Suprajit Engineering Limited (532509) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Suprajit Engineering Limited Q4 FY '24 Earnings Conference Call hosted by Anand Rathi Share and Stock Brokers Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mumuksh Mandlesha from Anand Rathi Share and Stock Brokers Limited. Thank you, and over to you, Mr. Mandlesha.

Thanks, Ranjeev. On behalf of Anand Rathi Shares and Stock Brokers, I welcome you all to the Suprajit Engineering Q4 FY '24 conference call. I thank the management for taking time out for the call. From the management side, we have Mr. Ajith Kumar Rai, the Founder and Chairman; Mr. N.S Mohan, MD and Group CEO; Mr. Akhilesh Rai, Director and Chief Strategy Officer; and Mr. Medappa Gowda J., CFO and Company Secretary. Request Ajith sir and team to give an introduction review about the results, and then we can follow-up with the Q&A session. Over to you, sir.

Yes. Thank you, Mumuksh, and thank you, Anand Rathi for hosting this Q4 quarterly call. Good morning, everybody, welcome to our fourth quarter discussion on the numbers as well as for the year. I will, as usual, start with our team, and then I'll give you a quick brief to cover before we go on to the question-and-answer. I'll start with Mohan, our Group CEO, Mohan.

Yes. Thank you. Good morning, everybody. I'd like to give some general overview of the economic and the business situation in the territories that we are operating. The big trends that I'm seeing in the economic world, if I can say so is, one is the interest rates, the second is the political shifts that are happening more towards riots that's, which is, again, leading to trade barriers, protectionism, nationalism and also regionalism. And the third big impact that I'm seeing is obviously that we all talk about, the EV impact. I would say, as Suprajit, we are well and also uniquely positioned to handle these kind of effects. One is, of course, on the onshore, nearshore and offshore model that we have, be it for U.S. or for the European market, all goes well for us. The second thing is in the EV area, I think our positioning with various players. Both I talked about the new players and also some of the established players, also all goes well for our business on the long-term. Now I would like to just move on to the specific divisional updates. Starting with Suprajit Controls division, we had announced that we have what's called MAX Teams, which are, in my opinion, doing a splendid job in integrating and cross-pollinating ideas across the globe and also within the various divisional facilities. We continue to work on long-term restructuring of the division of both revenue and the margin growth. Our orders wins continue to be strong with automotive division. The SCD recently won largest single contract from the U.S. customer. This will be produced in SAL, that is Automotive Limited here in Asia, warehouse in Brownsville U.S.A. and supply to the customer in U.S. Interestingly, this contract was won on no China content, and this was a requirement from the customer. And I presume this contract was a follow-up of this China Plus One strategy of the customer. Overall, if I look at what's happening in U.S. and in Europe, I see that markets are subdued, and I think this is putting a lot of pressure on the OEMs and the Tier 1s to find alternatives, I would say. This interestingly, is putting a lot of financial stress on the pure local cable players, which I think would possibly lead to more consolidation in the Cable business within the largest -- in the world of cable space with players like us. Let me now drill down to specific facilities within SCD. I would like to start with the China facility, the Lonestar. On 24th April, we relocated ourselves into a larger and more modern facility. And this plant was inaugurated by the Mayor there in the presence of our Chairman. This showcases our commitment to grow in China and demonstrates our intention and seriousness of not just being, but growing in the Chinese market. Moving to Europe, Hungary showed volume growth. What's very interesting is the ownership assumed and the operational improvements made by the Hungarians. This is very much akin to our -- the Indian Suprajit model. The local team has assumed complete responsibility, and we are now confident of showcasing the Siofok plant to customers in Europe more as our onshore facilities in the EU region. Moving to North America. We have identified projects and products, which were not greatly profitable out of Mexico, and we are in the process of moving them into India into SAL and the focus will be -- is given to good marginal products being manufactured out of those. The labor arbitrage is becoming more and more between Mexico or India due to the increased wage rates in Mexico. We will further focus on Mexican operations to make that more economically successful. There was -- we had talked about this earlier, the China tariff. We have gone on an appeal, and we are hopeful of a favorable decision from the U.S. tax authorities. In terms of Non-Automotive business in U.S., it has stabilized at lower levels. But I would say, we are making inroads into the rotary sensors and other noncable products, which are made in Suprajit Electronics division and also our Unit 9, which is here in Bommasandra in Bangalore, and that would be supplied out of Wescon. Suprajit Europe and Suprajit Automotive Limited has had a solid growth and profitability during the year, and we have also continued to build significant global contracts. And moving on to Domestic Cable division. The India Cable business has performed well, both in 2-wheelers and the 4-wheeler market. The aftermarket business was muted. After a long period of lull due to this GST and COVID effect, suddenly, we see the gray market operators have raised their ante. We are seeing them cannibalizing the market with our brands. That is now what we generally call as spurious and also look alike. So there are something which is exactly Suprajit or something which is called as Supraajit or Superajit or something like that. There have been multiple rates that have been organized by us through the local authorities. And we see this trend not just in cables, but also in the halogen bulb. Therefore, I think it is industry pain. Sticking to Cable division, the Beyond Cable products mantra is catching on, the tech shows that we conducted last year has generated a lot of interest and now it is getting translated into new business, Beyond Cables. Phoenix Lamps Division continues to grow, despite all the LED penetration. We have made strong inroads into the aftermarket, direct exports and also through our arm in Luxembourg, that is Luxlite. And margin improvements have been pretty solid, a fantastic team effort, not just to contain, but also reducing cost by our operations team. The restructuring of Trifa has almost been completed, the last tail of it is remaining, and this Trifa would be closed in a few months, in my opinion. Ms. Saliha Krich who has been taken -- she has taken over as the new Managing Director at Luxlite. Talking about future in terms of investments, we are looking at a CapEx of about INR 180 crores covering all divisions and all over the globe. Out of which, we are looking at ballpark 45% to 50% being earmarked for new products, new projects or infrastructure buildup and the rest is for the normal CapEx spend that we would generally do that's primarily for modernization, EHS, capacity buildup, quality, productivity, automation, those kind of things. So this gives a general play over, and I would like to hand it over to Akhilesh to talk about Suprajit's Electronics division and STC.

Thank you, Mohan. At Suprajit Electronics division, we've seen a solid growth and margin improvements. We had a good double-digit EBITDA margins in both the last 2 quarters. The delivery increase for actuators, digital clusters and throttle position sensors from both, marquee EV and ICE 2-wheelers, as well as 3-wheelers and our off-highway segments. Internal manufacturing also started supporting Phoenix Lamps for their LED retrofit lamps as well as for SCD for exports of controller boards. This is expected to ramp up significantly in the coming years. After certain reorganization from Q1 onwards, we will be including mechanical speedometers also in the numbers of SED, we see a robust outlook with clear visibility of growth, both internally and externally. And so our expansion CapEx has been budgeted. SED continues to support the company's transition towards a more sophisticated electronic and a global actuation platform crucial for premiumization in both EV and ICE vehicles. At Suprajit Technology Center, the core purpose is to develop platforms for actuation, focusing on digital clusters, actuators and sensors and braking systems. STD is the source of multiple new order wins at various divisions and has multiple products under customer evaluation, focusing innovative solutions tailored to Indian customer needs. We're also working with global customers along with our teams in the U.S. and Europe. Plans are in place for larger premises to accommodate our growing team at STC, ensuring that there will be sufficient space and resources for our ongoing and future projects. The technology we have built at STC is wholly owned and globally applicable across geographies, industries and large customer base. With that, I hand it back to Chairman for some general updates and closing.

Akhilesh -- Okay. Thank you, Akhilesh and Mohan. Medappa will you give you a quick update as well?

Yes. Thank you. Good morning, everyone. We have announced the financial results for the year ended March 31, 2024, yesterday. The consolidated revenue for the year ended March 2024 was INR 2,896 crores, at against INR 2,752 crores for the corresponding previous year with a growth of 5%. The consolidated operation EBITDA for the year ended 31st March 2024 was INR 326 crores, as against INR 319 crores during last year with a growth of 2%. The stand-alone revenue for the year ended March 2024 was INR 1,537 crores, as against INR 1,431 crores last year, recording a growth of 7%. The stand-alone operational EBITDA for the year ended March 31, 2024, was INR 276 crores, as against INR 250 crores for the corresponding previous year, recording a growth of 10%. The total net debt level was INR 624 crores as on March 20, 2024. The surplus cash balance was INR 513 crores as on March 2024, invested in mutual funds and bonds. For further queries, if any, you may approach me directly even after the call. Thank you very much.

Thank you, all. Just a quick summary, the sum and substance is that the 3 divisions; Domestic Cable division, Electronics division and Phoenix Lamps division did well. Suprajit Controls Division had a challenging year and probably a slightly improved quarter. This is largely considering for various points that Mohan has raised. But I would say that operationally, they are doing well. And in fact, we think that they had a decent quarter and year. The -- again, I believe that the worst is behind us as far as Controls Division is concerned, and looking at the Q4 number, which I think has been a good quarter for us, I get a feeling that the worst is not only behind us and we will continue to improve on that performance going forward. The outlook for the year is pretty good. We have given outlook as well for various divisions. What we see today, unless, of course, the global scenario changes for the worst, we expect to have a decent and satisfactory year. So the basic model of our ability to meet the customer, both with onshore abilities, nearshore abilities and low-cost destination, like India, is making us a preferred vendor with most of the customers. I think that's why we have been winning contracts -- multiple contracts, and we have been talking about it, Mohan just mentioned about the largest one with no China content. I think these are the things that really are the ones which are giving us wings to take Suprajit Controls Division to the next level, I think. So that's in sum and substance of the quarter as well as for the year from all of us. We are now ready for questions, and I ask our moderator to start collecting the questions and directing to us. Thank you very much.

[Operator Instructions] The first question comes from the line of Ravi Purohit with Securities Investment Management Private Limited.

Thanks for a detailed update on what's been happening at Suprajit. Sir, just 2 questions. One was I think we've mentioned couple of times in our press releases and also on various con calls in the past about FY '24 having a lot of one-off issues, be it wage increases, be it duty, levy, be it -- can you generally quantify in terms of how much of expenditure we would have had to make in this year in terms of loan, let's say, percentage of revenue? That was one. And the second question was, we have given a guidance of about INR 180 crore CapEx. Could you just kind of break this down in terms of where, in what areas are we looking at this CapEx and how much of it is maintenance, how much is actually growth and greenfield CapEx, so if you could just give a little more insight into this INR 180 crores CapEx that would be very helpful?

I think in terms of the one-off, let me address that first. I think the really one-off is the relocation of China plant, I think, that would be the only one that I would call it one-off. Others are ongoing challenges that you mentioned about whether it is Mexico wage cost, which has been going up in the last 2 years in excess of 20% every year, that will continue to be there on the balance -- in our P&L, things like China tariff that is happening in the U.S., which, of course, we are fighting it. But at the moment, that is another major cost. So they are an ongoing cost. They are not exactly one-off. So one-off is, technically, I would say, is only some significance for a balance sheet of -- China size is probably China, which is probably, I don't know the number, it's probably less than USD 1 million, in between USD 0.5 million to USD 1 million, I think. Now in terms of CapEx, I would say that 50% for maintenance CapEx, various units having minor replacement changes, changing of layouts, blah, blah, blah, the another 50% is probably on -- more on strategy. When I say strategy, I would say this, for example, we are setting up a greenfield technology center in Bangalore for STC. We already are 100-plus now, and it's expected to go to 200 in the next couple of -- whatever timeline. So we need to house them in a more modern, more spacious space. So that is one investment decision. We are also planning to buy some additional land and industrial building within Bangalore for some of our ongoing projects. That's the other expenditure that is not maintenance CapEx. We are also setting up an additional floor in our Chakan plant. So that's an additional CapEx. I think these are the things that are coming additionally. So I would say, 50% is for ongoing operational maintenance kind of related and balance 50% is towards these one-offs, which will be there for our improved future performance for new products as well as strengthening our team.

Next question comes from the line of Amit Hiranandani with SMIFS India Limited.

First of all, congratulations to the team for the very good set of numbers considering the challenging macro situations in the exports. Sir, I joined a little late. Just my first question is on the Suprajit Control Division. So here, we are -- Suprajit Control Division, my first question.

Yes.

So here, we have been observing a gradual quarter-on-quarter improvement in the margins. Now things are getting better -- in a better shape for this division as the company is winning large contracts. Hence, we believe that double-digit growth is for sure in FY '25. We want to understand what is restricting this division to reach double-digit EBITDA margin. Are we observing now any kind of tailwinds? And how soon we can achieve this level, sir?

Okay. Yes, I think we actually touched an EBITDA margin of 3% also, I think, in the second quarter, if I remember correctly, whereas from there, it has improved. Last quarter was 7%. And for the year, it has been 6%. So it is difficult to give a guidance because we still are little struggling with the global macro situation at various places and the economic scenario. But I'm pretty sure that margin 6% will improve. Now when will it go to 10% is difficult to say. But our aspiration and interest this year, we may be able to cross the 8% EBITDA kind of a number, consider if things are what it is and that's what we see today at our end. So I think there is an improvement. But let me also say that it's a global business technically in all auto component industry that we have seen now is that they are typically single digit in auto components space, they're all single-digit margin businesses. So I think we will be there by end of this year in a comfortable way. But the aspiration is certainly go to double digits, and I think it will take a little more time.

Great, sir. And sir, my second question is on the PLD division. So the PLDs magical 15% margin in Q4 was a commendable job from you guys. I want to understand the core reasons of this improvement and how much of this is sustainable? What was the one-off cost associated with the restructuring of Trifa, Luxlite? And wanted to understand, continuing with this, the -- how much is the LED retrofit contribute here along with margin difference between the halogen and the LED retrofit product?

I think LED retrofit is still small compared to our overall business of whatever INR 350 crores, INR 400 crores, I think. Mohan, do you have a number on the LED retrofit, maybe INR 20 crores, INR 25 crores?

No, I don't have it off hand.

Okay. I think that is the kind of number that is on that. It's not more than that in any case. In terms of margin improvement, I think it is the way operationally, we improved in India and the restructuring in Luxlite and Trifa. Trifa is -- although it is not technically closed for -- it's basically closed. I mean, there's some paperwork to be completed. But I think it will be done. In the process, I think Luxlite, of course, the previous Managing Director also is no longer with us. So the cost structure in Luxlite itself has come down significantly. So -- and then there are improvements in terms of the way we work together between Luxlite and Phoenix Lamps has improved significantly in the last couple of quarters. So beyond that, I think it is the way the team has performed operationally that has been responsible. In the first half of the year, there has been certainly some one-offs approve, I think December, there has been one-offs, but we are very comfortable that this year there will be a good growth, despite whatever LED penetration concerns and margins will be comfortably in the double digits.

Sir any more juice left in this. Like any more juice left in improvement in the margin.

Of course, we always believe that -- we want to think that there is always juice left in any business. But I think doing 10%, 12%, 14% margin EBITDA is pretty good for the business, which is technically -- lot of people who have been asking why are we doing this business and why are we still having this business? And we've always said that this is the last-man-standing strategy, and we will prove that, that strategy works and that's what we have done. And I think it will continue to be very profitable. Further improvement in margin, I cannot comment at this moment.

Sir, my last one question is basically on the Suprajit Electronics Division, which has been showing exceptional numbers in the first year of operation. Sir, which products are driving the growth? And what is the growth outlook for the...

Products, you mean?

I mean, within this Suprajit Electronic Division, you have a few products, digital instrument cluster and navigators. So what are the products are gaining traction...?

What are all the products? I will ask -- maybe Akhilesh, you can answer because -- what are all the products and things that we are doing at SED?

Yes. So this year, the growth was driven mainly with the growth in digital clusters. These are your TFT and LCD clusters and actuators. So there is actuators, like steering lock actuators, charging and lock actuators, seat lock actuators, these kind of actuators. This will be the 2 main products that grow growth this year.

Sir, with this question only, what are the top 3 customers we have? And is this 13% margin level peaked out or there is something more to -- more here in this thing?

I think on the margin, we always aspire to improve our margins without any question. But it all depends upon the product mix as we are scaling up, there are more products coming into production what the product mix will be there, from when it will start production. There are a lot of unanswered questions. I think end of this year, we will see probably a more, what I would say, steady-state margin understanding of Electronics division. But as we said, double-digit margins is quite comfortable. I must, of course, sort of forewarn all of you that this year, we are also adding our old mechanical spherometer, which is actually a lower-margin business into this division because it is all operating out of the same premises. So just to keep the accounting and monitoring easy, we have combined it under the same division. So the growth will be still very good. I think margins will be double digit. I think this will be another good year for Electronics division.

All the best, sir.

Next question comes from the line of Mumuksh Mandlesha with Anand Rathi.

To Akhilesh sir, continuing on the last question, sir. On the SCD business, how do you see the growth trajectory ahead? So can you update what would be the annual order book size, sir? And just a little more on the recent wins from the new customers?

Akhilesh?

Yes. So I think we had disclosed and for -- we did a onetime disclosure of order book. We don't really disclose order book for our division. But I can say that, that same order book looks strong, and it is -- certainly, there have been even more wins on top of that in this year. So I think our forecast that we made in that release it will valid that I think in the next few years, this will be a significant part of Suprajit Indian revenue stream.

Got it. And just can you mention what would be the revenue of this mechanical cluster business, sir?

I don't have the number with me, Mumuksh, but I think you can certainly get it offline with Medappa later on, if you want.

Got it, sir. Sir, coming to the Non-Auto overseas business has been muted this year because of weaker market. Just can you help us understand what kind of fall we are seeing in that part of business? And can you indicate on -- how the margins, have they suppressed there? Because if the same market rebounds in the next 1 to 2 years, then we can again see the margins coming also back. So SED business margin profile can improve from that level. So can you just indicate on the...?

Got it. Mohan, will you make a -- probably can make a comment and the commentary on Non-Automotive a little bit.

Yes, sure. When we talk about Non-Automotive, basically, we are talking about 2 portions. One is what's happening at Wescon, what we used to call it SENA earlier has got 2 portions. One is the Wescon portion in the U.S. and the Unit 9, which is the India portion. India portion has traditionally been at a good EBITDA margin of 30-plus percent. And we look at Wescon. Wescon would be somewhere in the single-digit number. So mix all put together, we would be looking at a decent margin profile both -- as SENA. Specifically, in terms of what's happening is that we are trying to push into Beyond Cables in the Non-Automotive segment. Which should mean 2 things. One is, the share of wallet with the customer will go up because highly priced products goes in, and it also leads to a better margin profile there. So this is the transition that we are going to go through. And we had one of the customers recently visiting our Suprajit Electronics Division to validate our plant. They have gone back confident, and we are pretty much confident that we would be able to land up with some good business with this customer, which is a U.S.-based customer. So net-net, to answer your question, do we see a margin improvement? Definitely, yes, as the winds catch the sales.

Just to add to what Mohan said, just to give you a little more color. Last year, Non-Automotive business in U.S. dropped by something like 30%. It dropped, and it is sort of stabilizing at that lower level. But we are still expecting to grow despite that drop is purely because of also some of these new business wins, what Mohan mentioned. We've recently won after a much wait, I think, on the gearboxes with one of the customers. We also won in the final stage of winning, a rotary sensor of additional business with another customer. They're all going beyond cables actually. So while we are also winning certain contracts on cables in the Non-Automotive space, we are also winning contracts in the noncable space. So I think going forward, despite this weakness in the U.S. market, we are comfortable to grow the business and also improve the margins as Mohan said.

This is helpful, sir. Sir, lastly, on the aftermarket side, that has been a little muted for some time, and you talked about the products -- gray market has grown up. So can you indicate how that should shape up next year, sir?

I think last year, just to be clear, I think in the Phoenix Lamps Division, the aftermarket did grow, whereas in Engineering work or the DCD, it did not grow. I suppose it is much easier to probably do a -- making a cable in some little space and doing a packing and selling spurious products is much easier. But spurious products, which sort of were on the sidelines for almost 3, 4, 5 years, suddenly, last year, we have seen that it is growing its [ ugly ] head. We had -- I think at least had a more than a dozen or at least half a dozen rates conducted. Recently, we did a major rate in one of the North Indian states. And we have been able to find people manufacturing and packing exactly our cables with the exact pack. I mean, there is a collision not just in manufacturing, but also with the packaging industry, and also the dealers and distributors. So it's a bit of -- I think people are still trying to avoid the GST and that kind of stuff. So I suppose those old habits die hard as they say. That still seems to be there. It has been sort of noticed last year significantly because when you are assessing why there has been some kind of a drop, we realized that this is what's happening. So it's -- it is there. It is difficult to quantify it. But with these rights, I think they also get a little smart and alert and probably, again, go into the shadows a little bit, but it's always shadowboxing, I guess. So -- but this year, we are expecting a growth. I mean, having said all that, we do expect the aftermarket to grow this year.

Next question comes from the line of Gokul Maheshwari with Awriga Capital Advisors LLP.

Sir, two questions. One is that you mentioned in your note about the tariff on foreign Chinese products in the North American market. Can you give a context in terms of how these are Chinese in the American markets and if this were to come through, how does it really benefit us?

Mohan, will you answer the tariff-related point?

Yes. Sure. This is a legacy product when we acquired the Kongsberg LDC, the Light Duty Cable Division, this product came along with it. And this problem also came in essentially along with it. The issue is very simple. There is a specific motor which comes in from China, which is imported from China. And there is a very substantial value addition, which is done in Mexico. In Mexico, our plant buys a lot of things, like the PCV -- populated PCV, completely assemble tests and then supplies it to a customer in USA. Now the U.S. customs have classified the entire thing as something which has come from China. Just to give you an analogy, let us say, the lace is coming from China, I am making the boots, and I am assembling the lace on to it and selling the boots. Somebody comes and tells me that the boots is imported from China. Therefore, I'm going to slap additional duty on that. So that's the issue. We have represented ourselves, gone on and appeal to the U.S. customs. We have gone with a detailed video shoots showing that what is being done in Mexico, what is the part which is coming out of China. And therefore, it doesn't qualify to be penalized to that extent. So that's the status.

Okay. [indiscernible]. And just on your Wescon business, I mean, that business caters mainly to the lawn mowers, et cetera, the Non-Automotive, which has seen a big decline, the industry has seen a decline. Would it be fair to say that the industry or the revenues from that division can come back in the next 2 years that you can achieve what you achieved in FY '23?

I would say, yes, maybe not necessarily with the volume revision in the North American market, but probably with the additional products that also will be introducing to the same customers. Let me also say it is not only in Wescon, even in our -- the old LDC entity, that means the Matamoros plant also supply to the same or similar segments in U.S. That also had a major downtrend. In fact, Matamoras didn't grow last year purely because of -- not because of the automotive, that side grew, but the non-automotive didn't grow. So it has been affecting both these plants actually, both these places. Having said that, in 2 years' time, will we go back to where we were, the -- I think that certainly is what our aspirations and plans are, and I think it is possible.

Okay. Lastly, can you give an update on the braking business you had put in an press release saying that you're putting up a facility for that? So what is the...

Sorry. Sorry, I didn't get that, Gokul.

The braking products.

Braking products. Okay.

Yes. You had put in a press release that you are putting up a specific facility for it. So what's the progress of it? And in terms of offtake, whether that's really started with any of the OEM customers?

Yes. Akhilesh, will give a status update on braking products?

Yes. So we're currently working with one of our marquee customers who introduced various braking products. We've actually gone live with systems like the CBS mechanism and the related braking systems that are now going to at least 3 OEMs, all -- both ICE and EV. Related to a more advanced braking system, we have got the land in place. We're now working on the plans for putting up a stand-alone facility for braking and for the braking division that was announced recently. We're seeing traction. Of course, this is a safety critical product, and this is quite a big innovation in the industry for braking. So for the advanced braking system that we have, we are working very closely with one of our ICE customers to productionize. We're hoping in the next 2 quarters that we will productionize and start production of that braking system.

Just to add to what Akhilesh said, I think Electronics division, we sort of got everything is done and set up the place and started solid traction. Whereas the braking products is a little longish scale because it's -- as Akhilesh said, it's safety critical as well. So customer is also very careful in assessing our abilities. So we have done good strides, I would say. And I think these are areas where we want to invest to make sure that we give an -- through alternative to some of these global competition in this space, completely homegrown wherever it's possible. And the aspiration is to give a complete braking product to the customer. So there are multiple things that we are working within the space. I think this is the space to watch. I think in the next couple of quarters, I think there will be a lot more developments, hopefully, and we'll be able to also update better. The fact that we have earmarked one entire recently acquired property for a braking division means that we have a very clear longer-term perspective and ambitions to be there in full strength. So that's it.

Outstanding. All the best.

Our next question comes from the line of Senthil Manikandan with ithoughtPMS.

Sir, my first question is with respect to the initial comments on the global slowdown enabling possibly inorganic opportunities. So if you can just share a little more detail in terms of...