Please note that this conference is being recorded. I now hand the conference over to Mr. VC Sehgal. Thank you, and over to you, Mr. Sehgal.
Thank you. Good evening, ladies and gentlemen. Thank you for joining the results conference call for Motherson. I'm pleased to announce the board has approved the results for the full year, naturally, 2024. Motherson has delivered its best ever performance, in which all key parameters just high double-digit growth. The leverage ratio has been reduced to 1.4 from 1.7x, and debt has been reduced despite huge large M&A payouts and growth CapEx during this FY. We trust, we are trusted by our customers, and the automotive booked businesses of nearly INR 84 billion gives you long-term visibility. We are setting up 18 greenfield plants and six new greenfields announced in this quarter, 13 of them in India, four in China and 1 in Poland. I will now hand over to Vaaman to provide further business insights.
Then the team is here to answer your questions.
Thank you, Vaaman. Thank you. Good evening, ladies and gentlemen, and welcome to the Motherson's earnings call for the full year 2024. The company reported full year revenues of approximately INR 98,700 crore, up 45%. EBITDA of over INR 9,300 crore, up 46%, and PAT of over INR 2,700 crore, up 82% compared to FY 2023. All business divisions have done exceptionally well on a full year basis, along with the fact that emerging businesses segment for the first time has reached a revenue of approximately $1 billion with strong profitability. It has been the highest margins amongst all our division, divisions. The full year results, however, are to be viewed against a backdrop of macro factors stabilizing, although at elevated levels. I'm referring to slide 5 in our presentation.
The manpower inflation continues to pose challenges for us, and further commodities are showing an upward trend, with copper already sitting at the $10,000 mark and aluminum at $2,500. I would like to clarify, a majority of our commodities are with pass-through effect, although with a lag to the customer. Further, the volatility in the Middle East will continue to mount pressure on the logistics supply chain for us. While the global light vehicle production grew by approximately 8% to 91 million in FY 2024, the growth is visible across the board in all key geographies. Europe and North America, however, are still 10%-15% lower than pre-COVID levels, and emerging markets continue to drive volume growth.
The automotive mega trends of premiumization and SUVs are playing out as we have stated to you before in our key geographies, and our businesses continue to benefit from content increases on the back of these trends. As the auto industry transitions to low and zero emission vehicles, the shift is happening at varied paces across geographies as OEMs adapt and evolve their strategies. The growth in EVs and hybrids is lower than anticipated a year ago, especially in developed markets. Please refer to slide seven in the presentation. I would also like to highlight that Motherson's portfolio is powertrain agnostic and poised to gain from industry trends and content. The well-diversified business model with the 3CX10 strategy has enabled us to mitigate the regional risks and capitalize on various new opportunities while ensuring stability and resilience.
As an example, while some pockets were impacted in FY 2024, we gained in others, such as growth coming out of emerging markets for auto and non-auto, trends of premiumization playing out in developed markets. For more details on this, you can refer to slide 11 and 12. I would like to highlight that the full impact of growth acquisitions, that have come in, will impact this in, customer and component mix will further get diversified as these get fully embedded in our results. The company is well positioned to benefit from tailwinds in emerging markets. This year alone, we are adding six new greenfields across India, China and Poland. More information on this is on slide 16. This is over and above the 12 that we have already announced earlier. We will be investing INR 2,000 crore on these greenfields in FY 2025.
70% of this CapEx will be towards non-automotive greenfields. Overall, we are likely to invest in CapEx about INR 5,000 crore ±10% in FY 2025. On the inorganic front, Motherson has closed all announced acquisitions. I would like to highlight that FY 2024 numbers only factors six months of Dräxlmaier and eight months of SAF. Impact of other key acquisitions such as Yachiyo, AD Industries and Lumen would only be visible from FY 2025, quarter one onwards. If acquisitions closed during the year are finalized along with Yachiyo, AD Industries and Lumen, the reported revenues would be approximately INR 113,000 crore, versus the current reported revenue of approximately INR 98,700 crore for FY 2024. Another important milestone will be crossed for us with the sales crossing the 1 lakh mark.
While we are investing for future growth, we're also very much disciplined in our approach. The leverage ratio, as guided to all of you, by Kunal, has improved to 1.4x from 1.7x, with a reduction in gross debt of about INR 1,800 crore compared to December 2023. It is important to note that we are back at FY 2023 levels on leverage, despite the large M&A payouts and growth CapEx done for the future in the current fiscal. We are quite comfortable with our liquidity position, with undrawn committed lines and the cash approximately INR 15,000 crore as of 31st March 2024. This gives us significant firepower, power to pursue more growth opportunities while maintaining financial prudence.
The company's disciplined approach has resulted in positive rating actions, with Moody's Ba1 rating under review for upgrade and Fitch upgrading senior secured bonds to triple B minus investment rate. It is a testament to our commitment towards ensuring sustainable growth and delivering long-term value for all our stakeholders. We are extremely grateful to our customers. Their trust is reflected in the automotive booked business of close to almost $84 billion, which is up from $77 billion reported in September 2023. Please note that this automotive booked business does not include Yachiyo as yet. Non-automotive booked business will further add to this number. The full year results demonstrate Motherson as a robust platform for growth, underscored by clearly laid out plans. That is a five-year strategic plan that guide our direction.
As we are in the fourth year for our Vision 2025, I would like to provide an update on the various metrics. One, the pro forma gross revenue is estimated at approximately INR 172,000 crore or $24 billion on constant currency basis. Please refer to slide 27. Two, the company remains focused on growth and absolute profitability, and I'm happy to report that the growth has improved to 17% in FY 2024 compared to 11% in FY 2023. Please refer to slide 18. Finally, the non-automotive business, incubated as a part of Vision 2025 strategy, has started to shape up with the potential to grow exponentially from here, with changing tides and alternative supply chains being set up.
Among a few lesser-known facts, post the acquisition of AD Industries, our aerospace division is now one of the key suppliers of structure and engine components to Airbus and Boeing. The health and medical facility is also well on track to receive certifications and will start supplying to a new set of customers in the current financial year. Given our manufacturing, DNA, and operational expertise, new customers have approached us to provide solutions in new segments, as a result of which we are further investing and diversifying into consumer electronics. I would like to congratulate the team on delivering stellar results as we push on to reach our Vision 2025 targets. The team and I are happy to answer all your questions. Thank you very much for your attention, dear folks. Operator, could you please assemble the questions?
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, if you wish to register for a question, please press star and one. Our first question is from the line of Kapil Singh from Nomura. Please go ahead.
Good evening, sir. Congratulations on a very strong quarter. Just, firstly, just some clarification on, you know, there is some one-time items here that are mentioned for Q4 EBITDA. If you could just help us understand, you know, there is a INR 197 crore contributed by customers towards Forex and also INR 69 crore Forex claim. So just want to understand, these are accounted for in which line item and which business division do they represent, and this is for which period? And also, if you can give some color, is there... You know, is this for the full year FY 2024, or there can be more such claims which we may realize going ahead?
Kunal, can you take this?
Yes. Hi, Kapil. So Kapil, the INR 197 crore is in reference to compensation that we have received for the losses that we suffered in Argentina. If you remember last time or last quarter, we had highlighted some of the challenges we had in Argentina, given how the forex devaluation happened in that part of the world. We had said that we will be working with the customers to share this is part of the compensation that we have received. This has been embedded as revenues because it's come as a compensation of netted off against cost. The cost of this is still residing in finance costs given that's how the hyperinflation account is.
But at the EBITDA level, this has come as compensation for what you're seeing in the finance cost, and we've classified that as from an EBITDA perspective. We are not seeing that same thing play out at PAT levels, because there it gets netted off against the Forex losses that we have in the finance cost.
... Can I just ask, you know, this is for the Q4 FY 2024, is this reflecting in the profit after tax? I believe you are referring to full year.
Yeah, I'm referring to full year, absolutely right. If you're referring to the Q4 data, in the Q4 data, there are other elements also in there, which includes INR 69 crore of ForEx gains as well that is sitting in there. So that's the INR 266 crore number that is there. So besides this INR 197 crore, there is a ForEx gain, which is again netted off against ForEx losses given the hyperinflation accounting is residing in the interest costs.
This INR 197 crore in Q4 is, and INR 69 crore, both of these are in revenue? Or where are they accounted for?
Your INR 197 crore is accounted for in revenue. INR 69 crore would be in other expenses or netted off against other expenses.
Okay. Okay. And this is for which business? Okay, you mentioned that it is for hyperinflation, you know, covering up the losses and the Street. And which period does this cover up for? This is mostly in FY 2024?
That's right.
Okay. Are, are we having more claims, or FY 24 claims are settled with this?
This one we are not having more claims on. Obviously, the hyperinflation scenario in Argentina continues to evolve. Same is true for Turkey as well. And as it plays out, we will work with the customers to see how we are able to get their support.
Sure. Thanks. And, could you also talk about, there is INR 231 crore deferred tax asset. Could you just talk us through that? What has caused that, and what could be the effective tax rate for next year considering this?
Look, the deferred tax assets, as the performance of different parts of the group has improved, as well as some of the international reorganization that you're aware that we have done, has resulted in our ability to claim some of the past tax losses. And hence, you know, we put INR 131 crore as deferred tax in this quarter, incrementally over normalized levels as I were to put it. On a more normalized level, I would think, you know, the ETR would be somewhere in the 25%-27% level, somewhere in that level.
Okay. And, sir, just lastly, wanted to check, you know, we are putting in a lot of CapEx for next year with these greenfields. Any indication on the potential revenue that these facilities can generate at full utilization? And also, if you could give some color on the consumer electronics CapEx, what is the CapEx there, and how much is the capacity put up, or what is the end product?
Kapil, the CapEx, you know, we don't give revenue guidance, as you know, so it will be incorrect for us, like, to talk about these greenfields in particular. You know, you can do potential assessment with some asset turnover effect, if you wanna do some sense of it. But, we'll be spending around about INR 2,000 odd crore across these 18 odd greenfields, which will be coming up in different points in time. Typically, you know, the greenfields typically take anywhere between, let's say, 6-18 months for the ramp-ups to happen, depending upon what you know product line it is in, one way or another.
Yeah, look, I think, like Kunal said, you know, we are bound by confidentiality clauses to disclose too much around, you know, the sales and the CapEx of the individual things. But as you can see, the growth is quite visible in all the new businesses segment that we are reporting as an individual segment. You can take some clues from that. We expect it to grow rapidly from here on exponential basis as these plants come into commission and these things get played out. But we'll only be able to give you more information about that later in time as these things become that much more significant. But we are definitely putting the platform for these businesses to grow significantly.
Sure. Sir, I was not looking for a revenue guidance, but just, you know, maybe some more color, particularly on the consumer electronics side, because it's a new division. Anything you can share in terms of product at least?
We had already shared in one of our last, you know, results, the joint venture that we have formed and how we are building on that. You could look at that for cues, but as of right now, you know, we are not allowed to disclose anything more on it.
Sure. Sure, thanks. I'll come back to you. Thank you so much.
Thank you. A reminder to all the participants, if you wish to join the question queue, please press star and one. Our next question is from the line of Jinesh Gandhi from Ambit Capital. Please go ahead.
Hi, congrats on a great set of results. A couple of clarification from my side. One is, this slide 27 which you are referring to, we have two items, INR 14,500 crore and INR 14,000 crore, so that is the impact of, if we consolidate all the acquisitions for the full year, is that that's what it is?
... Yes. So, you know, because we are, you know, always measuring ourselves as compared to what we set out for our plan in 2020 for Vision 2025. So, you know, if we allow everything to move, in, like, for example, Forex rates, et cetera, we kind of fix them at that point in 2020 so that we can really have an apples-to-apples comparison on how we have done on delivery of our five-year plan. So if you look at, of course, the FX rates that we had set at that time, and we set the vision because, of course, there are multiple geographies, multiple different Forex plays out. It's out of our control, whether something moves up or down.
Plus, you take what is the, you know, the 12-year run rate of these acquisitions that we have done. With that conversion rate of the FX, we are somewhere around the $24 billion mark. Of course, with the way the current Forex is, the Forex rates are, the number on, like, on an accurate basis is slightly lower. But again, we are only measuring ourselves as we, you know, are committed for our 2025 plan, at that time, at 2020.
So taking all of that, and this has been consistent, how we've done it for all our five-year plan, you know, we are wanting to show you that, you know, in just up to the fourth year, we are already at that 24 out of 36. We still have a better runway to go. But like I said, we are, you know, maintaining all financial prudence to make sure that we deliver the strongest results, and preparing the company for long-term growth.
Got it. Got it. And would it be possible to talk about what would have been EBITDA for the full year if we consolidate all the acquisitions for the full year, as it being some INR 9,300 crore?
It will be a little bit difficult to do that because, of course, some of these acquisitions that we have acquired have been, you know, and of course, with us coming in, and doing a lot of the reorganization changes, it will not be reflective of what is really the current situation. I think some of the bigger ones that you are seeing, for example, you know, SAS, all of that is already played out. But, you know, you're gonna have to give us a couple of quarters to see how the new ones are panning out.
But of course, our endeavor is to do much better than what we have, where we got these assets, and that has been the track record and history of Motherson to be able to deliver on that. So we are hoping that you will see that in the next quarter itself.
Got it. Got it. And my second clarification was regarding this one-off Forex gains. So the entire INR 266 crore is residing in fourth quarter, INR 197 crore is in revenue, INR 69 crore is in net of other expenses. That, is that correct?
That's right.
Got it. Lastly, from the CapEx perspective, for this full year, we are expecting to spend INR 5,000 crore, including INR 2,000 crore in greenfield. Would you be able to share, apart from this INR 1,400 crore in the new business, is 70% of INR 2,000 crore, broader areas where we are investing, which businesses are we investing in?
I think the information is already there on slide 16.
Okay. I'll look at it. Thanks.
Okay.
Thank you.
Thank you. A reminder to all the participants, if you wish to ask questions, you may press star and one. For any further questions, you may press star and one on your touchtone phone. Our next question is from the line of Abhishek Jain from AlfAccurate Advisors Private Limited. Please go ahead.
Thanks for the opportunity, and congrats for a strong set of numbers. Then in regional segment growth year-over-year basis is 16%, but EBITDA margin even flat at a 10.3%. So what is the outlook ahead on the margin side and the top-line growth?
So, Abhishek, as you know, you know, SMR is a very diversified business, working with most of the OEMs globally in all the geographies. So, if you see, the growth this year as well, you know, when you compare with the vehicle volume growth, has been pretty good. So yeah, our volume growth has been about 8%, and what we have delivered is about 16%. Of course, the growth is not the same in all the markets. You know, China has seen a very different growth curve, and we are not so much present with the Chinese OEMs, and that's on purpose. So, what you see is a reflection of an overall improvement that we've seen year-on-year.
Also a point that needs to be considered is, last year, in Q4, when you see, there was a one-off, which we had, a write back of litigation that we were having, which was about $10 million. So if you, do a like-to-like comparison, then it, shows a 9.7% with the last year, compared to a 10.3% this year. So that would actually show that the growth in profitability is higher than what you see actually in the reported results.
So sorry, last year, in FY 2024, there was also impact because of the labor strikes in the U.S. So most probably, this will not impact in this year? So most of the margin will improve further from 10.3% to 10.8% or 11%?
So as I said, yeah, this, I mean, this year, of course, had its own sets of challenges, so there was Red Sea crisis. As you rightly said, there was also the strike, you know, effect in America. And while there was a catch-up in the later months, yeah, it did have a overhang. So, clearly, you know, as we go forward, we will overcome all these, you know, challenges. If you see the ROCE performance, I think the ROCE performance has been very good. And, that is where we focus. And, going forward, you know, we are coming, very close to the group objective of ROCE performance. So yes, you would see better performance on ROCE going forward.
Okay. And sir, in wiring harness business, there's a very strong growth of 19% year-on-year in Q4 2024. And, further, there's increase of the copper prices in this year. So what will be the impact on the increase in the copper prices, the top line and the EBITDA? Positive or negative?
So definitely with copper prices rising, it will also, you know, revenue will go up and copper is all passed through, so with a lag, but that's how it is. And all the copper increases get passed through, whether when it goes up or comes down.
So, is there any benefit of the increase in the copper prices in Quarter Two in wiring harness business?
Not significant, because when it's rising, copper prices rise, and there will always be a slight negative impact because the pass-through is at a later when copper prices decline, then there can be a benefit for a certain period of time.
So most probably the next quarter number will be better than this quarter, because ultimately we'll be able to pass the cost to the clients. Right, sir?
I mean, there are lots of factors, as you know, that our businesses are multiple geography, multiple customers, and there are a lot of factors which impact the businesses. And, as I said, when you look at only the impact of copper at a certain point of time, depending on how the average copper price been during the quarter and at what price the price has been adjusted before the quarter with a particular customer. Because with... there are different pricing norms with the customers, starting from which month to which month. So it's a, you know, an aggregation of all of it together. That's how the results will get reflected on.
I can't predict exactly how will the overall quarter look like, but always, as a team, Motherson has been to continuously keep improving things which are within our control and improve our operational performance and improve return on capital employed. That's what we focus on. Because our products are also getting more and more enriched, and, so just looking at margins, is not the best thing for us, and hence, the company always focused on ROCE.
Sir, my last question on the recent acquisitions of the Yachiyo and others. So, what would be the incremental revenue you would be able to get in the first quarter because of these acquisitions?
Again, if you look at slide 27, you can get a little bit more idea of that. There's a column which talks about the pro forma impact of growth, M&As on net revenue, which is estimated. It's about INR 14,500 crore.
INR 14,500 crore on an annual basis?
That's correct.
Thank you, sir. Thank you.
Thank you. Participants, you may press star and one to ask a question. Our next question is from the line of Gunjan from Bank of America. Please go ahead.
Yeah, hi. Thanks for taking my question. I just had a quick follow-up on the INR 197 crore and INR 69 crore one-off that we have in quarter 4. Is there a way that you can call out which segment is this coming through in? Because the reason I ask is, in most sub-segments, the margin seems pretty much, you know, what you do in Q4, or it's been within the range, but in modules, the margin has seen pretty significant expansion. So, is that where it is getting reflected? Is that a fair reading?
No, it is getting in integrated assemblies. It's disclosed in integrated assemblies also, I think on slide... Yeah, on slide 22.
Okay. Okay, and okay, got it. Yeah, it's. Okay, and then in anything in particular to call out in the modules in polymer business, you know, on the margin expansion, or is there something we need to read from a change in mix, and, you know, this is where the margins are sustainable now? Because it's typically been in the 7%-8% range, and this quarter has been quite meaningful improvement.
Yeah, thanks for noticing that. Look, we've been making a concentrated effort to improve margins, but of course, you know, the delivery of the company on is on growth as a whole, and margins play a part of it. So we have definitely been taking a lot of actions to improve it. Also, you know, we have been speaking about a lot about sharing of the costs, which we got some support from the customers as well. We have to thank them because they have had the confidence in us and continue to award us some programs and share some of the costs which are out of our control, which has again, you know, been played out.
But, you know, definitely we seem to, we would like to maintain these and grow from here as we, as we move forward. It was on the lower side in the past, but a lot of, a lot of efforts are being made to improve this aspect of the, of that division, and to catch up with the rest of the group. So, it is a concentrated effort, and hopefully, we maintain and grow from there.
Okay, got it. And just, you know, just following up on that, you know, in the past, you all have spoken about these renegotiations and a lot of cost increases, which have happened in last two years. There were constant conversations with customers. So is that an exercise which is, to a large extent, behind now, and it is more, to do with, you know, what happens to commodities incrementally, and we pass through that, so that one-time exercise is behind, for now?
Ma'am, I wish it was a one-time exercise, but, you know, there are new challenges that come out every quarter. You know, there was a challenge of energy prices spiking, you know, in couple of quarters. That has stabilized now. You know, there are some, like now, copper will be a, you know, there's an automatic pass-through, but similar commodities, when they spike up, those kind of conversations happen with the, happen with the customers. So, you know, it is a, it is a constant, thing that we keep talking to our customers. Obviously, also, when there are programs that are done phenomenally well, the reverse conversations also happen.
So we want to focus on making sure that we can, you know, deliver the product in the most efficient manner, and whatever is extra noise which is not in our control, that's something that we sit together with the customer and, and make it on a fair, equitable basis so that, you know, we support each other and continue to grow. But definitely, there's been a lot of work that has been done to make the operations more efficient. And as we, as the, the macroeconomic indicators start to stabilize, that's when you start to see much better performance, and there are no spikes that are moving up and down. And I think that's the kind of level that we have reached with the, with the macroeconomic environment as well.
So like I said, I hope that this continues and things are stable. As they are stable, we can continue to show, you know, improved performance as we put in our efforts. But if there are you know, volatile things that happen or certain changes that come in the environment, we have to deal with it as it comes, and then, of course, sit with the customer at the end of the quarter, end of the year, and try to get a fair outcome out of it.
Okay, got it. And last question on the M&A. You know, clearly you've been talking about more opportunities coming to the market, and now from a balance sheet perspective also, there is flexibility. Now, if you were to sort of just give us little bit of sense on, you know, what sort of inorganic acquisitions are that we'll be keen to pursue, you know, just in terms of segments, in terms of, you know... So you did talk about consumer durable, but, you know, bulk of the acquisitions come through in other segments now. Any color, how should we think about that?
I think we guided you in 2021 with the five-year plan. Was it 2020? Sorry, 2020. We had set a target for $36 billion. That's the kind of range that we are talking about. We have enough to qualify the difference between 36 and today's target, whichever you take it. So please be sure that we will not let our egos take over. It has to be customer-directed. Customer is very important for us, and we have the trust of the customer.
So depending upon the volatility and the other factors which are there in the world today, it is a VUCA world, but I think, there's going to be enough opportunities for us to make sure that we cross our target, and as well, be of huge, immense help, to the people in those particular acquisitions and of course, the customers. So we don't really, get carried away by, particular size or, you know, quality of the assets. We believe that together with the customer, we have to work to make sure that this particular thing is achieved. And, if the customer is happy, then definitely all our, divisions, all our, companies, actually benefit because there's less, stoppage of production and things like that.
So it's a huge philosophy that we follow. This is sixth five-year plan, and it's very difficult to guide, so I can't tell you what is happening. So all I can say is, wherever the thing will be, it will, it will be related to the customer. And the ability of Motherson is we are not gods or anything like that. We work together to solve the problems for the three of us: the customer, the company, and Motherson. So I hope that would answer it. Further than that, we can't give any color or give you our names or anything like that, or the division where it will happen.
But a lot of activities, customers calling us all the time, telling us what we have to do, so we will keep evaluating that, and the results will come to you.
... Sure, all the best. Thank you so much.
You're welcome.
Thank you. The next question is from the line of M. Pirani from J.P. Morgan. Please go ahead.
Yes, hi. Thanks for the opportunity. Two questions from my side. First of all, you know, if I look at the list of your greenfields, you are doing a few of them in China also. And historically, as well as today also, you've mentioned that, you know, you are not present in a big way with the local OEMs. Given that, you know, most of these greenfields are still happening within the automotive segment, can you give some color as to are we, you know, continuing to be with the global OEMs in China, or is there some plan to, you know, increase engagement with the local OEMs who are, you know, gaining share?
These two that you're seeing in China for integrated assemblies are for the global OEMs. These are specific programs that we have won, that we will deliver. On the-
And the other one is the wiring harness one, where we work with our joint venture partner and we support, as you know, on the commercial vehicle side. It's mostly Chinese truck makers and their joint ventures with global truck makers. So we do supply to all the joint ventures with the global truck makers like Daimler and also Scania is coming up. So all those things we are doing, so for that purpose it's there.
And also, I mean, I think it's important for you to understand that, you know, we are not, not putting up capacity for, you know, Chinese customers or something like that. I think we have taken a view as a group that we will, you know, in a, calculated manner, where we are, where we know that the customer is growing well and we have a good probability of success. We are also catering to the local market. Of course, it's a small portion of our sales, but, as the market will change and evolve, we will also change and evolve. When we entered that market, the international OEMs dominated. Now you're seeing that some of these Chinese OEMs are setting up shop, for example, outside as well. You know, so-
Yeah.
Why would we not offer our services where we know that, you know, we can give them a good solution, and we can maintain our profitability and recover our investments? We will definitely look at those opportunities and treat them on a fair and equitable basis. It was just historically, when we acquired these companies, we focused on it, but we are, you know, adapting to the market as the market needs.
I think, to add to what Vaman has said, I personally feel, in my view, that the Chinese manufacturers, OEM suppliers, ancillaries and all that, will have a very tough time when they go out of China. That's where Madaan's facilities will get a better opportunity to be more competitive, because the playing rules will be in our favor. We've already been there. We already know the challenges and such things. I think the Chinese ancillary suppliers will have a tougher time. That's what I feel.
Mm-hmm.
Though they are very good, they might subsidize, they might do whatever, but I think out of China, it's a level playing field, and we would be in an advantageous position. That's just my view.
Understood. No, that's, that's good to know, because they are expanding in Europe, where you obviously already have a very strong presence. So that's a very, interesting point. Secondly, just a clarification. This, five thousand crores, NCD, that you're planning to raise, is it mostly some debt and financing or, are we looking at, you know, keeping some cash for some extra CapEx going forward or, some M&A?
Look, it's an in principle approval. As you know, the regulation requires us to take an in principle approval and put it. Last time we had taken INR 3,000 crore, we had issued INR 1,500 crore. We've taken INR 5,000 crore. Depending upon the need of the business, we will, we will come back and announce what is the size. So just please treat this as an in principle approval for INR 5,000 crore.
Sure. Okay, thanks for that. I'll come back if needed.
Thank you. The next follow-up question is from the line of Kapil Singh from Nomura. Please go ahead.
Yeah, thanks. Just one follow-up. Is it possible to comment on Yachiyo's performance for last one year? Or, you know, if it, if it's possible to share numbers, it's great, but if not, at least qualitative comments on revenue and margin performance would be helpful.
Look, I think, you know, we would like to focus on what we have inherited, and you will again see what we do with that in the results. I mean, you can look up whatever is there, public record that is there available in the public domain, as they were a public company before we acquired it, so you can have a look at that. But of course, there are some bits which have been kept by Honda San, such as Gucci, which is, well, Gucci, which is a part of the products that they offered. So you really won't get a like-to-like information from there. I would suggest please wait for a quarter.
You will see the first quarter result of Yachiyo, and then we can answer a lot more questions, as we have full grip over the entire business and the accounts.
Sure. Thank you, and wish you all the best.
Thank you.
Thank you. A reminder to all the participants, if you wish to ask questions, please press star and one. Participants, you may press star and one to ask a question. Our next question is from the line of Suhrid Deorah from Paladin Capital. Please go ahead.
Hi, good afternoon. My apologies, I joined the call a little late. I have two questions. One is that, from your vantage point currently, how do you see the business environment and the M&A environment?
Look, from the business side, I think, you know, our strategy of 3CX10, no customer, no country, no component to be more than 10% of our business has really helped us through these volatile times. Different geographies go through different periods. You know, we can get into it region-wise, but, you know, of course, you know, great bright spot is India, you know, record number of cars produced, you know, and we hope that this will continue in the, in the year. You know, the European outlook, you know, a lot of challenges have been there. So, you know, we are looking at consolidating more over there. We've done a ton of acquisitions, and as you can see, you know, the trucks are also going up and down, depending on the geography that you're there.
So again, I think, what we do at Motherson is that we try to focus on where the bright spots are and continue to grow those operations and breathe with the market where there are challenges, and make sure that, you know, we are the last people standing over there, so that when the business comes back, we can grow. And that's the kind of thing that we have been doing. With the acquisitions, we have further obviously cemented our, you know, closeness to the car makers, to a lot of our customers and, you know, penetrate more and more, increase the content, have their trust, and are being asked exclusively to go after these acquisitions, a record number of acquisitions for us, as we are busy integrating them into the Motherson DNA. So the challenges still remain.
We are, you know, we were just discussing, I don't know if you were on the call or not, that, you know, on a like-to-like basis from where we set the plan for Vision 2025, we are, we are, you know, current at $24 billion. We still have $12 billion to go. So those are opportunities that we still are on the lookout for. But again, no, no gun to our head or something like that, that we have to be done at any cost. We will, as you have seen in this quarter's performance, maintain our leverage ratios, maintain our profitability, maintain all the growth targets, and continue to invest in Motherson for the long term, whatever that number will be at the, at the end of this year. But definitely we, we see hope.
There's a lot of troubled issues that are still out there in the world that the customers may need us to solve, and we will be opportunistic about it. So teams don't have any time to really, really, you know, be not focused. I think a lot of stuff is still on our plate that we continue to solve as we move forward, and hopefully end the year and the five-year plan very strong.
Sorry, we can't hear you.
Sorry, your audio was not clear.
No, that answers my question. Thank you.
Thank you. Participants, you may press star and one to ask a question. As there are no further questions from the participants, I would now like to hand the conference over to VC Sehgal for closing comments.
Thank you very much for all the questions. I hope my team could answer them to your satisfaction. We are still a very OEM-focused company, and we have a lot of issues on what we can say, what we cannot say. But to the best of our ability, we try to explain things to you. But it's interesting to see that, you know, if you look at this last year, we have been telling you all that there are a lot of acquisitions happening. In fact, we're close to what? 18, 18 acquisitions. A company which gets that kind of opportunity definitely has the trust of the customer.
And even now, we are inundated by requests, not just from the OEMs, but even from the customer, from the component makers themselves, which are asking us: Can we be a part of Samvardhana Motherson, the way we professionally manage all the acquisitions and all that? People have done two or three acquisitions, then closed down two or three acquisitions as well. Madhusudhan has a good record. We've not closed any acquisition. We have not shifted. We have taken all the challenges head-on. So I think the next year is going to be... This current year is going to be a very fulfilling one because we have the trust of the customer, and please don't have doubt that we will not cross our targets. With that, wish you all a very happy evening and business in the coming time.
Thank you very much. Grateful.
Thank you. On behalf of Samvardhana Motherson International Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.