Q4 25/26

May 22, 2026

Summary

FY 2026 revenue rose 20% to INR 3,396.8 crore, while gross profit grew 8%. Lightweighting and export orders are expected to drive future growth, with FY 2027 CapEx guided at INR 90–110 crore.

Ladies and gentlemen, good day and welcome to the Q4 FY 2026 Sharda Motor Limited post-results conference call hosted by Equirus Securities. As a reminder, all participants' 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. I now hand the conference over to Mr. Mihir Vora from Equirus Securities. Thank you, and over to you. Yeah. Thank you, Steve. Welcome everyone to the Q4 FY 2026 post-results conference call of Sharda Motor Limited. From the management team, we have Mr. Aashim Relan, Group CEO; Mr. Ashwani Maheshwari, Deputy Managing Director; and Mr. GD Thakkar, the Group CFO. I now hand over the call to the management for the opening remarks. Over to you, sir. Thank you very much, Mihir. Thanks a lot. My name is GD Thakkar, and I thank everyone for joining the call today. I extend a warm welcome to all the participants on today's call. As Mihir just mentioned, I am joined by our Group CEO, Mr. Aashim Relan; Deputy Managing Director, Mr. Ashwani Maheshwari; and Chief Manufacturing Officer, Mr. KK Sharma. I trust you have had the opportunity to review our quarter four and current monthly results and investor presentation, which are available on stock exchanges as well as on our website. Before I move to the financials, let me briefly touch upon the Indian automobile industry performance during last quarter. That means quarter four. During that quarter, the Indian automobile industry continued to witness broad-based growth across all major vehicle categories. This robust performance was supported by improved affordability following the GST rate reduction, enhanced purchasing power from personal income tax relief and lower financing costs due to successive repo rate cuts by the Reserve Bank of India. Demand momentum remained healthy across all major vehicle categories, reflecting a balanced mix of urban as well as rural consumption. Passenger vehicles segment posted strong production numbers of 15.71 lakh units in quarter four of FY 2025-2026, registering a growth of 11.3% compared to Q4 of same period last year. The segment also clocked production numbers of 55.39 lakh units in 2025-2026, posting a growth of 9.4% as compared to previous financial years. While light commercial vehicle production grew by over 15.8%, reaching 2.08 lakh units this quarter and by 11.2%, reaching 7.12 lakh units in FY 2026. In quarter four of FY 2026, three-wheelers posted Q4 production of 3.35 lakh units with a growth of 32.4% as compared to same quarter last year. This segment also posted strong production numbers in financial year 2026 at 13 lakh units, registering a growth of 23.9% as compared to last financial year. FY 2025-2026 has been a landmark year for the Indian automobile industry, underpinned by a series of structural policy reforms that strengthened demand fundamentals and boosted consumer confidence. Consequently, the industry remains optimistic about continued growth across all vehicle categories in financial year 2027, building on the strong domestic momentum seen in the latter half of FY 2026. However, uncertainties stemming from the West Asia conflict, including volatility in crude oil and commodity prices, elevated exchange rates and disruptions to shipping routes continue to pose a risk to the sector. A stable geopolitical environment will be crucial for sustaining industry confidence and supporting further growth next year. Let me now walk you through the operational and financial performance for the quarter and year ended 31st March 2026. For quarter four on a consolidated basis, the company reported revenues of INR 971.8 crores, representing a YOY growth of 30%. Gross profit for the same period stood at INR 216.1 crores, a growth of 13% YOY. Gross profit remains the better indicator of underlying operating performance and growth was better than industry trends for this period. EBITDA quarter four FY 2026 came in at INR 112.9 crores, reflecting YOY growth of 12% with EBITDA margins at 11.6%. Profit before tax, before exceptional items for the quarter stood at INR 119.6 crores, after factoring in our share of profit from joint ventures and associates. In the corresponding quarter last year, profit before tax was INR 110.6 crores. Profit after tax for the quarter was INR 89.4 crores. For the 12 months ending 31st March 2026, total revenues stood at INR 3,396.8 crores, marking a growth of 20% over the same period last year. Gross profit for the period was INR 802.8 crores, up 8% YOY, is again in line with the industry growth. EBITDA for 12-month period stood at INR 419.1 crore, up 6% YOY. Profits before tax for 12 months was INR 459 crores, which included exceptional gain of INR 22.41 crores on sale of one of the idle industrial parcels in quarter one FY 2026, and an exceptional loss of INR 4.26 crores towards impact of new Labour Codes in quarter three and quarter four of financial year FY 2026. Compared to this, profit before tax was INR 420 crores in the 12 months last year. Profit after tax for the 12-month period stood at INR 345.4 crores as against INR 314.9 crores in the corresponding period last year. Now, I hand over to Mr. Ashwani Maheshwari, Deputy Managing Director of the company, for key business updates. Thank you. Thank you, GD, for the financial updates. A very good evening, everyone. This is Ashwani Maheshwari. I extend a warm welcome to all participants on the call. I will take you through the key business updates for the quarter and our operating priorities as we move into FY 2027. The global operating environment remains dynamic, particularly with the developments in West Asia. The key impacts remain crude price volatility, availability of critical parts, and workforce availability across global supply chains. So far, the automotive industry has managed these factors very well. However, the situation remains dynamic and we continue to monitor it closely. We at Sharda Motor also remain resilient due to our largely India-centric manufacturing footprint and our backward integration across tubes, stampings, fabrication, and assemblies. Raw material imports are largely linked to customer-managed supply chains, and our operations remain aligned with customer production schedules. At the same time, the current global environment is accelerating a few favorable long-term themes for India. Customers in Europe and the U.S. are increasingly focused on supply chain diversification and China+1 sourcing. This is positive for Sharda Motor, given our capabilities across emission systems, thermal management components, lightweighting products, temperature control tubes, heat shields, and other global business adjacencies. Regulatory developments also continue to support our strategy. On BS7, we have started readiness work by benchmarking European developments and engaging with customers on future system requirements. BS6.3 or WLTP, applicable from 1st of April 2027 for vehicles below 3.5 tons gross vehicle weight, is a more real-world representative test procedure and is expected to increase focus on catalyst efficiency, thermal management, and durability. On TREM V, a revised draft gazette notification has been issued, and the roadmap is now proposed power mode-wise across tractor kilowatt categories. While the near-term domestic opportunity now is on mufflers and integrated mufflers, the technology work already done is helping us in business development discussions, particularly in agri tractor and export-linked opportunities. CAFE III is another important development. These norms applicable from April 2027 to March 2032 are structured as a multi-fuel, technology-inclusive regulation. While EVs receive the highest credits, the framework also supports hybrids, CNG, ethanol, flex fuel vehicles, lightweighting, and other fuel efficiency technologies. Therefore, the response to CAFE III is most likely to be a combination of EVs, hybrids, CNG, flex fuel, and vehicle efficiency improvement. Except for pure EVs, all other powertrains continue to require engineered emission systems. Moving on to our lightweighting vertical, this continues to be one of our key growth pillars. The structural drivers for lightweighting continue to get stronger, oriented to balance fuel efficiency, CO2 reduction, EV range, and safety, amongst others. We have already started building our lightweighting and powertrain agnostic portfolio, including existing supplies to EV platforms of key OEMs. CAFE III further supports this direction as OEMs will increasingly focus on weight reduction, efficiency, and platform optimization. During FY 2026, we have done steady execution across the previously announced programs. SOP scheduled for FY 2026 has started as per customer plans, and the ramp-up is progressing in line with customer schedules. Our lightweighting FY 2026 market share has increased to approximately 14% and is expected to rise further in FY 2027 and FY 2028 based on the orders already booked. This vertical already comprises of approximately 10% of our gross sales and will continue to be the growth engine for the future and be a large contributor. Further, the Donghee TLA has added to our content per vehicle offering with subframes and torsion beams. These will be the next product segments that will add to lightweighting vertical growth. From a progress perspective, customer discussions and RFQ activities are underway across OEMs. In control arms and links, the focus is on scaling existing programs and increasing platform participation. In torsion beams and frames or subframes, the current phase is around platform design standardization, capability building, and customer engagement. These are relatively longer gestation products with higher engineering and validation requirements. Therefore, commercial scale-up will happen progressively over multiple quarters. In addition, we are in active discussion with other lightweighting technology partners for TLA JVs, which will add to our product offerings in the future. Moving on to exports business. Exports remain a strategic growth priority for us, with focus on North America and Europe. Our focus products include CEV emission components, engine and genset emission components, tractor emission components, temperature control tubes, heat shields, and emission adjacencies. Very happy to announce that during the quarter, we received an order from a leading global agriculture equipment OEM for supplies to Europe. This is a strategically important entry into the global agricultural equipment segment. It is the first order with this customer, and the customer has a large addressable wallet for products where Sharda Motor has relevant capability. Successful execution of this order will help us build a meaningful order book with this customer over a period of time. This current order has an annual value of approximately USD 2 million and a lifetime value of approximately USD 10 million, with the SOP scheduled from Q1 FY 2028. We have also received an order from an existing customer, a large U.S.-based heavy industry emission company. The supplies for this OEM export order in India. This is a test order, but of strategic importance as this gives us entry into another U.S. CEV OEM. Our previously announced export order with the North American engine and genset manufacturer remains aligned to customer schedules. SOP is moved from Q2 to Q3 FY 2027 with gradual ramp-up based on customer schedule requirements. We continue to see healthy RFQ pipeline supported by a dedicated export-focused team. The broader localization China+1 and supply chain diversification themes in Europe and the U.S. remain positive for our global business strategy. Now moving on to emission systems and adjacencies. Our core emission business remains steady and strategically important. We continue to maintain strong quality and delivery performance while also preparing for the next phase of regulatory requirement, including BS7 readiness. In emission adjacencies, the successful SOP of temperature control tubes for one of the largest off-highway manufacturer in India is an important milestone. The program has commenced and is ramping up as per customer schedule. This strengthens our position in thermal management adjacencies and creates a platform to build further business in temperature control tubes, heat shields, and related products. Coming on to infrastructure. The Uttarakhand facility is progressing as per plan. The facility is being set up closer to customers' manufacturing location and is expected to improve logistics, responsiveness, and customer alignment. The capacity will be modular and scalable, and the plant will support existing business as well as future opportunities in emission and lightweighting products in North India. The Chakan 3 lightweighting plant has started SOP and is gradually ramping up. Capacity deployment continues to be modular and aligned with customer tracked demand. On R&D, we continue to invest in people, testing, simulation, validation, and product development. During Q4 FY 2026, we filed 2 more patents. With this, the total number of patents filed stand at 22, and total awarded patents stand at 4. Our R&D efforts are focused across emission and thermal management, lightweighting and suspension, and global business products. These capabilities are critical as we move towards higher technology content and a greater system-level participation. On M&A, our approach remained disciplined but active. The current global disruption and supply chain realignment can create opportunities for well-capitalized India-based players. Sharda has a strong balance sheet, which gives us flexibility to deploy capital where there is strategic fit, customer and technology relevance. We will remain disciplined on valuation and ROC potential. On technology partnership, we continue to evaluate opportunities in powertrain agnostic products, lightweighting and structural components and processes. China and Korea remain important markets because of their capabilities in EV platforms, hybrid platforms, chassis system, suspension technologies, and advanced lightweighting. Moving on to FY 2027 outlook. The production plan and the preparations from OEMs indicate a steady demand. Our growth contributors include full-year revenues from earlier lightweighting suspension orders, partial revenue from FY 2026 lightweighting suspension orders with SOP in FY 2027, CV adjacency impact, North American export ramp-up and other export orders, and of course, the supportive OEM volume outlook with SIAM projections on industry growth. Our focus remains clear, disciplined execution, timely SOPs, customer deliveries, ROC discipline, and continue building a more diversified powertrain-agnostic and globally relevant Sharda Motor. Thank you so much. With this, we can open the floor for Q&A. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Preet Pitani with InCred AMC. Please go ahead. Thank you for the opportunity, sir. My first question would be on the line of data which you give on annual basis. First is your revenue industry split, like PV, CV, or highway and other. Also, if you could mention what was your export for this year. Sorry, you want PV, CV breakup for our data or you are talking about the SIAM PV, CV data? No, no. For our data. Like last year it was 55/40, 55 PV, 45 CV or what will be the data for this year? Okay, sure. Thank you for this question. So our CV emissions contribution is 44% for this financial year, and the PV emissions contribution is 43%. Off-highway gensets and exports together currently contribute 1% because these are growing. Suspension contributes 9%, 2% from supply chain vertical and 1% from miscellaneous. So this is the breakup of overall revenues of financial year FY 2026. Second question would be on the growth of FY 2026. You mentioned that last year we had suspension business of around 9% and this year also it is of around 9%. Our top-line growth was in emissions we have that raw material due to which our top varies. I believe there is no such portion as in suspension. So we have seen 20% suspension. If we remove the 20% growth from the suspension, base business has grown at around 6%-7%, whereas underlying PV and LCV industry has grown at 9% and 15%. So why did we underperform the industry? Was there any specific reason or are we losing market share? If you could give some insight on the same. So, yeah. There are multiple questions in what you have asked. I think one primary question is that why the suspension percentage still remains around 9%-10% of our total sales. Now, in FY 2026, lightweighting has seen a decent growth in absolute value as compared to FY 2025, and so will the value market share. As we said, the value market share has further gone up from 12.5% to 14% on a full year basis. The data which is shared is including catalyst and hence, because of the increased catalyst price this year is leading to the number not showing in the true increase. So on a value-added sales basis, the lightweighting vertical has increased in percentage of sales. And of course, as we said that going forward in FY 2027 and FY 2028, based on the order book, this percentage will certainly go up. No, sir. I think there was some misunderstanding. I have asked that, yeah, I understand that suspension business has grown at a good pace. So we have added from 12.5% to 14%. If we remove the suspension business, our gross profit growth comes at around 6%-7%, whereas underlying industry has grown around 9% for PV and 15% for LCV. So why we have underperformed the underlying industry? Was there any specific one-offs or did we lose any market share? If you could call out on this thing. Sure. I think this is very clear now. As far as growth for this quarter is concerned, our gross profits growth was 13%, versus industry's growth of roughly 10%. And on annual basis, our gross profit growth was 8%, which is largely in line with the industry which we serve, one of the key customers of the industry which we don't serve, if we exclude that, the overall industry growth was around 8% and our growth is also on similar lines. Now, in terms of how it compares with the overall growth, excluding suspension. So suspension, as Mr. Ashwani Maheshwari just mentioned, continues to be broadly at the same level as it was last year. So if you look at it from that perspective, our gross profit growth, therefore, has been consistent with the industry growth. There has not been any leakage of any form in terms of customers or margins. It has been consistent as it was last year and broadly in line with the industry. Sure, sir. Sir, if you could, just on this data, if you could brief, apart from the export orders which we have got, and apart from the suspension higher growth which we are planning, is there any other growth driver in terms of top line or similarly in terms of margin? Because our margin also at the same level, how we grow at a gross profit level, our EBITDA margin also increase at the same level. Are there any operating benefit which we can get for both revenue as well as margin? Revenue, our strategy is around diversification of powertrain products and geography. Lightweighting vertical, as we explained, because of the orders booked in FY 2027, 2028, will continue to grow extremely well. In exports, we have booked, despite all the geopolitical tensions and tariffs, we have added largest CV engine maker in the world. We have added one of the top three largest agri tractor company and also two more customers. This is the second driver of the growth. The third driver of the growth continues to be emissions and adjacencies, which I had spoken about. I'm sorry. Are you with? Yeah. Yeah. That answers my question. Let me just rephrase so that I get a better understanding. I am saying apart from the export orders, which we have already shown in our PPT, and lightweighting, if we keep lightweighting suspension business, which we are growing and Donghee TLA which we have signed, in which we will be growing. Is there any other opportunity which we are looking? Of course, you mentioned about M&A and TLA, like increasing share, like the one OEM which we are not supplying, it has been rumors in the market that they are being going to one of our competitors, and they would be starting supplying to them from 2 years down the line. Are we also getting some share of business there? Is there any talking going on? I presume you are talking about one of the largest manufacturer of PVs in terms of percentage. Yes As we have always said that our current market is excluding that largest share. While the opportunity with that company is very attractive and they represent a significant part of the vehicle market, they already have a very well-established supplier ecosystem, and they have a dedicated exhaust partnerships and JVs which have been supplying for a long time. For us, entering into that customer is certainly a long-term opportunity, but it could be a long-term rather than an immediate conversion. I mean, we continue our work on direct and indirect engagement routes, but it would not be possible or appropriate for us to indicate a specific timeline of entering to that customer. Thank you, sir. Uh- Thank you so much. Thank you. The next question comes from the line of Ankur Poddar with Swan Investments. Please go ahead. Hello. Thanks for taking my question, sir. Vishal here. Sir, this is regarding the SOP for North America engine manufacturer, which we have received last year. There have been couple of delays which has happened in execution of this SOP. Can you share some thought on that, why this delay has been happening? One more question here is it for the new launch for the product, or is it we are replacing some existing customer there? We essentially follow the customer schedule on this SOP. Yes, there have been couple of quarters delay in the launch, and we are following customer schedules, and we will start the sample orders sometimes in Q2, but the SOP as per the customer schedule to start in Q3. As we explained last time, the delays at the OEM end is difficult to explain by us, but primarily they are related to some of the inventory buildup, which would have happened because of the transition of norms, is what we understand. Okay. And sir, this is for the new launch, or this is for the existing model where we are replacing some supplier there? No, this is for a new launch. This is for a new launch of our Okay. And sir, do you see any benefit of the new CAFE norms, which are expected to come by April 2027? Is there a kind of value addition doing in the content per vehicle on our content from the current levels? So you are talking about the CAFE III norms? Yes. Yeah. CAFE III, if you go through the draft gazette notification, it is structured as a multi-fuel technology-inclusive regulation. In this, while EVs receive the highest credit, this framework also supports, if you see hybrids, CNG, ethanol, flex fuel, lightweighting and other fuel efficiency technologies. Our view is, therefore, the response to CAFE III would most likely be a combination of EVs, hybrids, CNG, flex fuel, and other vehicle efficiency improvement. Except for pure EVs, all other powertrains continue to require engineered emission systems. Exactly, sir. Yeah, absolutely. Our growth engine for lightweighting and powertrain agnostic products is what would be leveraging on this CAFE III norms. We are already supplying lightweighting products on EV platforms of key OEMs, and CAFE III is further strengthening this theme because OEM will essentially have to focus on weight reduction, efficiency, and platform optimization. This norm is a very strong tailwind for our new lightweighting portfolio, as OEMs would require to make their platform lighter and standardize design across these multiple powertrains. Hence, to summarize, this would not only lead to multi-fuel, which would require engineered emission systems, this will also lead to lightweighting, which is in line with our strategy of lightweighting of our portfolio expansion. Okay. So, sir, is my understanding right, as the OEM would prepare for this norm from 6 months or 8 months, 1 year prior of their products, our content or value per vehicle will gradually increase. So starting from FY 2027 itself, right? Yes. Content per vehicle, as we said, would depend upon the platform standardization. We are adding in lightweighting portfolio, apart from control arms and links, we are also adding torsion beams and subframes. This entire portfolio will lead to a content increase. We intend approximately adding almost INR 4K to INR 10K in content increase because of portfolio enhancement. Okay. Sir, in terms of, again, coming back to the gross profit question. Sir, repeating the earlier participant, which he asked. In fact, not this quarter, last 2, 3 quarters, we have been underperforming the volumes in the passenger vehicle industry. If you consider any ways, like year-over-year growth. Or if not underperforming, we are on par with the volume growth. So we are not seeing any kind of value addition there because we are constantly adding new products in lightweighting and other emission products. So that is why the question is being raised that is there some dilution in the market share which is happening in our products? So if you can throw some light more clear on this or maybe share some presentation, where you bifurcate what kind of growth in each segment and what kind of value addition minus the value of each segment. So that will give us a very clear picture how our company is performing on a quarter basis vis-a-vis the industry. Thank you very much. There are a couple of parts to the question. I will take them one by one. First of all, I am sorry to interrupt. Mr. Ankur, I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Mihir Vora, Equirus Securities. Please go ahead. Yeah. Hello. Thank you for taking my question. GD Sir, you can just complete the previous participant's question. I think it was left. Sure. Maybe you can complete. Sure. Right. Sure. Basically, the growth, as rightly mentioned, has been broadly in line with the industry growth. All of you would have seen a lot of orders being announced in FY 2025 as well as FY 2026, particularly in the new areas of growth, which are lightweighting as well as exports. You would have also noticed some of the SOPs have taken place towards the second half of FY 2026, and a good number of orders will see SOPs this financial year and next financial year. As a result, the real impact of these orders will be visible in our growth as we move along. So far, absolutely right, this is not clearly visible because the impact is limited. As these have gone into SOPs recently only. As the ramp-up takes place, as new orders see SOPs, we will start seeing the growth. On the other disclosures, as we mentioned earlier as well, we are in the process of implementing SAP and gradually we would know what more we can share to give a better idea about our growth in due course of time. We will keep updating all the stakeholders in our quarterly calls. Maybe in next couple of quarters we would get back on that as well. Okay. Going ahead with my question here. Sir, basically you got a lot of orders in terms of emission component system for export business. Just one thing here, does this also have an element of catalyst or this is without exhaust catalyst kind of orders? Yeah, thanks, Mihir. As I explained that in export, our focus is on CEV emission components, temperature control tubes, genset emission components, and small agri genset exhaust systems. Specifically to your point, whatever we have announced till now does not have a catalyst component in the export orders. Okay. All right. This would be something which will be pure revenue which will come through. Yeah. This is one. Apart from that, sir, my question was on to the CapEx outlook which you are looking at. Till now, I think we have the suspension plant which is up and running now, but seeing the good order intake which is coming into that segment, apart from that we will be also going into other lightweighting components. What kind of CapEx strategy do you have here? Or some number here, what can we see in terms of CapEx spend for the next 2 years? Thank you, Mihir. As far as FY 2027 is concerned, our broad CapEx guidance is around INR 90 crore to INR 110 crore. We are increasing this because we are augmenting R&D capabilities in lightweighting and readiness for new emission norms and a lot of SOPs of new programs are also taking place this year. Investment in new facilities to expand the footprint as per customer needs will be definitely over and above this yearly CapEx range, which I just mentioned. Besides this additional CapEx, we will do in due course of time for growing lightweighting and powertrain agnostic component business. Investment, definitely, as we have said earlier as well, will remain linked to customer schedules and order visibility. Okay. In terms of emission side, we do not require any further CapEx to deliver the export orders as well. No major CapEx except for the Uttarakhand plant. Yeah. I think in emission, the capacity augmentation is relatively straightforward and CapEx involved is also very limited, so it is not very sizable. You rightly mentioned about this facility. Depending on the customer needs, whatever we have to incur in line with their requirements, definitely we will always be engaging with the customer. All right. Okay. Okay, sir. I will stop here. I will get back into the queue. Thank you. Thank you. Thank you. Next question comes from the line of Manpreet Arora with Arora Wealth Advisors. Please go ahead. Thank you for the opportunity. Am I audible? Yeah. I have two questions. One is around the TREM V regulation, the other is around the pure EV. First, on the TREM V, sir, you mentioned that the new notification, draft notification limits the other opportunity to mufflers, et cetera. If you can expand a bit more on that. I believe that from October, less than 25 horsepower are probably included and then the 25 to 50 will get into 2032. If you can explain a bit on the notification and how, if there is something that we can still serve in this market and what would be the opportunity size for that? Okay. Yeah. Sorry, I could not get your first name, so I would address Mr. Arora. Your question is around TREM V. I think you broke in between, but I broadly understood your question. One is around what TREM V notification says, and then what would be the opportunity size for us. There is a revised draft gazette notification. This notification now proposes a power mode-wise basis with different norms and timelines for different kilowatt categories. If I have to go node-wise, there is one node which is below 19 kilowatt. The TREM V is applicable from October 2026. This is a very limited small market. The key relevant segment is 19 to 37 kilowatts, in which the revised TREM IIIA notification is valid. This is roughly 75%-80% of the market. Because the revised notification, the opportunity is likely to be around muffler and integrated muffler design. This will be a very small, much smaller niche segment, and what we are awaiting is further design finalization to estimate the actual opportunity size. The next kilowatt is 37 to 56, in which the TREM IV is already applicable. This is again a small volume business and as Sharda, we are already present in this business. Then there is above 56 kilowatt, in which TREM V is applicable from October 2026. This is not material again for domestic factors. For us, there are two impacts. 19 to 37 kilowatt, the new TREM IIIA, which will be around integrated mufflers. We await the design confirmation to get the opportunity size. It is a niche, small size. The second advantage which we have got by TREM V is, while we have not done any CapEx, but there is a lot of R&D capability which we have built around TREM V, which is helping us engage with the customers. As we announced, there is a new export order which we have got from one of the top three agri equipment manufacturer, which will start the SOP from Q1 FY 2028. All right. Thanks. This muffler and integrated muffler market, is that something we are already present in or supplying to? Or this is a new market and once we get the design As a capability, we have very deep capability in this particular segment because of the products which we make and the business which we do. The specific design which this 19 to 37 kilowatt segment would need, for which we are engaging now with the customers. This would essentially be a combination of design capability and manufacturing capability, both of them which we have. We have now engaged with the customer, which we are in the process now, and deliver the opportunity. But as I said, it's a smaller niche opportunity now. Yeah. What I was trying to get at was that this will be over and above what we do today. Even if it's a small- Yes. Absolutely right. Yes. Absolutely right. We have spoken about the growth. This particular aspect, we have not spoken about. This is over and above. Okay. So let's say INR 2,000 crore was the TREM V potential market with catalyst and everything. With mufflers and integrated mufflers, will it be 10% of that market, 20% of that market? I do not know about this INR 2,000 crore market. I guess this is sort of your estimate. But in the muffler, integrated muffler, as I said, at this point of time, it's a much smaller market. Very difficult for us to say what the market size would be and what the percentage would be. Essentially, when we get the final notification, start engaging with the customer, we would get to know the size. Suffice to say that this is almost a 75%-80% of the tractor market, 19 to 37 kilowatt is what we are talking about. Yeah. Yeah. Sorry to interrupt. Manpreet, I would request you to please come back in the queue for further questions. Thank you. The next question comes from the line of Darshan with Rekha. Please go ahead. Hello, am I audible? Yes. Darshan, right? Yeah. Go ahead. I had a few questions. Firstly, as you have mentioned that lightweighting vertical is being a megatrend in the future. Currently it comprises about 10%, right? How much do we aim it being as a percentage of total revenue in the future? Now, as we explained that the percentage revenue, for example, this year itself, we were last year 9% and we continue to be 9%. This percentage on the overall sales is dependent upon top line. Mathematically, denominator, numerator is dependent on the top line. While in terms of value, there is a very decent growth in lightweighting, our percentage revenue has still remained 9% because the top line has got impacted, as GD explained, by the catalyst price increase. It is difficult for us to say as to what percentage we would aim at. But if I put the FY 2027 orders, and if I put the FY 2028 orders, we would almost be 3 times from what we were last year in FY 2028. That's the kind of increase which is going to happen. Okay. That's helpful. Thank you. Also, if you could give a little clarity on how much margins would be in the lightweighting vertical. Lightweighting vertical has a very good margin, and while this is obviously a very new segment for us, steadily growing for us, and gradually as it stabilizes, the margins will also stabilize further. At vertical level, obviously, we don't share the margins. However, these will continue to be decent margins. Initials separately, as we have said previously also, will be relatively higher, but margins in this business also will be quite good. Okay. One last question I have is that we had a good amount of orders in the last quarter, as you have mentioned, and in the presentation as well. But the inventories have risen quite rapidly from around INR 10 crores to INR 75 crores. Is there any supply chain disruptions or anything? If you could give a little bit of clarification on that. Which number again? Sorry, where did you pick up this data of inventory increase? Sir, this is from the cash flow statement. Two parts to the question. One is, are we facing any supply chain disruption? As of now, there is no supply chain disruption. The volatility continues. We are keeping an extremely close watch on this entire development. But as on today, as we speak, there is no supply chain disruption. On the inventory, I request you to take that. Yeah. Darshan, I got your point. you have looked at the inventory levels here. If you see, there has been steep growth in revenues this year, 30%. Obviously, inventories have moved in line with that. If you look at it on a number of days basis, these have rather improved. This is purely on account of overall increase in scale of operations. This is nothing unusual there. Okay, that's helpful. Thank you and all the best for the future. Thank you. Thank you, Kumar. We have a follow-up question. It's from the line of Preet Pitani. Please go ahead. Thank you for staying virtually once again. First question, like you mentioned, that we have a higher margin emission and a little bit less than emission in suspension business, and I understand that you cannot give the exact breakup of the margin. But if you could just mention the differential of the margin, like it will be 100 basis point or 200 basis point or 300 basis point for full year of FY 2026. No, Preet. As a policy, we do not share the vertical level margins. I cannot share them indirectly as well. However, as I said, there are good margins in this vertical, and this vertical is still growing and will grow a lot in next couple of years on the back of the orders which we already have. We expect these margins to improve further from here, and which will be visible in the business performance as we will see all along. I think that is max I can share at this stage. Thank you. No problem. Apart from this, all the orders which we have mentioned in the export, I believe export it would be requiring a higher working capital for the export. Will export margins be better than our company's margin, or it will be also on the same level? Yeah. Broadly, you are right. Export margins relatively are going to be higher, and as you rightly said, there will be an increased working capital requirement. On net basis, these will broadly be in line with the domestic business margin. At net level, these will be broadly in line. Got it. The annual value which you have mentioned in the PPT for export, just taking example, if we take any customer in which you have mentioned that it will be starting from quarter 3 or quarter 4 of FY 2026. Will we see on FY 2027 entire basis the annual value which you have reported in PPT, or it will take one or 2 years to gradually ramp up, and then we will see 2 years later that this full number? So obviously, at order level, as a policy, we do not share any specific numbers. However, whatever is the outcome against any particular order, this will be strictly in line with the customer requirements. The annual value is based on the customer guidance, and accordingly that is arrived at. Precisely what will be the revenue will entirely depend on the customer schedules and their requirements, and we will abide by that. So annual value is just a projection, which ideally should be the case, but this can move either way based on ultimate requirement of the customer. Thank you, sir. The next follow-up comes from Ankur Poddar. Please go ahead. Thanks for taking my question again, sir. Sir, can you share some thought on your vision behind your association with Donghee and what kind of industry will it cater, CE or BE? And what kind of market size will it cater in these kind of products? If you can share some thoughts. Okay. So there are two, three parts again to your question. Let me explain the Donghee association. So with Donghee, the association is of a technology licensing agreement that enables us to expand our suspension lightweighting portfolio from our existing control arms, and we will include subframes and torsion beams. This essentially deepens our participation in powertrain-agnostic products. In lightweighting, we have already increased our market share in control arm and link to 14%, and basis FY 2027, FY 2028 order book, we are going to grow it further. This will strengthen our capability in the segment, and we also have localized R&D manufacturing expertise, and Donghee will give us the global access to global technology and benchmarks. Now, Donghee association, as I said, will help us add torsion beam subframe to the portfolio. This will help not only penetration, but also help in content per vehicle, which would depend upon the architecture and the product scope. This is where our lightweighting vertical portfolio will grow further. We are already engaged with Donghee and focusing on knowledge transfer, manufacturing and design technology, improvement of existing products, and the operational efficiency improvement. The subframe torsion beam will essentially supplement and add to the portfolio and content increase. As we are talking about CAFE III, these norms will also accelerate the platform standardization. Customer already talking about platform standardization across multi-fuel technology. Okay. Export market for these products also, will we be able to export under this agreement? As of now, the agreement TLA is for India. However, India-based exports are included in the TLA. It means I manufacture in India and export, that is part of TLA. But this TLA is valid only for India geography. If you are talking about only this TLA. But in our export, as I explained you in the product segment, we are targeting emission components, we are targeting temperature control tubes, we are targeting heat shields, and we are targeting small agri and genset components. When do you envisage the SOP will start under this agreement? As I explained, there are two parts which we are talking about. We are talking about our operational efficiency improvement of our existing product portfolio. The second part is adding the subframe and torsion beams. Subframe and torsion beams, the discussion have already started with OEM. These are little long gestation period, so over a period of few quarters, we anticipate to see success in this area. Thank you, sir. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Thank you very much. Thanks a lot. We appreciate your participation in today's earning call. We trust that we have addressed all your queries. Should you have any further questions, please feel free to reach out to our investor relations advisor, Hanson Jang. Thank you, and have a pleasant evening. Thanks a lot. Thanks so much everybody on the call. Appreciate it. Thank you so much. Thank you. On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.