Thank you, Amshad. Good morning, everyone.

On behalf of Emkay Global Financial Services, I would like to welcome you all to the 2Q FY26 Earnings Conference Call of Sandhar Technologies Limited. Today, we have with us from the management team: Mr.

Jayant Davar, Chairman, Managing Director, and CEO; Mr. Neil Jay Davar, Director; Mr.

Gurwinderjeet Singh, Whole-Time Director and Head of Corporate Strategy; and Mr. Yashpal Jain, Chief Financial Officer and Company Secretary.

We'll begin the call with opening comments from the management team, followed by a Q&A session. Over to you, Mr.

Davar.

Thank you, Chirag, and thank you, Amshad, for putting this call together. Thank you to all the investors who've joined early this morning.

Let me begin by first of all saying that the domestic auto industry grew by about 6.1% in quarter two of 2026, out of which the two-wheeler segment has grown by 7.4%, the passenger vehicle segment actually witnessed a de-growth of 1.5%. In terms of how Sandhar has built on this, I'm going to divide this into three different parts: one is the Sandhar India business growth, where our revenue from operations have grown by 33%, the operational EBITDA grew by 24%, operational EBT grew by 33%, and operational PAT grew by 28%.

In terms of our overseas business, if I look at it from quarter to quarter, the revenue of operations grew by 2%, operational EBITDA is down by 12%, operational EBT is down by 29%, but you have to keep into context this was actually, as I had mentioned in the previous calls in the last quarter, if you compare it on quarter one basis, our losses have dropped by half and we are very, very confident that the next half of the year will bring it back on its own two feet, the way we had promised it would be. If you look at Sandhar's consolidated business growth, our revenue from operations grew by 29%, operational EBITDA by 19%, EBT by 32%, and operational PAT by 15%.

In terms of our joint ventures, I'm very happy to announce, as I had in the past as well, all the five joint ventures have performed satisfactorily, registering a revenue of 68.57%--this is of course calculated on the basis of 50% of our partnership--and all of them are now PAT-positive and they are on a strong growth and recovery path. We are constantly watching the performance and taking all necessary steps in collaboration with our joint venture partners for sustained growth and profitability.

In terms of EVs, the company started commercial invoicing of battery chargers and motor controllers, while the pilot lot of DC-DC converters is getting positive response from the market. The customer base is gradually increasing, with more customers being added, and we generated a revenue of 6.94 crores in the first half of the current financial year, and we expect to do a business of around 15 crores for this financial year.

What I'm also happy to announce is that the auto industry per se seems to be on a good trend right now. I do believe that the second half of the year, as always, will be stronger.

The lucky thing is that even in the case of December, November and December, because of the elongated festive season, our order books are extremely strong. We do expect a strong third quarter and, of course, as always, a very, very strong quarter four.

With that, let me open it up for questions. We have on the call, like Chirag mentioned, GJ, Neil, and Mr.

Yashpal Jain, our CFO, who will answer all your questions from the financial perspective in a more detailed manner than I possibly can. Thank you.

With that, I'm open to questions and answers. Thank you all very much once again for joining.

Hello, am I audible, sir? Hello?

Mr. Lodha.

Sir, my question is that, in first half, you kindly refer to your presentation, table number five. First half, sales have grown for 25%--24%, from 1,896 crore to 2,360 crore, 2,360 crore, whereas EBITDA has been down from 9.7% to 8.5%.

EBITDA has down from 9.7% to 8.5%, and the PAT also down from 3.2% to 2.3%. In spite of increase in sales by 24%, what may be the reason for the fall in EBITDA and PAT percentage?

Okay. Thank you, Mr.

Lodha, for that question. I'm glad you asked that question.

If I compare quarter two of '26 with quarter two of '25, there are some exceptional items. One is the impact of the new project, sir.

That we had bought over the unit of Sundaram-Clayton, and we had put up Pune and South India new projects, which have resulted in a negative case scenario or impact of 8.07% on EBITDA margins. The other thing is the machining business, which also cost us 3.14 crores.

In all, the total impact on the profitability has been 11.21 crores. If you were to normalize this, sir, then our EBITDA margin is 10.44% compared to what you see.

If I look at it, you are aware that Sundaram-Clayton is the business which we've just taken over, we are in the process of moving it into our new facility, and obviously, it is not generating a normalized EBITDA as of right now. You mentioned half years, which is H1.

H1, sir, you know that the first quarter was extremely tough on us, but the second quarter has been relatively much stronger. The H1 figures are only taking into account the impact of that first quarter, which is being generated into the second quarter as well in terms of when you compare it from H1 to H1.

Those are my comments, sir. I'm happy to take on any supplementary questions in this regard.

Sir,

in this continuing discussion, sir, but in second quarter, in second quarter you had other income of the 34 crores, total 45-something crore other income, that has elevated your EBITDA to 10%, not actually--

No, Lodha ji, no, sir. See, I'm talking of the India business normalized revenue.

Our normalized India business revenue is 1,153 versus 868 in quarter two versus quarter two. Operational EBITDA is 109 versus 84, which is 9.47% versus 10.06%.

If I was to look at this, then the EBIT margin is exactly the same as 5.5% to 5.5%. If I look at the impact that I gave you of 11.21%, our EBITDA is 10.44% versus 10.16%, in fact higher than the quarter two of 2025.

I'll ask Yashpal ji to please explain this a little further. Yashpal ji, if you can come in and explain this, please?

Sure, sir. Good morning, sir.

Basically, may I answer the question? Other income, sir, while doing the presentation for investors, we haven't included other income for calculating the effective EBITDA and margin, sir.

Although in the published accounts, it's together because the SEBI format is combined on the total PAT level and EBITDA level. The reason--the exact reason for the downfall is because of the 11.21 crores that we have analyzed, and that is out of the five major projects internally that we identified, out of them three are totally new projects, sir, relating to two of them for the die casting and one for the sheet metal one, which will--which are going to turn around from April '26.

Before that, they will continue with the same, I would say, margin base. Yes, quarter two would be more better for them.

We are reviewing then. Quarter--sorry, quarter three and half year two, they are going to be better compared to this half one and quarter two of the current year.

We have not included the same into calculations. We have removed.

If you see slide number four of our investor presentation, there we have shown on the top side of the left-hand side is operational performance, then there is other income break-up. If you add together both of them, they will simply tally with the results that we have submitted to the stock exchanges.

Right side is the major reasons why we have seen a downfall in the margin, sir. We have just tried to reflect that these are the five projects which are hitting.

Had they not been in the place, we would have been on the same trajectory that we, at the beginning of the year that we have presented before the investor community,

yeah. Yeah.

Lodha ji, I think Yashpal ji has explained it. We haven't taken those extraordinary incomes into the presentations that have been given.

We've only taken the operational, sir, for clarity for all of you. Thank you.

That's the reason in the slide number five also, the margins are shown as down with a red marker.

Thanks for opportunity and congrats for a strong set of numbers, sir. Sir, in overseas business, we have seen a very strong recovery in this quarter, despite that a muted growth in the top line.

If you can throw some light on what are the reasons behind this, and the second, that how the growth will start to come in overseas business?

Can you repeat that question, one second? Dobara batayenge please?

Sir, my question is on that overseas business, what is the reason for the expansion in the margin in the quarter-on-quarter basis, and what would be the key growth levers in the top-line growth in the coming quarter?

Okay. My quick answers to this is, one, the European market had gone down dramatically.

It had become very volatile with whatever was happening with the Trump administrations and the overall industry going down. Europe was actually losing its orders.

We, in the meantime, got orders for newer products. Those have started to ramp up, and we are very, very hopeful that the second half of the year, while we put a major control on our expenses in quarter two compared to quarter one, we do believe that now with that having been taken care of both in terms of financial cost and operational cost, where optimization has been brought in, with new orders kicking in and production starts, we do believe that as we had said, we will try and remove the losses that we've had so far in the second part of the year.

Yashpal ji, you want to come in and add something to this?

Yes, sir. Abhishek, as we discussed in earlier quarters during the concall that we are striving our best to turn around the overseas operations, and if you see the slide number six of the investor presentation, we have given a comparison of the four quarters, starting with quarter two of FY25, which happens to be the corresponding quarter.

Although you can see a downfall in the revenue, but exactly if you see the margins, they are substantially improving compared to quarter one of the current year. I think quarter three and quarter four would be more better, huh, because as sir has told, the operational cost also we have tried to plug in, and as well as some of the new financial decisions we have taken, which will effectively bring down the borrowing cost also.

Okay. Got it.

Sir, in this quarter, we have seen a very high employee expenses. What are the key reasons of that, and is there any one-offs in employee expenses?

Can you repeat? Employee

expenses we missed. Employee expenses is very high.

Mm-hmm. Is there any one-offs in employee expenses?

Actually, the increments of the staff was finalized during this quarter, huh. Although we have been taking provisions in the first quarter itself, but you know when the actual increments are finalized, then only we are in a position to know what has been the actual cost.

Secondly, if you see, this time we had a all-time high production also in the revenue in terms of our core businesses like the die casting and the sheet metal, which happens to be a capital as well as labor-intensive in some regions, sir. That's the reason the cost of labor has also gone up, because we have to supply and there was all of a sudden demand from the customer side, the more manpower was deployed and the machines were also running for all the three shifts in many of the months, sir.

That's the reason. Otherwise, it's going to be normalized in the coming quarter three.

Yes, the increments were finalized in quarter two, always there is a gap between the actual performance based and the provisioning that we are carrying in the books,

sir. Got it.

Sir, depreciation has gone down in this quarter versus the last quarter, what is the reason of fall in depreciation?

Yeah. Exactly, if you remember, like we have said in earlier calls also, we regularly revisit our depreciation policy and the effective life of the assets.

The reasons like the intangibles, etc., which we have projected earlier, now they have started going out of the books in the sense they have depreciated to the full extent. That's the reason in the coming period of time, the depreciation will be in the similar pattern.

Initially, we have provided higher because normally for intangibles, we amortize over a period of 3 to 5 years, depending on their effectiveness and the product penetration in the market. Gradually, once the intangibles are written off, the depreciation will be in the normal course, sir.

That's the reason, and we are regularly revisiting the effective lives of the assets in consultation with the technical valuers and the statutory auditors, and basis that we are revaluting the life of the assets. That's the only change.

Apart from that, it continues to be the same.

Got it. Sir, in the ADC revenue growth in this quarter that remain strong in the domestic side, how is the revenue trajectory of the Sundaram-Clayton, and basically what is the EBITDA margin in this quarter, and how that margin will improve in the coming quarter?

Abhishek, if you see the ADC share has gone up even in the overseas and domestic. Overseas if we negate from the half year, rest remains to be the domestic share.

Roughly in this quarter, the ADC business has been about 32%, right? Which includes our revenue of 198 crores from Sundaram-Clayton business.

Despite that, India business standalone in quarter two has given 177 crores of revenue to us, which is up versus 130 crores in the corresponding Q2 of FY25, huh. This growth will continue to come as we expand our lines.

As for the margin profile, the Sundaram business has given us a margin of 4.48% only for the half year, but it was five--near to 5% for quarter two, which means a improvement over quarter one, huh. As we shared our plans earlier like along with the machining, we expect something 11-12%, and in terms of as-cast, the margins are expected to be around 9.5% to 10-10.15%, that's all.

This is 198 crores in the first half or in the second quarter?

It is a half year. 198 is half year, second quarter is 102 crores, remaining was quarter one.

The margins have improved. We are close to 5% in quarter two for this Sundaram business, huh.

Okay. How will be the margin in coming quarters, sir?

Coming quarter, we had a discussion with the business heads, but yes, the relocation cost of the plant will also be coming in the coming half year. Also, our premises rental will be coming up for a new premises of much bigger one compared to the existing because new set of machines are going to be deployed.

This year, we expect it to be around 5%, huh. Yes, from the next year onwards, as the business team has indicated, they will be going back to around 9% or something so that we are generating from other parallel business, huh.

Thank you, sir. That's all from my side.

Thank you.

Thanks for the opportunity, sir. Sir, this quarter, on the absolute amount basis, we witnessed significant drop in assemblies business on both YoY and QoQ.

Is there any reclassification here or any other reason for drop in sales?

Assembly business, Sailesh

ji? Correct.

Yes, sir. Assembly business, if you recall, we are into the spokes wheel, huh.

We are not into the alloy wheels, huh. One of the reasons is that the premium segment is now being replaced by the alloy wheels, huh.

There's no much reclassification. It continues to be the same.

If we see the assemblies volume in half year against 10.5%, it is 9.6%, right, sir? It's a normal 1%--1% something down, 0.9%, I would say, because--

In absolute amount, it has come down a lot, actually. If you

look at-- Absolute, it has come down a lot.

Last quarter it was 104 crores, now this quarter it is 64 crores.

Exactly, but we have not done any reclassification, because likely you say, if you see the assembly business, major of the components are coming from the customer side itself. While everything is dependent on how the volume will be performing, otherwise, with the passage of time, the spokes will be largely replaced by the alloy wheels in the coming period of time.

As of now, the mopeds and some segment of the bikes are being run on the spokes wheel, huh. That's the reason it is going down, but nevertheless, we are not idle space, because we have combined the assembly and sheet metal businesses.

Everything will be, I would say, adjusted with the sheet metal business in place of assembly business in the coming period of time,

huh. Okay.

Sir,

for the past year, we have been waiting for quarterly revenue run rate to reach around 1,200 crores and we have touched that number, but if you see, the margins only are again bottom-line, still we have not achieved it. With this high scale, still we have not crossed 10%.

Can you help us understand what specific costs continue to crop up and by when should expect the margins to improve meaningfully? Again, you are saying there will be a rental cost, some of the costs keep cropping up.

Can you please explain on that by when we can start seeing 11% EBITDA that we have guided earlier? Also, can you please discuss about the overseas business: which geography is currently dragging the overall performance, and what are all the measures we are taking to turn around the operations?

Also recently, I came across an article highlighting a sharp increase in power cost in Romania, how is company planning to mitigate these challenges and start reporting 11%-plus of EBITDA at this 1,200-plus crores of top line? Sailesh ji, yeah, sir, you want to answer something?

No, I just want to answer. I am not going to answer on the numbers.

I think you would be able to answer the numbers better. I just wanted to give the supplement of a comment that was made in Romania and for the overseas business.

The overseas business, Mr. Raja, is now in a mode of consolidation.

I don't know where we've got this information about power costs going up in Romania. Actually, the European power costs have started to come down.

During the time of the pandemic and post that, power costs had gone up dramatically. In fact, gas costs had gone up eight times, 800%, especially with the war between Russia and Ukraine.

Gradually, it started to come down. It is still not at the levels at what was there before the war, but it has come down dramatically.

The cost of operations in Romania are lower than those in Spain by a significant margin. We do want to take advantage of the new facility that has been set up there.

You're aware that regular productions there also got suffered on account of the war. I think the worst is behind us.

It has now been established. Gradually, by the month, Romania is going up.

We are trying to shift some business. In fact, some of the new projects that are coming into the overseas business are being routed through Romania.

It's on that basis that we do believe that margins will go up as was projected. In fact, if you look at our overseas business in the past, our margins there are higher than those of the Indian business.

They were at about 12.5%, 13% EBITDA margins. We expect those margins to come back very, very shortly.

I don't see margins are going to be an issue. The European business, you also have to consider the fact that with the depreciation of the rupee and the euro becoming stronger, we've had translation losses.

When the overall business is in a loss, in the Indian context and in translation to the Indian rupee, that has a double whammy impact. That's what has happened.

Going forward, I do believe that the overseas business will come back to its normal feet and we are very, very hopeful that in the second half of the year, we will be able to mitigate any losses that have been there in the previous quarters. That is the impact on the margins in the overseas business.

In terms of the Indian business, you did mention, but I think if you actually calculate the Indian business on a normalized revenue, then on an EBIT platform, we are exactly the same margin as we were in quarter two of financial year '25. If you were to add to it the impact on profit on account of the new business that has been taken in, which is the Sundaram-Clayton business and two new plants in Pune and South India, we are actually at a margin of 10.44% vis-a-vis 10.16%, which was there in the last year.

If you ask me, we are on a very, very healthy scenario. Now obviously, growth sometimes does mitigate and take away some of the margin growth, and that has happened with the growth coming in from the acquisition.

Whereas Mr. Yashpal ji said, our margins are about 4.5% right now.

We do believe by the end of the year, despite the rentals and despite all of that, and during the year translation and transition that has happened, we will still end up at 4.5%, 5%. From next year onwards, we'll go back to being a normalized die-casting business that we run with margins in the other businesses that we have.

We are very hopeful and very happy that things will normalize very, very quickly. Therefore, that's the reason we have subjugated and have given you a feed on the normalized versus the revenue that would have been impacted or affected otherwise.

I hope that answers your question.

Yes, sir. Clear, sir.

Very clear, sir. Sir, actually with improvement in second half in India business, margin improvement, and also you are guiding overseas also there will be improvement in margins, by year end, what ROCE that you are targeting, sir, this year and next year consolidated?

Sir, yes. If you ask me about the ROCE, if you look at, sir, the India business, if you look at as on 30th September, if I was to look at adjusted capital employed and ROCE, we are on an annualized number this year at 16.09%.

Now so this is compared to 15.5% of last year. We have given a call and we have mentioned in the past that our aspiration is to reach a level of 18% as soon as possible.

We are working hard and that is our target. Yashpal ji, you want to say more on this?

Absolute, sir. I echo what you have said, because initially in the first phase, we have given a target of 15% going to 18%.

This would be pretax and subsequently for the post-tax ones, sir. Barring three projects, as we discussed earlier also, two of the die casting businesses and one of the cabins and fabrication, these three are the new projects which are giving us a little tough time this year.

As we have discussed with the business teams, they are expecting to start full production in this by April '26, sir. In the Pune die casting, we have received now the customer consent also, and from next year April, the volumes will gradually start.

That's the reason this new business, which is dragging us down, would again be in the same profit trajectory. Hopefully, we will be able to achieve what we have promised to the market.

Okay. Great, sir.

Thank you, sir. All the best.

Thank you, Sailesh ji. Thanks.

Good morning, sir, and congratulations for a good set of results in this tough environment. I have a few questions.

Some of the questions pertain to some of the things we discussed in the Q1 call. One was we mentioned that the smart locks production will begin in Q2.

Has that started, and what is the kind of volumes we are seeing there?

Okay. Smart locks has started, sir.

The volumes are small. We did get a review from some of the customers.

We have two main customers. One project has been delayed a little bit, they are in a stage where we've shipped out some, but we do expect that the last quarter, there will be a little bit of smoothing of operations there where we'll be supplying smart locks more on a daily basis than a weekly kind of basis, which is being done now.

Yes, to answer your question, yes, we've started smart locks already.

Wonderful, sir. We had taken an approval for a QIP of 500 crores.

Can you update the status? In the same context, there is a news of a sheet metal fabrication company being put up for acquisition.

It's an Italian group, I don't know if you have heard of it, but are we considering any such possibility in the near future?

Rajit, all I want to say here is that there are various opportunities that are brought up to the table. We are much more careful with any kind of inorganic growth.

We would want to pursue it. In fact, the point that you mentioned, the QIP, was to be kept as our war chest in case any such opportunities were to arise.

We still haven't finalized on any so far. There are several that one keeps on looking.

We are very, very mindful that any inorganic growth that we consider, whether from M&A or from any new projects, has the potential in the medium term to be able to reward the stakeholders with an appropriate return on capital employed. I think Yashpal ji also mentioned that we are looking at an 18% pretax to begin with and then post-tax return to the shareholders.

Keeping that in mind, if we come across opportunities where we can deliver and it's a part of our strategy and core competence, we will go ahead for that. At this point of time, I do not have anything to report.

As and when if something were to come about, obviously you will be amongst all the investors who will be the first ones to know.

Wonderful, sir. Thank you.

May I ask a few more questions? If not, I can fall back in the

queue.

Okay. Do we have HMSI as a customer, and what is their share of business, and how has the performance been of that business in Q2?

Rajit, you're aware that a few years ago, HMSI was not a part of the business, was not a customer, largely on account of the fact that we were at one point of time associated as being a Hero supplier and there were some tensions between the two of them. For the past few years, we've started business.

We have now started in every category of their supply and what we hold a core competence in. Whether it is sheet metal, whether it is castings, whether it is locks, whether it is mirrors, we are in all those businesses now.

You're aware that the latest technologies in terms of smart locks and so on have been awarded to us. They have become a strong customer for us.

Going forward, I do believe that that number of or a percentage of our revenue will grow dramatically with HMSI. In front of me, I don't know if Yashpal ji has a number of what percentage we do right now, but it's been growing constantly and it's been growing quite aggressively.

There are some new projects that are starting with HMSI as we speak. In fact, HMSI also is a customer for our helmets.

They cover a large part of the dimensions of all that we do. Yashpal ji, if you have the number of percentages of what we did last year?

Sure, sir. For current quarter, I mean quarter two, the HMSI share is 4.2%, and for half year also it is 4.2%, whereas in the corresponding year, it was 3.7%.

So 0.5% we have gained, but as sir said, the new projects are in the pipeline, in the coming period of time, especially in the FY26-27, the HMSI share will go up, huh, with the new products giving us a revenue, huh.

Rajit, just to answer that and add to this, it was 3.7%, it is 4.2%. If you look at pure revenue, obviously that number is much higher on account of the fact that the overall company has grown by 30%.

If the 30% growth in the company means 3.7% to 4.2% as it supplements to even that growth that has happened, I hope you understand that, right?

Right, absolutely. Thank you, sir.

Sir, just one clarification on Sundaram-Clayton's numbers. Last quarter, I think during the call it was mentioned we did 103 crores of sales, and this quarter is same.

Is it correct or did I get the numbers wrong?

Yashpal ji, can you answer that?

I'll just answer, sir. Sundaram-Clayton effective sales is now 198 crores for the half year.

It was around 95 crores last quarter, 102, 103 roughly, 92.5 and 102.5. This is how the break-up is, quarter one and quarter two between.

Okay. I think there was some miscommunication in the Q1 numbers.

Maybe I'll get back to you on that. Just last question: have we added any customer in Europe in the last one or two quarters, any new customers?

There's a process to add a customer like RFQs, then the quotes, etc. That process started.

There are four, five new customers coming in the pipeline. As sir has also answered previously in this session, we are going to see a new customer base also, starting might be quarter four of our financial year and quarter one of their financial year, which is effective Jan '26,

sir. Okay.

Wonderful. Thank you, sir.

Thanks, sir.

Sir, just a few questions. I think you did touch upon the JV performance, which has improved significantly over the past few years.

Any thoughts you want to share in terms of over the next 2-3 years, how we should see all JVs put together or maybe any one or two JVs which you would like to highlight in terms of, let's say, which can contribute significantly? As of now, I think PAT contribution is about 6% to 7% in terms of our overall contribution.

How do we see, let's say over the next 2-3 years, JVs doing for us in terms of numbers?

Chirag, thank you for that question. It's a good question in terms of JV performance.

Obviously, the JV revenues don't show up in a consolidation or in standalone, and therefore we report it separately. See, JVs are a way for us to keep relevant in terms of newer technologies and it keeps us in the international domain of customers who want to buy and set up things in India where we become their local suppliers of sorts.

That is the large intent. What we are interested in is that the operations of these JVs give a good return in terms of aggregate to the investments that have been put in.

If you look at it from a perspective of return on capital employed, if you look at in terms of return on equity, of course the capital employed has become larger with the previous losses, but going forward, like I said, all our joint ventures are profitable. Each one of them gives us an opportunity of breaking into newer technologies that are still not being used in India.

As and when they become a significant part of the component pack in India, we would be way ahead with our joint venture partners to be able to offer it to the industry. There is a strategic intent to these joint ventures, but at the same time, we are also very conscious that whatever investments there are in the joint ventures give us an adequate return that justifies the financial impact of what we are doing.

I do believe that each one of the five joint ventures that you see here are important. Each one of them have a new take.

If you look at our joint ventures, whether they be in the area of rear parking sensors, whether they be in the area of shark fin antennas, whether they be in the area of new kind of cables, whether you look at special electronics, small componentry, I think each one of them has a much higher level of potential not only in terms of the auto industry, but in some cases even the non-auto industry, which could become very important into the future. Thank you.

Thank you, sir. Just couple of more questions.

I think in two of our businesses, one is vision system, we have more or less doubled our revenues. In fact, even in the first quarter, we had almost 30% sort of growth.

Can you please elaborate in terms of what is driving this, and how do we see the outlook for second half and probably going ahead?

I do believe I will not give any special outlook for the vision systems in the second half. I do believe that the growth that you are seeing will continue even in the second half and beyond.

Some of it is coming from features that have been added into these mirrors. Some of it is coming from volumes.

In the next quarters, we do see some growth on account of addition of new customers. If I look at the entire wallet from market share to premiumization will take impact and growth, which will then help us in a faster growth in the vision system business.

Thank you. Just lastly on the cabin and fabrication business, I think this business has been somewhat subdued for the past three quarters, largely because of the emission norm changes in the construction equipment industry.

What are the, let's say, outlook for this business, how going ahead? Are we largely through with the emission norm changes on the ground, and the price increases has been largely absorbed?

Any thoughts on that, and then I'll come back in the queue.

Yes, to a large extent, yes. We've started green shoots of new orders coming in.

The cabin and fabrication business, like you said, was affected a lot with the change in the emission norms. There was a lot of inventory lying with the customers.

I do believe that the new orders that I see in quarter three and quarter four of this financial year seem to be much more solid compared to what we had in the first half of the year. Fingers crossed, but that's the information that I have.

We ourselves are conservative in our approach even for the second half of the year, but I do believe it is definitely better than what was there in the first half.

Thank you. Thank you so much, sir.

Hamshad, we can go back to the question queue.

Yashpal ji, you want to comment? I don't know if he's been disconnected, let me answer this question.

Hello, am I audible, sir?

You are audible.

Yeah. I would just answer the question.

Other income has been exceptional in nature, that's the reason we have presented it separately in our investor presentation on slide number four. The biggest other income came from one of the plants that we did the consolidation in cabins and fabrication in Bangalore.

There we got a profit of 34 crores in the disposal of the land. That's the reason, otherwise there is no as such planning to increase other income.

More or less, it will continue as a casual income coming exceptionally. That's all, because we are more focused on the operational business.

There is no other source of other income. All right.

Sir, we just mentioned that the smart locks production has just started, what sort of EBITDA margins do we see for that segment?

I do believe that, Disha, smart locks business is as appropriate as any other locks business. At this point of time, we do believe that the margins will be probably better because the volumes are smaller.

As the volumes go up, there will be shrinkage in terms of the overall price of the smart locks. At any point of time, as our locks business is, that gives us a margin of 12% to 14%, that's the kind of an EBITDA margin that we consider also in the smart lock business.

All right. Sir, going ahead, just a bit of your comment on the product mix, because we've seen the segment of ADC rise up very sharply, what are the two, three major products that we see dominating the product mix going ahead?

Disha, the way I look at it, we look at ourselves as four basic verticals. There are times when one is kicked up ahead of the others.

You saw casting business grow. In the last year and a half, you have seen that our business of sheet metal has grown significantly and that is on a very, very aggressive path as well, where we've set up new businesses.

From a business only a few years ago which was less than 200 crores, we are now looking at crossing 1,000 crores of the same business in sheet metal. The same aggressiveness has been in die casting.

At this point of time, I think Chirag asked this question and I said that the cabin fabrication is a business which is muted for the moment, but I think going ahead and in the next few years, that could also take an aggressive shape. Let's not forget the main business, which has been the automotive business of locks and mirrors and so on and so forth.

I think with smart locks and with a few other technologies that are in the pipeline, that will have a dramatic impact of growth in the coming years to come. I'm not saying what is happening.

I do believe that each one of these verticals has a strong momentum coming ahead. Some years will see one racing ahead, some years will see the other racing ahead, but our belief is in all these four businesses keeping up to the level of growth that we've anticipated for the entire company, which is like I've said in the past, we want to grow at least double of what the industry is going at.

All right. That's it from my side.

Thank you.

Sundaram-Clayton, as we discussed earlier during the call also, we are expecting the margins to be in the normal die casting, at par with our other die casting business, which runs around a margin of 9% to 10% in between, as-cast. The same margin we are expecting for Sundaram-Clayton going forward.

Yes, that will start coming up from April '26 once we are into our own premises and also we add to new machines that we have set up the entire plant. That's going to come from April '26 only.

Okay. For the overall business, sir, what is the kind of margin trend that we can expect ahead and what will be the growth levers for the same?

Basically, as we promised and we discussed with the market in earlier calls, we want to go up to a margin of 11% in next 2 years of time with a improvement of around 50 bps, 10 bps to 50 bps every year. Unfortunately, quarter one, as we discussed earlier, was not so well for us.

That's the reason in overall half year, the margins have been down. We expect to go around 11% of a healthy margin from operations.

The growth drivers would be all business segments, because sometimes, as sir has just said, some business is up, some are down. That's how it goes like a family, all the business verticals.

If one of the vertical is facing a tough time, other one supports it. Yes, revenue expectations, as we mentioned, that we want all the four business verticals to be a big business verticals with a average EBITDA margin of 11%, and ROCE we intend to achieve 18% pretax in the first phase and then later on followed by 18% post-tax in the coming period of time.

Sir. Just one last question: as you mentioned, Europe the sales were down because of the volatile market, what is the outlook on that?

Basically, yeah, overseas we are working on three different legs: one is increasing the operational efficiency over there, at the same time cutting down the operational cost; second is we are trying to increase the customer base also, from a traditional set of customers, we are moving to new customers also and just trying to tie up them from our existing facilities itself; and the third one is that we are doing a financial re-engineering also in terms of borrowings and other product mix also. These are three set of, the areas where we are concentrating.

Even though the revenues might be in the same range, because till the time we see a final arrangement between the European Union and US markets and other markets, but at least plan is that we should not incur the losses and we turn around to a breakeven in the first phase and go back to our earlier margins in the coming period of time. In overseas, what is important for us to sustain a business, to have a margins in the business, despite the volumes might remain constant if the market conditions doesn't improve, but thing is that the return should come and there should not be any losses in the project.

This is our first and prime task over there. Sir.

By how much time do you think you can move in that direction near breakeven? In Europe, they are following the calendar year as the financial year.

The update that we are getting from the overseas businesses, quarter three will be better compared to quarter two, as you have seen in our presentation also. The quarter two was better than quarter one of the current financial year.

We are expecting our quarter three to be better, followed by quarter four to be a neutral in terms of margins and losses. We expect to be in green.

This is our prime desire. All right.

Thank you for answering my questions. All the best to you, sir.

Thanks. Thank you.

If you see the guidance that we have been giving to the market was that the current year, we would like to something between 9.9% to 10.40% and another 50 bps in FY26-27. Going by that, it is around 10.90% or sub-11.

Since in the current year, the quarter one, as you all know, we have given the reasons also, has not fared fairly well, but yes, for the next year, we intend to be about 10.5%. That's how we are working.

All this three new projects as expected to go live in the full volumes, which happens to be two die casting businesses and one is the cabins, and plus the overseas business going into the old flare, eventually we should go to that margin in the coming period of time. Okay.

For the current financial year, will we be able to hit at least double-digit margins? Our efforts are to a double-digit margin.

At least we close at double-digit margins by March '26. As sir has said in the beginning of the call, the quarter three and four would have a back up of strong demand.

Proportionately, we are working on the same that at least this two quarters run about 10% so that our average margin should land something beyond 10%. That is our prime task.

Let's see how quarter three goes. Everything will be dependent on quarter three, and that time we'll come back to the all investor community how we are going to do in this current financial year.

Okay. From a growth outlook perspective, on a consolidated basis for this year and coming couple of years, do you want to share some outlook there?

In terms of revenue, the volumes, the market is going well. The customer base that we are having in terms of the OEs, they are also performing well.

Keeping their growth in line, I think our growth should continue the guidance that we gave in the beginning of the year that at least 15% on the normal business and rest is the Sundaram guidance also, the additional revenues, I think we should be able to meet that by the end of this year, because quarter two this year has a festive-- 15% normal business and sorry, Sundaram is around 400 crores annual business? Annual is 400 crores, it is 198 for the half year.

We have given up to 15% of the revenue growth in the existing business plus 400 of the Sundaram. That's the reason we are on the track.

I think we should be able because 2,370-something is the 2,360 is the revenue that we have clicked in the half year. We are well on the track, and the quarter two has been good in terms of volumes because of festival also there.

Then there was a GST realignment by the government also, which helped to push the demand. I think three and four should also be good, especially in the fourth quarter with the new models coming in.

The OEs are trying all best to increase the volumes. Let's see how it goes.

Okay. Anything on the capex side and also the debt position and the plans to reduce and all, can you share some numbers?

Sure. On the capex side, in the beginning of the year, we have said that around 300 crores of capex would be there, including the Sundaram one also, and the debt is around 858 in the month of September.

Yes, our working capital requirement has increased, that's the reason that debt has gone up. Earlier, we were having some favorable payment terms from some of the customers, which has been now rolled back to the earlier levels.

It's a part of the business, the part of the arrangement that we already factored. In terms of the debt, I think it should be around 850 to 900-something, keeping into the working capital requirements as the business is going up.

We need to maintain inventories also and the receivables also, the collection period is 45 days, while suppliers in some of the cases is 30 days also or 45 days also. This is how we need to maintain.

Capex around-- You may finish. When you have finished-- Yeah.

Hello? Hello?

Sir, you can-- Can you hear me? I can hear.

Sure. The 300 crores of capex we have planned for this year, including some overseas and remaining for the India.

Debt are you planning to reduce or it continue at this kind of a level? Basically for debt three of the unfinished projects are in the pipeline that we have mentioned, the Sundaram one also we are doing some additional capex of 40 to 50 crores.

Majority of the same will be coming up by the month of March while we shift to our premises. Then there's another die casting coming up in Pune and the cabins and fabrication again in Pune, we have to complete the same.

With this, we will be through with all the capexes in terms of new projects, sir. That's the reason repayment is going continuously in terms of term loans.

If you see term loans, we have already repaid around installment of 45 crores in the first half. The similar will be coming in the next half also.

As I said, the requirement of working capital is going on, so that portion, the break-up of working capital is going up in the overall debt compared to the term borrowing. Working capital is directly dependent on the business, nothing to worry about that.

That's what I can say. Right.

FY27 capex will be more because we have been doing a lot of capex in the last few years, right? Is it going to reduce the capex significantly going forward?

We have done our capex in last three years, there has been huge because you see we had a very negligible presence in die casting and sheet metal, the revenues are also now started coming up from those businesses. As far as those businesses are concerned, I think they are through the same.

Yes, the business expansion, it is a continuous process. The customers are reaching out and we don't have the capacities or the facilities, that obviously the capex will be coming.

Last four years has been a major capex because we did a major expansion in these two of the verticals. Now going forward, we have a presence, we have the facilities.

If something will be coming in, that will be in the sub-range of 40 to 50 crores per project, if something new comes up, that too at the customer requirement with a assured volumes and margin base to us. I think this year we are through with the major capexes, but yes, we are now focusing on increasing our base in our main property, I would say, the automotive business, which is the vision and locking system.

You could see something coming up over there, new over there. With new technologies coming in, we might have to seek a new technology partners and all those sort of investment might come in the coming period of time.

Safety and environmental capexes are also there, which government is putting. All these things, 150 to 200 crores is a normal capex for a industry like us, which includes the environmental norms also, the safety capexes also, the growth capexes also, and there is a replacement, renovation of our old manufacturing facilities also.

This is all.

Just to supplement and clarify, I don't see anything which is happening on the basis of inorganic right now. What will be required will be incremental capex on incremental growth basis.

Right now, with the additions that have been done in capex in the last couple of years, we do have a lot of capacities that will be utilized. In short, there doesn't seem to be any major requirement of capex in the next 12 months at least.

We are well within our framework to grow at the rate at what you've been seeing us grow, without further capex required on a large basis. Like Yashpal ji said, there is always incremental and maintenance capex that is required, but beyond that, nothing.

Thank you. All right.

Thanks. Thank you.

Let me once again thank all the investors who took out time to meet us this morning. I want to thank Emkay, Chirag, Hamshad, who put this entire thing together.

Thank you for your patience, ladies and gentlemen. All I can say is that your company seems to be on a good growth path with a team that's working very, very hard to ensure that our stakeholders are kept happy.

I'm also happy to report that your customers, both new and old, are happy. I'm also happy to report that the quality products that we supply are very well accepted and are looked forward to in terms of new developments of similar parts.

We are also very happy to report that we have a good set of energetic employees who are working also extremely hard to deliver what is required in the market. We are guided by a very good set of a board of directors and our senior leadership teams and management team.

Once again, thank you all and although a little early, let me take this opportunity of wishing each one of you a very, very happy New Year and God bless in every way. Thank you all very much.