Samvardhana Motherson International Limited (517334) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the conference call of Motherson Sumi Systems Limited. [Operator Instructions] I now hand the conference over to Mr. Vivek Chaand Sehgal. Thank you, and over to you, sir.

Thank you very much. Good afternoon to everybody. I'm sure you must be having a lot of questions. So there is no presentation per se. Just that we are going through a unique situation in the world, and there are pros and there are cons. So we are willing -- all of us are here to answer them. With me on this call is Pankaj Mital. We have Mr. Gauba. I have Vaaman Sehgal, who's flown in from London with a lot of difficulty. This -- 4 of us, we will try to answer all the questions that you might be having. Thank you very much.

Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] We have our first question from the line of Basudeb Banerjee from AMBIT Capital.

Sir, so a couple of months back when we hosted -- there was a call regarding discussing the demerger plans. So post this kind of business it is coming on -- up, what's the current status of that demerger plan? That's the first question. And second thing, please highlight the state of production impact in March and your outlook on that, both in India, Europe, U.S.

Thank you. I will like to reiterate that we are going through the demerger and the whole process of resetting the company will go on as scheduled. In fact, we will have lot more time now to really focus on that and try to do this as quickly as possible. The second question has much more parts to it. So I would break it up. I think Vaaman will answer the questions on SMP and SMR. And Pankaj will answer on the wiring harness domestic and outside. Would that be all -- would that be okay with everybody? If that's fine, then Vaaman, go ahead.

Yes. I think you would have seen the customers have announced plant shutdowns. So we are also getting that information in real-time as they're announcing it to the public market. So yes, as you can see, the number of cases have gone up significantly in Germany and even Spain. So most of them -- these are 2 big countries for us in terms of production. So definitely, all the customers there are affected, are going through shutdowns that are starting from today. We are assessing the entire impact. It's not -- it's a situation that, as you can imagine, is dynamically changing, but we are preparing ourselves to see this shutdown and go as long as possible, even with these plants shutting down, being prepared for whatever requires for that -- for this period of time. So yes, Europe is impacted. U.S., still we are seeing that the cars are still -- the plants are running. We're not seeing the reduced demand there as yet. But again, seeing how the world is progressing with the shutdowns and things are quite dynamic, we are preparing for a global scenario, but we still do see that a lot of customers are continuing production as well in cases like U.S. where the markets are still holding up.

I would like to just add one thing that I think the -- just with -- whatever people we have discussed with, the game plan is very simple. They don't want to make an area where they can spread the contagion, whatever, coronavirus, whatever it is. So they are thinking that if you do a 15-day block holiday, the unions and everything, we're are all discussing it all across. And they would probably prepone some of the holidays that they have in the later months that are coming. So I think the game plan is very sound. You stop the contagion to spread. And 15 days break is a good enough, this thing, to come to know. If there is any problem, they can then continue to stay at home. And the rest of the people who are fine will come back and they will open up the plants. That's our reading as of now from all the people that we have discussed. Pankaj, on to you for wiring harness.

Yes. It's a similar situation developing in terms of PKC and MSSL facilities providing harnesses also. I mean so far North America is not impacted. Of course, there can be volume drops and other things, which can happen in terms of the market conditions, but all the facilities are up and running. China facilities, we lost a lot of time during the outbreak in China. They are -- they have come back to normal production, and -- except one facility where the production rate is still low because that was in the -- very close to the core area from where the whole thing started. Apart from that, the South America is still running. Even in Europe, our plants have been running so far. Because customer shutdowns are being announced step-by-step probably, so we've heard some customer plants which were in France getting shut down first. Rest of them are still continuing. So as long as the OEMs are working, we want people to work. We have had no issues reported from any of the plants. We have daily calls to get an update and all the plants are working under very strict controls, which have been put in place across the world as a group in all the facilities.

I think what is very -- the good news is that China, we have 27 manufacturing plants. And as Pankaj said, other than one, 26 are almost back to normal. So that shows that the ability to isolate the people for a period of a month or -- 15 days to a month can result in very good results for the whole this thing. So I think we are a bit enthused with this. It's a ray of hope for all of us.

And as far as Indian operations are concerned, so far they have been running normally. So that's where we are.

And sir, last question is, sir, last time, as we discussed in the past mega economic crisis, you said that you have never asked a single employee in SMRPBV to exit because of demand slowdown. So under current demand risk, any specific cost management initiatives you are planning to avoid any major drop in margin?

So I think this is a human tragedy. I don't know how you guys will take it. But for us, we are a committed company towards the people. We will go on as long as it is necessary to and that we can, we will go on. But more than us, I think the governments of these countries all over are very, very focused on this particular issue. Even the Indian government has already done the ESI and PFs are not to be deposited or something like that. I heard -- just heard about 10 minutes ago. So I think every government is going to put in the best foot forward. There's going to be a lot of effort to keep all the plants running, don't have the tragedy of human tragedy on top of the virus tragedy. So I think we have to be very human. We have to be very focused because manpower is our biggest capital. So we will not sacrifice that for anything. So we will continue. The good news is that I've talked to my CFOs, and everything, all of them are very well profitable. So they have a lot of cash sitting with them. So we will do whatever is necessary and by law, whatever the relief that will come to us, we are very happy with that. And we are grateful to all the governments globally for taking a very good human view on this particular thing.

Great sir. Wishing you best of luck to come out of the crisis.

Thank you.

We have next question from the line of Priya Ranjan from Antique Stockbroking.

Just one thing. I mean I know this is very human and it's unfortunate tragedy. But at what level of decline you would be still be thinking of breakeven levels for -- if this persists for, say, 1 or 2 quarters?

I don't think there will be anything to really say for if this is going to survive for 1 or 2 quarters. What do you think will be left? Do you think we will be left? The speed with which the whole thing is taking its toll, I don't think it's a matter of 1 or 2 this thing, I think the vaccines are out. There is a tremendous amount of hope. I think every single lab that you can think of in the world is working on this particular thing. So I'm sure the human spirit is going to eventually triumph. I would have my doubts that if it's going to last even a month, 1.5 months. That's the way I look at it. Because if it's 6 months, and if you have a geometrical progression, my dear friend, we don't have -- we would have wiped out a huge part of the population. So where are we going with this. So I think we are optimists. We are thinking that the government's idea to keep the plants closed for a period of, say 15 to 30 days, maybe 45 days, I don't know, is a very good one, and that will reduce this. I mean you must have got a lot of photographs from all over the world, all markets, all malls, everything is empty. So I think that whole particular thing is happening with a lot of high spirits.

And today, we have a benefit of a China experience because China had just closed for the New Year Chinese holidays. And after that, how they did it. So the whole world has experience of how China could come out of this, same way Korea or Japan.

Yes. I think everybody is interested to get back as soon as possible.

I think, again, the bottom line from us is, we're prepared -- we're preparing ourselves for the worst. We are hoping for the best, and hopefully, it will be somewhere in between that.

We have the next question from the line of Hitesh Goel from Kotak Securities.

Sir, can you just shed some light on the, is there any stress on the working capital side or supplier side on your operations because there may be some Tier 2 vendors from which you are taking material and their financial situation is definitely much worse -- would be much worse than yours, right? So just trying to get a sense on the supply chain. How is the supply chain panning? So is everything normal there? The issues you're facing on the supply side.

Okay. One of the good things that Motherson has is that our Tier 2 is something which is even bigger than our company itself. Most of our components are coming from our collaborators. And our collaborators are very, very capable. They are taking care of all the supply issues. So for example, in the wiring harness, all of it is coming from Sumitomo mostly and some coming from other companies, which is -- which are also equally big. On the polymer side, our material suppliers are companies which are very big. Reliance is there. I mean BASF is there. There are so many of these global entities, which are very strong suppliers. And the good thing is that all the other parts, which are the child parts, 90% of the child parts are made by us, by ourselves. So Motherson is a comprehensive group in the sense, right from designing to toolmaking to assembling of the parts, subassemblies and making of the main parts and then supplying it in modules to the customer, the whole thing, very little is outside Motherson. That's the reason we are not very concerned about here too. But yes, you're right. There might be something, one thing here and there, which is down. And if it is down, then we have told the customer, and we have got the alternatives and we're doing it.

And any -- just another question...

Vaaman will answer -- Vaaman is answering your first question.

So you have to understand, part of our diversification strategy 3CX15, we've made our plants sufficient to source locally, supply locally, and procure locally. So that is another thing which is helping us, like we're not doing any very high-tech components which have to come from...

Especially, the mirror and everything. Even the electronics has been...

Exactly. Quite a high level of horizontal and vertical integration, backward integration that we have been able to achieve. So we have quite good visibility on our supply chain. I'm pretty confident at this moment with the information that we know that we will not be in a place that we are stopping any of the customers' demands. They may have other issues with other suppliers that are sourcing key components from some areas which are -- were affected. But on our side, where the plants are running, and where, of course, the government is allowing trucks to move in and out or those kind of issues are not there. We don't have any issues that have come up so far.

To add, we have 4 channel offices globally. One is in Americas, one is in Europe, one is in China, Asia and the other is Southeast Asia, including India and the Middle East and Africa. These particular 4 this thing, we have a daily meeting coming from them. There's a mail coming for any news that is in that particular area. So this command center and control center is based here in Noida. And if there is a shortage of anything in any of our group companies, we come to know about this instantaneously. So that's also something which is -- we are very grateful to all the people who are manning this 24/7.

Sir, just a follow-up. Are you facing any project fees on the working capital loans or anything? Globally, there's a lot of concern in the market that this can turn down into a...

[Foreign Language]

I'm just clarifying.

No, Hitesh, there is no bank or no institution which has come that they are...

[Foreign Language]

We have not hired or fixed any of the bankers.

We have next question from the line of Shyam Sundar Sriram from Sundaram Mutual Fund.

Hello?

Yes, go ahead.

Yes, sir. Sir, I understand this is a very big tragedy for the entire humankind. Just on the liquidity situation for us from an SMRPBV perspective, if at all, we have to run the plants at very low utilization levels, in terms of managing the fixed costs, et cetera, how are we placed in terms of a cash position? And if you can give some numbers of how much cash you may have in -- at the SMRPBV entity? And are the banks and other financial institutions there ready to give a credit line as and when required if need be?

I think it's a question for Gauba, so he will definitely answer it. But I would like to just put one thought in your mind. See Motherson has not invested what you are thinking we have. Most of the companies we have bought for a $1 or less. So our investment in real estate and all these particular things, the fixed costs on those particular sides, they -- keep it out of your mind. But Gauba, I think he probably needs your undivided response.

What is important is we have enough of liquidity, both in terms of the cash on the balance sheet as well as on the unused credit facilities, RCF or otherwise available both at SMRPBV as well as at rest of the world. I think it is important to consider the group as such because this is how the group [indiscernible], and we are always there to support SMRPBV. But SMRPBV by itself has enough liquidity as well as one of the aspect is that you are also seeing the governments coming forward and offering in support for this period to meet part of the fixed cost.

Right, sir. So there is -- will there be any breach of debt covenants in case of such -- in such a dire situation? And are the credit -- will the creditors take a more lenient view in that case, sir?

We don't want them to take a lenient view. If required, both Motherson Sumi and SAMIL, which is the holding company of the family, will repay the loans. We have enough cash.

Okay, okay. Sir, and just one more question more from a business perspective.

Go ahead.

Sir, from a business perspective, sir, if -- I mean given the scale of this event, are the customers thinking of postponing the new programs, et cetera? I know it is very...

On the contrary, this particular thing vindicates what Motherson has been saying all along. We have been saying this whole particular story about connected, shared, all these vehicles that people are not buying cars and all that is absolutely destroyed. I would encourage you to now go back home in an Uber and I want you to see. You'll be sweating, my god, who is the last person sitting on it. And was he clean enough. I'm just saying all these things are going to happen. But we are not looking at that. I think it's an awful tragedy which has happened to the world. And it shows that whatever we think will happen is not so easy. There are so many things that are going to happen. This is just one particular virus that's happened over there. And the whole, I think, thinking of the carmakers has totally invigorated at the moment. I hope soon you will realize about the electric car also. But again, I'm telling you. All these particular stories that you will have disruption -- global disruption and all that, I think they will be very nicely disrupted.

Okay. Understood, sir. Understood. Sir, one last question, sir. Our promoter entity, the SAMIL entity has -- there is a share pledge of Motherson Sumi. Is there...

I said, sir. I told you the total debt that SAMIL has is a particular amount. If god forbid, if it is required, we can pay it off now. I told you, sir.

We have next question from the line of Kapil Singh from Nomura.

I hope everybody at Motherson family is safe. My first question is, want to check, after 15 days or whatever period when the plants open, there is a risk of, again, a second wave of infection. So what kind of precautions and contingency planning has Motherson done to ensure that the production runs smoothly after the plants open?

Kapil, 2 things. One, thank you for asking for the people. I thought a lot of people would be worried about that, but nobody will ask such a question. We are very happy to report that up till now, we have not got even one case of such an infection in our entire group. And that's about 140,000 people, including their families and all that. That should be almost about 500, 600 people -- 500,000, 600,000 people. So we are very grateful to god that not even one case of this has been reported in our group all over, including China. So thanks for that. And I think to answer your second question, when this whole particular thing would be over, I think the first cheer will come when the virus is successful -- I mean the antidote for that is successful. The vaccines have already -- I mean we've been hearing even President Trump is tweeting that the vaccines are on the way. So I hope that all that particular thing will allow the people to be healthy and safe. Third point, which I would like to make that depending upon the geography, people are very, very vigilant over there. They are very careful. When you look at the Europe this thing and all that, if the people have even an iota of a doubt, they will go and they will isolate themselves, and they will do so in a very happy manner. So I think all this depends upon the human being really itself and which continent you're wanting to talk about. And yes, we are keeping our fingers crossed, hoping that the whole start-up and all that will be smooth. But honestly, there will be a little bit of hiccups here and there. But then whatever it is, it is for everybody.

And just to add to that, we are following the entire safety guidelines as prescribed by the governments, by the health agencies, and they differ from the different countries, as you can imagine, as they all have their own guidelines.

But that will still go up because we are giving hand sanitizers to all the plants and masks and everything.

So all those contingency plans, god forbid, if there is a case identified in a plant, the isolation, who takes over. I mean all those plants, all those things have been issued as per the regions as the situation is developing. So we are currently focused on this first wave. I think second wave, definitely, once we get over this hump, we will look at what has to be done for the second wave. There are a lot of learnings. A lot of -- I think the whole world has -- will pick up a lot of learnings from this that we will implement. But right now, the most important thing is the safety of our people that are there right now. And following the right practices that have been informed by the governments and the health authorities in the local regions and we're following that to the dot.

Great to hear that. Also I wanted to check in terms of the stock price had seen a significant correction. So would you consider options like buybacks, for example, at present?

I don't think of a buyback or something like that for the simple reason, we have to -- we are very clear. We have to conserve our cash, and we are keeping it at this particular moment to make sure that our company, we don't know the end of the -- this particular episode. So we are very clear in our mind. We want to conserve the cash so that we can support our activities globally. And buyback and all these particular things will happen at a time, we are okay. In the last crisis, and I don't know about you, but my -- I remember that our share price had come down to INR 38 [Foreign Language]. No issues there. We don't worry about it so much.

Yes. And sir, what kind of support are you getting from the carmakers side, if you could talk about that as well? You can talk about generic case, if specific case is difficult to talk about.

I think we can talk about it. But believe me, they are very, very human. They are very human centric. Most of these companies are huge companies by themselves. And they are not looking at this as a matter of, I have to get compensation or something like that. I think there are a lot of issues that are happening. But clearly, companies have come out with a game plan, which is, I think, supported by the government, where they are saying that let's isolate the people for 15 days, 20 days. And by doing that, they will stop the spread of this particular thing because automotive production cannot be done from home. So obviously, the people have to be working together and all that. So all the companies are taking a 15 days break, at least that's what we have been told, but some of them may have not announced it in that many days or something, but they are trying to look at a 15-, 20-day gap so that no traveling is required or no this thing is there. And yet, if god forbid, anybody has got this particular exposure, then he or she would then be isolated in their own home itself. So that's the kind of wonderful self-control that the people have, especially in all our markets. All our markets are in very developed countries. So we are very, very sure that they will overcome this very soon. And as Gauba said very rightly that China has already done it and proven it, so I'm sure the same thing will happen here.

We have next question from the line of Jay Mehta from Edelweiss.

This is Chirag here. Thanks for taking time out for this call in such a tough situation, first of all, and hope we come out of it very soon. Sir, 2 questions. Question number one, you've indicated that you are preparing for the worst. Is it possible to indicate how do you define this? Because it's an event which it is difficult to comprehend actually, so you must be doing your internal analysis and permutations and combinations. There would be multiple scenarios that we would have to focus on given our business spread, the regional spread as well as the different cultural spread that we have. And it is not just supply chain or customers, also includes the employees in that sense. So is it possible to indicate when you're trying to figure out what is the worst case scenario, how are you thinking about it?

So I think the worst-case scenario that we are thinking, I think Vaaman will also elaborate on this. Pankaj as well can join in. I think it's the length of the duration of the stoppage. Because on our supply chain, manpower, our global reach, we don't really have a problem. The problem is, how long will the customer want to keep the plants down, that's the only issue. All our plants are geared up, we are producing, every single thing is happening. But as the government is taking steps to curtail or contain this particular problem, that's the biggest of the worst-case scenario. But I would welcome Pankaj and Vaaman to add up on this.

That's exactly the point.

We are not worried about the supply chain. We are not worried about our financing, this thing. We have enough resources to take care of this particular thing.

Yes, exactly. I think this is the last year of our 5-year plan. And luckily, with god's grace, we put in, in our plants something called Project Victory, which was to start conserving cash already from last year so that we can come to a very high ROCE at the end of our finish line of 5-year plan. So that has given us a lot of, let's say, room. As you can imagine, we also spoke about that our CapEx cycle was completed. So a lot of those plants have started with the new businesses. So we are not stuck anywhere in that kind of sense. All the plants, touch wood, like I said, before this instance, were doing fine. And even with this, we are -- like dad said, that we are really imagining it to be a short-term thing, 15 days, very optimistic, 30 days, maybe if it goes on, worse case, 45, if we think it goes on like that, but not more than that. Because, again, we have the history of China behind us. China, our plants did shut down and have started fine and all of them have started up in a very good way. So we believe that the rest of the countries will follow. In fact, some of the countries are now ahead rather than waiting for when China did the clampdown. They are taking precautionary measures and doing it in advance. So we're hopeful that those plants will open up even quicker. At the same time, we are doing the entire -- the cash balancing, seeing that we have enough and we have enough headroom. We've repaid some of our loans as well. So we're in a comfortable position. And of course, we need the support from the carmakers and the governments as required and depending on how long it goes on. But as of immediately, we do not see any fear, and we are bolting down for this shutdown to be there and preparing ourselves.

Chirag, to give you one example, in the end of February when the New Year of -- China New Year was coming to an end, the Chinese government had come up with a clear explicit this thing that if you don't have masks, you can't come into the factory. And I remember that our purchasing organization airshipped from Dubai 150,000 masks to China because they didn't have any masks with them at that time or they were running short of it in China at that time. But I was very heartened to hear that recently one gentleman, a billionaire from China, has actually donated a lot of masks to USA. So the way to overcome -- adversity will teach the people to overcome and come out with solutions. And that's our biggest hope. And we think that the thing is definitely already under the microscope of all the governments. They are looking for the vaccine. I'm sure the vaccines are already tested out and being shipped as we speak. And I'm also talking about that the resilience of the people to understand the responsibility is phenomenal. That's why the whole particular thing is coming under control in China. So I think it's just a matter of 2 weeks or 3 weeks or 4 weeks, I mean somewhere there would be the answer to the whole thing. And we have to be conscious of this. And if we can get out of this, we'll be ready for the new age of the world.

And sir, if I can ask, second question is, again, on balance sheet management or support that is required, again, from various expense numbers [ finances to settle that ], because you would be taking various extraordinary steps in last 1 or 2 months, right from supply chain to your employees. So are there any major one-offs that could come in the results that you would like to indicate as upheld in that sense that the kind of support that you're trying to get from, be it employees or be it vendors or suppliers or customers, and it could have some major one-off impact on the financials. Would you like to comment anything on that side, sir?

Chirag, I am Gauba this side. I mean while we are just closing the March year-end, it is only today or tomorrow you are hearing that the customers are shutting down. So like Vaaman said till yesterday, till today, most of the plants are running. People attendance is there. China, Pankaj talked about that. And beyond that, for us to elaborate on March will be difficult. But...

I think anyway the life of our workforce, life of our management is concerned. So I'm not going to start working the computer as to what is my cost of that. So Chirag, sorry, that's very difficult...

That's important -- That is the most important thing. You will not have to explain...

We're just looking at all this -- we are looking on the life -- on human life.

And we'll come back -- if there is -- if like the assessment is there and there's something that comes up, we will -- like we are having this call today, we will be open to communicate that. If we see something like that that comes up, we will communicate.

We are proactive in talking to you because they were multiple requests. So we said why don't we have a call.

But as of right now, again, we don't have any assessment of that.

And Vaaman, just a clarification. You indicated that OEMs, our customer, have started indicating on plant shutdown. So is it across Europe or even in Europe, it is happening in pockets? And are they indicating any duration of shutdown to be in their first phase? Or if there is a general statement that we can look up.

Look, it's coming from the carmakers, and also that's somehow coming from the government. The government tells if the state has to shut down or the country has to shut down, then the carmakers have to follow. So it is a dynamic thing that is happening, different countries, different regions, different customers. It's not one thing that's happening for all. But yes, you've seen the news yesterday, Daimler has said that it will shut all plants in Germany. So then the...

The American plant is working, the Hungary plant is working. The other -- Indian plant is working. So very difficult to give you a quantum of which customer is saying what. Then we need at least 2, 3 hours to then give you step by step, plant by plant, customer by customer, kind of this thing. But as I explained that we have 4 very strong channel offices globally. And they are giving us day-to-day information if there is anything that's coming from the customer to any of our plants. But generally, the consensus is that let's try and contain for 15 days to 30 days. That's the first thing that is coming in front of us. And that's happening. As Vaaman said, it's happening from the 20th or the 21st of March. So the thing is, in an ordinary plant, a car which is -- say, a plant which is making, say, 500,000 cars a year, can you imagine how many trucks are coming in? So it's not just that they can say today, one day to another and then we stop. It doesn't happen like that because the supply chain, the things, goods which are in transit. There are a lot of things which are there. So they're giving a particular date and saying that from this day we are going to shut down the plant, means it gives you 2, 3 days. They will accept whatever is coming. And it's a complicated procedure. And this is a plant-by-plant thing. It's not a company-by-company take.

And Chirag also Easter holidays are coming up in a few weeks. So they're taking advantage of that. Also there are talks that what we lose over here, maybe in August time when there is another shutdown, that may not happen because we've already had the shutdown here. So there will be ways and means we will try to catch it up. So again, this is -- it's developing right now. I don't think we're in a state where we believe that there is doom or something like that. Yes, there is a nonnormal shutdown of 15 to 30 days, but they will catch up. You know the carmakers. They will put extra efforts as soon as the situation is back to normal, and we will figure out, maybe in the...

We're discussing in a very positive manner with the unions because the unions are also very concerned about this sort of -- with this sort of particular tragedy. But on the lighter side, Chirag, just for your information, I have my 2 grandsons also they're supposed to be in school in London, but they're all back here in India. So I'm going to enjoy that particular thing. So there are some pluses, some minuses, yes, it's part of life.

No sir, this is an unprecedented event. And if any thought, actually hats off that you're able to make this kind of planning in terms of contingency plans and all this in your own way. So that is tough, given the kind of spread you have and kind of focus that you're having. So it's really hats off for you all to be able to do this kind of planning.

Thanks.

We have next question from the line of Binay Singh from Morgan Stanley.

Wish everybody good health. Most of my questions have been answered. Just one question. What will be your minimum level of CapEx in the next financial year, FY '21?

CapEx, really we don't have the time at the moment to work out this particular thing.

So we haven't disclosed that number yet. That number definitely will be way reduced as to what our planning was with the current market circumstances, you can imagine. But again, we've been following a path over the last 5 years. We had an investment cycle. We've invested. We told you that our entire order book today is sufficiently being taken care of by the plants that we have. We're not really looking at any new greenfield at the moment. So that number is significantly reduced from where it was in the last couple of years. But as these things are developing and once we have the clarity at the end of the quarter, we make -- we freeze all our budgets, we'll come back to you with that.

Luckily, the virus is not affecting the machines and computers.

Yes. Actually, they are much safer than us. We'll wait for more details from your side. And take care, everybody.

Thanks.

We have next question from the line of Ketan Gopani from Unique Asset Management.

This is Nirali Gopani. Sir, this truly is a very tough time. Sir, my question is that we have a track record of acquiring companies that create valuations during stress time. So -- and this is clearly a tough time. So if you can just talk about on this front, it will be great, sir.

I'm sorry, I was on a call, where some bank wanted to give me loan. So apt question at the right time. I told her that, no, we don't need any loans. We are pretty okay. I think the good side, if there is one, of this particular scenario, is that the global valuations have come down dramatically. We are, today, much better off than a month ago on the valuations. A lot of the companies need help. And more than the companies, the customers are telling us, please go and have a talk with them. So we are not giving up on our target. The target is very clear, $18 billion with 40% ROCE. If I don't see the ROCE, I won't do the acquisition. I have amply displayed that in the last 5 years. So yes, we are not giving up. We got 11 days to go. Watch the space.

We have next question from the line of Arvind Sharma from Citi.

[indiscernible] about the OEMs still in the quite positive...

Your voice is cracking. Can you come close to the phone or...

Sure. Sure. Am I audible now, sir?

Yes, yes, better now. Yes.

Yes. Apologizes for that, sir. Sir, any impact on the order book that you have seen over the last maybe a month?

No, nothing has changed other than the volumes will go up, because shared mobility will go down. You have to allow me that laugh here.

Sure, sir. And secondly, I missed the part on the China plants. You said that they have come back on track. So any statistics that you can share on that?

Can't, again, because we're in a quiet period right now, so can't tell you numbers for March in that sense. But like I said...

You need -- you want more of the human side of it? Or you are wanting more the numbers side of it?

No, sir, just very -- very broad numbers, like how many plants are functioning now and at what capacity utilization?

So Pankaj has said, all the 27 plants from Motherson are working in China. And 1 of them is still having 20%, 25% attendance. And all others are almost at 70%, 80% attendance. That's the only number that I can give you.

[Operator Instructions] We have next question from the line Priya Ranjan from Antique Stockbroking.

Just on the -- I mean if we look back, I mean if we had to look beyond this crisis, say, next 1 year or 2 years, so how do we see this as an opportunity? Or is it like, say, export kind of scenario will be kind of reduced and local to local will be more sourcing, that one will be the view going forward?

I think your question is very deep, and it's a good question. I think everybody has their own thinking as to how they are going to take care of the customers' needs. Luckily for Motherson, we have plants in 41 countries where we are all over the globe. Local, this thing, is always going to be preferred. But that was not necessarily because of the virus. I think when Mr. Trump came in, he actually showed that he wants production to go up locally. Almost all the countries in the world can see that there is importance given to the industry in their own this thing. So they would like that no exports take place. So I think, yes, in that sense, Motherson feels good that we pursued that. Otherwise, you can imagine, if we had concentration in 10, 15, 20 plants, you would have had huge issues with this particular thing. So the ability of the other plants to cross-geographically support each other is something which is also playing a lot of good things in our case. We think we will pursue, and we will keep on adapting to whatever the world is going to throw at us. We will try and come out with newer, better ways to improve. And we feel grateful to the carmakers for giving us this opportunity time and again. I hope I answered your question.

[Operator Instructions] As there are no further questions from the participants, I now like to hand the conference over to Mr. Vivek Chaand Sehgal for closing comments. Sir, over to you.

Thank you very much. I would like to reiterate that Motherson is on top of the situation. Whatever challenges are being thrown at us, I'm grateful to my team globally. They are doing a phenomenal job and virtually working 24 hours to be able to solve the issues on every challenge that has been given to us. I'd also like to appreciate my customers. But one particular statement I would like to say that in this particular tragedy, many things have come out very clear. And that is we are going to rethink whatever people have been feeding us on the mobility issue. There's going to be a huge rethink about it. So even with the petrol coming or the diesel coming down to $30 a barrel or whatever, I think -- naphtha, sorry, you're going to have second thoughts about a lot of things. So I think there is a lot of steam left in what particular business we are into. So I hope you will give us a chance to show you that in the coming months and quarters. Thank you.

Thank you very much, sir. Ladies and gentlemen, on behalf of Motherson Sumi Systems Limited, that concludes this conference call. Thank you for joining with us, and you may now disconnect your lines.