Rishabh Instruments Limited (RISHABH) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Rishabh Instruments Limited Q1 FY '26 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Narendra Goliya, Promoted and Executive Chairman, for his opening remarks. Thank you, and over to you, sir.

Thank you, Shruti. I'm Narendra Goliya, and good evening to all of you for joining us on this first quarter of the financial year '26 earnings conference call. I am pleased to inform you that along with me is Mr. Dinesh Musalekar, Whole-Time Director and CEO of the company; Vishal Kulkarni, Chief Financial Officer. Then we have Nishant Dudhoria, Additional GM, Strategy, Finance and Public Relations; and we have representatives from SGA, our Investor Relations advisers. The financial results and investor presentation has been uploaded to the stock exchanges and the company's website. We trust you have had an opportunity to review these documents. I am pleased to report a strong quarter with consolidated revenue growing by 12.4% on a year-on-year basis and profitability surging more than sixfold to INR 196 million. This performance underscores the resilience of our business model, the operational discipline we have implemented and our strategic commitment to long-term sustainability. We are seeing encouraging momentum in renewable energy adoption and automation products across many regions, and we anticipate significant demand for both new and existing markets. Our operational scale, innovation focus and market strategy give us confidence that Russia will continue to be a major growth engine for the group. India remains a key growth driver raised by supportive domestic policy and strong demand. On the international front, our export operations are well positioned to capitalize on rapidly expanding renewable energy markets in developed as well as emerging economies. A standout achievement this quarter comes with the successful turnaround of Lumel Alucast. This business has faced several challenging quarters, but through focused execution, disciplined leadership and decisive strategic measures, including targeted pricing adjustments with OEMs, the exit from low-margin orders and a strong emphasis on high-margin non-automotive segments, we returned it to a growth trajectory with double-digit profitability. I'd like to particularly acknowledge the exceptional leadership of our Poland team led by Dinesh in driving this transformation. Despite global macroeconomic and geopolitical challenges, such as shifting trade dynamics, economic slowdown and evolving government priorities, we have seen minimal direct impact from tariff-related concerns. Our strategic priorities remain clear: diversify our product portfolio, continue investing in R&D, focus on higher-margin businesses, strengthen our global export capabilities, leverage emerging trends such as defense adjacent solutions and renewable energy infrastructure. I'm pleased to announce our operations structure business divisions have now been streamlined into 2 clearly defined segments to enhance focus and transparency for investors. First one is the electrical and electronic instruments encompassing products from the earlier business segments, Electrical Automation, Metering, Control & Protection Devices, Portable Test & Measuring Instruments, Solar String Inverters and Others. The second is High-Precision Die Casting, delivering precision engineered solutions across diversified industries. This reorganization will sharpen segment level strategies, accelerate innovation and better align us to capture emerging market opportunities. Our leadership team remains agile and resilient across geographies, which, together with our disciplined execution, positions us well to navigate ongoing challenges while investing in future growth. We remain highly confident in Rishabh's forward trajectory. With clearly defined internal strategies, a robust R&D pipeline and our capacity expansion in India soon to double their production, we are well positioned for sustained and profitable growth ahead. With this, I will now hand over to Dinesh Musalekar for his detailed comments and analysis of the results. Thank you.

Thank you, sir. Good evening, ladies and gentlemen. First of all, we are pleased to report a robust start to quarter 1 of financial year with consolidated revenues growing by 12.3% (sic) [ 12.4% ] year-on-year to INR 1,903 million and consolidated EBITDA margin expanding sharply by 950 basis points to 15.9% this quarter. These results reflect the disciplined execution, operational agility and resilience characteristics of our business model. At Rishabh India, stand-alone revenues increased by an impressive 17.3% year-on-year in this quarter, sustained by a strong market demand, both domestically and internationally. Stand-alone EBITDA margins reached a staggering 24.5%, underscoring the value of our enhanced product mix, operational efficiencies and benefit from operating leverages. Our performance this quarter was fueled by multiple growth drivers, rising export demand and robust domestic order inflow created a balanced and sustainable growth platform. Export business was a key contributor to stand-alone revenue growth, while margin expansion was supported by strategic focus on high-value offerings and rigorous cost optimization. Further, the successful turnaround of our High-Pressure Aluminium Die Casting business at Lumel Alucast, which gained profitability through targeted initiatives, it achieved a remarkable turnaround, posting 10.3% revenue growth and returning to double-digit EBITDA margin of 10.2% compared to losses in the prior 4 to 5 quarters, an outstanding improvement of 1,600 basis points in EBITDA margin compared to quarter 1 of financial year 2025. This recovery was driven by cost and process efficiencies, strategic legacy contract cleanups and renegotiations, rigorous cost optimization initiatives that have enhanced operational efficiency and focused portfolio rebalancing. Our strategy now focuses forward to the higher-margin non-automotive opportunities in the region. While regional demand remains subdued, our strengthened foundations position has a sustained earnings momentum. As we navigate through the rest of the financial year, we may further reduce our EV automotive business share and add some more profitable businesses from other sectors. This may also result in some ups and downs to our top line in the short period of time. What I mean is in next quarters, third or fourth. As our fundamentals are strong, we are confident that Lumel Alucast business will be sustainable and profitable business like it was for over a decade before we encountered this EV automotive challenges. So in the long run, in the years to come, it's going to be a sustainable and profitable business. Revenues at Lumel SA declined by 6.1% compared to year-on-year last year first quarter. This is influenced by external pressures such as shifts in government spending towards defense because of all the geopolitical things which are going on. The European Unions have started allocating more funds for the defense. Despite these near-term pressures, Europe's track record for rebounding in industrial innovation and clean energy gives us confidence in eventual recovery. In this quarter, we commissioned a new surface mount technology line to enhance capacity for advanced electronics and secured a significant [ EUR 5 million ] multiyear contract with a leading German energy sector firm. This contract running through 2026 marks a major step in our European strategy and underscores our credibility as a high-value trusted partner in industrial automation. This agreement based on a tailored engineering solution represents a strategic milestone in our European expansion, signaling trust in our technological proficiency and supporting future growth momentum. We have already started the deliveries under this contract since last month, and this should also offset the general drop in sales due to macroeconomics in the European market and help us to further grow our business from the last year's sales numbers. So Lumel SA, even if you see 6.1% drop, we are pretty confident because we have a strong order book to cover this in the subsequent quarters to come. Further, Rishabh India continues to deliver stellar results. Stand-alone revenues grew by 17.3% year-on-year to INR 618 million, supported by improved product mix, strong export flows and stable domestic order pipeline. EBITDA margin stood at 24.5% and PAT surged by 139% year-on-year to INR 99 million, highlighting effective operational leverage and the cost control. Our recent capacity enhancement include a new SMT line in India, which is already attracting interest from major players. These SMT lines are advanced to produce the motherboards of laptops, which is supposed to be one of the apex of SMT manufacturing, and we have already carried out pilot batch productions and are in discussion with a few major players to continue this business. The early responses have been very, very promising. Further, our R&D team has brought forward innovative solutions, most notably launching Solar UNO, a new milestone product in the solar segment that underscores our leadership in clean energy technology. The faster pace of EBITDA growth relative to revenue highlights the benefits of our operational leverage and efficiency drive. Moreover, our capacity expansion in India is progressing rapidly with 2, 5 and 7-story buildings under construction at MIDC and Trishala sites in Nashik with expected date of completion of March 2026, poised to double our production capacity upon completion. Furthermore, apart from the above developments, I would like to inform that Mr. Goliya mentioned earlier, we have classified our business operations into 2 clearly defined segments to sharpen our strategic focus and enhance transparency. We have restructured our business reporting into 2 clear segments. First one is Electrical, Electronics Instrumentation. We call it an EEI and the second one is High-Pressure Aluminium Die Casting or HPDC. In Q1 '26, the EEI segment posted 13.8% year-on-year revenue growth with the EBITDA margin near 20%. So this is a strong part of our business and really looking very, very promising, reflecting operational strength and market alignment. Looking ahead, we believe EEI holds significant growth potential, supported by a strong innovative pipeline, increasing global adoption of automation and renewable technologies and expanding export opportunities. We expect this segment to remain a key growth engine for the group. Our streamlined business model, capacity expansion and focus on innovation uniquely position us to capture growth opportunities in the new geographical -- new geographies as well. This quarter reflects strong execution, strategic wins and positive momentum across our entire group from the turnaround of Lumel Alucast and the strong performance of Rishabh in India and the launch of Solar UNO and also the landmark contract in Europe. We are delivering on our strategic objectives while building for the future. We remain committed to advancing our product portfolio and innovation agenda with the ambition that new products will contribute 50% of the Electronics segment turnover within the next 5 years. I extend my heartfelt thanks to our teams and their dedication and to our customers and stakeholders for their trust. With this solid start for the financial year '26, we are confident in delivering sustainable profitable growth in the periods ahead. With this, I would like to hand over to Mr. Vishal Kulkarni, our CFO, to delve into financial performance of the group. Thank you.

Thank you, sir, for the detailed overview. Good evening, all. Let me just give a brief snapshot on the financial performances. The stand-alone performance for the quarter 1 of financial year '26. Stand-alone revenue for the quarter 1 of financial year '26 stood at INR 618 million compared to INR 527 million in the same period last year, which has registered a year-on-year growth of 17.3%. The adjusted EBITDA for quarter 1 of FY '26 stood at INR 152 million, reflecting a year-on-year growth of 100.4% Here, I want to mention that the adjusted EBITDA includes ESOP expense of INR 9 million for quarter 1 of financial year '26 and INR 15 million for quarter 1 of financial year '25. The adjusted EBITDA margins were at 24.5% compared to 14.4% in the quarter 1 of last year. The reported EBITDA margins were 23.1% for quarter 1 of financial year '26. The PAT for quarter 1 of financial year '26 stood at INR 99 million, marking a year-on-year growth of 166.3%. On a consolidated basis, our revenue for quarter 1 FY '26 stood at INR 1,903 million, reflecting a year-on-year growth of 12.4%. The adjusted EBITDA for quarter 1 of financial year '26 was INR 303 million compared to INR 109 million in quarter 1 of last year. The growth is 179.1% year-on-year. Here also, I want to mention that this adjusted EBITDA for quarter 1 FY '26 includes ESOP expense of INR 19 million and INR 33 million for quarter 1 of financial year '25. The adjusted EBITDA margins were at 15.9% compared to 6.4% in the quarter 1 of financial year '25. The reported EBITDA margins were 15% for quarter 1 of FY '26 and 4.5% for quarter 1 of FY '25. The PAT for this quarter stood at INR 196 million, representing a year-on-year growth of 510% with PAT margins improving by 841 basis points to 10%. Starting with the company-wise key financial highlights. The revenue stood at INR 460 million for Lumel SA, which is down by 6% year-on-year basis. For Lumel SA, the EBITDA was at INR 56 million for this quarter. EBITDA margins were at 12.1% for the quarter and the PAT stood at INR 27 million. For Lumel Alucast, revenue stood at INR 754 million, 10% growth on a year-on-year basis. EBITDA was INR 77 million compared to a loss of INR 46 million last year same quarter. The margins at 10.2%. PAT for the quarter was INR 44 million compared to loss of INR 40 million last year same quarter. On a consolidated level, we remain net debt-free with a strong balance sheet. The net cash and cash equivalents as on 30th June 2025 stands at INR 864 million. With this, I shall now leave the floor open for Q&A. Thank you so much.

[Operator Instructions] The first question is from the line of Prateek from Subh Labh Research.

Am I audible?

Yes, Prateek.

Yes. Congratulations on a good set of numbers. In fact, I would like to highlight the Die Casting business performance. Kudos to Mr. Musalekar and the team for that. Mr. Musalekar, I just want to understand how sustainable Die Casting performance is for the rest of FY '26? And since you have already explained the steps taken to make this profitable, I just wanted to understand how does Q2, Q3, Q4 look for the business, for the Die Casting business? That's the first question.

Yes. Yes, Prateek, I was, in fact, expecting these questions because we asked these questions to ourselves also. So this is a very apt question. So I tried to cover that in my speech also. In a very short term, I would say we are still not out of the whole rough period we are going through. But in a basis of 1 year's time, we are through with that. So I'll try to elaborate more on that. So what is -- what really pulled us down was the automotive business and that too the projects where EV cars were involved in European market. So EV cars in European market is a big disaster, not so much the other. So that's what we decided to pull out of, and we went with all these renegotiations, contracts, et cetera. So most of it is completed and done, but we are also in the phaseout period where all these contracts are going out. We still are supplying and they are going out. So as they fade out, but we are supplying with a negotiated prices, which are profitable for us. So this business is going to drop. Eventually, we will go out of the funnel by end of this year. So during this period, we are also trying to add more business, so which we are trying to do, and we have got some successes with that with some of the electrical division, non-automotive customers we have added. We have gone back to our traditional customers like ABB, Endress+Hauser, we have received some new orders from them or increase in supply. So we are doing that part of it. Then we are also trying to get some automotive business, which is not connected with EV, from other new -- total new customers. So this is all -- a lot of activities are happening, and they will fall in place eventually because there are very few manufacturing setup with strong fundamentals like us in Europe. So there is a demand and there is a resource available. And we know that we are very competitive in European scenario. So those customers who want to have things made in Europe will come to us, and this is work in progress. Now how fast this new business will get added and how slowly this old business of -- which is kind of profitable for a period after price correction will go out. So this is something which is happening. Both of them are happening. So we -- that's why when I chose those words also very carefully. So we can have some ups and downs in the top line. But as the fundamentals are very strong, and we -- it's just a matter of time, whether this becomes kind of a really sustainable for goods from quarter 3, quarter 2, quarter 4 is something which we are always exploring. This is where it stands. I've been trying to be very honest and transparent with this. So this is where we are. But if you ask me 2 years, within 2 years, is it going to be sustainable, profitable? Answer is clear, yes. So 1 quarter, next quarter, is that going to be 10.2% EBITDA again or it's going to be 6% or it's going to be 0? I really -- it's a bit hard for this point of time to answer. But we are in a good direction, and we are doing that. So this is where it stands now.

Very much appreciated, Mr. Musalekar. Just 2 tiny follow-ups on this. So at this point of time, what's the mix of auto and non-auto for the Die Casting business? And with the new contracts with the new customers or even the renegotiated contracts, what's the peak EBITDA margin even after 4, 5 quarters you anticipate in this business?

Okay. So I mean, historically, we have had EBITDA from 15% to 19% in High-Pressure Aluminium Die Casting business with 50% automotive, 50% non-automotive. Our target mix is going to be 75% non-automotive and 25% automotive. This is our target, but it is not entirely in our control. That's the benchmark which we are trying to have. So once we achieve that, what we are looking at is about anywhere between 12% to 16% range of EBITDA, which is what we are trying to target. Because when we talk about the EBITDA of 16% to 19%, the cost of labor was less, the energy costs were less. So that has changed in the last 2, 3 years. So I do not want to project numbers like 19%, which we used to have in the past, but anywhere between 10% to 15% is sustainable, achievable EBITDA on this business going forward.

Very helpful, Mr. Musalekar. Mr. Musalekar, my second question is regarding the slowdown in European electronics business. So I heard you that probably this is because of the shifted focus of government from -- to defense manufacturing. And my understanding is these kind of manufacturings are very long gestation manufacturing. So is it fair to assume that the focus of the government is not going to go back to electronics and electricals? So this slowdown may continue for the coming quarters as well. Is that a fair understanding?

No, no, no, I wouldn't say that because, of course, there are 2 parts to this. One, I will address it in a way. See, there were some -- the European Union also works with some plans. So they had allocated, say, EUR 20 billion for investment into upgrading the distribution network and those kind of projects. This is government spending. So that trickles down to everywhere. So those kind of spendings, they are from, say, EUR 20 billion, they will make it INR 10 billion and INR 10 billion, they will put on defense. So this is kind of a thing which is happening. So that will reduce the number of projects. But the market is so big, so it makes not so much of difference to us. Now we won this EUR 5 million business, and we started delivering that. So we have some drop, and this is going to compensate that drop, and we may have some percentage of growth also. So with the same customer or similar customer, we are also trying to have some inorganic growth from new sectors, new customers, and this will support us. So even though there is -- we have done that in the past also. Even during COVID time, we had profits and we didn't suffer so much because it's all about what is the market share you will get. So if you're having the same -- if you have the same customer base and you are dependent only on the organic growth, then these things matter. So you are depending more focusing on adding new products, getting new revenue streams, adding new customers or doing new projects for our customers. So these things will offset. So the market is so huge. So Lumel SA, I'm not even one bit worried about anything like Lumel Alucast. We are very confident. It's a profitable business. We'll continue to deliver. In fact, you'll see that Q2 business -- Q2 will be much, much different from Q1 for sure.

Very comforting, Mr. Musalekar. Am I allowed to just last 1 question, sir, if you allow me?

Yes, go ahead.

Mr. Musalekar, I want your opinion on Solar Inverter so far. So I'm sure in the last 2, 3 years, we have invested a lot of bandwidth, if not a large amount of capital on this business unit. So if you can throw some light numerically, how this business is shaping up, what revenues we are seeing in this segment? Because I can see the full-fledged solar value chain players are now entering the space. So in that scenario, how do you look at a competitive landscape for India when the Waaree and the Premier Energies of the world are entering this business?

Yes. So on the Solar business, we -- in terms of number, let me say that we are doing about INR 10 crores -- around INR 10 crores annually currently as we stand. And with where we are -- again, we were losing money until now. Now we are at -- last few months, we are at 0 profit kind of a thing on what we are selling. So -- and that's why we were not pushing because we wanted to get this product redesigned so that we become competitive, not only competitive, we start putting margins on that. So that fortunately has happened for us now. And so 2 product lines which are coming. One is UNO, which is single phase, which will fit into the Prime Minister's solar thing, again, today also, we saw some new announcements on that. So there, up to 5 kilowatt single phase ones, we -- our model and the product was designed for making hundreds. Now we have redesigned the product for making them in thousands. So this will change the whole thing. So the SMT line and the fully automated production facility, all that we are putting, then we went from making those with metallic boxes to aluminium die casted like you are like printing more. So the whole redesign of this product is done. And last month, we launched the first beta batch of 25 units into the market, and the results have been very positive. And now we'll be manufacturing them in hundreds. Now even if there are other people who entered into this market, believe me, none of them design and manufacture. So we can be a big contract manufacturer for these people because they are getting it done from China. They're importing from China. Today, we have designed the product where we are -- we beat Chinese cost. So this was something which is very, very challenging. It took longer than what we anticipated. We are ready with that. And the second 3-phase inverters up to 12-kilowatt also, we have redesigned and done this. So these 2 elements. So what I can say is up to 12 kilowatts, we are going to be very competitive and we'll be very aggressive in the market. This will start happening in the coming quarters. So we will grow from INR 10 crores to maybe INR 25 crores, [ INR 25 crores ]. So every year, we can double this. In 2, 3 years, we can reach up to INR 100 crores. But we were slow. We could have sold more inverters, but would have created more losses or no profit for the company. So we were slow. Now once we have that, we will do an ad campaign. It is more like B2C kind of a product when it comes to single phase. So I've got some plans to drive a massive marketing campaign also for that. I was holding back because I don't want to do it when I don't have a product which will be supporting that with that cost base. So now that we have, this will follow up in the coming quarters, and we'll go full throttle on that by second, third quarter of this year.

This has been more or less the trend in all our products. And whenever we get technology from Europe or wherever or we develop ours, the first few years, we will make losses. Both in terms of volumes are low, we haven't developed the purchase base, the vendor base and the technology needs to be refined. But eventually, all the products, call it analog panel meter, call it multimeter, call it transducer, ended up in a positive numbers for all the models. Dinesh just told you that up to now, we are profitable in the 12 kilowatt. But we still have 25 and 50 kilowatt -- 15, above 15. We have to still do some homework. But eventually, we will do it and make sure that each and every model is profitable to sell. I just wanted to add.

Absolutely. On the R&D is working on the next models now. Now up to 12 kilowatt, their work is done. Now it is for production and ramp-up, which is going to happen. From 12 kilowatt to 50 kilowatt is the second phase where we will look at the cost reduction of existing inverters and do that. And 50 onwards is R&D, which we will be carrying out with collaboration with IIT from Mumbai, where we will come up with the next generation of high-capacity inverters. This is something which may take about a year or so. So this is -- I mean, we want to also go step by step. But there is so much of market, even up to 5 kilowatts. There is so much of market even up to 12 kilowatt, and then we'll expand more and more.

The next question is from the line of Avinash from Parami Financial Services.

Am I audible, gentlemen?

Yes, clearly.

I'll start with Lumel Die Cast. I have 2 questions. The first is, in our last con call, Dineshji, you have alluded that it is very difficult to fill capacity, the new capacity, what is going away with the non-automotive business. So can you speak about the programs which potentially can come and fill this capacity? [Foreign Language], you said that the automotive business, which is slightly profitable, renegotiated contracts, which will go away. So what kind of programs we will be able to fill with? Are they short duration, short-term contracts as compared to the automotive? Yes, if you can just talk about that.

Yes, I get to your point because that's why I wanted to put a word of caution in that. But see, whatever we are going to refill because as we speak, I can give some numbers also to comfort if that can be helpful. So in the last 4 months, we have sent -- we have generated RFQs for about 250 parts. And out of the 250 parts, we have already sent offers to about 120 parts. This is one side. And all the automotive -- whether it is automotive, non-automotive, all the contracts that we negotiate in Lumel Alucast are long term. We don't take anything short term, and it doesn't work for any of our customers. I can give you some examples. MR and Meco is a customer, which we are doing about EUR 1 million annual turnover. Now we added EUR 1 million more of annual turnover with them. So this is one example. Then we are also adding another EUR 1 million, and this will be for 10 years supply, at least. This is a horizon. And then we are also renegotiating with one of the automotive client for a few projects, which are not connected with engine type of car. It can be in any car. This also we are renegotiating. And this is under progress. Then we are doing something for suppliers of street LED lights. So street LED lights, those housings are aluminium high-pressure die casting. That's another one which I can talk about. Then we have this Endress+Hauser and ABB. They have -- I had a massive tour with all our existing clients and potential clients. And they are also going to give some more additional projects where we have got 40 years of relation with these guys. So those are the things. And then similar to them, there are companies like Yokogawa and other companies are there who are competitors for them, Siemens, ABB, Endress+Hauser, Yokogawa and there are other companies where they also are coming to us. See, what is happening is because of -- there's always an opportunity in every threat or risk we had. All this has created so much of problem for companies like us because we were more resilient, we sustained all of this, and we are still marching. Many companies closed down or went bankrupt. So that capacity, there is -- at some point of time, there is going to be a supplier consolidation also for the customer. So those projects also will get relocated. And not everything can go to China, not everything can go to, say, Romania and other places. There are companies which want to have a supply chain in Europe and closer to them. And even if it is going to be expensive, naturally, because we are still there, so that will come. So these are all going to be long-term these things. So I can have my doubts for 1 or 2 quarters. But 1, 2 years, I have no doubts.

Sir, can you reasonably -- now given the kind of visibility we are in the fifth month of the financial year, given whatever visibility you have the best visibility, [Foreign Language] will end this year between 0% to 5% EBITDA margin?

Yes, that's what we are trying absolutely because I do not want to say that we'll end with a 10% EBITDA margin. We will be -- see, at the beginning of the year, we said that we will try to have INR 100 crores of EBITDA generated, INR 50 crores coming from Rishabh and INR 40 crores coming from Lumel and INR 10 crores coming from our other things. And our target was to make sure that Lumel Alucast is not going to drain what we are accumulating here. So that's the bottom line. So we want to make it better than that. So what you're saying is EBITDA 0% to 5% fits into what we are saying. Now after 3 months, we have INR 30 crores of EBITDA generated there at the group level. If we extrapolate that, it should be INR 120 crores. So I'm still not saying INR 120 crores is what we are targeting, but we are saying that at least INR 100 crores is what we are targeting. Anything should be upside from there.

Okay. Second question is on the stand-alone Rishabh business, the India business. So we have seen a gross margin of 55% and EBITDA of 24% on an adjusted EBITDA basis. So can you share some qualitative aspect, the sustainability of this kind of margin, the one-offs? And is there some extremely favorable mix in the export orders? So what is the steady-state EBITDA margin we should -- and gross margin we should understand?

See there has been a significant sustainable shift we have done in the operations in Rishabh. It is reflecting not only in these numbers, in operational numbers also. 20% is rock bottom sustainable thing, which I can talk to you about it. So what are the things which we have done on a qualitative analysis is a reorganization of the whole production processes. Then a lot of automation we have carried out. Then we have done a renegotiation of our supplier base. We have changed key people in the organization here and there. So in the last quarterly review, I had talked about all the -- a few quarters ago, I had talked about getting some key people in some position. All that has started resulting very well. Apart from these numbers which you see, our inventories were like about 6- to 7-month inventories we are having. Today, we have about 3 months of inventory, inventory days, if you talk about. So it's reduced by 50%, while our sales has gone up substantially. So this is all coming not because of just something happening. It was happening quarter-by-quarter, month by month, week by week very sustainably. Actually, to tell you, very honestly, there has been no product mix change. Nothing is one-off case in that. This is sustainable thing. And whatever changes have been done are very basic fundamental in production management, quality management, inventory management. So these are all things which were happening, and they started putting results on this thing. And we changed a lot of our machineries, upgraded existing 2 SMT lines, added another new SMT line. A lot of good things have happened during the last 1 year, and they have started giving results. And that is quite a sustainable thing and absolutely no doubts on that.

One follow-up on this, the SMT line we have put up. So we have some spare capacity, which is not being used internally as of now. And we also alluded to some use case from that SMT line. So can you speak about the [Foreign Language] commercialization [indiscernible]?

So are you talking about EMS business or you're talking about...