Ladies and gentlemen, good day an d welcome to the Suprajit Engineering Q1 FY 2027 earnings conference call hosted by Anand Rathi Share and Stock Brokers. 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 star then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Mumuksh Mandlesha from Anand Rathi Share and Stock Brokers. Thank you. Over to you, sir.
Yeah, thanks, Shruti. On behalf of Anand Rathi Share and Stock Brokers, I welcome you all to the Suprajit Engineering Q1 FY 2027 results conference call. I thank the management for taking time out for this call. From the management side, we have Mr. K. Ajith Kumar Rai, the Founder and Chairman, Mr. N. S. Mohan, MD and Group CEO, Mr. Akhilesh Rai, Director and Chief Strategy Officer, and Mr. Medappa Gowda J, CFO and Company Secretary. I request Ajith, sir, and team to give an introduction review about the results and then we can follow up with the Q&A session. Over to you, sir.
Thank you, Mumuksh, and good morning to you all. Greetings from Suprajit. Thank you for joining us for the Q1 call. As you all know, the Middle East conflict, the oil and commodity prices, trade restrictions, and shipping disruptions continue to be in play. Global automotive and non-automotive business have been not growing. They also stayed muted. India had a very good quarter in terms of the automotive numbers, with the sector growing at about 22%, and both passenger vehicle and two-wheeler segments had a solid double-digit growth. From our point of view, I think our team will talk briefly about how we performed. On an operating level, I think we have had an exceptionally good quarter. Consolidated revenue grew up by about 24%. EBITDA was up by nearly 57%. We had the highest-ever quarterly operating revenue of INR 1,070 crore in this quarter.
Standalone margins came under pressure, and Mohan will be walking through that as to what happened and how it's going to be a temporary phenomenon for us. Then we'll take on the questions after all our briefings done from our team. First of all, I'll hand over to Medappa for a brief financial detail. Medappa?
Yeah. Thank you, sir. Good morning, everyone. The consolidated revenue for the quarter ended June 2026 was INR 1,070 crore as against INR 863 crore for the corresponding previous year, recording a growth of 24%. The consolidated operational EBITDA for the quarter ended June 2026 was INR 129 crore as against INR 82 crores for the corresponding previous year, recording a growth of 57%. The standalone revenue for the quarter ended June 2026 was INR 470 crore against INR 390 crore for the previous year, recording a growth of 20%. The standalone operational EBITDA for the quarter ended June 2026 was INR 60 crore against the INR 61 crore for the corresponding previous year, recording a growth of 0.3%. The total debt level was INR 776 crore as on June 2026. Surplus cash balance was INR 243 crore as on June 2026, invested in the mutual funds and bonds.
For further clarification, you can connect with me even after the call. Thank you very much.
Mohan?
Very good morning. Thank you, Medappa also. Let's start with the Global Cable and Mechatronics, what we call it as GCM now, which used to be formerly called as SCD or Suprajit Controls Division. First of all, the revenue went up by 27%, almost 28%, and EBITDA moved very smartly from 5.8%- 12.6%. This has been an outcome of the global restructuring that we have been explaining over the last few quarters. Thank you for all your patience, and we are finally seeing the results here. GCM continues to work with our customers and also with some of the governments for a fair recovery of the tariffs, particularly in the U.S. And we have certain VAT recoveries in China, Canada, and Germany, which was a part of the acquisitions that we had done there.
In terms of new business, we are ramping up new projects both in China and India. China, we have one of the largest OEMs that we are now working with, and we are going to launch the product with them, is the Chinese OEM. Again, in India, we are launching quite a few lines and products for a large U.S. OEM who is specifically looking to building a resilient supply chain as they describe it. These are all carrying good volumes at the GCM. This quarter was very strong for new business wins also, and we have recorded business wins across India, Mexico, China, which I think is showing the customers' various preferences, particularly with the kind of global footprint that we have today. Because I moved to India, and before I get into the specifics, let me just talk about company in general.
First things first, I think we need to recognize that we have strong headwinds that has hit us, not in terms of the market. The market is doing good, but the raw material prices are really gone very high. To compound with that, what we have had is an increase in employee cost. This happened, as you know, in the NCR region, all those unrest happened and the elections happened. Therefore, we had a lot of migration of labor going back to work in their constituency. Therefore, these were the kind of headwinds we faced. While we have mechanisms with our customers to tackle with the material cost increases, employee cost increase has been a different animal for us.
For the first time in many years, we have approached the customers to pass this on to, and quite a few customers understand this pain point, and some of them have already agreed to make amends. I am sure that we should be able to see reason in the industry and make good of it, net of the productivity measures that we are going to take. Having said that, let me start now with the specifics. Now I move to India's Cable and Mechatronics or ICM, which we used to call it as DCB earlier. Revenues went up by almost 21%. This is broad-based. If you look at it, OEM, aftermarket, everything put together. But EBITDA grew only by 4.2% with the margins down from almost 15%- 13%. This was primarily due to the cost pressures that I mentioned to you.
In our opinion, this is very clearly a timing problem. We haven't yet passed through all the raw material and wages increase to the customer, and the process will get completed in the coming quarter and the margins will recover. Our braking products here are moving very well and on a small base, a smaller base, but on a long journey, it always starts with a small step. The CBS revenues went up by 110%. Brake shoes and brake pads went up by around 80%. So I think it's a good start in our braking area. Moving over to Phoenix Lighting and Electrical or PLE, what we used to call as PLE earlier. Our revenues went up by 5.4%, but EBITDAs went down by 45%, margins went down 2.8%- 6.7%, primarily due to delayed price increases and also particularly in the aftermarket business.
New prices are now in effect, and we expect a recovery going forward in Q2, Q3. Pre-Focus sales in Middle East still remains soft. On a positive side, we have started ramping up deliveries to one of the largest retailers in the U.S. who awarded significant additional business. So overall, while we look at damp results in Phoenix Lighting and Electrical, we look at that brightening going forward. With this, I'm going to hand it over to Akhilesh to take us through Sensors, Electronics, Displays and Technology sector. Over to you, Akhilesh.
Thank you, Mohan, and good morning, everyone. From the Sensors and Electronics and Displays division, it had a very strong quarter. Revenue was up 48%, EBITDA up 100%, margins close to double digits. This is because of a lot of new projects that ramped up very well in the quarter and will be continuing to ramp up. A lot of strength is in the digital clusters and electronic throttle grip area, where that is driving the growth of the business. We also have a very good pipeline of new wins, which is why we are now on a war footing, expanding capacity of our electronics division to take care of this increased demand and our pipeline. SED has also picked up a lot of good awards worth noting.
Firstly, from Mahindra Last Mile Mobility, we got an award for our extraordinary efforts in ramping up the throttle supplies that we had this year. This is all because of the rare earth curbs that were put on India, and we had developed a rare earth-free throttle. So they had to very quickly move to Suprajit, and that ramp up was extremely difficult this year. But we managed successfully, and we have now won further businesses with Mahindra. Similarly, we also on operations continue to have excellence in operations as well, and that's shown with the ACMA Manufacturing Excellence Award, which SED won this quarter. Coming to STC because SCS is now part of GCM, I won't be covering it. It is already covered with Mohan under GCM.
Coming to STC, it of course is our R&D engine, continues to support a lot of projects, including the ABS and sunroof cable projects, which are now progressing well. STC and ICM have jointly picked up the ACMA's Most Innovative Supplier award, really showing the kind of capability that we're building as a true technology provider in India. The new STC building is on track now for completion in Q3. We would look forward to hosting our investors there sometime. General updates, I think we also have won a lot of good awards from Bajaj, JIPM DPM Excellence award. TVS Motor Company gave us a platinum award for our DPM process as well. Those show that we continue to have great support from all our customers, whether it's ICE or EV. With that, over to you, Chairman.
Thank you, Akhilesh. Just to sum up, I think the GCM restructuring is completed, and the numbers of the quarter clearly show that the restructuring has yielded the right result for us. ICM and PLE margin pressure, as Mohan has explained, it's a timing issue and a price pass-through, and we expect that to be recovering well in this and the next quarter. The guidance we gave, despite all these things, the guidance that we gave in our press release dated May 25, 2026 still holds for the year. I don't think there is any concern on meeting the guidance that we have already set out. Thank you all for joining. Now I hand over to Shruti at the Chorus Call to start organizing the call and the questions. Thank you.
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 your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to unmute themselves while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Viraj from SiMPL. Please proceed.
Am I audible?
Yes, you are, Viraj.
Hi, sir. Congratulations on decent set of numbers and a very good environment. Just a couple of questions. First is on the GCM. If you look at the consolidated numbers also and the segmental, which you gave, the margin which we have this quarter, was there any one-off in terms of write-backs or any FX element in this?
In operation result, there is no.
In the global total—
Yeah. GCM, whatever the operational number that we have set out, there isn't anything that is a one-off number in that. There may be small one-off, but nothing that is material, no.
Okay. Because if you look at the margin. If you look at the consolidated margin first, we have seen a very healthy expansion.
Yes.
Given despite the pressure we have seen on the RM and the standalone of the India business, also considering that the overall raw material environment has been very inflationary. Despite that, we have seen a very healthy gross margin in the consol. I am assuming that in the subsidiaries or the global business, we have seen a very healthy expansion in contribution margin. I am just trying to understand what is driving this.
I think one is, please understand, the restructuring has made our operations very tight, and it is much leaner now compared to what it was earlier. That is number one. Number two, there is a top-line growth of whatever, 20%+ Automatically, when the operations are tight and lean and efficient, and the top line grows, it automatically drops into the gross margins.
But it is a bit material.
Please also note, during the course of last year, we have initiated quite a few cost improvement projects within the group globally. That also has had its effect. There is nothing one-off in this actually.
Okay. This margin is—
It's improvement in margins. Yes.
Okay. This margin of 12.5% which we earned this quarter, this is what should broadly sustain.
Yeah. We did mention about 10.5%-12% was what we said in the beginning of the year. At this moment, it is at about 12%+, but I will still stick to my guidance that we have given for GCM at whatever, 10%-12%. Again, it depends upon the product mixes as we go forward. New projects are getting launched. We have to actually see how the margins are. That 10%-12% at GCM is very much on the cards. Right now it is on the higher side little bit. Yeah.
Okay. Can I just get your thoughts on the India business? I understand there was a raw material impact and the wage inflation. But typically, do OEMs give the escalation from the wage impact, or do you see any continual impact of that in coming quarters?
Honestly, we are in discussion with the customers. I think the pass-through of materials is not an issue. Pass-through of wage increases, which has been significant, particularly in the northern region, is pretty significant. I think customers understand our view. Some of them have agreed to pay, some of them are still dilly-dallying. That is why I said, it takes one or two quarters to convince this part of the increment. Having said that, we are also working on a lot of cost reduction within the organization. So my view is that, by Q2, Q3, let us say latest, we should be recovering most of that last 100 basis points here and there on the wage.
Okay. That is all just what I wanted. Thank you.
Thank you. The next question is on the line of Anubhav Mukherjee from Prescient Capital.
Hello, am I audible?
Yes.
Sir, congrats on a great set of numbers, and thanks for the opportunity.
Thank you.
My first question is, will it be possible to share separately the revenue contribution and EBITDA margin for SCS in Q1, sir?
No, we have very clearly said last year itself, end of the year, even when we acquired itself, that SCS will be separately disclosed for a year till March this year, just to show how the progress we have done post-acquisition. That it will turn EBITDA positive. Once that is done, we have said that we are going to combine that in Global Cable and Mechatronics. The reason is simple. They all work in tandem with each other. The names of SCS, LDC, Wescon, they all vanish from the scene. They are all acquisition entities, acquisition names. Today, GCM operates as a single entity as far as we are concerned. There are entities within GCM which will disclose their numbers end of the year, which you will get to see.
It has got no meaning actually, because the way we have restructured is such a way that LDC entity has been a Wescon entity, has been shut down and merged with the LDC. SCS in Germany has been restructured. The warehouse of SCS has moved to old LDC. There are so many things have happened. Separately disclosing has got no meaning anymore, which we explained earlier con calls also. It will be under GCM.
Got it, sir. Sir, the very strong revenue growth of 28% in GCM, can you share some perspective on what kind of growth you expect for the rest of the financial year?
Okay.
in GCM year?
Also, let me clarify a little bit. I think the second tranche of SCS Canada and China happened in May. We did not have the revenue of April and May of the second tranche of SCS last year. Actually, optically, the number of 27%, I must state, that is not entirely right. I think if you offset those two months' revenues, the growth is around 23% or so, actually, because of the acquisition completed end of May last year. There is a slight variation there. Having said that, it is still a very good growth. What we are seeing from at least a month's number that we see as of July, it is still very strong. August is a month where, of course, it is the same thing for last year also, is a month of holidays in Europe and most of the places.
Whether the revenue growth will be there or not compared to first quarter, I do not know. But compared still strong double-digit growth for this quarter also for GCM.
Yes, sir. Sir, my last question is, the other income for Q1 compared to Q1 last financial year—
Yes.
—that has seen a sharp drop. Can you explain the—
Yes, I know.
—the composition and yeah.
Yeah, the compositions are multi. I think there are so many things, but I will summarize this way. There are few elements in it. One is restatement of our, let's say, loans across our divisions. It gets restated. We have quarter-end creditors and debtors, which is in different currencies. That gets restated. There is also forward covers that we have made. There is certain portion of the forward cover which does not go through the balance sheet. It comes into the P&L. There is also some other incomes that accrue. For example, last year we had some subsidy came into Morocco, which is not there this year. These four, five elements, if you see last year, from the beginning of last year to end of the last year, the rupee dollar, rupee euro, all was very positive in terms of change.
That is why you saw a large number end of last year. Since March, now it is more or less stable, so that fluctuation is not there, so there is no delta there. That is why that amount for the first quarter is much smaller.
Get that. Thanks for the explanation. Sir, my final question before I get back in the queue, sir. In the SED division, can you share some light on what is driving the growth, and is it mainly driven by the digital cluster business? What kind of new business deals are we getting in that?
Mohan, will you answer that question?
Sure. We need to break it down into three major product groups. One, I would call it as display systems, that is instrument clusters. The second one I would call it actuators and sensors. The third specifically, within sensor, it would be the throttle position sensor or TPS, as we call it. So around those three counts, we are seeing growth. We are seeing growth happening. It is not just across one customer. We have got couple of customers. In fact, if there is one problem, and it is a good problem to have, this month and next month is multiple launches. I am facing about six launches in my plant with various customers. Therefore, is it a problem? The answer is yes, but it is a good problem to have. So are we gaining traction on all these product groups? The answer is yes, with multiple customers.
To add to what Mohan said, just as a matter of general information, I think July has been an exceptionally good month at electronics division, clocking the high est sales, and I think the trend seems to be continuing at the moment.
Got it. That is all from my side.
Thank you.
Thank you. The next question is on the line of Rakesh from Axis AMC. Please proceed.
Yeah, hi. Congratulations on a good set of numbers. I think it is a good delivery from last four to eight quarters with the efforts you have taken. Looking at your presentation, the FAQs clearly highlight one thing, that our product portfolio today does not cater the EV power trend in a very significant way. While the market is moving in a direction at least into the three-wheelers and PVs, where currently a large part of the growth is being driven over there. How is the management thinking in terms of catering to this journey of EV right now? Organically, how are we placed? If I missed out any of your products which are not there in presentation, and how should we think about our participation in this growth phase of EV?
I will ask Akhilesh to answer this. Akhilesh, on our EV journey and what we are doing and what are the products that are going in.
Yeah, of course, we are very much and very deeply involved with many EV customers. I would say EV has been a great driver of our growth, especially at SED, but also in our ICM division. I understand your question is just around the drivetrain. We don't specifically look at the drivetrain itself, but we look at very agnostic products that will support EVs and non-EV programs. Please understand that just like an EV has to, a drivetrain makes a vehicle go forward, we also need to stop that vehicle. So our focus has been on the stopping side and looking at braking as a key technology going forward. Because EVs, just like the drivetrain has changed, also the requirement of the braking is changing. And we are in the right place at the right time with lot of good technologies and braking to support this change.
And I think that is why, for example, Ather has given an innovation award and they gave us their key braking system products. It is because of this kind of knowledge and technology that we are building. And I think Ather, as you know, is a well-renowned technology name in the EV industry in India. And similarly, we supply to all the new age EV brands for some of our products. It depends on whether it is clusters or actuators or braking products or even our core cable product. We are still supplying to practically all the EV players in India.
Sure. Can you help us, how the content of braking or actuation products would have, or is it how different it is for EVs versus ICE in whatever customers we are catering to?
The content per vehicle, for the most part is the same in terms of EV versus ICE. But because we are going from our core product of a INR 100 cable to a product of braking, which could be anything from INR 400 CBS to INR 1,500 , INR brake systems, or from speedometer cables to digital clusters, which can again span from INR 700, INR 800-INR 7,000 , depending on the cluster. So, each of our product lines are increasing by at least 3x to 4x, 5x in terms of price that we sell to our customers. But in terms of whether EV and ICE, there is no real difference. These EV or ICE could pick any of these products going forward.
I think just to add on what Akhilesh has said, I think it is important to understand if between GCM and SED, both are significantly in the two-wheeler kind of space. If you add them together, the kind of growth we had is ahead of the automotive industry growth. What I am trying to say is that, a couple of years ago, we have sort of said that some part of our cable portfolio may become or change over to something else. But at the same time, we have said the content per vehicle will increase. We still hold the same view, whether it is ICE, whether it is EV, our overall content in the two-wheeler per vehicle, I think it is only increasing as we see it now.
Great. That was helpful. I will fall back in the queue. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is on the line of Gokul Maheshwari from Awriga Capital. Please proceed.
Yeah, thank you for the opportunity. I just have a couple of questions. One is on the GCM business. Is there an element of Forex which would have come in with respect to enhancing your growth rates? Or if you could just provide what could be a constant currency kind of growth rate, which we would have experienced in Q1.
Actually, no, Gokul, we have not been announcing the constant currency rate for all this because there are so many multicurrencies involved. Yeah, there would be some, I would not deny that. But in the last quarter, at least, there has not been a significant change in the rate. Whereas, I think during the course of last year, there has been an increase in dollar-rupee conversion significantly. But I think now it has been around whatever 95, 96 has been more or less stable. I think that would be the rate that has been used.
Okay. Any tariff recoveries happened in this quarter?
Yeah, please understand, tariff recovery is a double-edged sword. If the customer has given the tariff relief to us, we will have to give it back to them. If they have not given it, that is the only thing that we can recover. As we have always said, most of it has been passed on in our last year's press releases. Most of us that has come back also needs to be going back. There will be some delta, if you ask me. We always like to hold on to something. That is something which is difficult to quantify it here. That would not be very significant.
Okay. Just lastly, on the domestic business. This quarter we grew 20%, which is fantastic. If you could just give us sort of a flavor with respect to the broader breakup between the core traditional business in terms of the cables and how newer products within this segment are actually helping driving the growth. I am not talking specifically of the numbers, but just more qualitative comments that how the new products are really contributing in ensuring that the growth rate is now matching with the sector growth rates.
I think in this, Gokul, I would say, the other products, the non-cable or beyond cable products, are basically some of these braking products like CBS and some of those related products. Although they have grown very well, as Mohan has sort of mentioned in his commentary. They are still at low base. Will that would have given it, let us say, a couple of percentage of traction to ICM? The answer is yes. It is not beyond that. That is what I am trying to say. It is still a small base. Let us see how the whole year goes. Maybe next year we will segregate breaking separately out or whenever the time is right, then I think we will also get to know more clearly there. The base is still small. They are growing at a much higher rate, yeah.
Okay, great. Thank you so much, and all the best.
Thank you.
Thank you. The next question is from the line of Nishika Sanklecha from Sapphire Capital. Please proceed.
Hello, am I audible?
Yes.
Yeah. I am just attending the call for the first time and hearing about the conference for the first time. If you could just reiterate the guidance that you have given earlier, that would be great.
Okay. What we did was in May, after finalizing the Q4 and the annual numbers, we have said that on a consolidated basis, we will grow in double digits, and that the EBITDA margin range would be, these are all operation numbers we are talking, 12%-13.5%. We have said the Global Cable and Mechatronics will also have a double-digit growth with the EBITDA margin operationally between 10%-12%. ICM, we have said around the last year's number, which is, I think about 5%-10%. PLE, that is Phoenix Lighting and Electricals, we have again said around last year, which is about 12%. And SED, we have said again in line with the last year, which was touching 10%. So basically, we are aiming to do the 10% again. These are the guidance that we have given last year for the current year.
Okay. Understood. Thank you so much.
Thank you.
Thank you. The next question is from the line of Pornima from Karan Family Office. Please proceed.
Can you hear me?
Yes.
Yes. Good morning.
Can you please talk a little louder? I think you are a little weak. Sorry.
Okay. Can you tell me the revenue generated from LED electrical business other than financial year 2026? Is it—
I cannot hear you properly, Pornima. Sorry. I am not able to get your question.
Can you hear me now?
Not very good.
Is it better?
Okay, go ahead with your question. Let's see.
I wanted to ask, what is the revenue number for LED electrical business other than FY 2026? And is it profitable on EBITDA level?
LED retrofit, I don't think we give any separate numbers for this. I don't think it is large enough to disclose. Mohan, do you have any idea on what is the LED status on our retrofit? General comment, maybe.
No, I don't have specific information. I do know we track what we call it as beyond halogen. Specifically, is it such a significant number that we can disclose? The answer is no.
Yeah. We don't have that.
Okay. Is that segment profitable? Do you have any idea about that?
It is profitable because the point is. Yeah, go ahead, Mohan. You can comment on the retrofit generally, maybe. Yeah.
Yeah. So that I can confirm, yes. There is quite an amount of localization that we have done. There is some amount of imports that happen, but there is quite an amount of localization that we have done. Again, when you say LED, you have to understand that we are doing what we call it as a drop-in solution, a retrofit drop-in solution. Therefore, this almost looks like in the way it is handled, more like a halogen, but it is an LED-operated lamp or a bulb. So that's how we are doing it. So in terms of profitability, the answer is definitely yes.
Okay, thanks. Thank you. That was on my end.
Thank you. The next question is on the line of Dinesh from Oracle. Please proceed.
Good morning, team, and congratulations for a good set of numbers and execution, Suprajit team. Almost a year back, Ajith sir, there was a time when you guys had given some of the order wins initially and said that, you kind of wanted to show it one time. Just when I look back in the last four quarters with the SED division, we have been in that INR 40 crore-INR 45 crore of revenues, kind of a run rate. We have kind of consolidated there. Yes, there was a slight uptick in this quarter. EBITDAs obviously have been in that INR 4+ crore on a run rate basis. Just trying to understand that a year when these order wins were given, one thing that I want to understand is the execution and timeline of how that flows through.
Because in this quarter, you mentioned that there has been certain wins from the U.S. and the Chinese OEM. In that sense, will that kind of show up? When you speak of order wins, what timelines are we certainly talking about, and the kind of quantum over the next two, three years in terms of contribution to revenues?
Is it for GCM you are talking? Because order wins in U.S., China is mostly on GCM. You started talking about the electronic division, I think.
In effect, I am talking about both, because one thing I referred to is that a year back, you mentioned about order wins.
Yes, sir.
Yeah. That plus the fact that I am talking about the U.S. and the Chinese OE as well.
What is happening is how we are growing so much when the global business is at 0% growth, even if you are adjusting for that two months of that small last years between SCS, China, and Canada, we are growing at 22%-24%. How is that possible when the global business is at 0%? That is because of those orders that we have won a year ago or 18 months ago is now starting to come into production, number one. At the same time, some of the businesses that we have been producing also going out of business. There are two things happening. One is some of the old contracts are going away, but the new contracts are so much more that the growth has been at that particular percentage, which we are expecting to continue.
It is a solid performance, and that also, along with the restructuring and most competitive buying and new contracts are coming at current prices. That all has added to the margin improvement. That is why the margins are more than doubled from the last year's same quarter time. That is where the whole color is changing, actually. I do not know whether that is what you are expecting as an answer or—
Yes.
—whether I got the question right.
To add to that, when you speak about the order wins with the U.S. and the Chinese OEM, is there a possibility to give a perspective that over the next two, three years, what is the opportunity there in terms of any size or any numbers that you can share broadly?
I think in terms of the size of the business, I think we made a press release a month ago, particularly about three large contracts. I do not know whether you have seen it, but that was a very important announcement we have made, which I do not know whether I got that number here, but that was very significant. I think about three contracts we have talked about. One is the largest EV cable contract, which is an annualized value of $5 million and a lifetime of about $7 million. Second one is a European luxury OEM, which is $2 million a year, a lifetime of $12 million. And another one is from a Japanese OEM, again, $1.2 million a year, lifetime of $6 million.
They are all going for different plants of ours, for Matamoros, for China, et cetera, and for probably some of them also going to Morocco. What I am saying is that the order inflows are pretty strong. These are only three major ones we have talked about. Subsequently, we have won additional new businesses. I think we are in a position where from last year, everybody fighting the tariff war, today we are fighting for the order wins. I think the scenario has changed, and I think we have been winning them pretty handsomely. In terms of how we should change the profile of margin, I think let us understand this. It is still a very competitive business globally. There is a consolidation happening, and I think the consolidation only leads to eventually the stronger players to probably eke out a slightly better margin.
We have just completed a major restructuring, so any change in guidance, we do not want to do now. Maybe end of the year, we have said 10%-12%. After seeing the actual outcome of this restructuring, if we find that the margin profile needs to be revisited, we will probably only do end of the year.
Okay. Lastly, on the SED, for the current run rate that we are heading, is that something that over the next couple of years, in terms of the visibility that you all have, is there something that we can see a kind of major push up there in terms of all the pipelines that you all have currently?
I will let Akhilesh answer this. Akhilesh, you want to take it?
Yeah, sure. Firstly, when we made our disclosure before launching the electronic division, and we talked about the pipeline and the businesses that we had won for that business, it also included, at the time, who was one of the largest EV players and a significant portion was their business. Which, as you know, that player didn't really continue with the volumes that they were at two years, three years ago. The loss of that volume was negative for the division, which we overcome by bringing a lot more businesses. So probably, whatever was in that disclosure, there were a lot more projects that came in, which more than overtook what we had, the volumes that we didn't get from this number one player at the time. I think that is one point on electronic division.
What good is that right now, the electronic division, a lot of the business is not just driven by EVs, but also by ICE customers who are picking up a lot, especially in the south region, a lot of the OEMs here are doing pretty well. We see the strong growth continuing in the next few quarters. We see, like we said in the release, that we are expanding our capacity on a war footing because we are flooded with orders and new launches. I think, of course, a lot of these EV things, you never know how are they going to do, go up or down, but at least in terms of the current market scenario, EVs are doing great, and therefore, this SEV should also do well, along with the fact that ICE is also doing well.
Our business is looking strong for at least the next 12 months. We see a good traction to continue at these levels that we hit this quarter.
Akhilesh, you can also talk a little bit about some of the businesses we are working on the connected side, maybe.
Yeah, I think like Chairman said, of course, our tech center continues to work on a lot of projects, and one of that is into telematics. This quarter, actually, we won three projects in telematics and connected clusters and TCUs. This is a great opportunity also for us to grow into the telematics side of the business. That should launch in the coming year and then gives us a new platform to take to all our other OEMs as well. Yeah, I think that's on telematics.
To add to what Akhilesh has said, we have now decided to move out of the current location temporarily. We already found a larger leased-out premises nearby. I think in the next, I don't know the timeline, maybe six months or so, we'll be completely relocating to that site and completely rebuilding the current plant by demolishing and coming out with a much larger facility for electronics. All that shows that we are very clear that the original plan at which we said that, okay, this place is okay for some, let's say, INR 250 crore of business, but now we are seeing much higher traction. What we are doing is we are relocating the plant, except a part of it, and then completely rebuilding and coming out with a multi-story electronics division. I think that work should start soon.
Thank you for these responses. If I may, in the PLE, there were two comments. One comment made in the last quarter about one European competitor having trouble, and in the current quarter, you mentioned about the U.S. largest retailer order revamping. With this, we've been in that INR 90 crore run rate per quarter. Do we see that we kind of breaking out of that zone in the coming quarters?
The volume globally is obviously reducing, right? I mean, it's in that old part. The insolvency in Europe, it is still an ongoing. They're still operating. Some customers are trying to support them and all that stuff. The whole thing is still not yet fully rolled out as to how it will pan out. In the meantime, we are in discussion with multiple opportunities to do business. But I think ultimately, it depends upon whether this particular player who is in insolvency, how he comes out of insolvency. Does it shut down? Does it get taken over? I mean, these are the kind of questions. We are in discussion with multiple customers, prospects. I think in the next quarter or so, we'll start seeing much better clarity on those inquiries.
I think there is a good opportunity for us, and I am pretty sure that we will capitalize on it over the period of the next three to six months' time. This U.S. business is ramping up nicely. I think we have had much higher, I think this year it will be a much larger business than last year. Again, it will go into much larger business for the following year, in the next year. Because last year we did piloting. This year, talking about specific number of stores, and I think that number of stores will probably triple or go four times next year. I think that is going as per the plan. In fact, I think we had a good dispatch of that in this July month, I think.
Truly appreciate your detailed responses. Good luck to the team.
Thank you.
Thank you. The next question is from the line of Chirag Shah from White Pine Investment Management. Please proceed.
Thank you for the opportunity, and congratulations on good set of numbers. Sir, before I ask the question, I have a request and a suggestion. If you look at some of your peers, sir, their disclosures on new order wins is reasonably well-organized in their quarterly updates. If possible, you can think about it. When I say new order wins, either addition of a product or addition of a model or a new customer or a new geography, et cetera. If you want, we can take it offline. Because this question keeps on coming every time, and it will save time on discussion also, sir, you don't have to repeat lot of things.
Okay.
It's a suggestion. Sir, the question is, one, the India business or the standalone business where you have the margin pressures which you've explained, on annualized basis, can we assume that margins will be similar to the last year once the pasture, et cetera, happens?
I would say almost similar. Let's say ± 50 basis points, probably.
Okay.
It's difficult to say because ultimately, it depends upon what price we are able to strike with customers. Our feeling is that it's probably not more than 100 basis points, if at all. We don't expect that also, but I'm just saying probably as an extreme case.
No, fair point. Yeah, that's why I'm asking because quarterly variations will be there.
The only problem is not about passing on the material cost increase, Chirag. I think the issue is about the wage increases.
Wage increases.
That is where the real debate is going on. I don't think anybody's questioning our material cost increases. I think on the labor cost increases, because we are still a fairly large labor-intensive operation, I think that part is what is being strongly debated.
Fair point. Sir, second question was, Akhilesh alluded to the different price points of different parts that you supply to customers. If I have to ask it a different way, what will be the median price per unit realization that you would have? Because we have product from INR 100 going up to INR 7,000.
It is difficult to say, Chirag. I cannot give you that number because it keeps changing. It is a dynamic situation. Our product range is like that, so giving a median price is like throwing a dart. We do not know where it is going to hit.
But structurally, three-year or five-year route, can we expect a 25%-30% increase in this median pricing, whatever is the number it could be? Is that the right direction we are in, given the product
Yeah. I think, again, the point here is that cable has got one range of price, right? I got a INR 6 cable, I got also a INR 600 cable. How do I give a median of that? Then on top of that, we have got these other products coming where the volumes are different than the cables. Cables are all high-volume ones. The median value of our purchase on a consolidated basis is absolutely, I think it is a wasted exercise, if you ask me.
No, fair point. It is like—
I think the content per vehicle is a fair question, I think.
Yeah.
That is what I am trying to say.
Okay, fair point. Content per vehicle is also a good way of looking at it, but—
Yeah.
Can we say—
It does not matter what it is. Yeah.
Directionally, we can see a 5%-6% improvement on annual basis, so by around 20%-25% improvement over three to five years. Is that a fair assumption to make?
Sorry, improvement of what?
Content per vehicle.
I cannot answer that question without having done some homework. I just explained earlier, if you combine our SED and ICM, you can see the growth, right? That growth is more than the industry growth. At the same time, there has been some of the cable operations are not there now compared to what it was, let us say, a year ago. So the content per vehicle, we will try to see how we can accommodate that and whether we can track something like that. Maybe it is a good idea to do it for us on internal basis. Whether we will disclose, we will decide on that. I cannot give an answer to your question, no.
No, fair point, sir. Maybe if it comes down the line, once you do your work internally, you may choose.
There are a lot of new things. The braking products are coming up now. Electronic division is ramping up fast. At the same time, the new baby is starting to grow. So we do not know the trajectory of all these products, how it will be over two or three years' time. So it depends. Something may take off. It depends upon how the customer volumes are there. There are so many variables. So it is impossible to put a target there.
In the last question, in the brake and brake release system, you have mentioned CBS and HMSI as the customers.
Okay.
In the brake and brake release system, you have mentioned CBS and HMSI as the customers.
That is for the CBS, I think. That is for CBS. Yeah.
Okay, that is only for CBS.
Yeah.
If you can throw more light, is it that we have just made entry in one or two modules, or how it is and how should we look at it two, three years out?
Mohan, you can give any clarity on the CBS situation now, where all we are?
Sure. First of all, let us understand one thing. The braking system or brakes is a safety critical item. Therefore, any OEM, before they take a plunge, they do a lot of confirmation, product validation, design validation, et cetera. Therefore, we are going through that process with multiple customers. With some of the customers, we have completed it, some we are in the process. Second portion that I need to explain here is, unlike many other, I would say, players in the market, we are looking at a total technology stack here. That means we are looking at the levers, we are looking at the cables, we are looking at the hoses, we are looking at the reservoir, we are looking at caliper, we are looking at rotor, brake pad, ABS.
Therefore, we are looking at a complete technology stack in the braking system, and CBS also as a part of that. Therefore, what we are doing is making inroads with certain customers with certain portions of it. Our general vision or guideline, what I would like to say is, A, we would like to own a complete system responsibility. So that's our direction. So we take over the system responsibility. Second thing is, we would like to have a claim on a specific real estate in a two-wheeler in architecture. Therefore, this is the way I would be looking at. Therefore, to answer your question, which part of your body is growing more, hands or legs or brain? If you're asking me, it is very difficult.
I would say that there is an overall growth happening in the body and are maturing, both as a technology and also as a player in the market.
Sir, because this is a very, if you are able to do the transition, it could be a unicorn and it could really give a lot of profitability also to the company. Hence I was asking about it.
I agree with you. I absolutely agree. I think that is the idea. I think I have made this comment in some previous calls also. This is a long-term story, even longer than the electronic division story in terms of how it will mature, which product will get launched first, which product will grow faster, which product will launch later. But the idea, as Mohan said, is to give a complete braking solution. I think that is our North Star statement.
Okay. Thank you very much.
Thank you.
Thank you.
I think what is the time? We have 12:00 P.M.. We will take two more questions from the audience here.
All right, sir. The next question is on the line of Raksha Srivastava. Due to no response from the current participant, we move on to the next. Next question is on the line of Rahul Purohit from Security Investment Management. Please proceed.
Yeah. Hi. Am I audible?
Yes, you are audible.
Yeah. Hi. Congratulations, sir, on a good set of numbers. This is one question. Most of the other questions have been answered. I think we had discussed a little bit on actuation system from the LDC acquisition, and I think last quarter con call, we had mentioned that we have done a refresh of the tech or the products that we are doing in that. If you could throw some light, because that was one opportunity which allowed us to, if I can use the word, forward integrate from cables to actually providing actuation systems, and the addressable market for that similarly is significantly larger than just the claim cable. If you could throw some light on any order wins or anything that we are looking at on that aspect over the next couple of years.
Yeah, sure. Akhilesh, can you answer both on our product development status and maybe on the business side of it, please?
Yeah. On product development, I think the product has been developed now, and we are taking this to our customers in the U.S. especially, and then next to Europe. This will, of course, take some time to filter into actual business wins. This will not be something that will be an immediate kicker. What we are seeing is that in India also, there is a lot more talk about bringing these kinds of actuation systems. In the U.S., it is a standard on premium vehicles. In India, it is barely there, even in the top-end vehicles of most of the cars. Now I think a lot of customers are looking at it. You have seen, I am sure, in the analysis of these industries, a lot of new tie-ups in seating-related companies coming to India to bring their technologies.
In those technologies, a lot of them are also talking about actuation for all these seating companies. We are also in discussion with seating companies in India, but this is a mixture of both that the technology has to come to India, plus we need to win that business. I would say it is still a little bit down the line before we can really win seating actuation businesses other than what we already have. I think that is an ongoing process.
At the same time, I would say that with some of our key passenger vehicle customers, I will not name one of them, but it is a leading EV OEM. They have looked at us for almost four or five different actuation-based projects, which are all very much in the R&D phase. This may take again, two, three years before it even comes into the market. This is with very deep advanced engineering that we are working very closely on very interesting actuation projects. I think this is a matter of time to play out, but I think the signs are strong on actuation that we will have a lot more business going forward.
As to what Akhilesh said, Rahul, is that the current businesses that we have in actuation continues. Some new projects were launched in the two-wheeler in the last two, three years. They are also continuing. Now, I think the Indian larger passenger vehicle side OEMs are seriously looking at some of these newer technologies on seating, and I think that is where we are fitting in. I think we have some very interesting conversations with at least a couple of them, and as Akhilesh said, we are in discussion. In terms of the product, I think we are working on, as he said, it is more or less finalized, at least two, what I would call as the level of actuation based on the force. I think they are all in the final approvals are in the process.
I think they will all be launched as an upgrade on the existing actuation products that we have. I think it is a journey, but I think there are very exciting new opportunities that we see.
Okay, great. Good to know that. The other question is on the non-auto side. Historically, I think a few years back before we acquired LDC, we used to discuss non-auto side of the business too. Over the last couple of years, I think the discussions have mostly veered towards auto. Is there any update that you can share on what happened on non-auto side of any products that we have developed or anything that we are working on or anything that looks exciting?
I think non-automotive has been fairly the business in U.S. Most part of that business is out of U.S. They have continued the last two years; unfortunately, I would say it has remained very muted, and hence our conversations have also been fairly muted. What we are doing though now is, in those days, what we were talking about is on opportunities in cable. But what our business development guys are doing now is that we are pitching in some of our new products, particularly from the STC products on the displays and on sensors, et cetera. I think we already started supplying some of the sensors already in the last couple of years. But I think there are quite a few new ones, including some of the displays, are being presented and discussed with these non-automotive customers.
The cable side of the business, honestly, is not growing, but I think these new products is where we expect the traction to come over the next few quarters.
Oh, okay. Great, sir. All the best.
Thank you. We will take one last question if it is there, madam.
Yes, sir. Thank you. The next question is on the line of [Devesh Pai from Barings AMC]. Please proceed.
Sir, just want to understand, you mentioned regarding the Chinese OEM.
Sorry, what OEM?
Chinese OEM.
Yes. Okay.
Yeah. What we have been hearing, Chinese guys making inroads in Europe and other places globally. For us, how it has grown and what will be your contribution to revenue and how do we see it from here on?
I think Chinese OEM business is done out of Lone Star in China, actually. How we pitched to this OEM was simple, that they have global ambition. They are the largest EV maker to date in the world. They have global ambition. They are, I think, already in Hungary. They are talking about Matamoros, Mexico. So how we pitched it a year and a half ago was that we have footprint in these places where they want to go and that we want to be their global supplier. They have a local couple of suppliers, but they are purely local. They have no global footprint. Eventually, after good rounds of discussion, they have said that, "Okay, let us try you out because if that's really needed, we will be able to use your footprints globally." But the starting point was China. Okay?
We are still making most of it out of China. We supplied our current product. So in the process, I think we have won nearly 25 different cable projects with this customer. I think five or six of them have been launched already, and the balance will be launched over the next 12 months or whatever timeframe, depending upon the development time. The growth is very clearly seen. If you look at Lone Star, last two years, they have been a flat year for Lone Star. But we are seeing something like a 20% growth at Lone Star. I think that trend is likely to continue with the kind of business wins that we have. Eventually, the idea is to take that from there to try to offer to the same OEM out of Europe for North American launches. So that is the overall plan.
Mm-hmm. That's it from my side. I wish you all the best.
Okay. Thank you. Thank you, all. Thank you very much for your time and patience and continued interest in Suprajit. I would also like to thank Mumuksh and Anand Rathi and Chorus Call to organize this call, and all the best. Thank you very much, Shruti. As far as we are concerned, from our side, there is no more brief from our side. So thank you.
Thank you. On behalf of Anand Rathi Share and Stock Brokers, that concludes this conference. Thank you for joining us, and you may now disconnect your line.
Thank you.