Ladies and gentlemen, good day and welcome to the Q3 FY23 results conference call of the Samvardhana Motherson International Limited. As a reminder, all participant lines will be in the listen-only mode, and you will be an opportunity fee to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Vivek Chaand Sehgal. Thank you. Over to you, sir.
Thank you. Ladies and gentlemen, good evening, thank you for joining us this evening. Samvardhana has approved the third quarter results, we are happy to report another improved performance. We crossed INR 20,000 crore in a quarter for the first time, best ever quarterly result revenues yet, topping our earliest highest during Q1 and Q2. We generated double-digit growth in the EBITDA and profit on QoQ basis, nearly 5x bottom line on a year-on-year basis. Enabled by improved performance by all divisions, despite inflated inflationary segments and localized challenges. We reduced the net debt as EBITDA improved from two to 1.8. There is still some pain in the system, the worst seems to be behind us, thus cautiously optimistic going ahead. These results demonstrate strong fundamentals of the company and continued focus on operational efficiency.
Our teams have worked very hard to deliver this result, and with further improvement expected in business environment, we are poised to deliver greater value to our stakeholders. We want you to thank our customers for their continued trust in Motherson. As always, with me, I have Vaaman, the management team comprising of Pankaj, Charles, Rajat and Kunal. With this, I would like to ask Vaaman to walk you through the results. Vaaman?
Thanks, Papa. Good evening to everyone. The company has reported another set of record results with the highest ever quarterly revenue of over INR 20,000 crores. This is a 25% growth year-on-year and also an 11% growth on a QoQ basis. All business divisions improved performance. Correspondingly, EBITDA grew to INR 1,680 crores with a 13% growth sequentially and a 45% growth on a year-on-year basis. That was up 5x versus last year the same quarter and nearly 2x of the previous quarter. With chip shortage and supply chain improving most parts of the world, production scheduling was much more stable and enabled recovery of volumes on year-on-year basis, with industry volumes growing by 2% in light vehicles. All regions grew other than China.
As you would expect, COVID-related issues caused China volumes to decline 6% year-on-year and 2% QoQ. On quarterly basis, industry volumes for light vehicles were flat in North America, India and China, all showing decline ranging from 2%-3%. We were, however, aided by growth coming back in Europe and showed 15% growth, which highlights the benefits of a diversified business model. In commercial vehicles, there was a 6% decline on year-on-year basis, with China being the main contributor, but North America showed 3% growth. On quarterly basis, China improved by 24%, although on a small base. Europe was also up by 18%, but North America was down by 6%, resulting in an aggregate industry volume growth of 5%. You can refer to slide five for industry details.
Our 25% year-on-year growth highlights significant outperformance versus an industry growth of 6%. Even without considering the revenues from Motherson Sumi, which were not there in the previous quarter, we grew by over 20% in this quarter versus Q3 FY22. Continuing trends on premiumization, electrification, commodity costs and sharing of inflationary cost of continue to add content and value to our products. This was further fueled by a favorable Forex impact. Even on a Q-on-Q basis, we grew by 11% versus a flat industry growth. You could refer to slide 12 for more details on that. We are very grateful to our customers for their continuous trust in Samvardhana Motherson.
We continue to work with them on sharing of the inflationary cost structures, and we've embedded some of the success in this quarter and continue to work with them to close out the remaining in the coming quarters. Given the continued volatile sales of vehicles in this world, we expect that this conversation will be a regular feature for some time into the future. On the CapEx side, we are being vigilant and in line with our guidance we gave last quarter of being at the lower to mid-end range of INR 2,500 crores ±INR 250 crores. So somewhere between INR 2,250 and INR 2,500. The improved performance and focus on CapEx has decreased the leverage ratio to 1.8 times versus two times in the previous quarter. Net debt actually reduced to about EUR 50 million versus previous quarter.
The Forex changes had a negative impact of about INR 360 crore-INR 400 crore. We continue to carry elevated working capital levels, given it's still early days to China removing the zero COVID policy and the geopolitical situation in E.U. countries. We remain confident that by year-end, we should be able to normalize some portion of this working capital. This is also supported by improvement in Global Supply Chain Pressure Index and some softening of commodity prices. You can see slide seven for more on this. Given this backdrop, as well as the declining energy costs of the previous quarter, we remain confident of delivering continuous improvement in the ongoing quarter as well. This will enable us to deliver much more going ahead and aid our inorganic plans as well.
We just believe we have adapted ourselves well to the new realities and are cautiously optimistic on the way ahead. With this, I conclude the overview, and we now open it for question- and- answers. Moderator, can you support, please?
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Reminder to the participants. Anyone who wishes to ask a question may press star and one. The first question is from the line of Kapil Singh from Nomura. Please go ahead.
Good evening, sir. Congratulations on a great performance this quarter. My question is actually on European operations. I just wanted to understand that, from a revenue run rate perspective, are we closer to a normalized run rate or, there is still significant supply chain pressures and therefore, we should expect further ramp-up in production run rates? Also on inflation, if you could just mention, we've seen casting cost and other costs seeing significant cost inflation. Does this quarter really reflect most of it, or should we expect more increases in these line items?
Vaaman?
Sure. I think the production run rate that you talk about definitely had some instances starting up in the, you know, post the December holidays, et cetera. Since it's more talking about the last quarter, we definitely do see an improved trend. However, it's hard to really comment with the ongoing macroeconomic situations in Europe. You will understand more as we get closer to the summer and understand how things are flattening out. Definitely do see some catch up towards that for the missed run rates that we had in the previous quarters. But it's very much a watch closely kind of a situation. On the inflation side, we believe most of it has already been taken in.
Of course, a lot goes to be seen how things pan out the rest of the year. Definitely is a ongoing discussion with the customers to see what's going on. It is a volatile situation that is there. Can move in any direction. I think that's when we are making sure that we have close communication with our customers to be ready for any eventuality. Like I said, we are cautiously optimistic, but, definitely not clear of the woods in terms of volatility yet.
Okay. Thanks, Vaaman. I have two sort of clarifications on the presentation. One was on slide 16, we have mentioned Wiring Harness Division, where there is a INR 61 crores favorable outcome on past split litigation. If you adjust for that, actually margins are a bit lower on a QoQ basis despite better revenue. Wanted some color on this. Second is on the standalone results. We see that the other income has seen a significant increase on a quarter-on-quarter basis. It was INR 144 crores, it's INR 248 crores from September to December quarter. If you could just throw some color here.
Kunal?
Kapil, firstly on the wiring harness side, you're right. You would have seen MSPL results also yesterday, which had a slight decline. India in general has been in Q3 lower than what was expected. You heard, I'm presuming enough about the reasons behind it. You know, the fact that production was missed, chips, there were chip shortages still in India and so on and so forth. While the capacities effect over there, but the production didn't really happen as much. That is one of the large reasons why it looks the way it looks. On top of it, if you think about China, there was growth, a little bit of growth, but it's still so significantly below, you know, previous levels.
The base is so small now in China that it continues to still make losses right now. These drop the margin profile really in wiring harness. If you look from an other income perspective, the INR 61 crores that you are referring to, this is actually lying in that other income. You are also aware that the rental income that SAMIL now charges MSPL, that is also lying in this other income. The large difference is on account of the 61 getting booked in other income, and that's why we've highlighted that specifically as well. Going forward, we aim to reclassify some of these things to make it a little bit more clearer.
Hopefully next quarter onwards, this will become much more elaborate for you to understand this better.
Okay. Thanks.
Thanks.
Thank you. The next question is from the line of Jay Kale from Elara Securities. Please go ahead.
Yeah. Thanks for taking my question, and congrats on a good set of numbers. My first question, sir, is, you know, you mentioned about the strong outperformance at the, you know, global industry via revenue growth. If you can just, you know, kind of take us now into how much of it is because of, you know, your content increase versus inflationary benefits as well as mix. Any favor so that 11% outperformance, how much of that contributed to other content increase?
Vaaman and Kunal, please.
Yeah, I can start and Kunal can help. I don't think we've done to that minute detail. As you can imagine, there are numerous new programs running and there are launches and that across our customers. I think on overall basis, we do feel that the diversification has helped where, you know, some customers were obviously affected a bit more, some customers affected bit less. Hence we are not tracking exactly as the market, in fact, outperforming with the strong order book and the launch. You know, we had already shown how our content is increasing with the changes in the price and content. I think all of that has helped, but to give you an exact breakdown I think will be difficult.
Understood. Also, and also on the energy cost, you know, you did call it up in the last quarter as well, and I know that, you are in talks and in this quarter also in presentation you've mentioned that you are in talks with customers who are getting a pass through, for the energy cost rise. Just wanted to understand where are we on those talks? How, you know, what % of customers would have given you that energy cost increase? Because if we see your energy cost as a % of sale of your SMRP BV, in this quarter it has, you know, moved up on a quarter-on-quarter basis. I'm just wondering, you know, going forward, are we expecting that in future quarters?
If at all we get that compensation, would it be, you know, reduced from other expenses line item or it will be added to revenues as a compensation?
Yeah, I can start this and others can support. Again, I think it was a conversation to have with the customers. The energy prices, specifically in Europe, has been quite volatile. Although, I think you have seen the past peaks behind us. There was definitely more softening in December and January. We definitely did have those conversations with the customers. Again, it depends on the customer, depends on the program, depending on the location. As you can imagine, the energy prices have not stayed able for all of Europe. Different countries have different impacts. And that's where the support has been spoken to with the customers and again, it's completely varying depending on the location and the product. That was also only up to the point of December.
In January, again, we have seen some softening compared to where the levels were in December, but still elevated levels as compared to where it is normally. Those discussions, as we mentioned to you before, are a continued path where we will continue to talk to our customers, show them the impact and hopefully have some support, if it is, you know, quite large this quarter as well. The good news is that it's on a negative trend from the peaks that we saw, but still at elevated levels. For the accounting, I'll request Kunal or Vivek to answer the question.
Yeah. I think the number obviously elevated in quarter three. The peaks were seen in October, November. Since then it's been on a declining trajectory, though still continues to be volatile. Where we stand right now, and whatever outlook that we have, in the current environment, it does seem that energy prices would be lower in the ensuing quarter.
Okay. Just to ask, understood. Just to say that, you know, since energy prices are actually declining, you may not require those kind of price increases from your customers, which you all were, you know, wanting, maybe four, five months back, since, you know, already it has started on the decline. That is the right understanding, right?
Let me just put it. Look, this is not the only thing that is under discussion with customers. When you're discussing with them, then you're discussing as a comprehensive package across commodities, across inflationary pressures, across supply chain issues, across working capital issues and so on and so forth. It's not necessarily a like to like on a single, you know, aspect only. When it is, it is really about sharing the pain. These are not costs that are caused by anyone. Hence it's the sharing of aggregate pain.
That's how the customer discussions are.
Great. Thanks. All the best.
Thank you. Reminder to the participants, anyone who wishes to ask a question, press star then one. Next question is from the line of Kumar Rakesh from BNP Paribas. Please go ahead.
Hi. Good evening. Thank Thank you for taking my question. I have just one question around your customers. Volkswagen, which reported its Q3 release numbers, talked about working capital pressure, which they saw strictly towards the end of the December quarter in the last few days. We talked about inventory build for finished goods as well as raw material. Can you see some of that impacting your March quarter as some of your customers start rolling out their stock inventory and possibly the production needed from our side may be lower?
Vaaman?
Look, we did see. Again, I can't go into customer-wide specifics, and I'm not answering for Volkswagen. I'm just talking in general. We did see some delayed starts from customers. Again, we do hope that that catches up. Usually you do see a, you know, more something happening as people are coming out of the different holidays, January holidays. Definitely you do see better pickup in February and March. Look, that's something general that we see. I think might not have been extra special this year in particular, but like I said, some customers actually did take some time to clear out some inventories. That was also because of, you know, building up some of the semiconductors which still continue to play havoc in some programs.
It could also be that, they are, you know, making sure that their inventory levels are stocked to a good level for more level production, till the end of the year. Again, we are, we are optimistic that, it should be caught up. Yes, was there some effect to that? We definitely did see that in the January start. Hopefully it should be caught up.
Got it. Thanks a lot for that. One clarification, Kunal, you have already answered that. How much would be energy as % of sales?
I think it will be ballpark somewhere in the 2.5%-3.5% levels.
Got it. Thanks.
Right. Fair answer.
Thank you. Reminder to the participants, anyone who wishes to ask a question may press star and one. Participants who ask a question, you may press star and one. Reminder to the participants, anyone who wishes to ask a question, you press star and one then press nine. Next question is from the line of Basudeb Banerjee from ICICI Securities. Please go ahead.
Thanks, and congrats for the quarter numbers. A couple of questions, sir. One, if I look at your SMP, SMR and SMP and plastic business margin, which used to be in good days somewhere, 8% plus. Now because of various cost inflation items as Kunal mentioned, plus crude was also elevated at $100 per barrel plus. It is now down to 5%-7% level. How much. just to understand with crude down to $80 and the polymers which you are using for the plastic product business, so is there any lag effect of input cost of polymers for the business and with crude at $80 it should help some of the plastic business margin inch up? How to look at from that triangle, sir?
I can take that. Look, you know, we are talking about highly engineered plastics. While there is a correlation, I don't think it's a direct correlation as you do see it. Even when the oil prices went significantly higher, even though our raw material cost did move up, it's not always in the same one is to one level, as you can imagine. Definitely as it's moving down, it eases some of the pressure on us, on our suppliers. Is it an exact reflection of it going down? Not specifically because these are, you know, very specialized engineered plastics.
We have, you know, clauses with the customers that if there is a significant improvement, I mean, there is a range in which we have to absorb it or the customer absorbs it. After that range, there is a discussion to be had with the customers. Like I said, I think most of these quarters we are staying very, very close to the customer, being completely transparent, showing the things that are not in our control, trying to pass on the volatility as much as possible, and getting good support from the customers as well, where it is a, you know, a reasonable impact. Definitely, as I said, it works both ways for us in the discussion with the customers. Should it help? Definitely. What context we'll see because it will.
We will probably know only once we've seen the entire quarter go through.
Sure. Second question is, which nal earlier mentioned, not only with respect to power cost inflation, but freight inflation, wage inflation, working capital, fleet cost, everything combinedly on a holistic basis, where you discuss with your customers in terms of price contracts. On that overall basis, any scope of price, you know, appreciation from an annual contract basis, currently as such?
Okay, I can take this as well. Kunal, maybe you can support.
Sure.
Some of things which are operational for us definitely have to be absorbed by us. We are obviously making our own efforts to improve operational efficiencies. Where the costs are under the control, have spiked for reasons that are out of our control, we definitely do have those conversations with the customers, including volume changes or shift cancellations or anything like that. Like I said, for like smaller items like logistics, et cetera, you know, at some point we have to absorb it up to a certain level, which is why you've seen the results deliver in the last few quarters in this tough environment. As these things are easing and as we're getting support for items that are reasonable enough, I think we are doing better.
I think we should not take away from the operational teams that are working extremely hard to deliver on higher efficiencies in the business, removal of fat, and making sure that we can sustain and keep standing during these tough times and continue to support our customers with the highest quality and delivery, even in such conditions. I think that's also appreciated by our customer. The rest, I think, again, it's a, it's a continuing dialogue that we have with the customers. We can really, you know, have a very good relationship with them that we can discuss how to deal with some of these things in the next quarter as well.
Sure. Last question from my side. If I look at on a sequential basis, EUR terms, revenue was up some 3.5%. In INR terms it is high because of currency movement. Even in a quarter with lesser working days, on a sequential basis, your revenue was up commendable. Just wanted to understand the trajectory where SAMIL has been moving through past few years, where better mix, rising EV mix, et cetera, where value per car has been moving up compared to volume of cars serviced. How that has been moving, because even on a sequential basis of revenue increase is quite impressive.
Thank you. Thank you very much for that. I think, again, it's commendable to the teams that are bringing the new business orders, and we continue to invest in technologies that enable us to increase our value content. We had shown some of that in our investor day, you know, how the future of our business is positively affected by changes in preferences of consumers, whether it be, again, some of the buzzwords that talk about our general preferences in the sizes of cars that they want, and the luxury segment also growing.
I think that's a combination of all of that and having a very diversified business where we have the opportunity to have launches even in tough conditions because we are with all the customers and part of their new launches. We always try to increase the value of the new launches compared to previous ones. Again, whether it is materials, whether it's processes, whether it is adding more technology, adding more electronic content, adding more features, all of that really goes in and that's the key reason why we are able to grow even in a depressed market.
Sure. If I might add, Basudeb, that's why we keep saying please look at absolute results. Your first question on inert polymer, 8%-9% margin, et cetera, it'll just be useful to look at absolutes and hopefully we will continue to do better every quarter.
Sure. Sure. Thanks, Kunal. Thanks.
Thank you. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services Limited. Please go ahead.
Hi. My question pertains to the inflationary pressures on the commodity side. Have you started to see that moderating in our numbers now, or that is yet to reflect into our PNL?
Maybe I can start there. We haven't seen it as yet. It is in the process of softening. There is a lag effect that, you know, happens in there. Like we were talking about energy, last quarter energy was still elevated, so this is more in current quarter that this will be much more softer. Supply chain has now started easing. You know, we had anticipated we would be able to normalize our working capital in this quarter, but not much could have been done given just how the geopolitical situation continued and how, you know, the COVID-related issue in China continued. That is also work in progress.
You know, as the supply chain becomes much more stable and tends to, you know, both, decrease the working capital going forward, which should again help in deleveraging in the ensuing quarters.
Right. Particularly on the input material like copper on the Wiring Harness or polymers on modules and so on and so forth, have you seen stabilization at least that may have to benefit?
Yeah, that would be a better word. It remains volatile. You know, copper in last quarter did show in the latter part a decline. You know, in January it started going up. Now it is again showing a bit of decline. It remains relatively volatile.
Right.
It's not showing, you know, a takeoff or a fall down from a cliff construct. It is, it is more stable and hence, you know, with the lag effect, it should be more of a path to eliminate at least copper for us.
Got it. Last, second question pertains to the order book which has gone into execution over last couple of years, which has come out of our order book per se at similar PDB level. Wouldn't we try to say that the large part of a ramp-up of those orders is still behind? I mean, it's still to happen because of the supply chain issues, and as that happens, we should see a good evolution on the top line.
A s well as profits or, SMRP BV?
Look, I think it's a continuous process. I think, you know, some of our large plants are already up. We are seeing, of course, some new orders also kicking in, which is a continuous process. I think that's also one of the reasons that you're seeing record revenues that have come in in this quarter. Is there still more growth to come? I definitely think so. That's again, due to the success of the group being diversified and us launching more programs and we're seeing the strong order book that exists of new programs that are gonna come in the coming quarters. Definitely think that the best is yet to come.
Got it. Thanks. Thanks and all the best.
Thank you. Next question is from the line of Jay Kale from Elara Securities. Please go ahead.
Yeah, thanks for taking my question again. Just a follow-up, you know, on your M&A strategy as well as your M&A outlook. How are you seeing the environment currently in terms of, you know, target companies? Any flavor you can give on whether the opportunities, intensity, you know, that you're looking at has increased? Within your different segments like polymer, vision systems and wiring harness, and of course, the other emerging segments like mould tools, which are the, you know, segments that you are most excited about or most, number of target companies, you all will be recruiting at, any indication around that?
You know, there was expectation that, you all could also now look at global passenger vehicle wiring harness opportunities as Tier 1 suppliers. How is it shaping up over there in terms of an organic approach?
Wow. Vaaman, you want to go for this?
I think the strength of Motherson is, as you can see, that we are significantly de-leveraging ourselves and preparing ourselves to grow together to reach our target through FY25. That remains intact. In fact, independent teams are working as we speak on multiple opportunities. As you can imagine, in these environments, I think there are even more opportunities on the table. Very hard to say which one I'm most excited about. It's like asking someone who has multiple kids which one is favored out of all of them. We believe there's capability and opportunity in all the divisions and are also very confident that we'll find very good opportunity, not just in the existing business, but also in the new business. You have to be little bit patient with us.
You know, we are obviously signed NDAs, et cetera, for any evaluation of any opportunity. Not really able to disclose. Also, we are extremely picky because we do have to deliver a high dose to our shareholders. Out of 100 opportunities we see, we'll probably end up doing one or two. You can imagine how busy the teams are. They're working overtime. There's a lot of opportunity in the market we are seeing where our customers are telling us to look at. Those are some of our priority. Is there enough in the pipeline? Absolutely. I think, there's more than we can all work on at the same time. We are prioritizing.
Again, we'll come back to the market as soon as we have something. You're hearing some smaller bolt-on acquisitions that are happening. We just announced a partnership with SAS. As you can see, you know, our growth do also depends on partnerships. All of those things are happening. I think, again, the next two years with the strength of the balance sheet, the wonderful job the teams are doing and the customer support, I think you will see that we will have a lot more to come back and talk to you about in coming quarters about the question that you've asked. As far as the Wiring Harness question that you asked, that was always there.
You, you know, we do everything with discussions with our joint venture partner. There is really no stop for us to go and look at anything as long as we have good communication with all our customers worldwide. You know, nothing is, you know, outside of the cards. We believe in fostering long-term full of trust relationships. Again, anything that we will do will be within that philosophy. Papa, you can add or some or anything .
No. I think, you're right. We have a large presence assistant, and that means the customers are asking us time and again to solve their problems. I think, you will hear soon enough as it will happen. In the worst of the years, in the last 2 and a half years, we've done seven acquisitions. You can be rest assured if things are getting better, then we will have that much more because we always like to be physically present at the place so that we can see the problems and understand it and then find the right solution for that. Because of COVID, we could not go to many of the places and things like that.
You can be rest assured that we are very much looking forward to this opening up, and we will be in a position to give you good news soon.
Great. look forward, sir. Thanks and all the best.
Thanks.
Thank you. Participants, to ask a question, you may press star and one. Reminder to the participants, anyone who wishes to ask a question may press star and one. Next question is from the line of Suraj Deora from Prabhudas Lilladher. Please go ahead.
Yeah. Hi. I'm sorry I joined the call late. I was wondering if you talked about the booked business slide. It's not in the presentation for this quarter. It was there in the previous quarter. The waterfall which shows your booked business change over time.
I think we say it every six months. It goes now. Did we answer that?
Yeah.
That's right. Look, we will disclose it again, at the end of next quarter. Needless to say, you know, we continue to gain traction in the business, in all our businesses for that matter.
Got it. Thank you very much.
Thank you. Participants, to ask a question, you may press star and one. Reminder to the participants, anyone who wishes to ask a question may press star and one. Next question is from the line of Chirag Shah from Nuvama. Please go ahead.
Yeah. Thanks for the opportunity and sorry if I'm, I've joined a little bit late, so if this question has been asked. First, a housekeeping question, Kunal. Is there anything lumpy or one-off in other expenses that in our reporting structure which is really slightly higher, or it's a normal quarterly thing?
No. one, there is a INR 61 crore write back on the litigation which were done favorably for us. We've written back into vision. That's only one-off that we have highlighted in notes.
Even at console level, there is no lumpy effect or a lumpy impact, right? Which could have been spread over quarters, which has come up suddenly in this quarter kind of thing.
Okay. Other than that, look, energy prices are obviously elevated in this period. Some of the commodity prices, slash rate costs, et cetera, remain elevated. If you're looking at the expense side, that's the reason why they're showing an uptick there.
How is the trend, especially on the energy cost end? Because this, they have been trending down. That benefit will be seen on immediate basis or so how does it work or there is a lag over there?
Yes, you will start seeing more of this in the ensuing quarters. There are obviously some long-term contracts in place, some short-term contracts in place, there are spot rates. Both the availability of energy and cost of energy is something we've been monitoring closely. It remained elevated last quarter. I think right now it is relatively soft. If it continues the way it is right now, I mean, we should be seeing a much lower energy cost going ahead.
It would be visible in Q4 itself or it's more of with a lag and hence, in Q1 onwards that change it will be visible?
It will start being visible in Q4, but remains that it is, it will become more starkly evident, let's say, in the ensuing quarters.
Okay. This is helpful. Second question was on the truck demand in general and our positioning over there. In U.S. and in Europe and even in China for that matter, This is what the indication coming from OEMs? If you look at the, for example, in U.S., the Class 8 order book data is all over the place. It goes up very much, it goes down suddenly very much. The details are holding on. Is there any trend change communication coming from the OEMs across the three digits, either on the positive or on the softness side?
Chirag, you want to know the customers' briefing?
Yeah. What I'm trying to understand that has customers indicated anything to you, be it U.S., Europe or China, in terms of a significant higher demand or some kind of softening of demand on the truck side, for PKC business?
We can't really, because we've not heard anything from the customer side per se, because our customers are collaborators.
Yes. Chirag, when you see U.S. also there is a huge backlog. The order book is very strong over the prior 12 months.
Yeah.
They have the orders which have to be executed. Then you see then they start to book orders and then they don't book more orders. That's how it continues when you just look at those Class 8 numbers also. Demand has remained strong so far.
Yeah. Yeah. Yeah.
In China, the demand is little lower. China is the only market.
The commercial vehicle side, the truck side and heavy-duty side has been much lower over the last year.
Any change of trend in China specifically lately? It's still too early for. You are really taking signs that there could be a certain uptick in demand in China on the truck and the PKCs that I'm listening to?
Once it happens, we'll let you know. We had been waiting for the last quarter also.
Okay, great. Great. No, this is helpful. Thank you.
Thank you.
Just, one comment, for better understanding. If China is going to, is opening up and all that, obviously the truck demand will go up because, it needs tremendous amount of transportation logistics. Just, if it helps you. Thank you. Sorry. Go ahead, please.
Thank you. Participants, to ask a question, you may press star then one. Reminder to the participants, anyone who wishes to ask a question may press star and one. There are no further questions from the participants, I now hand the conference over to Mr. Vivek Chaand Sehgal for closing comments. Thank you. Over to yourself.
Thank you very much for this question and answer. I hope more clarity has come to you. I wish you all the best. Thank you very much.
Thank you. Ladies and gentlemen, on behalf of Samvardhana Motherson International Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.