SPR Auto Technologies Limited (SHRIPISTON) Earnings Call Transcript & Summary

Ladies and gentlemen, good day. And welcome to the update call for SPRL's acquisition of TGPEL, Precision Engineering Limited, hosted by Shriram Pistons & Rings Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Krishnakumar Srinivasan from Shriram Pistons & Rings Limited. Thank you, and over to you, sir.

Yes. Thank you, Ryan. I hope you can all hear me well. A very good evening to everybody. On behalf of Shriram Pistons & Rings, I welcome you all to this investor call to update you on the proposed acquisition of TGPEL Precision Engineering Limited by Shriram Pistons & Rings through its wholly owned subsidiary. We had intimated the stock exchange with the necessary disclosures as well as the press release on the 10th of December. However, we felt that we should also give an update to you all via this call. So thank you all for attending the same. Let me begin, Shriram Pistons & Rings Limited through its wholly owned subsidiary, SPR Engenious Limited, has entered into a definitive agreement for the acquisition of 100% shareholding and TGPEL Precision Engineering Limited, which is engaged in the manufacturing of high-precision injection molds and injection molded components. TGPEL Precision Engineering Limited, formerly known as Timex Group Precision Engineering Limited, is a leading player in the field of precision mold-making and injection molded parts, particularly known for its diverse product offerings in the automotive industry. Additionally, TGPEL Precision Engineering Limited has a presence in the electrical consumer goods and medical sectors and its markets also extend beyond our domestic borders. Established in 2008, TGPEL Precision Engineering Limited boasts of 2 state-of-art manufacturing facilities in Noida, Uttar Pradesh that are outfitted with advanced capabilities for the design, development and production of high-tech precision molds as well as in-house tooling and the manufacture of intricate injection molding parts. TGPEL Precision Engineering Limited primarily supplies injection molded parts, products and molds to OEMs and other automotive companies. Its diverse product range includes many precision automotive components like the speaker grills, the air vents, the flange covers, manifolds, bobbins, door handles, EV fuse box covers, CRB housings, clamps, connectors and also many nonautomotive components like the electrical terminal blocks, density parts, the plastic gears, canister brackets and small medical devices. Some of the clientele of TGPEL include Denso, Asahi India Glass Limited Continental, Motherson, Havells, Dabur, Kohler, Gillette, Schaeffler, Nidec and many more. TGPEL has shown a positive financial trajectory with revenues climbing to 1-1-8-3, INR 1,183 million in financial year '24, up from INR 726 million in financial year '21, growing at a CAGR of 18% between financial year '21 to '24. Along with that, the EBITDA margins have been ranging from 23% to 26% during this period. It has not only reflected a strong growth in the top line, but also in the profitability. TGPEL Limited, with its healthy profitability metrics, has demonstrated strong capabilities and operational efficiencies on a day-to-day basis. The acquisition of TGPEL is extremely strategic to us not only from a point of view of diversification into non-ICE components but also into areas beyond automotive with lightweighting as a concept across various industries. TGPEL's robust financials are expected to contribute significantly to the overall consolidated financial strength of Shriram Pistons & Rings Limited. Let me quickly talk you through the -- about the transaction. SPR Engenious Limited will now -- will acquire 100% shareholding in TGPEL at an enterprise value of INR 2,200 million on a debt-free cash-free basis with adjustments of debt and debt-like items to be considered as on the date of the closing. The transaction is expected to be completed by 31st of December 2024, subject to satisfactory completion of all the condition precedent. SPR Engenious Limited will acquire 30% shares from Asahi India Glass Limited listed company, 30% from Padmini VNA Mechatronics Limited and 40% from 3 other private investors. There are totally 5 investors in this company, and SPR Engenious will acquire 100% of the shares from these 5 investors at the above enterprise value. The proposed acquisition is part of Shriram Pistons & Rings Limited's overall long-term strategy to invest, diversify and grow its product portfolio in the areas agnostic to ICE powertrain, thereby cementing its leadership position in the automotive sector. This deal will mark one more step towards Shriram Pistons & Rings' focus to consolidate and strengthen its position into the manufacturing of high-precision injection molded components. Leveraging TGPEL's cutting-edge molded development capabilities and its infrastructure for producing high-precision injection molded parts, we are well positioned to meet the needs of both local and international clients seeking meticulously crafted molded components for automotive and other industrial applications including medical. Integrating Shriram Pistons & Rings' robust manufacturing and engineering prowess with its extensive customer network presents numerous opportunities for synergies. This acquisition is poised to reinforce Shriram Pistons & Rings Limited's footprint in the specialized area of high-precision plastic injection molded area as well as the overall weight reduction strategy along with its previous acquisition of SPR Takahata. This acquisition aligns with the Shriram Pistons & Rings Limited's strategic emphasis on broadening its footprint in the non-ICE product segment and thereby creating long-term value for its stakeholders by being accretive to our EPS right from the first day. So I'm sure you will find this quite interesting. And I now request the moderator to open the floor for any questions that you may have. Thank you.

[Operator Instructions] Your first question comes from the line of [ Akshay Sam ] from Sam Capital.

Am I audible?

Yes, Sam. You are audible. I can hear you well.

So firstly, congrats on the acquisition. It's heartening to see very high margins of TGPEL. I had a few questions. Can you just tell us about what are the synergies you will have with another acquisition you did, Takahata, last year? And also since we have seen very high margins for this company, in particular, I wanted to and in particular know why are margins for Takahata very low despite them being around for 15 years already in India? Is it more towards -- is it because of low capacity utilization? Or there are some other factors? Or eventually the margins will eventually catch up with TGPEL? That's my first question.

Yes. So Sam, let me answer the first question -- first part of the question. First and foremost, as far as the synergies are concerned, we see a lot of synergies in the sense that we bring the depth in terms of the reach with all the customers, all the OE customers as well as the Tier 1s. And because of that reach, we are in a better position to really help TGPEL also and as also the Takahata team get more business. We have already started doing that in Takahata. And so we see that basically with the product range that presently that TGPEL is able to cater to the industry and as well as Takahata, you will find that as far as the precision injection molded components are there, most of the OEMs, they -- since it requires for a very heavy amount of molding, costs to be put on the molded parts, we find that most of the customers normally have only one supplier for one part. So in terms of the product overlap, there's almost zero overlap. That's the good part between TGPEL and between Takahata. Now as far as the customer overlap is concerned, there are some customer overlap, but that's not too much. And we find -- we really found this acquisition leading us to a very good kind of a situation with regards to finding the synergies as well as seeing this whole acquisition being very complementary in terms of its overall positioning both on the top line as well as the bottom line. So having said that, I would say that with regards to the margins, I would like to clarify that, first and foremost the margins of Takahata are not pretty low. So you might have seen in the last 2 quarters, we have already shown the margins in our consolidated statements. The margins are very close to very high -- it's high double digit -- high -- in the high 20s. And we are very hopeful that the margins of Takahata and margins of TGPEL will really help us to get a fantastic -- a very accretive EBITDA business for SPRL on the whole.

Sure, sir. My second question is regarding further acquisitions, if you have planned in the pipeline. Obviously, you've said in the past that all of you are very active and looking out like a hawk for more potential investments. Can I know, is the strategy of the company is to like get into more use case applications since automotive industry is generally very cyclical? For example, if I may, I'll name a peer of yours, similar to what kind of tube investments they are doing. Because there's so much potential for India's manufacturing sector in general. So looking at just, say, automotive with a narrow lens may not be the best strategy for future if we want to build more like an industrial hub in India. So in terms of just diversifying your use case applications, what is the strategy of management so that we are not just looked from the lens of automotive in general and more looked like an industrial company?

Yes. So first and foremost, let me clarify. I -- while I agree that the automotive industry is fairly cyclical. But at the same time, with the penetration of newer models and newer areas, especially the EVs, I think overall, if the company really does strategic investments, it will continue to have a continuous growth path. So I don't see any reason why that should not be achieved. It's a question of how we are able to leverage our strength in the areas of automotive. That's point number one. Point number two is, as far as these 2 acquisitions are concern, both Takahata and this, you might have seen that they have exposures in the market as far as market is concerned to areas beyond automotive. And on an average, both the companies are doing quite well in industrial sectors as well as medical sectors and other areas. So as a result, we feel that our exposure into those areas are slowly improving and increasing. But it's coming more from the acquisition, and I don't think we have a very clear -- let me put it this way, a very strategic intent to go into areas other than automotive. Our focus -- our strengths are in the automotive and will continue to be in the automotive as a dominant player. But at the same time, we will also explore other areas in industrial as well as medical and other areas so that we slowly derisk the overall business model. We have already done that with -- now with both the companies put together, we'll have a sizable turnover as far as the plastic injection molded components are concerned, and we'll have both on the top line and bottom line a fairly good presence from the plastic side. So fundamentally, if you really understand the overall strategy of the company is more to ensure that we are able to keep the position -- the lead and the position that we have in automotive and then leverage it to be able to focus into other areas of automotive that also very niche areas. We just don't want to just put money into very normal items which will not give us the required margins. Because our focus has always been on margins, and we are trying to see that whatever we do is EBITDA accretive to us. So that is the way that we are focusing. And going forward, to answer your first part of the second question, whether we are looking for other acquisitions, yes, you're right. Though we are looking like a hawk, but we are looking at like a hawk in a very -- let me put it this way, in a very close zone to ensure that we zero in on the right companies which will be able to give us the -- both the top line and the bottom line rather than just throwing money into very, let me put it this way, irresponsible acquisitions.

[Operator Instructions] The next question comes from the line of Gourab Paul from Techsellence Financial Research.

Am I audible?

Hi, Gourab, yes.

Sir, my first question is a bit technical. So what is the sort of the lead time or the product development cycle for precision mold? Could you kind of explain me? And the second part is that, last call you had mentioned that the TAM for Takahata is around, I think, INR 3,000 crores to INR 4,000 crores in domestic market. So with the addition of TGPEL, how big will this -- I mean, how big the market becomes? And where do you see this entire plastic business in, say, 3 to 5 years of time?

See, basically the -- let me answer the second question first so that it makes it easier for you to understand. The TAM, the total addressable market for Takahata from a precision injection molded parts standpoint, what I stated at that point in time was more limited to all the current scale of the industry as far as automotive is concerned. Now if you really scale it up to areas beyond automotive like the, let's say, the medical industry and the industrial components, there again, the precision component industry is quite big and then the TAM continuously keeps on increasing. Our focus between the 2 companies put together would always remain to have at least anywhere between 20% to 30% of the market being addressed beyond automotive and at least 70% of the market being addressed by automotive to retain our margins as well as retain our lead positions that we have with the synergies that we can bring on the table. So strategically, it will always be a combination of all these factors to enable us to not only maintain our position but also grow the business across both the companies. Now both the companies put together will have a sizable market share as we go along with them. And the precision injection molded parts always requires a lot of technology, and we have to keep upgrading our technologies also continuously. And that's where our partner, Takahata, has really been able to do that across various segments of the industry. So we are very confident that our overall strategy is very well falling into place, and it will really help us to scale this business quite heavily.

Understood. So I generally wanted to understand, say, for example, an OEM comes with an RFI or an RFQ for precision molding -- not an OEM, sorry, a Tier 1 or Tier 2, how much time does it take to develop...

I'm coming to the first part of your question, especially the lead time required for any new development. Now this again depends on size to size. We see -- if you go onto the TGPEL's website, you'll see all kinds of components that they make, they make right from small connectors right up to big fuse boxes and various precision components. So sometimes, the lead time could be as low as anywhere between 3 months, it's between 8 to 12 weeks, or in some cases, even as high as 8 months wherever it requires a huge amount of validation. For many of the automotive components, we have to also do a lot of validation, but there are components which can go only through the PPAP route and then that doesn't really require a very huge valuation. So we have multiple combinations which work on this side and it's very difficult to pinpoint and say that takes minimum this time. Rather, it is better to say that the growth that you see on a yearly basis is a clear indicator in terms of how they are able to convert their new inquiries into business. On an average, they have been achieving a CAGR of around 18%, and that's a very fairly good growth that we see on a year-to-year basis. And that's been one of the major reasons why we said that we should invest in this company.

Understood, sir. I have another question on ECV...

On the?

On the aftermarket side.

Okay. What is that? Can you repeat your question, Gourab?

I had a question on the aftermarket side. Will this call be appropriate for that question or maybe I'll take up in the earnings call?

No, no, it is -- see, the aftermarket as far as this particular product is concerned is certainly there. But this -- most of this aftermarket gets serviced by the OEMs directly because there's been a precision component goes inside most of the assemblies, and the assemblies either are addressed by the Tier 1s or by the OEMs. So we don't -- for these parts, that is a plastic injection molded parts and the precision plastic injection, we don't expect to have a separate line of aftermarket because you have -- we have to service it through the Tier 1s. But at the same time, at any given point in time, if we find that there is a good possibility for us to enter the market with the excellent network of aftermarket that we have across the country. I think it is not going to be a very tough task.

The next question comes from the line of Vikram Rawat from East Lane Capital.

Sir, my question is regarding the -- given these 2 acquisitions, how should we look for the scaling up of this plastic injection molding business? And second is on the TGPEL side, what kind of capacity utilization level are we running at and current capacity, basically, how much potential revenue can we reach from the existing asset base? And is there any plan for those scaling up like a CapEx we are doing in the Takahata? Is there any further CapEx plans for this business?

Yes. Good question, Vikram, and let me answer this. This market, as far as precision injection molded parts are concerned is a growing market. Now the reason why it's a very growing market is because people have realized that you can leverage a lot of possibilities by using plastic injection molded parts as compared to a mechanical part or a steel part and thereby get almost the same strength and get the output that is required. So that's why people have started applicating this into a number of areas in the vehicle also because that helps them in the overall lightweighting concept that they have for the vehicle. As a result, you will see that these companies have been growing at this rate, 18% CAGR is really a very good growth rate that they have been able to achieve over the last 5 years. Then there is no reason why we should not look at applying the same kind of growth rates in the future years. So -- and both the companies together should be able to give us that kind of business growth that we are looking for. And going from a capacity utilization standpoint, while we don't normally give these numbers directly, but I can only say that both the companies have a fairly -- injection molding, if you see as a business normally, we put the machines with a certain molding capacity, let's say, a 350-tonne machine if we put, and normally, the capacity is quite good and it is -- it requires a good amount of orders to really fill up that capacity. And we have -- between the 2 companies put together, we have, I think, over 250 to 300 machines. And as a result, we have fantastic flexibility that we can bring in, in terms of our capacity and also be able to work out strategies with regards to high volume lines and low-volume lines and be able to mix and match a lot of possibilities for the end markets. So as a result, I feel that there are a lot of possibilities that then comes along this way because we have a fairly good mix of machines available, thereby catering to bigger segments of the market.

The next question comes from the line of Mitul Shah from DAM Capital Advisors.

Sir, congratulations. Sir, 2 questions. In this acquisition, out of overall revenue, how much would be roughly from the molds and how much would be from the moldings? And would that be entirely injection molding or molds includes the injection mold as well as blow mold and all?

Okay. Yes. So Mitul, thanks for the question. First and foremost, as far as precision injection molding, I keep saying this that our injection molding, the area that we are trying to attack is only precision injection molding because that's where we are able to get the technology. We need a lot of technology with regards to vacuuming, with regards to insert molding, with regards to temperature stability and a lot of other things. Because that way, then we can give very thin sections and be able to reduce the weight of the components, and that is fundamentally the technology that goes behind this. And in this, there is absolutely no blow molding. Because blow molding and all are very low technology items and very beaten up on costs, on prices. Whereas these -- where the technology is involved, it's a very high precision component, and there is a huge amount of technology as well a huge amount of effort that needs to be put up to manufacture the molds. So in almost all the cases, when we make the molds, while the molds are owned by the Tier 1s or the OEMs, the molds are made for the respective part that we get awarded from the business. So almost in 90% of the cases, in very rare cases, the customer gives the mold and we have to give the molded parts. And 90% of the cases, we have to make our own molds for the parts that we get awarded in terms of the business. And we have to design the molds to suit our -- to suit the technology that is required to achieve the end result. The end results are the ones which I said in terms of low thickness, 1 mm, 0.5 mm thickness and all that to maintain stability. So all this -- so most of the molds that you'll see is -- has to be manufactured for the products that we make. There are also a stream of business that we do where in both the companies, Takahata as well as this, where we do the molds for specific to customer application, we give it to the customer and customer does the molding himself. So that -- those cases are also there. So it's a good mix and match. But overall, as a percentage of the business, the mold business will be fairly, let me put it this way, anywhere ranging between 15% to 20%.

So about 80% is the moldings, right?

Molded parts. But even molds that we make may be for the molded parts, for the same molded part, but retained by us but manufactured for the customer.

Okay. And just follow-up on this. In terms of margin, generally, mold margins, mold-making margins are much higher than the molding, right? So what will be a difference roughly in terms of the percentage points?

No, we don't normally categorize that way because when we make the molds for the parts that we make, so we focus on the part cost. So -- and the mold is owned by the customer. So it's not that on the margin on the molds is bigger than the margins on the other thing. So it's a mix and match kind of a situation.

Sir, lastly, on again molds, how much would be the captive consume molds out of that 20% revenue? How much is the third party for which molds are manufactured?

Again, year-to-year, it will vary. So you can't fix it up to a certain number because it depends on the kind of business that we get. And we are open to doing -- we don't do a normal run of the mill kind of mold because there are many inquiries for that, but we don't do all that. Because our capacities are limited and we want to focus on very specific areas where we can bring technology. And so that way, we can't exactly pinpoint and say that this will remain like this in the future also. So I don't think that number will make any much relevance.

And sir, on utilization, how much is -- and how much it can go up with minimal CapEx on debottlenecking?

I think I answered in the previous question, so we expect -- we have -- as I said, the different grades of machines are different capacity levels and different utilization. So we normally categorize it by the availability of the kind of machines, the tonnage of the machines that is there. And we categorize it across 80 to 100 tonnes, 100 to 150 tonnes, 150 to 200 tonnes, 200 to 300 tonnes and 300 tonnes and above. This is how the overall categorization happens in the precision injection molded parts. There are, of course, many other plastic parts where it is even above 300 tonnes, 350 tonnes. So it varies from tonnage to tonnage. But we have a fairly good capacity available, now let me clarify that, between the 2 companies put together where we can mix and match and get efficiencies out by the volumes. So we are able to then easily have a fantastically good capacity available.

The next question comes from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Congratulations on the acquisition, sir. Just sir, firstly, I mean, in terms of the -- if you can help us how the Timex Group was -- I mean, just in the landscape of this thing, what are the capabilities they have. And we have the 2 partners different, Timex and Takahata? So how the technology will be then shaped up for the future, sir? I mean, which -- it would be different for different businesses or they would also combined effort? Firstly, on this, sir.

Yes, let me answer this question first, because it's a very good question, a very important question. First and foremost, TGPEL does not have any partners today. It was actually formed as a Timex Group. Timex was a U.S.-based company. And you might be knowing that Timex initially formed the company with the Tata's collaboration. And this was founded in 1992, as you know, when Timex used to primarily focus on making the molds and plastic injection molding for watches. But that's how it started. And then subsequently, it was carved out as a Timex Group Precision Engineering Limited in 2008, when the relationship between Timex and Tata broke and Timex went off. And Timex -- the injection molded parts still remain in the country as a stand-alone company, and it became Timex Group Precision Engineering Limited. And this company actually started with a new facility in 2009 in Noida. And they had roughly one plant, I think it was close to 45,000 square feet that they had constructed at that point in time. But then in somewhere in 2014 or end of 2014, they were acquired. And in 2019, they were acquired by 5 different shareholders from different companies, and this included Asahi India and then Padmini VNA. They both had 30%, 30%. Then there was private investors, 3 of them from Hong Kong, all having 20-10-10, that kind of a shareholding. So it was a very mixed kind of shareholding, more like a financial investor. And none of them were able to consolidate the financials of this company, and it was standing as a stand-alone company. And now with our acquisition, we find that they also find that it makes a lot of sense. We are able to then give it more strategic direction, more direction in terms of growth. And there is then a clear focus with regards to how we want to grow this lightweighting segment of ours in terms of the plastic injection molding. So that is how this whole acquisition made sense, and I think it is a very apt acquisition with regards to our overall strategy.

And now, sir, it would be played through both of the partners -- I mean, both of the companies will be -- separately, it would be played in the market?

So they don't have any partners from outside. It is only -- Takahata is a partner whom we have under the Takahata wing, which will continue. And between us and Takahata, we have a clear understanding of how we'll run this whole overall plastics business.

And sir, just on the -- how is the ROCE profile, if you can help us understand, for this business as of now? And I mean, is there any other incrementally margin triggers you see that can support better margins for this acquisition, sir?

See, the past figures are all available on the ROCE side. So you will be able to get the financials down. And on an average, their return on capital so far has been in the region of around 24%. So 23% EBITDA is what we have been maintaining. So their return on capital, et cetera, is all available for the previous year's figures. So I think that, you'll be able to get from there.

[Operator Instructions] The next question comes from the line of Gourab Paul from Techsellence Financial Research.

Sir. Am I audible?

yes, you're audible, Gourab.

Sir, I just wanted to understand this tooling that you do for mold, it's usually paid upfront by the customer, isn't it? Or what is generally...

There are some models where it's paid upfront, there's some model which we opportunate from the customer part.

Okay. And my second question is for medical devices. You mentioned that there are some medical devices under TGPEL. So are there any components which have gone through FDA approval or something like that? Any idea or any...

Yes. They're already supplying. They are already supplying to Tier 1s directly.

Okay. The second question was, in the last call, you said that in export business you're seeing green shoots coming up and more business coming forward, your base business, not plastic, but for systems. from Europe and America. So I mean, overall, this quarter, are you still seeing that? Or I mean, it's still subdued?

No. As I said, I think I mentioned it in the last call that our exports business has got affected because of the war situation at both in the Middle East as well as in Ukraine. So the whole of Europe is under a lot of slowdown. The whole of U.S. is under slowdown. So the primary markets for us are in the Middle East and Europe. And naturally, the markets are -- the exports markets are affected. But notwithstanding that, we have continued to grow and we'll continue to grow primarily because of newer areas that we are attacking in terms of new business and also in terms of ensuring that we are able to cater to some of the urgent requirements that some of the companies have abroad, which is happening primarily because of some of the big players vacating capacities. So we are able to cater to that with our clear strategy of growing in all the areas that we are invested in. We want to ensure that we are able to cater to the end markets in a manner which is going to be very seamless for the customers. So that way, we are able to actually grow the business.

Okay. Sir, also in the CV and tractor, overall -- I mean, the aftermarket segment, so I understood that there are around 10 crores of CVs in the Indian domestic market on road. So typically, what is the overall cycle of that? I mean, say, in likes of, say, 10 to 15 years, how many times do they go for piston replacement?

I think I explained this in the last call. Normally, in the life cycle of CV industry that are normally anywhere between 5 to 6 times that it undergoes overall engine overhauls. And that -- it's not a sacrosanct figure because it's very, very -- the whole industry works in a very uncoordinated manner. There's no coordinated figures available thereby you can conclude and say that this is how it will move. But in an approximate manner, anywhere between 5 to 6 times in a CV that it undergoes a major overhauls.

Understood, sir. And my last question, I wanted to understand regarding the ethanol-based blending. So I understand that in Brazil, you supply for components where the blending is around 60% to 80%, and please, correct me if I'm wrong.

You're 100%. See, what happened, ethanol blending happens from 10% to 100%. So in Brazil, they have reached -- not today, they've reached, almost close to 5, 6 years back, 100% blended ethanol usage. And they have realized that with 100% usage, they have -- the wear and tear on the engine components are very, very high, as a result of which it has now been blended down. And they, on an average use, between 80% to 85% as the standard ethanol blending. Now with 80% to 85% blending, what happens is you'll still -- there is a big drop in the power density, as a result of which you have to go for higher ratios and other things. And as a result -- and you have to completely redesign the product because the carbon suit being on the higher side. You have to redesign the product to be able to maintain all the scavenging that is required on the engine blocks. And that requires a huge amount of technology with regards to the quoting of the rings, coating of the pistons and other things. So that is the technology that we have developed. And we have -- we are leading the entire race by giving product components which goes into CNG and ethanol applications in a very, very big way, both in India as well as in abroad.

Yes. Sir, just to give a sense so, see, for example, we have a BS-VI piston. And compared to that, say, you have Freedom 125 piston of similar vehicles. So the machining content for the Freedom 125 or a CNG-based or an ethanol-based one, would it be more high like the top crown surfaces and all?

Yes, yes, yes. Everything -- not only the machining, machining plus coating, everything changes completely.

[Operator Instructions] The next question comes from the line of Akshay Sam from Sam Capital.

Can you throw some light on the competitive landscape in the precision plastic molding segment in India? Because I've seen a lot of competitors abroad who are market leaders like OKE, they do a very niche stuffs such as plastic and metal precision molding as well.

That is one of the major areas that we do where there is -- we call it as insert molding. And it's a metal insertion molding that we do and do it with companies. Well, the competitor for Takahata was Timex, competitor of Timex was Takahata. So we do have other competitors, but then we -- I think we have a good position now.

Are we the biggest in India, sir?

No, I don't think so. From the landscape of the market that is available, I think you can easily make out we cater to around 15% of the market now and we want to grow to a much bigger segment. Aim is to become the biggest thing. What it required was a group which will actually bring a lot of synergies with regards to the market and the front-end situation that we have with so many Tier 1s, that we are able to consolidate all that and bring it all together. And that is where we see the synergies coming from SPRL. So SPRL will play that part with regards to getting those synergies and growing the business for both these companies.

So we have 15% market share at the moment, and do you think the market leader is what, around, say, 20%? Is that fair?

No, I'm not saying that. There are very distributed kind of suppliers. As a result, there's no one guy owning more than double-digit figures in terms of the market share. Because this happened -- when you have a very niche market, the customers cannot invest in multiple suppliers for the molds because, otherwise, the overall cost goes up. So they tend to develop their own partners in small segments and they are normally investing in -- they want the partner companies to then invest in the mold. So that is how it happens. So most of these companies will not find any product overlaps, but you'll normally have overall group overlap happening because of it being a plastic injection molded part.

[Operator Instructions] As there are no further questions, I will now hand the conference over to Mr. Krishnakumar Srinivasan for closing comments.

I think these were all great questions today, and I think we have been able to answer it to the best of our abilities. In case anybody has any further questions, please do reach out to us any time. You have the numbers available of Mr. Pankaj Gupta, who is our Company Secretary and Legal Counsel. He will ensure that he will then reach out to the right person to get the answers and be able to give the answers back to you. We extend our gratitude to all the participants for attending today's investor call. Your participation has made this discussion extremely engaging. We remain dedicated to our -- in our commitment to our strategic business objective, and we'll continue to strive for sustained positive outcomes. For any further questions or any information that you may have, please reach out to our Investor Relations team at E&Y, Ernst & Young. And on behalf of the company, again, thank you once again, and I appreciate your time and involvement in these discussions. Thanks a lot. Take care, and goodbye. And I do take this opportunity to wish you all a very, very happy new year. Thank you.

Thank you, sir. On behalf of Shriram Pistons & Rings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thanks, everybody.