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

Ladies and gentlemen, good day, and welcome to the Rico Auto Industries Q4 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Hazel Rathod from S-Ancial Technologies. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and thank you for joining us for Rico Auto Industries Q1 FY '25 Earnings Conference Call. From the management, we have with us Mr. Arvind Kapur, Chairman, CEO and MD; Mr. Kaushalendra Verma, Executive Director; and Mr. R.K. Miglani, Executive Director; Mr. Rakesh Sharma, Chief Financial Officer; and Ms. Ruchika Gupta, Company Secretary. I now request Mr. Arvind Kapur to take us through the key opening remarks, after which we can open the floor for the question-and-answer session. Thank you, and over to you, sir.

Good evening. My name is Arvind Kapur, and I'm sitting here with my colleagues. I have Mr. Rakesh Sharma, who is the CFO. Along with him, I have Mr. Kaushalendra Verma, who is a Director of Board; then Mr. O.P. Agarwal, and I have other colleagues looking after marketing and company secretary and everybody sitting here. And in the outset -- on a positive note, the GDP of India will be growing by 6.2% this year, even though it's been lowered by the World Bank and also by RBI, and we are talking of 6.2% plus. And the last time I had said that we should be between 6.2% to 7%. That's what we had indicated based on the information that was provided to us by the government and by all the industrial bodies as well. We have become -- we must congratulate ourselves. We have become the fourth largest economy in the world. And hopefully, we'll become the third largest in the next 3 years. And if the economy keeps on growing this way, certainly before the end of 3 years, we should be the third largest economy. There is a lot of geopolitical tension that is there these days, primarily -- one is, of course, the wars that are going on in the Middle East and as well as in Europe, but also because of the trade tensions that are there, primarily because of -- they all originate from the U.S. And so as a result of which we are seeing FTAs being signed by -- bilateral arrangements being made with various countries. The U.K., we have signed, even though implementation might take a while, but I'm sure the Indian government is very aggressive on signing further bilateral trade agreements with EU and many other countries around us. And hopefully, one day, we will also sign with the U.S., but that might take a little while. And the target was September, but we are not very sure as to what really happens there, and it totally depends on the team of the President of the United States. Talking about Rico, our turnover has gone up by 2.5%. We had estimated a better growth this year, but there were some issues with the exports. If I talk about exports in the year '23, we had exported INR 500 crores worth of goods. '24, we came down to INR 422 crores, but this current year, we are talking of -- that's '25, our exports came down to INR 351 crores. That was primarily because BMW, the electric vehicle business dropped by almost 40% in Germany, in Europe, and that had a major impact on our sales. Now this current year, that's '25-'26, the exports will go up to INR 380 crores. And by '27, the orders that we have in hand, we should be crossing INR 500 crores back to the year '23 position. Our turnover this year is INR 22.12 crores, and we are estimating our turnover to go up to INR 2,650 crores this year. These are based on the projects which have been implemented last year and which have come into production this year and some of the projects which are getting into -- getting live this year. And everything seems to be doing well so far and primarily driven by the domestic demand, but the export demand will also go up. This year, the exports going up to INR 380 crores or INR 351 crores, but our shipment will be much more, primarily because we would be stocking in the U.S. for the sales to start from January-February next year onwards. And that's the reason that I'm very confident that next year, we'll be crossing INR 500 crores as far as exports are concerned. So this year, our sales turnover expected is INR 2,652 crores. That's what has already -- that's now almost 20% higher than this current year. And the year after that, the plan that is already in place where the orders are placed, is also another growth of about close to 15% plus. Last time I had announced that we had -- last year, we received orders worth about INR 720 crores. And these will be implemented in the next -- this year and next year and the year after that, that is the 3 financial years. And this year, our target is to pick up another INR 650 crores worth of orders which would be implemented partly this year, partly next year and the year after that. Out of INR 650 crores, we've already picked up orders for INR 70 crores, where the deliveries have got to start from this year onwards itself. So we are very happy about that. These are the add-ons to whatever budget we have prepared for INR 2,652 crores, but we are sticking to INR 2,652 crores of turnover this year -- this current year, that's '26 we are talking of. The business seems to be good, but the only problem that we are all facing is the uncertainty of what happens in the U.S. The exports are taking place, the new orders that we have received, we have started delivering those goods. The shipments are being made here. And the tariffs have been applicable. But at the moment, I don't think the customers also have a choice. They need to pay off the tariff. And we have settled with some customers, but we are settling with the other customers as well. So this should be okay till there's a trade agreement which is signed between India and the U.S., where there could be some negotiations on the reduction of the current tariffs that are there. So this year -- this current year that we are talking of, '25-'26 is going to be a good year, 20% growth that we are anticipating. That will also help us to utilize the equipment. And like I had mentioned in one of the meetings that our foundry -- iron foundry, our utilization capacity was only 50%. This will go up to almost about 60%-65% this year. And next year, we'll be crossing 80% utilization of the gray iron foundry. And in the aluminum side, there, we were at 62%-64%. We should go up to about -- almost about 75% this year. And then next year, we should be in the region of about 90%. That's the current equipment where the investments have already been made and capacities which had freed up partly because of the efficiencies that had come into the system and also there was some reduction of some export orders and that also freed up the capacity, but we'll be able to utilize the total capacity in the next 2 years. The investment in Hosur is going on. The building is getting ready. And the total investment that will take place there is close to INR 220 crores, but spread over 3 years, partly this year, this year would be about INR 70 crores and next year would be about INR 100 crores and the balance would be in the third year. That's how the -- and there, Hosur is going to be catering primarily for Toyota as well as Aisin Seiki. And these components are for the hybrid as well as electric vehicles that Maruti and Toyota would be producing. The defense is also doing well and the shooting ranges that I had mentioned last time, that we've delivered, I think, over -- close to 40 of them, and we are delivering almost 10 to 12 ranges per month. And there are future orders of that we are expecting, and that should be interesting business. We've also started delivering to the -- we've entered the railway business using the current capacity of casting as well as machining that we already possess. We've already started supplying to the people who are supplying to the railways. And in the meantime, we are getting the RDSO and other approvals which are required to be done, and we are hoping that the growth would be very good in the railways side. And this is primarily utilizing the current capacity we have with a minimal investment that would be required to be done. This is what -- this is the new business that we have taken up so that -- one is to add on additional lines of business of defense like it took us almost 10 years to come into defense to actually start delivering. But railways, we've been fortunate. We could start delivering within, I think, 2, 3 months of -- after we had decided that we will get into the railways. So things are moving fine. Things are moving good. We have not factored the railway business in the current year, but we are hoping that we should be in the region of INR 70 crores, INR 80 crores plus this year in any case, if not INR 100 crores. That's what the target is. That's what I wanted to say, and we are open to questions. And my colleague is also sitting here to answer all the questions.

[Operator Instructions] The first question comes from the line of [ Bhaskar ], an individual investor.

The first one is in the current quarter, how much defense we actually delivered in turnover -- how much turnover we did in the defense?

In the last quarter, you mean?

Yes -- sorry, yes, last year, Q4.

What is the present...

Because the consolidation and the stand-alone difference is only INR 26 crores, and we have showed, I think, onetime loss of INR 6 crores. If I remove that INR 6 crores, the profit will be like around INR 6-some crores. So that is a good margin if I look at the only consolidated revenue after removing the stand-alone. So I'm not sure whether it's from the defense or it's from the wheels business?

I'll just give you the right figure on the defense.

Okay.

And -- but that loss is -- I had mentioned last time also, and that is a onetime loss of INR 6.25 crores on the sale of assets and which was -- that will not appear there. In the quarter, there was a sale of about INR 6.8 crores in the defense.

Okay. So the defense revenue will come into stand-alone, sir, or in consolidation?

They come under consolidation.

The difference between stand-alone and consolidation is only INR 26 crores, right, if I'm not wrong in Q4?

It is INR 1,607 crores in stand-alone. While in consol, it is INR 2,212 crores. For quarter also in stand-alone, it is INR 415 crores, and consol, it is INR 545 crores. This is only the sales portion. If we include total income also, then it is INR 49 crores -- INR 549 crores in consol and INR 422 crores in stand-alone.

Out of INR 164 crores revenue, like you think the margins will be around 20%, right, if I'm not wrong -- what is the margin?

The defense and the margins are definitely better than the auto any day. And so -- since we are ramping up and -- the margins keep on improving over time.

Okay. So basically, as per your comments earlier, every quarter, we deliver 36 containers, right? We are going to deliver at the moment.

We have the capability of delivering one container a day, and we are ramping up to deliver 2 containers a day. And now we are trying to seal the orders with the Navy and Air Force and others and hoping that as those orders come in, that -- we are ready for it now.

Okay. Because the line was not clear while you were giving the initial comments, and I didn't get that figure actually. How much defense revenue we expect in the current financial year?

It's going up, and we are hoping to -- railways and both put together, I think we should be INR 100 crores, INR 150 crores plus. That's what we are looking at, and we want this business to grow. In console, we also have Rico Fluidtronics. There, the growth has been very good. And in consol, that also adds up to the total figures.

Okay, sir. And one last question is that about the new plant that is under construction, sir? Like, it's going to take some time. For Toyota specifically, we are putting some new plant, right?

Yes. At Hosur, we bought 12 acres of land and the land -- the building is under construction. And by July, I think we've got to deliver samples from there. By November-December, we got to start delivering samples from there. And we need to start -- the building -- first portion of the building would be ready by July-August so that we can start installing the equipment and other things there.

[Operator Instructions] The next question comes from the line of Jyoti Singh from Arihant Capital Markets.

Sir, congratulations on the good execution. Sir, I just wanted to ask on the CapEx side, like you have mentioned around INR 220 crores CapEx. So this year, how much we are targeting to expand? Like next year, I heard INR 100 crores. And this year, how much we are targeting to expand? And which are the products that we will going to supply and which are the OEM that we are targeting? And any unlocking is happening also on the new client side?

See, the INR 70 crores I mentioned and the INR 120 crores I mentioned, that is primarily for the Hosur plant I was talking about. That is for this current year, that is '26 and '27. And -- but if you look at the expansion that is also taking place for Maruti and for -- primarily Maruti and for some -- Maruti and Toyota [Foreign Language] -- Hosur as well as in Chennai. And so -- and there are customers where we have been supplying for a couple of years, GKN, there, our sales will double almost. And with -- the other customer is Bremse. There also, our sales are going to go up -- the sales are going to be very good there. And the advantage is the utilization of the current capacities that we already have, that's the casting capacities that we have, both in the aluminum as well as the iron. So we are very excited about that. That also helps us to improve the bottom line and the -- also utilization of the plant and equipment and also the people. And -- but if you look at the total investment that would take place this in '25-'26, we are talking of the region of about INR 150 crores to INR 155 crores, but that includes the dyes, et cetera also.

And sir, just if you can guide us on the margin side, like earlier, we have guided 13%-14% margin on the order for the domestic and 17% to 20% margin on the export side. So it remains same or any changes?

See, the -- let me redefine it. Export is always in the region of -- it's always 15% to 20%. That's the minimum margin we work on exports. We are fortunate to get those margins. But if you look at the domestic -- in domestic, if you look at the 2-wheeler, there the margins are on the lesser side. They have the -- they are totally commoditized. If you look at the car industry, we get better margins. There, we are in the region of 13%, 14%, 15%. That's where the margins are. And the commercial vehicles, we also get better margins. But it's the 2-wheeler that -- but 2-wheeler is very important for us because it acts as a filler for the plants also, utilization of capacities and other things that are required to be done, and because the volumes are very high there. So we do take advantage of that. And so we will -- in the domestic, we will average out around about -- I would say, about 11.5%-12%, that is the car industry and the 2-wheeler put together. But with the competition of the exports, our margins dropped slightly this year only because the exports came down. If the exports we had -- the market had carried on, we would have -- our margin would have been much better. And this year, we are increasing our exports by about -- it's going up marginally though this year and it's going up to about -- by INR 30 crores, which is about 10%. But next year, we will be INR 500 crores plus back to the '23 level. And there, you will see the complete change in the balance sheet.

And sir, what led us to be that much positive? Any new order that we have got, if we can discuss on that?

Yes. We mentioned that, that we -- last year, we picked up -- see, we pick up orders in one particular year. And the total orders we picked up last year was to the tune of INR 720 crores -- INR 720 crores, INR 720 crores plus, and that we had declared also. Now those are the orders in hand, which we received from both the domestic as well as the export customers -- overseas customers. And the year before that, we had picked up orders worth about INR 350 crores, INR 400 crores. And those -- what we picked up the year before that, those have started maturing and we've already started production of those. Out of the INR 720 crores, we would be adding about INR 150 crores this year and almost about INR 320 crores INR additional next year, that would be INR 420 crores out of the INR 720 crores. And the third year from now, it will be -- we'll be doing INR 720 crores a year. Now these are the confirmed orders where the advances have been received by the letter of intent, everything has been received.

Okay. And sir, if you can guide us on the top line side and margin side overall?

So I did mention that this year, our target is INR 2,652 crores -- INR 2,652 crores and -- say INR 2,650 crores, that's -- and having said that, the orders we received just a couple of days back, some of them will start production by October -- September-October this year, we should actually be able to cross INR 2,650 crores.

[Operator Instructions] The next question comes from the line of Rohit from ithought PMS.

Sir, some questions from my side. I'm fairly new to your company, so pardon me if they are very basic. So sir, if I'm looking at your company for the last couple of years, we've sort of stuck at this stagnant level of INR 2,200 crores, INR 2,300 crores. This year was a bit lower. So -- and I was going through some of your previous calls, you mentioned and just to your previous participant also, that exports were a bit lower, and that is probably one of the reasons for your margins to go down. So if you can just maybe step back and explain what was the reason for the general sluggishness since FY '23, the last 2 years? That was my first question. And then I have a couple of more.

Okay. One is the -- if you look at the -- our exports coming down, it primarily happened with BMW, their sales of electric vehicles in Europe came down by 40%. And we were the single source supplier to those EV components for Germany. And that reduction was huge, and we had extra stocks also lying there in Germany and the shipments -- further shipments had to stop here. We had to reduce our production here. That was one. Number two was PSA, they had extended a program until the end of the year, but they -- they didn't realize that. So that sale was also pretty large, which could not be -- the goods are ready. And now they're going to start consuming it this year, and that's what is going to happen in the export side. In the domestic side, Renault did not perform at all. Their performance was very poor last year, Renault Nissan, and that impacted us. Now they're picking up, but primarily because of the exports. For the domestic, we have -- we are very cautious in picking up orders for the domestic market as far as Renault Nissan is concerned. But for the export market, we are more confident and we have diverted that portion of the equipment for the export market to Renault Nissan for this year. And Kia, their performance was also lesser than the previous year. And -- so these are the 3, 4 customers who actually brought our sales down. The capacities were already created. Then there were 2 programs which got delayed. One is by Toyota itself, and that was a turnover of almost INR 100 crores and Aisin. So it's the same program, Aisin and Toyota, but Aisin was going to supply the transmission and Toyota was going to supply the complete hybrids. Now this year, they are increasing the capacities. Our capacities are already in place, and we are excited about that and this is going to be much better this year. So this was the main reason why the sales dropped. So this year, we are expecting a sale of INR 2,650 crores plus. And next year, we already have a budget [Audio Gap]. So next year, -- next year, we are about INR 3,100 crores based on the current orders in hand and current programs that are already with us and -- which we are implementing and/or which we should start delivering by the end of the year or beginning of next year. So these programs are in place. And having said that, there could be some delays in some programs. But now we're not anticipating delays from Toyota and others because they are after us to deliver them in time. And of course, their hybrid sales are suffering at the moment. And so there, we are very confident. And Renault, we have discounted absolutely for the domestic market, but for the export market, they have picked up -- started picking up the goods. So there's a lot of excitement in that direction as well. So we are full of confidence of INR 2,650 crores this year plus and INR 3,100 crores next year. Now having said that, we've already picked up further orders, some to be delivered this year onwards, which were not factored in this. That would be an add-on and that would also add to the figures over the next year.

Got it. Sir, the second question was in terms of margin, I think you've been saying that you are very -- I mean, your aspiration or you want the margins to be around 13%-14% at a company level, and that is where your endeavor is. And of course, you mentioned that exports were down, so hence, the margins got impacted. So in that journey from, let's say, 8%-9% or 9%-10%, which are right now. So to get to a 13%, how do you see that journey over the next 1, 2 years, if you can share that?

Yes. So if you look at the cost, we have been able to improve as far as the -- like power cost, that is actually -- we've saved a lot on the power cost. There's a lot of working that has happened on the power cost, mainly because we've gone into solar and hybrid power through windmill, et cetera, and that's helped us to do. And number three, we've invested in very efficient furnaces where we've been able to save a lot of power. So the full impact of that would appear this year. In the last year, since it was being installed over the year, we could still do some savings there. But this year, you'll see a larger impact on the part. So as far as the various costs are concerned, there's full pressure on monitoring what is happening there. Now the problem was the utilization of our plants. We had -- we have surplus capacities as far as the castings are concerned. And those castings -- where there's a lot of investment involved, those castings were not running at full capacities, which now are being utilized better with the addition of railways and also some of the [ non-abrasive ] components we picked up on the iron side. In 2 years' time, we'll be running at almost 90%, and we'll need to add some furnaces to further enhance the capacities, but that we'll do 2 years from now. And that would change the whole picture because the manpower remains the same, the plant is fully automatic, the same people run the plant 24/7, and -- we were running it only for 15 days or 16 days a month, now we'll be running it for 20 days and then going up to 24, 25 days or 26 days a month. So that utilization itself gives us a lot of savings. Then in the casting side also -- in the aluminum side, we've improved our casting capacities by improving our efficiencies. And we are getting more per day from every machine than we ever got. It's almost a 20% improvement we did as far as the casting is concerned. So rather than running the machines, we shut some of the machines so that we could -- the machines which are running would run at full capacity. So these changes which are happening, and now with new orders coming in and those -- the balance capacity -- the die casting, which we had shut and we start utilizing those capacities, you will see a complete change taking place. 13% is doable and so we worked it out. And once we are at about INR 2,600 crores, our utilization capacity is much better, and you will see the change this year itself.

Again, very helpful. Sir, just 2 more questions, if I'm allowed, if I can go ahead, sir?

Yes, yes. Please, please.

Yes. So sir, if I look at the balance sheet right now, so we have about INR 750-odd crores of debt -- probably around INR 750 crores, INR 800 crores of debt, if I'm not wrong. And of course, as you mentioned, you've expanded the capacities based on certain orders which got delayed. So over the next 1, 2 years or 2, 3 years, how do you see this balance sheet evolving? Maybe if you can share a bit on that? And also, sir, I think we have some surplus land in Gurgaon, which we have mentioned in the last -- I mean, in our interactions previously. So any thoughts on that? And how are you thinking about this whole leverage situation right now?

The total debt at consol is about INR 660 crores -- yes, INR 660 crores, but you'll see the debt come down this year itself and that's a pressure from our Board also. The land you're talking about is the Gurgaon land where we are currently sitting. And this land, this is about 26-acre, 27-acre parcel and very prime land, right off the main road, Delhi-Jaipur Highway prime land and -- so we have been talking to various people to -- so that we could monetize this land, and we have it in mind. But if I cannot distribute enough money to my shareholders, we are not going to do it. There were people offering the land that said [Foreign Language] and certainly, we are not prepared to sell the land. And -- because shifting -- this is a very large plant, almost 2,500 people plus working here. We need to shift the equipment, machines. We are mentally ready for that. We have the space for that. We have the capacity to do that. But we also need to take permission from the customer because anything that we shift, the customer has got to give us a clearance, be it BMW or be it Maruti or be it Hero or anybody else. And we are mentally ready for that. But we should have enough money that we should get. If I'm getting only 200 -- if I'm making a profit of INR 200 crores, we are not going to do it. If I'm making a profit of INR 1,000 crores, we are certainly going to do it so that the shareholders also benefit by that. Let me tell you the talks are on. We have -- we continue talking to the big builders like we're talking of Tatas and the Godrejs and others.

Okay. Okay. And sir, one question on this export. So I think BMW, I mean, we were -- we have expanded on the EV side in the last few years. And of course, the slowdown because of the competition from Chinese side, but you were again gung ho about the export bouncing back. So what is giving you that comfort. Because whatever we are reading on some of the German or European manufacturers of EVs, they are still like trying to fight this competition and they are still quite sluggish. So what is giving you that comfort on the demand side? And one more question on the debt, you said it will come down from INR 660 crores. Any ballpark number on how it will come -- what kind of quantum it will come down by?

Our Board has told us that we should try to reduce the debt by about 10%. That's the target they've given us. But at the moment, we are working on it, and we are determined to reduce the debt. So that's the direction the Board has given us, and they're going to monitor that on a quarterly basis. So that's on the debt side. And -- but we will be taking new debt also for the investments that are taking place, but we are also paying off and -- but we are also knocking off -- we are trying to make our working capital more efficient. So that's where we are working on. And that's what -- in fact, most of our Board members are finance guys, and they are totally clued on to this. And so I think they are very particular about this, which is very good for us.

Working capital will definitely come down.

Yes, working capital will come down, yes.

Long term, we'll try to bring it down.

[Foreign Language] On the export front, to give an example of GTN, from INR 80 crores, we're going to INR 120 crores this year. So that's a major increase which will happen for GTN, one particular customer. And that customer is catering to Ford and GMs and BMW also in the U.S. and various other customers. So we are very confident of that. And then the other customer is Knorr-Bremse. That's a new addition. And there also, the supplies have started picking up, and we are -- and that also helps us to improve the utilization of our foundry. That's the best part.

[Operator Instructions] The next question comes from the line of [ Abhishek Kumar ], an individual investor.

First of all, congratulations for the projections you have provided for this year. There's few things that I want to understand. The number one, you told about how the export is going to pick up and the aluminum price has gone down. So can we expect a better margin [Audio Gap].

I'm sorry to interrupt, Abhishek. You're not quite clear. Please come a little closer to the microphone.

Yes. The next, you told about the Hosur plant, which will have a CapEx of INR 220 crores to INR 230 crores. So how much revenue we are expecting from it? And what would be the EBITDA margin? Because you told for the exporter, it will be higher for the passenger vehicle. It is higher, but for the 2-wheeler, it is very low. So what is the margin we are expecting from this INR 220 crores project?

The turnover there at Hosur is expected to cross -- be close to about INR 350 crores to INR 400 crores. That's what the expectation is. And with the -- the investment is in land-building and also in the equipment that we are talking about. The land-building is almost about INR 50 crores. And balance is the equipment that is required to be installed. And we are expecting -- we should cross turnover of INR 400 crores there. And -- that's one. And the margins are -- like I mentioned earlier also, the car business, the 4-wheelers, the margins are better than the 2-wheelers. And this is all car business. And this is also car plus, I would say, mainly because this is related to the electric vehicle and also the hybrid vehicles. These are very complicated components that we are able to supply, and these are premium components.

Okay. And this year margin -- this quarter, we are expecting some improvement to happen because aluminum prices has gone down?

In the last balance sheet that you see, there's a carryover of almost about INR 14 crores, INR 15 crores in the aluminum side. And -- which we will -- because now the prices are coming down. So that advantage, we will get this year. And I hope the aluminum prices keep on coming down. So that's the important part. If you see -- but thanks for congratulating us, but I think we could have done a better job -- we should have done a better job and we should have got better margins. Our target is to improve our margins.

Is our long-term debt, which we are planning to pay this year apart from what we are going to raise. But what is standing as on date, how much we are going to pay for this year?

[indiscernible] is INR 140 crores.

INR 140 crores is [ repaid ].

[Operator Instructions] Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for the closing remarks.

Ladies and gentlemen, thank you so much for taking the time out to listen to us. But let me tell you that we are -- we are not satisfied with our results, and we need to improve them, and we are all working in that direction. And you will see it this year with better utilization of capacities, the margins are coming back to whatever we had -- we have been mentioning to you and those are achievable margins, those are right there. The cost reductions that we've been working on, on manpower reduction and others, those are effective, and we see those -- and the power saving and the tooling costs, et cetera, and the improvement in productivity on the equipment and all those things are actually on place now, and you'll start seeing the results in this year onwards. And hopefully -- hopefully, there is no major disruption that takes place. And we are very hopeful that this year would be a good year, and this year and the next year are going to be very good years. So we're very excited about the orders in hand. And the growth is primarily coming from exports as well as the domestic market. But in the 4-wheelers, not -- 2-wheelers also grow. We don't leave the 2-wheeler business because that is very important as a filler, like I mentioned earlier. But our focus is primarily on the 4-wheelers and commercial vehicles and now, of course, the railways and defense and also the exports, which are better margin items. And you will see the change that is going to come for. We've been saying it last year, but this year, we assure you that we will achieve those results. Thank you so much.

Thank you, sir. Ladies and gentlemen, on behalf of Rico Auto Industries, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.