ZF Commercial Vehicle Control Systems India Limited ($ZFCVINDIA)

Ladies and gentlemen, good day, and welcome to ZF Commercial Vehicle Control Systems India Limited Q4 FY '26 Earnings Conference Call hosted by 360 ONE Capital Market Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayaraj from 360 ONE Capital Market Private Limited. Thank you, and over to you, sir.

Thanks. Good afternoon. Thank you for joining us today, and welcome to ZF Commercial Vehicle Control Systems India Limited Call to brief you on the Q4 quarterly earnings and the earnings for the FY '2025-'26. Today, the fourth quarter earnings and annual results for FY '25-'26 will be presented by the management team of ZF Commercial Vehicle Control Systems India Limited. Your host today from ZF Commercial Vehicle Control Systems India Limited are Mr. Paramjit Singh Chadha, Managing Director; Ms. Sweta Agarwal, CFO; Mr. Shankar Venkatachalam, Head of OE Sales; and Ms. C. V. Kavviya, Assistant Company Secretary. I'll now hand over the call to Mr. Paramjit Singh Chadha, who will provide further insight into the results. Over to you, sir.

Thank you, Jayaraj. Good afternoon to all of you. I warmly welcome you all to ZF Commercial Vehicle Control Systems India Limited's Fourth Quarter Results and Full Year Performance for 2025-'26. Certain forward-looking statements that we will be making today are based on management's good faith and expectations concerning future development. As you know, the actual results may differ materially from these expectations as a result of many factors. ZF Commercial Vehicle Control Systems India Limited results for the quarter ending March 31 2026, and the annual performance for financial year '25-'26 was published on 13th May 2026. They are available on the website, www.zf.com, under the ZFCV India Investor Relations section. We hope that you have had an opportunity to go through them. A transcript and recorded audio of this call will also be made available on the website, www.zf.com under the ZF CV India Investor Relations section. I am happy to talk to you today as we give you the update about business performance. So we will first talk about industry and economy updates. I will begin with a brief overview of macroeconomic and industry environment relevant to our business. The Indian economy has continued to demonstrate strong momentum with GDP expanding by 7.8% in Q3 of financial year '25-'26 and the full year growth estimate revised upward from 7.4% to 7.6%. This performance has been supported by improving consumption trends, sustained investment activity alongside continued policy support including GST reductions, which have further strengthened the overall demand environment. Industrial output grew by 4.1% during FY '25-'26, broadly in line with the previous year. While some moderation in mining and electricity weighed on overall performance, the manufacturing sector showed improvement, growing at 5% compared to 4.1% last financial year. This growth was primarily driven by strong momentum in capital goods and infrastructure-linked sector supported by government's continued focus on capital expenditure. Inflation remained relatively contained during the year, averaging 2.1% for FY '25-'26, although it edged up to 3.4% in the month of March, largely due to movements in food and energy prices. On a global front, the economic environment remains challenging, in ongoing geopolitical developments, particularly the conflict in West Asia and associated disruption to the supply -- global supply chains. While these factors may have some impact on India, domestic fundamentals continue to remain relatively resilient, although external volatility could pose near-term pressure on industrial activity. From an industry standpoint, there are encouraging signs of improvement. The mining sector exhibited a positive trend in Q4 of '25-'26 with growth accelerating to 5.4% in March '26 from 3.1% in February, indicating a gradual recovery in commercial vehicle demand. At the same time, sustained movement in infrastructure, capital goods and construction activity continues to support overall industry growth. In addition, replacement demand for aging fleets, driven by need for improved efficiency and lower total cost of is expected to further underpin demand for new vehicles going forward. Looking at Indian commercial vehicle industry. India's strong GDP momentum was reflected in commercial vehicle industry, which delivered a robust 16.5% growth in production for medium and heavy vehicle segment, more than 6x, indicating healthy and broad-based demand. Growth driven by improved consumption, GST reform for the momentary condition and continued policy support. The industry outlook continues to be supported by strong structural drivers, including an aging fleet driving replacement demand, sustained growth in e-commerce and logistics and increasing consolidation of trailer segment. At the same time, the push towards electrification supported by government policies, public private partnership adoption in public transport is accelerating the transition towards cleaner mobility. While quality factors are conducive for the growth. However, external risks such as the Middle East contract remain areas to monitor. Looking at sales, FY '25-'26 sales was driven by sharp industry rebound after GST rate cut supported by supported demand in the second half. We face short-term headwinds such as capacity ramp-up challenges, supplier constraint and global geopolitical disruption causing gas and key commodity shortages. Our teams mitigated these challenges executed with discipline and delivered the best ever results in the history. The company strengthened its the future-ready portfolio with new product launches and product ramp-ups during the financial year. New launches such as exhaust brake wall OPR compressor with a power reduction feature and solutions such as EBS e-cars for EV buses. The company also accelerated ramp-up of hydraulic and pneumatic ESC and expanded e-compressor supplies for the domestic market, while scaling exports through higher capacity compressor for Europe and new actuator variants for global trailer customer. Against this backdrop, I will now move to some highlights during the FY '25-'26 across different functions. In the OE sales on the back of recovering commercial vehicle industry is supported by a strong second half following GST normalization, improved infrastructure, mining activity and festive demand, the company delivered a robust performance. This momentum peaked in Q4, particularly in the commercial vehicle more than 6 tonne segment, with production reaching a record 151,000 vehicles in quarter as compared to 119,000 of previous year same quarter, reflecting a growth of 26.9%. And this contributing to an overall vehicle growth of 16.6% in FY '25-'26, which is 463,000 vehicle versus 397,000 vehicles. Capitalizing on this up cycle, our OE sales grew by 17.6% in FY '25-'26, clearly outperforming industry growth as explained above. As we look forward to FY '26-'27, we enter the year with cautious momentum supported by GST-led tailwind, resilient domestic demand and strengthening fundamentals across key segments. While the overall outlook for commercial vehicle industry remains positive, evolving geopolitical developments, particularly in West Asia will need to be monitored. In this context, the company remains focused on executing its strategic priorities. We aim to sustain our leadership position in braking system in -- by strengthening our market share in ESG across OEMs ahead of upcoming truck regulation. We are also driving higher penetration of advanced trailer technologies, including retailer EBS in line with AIS 113 regulations and increasing focus on safety and efficiency. In parallel, we are accelerating new product introduction, including upgraded compressor platforms plus servo with beer sensor pressure-reducing walls electronically controlled A suspension EBS and e-compressors for EV platform. We are also expanding our EV portfolio with a strong focus on E compresses and EBS systems, particularly across independent bus manufacturers. Beyond the near-term recovery, we see strong long-term growth driven by a tightening regulatory environment and increasing adoption of electric mobility, which together will continue to shape the future of commercial vehicle industry. In aftermarket, the aftermarket business reported revenue of INR 151 crores in Q4 '25-'26. And FY revenue stands at INR 584 crores which is a growth of 15.6% compared to last financial year. This growth was driven by active channel management, like extensive optu market team outreach covering 6,000-plus retailers, 4,000-plus distributors, 1,800-plus fleets and 200-plus workshops continued to be a key driver of growth. Network expansion to 51 new distributor branches and 14 new service centers, strengthened presence across B and C class cities, particularly in high consumption markets. The mining segment, which remains subdued in the first half of the year, witnessed a strong recovery in the second half, contributing to higher compressor penetration. Additionally, a regulatory push around safety compliance in the oil and gas fleet drove incremental demand, particularly for trailer EVS solution where retrofitment initiated resulted in additional sales. Our strategic focus on new product penetration, Spark merchandising program, especially in door control retrofit ASP played a key role in accelerating the performance. Talking about exports of goods, the U.S. tariffs created headwinds for the industry by increasing import costs and constraining manufacturing activity, which in turn impacted demand and overall market growth, while the European market remained relatively resilient and provided some offset. The broader export environment continued to be challenging. Against this backdrop, company reported export revenue of INR 1,025 crores in financial year '25-'26, reflecting a decline of 11.1% year-on-year compared to financial year '24-'25. Despite the volume moderation, particularly in the U.S. market, we are able to outperform the broader export market supported by a favorite product mix and new business wins in the trailer and off-highway segment. Looking ahead with early signs of recovery emerging in the U.S. market in Q4, we anticipate moderate improvement in export demand. We remain focused on proactively navigating the environment with continued emphasis on new product launches and product ramp-ups, including compressors and actuators. Export of services. export of services recorded a strong growth of 22.5% in Q4 financial year '25-'26 compared to the same quarter last year. For the full year, services export grew by 15.4% in financial year '25-'26 compared to the previous financial year, driven by sustained expansion in engineering activities delivered from India to our growth centers. Looking at ESG efforts. As part of our continued commitment to sustainability, we have implemented several initiatives focused on environmental stewardship and resource efficiency. At our plant, we successfully commissioned a fully automatic organic waste converter, capable of processing food waste into organic menus, supporting our objective of achieving 0 waste field to landfill and reducing our environment footprint. Further strengthening our water management efforts, we have established a rainwater harvesting pond at our Jamshedpur facility with a storage capacity of 1,200 kiloliters. This initiative is designed to enhance water sustainability, reduce dependence on groundwater and meet approximately 40% of the plant's annual water requirement through harvested rain water. Our efforts in safety and sustainability have also been recognized externally. The Ambato plant was awarded first place in Tamil Nadu State Safety Award under the engineering category, reflecting the strength of our safety system, proactive risk management and a deeply embedded safety culture. Additionally, the plant received the gold award at the ESG Summit 2026 organized by Anna University, recognized our continued focus on environmental, social and governance excellence. Update on in general. The engineering team has played a pivotal role in quickly evaluating and releasing new additional sources inducted to meet the increasing demand for various parts like actuator walls, driveline component and compressor, also stabilized the SOP in new exhaust break for OEM in delivering greater value to our customers. Update on manufacturing. The company continues to scale advanced technology product from its state-of-the-art multidivisional manufacturing facility in Oragadam supported both domestic and global customers. New lines for crankshaft machining ASP cottages, pump have been successfully commissioned. During the year, we enhanced our product portfolio with new launches across compressors, actuators and electronic systems. While expanding manufacturing capacity across plants, assembly capabilities at Jamshedpur and Lucknow was strengthened, improving agility, delivery performance and supporting sustainability objectives through reduced logistics footprint. CVCS India achieved a significant milestone in the Germany towards operational excellence with the successful completion of overall maturity assessment across Mahindra City, Lucknow, Jamshedpur location with a good score. The OMA framework evaluate plants on 6 critical dimension, including plant basic operations management, operational strategy, equipment effectiveness, DNA of quality and EHS and sustainability ensuring global consistency and best practices. This achievement reflects our dedication to building a learning organization and driving cultural transition through qualifications and capability over. Overall, these initiatives reflect our continued focus on operational excellence, technology leadership and building future ready manufacturing capabilities. Looking at corporate social responsibility, CSR. At ZF Group, our corporate social responsibility initiatives are guided by the acting now principle. Built around 4 core pillars: improving road safety, enhancing the quality of life of our surrounding communities, promoting environmental sustainability and supporting skill development. Let me briefly highlight our CSR initiative during the quarter. In Q4 2025-'26, we focused on community infrastructure the new urban energy and road safety. We installed a high mass lighting across Jameshedpr, Lucknow and industrial areas, enhancing safety in public spaces. In parallel, we expanded our solar lighting initiative across villages and schools supporting sustainable energy access. We also contributed to education infrastructure through school renovation and lighting projects, creating safer learning environments. On the capability building front, we train, trainees and through our road safety program, we reached over 1,200 drivers and nearly 600 technicians promoting safer driving practices. Additionally, we distributed 500 safety kit to technician. Overall, our CSR efforts reflects a strong focus on safety, sustainability and community development. Awards which we got, our employees continue to demonstrate a high level of engagement and participated in various external total employee involvement, TEI competitions, winning, numerous awards across several categories in the last fiscal year. I am happy to share that in FY '25-'26, our team won 14 national awards and 16 regional awards in competition organized by CII, ACMA,CFI and with many more awards at regional levels. This included 21 awards, including 3 regional awards and 2 international award in quarter 4 of financial year '25-'26. Now moving on to financial performance for the quarter. I will hand over to Sweta to explain.

The results were made public at 3:55 p.m. on 13th May 2026. I hope you've had a chance to go through them. We are happy to share that for the quarter ending 31st March '26, our revenue stood at INR 1,197 crores, the highest single quarter result with 15.2% growth compared to Q4 of last year. Our profit before tax was INR 196.6 crores a growth rate of 16.4%, and our profit after tax was INR 146.3 crores, a growth of 15.5% over Q4 of previous year. Talking about our financial performance for the whole year, I'm happy to share that for the FY '25-'26, our total revenue stood at INR 4,302 crores, the highest in the history of the company with 9.2% growth compared to last financial year. Our profit before tax was INR 693 crores for FY '25-'26 and year-on-year growth of 13.9% and and PAT of INR 517 crores, which is a year-on-year growth of 12.2%. I would like to thank all our stakeholders for achieving this milestone. As a result of our good financial performance reported in FY '25-'26 the Board of Directors has approved the issuance of bonus equity shares in the ratio of 5:1, subject to shareholder and relevant regulatory approvals. This means that we would be issuing 5 shares in view of every one bonus share held on the record date, which is fixed at 24th June 2026 and 25th June '26 would be the deemed date of allotment. This is the company's first bonus issue aimed at rewarding our shareholders and enhancing market liquidity. In addition. In addition, the Board has recommended a final dividend of INR 4 per equity share post-bonus for the financial year ended 31st March 26, subject to shareholder approval. The record date for the AGM and dividend payment would be July 10, 2026. Handing over to Mr. Paramjit Singh Chadha for his closing remarks.

Thank you, Sweta. CVC India enters financial year 26/27, with strong momentum, supported by robust domestic demand, rising adoption of safety and efficiency technologies and a strong new product pipeline. The company will continue introducing advanced regulatory aligned products in the Indian market, reinforcing its commitment to redefining India's mobility. Thank you. We now welcome your questions.

First question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Firstly, to Sweta ma'am, just on the Q4 margin performance. So it was lower by 230 bps Q-on-Q. So can you just help us understand what factors played on the margins, whether the commodity, ForEx, employee costs or any other provisions like warranty, which impacted the margins?

Okay. Two factors that I can talk about. One is a bit of material cost. As you know, the last quarter, we've had significant challenges on increased supply, coupled with the war-like situation. in the Middle East. And therefore, we have some increases on the cost side. Conversations are ongoing with the customers for recoveries and therefore, you see an increase in cost compared to the revenue recorded during the quarter. On the cost side, well, we then salary increase effective 1st January, and that would also contribute to the cost increase of -- there's no -- there are no other special items or no specific callouts on inventory or any other time costs.

Got it. Got it. And just going ahead for next year, just how do you see the margin range in the context of the commodity ForEx part and the mix -- and also there is a growing next year, we would also see the higher content for EC ADAS. So how do you see the margin for us?

I mean, I would expect it to be more or less flattish with maybe single-digit small growth for the next year. As we are going in, there are challenges which are being called out on the Middle East was front and caution from the government also to look at our expenses and consumption. So very difficult to call out on -- given this macroeconomic situation, I would be cautious on the call out for financial year 2016.

Paramjitji, sir. Just on the ADAS regulation, can you update how are the OEM order wins happening and order book is building up? And if you can mention how are the key customer wins or what kind of market share we can expect for this regulation?

Yes, I think the best person here with us is Shankar, maybe you can give some later.

On the ADAS side of the business, we have been actively working with all the OEMs with regards to the potential business coming up with the upcoming regulations. In fact, we have already got business awards for the full suite of solutions, which has a complete range of ADAS portfolio of products beyond the regulation requirement from 2 OEM customers, whom we are now working with. And with most of the other OEMs, we are in engagement with multiple OEMs on the discussions and next steps. Here, the point of discussion is happening at an engineering technical discussions where the customers have visited our test tracks and observed our solutions in terms of benchmarking. Since there is a bigger volume segment coming out of regulations, there are several players out there in the market who are also engaging with customers.

Just to set clarify at least for 2 years, we have full suite of solutions, right?

That's correct.

Got it. And for the ESC part, we would be quite a major player there across the OEMs?

That's correct.

Got it. Got it. Just lastly, to Sweta ma'am, if you could share what would be the FY '27 CapEx outlook?

We're looking at about spend of about INR 180 crores to INR 190 crores.

And which area, ma'am, this would be?

Some of it is new product -- CapEx for new products. Others would be replacements and regular upgrades.

[Operator Instructions] Next question is from the line of Lakshminarayanan from Tunga Investments.

Last 1 year, we have done extremely well in terms of quarter-on-quarter in terms of growth in top line. But there is a divergence I see in terms of the EBITDA growth, the operating profit growth, if I exclude the other income. And that has been not matching up with the revenue growth. Just want to understand whether this is because of some operating deleverage? And how do you think this would actually pan out as the outlook remains pretty robust for this financial year -- for the upcoming financial year?

Lakshminarayanan, as replied also to the previous question, we see this impact of the war and increasing prices of certain commodities, which is leading to a blip on the cost side. Conversations with customers are ongoing to collect it, but there is always a lag between the 2, and that's what's showing up as the growth in EBITDA. We would expect that to get corrected on a lag basis.

I'm talking about the EBITDA growth with respect to the revenue growth, not talking about the absolute -- I mean, not talking about the margins here. So for example, the revenue growth has been higher, but the EBITDA growth has been lower.

That's because the costs have increased disproportionately to the revenue due to these -- yes, the timing difference between the cost of the revenue.

Next question is from the line of Shubham Bhatra from Ambit AMC.

Basically, I wanted to understand something...

Sorry to interrupt, Shubam, your voice is breaking.

Is it better now?

Yes, please go ahead.

[indiscernible] On the technology side, we talk about ABS and...

Shubam, your voices again breaking, it is not stable. The connection is not stable. The voice is breaking. The line for the current questionnaire have got disconnected. We'll move to the next question from the line of Dishant Jain from Kaiser Capital.

Am I audible?

Yes, you are.

Ma'am, is it possible to give the segment-wide growth figure for the quarter Q4 aftermarket and exports?

Yes, sure. So give me a minute. So aftermarket has grown by about 25% enough -- sorry, our OEM supplies have grown by about 25%, aftermarket by 21%, and we see a degrowth in exports of about 6% -- an increase on servicing.

Sure. And is it possible to give the Europe and U.S. growth for the quarter?

So the Europe growth was about 6%, and American degrowth was -- just give me a minute. And yes, there was a degrowth in the Americas of about 22% on a blended basis, a 10% growth for us.

Sure, sure. And ma'am, just on the demand scenario since government has also increased diesel prices today morning. So like in the past, whenever it has happened, hasn't impacted the demand -- ongoing demand going forward? Like how do you see to be the demand from here onwards?

Typically, this would impact the freight rates. So then impact on freight rates will have cascading effects on the utilization of trucks and thereby the buying capacity of fleet owners. So it may not happen immediately, but this slowdown may be there in terms of the vehicle purchase. So that's something that we need to keep a close eye on.

But on the other side, if you see people may like to buy the new truck because old are not so efficient and the cost of ownership is -- so it depends upon how the fleet owners take the decision on this side.

Can I ask one more?

Sure.

And then, is it possible to provide how much aluminum and copper consists of our total raw material cost?

Yes, approximately in last quarter, the major increase has been in aluminum. It is close to 15% to 18%.

Okay. Aluminum consist to around 15% to 18% of the total cost.

No, no, aluminum only, commodity. Aluminum as a commodity has been increased from almost INR 233 per kg to INR 274 per kg, approximately. It varies from grade to grade. So that is around close to around 18% as a commodity. And that is a major commodity for our products.

Next question is from the line of Preet Pitani from InCred AMC.

Just wanted to ask on the tech side, does ABS and ADAS work together like if any supplier is giving us order, do you mean to give orders for both together or we get orders for both separately?

Ideally, we would look at system partner as a combination setup because you have both the electronic stability control and the AEBS, which will work in tandem. But today, most of the OEMs have associated one with the other. So they are looking at options where they could use 1 or 2 partners in the cases.

Okay. And in ABS and us, not ESC, ABS, so it works was sale?

Within ABS is one of the features of us. So 5 features have been mandated as part of the regulation. So under those 5 features, typically OEMs would like to go with one partner who is able to demonstrate all 5 features.

Okay. So just clear me if my understanding correct, for ESC and Ira, there could be 2 supplier. But generally for EBS EDA, they prefer single of that. Is my understanding correct?

Yes, correct.

Next question is from the line of Madhu Agarwal from Agarwal Family Office.

So my first question is as we're seeing the safety regulations starting to get implemented, are we already seeing a meaningful increase in our CPV across the bus and CD platforms? Or if it's possible to quantify the before and after?

So today, we already have electronic stability control mandated in all buses except Type 1 city buses since September 2025. So that's the uptick that you're seeing in the last financial year. Going forward, the next wave of regulation is effective 2027. So it may not be effective in this coming financial year, but more so the work will be happening for that. And the impact of that will be seen in the subsequent financial year.

So that's on the buses. About the more than 12 tonne trucks, which are coming in from 2027.

That's right. All vehicles that are greater than 6-tonne segment would be impacted by the regulations, which would be rolled out effective October 2027.

Understood. Sorry, what I think I was trying to understand is that are we seeing a meaningful shift in the value of what we are supplying because of the -- and is it possible to quantify what that shift is for us in the value per vehicle because of the regulations kicking in?

So in the current business, we are already with ABS, basic ABS in all of the vehicles. So in some of these vehicles, we have upgraded to ESC. That delta increase is already impacting the current sales that we are having. When it now spread across the complete vehicle portfolio platform, we would then look at the penetration increase going from the current stage to maybe completely covering the entire portfolio of vehicles. So there, we will be looking to increase our value per vehicle in the EC segment directly.

Understood. Okay. And I think the next one is, obviously, I know right now, we've got some challenging macroeconomic conditions. It's very hard to really forecast where things are at. But as the environment should stabilize, how are we thinking about the long-term structural growth opportunity here? Are we looking at penetration net growth? Are we -- how are we sort of thinking about what the next 2 years look like under more normal geopolitical conditions?

So on the focus areas, what we have, we have several products like we already spoke about the safety side of the things where we are looking at breaking. There are part, there are also products under the efficiency portfolio. We also spoke about compressors with optimized power reduction feature. These all offer a fuel savings benefit to OEMs. And then also on the AMT, where we see potential penetration increasing that will allow us to grow in the segment of offering more AMTs to market. And then there are some focus areas where we are looking at ESC as a growth for both the hydraulic as well as the pneumatic platforms.

Next question is from the line of Nishant Vass from 360 ONE Asset Management.

My first question is on the exports. Obviously, there might have been some potential issues this quarter. Can you confirm on the export side, whether there any such challenges you face? That's one. And second, connected to the export is obviously the U.S. tariff came and there have been some obviously some pushing to and I think stabilization in OEM might have happened on the pricing side, so how does the U.S. market shift up next year? That's my second question. And lastly, from a medium-term standpoint, obviously, ZF has come to some restructuring in some markets. They've had long plans of larger sourcing from India. So can you give us an update in terms of where are -- where is the group right now also considering the backdrop of high energy costs in Europe probably some of the challenges would have come back to the score on manufacturing. So where are from a localization and export in India medium term 20, 30 stand-point? Those are my 3 questions.

Okay. I mean updating on the exports, what we see is the de-growth overall. We see a growth in Europe, coupled with the degrowth in Americas. What -- the trend what we saw was a reduction of the gap in the supply is increasing compared to last quarter's up to Q3, which is now catching up. So we still see a 20%, 22% degrowth as compared to the same period in the last financial year. Predicting for next year, we expect -- since we're seeing this gap narrow down, what we would expect is an increase in the trend in the U.S. market as well for the Europe markets, of course. And whether that would really catch up to now 2 years back kind of volumes still to be seen because there's still a 20% gap over.

See, this vehicle production in the U.S. market, we can see last 4 months, the uptrend, which was going down trend for many months. So I think that gives some hopes on this.

Yes. That's the next year, of course. With respect for sourcing from India continuous effort to localize and also maybe potentially introduce our suppliers to be able to supply directly to our factories in the Europe, but that's not within the scope of our activity. On the R&D costs, projects are continuously evaluated and allocated to the R&D team in India. So we would see some expansion of the service revenues.

Okay. So the reason I'm asking is, I appreciate the fact that the decisions are at a parent level. But visibility, obviously, when programs have to be moved typically in the sector typically a 24-month lag for programs to move. So from an FY '30 target that the parent put out. And I think Mr. [indiscernible] retain that it recently in his conversation media. Somewhere down the road in the next 12, 24 months, you should be seeing some of that right otherwise, in India.

So okay, we are getting some new RFQs, I would say, and that's ongoing. But what has been given out as a target for India's growth very definitely stands. So that commitment is definitely there from the group to the country.

Next question is from the line of Pritesh Chedda from Lucky Investments.

So for FY '26, if you could give the OE aftermarket and exports growth and revenue number?

Full year.

I think what was given was for quarter 4, right, 25%, 21% and minus -- yes. Can you give that.

OE growth was 17.5%, aftermarket 15.5%, with export degrowth of 11%. Service income increased by 10%.

Can you give the absolute number as well OE aftermarket and export?

Yes. OE is INR 1,978 crores, aftermarket INR 583 crores, exports INR 1,025 crores with service income, INR 509 crores.

Okay. And the other part I missed was you guys with the aluminum copper and the metal content in the RM what was that?

Aluminum also has some part of copper in this aluminum alloy, which because of this global geopolitical situation, there has been a crisis of aluminum availability in the market in last quarter. And that has also caused the increase in the price of aluminum and some more commodity. We talk more about aluminum because that is one of our major raw material, which we are using. So that is the update we have provided.

Okay. And sir, one clarification. In the top segment, the ESC, which is being sold, is a voluntary fit out right now? Or are there any particular category of CVs that mandatory fit-outs have picked up?

As of now, there is fitment happening voluntarily primarily in the POL that is the petroleum and oil tanker segment, where they see the application in the hazardous goods type of usage required environment. So there, we see a voluntary fitment. The regulation kicks in from 2027.

Okay. Just for a classification. So the first deliveries for us which is mandate -- which is as per the mandated 2027 should begin for which quarters?

October '27.

Next question is from the line of Darshan Bandarkar from Banyan Tree Advisors.

Could you share [ Q3 FY '26 and Q4 FY '27 ] the quarterly average content per vehicle for our OEM segment?

So the Q4, you're -- referring the Q4 financial year '26 versus the previous year? Or what is it that you were asking?

No, no, Q3 FY '26 versus Q4 FY '26 Q-o-Q trend.

So the Q3 FY '26, we saw value per vehicle of approximately 45,500. And in the Q4, it was around 40,000 -- 39.5, yes because yes, there were some one-timers that happened in the close of the previous quarter. Those are the ones that contributed to this delta increase in the value content per vehicle in October to December, whereas those who are in quarter 4.

What were those -- can you this point out that?

Could you please repeat the question? What was the what?

What was the one-offs in last quarter?

It was related to certain selling price variances that we got from customers. Those were some one-timers that were got in the close of the quarter. That led to the increase in value per vehicle, which was recorded as part of the sales that was retrospectively realized in the quarter 3.

If you remove those one-timers, you would be more or less flattish on the value per vehicle.

Next question is from the line of Lakshminarayanan from Tunga Investments.

Two questions. One is that we are seeing an increase in the tonnage of vehicle. In addition to it, there is also a movement of multi-axle towards tractor trailers. Now in these 2 accounts later when the tonnage increases, whether the component which you are actually placing in the vehicle, does it also increase in terms of value as the tonnage increases? Or it is the same whether the tonnage [indiscernible] X plus Y?

There are -- the tonnage increase is directly proportional to the number of axles that are there at the vehicle level. So when you talk about the multi-axle, we have different configurations. We have 4x2, we have 6x2 and so on so. These multiple configurations, which are there, those are the ones that contribute to any kind of increase in our content per vehicle because each axle, we have the components that are fitted, maybe it's an actuator, maybe it's a wheel speed sensor, maybe it's the foundation break side of things. So these are all the contributing factors to contributing to an increase in the content per vehicle. So the basic tonnage increase doesn't really add that much of a value except for the fact that maybe the customer may switch to a higher duty compressor lighter duty compressor from May an ICV to M&HCV segment. That's the kind of a difference we would see.

Got it. Got it. And the other question is that there have been fleet rate agreement between India and U.K. or India and Europe, right -- sorry, India and Europe. Now what does that mean for our exports? Does this actually enhance visibility and also is a better value proposition for us in the relevant markets?

Yes. I think this is already -- if you see announced, but it is in the draft stage, and it may take some more time, maybe about 1 or 2 more years to get it finalized and that also will have a slow ramp up. Definitely, whenever it is implemented, we will definitely have advantage because we have many plants across Europe, and there will be better competitiveness from India to Europe and vice versa.

Okay. Sir, if I look at our Chennai facility for exports, we have a large land and had large plan for exports to the U.S. market. And we also can add with higher develop automation and modularity in terms of manufacturing. Now there has been some kind of slowdown in the last 1 year in terms of the U.S. markets, driven by uncertainty in tariffs. Now is it fair to assume that everything is behind and that we are in a perfect launch mode in terms of enhancing our -- I mean leaving the current Gulf crisis, is there a possibility that it can be -- it can give a good tailwind for our revenues and therefore margins as we step into the next 3 years?

Yes, I think it's a very difficult question to answer. But looking at focus for India, we are definitely exploring more RFQs are coming to us for coating for export from India. And not only Mahindra Ward City, we have a big plant in Oragadam. Mahindra Ward City, I would say, the overall plant utilization is at almost peak level and further expansions we will be doing in Oragadam.

Got it. Got it. So you are saying that is it -- if I understand right, it's still uncertain and in terms of the tariffs or it is uncertain because of the gulf crisis?

Gulf prices, I would say. Tariff, I think now it is getting tapered down, as we said that our sales is almost 50-50, I would say, for America and Europe. And overall, if you see, it is minus 11% in spite of tariff in place for many months now. So that way, I would say that effect of tariff is tapering down slowly.

Ladies and gentlemen, due to time constraint, we will take this as a last question for today. I now hand the conference over to the management for the closing comments.

Yes. So on closing comment, I would say that when we see this quarter after having a very good quarter of last year. April volumes are also better as compared to if we see comparing the previous years with no special aspects. And even May volumes are looking good, whereas generally first month of the year is not so high volume historically. So we do see a good quarter this year also. And only aspect of geopolitical situation, we have to closely watch and ensure that we -- in case of any issue, we do the flexing of our costs. So with that, I would like to thank all for giving the support to have this historical performance, and we will continue to improve our efficiencies and ensure that we continue to monitor our overall performance. Thank you.

Thank you very much, sir. On behalf of 360 ONE Capital Markets Private Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.