Good afternoon everyone and thank you for joining us today. Q1 FY27 is a strong start to the year and gives us further evidence that Shivalik is progressing higher on the value curve.

We are building on our precision materials and process technology base to participate more deeply in higher-value components, integrated assemblies, and application-ready solutions. The objective is to grow revenue and to also improve quality of growth, deepen customer relevance, and increase the value we capture from our engineering capabilities.

This quarter reflects that progress. Consolidated revenue grew 33.4% year-on-year to 182.2 crores, EBITDA increased 35.2% to 43.2 crores, and PAT grew 44.9% to 33 crores.

Sequentially revenue increased 13%, EBITDA 23%, and PAT 26%, giving us a strong operating start to FY27. Importantly, this margin improvement was achieved while employee costs increased as we invested in capacity, people, and capability, giving us confidence that the underlying operating model is strengthening as we scale.

From the quarter, shunts remained the stronger growth engine, with revenue increasing 18.7%, while bimetals grew 7.4%. India delivered broad-based growth across both businesses.

Europe grew strongly, led by shunts, with Americas also showing early improvement in shunts with a 30% growth year-on-year this quarter after a softer FY26. Asia was weaker during the quarter and remains an area where we are focused on rebuilding momentum.

At the consolidated level, growth was supported by a higher contribution from our subsidiary platform. As electrical contacts scale, precious metal content can affect reported revenue and gross margin, we remain focused on EBITDA and cash generation.

I would also like to thank Rajeev for his contribution to Shivalik. We will ensure an orderly finance transition and continuity.

Subsequent to the quarter, receiving consent to operate for Phase 1 is an important milestone in the operationalization of our Pune facility. The approved capacity provides a scalable manufacturing platform for cell connecting systems and support our strategy of increasing participation in value-added components and assemblies.

It represents an important extension of Shivalik's model, bringing together our strengths in material science, precision joining, electronics, and application engineering on a single platform. The next phase will focus on completing customer and process qualifications, establishing repeatable production systems, and scaling in line with program requirements.

Over time, this should enable us to deepen our participation in automotive and electrification applications, while increasing the value we deliver to OEM and Tier 1 customers. We look forward to growing our business in cell connecting systems, busbar assemblies, and PCBA assemblies in line with customer program schedules.

Looking ahead, Q1 positions us well for a positive year. Our priorities remain margin quality, working capital efficiency, cash conversion, and selective capital allocation.

We will continue to grow the core, recover opportunities in key export markets, and execute on our forward integration objectives carefully. In summary, Shivalik is becoming a more integrated, higher value, and more resilient precision components and assemblies platform.

Q1 shows that this strategic progression is beginning to translate into stronger growth and better earnings quality. With that, let's start with the Q&A session.

Thanks, Sumer. Before we begin the Q&A, just a reminder on how to raise your hand to join the question queue.

If you're on your desktop or laptop, look for the reactions button at the bottom of your Zoom window, click on it, then select "raise hand" from the options. Your name should appear in the queue and I'll call on you in order.

If you're on mobile or tablet, tap on the more {dot-dot-dot} button at the bottom right of your screen, then select "raise hand" from the menu. Perfect, we'll start the Q&A session.

Our first question will be from the line of Dhruv Jain. Hi Dhruv, you can go ahead and ask your questions.

Hi. Thanks a lot for this.

Congratulations, guys, for super numbers. I had a couple of questions, right?

You said that Q1 has been pretty strong and incrementally, if I'm not wrong, a lot of busbar revenue has also not come through. Just wanted to get a sense that for FY27, what would your guidance be for the full year in terms of top-line and margins both, and if you could split that into say shunts, contacts, bimetals, and busbars also?

That's my first question. Okay.

Busbars, as and the cell connecting systems are fairly new, they're just minimal addition to the revenue in this quarter and then it's substantially increasing in the current and upcoming quarters. It's a business that, as has actually just begun.

Initially, we were doing some sampling and we were making pilot lots, etc., but now full production has started and a lot of that production has not been a part of this Q1. There has been some revenue addition in this one month or so, of the last month of the quarter, but most of it is going to start reflecting in the current quarter and the upcoming quarters.

Even the current quarter being very, to some extent, quite limited because our real manufacturing, the main manufacturing facility for this actually becomes fully operational only in October. Right now we've got only the first phase running as we've been making clear.

Now coming to the expectation of what we are seeing from our customers and what forecasts we have, we expect that on a Shivalik standalone basis, we expect maybe a 44, 45% revenue coming from bimetal and 54, 55% coming from shunts. With shunts, obviously it's a little bit different from what it used to be, as we've been mentioning that we've converted a lot of our business from ready-to-use strip for resistor manufacturers to final components.

The value there as well as the value added there is consistently increasing. Keeping that in mind, we expect 45, to 45% and a 55% between this.

On a consolidated level, I think we would be more like maybe around 30, 35% of total consolidated revenue would be from somewhere between the 30 to 35% should be from the contacts business, which is the wholly-owned subsidiary, and we expect that from these assemblies, the PCBA assemblies and these busbar assemblies, we expect, in the first year, maybe about a 15, 16% of total revenue coming from that.

This is helpful. I was talking about what's the growth number that you are envisaging in FY27?

We can then do the math around the proportions that you've spoken about, but broadly.

I think proportions is something that probably you need to hear from me, and then you can work the other way around. Anyway, growth, if things go as per what we have in forecasts, etc., of what expectations we have from the customers, we could on a overall revenue basis, be looking at somewhere between that 20 to 30% kind of a number.

It depends on a lot of factors. We're still pretty early on in the financial year.

We are working towards and we have expectations of business in that kind of a range.

Got it. My second question, Sumer, was that I was noticing your largest customer's recent earnings announcement.

It seems that the category that you're present in has seen a significant surge in order book. Does that mean that for the next say one or two years, at least in the shunt resistor side, we should start to see that meaningful recovery that you've been speaking about in the last year, year and a half actually finally starting to come to fruition, and US as a geography starts picking up meaningfully?

I understand you're doing it for the other geographies as well, but it was interesting to look at that number that your key customer reported. So.

Yes, so that's what that key customer has actually given us an expectation for this year, and those numbers look pretty encouraging. The good part is that this resurgence that we are experiencing from that customer is now in a form of a much more higher value-added business as compared to what it was a few years ago.

Not only do we go back to those levels, but we expect to go back to those levels with a much higher value add.

Got it. Any key end markets that you're seeing a lot of traction, at least with respect to that customer, you'd want to call out a couple of qualitative aspects there?

We we, the two areas where we're seeing a lot of growth coming in or a lot of developments happening at a very fast speed because, the market demand is there. One is two-wheeler EVs, and a lot of a lot of developments happening there.

When such developments happen at this with this kind of a demand increase in demand, then then everybody goes into a very fast development mode. We have a lot of pressure on these opportunities, shunts to be used for that, and then as we produce these cell connecting systems and as we scale in that, that demand will continue.

Currently, a lot of that business, a lot of that, those components are imported, but as we get more into that, we'll see a demand. Even for our shunts as of now, as just shunts on their own, because they're all all all these two-wheelers use shunts directly as well.

We're seeing a lot of new developments and a lot of fast developments happening actually in that area. The other other place that we're seeing a consistent growth is smart meters.

When when we talk of shunts, these two both these both these areas we're seeing as an end use case, we're seeing a lot of growth.

Got it. Or

expected growth.

Got it. No, thanks a lot, Sumer.

This is very helpful and all the best.

Thank you, Dhruv.

Thanks, Dhruv. We'll move on to the next question.

We'll take the next question from Nirali Gopani. Hi Nirali, you can go ahead and ask your questions.

Hi. Thank you for the opportunity.

Hi, Sumer. My question is on the revenue for this quarter.

When I look at shunts, is it largely driven by the conversion from strip to high value-added products, and how much of contacts revenue would be silver-led, the pricing-led?

Hi Nirali. Yes, basically, a lot of the increase, and specifically in the value add more than in the revenue itself, because see part of the revenue of even the shunts can be attributed to an increase in material prices.

From let's say, last year to this year, there has been a substantial increase in copper prices, and a lot of the materials, a lot of the cost of raw material that goes into the shunts is copper-driven. It's either directly copper or some copper alloys.

Some part of it has come from there, but still there is an increase beyond that and specially an increase in the value addition that comes from, as you rightly said, from the conversion of strip to parts. Now between the two quarters compared, for example, our strip sales in shunts has come down to nearly 1/3 of what it was last year that same quarter.

Interestingly, that whatever leftover strip quantity, that 1/3 that's left, is actually the higher value-added strip. In strip also we had two, three types of strips that we were supplying, and the lowest value-added ones are converted into parts, which have become automatically higher value add in comparison now, and the leftover strip is actually also a higher value-added strip.

That strip business, if it continues also, it's great for us because that's a higher value-added more tolerances-wise or dimensions-wise, a more complicated size. That's with the shunts, and when we purely look at silver pricing affecting the revenue growth, the answer actually lies if you do a sequential comparison between Q4 last year and Q1.

Between these two quarters, silver as a material, or silver as a bullion price has actually gone down a little bit. Sometimes it's been similar, but it's actually overall gone down.

We've still experienced growth. Now when we compare this quarter to Q1 last year, there you will see that silver is nearly more than double of almost just a little bit over double of what it was last year.

I would say about what you purely see as revenue, about half of that revenue growth can be attributed to silver alone.

Right. Sumer, to put it in simple terms, of this 33% of revenue growth that we see in the quarter, how much of that is sustainable, keeping aside the commodity prices?

I think about what I said earlier, somewhere in this 20 to 25 or, like I said earlier, if we go as per the developments that are happening, we could somewhere be in between the 20 to 30 range.

Fair enough. What would you attribute this increase in the EBITDA margins to?

A lot of that a lot of that comes from, again, from two areas. One one, it is coming from, first of all, even even for a lower growth area like thermostatic bimetals, even there we are seeing an improvement in margins because because we have followed this, higher value-add component strategy to some extent even there.

For example, if we were supplying a thicker or a wider material size to certain customers, we have gone with proposals to supply a finished component or add some more value to our process. We are working on so we the although minimal, but there is still a margin or a or a earnings increase even in the in the low in the lower-margin business segment.

A lot of it comes from from shunts, and because we've switched from those strips, those lower value-added strips to components, a lot of that EBITDA margin increase is coming from there. Yes, that part is sustainable because those parts are here to stay.

In fact, the strip business is probably sometimes less sustainable because a strip can be sourced from, let's say, a competitor. When we have developed a a very high-precision component for for a customer, the chances of that business going away, other than its lifecycle finishing or other than some some kind of a major design change happening, which is very unlikely in a short period of time, that's usually doesn't isn't the case, so that business actually becomes sustainable.

The the vast majority of contribution coming into the EBITDA is coming from a sustainable source. Interestingly, some portion of of profitability also does come from materials because certain, our way of costing is such that certain percentages do come in, but that's a very minimal amount.

What we see is that what you'll see that some margin will increase because of materials going up, but that usually ends up showing when the materials have gone up a lot. With slight increases in materials or slight reductions in materials, you will not see a huge difference, but materials have been a little bit, different than its their usual trajectory in the last one and a half, two years.

How things have been, specially in cases of silver, etc. Definitely a a sustainable majority of If If it was the other way around and a large portion of our our profitability was been attributed to materials going up, we would be really worried.

We a large portion is since it's coming from a sustainable source, we feel confident.

Nirali, I request you to join the follow-up queue by raising your hand again. We'll certainly take more questions from you if we have time.

Perfect, thanks Nirali. We'll go on to the next participant asking questions: Deepan Narayanan.

Hi Deepan, you can go ahead and ask your questions.

Good afternoon everyone. Thanks a lot for the opportunity.

Firstly, one of our large US-based client has delivered very strong growth in this AI-related application with their MOSFET division. Do we expect more volume growth from their higher growth from MOSFET, or we supply only to their resistor division?

We only supply to their resistor division, but we expect we expect some increase in You see, our our product is actually something where the customer can give us very black-and-white numbers because they know that what are the expected volumes of the final product where our product is going. We we we do get in sort of a year year-wise, or at least for this current year, we know that how many components are expected to be shipped out to them for this and because we actually know where that product is being used in the end.

It's also, we can also do a sort of an analysis on our own to see where that trajectory is going. Now the volume that we see from that same customer coming in is for specifically for two or three automotive giants, which I'm not at the liberty to talk about because of the NDAs in place, but so we we we have an idea, and they have they have given us an idea as to what these volumes would be, and and so it's easier to estimate.

Does that their MOSFET division also use some kind of shunts in their products? See,

shunts are it's a general product. There are many different types of shunts.

What we manufacture are very specific EB-welded strip shunts, which is a very, very small portion of the many hundreds or thousands of different types of shunts that exist. Although we don't have any such development with them happening at this point, we have some other developments in areas, but they're only linked to their resistor unit, or the resistor portion of their business.

Understood, sir. On the bimetal side, what is our expectation or when do we expect the growth to be turnaround in this segment, because shunts has been doing well for some time, now bimetal has been struggling across regions.

Do we expect the growth to return in '27?

Yes. Interestingly, just in the last few days actually, from our existing customers, we are getting a lot of information about increase in quantities, expected quantities, and a lot of that I think is coming from real estate as well as from infrastructure development.

For the first time in actually quite a few quarters now, like four or five quarters, we are actually getting this kind of a feedback from the customers and we are actually seeing it in this current quarter that bimetal is for the first time seeing an uptake in terms of not value or anything, but specifically in terms of quantities. We expect and we do find that information from our customers very accurate because 70 to 80% of thermostatic bimetal consumption is kind of evenly split between four or five large players.

It's fairly easy to get the right amount of data about what's going on, and this, by the way, all this increase or expected increase that I'm talking about is specifically more towards the Indian market. For the first time, we're seeing an uptake or an expected uptake, including for this month, for the domestic market.

We do have a few developments in place that could add decent volumes for thermostatic bimetal for some export opportunities, which I don't know if you've been following, which had sort of taken a bit of a back seat during the tariffs issue with the US. A lot of those, I'm happy to say that a lot of those developments have restarted and some with some customers.

By the way, those customers are all our existing customers, with them we are working on a couple of larger volume opportunities. Now those, of course, are not something that we foresee are going to add a lot of revenue in the coming, let's say, one or two quarters, but let's say slightly longer term, like four quarters or so, or a year from now, we should see added revenue coming from those developments as well.

If we see a substantial Indian growth, and then by two or three or four quarters we start seeing an increase in those developments, which are in the middle of testing, etc., right now, we should see bimetals going in a growth direction as well, finally.

Thanks a lot, and all the best for future.

Thank you.

Thanks, Deepan. Our next question will be from the line of Rushit Shukla.

Hi Rushit, you can go ahead and ask your questions.

Hi. Thank you for the opportunity.

I just wanted to ask questions regarding the new side of the business, that is busbar and the cell system that we are manufacturing. I just wanted to know what is the runway, and currently how much of orders that we have received from how many OEMs, and also what is the guidance that management gives for FY27 as a whole?

This product actually, you see, we don't we we develop it sometimes for certain types with the OEMs, but our customer actually is the supplier to the OEM. Again, we have, the final user of the first the first product that we started in this cell contacting system division is is is for a specific customer end user, which again, due to NDA-related issues, I I cannot take the name of that customer, but it's through the supplier to that customer, and that actually the NDA is with that company.

It's it's I can I can tell you that it's a it's a two-wheeler major two-wheeler OEM, two-wheeler manufacturing OEM that has gone in a very big way into EV two-wheelers, and that same company that has developed this the final battery pack for the the end user is also doing it for three or four major other brands as well. Although it started with that one OEM for us, but we are currently working with another two or three designs, and the steady production as well as sale is right now only for one one OEM.

By the end of this year, we should, those other developments should start converting into business as well as, it's sort of the two things are going hand in hand. Our plant needs to be 100% ready to be able to get more of that business and right now the capacity or the first phase that we talk about in Pune for which we have the CTO or the consent to operate, that is only specifically can cater only to that one particular model.

In any case, even if we had more developments, we will we would not have been able to add more revenue from it before the end of the year. Developments are are are in place.

In this, we expect the the kind of business that we're looking at or the value of that business that we can gain from the from the this this Pune facility for this particular thing, is somewhere in the range of 300 to 400 crores in two is in about three years' time, out of which we see about maybe about 10 to 15% revenue coming in year one, maybe about, 150 to 200 crores in year two and then 300 onwards thereafter. These numbers obviously are subject to change a lot because this is also a product that India as a country is still, absorbing.

It's not caught. For example, to give you some context, if if an OEM tells us they're planning to sell 10,000 two-wheelers of a certain model and and, the product is not accepted as well, and it turns out to be only 5,000, that changes everything, because if you follow the two-wheeler EV market, it's a product that people are still in the process of gaining confidence.

It's a lot better than where it was two or three years ago where people were still not accepting this as a product. It's a lot better the situation now, and thanks to these some other things that have been recently happening, the push has happened actually faster now, the the the adopting of two-wheelers in EV two-wheelers is is speeding up.

Subject to those things, this is the kind of revenue we could expect. We also feel that that once we once our facility is running, which has a fairly enough extra room for expansion, we can also look at certain other assemblies which can be used alongside these products along with some some some specialization of ours.

For example, we supply shunts for the BMS BMS as well for these all of these two-wheelers. We have an opportunity there if from the same facility we start supplying, like a like a integrated assembly that adds even more revenue.

I think this this Pune facility is one step with the revenue that I mentioned, but then looking at these other opportunities that could also be serviced from there, that could add, more revenue. Then this is a sort of a three-year, four-year, five-year plan.

Yeah. Thanks for such a detailed response.

What we have understood till now internally is that this product can improve both battery life, battery quality, and also the range of the electric two-wheeler. This could be a breakthrough for entire industry.

We expect that we are starting with one giant OEM, but if the industry itself is growing at such a high pace, and we can accommodate another two, three OEMs and obviously, naturally, if the battery life and the kilometer capacity is increased, then other OEMs will come. How do we plan in terms of capacity expansion, funding requirements, and also handling so much of demand when the products hit the market?

If you look a little deeper into this market, a lot of EV two-wheelers are being manufactured as we speak, right? The numbers are already there.

A lot of those, even if you speak of four-wheelers, this applies to that as well. Now, a lot of these existing products in the market import a lot of their major battery components, including the battery pack itself.

What's happening now, as a lot of that supply chain for import is already in place, and to switch from that overnight or to switch from that very quickly is not something that a lot of OEMs can do. For example, they are still establishing their product in the market because EVs themselves are a sort of a new thing for a lot of people, first-time buyers especially.

They're not going to immediately, even if there's a substantial cost saving, they're not going to immediately switch a supplier, even if they say, okay, fine, Shivalik can give us this assembly or that assembly, they're not going to immediately do that. Why?

Because the import supply chain is already in place. Where this comes in is when there's a design change or there is something specific that's, like you mentioned, when, say, with a new technology, range is going up, or battery life is going up.

In this case, the cell contacting system, which uses our EB-welded strip, in this case, the maximum benefit that a user can take from such an assembly is actually not the two things, not to that extent the two things that you mentioned, whereas it's actually more on the safety side. If you see why our product has a possibility of a very high-volume consumption in the future is because safety was one of the biggest concerns of people buying two-wheeler EVs in India, because there were a lot of early reports of fires and all these things that were related to safety issues.

I think there, even an import supply chain can be bypassed to be able to design a product that's more suited to Indian conditions, which has been reporting these kind of safety issues. I think our biggest selling point becomes more related to safety.

Thanks, Sumer. Rushit, you can raise your hand again to join the follow-up queue.

What we'll do is move on to the next participant. Our next participant asking a question is Naushad Chaudhary.

Hi Naushad, you can go ahead and ask your question.

Hi. Thanks for the opportunity.

Hope I'm audible.

Yes Naushad, go ahead.

Yeah. Congratulations, Sumer, and the team for very good set of number.

Two question. First on the busbar side, you indicated the potential of this product could be 3, 400 crore rupees of business.

Now assuming if we have to reach there, how much incremental investment would require Pune facility to achieve that number?

Hi Naushad. The capex requirement for this entire project is somewhere in the ballpark of about 20 to 25 crores.

Again, we clarified this because somehow it doesn't sound right that with that kind of investment, how do you generate that revenue. A lot of the high-capex process, or the high-capex part of this whole product that's there is already there with us, let's say in Solan, right?

That capex is already done. Standalone, the incremental capex of Pune doesn't fully justify or doesn't paint the right picture.

Yes, since that is the case, the Pune project is estimated in this phase. In this phase where we're talking about a possibility of reaching that, thereafter, when we talk about making more assemblies or we talk about making more different types of finished integrated assemblies, there the number could change, but as of now, the exact specific product that we're targeting and the exact capacity that we're targeting is expected to be a capex of about this much.

Interesting. Second one on the new any new development, if I remember, we have been indicating our interest into precision electronics component, which we evaluate and get into, any development on that side or any other new initiative which can help growth beyond '28, '29?

Yes, there are two areas which are where we are working with potential technology partner or JV kind of a setup. We're still in talks with them as to we're still in the process part of it.

The two areas narrowed down to a very, very specialized material for some electronic applications, but it is a metallurgical specialized material that is used massively in most electronic applications and very few companies in the world make it. We are in the again, I apologize, but I can't give very specific details of it because it's still in talks, and the technology partner that we're talking to comes under a very strict NDA.

I can say it's a specialized material. It's a very interesting thing for Shivalik because it's got a metallurgical specialization to that product and but supplies to a vast huge market size within the electronic space.

That is exactly the kind of product for future growth or future addition that qualifies for, let's say, a company like Shivalik. There are two areas of expertise that we feel we are in in precision components for electronics and automotive.

We already have all of those systems in place to cater to that, but our core actually lies in metalworking. This becomes actually a very, very good product for us to consider, and hopefully, by the time we have our next earnings call, we should have a lot more concrete information to share on that development.

Similarly, there's another project which is related to automotive fuses. Now automotive fuses have also for the longest time been a commodity product, but it's also very, very few manufacturers make those automotive fuses.

Then beyond the automotive fuses that we see in cars, which we generally talk about, there are some other fuses that are in individual equipment within an automotive fuse box, and those are the ones that some of those designs meet our joining capability ethos. We are also, again, with some fuse manufacturers, we are in talks as to which one we could materialize.

Now both these developments could result in some kind of a partnership or some kind of a technology partnership or even a some kind of a smaller size or a some kind of an acquisition to buy that technology and bring it here. We are exploring those kind of options.

To answer your question, yes, these developments are going on. Other than this, there are quite a few others, but I would not mention them right now because those are not in any advanced stages, but these two kind of are closer to something coming out of it.

This is where we are working on. I think I've mentioned this a few times, one very useful step that we took in Shivalik was to segregate people or a team of persons who look at these kind of new technologies and We totally understand that our business with whatever best we can do with it growth-wise has limited scope in terms of scalability, and until Shivalik goes into these kind of new product verticals, the real growth or the real scalability only comes then.

We don't want to do it at the cost of whatever best we can do with what we have, we have to work alongside each other and not let the two things come in the way of one another.

Thanks, Sumer, and thanks, Naushad. You can keep your hand raised for the follow-up queue, and we'll certainly take more questions if we have time in this session.

Our next question will be from the line of Bhavya Nahar. Hi Bhavya, you can go ahead and ask your questions.

Hi, can you hear me?

Yes, go ahead please.

Hi, and congratulations on the results. I just had one question on shunts.

Could you please, if possible, exactly indicate what proportion of the growth was driven by value-added products versus the underlying commodity increase?

We were reverse working on that. The strip business basically has, like I mentioned, strip business has come down to about 1/3 of what it used to be, and all of the growth that you see right now in the shunts has basically come from two things: one is the material cost and a bigger number comes from the value addition.

If we were to see that out of the overall growth, roughly about 70, 75% of that value addition growth has come from converting to value-added parts rather than from the materials. The rest of it has come as a contribution from material commodity prices.

Thank you.

Thanks, Bhavya. The next line of questions will be from Vivek Seth.

Hi Vivek, you can go ahead and unmute your line and ask your questions.

Thank you so much for the opportunity and congratulations on the good set of numbers. My query is now that since we'll be generating a lot of cash in future and majorly the capex is done, any plans for the future with respect to inorganic growth by means of acquisition?

Yes. Hi, yeah, hi Vivek.

Just one question ago, this is what we were discussing that when I mentioned that we are closely and not interfered by the day-to-day business as well as these developments within our business, we have a separate group of people who are working constantly on these new developments. We have identified two or three opportunities which could result in a either a greenfield project or a technology partnership.

Those details are being worked out, but we are very closely working towards materializing at least one or two of those projects soon and announcing them because we know for two reasons: one is, of course, the cash that we are generating, we want to deploy it to a good business opportunity that matches the ethos that we've so far worked on, and that as well as we also know that, like I mentioned, real scalability for our business will come from adding more such verticals. These two reasons make it very, very important for us to materialize some of these new opportunities without of course jumping into something that just for the sake of it.

We want to be conservative in the right way, but also we want to focus on these new opportunities with a growth mindset.

One more quick question. How much portion of the revenue is going towards the switchgear portion of the sales?

About 45%, 40% or so through bimetal. In fact, by the way, contacts business mostly caters also about 60% of the contacts revenue goes into switchgear, about 30 plus 40, 42, 42.

Just a sec. It's about Including Yeah, it's about 300, 350, 300 let's say about 45 to 50% somewhere between the 45 to 50% of total revenue.

Switchgear-related. Thank you so much.

Thanks, Vivek. We'll take the next question from Raj Agrawal.

Hi Raj, you can go ahead and unmute your line and ask your questions.

Hello.

Go ahead Raj.

Thank you so much for the opportunity. Sir, I had two questions.

First, a previous participant already asked this question. Since our busbar product offers a much better safety solution to the customer, I understand that it will not happen immediately, but do you expect that eventually, maybe five, seven-year journey, every two-wheeler auto company will be using our solution or an EBW solution in their vehicles, battery solution makes?

Yes, for certain applications, definitely. Now when you still look at where the answer actually lies in this, even a slight improvement in whether say it's safety or performance, when we add suppose an EB-welded component which adds this additional dimension of safety, let's say, the overall cost of the product or the final product doesn't drastically go up.

Or let's say the overall cost of this product has let's say even a battery pack, let alone the final two-wheeler, but even a battery pack within the two-wheeler does not go up drastically. Now, for example, if we were to compare two types of assemblies, one with an EB-welded and one without the EB-welded, there the total price difference between those two maybe in a few hundred it may be a few hundred out of an assembly that's say 3 or 4,000 rupees?

It is eventually going into a product which is going to be 25 to 40,000 rupees, the pack itself, or the pack and all of its components. When you look at it from that point of view, let's say in a 25 to 40,000, a 100 to 3, let's say 100 to 300 range, or say an average of 200, is really not going to have an impact for somebody to decide.

Since price is not the deciding factor, then there is an absolute possibility that whenever such an improvement happens in our product, we have an opportunity to access all of those products. At some point, I mentioned in the past that some of these solutions are already imported as it is, and sometimes it's difficult to change even for an OEM that supply chain because of the way it works.

Some of them have to wait for the lifecycle to end. Yes, eventually, as you rightly mentioned, and that's actually the right way to look at it, in that seven to eight-year period, that is absolutely doable and possible.

By then, if we have specialized ourselves in making various types of other components, for example, even the PCB assembly for the BMS itself, even that becomes an added opportunity and every two-wheeler possibly could have that.

That was super helpful, Sumer sir. My second question, sir, this busbar as well as our EBW capability also translates into areas like these areas that are just coming to India: aerospace, satellites, data centers.

Do we have any relevance in these areas? Are we working in these areas?

Any updates on that side if you can?

You see, anything that requires current sensing measurement to be accurately done, and one big area over there is energy storage. Renewable energy without energy storage it doesn't exist.

Again, let me go a step backwards. You see, in most of where our product goes, a lot of that equipment itself was always imported, and that applies to even when you look at a relay in a smart meter, or you look at a battery pack of a two-wheeler, or you look at a battery storage application, you would see that a lot of it is something Shivalik cannot or could not in the past, to some extent, target because our usage was in the product in the middle.

That is something that was until very recently and even in large quantities even today, imported. As we see more of that ecosystem in India being created, for Shivalik's product, don't look at the final product alone because final product alone will never paint the right picture.

A very good example for that is to study the smart meter business. When smart meter manufacturing in India was really going up, Shivalik's sales in smart meters was not that much, or it was a small penetration, and we used to always tell people who would ask us that why your shunt business is not growing if smart meters are growing, that's because our part goes into a relay and the relay was still being imported.

Even though there was a huge growth in smart meters, it was not coming to us because of the relay. Now apply that same logic to a lot of these other applications.

When we talk about all these two-wheelers and these busbars and even these EB-welded designs, all of that is very new not because the two-wheelers themselves are new. Two-wheeler now we are seeing growth, but electric two-wheelers have been around for a long time actually, if you see.

Why we were not supplying to those volumes is because the ecosystem to make these components in between, like the ecosystem to make these packs in between, etc., didn't exist in India. Sir,

just a small thing here. How long do you think that this ecosystem gets made, and how much time will this industries take to

It's already happening. See, it's already happening.

Now that is why our business has a potential now because we see this change happening. Now, it sort of has a domino effect, right?

For example, one major OEM has developed it in India through its supplier. It's automatic that, one by one, everybody gets into that.

Nobody wants to import these huge battery packs and nobody wants to import these huge components especially with four-wheelers. Now let's go a step ahead and we haven't spoken much about it, but if you look at four-wheelers, it's the same story.

Right now, let's say a large OEM like a Maruti Suzuki or Mahindra or Tata, for a lot of their models, they still import packs. That means that entire system comes from there, not ready to be used and assembled.

They don't want to do that because they want to have local suppliers making all of those things. It's hard to say when it will happen, but the thing is it's happening.

It takes time for a country to change this assembly mindset to a complete ecosystem manufacturing, and I think a lot of people will play a role in it. It's not just a few auto manufacturers, it's the government, it's the schemes by the government, it's the ease of doing business.

There are a lot of moving parts that have to move together. Good news is that it's happening.

Now at what pace it happens is something that even we can't say.

Thanks, Sumer. Thanks, Raj, for your questions.

You can keep your hand raised to join the follow-up queue. We'll take the next question from Dhaval Shah.

Hi Dhaval, you can go ahead and ask your question.

Hi Sumer and team. Good evening to all and keep it up.

Broadly my question is answered, but just again touching a bit on the electric vehicle and the way we're seeing bookings and the demand today. When you were drawing your business plan six, eight months ago versus today, what has changed for the company seeing the current demand for electric vehicles in India?

Maybe you can also touch upon, even globally the trend is picking up really strong, like Chinese OEMs are conquering European, American markets. What has changed for Shivalik with this entire EV demand across two-wheelers and passenger vehicles?

You've spoken a lot about two-wheelers, how Shivalik benefits, but if you can also touch upon how Shivalik benefits with greater four-wheeler demand? Thank you.

Hi Dhaval. The thing is that a lot of the increased volume that we are seeing from some of our existing customers for shunts, they're not in assembly forms, they're just the metal components, just the welded and then stamped components.

Sumer, just one moment. Dhaval, do you mind muting yourself while Sumer is speaking?

There's some background noise. Thanks.

Go ahead, Sumer. Sorry about that.

A lot of that is coming actually, interestingly, from larger Chinese OEMs. Why that is happening?

Because again, it's sort of an extension of what I was mentioning earlier. Where our part goes or what we manufacture really, which is very important, but fairly small in the value part of it in the four-wheeler is something that it's not just decided on the basis of price as to whether somebody would buy that from Shivalik or not.

It usually comes down to accuracy, and when it comes down to accuracy, then it becomes even more important as to which supplier is going to supply that component. What we have seen is that with one of our larger resistor customers, that they have recently patented certain designs where they have a far greater accuracy than they had originally in those resistors.

Not only are, let's say, some of the American large OEMs buying now from there, even some of the larger Chinese ones are buying from there, because a Chinese EV can enter or conquer the entire market for selling a product that should be $60,000 for $20,000, but they're still going to buy that same $5 shunt or a $7 shunt as long as it's providing that accuracy. To come down from 60,000 to a 20,000 EV, they don't necessarily need to look at cutting down $2 in the shunt.

There the deciding factor actually becomes the accuracy, and so now this recent patent development, this is actually a very recent thing. When I say recent, it's about a year old.

This was all happening at a time where the whole world was asking us, "Oh, all your US business has gone away," or all this large business. Within ourselves, we knew that we are going into a much larger thing eventually.

Of course, we were not at the liberty to talk about it at the time, but yeah, these things do happen, things get modified over time, and technology changes. The opportunity for four-wheelers is a lot, but when it comes to fully-made assemblies, there we need to add that to what we are developing, let's say in Pune, what we're doing for two-wheelers, we also have a plan to introduce those kind of assemblies for four-wheelers, starting with the Indian market.

That is the other four-wheeler area that we are working on. One is through our large customer who eventually makes value-added products out of those resistors, a large chunk of that business will remain as it is.

Although some of those will eventually get into a bit of forward integration as well, because that's what the customer is asking us to do, but that's again a development. Then the CCS assemblies that we talk about for two-wheelers, there's an opportunity for certain four-wheeler designs as well for us to introduce.

We are in talks with the manufacturer for the battery packs alongside the OEMs to look at those opportunities, assess them, where all we can push our product of an EB-welded design. By the way, we can always go ahead and enter these assemblies as a non-EB-welded design to begin with, and then eventually go into a future development with EB welding, we have that flexibility as well.

Alongside the two-wheelers, because that is what is converted into business first, we speak about it more, and we typically try not to talk too much about business that has not actually started,

but

alongside, we are working a lot on the four-wheeler CCS as well as four-wheeler assemblies.

Regarding the Chinese OEMs, were they procuring domestically this shunt, the resistor product which your customer is now supplying to them, or how was it before?

It's very interesting because, again, it doesn't work like that. For example, let's say there are four suppliers for a similar type of shunt, it's not always a necessity.

Let's say somebody sitting in China doesn't necessarily have to buy it from a Chinese source. He will say that, "Okay, look, this is where I'm getting the maximum accuracy for my design, and I will source it from there."

Now to give you a real-life example, there are two of our two customers who produce BMSs in China, but they're not Chinese companies, but they don't source the shunt or the resistor from China, they buy it from us in India. Similarly, there are probably some shunt applications wherein the design works better from another supplier.

Let's say even if somebody is based in India, but their design works, the way their design is, that accuracy they are achieving more with, let's say, a German competitor of ours, they will continue to buy from there because of that accuracy. Now it's not like we cannot reach that accuracy, but they don't necessarily need to change it or risk changing it right now.

The decision to buy it from whether it's from a local source or not from a local source is actually in these shunt resistors doesn't exist, because again, it comes down to the total percentage value of the product. It's accuracy that matters more, and it's not like you can say that this supplier is more accurate than the other.

It could be for a particular design, it could be for a particular application of that design, there's far too many variables to know, and there's very few suppliers for it in the first place. It's a very, very different ecosystem to try and understand.

It works very different from a traditional business. I don't know if I was able to make myself clear, but whatever best I could do.

Thanks, Sumer. No, that's great.

Thanks, Dhaval. I think you can write to us for your follow-ups.

We'll take one more question. We'll go ahead with Gokul Handa.

Hi Gokul, you can go ahead and ask your question.

Hi. Just want to understand, I think now that we're seeing revival in the US shunts business, what kind of concentration would we have with our largest customer, because that has been significant in the past?

Just want to understand that, and are we able to take steps to diversify away from that? Yeah.

We've had a very healthy trend of going from the maximum exposure we ever had to one customer was at one point somewhere between the 35 to 40% mark, which is obviously sleepless nights at the time. Now, even with this growth coming back and our diversification is a lot more healthier, even this year, for example, once those numbers the way they are supposed to be going and the way that we expect them to go, even then in that maximum case scenario also, it will not cross a 17, 18% level, and so we come back to those original levels of what at one point of time used to constitute of 20 37, 38%, but it will still remain well below 20%.

Got it. One last thing, could you also help me with the number on your capacity utilization?

For shunts, it's a little bit difficult to say because shunts involve not just shunts, for all of our products actually, they involve a lot of processes. Usually what we do is we calculate our capacity on the basis of the most capex-intensive process.

Because, of course, if we want to increase capacity, we don't necessarily always have to get all of those processes because there's eight or 10 different other processes involved. If we just simply, for example, if we look at shunts, we would translate that to a welding capacity.

If we look at purely our welding capacity, right now we are at about 65, 70 it's about 70% of our welding capacity, and we, in a short, say, two to three months kind of a window, we can always quickly add capacity because we always keep spare ready to build capacity in terms of spare parts, etc., to add that to increase the speed or to increase an additional smaller line. On a very short notice, it can be increased.

Whereas for thermostatic bimetal, it's a different story, because increasing that capacity actually takes a lot of time. It's also very highly capex-intensive, also it takes many years to get that process right.

In case of bimetal, we are only at about 40, 45% of our capacity, but we had to put in that larger capacity earlier because there is no other way around it. We knew even at the time that we'll only be able to over a few years reach some vast majority portion of it.

Capacity utilization, again, like some of the other things I mentioned, does not work similar to a lot of other businesses. It's a little bit complex.

Got it. Thank you.

Thanks, Gokul, and thanks, Sumer. I see there's a few participants still in the follow-up queue, please do write to me at [email protected] and I'll make sure the team sets up some meetings for you so you get all your questions answered to your satisfaction.

Before we wrap up, just a big thank you to you all for being part of Shivalik's growth journey and for attending this call. I'll now hand over to Sumer for closing remarks.

Thank you, Shankhini. Quarter 1 gives us confidence that Shivalik is moving in the right direction, with stronger value capture, improving earnings quality, and a broader platform for growth.

As we progress through FY27, our focus will remain on disciplined execution, cash conversion, and scaling our higher-value components and assembly capabilities. Thank you for joining us today and being a part of Shivalik's growth journey.

Thanks, Sumer. Thanks to everybody for spending your afternoon with us today.

You may now disconnect your lines. Cheers.