Q1 23/24

Aug 16, 2023

Summary

Q1 FY24 sales rose 6.5% and PAT 19.67% YoY, while EBITDA margin was 13.1%. New vehicle programs and EV/LED growth support the outlook; the Rai fire was insured and production resumed within three days.

Ladies and gentlemen, good day and welcome to Fiem Industries Limited earning conference call, Q1 FY 2024 conference call 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 your touch-tone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on the date of this call. These statements are not a guarantee for future performance and involve risks and uncertainties that are difficult to predict. I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you, and over to you, sir. Yeah. Thank you, Liba. Good evening, everyone. On behalf of Monarch Networth Capital, I welcome you all to the Q1 FY 2024 conference call of Fiem Industries Limited. We'll start the call with the initial comment about the results and the future outlook of the company, and then we'll open the floor for questions and answers. Without much delay, I now hand over the call to Mr. J.K. Jain, Chairman and MD of the company. Over to you, sir. Thank you. Good afternoon to everyone, and welcome to the Q1 FY 2024 earning call of Fiem Industries. Joining me on today's call are Rahul Jain, Director; Vineet Sahni, Director and CEO; Rajesh Sharma, 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's website and the stock exchange. I trust that all of you have had the opportunity to review the same. As we celebrate India's 77th Independence Day, it is heartening to observe the remarkable progress of our nation's economy. Our strong fundamentals have laid a solid foundation for sustainable growth in coming years. The Indian automotive industries have also shown a strong performance. The passenger vehicle industries have grown 7%, driven by robust growth in the utility vehicle segment. The two-wheeler industries have posted growth of 1.6% in the production volumes and 11.6% growth in the domestic sales volume in Q1 FY 2024 as compared to the same quarter of the last year. The sales growth has been driven by a combination of factors, including the growth in the country's GDP, green shoots of recovery in the rural market, and the new product launches. With an 11% increase in the sales during Q1 FY 2024, along with the improved consumer sentiment, the industry is poised to sustain this positive momentum through the year. During the quarter, the EV two-wheeler segment experienced a significant policy shift, with the reduction of FAME II subsidy from 40% to 15%, effective from June 1, 2023. This change led to a decline in the June sales for electric vehicle EVs, as against their strong performance in May 2023. Despite this setback, the overall sales for the quarter remained strong, with EV two-wheeler sales reaching 2.7 lakh units, marking a 56% increase over the same quarter last year. Looking ahead, we are confident that the EV industry will find its footing and stabilize during the course of the year. Now, let me shift my attention to the operating performance of Fiem Industries in Q1 current year. We are pleased to report a strong start to the fiscal year Q1 FY24, net sales of INR 471 crores, EBITDA of INR 52 crores, and PAT of INR 35 crores. This comes on the back of our record FY23, which once again reflects the diversity of our business model and portfolio. We have a strong balance sheet and are well-positioned for growth. On business front, I am excited to update you on our engagement with Hero MotoCorp. As you are aware, Fiem Industries is working closely with Hero on several new projects. I am thrilled to announce that we have commenced production of the prestigious Harley-Davidson X440, which was launched by Hero MotoCorp during this quarter. This model has received positive market response. Additionally, the quarter witnessed the launch of Simple Energy's EV scooter, marking another significant milestone in our ongoing pursuit for the leadership in the EV segment. Now, I would like to draw your attention to an unfortunate event during the quarter. Despite our best safety measures, we had an incident of fire at our Rai factory. The fire caused substantial damage to the plant and machinery and part of the building. However, all assets of the Company are adequately covered under insurance. Due to the presence of the right safety measures and the timely action by the management and its employees, we could save substantial part of the injection molding, surface treatment facilities, et cetera. We are happy to announce that there was no loss or injury to the human life. Company resumed production within three days and there was no business loss. I must extend my heartfelt gratitude to our employees and OEM customers who responded swiftly and worked tirelessly to restore normal operation. Now I hand it over to Mr. O.P. Gupta and the finance team to update on operational performance. Thank you, sir. Good afternoon to everyone. I would like to present the Q1 numbers for FY 2024. The company registered a sale of INR 470.71 crore in Q1 of current financial year against INR 441.98 crore in corresponding quarter of 2022-2023. This represent a growth of 6.5%. The EBITDA for the quarter stand at INR 61.66 crore, translating into an EBITDA margin of 13.1%. The EBITDA in corresponding quarter, 2022-2023, was INR 57.55 crore and percentage was 13.02%. PAT of the company is increased by 19.67% to INR 36.44 crore as compared to INR 30.45 crore in Q1 of FY 2022-2023. During the quarter, the company has made a tax of INR 18.12 crore. During the quarter, an unfortunate fire incident happened in part of one building of our Rai unit. Company has identified various assets, including stocks and plant and machinery, which were affected due to this fire. The carrying value of inventory impacted is INR 25.8 crore and plant and equipment impacted is of INR 25.2 crore. This has been written off in the statement of profit and loss during the current quarter ended on 30th June 2023. The above amount has been shown as recoverable on account of insurance claim as on 30th June 2023. In lieu of this, there is no impact on profit and loss. The company has a valid insurance policy which adequately covers the losses for the inventory and property, plant, and equipment. With this, I end the financial brief, and now the floor is open for question and answers. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Priyash, an individual investor. Please go ahead. Hello. My question is mainly to Mr. O.P. Gupta regarding the accounting treatment of the fire insurance. Sorry, regarding the fire incident. One part is very clear wherein he has mentioned that the loss to the inventory and as well as to the plant machinery has been written off. That is absolutely clear. It has been debited to P&L account. But the second sentence is a bit vague and unclear. Wherein it has been mentioned that it has been shown as recoverable. Recoverable is fine. Recoverable means it is an asset item. So where it has been created in the second entry. Second entry has been taken to the liability or to the P&L account? Yeah. Once you write off an asset, you debit to loss on account of fire, and credit to stocks and plant and machinery. That is clear. When this loss is not the loss of the company, this money is to be recovered from the insurance company. So what you do next is you reverse this loss and then show as recoverable from insurance company. So the exact amount which is shown as written off is nothing but recoverable from insurance company. So there is no impact on P&L account. Gupta Ji, again, you are not clarifying. In second entry, did you credit the P&L or did you credit the liability? No, there is no liability. There cannot be a liability because liability- Hold on. Let me explain you. I am a chartered accountant. Let me explain you. Okay. Once the loss is incurred, you have to pass complete written off. But this claim from the insurance company is not yet determined, is not fixed yet whether you will receive full amount. So ideally, you should have taken only the debit and not the credit. Or if you want to take credit, you can take to the asset as recoverable and corresponding liability. You cannot take credit to the P&L account. Since you assume that you will get full amount, which is doubtful, because insurance may not give the full amount because they will also have their depreciation or they also have their own way to calculate. So you will not get in any way the full amount. That is what I think it is not clear to you. This is the carrying value of the asset in the books. It is not the full amount. It is only the written down value which is shown in the book, which is knocked down- No, written down value is your value, but they calculate differently. They calculate differently. That like if you dispose your bike how much you will get. The point I am trying is that you may not get the full amount, sir. That is what I want to tell you. So ideally, you should not have credited the full amount to the P&L account. Generally, all the companies, they debit the-- Once the loss is done by the incident, you have to take the loss to the P&L account, but the credit entry, they do not pass to the P&L. You can see a lot of-- Recently there was a case of, I think Amara Raja, this one, I think. So you can see their benefit also. They do not take this insurance claim receivable from the P&L account because it is not determined. It is yet to be filed. In your case, the claim is not filed. Actually, you are not understanding. You have not seen the insurance document. Insurance document is, the insurance is for the cost, including the reinstatement of 15%. What is recoverable from the insurance company, they have deputed. I think, you can take this clarification offline because this is a discussion going on and other people are also waiting. It will be better if you can take. Please. Okay, no problem. My second point regarding employee benefit expenses. Yes, please. It has gone significantly up from INR 56.8 crore to INR 68.01 crore, corresponding to year-over-year. So almost an increase of about 18% increase. What steps are we taking to reduce the employees, its cost? This employee cost is annual increments are happening in the first quarter, and sometimes also goes into second quarter. This is nothing but the yearly increments of the employees. Sir, my humble request to you are the majority owner, you are significant owner. We are the minority shareholder. We do understand the concept of increment, but it is not mandatory to give such increment that, this employee cost has increased by INR 12 crore and profit has increased only by INR 8 crore. It means the increment given to the employee are way high than the performance of the company. Yes, like motivation has to be there, no doubt, sir. But I think this has to be really calibrated properly in future. In case of other companies, even the CEO has taken the cut in the salary. Note there, for example, increment instead of Wipro, for example. Although it has made profit, but in our case, we have way high increased the salary, sir. So a very humble suggestion to you, please reconsider this point going up, like in the future, sir. Because this is very significant. Sir, we have taken your advice, but anyway this is the internal appraisal and the whole thing, sir. So we have well taken your point. Thank you. Appraisal is fine. Appraisal is only process, but to give or not to give, to give how much to give, sir, it is your call. So we are only telling you that INR 13 crore, INR 14 crore, like salary has increased 20%. Profit is not increased by 20%. That is what I am telling, sir. Please do not give such a high salary, sir. Yes, sir. I think you have not fully understood that turnover in March quarter 4 was INR 432 crore, and the turnover in this quarter is INR 478 crore. So there is. Only 10% increase. No. Salary is going up by 20%. Salary. No, the 10% increase of INR 430 crore comes to INR 40 crore, and whereas the salary has increased by INR 8 crore. You are not understanding. The 10% you are calculating of INR 438 crore will come INR 40 crore. You are taking the percentage, you are not taking the amount. Thank you. If you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Ashwini Modi from Equity Group. Please go ahead. Starting production from the Harley. My first question is regarding our business with Hero. We have launched one scooter earlier and now we have launched with Harley. Are there any new product launches lined up with Hero? If you could quantify our revenue with Hero, that would be helpful. Also on these lines, if you could also help us, our content for vehicle on the Harley compared to your normal content. Thank you. I am Rajesh Sharma this side. The vehicle launch by Hero is already explained, like, under Harley-Davidson umbrella, X440 is being launched. As of now, product volume is very difficult to say from our side. This is all customer's input and we are ready for any kind of volume which Hero will ask from us because we have readily available all the products lineup which is being assembly condition and all is well established at our end. Yes. I was asking our revenue with Hero during the quarter and are there any new product launches apart from the scooter and Harley launch which you have done? Yes, there are four models. Further models are under pipeline that might be launched during few coming years. Okay. Is content on the Harley significantly different from our normal content for vehicle currently? Lighting content. Sorry? Is lighting content for vehicle on Harley significantly different from our normal lighting content? Yeah. All lighting. This is all lighting, and contents are high. Of course, all are in so value is high. Okay, thanks. Secondly, on our revenue with Yamaha, are there any new model launches which are lined up with Yamaha? Within the existing business, how do you see the demand for the export models of Yamaha? Overall, how do we see the revenue with Yamaha going forward? There are additional four models under pipeline and might be during coming months and years, these all will be launched. We are looking for a very good product sales as against our customers input and customer requirement. Wherein the export models are of course based on the requirement of individual country, and we are following that. We are very optimistic for the sales towards Yamaha project for domestic as well as export. Okay. Sir, my third question is regarding this other business which we did. That business has come down. That used to be INR 35 crore-INR 40 crore odd per quarter. It is almost down to INR 18 crore this quarter. What is the reason behind that? Other business means what you are referring? Can you clarify? Other business which we. So in the product-wise split, the rear view mirror, lighting, plastics, and the other business which is there, which was INR 19.2 crores during the quarter. So that used to be approximately 10% of our revenue at INR 40 odd crores. Yes. This other business is actually other than the lighting, the mirror and the plastic part, so it remains less weightage as per the requirement of the customer. Okay. I am asking apart from these rear view mirrors and plastic moulded parts, there is a fourth element which is considered as other. So that has significantly dropped from historical levels. I was asking about that business. Yeah. That remains as per the model because even the rear view mirror and the plastic parts. That is right. Yeah, that remains stable, yeah. Okay. Lastly, on margin. There was a dip in gross margin during the quarter. Was it more because of mix or has the RM prices increased for some elements? We have always guided for a If you recall, earlier we were guiding for a margin of 12.5% to 13%. Last quarter you saw substantial increase in margin. It was exceptional last quarter. But we had indicated that we continue to guide for 13% to 13.5% as our overall EBITDA margin. That is something we will get to. This quarter also we are around the same level. You should actually factor that 13% to 13.5% and look at the overall year because there are some marginal variance from one quarter to another. Okay, thanks a lot, sir. I will join back with you. Thank you. Thank you. The next question is from the line of Nikhil Abade from Securities Investment Management Private Limited. Please go ahead. Yeah, hi. Thanks for the opportunity. One question was, if we look at the HMSI business, so Q4 we had mentioned that there was some disruption and all. To some extent we've seen sequentially the revenue contribution has increased. Do you think it will sustain at this level or any outlook that you can share on the HMSI part? That is first part. Secondly, have we lost any market share there? What we used to have with HMSI, has that market share gone down? Anything on the models of, or with any other product? HMSI, the overall volume which is being predicted by HMSI is 4.72 million and we are having the same percentage of share which is being given to us. Next question is for- No market share. There is no market share is being down from our side. What, pardon? No market share. Yeah. It is stable. Stable, yes. It is stable as per the requirement of HMSI it is stable. As far as your question on quarter to quarter, we did mention Q4 was exceptional for HMSI. There was some glitch there. Q1 is back. HMSI is doing better and as we see even July seems to be better. HMSI also seems to be on track and we have our market share intact also. Okay. So that inventory rationalization and all what they were doing is now behind us and it is normal business for us on that. Yes. Q1 seems to indicate that. As of now, they seem to be on course. Secondly, because of this fire loss, did we have any production loss? Or would you say it was not significant to impact the sales for this quarter at any point? No, not at all. We were able to begin production back within three days. So even the customers and our employees worked overnight. So there was no production loss at all. Because what we were able to do is to use our facilities across and was able to fulfill the requirements for the customer from other facilities. So there was no production loss at all. Okay. If you can talk about the new initiatives on Gogoro and Toyo Denso. So how are we progressing there and when do you see just how are we progressing there in terms of the business and overall profile? Yeah. During our last communication also, we did about Gogoro SKD production, we have already started, and this will be ramped up in coming months. Further on, we are working on localization, domestic production, 100% domestic production. For that, we have taken the next six to eight months timeline, wherein we will do the complete SKD into CKD, and the complete domestic production will start for MCU and motor controller. Okay. This is about Gogoro. On Toyo Denso tie-up? Toyo Denso, we are already working for bank angle sensor. Further on, we are working for some new projects, which will be announced very soon. Okay. Just last two questions. On Yamaha, you said there are four models in the pipeline. Are these a replacement of existing business or are these completely new models? How should we understand this? These are all new models for domestic as well as for export market. Okay. In export, are there any new countries or is it largely same regions which we were earlier supporting? Same. These are all with the same regions. Okay. Lastly, on the four-wheeler business. What kind of investments have we done as of now through the P&L and how large is the team build-up which is happening, and anything that you can share on the progress on that side? Yeah. Vineet Sahni this side. See, at this moment, we have formed a small team, and we are actively engaged with four-wheeler customers. As a result, we have inquiries and RFQs. We are now enhancing team in technical area so that we can cater to the requirements of four-wheeler customer. So we are proceeding in a step-by-step manner to enhance this business. Okay. Fine. Sorry, I will come back in the queue. Thank you. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. The next question is from the line of Rohan from MultiAXPMS. Please go ahead. Yeah, thanks for the opportunity. My question is on provision for warranty. If I look at FY 2023 numbers, there was a sharp jump in provision for warranty. Just wanted to check the reason for that. I think you are referring the balance sheet of FY 2020 to 2023. Yeah. The provision for the warranty is made considering the evolving landscape in automotive industry, as almost all OEMs are revising their supply agreements, wherein the warranty period as well as the warranty amount for defects or rejection is more in comparison to the earlier practices. Considering that development, we made this provision. Should we- Yeah. Please. Should we expect this kind of a run rate, like around INR 11.8 crore kind of a run rate on expenses side? No. Actually, this is a provision only, and there is no actual outflow of cash in the provision. It will be reviewed after, say, some quarters it will be reviewed, and it will be looked what is the actual things. Okay. But basically, this kind of a run rate should be expected going forward as well? No, no. Okay. But it was a big jump, like from 1.95 crores to 11.8 crores. As I already Out of that, around 7.3 crores was in non-current, and balance was in current. What was the reason for that? Is it like a tenured kind of a provision that we are making? See, what I already explained, this is a matter of abundant caution, this provision is made. We can definitely relook and review it after two, three quarters or one quarter. It is a provision only. There is no actual outflow of the cash. Mm-hmm. Okay. Fine. Thanks. Thank you. Thank you. The next question is from the line of Nirvana Laha, an individual investor. Please go ahead. Hi, am I audible? Yes, please. Thanks for the opportunity. Can you tell us when you expect the money from the insurance claims to come, separately for the inventory claim and for the equipment claim? See, this process is going on, so it is definitely a long period to assess all this thing and even the insurance company takes time. We will update you again when something happens to update. Okay. From your experience from past such claims, any idea on whether it will come in this financial year or longer? No, we cannot comment. We will definitely update. Okay. You mentioned something about the claim clause. I didn't get it exactly. Did you say that it was the claim clause states that whatever the written down value is, you're entitled to 15% above that? No, no. Actually, this is what was explained to the earlier analyst, that we have to see the insurance policy. There is different insurance policies for different coverages. Unless you go through the insurance policy coverage, that is difficult to explain. That was the reason. Okay. The reason that I am asking is I am trying to understand the claim value that you will get and the replacement cost that you will incur. Do you expect significant difference between the two? Because if these are old assets, then there will be a lot of difference depending on the insurance, the clause of the insurance claim. I am just trying to understand that. Yeah, of course. Of course. You are very right in understanding. This is the written down value and of course, the replacement value will be definitely higher, and the actual assets will be definitely higher. That is what the insurance policy is for. The replacement value of the actual assets and the further reinstatement to the extent of 15%, it is all covered under the insurance policy. It is not only the written down value. The actual cost of the new assets is covered. The replacement cost is covered. Okay, thanks. Thanks for the clarification. On Gogoro, I just had a few questions about the partnership itself. Is the partnership limited to Gogoro's models in India, or are we also entitled to sell it to their models outside India and China, for example? As of now, this agreement between we and Gogoro is for India market. Going forward, it can be discussed further in coming years. Okay. Have Gogoro already launched their models in India? Not yet, but very soon they will be launching this vehicle. Okay. All right. I think you had said in the last call that initially you will start from CKDs, and then you will gradually move to localization. I know it is new technology, new experience for you, but do you have a timeline in mind? How much time will it take you to indigenize the production? Yeah. Total, eight to nine months is being discussed with Gogoro, and we hope by coming next financial year, we will be localized this part and start supplying to Gogoro. Okay. What percentage will be localized? Are you in a position to say that? Will it be 100% or will it be less than that? As of now, no. We are working on that very closely with our suppliers as well as Gogoro. Okay. Last question from my side is, you said that there was some softness in EV two-wheeler sales in June. If you can tell, how much did they come down from May to June, in EV two-wheelers, and how are we seeing volumes in July, August? Is it at the June kind of numbers, or is there an uptick? If you can comment on that. What we did mention was at the industry level, April, May were good. May was the highest, in fact, ever, on a monthly basis. June saw a dip from May, and July seems to be, as per the data available, has improved the external data. This is the industry data. As far as we are concerned, our EV sales is increasing. Our share now is close to 6%, which is fairly a good number, and that will continue to ramp up during the years because we have a significant leadership in this sector. What we were giving was an overall overview because of that FAME II subsidy, that there could be couple of months here and there. But directionally, if you look at over the next 12, 18 months, the industry will continue to grow and we will get a decent share from that. Okay, thanks. One last thing. Can you talk about seasonality in your business in terms of quarters? Is quarter 1 seasonally a little weak? Q1 is relatively lean. Then the season is the festival season. Festival season also depends on the timing. Sometimes it is in September, sometimes in October. You will see a sort of a ramp-up around festival. Then there is a sort of a little bit of lull, then March goes up. I think there is a little bit of seasonality if you look at quarter to quarter. Okay. All right. Thanks for answering my question. Wish you all the best. Thank you. Thank you. Thank you. Anyone who wishes to ask a question may press star and one on their touch-tone phone. The next question is from the line of Sahil from Monarch Networth Capital. Please go ahead. Yeah. Hi. First of all, congratulations for delivering results better than the industry. My first question is regarding the limited providence of the one that you mentioned in the annual report, the USB charger and G-APS sensor. Could you provide any details on that? I mean, what exactly is that? How it would shape up the timelines? Sahil, this is Arvind. Actually, for Toyo Denso, we are already in relationship of technical collaboration for the bank angle sensors. Whatever is new is for the specific product and customer. As of now, nothing to share more about that. Got it, sir. Secondly, this is a question about the overall two-wheeler industry. We saw a 9% decline in July, year-over-year, for the overall two-wheeler sales. On the demand front, what do you see? What is the outlook as such? Do you expect some near-term weakness? I think that the rain did have an impact on a short-term basis, which would be probably for a month or two. I think we are expecting a good season again. The coming quarter should be over the next 3 to 5 months, and for the season should be good. We are yet optimistic, as far as the full year is concerned, we are still hoping to get a double-digit increase in the two-wheeler industry. Right. Another question on the EV front. Ola did come out with the Ola S1 X yesterday, the unleashing happened. Are we going to give them some supply, the lightings for Ola, this model also, S1 X? Yes. All Ola models as of now, whatever is being produced by them is with Fiem Industries. Yesterday, 15th of August, whatever is S1 Air is being launched, all lamps are being supplied by Fiem Industries. Got it. One last question related to Fiem itself. Sir, I would just want to understand the interest cost, which seems abnormally high. Even if we look at the borrowings, maybe the interest cost as a percent of borrowings, even if I remove the lease obligations, still it seems to be very high. What's exactly over here, what consists in the interest cost? You see, this is a zero debt company. There is no interest cost except that the interest cost on bill discounting which the company has taken from SBI. So there is very little interest cost now. That is the bill discounting charges. There is absolutely no interest cost of the company. In the refining in the future, quarter slowly, this bill discounting is also going to be over because the banker is now making arrangement with the customer and they will have a tie up with the customer and the customer will in turn give us the discount. So we will not be only having this bill discounting charges in the current quarters. So the INR 5 crore kind of interest cost that was there in FY 2023 whole year, that could be attributed to bill discounting itself? Or some part of it? Yes. Okay. Yeah. On a bill discounting. Okay. Thank you. That answers my question and all the best. Thank you. Thank you. The next question is from the line of Nikhil Apadia from Securities Investment Management Private Limited. Please go ahead. Hi. Just one question. This is on our gross margin. Last quarter, we had reached almost 40% gross margin and gross contribution margin. In this quarter, we are at around 38.3% or in the range of 38%. While for most of the players what we have seen is that the RM cost deflation has actually helped the auto ancillary. How is our case different from most of the auto ancillary players? What part of the cost element has seen a higher increase? Or is it more because of product mix? If it is product mix, if you look at our LED contribution is the highest in this quarter across 16, 20 quarters. I would have thought that the gross margin and EBITDA margin would have improved year-on-year and both sequentially. If you can just help us understand that. Are you comparing it with sequential? Let's take the sequential, I think you're looking at that. If you see our sequential margin has declined, right? If you look at the EBITDA also, that has declined. Even the LED share was higher last quarter. For the full year it was lower, but for the last quarter it was exceptionally product. This is a quarter here and there you will see various things. This is product mix. One particular model which is doing well, that supply is going, that has a higher LED contribution, then it will normalize. For example, on the LED, we've been guiding that we will hit over the next 18 months, 60 odd percent. We are at 53.5% now. Last quarter was 56. So the LED front, that's where the journey is. We did mention that last quarter also, we had some sort of escalations which had come through. Hence the normalized margin should be looked at in that range of 13.5, which is where we are right now. On the third, I think the first question you asked around RM cost being passed, ours is basically passed through. So, with the quarter effect here and there, lag here and there, we will end up with a similar kind of structure. It doesn't really benefit or- Depend on the raw material. That's right. Okay. But sir, one just follow up here. But if you look at sequentially, the sales is also much stronger than what we were in Q4. We are almost INR 60 crore-INR 70 crore higher than what we were in Q4 of last year, INR 40 crore higher. So wouldn't have that contributed towards a better EBITDA margin? Maybe gross I understand that product mix was inferior of lesser LED versus Q4, but EBITDA should have improved, right? Because the sales and operational- The answer there is escalation. So one is, as you rightly sort of understood and answered yourself, the higher LED share in the last quarter, but also escalation had come through last quarter, which is why the margin had abnormally shot up suddenly. If you see our normalized margin, this is where we are. Between 13% and 13.5% is what we are guiding. Okay. And the full year CapEx would remain around INR 50 crore-INR 60 crore or any rethought thinking on that number? No. That is at this one. Okay, sir. Fine, I will come back. Thanks. Thank you. The next question is from the line of Gopinath, an individual investor. Please go ahead. Yeah. Thank you for the opportunity, and I have two questions. The first question is, when can we expect revenues from Gogoro? Next year. Yes, we have recently started the production, and might be by next year, we can see the revenue from Gogoro with the individual customer. Okay. Thank you. The second question is regarding this fire accident. I want to understand if there is any difference between the actual amount, for example, around INR 50 crores, but is there any final claim if you receive around, for example, INR 40 crores, then that INR 10 crores we have to show it in P&L. It will happen only after insurance claim is done. Is this correct? No, no. The amount receivable will be much more than what is shown because this is only the carrying amount. This is the worst minimum amount which is shown in the books as written off. There is no question of anything even a penny less than this. Sorry, I didn't get. What I want to understand is whatever the loss occurred, incurred or occurred. The whole amount we are going to get from insurance company? That is what I'm saying. This is only the affected assets have been written off. What amount the company is likely to recover is when the final details will be made, and then the claim will be filed. That is the time when company will know what is the actual amount to be recovered. But it will for sure be more than what is written. Okay. Got it. What about this FY 2024 outlook with respect to revenues? Yeah. Outlook is very good. Basically, there are four, five factors. One is the auto industries growth. That itself is one of the factors. Then the new projects, which we have more than 80 in our hand, that is going to be another factor for our growth. Third is increasing contribution of LED, because the more LED usage will be the better growth for the company. Fourth is the indirect export to the LED growth. Basically, what we are supplying to the OEMs here, they are exporting. Basically, it is indirect export for us. For example, Yamaha, Honda, Suzuki, Piaggio, like that, these customers, we are having indirect export through them. Then higher market share in EV. That also is going to be the driving factor for our company. Then last, four-wheeler segment will also going to give us a big chunk of growth in future to come. Okay. Thank you. Thank you. The next question is from the line of Asin Modi from Equityz. Please go ahead. Yeah. Thanks for the opportunity again. This last quarter, we indicated our order book of approximately INR 9.5 billion. Could you please give our current order book? Also if you could give some color on that, what is replacement business and what is new business, and some SOP of this order book, what will come this year and what will come next year? Yeah. Order book is same what we declared. Almost 85 to 90 products are online right now, and we'll be expecting 25%-30% sales revenue within this year and balance will be next year and so on. Okay. In terms of LED, our value share currently stands at approximately 56%. What would be a volume share, and what would the volume share of LED be in the industry currently? See, industry is now growing and whatever new facelift models are coming or new models are coming, those are coming with the LEDs only. This contribution year-on-year will increase, and we are expecting every year in between 5%-10% LED increase will be there in the products. Okay. So volume share of LED would be approximately 20%, currently in our business? Yeah. It is very difficult to comment on that. Yeah, sure. Thank you. We are seeing that there is a decreasing trend. But we are seeing the increasing trend in that. Okay. Yes, sir. I think, can you say that currently we are sitting at 56% and we have a target of 60%? Given that volume share is low currently or every day, so we can easily surpass that level in the next 18 months? Yes. We are saying 5% plus every year, so this is what we are targeting over the next 12 to 18 months. Of course, it depends on the industry, but I think a 5%-7% shift every year is a reasonable number to go. Okay. Thanks a lot, sir. I done with this. Thank you. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. The next question is from the line of Karan Gupta from Varaneeya Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. My question is related to the four-wheeler segment that you are entering now to Vineet Sahni, sir. In the competitor where you already launched, they are majorly in the four-wheeler market, four-wheeler lighting segment, where the margin is around 7%-8% or maybe 7%-9%. Here in Fiem, what is the different strategy we are using or what different we are trying to approach the market, to not compromise with our margin? Yeah, this is a good question, and thank you for that. See, the products in four-wheeler, and as you mentioned, the earlier company, that also has many legacy products because that company is a lot of halogen products and legacy products. What we are trying to enter is into a new technology products as well. Secondly, Fiem has very deep integration of processes, which leads to frugal manufacturing, basically catering to two-wheeler market. We are going to use this strength to enter into four-wheeler market and maintain the margins and even try to grow. That is our strategy. Okay, so new product in four-wheeler, all will be in LED or more advanced technology? We are trying for that. It will be a mix, but then we will use our deep integration capability to continue to increase the margins. Okay. Is any CapEx we are planning to take? No. At this moment, we are in the process of market study and preparation of business plan. We shall update the investors as soon as we are ready. Okay. Thanks. Thank you. Thank you. Thank you. A reminder, anyone who wishes to ask a question, may press star and one on their touch-tone telephone. The next question is from the line of Gopinath, an individual investor. Please go ahead. Yeah, thanks for the opportunity. Just I have one question. Is there any plans for the stock split or bonus? Can you repeat your question, please? Is there any plans for the stock split or bonus? No. As of now, there is no plan, but appropriate time, board will consider this. Okay, thank you. Thank you. Thank you. The next question is from the line of Radha from B&K Securities. Please go ahead. Hi, sir. Thank you for the opportunity. I wanted to ask a bit on the industry perspective for the new products, hub motor, MCU, et cetera. Since we are expecting our revenue to come from FY 2025 onwards, what will be the margin trajectory of these products initially, and how will it pan out in the next five years, given that many other players are trying to enter this product? Also, secondly, currently, is there any imports of such product in India? Yes. As of now for Gogoro, we are using SKD products. All products are being imported from Gogoro, and wherein the product is being made as per agreement is only for Gogoro as of now. We will be accepting overall revenue from Gogoro itself. Further on, the technology and the partnership can be seen for the new opportunities wherein we can serve for this model to other customers. With this addition of new product like hub assembly and all that, per vehicle, our participation will be totally around INR 15,000-INR 17,000 per vehicle. Okay, understood, sir. And sir, margin profile? We are still working out, but definitely it will be in line with that. In line with? With our existing margins. 13.5%? Yeah, approximately. That would be over a period of next 3-5 years when we reach an optimal utilization. Yes. Yeah. It's going to be very high in next couple of years. Initially it will be less because of imported content, and as we localize, it is planned to increase. Okay. So, sir, over a period of time, we can increase our overall margins beyond 13.5% because of these products? Yeah, we are working on that, how to improve our margins. Okay, sir. Thank you very much. Thank you. As there are no further questions, I would now like to hand the conference over to Mr. Sahil Sanghvi for the closing comment. Yeah, just wanted to thank the management for patiently answering all the questions. Also on behalf of Monarch Networth, we thank all the participants for joining the call. Gentlemen, would you like to give any closing comments? Yes. Yeah. I would like to thank everyone for participation in today's conference call. I do hope that we have provided satisfactory answers to all your queries. If you have any further questions, please don't hesitate to contact us. Thank you, and have a good day. Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.