Rico Auto Industries Limited (520008) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Rico Auto Industries Q1 FY '24 earnings conference call hosted by S-Ancial Technologies Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vijay Gyanchandani from S-Ancial Technologies Private Limited. Thank you, and over to you, sir.

Thank you. Welcome to Rico Auto Industries Q1 FY '24 Earnings Conference Call. From the management, we have today Mr. Arvind Kapur, Chairman, CEO and Managing Director; Mr. R.K. Miglani, Executive Director; Mr. Rakesh Sharma, CFO; and Mr. B.M. Jhamb, Company Secretary. Now I request Mr. Arvind Kapur to take us through the key remarks. After that we can open the floor for the Q&A session. Thank you, and over to you, sir.

I'm sitting here in the boardroom of Rico Auto with my colleagues, who are all here with me. And firstly, I'd like to apologize for having the conference -- investor conference call today. We should have had it on the same day as the Board meeting, that is on the 11th. But unfortunately, or fortunately, one of our directors was overseas. He was in Canada. And so the timing, we finished our call, we finished our board meeting around 06:30 in the evening. So then it became difficult to have an investor call immediately after that. So being a long weekend, Monday's we were advised that there's no point in doing it because many people will not be able to participate. So the earliest was 16th. In future we are going to take care. And in case such a situation arises, we will have our Board meeting early morning and so that by the evening, we can definitely have the call, in case there is a long weekend ahead. Otherwise, we assure you that in future we'll have the conference call either on the same day -- investor call, either on the same day or the following day. The market seems to be good at least in the passenger vehicle segment. And in general also, the market is good, if you look at the real estate, et cetera, because if you look -- going by the GST collection that's taking place, that's been on the positive side. And so things seem to be shaping up in our country. We are very happy on that. The country is now getting into election mode. And so I think the next 1 year is going to be excitement both politically as well as there would be many freebies and other things that would be distributed in the market. There's a lot of investment and a lot of focus on semiconductors. We have all suffered because of that in the past. But we are hopeful that the investments that are taking place in the country, there would be enough available in the country itself. But at the moment, also there is enough available in the world. There could be a problem of choice, but the semiconductors are available. And not many productions are being lost because of that. But there could be some redistribution or reallocation of the semiconductor because of the availability of any particular type of conductors acquired. But a lot of investments are going to come in, and that Taiwan is investing, Japan is also investing and the U.S. companies are also looking at India very positively to invest in the semiconductor industry in our country. So the passenger vehicles are doing well, and there's still a waiting for the passenger vehicles. And like I said, the last time, the more expensive the vehicle, the more the waiting. 2-wheelers is still a challenge. They keep on fluctuating. They are not up to the best that we've had. And it is -- we are not very certain as to what the future is. They keep on telling us again and again that the next quarter is going to be better, or this quarter is going to be better. Now it's a season time, which is around the corner, and we do better, but it does not happen. And we are hoping that there would be better sales and the rural markets actually pick up. If you look at the commercial vehicles, they were down in the last quarter, but this quarter there seems to be bouncing back. We are hoping that the market would remain on the higher side. And the bus market would also improve further. So we're looking at that. The exports are okay, and we've done better than last time. And there's a lot of development that is actually taking place, a lot of sampling, et cetera, et cetera, has also been done, and the approval process is on. So gradually, our exports will also go up. We should see an improvement taking place. Now coming to the quarter, there was a reaction and there was a disappointment that was there. We've had -- as far as the turnover is concerned, it's been less. One is one of our customers, they were down by more than 25%, 26%. And at the moment, there is no visibility as to their revival. So we're not very sure. We are talking to them, and we are asking for better pricing and/or we are going to free the footprint which is lying in those lines so that we can use our equipment for all the new programs which are coming in, so we don't have to do major investments. On the 2-wheeler side, our main customer, Hero, they were down, and their market share also came down. And -- but we as a company, we took a tough decision this time that we actually reduced some volume, our orders that we are supplying primarily because there was a dispute as far as the pricing is concerned. And we've been requesting them for almost a year and nothing has been done. But now there is some movement that is taking place, but we took a tough call because what has happened was every component of supply, we were losing lots of money on the supply. So we took a tough call, and we did bounce it off the -- Board also told them that our turnover has come down, we have promised better turnover, but it will come down. But the main reason is that we cannot sustain the losses which are coming in because there is no end in sight as far as the price is concerned. Now the talks have taken place. Hopefully, in the next 10, 15 days, there should be some settlement that will take place. It is not only us who are suffering. It was -- I think the whole supplier community was actually suffering, 2 billion industry. So we are hoping that this would get okay. And -- but taking advantage of the situation, what we did was we did approach aggressively the other customers. So that is the Suzuki Motorcycle and Honda Motorcycle and Royal Enfield. And they have approved our plant. We have started the process of sampling and sample making, et cetera, et cetera. The pricing that we are giving is a lot better than the pricing that we were getting earlier from our main customer. So there, if you took advantage of the -- what we did last in the last quarter, and we got our approvals done. And hopefully, by the end of third quarter, our supplies should commence to some of these customers. And this process is long. On the profitability front, there is an increased cost of manpower. I must tell you here that this is the quarter when our -- we have a 3-year rate settlement with our unions. And the installments get due in the first quarter of the year, and that's why you see a change there. On the -- we did reduce our production. So -- but we did not -- shout out to the worker because they're all trained manpower, because we knew that if at all we reduce our production level for certain components, we would be requiring those people to come back to work with us in any case. There was minimum salaries which are -- which the government allocates. Those were also revised. In Gujarat, they revised it by almost [ INR 400 to INR 700 ] per month. And -- how much is it, about 20%?

Over 20%.

It's over 20% increase that they've given and other states have also done the revision. So that -- whichever state is actually heading towards elections, they keep on increasing the salaries and so that also has an impact on the salaries. But we are very confident that by the end of the year, that will level out, and we already have plans to cover up the total cost of the increase in salary cost. And by the end of the year, we will be back to whatever we had achieved last year. Our annual increment would be exactly or if not lesser than last year or better than last year. So that we are very confident. On the power and fuel, this is a seasonal increase that you would notice. Every summer, we need to switch on our air handling units, the cooling arrangements and other things in the plants and the cost actually goes up. If you compare it to the last year's same quarter, you'll find that the power cost was about the same level. Having said that, there was a slight price increase also, but that was not major. And -- but we are -- this also will be covered because it gets balanced out for the -- in the balance part of the year. And having said that, we have also getting solar and wind will power. Solar will be available in all the major plants by October end. And the windmill in Chennai would be available by January end. So we've already taken steps. We made the investments which are required to be done on this, and there is work which has already started on this. So this has also helped us reduce the power cost. So I think we should be -- by the end of the year, we should be -- our power cost will be lesser than the previous year. This will also help us to -- but despite all this, we could maintain a double-digit EBITDA. And -- but we are very confident that by the end of the year, our EBITDA would be better than whatever we achieved last year. This is as per the promise that every quarter we'll see change. But this quarter has been exceptional, primarily because of some of the tough calls we had to take, but we had to do it, there was no choice that was left for us. Okay. So then there is an increase in inventory also. We'll talk about it as we come to the question-and-answer. All right, that is it from me, and I think that's -- I think we open it to the question-and-answer, and I'm sure people are waiting to ask -- to be asking us the questions.

[Operator Instructions]

I'd like to add one more point here. In the last meeting, we had said that our turnover this year will be in the reach of INR 2,700 crores, including -- which included about INR 80 crores to INR 100 crores of defense supplies. That is -- there will be a slight revision here. We are now talking of INR 2,600 crores approximately. That's what our turnover would be, but INR 80 crore to INR 100 crores of defense supplies. That's one thing I would like to add here. Yes, please, carry on.

[Operator Instructions] First question is from the line of Harsh Vasa from SBI Capital Securities.

So actually, I just missed out on the few points which you had told earlier. So what was the reason behind the decrease in turnover, like what was the reason behind that?

Come again?

The turnover was less due to what? So actually, there was a lot of disturbance coming, so I could not hear. So I just missed on that. Could you please repeat it?

No, you are asking why the turnover was less.

Yes, you told that there were some 2 regions like one of your customers is…

Stop, I get your question. One is that Renault, one of our customers in Chennai plant, their productions have come down by almost 25%, 26%. The exports are also down and the domestic market are also down. That is one. And number 2 was the supply to our main customer, the 2-wheeler plant, Hero, they were also down. And A, they were down; B, we also curtailed some of the supplies to them, primarily because the prices that we were getting were not fair. And we have been requesting them for almost 1.5 years or 1 year actually. And now there is some movement that's taking place. And hopefully, I think in the next 10 to 15 days, that should take place and we should be back to normal.

Next question is from the line of Deepak Poddar from Sapphire Capital.

Sir, I just wanted to understand, first, I mean you spoke about a lot of -- I mean, disappointment that happened in this quarter, right, the problem of the Renault plant even on the Hero side. So I just wanted to understand, I mean, why you didn't give a heads-up to the market. I mean we had a last call on 30th May, right, when we were like 2 months into the first quarter. So why was this issue not discussed in the fourth quarter call where you could have highlighted, right, that these were the issues that we are facing right now. I mean this would not have cropped up in 1, 2 months, right?

What you're saying is correct, we should have taken it up, but we were hoping that the settlement work would have taken place and we would be back to normal. And Renault also we have been discussing and they kept on saying give us another 10 days, 15 days and the exports are going to start again. So this was the commitment that the customer kept on giving us again and again. And as far as the 2-wheeler part is concerned, we were questioning them almost on a daily basis, and they had assured us that the customer would pick. Now they've been talking about the sector for almost -- we've been asking about over a year, but they've been talking about it [Foreign Language] for last 6 months. So one, it is hope against hope that it's going to be [Foreign Language]. This is what actually happens. So what they're saying is correct, we should have brought it up in the last meeting. That's -- we stand the way and we'll be able to do that.

Yes, that would be a request that if you find any such issues, I think that right in the con call, you should have put the heads up or something like that to the investor community, right? This is what the…

Yes. You're so right. I think we should have actually taken it all up last time. That is...

The reason I'm saying that even in the last quarter, you were of the view that quarter-on-quarter, we would be seeing EBITDA margin improvement, right? We were at 12% EBITDA margin…

Yes. So we were hoping that the price settlement would take place [Foreign Language] in any case. So we were very confident of that. But the delays just kept on, kept on, kept on. And so the water went above our head. We are sorry for that. We will keep this in mind. We will do that in the future.

Okay. Sure. And now on the defense side, I mean, you said INR 80 crore to INR 100 crores. So aren't you seeing more traction on the defense side because there's a lot of optimism in the segment, right?

No. The optimism almost differ this, but we are committing INR 80 crores to INR 100 crores primarily because that's the first time that the big orders are going to start growing in. And once it starts growing in, then it goes up to quite a large number. But defense is -- there are some things we've been working at defense for last 5 years. And there's always a split between the tougher dynamics. So we get very weary of that. This will be actually -- result. We did not commit the larger number, to be honest with you.

But are we bidding -- I mean, are you increasing the bidding pipeline in the segment?

Yes. The bidding pipeline and the number of -- and the variety of item which is -- which are there has also gone up. And there are -- the orders have been placed in some cases, but until we get everything in place, we have not -- we did not talk up the number. Let me tell you after so many years is the first time we're actually getting excited about the defense of what is happening. And even so, we will share with you what all we will be planning in the next meeting or even we'll try to have a meeting earlier in that once the orders get final and we start working on it.

Yes. Okay. Fair, and I understand. And now you're saying in the EBITDA margin front, by year-end, what we expect to -- will be better than whatever we have achieved in FY '23, right? So you expect EBITDA margin to, I mean, fall down further in coming quarters?

No. We will be 11% plus for the year as a whole.

11% plus, including other income, right?

No, no, no, no, no.

Excluding other income?

Yes.

EBITDA margin element -- and in terms of business, I mean, do we have aspiration medium to long term of 14%, 15% kind of a margin aspiration? Can we have that actually or will…

Internally, our target is that by next year we should be in the region of -- next year, we should be 12% plus. Between 12% and 13%. And what is happening is the newer items which are coming to production, those are better margins than all the older items which are there. So -- and the new items, we are building are all in the better EBITDA level. In some cases, we are talking of much higher EBITDA level.

12%, 13%, right?

Yes. Once the defense gets in, what you're saying we'll cross that very easily.

Okay. Fair enough. All the very best.

Thank you so much. We are sorry for not informing the last time.

[Operator Instructions] The next question is from the line of [ Dipesh Sancheti from Manya Finance ].

[Technical Difficulty] it would really help, and we won't have to repeat the questions. Hello.

Yes.

Yes. Just a request for the investor presentation before every call. I just wanted to know about what is the debt situation right now?

The debt situation remains the same as it was at the end of the year. And by this year-end, like we promised earlier also that our debt will start coming down. At present it is at the same level. There is no increase or decrease. Although we have made repayments also, but working capital is also -- that need is there because of the expanding business. So because of that, at present, it is at the same level.

Okay. What is the percentage of sales from Hero in this quarter?

28%.

And from the EV business, how much are we getting? How much sales -- how much percentage of sales are we expecting in this year?

We are expecting 12% plus, but I can give... So we did 12% last year. This year, we are expecting to be 15%.

Okay. And are we supplying to any pure EV players, or are we are only supplying to Toyota as a major customer in the hybrid model?

No, no, no, no. Our main customer is BMW in Germany. I mean like, we've been supplying for the last 8, 9 years now, not hybrid. You are talking about pure EV, yes?

Pure EV, yes. I'm talking about pure EV.

Yes. We have been supplying to BMW, to PSA, Renault for the last almost 8, 9 years now. Development started in '16 and we've been supplying since 2017, '18.

Okay. And are we looking at even supplying to any of the local players over here in India?

We will supply to anybody and everybody. As far as the passenger vehicle is concerned, what is happening is that it's a very slow traction that's actually taking place. And more so it's in the 2-wheelers and the 2-wheelers probably pick up much faster than the passenger vehicles. So what we are estimating is by 2030, the passenger -- sorry, the total would be a about 7.7 million to 7.5 million vehicles. Out of which, 50% would be -- 50% to 55% would be ICE engine and about 25% to 30% would be the hybrids and about 15% to 20% would be the electric. That's what we are estimating. And that's what we were interacting with the government also that we are estimating. And because there's a lot of infrastructure, I think which are required to be still installed. I think that also is taking place. And -- but we are interacting with anybody and everybody, and we are always there.

And are we planning any CapEx in this year?

No, there is -- what is happening is, we -- the CapEx is normally is about I think INR 60 crores, INR 70 crores, that's what we would be spending. That's the -- mainly the maintenance CapEx would be some balancing equipment which is required for like Maruti increased the volumes for -- we've become a signal source of many components to Maruti and for the oil pumps and the oil pans and they increased the volume from -- they gave us a commitment of 1500, now they want 2,500. So for that, we are putting some balance equipment. So that's sort of thing we are doing. And -- but there is a major CapEx for any new project like we have done for Toyota. That is not at the moment. And what means that we're doing, we've started taking on -- most of the equipment that we have is fungible. We can shift from a normal component to electric component to hybrid component to any component that we would like to machine. So we do that shifting. Almost 85% of our equipment is fungible. It's 15%, which is very specific to the component. So we have flexible manufacturing system with us in any case.

That's great. Fine. But just at another request, if you can have an investor presentation given before every call, it will be great for us to go through and ask better questions.

Okay. In fact, investor presentation was uploaded, I think, 1 month back only. And yes, earnings release has been done today. So investor presentation also we'll try to update every time. We'll do that.

Next question is from the line of [ Chetan Dhruva ] an Individual Investor.

One question, a clarification actually. So you had mentioned that you are targeting around INR 2,600 crores of revenue and INR 80 crores to INR 100 crores of revenue would be coming from defense. Is that over and above the INR 2,600 crores or is part of that?

In the last meeting, we had mentioned INR 2,700 crores, including defense INR 100 crores. And this time, we are revising that to 2,600 plus -- including INR 80 crores of -- INR 80 crores to INR 100 crores. We'll exceed it, but now we are committing something and we want to achieve it and exceed it.

[Operator Instructions] Next question is from the line of Ashwini Agarwal from Demeter Advisors LLP.

Just 2 questions. In the opening remarks, sir, you alluded to higher working capital, higher inventories in particular. If you could provide some insight into what happened?

Yes, when MD was talking about the higher inventories, it was in the context of P&L account. If you see our P&L account, in that increases in inventory is there to the tune of around INR 12.3 crore. And if you see the previous quarter, there was a decrease of inventories by INR 50 crore. So that effectively means that when we talk of the goods produced by our plants, those were almost at the same level. Out of the INR 602 crore of turnover that we achieved last quarter, INR 50 crore came from the existing inventories, those were already manufactured. And this year, whatever sale has been achieved like [ INR 533 crore ], in that we have additionally produced around INR 12.5 crore of goods. So in that context, he was mentioning that manufacturing level came to the same level, so percentage of expenses, that gets distorted when we base it on the operating revenues only. So if we consider the increase and decrease in finished goods inventory, so we will see that both the quarters, the same kind of volumes were produced by us. So expenses were incurred to that tune. So that is why certain expenses in percentage terms, those are looking at a higher side this quarter, while it was not that much higher as compared to the last year. And the reason for this happened was that this quarter, a lot of our customers took shut down. And because of shutdown, they had instructed us that they will need these components, and we have to keep producing them. We had to accommodate extra inventory for them. They wanted 4 days or 6 days of stock or something. It's not from the point of view of working capital. Working capital, not much of increases there in inventories. But with respect to P&L account, this has a significant impact.

So in the follow-up question to the first person who commented that we had our call around the 30th of May. And at that point in time, of course, we had hoped that things would recover in June, but they didn't. And therefore, we landed up in the situation that we are. And now we are halfway through the quarter. We still have 6 weeks to go. But again, I'm asking this question purely because what's happening is that if the guidance doesn't get met on a quarter-to-quarter basis, then what happens is that there is a certain degree of skepticism that creeps in. So how confident do you feel that Q2 will be better on margins on a quarter-to-quarter basis? Or this is still work in progress and it's uncertain? Because if it is uncertain, then I think it's better that we know it right now, also because both Hero as well as Renault, from whatever figures I can see in the papers in terms of their monthly production and market shares and so on and so forth, they are kind of struggling. So if the 2 main customers are struggling, then is there -- what is the basis for expecting that the September quarter will be better than the June quarter? That's the second question I had.

Renault, we are not very confident whether they're going to bounce back. But Hero should bounce back primarily because of the Diwali season that's around the corner. So this is the time we actually produce more to -- for the season. And we are also confident that our price settlement will also take place in the next week, 10 days time. That's more important part. But the other side is that our Maruti sales are going up and the other customers -- our exports are also going up. So we've actually gone customer to customer to see what is the worst situation, what is the bad situation. And keeping that in view, we've -- this is what we are saying is that the wheel production will start the day they do the settlement of the day -- okay, the whole volume will start, the day of the settlement. But we -- now we have decided that we will not -- we were giving almost 80% of the supplies to them. But we've actually reduced it down now. In future, we are going to distribute it amongst Hero, Honda, Suzuki and Bajaj and Royal Enfield. So we are going to distribute it evenly amongst all and whoever gives us a good price and better price. And if Hero doesn't give us a price, we are actually going to reduce our volumes.

Okay. And sir, finally, there was some discussion around the sale of the land at Gurgaon. And obviously, it's a long process. It's a big piece of land. Is there any update you can share with us?

There is no update. But in case you have -- we've been talking to various people. You had also recommended that person. They came and they spoke to us, but he confused us more than he convinced us. He's still become -- he has one of the ways.

We are in touch with the guy, but at the moment, there's no update. There is nothing there There's no movements that has taken place.

All right. There were 2 possibilities. One was the outright sale, and one was the joint development. In outright sales, the amount that he was suggesting was similar to the joint development that was taking place. We said why should I go for joint development, I spent 4 years to get my money than to do outright sale. So there's got to be some benefit I get in the -- if you can help us there, we'll be too happy.

All right. I'll take the subject offline with you.

[Operator Instructions] Next question is from the line of [ Sushant Verma ], an Individual Investor.

Well, I am disappointed with the numbers to say the least. But what I'm more concerned about is since the time I attended the previous call versus today, somehow I feel your confidence level or maybe you have become more tentative than what you were probably the last time. So as an individual investor, where I'm quite worried now because I'm not getting that certainty or that confidence from the management team, although you have provided all the details that I really understand and I appreciate as well -- but I really hope that considering that this industry and the industry that you are in, that has a lot of tailwinds. I'm hoping that the progress would be much more faster and whatever you have planned would be achieved in the coming quarters. But as of now, I have become quite nervous, I would say. And I really wish to know that -- what is your confidence level as a management team to achieve the numbers that you have stated?

Sushant, we are very confident. And let me tell you that we worked out every detail. The only unfortunate part is that when we had to cut down intentionally the production to one of our main customers. And the second customer, Renault, they collapsed. Otherwise, we are very confident. And because our machines are fungible, we do ship the equipment of one to the other. So we don't waste our investments which have actually happened. So when I mentioned about Honda and Suzuki and others, that is the day we decided to do that the same way we approached them, and we got approvals done immediately. So we are very confident on what is happening and to change the final numbers and also to give you a better bottom line. That's for sure. Now unfortunately, there's a INR 100 crore of loss -- internally, we are still pushing it. But to you, we are telling you in advance that we're going to lose INR 100 crores of sales. But the bottom line is still going to be intact. We are -- our team is very confident, we are all on it. But we would want you to visit us and come and see what all we are doing, yes.

No, sir, I definitely would want to. But as I said, between the 2 quarters, I mean, the calls for the 2 quarters…

No, this has been unfortunate what has happened and because we will break in about 1 year. That 1 year is all time. It doesn't -- and [indiscernible] absolutely reasonable.

No, that I appreciate. You are candid and transparent, I know that. But I was just hearing my apprehension, that's fine.

If I were you, I would have probably reacted in the same way. But let me assure you that we are on top of it.

Next question is from the line of [ Bhaskar Rathi ], an Individual Investor.

My question is like what is the share of Renault in our turnover? And we are going to stop delivering…

We're not stopping, Renault, please. It is about -- it was about 10%. It's come down to 6%, and it was about actually 12%, 13% and it's come down to 6%. And -- but we are telling that -- we are asking them very transparently, either you pick up the material or we transport the equipment to some other programs. So that's what we've been wanting to do. We have the requirement for equipment, so we will transfer it very easily. But they were -- BMW was about 18%, 19% earlier, and they were about 12% to 15%. Now they are 6%, so they have dropped rapidly.

Okay. Sir, the second one is like, is there any new orders from BMW like we expected some big orders? Like is there any traction on that from BMW?

We received one order for, let's say, vehicle components. That has already come to us. That's about INR 100 crores a year when it is up. And there are other components that we are talking to them. And there's a lot of traction in this.

The last one is like on the defense side in the last call, you mentioned that there will be some like joint partnership with someone that you're going to announce in a couple of months' time. Is there any progress on that?

Yes. Actually -- we're waiting for the orders to come. As the orders come, then we will make the announcement.

Okay. And is it going to be before the annual general meeting, or it's going to take a couple of months more?

Before the AGM?

Yes.

Maybe around the AGM only. Maybe we can make the announcement then also. That's a possibility.

[Operator Instructions] We have our next question from the line of Deepak Poddar from Sapphire Capital.

Sir, I just wanted to understand -- I mean, what was the share of revenue from Hero in FY '23 versus in first quarter FY '24?

See, Hero normally ranges between 30% to 35%. That's what -- when we actually did it, was 35%, 36%. But now it's about 28%, 29%.

FY '23 was 30%, 35% and FY -- first quarter was 28%.

It's about 28%.

It was around 30%.

It varies between 30% and 35% normally. But now it's 27%, 28%.

About 27%, 28%. And are we still supplying to Hero or because of the pricing issue we are right now not supplying?

We supply a bunch of components. We supply almost about 10 different types of components. So [Foreign Language] is on 2 components, to be honest with you.

And what would be the share of that? I mean that 2 component revenue share?

That -- whatever drop there is there is only on those components.

No, so a drop in the sense, so you…

Let me tell you, those are the main components. One of the aluminum wheel, one is the clutch. The clutch has bounced back, and the -- now I think we are back to normal. And on the wheel front, [ that's the break up of order on the wheel front ].

That I understood. But these 2 components forms about what, 10% of your revenue? That will be, right, 5% to 10%?

Clutch is 10%, yes.

See 10% is the total revenue…

Clutch is about 10%, yes. Wheel business should be around, I'd say, 15% to 20%. I think that -- I'm not -- I'll have to get back to you on this.

No. But it is not of the total turnover. It is a turnover of the Hero.

Yes, understood. So I understood. So around 10% would be clutch, and 15% to 20% of the component. So total 25% to 30% of total Hero turnover would be these 2 components, right? Is my understanding correct?

Yes, yes. But we'll give you the exact results since you asked us this question. Yes.

Okay. And we expect this pricing issue to get resolved in the next 10 to 15 days?

The clutch has already bounced back and now it is wheel which is left now. [Foreign Language] It's not that -- the only thing is it took a little too long.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for the closing comments.

Well, thank you so much for this meeting and also the questions. And please feel free to write to us to talk to us or call us up and ask any other questions that you would like to ask. We would like to be totally transparent. And we will take care that in future in case there's anything to be shared with the shareholders, we will do it in advance, and we've taken a note of that. And let me assure you, we are on track, and this small -- the small tension that we had with Hero because of the prices, that gave us - that probably pushed us to get into other customers as well, which is a good thing. And fortunately, they've all played us. And hopefully, by the end of the year actually, end of the third quarter, we should start some supply to them. So this is a blessing in disguise, and this will also add further to our turnover. And so we are very happy on that account. And some of these customers were not even talking to us earlier because they said that we are related to the Hero family. But now that is the past. And so we took advantage of the situation. And so we will be supplying to all the other 2-wheeler suppliers as well -- customers as well. And -- but talking about the others, Maruti is doing very well. We're adding more and more components on Maruti. And Toyota, they are also increasing and the volumes are going up. Kia, their volume is also going up. And all the other customers are doing well. It's mainly the -- the commercial vehicles have also started picking up. There also we are okay and there are new sets of components which have also come around. The export front also we're doing well. So we are okay as far as that's concerned. And let me assure you that we are on top of it. We had to take a tough call this time and the tough call, they should lead to some good results, and this will also improve our bottom line. That's the other big advantage that we'll finally hit. Thanks so much for the call, and please do write to us in case of any questions.

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