Q2 24/25

Nov 14, 2024

Summary

Q2 sales rose 20.08% YoY to INR 607.45 crore and PAT grew 18.9%, with EBITDA margin at 13.21%. Management maintained 13%-14% margin guidance and capacity-expansion plans, while EV weakness and the uncertain Gogoro rollout remain risks.

Ladies and gentlemen, good day and welcome to the Q2 FY 2025 earnings conference call of Fiem Industries Limited, hosted by Monarch Networth Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Sahil Sanghvi from Monarch Networth. Thank you, and over to you, sir. Thank you, Sam. Good evening, everyone. On behalf of Monarch Networth Capital, I welcome you all to the Q2 FY 2025 conference call of Fiem Industries Limited. We will start the call with the initial comment about the results and the future outlook of the company, and then we will open the floor for the question and answers. Please note that this conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Now I hand over the call to Mr. J.K. Jain, Chairman and Managing Director of the company. Over to you, sir. Thank you. Good afternoon, and welcome to the Q2 FY 2025 earnings 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. The investor presentation and the results have been published on both the company website and the stock exchange. I do hope that all of you have reviewed the same. I am delighted to announce that Q2 FY 2025 has been a milestone quarter for us with our company posting its best-ever quarterly result. Our sales has grown by 20% year-on-year, showcasing our strong execution capabilities. Net profit of the company rose by 19%, underscoring the effectiveness of our strategy, initiatives, and operational systems. In Q2 FY 2025, the Indian two-wheeler industries demonstrated a strong growth with production volume reaching 6.3 million units, which is a 12.5% year-on-year increase. This growth is largely fueled by a resurgence in the rural demand and a strong consumer sentiment. Our close partnership with the leading OEMs have been instrumental in enabling us to scale our production and capture this demand effectively. We anticipate continued growth in two-wheeler industries for the remainder of the fiscal year, supported by the sustained demand momentum. Our new product pipeline remains exceptionally strong and robust. During the quarter, our valued customer, TVS Motor, has launched the new premium Jupiter scooter incorporating our advanced LED lighting technology. This model features front and rear combination lamps equipped with our unique micro optic collimator technology, a first in the Indian two-wheeler market. This innovation not only enhance visibility but also bring a distinctive look, adding significant value to the rider's experience and setting a new standard in the scooter styling. During the quarter, we worked closely with Yamaha for the launch of their YBR 150 model, now being exported to Brazil. In passenger car segment, we are making steady progress with several exciting initiatives. Our second project with Mercedes has been successfully delivered, and we are now in the final stages of the third project. I am delighted to inform you that we have received orders from Mahindra & Mahindra for the number plate lamp for their Thar, Scorpio, Baleno, and other models. A start of production of these orders will commence from January 2025. This is an important milestone towards our progress in the passenger car segment. We are actively collaborating with the major OEMs to develop proof-of-concept solutions tailored to the Indian market, reinforcing our commitment to the innovation and the new technologies. With this, I hand over to Mr. O.P. Gupta and the finance team to update on the operational performance. Thank you, sir. Good afternoon to everyone. I am presenting quarter 2 and H1 numbers for FY 2025 in comparison to the corresponding period of previous fiscal year. In Q2, the company has registered a sales of INR 607.45 crore against INR 505.85 crore in the corresponding quarter of previous fiscal year, which is an increase of 20.08%. For H1, the company has registered a 20.94% increase in sales to INR 1,181.05 crore as against INR 976.56 crore in the corresponding H1 of previous fiscal year. EBITDA for quarter 2 stand at INR 80.27 crore with a margin of 13.21% as compared to INR 66.36 crore, that is 13.12%, on corresponding quarter of previous fiscal year. For H1, the EBITDA stand at INR 159.04 crore with margin of 13.47% as compared to INR 128.02 crore, that is 13.11%. PAT for Q2 is INR 49.83 crore as against INR 41.91 crore in corresponding quarter of previous fiscal year, which is higher by 18.9%. For H1, the PAT is INR 99.03 crore as against INR 78.35 crore in the corresponding period of previous fiscal year, which is higher by 26.39%. During the quarter 2, the company has made a CapEx of INR 43.42 crore and total CapEx in the first half of current fiscal year is INR 71.84 crore. With this, I end the financial brief. Now the floor is open for question and answer. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone phone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use only handsets while asking a question. First question is on the line of Viraj from SIMPL. Please go ahead. Yeah, hi. Thanks for the opportunity and congratulations on the numbers in such a challenging environment. Hello, am I audible? Yes. Viraj, you are audible. Please go ahead. Yeah. Just a couple of questions. If you see in the first half, we have incurred a CapEx of INR 70 crore. I think in the last few calls we have been talking about INR 250 crore to INR 300 crore in CapEx over a three-year period. What is driving this increase, and is there any change in terms of guidance in terms of CapEx spend? If you can just give some color on this. Yeah. Our CapEx guidance remains the same. If you see in FY 2024, we did a CapEx of INR 85 crore. YTD, we have done INR 72 crore. We expect to do another INR 50 crore in H2, which will be approximately INR 120 crore to INR 125 crore for the year. Our target for next year is another INR 80 crore to INR 100 crore. Hence, if you look at it is going to be ballparked between INR 250 crore to INR 280 odd crore. That is the number which we had guided for. This is for expansion of capacity. You see our revenue growth and our future revenue growth target. We want to be well-positioned for future growth. Got it. This would include the CapEx for the PV lighting unit as well, right? This is the broad CapEx plan for the next 18 months right now. Yes. Yeah, but it will be inclusive of the CapEx for PV lighting segment? Yes. Okay, just one or two more questions. If you talk about lighting, the competitive landscape, everybody has seen the Who's Who in the Indian lighting space catering to the auto segment. I think in the last few calls, you've been talking about us trying to enter through interior lighting and other new technology offering by targeting niche segment in lighting in the PV space. There are a few questions here. One is, how large each of these pockets, and in terms of competitive landscape, can you just give some color? Is the market still catered by the same players who are there in the headlamp, tail lamp category, or these are, kind of catered to by imports? The related question is that, in PV, we are seeing a very high hyper competition with realization under pressure. In terms of margin structure, will it be similar or lesser compared to two-wheeler or any color you can give on these aspects? Maybe Vineet can address the PV segment. Vineet? Hello. Hello, can you hear me? Yeah. Yes. We are working on various new technologies with specific OEMs. To answer your question on competitive landscape, the answer today is we are the only players who are working on specific technologies with OEM. That is making us different. OEM is also engaging with us very deeply to bring these technologies. At this moment, we cannot reveal what kind of technologies, because they are pretty unique and very futuristic. But we are working on different technologies with the customers. On the second part, you said on margins, the margins are similar in PV as they are in two-wheelers. Just one follow-up. Can you give some perspective on what is the addressable opportunity for each of those applications which we are targeting, outside of headlamps and tail lamps? Just again, on competition part, say someone like a Lumax through IAC, they have bagged a good amount of orders from Tata Motors, and they also have seems to be Hyundai and Mahindra. There are primary two OEs we are also targeting for entry in PV lighting. Just perspective on size and also competitive landscape. Is it primary import-based or is it same players who are catering in headlamps and tail lamps? Just any perspective. At this moment, we cannot tell you and quantify the size of the market, because it would depend on what kind of technology is finally adopted by the OEMs. The kind of technologies we are working, they are not necessarily headlamp and taillamp. There are many other technologies which have come into passenger cars. We understand what the competitive landscape is doing. We are also in the market, and therefore I said that we are working on certain unique technologies, and if we get the breakthrough, that will be unique, and that could open up new markets and new segments in the industry. Okay, I will come back. Thank you. Thank you. Thank you. The next question is from the line of CA Garvit Goyal from Invest Analytics Advisory. Please go ahead. Hello. Am I audible? Yes, you are audible. Please go ahead. Good evening, sir, and congrats for a decent set of numbers. My first question is on the margin side. QOQ, there is a slight dip in the margin. Is there any specific reason for that, sir? Yeah. There is no specific reason. We continue to guide for the range that we have, which is 13%-14% odd. There is always a change in the quarter because sometimes there are some price markups come, in another quarter they may not come. Overall, if you see normalized basis, we will continue to be around the margin level that we guided. Understood, sir. And sir, like in last phone call also, you mentioned about the industry outlook. Two-wheeler industry is doing tremendously well in recent times. How do you see the industry outlook shaping up in next, say, near to medium term? Is there any kind of risk that we may encounter in the coming quarters? No. Overall, we continue to believe that at least H2 is looking very decent and overall, if you see our industry numbers, we are yet below the all-time peak that we had hit. There is enough room for us to grow. We continue to be fairly positive over the next 18-24 months for looking at a large opportunity here for growth. Noted, sir. Secondly, on the diversification side, we are looking to enter into PV segment. By when do we expect something material will be coming to our top line from this segment? We had given the indications in the past that it takes a long lead time, and we had indicated a three-year period in our last investor calls as well. We maintain the same thing. Got it, sir. That's it from my side, sir. All the best for the future. Thank you. The next question is from the line of Rohit Singh. The line from Mr. Rohit Singh has dropped. We move on to the next question. The next question is from the line of Jatin Chawla from RTL Investments. Please go ahead. Yeah, hi. Good evening, and thanks for the opportunity. Just carrying on the first question from the first participant on the competitive intensity side. We heard a couple of players talk about the competitive intensity rising on four-wheelers. I think you addressed that, but I wanted to check if on the two-wheeler side also, are you seeing any change in the competitive intensity? How is that evolving? Yes, two-wheeler market is also been growing and definitely there is a chances of so many new opportunities are there, which is being implementing not only headlight taillight. There are certain lights which soon will be in the market, and that will also be launched same as like PV. I meant in terms of competitive intensity. Are you seeing more competitive intensity, which could put some pressure on margins going forward? As such, no. Got it. My second question is, when I look at your QOQ numbers, there is a big track pickup that we have seen on TVS from almost INR 145 crore to broadly INR 175 crore. Is this largely driven by Jupiter or we are seeing traction across other models as well? There are not only Jupiter. Yes, Jupiter new premium launch is 100% with us and that is one of the major factor, wherein other models also have increased their volumes like 3-wheeler and other 2, 3 models did a very good market during last quarter. Got it. On the other side we have seen a reasonable decline on a quarter-on-quarter basis. Is this largely driven by the leading EV player or is it more driven by some of the smaller players not getting PLI subsidy and hence their volumes declining? EV market. You are talking about the other category, right? Yeah. Where revenues have come down from INR 70 crores to That others is a mix of everything else including some EV players and some of the others. That mix you are aware in terms of there has been some shift in the EV volumes. EV volumes have been low in the current quarter. Right. For Yamaha, how do you see things panning out? You mentioned one launch has happened, but I think you had earlier said that there are a number of other launches lined up as well. How do you see that account shaping up for us? Yeah. Yamaha, as we already disclosed, seven, eight models are already under development right now, and there may be chances by next quarter or next quarter, they will launch their vehicle and parallelly SOP will start accordingly. Got it. Thanks for the opportunity. Okay. Thank you. The next question is on the line of Tanuj Goyal from Gravy Train Capital. Please go ahead. Hi. Thanks for the opportunity. One question was regarding the hub motors project, which we developed for Gogoro, I guess. What is the status of that project? If it goes through, then what are the projections we see in terms of volumes, pricing, and profitability? The project with Gogoro is currently facing some headwinds. Gogoro has seen some significant management change internationally at their head office level. They will need to refocus and then make a strategy around India. At this point of time, that technology transfer has happened, machines have come, but the outcome in terms of where Gogoro is going to the market remains uncertain for the next two quarters. We have to wait and watch. Wait for the market development. For Gogoro, for the others, we do have a certain plan in mind for going after the motorcycle. Okay. Have we approached our existing client, Ola Electric, for the same, for hub motors? No. We are working with many OEMs. Okay. Thanks. Another question was regarding the growth which the company sees from the four-wheeler segment, since we have just started it. Other than lighting, are there any other segments in the four-wheeler market which we intend to pursue? Also, just to add on to this question, in terms of profitability and cash conversion cycle, vis-à-vis the two-wheeler market, how is the four-wheeler market for us? I will take the question. We are currently focused on our core product, which is lighting. We are not diversifying because first we have to focus on our core strength. We are pursuing lighting with four-wheeler. Your second question was on, I think, margins, which we have handled before. They are similar to the current status. Just one last question. Though there has been a decent improvement in financials of the company, however, there has been a significant stake sale by the promoter group in June. Is the promoter group looking for any other business avenues, or what exactly is the reason for a significant stake sale? No. First of all, let me correct, it's not significant. This is the first-ever sale by the promoter in five decades. It's not a significant number. It was intended for personal use. We do not have any plan at this point of time for more stakes. Thank you so much. Thank you. The next question is on the line of Shiv Shah from Ranpreet Capital. Please go ahead. Hello. Yes, you are audible. Please go ahead. Sir, I have two questions. First is, can you share the LED contribution for the quarter on source shops and percentage proportion of LED in order book? For the second quarter, the LED has remained 57%. In Q1, it was 55%. For H1, it is 56%. With regards to the projects, 98% is LED. Understood. This is a follow-up question on earlier asked margins question. I think there is a slight decline in gross margin for this quarter. Sir, any raw material price situations or is this transient? We explained that there are the margin uptick minor here and there happens every quarter and normalization happens as we go along with the OEM cycle. There is no specific reason, and we continue to guide for our margin, which between 13% and 14% we expect to remain. That will remain. So there is no specific reason for this quarter. Our raw material is all passed through. Understood. That is all. Thank you. Thank you. The next question is on the line of Vinay Nadkarni from Hathway Investments. Please go ahead. Yeah. Just wanted to check out, your replacement market is pretty low, 5%-7%, or was between that. Any particular reason why it is so low? Is not that a big segment, or is there too much competition there? Basically, with the introduction of more and more LED, the domestic market will definitely go down, because the life of the LED is much, much higher. Because the normal conventional light is to 1,000 hours, whereas the LED lighting is 25,000 hours. So only when there is accident, the change is there. So the aftermarket is going to be little less in LED lighting. But conventional lighting we won't be able to supply. Isn't the margins in the replacement market more than the OEM market? Yeah, margins are same. But the conventional market is not growing, right? The LED market is growing. That's why our share is higher there and there is a lesser replacement market. Okay. Also, we are in agreement with OEMs. There is a contract with certain OEMs where we refrain from selling in the market. Okay, thanks. Secondly is on the capacity utilizations. Can you just give us some figures on that? What kind of capacity, because you are growing at 20%? I just wanted to check out on what is the capacity utilization. Yeah, it is close to 80% during the second quarter. Okay. With 20% growth year-on-year, your CapEx is also keeping in pace with increasing the capacities, I presume. Yes. This is increasing steadily by the CapEx we are making. Okay. Can you just spell out the order book? I am sorry, I did not get that number, which we have as on date. Approximately INR 3,000 crores. Order book. Order book, we have already informed that we have more than 100- 100 projects. 100 projects lying with us, which work out to be INR 1,200 crores. Okay. This would be what timeline for deliveries? Maybe next one or two years, depending on the launch of the product. Okay. It is this pipeline projects always we take. Whatever is being started 2 years back might be launched now. And RFQ which is being converted into orders may take another 2 years' time. So it is a cycle. Okay. And one question. Yeah. Sorry. Yeah. Yeah, please go ahead. Yeah, please go ahead. Yeah. Yeah. Just one thing which keeps bothering me when I look at your marquee client base. Your concentration with two, here is very high. It is almost 57% with only two companies. What is the moat that we have with them that we will not be losing them anytime? Because a loss there would be a big hit. First of all, if you see the two-wheeler market, the five players will essentially capture the whole market. Our concentration risk is very distributed. None of them is more than, the topmost Honda is 28-odd percent. I think, given that the overall market has only four or five players, we will have to be with all of them, right? What would your share be with Honda? In the sense, Honda's share with you I can understand, but how much of Honda's requirements are you providing? See, on the overall basis, we can say more than 70%, 75% on the total. Depend on the models. It more depend on the models and the item levels. Okay. Overall, 70%-75%. TVS would be how much? I think you would be better served to look at our last annual report. There it will give our- Okay, that's fine. annual model-wise numbers. I don't think we should look at the rough number of 70/30 in this manner. One should look at each model and then see the share. That's a better way and more accurate. Fine. Thanks a lot. Congrats for a really good numbers. I mean, in a very bad season, I think this is a good change. Thank you very much. Thank you. The next question is from the line of Mihir Vora from Securitas Securities. Please go ahead. Yeah. Hi. Thank you for taking my question. Basically, just one question on that. Were we present before in TVS for Jupiter, or is this a new product we are doing? Jupiter base model, we were there for all the lighting. This premium model, which is being launched in the last quarter, is 100% with us. During this quarter, they did 70% plus production of premium model, wherein 30% is of base model. Okay. But in this, we are both in the base and the premium one, right? Yeah, in both models. Okay. And sir, any update on the Hero thing? We were expecting some orders from Hero? Yes, Hero, we are already working on eight or nine numbers of models. We are just waiting for their few models which are already being developed and are ready for the mass production. It is only we should get the go-ahead for SOP from customer, and then we will continue that. As of now, currently we are in three models. We are supplying only All right, sir, and congrats on this Mahindra win. Basically, just wanted to know whether it is from, like we have a separate plant for PE or will it be from our existing plants only, the supply to the Mahindra? At present, we are continuing using our capacity of the existing plant. It will be from the existing plant for Mahindra also. And, rough, like would you be open to share the share of business there for those models? Like overall, what can we look at? I think it is little premature to share because in some models we have entered as a second source, and in some models, we have entered as a first source for future models. Okay. That's all from my side. Thank you. Thank you. The next question is from the line of Rohan Advant from Prach Capital. Please go ahead. Yes, sir. Thanks for the opportunity and congratulations on a good set of numbers. My first question was on Honda. If you see Q2 versus Q1, we were flat. How is H2 looking for Honda? Any orders in the pipeline, any launches that we would be supplying to? Yes, there are models, but as of now we cannot disclose. But there are models always in pipeline which will be launched in subsequent quarters, years to come. Okay. Sir, and with respect to the passenger vehicles where we are trying to get inroads and we've had some logos that have opened up for us. I understand in the initial timeframe, these would be small in value. But over a 3-year period, sir, how much do you think can passenger vehicles contribute to our overall revenue by FY 2027 or FY 2028, around that timeline? So, as indicated in our previous investor call, we would like to still hold on to these numbers. As you are aware, we are exploring various possibilities, and it will take us some time to put a proper business plan, revenue growth, everything. Kindly have patience, and we will definitely talk once we are ready with that. Okay, got it. Thank you, and all the best. Thank you. The next question is from the line of Khush Nahar from Electrum PMS. Please go ahead. Sir, thank you for the opportunity. Just one question, sir. Are we onboarding Ather as a client as of now? Yes, sir. Yeah. We as of now working with so many other customers, too, and Ather is also one of them. We will disclose once we get some business from customers. Of course, we will always be announcing this thing during the call. Okay. And one last question, sir. How is the overall EV space panning out for us in terms of the new model coming out in EV, so we are participating in that? We are present with almost every major EV player. However, you are aware that the EV volumes for the quarter have been fairly low. The total volumes are less than 150,000 for this quarter. So EV sector is facing some headwinds, be it the government subsidy or be it other challenges. We feel that they will sort that out in the next couple of quarters and will come back to growth. When they do, we are very well prepared because we are working. We have relationships with almost all of them. Okay, sir. Thank you. Thank you. The next question is from the line of Ankur Aggarwal from Akari Services. Please go ahead. Hi. Thanks for the opportunity. I wanted to ask that there has been a fire incident in the month of June last year. Hello? Yes, please go ahead, sir. Yes. So, you filed an insurance claim for INR 120 crore, right? Yes. Out of which you received INR 30 crore and the rest was in litigation. The case is still going on, I think. Yes. I think you please read our full disclosure in the quarterly results itself. This is under process and with the surveyor for the assessment. We will update as and when this development comes. We already received INR 30 crore as an advance payment. Yeah. Okay. So right now, there is no proper visibility after that. Yes. Okay. Thank you. Thank you. The next question is from the line of Khushi Parekh from Pentacle Family Office. Please go ahead. Yeah. Hi, sir. Just a few questions back, you mentioned that most of your raw material cost is passed through. I wanted to understand, is it passed through in terms of percentage to enable us to maintain the margins, or it is on rupee cost-to-cost basis? Cost-to-cost. This is cost-to-cost basis. Average out all the buying cost and that is being passed on by customers. Okay. So with the raw material increase or decrease, the margins can also fluctuate a bit because the pass-through is largely on the cost-to-cost basis. Okay. Correct. Also, you mentioned that you are working with the OEMs on some of the newer technologies. Can you help us understand that what can some of these new technologies enable for the OEMs and can result into their adoption? Like, say, for example, you mentioned that LEDs have a life of about 25,000 hours versus the 2,000 hours for the traditional light. So what can some of these new technologies enable for the OEM for them to adopt? I will take this question. We will not be able to disclose the technology, but we can always tell you that we are working towards more of safety of riders and co-passengers. We are working towards communicating lighting. We are working on these features which will enhance not only the decoration but also the safety features in the passenger cars and 2-wheelers. Okay. Got it, sir. Thank you so much. Thank you. We have a follow-up question from Viraj from SIMPL. Please go ahead. Yeah. Thanks for the opportunity. Just a few questions. You said that Gogoro has kind of put on hold and reviewing plans for India, given a change in leadership at the top. But in the technology, say, in-house, Hub Motors, MCU, has that been fully transferred and absorbed at our end? Yes. Entire plant set up, everything which is being required for hub motor and motor controller is already being placed at our end. People from Gogoro will be visiting to install, and very soon we will start talking with other customers also based on the facilities available with us. Earlier, when we entered into this arrangement with Gogoro, the thinking was that this will largely remain for supply to Gogoro. Is there any license fee or royalty to be paid to them so that we can start catering to other players? These facilities are manufacturing facilities which can produce or which can manufacture any kind of wattage which is being required for a two-wheeler customer. Basically, it is common, so it is not specific, but the technology is what we know from Gogoro. Yes. Okay, got it. So there will be some royalty or license fee when we start supplying to other players as well. Once the order book will be ready, we will discuss and disclose these royalty factors also. Okay. Second question is, on the employee cost front, I think the kind of increase we are seeing for the last few quarters is higher than what the industry has been. Just trying to understand, is there anything, what is driving it? If you compare the last quarter, the quarter one, it was 14.05%, and this quarter it is 13.78%. So there is no increase in it. It will remain in this range only. Okay. Sure. Thank you very much. Thank you. The next question is a follow-up question from CA Garvit Goyal from Invest Analytics Advisory. Please go ahead. Hi there. Am I audible? Yes. Thanks for the follow-up, sir. I think in the opening remarks, you were talking about some innovations happening at TVS End. Can you, sir, please elaborate on it, I missed that thing from you. Your question is specific to the TVS Jupiter model? No, I think you were talking about some technology innovation, first time in India. Yes, so we are working on new technologies which are currently not being used in any of the passenger car or two-wheeler segments. So we are trying to work alongside customers to bring this technology to India, and there our team is working on innovations and new technologies. So this is towards the two-wheeler four-wheeler. Yes, it is for both. Thank you, sir. Thank you. The next question is from the line of Praveen Motwani from Bank of India Mutual Fund. Please go ahead. Yeah. Hi, sir. Thanks for this opportunity. I have just one question. Could you please just help us to understand the development on the four-wheeler side? It is around 3.3% of our revenue. How are we planning to ramp up, and who are all the clients in domestic and international? If you can just help us to understand that, please. Yeah, sure. I will brief you. It was also in the Chairman's speech. We are working alongside many clients in four-wheeler, and we successfully delivered two projects for Mercedes, and we are working closely for the third. We are going into start of production for Mahindra & Mahindra number plate lamp. It is a small lamp, but it goes across all models, wherein in some models we are second source, and in some we are now first source also. In other customers, we are also working on new technologies engagement, where we are developing proof of concepts so that we also follow the technology route, which is a very strong way to enter this segment. There we are getting good response from customers. These are the various activities we are working on in four-wheeler segment. Okay. Understood. Sir, when you talk about you working with multiple clients, you said on the Mercedes piece, two projects have been delivered and you are working on a third project. Is this just a trial period, or is it actual delivery you will start doing? As explained in earlier investor call, we are engaged with them for development projects, the development cars. This is the stage 1. Okay. Small volume projects are developed with them and delivered to them, which they use for their development cars, and then once we have deeper engagement, we go on a single production. Okay. Sir, any number, like in next 2 years or 3 years, what is your target? How should we see the mix changing from two-wheeler to four-wheeler? We are at 3.3 right now. How will it change over the next 2 years? Any number on that front or your thoughts on that. So as explained in the previous questions by me, it is little premature to talk about this guidance. Kindly have patience, we will definitely work this out. We are working on several streams, so any number we give will be pretty premature. We will definitely come out with the number at appropriate time. Okay, got it. Thank you, sir. Thank you. The next question is from the line of Ankur Shah from Kalsar Capital. Please go ahead. Yeah, hi sir. Thanks for the opportunity. Sir, can you just outline the contract scale-up size with Mercedes, like what can an eventual contract be? So, as I said, we are not targeting the revenue. These are small volume development projects. It is more towards developing the technology for four-wheelers alongside Mercedes, getting to know their systems and developing the trust with them. Because the very fact that we are on the third project, it makes us feel proud because you can be awarded third project only once you are successful in the first two. That is the step-by-step process. At this moment, revenue will be a wrong measurement of the way we are proceeding. At appropriate time, we will give you the indication of revenue revenue. Okay, great sir. Congrats. All the best. Yes. Thank you. Thank you. The next question is a follow-up question from Shiv Shah from Ranpreet Capital. Please go ahead. Mr. Shah, are you audible? Please go ahead. Hello. Yes, Mr. Shah, please go ahead. Sir, I wanted to clarify on the cash received from the fire insurance. How will the accounting for it work? INR 30 crore we received as interim payment. It is subject to final assessment because this policy is on reinstatement basis. After final assessment from the surveyor, the final settlement will happen. It is not yet reflected in our financials, is it? Let me write. Sir, you are asking about the cash. The treatment. This is the book value as already written off. We have given a complete disclosure in the quarter itself. Okay, understood. The second question, is there any specific revenue guidance for growth guidance for FY 2025? Sorry, come again. We generally don't give specific, but our long-term agenda remains medium term, 15%-20% growth is something we believe we are delivering. Understood. Thank you. Thank you. The next question is from the line of DS India from Individual Investor. Please go ahead. Good afternoon, sir. It is DS India. Thanks for giving opportunity and putting good numbers. My first question is that what percentage of your total R&D investment is allocated to each of your key segment, like 2-wheeler, 4-wheeler, or any? Can you highlight any specific R&D initiative or technology platform that you consider to be important towards your future growth in each of these segments? Let me split your question. First is about the numbers. Our R&D spend is on a consolidated basis for the all lighting products. It is coming around 1.5%, you can see in the balance sheet. It is usually 3%. Yeah. In future it is going to be increased substantially. Then again, your second question, what kind of new technologies or this, we already explained, I think in the product when we talked about the Jupiter and at four-wheeler passenger vehicle side, Mr. Sahni has already informed about the new technologies. Okay, sir. I will just add on, all technologies that we are working, they are pretty significant, both for passenger cars and two-wheelers, and also significant for auto industry in India. It takes time, but some of the technologies will certify shortly and we will keep you informed. Okay, sir. My second question is, sir, as my earlier participant has been asked, but I want to know that the objective of growing the four-wheeler business to a significant level within the next five years, what is we doing long-term strategies for balancing growth between two and four-wheeler segment, and how will the company address the competitive dynamics and customer acquisition challenges in the four-wheeler segment, sir? I think it's a good question, and we have been talking about technology. The very fact that we are pursuing technology is to have a long-term presence in four-wheeler market. We as company management will ensure a proper balance and focus is maintained in both the segments. That will be done. That's more of a management part of it. But the technology is very futuristic, and that is the way where we can maintain and increase our market share and grow our revenues. Okay, sir. Thank you. We are very much hopeful to have a very good substantial amount in next five years in four-wheeler segment. Okay, sir. Got it. I know, sir, just you putting a good numbers, then your margin percentage and this EBITDA percentage is, I think, this is conservative, or we can assume more, sir? Hope so. We are hopeful for the better. Okay, sir. Thank you very much and best of luck. Thank you. The next question is from the line of Khushi Parekh from Pentacle Family Office. Please go ahead. Yeah. Hi, sir. I would want to follow up on my previous question on the new technologies that we are looking to have adoption of. Have we seen these new technologies being adopted already in some of the other markets by other players and how the penetration has been in those markets? If you can help us understand that. Yes. These technologies, we can divide into 2 sections. Some of the technologies are already present globally and adopted by certain players internationally. We are trying to bring that to India. That’s section 1. Second is where even globally, all players are working to introduce their technology, and we are also one of them to bring that to India. That will be like, if it gets launched in Europe, it will be getting launched in India. It is very contemporary. We are working on both the things. Okay. Any of these are as a result of regulations that have evolved in the other regions, or it is just that OEMs want to offer the better features to the customer? It is a mix of both. Okay. Got it. Thank you so much. Thank you. The next question is from the line of Devang Mehta from Eagle View. Please go ahead. Sir, are we currently exploring any opportunity for inorganic growth, given we have good cash and balances? Do you want to repeat your question, please? Sir, are we currently exploring any inorganic growth opportunity, given we have good cash and balances, sir? No, we already have identified a few segments. Like we were explained our foray into passenger vehicle, our foray into what hub motors can do. I think those are near-term areas that we are working on. Understood. Thank you, sir. Thank you. The next question is from the line of Ram M, an individual investor. Please go ahead. Mr. Ram, your line has been unmuted. Please go ahead. There is no response to the line of Mr. Ram. We will move on to the next question. Before we move on to the next question, an announcement. Participants who have a question may press star then one on the touchtone phone to ask a question. Participants who have a question may press star and one on the touchtone phone. We will wait for a moment till the question queue assembles. The next question is from the line of Ankur Shah from Kalsar Capital. Please go ahead. Hi, sir. Thanks again. Sir, just one question on this premiumization trend, which is playing out and all these OEM manufacturers, I think they have significantly increased their premiumization launch strategy. With this respect, sir, does the value or the kit size differ significantly, like, on normal versus a normal sort of a launch? Yes. Premium technology means some additional cost, and that is being identified as a base model to premium differences also. Marginally, there is additional cost, which is being used in raw material as well as in processing cost also. And also the new features. Yeah. So sir, are we actually seeing the volume intensity pick up in that manner? Because obviously rural sales and all being a part of it, I don't think so. But is the premiumization trend very clear inside Fiem also? Yes. It is very clear because we started from 50 cc motorcycle and now we are running on 500 cc, too. So this is a premium. Already we are working on that area only. So in our work segment also, we are working towards that area. Okay. Sure, sir. Thank you so much. Thank you. The next question is from the line of Abir Katyanan from Neo Wealth Management. Please go ahead. Hi, am I audible? Yes, you are. The question I had was in terms of LED growth that we saw this quarter, roughly north of 35%. Apart from Jupiter, let's say Classic 350, are there any other significant models that contributed to this growth? Yes, there are models like Ronin, Raider. Dodge, Apache, these all model mix are there, which has given this significant figures to us. LED. These are all in LED models. Okay, understood. Another question that was concerning me is when the premiumization story we all see, but then eventually this LED gets to a particular scale. Do you think that LED won't be considered as a premium product anymore, and the value of the overall market segment that you are targeting might actually be affected in, let's say, the coming three or four years? LED will be definitely a part of that overall. Along with LED, what all premium things you can make it in your design, that is the styling and customer acceptance, and we are working on that area. Because everybody want new feature, new things. This is also part of it. Yeah. Okay, understood. That's it from my side. Thank you. Thank you. The next question from the line of Saurabh from Multi-Act. Please go ahead. Yeah. Hi, this is Akshat here. Congratulations on good numbers, first of all, and I had two questions. My first question was, historically, we have been saying that the difference between halogen and LED is in the range of 2 to 2.5x. Now, when we look at the new Jupiter, which is launched, and we have also discussed on the call that the technology is the newer technology which we have used. As we are moving ahead in the LED adoption, is this gap even increasing further in terms of the content premiumization? Is it higher than 2.5x now, or we continue to trend on that line? Basically, it is similar. Only the features are added new. Okay. We continue to maintain the 2.5 times realization as compared to halogen, once the full LED adoption is completed. Yes. The second question was on the new wins that we have had, in TVS Jupiter and Eicher Classic 350. Both these models, were they fully ramped up in the quarter 2 or the production will be fully ramped up from the third quarter onwards? This is continuing. As of now, the projections which we received from Royal Enfield or TVS are in the similar page. Okay. But they were there for all three months of quarter 2 is what I was trying to understand. Yeah. All three months of quarter 2. Okay. Thank you. Thanks a lot. Thank you. That was the last question. I would now like to hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Please go ahead. Sahil, your line has been unmuted. Yeah. Am I audible now? Yes, you are. Yeah. I just wanted to thank the management for patiently and elaborately answering all questions. Also on behalf of Monarch Networth Capital, we want to thank all participants for joining the call. Jain sir, Vineet sir, any closing comments? Yes, please. I would like to thank everyone for participation in the today's conference call. I hope that we have adequately addressed all your queries. If you have any further question, please don't hesitate to contact us. Thank you and have a good evening. Thank you. Thank you. On behalf of the management and Monarch Networth Capital, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.