S.J.S. Enterprises Limited (SJS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the S.J.S. Enterprises Limited Q1 FY '27 Earnings Conference Call hosted by Elara Securities (India) Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Munindra Upadhyay. Thank you, and over to you, sir.

Thank you, [ Anushka. ] Good day, everyone. On behalf of Elara Securities, I welcome you all to the Q1 FY '27 Results Conference Call of S.J.S. Enterprises Limited. I also welcome the senior management of S.J.S., Mr. K. A. Joseph, Promoter and Managing Director; Mr. Sanjay Thapar, Group CEO and Executive Director; and Mr. Mahendra Naredi, Group CFO. Now I will hand over the call to Ms. Devanshi Dhruva, Head of Investor Relations, to take it forward. Over to you, Devanshi.

Thank you, Munindra. Good afternoon, ladies and gentlemen, and thank you for being with us over the call today. We appreciate it. Moving on, this is how we intend to take today's conference call forward. I will pass on the dais to Mr. K. A. Joseph, our MD, who will make his opening remarks and then hand it over to Mr. Sanjay Thapar, our Group CEO and Executive Director, who will take you all through some of the slides of our presentation that has been uploaded on the stock exchanges as well as on our website. Mr. Sanjay, who will take you take you all through the industry view, our business performance and then give a strategic outlook for the future growth of the company at the end. And Mr. Mahendra Naredi, our Group CFO, will update you on our financial highlights, post which we will open the floor for Q&A. The duration of this call is around 60 minutes, and we will try to wrap our comments in about 20 minutes so that we leave enough time for you guys to ask questions. If the time is not enough, please feel free to reach out to us through e-mail, and I will try to answer all your questions to the best of my ability. Thank you once again. And I will now hand it over to Mr. Joseph to make his opening comments. Over to you, Joseph.

Yes. Thank you, Devanshi, for the introduction. Good afternoon, everyone, and thank you for joining us today. I hope you all had the opportunity to review our investor presentation and the financial results announced yesterday. The Indian automotive industry maintained a healthy growth trajectory during the first quarter of FY '27, supported by resilient demand across both passenger vehicle and two-wheeler segments. Structural trends such as premiumization, increasing content per unit and growing consumer preference for differentiated products continue to shape the industry landscape. These trends reinforce the long-term opportunity for companies like S.J.S. with differentiated capabilities in aesthetics, design and value-added solutions. Against this backdrop, S.J.S. delivered another quarter of industry-leading performance, marking our 27th consecutive quarter of outperforming the underlying automotive industry. During the quarter, our automotive business registered a Y-o-Y growth of 32.4%, significantly ahead of the 21.7% growth recorded by the combined passenger vehicle and two-wheeler industry. The strong performance reflects the resilience of our diversified product portfolio, deepening engagement with OEM customers and our continued focus on expanding premium content across vehicle platforms. We delivered our highest ever quarterly revenue of INR 2,610 million, representing a year-on-year growth of 24.5%. This performance was driven by a robust 45.4% year-on-year growth in the passenger vehicle segment, supported by sustained momentum in the two-wheeler business and a strong contribution from exports. The quarter also marked our highest ever quarterly profitability since listing. Alongside our revenue growth, we delivered healthy profitability, supported by a favorable product mix, higher export contribution and sustained operational excellence. Strong cash flow generation and healthy net cash position continue to provide us with financial flexibility to invest in capacity expansion, pursue strategic growth initiatives and evaluate value-accretive opportunities. Looking ahead, we remain focused on deepening consumer partnerships, accelerating development of next-generation products and technologies backed by continued investment in innovation, manufacturing capabilities and technology. We believe S.J.S. is well positioned to sustain its growth momentum and create long-term value for all our stakeholders. With that, I would now like to hand over the call to Sanjay, who will take you all through the business and industry highlights for the quarter. Thank you, and over to you, Sanjay.

Thank you, Joe. Good morning, everyone. Good afternoon actually. I am pleased to share that our company has delivered yet another quarter of strong operational and financial performance, underpinned by resilient customer demand, sustained business wins and our continued focus on premium and technology-led solutions. We once again outperformed the underlying automotive industry while delivering our highest ever quarterly revenue and profitability since listing. This reflects the strength of our diversified business model and disciplined execution. Let me begin by highlighting some of the key developments for the quarter. In Q1 '27, the combined passenger vehicle and two-wheeler industry recorded a year-on-year growth of 21.7%, while S.J.S. Automotive business grew by 32.4%, outperforming the industry by approximately 1.5x. This performance was driven by a robust 45.4% year-on-year growth in the passenger vehicle segment, complemented by a healthy 19.5% growth in the two-wheeler segment and a strong performance on export front, demonstrating the increased adoption of our differentiated product portfolio across leading global OEMs. We reported our highest ever quarterly revenue of INR 2,610 million, representing a year-on-year growth of 24.5%. EBITDA increased to INR 799.6 million with EBITDA margin expanding to 30%, supported by a favorable product mix, higher export contribution and sustained operational excellence. Profit after tax reached a record INR 744.2 million, registering a year-on-year growth of 115% with PAT margin improving to 28.5%. Healthy cash flow generation during the quarter further strengthened our balance sheet, reinforcing a net cash position and providing financial flexibility to support our long-term growth agenda. The company also secured new orders from leading customers, including Mahindra & Mahindra, Tata Motors, TVS, Autoliv, Royal Enfield, Skoda, John Deere, Hero MotoCorp, amongst others during the quarter. SDPL won new businesses with Tata Motors, while Walter Pack won new businesses with Mahindra, underlining our strategy of increasing cross-selling opportunities going ahead. We also achieved several important strategic milestones. The Board has approved setting up a wholly owned subsidiary for the cover glass and display business. Further reinforcing our commitment to innovation, our in-house R&D center received recognition from the Department of [ Science ] and Industrial Research, DSIR, the Government of India. This recognition validates our technology-led approach and strengthens our ability to develop differentiated products that address evolving customer requirements while enhancing our competitive position. In August '26, we also commenced commercial operations on the new S.J.S. Decoplast manufacturing facility in Pune, further expanding our manufacturing capacity and creating additional capacity to support future customer programs and business growth. Our export business continued to deliver strong momentum, registering a year-on-year growth of 83.2% and contributing 9.8% of our consolidated revenue. We remain focused on expanding our global footprint through deeper engagement with existing customers, addition of new global OEMs and an expanding portfolio of premium products. Sustainability continues to remain an integral part of our long-term strategy. During our ESG initiatives, we remain committed to creating value beyond business performance. During the quarter, our employees planted more than 3,853 saplings across Nadaprabhu Kempegowda Layout in Bangalore and government schools in Karapanahalli and Maliyappanahalli, Hoskote. Along with these community initiatives, we continue to strengthen our environment performance through responsible manufacturing practices, improving resource efficiency and sustainable operations across our facilities. These efforts underscore our commitment to create long-term value for all stakeholders while contributing to sustainable and inclusive growth. S.J.S. has received strong ESG rating of 75.6 from CareEdge, underscoring our leadership position in the ESG risk management domain, supported by best-in-class disclosures, policies and performance. The company's commitment to excellence has been recognized by leading customers such as Ather, Royal Enfield, Motherson, reflecting the trust and confidence they place in our capabilities. Adding to this achievement, our CFO, Mr. Mahendra Naredi, was honored with the Financial Visionary Award and the CFO Trailblazer Award at the CFO Vault Summit & Awards 2026, recognizing his outstanding leadership and contribution towards financial excellence. Looking ahead, we remain committed in the growth opportunities before us. Our strategic priorities continue to be centered on expanding our product portfolio. increasing premium content per vehicle, strengthening customer partnerships, accelerating export growth and further enhancing our manufacturing and technological capabilities. Supported by a healthy order book, recent capacity expansion and sustained investments in innovation, we are well positioned to deliver profitable growth and continue outperforming the underlying industry over the long term. With that, I would now like to hand over the call to Mahendra, our Group CFO, who will take you through our financial performance for the quarter. I will return thereafter to share our strategic priorities and growth outlook. Over to you, Mahendra.

Thank you, Mr. Thapar. Good afternoon, everyone. I will now take you through the financial highlights for the quarter. Slide 12 through 15 of our investor presentation provide a detailed overview of S.J.S. consolidated financial performance. For quarter 1 FY '27, the company reported consolidated revenue of INR 2,610 million, representing a year-on-year growth of 24.5%. This performance was primarily driven by robust growth in the passenger vehicle segment, strong export momentum and sustained customer demand supported by a favorable product mix. EBITDA for the quarter stood at INR 799.6 million, reflecting a year-on-year increase of 36.2% with EBITDA margin expanding by 239 bps to 30%. The margin improvement was driven by a richer product mix, higher export contribution and continued focus on operational efficiencies. Profit after tax for the quarter stood at INR 744.2 million representing a growth of 115% over the previous year. This includes a onetime gain of INR 241.7 million arising from the sale of our Bangalore old facility, which is -- which was not in use since 2019. Excluding this exceptional item, adjusted PAT increased by a healthy 45.2% to INR 502.5 million, translating into an adjusted PAT margin of 19.3%, our highest profitability since the company's IPO. This demonstrates the underlying strength of our operating performance and the improving quality of earnings. Our portfolio continues to evolve towards higher value and technology-driven products. New generation products contributed approximately 24% of consolidated revenue during quarter 1 FY '27. Our revenue mix remains well diversified with passenger vehicle contributed 44.6%, two-wheelers 36.6% and consumer appliances and others forming 18.8% of consolidated revenue. This balanced portfolio enhances the resilience of our business while providing multiple avenues for sustainable growth. Exports continued to gain traction during the quarter, growing by 83.2% year-on-year to INR 255.8 million and contributing 9.8% of consolidated revenue. As both S.J.S. Decoplast and Walter Pack India currently have predominantly domestic operations, export accounts for 9.8% of consolidated revenue at present. We remain confident of progressively increasing this contribution as our international business continues to scale. Turning to the balance sheet. It continues to remain strong, underpinned by healthy cash flow generation and a net cash position. Cash flow from operations for the quarter stood at INR 809 million, which is 101.2% of EBITDA, and we generated free cash flow of INR 838 million. Despite continued investments, we have maintained robust returns ratio with annualized ROCE at 37.2% and annualized ROE at 20.3%. Cash and cash equivalents as of June 30, 2026, stood at INR 3,380.8 million, resulting in a net cash position of INR 3,287.7 million. Taken together, this financial strength gives us the flexibility to fund capacity expansion, support strategic investments and pursue selective value-accretive opportunities while maintaining a prudent capital structure. With that, I would now like to hand the call back to Mr. Thapar, who will discuss our strategic priorities and growth outlook. Over to you, Mr. Thapar.

Thank you, Mahendra. Moving to our outlook for future growth. We remain confident in our ability to sustain our growth momentum, supported by our differentiated business model, strong customer partnerships, technology capabilities and consistent focus on operational excellence. Our proven track record of outperforming the underlying automotive industry reflects the strength of our diversified product portfolio, innovation-led approach and our execution capabilities across automotive and consumer segments. As we continue to expand our solutions portfolio and strengthen customer engagement, we remain well positioned to deliver sustainable growth ahead of the industry growth rates. Innovation continues to remain a cornerstone of our long-term growth strategy. We continue to invest in advanced aesthetic and functional solutions, including optical cover glass, automotive display systems, illuminated logos and in-mould electronics. These capabilities will enable us to enhance our value addition, content per vehicle and strengthen our positioning as a preferred partner for differentiated and technology-driven solutions for leading OEMs. Strengthening our global presence remains a key strategic priority for us. We continue to focus on scaling our export business and remain committed to achieving export contribution of 14% to 15% of consolidated revenue by FY '28. This will be driven through deeper engagement with existing global customers and expansion into new markets and continued enhancement of our product portfolio. The commissioning of our new S.J.S. Decoplast facility in Pune marks an important milestone in strengthening our manufacturing ecosystem and enhancing our capacity to support future customer programs. Furthermore, the acquisition of the remaining stake in Walter Pack India, making it a 100% wholly owned subsidiary will enable greater operational alignment, enhanced technology integration with improved execution capabilities, thereby strengthening our position in the premium interior and technology-led decorative solutions. With a robust balance sheet, strong cash generation capabilities and a disciplined capital allocation framework, we remain well positioned to pursue both organic and inorganic growth opportunities that complement our strategic objectives and create long-term value. Given our current business visibility, healthy order pipeline and execution capabilities, we continue to expect S.J.S. to outperform the underlying automotive industry by 1.5x to 2x in FY '27. We remain committed to delivering sustainable and profitable growth through continuous innovation, premiumization, operational excellence and responsible value creation for all our stakeholders. With that, I conclude my quarterly update. Thank you for your attention, and we now open the floor for questions.

[Operator Instructions] We'll take the first question from the line of Chandramouli from Goldman Sachs.

First question is just around the levers you had this quarter to manage margin. In this inflationary environment, it looks like EBITDA margin has been flat quarter-on-quarter. But gross margin has declined understandably by about 200 basis points quarter-on-quarter. So I just want to understand what is the time frame that you expect it might take for you to pass on some of the higher input costs to your customers? That's my first question.

Yes. Our margins have improved. They've not declined. So anyway, coming back to your question. So as we mentioned earlier, we have a very robust supply chain growth from -- on the supply side of what we buy and pricing we get from our suppliers as well as our ability to pass through any increase to our customers. So typically, we performed well on that business. And while cost increase negotiations with customers are on, some of them have already come in. So you see that in the fact that our EBITDA margin has improved in this quarter despite global headwinds in commodity prices. Mahendra, you'd like to add anything?

Yes. So the gross margin on a quarter-on-quarter, I mean, quarter 4 was 56.6%, and now we are 56.7%. You see it is actually increasing by 0.1%. So gross margin is up. Raw material side, the question is about the recovery from the customer. So that is a business we are into. Mr. Thapar already explained how we are -- we have terms with our customer to recover the increased raw material content from the customer. That is going on. Somewhere we have a lag for one quarter or maybe two quarters. But we were able to maintain our gross margin with a lot of operational efficiency and the exports and also the whichever product mix.

Got it. That's helpful. Just a follow-up. What is the rough impact on profitability this quarter from higher input costs? Is it 100 bps, 50 bps? Just want to understand what is the rough impact, which could be offset in future as and when this possibly gets passed through to your customers?

That would be somewhere between 0.5% to 0.6%.

So what's important to bear in mind, let me add to what Mahendra just said that we remain a very profitable company. In the beginning of the year as well, at the end of last year, I guided that we will maintain margins. The guidance really was in the range of 27%, 28% because we have a lot of new products and new technologies coming on stream this year. But what is important to note is in this quarter where there was a lot of headwinds, we've been able to manage our profitability reasonably well, thanks to all the factors that we just outlined a few minutes ago.

Got it. That makes sense. That's helpful. My second question is just around the new Decoplast facility that you've just opened. Just want to understand versus the current capacity you have on Decoplast, how much additional capacity does this give you? And over the next 1 or 2 years, based on the order books that you have, what is the rough utilization rate that you think you hit in the next couple of years here? Also just related to Decoplast -- sorry, also just related to Decoplast, I think your overall company asset turn on fixed assets is north of 2x. So I just want to understand on Decoplast side as well as this capacity matures, new capacity matures, steady state, what is the sort of asset turn you'd expect there?

Yes. So our sales at Decoplast have been growing very rapidly as all of you are aware. So we've benefited on both counts. A, increased sales very rapidly. And this new capacity will add close to about INR 200 crores to INR 250 crores of additional revenue. So our order book continues to be very strong. So since the time that we acquired Exotech Plastics, we already mentioned we've increased 4x. We've improved EBITDA from 12% to 20%. So we are extremely bullish on our prospects here. And we continue to see very, very strong demand. So we are very optimistic on the growth prospects at Exotech Plastics. You had one more question on inventory...

You rightly said we are currently around 2x. In the new facility, we expect to be between 2 to 2.5x.

Got it. And just following up on this, over what time frame is the INR 250 crore expectation for the new facility?

So close to 3 years. So what we mentioned was that we hope to double sales in the next 3 to 4 years. So that is the plan that we have internally...

We take the next question from the line of Pranay Roop Chatterjee from Burman Capital Management.

First question is on cover glass. Obviously, one of the updates was you are setting up a subsidiary. Is there any material updates since the last quarter around progress, timelines in terms of whether equipments are in place? If you can just give some color?

So we had already mentioned last time that, look, this new facility that we are setting up for cover glass and display, equipment is on order. It will be shipped and installed and sales out of this new plant will come in Q2 of next year. This is what FY 28, that is what we have guided and we are online to do that. The reason for setting up a separate wholly owned subsidiary primarily is to leave the door open. So at the moment, we have a technical license agreement and what we are looking at the potential of maybe moving forward, want to look at a joint venture, then it's much easier to investment in a new entity rather than get it in the parent company. So that is the rationale why we set up a wholly owned subsidiary. And plus -- so essentially, to open the doors to expand this business in a very meaningful manner because we see this as a very significant opportunity. And it is just prepping ourselves structurally to look at all possibilities as we expand this business in displays and cover glass.

Is it fair to say that the right time for you to be able to sign something concrete with customers, even if it is like a soft agreement, the right time would be once you have the equipment in place, the customer audits it, it's tested. So even visibility on orders will only come in, in FY '28 after the plant actually starts becoming operational. Is that the right understanding?

No, not really. As I have mentioned earlier, BOE is a global leader. They already are -- there's a phase of development that happens before supply starts. So there are issues like Make in China. So the customer businesses are awarded already. Here, what we are looking at essentially is starting supplies of the assembled panels or displays from India. So the customer award, there's a cycle that happens globally. You develop prototype, the customer tests it, he likes it, prices are finalized. So all that is in process that BOE is already handling. So what we are looking at really is doing that activity in India. So serial supplies will happen from India from the S.J.S. plant, that is the target. So it is proceeding as per schedule. As and when the customer -- typically, when the development has started, the customer is not hearing -- hurry to really release purchase order in advance. But yes, once the plant gets installed and there will be PPAP runs that do, that is a typical qualification process of an OEM for local assembly in India. That would require customer approval. And around that time, we can -- we will expect to get a formal purchase order from the customer -- from the final customer. That's it.

If I am a Mahindra, let's say, and I'm looking for a new supplier for the cover glass and display, the entire product, who am I going to be speaking to? Will I be speaking to you or will I be speaking to BOE or will I be speaking to both? The reason I ask this is because while you do not have a track record, BOE has an excellent reputation and scale globally in this. So isn't it going to be much, much easier and faster if BOE is the main guy who is collecting the orders and then you are simply executing those orders? Will the ramp up be much faster...

Your understanding is correct. BOE, I mean, at the moment, S.J.S. is starting this business. So the reason for getting a technical license agreement is that BOE will be the partner who will be involved in the technical phases of development. So that is being led by BOE. So that already is being led by BOE. The localization in India, the local assembly in India will be done by S.J.S. So to that sense, in terms of time line of when will India supply start, that is a conversation that is done in a tri-part manner, the customer, BOE and S.J.S. But all the development phase discussions or technical discussions are done by BOE. So that is exactly what we are doing.

Understood, sir. Sir, I have one final question, if you may allow. On exports and Walter Pack, in both these businesses, we have been in a tight range of revenues for the last 4 quarters. In Walter Pack, from what I understand, we were waiting for new business to ramp up because the tooling takes time. And on the export side also, while we have started supplies and reached INR 25 crores quarterly run rate to a couple of large customers. When do you expect in both these segments to again start ramping up from the latest quarter run rate? Do you have visibility? Has it already started? What is the right time to start...

Yes, there are some large businesses that are under discussion. So we have a good pipeline of how this will happen. So at the moment, our guideline or our target really is still to be 14% to 15% of our sales by FY '28 that we still maintain. So there are advanced discussions happening depending on the technology. So there are multiple projects. So it's not just one technology that we are talking of with customers when we look at exports. There are products that will come out of S.J.S. There are products that will come out of S.J.S Decoplast and there could be some projects out of Walter Pack as well. So it's a combination of all these. And we are in advanced stage of discussions. And typically, these will fructify during the course of the year. So we are on track.

And Walter Pack, sir?

Yes, what about Walter Pack?

So when would we expect the new business to start after the tooling gets over, which has been the commentary for a couple of quarters?

So that is fundamentally a launch decision by the customer. So there are new products that we are starting. We are looking at some businesses being supplied to customers in India. There are also exports happening out of India. So I would not like to name the customer at the moment because it is still -- we can't discuss under development project. But the plan is Walter Pack to start supply for some products in India and that customer has global requirement also. So we are gearing up to supply to global locations out of India. So whether the customer will want us to ship directly or they will consolidate it in India and distribute it across the world is still a matter of discussion. But the products we are engaged with the customer to do development and that is progressing well.

We take the next question from the line of Pradyumna Choudhary from Bowhead Investment Advisors.

Congrats on a good set of numbers. My first question is if I look at your revenue by end segment, there's a 4.3% contribution from others. So what exactly is others in this?

So revenue from others like we mentioned two-wheeler, four-wheeler and consumer. And apart from that, we are also doing -- working with sanitary ware, electrical company, we are doing for medical industry. So all put together, we are putting to others.

And what sort of growth outlook do we have here? Because if I look at it, it's a consumer segment and others, which has been really lagging two-wheeler and passenger vehicle has been doing wonderfully well for us.

Look, when we look at growth at S.J.S., we believe in all-inclusive growth. As I mentioned many times earlier, we are not chasing growth at the cost of profitability. So you will recognize that while we have been showing year-on-year, quarter-by-quarter outperformance of the industry by high growth at S.J.S., we've also been very mindful of the fact that we have a very sharp focus on profitability. And that is the reason why we've been able to maintain the profit margins for the last 26, 27 quarters that we've been reporting results publicly. So we take conscious calls during the course of the year to say what products are profitable and do we need to discontinue. So a typical case in point, which I mentioned in my last earnings call also was that consumer, we were doing some businesses where we felt that our capacity could be better utilized doing higher value-add products, which were more profitable. So we took a conscious call, this was at Walter Pack, where we gave away some business or in fact, gave away the wrong word, we created it for a much higher profit business. And that high profit business, while it has started, it is ramping up phases. So we take those calls. So overall, I would like you to think of S.J.S. as a high-growth company, but at the same time with very disciplined execution in terms of profitability. So when we look at a business or we look at, we don't really look at what segment of business is performing or not performing. We look at the overall basket and we look at how can we ensure profitable growth, which is industry leading. So that is the sole focus we have. It happens to be consumer where we want to recheck our strategy, we do that. It has to be some automotive customers, we do that as well. So I'm not so concerned about what happens in the short term or a quarter or two quarters for one segment. But I would encourage you to think of us as a high growth company, which is able to maintain margins consistently quarter after quarter.

Sure, sir. Understood. And my last question on the two-wheeler business. So of course, now the initial business that we've done with Hero MotoCorp that's already reflected in our quarterly numbers. So going forward, would it be fair to say that we largely grow in line with the two-wheeler industry? Or is there any further growth trigger to come?

Cross-selling is a major trigger for growth. But as I maintained the content addition in two-wheeler is limited because it's a smaller vehicle. So growth in relative terms for four-wheelers is going to be much higher, which we've been demonstrating because content is increasing. In two-wheelers, we do have opportunity for cross-selling products and we will start executing that. For example, we don't do chrome plating for many of the customers to whom we supply a lot of parts for two-wheelers. So that is one big opportunity that's available, including with Hero and with a few of other customers also. So it's a question of our managing capacity that we have. Now that I have a brand-new plant and so we need to be very, very focused in terms of deciding what will I fill that capacity with. So my -- I'm still looking at exports as a very major tool. So all the capacity that we put at S.J.S. Decoplast, I would -- my wish is that we will fill it in a large manner through exports, which will be more profitable and at the same time, expand the two-wheeler universe as well. So when I look at business, again, I'm saying I don't look at segments to say two-wheeler, four-wheeler, I look at and high growth. So where we see potential, we will utilize our capacities and we've undertaken very significant capacity expansions in the last year, both at Pune as well as Bangalore parent plant where we've added capacity. So overall, we are well poised now to chase high customers. And again, when you look at large customers, you need to underwrite that you will have the capacity in place to support the high volumes. So we -- last year has been a consolidation phase where we relooked at our capacities, we looked at our business plan and we found that, yes, the demand continues to be exceedingly strong and therefore, we invested.

So sir, would it be fair to say, before the Hero orders started coming in for us, our two-wheeler growth largely converged to industry growth, right? Going forward, do we expect that this cross-selling could be meaningful going forward and we are going aggressive in terms of two-wheelers I'm talking about?

It is meaningful. As I said, we've added almost INR 200 crores, INR 250 crores of capacity. Now that INR 200 crores, INR 250 crores of capacity has to be utilized with high-margin products. So two-wheelers continue because we have demonstrated that with a few customers, and we find ourselves to be very competitive. And we have the operational advantage of putting sharp focus on reduction in waste elimination or shop floor. So we think we are globally competitive. And moving forward, there's a very large chrome plating requirement for two-wheelers as well, which is what I mentioned as cross-selling opportunity. So it will -- there are meaningful cross-selling opportunity is there, especially in the chrome plating space for 2-wheelers. So we are not apart from -- just 1 or 2 customers, we are not supplying chrome parts to other people. But historically, we've been -- the demand for our chrome-plated parts have been so strong that we've had no capacity available to offer to any new customer. Now that I have capacity available, of course, we'll go out and win those businesses as well, which are -- which will -- could well be 2-wheelers, and that is the additional 2-wheeler opportunity apart from the organic growth.

[Operator Instructions] We take the next question from the line of Ganeshram from Unifi Capital.

Congratulations, Mahendra, Sanjay, Devanshi. My question is on the optical glass -- cover glass expansion. So my understanding was initially you were looking to increase the scope of work. So I'm just trying to understand where you are in terms of that. And in terms of new customers or I mean, do you have any commercial agreements with any customers and the ramp-up that you expect, which is from Q2, that's what you mentioned. Is this in terms of prototypes or in terms of firm orders? If you could just give us clarity on this, that would be very helpful.

So as I mentioned earlier in the call today, so our cover glass and our display business is going on track. The businesses or whatever I mentioned that sampling from customers to OEMs is going on at BOE primarily is these are production samples which go because the OEM has to validate for any new part products on their vehicles, whichever they are introducing. So that goes through various series of runs and they go through field testing and all that stuff. So these are production. These are not prototype samples, these are production samples which are being supplied to customers. And these are the products that will get transferred for local assembly to India once the plant is installed and validated. And that's where we said earlier to that earlier question, we expect supplies from this new facility for cover glass and display to start from Q2 of FY '28.

Got it. And what would be the content value on this...

Sorry to interrupt Mr. Ganeshram, could you please join back the queue, as there are several participants waiting for their turn.

I thought you said two questions. I've raised the first question and a follow-up.

Okay.

So what would be the content value, Sanjay?