Q3 24/25

Feb 13, 2025

Summary

Q3 sales rose 22.15% YoY and PAT increased 17.64%, with LED lighting reaching 61% of automotive lighting. Management expects continued two-wheeler momentum, while expanding electronics and four-wheeler entry; Gogoro plans remain paused amid global headwinds.

Ladies and gentlemen, good day and welcome to the Fiem Industries Limited Q3 FY 2025 earnings conference call hosted by Monarch Network Capital 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 call, please signal an operator by pressing * then zero on your touch-tone phone. Please note this conference call may contain forward-looking statements about the company, which are based on the belief, opinions, and expectations of the company as of the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Network Capital. Thank you, and over to you, sir. Thank you, Uday. Good evening, everyone. On behalf of Monarch Network Capital, I welcome you all to the Q3 FY 2025 conference call of Fiem Industries Limited. We will start the call with the initial comments about the results and the future outlook of the company, and then we will open the floor for question and answers. Now I will hand over the call to Mr. J.K. Jain, Chairman and Managing Director of the company. Over to you, Jain sir. Thank you. Good afternoon and welcome to the Q3 FY 2025 earning call of Fiem Industries. Joining me on today's call are Rahul Jain, Joint Managing Director; Rajesh Sharma, Joint Managing Director; Vineet Sahni, CEO and Director; Arvind Chauhan, Company Secretary; O.P. Gupta, CFO; and other members of the finance team. Our investor presentations and the results are now available on our website and the stock exchange. We trust that you must have reviewed the same. It gives me great pleasure to report that Fiem Industries has once again delivered an outstanding quarter, exceeding industry benchmarks and demonstrating the power of our strategic vision. Before going into our detailed results, let me briefly give an overview of the economy landscape. The Indian economy remains on an impressive growth path, with GDP expected to rise by 6.7% in FY 2025. Further, the Finance Minister's historic move to give substantial relief of income tax to the middle class is likely to inject fresh momentum into consumer demand, which will have a direct positive impact on two-wheeler industries. Turning to the automobile sector, the two-wheeler industry has maintained its robust momentum, growing by more than 10% in the first nine months of FY 2025. Rising rural income, robust demand from the urban market, and new model launches have driven this growth, solidifying the two-wheeler industry's position as a growth driver in India. Fiem has been able to outperform the industry, achieving 22% sales growth in Q3 FY 2025. During the quarter, Yamaha and Royal Enfield posted a strong performance driven by new model launches. Yamaha launched FZ 150cc and FZG 250cc for Brazil and European markets. In line with the trend in the automotive lighting industry, we are making significant investments for strengthening our electronic capabilities in the area of advanced design software, electronic laboratory for EMI and ESP testing, and validation. Further, we have also invested in state-of-the-art electronic manufacturing facilities at our plants in north and south. In addition, we are also expanding our R&D and design capabilities at our subsidiaries, FRT Italy and Fiem Japan. We continue to make our sincere effort in growing our four-wheeler business. Our first project of LED number plates for Mahindra & Mahindra has been approved for their 3XO, Thar, Scorpio, and other models. Similarly, the second number plate is approved for the electric three-wheeler Supro and Bolero models. Our manufacturing facilities have now been approved by Mahindra & Mahindra, and production is likely to commence from quarter 1 FY 2026. Moreover, we have received another order for a new project, XUV700 refresh model. Further, we are currently working on many more RFQs, which are likely to be converted into confirmed orders in FY 2026. We continue to remain focused on growing our business in the two-wheeler and four-wheeler segments through new products and new technology introductions. With this, I hand over to Mr. O.P. Gupta and the finance team to update on operational performance. Thank you, sir. Good afternoon to everyone. I am presenting Quarter 3 numbers for FY 2025 in comparison to the corresponding quarter of the previous financial year. The company has registered sales of INR 590.1 crore in Q3 of the current financial year in comparison to INR 483.11 crore in Q3 of FY 2024, which is an increase of 22.15%. The percentage of LED lighting within the total automotive lighting has increased to 61%. The EBITDA is higher at INR 77.88 crore, translating into an EBITDA margin of 13.2%, as compared to an EBITDA of INR 64.48 crore, that is 13.35%, in corresponding quarter of previous financial year. PAT has increased by 17.64% to INR 47.41 crore as compared to INR 40.30 crore in Q3 of FY 2024. During the quarter, the company has made a CapEx of INR 36.94 crore, taking the total CapEx to INR 108.78 crore for nine months of FY 2025. With this, I end the financial brief, and now the floor is open for question and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from CA Garvit Goyal from Nvest Analytics. Please go ahead. Hello. Yes, please. Hello. Yes, if you can little bit loud, that will be better. Good evening, sir. Congrats on a decent set of numbers. Actually, I was reading in Business Standard, the commentary from CEO Niranjan Sir of Hero MotoCorp, that they are seeing a big rural sales jump over the next four to eight quarters. Are we witnessing a sharp increase or any such indication of increasing demand for our products, based on whatever conversations happening with our end customers? Thus, can we expect FY 2026 to be at a higher growth than our historical growth rate of 20%, driven by the expected industry tailwinds, as you also mentioned in your opening remarks? That is my first question. Yeah. Specifically, I don't know which comment are you referring to, but we have maintained that the two-wheeler industry is on an upstream. FY 2025 is going to be very robust, and we see no reason why the demand momentum should not continue into FY 2026 as well. Both rural and the urban markets are showing positive. Understood. First 9 months, basically, we reported a significant growth. Are you confident enough to maintain that year-on-year growth in Q4 as well? Yes. Growth momentum is on positive. We are seeing positive offshoots everywhere, and we should continue. Understood, sir. Lastly, on the R&D initiatives and our four-wheeler initiatives, what are the progress happening on that side? Are we looking to increase our revenue in FY 2026 to the total revenue from the four-wheeler side? What are the updates on the Gogoro side as well? There are many questions in there, but let's just first take the question on 4-wheeler. Vineet, I'll answer your question on 4-wheeler. As per our strategy, we are first finding entry points into 4-wheeler. Revenue is not our immediate agenda. You would have heard in Chairman's speech, we already got presence in multiple models of Mahindra, which is as per our strategic plan. Now our plan is to move up the value chain and obtain orders for higher value. Then next step would be to translate to other customers. Revenue will follow, but we are following our strategy of Fiem group to go step by step in this field. On Gogoro front? Gogoro is facing significant headwinds in the international market. I don't know if you've picked up those comments. They had a lot of challenges that they are facing at global markets, which is why their India strategy yet remains unclear and which is why we are not seeing any significant uptick from where we updated since last quarter. It is right now on pause. Until now, how much fund we have invested in that side? That is not a very big amount, and we don't have that figure in handy. We are just waiting for the Gogoro response on level things. Understood, sir. That is it from my side, sir. All the best for the future. Thank you. Thank you. The next question is from Jatin Chawla, from RTL Investments. Please go ahead. Yeah. Hi, good afternoon, and thanks for the opportunity. In the opening remarks, you spoke about some order for the XUV700 refresh. Is that also for the number plate or is that for some other lamp in the vehicle? No, it is not number plate. Number plate, in any case, will get commonized, what we are developing. This is for another product, but still small lamp. But it is for a new forthcoming model. Got it. On the quarterly results side, just wanted to check on two things. One, when I look at the growth for Honda, that growth is on a year-over-year basis 4%. I think Honda's production numbers, the growth was much higher. Is that some share loss or is this because some models of Honda where we are present are not doing well and some others are doing well? That is one. Secondly, on the replacement side also, I see there is a double-digit decline year-over-year during this quarter. What is driving that? On Honda business, you are right, the growth is 4% odd versus 6%-7%, which Honda has grown. That is primarily driven by a certain set of models there at Honda's end, which have taken uptick. There is no sort of change in our business models with them. Our business continues to be absolutely same, and Honda is already showing uptick in volumes as we speak now. The last quarter, there was also shutdown at Honda, which has impacted some volumes. The plant shut down from December 22nd onwards, so that has also impacted their volumes. Got it. On the replacement side? Yeah. As in the last quarter also, it is being explained that now all the lamps is being converted from conventional to LED, so demand is of course be reducing. Further on, we have an agreement with all the customers, whatever properties of molds and other things are available with us to be produced for customers are belongs to them. So this will be impacting quarter-on-quarter, plus or minus both. Good. Broadly directionally, we should expect this business to kind of go down, going forward. We are working for some other models wherein we are not in directly with the customers. Those things will definitely come in the replacement market. That will give the boost to our replacement market sales too. Understood. Thanks a lot. Thank you. Next question is from Ravi Purohit from Securities Investment Management. Please go ahead. Yeah. Hi, thanks for taking my question. Congratulations on good set of numbers. Some of the things, generally wanted to understand. We have been speaking about various kind of ambient lighting and lighting per se themselves have also dramatically improved over the last few years on the newer vehicles. If you could kind of just give some flavor, let us say for example, five years back or 10 years back in a typical SUV or a typical sedan or hatchback, what would have been the cost of putting all the lightings inside of the car, and headlamp and tail lamp and all those things. Today, let us say when we are looking at newer models from newer companies, like recently Mahindra has showcased their electric vehicles. Hyundai is in process of launching a few. Maruti has announced a few. We see a lot of lights in these newer vehicles. How does kind of the addressable market or the lightings per vehicle on an average change between what it was three years back, five years back, and what it is today, and what it will be in the next five years? That is a very broad question. I think we need to spend a lot of time on that, but give you a broad sense. Let us say 20 years back, a lamp of the minimum, let us say 800cc model, used to cost around INR 700, INR 800. Right now, a typical lamp of LED today would cost around INR 8,000 to INR 10,000. That is a big change that has happened in the industry. The overall market, which was approximately INR 2,600 crore, now is around INR 8,000 to INR 10,000 crore market just for exterior lamps. The interior lamps and ambient lighting is also getting added. The overall market potential of lighting only in India is going to around INR 10 thousand to INR 15 thousand crore in future. There's a lot of work to be done, you are right, and we at Fiem are working on all these technologies. We are also developing some proof of concept with some of the OEMs, which I can't disclose now on several new technologies. We are absolutely abreast on what is happening in technology in lighting, and we are working closely with certain OEMs to bring this technology in India. If you could just give like a ballpark, let's say, the Mahindra showcase of those two new electric they did, right? What in your guess would be the total spend of lighting in that model, right? If those models are selling at INR 30 lakhs or INR 35 lakhs, would lighting be INR 50,000 worth inside or outside, both put together? No. This is out of the scope of my purview to give the answer because those are competitive products. Right. I don't think it is right for me to give the numbers on this subject please. We are not supplying to them. It is the competition, so it won't be correct on my part to give you any numbers. Right. Okay. But since you Yeah in lighting, in addition to the existing lighting would increase substantially going forward. We already have products and all the lighting be able to service this upcoming demand in the next 3-5 years? There is a strategy which Fiem has, and as we said, we want to follow a robust strategy. It is a step-by-step manner. You cannot address whole market immediately. It will be incorrect. We have a planned strategy, focused customer with whom we are working, and gradually we will expand our base. Mm-hmm. Because we are increasing our spend, as you would have heard in Chairman's speech on R&D. We are focusing a lot on electronics, and these are the future things which will help us in growing our market share in India. Right. And sir, second is on, we had this tie-up with Gogoro, and we were kind of getting tech transfer on the motors and other products. What happens to that? What happens to the money that we've spent? What happens to the tech transfer that is coming in from there? Are we allowed to use only for Gogoro or can we absorb technology and offer products to other OEMs also? If you could just give an update on what is happening with the tie-up with Gogoro. How much money has been spent, and what does the future look like? Okay, so let me answer that. First, on the money part, the money is kind of insignificant. It is under INR 10 crore. So it is a very small number that also is reimbursable. So frankly, that is not the challenge. As you rightly pointed out, what we were hoping for was the technology transfer to happen fast, and we could go to the market to other customers as well. That process is, as of now, at pause, as we said, because of the global challenges. We expect that technology transfer to happen. That should happen in the next couple of quarters. It might get delayed. However, it is kind of clear that Gogoro may not be pursuing the Indian market so heavily. So we do not expect too much volumes out of that. But if the tech transfer happens, then that could help us attack this segment in a different manner. But that remains to be seen how it will be played out over the next two quarters. At this point of time, it is on pause. Okay, great. Thanks a lot. I will get back in the queue and all the best. Thank you. Thank you. Next question is from Hitesh Goel from Mudessir Advisors. Please go ahead. Thank you, sir, and congratulations on very good set of results. My first question is on 4-wheeler business. Can you give us some sense what is the kind of content per vehicle right now you are envisaging in the 4-wheeler segment with especially Mahindra, which has got a lot of these models, versus the content that you have in Honda or TVS, just for us to get a sense how 4-wheeler business will move. Yeah, thank you, Hitesh. I have understood your question. See, as of now, as I said, this is a very small lamp. Our strategy is to make our presence in every model. The best way to enter into every model is get into some lamp which is common, which we have done, right? The content today is insignificant, and therefore we are not changing revenue. As of now, we are stating our presence in various models because that will open bigger markets for us in future. That is the plan. So Vineet, any guidance you can give us, say, in 5 years time, what can be the revenue share of 4-wheeler, or your vision? Maybe your vision, say, today it is only 3%. Yeah. As I had spoken in last conference also, we have not documented and we have not planned revenue as of now, and I had requested for 1 more year to bring in our strategy paper because our presence is maturing, and we are getting good response from our customers. Even the traction on new technology is good. It is difficult to quantify at this moment. We will do it at appropriate time and share with you that later. Okay, great. My second question is on Hero MotoCorp. You had talked about 6 models that you are working with Hero for development. Any updates on that? When will we see a meaningful revenue from Hero for Fiem? Yeah, we are just waiting for the products are ready for mass production. We are just waiting for the launches, which is being announced by customer. Thereafter, we can start, and we can declare in our subsequent quarters. What can be the size of Hero? I mean, in that sense, will it become, say, 10% of revenue in, say, 2 years' time? Any sense you can give us? Yes. This will be very difficult as of now because volumes are obviously decided by the customer. Sales and other sales definitely come out with once the customer will launch and customer will declare their numbers. These are right now new models, so it is tough to say in terms of acceptance of these new models, how quickly they will scale up. But over three to four years- We are working for more than 10%. Yeah, we are working on that. Okay. My final question is on margin. Basically, we are seeing consistent increase in LED ratio in the lighting business, and most of even in entry-level now customers are putting LED lights. Just wanted to get a sense on margins, because gross margins haven't moved much. If you look at the gross margins will remain the same. Is LED margins and LED gross margins We- Sorry, go ahead. We have kind of clarified this in the past as well that there is a gradual turn towards LED, which you can see now even today. However, our margins, whether it's LED or business, are broadly in the same range. So similar. Okay, great, sir. Thank you very much, and all the best. Because of volume and operating leverage, that has already increased, yeah. Yeah, got it, sir. Thank you, sir, and all the best. Thank you. Thank you. Next question is from Kush Nahar from Electrum PMS. Please go ahead. Hi, sir. Thank you for the opportunity. Couple of questions from my side. The first is, could you elaborate more on what led such strong growth of 21% in Q3? Because usually from other auto players, we hear that Q3 is usually a weaker quarter in terms of post-festive and some shutdowns happen. Consequently, the new order wins that we have won, how much is the LED portion? My second question is on the CapEx plan that we have over the next three years. Okay. The Q3, you are right. Q3, the industry has grown well. In volume terms, if you see, Q3 has been 8% growth for the industry. We have outperformed because of our overall mix. We have kind of highlighted that some of our customers, notably Yamaha, Royal Enfield, and several others, did much better than these numbers. All of this together, it does beat this industry SIAM number, and we have grown more than 20% at close to 22.2%. As far as your other question on LED is concerned, yes, that has increased from 57% to 61% for the current quarter. We think that this number will keep inching upwards as new models are being introduced. New models, all of them are for mostly LED, and hence LED number will constantly increase. Okay. Your final question was on CapEx. We had guided for a INR 125 crore to INR 150 crore order of CapEx. We already spent INR 108 crore for nine months already. Another 25 odd crores would be sort of spent in January to March. So we are broadly in that range for the current year. For the next year, the number could be anywhere from INR 75 crore to INR 100 crore additionally. As of now also, we are not planning to spend in terms of a new four-wheel plant? No. This does not include any new greenfield four-wheeler plant. This includes the normal CapEx, which takes care of the current requirement of the four-wheeler. Could you help me with the cash number then, the cash on books as on date? This is two hundred and seventeen crores. Okay, sir. Thank you. Thank you. Next question is from Viraj from SiMPL. Please go ahead. Yeah. Hi. Am I audible? Yes. Yeah. Just couple of questions. First is, if you look at the sales figure for the supplies to Royal Enfield, a quarter or two back we talked about us bagging order for Classic. If you kind of adjust for that, it's probably not seen a full ramp-up for that, for supplies to Royal Enfield. Would that be a right assessment? Sorry, can you come again? What is your exit? Your voice is not clear. Just go a little distant from the mic, please. Your muffled voice is coming. Yeah. Am I audible now? Even better, sir. Yeah. I was asking if I look at the supplies to sales to Royal Enfield, given that we have bagged an order for the Classic and you have a scooter plan there, one would think the ramp-up would be much faster in terms of supplies to Royal Enfield. So just trying to understand what is driving, why the ramp-up seems to be little softer. Why would you say faster? If you see Q on Q, year-on-year increase for Royal Enfield, we are almost up 100% over last year. Yes. Okay. Because if we map out the quarterly production numbers and unit realizations, usually one would see a typical sales addition of 20 odd crores on a quarterly basis. So, hence, I was just trying to understand the ramp-up. It is more like 30 crores for Royal Enfield, which is significantly higher number than last year. Okay. Second is in terms of Yamaha. Can you just give some more color, what has driven the growth there? Is it more export-driven? Is it more domestic launches? And how should one understand the run rate there? See, as our Chairman has already announced, there are two models which has given us export volume. That is for Brazil and Europe. Simultaneously, the domestic market is also growing, which is together with us. Okay. So in the past, we used to talk about us working on 6-8 new model platforms for Yamaha, both globally and India. How is the pipeline looking now? Yeah. As of now, we are at the same track. We are as of now also having 8 new models which are for domestic as well as for export market. Okay. Second question was on the PV. In the earlier conversation, you talked about us working on electronics, further making investments, and also working on it. Can you elaborate a bit more what exactly we are doing there? An added question is, in the past few calls, we talked about us looking at or having tie-ups with for different technologies. Is that largely for the Indian market or there is an opportunity for us to look from an export point of view also with those partners? I will address this. Your first question is on electronics. Yes, electronic is required not only for 4-wheeler but also for 2-wheeler because both the products in segments are going electronics. So Fiem as a group is strengthening the electronic capability in-house. All in design softwares, validation, setting up EMI, EMC, and setting up a good manufacturing facility with the latest equipment. That is a process which is not only going to help 2-wheeler, but also 4-wheelers, as a business. We are still working with our technology partners and all this development is focused on India market. While we are absolutely open for exports, but our focus today is for India market. Okay. Just one follow-up. You talked about electronics. Now, if you look at for two-wheeler lighting also, I think we were one of the earliest players when it came to setting up the SMT lines and having that backward integration. So when you say further in electronics, what is further backward integration we are doing there, either for two-wheeler and four-wheeler? See, the whole outlook of electronic is changing. It is not only simple electronic, now electronic is coming with AUTOSAR, CAN and LIN arrangements, connectivity within the two-wheeler with the ECU inputs. So lot of things are changing in electronic. It is not very simple. Software is getting embedded into hardwares. So software, firmware, hardware, everything is required in modern products. So this is something which needs to be upgraded by the organization and we are again taking early mover advantage by taking some actions now. Okay. So in terms of CapEx, I think what you said is we are looking at spending close to 100 odd crores this year. Correct me. Now if I look at the cash balance as of September end, we were close to 220 odd crores in terms of cash balance. Now even in the end of the December quarter we are still around the same balance. So is it because of, I mean, is the working capital increases, is there any significant increase in working capital or how should one understand this? Is your question around the end use of this of this cash? My question is if I look at September cash balance, it is still around INR 250, INR 220 odd crore and as of December it is still around similar amounts. Your observation is correct. The cash balance is almost same. There are basically two big reasons. One is that dividend payout that has happened in the same quarter. Whatever is the additional CapEx we are doing, this is all from internal resources. So the balance remains same. Okay. Thank you and good luck. Thank you. Thank you. Next question is from Mohammed Patel from Care Portfolio Managers. Please go ahead. Hello. Can you hear me? Yes. Yes. Thank you for the opportunity and congratulations on the recent numbers. My first question was looking at like currently we are Your voice is not clear. Sorry. Is it better now? There is lot of background noise. Sorry. Is it better now? There is lot of background noise. Hello. Is it better now? Yeah, okay. Much better. Sir, just I was asking that currently we are servicing the PV market with the help of our current existing lines and plant and machinery. Going forward, would we be requiring new assembly lines and plant for ramp-up of the PV products? Yes, for PV products, unlike any other products, new lines are required. Same lines cannot be used. Whatever products we are doing and will do will require investment in lines, assembly lines. What would be the estimated CapEx, just a rough estimate if you had to give? The CapEx figure given to you just now includes investment of 4-wheeler and 2-wheeler both. There is only a marginal investment in 4-wheeler as of now. Any significant investment will be informed to the investors. Okay, sir. Thank you. Last question was for Gogoro. I am sorry if I am repeating the question. For Gogoro, as you said, we have only spent INR 10 crore for the investment, but have you put any plans for the Gogoro and is it remaining idle or what have you done in terms of investment for Gogoro? Okay. Let me try and understand because it is difficult to follow your, there is some noise. Did you ask what is our investment in Gogoro? Yes sir. Have you put up a plant or for the As I said it is under INR 10 crores, it is in single digits and that is why it is not a material figure and plus these are all investments which are returnable from Gogoro. These are part of the agreement with them. Okay. So we have not invested any major asset for them currently No. There is nothing beyond this. Okay, sir. Thank you so much. Thank you. The next question is from Shubh from Ratnatraya Capital. Hello. Yes, please go ahead. Sir, you used to share wallet share data for different OEMs. If that is available, can you share, please? We shared up to last year's only. Last two, three years we shared, but as of now, we do not have that data because that is a lot of information required from the OEM end also. We do not have that data for the current year. We will be able to perhaps put it together as part of the annual report. It is estimated number on quarter is difficult, but we will try it for the annual. Understood. No problem. Also, is there any update on the fire money, the investment? You are talking about the insurance? Insurance. That is already in the process. We have received 50. INR 30 crores is already received in the month of September as an ad hoc. Right. Understood. Nothing about that as of now, right? No, that is, I informed this is under process, under finance process of. Nothing is required further. From there we have not received anything. Okay, understood. That is all from my side. Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. Next question is from Kush Nahar from Electrum PMS. Please go ahead. Kush Nahar, you may go ahead with the question. Hello. I am audible now? Yes. Yeah. Thank you for the opportunity again. I just wanted an update on the four-wheeler European OEM to whom we were supplying. Approval stages were going on over there. Any update on that? Yeah, it is a good question. We have last week submitted our final samples to them. It has just reached them yesterday. With our complete detailed report, all parts from our side are okay. We have sent the final samples and that will go to customer next week, and then the process will start. This is moving as per the plan. Okay. All right, sir. Thank you. Thank you. Next question is from Saurabh from Multi-Act. Please go ahead. Yeah. Hi, thank you for the opportunity. I am Akshat from Multi-Act. My question was mainly on Yamaha. I wanted to understand and get a clarification as to this light that we are supplying. If we are supplying to Yamaha India, and whether they are exporting the light as it is or they are making the entire motorcycle and exporting it. No, we are sending the lights to Yamaha India, and Yamaha India is sending these lights to outside countries. Vehicle assemblies will be at MBK as well as in Yamaha. This is mainly for YBR 150 model, right? These are the two models which is being explained you. This is of, model is FZ 150, YBR 150 and XTZ 250cc. All right. My next question was mainly on Hero. We have been working on around six to eight model of Hero for a long time. Just wanted to understand, if you have got any idea of the launch pipeline of those models from Hero and what could be our estimated SOP for those models. It is three models, upcoming models are being validated and QA is being done by customer. Now just we are waiting for their launch and ramp-up plan, and thereafter we will explain you, and we will give you the overall details. All right. Sir, any other significant model wins in the Q3 which you would like to highlight because we have not highlighted in the opening remarks. Q3 was of course their year-ending model year, so it is all going to be launched in the new year whenever you go for a January 2. There are few models which is being launched by the new customers, by the other customers during this quarter. We will explain you these all models during next call. Okay. Thank you. Thank you. Next question is from Prashant Kothari from Stock Market Read. Please go ahead. Yeah. Good evening, everyone. Am I audible? Yes. Yeah. I wanted to ask about the Mercedes-Benz project. What is the SOP for that? As we had informed, we are doing the low volume development project for Mercedes. Our first two projects are already complete and delivered to Mercedes. Third project is on, and that is also moving as per plan. Okay. About the Gogoro project, have you initiated any discussion with the other EV OEMs to commercialize this? No, we just explained that the transfer of technology process is pending. Once that is completed, only then can we start that discussion with other OEMs. Okay. Thank you. Thank you. A reminder to participants that you may press Star and One to ask questions. Next question is from Mehul Panjwani from Forty Cents. Please go ahead. Hello, sir. Thank you for the opportunity. I am recently tracking your company, so I just want to understand. I got to know from earlier question that there was some fire for which we have got insurance. When was the fire, sir? Which period of the year? Was it in this financial year? This fire happened on 13th of June 2023, and as I informed, one ad hoc payment, we already received INR 30 crore in the month of September last year. Rest of the things are under process. Okay, sir. Thank you. And one more follow-up question, sir. Was there any operational impact during that period? No. We timely intimated to the stock exchange also. This production was resumed within 3 days, and all things are now in original stage. Okay, sir. Thank you so much. Thank you. Ladies and gentlemen, to ask a question, please press Star and One. Participants who wish to ask questions may press Star and One on their touchtone telephone. Next question is from Shubham Sehgal from Skill Ventures. Please go ahead. Hello, am I audible? Yes. Yeah. Thanks for the opportunity. My question is about the new technology. If we see in our annual report, we had mentioned about four technologies mainly, ambient lighting user, capacitive touch, and micro lens array. We also mentioned that we have been working with our technology partners, and we have signed MOUs with them. I just wanted to ask, how far are we with these technologies? Could we see them materializing in maybe 1, 2 years going forward? Could you give some color about these and any specific technologies that we have got any proof of concept that you are working on? Yeah, sure. As I said, this initiative of ours in new technology is quite well appreciated by our customers. We did a technology show, and we are quite deeply engaged with our customers. Currently with two customers, we are working on proof of concept, and one of the technology has got more traction, and we will be shortly receiving a statement of requirement and RFQ from one of the customers, and that is a result of all the hard work we have done in last 1 and a half years on technology. Once we work on that RFQ, then we are likely to get that business. This is a step-by-step process, and we are quite engaged with the customer in bringing good results for Fiem group. Okay. I am assuming this would be a domestic customer that you are working with? See, we are working with Indian customers. That is our focus. My question here is that why aren't we targeting international customers? Don't you think the acceptance rate could be higher, and we could get more orders there? No, it is not the wish. As we said, we are a conservative organization moving in robust, planned, step-by-step process. We don't want to jump. First, we will establish ourselves in Indian market, we will establish a good quality, and then we will approach international market. Okay, got it. That's all from my side. Thank you. Next question is from CA Garvit Goyal from Invess Analytics. Please go ahead. Hi. Thanks for the follow-up. Just want to know what is the anticipated margin profile in the upcoming quarters? Like in June quarter, we did around 14%, and since then, we are doing 13%. Is it the sustainable kind of margin guidance we will guide for future as well, or are we looking to further improve the margin? We don't give quarter-by-quarter margin guidance. We've kind of said that we ideally like to work in a band of around 13%, 13.5%, but we don't give any other specific guidance, especially quarter-on-quarter. This is what our intent would be over the next couple of years. Thank you, sir. Thank you very much. Thank you. To ask questions, please press Star and One. Ladies and gentlemen. To ask questions, you may press Star and One on your touchtone telephone. Next question is from Prashant Kothari from Stock Market Read. Please go ahead. Hello, am I audible? Yes, please. Yeah. Just to follow up With the recent fluctuations in the raw material cost, particularly for plastic and electronic components, how are we handling the price pass-throughs with the OEMs? Has there been any delays or pushback in passing on the cost increase? There is a very defined process in terms of handling these sometimes escalations or changes that happen, because we have to work very closely with the OEM on every component. Everything is transparent. As we have explained in the past also, ours is a pass-through process. Any changes is passed through on a quarterly basis. Any impact on any changes will come through with discussions with OEM on a quarterly basis. It is an auto process which we have. No impact on us on any changes that may happen in raw material. Okay. Thanks a lot. Thank you. Next question is from Kush Nahar from Electrum PMS. Please go ahead. Sir, thank you for the opportunity again. Sir, just one question I had, any kind of guidance that you would like to give in terms of revenue for the next three years? We don't give any specific guidance. Yes. What we like to maintain is that we will beat the We are very optimistic, and we hope as the things are going well in the auto sector, we hope good improvement. Any kind of range, like 15%-20%? Maybe one point. If industry is growing by X, what are we targeting? We've always done better than industry, and 15%-20% is something that we definitely would like to get to. Definitely not less than that. Again, as we said, we don't give a specific number. But yeah. Right. And sir- Like auto. When can we expect four-wheeler to contribute significantly, say around 10% of our top line? When is that possible, in which year? As I said that we will be coming out with the crystallized numbers after our strategy in entry at OEM is done, which will take a year, and we will definitely present our business plan. Because currently we are not focusing on revenue. We are focusing on entry, and then we are going to focus on increasing our revenues. We will be sharing that with you at appropriate time. All right, sir. Thank you for all the answers, sir. Thanks. Thank you. Next question is from Ankur Shah from Kasara Capital. Please go ahead. Hi, sir. Congratulations on a great set of numbers. Just one question on the margin. With the 22% top line growth, we would have expected some operational leverage to materialize on the bottom line. Yeah, sir, is there some reinvestment which is taking up the extra margins? Because last call, I think you all called out that the factories are running at 80% capacity. In any manufacturing setup, the last 20% is the most profitable. So why are the margins staying where they are? Yes, please. Here is the synopsis of how we look at our business. As we explained, from a product-wise, one of the driver has been LED also, as you see. The growth is coming from the transformation from conventional to LED. That is also one of the important driver of this growth. Whether it is LED or conventional, the margins are broadly same at customer level. While I appreciate what you are saying on operating leverage, however, this is the broad number that we operate. Is it that if we reach a particular customer volume, is it that the customer will ask for repricing? Because that is the only thought which comes to my mind in this setup. Yes, we are in a super competitive environment where customer always wants a lower price. It is never that the customer will not want a lower price. A lot depends on product mix also. One of the customer goes down, other customer goes up. So margin is complex and you cannot relate directly that if the sale has gone up, margin will go up. Yeah. What product mix is there, that is very important. I can give you example. Ola was doing, for example, 50,000 a month, which is now 25,000. So margins have changed. So the product mix is important. Also if you look at Q1, Q2, from Q2 to Q3, our sales were actually marginally lower only from Q2, but our margins are better. So it is not just a function. You are right in an environment where just there is increasing sales, there should be more. But there are many other things that you will need to kind of build out, including what you mentioned around product mix. No, really appreciate, I understand the competitive intensity. Thanks for all this. Wishing you all the best. Thank you. Thank you. Thank you. That was the last question in queue. I would now like to hand the conference back to Mr. Sahil Sanghvi for closing comments. Yeah. I just wanted to thank all the participants for joining the call, and also thank you to the management for very elaborately answering all the questions. Jay sir, would you like to give any closing comments, please? Yes, please. I would like to thank everyone for participation in today's conference call. I hope that we have adequately addressed all your queries. If you have any further questions, please don't hesitate to contact us. Thank you and have a good evening. Thanks. Thank you. Thank you very much. On behalf of Monarch Network Capital, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.