Syrma SGS Technology Limited (SYRMA) Earnings Call Transcript & Summary

Just to add on here, we are setting up one additional capacities for our MedTech business specifically in Jodhpur. So there also, we are expanding the capacity with additional plastic injection molding capacity and the SMT lines over there. Keeping in mind, the additional incremental new Medtech businesses which we are getting now.

Yes. In the MedTech business in Jodhpur, we are expanding our capacity and capability. We are entering into a medical-grade plastics, and new sort of lines into the MedTech business. Hence the expenditure is being incurred. So I think this will give us some good growth opportunity in the coming '27, '28 onwards.

Got it. Just a clarification on your earlier comment in terms of the percentage margin, can you help us understand in terms of the price inflation of your components, how large would that be on a blended basis? Sir, just a ballpark. And what kind of bps impact we've already seen in 1Q because of that?

See, what is the impact, I think on an annualized basis, I can't comment because the situation, the dynamics of the global economy supply chains keep changing. I was only referring to a principle that if I get 100% pass-through of my cost increase, my absolute margin is not affected, but my percentage margin gets affected. That was the only thing which I was referring to.

Yes, yes. I understand. And that's why this question, sir, the reason...

But it's tough to say that it would be for the full year as economies -- the supply chains are still evolving. Where does the dollar go, I don't know. What will be the semiconductor shortage? I don't know. But I know there will be a shortage. So what impact it will have on the supply chain because all the demand of semiconductors is being consumed by the AI center. Now of late, there has been a sort of slowdown of general perception that the AI may not be that good or bad. So if that happens, the supply chain constraints ease. So I really cannot comment today. But generally, we believe that the pressure of supply chain will continue. And whenever there is a pressure, it has a direct implication on the cost.

Just to add on there, whatever guidance we are giving 10.5% to 11% margin that factors -- all initiatives together, and that's where we are guiding to 10.5% and 11% kind of a margin segment we provide for the full year.

The next question comes from the line of Neel Mehta with Equirus Securities.

Congrats on set of numbers. Sir, just wanted to know that, sir, you mentioned that we have onboarded 18 new customers. So like from where we can expect this to grow in our financials sooner? And the second question is that, sir, we have seen sharp Y-o-Y growth in Auto. So just wanted to know that is this a largely a wallet share driven growth or a new customer driven growth, if you can highlight that.

So on the new customers, I think whatever we are onboarding the new customers in this quarter in this year, it will not have a significant impact on our revenue. These are all work in progress, which will give us a growth in the coming years. The breakup of the customer onboarding, Bijay will share in what vertical, but typically they are in line with the market sort of breakup of the vertical sales.

So just to add in here, on the Auto side, we have onboarded 5 new clients, investor also 3 clients, healthcare also 2 clients, and the balance on the Telecom, IT and Railways. But as Mr. Gujral has said, actually the volume will start up from the next year. And full ramp-up may take a year after that also, actually. But with this new customer addition, we have the potential to give me additionally thousand crores plus kind of revenue on a full ramp-up basis.

And sir, what would be the margin profile of these new customers versus the current margin profile?

So there is a segmental margin will follow. So if somebody is there in the Auto segment, Auto segment related margin will come into that. They will not be completely off for the vertical kind of a margin. So depending upon which business, which client is coming into which vertical, the margins of that vertical will generally follow.

Yes, sir. And sir, just last question from my side. If you could share, what would be the geography mix of the current quarter's export revenue?

Okay. The export revenue, what we have got is, if I was to take it as the only percentage of the exports, only percentage of as I said, my exports are say INR 387 crores this quarter. If I was to take a break-up, USA would account for about INR22 crores, Europe around INR40 crores, and the balance is other countries. But if I was to include NAM, then the figure of 22%, NAM means Mexico, Canada, and America, then this 22% would go up by another 15%-odd, I think. This is break-up of the export sales, not as a percentage of total sales.

The next question comes from the line of Praveen Sahay with PL Capital.

And my question is related to the ODM and export, which you had highlighted. These are the two growth pillars for your business. And also we can see the other contribution is rising, 17% and 24% from now. So how you are going to see the contribution of these two segments to be in the near term? And how has been the margin profile for these businesses as compared of the domestic ones?

I'll take one by one exports. Exports last year, we grew by 40%. And that only shows that none of the economies where we were exporting have grown by that, that we are migrating customers from other geographies into India. The Q1 has been very good. We have grown by almost like 60%. So I expect that this year, we should grow our exports by around 30% to 40%. Last year, we did the exports of about INR 1,200 crores. So we should be able to grow the business to INR 1,500 crores to INR 1,600 crores for the current year. Again, as I've always been saying, let the geopolitical situation settle down. It will give us more clarity. But despite all the turbulence, we are still confident of growing the exports. On the ODM, again, it gives us a big satisfaction that ODM, which grew by 82% last year, has grown by almost 100% in this quarter. So going forward, I expect this momentum to be maintained as my MedTech and the defense business scale up, the ODM content would go up further. Currently, we are at about 17% of our sales are ODM sales. The target is to take it up -- the long term target is to take it up to a quarter. It's not a sort of a sprint, it's a marathon. And it will take time for us to take it up to that. And this problem or this sort of task becomes even more difficult, because my non-ODM revenue is also growing at a very healthy pace. So the pie size is increasing. And I want to increase from 17% to 25%, that is almost like a 50% growth from -- yes, a little less than 50% growth. But ODM to grow at 50%, 60% level to be able to reach that 25% target in the next several years. Short term, 17% to 18% to 19% will be the target.

And on the margin front, sir, or you can...

Both these segments have superior margin profile.

Or you can give some color on the ODM contribution of the segments, which like healthcare or industrial more contribution...

ODM primarily would be healthcare, it would be defense, it would be consumer and a little bit of industrial.

[Operator Instructions] The next question comes from the line of Bharat Shah with BCS Capital Ideas.

Gujral, I did not really have a question to ask, but I just wanted to state my observation over many years that I've seen Syrma and through many different phases of challenge and when chips were down, I think the firm has displayed remarkable strategic restraint, strategic intent and its execution without wavering by the short-term considerations. I remember a period of about 2 years back when things were materially confused as far as the externalities were concerned, and there were a lot of challenges. Quarterly numbers look like lottery, margins were going higher. And the top line was fluctuating quarter-to-quarter, but with little clarity as to what it is. But throughout this period, I have observed our strategic intent has remained firm. We remain steadfast and not stuck to the temptation of any loose picture being given. We have remained scrupulously transparent. So I just wanted to put on record my deep appreciation of the way the firm has evolved. And I also must thank and appreciate Bijay Agrawal, who must have gone through a lot of challenges in managing on a much smaller balance sheet, financial constraints and working capital challenges and very low ROCE that the business faced to contain with the high growth and managing finances. But even he, I think through this period has remained truly, truly focused on guiding the destiny of the firm. So a deep note of congratulations and appreciation.

Thank you, sir. I would just like to -- just a follow-up to your comments. I would just like to reiterate that what we are in Syrma focused on is in building an institution. And we have to balance the short term and the long term, but never ever would we compromise the long term for the short term. I think that focus is very, very clear. We'll rather absorb the pain, the short-term pain, but we will never ever compromise or sacrifice the long-term objectives of the management and the Board, which is to build an institution which is truly global in nature, engineering led. And focus on very sort of tight execution and generating free operating cash flows, tight capital allocation policy.

Thank you, Bharat bhai.

No, no, absolutely. Just one point, if I can check with you. While opportunities abound our capacity and capability, both are rising at a greater pace actually. What in your opinion could be emerging threat or challenges may not be today, but over a period of time? Or any areas which you think are strategically very vital, but which are not visible today?

Well, I can only say that I think we in Syrma and I think the industry for the benefit of the country taking on sort of philological level. I think we have to be very cognizant of the fact that long-term sustain does not come in from plain manila manufacturing, whatever be the vertical. It has to come from design. It has to come from engineering. So earlier the companies invest in that they are securing the future. And we are very, very focused on that. We know this business of manufacturing would continue for the next 10 years. I'm not having any doubt on that. But what we have to learn from China is that while we are harvesting the sort of produce from manufacturing, we should not sacrifice the long-term vision of investing in technology, in engineering, in design. And end of the day, India has to become a product nation. Now the product may be of the brand owner. The back-end technology has to be with companies like us, which develop products, develop technologies. And that is where I think everyone should be focused. On what are the areas which may become future, I really can't say as of now. Data centers is a big buzzword globally. Let's see how it pans out. It is opening up big opportunities for manufacturing currently. Long run, I really can't say on that. Semicon is another business where we in India, I think majority of the companies will be focusing on the assembly and whatever part. Design part is where the cake is, where the cream is and then the fab. So we have to see how we get into the higher margin profile within the semicon ecosystem.

The next question comes from the line of Rahul Maheshwari with Ambit Investment Advisors.

Congratulations on a good set of numbers. Two questions. First, while deciding or coming on board with any JV or any partner, what are the top 3 criteria you look at? What are top 3 criteria with the partners looks in you? And second question is, can you give some customer....

Sorry to interrupt, Rahul. Your voice is breaking. Could you please...

Yes. I lost the last part of your sentence.

Can you hear me now better?

Yes.

Yes. So first question was while deciding any partner or going with any JV, what are the top 3 criteria you look into the partner and the vice versa with the partner looks to you? And second question is while onboarding any customer, what is the gestation period? And can you give some kind of wallet share gain that is happening in a long period from the last 3 to 5 years? These are my 2 questions.

Okay. On the first part, I think we have always been very clear in sort of communicating with all the people that we enter into joint ventures or we acquire companies in areas where we are not present to fill in the gap of technology, regulatory approval or maybe market access. So if the joint venture cannot bring any of the 3 things, then what's the point of entering into a joint venture. So a joint venture will be entered if the partner brings in something which I don't have, which could be technology, which could be access to a particular ecosystem as we said the Japanese ecosystem or access to some regulatory approvals or areas where we are not present, and that's why we acquired Elecomp. We were not present over there and rather than reinventing the wheel, we thought it better that it would be better to acquire and sort of scale up that business. So those are the technology market access is what our regulatory approvals is what we look at in forming any joint venture or acquiring any company. Normally, we will not acquire a company which gives me additional revenues, but not one of these 3 strategic sort of entry points. On your point of the scaling up of the customer, there are 2 sort of cases of this. One is where a mature product is being transferred to us, there the scaling up time could be 12 months to 18 months, closer to 12, but outside 18 months. But if it's a new product which is yet to be validated in the market, this 12 to 18 could stretch from 18 to 24 or even 30. So there are 2 different case studies. So we have seen that where customers are migrating mature products to us, the ramp-up is about 12 to 18 months because he has to phase out from his existing line or ramp up with me. I hope that answers your question.

Yes. Just an addition to it, what kind of market share particular customer you have increased up to because he also would be diversifying his entire chain? So can you give some idea on that part that during the year, what kind of gain you have done in his entire ecosystem?

See, again, the global customers and the domestic customers. And global customers, when we enter with their supply chain, I think we are a very small and significant player when we enter. Because if our company, as I say, I spend a $1 billion on electronics and supply INR 120 crores or INR 150 crores, it's not even 2%, 1%. So there it could slowly and steadily go up to 4%, 5%, 6%, but I don't expect this global company it could go up to 40% in the 5 to 7 years because they are very entrenched line the supply chain. But the volume being so large, even if you have a 2%, 3%, 4% share, it could be $100 million worth of business or $50 million worth of business. On domestic customers, typically, we are either the #1 or #2 vendor. Very rarely we will be the #3 vendor with my customer. And there the endeavor is always to keep increasing the wallet share, and we have increased the wallet share with the existing domestic customers. If we are one, we have sort of increased the gap between the 1 and 2. And we are #2, we have reduced the gap between us and the #1.

And sir, how much would be domestic customer and global customer mix?

See my exports is about 25%, 24%, 25%. So 75% is my domestic consumer -- customer.

The next question comes from the line of Tanay Shah with DAM Capital.

Congratulations on a great set of numbers. Sir, I have two questions. First, obviously, you've highlighted in detail about the supply chain disruptions, which the industry is facing. But given that we focused on inventories as a strategic asset, let's say, for the next couple of quarters, do you see that -- do you see any risk to achieving the current guidance which we have? While you said that we will exceed the guidance what we're doing, is there any risk to the current estimates which we at least are projecting for ourselves for FY '27?

See, I would answer this question with a caveat. On a micro level basis on my demand side and my execution strategy, I don't see any risk. It is a tough choice. I'm not saying it's a cake walk. It will be a tough walk, but we would achieve what we have guided or exceed what we have guided. The only imponderable is the geopolitical situation in West Asia and which is beyond my control or beyond control of anyone. If tomorrow, it was to again escalate further and cause some significant damage to the supply chain capacities. Well, then not only me, but all the competitors, all the industries, everyone will have to bear to burnt. So that's the only improbable factor on which I believe I'm not competent to comment what will happen.

Sure, sir. But it was just more from a perspective of the particular bear PCB shortage which we're seeing across the industry. And what we understand is that even single layer boards are something which are going into shortage. So do we feel like we're covered for the year wherein we see no risk from a delivery perspective? I understand the demand is...

Yes. When you say cover, it is not that for the next 8 months, I have the inventories stocked in my factory. We have the orders. We are in constant touch with the vendors, we are constant touch with the suppliers or whatever to ensure that whatever has been committed is given to us. But again, it's a hypothetical question if one supply of chemical was to come down to 0, then the entire industry -- global industry will come to a grinding halt. I don't foresee that situation. But it's a constant tug of war. And I think, as I said, we have set up a separate war room in our company to tackle all these shortages and ensuring that the supply chains are maintained. So it has been carved out of the material supply chain team. So they have 100% focus only on the critical items which we believe could sort of have an impact on us.

Sure, sir. Sir, and just one last, if I can squeeze in. So the core industrial portfolio, right? I mean, obviously, in industrial, we also have the defense contribution. I'm not sure what the number would be. But if we were to exclude that, the growth would surely have looked moderated. So how do we see that industrial portfolio going into FY '27, the growth? I mean we know that we're going slower on smart meters, but any other outlets of growth if you can sort of highlight out there?

I think you have hit the nail on the head on the smart meter. I'll ask Bijay -- request Bijay to delve on that...

Right, yes. Last quarter, the defense maritime business contributed approximately INR 140 crores into the industrial business of about INR 460 crores. So excluding that, it was about INR 320 crores. And this quarter, also excluding that, this is about INR 325 crores, near about. So there is actually this entire sequential your lesson which you are seeing, this is primarily because of the defense maritime business, which is much more physical, or maybe you can see it is much more rear-ended, loaded, in a way. So that's one. But again, in totality, industrial business is growing at a very decent pace. A lot of new businesses, like we have been adding into this particular vertical, specifically this fuel industry system, and maybe the other utility metering business, that is also growing. Only the Indian smart metering business, which is also the uptake there is slightly lower in the last 2 quarters. And we are also deliberately keeping a watch on it to keep our working capital under control there. So that's how this particular vertical is growing.

The next question comes from the line of Santosh Seshadri with Avendus Spark.

Congratulations for solid numbers. So my first question is on the divisional growth outlook over the next couple of years. You have been mentioning that the company as a whole could grow at 30%, 35% and you're already exceeding that. Could you help us break down how the different business segments are likely to grow and which divisions do you expect to outgrow the company average? And also is there any possibility of any new segments or subsegments emerging given the opportunities that you mentioned within the semiconductors and data center value chain?

Okay. So I'll take this question. First, on the growth part, we have already said that this year, we should be not only achieving but exceeding what we have guided. So it is 35% plus growth rate for the current year. And we maintain that for the coming years, that is '27-'28, '28-'29, at least for the next 2 to 3 years, we would be able to grow at this percentage going forward on a higher base. So the business -- the clients which we are onboarding, I think they have a tremendous potential of maintaining this momentum of the growth, if not increasing it further. I think you must appreciate -- everyone must appreciate that the global clients when we onboard, they take 2 years to sort of start giving decent figures. And it's only the third year that the real growth happens. So whatever export growth we are witnessing today is the effort of the clients which we had onboarded in '23-'24, '24-'25 and '25-'26. Now clients which have onboarded in '25-'26, they may contribute something in this year, but the real contribution will come in '27-'28. And we have onboarded several global clients, which have a big potential of giving revenue. And these are spread across automotive, industrial, MedTech export. Domestically, automotive remains to be the cornerstone for growth led by the EV. EV is seeing a surge because of the fuel price increase, all the figures are in public domain the way the EV vehicle industry is growing. And we are well integrated into that system with the electronics on the vehicle and the charging infrastructure. We are also sort of growing significantly in the coming years. This year, it may not be very big into the ecosystem of the data centers, which would be the power management and the cooling systems for the data centers. We are beefing up our Bangalore facility and dedicating certain areas to cater to this business. Early days, but we are very confident that this will scale up significantly in the coming years. Bijay, if you'd like to add anything.

Loverly. We are done.

And just to clarify. So do you -- just to double check here. We are expecting the growth rate to continue at about 30%, or did you mention that there is a high base effect where the growth could moderate?

What I said was that current year, we are achieving what we have guided rather than exceeding what we have guided. Going forward, we are very confident that at least for the next 3 to 5 years, 5 years is a very faraway figure, but for '27-'28, '28-'29, and maybe thereafter, we are on track to achieve 30% to 35% growth rate. What I said was the global customers which are onboarded have a potential of further giving a bit or sort of uptake to this growth rate. Early day, so I can't comment a figure to it, but there is giants, they buy billions worth of electronics, so they have the potential for us to grow at a even faster clip, but I can't comment and commit today, because we're yet to start series applies to them and all those things. And the geopolitical situation how they pan out in the coming years. But the trend today is that people are looking at diversifying the electronic supply chains, and India is one of the preferred destinations.

Just to follow up on that, on the exports, you mentioned that the momentum is very strong. So is it concentrated in any few verticals like industrials or MedTech, or are you seeing a broad-based traction here? And beyond the supply chain shift away from China, what is driving specifically this for Syrma? Is it largely existing global customers giving wallet-share gains? Or is it like a significant new addition on the export front?

See, on the export front, currently the composition is broadly between industrial and MedTech, broadly a little bit in RSID, which goes into different applications, and a little bit in Auto. We crossed the INR 120 crores marked in Auto exports last year. Some of the new clients which are onboarded belong to the Automotive sector. So going forward, I believe the Automotive sector, and technically industrial and MedTech would be the drivers for the export growth.

The next question comes from the line of Archit Shah with Archit Shah 360 One Capital.

Congratulations on a good set of numbers. So my first question was that your presentation mentioned that your networking capital and your capital working capital loan increased because you have some early ramp-up in some customers. So is that built-in in our growth, like the confidence that you are seeing of increasing your growth from 35%? Does that also include that or is it just first quarter performance that gives you confidence so that can be more achievable on early ramp-up?

Borrowing increased primarily because of a higher working capital investment and mainly led by higher inventory carrying right now in this quarter because of certain supply chain constraints and also faster ramp-up of the customers. On the faster ramp-up side, this is primarily on the consumer segment. That's where we have seen a higher consumer segment mix in this quarter and higher volume mix for that particular vertical year. So here, generally, like instead of portfolio even distribution, we have seen a faster ramp-up from few of the customers here. And also, on the Auto segment side, the customers whom we have onboarded last year, this quarter some bit of a faster ramp-up we are expecting from those clients seeing their order book visibility now. That's where we are preparing for the same.

I hope that answers your question.

Yes. Sorry. Just a second question, sir. Where are we on different segment right now? What could it be of overall contribution in this year and next 2 years? How can the ramp-up look like? Are we also getting new customers on our own onboard or we are only relying on customers that Elecomp has?

So on the defense vertical, I think it's early there just been 6 months since we have acquired that company majority stake. We are very confident that going forward, this sector, defense portfolio would continue to give 30%, 35%, 30%, 25%, 35% growth rate. So we are -- as I said, we have acquired a platform for the defense setting. We are in dialogue or search for briefing of the portfolio in this company. So we would not in the coming 3 to 5 years would not rely on the existing -- only on the existing offerings of Elecomp. We would definitely be adding more technologies or offerings to the menu and so that we can cater to a broader spectrum of customers. Early days today, I think, let's wait for 6 to 9 months to have a better grip over what all we'll be doing in the defense. Short term, we'll be growing on the portfolio of Elecomp, but we'll be definitely adding more products and services or menus or offerings to the Menu.

Okay. And so just one last question. On this current quarter's growth in Auto and also 100% in Healthcare and 68% Consumer. Within that, is there any particular customer that we have increased wallet share or is it just a ramp up of -- early ramp up in consumer? And also, which product might have seen a larger growth, let's say, in Auto? Is it at EV we are making more in roads? And within consumer, is it BLDC motors or anything that we are making more in roads, any such thing?

I'll just broadly answer and then Bijay can take the detail. I think we are seeing a big traction in the EV and the growth has come from expansion of business from the existing customers plus adding a few customers which will significantly grow in the coming quarter. They may not have added too much to this. One of the major growth areas in the automotive is charging. WE classify it as Automotive -- yes, Automotive charging, that business has seen an uptick compared to the last year. So, very bullish on the Automotive sector and with the addition of a global customer, not in this year but in the next year, we expect that this sector would continue to see this strong traction. On the Consumer, Bijay, I think you have the details.

So Automotive, yes. EV is growing faster. So that's where we see a lot of new customer onboarding also and the business growth also together. Consumer, again, our Elecomp business is growing in this quarter which has shown up maybe faster or maybe early kind of schedules here in this quarter. Apart from the consumer business, our ODM business also has grown into customer consumer segment here which is more of a water purification business. That has also shown a good traction into this quarter. Similarly, on the MedTech side, apart from the MedTech business, this quarter, our RFID solution business going for MedTech end-users, healthcare end-users, has also grown significantly. And on the Industrial segment side, I have updated the business is slightly lower in this quarter but power supplies are good and defense is also maybe subdued in this quarter. Most importantly, IT sector business is also growing at a very faster pace. There are a lot of IT assembly businesses what we are currently doing. We are also targeting to do the domestic motherboard manufacturing also gradually here. We also have a CDAC approval in our favor which helps us or maybe will allow, this is if we are eligible to design and manufacture several motherboards also which we are already in process of working with few select clients on it.

Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. J.S. Gujral, Managing Director, Syrma SGS for the closing remarks.

Thank you. And I think Q1 has laid the foundation for a sustained growth in the coming quarters and the coming year. And as we have all the time been saying that we are very focused on execution. And I think that has started paying results and we should be reaping even better benefits in the coming quarters and the years. As I said, the management is very, very focused on building our institution and having a long-term objective. We have our internal plan for the next 5 years where we want to be, what we want to be. And we are going in that away in a very structured and strategic fashion. The geopolitical situation continues to be an area of concern, but for us it's a global thing. And I think if the industry, despite these turbulations, is able to demonstrate a healthy growth with margins, I think full credit to the industry as a whole. I'm speaking from the industry point of view, not from the company's point of view. Apart from that, I think we have focused greatly on our ESG, though not mandated. We have been awarded the Gold Medal by EcoVadis, which ranks us among the top 5 percentile companies in terms of ESG. So we are very sort of mindful of our responsibility to the society and environment. Again, not mandated by any regulation, we have signed up with SBTI, its initiative based out of England, to set our targets for emission and carbon footprint for the next 10 years. So our team is in dialogue with them to set the targets. And I think one point would highlight the whole thing. We have a Senior Executive, President-level Executive looking after ESG. So that, I think, shows the intent and the sort of focus which the senior management team, led by the board, has on ESG. Going forward, I think we are well-entrenched to integrate ourselves with the global supply chain. The work in progress is to further beef up the ODM business. Now, I'm only talking of the existing EMS business. A beef up the ODM business, and we are strengthening our capabilities in that sector. With Jaidit Brar joining us, and he brings with him a very sort of 360 view of the business, coming in from a consulting background. He's not sort of marred by a myopic view of our production led manufacturing. So I think that will place us in good state in the coming years. Semicon continues to be an area of focus, but we are in no hurry to jump into the bandwagon until we are sure about the credibility of the partner. Because it's an industry which is sort of notorious for its requirement of deep pockets and fast-changing technologies. So we don't want to burn cash and our fingers or whatever until we are sure about the credibility of the partner. We are currently in dialogue with several of them, but just nothing is concrete. I'm not in a position to commit anything, but I can only commit the management is focused that we should be a part of the Semicon supply chain, but within the sort of red lines drawn by us. And I think our team has done a phenomenally good job, and I would like to, through this medium, thank the entire team of Syrman SGS and all the value partners, whether they are our channel partners for supplies, for technology, the bankers and everyone. And last but not least, the investors, who have reported confidence. We had a tough couple of years in the beginning, but I think the worst is behind us, and we are well on track to be one of the recognized Indian global EMS companies. Thank you very much.

Thank you, sir. Ladies and gentlemen, on behalf of Axis Capital, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.