Ladies and gentlemen, good day, and welcome to Q1FY26 Dixon Technologies Earnings Conference Call hosted by Dan Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on a dashboard phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Bhoomika Nair from Dan Capital Advisors Limited. Thank you, and over to you, ma'am.
Good evening, everyone, and a warm welcome to the Q1FY26 earnings call of Dixon Technologies. We have the management today being represented by Mr. Atul Lall, Vice Chairman and Managing Director, and Mr. Saurabh Gupta, Chief Financial Officer. At this point, I'll hand over the floor to Mr. Lall for his initial remarks, post which we'll open up the floor for Q&A. Thank you, and over to you, sir.
Thanks, Bhoomika. Good evening, ladies and gentlemen. This is Atul Lall, and we also have on the call today our CFO, Saurabh Gupta.
Good evening, everybody.
Thank you very much for joining the earnings call for the quarter-end of June 2025. We have begun our financial year 2026 with robust all-around operational and financial performance. Our diversified portfolio, strong customer relationship, healthy order book, operational excellence, and focus towards backward integration and creation of components ecosystem give us confidence that we'll continue our stellar track record of consistent performance and scale to new heights over the coming years. To share with you the key highlights for the quarter, consolidated revenues for the quarter-end of June 30, 2025, was INR 12,838 crore against INR 6,588 crore in the same period last year, growth of 95%. Consolidated EBITDA for the quarter was INR 484 crore against INR 256 crore in the same period last year, with a growth of 89%.
Consolidated PAT for the quarter was INR 280 crore against INR 140 crore in the same period last year, with a growth of 100%. Guided by our underlying commitment to financial improvements, we continue to demonstrate a high level of discipline in managing our working capital cycle, which stood at negative four days along with a strong balance sheet with a net debt of negative INR 214 crore. We continue to deliver consistent improvement in our return ratios, with return on capital employed of 49.1% and return on equity of 33.9% as of June 30, 2025. This reflects our strength of our business model, and these ratios will continue to serve as fundamental benchmarks in assessing strategic investment opportunities and guiding capital allocation decisions, and ensuring alignment with the long-term goal of generating sustainable value for our stakeholders.
We continue to make strategic investments to expand our manufacturing capacities, enhance our manufacturing capabilities, and focus on deepening the component ecosystem, which will help us build a resilient and future-ready business. We will be filing our component PLI applications for display modules, camera modules, and precision components in the next week or so. Now, I'll share with you the business performance and insights of each of the segments. Mobile phone revenue for the quarter for mobile business was INR 11,663 crore, a growth of 125% year-on-year, and operating profit of INR 395 crore, which is a growth of 131%. Out of this, revenue for telecom, IT hardware, wearables, and wearables was INR 1,410 crore, INR 247 crore, and INR 175 crore respectively. We witnessed strong momentum in the quarter with healthy volume growth across various smartphone brands. Order books for Q2, financial year 2025-2026, look even stronger.
Ahead of the festive season, we expect volume growth of at least 15% quarter-on-quarter. Dixon remains the largest domestic manufacturer of mobile phones with high-volume capabilities in the basic infrastructure. Construction of our 0.8 million sq ft mobile manufacturing campus is progressing well in Noida, and our anchor customers with much higher capacity is expected to be completed by March 2026. Approvals are expected for our 74:26 joint venture with Longcheer shortly and PLI appraisal process for our 51:49 joint venture. The Vivo is advancing well, and also the application for our joint venture with HKC is advancing well. We have signed a binding term sheet for 51% stake in QTech India for manufacture and supply of camera and fingerprint modules for smartphones and will be filing applications under the CSMC shortly.
The interim agreements pertaining to the transaction are expected to be closed in another couple of months, and we expect the financials to start consolidating from Q3 of the current financial year. Construction of a facility for display modules in which we have a 74:26 JV with HKC for first phase is underway for smartphones and notebooks, with trials to be commenced by Q4 this fiscal and commencement of mass production by Q1 of next fiscal. We'll be filing the application for this under the ECMS scheme posted in the next 7-10 days. Consumer electronics, like LED TVs and refrigerators, revenue for the quarter was INR 672 crore with operating profit and margin of INR 40 crore and 6% respectively. Out of this, the revenue per refrigerator business was INR 628 crore. LED TV.
Q2 of this fiscal year looks very promising, and we have a healthy order book ahead of the festive season. We have a strong interest from some new brands of our OEM solutions, and almost 72% of our sales would be from OEM solutions in LED TVs. We're actively working on increasing the capacities and enhancing capabilities for manufacturing for industrial institutions and automotive displays. Refrigerators, within one year of operation, we have been able to capture around 10% of the Indian market in direct cool category, and seeing the increasing response from the brands, we are now expanding capacity to 2 million from current 1.2 million at existing facility in Greater Noida. We're also now pouring into the new products in cool and deep fridge like Frost Free, Side by Side, Mini Bars, Deep Freezers, and Mini Coolers.
The outlook for 2025-2026 is very promising with healthy order books, and we are confident of achieving 50% growth this fiscal. With the capacity expansion and new product categories, the business is expected to continue meaningfully in the next couple of years. Home appliances, revenue for the quarter is INR 313 crore, operating profit of INR 36 crore, with a growth of 13% year-on-year with an operating margin of 11.5%. Our construction for capacity expansion for FATL in Tirupati will be ready by August 2025 to meet the increased order book for per capita. Launch of semi-automatic washing machine higher capacity category of 16 kg and 18 kg has already been done, and product will be launched by Q3 of the current fiscal. We have also now partnered with UVECO Foods for manufacturing of robot vacuum cleaners with diversified product portfolios.
We have already started working on projects for front-load washing machines, and I've appointed a very senior Korean expert to drive this project. Lighting, revenue for the quarter was INR 188 crore. Our 50:50 JV with Signify for the Philips brand will commence the operation from the first week of August 2025 and expect to realize operating efficiencies with synergies, the addition of new product lines including premium indoor and professional lighting, and potential exposure opportunities. We got a first pilot order from one of the top retail chains in the U. S., which are expected to be used in the current quarter and aim to scale up this opportunity into a sizable business in the upcoming quarter. We are continuing and focusing and investing in automation to further enhance the operational excellence.
Telecom and networking products, this segment witnessed a strong growth with revenues of INR 1,410 crore, which is more than 250% growth. Home broadband penetration in India continues to grow at a very fast pace, and we have been continuously building our more capacities and enhancing our manufacturing capabilities for 5G FWA, that's fixed wireless access devices for our anchor customers. We also have a very strong order book from our anchor customers and IPTV set-top boxes. In line with our backward integration strategy, we have already localized components including moldings and reductors and now focus on other critical parts with the objective of strengthening supply chain resilience, improving cost structures, and afford modern expansion. We are in an advanced stage of discussion for a JV for a critical component for telecom devices.
We see telecom segment as a multi-year growth opportunity, and we are actively working on non-CG products now. Laptops, tablets, and IT hardware products. Our dedicated IT hardware product manufacturing unit in Chennai has started mass production of laptops and AIOs for HP and Asus. Order book for Lenovo is picking up every month, and expect a strong revenue growth in the coming quarter. We are excited about the long-term opportunity for this segment. Our 60:40 JV is in Inventec, one of the world's top five PC ODMs for manufacturing of notebook PC products, servers, and desktop PCs expected to be operational by Q1 of next fiscal. We have signed a binding term sheet of 74:26 JV with Chongqing UI for precision components for mechanicals and metal parts for existing customers for notebooks and further be extended to smartphone and various other product categories.
We will file for this category also. Our application under the ECMS scheme shortly. We are also pursuing potential partnership for components like SSD, memory modules, and power supply to leverage the IT hardware PLI scheme. Wearables and wearables, revenue for this segment was INR 175 crore for the quarter with healthy operating margins and very good ROCE. We have strong order book in this business. We have also now added dashcams and smart watches to our product portfolio with an existing customer, and we are also in discussion with new brands and increased focus on backward integration and localization. At Exxon Dixon Electronics, this is JV with Exxon achieved highest quarterly revenue of INR 144 crore with very heavy operating margin and high ROCE. We have finalized a new manufacturing location at Chennai for meeting the increased order book for our anchor customer, which is expected to become operational by Q4 of this fiscal. I would like to stop here, and we have thought about that to address any questions. Thank you so much.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchscreen telephone. To remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Siddhart from Norma Capital. Please go ahead.
Sir, first question is all about camera module JV. Can you share some more thoughts about how should we think about the ramp-up here in terms of volume markets that we have? Who are the key customers? If, as and when they come with us in a JV, how should the ramp-up look over the next couple of years?
QTech is one of the five largest camera module manufacturers globally. They have a running factory in India. Already in India, they're supplying to all the major Android brands. That is Vivo, Oppo, Xiaomi, Motorola. They have a large market share there. Just to give you a thumb rule kind of a thing, in every camera, there is almost in every mobile, there is almost 3.2 camera modules going in. The Indian market is around 450 million-475 million camera modules. Last year, they did around 40 million camera modules. Dixon in-house consumption itself of camera modules is going to be almost in the next two years reaching 180 million-190 million. We want to ramp it up to that level. Plus whatever we can sell to the in-house consumption, in-house manufacturing of the various brands. That's the addressable market we are looking at. We feel that over the next four years. Last year, they had done a revenue of almost INR 1,977 crore. We feel that over the next four-five years, this business is going to be somewhere around INR 5,000 crore.
Got it, sir. How do you see the investments here on, both the initial investment of the 51% stake and subsequent investments going ahead? Similar for the Chongqing JV, any numbers there in terms of investments and revenue ramp-up you are looking at?
There is some investment going into the purchase of shares from present owners. This is almost around INR 400 crore. Balance INR 150 crore is going to go for the CapEx use into the company. This is required for the capacity expansion of deepening of manufacturing of what we plan to do. This is the nature of transaction.
Got it, sir.
And in.
Sense.
The Chongqing UI, the contours are still being worked out. The numbers are yet to be worked out. They'll be worked out in the next couple of months. We feel the investment there, the total project cost is going to be INR 100 crore.
Okay. Okay. So given these investments now for the year, how do you see the total CapEx and investment spend for the company? If you can describe that for me.
Yes, as you see. In first quarter, we made a CapEx of around INR 287 crore. Around INR 287 crore, and. I feel another INR 800 crore-INR 900 crore is going to go into this. Yeah. Combination of expansion capacities and also this QTech acquisition. I think so, yeah, by end of this year, we should be closing at a number of closer to anywhere between INR 1,150 crore-INR 1,200 crore. Total. Yeah.
Got it, sir. Lastly, on the consumer electronics, we have seen a very sharp fall in the volumes or the revenues consistently. What is the outlook there? When do things start turning around, or do you think it may take some time before we do see any meaningful improvements here?
Undoubtedly, in the first quarter, we've had a significant miss on the television business, although the refrigerator business has been exceedingly well. In Q2, the order book looks good. We should be back to almost INR 800,000 crore in Q2 of this business. And 70%-72% of this business is through the ODM solutions.
Got it, sir. Thanks a lot. Welcome back, Mr. Lall .
Thank you. The next question is from the line of Darshil Pandya from Finterest Capital. Please go ahead.
Hello , am I audible sir.
[IRC].
Yes, sir. Good evening. Sir, my question was in similar lines to the other participants. I just wanted to understand the security surveillance system business, and how are we planning to cope with the government's new targets of just installing in the trains and now the CVSE boards? All of what I've heard is like 80%-85% of the business is all imported and just assembled. Wanted your clarity as to what we are doing in this business.
We only have a minority stake of 6.5% in Adalta Input AI. Please appreciate our CCTV business has been merged into Adalta Input AI, in which we have a 6.5% stake. That is our limited interest in that business. Yeah, it is going through a different route of public market, which I think will be a significant value creator for Dixon. We are not running the business anymore. Yeah.
Okay. As per your 2024 annual report, it shows that we have plans to scale this capacity from 12.25 million to 21 odd million. Where are we standing today, we might need to understand.
In the CCTV business?
Yeah.
It's already explained. Last year, we did a transaction where we sold our 50% stake to our JV partner, Adalta Input AI. As part of the transaction, we have taken 6.5% in their branded entity, and that entity is now an IPO. We are a minority shareholder, so we are no more running that business. Yeah.
Basically, this will be under the shareholder shareholding factor. Got it.
This will look like as an investment in the Dixon's balance sheet. Yeah.
Correct. Are we not having any plans to really?
Sir, I just request you to rejoin the queue, please.
I have just listened. I'm not asking new questions. If you can just let them answer once.
Okay.
We didn't get your question.
Do we have also plans to run this separately, or we want to be kind of investors in this Adalta Input AI?
The minority partners of Adalta Input AI.
Got it. All right. Thank you. I'll get back in the queue. Thank you.
Thank you. The next question is from the line of Aditya Bhartiya from Investec. Please go ahead.
Hi, good evening, sir. My first question is on. Good evening, sir. My first question is on the Longcheer JV. Earlier, we were having just a contract with Longcheer. Now we are going the JV route. Just wanted to understand the rationale for that and how volumes are likely to be shaping up versus what our initial expectations were. That's the first question. The second and related question is also on the JV and arrangements that we are now having with Chinese companies, whether it's Longcheer or Vivo or QTech or HKC. If you could just kind of give us some indication about what the status of government approvals is. Are we seeing any challenges around that?
In Longcheer, it's one of the largest ODMs globally in the space of mobile and certain other IoT products. We are having a 74:26 JV. Our information is that we'll be getting the PM3 approved very shortly. Now, in the mobile space, they are a large player with a large customer base, and they're a large outsourcing partner of various global brands, which is even beyond Chinese brands. This firms up our relationship and secures our business in also the post-PLI scenario. Further, it helps us in deepening the manufacturing because they have a huge strength in supply chain, and also, they are helping us in expanding the product portfolio beyond smartphones. Further, there is also a commitment of setting up a joint design center. For us, strategically, it's a very important move in becoming a much larger and much deeper player in this whole ecosystem.
The second JV application under PM3 that we applied for is for a display module with HKC. HKC is one of the largest global fabs within the top five, and in phase one, we're setting up a unit with a capacity of 2 million displays per month, which is going to be for mobiles, which is going to be expanded to 4 million. Also, we're setting up a line for 1.8 million of notebook displays, and also, these lines are fungible for automotive displays, both for two-wheelers and four-wheelers. We're looking at a business case for setting up a TV module display line. We are expecting to make the CapEx over a period of time of almost $130 million. The factory of 400,000 sq ft is under construction. It's going to be handed over to us, I think, in the next 45 days or so. They'll start handing over.
In this, the JV application is under approval. The PM3 is under approval. We are pursuing with the government. We feel that we should be able to get it within a couple of months. In any case, the execution of JV or execution of this project is not hinging on the PM3 approval. The project installation, the project implementation is carrying on parallelly. The third is JV application under PM3 for a requisition of 51% of the manufacturing arm of Vivo, and that's also under evaluation. That's going well. We feel that we should be getting it again in the next two days or so, and post that, the consolidation and execution will start happening. Among the fresh applications for QTech, we don't need the PM3 because the unit was set up before the PM3 notification came. It's going to be something similar to a requisition of iSmartU. In the case of Chongqing UI, we are going to be filing a PM3 application. Once the binding term sheet has been signed and the teams are going to be working, we feel that we should be filing in the PM3 application in the next 30-45 days.
Understood, sir. Understood. Just on lighting exports, if I heard you correctly, you spoke about some export order from one of the U.S. retail companies. If you could just throw some light on that and how we are looking at the lighting business after the JV with Signify.
Before answering your question on exports, I'll touch upon that slightly later. Let me give you the business thesis behind the lighting joint venture. If you please appreciate, lighting is globally and also the case in India, particularly the consumer-facing lighting. In the domain in which Dixon operated, which was largely LED bulbs, downlighters, and tube light patterns, there has been a huge deceleration in prices and also huge commoditization. That is the reason we went in for this joint venture, a 50-50 joint venture with Signify. More volumes are going to come. More than that, what happens is that it shifts our manufacturing footprint to premiumization. The product portfolios being expanded into is largely on the premium side. This new product portfolio, and we are working on hundreds of new products because the combined strength of Signify R&D and Dixon R&D is working on that.
Some of them are existing solutions. Some of them are new solutions. It is going to be not only for Signify, but for all the other existing customers. Further, it helps us in accessing the global market. We are excited about it. We feel there is going to be significant growth and also this operating leverage. One, it is going to be heading towards premiumization. Second, it is going to give us an operating leverage to manage our costs better. That is the thesis on which we are working, and we feel that it is going to give us results. Now, on the export side, there is a large retail chain. I am not in a position to share the name of it, which has placed an order on us, which is a pilot order, mainly in the area of strips and ropes, strip and rope lighting, which is going to be executed in this quarter. We feel that this should scale up over a period of time.
Understood, sir. That's very helpful. Thank you.
Sir, thank you.
Thank you. The next question is from the line of Madhav from Fidelity. Please go ahead.
Yeah, that's actually a good time. Just wanted to understand how the valuation was arrived at for the QTech acquisition. So if the revenue is about INR 2,000 crore, I'm assuming 5%-6% EBITDA margin. And if it's growing to like INR 5,000 crore in, so, four years' time, just if you could help us understand how the valuation was arrived at at about INR 1,000 crore for this entity.
Yeah. So basically. The revenues are INR 2,000 crore. They have an EBITDA margin of broadly 7%-7.5%. So broadly at INR 150 crore of EBITDA and INR 70-75-72 crore kind of a PAT, which is the last reported numbers. If you look at the valuation. The INR 550-odd crore.
That's 15x of PAT, 15x of broadly PAT that we have given, or in terms of EV/EBITDA, it will be closer to 9x-10x .
Okay. Now, I'm just trying to understand. How does the valuation get arrived at given where the sector trades at in India? The growth is pretty strong, like two and a half times growth in sales in so far years' time. Just trying to understand the valuation map. How does that get arrived at?
It's a negotiated valuation. Basically, both the partners are bringing their own synergies on the table. We're bringing a large Android ecosystem. We're bringing a large customer access. They already have the technology. Both the partners are bringing. It's a negotiated kind of a deal. There is no specific way. It's more of a negotiated kind of a deal. We think that both partners can bring in their respective synergies over a period of time, and together we can make this business scalable from INR 2,000 crore to INR 5,000 crore. We feel confident that with more deepening of manufacturing happening in India, and also by leveraging on this EC and this PLI scheme, these margins potentially with the 7%-7.5% can go to 9%-9.5% in the coming years.
Interesting. Just the smartphone volumes, please, for Q1. Thank you.
The smartphone volumes for Q1 was almost 9.6 million. 9.6 million. 9.66 million.
9.6. The feature phones?
Feature phones was closer to 5.73 million.
Okay. Thank you.
Thank you. The next question is from the line of Piyush Khandelwal from Motilal Oswal. Please go ahead.
Thanks. Thank you, Atul Lall and Saurabh. I just wanted to ask, do we have any plans to get into the bare PCB manufacturing as well? Because that might help us in getting more of macro integration as well.
As of now, we are not pursuing it. We were working on these strategic acquisitions because, to be candid, we were working on a very tight timeline so that we can file the applications for PCMS and leverage the government policy framework. As of now, no. Definitely, we feel that PCBA is a very large opportunity. Now, the next phase of mine is to create a business resource and a strategy for pursuing that opportunity, undoubtedly. Maybe something for industrials, automotive, PCBA kind of. One domain we are going to aggressively pursue.
Okay. The reason why I'm asking this is because government is providing subsidies anyways in this latest component PLI scheme. We can anyways take an advantage of that. That will be much more lucrative as well. Apart from just PCBA, which you said is a very, very lucrative opportunity.
As of now, PUSH, we are not pursuing at least the ECMS scheme for PCB, bare PCB. PUSH, you're focusing on other components, but we feel that other components. See, our sense, Push, is that there is a large surplus global capacity as far as PCB is concerned, bare PCB. Second, also, there is no duty arbitrage. It is an ITA-1 category. The government cannot create a duty arbitrage in this particular component. The financial matrix is different. I think it is a matter of perception and each business has its own view. We have pursued the other parts of the component ecosystem.
Got it, sir. Thanks.
Thank you. The next question is from the line of Ankur from HDFC Life. Please go ahead.
Yeah. Hi, good afternoon, sir. Thanks as always for your time. Two questions on the cell phone business. One, obviously, Q1 has been very strong, more volume growth, top-line growth again, extremely strong. I think in one of your comments, you said you're looking at another 15% Q1-Q2 growth as well given the way order books are with you. If you could just help us, what's driving that growth? Is it also scaling up of exports for one of your anchor clients in the U.S.? Is it more domestic volume, new customers? Just some more insights into what's driving that growth. If I remember right, you said about 42 million-43 million annual numbers for the cell phone business. Are we broadly sticking to that?
Our order book, until it's looking good for the smartphone. As Saurabh just shared the number, we did around 9.5 odd million and 6 odd million in Q1. The order book is, I think we should be somewhere at around 11 million-12 million in Q2. Now, this is a mix of better performance of our customers, both in domestic markets, and also a significant flip of our Ankur customers for global markets. It's a combination. Q2 looks good. We are confident that our final numbers of 42 million-43 million, we're going to hit. Yeah, we're working towards it. Please appreciate all these numbers we are talking about without the Vivo chain.
Yeah. Sure. Okay. Okay. Just a follow-up there. Given that the PLI obviously comes to an end in FY2026, and our guidance, of course, is to get to 60 million next year. I know this question may have been asked to you earlier as well as how do we both retain and take on more customers, right, given that the PLI will not be there? Are we cost competitive enough? I know customers could also be a little sticky given our relationship with ODMs and the kind of scale we have. If you could just spend a minute here as well. The scenario you see both PLI getting over. Yeah. Thanks.
It's a combination of primarily three factors, Ankur. One is our deepened relationship with the customer, and our large scale will generate an operating leverage. Second is the nature of our relationship with the customers is bound through JVs. These appreciation relationships with Samsung Brands and also Vivo is through a JV. The third is our foray into backward integration of camera modules, of displays. Now, these give us a significant advantage and give us a competitive edge. We have done the number crunching, and we feel that we will be able to more than adequately compensate for the PLI components. That's what the strategy is. For that.
Okay. Great. Sounds good. Great. Thank you so much, Dr. Lall. All the best. Thanks, sir.
Thank you.
Thank you. The next question is from the line of [Bhoomika Nair] from Philip Capital. Please go ahead.
Hi, sir. Just a couple of questions. Firstly, sir, on the camera module expected revenue, currently QTech is doing INR 2,000 crore revenue for INR 45 crore camera modules. Correct me if I heard it right, but I heard you said INR 20 crore camera modules expected. If I just multiply it proportionately, revenue should be INR 8,000 crore, right? Or is it INR 5,000 crore?
You see, what I was talking about, everything was in the addressable market. The revenue that we have taken in our budget is a certain percentage of the addressable market.
Okay. So you are seeing out of INR 2 billion, you will do some volume, and that's why INR 5,000 crore. Is that understanding correct?
That's right. That's right.
Okay. Got it, sir. And sir, secondly, just a quick follow-up on a minority interest because correct me if my understanding is correct. What I see is minority interest is primarily derived from ICE Mar 2 and the Airtel subsidiary. Both these segments have gone up QOQ. Still, minority interest has declined QOQ. Can you please explain where the disconnect here?
Yeah. So basically, one, you're absolutely right. One is on account of ICE Mar 2. Second is on account of the telecom JV with Airtel as a 49% partner, and also the Caliphonix, which is basically a JV of ours with Imagine Marketing for both brands. Last quarter, I think, we also had some numbers coming in from our AIL Dixon, which was basically sold out subsequently. That is broadly a difference. And also, yeah, that is mainly the AIL difference.
Got it, sir. Got it. Got it. Lastly, the 15% QOQ volume growth expected, is it fair to assume that revenue growth will be in line or better than this?
Revenue growth should be in line.
Okay. Thank you.
Export revenues in Q2. Yeah, it can be slightly better than compared to Q1.
Got it. Thank you. Thank you.
Thank you. The next question is from the line of Anupam Goswami from Third Life. Please go ahead.
Hi sir. Sir, overall, let's say non-mobile phones, do you see the size of this growing in the next three years? What are the categories to lead this?
When you're looking at the non-mobile business, we feel that our telecom business in a year or so can touch a revenue of almost INR 5,000 crore. We feel that in a couple of years, our refrigerator business, because in phase one, we're expanding our capacity from 1.22 million and then to 3 million, can be somewhere between INR 2,000-INR 1,500 crore. Washing machine, we are further expanding the capacity from 3 odd million to 3.8 million. The current revenues of almost INR 1,200 crore can go up to INR 1,800-INR 2,000 crore. Lighting through a JV, we are confident that from INR 850-INR 900 crore can double to INR 2,000 crore. These are the numbers. Similarly, with the hearable, wearable business, there is going to be an organic kind of a growth. The new vertical which we are pursuing is mainly the IT product, which we are really focusing up to grandpa. We feel that in a couple of years' time, that again, revenue can be somewhere in the range of INR 3,000-INR 3,500 crore.
Okay. Got it, sir. Sir, and how do you think they will?
That will be largely captive. That's going to help. That's going to help us in improving our branded mark.
Okay. Okay, sir. Got it. Sir, one more question is on there has been reports and media news also on the Motorola sharing or spreading its own, distributing its own EMS manufacturing. So are we losing any share to Motorola or any other launch year or anyway?
Motorola has got another EMS, but please appreciate that almost 80, 80% of Motorola's requirement. In fact, more than that is with us.
Okay. Okay. Got it. Thank you, sir.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla Mutual Fund. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Two questions, sir. First, on the we are doing multiple, we have multiple projects in hand. Many of them are new for us. Just wanted to understand from a management bandwidth point of view, if you can help us understand how are we positioned, what are the key headings you have done in the last one year, and what are the gaps? Or is there any difficulty in terms of fixing the requirement of the management?
Undoubtedly, we are on a significantly aggressive growth path. Talent acquisition is an ongoing process. We have recently hired a Vice President of Strategy and Digital Transformation. We have hired a Vice President for our component business. We have hired an expat from Taiwan to head display manufacturing and business. We have hired a Korean expert to head our R&D for washing machines and appliances. We have hired a Vice President HR. Many, many hirings are on, but of course, it has to be scaled up much more. We are working hard on the talent acquisition. I think today we are in a sweet spot wherein we are able to get the talent.
Second, on the cell phone business, just wanted to understand, does your export business give you better ASP versus domestic? And if that is the case, can the productivity for itself, or is it that the margin of export business could be better than the domestic?
ASP for export, which is the RDS presence of our ranker customer, is almost similar to a domestic ASP. Exports, we appreciate, with a complex system. There are some ramp-up requirements. Therein, we have to invest more in the organization. The margin level finally is going to be similar, but initially, the costs are going to be more. Finally, the margins are going to be similar.
All right, sir. All the best. Thank you.
Thank you. A reminder to all the participants, you may press star and then two to ask questions. The next question is from the line of Abhishek Ghosh from DPS Mutual Fund. Please go ahead.
Hi sir. Can I? Hello?
Yes, yes, Abhishek.
Yeah. Thanks for the opportunity. Sir, just in terms of, if I broadly look at your FY2027 mobile guidance of that INR 6 crore-INR 6.5 crore, your market shares will be fairly high at probably 45%-50% if we exclude some of the brands which typically do not outsource. In terms of the Longcheer JV that you are kind of announcing, do you think there could be upsides to that? How should one look at the export mix as far as the FY2027 mobile targets are concerned?
Yeah, there will be a launch year, will be an upside to that number that we are talking about. Exports, we feel in 2026-2027, this year, we feel the export last year, it was around INR 1,600 crore. We feel in the current year of 2025-2026, it should hit around INR 7,000 crore. We feel because we are working on another large export opportunity. I can't share the granular details as of now. We feel that this number of INR 7,000 crore can ramp up to almost INR 11,000-INR 12,000 crore. Basically, Abhishek, the way you should look at it, though the number may be 65 million or INR 6.5 crore which you mentioned, that would have a decent export element also. If you exclude that, then our market share may not be that much as compared to the number that you just mentioned.
Got it. Got it. Does this JV also open up some of the export opportunities for you guys?
Which JV are you referring to, Abhishek?
The launch year one, which we kind of asked. Launch year to start with would be largely domestic.
Initially, it will be domestic, Abhishek, but yeah, over a period, over a long-term period, mid-term period, yes, it can open up opportunities.
Okay. Great. Sir, just last question is in terms of the margin profile for the mobile segment, with the backward integration you are doing with the JV partnership and other things there, you're moving from a 15%-17% of bill of material to almost something like in excess of 35%-40%. PLI going away in some way, how should one broadly look at the margin trend as far as the mobile is concerned? There will be also an operating leverage factor also. How should we look at it?
Yes. So broadly, the way the math that we have done, we think that in 2027-2028, and of course, a large part of it will start reflecting in 2026-2027 when the PLI also goes away. In 2026-2027, we think we can expand the margin. Even after taking into account the PLI margin, which is our share of PLI margin going away, we can expand the margin to almost 120- 130 basis points in 2026-2027. This should even be higher in 2027-2028 once it is completely ramped up. We have expansion of mobile displays. We have more TV and automotive displays coming in. We think 2027-2028, this can be a further margin expansion as well.
Great. Thank you so much for answering my question, Abhishek. Thank you.
Thank you. The next question is from the line of Nilesh Singh from BNP Paribas. Please go ahead.
Yeah. Hi, sir. Thank you for the opportunity. Sir, my first question is on the Inventec JV. We just wanted to understand what kind of products we are working on under this JV and R&D. When we say that we will also be getting into the servers, does that include a part of the broader addressable market of overall servers and boards is around $5 billion? Just wanted to get a better sense of what exactly are we looking to cater to under this JV with Inventec?
This is a 60/40 JV wherein we have 60% and Inventec is 40%. It's going to be for notebooks. It's going to be for AIOs, and also it's going to be for servers. Inventec is one of the top most, within the top five global ODMs in the IT product space. Also, they're going to help us with the backward integration play. This JV of ours with Chongqing UI, that is a large vendor to Inventec and HP. Also, we are exploring the possibilities of SSD and memory modules in this JV. This is the mandate for this JV.
Sure, sir. So this SSD and memory module would be with some other partners, right?
We are evaluating that. Some of it, Inventec has an in-house capability.
Got it. And sir, second question on Longcheer JV. So just wanted to understand, do we have a similar kind of agreement that we have with Depot JV in which around 65%-70% of their volumes in India are tied up under that JV? So how are we looking at a difference in the incremental volumes that might come when we go through a JV route?
As I mentioned to you, to the earlier part of the event, when Abhishek was asking that question. Once the JV is formed, we feel that practically all launch year volumes are going to be with us, which is going to be a further upside.
Basically, Longcheer is a large ODM partner for a lot of mobile brands. They have a very deep relationship with them. We feel that once the JV is concluded and they also happen to be an equity partner in that, then those volumes can potentially be part of that JV.
Sure, sir. That's it from my side. Thank you and all the best.
Thank you. The next question is from the line of Girish from MS. Please go ahead.
Yes, sir. Thanks for the opportunity. Just a couple of questions if I missed the sorry. On the CapEx part, I wanted to understand the outlook for this year and next year for the core EMS business and the component. Across the three portions, which is display modules with SKC, the CapEx that you're likely to do on camera modules with the new tie-ups and the peripheral tie. I had a follow-up.
Yeah. So camera, broadly, we have mentioned, Girish, that we will be doing a CapEx. It will be a combination of buying out their—it's an acquisition, so it's a combination of buying out their existing shareholders and also putting some primary money in the company to lead the CapEx and also deepen the level of manufacturing. So camera and displays. Put together, we would be doing the CapEx closely to almost, I would say, INR 750 crore-INR 800 crore this year. And also some. And broadly, the other part of the CapEx, the INR 300 crore-INR 400 crore, can be the expansion of capacities and other things.
On the core EMS side, how much would be the CapEx that you would think this year?
This number that Saurabh just mentioned includes that.
Yeah. INR 750 crore plus INR 300 crore, so INR 1,000 crore across all businesses.
Somewhere around INR 1,100-INR 1,200 crore.
Okay. Sir, what is the current margin profile that you have for the camera module acquisition, and what are the working capital days if you can help on that?
The EBITDA margins are somewhere in the range of 6.5%-7%.
And sir.
We'll be.
Yeah, sorry.
No, go ahead. Go ahead.
I was just inquiring this in context of tariffs because presently, I believe there is a 10% import tariff that exists on camera modules. And margins of this entity are 6.5%-7%. So what kind of, I mean, is there a royalty fee that this company is paying to the parent, or how is the math working out for them? You mentioned in one of the interviews to the media that you're looking to increase the margin. Just wanted to understand the levers to increase and how that will come through on the margin side because previously, on camera modules, I believe, and on all components, you've been talking about mid-teens number on margins, but this number is quite low. Just wanted to reconcile what value addition will happen to increase it versus what you were earlier thinking of mid-teens to begin with.
The mid-teens, the event for camera modules we never mentioned is going to be mid-teens. Please appreciate that when you are doing the manufacturing in India and to secure more orders, you have to share some advantage with the customer also. That is where it makes the business case. We plan to invest to further deepen the manufacturing. Also, there is going to be a PLI coming into this business through the ECMS booth. We are confident that the EBITDA margin in this business would come up to almost 8.5%-9%.
Yeah. It'll be a combination, Girish, of operating leverage coming in on account of increased volumes of basically our customer access to them. Second, the PLI benefit as part of the ECMS scheme. Third is more deepening of manufacturing. They're doing a particular manufacturing process, which once we put in money in the company, which also gets qualified for that ECMS application, ECMS committed CapEx. One, it deepens the level of manufacturing. Deeper, you are able to capture more value here, which increases the margins. Then the operating leverage and then the PLI benefit. We feel confident that the 7%-7.5% margin can potentially go to 9%-9.5% margin over the next couple of years.
Okay. Last question was just around.
Sir, I just request you to follow that, if you please, for the follow-up question.
Sure.
Yeah. Thank you. The next question is from the line of Keyur Pandya from ICICI Life Insurance Company Limited. Please go ahead.
Thanks a lot, sir. Just two questions. First, on the broad timelines of all these JVs, so Inventec, King Kong, and SKC JV, as well as Duplex, what kind of ramp-up should we expect over the next two years, considering that they are a relatively new category and may take some time for setting up plans and approvals as well? How should we think about the commissioning and ramp-up of this JV? That is the first question. Second, on the mobile export side, I mean, is there a business case, except for the U.S., where there are some restrictions on Chinese manufacturing, to make phones from India and export, which is competitive versus China? Does that make any sense in terms of the commercial math? That is the second question.
Part of your question, QTech is a running factory. Once we are able to conclude the deal, which we feel should happen within the next two to two and a half months, we'll start consolidating the results, and then we'll start ramping up. As we have shared in our deliberation, finally, we aspire to reach a revenue of INR 5,000 crore over the next four to five years. As far as the HKC display unit is concerned, the construction is on. We are targeting to do the trials and pilots in Q4 of the current fiscal, and the revenues will start getting booked in Q1 of 2026-2027. Finally, the aspiration is that we should be able to do 4 million units of mobile displays, 1.5-1.8 million units of notebook displays, and we feel that we should be able to do almost 1.5-2 million units of the automotive displays. That's the plan.
The Inventec JV, we target to start in Q4 of the current fiscal or Q1 of the next fiscal. For the new JV of Chongqing UI, the plan that is still being drawn is going to take some time. As far as the Vivo JV is concerned, we're waiting for the PM3 approval, and then we'll conclude it.
Just a second question on the export opportunity.
The export opportunity. We have already started exporting to Africa. We feel that we will be able to meet the cost targets. This is a large opportunity that we're working upon with our anchor partners.
Okay. Thank you. Thanks a lot, and all the best.
Thank you. The next question is from the line of Teena Virmani from Motilal Oswal Financial Services. Please go ahead.
Slim, congrats for the third member, sir. Sir, my question to some extent, yeah, my question to some extent is already answered regarding the camera module and precision components. Just wanted to get some sense from you regarding the margin improvement that can start happening. Can it start getting reflected in the financials from FY 2027, first half or second half? Once the PLI goes away and simultaneously your display and camera module and precision components simultaneously, quarter by quarter, they can add up to the margin improvement?
Yeah. That's what we are working on, Teena. It's going to be slightly slow of enhancement of the blended margin through the component route in first half, but I think second half, we are confident.
Something like cameras and displays would start to reflect in the margin. Something like the precision components may take some more time. Yeah, but effectively, the full impact would start coming in. Second half. In second half of next financial year or somewhere, yeah, after the first quarter.
Okay. So you are in discussions with the existing clients also to accept the camera module and the display that you all would be manufacturing?
That's right. That's right. Team will see our existing customers, the brands are already using QTech. It has to be further, okay.
Understood. Lastly, just a small question on how is the scale-up expected from this Vivo JV, like the 60 million-65 million volumes that you have mentioned? Does it include Vivo volumes, or this is not including Vivo volumes?
That includes the Vivo volumes. The large upside would come in from Vivo volumes, which would, yeah, large. Vivo is doing almost, it has almost 22% share in the market, which is almost 30 million-35 million numbers. And two-thirds of that volume is going to be done in JV. Finally, when everything is consolidated, we expect that volume to be almost 18 million-20 million. That's how we are talking about because in the current fiscal itself, we are targeting almost 40 million-42 million. Another 18 million-25 million, that 20 million is going to come from the Vivo market.
Where is JV? That may come maybe by end of FY26.
That's right.
Understood. Thank you, sir.
Thank you. The next question is from the line of Amber Singhania from Nippon Mutual Fund. Please go ahead.
Yeah. Hi, sir. Thanks for taking my question. And congratulations on both set of numbers. Hello. Am I audible?
Yeah, yeah. Thank you, Ambar. Thank you.
Yeah. Sir, just two questions from my side. One, if you can help us to understand what kind of volumes Longcheer do in India currently with the various brands. Second thing is, when we will be booking into the backup implication, how easy and difficult is it to get the approval for various components, be it your display module. I understand QTech already has for camera modules, but for the display and others, how easy and fast will it be to shift for our brands or the brands which we are making for these components?
Responding to the first part of your question, our estimate is that the Longcheer volumes in India would be somewhere around 25 crore million.
Okay.
QTech, we explained to you that. Most of the brands are already using QTech.
Yeah.
As far as the display module is concerned, some of the brands are using HKC. For other approvals, our China team, HKC China team, and our India team has already started working with the brand owners because the approval is required at the POC stage. They are already on the job for getting those approvals done.
Okay. By the time it will be operational, we are positive that it should be get approved by then.
It's going to happen in phases. But we are confident it will be done.
Okay.
HKC Ambar actually supplied to this Android brand, but every model is different. We also do teams that will be working. It will happen in phases, but by model by model, it will keep happening.
Got it. Just one last question, if I may. In terms of margins, you mentioned about the QTech 6%-7% margin moving up to 9%-9.5%. Similarly, if you can help us understand what kind of normal margin we can expect in HKC display module as well as on the mechanics whenever they will be operational?
Mechanical, I mean, mechanical, the numbers are yet to be worked out. We'll work out the retail business plan along with them on the opportunity side.
Yeah. I think they may be, please be sure on the mechanical for the laptops, the margins are going to be very robust.
It will also be in double digits. Okay. And display is also double digits?
It's higher double digits, yeah.
Fine. Thank you. Thank you, sir. All the best. Thank you.
Thank you. Ladies and gentlemen, in the interest of time, we'll take this as the last question. I would now hand the conference over to Ms. Bhoomika Nair for closing comments. I'm over to you, ma'am.
Yeah. On behalf of Dan Capital, I would like to thank all the participants. Thank you very much to the management for giving us an opportunity to host the call. Thank you very much, sir, and wishing you all the very best in closing comments from your end.
Thank you, Bhoomika, and thanks to all the participants for being with us. Yeah, we have already shared our strategy, our journey, our way forward. Thanks for being our stakeholders and supporting us. Thank you so much.
Thank you, everybody. Thank you so much. Thank you. Thank you, Bhoomika.
Thanks, Boomika.
Thank you, sir.
Thank you. On behalf of Dan Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.