RACL Geartech Limited (520073) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen. I am Neha Bahal, Company Secretary and Compliance Officer of RACL Geartech Limited. On behalf of the company, I extend a warm welcome to all participants joining us for the earnings conference call to discuss the financial performance of the company for the first quarter of the financial year '26-27. I will be moderating today's election. Before we commence, I would like to draw your attention to a few important points. During the course of this call, the management may make certain forward-looking statements relating to the company's future performance, business prospects, growth opportunities and outlook. These statements are based on current assumptions and expectations and are subject to various risks and uncertainties that may cause actual results to defer materially from those expressed or implied. For the smooth conduct of the session, all participant lines will remain muted during the management presentation. This will be followed by a question-and-answer session, during which participants will have an opportunity to interact with the management team. Should you require any assistance during the call, you may submit your queries through the question-and-answer box or use the raise hand feature available on your screen, and our team will be pleased to assist. Please note that this conference call is being recorded. We are pleased to have with us today the management team of RACL Geartech Limited, represented by Mr. Gursharan Singh, Chairman and Managing Director; Mr. Jitender Jain, Chief Financial Officer; Mr. Prabh Singh, Chief Operating Officer. We are grateful to have them with us today to share the impact on the company's financial performance, key developments, business outlook and strategic priorities and to address questions from the participants during the interactive session. With that, I would now like to invite Mr. Gursharan Singh, Chairman and Managing Director, to deliver his opening remarks. Over to you, sir.

First of all, very warm and greeting from RACL Geartech Limited. Today, we are having probably our first investor meeting from -- sitting from our factory. So probably it is the first meeting -- from anyways. So as I'll not be speaking much about the numbers because numbers are already with you of the first quarter and within the course of discussions, our CFO, Mr. Jitender Jain probably will run through this number, but I'll just give you a brief how we are performing in the current year. We have closed almost 4.5 months or 5 months almost, and I think 7 months are there for this year. But in a nutshell, I'll say that despite all the challenges of geopolitical conflicts, despite all the challenges of severe energy crisis, which happened, which started from March 2026 and extended even now the crisis, India is still not energy crisis, but given the on saying that when the going gets stuff, the tough gets going. So we have been able to face these challenges collectively with your support, with your best wishes and dedication and commitment by all our supply chain partners, our employees and our customers also have supported us in this difficult time, not to our entire content, but whatever within this means. So we have been able to perform very good and coming times are also showing very, very encouraging. And since you all administered know the markets much better than us, the automotive scenario in India is emerging very, very fast, and all the segments that it is 2-wheelers, whether it's passenger cars, whether it is agriculture, machinery or the commercial trucks, they are generally growing. So that way, our domestic market is very growing good, and all the initiatives which we undertook in the past to focus our performance in domestic markets. So that has really helped us to increase our performance in domestic segment. Similarly, in exports segment, our performance is actually going very, very resilient and with a growth-oriented trajectory because in Europe, also economy, okay, not growing by the Indian standards, but by their standards, they have already seen the plateau in 2025. 2026, generally, automotive industry is doing good. Two-wheeler industry is doing very good. And I'm very glad to share with you specifically about KTM because many of our investors who are associated through this call for last 2, 3 years, you all must be aware that KTM had some difficulties because of some financial insolvency and all, but now KTM has bounced back, and it is really doing very good numbers. And in coming time, we'll be able to see a very positive impact on our performance of not only the Indian operations even our Austrian operations from there we are surveying our KTM as our prime customer. And I'm also glad to share with you that our business is, whatever businesses we had invested or capacity expansion of the new project, everything is going as per track, as per forecast and at most of places, either it is as per forcast or better than the forecast. This really shows that coming time should be very good. And I think thanks to you by big compliments you that you guys have always maintained your support, your confidence and your trust in us, in general, and me and particularly all our colleagues your trust and confidence, very, very inspired and were very motivated. Through the post of discussion, you will get a chance to listen to an and crop for the numbers or the explanations about what we did in the past and what we are doing in the future. And of course, in Q&A sessions, we'll be able to address your queries. So then, I'll really pass on now the stage to JJ, so kindly over to you, and kindly take it up. Yes. Thank you.

Thanks a lot, sir. Good afternoon, everyone, and a warm welcome to everyone. We'll start with the presentation now. Thanks. So these are the brief index of the areas which we will be discussing today, including the financial performance and other updates. Next, so this is the overview slide of our business. We are a little more than 4-decade young company. We started in 1983. We crossed the historical milestone of INR 500 crores last financial year. We clocked a consolidated turnover of INR 512 crores in FY '25-'26. We have more than 1,200 employees working for us. We have 29 active customers and more than 1,600 SKUs. Our product application applies to all industry segments, whether it is 2-wheelers, 3-wheelers, passenger cars, ATVs, commercial trucks, agricultural equipment, industrial gears, et cetera. Our head office is in Noida. We have 2 manufacturing locations. Our mother plant is situated at a place in UP called Gajarola, and our second plant is in Noida. We have 100% of subsidiary based at Austria, and we have 5 warehouses across Europe. Our product ranges from transmission gears and shafts to subassemblies to precision machine parts to chasis parts and industrial gears. We have credit rated A- listed on both the recognized stock exchanges in India. Our core competencies goes from gear cutting to precision machining to R&D to concurrent engineering, heat treatment to subassembly everything. And we have all the certifications, whether it's locally or whether it's globally required to run manufacturing operations in India. Next. So this is a slide for the total revenue for Q1 of '26-'27. In Q1 of FY '26-'27, we clocked a consolidated turnover of INR 132.60 crores. The breakup is INR 85.06 crores of exports, which is 64%; INR 40.54 crores of domestic business, which is 31%; INR 6.75 crores of other operating income, which is close to 5%; and very miniscule of INR 25,00,000 of nonoperating income. On a stand-alone basis, we clocked a turnover of INR 127.82 crores, which is INR 80.37 crores of exports, which is 63%; INR 40.54 crores of domestic business, which is 32%; INR 6.72 crores of operating income, which is close to 5%; and a very miniscule INR 19,00,000 of other nonoperating income. Next. Now this is the business share of -- on a net sales basis. On a net sales basis, our export turnover is up 66%, and our domestic business is 34%. And on a geographical thing, now this time, we have changed the pie, so we have now classified regions as Europe, India and Asia Pacific and North America. So Europe contributes about 59% of our business, India and Asia Pacific about 36% and North America contributes 5% of our business. This is the consolidated financial performance for Q1 of FY '26-'27. On a quarter-on-quarter basis, on a quarter-on-quarter basis, we clocked a turnover of INR 132.6 crores as against INR 108.7 crores last year same quarter, which is a growth of close to 22%. I just want to clarify this 1 thing that we have seen that this time in this quarter, we have very negligible nonoperating income. So our operating revenue has grown from INR 100.65 crores to INR 132.35 crores in this quarter on a consolidated basis, which is a growth of 31.5%. Our EBITDA has grown from 27.29%, which was 25.11% to INR 32.19 crores, which is 24%, which is a growth of close to 18% on an absolute basis. And PBT has grown from INR 11.26 crores, which was 10.36% to INR 16.82 crores, which is 12.68%, which is a growth of close to 50%. Next, so this is a snapshot of quarterly performance on a stand-alone basis. On a quarterly basis, on a stand-alone basis, we have clocked a turnover of INR 127.82 crores again as against INR 107.96 crores achieved last year same quarter, which is a growth of 18.4%. Again, I want to clarify here that our operating revenue has grown from INR 99.91 crores in Q1 of last year to INR 127.63 crores in this quarter this year, which is a growth of 27.74%. Our EBITDA has grown from INR 27.23 crores, which was 25.22% to INR 32 crores, which is 25.04%, which is a growth of close to 17.5% on an absolute basis. And our PBT has grown from INR 11.25 crores, which was 10.42% to INR 16.66 crores, which is 13.03%, which is a growth of close to 48%. This is a head-wise comparison -- and versus Q4 of FY '25, '26, so our -- I mean, comparison, everyone can look at. I just want to showcase our consumption of raw material is close to 28%. Employee benefit expenses close to 12%. Our finance cost has come down significantly now because of the payoff of the loans last year, so which is now almost 4.81%. Depreciation is 7.2%, manufacturing expenses 33.5% and administration selling and other expenses of 9.44%. Comparison of all these expenses versus Q1 and Q4 is displayed for your reference. Next. So coming to the general updates, I want to share a very proud moment for RACL Geartech. Your company has been recognized as the best organization to work 2026 by ET Edge, which is an initiative of Times Group. It showcases that we believe in growth, but we believe in inclusive growth, including all our employees because they are the pillars. Human capital is a pillar, which basically helps us to achieve and to come where we are. So we have been recognized by them as the best organization to work. It basically showcases the people-centric work culture, which we have. We focus in on developing leadership within our organization. Whosoever has visited our plant, we have -- they have met quite a few people who have joined us as a management trainee quite a few years back. And today, they are heading 1 or 2 other departments and all. So we believe in leadership development. We believe in workplace excellence. We believe in employee engagement, and we are a responsible organization who believes in achieving the growth sustainably as well. Next. So coming from the previous slide, as I said, that we believe in inclusive growth. For everyone's information, we organize is our annual awards ceremony, we reorganize it every year. Last year, we could not organize it due to some unavoidable circumstances, but we have organized annual awards ceremony this time. And this time, it was organized at Jim Corbett, and we have taken all senior employees there. And we basically recognize the best department of the year. We also recognized Chairman's Award for Exemplary Leadership, which is given to 1 employee across the entire organization. And we also recognize Emerging Leader of the Year and Employee of the Year. This we recognize at every level and in all our locations and all. So this event -- I think this was first time, sir, we had done it outside?

No, second time.

Second time. Yes. So it was a good weekend spend together. -- and recognition of the people. And obviously, it actually helps us to connect with all our employees on a personal basis as well. Next. So as we had declared last time that the total CapEx, which we are doing, so we are constructing the entire heat treatment plant afresh. We had disclosed last year that we are replacing our entire heat treatment plant. So we just thought that it's our -- we should give an update on that. So the heat treatment plant, its foundation was done on 21st of January 2026, and these are the actual pictures of 24th January, 16th August and 24th of August. Our construction started on 21st January. We are expecting the building and construction to be completed by October 2026. Just to update all the equipments which are required have already been ordered, and we are expecting all equipments to arrive within September to October 2026. And we will install and do commissioning from October 2026 to December 2026. And as of now, if all goes well, we are planning to start the trial production by January 2027. This heat treatment plant as we had explained earlier also, currently, our heat treatment plant is running on LPG. And this heat treatment plant is basically will be completely run on electric-based furnaces, LPG is an outdated technology. And anything you want to add on heat treatment.

Exactly because we already anticipated that this energy crisis, which eventually as now hit the entire globe. We already anticipated about a year back. We took the actions for this inclement are all long dewater. So hopefully, by end of this financial year, this plant will be fully commission and entire production listed to the new treatment facility, which is going to be state of the art technology in line with all our machining processes. Our heat treatment plant was a little outdated also because we did not replace this equipment, which are most of our equipment are over 20 years old. So they are actually all at -- they have already completed end of their life. We were just running an extended life. Now eventually, this new equipment will be matching with our organization program, then we'll -- just over to you to, JJ.

Thank you, sir. Next. Now this is a new dashboard, which we will be now sharing with all our investors in our investor call. So as I have explained that we believe in growth, but we believe in achieving the growth on a sustainable and responsible manner. So we monitor all our carbon footprint on a monthly basis. So this is the ESG dashboard for Q1 of FY '26-'27. So we had generated Scope 1 carbon emission of around 750 tonnes and Scope 2 carbon emission of around 321 tonnes. Now I'll just explain how the Scope 1 and Scope 2 gets calculated. So as you all are aware that our Gajarola plant is running entirely on 100% green energy, so as of now, we do not generate any carbon emission from our Gajarola plant. So Scope 2 is basically the generation of carbon emissions from electricity sources. So right now, the 321 tonnes of carbon emission, which has been generated under Scope 2 is predominantly from our Noida unit and from our corporate office. In Noida unit also, we are planning to set up our rooftop solar and all. So once that will set up, so hopefully, this carbon emission of Noida unit will go down. Scope 1 carbon emission calculations is done through other sources. So currently, our majority of Scope 1 carbon emission is coming from fuel gas for HD, which is LPG. So 73% of our carbon emissions under Scope 1 is coming from LPG right now. And as we have shared that we are shifting our entire heat treatment plant to electric. Now once that entire retreatment plant will be shifted to electric, then that consumption of LPG will go down significantly. So then we will be able to reduce our carbon footprint of LPG gas under Scope 1. And 23% of our Scope 1 emission is currently coming from DG set which is difficult for us to control, and the balance of 5% is coming from fugitive unit emissions and company-owned vehicles. So this is the dashboard on the ESG front. Next. Again, coming to a responsible organization, so we have shared our initiatives on the CSR from CSR perspective earlier as well. So we have we are sponsoring education of around more than 400 kids of a school in village in Noida. We are also sponsoring women empowerment session in Noida also. This slide is basically -- so now we have decided that apart from funding the primary, middle and secondary education of these students, we should also support students in higher education so that they are able to eventually get a job and get settled down in their life. So this initiative was started in last financial year, '25-'26, where we had supported 13 students in completing their higher education, which basically helps -- which is basically some skill development to get a work profile. So they had done from Federal Institute of Hotel Management, Jet King, ACACADMY, and there were courses from hotel management, cloud computing and radiology. So these 13 students, higher education is being sponsored by us for last year. This year, we have selected 14 students for '26, '27, where we will be sponsoring their higher education. Again, these education are in cloud computing, AI and radiology. So this -- basically, our target is to help them in their primary education at the school level than providing them at a higher education level, which is some skill development cost so that eventually they are settled down in their life. So yes, that's it from our side. So I think we are open for questions.

Is there any preregistered questions?

[Foreign Language] sir.

No sir, there are no preregistered questions. Mr. Sen, we have muted your mike. Could you please ask your questions?

My first question was regarding KTM and so -- can we assume that it has made a full bounce back and under the Bajaj ownership? Can we expect a higher share from India sourcing now?

Actually, since our relationship is always with KTM Austria. So definitely, our business -- private business remains always with them. And what Bajaj is doing in India, that is purely under Bajaj's portfolio. And until now, we have no such direct communication with Bajaj for the India production. But definitely, it's an open world, on will definitely now to that. But our primary focus remains with KTM for Austria business.

No, no, I was just trying to understand that sourcing from India and developing countries is something they have mentioned that they will increase. So about that.

We are already exporting to KTM. We are already exporting to Austria. And we are exporting to Austria, not today, last 15 years. So our relationship is already very well established with them. And for all their new models, which are being launched now last year, of course, now under management in ownership of Bajaj, we are already getting new business opportunities from KTMs. But yes, you're right, for Bajaj India are a jump now to work with there. But we are already working in a big way with Royal Enfield and TVS to eventually are already very well established in the Indian [indiscernible] will be there to write them also. Yes.

And can we expect the volumes to come back to normal soon?

Since I already explained you, KTM already bounced back, and they have already arrived almost pre-Covid levels. And now, in fact, there actually model year '27 means the vehicle, which now they will start producing from September. They will be classified as model year 2027. They have very good plans for 2027, and it is back to normal or slightly above normal.

Mr. Piyush Jain.

Just a couple of things. Any new update from the last quarter we discussed in this quarter with respect to any client or some program getting started or something? And what is the status of this BMW SOP, which I suppose should be starting from October '26, if I'm correct?

Yes. Everything is going as per plan. And there are a series of approvals. So level 1 approval is already done. And conditional shipping have already started. And the final approval, I think now -- 24th October?

Yes.

So 24th October, there is finally visiting us as far as final sign-off. So from there on, then we are -- in terms we've already started making some pilot supplies, which I told you as conditional approvals. And those are now the parts, which have already started moving. They will be put into the customer carts, until now, whatever who are producing they are either the validation cars, testing car or the road drive cars and phone or the demo cars. Now alive already started from a company or as per gas also. Everything is going as per plan.

So what I understood BMW supply will start from October, November, correct, sir?

Yes, exactly.

Okay. On last 1 more thing, sir. Can you just give a little bit more insight on the Royal Enfield deal. Last quarter, which we announced and we have got this impanelment and everything. Anything which you can share? What you cannot share is okay, like what type of size, what -- how many models and when it will start and how it will add -- and with this because this is a very big domestic order for us, and how it can open more revenues of the higher CC bikes and something? And are we discussing with any other domestic or any export new company, which right now is not in our client list?

I'll request probably Prabh from Royal Enfield if you can really -- you have more updated remits. Please kindly lighten the audience.

Mr. Jain, can you hear me?

Yes, yes. I can hear you.

So on the volume field, yes, we did away from January onwards, the commercial supplies did start. So we have already done around 8 months of turnover. As we said, we have been nominated for roughly 10,000 sets per month. When I say set, motorcycles. We are working on that level. So we were ramping up earlier, and we reached to a level of 7,500 to 8,000. We are sustaining that level. So the model, of course, we did mention the engine is 350 cc model, we are not clear and we can't disclose. However, this is a project which started, but there are multiple projects, which are under development for the new upcoming variants or they are doing some changes to the engine, and they are launching some new engines, which are still under confidentiality. But we will work on all such platforms since they usually work with not much many suppliers, they either make it in-house through their sister company or they have a couple of suppliers in India who are working transmission gears.

And what could be the size of this business can become not maybe today, maybe in 2 years, 3 years down the line? Or do we see any...

Yes, sorry, sorry. Please complete yourself.

Yes. Because what I understood, we are not doing the entire transmission gear box or something. We are doing some parts. Do we see ourselves moving towards from the parts to the entire transmission gear box or something in 2, 3 years' time?

So it depends on the customer. We are doing for their competitors from last 10 years. So it is for them to decide if they want to use that as a service. But right now, they want to do the assembly inhouse, but we are doing the entire loose component. So they just have to assemble and buy the shafts from their other supplier, but we are doing it for other companies. So we can do it. That is not a problem. Only thing is they have in their strategy fit, quality norms, whether that comes into it is their topic. On the size of the business, at the moment, we are not disclosing because it is still developing as a relationship and to also keep our competitive edge because our competitors then also know what kind of volumes or pricing we are doing because simply, you just multiply by the value you get the price since domestic market is highly price sensitive, so such things we don't disclose, but it's a sizable business.

No issue. Just last thing, this last thing, but I mean never discussed this. Can we give some color on the -- like in many companies in the auto ancillaries companies, give this a value per kit or realization per kit, can -- do we have such type of some measure, number or something where we can see the value of our product per kit to the customer has increased over a period of time, 2, 3 years or where right now it's standing. Can we have something?

No. I will give a red color to that. So we don't really disclose that because as I said, that is the competitive edge. If I know what price I am selling to my customer, my competitor can send at the same price. So that competitive edge in domestic is pricing. So we don't really disclose on the domestic business.

Okay. Fine. Last thing only how the business with Jedis is going on, any substantial volume increase happened in the last quarter or something or in the company quarter.

In ZF, in the last few years, as you know, there was a bit sluggish less due to the end product, which was the OEM car not doing well. That is why last year, we had to face a certain decline in volumes. That now product that there is a platform sharing. So it was going to a specific very high-end premium car. Now, it has come down to their main bread and butter SUV, which is just launched. I'm talking about the end customer. So that is an x 5. So now with those volumes coming in, we are now seeing that traction coming back. We are working at 50% to 60% utilization of the installed capacity. The peak year of revenue for this specific project initially was 2028. But since that couple of years went away, they convert they shifted to 2030 now. So maybe next couple of years, this should pick up. But it is, as I said, very much better from last 1, 1.5 years. And another good thing is the customer has shifted the assembly plant to a low-cost country from within Europe to East Europe. So that also helps customers to be more competitive to their end customers in returns, giving a bigger share to the project. Parallel, though this is still very early in fancy stages, customer is talking to another OEM for a similar project for the Chinese market. So if that comes in, that should really change everything we have put here. But still, these are the very early updates. But from ZF, another project, which you already know, it's electric power steering segment for which we are now investing. That should be -- that is on the track. And I think from end of 2027 or middle of '28, the commercial supplies for that should also start and that goes to an American OEM and that is also going to be a big project for us via ZF.

Okay. Last thing, how much is the CapEx will you be doing this year in '207? And what is our debt position will be remain in the peak debt during the year?

We have already disclosed to the stock market -- it was I think...

Sir, 77.45%.

Yes, 77%.

Okay. Okay. Sorry, I missed it.

Actually, we already explained you since out of the about INR 40 crores, we are investing only into the treatment investment actually real term is stock CapEx. It is basically the replacement program of the old equipment, remaining editions part of additional capacity expense.

Mr. Shaw?

So my first question is related again to the Royal Enfield business. Many OEMs which were making these gearboxes components in-house have started to outsource these products just like Royal Enfield. So is there a particular reason or pattern that we are seeing in the whole industry? And is there more opportunity coming away?

So Mr. Shah, I hope I could understand, you are saying that many customers are adopting this outsourcing strategy? And does that help us in the long. Is that the question?

Yes.

So you're right. See, eventually, an OEM would like to focus on making the assembly. Assembly is the case of the supply chain. So they would like to taking that commanding position. if you're putting your investment people costs in making the components as well, then we lose the scale at which the customers are now wanting to grow. Earlier gears of such critical products, wire need in-source work because there was not a very credible and established supply chain which were able to meet such specific moderate volume batch type -- at least I can speak in the terms of gears, like we are now creating a niche of our own in the premiumization of this entire product portfolio of these companies, for example, TVS is now launching motorcycles above 350 cc more than what they did in the past. The entire gear train for all of their motorcycles, we are the single source for even the platform under Norton or is the pace you are seeing coming in now Similarly, KTM has always been with us. Royal Enfield taking a clue from that also decided to now maybe coming to suppliers like us. There is another big OEMs motorcycles, which are now wanting to expand their presence in premium industry. They're also approaching us. So yes, this outsourcing is something which is becoming an increasing factor because like you know, Royal Enfield is investing roughly INR 6,000 crores to INR 7,000 crores in setting up 1 new plant near Andhra. So their focus will be to make motorcycles not to lose parts. So that is how this is the shift you are witnessing.

Got it. On second side, I also have a very preliminary question. So the gears in high-performance vehicles that we are targeting. I understand that the micron level and the precision is very clear and minor. So other than that, what is the difficulty in making these products?

It is a very small question with a very broad answer. Difficulty is not in making the product. It is -- anybody can make samples and submit 100 parts. It is consistently doing same thing on a large-scale volume where not everything is checked, not every parameter can be checked on a 100% basis. So you have to rely on 3 things. One is the process capability. Second is the traceability of such areas where issues come, how do you go back to clarifying to the customer? And third, which is most important is, right now, a lot of these procedures are orienting to a lot of technologies which are required since -- if I talk about even electric mobility, EVs coming in and such high-performance motorcycles, you are now motorcycles, but they run at very high RPMs. So then you need processes like branding or certain or other areas which can give you a very, as I said, consistently producing, let's say, if I'm doing 100,000, 200,000 parts per month. if I check each and every year for the credit characteristics, it takes roughly 4 minutes to maybe 30 to 40 minutes to check 1 part. One can't do it because it is impractical, cost-effective, so you need to depend on the process on technology on people who can do it day in, day out, without any issues. Customer has a runout problem of, let's say, even by 5 microns extra to the bike. He simply asks Boss, how many vehicles have similar parts that can have these issues, how many are in production, which they pads, which takes -- so there are so many things. So customers don't want to take risk, so eventually, they were always doing enough house because everybody believes I can do it best, right? So that is how the approach was. Now, with the evolution of supply chain in the country, of course, there are other suppliers who do similar hypersaline products. So this is now the trust on the supply chain from OEM side has increased, and that is how it is start forming into growth for companies like us.

Got it. So just on the finance side, in this quarter, our tax has increased a bit more as compared to the previous quarters. Could you just throw some light over there?

So Mr. Shah, we had explained it in the profitability side, profitability comparison slide. Our higher tax liability -- current tax liability has come because of the difference in depreciation and gratuity as per income tax add. And our higher deferred tax liability has come because there is a change in the surcharge rate of income tax. And because of which, I think the difference as per income tax at the difference of the entire block, the deferred tax liability gets created. It is because of that. So we had given that explanation of the profit entity comparison.

Mr. Abuzer Jain.

Sir, I have deliberately tried to use some other instrument today instead of my laptop. Otherwise, you can always not hear me. And my first question is that, sir, as you and Prabh have been repeatedly, I think over the last 1, 2 years, been mentioning, that RACL is working very hard on honing its capabilities and further improving our competencies in niche products and manufacturing on the precision machining as well as gear shafts, which is of a core area. So I wanted to know that on the non-auto side, what are the areas that maybe the company is trying to focus so that in the long run, the growth for the company gets supported from projects, which are on the non-auto side also? So as we see that globally, robotics is now becoming a big area for everyone and for automation and all and maybe the robotics involves a lot of usage of actuators where maybe some gears are used, so is that 1 of the area where we may look? Or is there -- which are the other areas on the non-auto side where you guys are trying to make effort and where at least in the next 2 to 3 years, we can see some revenues for us?

Abuzer, I'll answer the question. First of all, you are right that we have already made a very good brand presence as RACL into the premium product category, whether it's estate motorcycles or commercial trucks, and now, this business is eventually growing at its own pace and in a good place. So to answer your question, we have also started working very closely on some -- we identified some areas where we'll like to put our focus. And I'm not saying when we have identified it as well implement everything or will not implement anything. We'll element all every one. But a few areas there, we are actually identifying -- areas which we have identified. One is actually aerospace for civil aviation and that is an area which we also see is growing very fast and indications are going big way, basically for Airbus. Boeing is still not having such big forecast, but Airbus is going in a big way. So we are also thinking there is an area where we can really utilize our skills because we are a company with very, very stable selling positions and ESG so probably the same technologies we can use for aerospace for civil aviation. Second area, which we are identifying is a little bit of diversification you use a lot of actuators. We are also trying to a little bit in such way, maybe with small micro motors or actuators, all some stuff. So that is the area where we are indefinite also has a huge potential. And hardly, which you have told, robotics, now this area actually -- it's very clear that it has a huge demand for the gears itself. So technically, they have stalled a mechanical components and -- but their gears are of different concerns, different designs. Some of the technologies which we are already having are capable to this humanoid and robotics, but a bit of challenges in this space, and there are not many Indian manufacturers who have wanted into a field humanoid and robotics. And if there are some, but they are at infancy stage. Chinese, difficult to crack. If we're going to crack because China has its own very well established by then. For the Europe our target area, and we are exploring this avenue within European continent. So hopefully, something good will emerge because we have this is very clear that we have identified the use has come because for next 2, 3 years, visibility of automotive, we are already that we can really scale up our processes. But these are a few areas which we have told you. Other than this, is manufacturing, we have already told you, industrial manufacturing, we're only doing for Bharat Heavy Electrics and some other companies. So this is an area which already as a pilot, we are already doing it. And in coming times, this will also have a potential for scaling. But as I told you, yes, it will take maybe another few months to 1 or 2 years when we are able to zero on and then we start executing from actuators. So we stay connected, and we'll update you as and when something right.

Yes. Sir, so on these nonauto fronts, while you are making the efforts already and you're identifying the areas to go, but is there any investments that you guys have already started making in your plants which you would need to address these opportunities or that is still far away?

Yes investment in the form of our thought process and efforts, it's not papers carrying for put our papers definitely. We have started putting our cement resource results. As you know, first of all, we know each other for quite some time. We never worked with a vision. We never start mining, and we are very sure as this will develop it with of. And we also have a very, very clear strategy. We've always gone on a concert of incubation. We will now -- identified this, and now, we spend INR 50 crores or INR 40 crores or INR 100 crores on this project, no. We just incubate -- on a small scale, then we test the track. If pump or any case in today's business, no business is [indiscernible] were integrated, will make it stable and then we will scale. This is always our strategy and that same strategy we are acting in the new fields also.

Understood, sir. Sir, the second question was on project winners for the electric sports car. So I assume that the final production starting for this is slated for October, and if you are getting any indications from the customer on how this is looking likely is it as per the expectations, which was shared by the customer? Or is it difficult to comment? Like if any correction you can give on that?

I think you are a bit clear because there was a question we have answered. Project is going very well as per track. And our Level 1 approval has already been granted. And final approval is that TVS is coming precisely as 24th October. And after that, the load sign-offs where based upon our level 1 of rule, which is a normal process of the customer. Some pilot suppliers have already started shipping by sea transport board, which eventually will be put into the customer cars. This is going as per track. There is no delays and nothing. And they are given the forecast, which is as per the forecast, given the type of getting business. Resona is launched. So along with customers, we have to also keep the fingers cross. The end user accepts the vital because eventually, we all are working part and who is actually that consumer of those cars. But so far, I'll take it going ahead.

Okay. Understood. Understood. Right, sir. And the last one, I think on KTM, also, you gave some comment earlier in the in the opening remarks, I'm not sure in the Q&A initially also it came or not. But I just wanted to know that, do you expect KTM to come to the run rate, the higher -- highest run rate that we used to do earlier anytime soon?

I have already in the social media and Indian newspapers, KTM has already launched in new Duke 790. And there is a very, very good comment market that vehicle has very, very good acceptability in the U.S. market, and it's a totally new product. And so hopefully -- and I have not seen the vehicle because many months are not resting KTM. But from the picture, they have made a very, very versing vehicle and the entire kinematic for that is going from your company. So hopefully, that should be net, I already told in our monopoly remark and 1 other answer also that PPA is already doing very and they have reached very, very good respectable volumes and forecasts of the coming months is very, very good.

Amazing, sir. Great to know, sir, and always good to interact with you. My best wishes always with RACL team.

And congratulations that we have been able to speak today on the call.

Yes, sir. I'm more glad than you.