Ladies and gentlemen, good day, and welcome to the Q1 FY21 results conference call of Motherson Sumi Systems Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing stars and zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. VC Sehgal. Thank you, and over to you, sir.
Good evening. We have had a first quarter. Everybody knows April and May was almost a washout, but we are very enthused that the second quarter looks even better, much better than at least the first quarter. This has been the worst quarter in our history, so definitely we will make up for it. But maybe it might help you to realize that in the two months that the plants were shut, we were very grateful to our teams and our associates who actually came in and we relocated the plant. We did all the improvements, all the bottlenecks that we had, which we couldn't change because of the pressure that we had. We have been able to overcome that, and I think from here we will come out very strong. So without getting much into this thing, waiting for your questions, I hand this thing back to you.
Thank you.
Should we open up for questions?
Yes, please.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your touch-tone 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. The first question is from the line of Nitin Arora from Axis Mutual Fund. Please go ahead.
Hi, sir. Good evening. My first question is, when we read your statement in the presentation that about 84% of the plants are operating at more than 50%, Gauba ji, if you can tell us more on a direction side because it looks a little lower, so I just don't want to draw any conclusion. If you can talk about how is the reason why plant utilization directionally and at this point in time, and how much Q2 you think the business should be back for us. That's my first question. Second question was related to the greenfield losses, being a remarkable improvement there. Just wanted to understand, is there any one-off there, and if there are no one-offs, and that's what we'll be guiding everyone about your plans and the way to reduce losses.
Mr. Arora, this is the operator. Sir, there's a lot of background disturbance from your line.
Now that's fine?
Sir, a little better. Thank you.
Okay. So my second question was that if there are no greenfield one-offs in the greenfield losses today, one-off there, and on such thin volumes, you have narrowed down the losses, where do we see we are actually going to start making money on the greenfield plants because if the recovery is strong, as you highlighted? Those are my two questions.
Thank you. We will take the first question from Gauba, and the second question will be by Vaaman because you're asking about the greenfield. Go ahead, Gauba.
When we say more than 84% of our plants are operating at 50%.
Sorry, we're not able to hear you.
When we say that more than 84% of our plants are operating at more than 50% of the capacity, that means most of our plants are getting to normalcy because we have given the data based on each of the region also. And you will find that in Europe, compared to 30th June, on 24th July, the more than 75% utilization has come down because of the summer holidays. So therefore, it is a question of at what point of time we pick up the data. And as you would also recall, we have always maintained that when we start reaching capacity to about 75-80%, we start expanding. So we will always keep extra capacity with us.
As June became kind of a better month relative to April and May when we started opening up, it also showed how the demand is likely to be for July, September quarter, and we have seen that we are getting to a normal situation earlier than what we would have thought. The demand is good. And of course, Europe had the summer holidays, which was there last year also and the year before also. So barring unforeseen situation, we are seeing that by September, October, December quarter, we should be back to the pre-COVID levels.
Or better.
Or better.
Varman, can you take the greenfield question, please?
Sure. This is Varman here. The greenfields, of course, the only silver lining to this whole COVID situation was that we got time to really relook at our greenfields in a way that when you're working a plant seven days a week, it's very hard to bring in fundamental improvements, and with the COVID shutdown, we were actually able to bring a lot of the improvements that we have been wanting to put into these plants by relayouting, reorganizing, and bringing in a lot of improvements in terms of training as well that we were not able to do during the heavy pressure time of running the plant at very, very high sales levels for that time. I think as the plants have started to come back up, of course, April and May, like Papa alluded, have been complete washout.
But since June, towards the end, as the plants are picking up volume, we are seeing that these improvements are finally bearing fruit. They should continue in the next quarter, and we should really see the impact of this in the coming quarters as the volume comes back to those normalized levels, and all the improvements that we have really put into place should happen. I can't give you an exact number, but definitely the progress is going to be continuing in the good way that you were seeing. And I hope that there is no second wave of COVID or something that really dampens that. But other than that, as long as the demand holds, I think you should see much better performance in the coming quarters.
We can.
Varman, there are no one-offs in this quarter, right, in the greenfield. It's a pure, pure reduction led by the efficiencies and the cost reduction plan, right?
That's right. I mean, the improvements, you will see them on a constant basis. So it's not a one-off thing.
Very fine. Thank you so much. I'll come back in the queue for more questions.
Thank you. We'll move on to the next question. That is from the line of Amyn Pirani. Thank you. We'll move on to the next question. That is from the line of Mr. Amyn Pirani from CLSA. Please go ahead. Mr. Amyn Pirani, your line is in the talk mode. Please go ahead.
Hello. Can you hear me?
Yes, sir. Please go ahead.
Yes. Yeah. Hi. Thanks for the opportunity. First of all, thank you for putting out a separate slide on what you've been doing at the greenfield. It's actually quite informative. I just had one question on this. There is a significant reduction in manpower that you mentioned in Tuscaloosa. So I was just wondering if this is something like a temporary reduction because of the reduction in revenues, or is it like you have been able to increase the productivity and structurally you need lesser people going forward, if you can just help us understand?
Varman?
Yeah. I mean, we don't see that the manpower will go up again. Again, you have to understand where we are coming from. We had a very strong bench because we had very high absenteeism ratios. And of course, like I was saying before, the improvements that we wanted to put into place, we never really got a window of opportunity to put it in. As those things are happening with the same level of sales that we were pre-COVID, we think that we can manage with the people that we have over there. And of course, there are even further improvement targets from here. So no, we won't go back to the original number that we had pre-COVID because of the improvements that have been put into place and the lower level of absenteeism that we are seeing now that the situation is a lot more stable.
Great. Great. That's helpful. My second question was actually on the debt. I mean, the net debt, actually, given that this quarter has been very weak. I would say has been kept well within control. If I look at the trailing net debt to EBITDA on a consolidated basis, it is still, I think, pretty comfortable. So have you been doing any more cash flow measures? Last quarter, you had a significant reduction in working capital. Can you just put some light on what you have been doing on the cash flow, working capital, CapEx side to control net debt?
First of all, thank you very much for acknowledging because this was one of the important responsibilities all of us have to ensure that there is enough of a liquidity and our working capital does not go up unnecessarily. So immediately, and we had the advantage of facing a COVID-19 situation in China. So immediately, we got into an action to control our working capital. And therefore, you see that while there is a marginal increase in working capital, approximately by INR 900 crores, which should come back once the operations get normalized, we were able to ensure that the debt levels are kept within the controllable levels. And thank you very much for understanding this. On the CapEx side, we have been emphasizing that the larger part of the CapEx is over, and the greenfield CapEx, larger part was done until 2018-19 and the initial part of 2019-20.
So we have also been able to cut down our CapEx further within our guidance for this year. And of course, please appreciate that this debt is also overstated, not overstated exactly, but has the impact of higher exchange rate translation by about 130 crores or so. And we took a conscious decision to not stop the CapEx of this 400 crores that was done because we know that the strike back of the car makers, the coming back of the market is going to be very strong. So unlike what we heard, a lot of people have postponed their CapExes, we have not done that because we know that the strike back is going to be very, very strong. So we did whatever was absolutely essential. That's the one that we have already done.
Great. Thank you. I think I just missed what was the guidance for the full year CapEx, Goba, sir? I think I missed that in the middle.
Our guidance for 2021 stays at INR 2,000 crores, and then side acquisition of those things, there could be some plus minus due to exchange fluctuation, but that's the broader guidance.
Okay. Great. Thank you. I'll come back in the queue.
Thank you. We'll move on to the next question. That is from the line of Kapil Singh from Nomura. Please go ahead.
Yeah. Hi, sir. Firstly, just a clarification. We mentioned that we are expecting revenues to reach pre-COVID levels or better than that by September. Is this for India or overseas or both?
No. The thing is that near about that would happen by September, but I think October, December, definitely we are talking globally.
Okay. Okay. And where are we currently in India and also overseas? As a percentage of last year revenues, where would we be currently?
Your guess is as good as mine, whatever you say. See, we don't make nuts and bolts. So it depends upon which car you buy, and that will then decide the amount that comes in. But on the overall, I think, Goba, what would we say?
80% plus we are reaching that.
At the moment, we are reaching about?
80%.
80% plus?
Of last year.
Of last year.
Last year was low.
Yeah. I hope that helps.
Yeah. This is very helpful. Great. Second one is to Varman. Now, just some more clarity on the greenfields. With 66 million revenue, we have done a fairly solid performance in terms of improvement in the losses. Now, I can see that the normal run rate for greenfields is roughly about double of that. So when we touch those levels, are we looking whenever we reach there, are we looking at profitability?
Look, all efforts are on to achieve that. Definitely, as the volumes go up, the impact should be much better. But I would really wait for the next quarter results to comment on that as we are going through the increase in the numbers in the plants. And you will see that that answer comes in the next quarter.
Okay. And if you look at efficiency of these plants, Tuscaloosa and Kecskemét, how far are we from where you would like them to be or from your other plants?
No. I think it's a continuous process. So you can't compare one plant with another plant. Everybody has their own, let's say, local situations, what program they're supplying to, how the programs are doing. So you really can't generalize. You say, "This plant is doing this much. So why isn't your other plant doing that?" My father always used to say, "You can't compare your two children." Now that I have two children, I understand what he's saying very well. But to give you an idea, I think, look, the improvement, of course, in these greenfields from where they are coming from to where we believe that they can be, there is still a while to go. Whereas some of the mature plants, even in these tough times, continue to improve and push the benchmark even higher. But we benchmark them against themselves.
Definitely, I think the first objective is to get them to EBITDA breakeven. Of course, PBT breakeven. Once they have reached a PBT breakeven, I think that's when we will really set the bar even higher for them and try to be perhaps the best in the group. Right now, it's a staged process. You can imagine the stress and pressure where they're coming from. They take their targets, and we're supporting them. Like I said, first is the EBITDA breakeven. It will be followed by a PBT breakeven, and then we push on from there.
All right. All the best for that. Sir, just one last question. You mentioned that this crisis also gave an opportunity to reduce costs and look at some of the other things which may not have been looked at in normal course of business. So what are some of those things? And when we get back to normal revenues or higher than that, should we expect even better levels of profitability than the past?
Oh, sorry. You're going to take that?
Go ahead.
Basically, what Varman was trying to explain to you is we ask every company, every unit to do better than what they have budgeted, what they are doing, and irrespective of whatever the conditions are. So it's a given that we will continue to strive to do better and better and better. And I think sometimes we have to make huge investments because we have huge orders that are there. And that kind of disturbs the whole thing. But I think all the other companies have also done a phenomenal job. They have increased their profitability to help offset the kind of losses on the greenfield. But anyway, this is a special situation. Definitely, you can count on that.
Right, sir. All the best.
Thank you.
Thank you. The next question is from the line of Jinesh Gandhi from Motilal Oswal Financial Services. Please go ahead.
Hi, sir. My question, firstly, to Varman, with respect to those greenfield plants, both Hungarian and U.S., we did about 460 million revenues last year. What would be on a more steady-state basis when all the orders are-all the launches have happened? What kind of revenues should we expect from these two plants?
So look, it depends on. So when you get an order, the order is really five years. So you really kind of peak into that order somewhere around that third year, second and a half, third year, depending again on the launches. And then you start tapering down again after the fourth year. So you have two years of kind of peak-ish revenue. And the first year is really ramping up to that. So the timing of the two plants is different. Hungary was a little bit older, so it's already into its peak, whereas we said that U.S. Alabama will hit its peak this year. But then again, with COVID, there has been some redistribution of how those launches and how the volumes will happen. So it's difficult to say right now.
I think we're getting clarity from the customers for very short notice right now, as they're also dealing with the entire COVID situation and things are getting back on track. So really, I think 360 can be better. But again, depending on the COVID situation and how strong the market is and how the demand comes back, that we'll have to see in the next couple of quarters. So I can't really comment on that till we don't have the firm visibility, which would perhaps take a little bit more time. But directionally, yes, 360 or better should be matched.
Okay. Got it. And the second question to Goba, from SMP and SMR perspective, or in fact, even PKC as well, what would be the kind of government supports which would have gotten our European or even U.S. plants, both in terms of support for laid-off employees as well as anything on the interest subvention side?
See, it will be difficult to quantify, but more grants have come or more support has come in terms of a debt level. So not in terms of a direct PA level. So we would say that it will be more reflected in the additional debt which is there. Actually, one of the reasons why the debt looks a bit higher is also because we have taken that. We have taken that because if you see, liquidity remains at the same level of INR 10,500 crores. So the incremental debt, apart from INR 500 crores, which we raised from NCD in India, the rest of it is most of it has come from that government-guaranteed kind of a situation.
Okay. But no support on the staff cost side because many of the European countries have announced between 60%-80%, 90% of staff costs being borne by them during the lockdown period, so.
There may be some states, but it is not that significant as well.
Not significant. Okay, sir. Got it. Thanks. I'll come back in queue.
Thank you. The next question is from the line of Chirag Shah from Edelweiss Securities Limited.
Yeah. Thanks for the opportunity. Varman, first question for you is, will we right statement that Tuscaloosa plant is much more capital-intensive and much higher on fixed costs given the nature of that asset? And hence, the operating leverage angle could play out much sharper than other SMP plants?
No, not really. I think it's a newer plant, so definitely, a lot of investment has gone there into a new location, but it's not really anything different to what we have at the other plants. But I think you have to understand that being in Alabama, where it's still a newest kind of state for seeing a lot of people in the automotive, you have to attract talents from outside, which actually increases the cost of having people to relocate to support some of the sophisticated stuff that we have over there supplying to Daimler. The costs are perhaps in line or perhaps even a little bit more at the start in places like these, so I don't think that it will play out like that.
But yes, as we improve the efficiencies, the productivity, and the place gets more mature, definitely there's a higher chance to further improve the profitability in the region as it gets more mature.
Also, Chirag, you must understand that this was a greenfield plant in USA. And all our other SMP plants and all that are in the European domain and Mexico, of course. So the manpower in Alabama before COVID, the unemployment was less than 1% at that time. It's after COVID that the unemployment numbers have gone up to almost 10%-12%. And the two months that Varman is talking about, we gave us enough time to ask the people to come in from different parts of the U.S., from our companies, and also from other focused attraction of people to come into Alabama. So that has also allowed us to be done in those two months. So that's a huge add-up. That's one of the reasons why Varman and the team have been able to bring down their people from almost, I think, 3,000-something Varman to about 1,800 now.
But go down even further.
Yeah, that's correct. Around 2,800, perhaps at the peak, perhaps even a little bit more. But yes, getting down to around 1,800. And we have further plans to reduce as things stabilize further.
And a question would be that most of that effort that you have put on training and various aspects of labor over there, how would you rate the efficiency of the, I know it's a new plant, new location, but trying to understand that related to our established cases in Europe, is there still a significant scope of improvement in the efficiency for the efforts that you have to take? So if Europe says that, then the gap has been bridged in terms of ranking, or is there still a good amount of scope over the next two years we can actually see a much sharper improvement on the efficiency aspect of manpower?
No, definitely more is possible. As I said, as you have a new plant, you have new processes, new systems. And as they get more and more mature, you can drive further efficiency improvements. And again, it also really depends on the maturity of the people that are working in that plant. I'm very proud of our team in SMP Alabama and all the people of Alabama because they're really giving it everything. But there's nothing that you can do to increase the time. That only comes through as they get into the entire grips of the processes, the machines, how we really want to run our model plants. And it's a build-up in time. The quality circles, the people over there, as they do more and more, they get exposed to more. They see that further improvements are possible.
Literally, the last few months were picking up some of the low-hanging fruit. As you clean that up, then things get a little bit tougher. That doesn't mean that it's not possible to do. You just need the maturity to do it, which comes a little bit with time. We're really, really enthused by the progress that they are making. Still a long way to go. Like I said, quarter on quarter, you should see the improvement.
So double-digit margin at peak utilization is what we can aim to achieve, right?
There's a lot of disturbance in the back.
I hope it's better now.
Yeah, a little better.
Just wonderful. Double-digit margin at Tuscaloosa, where peak level is achievable?
Definitely achievable. Question is time when we get there.
Thank you. Thank you very much.
Thank you. The next question is from the line of Prateek Poddar from Nippon India. Please go ahead.
Yeah. Hi. So just one small question. If I were to think of loss of revenue and the contribution margins, which is the new plant, which is the new greenfield plants which would have given you this quarter, is it fair to say that that would have flown into the bottom line or EBITDA level and then basis whatever rough math you do, you are almost at EBITDA break-even level?
It's a little bit difficult to use this quarter as a benchmark when the plants are not running. You have fixed costs, and you have a lot of those things. So really, we have been very clear on the earlier calls as well. I think this quarter, definitely, we've controlled the cost in a good way. But it should not really be a benchmark for you to be deciding anything or what's going to happen. We're giving the confidence that we are making the necessary improvements, the teams are working hard, the results are coming well. But please don't take that as a benchmark to a quarter where two out of the three months were zero production months. So please be patient. Please give us another quarter since the volumes are starting to come back.
You will have the answers that you're looking for perhaps after this quarter when things are a bit more normalized. That would be a better place for us to have these discussions where, again, like I said, it's very hard to really benchmark or take trends out of things which are two months out of three closed.
Sure. So directionally, can you give us a sense whether July, August would be much, much better than what in terms of efficiencies of those plants be much, much better than what it was in April, May, June? I'm just trying to understand the direction, right? Would the direction be upwards, or how should I think about it?
Definitely upwards. Definitely upwards.
Sure. So for.
I'm sure that you will all be very pleased with the efforts that Varman and the whole team is doing. Really amazing. Every day that we hear about to see what's happening there.
Great. So I wish you all the best. Thank you.
Thank you. We'll move on to the next question that is from the line of Sahil Doshi from Paladin Capital Management. Please go ahead.
Hi. Good evening, everybody. I just want to ask you, what is the current landscape for your M&A opportunity set? I recall you mentioned earlier that towards the second and third quarter, you'll start to see some opportunities in M&A based on moratoriums expiring in different parts of the world. So I'd like to get your thoughts on that. Thank you.
Yeah. I think, first of all, you are aware that we only pick up a company or something like that which the customer wants us to do that. So at the moment, a lot of the money has been given by the governments and all that. So people's survivability has gone up by about three, six months. But we know that there are a lot of problems over there. We can see it because these companies are stopping the line. And we know what's happening in the open business over there. So I think we are waiting back because the money at the moment, they have money to burn. So we are okay with that. So I think somewhere around September onwards, December, that's the time when we'll be looking for making up those acquisitions which should have been done by March last year or this year.
Of course, new opportunities are coming time and again.
Thank you.
Thank you. The next question is from the line of Alpha Investments. From Alpha Investments, please go ahead. Participant, your line is on the talk mode. Please go ahead. There's no response from the current participant. We'll move on to the next. That is from the line of Chirag Shah from Edelweiss Securities Limited. Please go ahead. Chirag Shah, your line is on the talk mode. Please go ahead.
Just one clarification, if I can ask. In India, would there be a requirement of any CapEx at least for next 12 months?
Chirag, we have given guidance for the total CapEx. Of course, in India, a larger part of the CapEx goes into land and building. So there could be some construction with maybe halfway or some land to be acquired for future projects. So as Mr. Sehgal said, we don't stop something just because we have to make sure that we conserve our resources and yet ensure that we are prepared for future projects.
Thank you. Thank you very much.
Thank you. A reminder to the participants. Anyone wishing to ask a question, may please press star one. The next question is from the line of Nishant Vass from ICICI Securities. Please go ahead.
Yeah. Hi. Thank you for the opportunity and congratulations on the improvements on the greenfield. Just, my question is more away from the greenfield, Varman and obviously Gauba sir. Could you highlight what else are you doing possibly other than greenfield in terms of utilizing this time for cost reduction in other segments? Say, for example, India and PKC. Could you highlight some of the efforts there, if any?
I think PKC, you all will be pleased to know that the trucks are pushing very, very strong in USA. How much can you give them guidance on that?
Markets are bouncing back. In China, the rebound was very strong in this quarter. And also, Europe is showing its strength. And now, as we move forward, we see the American market also coming back. So in this time, you see two things have happened. We are a very manpower-intensive company. So while there are certain costs which we have to incur in terms of safe operations for people, that's making social distancing another thing. But the teams always take up this time to challenge for doing a lot of VA/VE activities. That's where we create win-win situations with our customers. And the customers are also more than happy to make those changes because everybody is under pressure to find solutions which do not impact ultimate functionality but can bring about cost reductions.
So when we did a lot of, as was explained to you, in terms of relayouting, in terms of bringing out efficiency. So all these things are the work which during the pandemic time, when the lockdowns were there, it was not that people were not working. All the people, even from home, were working and using their energy to find solutions. So it was first time for us that even our designers were working because the carmakers didn't want it to delay the launch of their vehicles. So they gave us access. And people were working from home on their workstations which were transported to them. And they were given access so that they can work from home. So the work continued.
And that's how we have been trying to ensure that whatever is an impact of the changes which lead to the COVID impact, how we can negate them and actually improve upon. Yeah. So the board actually congratulated everybody because it was very evident that every department, every cluster of companies in the group have actually improved their productive performance and all that. So it's very evident that there was a lot of hard work done by all of them.
Thanks for that. Pankaj sir, if I could just have an additional point on PKC, now that from a China joint venture standpoint, and you're obviously seeing China rebound much faster. So have you seen any or have you been able to create a distinct differential in terms of the profitability threshold that is now working in China vis-à-vis Europe? Or do you think that's more on a blended basis, similar?
I mean, see, as Motherson said, that we don't compare companies. So definitely, we do see some of our units doing better than the others. And the whole idea is to make and ensure that every company does the best. So we have three joint ventures in China, and they are all tending to improve their own performance. So what they were performing last year or a quarter before, so the whole endeavor is that. And at the moment, they were in expansion mode also. So we expanded our facilities. That's where we actually invested in new machines to expand at a very short notice to take the demand from the customers.
Okay. Thank you so much. That does answer my question. Thank you.
Thank you. The next question is from the line of Prakash Dalal from Ratilal Shares. Please go ahead.
Yeah. Thanks for the opportunity. I just had one question pertaining to when you say that more than 50, I mean, globally, 84% of our plants are running at more than 50% capacity. If you can just let me know which are the plants which are running at the highest capacity and which regions are they located in so we get an idea as to which economies are actually trying to come up out of COVID? Thank you.
So generally, I mean, we can generalize it as we go specific on this. But by the way, China, Korea are more than 70%.
Plants in India are doing.
More than reaching that level. So it's a mix in different economies depending on which kind of business has taken off much faster. So that's how.
Korea has been.
China was the first ones to hit that number.
So, if I'm just getting it right, China and Korea, you said 70%. Can you just please repeat the other?
See, even 70, maybe higher. So even if you ask me, I would say that even a plant in U.K. is doing that number. So we have so many different plants.
Right. Right.
So our plant in Derby, which is supplying for rolling stock, is because there has been a backlog of orders and the customer wants to do that. They are doing their highest numbers. So different geographies, there will be certain plants which are doing this kind of a number. And that's what you can see in the pie that which plants are doing more than 75% and how many of the plants. So that's the pie which we have given on page number three. And also, I think you must understand that some of those plants are for internal consumption also. So you can't take anything. It becomes really crazy. We have to try to show something to you. Please believe me, it becomes really, really difficult for us to do it. But what we do is we just take it as is.
I mean, if the capacity is 100% 75, we just put it at 75. So a lot of confusion there. But at the end of the day, the trend is going higher and higher and higher every day, every month.
Right. Right. Thanks a lot. Thank you.
Thank you. The next question is from the line of Rajat Chandak from ICICI Prudential. Please go ahead.
Hello. Can I auditor?
Yes. Please go ahead.
Yeah. First of all, congratulations to the whole team for coming out with such strong results in such tough times. I have two questions. One is on the Tuscaloosa plant in terms of the support which we may be getting from Daimler or we would have got. Any color on that in terms of are we under discussions to help make good some kind of clauses by price negotiations going ahead or any other kind of support which the customer we are under discussions with the customer?
Yes. Look, we are not at liberty to disclose any of the contractual information that we have with Daimler. All I can tell you is that Daimler is very, very happy.
Or any of.
Can you hear me?
Okay. Sure.
Yes. With any customer, those are contractual things that we have with the customers. And as you can understand, it's a relationship business. This plant is definitely very important for Daimler. And as we are solving all the delivery quality issues as we have done post the time that we have had, I'm sure they are always wanting to support good supplier companies like us in whatever way. It doesn't always have to be in a monetary sense, but also working towards working with them. To give you an example, we get a heads-up of about three hours when they have the first broadcast of the day. And that's kind of eaten up 90 minutes because the kind of the interior options that we get also come from a supplier. And for that to happen, it takes about a good 90 minutes for that to reach.
So it kind of eats into that time. But together, during the shutdown, we've been able to increase some of the holding periods, increase some of the storage areas together at us and at Daimler, which helps to decrease this 90-minute loss that we have, talking about perhaps different variants that are perhaps not the demand is not there to remove them from the inventory completely, things like that, more value engineering that we do together with the customer. So those kind of things we're working together that definitely they have been supporting tremendously and are a big reason why we've been able to also improve our operation. But it's a work-together thing together with our customers. We definitely would not be able to do it without their support.
Sure. Fair enough, and my second question is, any color we can throw in terms of how the order and flows have been? I know that we share that data half-yearly, but in general, any trend that orders are flowing in for SMRPBV?
Rajat, we are getting time and again. We are getting orders. I mean, the last week, we have picked up a lot of orders. But the thing is, it's very difficult to try to give you every time the order book and all that because it will only confuse you more. So we try to maintain that in a six-month period. But definitely, I can assure you that we are getting a lot of orders. There's a lot of pain in the system. And that is forcing the carmakers to look at things differently. So the weaker players, probably in the COVID period, the carmaker identifies them and tries to give the orders away from them to the stronger players. So we definitely have, when the next quarter we will declare the new orders, I'm sure you will be seeing how proud our team is taking them.
Sure, sir. One more thing. You mentioned that customer has also seen how some of the players are a little weaker, the suppliers, and we may benefit. In that context, really, in terms of M&A, that should really not have got pushed out, right? Because the customer eventually knows that the supplier is weak and would probably need to be taken over. So why should there be any delay?
You're right. But what has happened, a lot of the governments, especially the European government, the American government, has given a lot of money to the people, to companies and all that, to support them with the staff, with the workforce, with closure, and all these things. And that money is substantial. So what it has done is it has given breathing time for those companies to either get out of trouble or some more extension to their situation. So I think the real boil will come probably around September, October, because by that time, I think the money would have dried out. So that's the reason why the push-out is happening, not because of the customer really, but because the governments have supported a lot of the companies, every company, I mean in it, I mean, we also got a lot of help and support.
So I'm sure these guys are there. And I think there is no point in going and pursuing them at this moment because we always wait for the carmaker to come and tell us, "Buddy, look at this company. Look at this company." So that's the reason why we are not sort of giving you any inputs at the moment.
Sure. Thank you and all the best.
Thanks.
Thank you. The next question is from the line of Alpha Investments. Please go ahead.
Hello. Am I audible?
Yeah, yeah, yeah.
Hello, sir. This is Preet Gopani here. Thanks for the opportunity. So government recently came up with a plan to localize the defense products. And going ahead, defense and medical will also be a part of our next five-year plan. So could you please elaborate a bit on that?
So everybody has their own focus area. And I would beg an excuse from you that I can't take away the thunder from my teams, which I'm looking forward to present to you somewhere around October and November when we announce our next five-year targets. And they're going to make some excellent presentations for you. So all these things are great. We hope that all of you will be quite pleased at the efforts that these guys have put in. And hopefully, a lot of good news we will give you. Just a matter of two months.
Okay. Thank you so much. Looking forward to it.
Yeah. Thank you.
Reminder to the participants, anyone wishing to ask a question, please press star and one. Participants, if you wish to ask a question, you may please press star and one. As there are no further questions, I now hand the conference over to Mr. VC Sehgal for his closing comments.
Thank you very much for all your questions. Hope we have answered to perfection your concerns. I just want to reassure you that on the part of Motherson, we have also added two particular slides to the presentation, which is the SAMIL portion, which a lot of people were a bit there were some quiet questions that were being asked. That constitutes Kunal, you're on the line. So that constitutes about 85% of the joint ventures that are going to go into the new SAMIL that's going to be coming. And you can see the strong position where those companies are coming from. Kunal, would you want to just give a very quick something on those two slides, please?
Yeah. So we've just given you how the SAMIL data is for the last three years as well as for the quarter. It shows that SAMIL has been growing consistently over the last three years, even though the market's been a little topsy-turvy as it does, both automotive and some bits of non-automotive business as well. Even in the current quarter, the EBITDA is just about breakeven, minus 3-4% is what it is because part of the business of SAMIL continued to run, which was on the IT services side, on the engineering side, and so on. So business was not as much impacted as we saw what we saw in MSSL. We've provided you also on the second page the top 10 JVs and subsidiaries that we have in SAMIL, which constitute around about 85-90% of both the revenues and EBITDA.
And we'll give you a perspective of what the ROCE of these businesses are. That's the additional data also that we have provided just to give you a sense of the nature of the profitability and cash flow generation associated with these businesses. The debt largely remains the same. There is a slight increase again on account of working capital expansion largely, which will normalize as we move forward.
Thanks, Kunal. I hope that's also interesting for everybody too. If you have any questions, you can ask Goba, Kunal, or any of us. We can assure you that the next quarter, we will try to catch up with this particular quarter, which was totally beyond our control, nothing we could do. But hopefully, you will see a big comeback. So till that time, stay safe, stay healthy, and keep hoping for the best. Thank you very much. Bye-bye. Thank you.
Thanks.
Ladies and gentlemen, on behalf of Motherson Sumi Systems Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.