Ladies and gentlemen, good day and welcome to Gabriel India Limited Q2 FY '26 earnings conference call. This conference call may contain forward-looking statements about the company that are based on the beliefs, opinions, and expectations of the company as on date of this call.

These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Atul Jaggi, Managing Director from Gabriel India Limited.

Thank you and over to you, sir.

Thank you. Thank you so much.

Good morning, everyone. A warm welcome to everybody present on the call.

Joining me today we have Mr. Goyal, our Group CEO; Mohit, our CFO; Mr.

Nilesh Jain, our Company Secretary; and SGA, our Investor Relations Advisor. We have uploaded our results and investor presentation for the quarter ended 30th September 2025 on the stock exchange and on the company's website.

I hope each one of you had a chance to go through the same. The company entered into a joint venture with SK Enmove Co., Ltd., a leading Korean corporation, to undertake the business of engineering, manufacturing, and marketing of comprehensive range of automotive and industrial lubricants, including engine oils, e-fluids, shock absorber oils, greases, and thermal management fluids.

With Gabriel India holding a 49% stake in the new joint venture, this partnership marks a strategic step towards expanding our presence into newer product segments that complement our core business and support the evolving need of sustainable mobility. This joint venture is in line with our ambition to transition from a suspension-centric company to a diversified and innovation-driven mobility solutions provider.

Additionally, I would like to share an update on the revised joint venture agreement between Gabriel India and Inalfa Roof Systems. The earlier proposal, which had a shareholding of 49% by Gabriel India Limited and 51% by Inalfa, was subject to PN3 approval.

However, the application for PN3 approval filed by Inalfa was rejected by the Ministry of Heavy Industries, Government of India, in the year 2024. Following this, both parties have agreed to revise the proposed shareholding structure to 65% by Gabriel India and 35% by Inalfa, subject to fresh PN3 approval.

A revised joint venture agreement reflecting this structure will be installed in due course, and its execution and implementation will proceed only after obtaining the necessary regulatory approvals. Now let me start with providing a brief overview of the company's operations and key highlights in the automotive industry.

In quarter 2 FY '26, our standalone operating revenue grew by 15.4% year-on-year, reaching to ₹1,066 crores, supported by higher volume and strong sales performance in all our segments, with the two/three-wheeler growing by 15%, passenger vehicle segment growing by 13%, and commercial vehicle/railway division growing by 35% year-on-year. EBITDA grew by 19% YoY, reaching ₹96 crores, with margin improving from 8.7% to 9%.

This improvement in margins is attributable to higher volumes and the continued impact of our operational excellence initiative under the CORE 90 program. In the quarter gone by, Inalfa Gabriel Sunroof Systems Private Limited reported revenues from operations of ₹114 crores and EBITDA margins at 16.5%.

The sunroof business continues to experience strong demand fueled by rising volumes and new vehicle launches. On a consolidated basis, our quarterly revenue stood at ₹1,180 crores, showcasing a growth of 15% on a YoY basis, and for the half year, revenues stood at ₹2,279 crores, reflecting a growth of 15.5% as compared to H1 FY '25.

EBITDA for the quarter stood at ₹116 crores, reflecting growth of 18% on a YoY basis, with margin standing at 9.8%, and for the H1 FY '26, EBITDA stood at ₹225 crores, marking a growth of 19% on a year-on-year basis, with margin standing at 9.9%. PBT for the quarter was ₹91 crores, showing 11% growth year-on-year, and for the half year, our PBT stood at ₹172 crores, marking a notable growth of 9%.

Quickly coming to the industry highlights for the quarter 2 FY '26, the automobile industry delivered a healthy performance, growing by 9.5% YoY, with volumes reaching 8.8 million units. This was supported by steady domestic demand and strong export growth, particularly for Africa, Latin America, and Middle East.

The early part of September saw some softness as customers awaited clarity on GST 2.0, but demand rebounded sharply once the uncertainty lifted. Overall, Q2 FY '26 closed on a positive note.

As we enter the second half of the fiscal year, we see this demand momentum continuing with a positive consumer sentiment. Coming to the two-wheeler, the two-wheeler segment delivered a 10% year-on-year growth, reaching 6.8 million units, supported by very good rural demand and revised GST structure.

Scooters led with 12% growth, while motorcycles growth was 10%. Export was really good; it touched 1.3 million units, rising 25% year-on-year.

Overall, the segment remains a key driver for the industry recovery. Three-wheeler, again, the segment continues to post a healthy growth, 21% year-on-year growth in this particular quarter.

This was driven by easier financing and rising adoption of last-mile mobility solutions. Export in three-wheelers reached 1.23 lakh units, up by 51% on a YoY basis.

On the passenger vehicle side, Q2 FY '26, the passenger vehicle segment demonstrated a gradual recovery, with volumes rising by 2.4% YoY, reaching 1.3 million units. The quarter started on a softer note, but gained traction towards the end, supported by the GST 2.0 rate reduction, improving customer sentiment, and the onset of the festive season.

A key highlight for the quarter was the sharp rebound in exports. Export shipments rose to 2.4 lakh units, marking a 23% year-on-year increase.

On the CV side, the commercial vehicle this quarter delivered a healthy 9.4% YoY growth, with sales reaching approximately 2.6 lakh units. The growth was 10.1% in the MHCV segment and while the LCV segment grew by 9%.

Exports also grew by 22%, reaching to 0.24 lakh units. Quickly on the EV side, the electric vehicle segment recorded a strong YoY growth of 13%, with volumes now reaching 5.8 lakh units.

This is being driven by expanding product portfolio across the segment and improving charging infrastructure, showing a shift in the consumer preference towards cleaner and more cost-efficient solutions. Looking ahead, the Indian automotive industry enters the second half of FY '26 on a strong footing, supported by festive momentum, stable macroeconomic conditions, and the positive impact of GST 2.0.

On that note, I come to the end of my opening remarks. I now request the moderator to begin the Q&A session.

Over to you.

Thank you very much. We will now begin the question and answer session.

Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.

Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

We take the first question from the line of Jay Kale from Elara Securities. Please proceed.

Thank you for taking my question and good morning. My first question is on SK Enmove.

If you could just outline some of the details of the transaction in terms of what is the size of revenues that you are expecting initially, when could we start seeing this, and also as the SK Group has many products globally, is there any thought process of eventually localizing some of these products or getting those products over here? If you can just elaborate a little bit on this transaction and your outlook on this.

Thank you, Jay, for the question. We have our Group CEO, Mr.

Goyal. Sir, if you are there, you can give your perspective.

As you have seen probably on the press note also and whatever social media information was available, they are in the different product line, but a business which we have entered into a joint venture with SK Group, it is for the lubricants which Mr. Jaggi already covered in his initial briefing.

That is what our initial joint venture with SK Group, and we have not discussed anything about any other products so far. Let us restrict our discussion with respect to lubricants business only.

From the business point of view, I think we made a business plan and we expect this company to grow. It's a highly competitive market, it is a big market, again.

It is a very, very big market, there is a lot of scope to put our business as one of the player in the market, and we expect to grow this business. Based on our business plan, whatever we have made, our aim is that it's ₹500 crores business in next 5 to 6 years time.

Okay, ₹500 crores in the next 5 to 6 years

time. Understood.

This will largely be in the replacement market business, right? Aftermarket, is it fair to assume that this would fetch higher margins than the current company average margin?

Of course our idea is to not have a different margin. Of course, it is an initial period, initial period will start with a maybe 1 or 2 years with a slightly negative number, but, of course, the margin will gradually go up, actually.

That is what we have seen with any business will take time to grow, and it is not only replacement market, it is also a OE market business, basically.

Understood. Understood.

The second question is on your reported numbers. If we see your margin profile, while it has been healthy above 9% on a consol basis on a consistent basis, but last couple of quarters maybe it's just kind of flattering out despite you seeing strong traction on revenue side on a quarter-on-quarter basis.

Just wanted to pick your thoughts on how are you seeing the pulls and pushes on the margin side and what should happen going forward for this to further move up?

Maybe Jay, I'll take this question. As I think we discussed even in the last call also, with the MMAS acquisition, I had mentioned earlier that even in this quarter now we have realized a full quarter sale coming from MMAS, but, yes, the margins there, as discussed earlier, have been under stress where we shared that we are looking at a positive PBT by the end of the year.

Definitely I think a little bit of impact in pulling down the overall margins is coming from there, but there's a clear plan which is available to sort of break even and then take the margins to a similar level as the overall Gabriel number. Yes, that impact is definitely coming in the last quarter also, in this quarter also.

Understood. That's around ₹50-₹60 crores revenues on a quarterly run-rate basis?

A little less. A little less than that.

Okay. Just on your market share on two-wheelers and passenger vehicle suspension side, while we see that two-wheelers suspension market share is pretty steady at 30%, 32% since last many quarters, passenger vehicles if you could just highlight, how are you seeing the market, there has been some plateauing out on reduction in market share that we've seen.

How are you seeing the competitive pressures over there?

See, again, maybe I'll speak about the new businesses here for both the segments. On the passenger car side, as you rightly said, I think the market share has been hovering around this number, but in this last quarter, we have been able to secure three new platforms, all coming from Maruti.

We have just launched one model with Maruti Suzuki, Victoris. With this business acquisitions, we are now looking at improving the market share.

By next year, we are looking at another model is coming to SOP, and then in the next further 2 years another two, three models coming into SOP. This is all secured business.

We can easily expect a 4% to 5% increase in the market share in the PC side also, starting from the next year. This is one.

Even on the two-wheeler side also, I think the market share has been growing steadily. I have one good news to share that, again there also we have secured a couple of good businesses.

One of them with Yamaha for the inverted front forks, upside-down front forks, which will come into production by the end of next year. There also we are expecting to see a slight improvement there.

Understood. Just a last couple of questions.

One is on your EV two-wheeler market share as well. How are you seeing that evolve?

Earlier used to be 100% share of business in most of the new models except Bajaj, but now, with the market settling down, how are you seeing the split of business between various players incrementally and where do you see this market share settling? Of course, it's at very elevated levels currently.

The last one is on export side. It's currently 2%, 3% of your revenues.

Now with this restructuring etc. taking place, reorganization, how are you seeing export opportunities?

Are you seeing green shoots over there to increase that share?

Yeah. On the EV side, Jay, again, I think while the market share has been historically high because we got that first-mover advantage working with most of the EV players, we continue to enjoy a healthy market share there, but with all the competition around in long run, continuing to enjoy a 65%, 70% market share in such a competitive industry may not be possible, but we would still like to continue to be a dominant player there.

As of now, we have not lost any platform. The new businesses continue to flow, like the recent River model, which is basically branded for Yamaha, which was just launched, showcased, again has a Gabriel suspension in it.

The latest launches of Ultraviolette has the Gabriel suspension, and so, but the target is to continue to have a more than 50% share in this particular segment, we continue to put our efforts towards that. Even the last launch of TVS, Orbiter, has a Gabriel suspension.

We have maintained that we'll continue to target more than 50% share, and I think the actions are aligned with that. Your second question was on the exports.

Yes, exports I think while we have always been targeting new businesses towards the export side, and as I shared I think couple of calls back, we have sort of added some resources also in the organization, put up a structure to start working on the exports. We have not got any significant success.

There are one or two discussions at an advanced stage, one on the commercial vehicle side, one on the PC side, which is going on, but, yes, definitely I think I hope something will materialize from there. Just to add to that, the efforts on the e-bike and the solar side also will support our export journey.

Overall, maybe I think another year or so we may look at a better number once these two products also come into regular production, I would say.

Great. Thanks, thanks and all the best and I'll fall back in the queue.

Thank you, Jay. Thank you.

We take the next question from the line of Viraj from SIMPL. Please proceed.

Thanks for the opportunity. Congratulations on a good set of numbers.

I just have a couple of questions. First is, if you can give sales, EBITDA, PAT of the four group companies for H1 and the similar trend for last year?

Any broad mix you can give in terms of end-sector exposure like CV, PV? That is one.

Hello? Yeah.

Viraj,

maybe just to share with you, I think the presentation that we had shared has all the numbers, the distribution of the top line, bottom line of all these companies, the four companies that I think what you are mentioning is basically the part of the restructuring. I presume you are talking about the Dana, Henkel, ANKEMCO, and ACYM numbers.

They are all part of the presentation that was uploaded. All the business distribution segment-wise also was shared earlier.

Maybe any specific query is there.

Any H1 numbers you can share, sir?

This year we will not be able because we are still going through all the regulatory approvals, we'll not be able to share the latest numbers for that, but as we had mentioned, I think all the four entities continue to grow, continue to do very well, in line with what we had discussed in the previous call post the 30th June approvals. So...

Okay. Nothing has changed there.

They continue to sort of outperform the market. They continue to do really well.

Two, three questions on that. See, if you look at the management fee and the royalty, especially in the three JVs, post the transfer of ownership to Gabriel, the management fee or royalty, does that also get transferred to Gabriel or how will the distribution be like?

The same applies for the sunroof business post the shareholding structure we have arrived at. That is one, if you can give some more clarity how will that be distributed and will that also flow to Gabriel.

That is one.

We have noted, Viraj, you can ask your other question also.

Second is on the Dana JV. See, if you look at Dana play in India, they have multiple entities.

I think there are three, four different entities, and if you look at the portfolio globally, they have a wide side of products other than drive line, drive train products. What will be the part of this JV and what will not?

They recently also set up this Dana India CV, which is a 100% subsidiary, which will also cater to axles, drive shafts to the CV sector. How will that affect the JV?

Manoj,

you want to answer this?

Mr. Goyal, you can answer.

Okay. One I'll take the first question on the Dana side.

Dana, overall, let's not confuse with our joint venture, which is part of restructuring with Gabriel. That is not changing anything with respect to that joint venture.

That continues the way it has been continuing, and it is growing the way it has been growing at a market. As Atul mentioned, all companies are part of the restructuring.

They are maintaining the way they have been performing in past, in the same way, actually, basically. Dana has reduced its presence in India.

They have sold off-highway business. Accordingly, whatever business they left out, there's nothing new which they started.

They were having this business already, which was 100% for Dana, so that continues. It means our JV has not changed anything.

It is continuing. Our JV is for 100% for the drive shaft business, and for axle side, we are for up to say small commercial vehicle axle business.

Drive shaft for entire range, whether it is car or it is SUV or it is commercial vehicle, any kind of a commercial vehicle, or trailer or tractor, anything, actually. Whatever Dana is having axle business, it is already there for last 15 years, which is primarily in a segment which is not with joint venture, actually.

Nothing has changed. In fact, Dana has reduced its size in India, actually.

Hello?

Viraj.

On the management fee, royalty post the ownership transfer to Gabriel, that will also get transferred or how will the distribution be like?

Gabriel is a manufacturing company. Gabriel is a business.

Nothing is changing for the Gabriel. ANAND has a separate wing for providing services.

That continues to provide services to Gabriel or to its entire companies, whether they are part of the restructuring or otherwise, actually. Nothing is changing for Gabriel as such, basically.

Last query. See, for the Dana business JV, they have a very sizeable exports to US.

Post this tariff, which is there, how does it affect their business? Who bears the tariff and how does it affect the relatively competitive position?

Because most of the exports are to the group entities globally.

Nothing has impacted tariff, actually. We continue to do same, it means that any tariff impact, partially it is applicable, partially it is not applicable.

First 25% was applicable, other 25% was not applicable. On exports Dana, we are exporting back to Dana, Dana is in turn recovering Dana Global I am saying, actually Dana Global is recovering from its customer.

Does the incrementally competitive position, does it affect in terms of new business pipeline, given the tariffs which is there?

Far, it is not impacted. In fact, we continue to do well, our business line is growing as well, basically.

We have not seen any impact on the new business also.

Last question. See, next 2 to 3 years focus for us will largely be on consolidating these four entities and the two JVs which we announced, or you think there is enough pipeline in terms of new product additions?

How should we understand next 2, 3 years focus for us?

I think initially earlier also we made a statement and we continue to maintain the same statement that Gabriel is a growth feature for the ANAND Group, and that strategy continues, basically.

Viraj, just to add to it, I think you have seen that even post the 30th June sort of restructuring discussion that we had, I think there have been two two more sort of entities that have been created now. The growth journey continues.

Basis we continue to explore opportunities, and whenever the right comes, I think we'll go and take the next step. So...

Is there a pipeline in place for...

While not possible to share anything there, but I think at any time we continue to explore multiple opportunities. Whenever it fits into our sort of strategy, into our aspiration, into our direction, we take the next step.

So...

Sure, I'll come back in queue. Thank you very much.

Thank you. Before we proceed with the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant.

We take the next question from the line of Aditya Khetan from SMIFS Institutional Equities. Please proceed.

Thank you, sir, for the opportunity. Sir, I have a couple of questions.

Sir, with this restructuring into our Inalfa, they are getting a lower shareholding compared to Gabriel. What the initial discussion with them, what is suggesting?

Are we going to compensate them with the higher royalty or higher payout? And...

Aditya,

Aditya, maybe I think we're not able to hear your voice clearly. Either you come closer to the mic or if you're using a speaker, maybe use a handset, please.

Hello? Am I audible,

sir? Much better.

Yes, sir. Sir, my question was onto the Inalfa restructuring, they are getting a lower shareholding compared to Gabriel, and since they were the technology provider, what are your initial discussion with them suggesting?

Regarding? The lower shareholding?

Hello? Mr.

Aditya?

Aditya, the question is discussions related to the lower shareholding?

Sir, the question is regarding the restructuring which is happening right now. What is the discussions with them suggesting?

The discussion is exactly what we just shared. Obviously, when we are looking at, the PN3 initially was not approved, I think subsequent to that, there have been continuous discussions between both the organizations, and the current structure that we just shared with a 65-35 has been sort of approved by the Inalfa board also and has been approved by the Gabriel board also.

Every discussion has been in line with what we have just shared with them. Post the approval of both the boards, it has been shared by us.

Sir, the H1 capex of ₹108 crores, if you can share what would be the full-year capex and divided into segments like your second phase of sunroof and other businesses?

The H1 capex had MMAS asset acquisition that was included also. That was the major number.

I think we anticipate about 150-odd crores as we've been doing regularly. There are some upgradation of asset, maybe we might hit 180-odd crores of capex this year.

Okay. Sir,

our phase 1 of sunroof has been operating at full utilization level. This phase 2 would be largely catering to the Kia models?

Can you repeat the last line? Phase 2 would be catering to?

Catering to newer models like Kia and other players?

I think while we have already shared that we had installed additional capacity, in the sunroof business, but I think the current Kia model unfortunately continues to not do so well. That is why even you have been seeing a sort of I would say a flatter trajectory in the overall sales of Inalfa.

I think the capacity is available there for any future model coming in, but the current trend looks to continue even for the next year also.

Sir. Got it.

Thank you.

Thank you. We take the next question from the line of Shubham Sehgal from SIMPL.

Please proceed.

Hello, good morning.

Mr. Shubham, your voice is not audible, it is breaking.

Could you please fix that?

Hello?

Much better.

Is it better?

Much better, Shubham.

Yeah. My first question was, our railway business grew by almost 57% in H1.

Could you give some more color and is sustainable?

Yeah. See, I think one, the overall number is both CV and railways put together.

Okay? The growth that you see is basically in the CVR side.

It is CV and railways put together. The railways, yes, the growth has been quite good, but the top line is generally very small contributor there.

It basically depends upon the number of coaches that are planned to be added per year. Basis that, yeah, we continue to enjoy a good market share there.

It is mostly a distributed business, a tender-based business, but we continue to enjoy a good share especially on the Vande Bharat coaches and the Train 18 coaches, which are the latest one. With focus of the government continuing on the railways, we believe that I think this trend should continue.

It may not be at that level. Again, it will purely depend upon the plan for the next year and the plan for the years ahead.

Yes, we anticipate a continued growth in this segment.

Got it. My next question was that our two JVs, the Inalfa and SK Enmove one, firstly, when would the commercialization begin for both of them?

In our SK Enmove JV, we are into lubricating and function fluids. I just wanted to know, does it in any way conflict with our LIQUI MOLY agreement?

Okay. Manoj, you want to answer?

You can answer, sir.

LIQUI MOLY is no more an arrangement, actually. That was already finished almost 3 years back.

There's no conflict because of that.

Yeah.

The commercialization for the two JVs?

I think FY '27... Atul, go ahead.

FY '27 is when we are expecting, and obviously, something will start, because for Dana we need to set up a sort of a manufacturing location. We are expecting that to happen by somewhere I think the second half of the next year, and post that it will start.

For both JVs we can expect the commercialization to start in FY '27?

See, significant numbers would start flowing in by, say, start of '28, kind of a number, but something will, say, start at the end of '27. We can practically assume that in FY '28, I think we will start seeing some reasonable numbers coming

in. Got it.

Just one last question from my side. In our other top entity, ANKEMCO, we have a major aftermarket product which we are selling in India.

What would be the export scale-up for this? Would we be eligible to sell these products in global aftermarkets as well?

Could you just provide some color?

This question is related to ANKEMCO?

Yes.

ANKEMCO. ANKEMCO, there is no sort of restriction on selling anything for exports.

Yes, the business is a mix of OE, OES, and aftermarket business, and there's no restriction to sort of move out and start the supply on both. Just

to clear, we would be eligible to sell those products in the global aftermarkets as

well? We can.

The only thing is a product like DEF, the diesel exhaust fluid, now the transportation because it is a water-based product. It's a very competitive product.

Transportation plays a very, very important role in that. While theoretically there's no stoppage on that, but, yes, you have to be closer to the sort of usage point.

That is why in this particular case, for this product, you see smaller plants, but much closer to the customer locations and distributed across the country. Because this cost plays a very important role.

On the coolant and the other PU or the PVC kind of products, there's no restriction. We can do any export.

Okay. All right.

Thank you. I will join back in the queue.

Thank you. We take the next question from the line of Amit Hiranandani from SMIFS Capital.

Please proceed.

Thanks for the opportunity. Sir, my questions were related to the sunroof business.

Wanted to understand how's the traction at present in the sunroof business, any new order wins from key clients? Also, now the capacity is ramped up to around 400,000 units annually, what is the present utilization level?

Okay. Thank you, Amit.

On the sunroof, I'll give you a little update now in terms of the current capacity utilization. I think, as I said earlier, because the Kia Seltos and the Alcazar have not sort of performed up to the desired level, while Kia is now planning some updates, some exports for that particular model.

We'll have to see how they pan out in the second half of the year or the start of next year. The capacity utilization continues to be exactly at the same level, and we have practically sort of idle capacity available.

Almost, I would say, the second line is not utilized currently because of these two models not doing so well. Currently we are at a much lesser utilization.

In terms of new businesses, I think we have got a few RFQs, three additional RFQs which we are working on now, both with local customers and the other customers, the Japanese customers there. One challenge that we have is that the current Creta business, that is the main business there, we have not been able to win the new platform that will come into the production in 2027.

It becomes all the more important for us to sort of work on the new RFQs and win certain new businesses to fill up the gap that may come in the second half of 2027, assuming the model starts as per the timelines there. We are expecting sort of a flatter trajectory for the next couple of years, and we need to fill the pipeline moving forward.

So...

Right. Sir, you have some ₹1,000-crore target revenue, right, by FY '30?

I think looking at the current situation, I think we may not be able to achieve that number by 2030. While, as I said, I think there are multiple RFQs in the pipeline under discussion, but I think a more realistic number is that the aspiration continues to be the same, but I think we may see a year or a 2-year delay into achieving that number.

We are reworking those numbers, but maybe that 2030 number of 1,000 may not happen in 2030. There can be a delay of 1 or 2 years there.

In this sunroof business?

Just a follow-up, just last question.

Amit, if you asked something after I spoke, we could not hear you.

Sorry, I was just saying that any kind of margin pressure you are seeing here in the sunroof business?

Not on the current products that are there, okay, because some work on the localization, etc., is also happening. Not in the immediate term, but, yes, obviously with multiple players now competing for the sunroof business, with many new players getting added, yes, any new business would come at a competitive price.

That we will have to wait and watch to see once we get the new businesses, but nothing on the current.

Mr. Amit, are you on the line?

Can you please unmute yourself? We'll proceed with the next question.

The next question is from the line of Sugandh Patil from EyeSight FinTrade Private Limited. Please proceed.

Good afternoon to the team. I had two forward-looking questions.

You have given good guidance about margins and everything. I want to understand, looking beyond this quarter's strong numbers, what is the bigger plan for Gabriel as the auto industry shifts towards electrification and a premium suspension module and global supply chain integration?

How are you planning to build a lasting edge for the company, beyond just segment growth or joint ventures? Is there something deeper planned in IT tech platforms or any innovation pipeline, something that gives you the edge over your competitors?

Thank you. No, thank you for a question.

There's a lot of background noise.

I will just mute myself, 1 second.

Thank you. Thank you so much, Sugandh.

Yes, I'll come to technology. On the premium models, yes, we see a clear the market shift towards premiumization.

While the overall numbers are increasing, the market is moving towards premiumization and so is sort of our product portfolio also moving towards that. Because I just also shared a sale example of two-wheeler, I think the market is clearly moving towards the inverted front forks, the upside-down front forks, monoshocks.

There the products are far superior in terms of performance. Obviously, the realization is also much better there.

The market is moving towards that. Gabriel has also been significantly moving towards that.

As I said, we recently won another order from Yamaha for one of the platforms of inverted front forks. Our new business acquisitions with the other customers including TVS, being the largest customer for us, continues there, and there are multiple discussions going on for that.

Now, especially on the technology piece, as I think most of you are aware that 3 years back we had set up a tech center in Europe. We have been investing a significant amount of money towards the technology upgradation, whether it is the next generation products on the passive side or whether they're on the electronic suspension side.

I'm also happy to share that today we are working on multiple POCs with customers, both on the two-wheeler side as on the passenger car side, on these technologies that I have shared, and there's a clear tech roadmap available there. We have been filing continuous patents on the new technologies that we have been developing.

As I said, whether on the passive side, also on the active side there. That journey continues.

The investment continues. We have been continuously strengthening the team in Europe, both in Europe and India, especially the focus on being ready for the future, also in India, but also for the global market.

I hope I have been able to answer. If any specific point is there, I can...

No,

thanks for the thing. My second question to Mr.

Mohit is, again, a forward-looking one. When costs rise, whether it's raw materials, logistics, or compliance issues, how do you make sure the margins stay steady without putting pressure on the profits?

Is there any system that you have built or you're putting to place that quietly helps you keep the profits up, even when things are getting sometimes out of control or something? Yes, I'd like to hear your viewpoint.

Thank you.

I think you have asked this question to Mohit, I'll allow Mohit to answer, but before that, I'll just add two points and then Mohit would add on to it. See, one is on the compliance part of it.

On the compliance part It has nothing to do with the profitability per se. Compliance is something which is sacrosanct, which is mandatory.

It has to happen. Okay?

That is one. Second, I think we have been mentioning about the CORE 90 program where we look at all the aspects of the cost, and Obviously we continue to face various challenges.

We continue to find some solutions to sort of handle those challenge and continue our journey. Rest, I think Mohit can add.

I think you have already covered compliance is a no negotiations and this is something which is being talked about in the town halls, in the induction program, in the very periodic reviews which we have. That is a very essential part of doing business within Gabriel.

In terms of the profitability and of course, a couple of things which we see, we talked about MMAS turnaround strategy, and the program which we have is CORE 90. There I think all the Gabriel leadership participates in terms of taking the certain targets, factoring in the contingencies which might land during the way, and then track the progress on periodic basis.

That has been the key in terms of sustaining the margins over the period of time, despite having now putting up a significant money in MMAS, then also the kind of restructuring we are doing also needs certain expenses, but we are ensuring that through a very sustainable, structured CORE 90 program we should be able to meet the expectations of the investors.

Like any business, some expected, some unexpected challenges keep coming. Like if you take an example of Maharashtra, suddenly there's a lot of pressure on the power tariff, which for a short term would be seen in a lot of variable costs, because now the banking is not allowed for the renewable energy.

Automatically the tariffs go up, your electricity bills go up. Then through the CORE 90 program, you come up with certain more ideas and initiatives to sort of bring this back to a normal thing.

I think there's a good systematic approach that is available in the organization.

Atul, I have to sign off now, yeah?

Manoj. You can continue.

No worries. Thank you so much.

Thank you for the guidance and I wish the team best of luck for Q3. Thank you.

Thank you. Thank you.

Thank you. We take the next question from the line of Suraj Chheda from 3P Investment Managers.

Please proceed.

Thanks for the opportunity. Am I audible?

Yeah. Yes, Suraj.

Sure. My question is on the new Creta platform which you mentioned, right?

What are the timelines for this? Is it second half of FY '27 or FY '28?

This is '20 FY '27-'28. The second half of...

Okay, 2H of FY '28.

Yes, FY '28, yeah.

Okay. This will be a 100% share of business for competition or how does it work in...?

There are two variants to it. One is the EV variant and second is the ICE variant.

We continue on the EV variant, but we lost the ICE variant of this. Now, EV numbers as of now are not as strong as the ICE variants.

Let us see how it pans out in the next couple of years.

Understood.

Yeah.

What is the key rationale for OEMs who switch, because you have very strong existing supplier for them. Is there pricing a key rationale for them, if you can highlight some color on those?

It's very very difficult to say, because in lot of cases sometimes the decisions happen more looking at the global businesses. Sometimes the decision happens at a very local level.

Sometimes it can be only competitiveness, sometimes it is a combination of multiple other things there. Very very difficult to pinpoint exactly what happens, but again case-to-case basis it may vary.

Understood. Are you close to a breakthrough with any Japanese OEMs for sunroof business?

Give some colors in terms of over next 2, 3 years, are you expecting any good new high-volume models in terms of your sunroof business?

No, definitely. As I said, I think there are multiple RFQs that are there.

We have also made a sort of a separate team to work on the new business acquisition to create a business pipeline for this business. Definitely I think we expect to fill up.

Now, when it happens, which is the first customer that happens, we will have to wait and watch whether it is the Indian customer or Japanese customer or any other customer, but we'll keep sharing the updates on a quarterly basis.

Sure, sure. The second question was on your standalone margin, right?

Before MMAS acquisition you were targeting a double-digit margin, say, what 10%, right? I understand that with integration of MMAS the margin profile has come off.

What is the realistic target for you, say, by FY '28 in terms of standalone margin, any ballpark range which you can give, maybe somewhere between 9% to 9.5% or you still hold onto the 10% target for you over next 2, 3 years? Now,

see, again, as we always have said that the aspiration, the target has been to go to a double-digit margin. We continue the journey towards that.

On and off, some challenges would come. JVs sometimes needed for the growth of the organization, because with MMAS obviously we had some customers, we had capacities, we had a new product there.

As we mentioned on it, the target is to sort of make it to a positive profitability by the end of the year. Looking at the next couple of years, there's no change in the target that we have set for ourselves.

Understood, yeah. Thank you so much.

Really appreciate your candid conversation with the investors.

Thank you. Thank you, Suraj.

Thank you.

Thank you. Ladies and gentlemen, due to time constraints, that was the last question for the day, and would now like to hand the conference over to Mr.

Atul Jaggi for closing comments. Over to you, sir.

Thank you. Thank you.

I take this opportunity to thank everyone for joining on the call. I hope we've been able to address all your queries.

For any further information, kindly get in touch with any of us or our strategic growth advisors, our IR advisors. Thank you so much.

Thank you. On behalf of Gabriel India Limited, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.