Tube Investments of India Limited (TIINDIA) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Tube Investments Q4 FY '25 Earnings Conference Call, hosted by IIFL Capital Services Limited. [Operator Instructions] Please note, this conference is being recorded. I now hand the conference over to Mr. Anupam Gupta from IIFL Capital. Over to you, sir.

Yes. Thanks, Inba. And welcome, everyone, to the Fourth Quarter FY '25 Conference Call for Tube Investments of India. From the management, we'll have Mr. Arunachalam, Executive Chairman for the company; Mr. Mukesh Ahuja, Managing Director; Mr. AN Meyyappan, Chief Financial Officer for TI; Mr. Shivdeep Singh Jammu, Division Head for TPI; Mr. Sivakumar, Division Head for the Metal Formed Products; Mr. U Rajagopal, Division Head for the TI Cycles business; and Mr. Jalaj Gupta, CEO for TI Clean Mobility Private Limited. To start off with, I'll hand it over to Mr. Ahuja for the opening comments, and then we'll have the Q&A.

Thank you, Anupam, and good morning to all. From management side, just a commentary. The Board of Directors of Tube Investment of India Limited met and approved the financial results of quarter and year ended 31st March 2025. The Board has declared an interim dividend of INR 2 per share in February '25, and the same was paid to the shareholders in March '25. The Board has now recommended a final dividend of INR 1.5 per share for the financial year '24-'25. Just a snapshot of stand-alone results for Q4 and the full year. Revenue for Q4 was INR 1,957 crores against INR 1,962 crores of the same quarter previous year. Revenue for the full year was INR 7,893 crores against INR 7,611 crores of the previous year. PBT before exceptional item for the quarter was INR 896 crores and the year was INR 1,544 crores. During the quarter, the company has recognized a fair value gain of INR 569 crores in its P&L towards the investment in CCPS of the TI Clean Mobility Private Limited. PBT before exceptional items and the CCPS fair value gain for the quarter was INR 327 crores against INR 318 crores for the same quarter previous year. PBT before exceptional items and CCPS fair value gain for the full year was INR 975 crores against INR 970 crores for the previous year. ROIC at 44% for the year ended 31st March '25 as against 54% in the previous year. Free cash flow for the quarter was INR 225 crores and the cumulative free cash flow for the year is INR 397 crores, which was 55% of the PAT. This is excluding fair value gain. Coming to the respective businesses, Engineering, the revenue for the quarter was INR 1,229 crores compared with INR 1,276 crores in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was INR 142 crores against INR 160 crores in the corresponding quarter of the previous year. The revenue for the full year was INR 5,029 crores compared with INR 4,921 crores in the previous year. Profit before interest and tax for the full year was INR 617 crores, which is same as the last year. Coming to Metal Formed Products, the revenue for the quarter was INR 403 crores compared with INR 386 crores in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was INR 39 crores as against INR 42 crores in the corresponding quarter of the previous year. Revenue for the full year was INR 1,565 crores compared with INR 1,519 crores in the previous year. Profit before interest and tax for the full year was INR 164 crores [ INR 161 crores ] against INR 187 crores in the previous year. Coming to Mobility, the revenue for the quarter was INR 181 crores compared with INR 150 crores (sic) [ INR 154 crores ] in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was INR 4 crores against the loss of INR 9 crores in the corresponding quarter of the previous year. The revenue for the full year was INR 670 crores compared with INR 664 crores in the previous year. Profit before interest and tax for the full year was INR 5 crores as against the loss of INR 18 crores in the previous year. Others, the revenue for the quarter was INR 244 crores compared to INR 230 crores in the corresponding quarter of the previous year. Profit before interest and tax for the quarter was INR 13 crores as against INR 17 crores in the corresponding quarter of the previous year. The revenue for the full year was INR 987 crores compared with INR 834 crores in the previous year. Profit before interest and tax for the full year was INR 48 crores against INR 65 crores in the previous year. And with this, the stand-alone consolidated results, TI's consolidated revenue for the quarter was INR 5,150 crores against INR 4,490 crores in the corresponding quarter of the previous year. The profit before share of profit of associate/joint ventures for the quarter was INR 342 crores against INR 405 crores in the corresponding quarter of the previous year. With this, may I hand over back to you and happy to take any questions.

[Operator Instructions] We'll take our first question from Rushabh Shah from RBSA Investment Managers.

Firstly, you have been saying in earlier con calls that TI has room for one more business division that could be incubated. So any thoughts? Have you finalized anything what can it be? And also lately, the government has started new PLI for electronic components. Are we looking at this? Anything that could be done? That's my first question.

Yes, Rushabh, thanks for the question. As of now, we are still studying for incubating another business line in the TII. And regarding your question to PLI, we have yet to take call. We are also studying the adoption, but yet to conclude on that.

Okay. And my second question is on medical devices. We were expecting certain certifications from the export market. So have we received it? What is the status? Because I believe we are not growing as per the potential of the division so far.

So Rushabh, we agree with your remark on -- we have already invested in CE certifications for the Europe, which was a work in progress. And there is a bit of delay in getting those certifications, and we are expecting to be over in the next coming quarter, maybe -- which is current quarter. And after that, maybe the business will also start. Like fixed cost is already invested in, but revenue is to still kick on in a large way for the export market, which we are confident, going forward, will take place. But there is a bit of delay, we agree on that.

My third question is on the EV segment. We have seen lately there has been high competitive intensity, especially in the 3-wheeler. And so I just want to understand, what more are we doing to improve the battery range, aftersales and reduce cost, given the competitive intensity that has happened? And also one of the competitors are saying that they are already doing motor in-house, and they're also getting eligible for the PLI in this segment. So where are we on both of these?

Okay. So Rushabh, Jalaj Gupta here. I'll take this call. So you are absolutely right, the intensity of competition in the 3-wheeler electric business is increasing. That's because we are seeing a very high degree of electric conversion of the ICE and other fuel vehicle into 3-wheeler. As far as we are concerned, we have our product plans. In fact, the -- as of today, we offer one of the highest range that's offered on any particular battery offered in 3-wheeler. And we are working on introducing variants of offering other battery packs as well. That's one. Second part of your question was doing our in-house motor. There are various microcontrollers that go into electric vehicles, be it 3-wheeler or other components. We are well on our way to indigenize majority of the microcontrollers within ourselves that is in the business. And we'll be among the very few ones in the country to have their own microcontrollers for the business itself.

Mr. Shah, may we request you to return to the queue, sir, as there are participants waiting for their turn? We'll take the next question from Vipul Kumar Shah of Sumangal Investments.

Can you give the volume figures for all the 3 electric products? And what is the quarter-to-quarter change?

Okay. So I'll take this. Quarter 4 was perhaps our best ever quarter since the inception of TI Clean Mobility from the top line perspective. As far as the full year is concerned, the overall revenue grew by almost 160% over F '24. As regards to the specific volumes, the total volume for the year for the 4 businesses that we operate were 7,540 numbers. There are two, three more things I just wish to highlight over here. IPL Tech, which is the flagship business for the TI Clean Mobility, there, quarter 4, again, was the best quarter. We could deploy 65 trucks in the quarter 4. And just to give you the -- and give everybody the perspective of the -- of what IPL Tech is doing, in the entire last financial year, all over the country, for heavy electric trucks, 206 trucks were deployed in the country, in the entire industry. Out of 206 trucks, 172 trucks were deployed by IPL Tech. So that's the kind of impact or that's the kind of lead that IPL Tech has taken in the heavy electric commercial vehicles. Now I'll talk about 2 businesses, which saw them moving from project stage to the full-fledged business scale, which is our e-SCV EVIATOR brand, small commercial vehicle and the Electric Tractor business. So quarter 4 saw both of the businesses seed volumes, about 14 in one case and 17 in another case, into the market for quarter 4, which was the plan. So the plan was to ensure that in quarter 4, all the 4 businesses are fully operational, which we have achieved. And now we have the entire full financial year where all the 4 business will be fully operational.

Sir, can you give 3-wheeler numbers also?

3-wheeler numbers for the quarter were INR 1,662 crores and for the year were 7,324.

And what was the same figure for third quarter, sir?

Third quarter figure was -- yes. Third quarter figure was INR 1,800.

1,800. So we have degrown?

But we maintained our -- for the full financial year, we maintained our market share. In fact, for the full financial year, if I may just tell you, the 3-wheeler L5M category of business, this particular TIV, it grew by 91%. And just give me a minute. The TIV grew by 91%, and we grew by 116%, the 3-wheeler passenger business in which we operate, for FY '25 over FY '24.

So on any of this to -- this truck or 3-wheeler business, do we expect to breakeven at EBITDA level in near future, sir?

Sir, the plan is that yes, the attempt is that -- for both these businesses, the attempt would be that -- at least for a quarter or maybe even more, the attempt would be within this financial year, which is the current financial year, to achieve an operational breakeven.

Okay. And sir, my last question relates to Engineering division. So there, it has stagnated. So are we losing any market share? Means, can you comment qualitatively? Means tonnages are less? Or how should we read it? Because that was our main growth engine in previous year.

So growth momentum and the share of business continues to be strong in the Engineering division. Maybe, let's say, we have rather improved our market share in the domestic market. Coming to the margins, what you are able to see the stagnant level, that is because of a new facility in CRSS at Nashik has kicked off. And we are in the process of taking customer approvals, which is expected to be over in next 3 to 4 months' time. And then capacity utilization, which has just started now, is going to improve. And then we see the revenue growth as well as the margin improvement is going to happen in the future.

So should we expect better numbers in the second half of this year for Engineering division, sir?

Yes.

[Operator Instructions] We'll take the next question from Anupam Gupta of IIFL.

So sir, basically, coming back to the core business, Engineering and Metal Formed, can you please talk about how did the exports fare in this quarter and possibly break it up between the Engineering division as well as for the industrial chains, which we export? And similarly, how was the performance for the large dia tubes for which the new capacity was under construction in the last year?

So Anupam, thanks for the question. Maybe let's say, to answer your question one by one. Particularly to the exports business, exports business continued to be 15% of the TI's sales on an overall basis. And it has continued to be maybe, let's say, Engineering division as well as IC. But however, maybe on account of a little uncertainty, which all of us are aware of, customer relationship are in, let's say, in contact and maybe, let's say, continue to have a great relationship with the customers. But there is a bit amount of uncertainty in the short run, which may be, in our view, it's just a temporary period. And after that, we'll be back. Coming to large diameter plant, yes, you are right. For extended range, the plant is operational now, and we are in the process of getting the customer approvals for which -- may be all are the existing customers only, there are hardly new customers. And we have to go through the cycle of getting product approved, which we are hoping in the next 1 or 2 months will get approved. And then we see the extended range in the large diameter also will start kicking in for the Engineering business.

Okay. Okay. I understand. And similarly, in the Metal Formed Products business also, sir, we -- although there was a marginal growth, but margins there continue to remain weak. So what is plaguing the margins for the Metal Formed Product business?

So Anupam, like we shared in the previous calls, MFPD business is under pressure because of the railway, maybe let's say, not kicking off. But I'm happy to share with our investors today, we have signed a INR 1,000 crore contract with the -- for the next 7 years period of time, which is expected to start in Q4 of this year. So railway business, we expect to revive it back starting next year and -- rather Q4 of this financial year, which will help us to improve the margins in the MFPD business, which were stagnant or a little lower from the last 2 or 3 quarters.

Okay. So will this contract also boost your growth? Because I think over the last 6, 7 quarters, railway has not contributed much in terms of revenues, right? The growth also should be stronger compared to what it has been in the past?

Yes, Anupam, starting Q4 of this financial year, railway will be on the growth trajectory back to the original positions.

Okay. Fine. And just one last question on the EV business, sir. So EV, we had a target of reaching close to about 120 or so dealerships for the 3-wheeler business. I don't think so we have reached there, at least what is visible from the website in terms of dealerships. So where are we at this point of time? And what is the target, if you can break it up between 3-wheelers, small commercial vehicles and tractors for this year?

Okay. So Anupam, I'll go one by one. 3-wheeler business at this point of time, we are 85 dealers who are fully operational as of today. For small -- and when I say 85, I'm just talking of as on 31st of March for the quarter ended last year. For the quarter -- and the plan is to go upwards of 120 dealership for the year. That is for the 3-wheeler business. For the small commercial vehicle, 2 dealers were fully operational as on March '25, and the plan is to be having 25 dealers across the country. As far as e-tractor is concerned, 4 dealerships were fully operational. When I say fully operational, likewise in small commercial vehicle, there were many LOIs which were issued, which I'm not talking about. I'm talking about the number of dealerships which are fully operational. And as far as the tractor business is concerned, so there, again, 4 dealerships were fully operational. And the plan is to have about 25 numbers there also operational before the end of the current financial year. And as you would know, for the truck business, it's a direct selling model that we are deploying at this point of time. Maybe we may explore some service dealers, but that will be just done on a pilot basis.

We take the next question from Prithvi Raj from Unifi Capital.

So you made a point of this new plant in the Engineering segment. What will be the incremental capacity growth because of this new segment?

It is going to add incremental capacity of overall Engineering division about 7% to 8%. But in terms of volume, if we say that, it is going to be about 4,000 tonnes per month.

And on the EV side, could you quantify what are the losses for this financial year?

This is Meyyappan here. See, for this quarter, the loss is INR 107 crores. That's -- what we have reported is INR 244 crores, and this you have to eliminate the CCPS fair value loss what we have accounted for in the consolidated statement, that is INR 137 crores is there. If you remove it, this INR 107 crores is the PBIT loss for this quarter. And for the year, it is INR 412 crores.

And we expect this to reach breakeven by the end of Q4 of this financial year, right, by FY '26?

No, no. I think Mr. Jalaj has already explained to you that we are working towards EBITDA positive for breakeven for 2 of the businesses.

Okay. And the railway order that you mentioned is INR 1,000 crore order, right, over 7 years?

That's right.

Our next question is from Gnanasundaram Saminathan from Avendus.

The first one is on the EV business again, is that I remember sometime back, Mr. [ Valain ] used to call that we need to do about INR 1,000 crores in each individual set of these businesses to breakeven. And we are calling for operational breakeven in the next year. So how does the number work? I'm not able to add it up, I'm sorry.

So sir, the target is that TICM, all the 4 businesses put together, the first immediate target is how do we reach a $1 billion mark, let's say, in next 3 to 4 years. That's the first objective. Having said that, the second most immediate objective is, as you also said, how do we reach operational breakeven at least for the 2 businesses this particular year, right? And the third target that we are working towards is that how do we become among the top 3 players in each of the 4 businesses that we are operating in. I think these are the three big milestones that we are working towards.

Perfect. Should we have a number in mind to say when you're looking to breakeven in eHCV and the passenger auto segment? Is there a top line number that we should be aware of to be revised from the INR 1,000 crore number?

It will be difficult and not appropriate for me to comment on that at this particular point of time when we have just started our journey.

Right, sir. Perfect. But we can still expect operational breakeven in FY '26 is your commentary right now?

For the 2 businesses, not for full TICMPL. But at least 2 out of the 4 businesses, that's the plan.

Right, sir. And TICMPL, what would be the cash kitty that we have currently, sir, out of that INR 3,000 crores?

Almost around INR 900 crores, we are having it in cash.

INR [ 947 ] crores.

INR [ 940 ] crores, to be precise.

Right, Sir, another one is that, can you just explain between 2 businesses which were written off this quarter Moshine and the waste-to-energy business, what is the rationale behind it?

So Moshine, we started for a features phone market around 1.5 years back. We find maybe, let's say, whatever margin expectations are there that is not getting fulfilled in that business. That's why it was a small business around INR 15 crores. So we've taken an impairment in this current quarter. What we are mentioning about the [ Astro Villas ] that was done in the Q1 of this financial year, which was basically an investment in the start-up for the R&D project. And when we see that maybe it was not progressing well, so we have taken a call on that -- I think, Meyyappan, it was around INR 3.7 crores?

INR 3.5 crores.

INR 3.5 crores was the investment in the startup.

Right, sir. Fair enough, sir. And one more management-related question you have with Mr. [ Valain ] not being on the call today, should we read like this is a move because he moved to a nonexecutive role or this time he's not present for a one-off reason?

So Mr. [ Valain ] is traveling this time, and that's why he could not join this call.

We take the next question from Salil Desai of Marcellus Investments.

My first question is for Meyyappan. If you can explain the CCPS impairment provisioning that has been done, what is the reason behind this? And how should that change, say, in the next couple of years?

Yes. I can explain you. So it is regarding the -- with respect to CCPS, what we have invested in TI Clean Mobility. TI Clean Mobility has raised INR [ 2,750 ]crores of CCPS, out of which INR 500 crores has been invested by Tube Investments as a promoter and remaining INR [ 2,250 ] crores has been invested by private equity firms. As per this CCPS terms, it's a variable conversion, okay? It is not a fixed to fixed conversion. That is not straightaway -- fixed number of equity will not get into. It depends upon the performance of the company. At that point in time of the conversion, it changes. The number of shares what they get changes. That means as per the IND AS, we have to treat it as a current -- we have to treat it as a financial liability, we cannot treat as the equity in the books of TI Clean Mobility. And hence, for last 2 years, we were also showing it on the financial liability only. And our funding also got completed in June 2024. And since 9 months got over from that time, we have to do a fair valuation on that and accordingly account for it. And it should be a regular feature for every quarter, that is every reporting period, we have to do, and based on which we have done the fair valuation since the variability is there on this. And we have to do a fair valuation, we have engaged Big 4 for doing a fair valuation and done the fair valuation. It has come to something like INR 706 crores of number that has been accounted as a fair value loss in TI Clean Mobility. And in Tube Investments stand-alone business, whatever the investments which we are having, out of which INR 569 crores is the fair value gain for us that we have accounted in TI stand-alone business. In the consolidation, this gets knocked off, this INR 569 crores will get knocked off and only INR 137 crores, that's the investor portion fair valuation, that alone will come as a hit to the P&L in the consolidated TI financial statements.

So just to understand this, at the INR 706 crores fair value, which is lower than what was anticipated earlier, right, so should this be read as the fact that as per the shareholders agreement or the CCPS agreement, the actual performance is probably not tracking what was earlier, so expected fair value has reduced? Is that...

No, no, no. Actually, we never said any number earlier on this because the fair valuation, the first time we have done it only in 31st of March. See, earlier -- the earlier period, we have considered the cost as the fair value. The reason is the funding was not completed. Funding has completed only during this year in June 2024, the final money has come in and the entire funding got completed. And hence, we have done the fair valuation, and that has been accounted for. And we never mentioned any amount earlier on this.

And so what would be TICMPL's stake in the -- Tube's stake in TICMPL?

See, right now, we are 100% only, okay? Everything will get converted only at later point in time, okay? It depends upon the market conditions at that point in time.

Okay. Understood. Second is for Jalaj. If you can -- the INR 106-odd crores negative EBIT that we have in this quarter, what would be the major cost items that are leading to this? Last year, I think 2024, we had R&D expense, some corporate support expenses and all some of the major ticket items and some professional fees also. So it would be good to know what are the big ticket items. And if you have a path to Q4 profitability, then each of these items will either reduce? Or is it going to be just revenue growth thing that is going to drive the EBITDA breakeven?

Yes. This is Meyyappan here. See whatever we have reported here is operational PBIT, which we have given you. There is -- I mentioned in the earlier thing also, INR 244 crores was a loss, which has been shown as in Q4, and out of which, if I remove the INR 137 crores, INR 107 crores is the loss. And then going forward, see -- because the EBITDA breakeven will come in 2 of the businesses, that's what Mr. Jalaj has said, that will come in the future quarters. So that means we'll be able to maintain this because it's only operational loss. There's no specific behind this because once the revenue start kicking in, then this loss will automatically come down.

Right. So what I was trying to understand is, are there start-up costs that will reduce? Or is it also going to -- I mean, obviously, revenues will go up...

Costs will not come down. Revenue will increase and -- by which we'll be able to get more contribution on the product, whatever you are selling. And that will be able to absorb the fixed cost.

Understood. Okay. So it's not that there is some start-up costs that will reduce...

No, no, no.

And lastly, on the railway INR 1,000 crore orders, if you can just clarify what this order is for? And 7 year kind of seems like a long duration for typical railway orders, so good to understand the nuances behind this.

So like we said earlier, maybe it is a -- maybe let's say like you see railways going through the privatization route, maybe one of the many trains orders got awarded to one private player. And in turn, maybe that has been particularly bogey has been given to us. So it is starting Q4 of this financial year. It will continue to another 6 years, is a time period given.

Our next question is a follow-up from Rushabh Shah of RBSA Investments.

Just want to clarify, you mentioned the target of $1 billion revenue in EV segment. So does it include exports or it's only for domestic market?

Total, the entire size of the business, including exports.

And I think we are supposed to review the feasibility of the cycles business. So have we taken any call or I think you're targeting some export market there? What is the status on this division?

So, Rushabh, like we mentioned in the previous calls, we think cycle business is already into [indiscernible]. And this year, particularly, our exports has gone up, and we continue to focus on exports and the other categories of the cycle business, which we feel it is going to grow in coming future.

And just a clarification on the consolidated P&L, I can see the total profit and loss is around INR 158.19 crores in Q4. And the breakup between the owners of the company and noncontrolling interest, the ratio has come 30 to 70, from 70 to 30 last quarter. So is it due to CCPS only or what is the ratio that you expect going forward?

You see, this [ 46 ] is predominantly because of the CCPS, INR 136 crores you have to add and then see, okay? That will be the impact. If you add that and then see, then it will be -- INR 183 crores will be the number for the total number as against 46, okay? That will be actually INR 183 crores if you remove the CCPS thing.

And just last, if you just share something on the CDMO piece, what is the progress? And what is the road map, 2- to 3-year road map on that?

So like earlier mentioned, our construction in -- for the plant has already started, and we expect that to be over by coming year, let's say, quarter 3 and quarter 4, maybe in the middle of that, the construction will be over. And then we'll be able to go to the mass production level in the CDMO business. And that lab what we mentioned, the customer acquisition is continuing and -- which is encouraging. And then maybe after this commercial production happening with the large scale, we will be able to ramp up even for the CDMO business starting next year.

[Operator Instructions] The next question is from Vipul Kumar Shah from Sumangal Investments.

So my question is regarding TI Clean Mobility. We have cash of INR 900 crores. So considering current losses, we'll be forced to raise capital at TI Clean Mobility level in near future?

No, this is Meyyappan here. We will not -- we don't have any plans of raising any further investments.

Since we are already fully covered.

How we are going to fund the losses? We have only INR 900 crores left, you yourself have said. So if losses -- when volumes will increase initially, losses will also amount?

Vipul, as of now, we see that maybe we are covered for more than 1.5 to 2 years cash available. Also, maybe like we earlier mentioned in the call, we are very prudent on the increasing our fixed expenses and all these things, we are very careful being a part of TI Murugappa group. So we feel, as of now, we are covered up to 1.5 to 2 years time.

And sir, my second question relates to Engineering division for your Nashik plant. So when it will become fully operational in '26-'27, what type of revenue contribution we can pencil in for the entire year?

So we expect this to be fully operational by Q3 of this financial year itself rather than '26-'27 because one thing would work in when the steel scenario because of the safeguard duty introduced, we see there will be uptick in demand for the CRSS business. And as earlier mentioned during the call, this plant, we have done a capacity of around 4,000 tonnes, which we feel should be get fully utilized by Q3 and Q4. And then based on the progress, we have a plan to further expand, depending on how we are progressing.

So once it reaches its optimum utilization, what type of annual revenue run rate we can expect from that plant, sir?

So like, let's say, rather than giving plant-wise revenue targets, we -- maybe to give a guidance on the Engineering division overall, we expect double-digit growth what we mentioned in the previous call to continue for the Engineering business going forward.

Our next question is a follow-up from Gnanasundaram Saminathan from Avendus Spark.

One question is that we've also given a Board resolution saying about a INR 300 crore fund raise. What is the plan for this particular debt raise that we've called out for?

Yes, Meyyappan here. This is a generic resolution that is enabling resolution which we used to get every year. See, as per the regulations right now, we have to get this on a year-on-year basis. That's why we are in the first board meeting, we always get it for this year. And only in the need, we'll take. But we don't have any plan to raise at this point in time.

Right, sir perfect. And with regards to incremental cash that is being generated this year, how should we look at capital allocation as a policy?

So like we mentioned, as of now, maybe 5 verticals are already there and TI. TICMPL, like we discussed, they are fully covered for next 2 years' time. And the capital outflow will be happening for particularly TI Medical, CDMO business and for the core business, what we are going to do it. And as we said earlier, maybe we are also exploring newer opportunities. So depending on the attractiveness of the opportunity, fund will get allocated to that opportunity also.

Right, sir. And one last one is that TI Medical had a loss this time. What is the reasoning? And what is the turnaround period here?

So as, let's say, I earlier mentioned, we have invested a lot for the exports business and -- which is going a bit slow. We agree on that particular piece. And starting maybe next 1 or 2 quarters itself, we are expecting whatever there is a lag was there for 1 or 2 quarters, should get carried away, and then we see that it will be back to profits.

And with the current set of investments that we've already done into TI Medical, what is the kind of potential upside that we're looking, ROCE of 20%, 25%, what is the number? I'm just asking that from the current investment that we have done for about INR 260-odd crores and the partner putting about another INR 67 crores, INR [ 68 ] odd crores, INR 350 crores investment. Up to what revenue levels can it take this company into? And when will further investments be required on TI Medical?

So we are already exploring maybe like you say that maybe if we do any acquisition, let's say, it is coming at a higher price point, which is not as per our philosophy of TI. But it is going to be a growth vertical for us. And coming to answer your question of as overall TI, we expect always ROCE more than 25% on whatever we invest after the business gets stabilized.

[Operator Instructions] We take the next question from Mr. Anupam Gupta from IIFL Capital.

Yes. So a couple of questions. Firstly, in terms of CapEx, can you please detail what are the planned CapEx and investments in FY '26 by businesses, if you can give that breakup?

For the core business, we expect as of now, we'll be investing around INR [ 300 ] crores in our core business. And like I mentioned earlier, further investment will be going towards the TA Medical, CDMO and any other opportunity comes in front of us there. That's how the capital will get allocated for the current year.

So can you detail the quantum which we have planned for medical, CDMO and if there is anything planned for EVs as well in this year?

So Anupam, that depends on the size of the opportunity. It will be very difficult to mention what kind of CapEx we'll be putting it. Like we said, we are studying on the field of TI Medical either through organic or inorganic route, whatever it comes. That will depend on the size of the opportunity.

Okay. Okay. Understand. And one question for Mr. Jalaj. In your remarks, you said you are looking at more battery options for 3-wheeler. I understand your current pricing is a bit higher than what competition is offering and also because of the type of battery which you're offering. So if you can, can you talk a bit more about what changes we are looking at and what will it do to your pricing versus competition?

So Anupam, as of today, what we offer in the market is a higher-capacity battery. In fact, we and one of the competition are the two ones which offer a higher-capacity battery. Our battery capacity is 10.2 kilowatt hour. So the recent we have seen in the market introduction of products with lower battery capacity as well. So we will be offering them also as one of the variants, which will give us some advantage on the pricing that we can do. Not only that, when we introduced our product, there were certain very unique features and -- which were the best-in-class features in the category, which, of course, then the competition has caught upon. So very soon, we would be launching a refreshed version of our 3-wheeler passenger variant and -- which we feel that will again give us the competitive edge as far as the product is concerned. One thing which remains unchanged in the market is the premium positioning that we have positioned our product with, which is something a customer also acknowledges and customer is, therefore, willing to pay a slight price premium also on our product vis-a-vis the competition.

Okay. Okay. Understand. And one more question on -- for you, Mr. Jalaj. So on the trucks, obviously, we were the only offering to a large extent in the last year. And now we have seen that a larger incumbent has launched almost a similar product as what we have from IPL Tech. So have you seen any impact from there? Or how are you preparing for that sort of competition and possibly more launches in that segment?

So competition will come. I mean we are all embracing towards competition, not only from one, we will see competition from many -- there will be many more entrants into this particular field. However, what is important is how many trucks have been put on the road in terms of the actual usage. So I gave the figure earlier that out of 206 trucks deployed in the country, 172 were deployed by us. And what is important in case of the big truck business is the successful establishment of the end-use cases, which we have been able to do across 6 to 7 segments. So competition will come. But I guess we believe that we have a very good head start vis-a-vis the competition because anybody, be it competition, be it us, it took us about a year or more than a year, about 2 years to establish the successful end-use case. So there will be a learning curve which the competition will also follow. Yes, the learning curve may be slightly smaller, but everybody will have to go through that learning curve.

Sure. And one last question on Moshine. So you have taken the write-off, given the sort of margins that you're seeing. But let's say, is Moshine in that business, are you still open to take that electronics PLI, which is there? Can it be housed under Moshine? Or is that a very tough place to put incremental investments, given the sort of experience which you have had over the last year or so?

So Anupam, like we said earlier, maybe electronics is a field we are not ours to. But as of now, whether we have decided anything to do in the electronics field, the answer is no. But we are open to this field because it is going to be a growing field coming in the time, right? Like you mentioned, even government is giving a PLI. But as of now, we have not taken any call.

Inba, If you have any more questions from the participants, you can take that. Otherwise, we can, I think, close the call.

[Operator Instructions] We have a follow-up question from Gnanasundaram Saminathan from Avendus Spark.

One last one. Can you just explain the utilization of the current Engineering and Metal Formed division? And what is the upside that we've got left there in terms of capacity?

For Engineering division, our capacity utilization is maybe, let's say, if I exclude the Nashik plant, which has just started, and there is another plant going to come in the [ fan ] for the tube division; if I include this both put together, our capacity utilization will be around 80%. And in the MFPD business, maybe because it is a varying business, but overall number will remain again at around 85% capacity utilization in the MFPD also.

So do we have incremental capacity to take that particular railways order by the time we'll be adding a new capacity the assumption to the INR 300 crores we're investing this year into the base business?

So like I maybe, let's say, mentioned in the tubes and the cold rolled strips, we are covered for even at least next 1 to 2 years because those -- both the capacity addition, one has just started, another is going to start another down the line 1 quarter or 2 quarters. So we are covered in the tubes. And like we already -- let's say, it is already in public domain, for the MFPD division, we are also investing in the same place [ fan ] along with the tube capacity, which will also be good to go for next 2 years' time.

Our next question is from Namit Arora of IndGrowth Capital.

Sir, my question was on the EV business. Clearly, you are pioneers, and there may have been some learnings since you started compared to the original business plan. So could you walk us through any of the key learnings so far and any revisits to the business plan that you need to make with a 3- to 5-year view? I know it's a new market and you are pioneers, but it will be good to get some early color of qualitatively how you're feeling about this and any tweaks or changes you need to make to your approach to this EV business.

So Namit, as I just said, I'll just maybe reiterate those two, three points that our big milestone of reaching $1 billion, that doesn't change, right? So that in terms of business plan doesn't change. So the end destination remains the same. That is number one. Number two that we are the pioneers, so therefore, we would want to be among the top 3 players in each of the segments that we play in. So that also doesn't change. Yes, there have been a few learnings. So one or two learnings that I can share with you is that, for truck business, for example, we have realized that the time from which we start pursuing an opportunity or start engaging in a sales talk to the deployment of the truck, it's a long lead-time item, right? We earlier -- it's not so much about selling a truck, it is about a complete project getting institutionalized. So that's one big -- that's one learning that we have got because there are multiple stakeholders which are involved, including charging infrastructure, the logistics service provider, the end-use case, the financials, et cetera. So that's been our learning. The second learning has been that in many of the EV businesses since inception, it is the end user, I think, to whom -- or the end-use case business viability that needs to be established, be it in case of tractors, be it in case of small commercial vehicle. The only exception is the 3-wheeler business, where the business is primarily a B2C business. And since the business has reached almost 26% of the electrification, so it would be a usual through-the-channel sale of the 3-wheeler business. But as far as all the 3 other businesses are concerned, it would remain primarily to start with a B2B kind of an end-use case establishment before the sale can be executed. These are some of the learnings, and there are some more, but these are, I think, the top 2, 3 learnings that we have picked up as we have moved in this journey.

Thank you very much, sir, for your very detailed and candid thoughts. This is most helpful. All the best to the entire team, and many compliments to the entire group for phenomenal value creation across group companies over the past decade and more. Thank you very much, sir.

Thank you. As there are no further questions, I now hand the conference back to Mr. Mukesh Ahuja for closing remarks. Over to you, sir.

So we are thankful to all for fantastic questions, and this also help us to have a learning opportunity. Thank you very much for your support.

Thank you. Ladies and gentlemen, on behalf of IIFL Capital Services Limited, that concludes today's conference. Thank you for joining us. You may click on the Leave Icon to exit the meeting. Thank you for your participation.