Thank you, Sanya. Good evening, ladies and gentlemen, and a warm welcome.

Today, we have with us Mr. Arvind Chandra, Whole-time Director and CEO, and Mr.

Mahender Chhabra, Chief Financial Officer. A detailed presentation on the business and financial performance is available on company's website and on the websites of the stock exchanges.

We will begin with Mr. Chandra providing a business update, followed by Mr.

Chhabra covering the financial results. We expect the updates to take around 15 minutes, after which we will open the floor for a Q&A session of about 45 minutes.

Before we proceed, I would like to draw your attention to the disclaimers included in our presentation. With that, I now hand over to Arvind.

Thank you, Himanshu, and good evening, everyone, and thank you for joining us for Tenneco Clean Air India's Q1 FY 2027 earnings call. We started FY 2027 on a strong footing, driven by disciplined execution, continued market share gains, and increasing adoption of our technology-led solutions across both our Advanced Ride Technologies and Clean Air and Powertrain businesses.

Despite a quarter marked by significant commodity inflation, geopolitical disruptions, and the additional costs associated with operating as a newly listed public company, we delivered healthy growth while sustaining strong profitability. For the quarter, value added revenue grew 18.4% year-on-year to INR 13,816 million, outperforming growth of our served addressable market.

Revenue from operations increased 20.2% year-over-year to INR 15,448 million. EBITDA grew 7.9% year-on-year to INR 2,469 million, and we delivered an EBITDA margin of 17.9% on value added revenue.

Profit after tax stood at INR 1,652 million. Now, PAT grew similar to EBITDA growth if you exclude a one-time benefit recorded in the corresponding quarter last year where we sold our Motocare business and other one-off incomes.

If you exclude Motocare, our PAT growth is similar to EBITDA growth. I want to be very clear on that.

Beyond financial performance, I am particularly pleased with the continuous progress we're making in gaining market share across our core businesses. Our commercial vehicle Clean Air solutions business increased value market share from 57 to 58% in FY 2026, while our passenger vehicle shock absorbers and struts business expanded market share from 52 to 55% of the Indian market.

In off-highway Clean Air solutions, we maintained our strong leadership position with a market share of 68%. These gains reflect our technology leadership, customer relationships, and relentless focus on execution.

In Advanced Ride Technologies, the momentum behind our proprietary DCX Da Vinci platform continues to strengthen like never before. During the quarter, we secured multiple new application wins across existing customers while also adding four new customers to the conventional and DCX platforms.

Since its introduction, DCX has continued to redefine ride performance expectations in the Indian market while maintaining the affordability and robustness required for local operating conditions. Building on this momentum, we introduced DCX32, the latest addition to the DCX family specifically targeting smaller A and B segment vehicles and significantly expanding our addressable market opportunity.

We also successfully completed fitment and performance benchmarking of our mechanical adaptive roll damping, or MARD, technology with a leading domestic OEM. Importantly, this innovation was developed and validated entirely in India, further reinforcing our local engineering capabilities and commitment to technology leadership.

This type of local engineering and innovation will continue in the future. Within our Clean Air and Powertrain business, we continue to strengthen customer partnerships through multiple strategic program nominations spanning ignition systems, hot-end and cold-end aftertreatment solutions, and other powertrain applications.

One of the notable achievements during the quarter was securing a spark plug order from one of India's largest passenger vehicle OEMs. This win represents a strong entry into a new whitespace opportunity and demonstrates our ability to leverage longstanding customer relationships to expand our footprint.

Additional wins included a new passenger vehicle exhaust program with a leading domestic OEM, a cold-end assembly program for a global OEM CNG platform, and an upcoming emissions aftertreatment program for a leading domestic commercial vehicle manufacturer. These program awards continue to broaden our growth pipeline and reinforce our position as a trusted technology partner for our customers.

We're also making encouraging progress in export markets. During the quarter, our Advanced Ride Technologies business secured its maiden order from a leading European all-terrain vehicle manufacturer, opening a new customer segment and geography for us.

Additionally, our Powertrain business won a heat shield order from Tenneco America, demonstrating the global competitiveness of our Indian operations. These export wins support our long-term ambition of expanding exports and deepening our participation in global supply chains.

Another highlight of the quarter was the recognition we received from our customers and industry peers. We were honored with the Innovation and Performance Award from Mahindra, the Technology and Innovation Award from Daimler India Commercial Vehicles, and the Ride Performance 2026 Award from The Economic Times.

These recognitions validate the strength of our engineering capabilities, operational excellence, and customer-centric culture. As we look ahead, the underlying drivers of our growth remain intact.

We continue to benefit from increasing content per vehicle, strong program execution, technology differentiation, market share expansion, and a growing customer base. Our investments in Advanced Ride Technologies, alternative fuel enabling solutions, and next-generation mobility applications position us well for future opportunities while maintaining relevance across evolving powertrain technologies.

While external market conditions remain dynamic, including commodity volatility and geopolitical uncertainty, we remain confident in our ability to navigate these challenges through the disciplined application of our P3 operating model, commercial excellence, and operational rigor. Most importantly, we remain focused on creating sustainable long-term value for all our stakeholders through profitable growth, technology leadership, and strong governance.

With that said, I will now hand you over to our Chief Financial Officer, Mahender Chhabra, who will take you through the financial performance in greater detail. Thank you very much.

Thank you, Arvind, and good evening, everyone, once again. Let me take you through our financial performance for the first quarter of FY 2027.

As always, we use value added revenue, or VAR, as our primary performance metric, as it excludes pass-through substrate costs and provides the most meaningful view of the underlying operating performance and profitability of the business. We started the year with a strong growth performance despite a challenging external environment.

Revenue from operations increased 20.2% year-on-year to INR 15,448 million, while VAR grew 18.4% to INR 13,816 million. This growth was driven by higher production volumes, new program launches, increasing content per vehicle, and continued market share gains across our core businesses.

Importantly, our value growth continued to outpace the growth of our served addressable market, demonstrating both the strength of our customer relationships and the benefits of our diversified portfolio. Looking at our business segments, Clean Air and Powertrain Solutions delivered VAR of INR 6,626 million, representing growth of 9.6% year-on-year.

Advanced Ride Technologies continued its strong momentum and delivered VAR of 7,190 million, growing 27.9% year-on-year. The ART business remains a key growth driver, supported by increasing adoption of advanced suspension technologies, new customer additions, and expanding application of the DCX platform.

From a profitability perspective, EBITDA increased 7.9% year-on-year to INR 2,469 million. EBITDA margin stood at 17.9% of VAR.

While margins were impacted by significant commodity inflation, rupee depreciation, geopolitical supply chain disruptions, and incremental costs associated with operating as a listed public company, we were able to sustain strong profitability through disciplined execution, productivity initiatives, rigorous cost management, and commercial actions. Our customer recoveries and factory productivity amounted to 60 bps, already reflected in the EBITDA margin.

Our operating performance continues to be supported by Tenneco's global P3 framework, which remains deeply embedded across our operations. Through this operating system, we continue to drive continuous improvement across safety, quality, delivery, inventory management, and cost competitiveness.

The ability of our teams to execute with consistency and discipline has enabled us to navigate a period of elevated external headwinds while maintaining healthy margins and operational stability. Profit after tax for the year stood at INR 1,652 million, with a PAT margin of 12% on VAR.

It is important to note that PAT grew similar to EBITDA growth, excluding a one-time benefit recorded in the corresponding quarter last year, which was from selling our Motocare business and other one-off incomes. From a return perspective, our annualized ROCE continues to remain very strong, demonstrating our continued focus on capital efficiency and disciplined allocation of resources.

At the same time, we remain committed to investing in future growth opportunities, including previously announced capacity expansion projects that will support our growing order book and customer requirements over the coming years. Another important area of focus has been strengthening the governance and compliance framework expected of a publicly listed company.

We continue to enhance processes, internal controls, risk management practices, statutory compliance systems, and internal control mechanisms. These initiatives are intended to build a robust governance platform that supports sustainable long-term growth while meeting the expectations of all the stakeholders.

To summarize, we have delivered a strong start to FY 2027 with double-digit revenue growth, continued market outperformance, resilient profitability, and disciplined financial execution, despite significant external cost pressures. Our diversified business model, strong balance sheet, high capital efficiency, and focus on operational excellence position us well as we move through the remaining part of the year.

With that, we will now open the floor for questions. Thank you.

Thank you, Mahender. We request participants to kindly limit questions to two at a time.

If you have additional questions, please rejoin the queue. I now request Sanya to commence the Q&A session.

Thank you for the opportunity, and congrats on strong YoY top-line growth. My first question is on the value added EBITDA margin decline, which is around 170 bps YoY and 43 bps QoQ.

Which segment of yours, Clean Air or suspension, witnessed the higher decline, right? I believe in Clean Air, the input cost is more of a pass-through, and so this was because of only suspension business, or how the delta is between both of these segments?

Thanks.

Yeah. Hi, Ravi.

Thanks for that question. As a practice that we have agreed, we generally do not disclose the margins at a BU level.

We look at the overall margins, and as far as the costs are concerned, for components, the indexed components like steel and all, we have back-to-back arrangement with the customers. There could be a time lag by a quarter or so, and for non-indexed, we have been kind of falling up with the customers.

We have been able to recover certain amounts, and for the remaining part, the discussions are in progress.

I can just add to that. I think see, year-over-year, we were not a public company last year, now we're a public company, and obviously, the costs of running with a public company, entire setting up a full leadership team and all the things that are needed for good governance, right, that adds cost.

From a Q1 of last year to Q1 of this year, obviously, you'll see additional costs. The other one is just the geopolitics and the Mideast war that has, to some extent, impacted everybody in the supplier community, because of crude oil, LPG, CNG, plastics, rubber, and so on.

Some of these are not indexed, right? Like steel is indexed back-to-back with our OEMs, but some of these are not indexed.

Again, we've been able to partially recover some of these. I must say that's team has done a fantastic job, our EBITDA percentages have been maintained.

That year-over-year delta that you see mainly comes to these two. It's moving from a private to a public company, and secondly, the commodity escalation that happened in the last quarter because of the Mideast war.

Got it. Secondly, on the order book.

Since we have added four customers in suspension business and multiple wins in Clean Air, what is the growth in terms of your order book? Like last time, it was around 12,400 crore.

What is the growth? I just wanted to understand.

I know you don't share it on quarterly basis, but just to look at the directionally. Last time you had said for two years, it will be mid-teen kind of growth to achieve the order book.

Is that improved late teen or something, or how to look at it? Thanks.

Thanks, Ravi. Obviously, we cannot share specific, we have not that would be a forward-looking statement.

I think let's let's put it simply, right? What we said the last time from to where we are today, there's no change, right?

Obviously, we are very excited about the fact that, this Da Vinci technology is is completely disrupting the market, right? We are In fact, for us, it's more about how do you execute when you win so many programs?

One, the pilot program at our our lead Indian OEM customer, but winning more programs, winning more applications within the same customer, as well as picking up four new, completely different customers, and all of them very prestigious and growing. We're very excited about this the the rate at which we're acquiring new business with new technology, right?

Obviously, with new technology, hope hopefully, a margin situation will also go in the right direction, right? I cannot give you a number.

Order book we decided that because, the thing with order book is that there's no steady order book, right? Some quarters it goes really high, other quarters it's a little bit low.

To kind of even out the peaks and the troughs, we decided that we would report order book every half year, right? H1 at the end of the second quarter, we'll report order book, and then again, at the end of the full year, we'll report a second order book.

If you can just be patient for a few more months, you'll have the H1 numbers, well. It's, it's good.

That's that's the best way I can say it without sounding too positive or or too negative.

Perfect. Thank you.

Thank you, Ravi.

Hi, sir. Thank you for the opportunity.

I just wanted to understand why is the growth in the Clean Air business at let's say 10% when the industry is growing at mid-to-high teens for the quarter? That's my first question.

Sure. I think a very good question.

Obviously, we knew that this question would come up. Remember that our Clean Air and Powertrain Solutions that they address the whole market, right?

We are in passenger vehicles, we're in commercial vehicles, off-highway, and so on. We're we're not in EV, right?

An an electric vehicle does not get an exhaust system, obviously, right? From the served addressable market, you have to subtract the EV part of it, right?

From a 16% market served addressable market, you have to remove the EV part. Then also don't forget that we've we are not present in the in the passenger vehicle one of the leading Japanese OEMs, we're not present present at all.

That kind of removes us from participating in in the growth that they were having. In the recent quarter, quarter-over-quarter, because of GST, this particular customer, leading Japanese OEM player, we because we didn't participate and they grew by a very, very strong double-digit, we couldn't get the benefit of that, right?

Minus So, total served market minus EV minus this particular customer is where we end up. If you subtract that and compare us our growth to this, let's call it apples-to-apples served market, then we're actually growing because we've had some gains with one of our German truck customers, as well as a leading passenger vehicle OEM.

That's the best way I can describe it. Now, having said that, the good news is, and I've said that in prior quarters as well, we have with one entry into this passenger vehicle OEM that we did not have business for the longest of time, and we're entering through CAFE 3, and we're waiting for them to announce when their engine will be launched.

We're expecting that to be maybe '28, '29-ish. Based on that, you will start seeing our entry into that white space.

Then once once that happens, then our market share in the passenger vehicle side will also grow. That on the truck commercial vehicle side, we have very high market share, right?

We're at like 58%, and also on off-highway, we have like 60 60-plus percent, right? We're very strong players in commercial vehicles and off-highway.

With this entry in the FY '28, '29 period, we will start also making an entry on the passenger vehicle side. Hope that answers your question.

Yeah. Could you just give us the growth for the industry after doing all the deductions which you suggested?

I think our served addressable market is about a 16% level roughly. From there, I think the EV part Again, I'm just high-level numbers, don't quote me on that, but I'm just doing a basic math of 16% minus about 3, 3.5%, leading up to about 13%.

Then when you take out the growth of the passenger vehicle OEM, the large OEM where we don't have business, we end up with somewhere between 8 to 8 to 10%. Relative to that, our 9.6% growth for Clean Air and Powertrain is better, right?

It's a value growth that is better than the apples-to-apples comparison of the market, if that makes sense, right? Market minus EV minus this particular leading OEM equals apples-to-apples with our growth.

Our growth is slightly better, like I said, because we've had some gains with a few of our customers locally on the commercial vehicle side.

Right. Okay.

Sir, on the spark plug order, what is the size of that order? Can you give that?

Sorry, which one is it, Himanshu? What's your question?

The spark plug order.

We haven't released the value for that yet. We will do that at the right time.

I think the more significant thing is that getting entry into such a large vehicle volume base is very strategic for us, right? It's very hard to get in with what might be perceived as a commodity product, but we actually secured this through technology and also from the time-to-market perspective.

That we were able to leverage our relationship in other products to be able to get in. Leveraging relationships with new technology, something that's a product that's more durable, that's how we were able to get in.

That's exciting because now we can grow within this OEM in a very big way over time. To answer your question, we will come up with that number at a future date when we have solidified the revenue value.

Sure, sure. Thank you.

Just one last question: Can you give break up of domestic and export? That's it from my side.

This is for order book, Himanshu?

No, the revenues.

Yeah. In terms of the current quarter, our exports are slightly over 7% of the overall revenue.

Okay. Thank you so much.

Thank you, Himanshu.

Hi. Thank you for the opportunity, and congrats on a good set of numbers.

Two questions from my side. One, on the suspension business, PV suspension business, just wanted to understand where are we in the process of shift towards more advanced suspension technology?

What is the penetration of passive plus and similar premium technology in PVs? Where are we in the localization process of the same?

Because if I remember correctly, our localization content was on the lower side in this business compared to other suspension segments. Secondly, one more question on export side.

We had obviously plans to ramp up exports meaningfully as a percentage of revenues. Where are we in that journey?

Will it be more back-ended, or we will see good growth in exports in this year also? If yes, what are the capex plans for FY27?

Thank you.

Thanks, Nishit. You were breaking up a little bit, but I think I got the gist of what you were asking.

Going back to your question one, there were a couple of sub-questions as part of that question. I think one is, yes, we are shaping the market for suspension.

We introduced electronic suspension for first time for an Indian OEM, and that we saw in some of the electric vehicles that got launched by this OEM very successfully. We're still in the process of fine-tuning the technology, and they want to actually keep improving it till it offers a very, very high level of comfort, right?

Localization is a chicken-and-egg situation, right? Once we have the required amount of volume, we're able to kind of localize here with the critical mass rather than importing from overseas, right?

In the case of Da Vinci as well, now Da Vinci, the difference is one is the semi-active suspension is more with electronics and software, and it samples the road every 10, 11 milliseconds. Da Vinci, on the other hand, is more like frequency-dependent damping, right?

It's more like a FDD Plus, which is more about non-linear damping purely through mechanical means. See, that technology itself is so good that it has the ability to disrupt over half the entire market, and you're seeing evidence of that, the rate at which we're booking business on the Da Vinci is very spectacular, right?

Again, same thing on the localization side. There, I think the localization will happen much faster because the volume uptake of Da Vinci is going to be much faster.

It's going to be applicable across definitely the entry level, the B, C segments of SUVs. Also with this new DCX32 piston launch, we are also able to go down all the way up to the A segment.

To answer your question, localization is just a matter of time. It will happen.

We're waiting for the right critical mass and volumes to come in, and then we will localize. We are the ones that are disrupting the market.

That's very, very clear. To answer your second question on exports, like I said, there's no change in our story from last time.

We're still booking export, as you saw in this press release. We've talked about winning ATV order.

We're also winning business within our own Tenneco Group competitively, obviously. That shows that our cost structure and the fact that we are technology-equalized allows us to have export growth that is a little bit faster than the overall market, right?

With exports, again, it is not a linear thing. Depending on the quarter, it can go up or it can go down.

As part of our order book at the end of Q2, we will report both the domestic and the export order book. If you can just wait a few months, we will report that as well.

The good news is, we've got exports coming in across our major product line, across Clean Air, Powertrain, and suspension. Yes, tariffs is a problem.

The Trump administration levied additional tariffs on Section 232, which is some of the exhaust parts that get exported from here. That affects other suppliers as well.

It is a little bit of a downer, which makes the environment a bit tough for exports. Let's see, that's the situation we're dealing with.

Also, there are some macroeconomic conditions in Europe and in Americas. Again, nothing to do with us.

It's more to do with what's happening in those regions that could pose a challenge for exports. Having said that, our basic export story and our focus has not changed.

Yeah. Thanks, Nishit.

Hopefully, I answered your question.

Just one left, our capex plans for FY27.

Capex for?

For the current fiscal year, capex what are you planning for FY27?

Okay. Nishit, we are targeting to spend approx 350 to 450 Cr for FY27, which will support our double-digit top-line growth.

Having said that, please be mindful that we are closely monitoring the economic environment across our key markets and may pull in or push out capex based on the actual demand requirement. Please note, these numbers are kind of indicative and are not really a precise guidance for the current fiscal year.

Thank you so much.

Thanks, Nishit.

thank you, sir, for taking my question. My first question would be that again, if we segregate exports a little more, and you kind of alluded to it, how would you say the difference would be between what we are selling to direct OEMs outside and to Tenneco's global entities, like you highlighted the Tenneco America heat shield order win.

Broadly, what would be the contours of these two segments?

Sure. Look, again, you have to remember that our strategy to really focus on exports only happened recently, right?

Three, four quarters ago. We're only about a year into this just a bit before the IPO and post-IPO.

Right now, our export order book is coming in 70/30. 70% is more like Tenneco to Tenneco, right, Tenneco India exporting to other Tenneco entities, and 30% is coming through third-party OEMs.

Now will this ratio of 70/30 continue over time? I can't tell, simply because there's a lot of opportunities also with third-party OEMs that our sister divisions in Europe and Americas don't want to participate in for whatever reason.

Either not profitable enough for them, etc. Some of those that are not profitable for them are profitable for us, right?

We can go after those businesses. Those are things that we're still exploring across major regions.

Also internally, right, Tenneco to Tenneco, we're also looking at where there's technology equalization, where there's opportunity for cost arbitrage, where we can provide the partnership in terms of either child parts or sub-assemblies or even finished goods for that matter. A lot of these are opportunistic.

Some of them could be strategic depending on new products that have been set up or new technologies that are being pursued by our other divisions. It's a little bit of a mixed bag.

I think as we go through another year, the strategy will become a little bit more solid in terms of where the exports are going to come from. You can at least for now assume that it's a 70/30 split between internal versus third-party OEMs, but that ratio can easily change.

If it changes with more third-party sales, that's also good. We welcome that.

For us, it doesn't matter, right? We are happy to export to anybody who gives us a decent margin, which is obviously accretive to what we have.

Plus from a labor cost arbitrage, we are competitive, and we have the technology. Having the ability to be able to ship the latest technology from India anywhere else at the right cost structure gives us an advantage.

Hope I answered your question, Arvind.

Thank you so much. Just two more data points.

What was the royalty payment in the first quarter? If you could share the capacity utilization in both the ART and the CAPT segment?

Yeah. As far as royalty is concerned, royalty is 2.5% of the overall revenue reduced by intercompany sales.

That stays consistent in line with the previous years.

Royalty capacity utilization.

Yeah. As far as capacity utilization is concerned, for CAPT, it is upward of 80%.

However, Advanced Ride Technologies, we are really working more than 90% more than 90% of the capacity currently. That's one of the reason we already announced one new plant for Advanced Ride Technologies that should be at the western part of the country with an investment of INR 70 crores approximately.

A lot of the run-up to the increase in capacity utilization is directly as a result of GST as well, right? GST has really benefited some of the smaller vehicles, AB segment vehicles.

Not just for us, I think many auto suppliers are also hand-to-mouth on trying to deliver parts. This is a good problem to have, right?

It's good news that our volumes are going up because of that. It has really spurred demand, and the auto suppliers are trying to all maximized from a capacity utilization perspective.

That's the reason why we're adding capacity in a frenzy to be able to catch up.

Got it, sir. That's all from my side.

Thank you so much for taking my question.

Thank you. Thank you, Arvind.

Thank you, sir. Thank you for taking my question, and congratulations on a good set of numbers.

Sir, my first question is on the margin since the RM cost increase is a pass-through for you, and what we are seeing that OEMs are now kind of taking the actual price hike to pass through the RM cost inflation to the customers. We would assume that there must have been some pressure for auto ancillaries also.

Does your margin in first quarter reflect all the margin pressure or the pass-through, or there's still something pending at your end, which is yet to be received from the OEMs?

Vipul, hopefully, you're doing well. Good to hear from you.

It's a good question because we have commodities that are escalatable like steel, right? They're back-to-back covered, we don't have an issue there.

It's the non-indexed commodities, right, like rubber, plastics, and crude oil, LPG, and CNG, and so on. We use that for various processes, for our furnaces, for example, for welding, we use argon gas, and so on.

Some of these things, you have to bundle and then try to recover these from the customers. What we're showing this quarter's margin performance indicates a partial recovery of that.

I must congratulate our purchasing team to have tried very hard to recover this. Having said that, it is a very difficult challenge to recover some of these from our customers.

We're constantly hoping that we can recover all of it. With the mathematical formula, if your commodity costs go up by ₹10, and if you are able to recover ₹10 from the customer, your margin percentage drops purely because of the numerator-denominator effect, right?

Having said that, yes, look, we're trying. Our commercial sales teams are trying.

It is a tough market out there. One is the recovery, the other one is focusing on productivity, right?

Because of our P3 operating model, we're constantly focusing on factory-level productivity, making sure that we are doing everything we can to manage costs, including SG&A, and so on. Again, Mahender can talk in more detail about it.

It's an ongoing battle. We don't know how long this Mideast war is going to continue.

We're hoping that for whatever the cost increases are, we're able to offset that. It will be tough, but we are trying our best.

Yeah. Just to highlight, we're really in focus on the current cost environment, and we are very closely monitoring the current situation.

To mitigate the impact, we already strengthened oversight through various reviews and interventions that we have done within the organization. Some of the examples are, for example, energy optimization through peak-off uses, production consolidation, then we are having regular kind of sync over the SG&A discipline, we have kind of increased focus on the customer recoveries and all.

At an overall level, we have been taking all the actions to ensure that our cost, whatever there is an increment, we can kind of set it off to the extent possible.

Understood, sir. Maybe if you can explain us the seasonality of your margins in the stand-alone business, which is mostly your Clean Air business only, stand-alone.

I would assume that what happens from fourth quarter to first quarter every year, we'll see lower sales share of heavy commercial vehicles as compared to medium commercial vehicles, while it will kind of decline in first quarter. The sales share of heavy commercial vehicle will decline in first quarter.

Is there a seasonality which we will see every year in Tenneco margins in stand-alone business, or was it kind of one-off this year? How we should read through the stand-alone business margins?

Seasonality is typical, right, for the auto sector. This covers passenger vehicles, commercial trucks, off-highway also.

You do see a little bit of a decline, and then certain quarters, like leading up to the festive season, we do see an increase. We're not any different from any other auto supplier that is in the Indian economy, right?

I don't think we can give you any flavor on how our margins will behave over time. All we'll say is that it'll be consistent with how prior years have gone.

If we've looked at the prior quarters, looking at sort of the pattern of how the margins have been in terms of down, again, it's tied to the revenues, right? Far, the demand has been good.

If you start with the demand the last six months, even this quarter, even next quarter, at least the good news is where other regions in the world are struggling, Indian OEMs are still predicting very good demand. Now, if the Mideast war continues on and on, there will be some impact, I think.

I don't think the demand will keep continuing. Right now, it looks like through Q2 at least, the demand seems to be good.

You will go into the next quarter hopefully with an uptick, assuming that the Mideast war doesn't deteriorate any further. That will have an effect on our margins.

I think the pattern of margins will continue like prior quarters.

Sir, my next question is on the new Da Vinci for the smaller cars you have introduced. For example, what is the incremental cost for an OEM to shift from traditional or passive suspension to the new suspension?

Maybe, for example, if you can quote some example from say Baleno-like vehicle or Baleno or Fronx-like vehicle, what can be the incremental cost for an OEM to shift from a traditional to the new Da Vinci, a smaller Da

Vinci? We cannot specify price in a public forum, simply because it's forward information because it hasn't started yet, at the same time, it would be proprietary information.

Let's talk in general, right? As the customers convert from conventional to Da Vinci, or let's say semi-active, we do hope to see an uptick in margins, right?

The margins will uptick at the max level when we have the volume, we are able to localize, and we're, of course, hopefully able to charge a premium for the superior technology. Because these technologies, especially Da Vinci, comes with a much better comfort level.

Those of you who've driven the Mahindra 7XO can see that. It's highly publicized.

It's all over YouTube and Instagram. All I'm saying is these technologies over time will come at a better margin.

I can't give you a price delta because it's proprietary. No, it's I was thinking

actually, I was thinking from other perspective perspective, like, for example, if OEM wants to introduce, not from your margin perspective, like how fast the absorption acceptance of this model can happen from OEM level? For example, if OEM have to take a price hike of just let's say ₹3,000, the adaptation can be much faster.

If the price hike maybe say ₹10,000, then adaptation can be much slower. I'm trying to understand that delta from OEM perspective, like what

can be the Good question, good question. Very good question.

Look, the all I'll say is the price delta is makes it very affordable for the OEMs, at least on Da Vinci, for them to be able to scale up quickly. Now, it's a little bit different for the semi-active suspension because there's electronics and software and, routing cables and wiring harnesses and but and so on.

For the Da Vinci, it's very simple. It's a you remove and you plug the new one in, right?

It's a plug and play. The cost delta is is makes it very affordable.

In fact, that was the purpose that Da Vinci was designed as a way to kind of get you 90 85, 90% of the way there on comfort, but with a cost delta of, a few percent percentage points, right? I think that that's what makes it so compelling, and this is why you're seeing us win a lot of programs on Da Vinci, as I mentioned earlier.

Understood. Just one last question on the capex.

You highlighted that it can be 350 to 450 crore rupees. Can you give him some direction like where it will be?

It will be towards ART or Clean Air, any new capacity you are bringing in? If you can give some direction around it, that's my last question.

Yeah.

This capex will be towards both the business segments, Clean Air, Powertrain, as well as ART. Just to clarify, this includes the investment towards the two plants that we've already announced, which is amounting to INR 140 crores.

Yes, this will be towards both the business units, both the business segments.

Thank you so much. That's all from my side.

Thank you, Vipul.

Yes. Hi, team.

Thank you for the opportunity. Sir, when BS-VI norms happened, so that time, the content per vehicle for both PV and CV almost doubled for our Clean Air business.

However, when BS-VII is more about diagnostics and monitoring, if we combine the upcoming norms like CAFE 3 and BS-VII, does this mean that the content per vehicle increase will be limited to maybe 20% only? Is that the right way to think about it?

It's hard to say because BS-VII is not out yet. Whether it is a BS-VI Plus or a watered-down version of BS-VII, we don't know where that's going to be.

Certainly what we're doing is we're looking at the market as the whole world, right? We in the last quarter, if you remember, I mentioned that we had done a very successful proof of concept for Euro 7 with a leading European truck manufacturer.

That success means that we're not just technology-ready in in India, but we're for BS-VII in India, we're also technology-ready for Euro 7 and and, US the US version of that for for 2030, right? We look at the world as our oyster, to speak.

Yes, BS-IV to BS-VI was a much bigger jump, went from, X going to 2X, and in some of the cases of commercial vehicle, X going to like 4X. That won't be the case.

I agree with you. BS-VII, CAFE 3, it'll be more like X going to 1.3 to 1.5X, something like that, I think, if you take the combination.

Don't quote me on that because it's still not sure how the BS-VII legislation will land. As because of higher NOx and particulate requirements, they will need to have some sort of dual dosing for the SCR and larger particulate filter.

It's very likely. They can use some injection technologies to do some optimization.

Each OEM will figure out some way of how to achieve the legislation on NOx and PM through injection, through better fluid flow, fluid mixing, dual dual dosing, and and maybe more platinum more precious metals loading to achieve that legislation. Now, the CAFE 3 is the CAFE 3 norms are more about the penetration of gas direct injection because it really offers a huge CO2 benefit, right?

It improves CO2 significantly, but the byproduct of that is it produces more particulates. That will need a gasoline particulate filter, right?

That also will take you from X to like 1.2 to 1.5X, depending on what application that is. You're right.

It will not be like a BS-IV to BS-VI jump. It'll be BS-VI incremental, and that's how we see it.

Understood, sir. Secondly, sir, exports are 7% of your revenue as of now, like you mentioned to the previous participant.

Can you expect this business to grow at double of the domestic business going forward, considering the global partnerships that we have and considering India as the export hub, considering these factors, sir?

Radha, can you repeat your question? The voice is not very clear.

Are you on a headphone? Can you remove your headphone?

It's very muffled what you're saying.

Yes, is it better?

Yeah. Sir,

I was saying that exports are currently 7% of your revenue, and giving the multiple factors of localization, considering India as export hub and your global partnerships with Tenneco, do you expect this business to grow at double of what India business can grow?

Okay. Good question.

Look, we're starting from a low base, right? Pre-IPO, exports was only 5% of total sales.

Now, it's about 7%. I said that in prior quarters that exports are coming in at a higher percentage of order book, right?

If you look at the total order book of, let's say, 100, then exports were coming in somewhere between 14 to 20% of that 100, right? We do think that exports will be a higher percentage of the total.

However, there's one important thing that has changed. Our domestic business has really taken off.

We are booking business left, right, and center. You've seen with ART, with Da Vinci, and also with local Clean Air and Powertrain customers, the rate at which we're booking local business is great.

This is music to our ears, right? Exports will continue as a strategy for both third-party and also intercompany.

Don't forget that the denominator is also growing, right? That ratio is less important for us because domestic is growing.

Exports will continue. As long as we have the same technology, as long as we are cost-competitive, we will continue to seek opportunities for exports on both sides, by the way, this is for Ride Technologies as well as for Clean Air and Powertrain.

Understood, sir. Sir, generally, what is the delta of margins in exports versus domestic across your business verticals?

We generally do not disclose the margins for export and domestic separately. Having said that, our export margins are either in line or better than the domestic margins.

Okay. As there has been multiple order wins across both business divisions, especially catering to new customers, I wanted to understand whether the margins of these orders are better than the current margins of the company?

Radha,

we cannot disclose the customer-level or program-level margins, but like I said, for our exports business, the margins are better than the domestic business.

Understood, sir. Thanks, and all the best to the team.

Thank you.

Thank you for the opportunity, sir. I just wanted to understand the Da Vinci DCX suspension business a bit better.

There, what I want to understand is that when you win a model for Da Vinci DCX suspension, does it mean that all the trims of that particular model would have Da Vinci DCX, or would it be the case that it could be possible that lower trims still have passive suspension and it's the top trims which have Da Vinci? Secondly, over here, the four customers that we are mentioning we've won, are those four new customers for Da Vinci DCX suspension specifically?

Okay. I'll answer your first question.

Thank you, Viraj. On your first question, look, our objective is very clear.

Our aspiration is to ensure that all of India improves its suspension. Over the last 70-odd years, India is still 90% of vehicles on Indian roads, passenger vehicles, sedans, SUVs, they're still operating with conventional suspension, right?

We've had all sorts of improvements on engine, on interiors, better seats, now grass mats, screens, Bluetooth, ADAS, sunroof, but somehow suspension was always orphaned, right? That has changed.

That has changed forever. Why?

Because of Da Vinci and because of semi-active suspension. We have proven that it's not a big thing on your wallet to be able to aspire for higher suspension.

That's what Da Vinci has proven, that you can make it affordable and you can give better comfort. Our aim is to with this new announcement, the DCX32, that we are also going to be targeting the very, very low end of the A segment markets, we think that Da Vinci has the potential to disrupt all the way from the lowest What is the cheapest car?

It's about ₹3 lakh maybe. All the way up to ₹35 lakh, ₹3 to ₹35 lakh will be Da Vinci.

Maybe above ₹35 lakh, we'll start getting into semi-active suspension. It's our aspiration to do that.

Look, we are doing that. We are proving to you that we can book business very rapidly, and not just one customer and multiple programs within the same customer, but also multiple new customers.

These are new customers that are new not just for Da Vinci, but also for conventional, right? Very often, it happens that the customer says, "Okay, you can have these programs will have conventional, but these higher premium ones might have Da Vinci," right, within the same customer.

The good news is these are customers where we've never had any business, even with conventionals. With a 55% market share that's today, right, the fact that I'm telling you that we've won four new customers beyond that, that should give you an idea of how strong we are in the market.

Got it, sir. Just to get some sense, for an OEM, how much cheaper would a Da Vinci DCX suspension be compared to a semi-active for a similar model that they would be trying?

We cannot again discuss price deltas, etc. All we're saying is Da Vinci is affordable enough where it can become standard.

Just like a window regulator, right? It's become standard in every cars, automatic window regulator.

We think that Da Vinci has the ability to satisfy the needs of a large portion of the Indian vehicle market. Now, when you start getting into electric vehicles and, let's say, premium vehicles, it's better to put some kind of an electronic software-based suspension simply because it integrates better with braking, steering, engine performance, right?

Because you can have a common ECU, you can have a master ECU to have a common functionalities split by various ASIL functional safety aspects. It's easier to integrate electronic suspension in EVs.

Having said that, we still have interest from EV OEMs saying that, "Hey, we want to put Da Vinci on our vehicles, because it's a lot cheaper," right? I think Da Vinci has the ability to kind of satisfy a long range of A, B, C, even D segment vehicles if value and affordability become an issue.

Got it, sir. My second question is on capex.

Out of this 350 to 400 crores of capex, which is planned for FY27, how much would have we incurred in Q1 FY27? Secondly, there was some export-oriented capex also, which was going to be planned.

Would this 350 to 400 crore capex include some export-oriented specific capex as well? Thank you.

Yeah.

Yes, the overall capex, the guidance that we are giving includes the capex towards the investment for exports. Regarding the first question, since we would be publishing our balance sheet in September, we would be disclosing the amount that we would have spent during the first half when we do the Q2 discussions.

Sure, sir. Thank you.

Thank you for answering my questions. Thank you, sir.

Thank you so much.

Good evening. Congratulations for a very good set of numbers.

My first question is do we have any plans to enter passenger EV segment with any new products other than ART? My second question is when are we expected to start commercial production of Da Vinci suspensions for smaller passenger vehicles?

My last question is since we are already a debt-free company with negative working capital, how are we planning to deploy cash flow from operations in future? Thank you.

Okay. Thanks.

Thanks very much, Nagraj. I think, see, we are already a big player in EV, right?

In fact, electric vehicles almost necessitate that you have a much better suspension, because the EV rides on a battery with a very low center of gravity, and if you don't have a more robust shock absorber or suspension, it will feel like you're riding a go-kart, right? By default, all the EV players are leaning towards more of either a Da Vinci or electronic-type suspension.

That automatically gives us more content per vehicle, right? Now, if you're saying other than ART, that's a good question.

That's something that we are debating internally. We're not ready to disclose what we want to do, but that's something that we're discussing in the background in terms of how we can be more not just EV, but more agnostic, right, which means take a product, whether it's an ICE engine or, let's say, electric vehicle, that it should be agnostic, right?

It should work on both big type of segments of vehicles. On your second question on Da Vinci, the smaller bore announcement we've made, we've just developed that.

Now we are looking for customers. The good news is that this already came in as a result of some customers asking for it.

It's just a matter of time before we start merging the demand from the AB segment customers with the readiness and the comprehensiveness of this new technology, right? It's the chicken and egg.

OEMs want the same thing on the low segments, but we didn't have the technology ready. Now we do.

Now we can start discussing with them how we would like to apply this. Like I said, my aspiration is if I had a wish, I would put all of India's A and B segments on Da Vinci as a minimum, right?

That's my aspiration. Your third question was something around cash.

How to use the cash, right? Look, yes, we do generate a lot of cash.

50 to 60% of our EBITDA converts into cash. Our traditional business lines are big cash cows for us.

We will use that for funding our capex, that 350 to 450 crores is fully generated. The capex is fully generated through internal accruals, even after spending that kind of cash, we still will be debt-free.

The obvious question is what else are you going to do with the free cash, right? There are a lot of options, including M&A, inorganic options, that we are pursuing.

It's in line with your first question. Wait for the right time, and when we're ready to announce something, we will come out and do that.

Did that answer your question, Nagraj?

Yes, sir.

Thank you, and all the best. Yeah.

Thank you, Nagraj.

Hi, sir. Thank you for the opportunity again.

Just wanted to understand did we face any impact from Hyundai's supply disruptions, which we saw in 1Q? Did we have any impact from there on the Clean Air segment?

No, we didn't because we don't have a strong position in that passenger vehicle company. We didn't face that.

That's a simple answer.

Okay. Just on the progress of new product launches which you had highlighted earlier, like suspension business into different segments, how is it coming, and when should we start seeing some movement in those segments?

You're seeing that in the continued growth of our business, right? If the market grew by 16%, we've grown through content per vehicle and through new launches.

In fact, this coming year, as we're sitting here today going into next year, let's say through March 31st of 2027, we do plan to have a lot of new launches, especially from the Da Vinci win, semi-active. There's also on the Clean Air and Powertrain side, a lot of the business wins will start bearing fruit.

Somewhere between early calendar year 2027 through 2028 and through 2029, the next couple of years are going to be very heavy for new product launches across the board. We're quite excited about that, and that will automatically give us a pretty nice growth to look forward to.

Sure. Sir, and just last question.

What is the difference between the DCX32 and the DCX?

Sure. The normal DCX that we invented earlier was for the let's call it the mid to premium SUV types, right?

The 3 2 refers to 32, and the 3 5 refers to 35. The standard one was more like 35 for the luxury mid to luxury vehicles.

The 32 is basically the size of the piston, which works for the A and B segment vehicles. You're just kind of think of it like you have a product and you're just shrinking it to form fit a vehicle that is much smaller.

The rod diameter. For something like a 32, you would need a 25 rod, and it will be encased in an outer tube of maybe 58.

I'm just giving you an example, right? These are all ratios between the rod, the piston diameter, and the inner part of the outer tube.

By shrinking it, you are now able to compete on the lower end for A and B segments.

Sure. Thank you so much, sir.

That's it from my side.

Thank you, Himanshu. Thank you so much.

Thank you, Sanya. Ladies and gentlemen, thank you all for your continued interest in our company.

We appreciate your time and participation, and look forward to speaking with you again next quarter. Thank you, and have a good evening.