Ladies and gentlemen, good day and welcome to the Q1 FY25 earnings conference call of Lumax Auto Technologies Ltd. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. 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 the touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Jain, Managing Director of Lumax Auto Technologies Ltd.
Thank you, and over to you, sir.
Thank you. A very good afternoon, ladies and gentlemen. A very warm welcome to our Q1, FY 2025 earnings conference call. Along with me on this call, I have Mr. Deepak Jain, Director, Mr. Vikas Marwah, CEO, Mr. Sunil Koparkar, Managing Director, IAC India, Mr. Sanjay Mehta, Director and Group CFO, Mr. Ashish Dubey, CFO, Mr. Naval Khanna, Corporate Head Taxation, Ms. Priyanka Sharma, Head Corporate Communications, and Mr. Ankit Thakral from the Corporate Finance Team, along with SGA, our Investor Relations Advisor. The results and presentations have been uploaded on the stock exchange and the company's website. I hope everybody has had a chance to go through the same. In the recently uploaded investor presentation, based on our internal assessment and product profiling, we have now reclassified our diversified products under four major domains. The first one being Advanced Plastics.
First, while it was bifurcated into integrated plastic modules, lighting, and emission products, along with the IAC product portfolio. Number two is the Structures and Control Systems domain, which was previously bifurcated between the fabrication and shifter systems business. Number three, the Mechatronics, which includes the electronics, sensors, and the telematics components, and the last one being the Aftermarket domain. We commenced FY 2025 with a solid start. Despite witnessing headwinds in the passenger vehicle segment, your company has achieved a robust 20% year-on-year growth in revenues, reaching INR 756 crores for the quarter. This growth reflects our unwavering commitment to excellence through our diverse product offerings across OEMs. Speaking about the industry, a recent report highlights that the automotive and ancillary sector is expected to contribute 7.1% to the national GDP.
Key government initiatives, including Make in India, ongoing investments in infrastructure, and the emphasis on sustainable energy management have been instrumental in strengthening the sector's resilience. These efforts have not only supported the industry's growth but also positioned it as a critical driver of the economic growth. The growing domestic demand from both urban and rural populations, new model launches by OEM, and the trend towards premiumization have collectively boosted the content per vehicle, driving the overall expansion of the component industry. Discussing on the quarter's performance, the industry showed mixed results across most segments. Although passenger vehicles had a 6% growth, SUV continued their growth trajectory. The two-wheeler segment has seen a strong recovery since the second half of last year and is maintaining this upward trend.
We anticipate an improvement in the CV performance now that election uncertainties are behind us and an expected uptick in the capital expenditure cycle is going to happen moving forward. The Production Linked Incentive schemes for the automotive sector are viewed as a driving force for the localization of advanced auto components, creating a supportive environment for companies to invest in and manufacture within India. The Electric Vehicle segment, however, did experience a slowdown in growth following the conclusion of the FAME subsidy. We believe that two-wheeler EVs will continue to outperform the EVs in the passenger vehicle segment over time. In the long run, legacy industry players with robust networks across the country are likely to thrive. Overall, we are optimistic about the industry's performance in the second half of this fiscal year, driven by the festive season and multiple new launches planned by the OEM.
Speaking on Lumax Auto Technologies, Lumax Tech is a leading automotive component manufacturer in the country, having partnerships with globally leading joint venture partners and having relationships with almost all major OEMs in the country. Coming to the product category-wise performance in the quarter, the Advanced Plastics domain has grown by 13% from INR 371 crores in Q1, FY 2024 to INR 420 crores in Q1, FY2025. Passenger vehicle segment is the major revenue contributor for this domain, constituting almost 70% of the total revenues. Our outlook for this domain remains strong. With huge cross-selling opportunities and addition of new product lines, the order book for this domain stands at INR 610 crores. Next, the Mechatronics domain grew by more than double from Q1 of last year at INR 28 crores in Q1 FY 2025 versus INR 11 crores in Q1 FY2024.
This domain has a huge opportunity in terms of the volume share in the new model launches, mostly again in passenger vehicle segment, as many products are lined up for SOP in the second half of the current fiscal year, which would further increase its revenue. The order book stands at INR 150 crores for this domain. Coming to Structures and Control Systems, revenue has grown by 12% from INR 147 crores in Q1 FY2024 to INR 165 crores in Q1 FY2025. The passenger vehicle segment contributes almost 60% of the total revenue. Our outlook for this domain remains strong, with the opportunity to penetrate into the premium and EV segments and addition of new technology-driven products, with the order book standing at INR 240 crores. Lastly, our revenues from the Aftermarket domain have seen a sluggish growth in Q1 FY2025 with respect to the corresponding quarter of last year.
This phenomenon is not just for Lumax but across pretty much all tier one and other peer group companies, which have a significant presence in the Aftermarket. There has been either a negative growth or a very muted single-digit growth across the tier one space, and this is largely because of a poor income realization within the Aftermarket. However, the situation has already started to show signs of recovery in quarter two, and we expect to post double-digit growth for the full fiscal year. The total order book, considering the value of all four domains, is INR 1,000 crores, out of which 90% is new business. 25% of the total order book will mature in the second half of FY 2025, 55% in the next fiscal year FY2026, and the remaining 20% in FY2027. The EV contribution is approximately 40% of the total order book.
During the quarter, there have been some business updates. On July 20, 2024, the company has filed the draft scheme of merger with the NCLT of its 100% subsidiary, Lumax Ancillary Limited, with the company for efficient utilization and synergy of resources. The appointed date of merger will be April 1, 2024, subject to necessary regulatory approvals. The Bengaluru plant of the company cleared the first stage of assessment on excellence and consistent TPM by JIPM in the month of July 2024. The final assessment of the same is scheduled in January 2025. The board of directors has approved the setting up of a liaison office in Japan to explore new business prospects and further deepen the relationships of the company with its partners and customers. As we move forward, we remain focused on technological innovation and operational efficiency to sustain this growth momentum.
We are confident that our initiatives will continue to drive value for our stakeholders. Now, I would like to hand it over to Mr. Sanjay Mehta, Director and Group CFO, to update you on the operational and financial performance of the company.
Good afternoon, everyone. Let me brief on the operational and financial performance for Q1 2025. With increased focus on passenger vehicle segment and integration of IAC, our share of passenger vehicle is stood at 50% in Q1 2025, as compared to 45% in Q1 2024. In Q1 2025, two- and three-wheeler contribution to overall revenue is at 24%, Aftermarket at 11%, CV at 8%, and balance 6% was contributed by other categories. For more detailed operational highlights on customer-wise revenue breakup, one can refer to our investor presentation uploaded on the exchanges and company's website. On financial highlights, the consolidated revenue for Q1 2025 is stood at INR 756 crores, as compared to INR 632 crores, up by 20% YoY. EBITDA margin is standing at 14% for Q1 2025. Absolute EBITDA for Q1 2025 is INR 105 crores, a growth of 20% on year-on-year basis.
At PAT, minority interest for the quarter is at INR 42 crores, as compared to INR 30 crores in Q1 FY 2024, a growth of 38%. The tax rate for the full year is 26.3% and is likely to continue in the same range in the future. There has been no CapEx during Q1 FY 2025, as we have been very prudent looking into utilization of our overall capacity. However, with many SOPs planned for the second half of the year, the CapEx outlay for the whole year is estimated to be around INR 120-140 crores, a down by earlier guidance of INR 150-175 crores. The company is sitting on healthy free cash of INR 416 crores as of 30 June 2024, which is more than the long-term debt of INR 391 crores. With this, we open the floor for questions.
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit Hiranandani from SMIFS Limited. Please go ahead.
Yeah, congratulations, team, for the decent set of numbers. Sir, my first question is on the IAC. Basically, we are seeing that IAC revenue has grown by 7.5% year-on-year in quarter one, despite M&M's growth of 24% for the same period, and despite IAC has been winning new businesses from other clients as well. Sir, what is the reason for this low growth?
So, Mr. Hiranandani, just two clarifications. Number one, when you're talking about a 7.5% growth on IAC in Q1, this includes a huge amount of tooling revenue, which was there in quarter one of last year. There has been no tooling income in quarter one of current fiscal year. So, if you were to compare just the product revenue, the manufacturing revenue, that has actually grown by 19%, up from INR 182 crores last year first quarter to INR 216 crores in first quarter of this year, which is pretty much in line with Mahindra's own growth of 15% on a Q1 to Q1 basis in terms of the production numbers.
Yeah, thanks for the clarification, sir. Sir, continuing with the IAC, so the IAC's EBITDA margin, including other income, is about 19% level. So, although it dropped QoQ by roughly 140 basis points, but is this 19% level sustainable?
As we explained in our last investor call, the normalized and the sustainable EBITDA for the IAC business is closer to 17%. The last quarter, which EBITDA, which was 21%, it also included certain policy corrections. This quarter also, there is a one-time or an exceptional income of around INR 4-INR 5 crores relating to this correction of this tooling provision reversal. Excluding that, the normalized EBITDA for this quarter is closer to 17%. The normalized EBITDA of 17% is something which clearly the guidance is that we should be able to sustain that. As we continue to grow the business, we will make efforts to further increase the margins.
Sir, all those CapEx we were doing in IAC to increase the capacity, so that is all done, right?
It is an ongoing activity. In terms of CapEx on IAC, some part of it is already done. Out of the INR 120 to INR 140 crores total CapEx guidance for Lumax Auto Technologies in the current fiscal, I would say almost close to 50% of that would be in IAC towards the new model launches, which are expected in the H2 of the current fiscal year.
So, sir, broadly, utilization level is still above 90% for IAC?
That is correct.
Okay. And, sir, what is happening basically in the Aftermarket side? Because we have just grown 1%. I understand that from my checks, the gray market has emerged out again. So, is this right, sir?
No. So, I think Aftermarket, as I mentioned in my opening comments, number one, the Aftermarket, there are two challenge points. One, the OEMs, by their own service networks, have definitely become a lot more aggressive on the pricing because they definitely feel that they can garner a bigger piece of the pie of the Aftermarket. So, the OES, the OEM spares, is becoming a lot more competitive when it comes to pricing, which is definitely resulting in a bit of headwind in Tier 1 growing and expanding their Aftermarket channels. However, having said that, we still continue to believe that a double-digit growth for the full fiscal year is something which we should definitely be looking at. And for quarter one specifically, this was something which is across the industry.
There has been a lot of pressure on realization of income from the Aftermarket channel, and hence, we withhold the further pushing of stocks till the realization happens, and if you look at other Tier 1's, pretty much everyone is a similar bandwidth of a flatish or a negative or a very muted single-digit growth.
Thanks. Sir, my second question is on basically our consolidated entity is about 50% revenue comes from the passenger vehicle segment. And as per our on-ground checks, the PV dealers have high inventory of 60-90 days, plus the significant discounting is ongoing, and most of the dealers are also guiding some slowdown to lower sales for the upcoming festivals. So, sir, based on this, are you reducing your consolidated guidance of 20%-25%, or you're still maintaining that revenue growth guidance?
I would say that the full-year guidance for the consolidated entity should be anywhere between 15%-20%. You're absolutely right that there are headwinds in the passenger vehicle industry currently in Q1, and we do anticipate this to continue in quarter two as well. However, most of our growth is coming from new models and new product introductions into the current models. It would be a new revenue for us rather than being dependent on the volume growth of the current models in the market. For the full year, my guidance would still be 50%-20%. However, I believe in quarter two, we probably will be looking at a slower growth rate, even compared to quarter one growth rate on a year-on-year basis. The majority of this growth will come into H2.
Sir, the final last question. This is a bookkeeping question for the consolidated entity on a YoY basis. The employee cost increased substantially, and similar is the case for other expenses. So, any one-off here?
So, if you compare with that Q4, there has been an increase in manpower cost for about 1.5%. One of which there was one-off in Q4 of the last year, one being certain accrued gratuity impact, and other being the, again, the relevant policy correction in which there were certain costs that were transferred to inventory, and there were certain reversal of revenue, more specifically IAC, which led to reduction in manpower cost in Q4 of last year.
Sir, year-on-year also, we are seeing substantial increase in employee and other expenses.
Year-on-year, there has been an increase of about 1% on, you can say that, if you see as a percentage of sales. So, that has been only like inflationary impact, which has been a part in this quarter.
Okay, so we should know.
Going forward, the manpower cost on a consolidated level should be sustainable at a similar 13% mark. That should be the yardstick which we should go by. And again, one quarter, it may be at about 14 or 1%, but 13% is what we expect to be sustainable.
Okay. Okay. Thank you, sir. All the best. I'll come back in a bit.
Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Payal Shah from Billion Securities. Please go ahead.
Good afternoon, sir. Thank you so much for the opportunity. I have a few questions. First, we have seen a good growth in our content for vehicle, roughly 4X in the last few years for PVs. So, I just wanted to understand, what is the scope for growth here?
I think the scope for growth continues to remain quite strong. The Mechatronics domain you've seen on a quarter-on-quarter basis has had a substantial growth, primarily on a low base. And also, the order book will continue to come in probably towards the end of this year. I would say that the content per vehicle has, as you said, grown by almost 4X in the last five years. And we do expect to penetrate this content per vehicle in a wider population of models across OEMs rather than taking it further notch up from 4X to 6X. I think there is still a lot of opportunity for us to cross-sell our products across models and hence get the benefit of this 4X content per vehicle growth in other OEMs as well.
Okay. So, my next question is, Aftermarket growth has remained flat, as you mentioned. We are seeing cash collection issues. So, can you highlight why the industry is seeing this issue? What are the reasons behind this issue?
There are many reasons. I think, number one, the liquidity in the Aftermarket is a bit of a challenge. Again, Aftermarket works on a very different cycle. Quarter one usually is also a sluggish quarter, where quarter four, there is a lot of inventory which gets piled up, and people probably do not have fresh orders in quarter one to that extent. However, as I said, we've already started seeing some signs of improvement on the realizations in Quarter two. And hence, we are still hopeful that for the subsequent quarters and for the full fiscal year, we still should be anticipating a double-digit growth in the Aftermarket.
That's helpful, sir. And my last question is, there was an intimation regarding giving some intercorporate deposit to some entity. So, I just wanted to understand the rationale behind this. If you can, please explain.
Yeah, so there was an enabling resolution which we had proposed in due course. We've had certain internal rediscussions and deliberations, and we will not be going forward with this.
Okay, sir. That's it from my side. Thank you so much.
Thank you.
Thank you. The next question is from the line of Satish Sharma from ACE Investments. Please go ahead.
Hi, sir. Good afternoon. Thank you for the opportunity. I'll go ahead with my question. So, my first question is, now that we are very well integrated IAC and we are benefiting from the synergies as well, so, are we looking at any other inorganic opportunities in this fiscal year?
We are always evaluating inorganic opportunities for addressing our customer needs. As we speak, yes, we are evaluating other opportunities as well. Unfortunately, I cannot disclose or divulge more details. Yes, we continue to remain engaged for inorganic growth.
Sure. My next question is, I just wanted a view on the performance of the EV business. So, industry-wide, I believe we are seeing some low traction with the removal of the FAME Subsidy. So, yeah, I wanted to understand from you how the performance has been.
I think the performance on EV, as I mentioned, definitely in the two-wheeler space, the EV footprint continues to expand. I think if you look at the numbers, they are very encouraging, and they continue to grow on a month-on-month basis. The top podium positions have changed. I think now, more or less, the legacy players are the ones commanding these podium positions rather than the new entrants. I firmly believe the two-wheeler EV penetration will continue to increase going forward. However, in the passenger vehicle space, I think there seems to be a bit of a shift in the consumer mindset. Hence, the EV penetration will continue to happen in the passenger vehicle space. However, the rate at which it penetrates will be much slower than that of the two-wheeler.
Having said that, almost 40% of our order book, which Lumax Auto Technologies holds at about INR 1,000 crores, almost 40% of 400 crores of that order book is coming from the EV space itself, mostly driven by passenger vehicles.
Sir, so do we also have, like you spoke about two-wheelers, do we also have Ola? Are we present with Ola?
No, we do not have any business relationship currently with Ola.
Okay. Got it, sir. Okay. These were the two questions. In case of any other, I'll come again.
Sure. Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Amit Hiranandani from SMIFS Limited. Please go ahead.
Yeah. Yeah. Thanks for the opportunity again. Sir, my question is on the margin side. So, especially on the standalone margin, there's an improvement in the margin despite the sluggish growth in the Aftermarket business. Generally, Aftermarket is a high-margin business for you. And despite that, the margins have improved. So, what has led to this improvement and sustainability of the same? And secondly, the growth outlook for the standalone business, please.
So, you're absolutely right that margins have expanded on the standalone as well, despite Aftermarket being muted. And again, the reason for that is the diverse product portfolio. If you look at the growth across the other OEM domains, they have been all in double digits. I think the Advanced Plastics grew by almost, and the Structures and Control Systems both grew by almost 13%. And the Mechatronics grew, obviously, by almost 150%. However, it was on a smaller base. These also have a stronger margin in terms of realization compared to some of the other product lines which we are into. So, I think it's a combination of the product mix across our domains and across our different joint venture partners, which has resulted in the expansion of margins. And we're very hopeful that these margins should remain sustained on a longer-term basis.
Of course, as I said, there are some headwinds which we are currently battling in Q2 based on demand. But still, the margins should remain intact. Your second question on the guidance for the full year, as I said, at a consolidated level, I would say it would be about 15%-20%. However, standalone should probably be maybe close to around 10% or so, just the standalone. And then subsidiaries will probably grow at a much faster rate, probably around 30%-35% is the growth we are looking at the subsidiaries.
Okay. Thank you. And secondly, so overall, consolidated EBITDA margin guidance in last quarter, you have said that it will be nearly same what we have achieved last fiscal year. So, is this guidance remaining, sir?
Yes. I think the EBITDA margins, if you see the last three to four trailing quarters, they have been sustained at what we have achieved in quarter one of FY 2025. And my estimate and my guidance would be that we should be able to sustain the current EBITDA margins while growing the top line. Of course, the absolute amount will continue to grow.
So, sir, generally, the market looks into, I mean, excluding the other income. So, if we exclude the other income, there is some dip in the EBITDA margin. So, 11.6% is what is excluding other income. So, are you able to achieve that 13% level? Because to achieve that 13% level, the company will need to keep growing the margins to a 13%-14% level in the coming next three quarters. So, are we confident to achieve that last year's level margin without other income?
So, other income for the whole year will remain constant, which was in the range of around INR 45-50 crores. So, answer to your question, yes, without other income, we will sustain the last year EBITDA margin as well. And including other income also, we will sustain.
Okay. Thank you. And sir, still bookkeeping question. Wanted to understand the total debt, including the long-term, short-term, and current maturities. And this is basically as on 30 June. And what was the 31st March, the same figure?
Total debt is INR 660 as on 30 June, and it was INR 680 on 31st of March. It has been reduced by INR 20 crores.
So, sir, despite reduction in debt level, the interest cost, Q1, Q2 remains broadly the same?
Because of the interest cost in general of working capital, even the long-term also has been slightly increased. But we have taken the because the agreement was in lock-in, and lock-in is expiring, I think, within two months' time. So, we are renegotiating, and I think therefore the interest should be back to the normal level.
Okay. And sir, the guidance for CapEx, you said about INR 140 crores for FY 2025. So, where we are planning to spend this money?
The guidance for the full year would be about 120-140. As I said, 50% of this CapEx would be in IAC to service the new model and to expand certain capacities in the Pune region. There also would be certain the Structures and Control Systems would be about 20 odd crores. The Mechatronics would also be about 20 odd crores. And the remaining part of the plastics, apart from IAC, would also be about 20 odd crores. So, give or take, it would be equal in the other region or the other domains. But IAC would be about 50% of the total CapEx.
Got it. And sir, one question on the Lumax Cornaglia . Just one more feedback. Are these margins for the plastic fuel tank lower than the 17% margin what Lumax Cornaglia in general achieved?
So, the plastic fuel tank is a very recent entry. We went into the SOP just two to three months back. The market is still evolving. I think going ahead on a sustainable basis, once we hit critical mass, which we estimate to be about 30,000 tanks per year, at that time, the EBITDA should be anywhere in the range of 15%-18%.
So far is because of lower utilization, but it will increase to the company level, 17%.
LCAT or Lumax Cornaglia currently is operating at higher than 17%. It is closer to sustainable around 20% something right now.
Yes. So, but the plastic fuel tank is presently lower margin than what the company is doing right now.
The plastic fuel tank actually has not had an offtake yet. It's a very small contributor to the overall Lumax Cornaglia revenues. Hence, majority of the margin is coming from other product lines. Once we do hit critical mass later this year, we do expect the margins, as Vikas mentioned, to stabilize of the plastic fuel tank, in a similar vicinity as the overall Lumax Cornaglia business. Maybe it would start at about a 15%-18% mark. Then thereafter, once we do hit a certain order quantity, then we will likely expand that further.
Very clear, sir. Very clear. And sir, one last question. Basically, this is based on the FY 2024 number for Alps Alpine. So, that subsidiary has just grown about 1% on the top line. And so, what is the reason for this low growth and outlook for the next three years for this subsidiary? Because I believe that this is a very important subsidiary for the company. Secondly, similarly, Lumax Jopp, there is also we have seen revenues have dropped in FY 2024 from 9.5 crore to over 8 crore in FY 2024. So, if you can clarify both these things, please.
I think if you look at FY 2025 for the full year, and I'm not going to be talking about quarter one specifically, but if you look at the next three quarters, both the entities you mentioned, Alps as well as Lumax Jopp, are expected to grow at a very significant rate, although on a low base. Alps would grow anywhere upwards of 30%-35% on a full year basis. And Jopp would probably grow at 70% or upwards on a full year basis because they both are sitting on a good order book, which kicks in in the H2 of this fiscal year.
All right. Sir, many thanks, sir. All the best. Thank you.
Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Hitesh Goel from Rutish Advisors. Please go ahead.
Thank you for taking my question, sir. My question is on this subsidiary revenue. So, if I subtract the overall subsidiary revenue from IAC, which you have given, right, we see a 45% YoY growth, right? But when you do that for the EBITDA also, the EBITDA growth is only 31%. So, basically, there is a steep drop in EBITDA margin on a YoY and Q1, Q2 basis. So, can you tell us why? Is there something which has happened in one-off expense or something which we have missed?
The subsidiary growth, which you see on top line of 45-46%, also includes the Lumax Ancillary revenues, which was new in quarter one. I would think that 30% of the 45% would come from Lumax Ancillary . However, the Lumax Ancillary business currently operates at a lower margin than that of the company overall. Hence, you do not see the similar rate of change at the EBITDA level. However, having said that, I think we are focusing on how to synergize our capabilities and utilize our cost competitiveness across the group to try and, again, improve the margins of Lumax Ancillary . That would be one of the major reasons why you see this anomaly.
So, Ancillary , you said that it's operating at 20% margin for first quarter. And Lumax Mannoh was also around 16%, which was last year, right? Is that right?
That's correct. I think most of these joint ventures are running at double-digit 16-plus margins. The major reason is the Lumax Ancillary, where you see a top-line growth, but you do not see that bottom-line margin extension or contribution.
In IAC, sir, one more question. In IAC, you will be supplying to Tata Motors' Curvv recent launch also, right? You've said that in previous phone calls.
We will be supplying to Tata Motors, yes. We've got into Tata Motors as a full-service supplier. We used to be engaged with Tata Motors only from a designing work earlier. But this will be the first time where IAC India will become a full-service supplier, including design and manufacturing of the product for Tata Motors going forward.
Okay. Great, sir. Thank you very much.
Thank you.
Thank you. The next question is from the line of Yug Modi from AB Capital. Please go ahead.
Thank you for this opportunity. Sir, I just had one question. How are our smaller JVs faring in this quarter? And what is your optimum JV land in Pune sector? When do we expect them to become sizable in terms of revenues?
Currently, also, if you see, we have targeted for ourselves 40%-45% growth in terms of the joint ventures this year versus the previous year on a full year basis. While we have two very mature joint ventures in this, which is Lumax Mannoh and Lumax Cornaglia, they will continue to outpace the industry growth by a couple of basis points. But the other JVs are coming to traction. A large part of the order book that you see of INR 1,000 crores, if you take out the IAC, is coming from these other joint ventures order book of Lumax Alps Alpine, Lumax JOPP, amongst the two which are now slated to grow. We continue to maintain a conservative guidance on one particular JV, which is Lumax FAE, because this is a totally regulation-controlled product.
When OBD-II norms announcement happens in terms of a second sensor getting introduced, only then we'll be able to give a more clear picture of that. But to answer your question, all the JVs, they hit their critical mass with the exception of Lumax FAE in the next 12 to 24 months. And they all start operating at a double-digit EBITDA margin.
Perfect. That answers my question. Thank you, sir.
Thank you.
Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Apeksha Bajaj from AV FinCorp Private Limited. Please go ahead.
Thank you for the opportunity. Sir, I wanted your view on the inventory buildup, which is getting across dealers, across OEMs. So, will the auto sector underperform for the next couple of quarters or years? And how is the company dealing with it? Thank you.
It's a difficult question for me to answer on behalf of the OEM, but I think we have seen an increase in the inventory levels across the OEM, specifically in the passenger vehicle space. However, I think I still remain optimistic that while in quarter two, this sluggishness is likely to continue. However, in H2, backed by certain exciting new model launches, which will bring a lot of excitement into the market, and also, with the festive period, I do feel that these inventory levels should be normalized and the demand should come back. We can only hope for these times of recovery, but having said that, we are on a close watch with our OEM clients, and we are taking prudent measures internally to safeguard our top line as well as bottom line.
Okay. Thank you.
Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of the question-and-answer session. I would now like to hand the conference over to the management for closing comments.
I take this opportunity to thank everyone for joining into this call. We will keep the investor community posted on a regular basis for updates on your company. I hope we were able to address all your queries. For any further information, please do get in touch with us or SGA, our investor relations advisors. Thank you once again and have a nice day.
Thank you. On behalf of Lumax Auto Technologies Limited, that concludes this conference. Thanks for joining us. You may now disconnect your lines.