Uno Minda Limited (532539) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Minda Industries Limited Q4 FY '21 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not 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. Sunil Bohra, Group CFO, Minda Industries. Thank you, and over to you, sir.

Thank you, [ Malika ]. Good afternoon and a warm welcome to all the participants. I hope you all are keeping safe and healthy. These are unprecedented times. Please take care of yourselves and your near ones. On the earnings update call today, I am joined by my colleague, Ankur Modi, Head of Treasury and IR; and SGA, our IR Advisors. We hope you have had a chance to look at our financial results and presentation that is uploaded on stock exchange as well as the company website. I will briefly discuss about the business landscape and then update on our performance in the fiscal quarter. Following this, we will be happy to respond to your queries. As you must be aware, the close of fourth quarter was affected by the second wave of COVID. The intensity of the second wave was more severe than last year. The announcement of lockdowns in April by the state governments like Maharashtra, Delhi, Tamil Nadu resulted in many OEMs cutting down production or shutting down the accounts altogether. This was reflected in the auto sales number for April and May, which has showed considerable de-growth on a quarter-on-quarter basis. But as the new infection cases have started to drop and the pace of vaccination has improved, the lockdown restrictions have started to ease out, indicating improved demand and better capitalization for Indians. Personal vehicle sales might see a swift recovery as the pandemic ends, as the economic activity picks up and preference for personal mobility will further fuel the demand. Also the probability of third wave might make an increasing number of people opt for personal vehicles. The second wave affected the rural areas as well. Hence, we believe the demand for 2-wheelers might take some time before it normalizes. But positive indicators like a forecast of normal monsoon, higher rabi crops sowed than last year and financial measures included in this year's national budget will act as a fuel for the rural economy. The initial 2 days of June has been much better than May. The supply chain is more robust this time around and a faster recovery of demand is expected. As you are aware that merger of Harita Seating Systems Limited and 4 holding companies with Minda Industries were completed on 1st of April 2021. The merger was effective from [indiscernible] 2019 as the company has gained effect [indiscernible] as per Ind AS 103, i.e. business combinations in the stand-alone and consolidated financials with effect from appointed date that is 1st April 2019. Accordingly, the figures of previous period or previous year have been restated to include Harita's financials. Further, the Board of Directors of the company have approved purchase of remaining 49% stake from the existing JV partner, F.S Fehrer GmbH and subsidiary Harita Fehrer Limited for a purchase consideration of INR 115 crores. Harita Fehrer will become a fully owned subsidiary of Minda Industries after the purchase of 49% shareholding of Fehrer GMBH in the joint venture. As per the accounting norms, we have already considered 100% of Harita Fehrer Limited Financials while consolidating the results. Coming to our quarterly performance. You may refer to Slide #6. At a consolidated level during Q4 of FY '21, the company reported its highest ever quarterly revenue of INR 2,238 crores as against INR 1,498 crores for Q4 of FY '20, registering a growth of 49% year-on-year. This, as you may note, is significantly higher than the overall industry volume growth of 31% during the same period. The revenue for Q3 FY '21 was INR 2,031 crores, implying a quarter-on-quarter growth of 10%. The growth momentum from Q3 had continued in Q4 as well. We were operating at around 80% to 90% -- 85% to 95% utilization at most of our plants, to cater to this robust demand. EBITDA for Q4 FY '21 was at INR 72 crores in comparison to EBITDA of INR 140 crores for corresponding quarter, i.e., Q4 of FY '20. The EBITDA margin has also improved significantly on a year-on-year basis from 19.3% to 13.5% in the current quarter due to better operating leverage and sustained cost control. During this period, the interest cost has reduced from INR 22 crore to INR 15 crore as debt has come down due to prepayment of some of the borrowings and also renegotiation of interest rate downward on some of our loans, resulting in lower interest expenses. Depreciation has increased from INR 89 crores to INR 107 crore on account of capitalization of new projects, mainly tools and lining as well as [indiscernible]. The profit before tax of -- for Q4 FY '21 was at INR 190 crores as against PBT of INR 33.6 crore in Q4 of FY '20, registering a growth of over 4.5x. Profit after tax, which is the Minda Industries' share for the quarter was at INR 140 crores as against INR 13 crores in the prior quarter last year, an increase of 10x and it was INR 72 crores in Q3 FY '21 and only [indiscernible] of 21%. I would also like to highlight that Q4 has been historically better quarters in terms of financial performance. One of the reason is the price revision and adjustments with OEM during the quarter. Some of our associates JVs have also received retrospective price and business during the quarter, resulting in better share of profits of associates and joint ventures. Besides our infotainment business did well during the quarter on back of good orders. While most of our businesses have done well, there are a few businesses which are under incubation or a nascent stage which have underperformed. Couple of these businesses are Minda Onkyo and Minda TTE DAPS. Accordingly, as per the accounting rules, we have taken an impairment provision of INR 10 crore in stand-alone reserves for the quarter. As you know, in consolidated financials, the share of loss has already been accounted for. Moving on to the annual performance, you will refer to Slide 7. The company reported annual revenue of INR 6,374 crores for FY '21 as against 6,222 crore for FY '20, registering a growth of 2.4% year-on-year. As you can see, Harita Seating business sales have decreased during the year due to the pandemic and lower recovery on CVs in comparison to 2Wheelers and PVs. Excluding Harita, our consolidated revenues for the same period have grown by 5% roughly, despite Q1 FY '21 significantly impacted due to lockdown. EBITDA for full year was at INR 725 crores in comparison to EBITDA of INR 672 for FY '20. EBITDA margin also has improved on a year-on-year basis to 10.82% from 9.4%. The profit before tax for full year FY '21 was at INR 175 crores as against PBT of INR 224 crores in FY '20, registering a growth of 33%. The profit after tax after minority was at INR 207 crores as against INR 155 in FY 2020. The Board has also recommended a final dividend of INR 0.50 per share which is 25% of face value, reflecting commitment from the company to returning value to shareholders on a consistent basis. The company has also paid interim dividend of INR 0.35 per share in February, making a total dividend of INR 0.85 per share for FY '21 making a total dividend payout ratio of 11.2%. Moving to the product lines, if you could please refer to Slides 9 and 10. Starting with switching system, the segment achieved a revenue of INR 575 crore for Q4, contributing about 26% of total consolidated turnover, while the revenue for full year was INR 1,814 crore, contributing to 28% to the full year revenue. For 2Wheeler switches, we have acquired new business from an iconic American motorcycle manufacturer, which has been a big breakthrough for this outfit. For 2Wheeler switches, we have received orders for self-designed [ MT ] pinch power window, main and sub switch power socket. And order also from a Korean OEM for supply to Russia and Indonesia market and also complete switches order, which is the current number of switches for a model for a Japanese OEM in India. Moving to the lighting business. It achieved revenue of INR 486 crores for Q4, contributing to 22% of our total turnover. The full year contribution was also 20% amounting to INR 417 crore. We have received orders to supply lights to traditional 2Wheeler OEMs and now looking to increase volume there. We have also got first time entry into global European automakers for supply of 4Wheel likes. Moving to our casting business, it has achieved revenue of INR 319 crores for Q4, contributing to 14% of our total turnover. The full year contribution was 12% amounting to INR 748 crores. The 2Wheeler alloy wheel project, 3 lines have been commissioned and the fourth line is set to be commissioned in Q2 of FY '22. The capacity expansion for 4Wheeler alloy wheels at Bawal is under progress. Moving to acoustic business, the business has achieved revenue of INR 167 crores for Q4, contributing 7% of our total turnover, while it contributed 10% to the full year revenue amounting to INR 607 crores. Our European subsidiary, Clarton Horn, has received new orders from Japanese and American OEMs. Our seating business achieved revenues INR 252 crores for Q4, contributing 11% to total revenue. And INR 650 for FY '21, contributing 10% to the full year revenue. Moving to other product businesses, it has accrued revenue of 440 crores for Q4, contributing 20% of top -- overall top line. This business is mainly comprised of sensors, which delivered INR 464 crores, capitalized at INR 34 crores; and blow molding business at 54 crores; lastly, the battery business at 38 crores. The revenue for full year from other businesses was INR 1,138 crore, contributing 18%, mainly comprising of sensors at INR 171 crore, capitalized at INR102; blow molding at INR 158 and battery business of INR 115 crores. Moving to Slide #11, in terms of our revenue price for the quarter and full year ended March 31, 2021, OEM business accounted for 89% in Q4 and 88% for the full year of total revenue and aftermarket business around 11% for Q4 and 12% for FY '21. Our sales from international market, i.e. export from India plus sales from overseas operations stand at 16% of total consolidated revenues. With increased focus on exports, we endeavor to increase the same in coming years. Our aftermarket channel continues to record strong performance and has achieved a revenue of INR 235 crores during Q4 FY '21, which is a 74% increase year-on-year. Annual sales for FY '21 from mark-to-market sales stand at INR 741 crores as against INR 558 crores in FY '20, registering a growth of 33%. Alloy wheels have been added to the first portfolio, and we are planning to add seatings this year. Over the years, we have built a strong network of 40,000 plus retailers for our aftermarket channel. Aftermarket is also exporting its product to SAARC, Asia, LATAM, MENA and Africa markets. We have leadership position in all our major products category. Moving to Slide #16 on the EV, in line with global macro trends of connectivity, autonomous and shared mobility and electrification, Minda Industries has also been tracking the metro trends for India, and electrification is now one of the focus areas from a technology perspective. Moving to next side, focusing on the EV trend and evaluating our product portfolio, almost all our products can be supplied to EVs as well as -- barring, [indiscernible], et cetera. We have a well-diversified hedged product portfolio for the EV trend.. In fact, EVs will create incremental business opportunities for us. In terms of premiumization of existing products like LED lamps and sensors, along with opportunity to develop new EV-specific products. We have been working to upgrade our existing group products to meet requirements of electrical vehicles like low energy consumption and light weighting. Example, LED headlamps, tail lamps, side indicators, low current switches and electronic horns. We have also launched few new products, specifically for EV-like range from our existing divisions like sensors, example, accelerator position sensor or a brake pad sensor or EV battery temperature sensor. Moving to Slide 19, for the last couple of years, we have also been working on a completely new range of products for electric vehicles, which were not as part of our product portfolio. These products are synergetic to our good products and are mainly in the area of electrical and electronics. These products are mainly focused on low voltage electric vehicles like 2Wheelers and 3Wheelers. We believe that this segment of the market will have the largest and quickest adoption of EV, primarily because of less dependency on the charging infrastructure. Our focused new products for 2-wheel and 3Wheelers in EVs include ECUs, DC-DC converters, onboard and off-board chargers, telematic control units and smart plugs. We have also been developing battery management systems for [ retail manufacturing ] along with our technical partners in the U.S. Out of this range of products, ECU and Smart Plugs went into production this year, while ECUs, battery management system, DC-DC converter and onboard charger are under development stages. We are also evaluating motor controller as products and same is under study as of now. Moving to next slide. These new products, along with our existing products for EVs have potential fit value of INR 33,000, of which INR 7,300 comprises of existing products and INR 2,000 pertain to positive impact on lights and sensors. Products under production has potential fit value of INR 4,500 and remaining from products under development or study. We are already well entrenched with traditional OEMs and have already been supplying parts for -- to their new EV launches, received orders from leading OEMs for products under development. We can continue to leverage our relationship with these OEMs for supply as the volume increases. Besides, we are also positively engaged with all new edge OEMs and have shortlisted top 4 to 5 to engage and supply directly to them. We also plan to supply our EV products to our aftermarket channel. Moving to cash flows and debt levels. We had healthy cash flows during the year in spite of substantial increase in working capital requirement post lockdown. It may be noted that there was substantial release of working capital, which is over around 200 crores during the last quarter of FY '20 due to lockdown. The same was required to be redeployed in subsequent quarter once the business resumed. During the second half of the year, the working capital requirement also increased due to increased business activity, and also, the working capital in newly commissioned 2Wheeler alignment business. We incurred total CapEx of INR 276 crore during the year, comprising of tools and alloy business and has had sustaining effects. We have also invested around INR 11 crores, INR 12 crore in subsidiaries, joint ventures, mainly comprising of TRMN and PVs. TRMN and TG, therefore, acquisition of [ PVs ]. As you know, we had raised INR 241 crore through right issue in September '20, and majority of the proceeds were [ paid ] to debt. Accordingly, net debt as of March 31, '21, we were at INR 798 crore compared to INR 856 crore as of March 31, 2020. Our net debt-to-equity ratio is at a healthy rate of 0.3 compared to 0.4 in March '20. I would like to cover some of the announcement that we have made in the last few months since our last earnings call. With regard to our CapEx, we have announced an additional capacity at Gujarat for our automotive lighting business to cater to our utility bond for 4Wheeler automotive license. Total capital expenditure for this new facility in Gujarat is INR 90 crores. The plant is expected to commence operations by our quarter ending March '22. We have also announced a capacity expansion at 4Wheeler business. The expansion will be at the plant in Bawal, and it will add 60,000 wheels a month to cater to internal demand. The additional capital expenditure for the aforesaid capacity expansion will be around INR 167 crores. The expanded facilities are expected to commence operations by quarter ending March '22 and expected to stabilize by June '22. Besides, we had announced CapEx of INR 57 crores for our blow-molding business for setting a plant in Bangalore. We have planned these CapEx to augment the future demand being generated by the shift in the lighting industry towards LED for lighting, customer request towards lightings and customer demand for blow molding hubs. Out of the above announced CapEx, there are some still CapEx of sensors and [indiscernible]. Around INR 350 crores will be employed in FY '22, and part of it may be experienced in the next financial year. We have also been, as you know, controlling our maintenance CapEx for the last 3, 4 years, considering the downturn in the demand as industry growth was also muted. Considering low maintenance CapEx in these last 2 years, we will be incurring around INR 250 crores of sustaining CapEx in FY '22. Moving to organization business transformation. We are also undertaking a realignment of business doings based on similar technologies and driven domain to drive synergies between related business. As part of this initiative, we have focused on strengthening of our Board realignment of our business verticals to drive synergy among the similar products and technologies. We have recalibrated certain functions like procurement, R&D and marketing to bring an increased control and efficiency. More emphasis will be given to international export sales, and we are exploring certain steps like global offices and international locations that brings us closer to the global OEMs and helps us establish better understanding and relationships. In terms of strategic business update, we just briefed about Fehrer, which we will be acquiring 49% at INR 115 crores. As part of our corporate restructuring process, post dilution of 1.1% stake in Minda TG. However, it has now become an associate company and ceased to be a subsidiary company. Additionally, we have made further investment in TRMN for Tokairika Minda and increased our stake from 12.8% to 13%. I would also like to highlight that during the year, the group has taken a lot of initiatives, which are expected to have environmental benefits and improve sustainability of the organization. We have been working to reduce the energy consumption, water consumption, CO2 emission and waste reduction, reduce operational costs. We have set up Green Belt plantation drive covering 40% green area for new plants. We are also undertaking water conservation projects. We continue to reduce water consumption by 10% in '21, '22. With the aim of reducing our carbon footprint, we have been investing in renewable energy. We have now installed 8.4 megawatts of rooftop solar cells across 20 hectares, contributing 10% of power requirement of the group. We target to further increase renewable energy to 15% by end of FY '22. That's it from us. I would like now to open the floor for questions.

The first question is from the line of Ashutosh Tiwari from Equirus Securities.

Yes, congratulation on a strong set of numbers. Firstly, we mentioned that we have done almost very well in this aftermarket area, almost INR 740 crores. And in fact, Q4 revenue was at least INR 230 crores. So from a run rate of say, INR 75, INR 75 -- INR 50 crore on annual basis, the 9 -- go on to over INR 900 revenue for the year. Sir, what have you done differently this year in terms of like is it driven by network expansion in aftermarket or additional new products? What has driven the strong growth in FY '22 -- '21, sorry.

So there are 2, 3 factors which have helped us deliver the excellent growth in aftermarket. So first and foremost is our focus on addition of quality dealers. We have been aggressively adding dealers without taking any credit risk. And we've been going towards into areas where we have yet not gone earlier. We have also launched some of the products, which have not been part of this aftermarket channel. 4Wheeler alloy wheel is one of them, which obviously is a high value add. Then, another, battery segment has done pretty well in the aftermarket as we shared the revenue numbers also. And also, we have added some of other components like air brakes, et cetera, from around JV and tractor market. So we have been working on all fronts to see that we have what we call a lot of emphasis on, not only the aftermarket space, but also adding products and also going to new areas, like we spoke about SAARC, MENA, outside of the country also. So we have been going very aggressively on our aftermarket channel, and we will be taking further actions in this year and see that how do we further capitalize on the aftermarket demand. Because this -- we all know that aftermarket is a business which is not, a, dependent on the direct OE sales. But also here, because it's part of a B2C business, the business is -- there is a lot of stability. And as the number of volumes grow on the street, definitely, the replenishment and aftermarket needs of the components also grow in the same proportion. So from our perspective, aftermarket is a vertical where we are all working aggressively to see that we grow this to maybe taking double from where we ended last year in next 3 years.

Okay, sir, this alloy wheel, has it contributed significantly to INR 90 crores in last quarter for the full year, like more than INR 100 crores for the full year?

No, no, no, as a country, also, we don't have so much of aftermarket sale. So aftermarket sale, roughly for the last quarter, maybe we can get you the exact numbers. My understanding is it's not more than INR 10 crores, INR 15 crores for a quarter.

So normally, sir, INR 10 crores, INR 15 crores for a quarter, okay.

Yes.

So it is more driven by the other products that we had earlier and probably expanding network so far. And probably, going this year, allow you further grow and you're seeing that you'll add seats. So I think this -- okay. So this will go faster. Secondly, the question is on others in your segmental, I think you mentioned some breakup of that, but on a quarter-on-quarter basis, the revenue has gone from like INR 288 to 4 -- [ INR 450, INR 470 crores ] basically. So what drove the strong growth quarter-on-quarter in other segment? And is it sustainable numbers?

Yes, so in others, you see that there are 2 key businesses, which are doing pretty well and expected to do that. So sensors, we have been going very aggressively. So sensors has done almost INR 64 crores in the [ important ] year. It was, I think, below 50, it was INR 47, INR 48. Then satellites has also done almost INR 10-odd crores better. Blow molding has done a little more than that. Battery business has done also better. So almost every business has actually contributed in the other segment.

So these numbers of others on quarterly, which is sustainable bearing Q1, I'm thinking.

Sorry?

This other segment revenue is kind of sustainable bearing Q1 impact of COVID basically. So if you remove Q1, I think going there...

Absolutely, excluding the COVID impact, obviously, we all know that our destiny is linked to the number of vehicles being sold. So assuming the same number of vehicles, we should have this kind of numbers.

Okay, and sir, lastly, this Harita, I think this for last quarters, is operating around, say, 10% in of EBITDA margin. So how do we plan to improve this further in this segment? Also now that we acquired -- the full company is now under our control, how are we looking at growth in Harita?

So growth in Harita, actually, we know when acquired and we have been talking for the last 20 years, so year before, while this year, it has been INR 650 crores, year before, it has been INR 750 crores. And we have been very clear that we want to double this company in 4 to 5 years, and we are pretty confident that we should be able to reach that target of doubling from -- not from INR 650, but from INR 750, we should be doubling in next 3 to 4 years max.

Okay. Okay, and also, margins should also improve with revenue growth?

So focus as of now, definitely, is on increasing sales. And if you are able to increase sales, definitely, the operating leverage does help in improving margin and EBIT.

[Operator Instructions] Next question is from the line of Siddhartha Bera from Nomura.

Congrats on a great set of numbers. Sir, my first question is on this kit value, which we have shown. If we see the -- this is some clarification. I mean, if I compare to the last year, I mean FY '20, the kit value has been brought down and '21, we have given a number. So just wanted to understand, first, what are the things that are included here and why this lower number for the last year.

Which sheet you looking at, Siddharth?

Sir, the kit value for the 2Wheeler NPVs, which we have shown this time, that Slide 13 of your presentation.

Ankur, do you want to take this question?

Yes. So Siddharth, I think last year, I think there are a few items which were considered in last year itself which was primarily 2Wheeler alloy wheels as well as seatings business. But in actual, these have come into operations this year. So we'll just move these items from last year's kit value to this year's kit value. And that's causing the increase as well. Primarily, the kit value is increasing because also mainly due to product segment, which we have added.

Understood. Understood. So from these levels, which we have reported now, what are the future drivers of growth from here on? If you can just throw some light on the components, which we are -- which we plan to do in the next couple of years, which can push this even more?

Yes, so Siddharth, I think on our existing businesses, while we are working consistently to increase titles like additional side sensors or touch-based switches, which are currently lever-based might go to touch-based switches, but they are all technologies which are rolled ahead and can increase the, particularly, of existing products. Now unless you add more products, which we are not very, very aggressive on, I think we also mentioned a few quarters back that the focus now is more on vertical growth than the horizontal growth, which means that we actually increased the sales of our existing products rather than adding newer products. So that might not maybe increasing particularly, because where -- the position we are, we already have a lot of companies, a lot of businesses. And the focus is to grow vertically not horizontally. That's number one. Number two, in terms of also the future growth, as I think we have shared on the EV slide, the kit value is growing multifold based on whatever components we are currently working on. Now obviously, it's like anybody's guess, how will beat the -- how deep will be the penetration of EVs, whether it will be 1%, 4%, 5% in the next 2, 3 years. So definitely, subject to that, we are working now putting more energy on the technologies or products for the future. That is the EV.

Understood, sir. But for now, would you have some visibility on the order book, which you have for the EV products, which are under development, which you have highlighted in the presentation?

Yes. So we did share the kit value, the vehicles are not -- number of vehicles are not that big. So obviously, there is no point as of now in pointing of absolute numbers. But if you see in terms of the kit value, it's pretty sizable.

And any idea about the clients, sir, which we are planning to cater to funnel the EV segment in the 2Wheeler side?

So as we mentioned, Siddharth, the fact that we are actually in the discussion with all the existing OEMs, we all -- we have got very, very strong relationships with them. And some of them, we are already suppliers to their EVs. And we are also positively engaged with the new OEMs. And we -- as I said, we are shortlisted 4 to 5 key OEMS, which have shown some significant future growth promise for growth, and we are discussing with them to see how we get the lion's share of business from legacy products also and new products also. But that is -- as I said, it's a work in progress, and we are already supplier to some of the old -- the existing OEMs, which also mentioned manufacturers non-EV vehicles.

Okay. Okay. Sir, last question is on this share in profit. Also sales, we have seen a big improvement in the quarter. Any particular company, if you can highlight, which have led to this sharp improvement? And whether the number is sustainable?

Sharing profit on, you mean JVs?

Yes, sharing profit associates, which we report, which is INR 21 crore in the quarter.

Okay. Okay, so I was expecting that's that. But thanks, Siddharth. So let me tell you what has happened in last quarter. It is almost all our associate joint ventures barring TTE and Onkyo actually have done very well. Even TTE and Onkyo, if you see Q3 versus Q4, both of them also had lower loss. So like in Q3, TTE was INR 2 crore loss. Now it is INR 1 crore, and Onkyo is INR 3 crore loss, now it is INR 1 crore. But otherwise, almost all the businesses have done better in terms of profitability, be it [ MOTL ]. I think you also spoke about MOTL, which is now Minda Westport. Earlier, this is Minda MOTL, now they [indiscernible] Minda Westport because of their promoter. So they are also doing very, very well. The growth there is almost like 80% to 100%, which is the CNG kit. ROKI Minda has been doing pretty well. Even our DENSO TEN, which manufactures the infotainment system has done phenomenally well. TTE Minda also has done well. So almost all the companies, which we have, have done pretty well in last quarter. And some of them, as I said, have also got the price increases retrospectively.

Sir, any particular numbers which you can highlight for the ROKI and the other one, which you indicated for the quarter?

Siddharth, normally, you know that we don't give that kind of detail, but yes.

Okay, but sir, this '21 number is more sustainable, do you think? Or you think this will normalize depending on how the commodity prices are?

As I said, it has a component of some retrospective price increases. So to that extent, obviously, it may not be sustainable, but that component is not more than 5 crores, 6 crores of the '21.

The next question is from the line of Ronak from Systematix.

Congrats on great results. My first question is on the Harita Fehrer acquisition. Did you mention in your opening remarks that we have already consolidated that 100% when we report the numbers? Did I hear that correct?

Yes, Ronak. First of all, thank you, yes. Because maybe -- if you want to understand the accounting and the government...

No, no, no, I just wanted to clarify that.

Yes, it has been since 1st April '19, it has been consolidated fully. I believe that it also has been considered as part of financials.

Okay, so does -- INR 252 crores doesn't have -- I mean, it's just the 100% top line across the stand-alone Harita and the JV that...

It has 100% top line.

Yes, it has 100%, right. Okay, perfect. So -- okay. So the other question was the profit from associates doesn't have anything from that -- doesn't include anything, right?

Sorry, I missed your voice in between, Ronak.

Mr. Ronak, we had a slight disturbance coming from your line, sir, while you were speaking. So once you asked your question, we request you to mute your line, sir.

Yes. Is this better?

Yes. Go ahead, Ronak.

So I was checking, then profit from associates of just INR 21 crores doesn't include anything from Harita Fehrer that's what I was...

No. No. No.

So there was sudden jump.

As subsidiary, Ronak, even prior to that, with 20% ownership of anywhere or subsidiary. So holding of INR 50 to INR 100.

Right, okay, sure. And again, on CapEx and investment, you highlighted CapEx will be INR 350 crores of growth and INR 250 crores maintenance. Anything on investment? How much are we targeting for the -- on the investment side in subsidiaries and JVs?

So as I mentioned, Ronak, the current plan is only INR 115 for increasing of share in Fehrer. Outside of that, as of now, we don't have any firm plans, which we can share today.

Okay, sure, sure. And I mean, one thing which you have highlighted is for the end segment mix of passenger vehicle and 2Wheelers, which is mainly on the top line right now. But if we have to include our JVs as well, which is -- which because of India, we are not doing, what would be -- I mean, an approximate contribution from passenger vehicles? I believe all -- the majority of the JVs are focused more on passenger vehicles, which I think have a better demand or they have better stability right now versus the 2Wheeler segment. So would you have any number of...

It's a mix of both, Ronak. Maybe we can take a detailed number off-line, but I can share this at a very high level, like ROKI is primarily 2Wheelers, right, which is having a lion's share in '21. Then similar to that, profitability is DENSO TEN, which is, I think, in 4Wheelers. If I see the rest, majority, you see is 4Wheelers. So you are right, it will be tilted more towards 4Wheelers and less towards 2Wheelers.

Sure. Sure. And the other question was on sensors. Now if we take INR 64 crores as -- the run rate which we achieved in Q4. Could you highlight what are the other sensors which are getting added now or all the sensors, which we had planned to start manufacturing for have happened? So -- yes.

So all the sensors, which we started a year or so back, runoffs have all been commissioned, and we have seen the revenue from all of them in last quarter. Only additional things which we are working on, as we also shared, our EV-specific sensors, which we are currently working on, and as you know, that the volume for them, while it may not be significant, but once it grows, it will add to that overall portfolio.

Right, sure, sure. And just one feedback. I mean, the JV profitability has become pretty substantial at INR 20 crores, even if we take INR 15 crores to 16 crores run rate. So if you can share some annual numbers, you said you won't...

Yes. Absolutely. Absolutely. We can...

But then we should have it at an annual level. If you can share those numbers because...

No, absolutely. Anyway, we have to share number because that's the least we do. So Ankur, maybe once we have annual numbers, and I'm sure they are already there. We can share it with them also at once?

Sure.

But I'd do the annual report so we can have those numbers. That could really be helpful..

Yes, we'll do that. We'll do that, Ronak.

The next question is from the line of Vimal Gohil from Union Mutual Fund.

Congratulations on a great quarter. Sir, my question was on your EV portfolio. Just wanted to understand -- sir, my question was on your EV portfolio, electric vehicle portfolio?

Yes.

Sir, I just want to -- I just wanted some clarification. When you say that some of the products that are in development, are these products indigenous -- indigenously developed? Or are they co-developed with -- along with some of the OEMs that you work with?

Yes. So most of the components are -- yes. So most of the products, if you see the Slide #18 and 19, are developed indigenously. Only 1 component, which is the battery management system, that is with our joint venture partner, A&P, who are based out of U.S.

Okay, right. And sir, just if you -- when you say that you are in -- your talks with some of the newest 2Wheeler electrical OEMs are in progress, so what gives us the confidence that we'll be able to sort of have a similar breakthrough with these new edge OEMs as we have sort of broken through with some of the existing OEMS so well over the past few years. So if you could just highlight what gives us that confidence.

Yes, Vimal, it's a very good question, and I'm sure you also track more than what we do. So what we know and our knowledge may be limited, that some of the OEMs primarily are currently manufacturing their EVs with the import content being significant. Now we all know that what happened 20, 30 years back when [ Varisys ] started or Hyundai started, majority of the component has been imported. And gradually, they have all been localized to make sure that they remain competitive, right? So we do expect all these people who are currently importing the components to gradually go under localization. And once you localize them, obviously, we are being one of the largest players, obviously, I would expect the business to be secured. And that's why we said we're in dialogue with them to convert, maybe, some of their imports or some of their other supplies, how do we localize and how do we create a win-win and create a value to them.

Right, so when you say you are having a dialogue, does that mean that some of your products are being tested as a pilot? Or are there talks on that level?

So I don't want to be too specific, Vimal, I think -- as I said, you -- if you see the existing EVs already in the market, I don't want to name it. We already have products for both specific EVs and traditional components, both are being -- going into existing EVs, which are already running on the road.

Right. And some of your existing nonelectric vehicle portfolio, nonelectric vehicle specific portfolio like sensors or switches, those also would stay relevant for the electric 2Wheelers or 3Wheelers or 4Wheelers, right?

Yes, so if you see Slide #17, Vimal, you will get a perspective of what will go in EV and what will not from our existing business. We try to sort of give, transparently, the clear picture.

And last -- just last 1 question, I think you mentioned the kit value increase in this year in 2021 and other areas was led by -- one was seating. What was the other area, if you can just repeat.

Lighting.

The next question is from the line of Mukesh Saraf from Spark Capital.

First question is on the Harita Seating business. So I mean with our current portfolio, which is largely commercial vehicles...

Sorry, Mr. Saraf. There is a disturbance coming from your line, sir.

Is it okay now?

No, sir. There is still a slight airy disturbance coming from your line.

Is it better now?

Yes, sir. You may go ahead.

Okay. So question is first on Harita seats. With the portfolio currently being largely commercial vehicles, how do you see this change? Because, I think, initially, you had kind of mentioned that with Minda being running the business, there are some low-hanging fruits there, 2Wheelers et cetera. So could you give some sense on how soon we can tap on to that market?

Yes. So there are 2 aspects, Mukesh. Thanks for these questions. So first of all, [ Harita ] [indiscernible] is not actually heavy on CV. So if you see Harita Seating primarily into CV, off roads and other stuff. And Harita Fehrer is primarily in 2Wheelers. So there, actually, last quarter of last year. HFR revenue and performance has been much better than the seating business. And also, if you see from the revenue split perspective from the actual parts, CV is maybe around 30-odd percent of the total sales. So it is not majority. Majority is others. And in terms of Minda, I think we also shared, I think, a few quarters back, that we have actually, first of all, been maintaining transparency and making highly sure of -- higher standards of governance so that we don't have any cross information sharing unless the transition's approved by the authorities. But despite that, we have been trying to help them to see and create a win-win that -- and/or maybe cut the time of introducing them to our customers and then introducing them to our customers. So based on that, we have already secured some of the businesses from the Japanese OEMs for Harita. Don't worry, they are not even getting an entry. And also one, what we call, bus manufacturer, which they are not suppling. And we also have got entry into one of their main customer joint area for supplying switches. So there has already been worked on accessing each other's customers, which are not there and which has already been converted into actual business.

Okay, okay, okay. Right. So this INR 750 going to INR 1,500, this will be because of all these things. I mean, so the question I was also asking is that we got a sense that Fehrer was also helping us or in terms of technology, at least, they were helping in the passenger vehicle space. So how do we -- I mean, are we now with acquiring Fehrer stake do you think they are still kind of on track to get business even in the passenger vehicle space for seats?

So Fehrer, actually, obviously, once we went much further deeper, Fehrer is not into passenger vehicles. So they are part of the bigger Hyundai Group. Hyundai Group has another entity, which is into 4Wheelers. So as a group, they do have the technology, but Fehrer, who's our partners, because we know that all these entities do keep full arms' length and they don't talk to each other, unless required. So Fehrer, while they were our partner, they were not into 4-wheel seating, but their parents, maybe you can say their sibling, had the technology, which was not part of Fehrer.

Okay, okay. So your acquiring this stake doesn't really change your prospects now in the passenger vehicle space assets.

No, no, no.

Understood, sir. Understood. And my second question is on the sensors and controllers business, I think maybe last year or a few quarters back, you had mentioned that it could be the potential market there or the opportunity there could be as high as INR 600 crores, INR 700 crores in a few years. So now that we are at INR 60-kind-of crores quarterly, and you say that we have kind of commercialized most of those sensors that we were initially working on, so any update on now what do you think can be the potential opportunity there for sensors, controllers together, including this EV opportunity now that we have?

Yes, so Mukesh, sensors and controllers put together, let me tell you, this INR 64 crore, I think is only-sensors business. I also see control or control actually has done around 10 crores in the last quarter. So if you add both of them, it is already INR 75 crores, which is almost like INR 300-odd crore of run rate. And based on the lot of products which we just saw, which are primarily into controller business like your wireless charger or things like that, we have got a significant business or AIS 140, the connected vehicle business. We are actually confident still of that number, what we spoke about INR 500, INR 600 crores in the next few years. We will actually be achieving that target even a year earlier than what we said in the past.

Okay. Great. And last, just a bookkeeping one, this Harita merger now. Any sense on what percentage shareholders have opted for the RPS, the redeemable preference shares? And what percentage have opted for the equity shares of Minda?

So there were 2 different time lines, one for the promoters and other for the minority shareholders. So promoters have all opted for preference shares. Minorities, I think the time line has expired, I think, last week, only...

10th of June, I think, yes.

Yes, yes. So team will be, I think, working on it. Hopefully, we'll know that in next couple of days. But as far as my information is worth, majority being opted for equity.

[Operator Instructions] The next question is from the line of Nikhil Kale from Axis Capital.

Congratulations on a very good set of numbers. My question was you mentioned that there was a benefit of price increases. So would it be possible to quantify what was the benefit for the quarter and also for the full year?

No, so Nikhil, the way it works, I think, that all our agreements, wherever we have a price adjustment clause or price increase clause for input cost increases, so when we start the discussion with the customers, definitely, it is as per the agreement. But by the time you get the actual view, there is a lag and it spills over to maybe a quarter, actually, when we get it. And as per the accounting rules, we can't book the revenue unless we have a PO in our hands. So that is the key reason why you see that. Historically, if you analyze for last 5, 7 years, our Q4 is always one of the best quarters because the price settlement, normally, even though it starts in Q2, Q3, in some of the cases, it actually goes to Q4. So when you get a price adjustment in Q4, part of it also relates to the previous quarters. And this is the normal industry practice, and this is not something which has happened first time. So in terms of actual amount, I honestly personally don't remember it. Maybe Ankur, you can check separately and talk to Nikhil?

Sure. I'll do that now.

Sure. And on the Lighting division, I think it's been another quarter of very strong performance. So I just wanted to understand, I think we talked about orders worth almost 2.5 billion, if I'm not wrong, in the past. So just wanted to get an understanding of is that order book started to -- I mean, you started to produce that? Or is it still in the books? And when do you expect that to be commissioned and start coming into revenues?

Yes, Nikhil, the large part of that will come from somewhere in '22, '23 start coming from. You know that the order to development for a product cycle is somewhere 1.5 to 2 years. And that is the key reason we are setting up a new plant in Gujarat also for our lighting business. So the large part of that additional revenue of INR 200 crores plus will start flowing in to the income scale from somewhere in 2023 and maybe peaking in '23, '24.

Okay. Great, and just my second -- I mean, last question is on the CapEx part. So you highlighted that we'll require almost 600-odd crores kind of CapEx and maybe 120-odd crore kind of investments. You also talked about that utilization levels in Q4 were around 85%, 90% across the different plants. So assuming that things open up well during the year, we might be hitting -- the recovery kind of kicks in. We might be hitting those kind of utilization levels again in the second half. So I mean, we have been talking a lot about growth, we are seeing a lot of traction in terms of new order wins. So would it be fair to assume that, primarily, our focus right now is on growth? And also, how do you kind of balance return ratios? Because those will kind of be impacted, given that you may be required to, again, go for some CapEx, for switches or some of the other divisions, maybe not this year but maybe FY '23 or so.

Yes. So I think the sustaining CapEx, which we spoke about INR 40, INR 50 crores , right? That also considers some of our brownfield expansion, which -- relative brownfield expansion like existing plants. If I have to put a new line, if I develop new product, if there's a new tooling required, they're all part of INR 250 crores, which we already consider as part of a budgeting exercise, based on the annual volumes, which we get from our customers. So any further growth, which we all know from OEMs at the beginning of the year, the CapEx need for that has all been baked in. So we don't expect any additional CapEx beyond that.

The next question is from the line of Vivek Ramakrishnan from DSP Mutual Funds.

Congratulations on the numbers. My question has to do only with working capital. You had also mentioned that you had to build up working capital last year. Do you expect in the next 1 year, the working capital levels remain at the current levels? Or is there any tighter control possible?

Yes, Vivek. So in terms of working capital, as I mentioned, that last 10 days of last year, there was definitely a release from working capital, which went back once the unlock happened. Additional working capital has gone into the new businesses, like the sensor business, additional or maybe the alloy wheel business. So obviously, if you were to grow by whatever percentage points, your working capital, even the number of base remains the same, your -- you will have additional deployment in maybe inventory or maybe in debtors. And some of it in [indiscernible] also, which we can offset. But on an overall basis, at a current level, if we were to assume, we will not need any significant additional working capital.

The next question is from the line of Basudeb Banerjee from AMBIT Capital.

I just have a few questions. One, you said Harita revenue, INR 750 crores was down to INR 650 crores because of various segments in a decline mode last year. So INR 650 crores is the FY '21 revenue for Harita. Is it right?

Yes, you're right.

So just wanted to understand that if I look -- if I remember, Harita margins used to be high single-digit as such. So in Q4 were direct INR 650 crores of Harita revenue being accounted and reported margin is still 13.5%, so how to understand whether existing business margin shot up significantly or Harita margin improved? Because despite including Harita, it is 13.5%. So how to segregate that, sir?

Okay, let me try and explain to you, Basudeb. So last quarter, Q3, if you remember, our margin was 14.7%, right? Back then, there was no Harita.

Yes.

So if we have to take apples-to-apples for Q4, our margins would have been 14.4%.

Okay. Okay. Understood. So there's -- one can understand what is the margin for Harita as well.

Yes, that's the delta, you are right.

Sure. Second thing, sir, the payment for residual for your stake, has that been accounted in FY '21 balance sheet already?

For what balance stake?

The Fehrer...

Fehrer.

Yes. Yes. That has been a profit?

Right.

And last couple of things, 2Wheeler alloy wheel plant, which was set up, so how much has been the full year revenue? And what is the outlook for next fiscal? And as you were saying already, you are planning to set up the next brownfield there. So what's the update on that?

Yes, alloy 2Wheeler, last full year, we did around INR 80 crores worth of revenue. And our next year target is, if I remember correctly, it's around INR 250 crores plus. But obviously, with this Q1 impact, we have to adjust that.

And when you are expecting that to be at full and you are targeting for the next phase?

Yes. It is on schedule. So we said, if I remember, 22% to 23% to achieve the full CapEx full revenue at INR 450 crores plus.

Okay, perfect. So there is the...

You'll appreciate that the fourth line, actually, will go under commissioning in the next quarter. And that will also have some time to stabilize like we are having for existing lines. So that -- we are expecting the entire plant to get stabilized by end of this fiscal. So you have full revenue in the next fiscal.

And last question, sir, how is the progress of the European car light business which you acquired? And were revenue on a small base was improving, so now the semiconductor issues, et cetera. So what's the health of the business there?

I didn't get it, Basudeb. Can you be a little specific?

The European car lighting business, car LED business.

The LEDs?

Yes.

Yes?

So how's the revenue panning out? Because on 1 side, semiconductor issues has been impacting the European company. So far Delvis now has seen the progress. And Delvis coming into India, the progress as you were seeing earlier, so how that is happening?

Yes, so Delvis also, as you all know, that like the entire Europe, it has had a significant impact in the initial part of the year. So for last full year, they have done something like INR 220 crore worth of revenue. And the last quarter, if I remember was around INR 55 crores. So it's almost like in Q4. They had some impact because of this semiconductor shortage with the OEMs and some demand, what we call here. But otherwise, the business has been stable and we do expect that trend in terms of the run rate to continue. We're not expecting any significant jump up in Delvis revenues, but yes, the other business, which is the next door is iSYS. So iSYS has been doing pretty well. And as I think we also mentioned in the presentation, they have been getting newer orders. So iSYS has done almost like INR 110 crores worth of revenue last year, which was almost, if I remember, year before that was around INR 75, INR 78 crores. So they have grown almost 40%, 50% in iSYS.

And last question, sir, if you can repeat. I missed out. So what was your guidance for FY '22 CapEx plus investment?

Yes, so you know that we have already announced 3 plants which was the alloy wheel plant, 60,000 expansion in Bawal and the lighting plant in Gujarat and blow molding in Bangalore, which is the moment of existing plant, plus the bigger plant. And some spillover of order book revenue. And we might have some spillover from these new parts next year. But overall, this year may be around 350 crores for this additional CapEx thing. And in terms of existing sustaining CapEx plus, we are talking a little while back about the brownfield expansion, which means they're putting additional lines for tooling, et cetera, et cetera. All that put together, around INR 250 crores.

So around 600 crore maintenance brownfield plus new plants?

Yes.

And investments or M&A over and above that?

Yes, that's INR 115 crore, which is [indiscernible].

INR 115 crores that got accounted in FY '21 or that will be coming under '22?

So it has been accounted for us, yes. Because we've already consolidated. So once you consolidate, you have to book for the liability also.

The next question is from the line of Shashank Kanodia from ICICI.

I just wanted to understand on the gross margin trend. So is there any further pressure on raw material spread that should be built in Q1 and Q2? Or large part of it is largely accounted for on the RM cost side?

Shashank your voice is actually missing [indiscernible].

Yes, sir, I just wanted to ask on the raw material cost front. So because of increasing commodity prices, so that has come up 170 basis points sequentially, including EBITDA numbers. So going forward, is it expected to further deteriorate? Or we have reached the maximum that it could impact us?

So Shashank, your point is very valid. So most of the customers, we have already agreed or in the process of agreement for the price adjustment for the positive prices. But what happens that once you do that, you have a project for something like quarter average or half year average and things like that. So while you will agree that even if you get the average price, if the spot is higher, it may impact a little bit negatively on the spot that's lower, you will actually gain. So say, for example, if you have an annual rate contract and you agreed for X price. And the spot is higher, it will negatively impact. But if the price is correct, then you actually benefit. So from that perspective, if everything was to remain the same, then yes, the large part of it is already sort of aligned with our customers.

Okay. Sir, secondly, sir, on the employee cost front, so this around about INR 100 crores should be a new quarterly run rate for us, combined with later.

Sorry, come again?

So on the employee cost front, we reported INR 297-odd-crores this quarter. So the INR 300 crores is a sustainable meet for us, right? Or there can be even more markups going forward?

No, so obviously, you'll appreciate that for last year, there were no increments. In fact, there was some rationalization done initially, which has been restated sometime in the end of second quarter. So you will have an increment-led increase in '21, '22. Otherwise, all of that has been accounted for.

Right, and sir, lastly, sir, why enabling resolution further equity issuance? Do you have any inorganic acquisitions in mind? Or if you can throw some light on that.

We normally do that, Shashank. If you remember last year, also, we took same INR 700 crores. And you know that for issuing rights, you don't need this INR 700 crores. So -- anyway, that was then prior to that. So we always try and keep some enabling resolution in hand. So in case there is any need for the business which needs any re-capitalization, we don't sort of spend time on approvals and things like that. So it is more or so enabling approval. As of now, there is no proposal for any specific [ business ].

Right. And sir, lastly, on the free cash flow front, sir, obviously, you are a growing company and you intend to grow ahead of the industry. So, any focus that you have on FCS and any sustainable FCS that we should generate by FY '23 onwards? Anything incremental on that front?

No, there is definitely a very, very strong focus on free cash flow. And we all have what we call the business heads and CEOs KPIs, which are linked to the logical of free cash flow because there is no point that -- these businesses do need to grow. But at the same time, you need to hold your belt tight so that only the required amount is spent. In fact, we have got a very, very strong focus with our system driven controls on inventory and debtors. So in case, for example, there is any increase in number of days, there is automatic lock in the system where you can't even write invoice for that customer where they are overdues. So we have got a very, very robust and strong control on free cash flows. Now where business leads for growth, definitely, we have to see that we do that and don't compromise on the medium to long-term growth of the business. In terms of FY '23, as of now, we are not having a clear strategy part. We have made 3 years back, but with this pandemic, everything has got reset. So we will be working on our next 5-year plan somewhere, middle of this financial year. So maybe after that, once we do, then we will share with you what is our long-term plan for our growth and accordingly, the cash flow as well.

So I think you must appreciate the fact that last 5 years, we are hardly limiting it, right, and with the heavy CapEx announcement for FY '22, even that is bleak for next year as well.

No, last year, actually, we had very strong free cash flow. If you remember in FY '20, our -- we were significantly free cash flow positive. I can share the number also. So free cash flow was almost INR 500 crore plus.

Sir lastly, if you can share the gross debt numbers for this year...

So free cash flow I'm talking, right, it is before project CapEx. So if you even put in project CapEx of INR 150 crores last year, we were INR 350 crores positive.

So I'll check on this, sir. Sir, on the growth rate sir, what is the growth rate as of FY '21 and FY '20, if you can share the numbers?

Just a second. You are asking what is the gross debt for?

Yes, as of March '21 ending in last year, first one, if you will..

Okay, so our gross debt for console March '20 was around INR 200 crores, and March '21 is around INR 1,050 crores.

The next question is from the line of [ Rajesh Aarti ] from [ Anandrathi ].

I just wanted to check one, so if you look at Harita Seating...

We can't hear you.

Am I better now?

Actually a little bit better.

Am I better now? Is it okay?

Hello?

Is it okay now?

Yes I could hear the sentence.

Excellent. Sir, I was asking Harita 2013, '14 levels that INR 300-odd crores revenue moving all the way to INR 975 crores. We have seen EBITDA margin has been flatter at 8%. What is that Minda is doing that Harita would not do to improve margins? That's 1 question. Second is now that historically, you pointed about alloy wheels pricing have to be -- margins are unsustainable, when do we expect that at this one -- so combining this, how does one look at margins going forward? That is 1 question. Second question is how the Fehrer is out. They said they also through on, RV, they are in India. We're also hearing that they have made inroads and tractors and EV. So how do you see prospects for Harita, given that we hit on both top line and bottom line?

What's your first point? Was it on Harita? What was the point?

My point was Harita was stable margin at 8%, the last 7, 8 years.

Oh, margin. Okay. Okay. Okay.

So what is it you're doing that they couldn't do?

Yes. So I think we have got control of this company. We've revisit only from 1st of April '21. And we know the last -- how tough they have been on the entire country. So I think we have to take it with a grain of salt. But in terms of Harita margin, as I said a little while back, our first focus is to grow the business, because once you grow the business, then obviously, the operating leverage, et cetera, comes and helps you in terms of margin enhancement. So there, our focus first is not only on margin enhancement, but primarily all business growth. And that's how we have been working with them and sort of introducing them to our customers whom they don't serve. Somewhere we have successes, somewhere the discussions are going on. And in terms of growth, we just, I think, shared also that we are working to see that we double this company in next 3 to 4 years. Initially, we said 5 years, but what we are saying now, we should target that in 3 to 4 years. And not '21 -- 2021 revenue is INR 650 in but the previous year revenue, which was '19, '20 INR 750 crores. So we are targeting around INR 500 crores worth of top line in another 4 years. That's on Harita and its growth. Then you asked about AW margin being sustainable. I think this point also, we have been discussing that the more sustainable margin for any 2W will -- alloy wheel 4W, 4Wheel will be around 18% to 20% because as the time is moving, gradually, the old orders or the old orders which were at the premium pricing because of the import substitution, they have been -- volumes have been reducing and all the businesses we are getting are at the competitive rates. Now I'm sure the question is always when we see others, the margins are even not in that range. So if you see, from our operations perspective, we have a top decile cost in -- globally. I think I shared this point in last time also that we have been asked by a joint venture partner to give training to their other plants to help run the plants. And our wastages and our efficiencies are among the top decile, and that is what is helping us maintain that kind of or guide, that kind of margin. So that is on the AW level 4Wheeler. Then you mentioned the Fehrer is out. I could not get your point about tractor and PV. Because we continue to serve all those customers. In fact, we are the preferred suppliers from -- for all of our global customers. But if you can just elaborate a little bit, we said Fehrer is out, but they're in India. I didn't get this point.

So only, they are also trying automotive-first fabrics. And we hear that they've also got orders from some of the tractor players also into making inroads into...

So we are not into fabric, right?

No, not in the fabric, not in the fabric. Seating also. They're also got into...

We will take it out. That's a point for us.

Thank you. Due to the time constraints, this was the last question. Now I would now like to hand the conference over to Mr. Sunil Bohra for closing comments.

Yes. Thank you. So many thanks, everyone, for joining us today. I wish you and your near and dear ones the best of health and happiness. Stay safe. Many thanks.

Thank you. On behalf of Minda Industries, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.