Ladies and gentlemen, good day, and welcome to Amber Enterprises India Limited Q3 and 9MFY25 earnings conference call. 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 100 on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jasbir Singh, Executive Chairman, CEO, and Whole Time Director of Amber Enterprises India Limited. Thank you, and over to you, Mr. Singh.
Hello, good morning. Greetings for 2025, and thank you for joining from different time zones. On the call today, I'm joined by Mr. Daljit Singh, Managing Director, Mr. Sudhir Gohil, Group CFO, Mr. Sanjay Arora, CEO of Electronics Division and Whole Time Director of Iljin Electronics. We have uploaded our results presentation on the exchanges, and I hope everybody had an opportunity to go through the same. I'm pleased to report robust quarterly performance in Q3 FY25, with revenue of ₹2,133 crore, registering growth of 65%. Operating EBITDA almost doubled to ₹162 crore, recording 97% growth, and PAT grew to ₹37 crore from a loss of minus 1 crore over corresponding period previous year. As you are aware, we have three business divisions, namely Consumer Durable Division, Electronics Division, and Railway Subsystem and Defense Division. Let me take you through the divisional performance.
The Consumer Durable Division, which consists of room AC and its components, plus non-room AC components and washing machine. The RAC industry continued the growth momentum with channel inventory filing during Q3 in anticipation of the positive summer season. We recorded the blended division growth of 67%, led by both RAC and non-RAC vertical. RAC grew by 71%, and non-RAC vertical grew by 43%.
Management, please go ahead.
Yeah. And the resultant EBITDA of INR 116 crore, reflecting growth of 150% over last year, the strong performance is driven by the underlying growth in RAC industry, coupled with conversion of new customers from gas charging to ODM and deepening of customer relationships. Beyond the RAC, the commercial AC is picking up traction. I'm pleased to report the addition of one new customer and strengthening of commercial AC order book. The washing machine JV with Resojet is progressing well, and trials are in progress with new customers, and we expect to commence the mass production from the new plant by H1 of the next financial year. Switching to Electronics Division, the division continued the remarkable growth momentum, clocking revenue of INR 472 crore, reflecting growth of 96%, and resultant EBITDA of INR 34 crore, reflecting 193% growth.
Looking into current order book, we are pleased to revise our revenue growth guidance for Electronics Division from 45% earlier to 55% for FY25, propelled by both PCBA and Bare Board verticals. The journey which began to capture the technological shift from fixed-speed to inverter AC in 2018 has now evolved into a comprehensive full-stack EMS company. In the PCBA vertical, we continue to expand our customers with the addition of renewable energy customers. On the strategic expansion front, the construction is progressing well for the new facility at Hosur, and we expect to start commercial production by Q4 of FY26. Additionally, we earlier announced the JV for HDI Flex and semiconductor substrate PCBs with Korea Circuit Company, a pioneer for Korean PCB industry with more than four decades of experience.
To reiterate, the JV will bring the world-class technology into India, will leverage and connect with marquee global customers along with an interim buyback arrangement for initially two years. On the way forward, we are awaiting the finalization of the electronic component scheme by the Ministry of Electronics and IT, which, as per the recent media articles, has got the note from the Finance Ministry. While in parallel, we are scouting for the land and have started engaging with the customers. To summarize, the Electronics Division is on a transformative growth path with the addition of customer applications on the PCBA front and on the Bare Board front. The Ascent facility expansion, coupled with Korea Circuit JV, will unlock the new skills for the company. Now coming to our third division, Railway Subsystems and Defense.
The division reported a muted quarter with a decline of 13% in Q3 on expected lines owing to delay in offtake of products. The division profitability also got impacted due to delays and product expansion expenses. We expect to get back to a normalized range of 18%-22% by H2 of FY26. To emphasize, delays in offtake are momentary with no cancellations of orders. During the quarter, we further strengthened the order book with an additional air conditioner order for a metro project, and on the defense front, the vertical is gathering a robust traction with visibility on sizable export opportunities over midterm. On the expansion front, the construction is progressing well for Sidwal Greenfield facility for HVAC pantry doors and gangways and is expected to commence operations by Q2 of FY26. Similarly, the JV with Yujin Machinery of South Korea is progressing well.
We expect the facility to be ready by Q1 of FY26. Product trials to begin from Q2 or Q3 FY26 onwards for the driving gear coupler and pantograph. We continue to remain confident on the long-term potential of the division and maintain our guidance of doubling the revenue in the next three years, backed by strong order book visibility of INR 2,000 crore plus and increasing wallet share. To sum up, we witnessed a robust quarter, and we look forward. The roadmap is in place for multi-fold scale-up for each division as the expansion strategy unwinds. Now let me hand over to Sudhir Gohil, our CFO, for the financial highlights.
Hello everyone. Good morning. I'm pleased to report a strong performance for Q3 and 9M for financial year 2025. Let me first take you through the quarterly consolidated financial highlights. The consolidated revenue for Q3 financial year 2025 grew by 65% year on year, INR 2,133 crore compared to INR 1,295 crore in the previous year. And operating EBITDA increased to INR 162 crore during the quarter compared to INR 82 crore last year, reflecting a strong growth of 97% year- on- year.
Please note operating EBITDA is before the impact of ESOP expenses and other non-operating income and expenses. We recorded PAT of INR 37 crore against the loss of INR 1 crore in the previous year, same quarter. Let me take you through the 9M financials. Revenue for 9M financial year 2025 increased to INR 6,219 crore compared to INR 3,924 crore in the previous year, recording a growth of 59%.
Operating EBITDA increased to INR 482 crore against INR 285 crore in 9M financial year 2024, with a growth of 69% year- on- year. PAT increased to INR 133 crore compared to INR 40 crore in the previous year, reflecting a growth of 228%. Now let me take you through the divisional performance. Firstly, revenue and operating EBITDA details are not comparable with the published segmental results.
To start with, Consumer Durable Division, the division reported revenue of INR 1555 crore in Q3 financial year 2025 compared to INR 932 crore, reflecting a growth of 67% year on year on the back of strong RAC business growth driven by the positive season. Operating EBITDA for the quarter increased by 150% year on year and stood at INR 116 crore compared to INR 46 crore in Q3 financial year 2024. Coming to Electronic Division performance, revenue and operating EBITDA details are not comparable with the published segmental results.
The revenue for the quarter increased to ₹472 crore compared to ₹241 crore in the previous year, reflecting a growth of 96% year on year. Operating EBITDA for the quarter increased by 193% year on year and stood at ₹34 crore compared to ₹12 crore in Q3 financial year 2024. I will reiterate, we are progressing well and expect to close the year with revenue growth in excess of 55% for financial year 2025. There is a revision in guidance. Earlier it was 45%; now we are growing by more than 55% during the year. Moving to Railway Subsystems and Defense Division performance, again to emphasize the revenue and operating EBITDA details are not comparable with the published segmental results. The division reported a muted quarter owing to slower offtake, as mentioned earlier.
The revenue for the quarter stood at INR 106 crore, reflecting a decline of 13% year on year, and resultant operating EBITDA of INR 12 crore, impacted due to slower offtake and product expansion expenses. On the return on capital employed, with the strong underlying business performance, we expect improvement in ROCE and expect to cross the 15% mark by the year-end. Just to summarize the key initiatives taken earlier during the year of Ascent facility expansion, JV with Korea Circuit, and expanding the product portfolio of Railway Division bodes well for the growth of the company. Now I hand it over to the operator, and happy to answer all the queries.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. As a reminder to all the participants, please restrict yourself to two questions. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Natasha Jain with PhillipCapital. Please go ahead.
Thank you for the opportunity and congratulations, team, for a great set of numbers. So my first, I have two questions. My first question is on the RAC side. So now, in the past few quarters, we did more of assembly because of which our margins were flatish. Now, when I see a consolidated gross margin, which further declined by 106 basis points. So I just want to know if you could throw some light as to how RAC components did versus RAC assembly and some growth in between those two segments.
So the gross margin impact is largely due to the product mix. We need to give you the very detailed explanation for that because margins vary from product to product. Like we explained earlier, there are different margins for different star rating, different energies plus component, which component revenue share is how much. So it's very difficult to give you the complete breakup that how to measure it. But it's a normalized thing, and there's no big impact in the margins, gross margins during the financial year.
Can we expect that the components business is picking up, specifically the RAC components?
Yes, the components business is picking up. On the other side, RAC finished goods is also picking up. If you see the growth in both the products, there's a good growth we have done in the current quarter and the full 9M as well.
Understood, sir. So then my second question is on the electronics side. Now, we've revised your guidance upward from 45% to 55%. Now, given in the short term, we have capacity constraints for Ascent. Also, there has been an ASP decline in mobiles and wearables. So what is going to enable so much that we are revising our guidance so much?
Natasha, first of all, congrats on your new role, and good morning.
Thank you so much, sir.
You know, we are actually, if you see the traction and the journey of the Electronics Division, you know we keep on, we've added a lot of applications. So we started our journey with the consumer durable, specifically by supplying PCB applications and assembling boards to consumer durable, especially air conditioners, and then we graduated into refrigerator washing machines. But now we are giving solutions in the space of telecom in smart meter space. We are giving solutions in the auto space, both four-wheeler and two-wheeler. And in fact, recently, we have just started the commercial vehicles business also, and we've onboarded defense. So looking into that, plus the Ascent Circuits growth potential, we have revised the guidance, and we are very strongly hopeful that we shall be able to maintain more than 55% of the growth of this vertical.
Thank you. Ms. Jain, please rejoin the queue for more questions. Next question comes from the line of Bhoomika Nair with DAM Capital. Please go ahead.
Yeah, good morning, sir, and congratulations on a great set of numbers. So just wanted to understand the RAC segment a little better. Now, if I look at it for the 9M period, we've grown fairly well. Even in this quarter, we've grown about 71%. Now, if you understand, you know a lot of the brands are putting up a lot of capacities, and you know in a lean season too, they've continued to outsource. So if you can just explain what's driving this growth, what's the end market growth, and coming into the next season, given the overall slowdown in consumption and the base of last year being very high, how are you looking at the upcoming season, really?
Good morning, Bhoomika. We feel that, first of all, you know I'll give you the reason for 71% growth of this vertical. You know you would be aware that we were doing gas charging for large multinational companies, and we have been telling that we are converting those into ODM players, and that has already happened. And that's the reason of the growth. And also, you know the factories which brands were putting, it has already done. So there is no more new factory which is getting announced as of now. All the six brands who were putting up, their factories are up and running. There is no brand which is left out now. And you know from our perspective as a solution provider, we have tagged along with them while supplying our components as well as finished goods.
So this year, we have also seen some spillover because of large demand which came to us, and that's the reason why we have outnumbered the industrial growth. For coming year, I personally feel that industry should be doing it. This year, industry ended up at about 25% growth. Next year, industry is expecting good summers, and in that anticipation, they are ramping up the inventory right now. But you are right that there is some demand slowdown. We yet need to see that slowdown because right now, inventory is getting filled at the primary level, at the dealer's level, and that's how the ramp-up is happening. But as far as Amber is concerned, I think we will grow in tandem with the industry. And because of our addition of some new customers onboarded, we may outnumber the industrial growth next year.
Sure. So this is helpful. Sir, on Sidwal, you spoke about the deferment by Indian Railways, which has resulted in a bit of a sluggish 9M period. Now, going ahead, how are you looking at the ramp-up coming back? Because this year, we'll probably see some decline in revenues and drop in margins. But as you move ahead into 26, where do you see the acceleration coming through? What kind of execution can be there? And do margins then revert back to 20% if revenue growth comes back, or should we structurally look at a lower margin profile out here?
Bhoomika, we intimated everybody in last quarter also when the railway announced focus on non-AC production because of the accidents which happened. There was a lot of hue and cry in the market that the government needs to plan on the BPL families also for the AC, but the government is only thinking about air-conditioned trains. The focus entirely changed, and that's why we revised our guidance that this will be a muted year. Right now, if I see, there were two main issues. One is the 200 Vande Bharat Express order that got delayed in execution because of the structural shift in the number of coaches. Earlier, one train was having 16 coaches. Now, government has revised it to 24 coaches. The whole construct of designing of the train systems gets changed, and that's delayed.
But now, what I've heard just 10 days back is that they have been cleared. So most probably, it is moving by a year delay. So next year, this whole will come back from H2 onwards. As far as another project which was delayed was the Mumbai Metro project. Again, we are hearing now since the elections are over and everything is done in Maharashtra. So that is also coming up again on track. Apart from that, there is nothing, no change in Sidwal. Yes, we did get hit in the margins because of, you know, in anticipation of the growth, the expenses also were increased. There were teams which were built, and on the other side, the slowdown happened. The delays happened, which was totally not foreseen. But what we feel right now is all these two projects are coming again on board.
We feel that the margins will come back again. We will continue to get hit for next quarter and next to next quarter. After that, we will see these margins coming up because the railways have already given us indication of resuming the supplies from H2 onwards. We expect this division to grow next year. And apart from that, there are some defense projects which are getting added, and the order book on the defense side is also getting added. I believe next year, we should be able to come back to the normal 18%-22% range by H2, post-H2 range.
Thank you. Mr. Nair, please rejoin the queue for more questions. Next question comes from the line of Aditya Bhartiya with Investec. Please go ahead.
Hi, good morning, sir. Just wanted to understand these new customers that have been moved from gas charging to ODM solutions, how large could those customers be and how much they may have contributed in third quarter and 9M of this fiscal?
These are large multinational companies which were earlier importing their products, and then the gas ban was announced by Government of India. So we started helping them by gas charging the products. But ultimately, the roadmap was very clear that you cannot continue like this. You have to either put up your own facility or you convert it into manufacturing in India. And their volumes are growing. I think they are gaining traction. They have surpassed our expectations. We thought that they will grow in the range of 25%-30%, but two of our customers, they have grown by more than 45%. So we got benefited because of that, and the whole shift of gas charging to ODM started giving us more traction on the finished good side.
But one of the customers, the gas charging machine product category, they have put up their own factory, and they have already allowed us for the supply of components. So we will be supplying components to one, and we have started supplying finished goods to other two.
Understood, sir. So the reason why I was asking is that, like you mentioned, room AC category grew by 71%. Just wanted to kind of get some sense how much would have existing customers grown by and how much these new customers could have contributed. How relevant are these customers in the overall scheme of things?
These are long-term contracts, Aditya, because once you shift to ODM, when you design products and invest in the tools, so these are all long-term projects which are on board right now. You know, as on the percentage side, I think very difficult to say because largely, you know, customers have got added on the EMS front also, the commercial air conditioners front also. These two, three customers which have come on board, you can say that they have been instrumental in giving us the growth over and above to the industrial growth.
Sure, sir. That's helpful to understand. And is it fair to kind of think about outsourcing industry growing at a pace much, much faster than the overall industry in a good summer season, and therefore the benefit being disproportionate this year?
See, outsourcing industry, it's very difficult to predict at our level because we are a B2B solution provider. What we focus on is how deeply we can deliver comprehensive solutions to the industry. I particularly feel that, you know, if last year India was at 10 million mark, you know, and this year with a 25%-30%, we should end up at 1 crore, 30 lakhs market. By FY30, it is expected to be close to about 3 crore or 3.5 crore air conditioners. And if we see last five years or four years trend also, from 7.2 million in COVID time, it has come to 1.3. So looking into this, there's a 3X growth kind of a thing possible for this if these numbers stack up rightly. So enough growth for everybody in the whole air conditioning industry.
You know, I personally feel we are tagging along with the industry growth. The strategic shifts of customers will continue. They may outsource. They may buy components. So from our side, it is very important. The relevant thing from our side is that how much business we are doing with the customer on the absolute basis, irrespective of the structure and form of the solutions which we are providing.
Thank you. Mr. Bhartiya, please rejoin the queue for more questions. Next question comes from the line of Aniruddha Joshi with ICICI Securities. Please go ahead.
Yeah. Sir, congrats for an excellent set of numbers. So currently, the industry capacity, how do you see the current industry capacity of the brands as well as the EMS players both put together? And how do you see the capacity changing by FY26 end and by FY27 end? I guess most of the projects are already in place now. So what should be the capacity change maximum?
See, everybody has put up different capacities. All the brands, all the six new units which have come are at very, very different capacities. Some have put up 500,000 capacity. Some have started the 2 million capacity, but whenever a brand puts up a facility or, you know, they will think long term, so they have thought about next four, five years at least to put up these facilities, and to add on the capacities on assembly lines is not a very big challenge because it's just a six-month job, so you can add the assembly businesses anytime, you know, while moving in the season also. I believe that overall, we should look at how the seasonal capacities are panning out, so on the seasonal capacity side, I would say industry should be at around 65% of capacity utilization, something like that.
That's a very ballpark number which comes to the mind. But every brand is at different capacity utilization. We cannot comment on behalf of our customers. But as Amber is concerned, we are at a capacity utilization of 65% at the moment in our room air conditioner facilities.
Okay. Sure. So that's helpful. Say, on the second question, in a way, probably we would have gained the market share. So is there any loss of market share, or is it pure industry growth that we would have grown? In a way, right now, the kind of growth that we are building in is much higher than what the market growth also seems to be. So is there a likely market share gain, or in a way, market would have also grown at similar rate in Q3?
We don't calculate it on a quarterly basis. I think by year end, we'll calculate where are we. Last year, we were at 26% of the manufacturing footprint of air conditioners. And if industry grows by 30% and Amber ends up growing by 50%-60%, then definitely we would have grown in our market share.
Thank you. Mr. Joshi, please rejoin the queue for more questions. Next question comes from the line of Ankur Sharma with HDFC Life. Please go ahead.
Yeah. Hi, good morning, sir. Thanks for your time. Just one question. On this proposed JV with Korea Circuit on the manufacturing of PCBs, if you could just help us, what is the overall CapEx that you're looking at here? What could be the asset turns? And I understand we are expecting quite a bit of subsidy as well here. So yeah, some broad contours by when do you commission this plant? Yeah.
Yeah. Good morning, Ankur. So on the Korea Circuit, we are waiting for government to finalize the incentive scheme. You would have all heard through the media reports that it has already got note from the Finance Ministry. So earlier, we were talking of INR 40,000 crore incentive, but the note which has come from the Finance Ministry is INR 25,000 crore. And we are waiting for the structure.
We are not privy to the structure, final structure, which is going to come out, especially for the PCB parts. And once that is there, earlier we were hearing it is INR 1,000 crore minimum investment, but now we don't know because of this shift change. Maybe they have reduced or they have increased. We are not knowing about that. I personally feel that we expect that it should get announced by the budget time. And in case it does so, there will be a notification after that, and then at least two to three months will be given for the applicants, and then another two to three months for the approval systems. So by next year's half, maybe by September, the approvals will be in place, and then that is when the process will start.
But what we have done parallelly is we have started scouting for land, and the incentives which is talked about is quite a good number. It is more than 40% for HDAs and semiconductor substrates from the Central Ministry. And over and above to that, the state governments are also giving incentives. Like the Hosur expansion, we have been able to negotiate 35% of incentives from the state government. So we feel that it's a time to put a bold foot forward for creating this whole ecosystem in India. And if I have just to give you just the numbers on the electronics getting consumed and the reason why we are planning this large CapEx, whenever the incentive schemes are announced, largely we see as India as a country consumed $32 billion of electronics eight years back. Last year, we consumed $115 billion.
Business as usual is expected to be in the range of $285-$300 billion, whereas our honorable Prime Minister has taken a mission mode for getting the number to $500 billion because this is one sector which is labor-intensive, and it creates a lot of jobs also. If we see what it calculates into the total addressable market for the bare board PCB, last year, this is a mighty number which I'm talking to you right now. It is, I think, available on the MeitY's website. India consumed about INR 30,000 crore plus PCBs, and only 10% of that got manufactured in India. So with the incentive schemes coming in right now, I think there's a huge potential for this going up. If we talk about 5-10 years from now, there's a large potential and time available for this.
We will be a single-track company offering complete solution from single-side, multi-layer, RF category, flex category, HDI semiconductor substrates, all categories in one place. So that is what we are aiming to deliver to Indian markets. That's very helpful to know this. Also, have you chosen on how much are you looking to invest in this JV in terms of overall CapEx number? I understand there will be subsidies that you'll get thereafter, but is there a number you can share? There will be a threshold investment criteria by government. So as I explained earlier, it was 1,000 crore when we were talking of 40,000 crore of incentive scheme. Now it would have been shifted. We don't know whether it has shifted. That will be the number which we will have to put up for getting approved by the ministry.
So if it is INR 800 crore, we'll have to do minimum INR 800 crore. If it is more than that, we will have to do that. So I think it should be in the range of INR 1,000 crore plus.
Thank you. Mr. Sharma, please rejoin the queue for more questions. Next question comes from the line of Dhruv Jain with Ambit Capital. Please go ahead.
Hi sir. Good morning. Sir, the first question that I had was on the consumer durable side. So if you could just tell us what's the peak capacity or the peak revenue that you can do with the current capacity? The reason why I'm asking this question is that the government recently announced the third round of the home appliances PLI, and Amber did not participate in that. So just your thoughts there. That's my first question.
Well, you know, we've already got approval of INR 400 crore PLI, and that's the reason why we did not apply for any further PLIs. And the earlier PLIs are moving very fine. We are getting reimbursement from government in time, and we're very thankful to Indian government for all those reimbursements which are happening on time. On the capacity utilization, to answer your question, I already addressed this question earlier, but I'll reiterate. We are currently at 65% level, and we can calculate where we can go with the complete 95% or 98% capacity utilizations if that goes fine.
Sure, and the second question was on the JV losses, right, so we've seen that QOQ, the losses of JV have kind of eased up, so I wanted to understand what's the pathway or the broader, how should we look at this number going forward in terms of how it breaks even and how that number percolates into profits going forward? Thanks.
As far as Resojet is concerned, that's a new facility and a new product lineup. We believe that it should break even in next financial year. We should see losses coming down from quarter two of next financial year. As far as the other JV is concerned, that is a turnaround story. We are expecting next financial year, it will continue to bleed. After that, there is a complete turnaround story which is happening. They have received new orders, and a new CEO also has joined from Ex. Coda. CEO has joined that company. There's a lot of positive things which are happening.
Thank you. Mr. Jain, please rejoin the queue for more questions. Next question comes from the line of Teena Virmani with Motilal Oswal Financial Services Limited. Please go ahead.
Yeah. Thanks for taking my question. Sir, my questions are related to this JV where Ankur also asked you on the expected turnover or the asset turnover that you can expect from this particular facility. So basically, if we take this assumption that the incentives are provided and Amber invests into this particular facility, over a longer term, three- to four-year or a five-year term period, where do we see the scale-up which can happen in this particular subsidiary of Iljin and Korea Circuit? And my second question is on the margins of railway segment. Like you mentioned that margins can come back to the normal 19%-20% which it was earlier. But what kind of margin profile is there for the newer areas like those and gangways? Do you think that similar margins will be there for those portions also? So these are my two questions.
On the first question, the asset turns normally in the PCBs are similar to OSAT businesses. It is in the range of 1-1.25. However, how we should look at it is since government is giving incentives, almost 70%-75% will be given back collectively by MeitY as well as the state governments. So the asset turns from that perspective is much better. It goes to about 2.5-3 times. And also, to answer your second question on the railway front, yes, we expect the margins to come back from H2 onwards of next financial year. So next quarter and next to next quarter will be impacted because of the slowdown, but then we are coming back again. On the margins of the new product categories, so first two trains will be coming from the principals in Korea as well as from Austria.
But after that, it will shift to India. So since the first two trains will come, that is just trading. There will be hardly any margins in that. But once the manufacturing starts from H2 onwards, from Q3 of the next financial year onward, the margin profile of these product categories are in the similar range of 15%-18% range.
Thank you. Tina Virmani, please rejoin the queue for more questions. Next question comes from the line of Achal Lohade with Nuvama Institutional Equities. Please go ahead.
Yeah. Good morning, sir. Congratulations for great earnings. Sir, if you could give us, I know it's kind of a repetitive question, but for nine months, what would have been the industry growth in your estimate? I mean, you have said about 25% growth for the full year. Does that mean that fourth quarter, the underlying assumption is actually a lower number?
I think what we hear from different brands, everybody has grown differently. Most of them are reporting 30%, 35% growth, and some have reported 20% also. But on the industry side, I think the first nine months should be somewhere about 30% growth kind of a thing, what we hear from everybody. Quarter four, of course, because it's already a large quarter last year. So percentage-wise, I don't think that we should look at 30% or 35%. And that's the reason why I said that industry should be in the range of 25% by year-end.
Understood, and the second question, sir, with respect to the electronics guidance, when you mentioned 45%, it implies actually a very small number for the fourth quarter for the electronics revenues. So just wanted to understand what number could it be? I mean, is it a very, very conservative number, or is this a realistic number we should work with?
No, we have given a conservative number. We have already revised the guidance. We have said that now it is not growing at 45%. It's growing at 55% plus for the complete year. So we are very hopeful, strongly hopeful to deliver that 55% growth in the electronics division.
Thank you. Mr. Lohade, please rejoin the queue for more questions. Next question comes from the line of Niransh Jain with BNP Paribas. Please go ahead.
Yeah. Hi, sir. Good morning. And congratulations on a great set of results. Sir, my first question is on Ascent Circuits. Just wanted to check what is the revenue breakup for this quarter and the profitability as well. And one question from an accounting perspective is, why are we seeing any flow-through in minority interest from the Ascent Circuits? I mean, the minority interest has almost been flat in the last three, four quarters, while the Ascent Circuits revenue should start flowing in through, right? Or am I missing anything here?
Well, Ascent Circuits has done INR 82 crores in quarter three, and we expect Ascent Circuits to grow in the range of 30%, sorry, 20%-25% range. And we have onboarded five new customers recently. So whenever the new customers get added, the share of business is very skewed initially for the first year, and then it ramps up. We are already getting very good traction in Ascent Circuits on the single multi-layer PCB business, primarily because of the anti-dumping duty imposed. And we expect that in the next two years, Ascent Circuits will be doubling its revenue from where it is today. There's a lot of potential in that, and that's the reason why we are putting up CapEx also. And you asked for a second question. Can you please repeat it?
Sir, we are not seeing any change in the minority interest in the last three, four quarters, while we expected that the Ascent Circuits profitability will also impact the minority interest. So I just want to understand, am I missing anything here? I mean, why the minority interests are not going up as the Ascent Circuits revenue consolidates?
We own 60% of that, and it is a path to control transaction which we have done with them.
Thank you. Mr. Jain, please rejoin the queue for more questions. Next question comes from the line of Deepak Krishnan with Kotak Institutional Equities. Please go ahead.
Hi, sir. Hope I'm audible. I just wanted to check. We've seen a lot of interest with other peers as well as companies potentially putting up compressor plants due to maybe restrictions of imports coming through. Our thought as to why we are not considering that given the sort of strong growth. So just your views on that, sir?
We are already in touch with our suppliers for the capacity ramp-up, and most of the suppliers are indicating a lot of capacity being ramped up at their level. But however, in case we see that there is a shortage coming in, we'll certainly plan.
Sure, sir. I mean, we just wanted to understand what is the inventory level currently in channel given the summer assets. The previous summer was very strong with virtually stockouts, and after now, two quarters, we're seeing volumes coming through. So in terms of overall inventory level, is it at normalized levels? Do you see this growth momentum continuing to Q4? And after that, does it depend upon the season? Just maybe a check on the inventory level at an aggregate industry level.
So how we see is that brands buy from us only when there is a normalized inventory level or less inventory level. So our uptake is reflective that the inventory levels are at a very normalized level at this moment of time. However, we still need to see how the summer season pans out to be. Because generally, the trend is that from December onwards, brands start pushing up, filling the inventory at the dealer's level, and that's how the primary sales happen. I think we all should look at the secondary sales number from February onwards. That will actually define how the season is going on.
Thank you. Mr. Krishnan, please rejoin the queue for more questions. Next question comes from the line of Amit Mahawar with UBS. Please go ahead.
Hi, Jasbir. Congratulations on great scale-up across business.
Hi, Amit.
Sir, I just have one question. On a three to four-year basis, very clearly, the electronic division will lead the growth, even in profitability, and consumer is anyways going to be a steady state. But in the electronic division, so across the two, three divisions, can you help us understand how will we strategize the exports opportunity? And once the new facility by Q4 2026 starts and stabilizes in 2027, 2028, should we expect a significant export scale-up, or that's going to cater to maybe 80%-90% India only?
Right now, Amit, it is 90% India and very small exports which are happening. But yes, as the ramp-up is happening, teams are already in touch with for a lot of exports, not only for PCBs, but PCBs also. I believe for cracking the customer outside India, it takes a little time and gradually share of business growth. So to answer your question on the three to four years trajectory, yes, we see a significant scaling up of exports happening from both Ascent Circuits as well as the region.
Sure. And a quick one on CapEx and the cash flows. How should we think about maybe around next year? What kind of operating cash flow and investment should we understand? That's it. Thank you.
On the electronic side, or you are asking for the whole group?
Overall.
Overall, I can tell Amit, division-wise, so we are planning for about INR 250-odd crore CapEx in our consumer durables division, where we are bringing up some new model lineups and also ramping up on the component side giving solutions. Plus, we are also investing for our exports readiness. We are also investing in our washing machine business category. On the electronic side, we think that we have already announced INR 650 crore CapEx in Hosur, out of which land parcel has come this year. A major portion will come next year. Close to about INR 400-INR 450 crores will be next year for the Ascent Circuits and the Iljin PCBs. Our railway division has already been announced.
Last year, we announced INR 350 crore CapEx for the two facilities which are coming up in Faridabad, out of which 100 has already been spent, is being spent this year, and about 150 will come next year, so that is going to be the overall CapEx at the group level.
Okay. Thanks, sir, and congratulations.
Thank you.
Thank you. Next question comes from the line of Manoj Gori with Equirus Capital. Please go ahead.
Yep. Thanks for the opportunity, sir. So I have just one question. If you look at, there are some uncertainties around the supply chain. Earlier, it was on the grooved copper. Now, currently, there are some uncertainties on the compressor side as well for the upcoming stock. How do you see industry and yourself placed in terms of inventories and productivity? Can we expect some disruption if industry goes at around 15% or more than that?
So on the compressor supply chain issue, so copper supply chain issue has been resolved by government. They have already moved out the inner grooved from the category, and the BIS has also been revised for one of the companies. And plus, we are very thankful to all the copper manufacturing companies who have put up the facilities for building up plain copper tube facilities. I think copper, more or less, is resolved. As far as the compressor is concerned, I think February and March is good to go for everybody. But yes, April sounds a little tricky because there is a delay in shipments, and the companies who large order book was given to them, but they are supplying in a little miserable way, I would say. So April may get impacted in case compressor issue doesn't get resolved.
But we are talking, I think we are getting assurances, but from China, we have now also shifted to other geographies. So I don't think so that a very large issue should come up from that perspective on the compressor side also. Because if you see the worldwide, there's a lot of capacities available.
Right, sir. So secondly, on the electronics announcement of the schemes that the government is likely to announce, any timelines do you expect by when they should be coming out with any scheme announcements or any indications or any judgment from your end? That's all.
I believe you are talking of the electronic component scheme. Hello?
Yes, sir.
Yeah. Okay. So basically, since it has been nodded by the Ministry of Finance, it's a matter of time. It has gone to the Cabinet. We are expecting that it should get announced in the budget, but in case it doesn't get announced in the budget, most likely it should come in the month of March. And after that, Government does give some time for applicants to apply. And then, of course, there is a filtration process and approval process. So most likely by end of August, September, all the approvals should be in place.
Thank you. Mr. Gori, please rejoin the queue for more questions. Next question comes from the line of Shrinidhi Karlekar with HSBC. Please go ahead.
Yeah. Hi. Thank you for the opportunity. Sir, would it be possible to comment broadly how much price increases are required in your AC segment good business to compensate for the recent commodity increases and currency depreciation?
There's a little uptick on the gas refrigerant prices, which has impacted in the range of INR 100-INR 120 per air conditioner. Other than that, it's a pass-on strategy from our side. Whenever any kind of currency or commodity is hit, we've demonstrated in the past that we pass on to our customers on a quarterly lag basis. Ours is a B2B business. We operate on price variation clauses with our customers.
So not much of inflation on the other component because of copper?
Apart from gas usage?
Not really. Copper is in the same range currently operating.
Fair enough. Thank you for answering my question. All the very best. Thank you. Next question comes from the line of Vipraw Srivastava with PhillipCapital. Please go ahead.
Hi. I'm audible, right?
Yes. Very audible.
Right. Yeah, sure.
So quickly on the Korea Circuit JV. So I mean, if you look at Korea Circuit, they are also into manufacturing of semiconductor substrates. You are starting with bare board manufacturing. What's the timeline you're looking at when you transition from bare board manufacturing to a semiconductor substrates manufacturing?
So JV is basically for HDI Flex and semiconductor substrates. We will be beginning with HDI as a first phase and then move to semiconductor substrates because we think that FY 2027, 2028 will be the year when India's semiconductor ecosystem will get built up. Before that, we are planning for HDI.
Wow. Fair enough. Fair enough. And so secondly, I mean, obviously, the whole CapEx which you're going to do with Korea Circuit, it's going to be heavily financed by the Government of India. So I mean, do you see the synergistic effect of this on the EMS assembly business also? Because what I feel is you might actually price out the competitors if you are backward integrated into their goods.
Of course. I mean, Ascent Circuits acquisition has really helped us for ramping our PCBA business also because Ascent Circuits is largely into telecom and auto and defense aerospace businesses. So we are now gaining traction because of the PCBA. So there's a cross-deployment of customers in both PCBA and PCB. And I believe we will be able to do that. And that's the reason why we have commented that this journey started from INR 300 crore in 2018 when we required Elysium Electronics. At that time, EBITDA used to be 2.8%. And this year, you have seen the results, and we've guided the market that we'll be growing 55% plus. And we expect our margins to be in the range of 8% EBITDA. And I think there's a possibility of increasing it to double-digit numbers in the next financial year itself.
Buying agreement with Korea Circuit, right? So I mean, is the assumption correct that it will help you and has a quick ramp-up on your PCB facility?
Yeah. It was nice of them to accept this arrangement of uptake of two years because in India, it takes a little time for customers to approve and then the regulatory approvals and all. From our side, they have agreed to uptake the capacities for the first two years.
Thank you. Mr. Srivastava, please rejoin the queue for more questions. Next question comes from the line of Naushad Chaudhary with Aditya Birla Mutual Fund. Please go ahead.
Hi. Thanks for the opportunity. And apology, I'm in a bad network. So if my call gets dropped, two, three very quick verifications. Sir, first, in our electronics business, typically, what is the length of contract we do in this business and same for railway business?
It's depending on which applications we are serving. Normally, it takes close to about two and a half to three years to onboard a customer. In railway division, it's a process of four years minimum if everything goes fine at all the steps, and then you become part two, and then finally, after supplying 300 coaches or three years, then you become part one supplier in railways. In electronics, generally, the contracts are longest time ranging from three to five years contracts.
Okay. Secondly, on the Ascent Circuits, sir, this is slightly dated question. In terms of I was just trying to understand what was the incentive for the Ascent Circuits promoter to sell a majority stake to us at such an attractive valuation? Can you elaborate on that?
There was an issue of succession, and the promoter is aging, and he thought because he has two daughters. He was trying to sell it from last one and a half years, and he was meeting many bankers as well as many potential buyers. Finally, when we met him, the deal clicked.
Okay. And last, in the RAC components, except compressor, what other major components we don't have in our portfolio and any plan to add if we have any?
We are currently doing about 70% of what goes into air conditioners. We don't have refrigerant. We don't have compressor. We don't have copper tube. We don't have aluminum wiring harnesses. Many other components we don't have.
Any plan to add those as well, or is there a technical barrier?
No. Of course, as a team, keep on evaluating which component to buy and which to get into, of course. As a growth strategy, teams are already evaluating various options.
Sure, sir. All the best. I'll come back in the queue.
Thank you.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you, everyone, for joining on the call. I hope we have been able to address all your queries. For any further information, kindly get in touch with our head of IR, Ravi Kaul, or Rohit Singh from our IR team or Strategic Growth Advisors team, and we wish you all a very happy 76th Republic Day in advance. Thank you. Have a great day ahead.
Thank you. On behalf of Amber Enterprises India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.