because of the foreign exchange loss, the EBITDA has come down. You see, normally what...

What is the amount? I just want to know the amount, total amount.

Total amount is INR 3.32 crores.

Okay. About INR 3.5 crores, right?

INR 3.5 crores, yes.

[Operator Instructions] The next question is from the line of [ Reza Hawa from HG Hawa & Company ].

Sir, I think our capacity utilization is down due to the semiconductor shortage. Have you tried at all through the export markets if some material could be sold and -- maybe steel is cheaper in India. So that differential also could probably work in our favor.

If I can answer this. We are at -- almost 60% of our business is exports anyway. We are supplying to all major OEMs around the world. And it's not a product that we do. Camshafts is not something that we can start supplies of development at short notice like this. It typically takes 2.5 years to develop a camshaft that goes into a vehicle. So I think, at this point of time, just as all other ancillary and automotive companies are facing some need due to the semiconductor shortages, I think we have to be patient in getting through this because I think one thing is there that there will be pent-up demand because of the shortages right now. And we hope that in the coming year that there will be increase across the globe, not just India.

Do you feel that any cost-cutting measures could be taken? And have we taken any such measures?

Absolutely. A lot of cost-cutting measures have been taking place, which is why we see the increased margins despite the flat revenue. So if you look at the additional solar power plant that we are putting up to reduce expenses, Mr. Joshi explained regarding the green plant that we would intend to put up to reduce and cost. There are some certain cost-cutting initiatives taking place across all the companies. So for sure, this is being done to protect margins.

[Operator Instructions] The next question is from the line of [ Shubham Jain ], individual investor.

Congratulations for a fantastic set of numbers in Q2. I had a couple of questions. One was last time I had asked you -- we were trying to shift away from the camshaft business into other precision components business, which will be now in automotive. During the quarter and if some work has started on that, and I wanted to just check with you on this because we wanted to see how much of -- what percentage of revenue starts going from the nonautomotive business, which we are planning to start. Second is on EMOSS. You had also said that there will be some amount of components for the EMOSS vertically which will be now starting to get exported out of India. We'll be basically developing those components here in India and then exporting out to Netherlands so reduce the cost further and increase the margin here in the European market for EMOSS business. So I wanted to know if there are any updates on these few points.

Yes. Yes, I think on both fronts there is a lot of work going on. I can't explain all the details on this call because we are working with a lot of customers to develop this. Obviously, we only spoke about this last quarter. So I can't give it in 3 months. But I think, as we said, we have a plan at PCL to have at least 20%, 25% of revenues coming from non-camshaft business by 2025. And we are very much on track to look at such a target. We are working with several customers to develop products at [indiscernible] in fact, non-engine-related. So I think good progress going on there. As far as EMOSS is concerned, a lot of prior validation process is going on in terms of localization and seeing how gross margins at EMOSS can be improved. But regardless, I think as EMOSS -- as the company grows, we have better leverage to negotiate with our suppliers. We have better cost improvement opportunities in EMOSS, which stands at this point of time, which is why you see the company has posted a positive profit after tax for the very first time since we have acquired it. And I think this speaks great volumes about the business development side and the cost side of things. And I think we're very proud to have this -- the results that we have posted this time, and I think we can only improve from here on.

Sure, sure. And as a follow-on question, do we envisage the semiconductor issue having the impact on the EMOSS revenues in the months to come? Or we are relatively well insulated from the semiconductor issue at EMOSS at least?

I wouldn't say fully insulated. There are certain challenges in the supply chain. As of now, we are managing them as best as we can. And we don't see any immediate effects on revenues in the coming months or quarters. But if the situation gets worse, of course, it will start affecting us, but we only hope that it is getting eased out from here on.

[Operator Instructions] The next question is from [ Sudheer Badia ] from [ Consultant Capital Advisers ].

Karan, I had a couple of questions focused around EMOSS. So one is, are there any sort of laws or regulatory provisions which actually prohibit sort of easy launch of industrial retrofit electric vehicles kit in the new vehicle segment?

Do you mean in India?

Yes, in India, in India.

Our plan it will eventually launch a retrofit kit -- electric kit. Sorry, sir, I didn't get your question, if you can repeat it. Are you saying that there are -- are there any regulatory provisions to restrict the retrofit? Is that what you're asking?

Yes. So what I'm saying is, I mean, can anyone actually launch an electric retrofit kit in India? Or are regulatory approvals which are required for anyone to launch a retrofit kit?

No, no. Of course, there are regulatory approvals required. As in the case of our first bus that we have retrofitted here in India, we did this in close cooperation with the Automotive Research Association of India, which is a regulatory body, comes under the Ministry of Heavy Industries as well as Road and Transport. So there is a lot of regulatory process. There is a lot of component-level testing, vehicle-level testing, safety testing, a lot of bench testing that has to happen before a kit can be approved by ARAI to be fitted onto a vehicle. So I think one of the good things is a lot of these -- a lot of these steps have been done by us already for a specific type of vehicle, so we know the process fairly well. So going forward, when we are doing new types of vehicles, new type of kits, we know exactly what the expectation is from the regulatory body. But it's not that somebody can come in tomorrow and buy the same components that we do a supplier kit. That's not possible.

Okay. And just pardoning my ignorance, Karan, but are these regulations also applicable to all other automotive segment, for example, 3-wheelers, 2-wheelers, passenger car?

Yes. Every car that is -- every car or let's put it, every vehicle that is driven on Indian road has to go through this process, which is basically called homologation, and the homologation process is done at ARAI or similar institutes across India.

Okay, okay. Because a general search online actually shows a couple of retrofit companies actually in 2-wheelers, 3-wheelers and other things. So I was just wondering. So what kind of competitive intensity do we envisage for our company, for EMOSS in particular?

I think this is a very nascent industry. There are very few people in India doing this. Some are doing it well. Some are starting up. I think what we bring to the table or what we're doing differently is the tremendous experience that EMOSS has over the last 10 years working on a electrification of commercial vehicles. So one of the presentation mentioned -- and we have about 600 vehicles that we have developed electrified 'til now, and these 600 vehicles have driven more than 100 million miles total. That's the amount of data that we have to basically say how do we quickly deploy that data and that experience in the India context, make sure that the supply chain is from India to be cost-competitive in India and bring a high-quality product to the market. So I think we do have, let's put it like this, a head start. And I think that the industry is very small right now, and I think there is room for everybody to grow right now.

Okay, okay. And one last question, okay? So obviously, I hear you that 60% of your production is already kind of indigenized and you plan to -- India the balance also in the next couple of quarters. But at what price point in your assessment would Indian consumers be ready to kind of take the retrofit kits actually?

I think it's not the price point. It's not the price point. It's about the ROI, right? So if you think about a vehicle which you convert into electric and if you can recover that additional investment, whatever it might be, right, it might be INR 10 lakhs, INR 50 lakhs or INR 90 lakhs, depending on the type of vehicle and the type of range that you're looking for, as long as the customer has the opportunity to recover this money in 2, 3, 4 years, then it becomes a very, very attractive option for a customer. Because at the end of that recovery period, you are saving a tremendous amount of money for the rest of the life of this vehicle. So I can't tell you a number right now to convert this type of vehicle, it'll cost so much, or to convert this type of vehicle it'll cost so much because we are still -- we have done one, right? So it's very hard to say how the next 100 or the next 1,000 will look like. But of course, we are very much aware of the cost-competitiveness that is required for the Indian market, which is why on further vehicles that we are developing, especially on the LCV side, which is used for last-mile transport, we are being extremely conscious about this ROI metric, which will become the selling point for the customer.

Right. No, I get that. But the only point that I'm trying to ask is, in your assessment, you don't think that an entry point, I mean our cost point would be deterring anyone to make a purchase in the first place?

Sorry? Sorry?

I'm saying that you don't feel that the price point is not the determinant in that sense of it.

No. No.

High price point, but a better ROA will not discourage anyone from actually just buying into it?

No, no, no.

[Operator Instructions] The next question is from the line of Vipul Shah from Sumangal Investment Consultants.

Yes. So I just wanted to [indiscernible]...

Your voice is breaking. We request to come in a better...

Yes. So am I audible now?

Yes.

So we have booked some income by way of cancellation of orders. So will this income be repeated in the coming quarters?

No, no. This is only one time which is a composition for the loss of the business, and this is only one time. So it is not on a repeated basis.

Okay. And previously, you were giving the data of machined cams -- number of machined camshaft and un-machined camshaft. So why you stopped sharing those details?

You mean to say on the presentation?

Yes.

Okay. We're not stopping, but we will have been added. We'll add it.

So if I want, and should I drop you email, sir?

You can drop the name or we'll update that presentation, okay?

Yes. So that if you add it, that part, it will be better.

Okay.

Okay. And lastly, what is the R&D run rate per annum at EMOSS? So what is R&D expenditure?

I will get back to you with an exact number on this.

You can say any ballpark figure like is it [indiscernible]?

Should be approximately 2% to 3% at this point of time.

2% to 3% of the revenue?

Yes.

[Operator Instructions] The next question is from the line of [Shubham Jain ] individual investor.

Karan, one more question I had in mind was, are we previously looking at -- I mean, there are 2 parts really EMOSS business side. One is the retrofitting of vehicles. And the second is supplying the entire driveline to OEMs. I mean what is the strategy forward in terms of become a OEM supplier or moving deeper into the retrofitting segment? I mean what gives us more margins as a company? And where do we see ourselves? Because one is tied with an OEM and becomes a long-lasting relationship in terms of supplying driveline [indiscernible]?

Yes, I think we will continue to do both because there is demand for both. But since the time of acquisition, we have pushed the business more towards the partnerships with OEMs and the fixed supplies to OEMs because that's the real business where we can scale, get to big volumes, get to real revenues and have healthy margins. So the retrofits will still continue to happen. These are one-off, three-off, ten-off kind of vehicles, which require a lot of engineering work, a lot of development costs, et cetera, that goes into each vehicle because everyone is different. When we can start consolidating and saying that we can provide kits to a specific chassis or a specific body kind, it becomes more efficient for us.

[Operator Instructions] The next question is from the line of Sunil Jain from Nirmal Bang Securities.

My business -- my question again relates to more of EV business, what we are trying to do into India. So you said that ROE will drive the purchase of the customer. So considering whatever you experience you have and the percentage of 60% you had done [ localization ] in India, so at current point of time within the ROE is better than the people who are already there in the market? Or how it is at current percent?

I really can't give you a clear answer on this because we had only built 1 vehicle. The cost related to purchasing components for 1 vehicle is very different from when we do it at scale. So the ROI will never work when you are doing 1 vehicle because all costs are attached to that. We are only buying one-off components. Although they are localized, we're buying one-off or two-off at the most, right? So this would only start -- I would only be able to give you a more valid or a more fair answer once we start talking about larger numbers. And I think that when we start, we are focusing on a few types of applications and not doing everything that comes to our table. And when we start looking at the LCV in a more bigger way, I think we would have a much clearer picture as to what ROIs look like, what is the selling price of the kit, how much will it -- how much time will it take to recover the cost, et cetera. So hard to answer that right now.

The next question is from the line of [ Amit Desai ] from [ Excel Capital ].

Yes. I joined this call...

[ Amit ] sorry to interrupt you. Your volume's a little low? May I ask you to speak a little louder?

Can you hear me now?

Yes, better than before.

Yes. Okay. I joined this call late, so I'm not sure if this question's been answered. I know in your [indiscernible] you are talking about…

We are improving your audio.

Can you hear me now?

Yes, we can hear you, but then your voice is breaking.

Okay. Regarding your India plan, last -- in the last call, you said that you are maybe 5 years away. Any change to that? Or is it likely to happen much sooner? I'm talking about EV/and EMOSS.

No, I think if you want to look at a significant chunk of revenue coming from EV in India, I think we're still looking at 4 to 5 years away.

[Operator Instructions] The next question is from the line of [ Shubham Jain ] individual investor.

And one more question I had with respect to India. So we have already EV buses coming in India with JV in motor launching some buses and even in [indiscernible] partnership as well as doing something in India. And you have some talks with the manufacturers, bus manufacturers and truck manufacturers, [indiscernible] Leyland or probably [ Shirand ] or Tata Motors and all these guys because we are anyway supplying to most of them from the camshafts side of business, right? In terms of starting engagements with them on supplying EV driveline kits to LTV and MCV, which these guys are producing in India.

No, I'm sorry. Yes, for sure we are in talks with OEMs, but I can't disclose to you with whom and what at this point of time.

And is there a possibility that if something gets justified, your plan for launching into India can get accelerated and move ahead of time?

Yes.

The next question is from the line of Vipul Shah from Sumangal Investments.

Yes, sir, can you break up your EMOSS revenue into retrofitting and supply to original OEMs?

[indiscernible] then you can send an email and we will give you the information.

Yes, you can please write to us. We will get back to you.

Okay, okay. That is fine. But I just want to know how scalable that business is, particularly supplying driveline to OEMs. I mean, can you give any ballpark figure what will be the content per vehicle in euro or dollar?

It's very hard to define content per vehicle because every vehicle is different. If you're talking about a 50-tonne vehicle, the content per vehicle is EUR 300,000. If you're talking about a small LCV, it's EUR 10,000. So it's very, very different. So hard to define. But I think what I can tell you for sure is that, because of the additional businesses that we have got from OEMs, that let's say the yearly revenue has increased from a mere INR 40 crores just 3 years ago, touching INR 150 crores, INR 160 crores this year. So based on the current run rate. So you can see that there is a lot of traction based on these new customers that we have.

So bulk of the growth is coming from OEM segment only, right?

The majority, yes.

[Operator Instructions] As there are no further questions, I will now hand the conference over to Mr. Karan Shah for closing comments.

Thank you very much for joining this earnings call for Q2 FY '22. I hope we have been able to answer most of your queries. And we do look forward to your participation in the next quarter. And we thank you again for your continued support in your company. Thank you very much.

Yes. Thank you.

Thank you very much. On behalf of Precision Camshafts Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

Thank you.