Talbros Automotive Components Limited (505160) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Talbros Automotive Components Limited Q3 FY '25 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on belief, opinion and expectation of the company as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Talwar, Joint Managing Director of Talbros Automotive Components Limited. Thank you. And over to you, sir.

Good afternoon, everybody. A very warm welcome to our Q3 and 9 months earnings call. On the call I'm joined today by -- with me, Mr. Navin Juneja, our Director on the Board, Group CFO; Manish Khanna, our CFO of Talbros Automotive; SGA, our IR advisors. The results and the presentation are uploaded on the stock exchange and the company website. I hope everyone has had a chance to look at it. Let me begin with the industry and the economy overview. In Q3 FY '25, the Indian automotive industry displayed a mixed performance with an overall volume growth of 3.1% year-on-year. Passenger vehicles saw healthy recovery, increasing by 4.5% Y-o-Y, 2-wheelers segment grew at about 3% Y-o-Y, 3-wheelers only registered a growth of 0.9% Y-o-Y primarily due to a slowing of demand in urban areas and challenges in vehicle financing. Commercial vehicle sales remain subdued, rising by just 1.2%, reflecting ongoing weakness in the industrial activity and maybe delayed CapEx from the government and the private sector. According to FADA retail sales data, the tractor industry experienced a remarkable growth of 20.1% Y-o-Y, driven by good agricultural performance and also healthy monsoons in our country. EV sales, electric sales, grew at about 27% Y-o-Y. Coming to the company performance. During quarter 3 FY '25 revenue of Talbros Automotive remained stable, primarily supported by strong domestic sales, despite a large decline in exports to the European market while a slowdown in the automotive sector is happening. Despite lower exports, the company delivered a 7% increase in EBITDA margins and achieved an EBITDA margin of 17.4%. This achievement is based on good cost management, operational efficiencies and a lot of localization of a few components. During the first 10 months of '25 the revenue grew by 9% to INR 634 crores, demonstrating the company's ability to maintain momentum in evolving market dynamics. EBITDA margins for 9 months improved by 130 basis points, reaching 17.0%, underscoring sustained efforts to drive profitability and operation efficiency. Our PAT saw a growth of 13%, rising to INR 68 crores for 9 months. This, I feel, is a commendable job done by our team in difficult circumstances where the auto industry has generally been very muted, so we worked internally on our costs and our efficiencies. In FY '24, the company secured orders -- new orders worth INR 980 crores. Additional INR 1,478 crores in new contracts was secured during the first 9 months of FY '25. Execution have already started for these select projects. This will take time to come into birthing. When I say birthing, come into reality. At the same time, these projects will trickle in by quarter 2, quarter 3 of this year. The new contracts include significant deals with leading OEMs across domestic, international markets, highlighting a strong confidence that the OEMs have in us and our joint ventures. A noteworthy portion of the order book comes from electric vehicles, which is, as said earlier to you, we are making some inroads into getting our position strong in electric vehicle supplies as well. The Gasket division, which accounted for about 52% of the company's revenue, during the quarter this segment grew by 5% in this quarter. As you know, it is heavily muted towards the commercial vehicle space, which was very sluggish in the whole year. To drive diversification and growth, we are increasing our focus on our Heat Shield division, which has given us good results over the past 9 months. We have also received new orders from the Heat Shield segment of about INR 245 crores for only Heat Shields. Revenue from this segment reached INR 32.25 crores with high margins for this particular product line. We are now working on different kinds of Heat Shields. Some heat shields we're working on for noise insulation. Some we are also now working on for safety critical items like battery heat. So these are all work in progress. Our Forging division, which has given some stellar performance over the last several quarters is its first headwind of the European car market. There was a slowdown in Europe, which we saw, maybe schedules were very, very muted, stocks were high, but this, I think, will correct in the next quarter or 2 despite the headwinds that it faced in improving EBITDA margins compared to the previous year because of cost saving measures and also some price increases we received from our customers. Our joint ventures have delivered a good growth as they both are linked to the passenger vehicle segment, increase its share of business in the current customers and also acquire new customers both in India and domestically. Our joint ventures, I feel, are at the stage today where growth is going to happen at a faster pace than ever before. We as a company have shown that our exports even though in a muted market touched 26%, which is a good sign in the healthy side of exports. We continue to increase our play both in the domestic market as well as exports. With this, I will hand over the call to Manish Khanna, our Talbros Group CFO to take you forward with our financial performance. Manish, go ahead.

Yes. So, thank you, Mr. Anuj. Good afternoon and a warm welcome to all the participants. Let me begin with the financial review. Total revenue for Q3 FY '25 stood at INR 204.4 crores against INR 201.5 crores in Q3 FY '24, a relatively flattish growth of 1% year-on-year. And for 9 months FY '25, it stood at INR 633.8 crores against INR 583.4 crores in 9 months FY '24, which is also a growth of 9% year-on-year. EBITDA for Q3 FY '25 stood at INR 35.6 crores against INR 33.2 crores, a growth of 7% year-on-year. For 9 months FY '25 it stood at INR 107.5 crores as compared to INR 91.8 crores in the same period last year, indicating a growth of 17% year-on-year. EBITDA margins for Q3 FY '25 stood at 17.4%, as compared to 16.5% in the same period last year, higher by 90 basis points. And for 9 months FY '25, it stood at 17%, which has increased from 15.7% last year, higher by 130 basis points. PAT for Q3 FY '25 stood at INR 23.8 crores against INR 22.7 crores in Q3 FY '24, a growth of 5% year-on-year. For 5 months FY '25, it stood at INR 67.8 crores as compared to INR 60.2 crores last year, a growth of 13%. In Gasket division, specifically in Q3 FY '25, sales for Gasket division stood at INR 136.8 crores as against INR 130.3 crores in Q3 FY '24, 5% growth year-on-year for 9 months FY '25. Our Gasket sales was INR 413.7 crores as against INR 381.9 crores in 9 months FY '24, a growth of 8%. EBITDA for Q3 FY '25 was INR 22.8 crores, which is a growth of 9%, as compared to the same period last year. And for 9 months FY '25, this segment saw EBITDA of INR 69.6 crores, as against INR 57.9 crores, a growth of 20% year-on-year. Coming to Forging division. Revenue in Q3 FY '25 was INR 67.6 crores as against INR 71.2 crores in Q3 FY '24, primarily because of export demand being a little subdued in European markets. In 9 months FY '25, the revenue grew by 9% to INR 221.2 crores as against INR 202.7 crores in 9 months FY '24. EBITDA stood at INR 12.8 crores in Q3 FY '25 as against INR 12.2 crores in Q3 FY '24 and EBITDA saw a growth of 11% in 9 months FY '25 from INR 35 crores to INR 39 crores in the same period for the last year. For Marelli Talbros Chassis Systems Private Limited, revenues for Q3 FY '25 stood at INR 72.3 crores against INR 68.7 crores, a growth of 5%. And for 9 months FY '25 stood at INR 208.6 crores versus INR 189.6 crores in 9 months FY '24, registering a growth of 10% year-on-year. EBITDA for Q3 FY '25 was INR 11.9 crores against a growth -- which is a growth of 25% year-on-year and 9 month FY '25 stood that INR 32.1 crores as against INR 25.2 crores in 9 month FY '24, growth of 27% year-on-year. For Talbros Marugo Rubber Private Limited, revenues for our TMR business in Q3 FY '25 were INR 31.5 crores, which is -- which showed a growth of 11% year-on-year basis and stood at -- and it stood at INR 95.9 crores in 9 month FY '25 versus INR 91.6 crores in 9 month FY '24, registering a growth of 5% year-on-year. EBITDA stood at INR 3.8 crores in Q3 FY '25 as against INR 2.2 crores in Q3 FY '24. And 9 month FY '25 it was INR 12.1 crores as compared to INR 6.7 crores in 9 month FY '24, a growth of 81%. The company remains dedicated to delivering exceptional value to the customers by providing high quality products and maintaining competitive pricing. A strong focus is placed on upholding excellence across all segments while fostering strong collaborative relationship with the stakeholders. That is all from our side and I would like now to open the floor to questions and answers.

[Operator Instructions] First question is from the line of Yash Kukreja from Equitree Capital.

Congratulations for posting decent set of numbers even when industry demand remains subdued. My first question is, considering the sluggish export demand and divestment in NLT, do we stick to our guidance of INR 2,200 crores by FY '27?

Yes, so yes. Yes, we still stick to our guidance for INR 2,200 crores. I think it should be possible because we are getting some more business from Indian OEMs. Such as Mahindra & Mahindra, a large SUV manufacturer in the country. We are getting some good traction from Tata Motors. Even if you see in this 9 months we've shown that Maruti has gone up to about, I think, 17% to 18% as a contribution for our customer base. So we are pretty hedged. So yes, we maintain our guidance because export is about 26%. And in exports, if Europe has slowed down a bit, we're still looking at orders from the U.S. and in the U.K., which will compensate this. This is like a correction, I feel, to be honest with you, because it got hit, Europe got hit by sluggish demand, but also our stock levels had gone up to a large extent as well to the European nation. And so they were pulling less from us. But I'm already seeing better signs for quarter 4.

Got it, sir. And sir, our EBITDA margins will remain around this level only?

Anuj, can I?

Yes, yes, please.

EBITDA margin, you should look for 9 months, not quarter-by-quarter because some price increases of earlier quarter comes in this quarter, et cetera, et cetera. We should be able to maintain EBITDA between 16.5% to 17% going forward.

Got it, sir. Okay. Sir, my last question is, what has been the utilization levels? And what is the maximum revenue potential from all the existing facilities, including the new Pune facility?

Yes. If we see from the gasket and heat shield, we should be -- we should have -- I think it should be around INR 530 crores to INR 540 crores we can do from the existing facilities, okay, at present that is our ability, and we are about 85% of that. In forging, we can do around INR 350 crores, and we have around -- in forging, we are around 70%, 75%. In machining, we are 90%. In Marelli of course we are chock-a-block. We are setting up a new plant for the Stellantis order, which is, I think, will be commissioned within the next 6 months. So with that, the capacity should be around INR 500 crores. Marugo, we have a capacity, with a little addition of little machines we can easily produce around INR 180 crores. At present, we are at about INR 130 crores, INR 135 crores.

[Operator Instructions] Next question is from the line of [ Abdul Daga ] from [ Daga Securities ].

So I had 2 questions. The heat shield segment continues to scale reaching up to INR 32-odd crores in 9 months FY '25 and the new orders of INR 245 crores have been secured. So what is the expected revenue contribution from this segment in FY '26?

Yes. I think heat shield with the new models of 2 Maruti coming in and Kia going forward and Volvo coming in. And we expect that this business should give a revenue of around INR 65 crores to INR 70 crores in the next financial year, '25-'26.

Okay. Got it, sir. Sir, also the gasket business continues to be a major contributor of our revenue.

Yes, 48% revenue is coming from there, yes.

So what are the key drivers for future growth? And how do you see the market share evolving?

Yes. Every business has a decent growth trajectory. In gasket business, I can see about 12% to 15% growth. In heat shield it should be about 25%. In forging it should be 25%. I'm coming to next -- near 1 or 2 years, I'm talking about. And Marelli should be 35%, 30%, 35%, Marugo should be around 25%. So overall, we are looking at a growth of 20% plus in next couple of years. And key drivers are the new businesses, new orders converting into commercial production, number one. And a little 5% to 7% normal growth will be there which last year was totally down, you know that for 9 months there is hardly any growth. And passenger vehicle was also grown by 2%, 3%. In particular, certain companies like Mahindra performed very well. Rest are all -- Maruti is 2%, 3%, rest are all flattish type or negative. And 2-wheelers have done well, 13%, 14%, in which Honda had done the best. Rest are okay-okay. Bajaj, we are there in Bajaj and Hero, we are not there in Honda. So we foresee that the demand will come with [indiscernible] some going forward, the interest rate I think we are indicating a reduction of 0.75% this calendar year. Everything going forward, we foresee that the demand should grow.

Next question is from the line of Kuber Chauhan from Anand Rathi.

Two questions from my side. Can you give me the breakup of your vehicle type, like for this particular quarter?

What you want breakup of?

Vehicles, from 2-wheelers, passenger vehicles and for this particular quarter?

Yes, yes, yes. Just a minute, yes, just a minute.

Yes, I have it, Navin. 18% is 2-wheelers, 34% is cars, 22% is trucks and 13% is agri.

Okay. And then secondly, you said that EBITDA margins increased because of some localization of components. So can you...

We import some components from -- for our gasket division. We're trying to localize them in India. But it's a contribution of localization, it's a contribute of price increase plus operational efficiencies and economies of scale. I can't….

Okay. So have you seen any reduction in imports? I mean, if you can just give me some percentage, how much we have localized or how much has been the reduction of imports?

It's a continuous exercise. It's a continuous exercise. We can't give a number. We have set a target of INR 8 crores, INR 10 crores, and we follow that because we had to take for the localization, we had to take the OEM approval also. We have to give them a sample because any change in raw material, we need to inform them. Because OE will -- because they are ready to pay for the higher price, but you know the -- how the currencies are moving, like how the dollar has gone crazy. So we are -- we do some local manufacturing, we got it approved. It's a long process, it takes 1, 1.5 years for the approval. And we had to pass on some benefit, but some benefit will keep also.

So what can tell you is, overall our import buys in the last 3 years have actually come down…

Yes, as a percentage of total consumption, it has gradually come down. And we are trying to offer in the new RFQs, et cetera, we are offering a local RM, not avoiding to offer an imported RM.

Okay. Got it. Got it. And just wanted to know regarding the demand scenario about domestic as well as the international market. How has been -- and what has been your guidance for upcoming quarters or next 6 months?

Yes, yes. I can give you a guidance of about 24 months approximately. And export market is there. We are an agri offloader in a big way, which is not going to go anywhere. Of course, we are in passenger cars also. There's a little muted growth, but they are showing a normal trend because of the overstocking at the end because of China Sea, et cetera, because the lead time increased from 8 weeks to 12 weeks, we sold more material to them. So they got more inventory and little 10% tempering of demand from their side. With the result some effect has come in this quarter, and this will be all over from by March. Everything will be normal by -- we have developed new products for the offloader business. The supply just started and next year -- next 2 years it should boom. We are getting new orders from the U.S., et cetera. In the forging component, there is no problem of the -- and in the gasket, there is no problem of demand from that side. And we are not that big in that we control 50%, 60% of the export market, sorry. We are just 1% or 2%, 3%. It doesn't make a difference to us.

Next question is from the line of Shikha Mehta from Time & Tide Advisors.

Congratulations on a decent set of numbers in a tough scenario. I just have a few questions, trying to understand the quarterly numbers a bit better. Like we've mentioned this quarter, export was not as great for us. So is this kind of the bottom? Or are we seeing improvements in Q4 because we're already midway in March -- sorry, in Feb. So would Q3 be the bottom for exports? That's number one. And second, we spoke about lead time kind of increasing on the inventory cycle. Again, some effect of that has been seen in this quarter. How much of that is expected to spill over in Q4?

So regarding the first statement, export is down -- export -- direct export is not down, by the way. Direct export is -- we have done a decent direct export in this quarter. In forging division -- of course in gasket division, my export against 15% was down by to 13%, downfall of INR 2 crore to INR 3 crores only. In forging division, my export is 62%. The demand has come down in the case of indirect export, not direct export, sorry. Direct exports has gone to 62%, and it will remain between 60% approximately in the current quarter also. The demand came down in the indirect export because of the excess inventory lying with the customer outside, number one, because of the Red Sea problem we shipped more material, Red Sea problem resolved and the inventory is stuck there. And little bit demand has come down, little bit, but it has been normalized by the March end. We have been informed, we have received the revised schedule for the next financial year. There is no problem. Demand and other export will -- this export number 2, some projects have been delayed of European car manufacturer, which will be commercialized by June, July, plus our another order of Marelli which was bit delayed because of the passing of sample. Sample has now been cleared. We are yet to go. The commercial production of that order will we expect to start by the end of the second quarter. So that is again export, big export, huge export. So export by last -- next year, third or fourth quarter, you can see a huge jump in export. Export is there. Export is there.

So would it be right to assume that H1 of FY '26 will be significantly better than H2 of FY '25, just talking about exports.

No, export will be better, definitely. First of all, Q4 will be better than -- we should be 10% better than Q3 in all aspects, minimum.

Got it. Got it. And another thing, sir, trying to understand the CV space a bit better. I understand we've been seeing sluggishness for a while now. Are we seeing any green shoots kind of looking out…

Yes, yes. First of all, I want to tell you that we have the orders in hand. The commercial production launches have been delayed by OE. In the case of Maruti. Yes, in the case of Maruti, we have the order for Maruti suspension, EV vehicles, okay? It was supposed to launch in February. It has been delayed till June because I think they are not able to -- there are other issues with other products. They are not able to resolve that. Similarly, in the case of European car manufacturer also, order in hand is there. Everything products have been developed, sample have been tested, everything is ready. But they are saying they will be launching now in July. So order book is there and launch has been delayed by the various reasons. They have been delayed by the OE customers. It's not going to go anywhere. It is going to come maybe 3 months here and there or 4 months here and there. That's all.

But your question was also on commercial vehicles. Yes, we are seeing an uptick in demand…

Yes, yes, definitely, definitely uptick will be there. Commercial, it is there.

Okay. So we are beginning to see green shoots.

Yes, yes. We are seeing a pull in our stock -- in our schedules. Clearly, yes.

Which might come in may be in FY '26.

Yes, I think it will be better. I think all that confusion of elections and getting a government formed in the summer of last year and this and that, I think that's now of the past. And I think we are seeing an uprise here in commercial vehicles.

All right. Great. And lastly, on our JV side, again, we are, I think, set for really significant growth. Our Marelli capacity will be coming up in the next 6 months, as we mentioned earlier.

Yes, yes, yes.

If you could just throw some light on that, what kind of peak revenues this new capacity can do for us and what kind of margins we'd be expecting?

Yes. Regarding the Marelli, the shed is ready. We have already set up some -- few requirement for the European customer was also there -- U.K. customer there. We set up a few presses for that. And we have in-house -- we used to do outsourcing of ED painting, et cetera, which we have started doing in-house. We have set up the facility of that also. Now with the passing of sample by -- within the last 2 days, now we are starting the process of importing the balance equipment. The total CapEx will be around INR 45 crores to INR 50 crores at present, and it should be ready by the year-end, all the CapEx is, but we can start the production in the -- by August, September of this year, we will start the production and filling of our stock, et cetera. And we can see within next 2 years, this year, '25-'26, '26-'27, we should be around INR 500 crores in this company and EBITDA margin should be around 15%, approximately, minimum. We are already at 14% plus, we're already there here.

Next question is from the line of Uttam Purohit from Monarch Networth Capital.

So my question was on the forging side. So we are targeting somewhere around INR 500 crores of revenue by FY '27. And seeing the current sluggish year, so that would mean we are targeting more than 25% Y-o-Y growth in the next coming 2 years, somewhere around 27%.

Yes. Yes. So we are targeting -- yes, please go ahead first.

Yes, yes. So I was just confirming, do we see any change in our guidance, any revision or reduction in that?

Maybe -- okay, you are right, you are right in saying we also disclosed the same thing. Next year, we should be looking for 25% growth in the next 2 years. Maybe we'll see at the end of year because sometimes the demand comes up and down, sometimes development time takes extra time also, and we need to add capacity, sometimes it get delayed. Maybe we can go up by 5%, not more than that, not more than that.

There are some more customers in the pipeline from U.K. and in the U.S. targeting, it's a work in progress because we have to keep getting…

Our focus is, yes, we have to attach INR 500 crores. We can achieve INR 495 crores, we can achieve INR 480 crores, but it can't be INR 400 crores, please.

Next question is from the line of [ Sakshi Pratap ] from [ Pratap Securities ].

My first question would be given international uncertainty, can you throw some light on whether we can expect any change in domestic to export mix going forward from an overall global outlook for the coming 1 to 3 years?

No, we don't see any major change. No. We see still there is a huge demand of the forging component, on the machining component, huge, huge demand because we are -- as I told you earlier in the call, we are not very big. We are a small company in a big ocean. So by demand coming here by 5%, 10% doesn't make a difference much to us.

Understood. Got it. My second question would be about EMR business. So going forward, just wanted to understand the growth prospect. What kind of growth are we looking in that segment?

In which segment, ma'am, in which segment you said?

Talbros Marugo, very, very…

Marugo, yes, yes, right.

Very, very positive.

Yes. Next year, we are looking at a growth of 25%. We are taking now new players also in the Indian OEMs only, 2 or 3 big OEMs. I think for next 2 years, it should be around 25% minimum.

Next question is from the line of [ Riya Sharma ] from [ CK Capital ].

My first question is from -- is -- the MTS saw strong EBITDA growth of 25% Y-o-Y in Q3. So are there any new customer additions or some product developments expected in this segment?

For which company?

Yes. For our company as a whole, she is talking about [indiscernible]. Yes, you are right, you are right. The more the export is there, the more profit will be there, number one. In the forging division, we have a Phase 3 of the European car -- European -- this off-roader business OEM. The new phase was added. The supply has increased. So I told you earlier, 60% is exporting forging in last quarter. It has contributed towards getting higher EBITDA. Second is the price increase, et cetera, freight increases were there in the past, which pending we got in this quarter. That is a combination of these 2 stuff has increased my EBITDA plus cost cutting, et cetera, Anuj has already told you, it's a result in favorable response. And with the result, we have accumulated a decent EBITDA in this quarter.

Okay, sir. Got it. And my second question is what is the expected CapEx allocation for FY '26? And which segment would be a major focus?

So major focus, everybody is equal to us, every division is equal to us. The more order -- because the margins are good in every business now. It's not even -- one business is 2% EBIT margin, other is 20%. No. It's 1% or 2% here and there, everybody is equal now. So the more the order is there for which division and where the capacity is lacking, we will invest money in that division, irrespective of division.

[Operator Instructions] Next question is from the line of Uttam Purohit from Monarch Networth Capital.

So if you could help me with the utilization for 9 months. So we have utilization for FY '24. So if you could share the utilization level for Gasket, forgings, [ MTCS ] and TMR for 9 months as well?

What do you want to know 9 months?

Utilization levels.

Utilization level, utilization level, just a moment, please. Utilization level for 9 months. It's around 78% in gasket, around 80% in [indiscernible]. In forging, it's around 70% in forging, 90% plus in machining. And in the case of Marelli, it's about 78% to 80%. In the case of Marugo, anti-vibration is around 80%, hoses is around 82%, okay?

And on the [ MTCs ] side, so this INR 80 crore CapEx we would be doing by FY '27. So how much additional capacity it would provide from the current level? So even if it's ascertain it would be helpful.

Yes, it depends on the next year budget numbers. I will be able to give a better answer to this question in the month of our annual results in the month of May. By the time we'll get the schedule of all the OE customers, fresh order, et cetera, which has closed or which are closing, when the commercialization will start, we can give a better picture at that time, better picture.

And earlier guidance which we provided for -- sorry, Marelli was somewhere around INR 700-odd crores by FY '27.

Yes.

So I think that's a very huge number if we consider the muted base for current year. And that would like to be….

I understand from where you are coming. In the current year, we anticipated that our European car manufacturer will start the production, and we have already a huge order of 50, 60 line with us to be commercialized. That has been delayed. Only first phase has been started. There are 3 phases. By August, September, we anticipate all the phases will start. And the other order of European car manufacturer for which we got the order, I think we announced in the month of -- this April, last April that there was some design change, et cetera, the design finalized and 2 months it was on a test bed. Now 2 days back, test has been committed, 100% we passed. And now the activity has started. It has delayed by 6 to 7 months as such, but we try to start this business in the month of August, September. So this year, the full impact will not be there, but it has been a little bit delayed by 6 to 9 months overall figure. But the figure is there, don't worry. It's there.

So we might -- so the guidance might be -- we might miss the guidance by 1 or 2 quarters, right? That's the assumption.

That's nothing more because something is not in our hands, some design changes happen or some doesn't launch the vehicle, so it depend.

Okay. And if you could provide -- I know this is very granular data. If you could provide how much revenue contribution comes from Europe, particularly and how much impact we have seen in degrowth terms?

You really impact in this financial year is to the extent of INR 10 crores, INR 15 crores as a whole company, as a whole company. Some is because we have supplied excess previously, partly 50% is because we supply excess because of the -- because we are a single source of the part and the Red Sea problem was there, the sea was getting -- the shipyard getting delayed, we supply excess quantity. 50% is because of the schedule coming down. That's all. But everything is normalized by March. There is no major other impact. There's no other impact.

Okay. So the 15% is for a quarter or the 9 months?

Annual, I'm talking about. Okay, annualized, okay. Thank you. But the impact has come in the last -- it will come in the last 6 months only. First 2 quarters, there was no impact.

Yes, that's understandable considering the Red Sea effect, yes.

[Operator Instructions] Next question is from the line of [ Yug Modi ] from [ AP Capital ].

I just had one question. Sir, EV orders have been secured from top OEMs. Could you share insights into ramp-up plan and long-term revenue expectation from EV components?

Sir, we have already in the guidance we said we are targeting 12% of our total revenue to come from EV. But I don't think because of the delay in launches by OE customers, the project has gone delayed. If we see our order and the numbers shown by them, it will cross easily 12%.

Yes. But there are delays right now. So you can take a number of about 10%, I would say, a good number, but I mean they can be….

Yes, delay.

But we are not losing any market share anyway. We are progressing to get the --

The order is with us. It's a part developed, given for testing, everything is okay. We are waiting for the launch.

Yes.

Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for the closing comments.

Yes. Thank you all for joining the call. I hope we were able to answer all your questions. For any further queries, you can get in touch with Deven Dhruva from SGA, our IR company. Thank you so much, and all the best. Bye-bye.

Thank you.

Thank you.

Thank you.

On behalf of Talbros Automotive Components Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.