Ladies and gentlemen, good day and welcome to Minda Corporation Q1 FY25 earnings conference call hosted by Nuvama Wealth Management. 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 now hand the conference over to Mr. Raghunandan from Nuvama. Thank you, and over to you, sir.
Thank you, Den. Good evening, ladies and gentlemen. On behalf of Nuvama Wealth Management, we welcome you all for Minda Corporation Q1 FY25 earnings call. We thank the management for providing us the opportunity. We have with us from the management team, Mr. Akash Minda, Executive Director, Finance and Strategy, Mr. Vinod Raheja, Group CFO, Mr. Samir Sharma, Senior VP and Group Head, Mr. Nitish Jain, Lead Investor Relations. May I remind you of the safe harbor that the management may be making some forward-looking statements that have to be understood in conjunction with uncertainty and risk that the company faces. We'll start the call with opening remarks from the management, followed by a Q&A session. Now, I hand over the call to Mr. Akash Minda for his remarks. Over to you, Akash, sir.
Good evening, everyone, ladies and gentlemen. Welcome to the Q1 FY25 earnings conference call for Minda Corporation Limited. I hope everyone is in good health. I am pleased to connect with you on behalf of Minda Corporation. In the first quarter of FY25, the industry showcased growth across segments, primarily driven by the two-wheeler and passenger vehicle sector on year-on-year basis. However, the commercial vehicle remained subdued due to high base and also impacted by various factors: elevated vehicle costs and high channel inventory levels. The two-wheeler demand was particularly strong in the motorcycle segment, driven by continued focus on premiumization in the premium two-wheeler market. In the passenger vehicle sector, utility vehicles outperformed cars, which are sedans and hatchbacks. The tractor segment shows signs of recovery, and the expectations of the above-average monsoon are likely to boost the demand in the second half of the financial year.
Coming to the performance highlights of Minda Corporation, we would like to share that during the quarter, Minda Corporation maintained its growth momentum, with company revenue from operations stood at INR 1,192 crores, marking an 11% year-over-year growth. The domestic OE business grew in line with the industry growth, though it was partially offset by subdued export demand in the European and American markets, flat aftermarket sales, and slowdown in the ASEAN countries. Moving on to the profitability, we are pleased to report that the company has delivered EBITDA of INR 132 crores for the first quarter, reflecting a 15% YOY growth with an EBITDA margin of 11.1%. Profit before tax stood at INR 84 crores, with a margin of 7%, up by 114 basis points year-over-year. Profit after tax was INR 64 crores, representing 42% year-over-year growth, translating a margin of 5.3%.
An increase of 115 basis points year-on-year attributed by operational improvement efficiencies. Now, I would like to take you through the key developments during the quarter. The company has executed a total lifetime order book of INR 2,100 crores, comprising 50% of new orders and 50% of replacement orders, demonstrating our balanced growth strategy and strong market demand. To meet the growing demand, we are proactively enhancing capabilities and capacities in manufacturing and engineering for all our product domains, such as vehicle access, EV products, driver information systems, die-casting parts, electrical distribution systems, and new technologies. The company has signed a joint venture with HCMF of Taiwan for automotive sunroof and closure systems. The collaboration enhances our technological capabilities and reinforces our position as a leading provider of comprehensive mobility solutions.
Our commitment to innovation was demonstrated by bringing a total to 280 patents, underscoring our continuous efforts to stay at the forefront of technological advancements in the auto sector through our Spark Minda Technical Center. Looking ahead, our strategic priorities will include strengthening customer relationships, expanding our market share with existing and new clients, and enhancing product premiumization through new product launches. We will place a strong emphasis on technological advancements driven by innovative in-house R&D initiatives and global strategic partnerships and alliances. I will now walk you through the presentation, which outlines the key highlights for Minda Corporation's performance for the Q1 FY25. I now refer to the earnings presentation uploaded online. I start from page number 2, which shares the Minda Corporation at a glance.
Our group revenue last year was about INR 4,650 crores, EBITDA was about INR 515 crores, and we have 28 manufacturing plants, more than 17,000 workf, and spread over five product domains, which are vehicle access, electrical distribution system, light weighting, and plastics, driver information, and EV products. We have five joint ventures and four P&Ls. Moving on to the next slide on the industry automotive performance. The industry grew on year-on-year basis in the first quarter by about 15.5%. This industry growth was led by the two-wheeler of about 19% growth, passenger vehicle of about 5.8%, three-wheeler by about 9%, commercial vehicles were almost flat, and tractors were also almost flat. In the two-wheeler, the growth came due to the resurgence in the demand in rural areas and also fresh model launches. The passenger vehicle growth came due to the new strong SUV demand.
On the quarter-on-quarter basis, on quarter four to quarter one, the industry grew by about 2.5%, where the two-wheeler industry grew by 6%. The passenger vehicle was down by 10%, and so were commercial vehicles as well as three-wheelers. We believe the upcoming monsoon season, the festive season, and stable pricing movement and new launches should drive the growth for the full year FY 2025. Moving on to the next slide, which shows the key strategic developments for the quarter. Minda Corporation delivered a revenue growth of 11% YOY despite various macro challenges. EBITDA margin stood at 11.1% for the quarter, growth of 38 basis points. Total lifetime order book exceeded INR 2,100 crores, which were booked during this quarter. Signed the joint venture with HCMF for sunroof and closure systems. Filed six new patents during the quarter, taking the total patent north of 280.
Moving on to the next slide, which is the update on the sunroof and closure systems. While the LOI was found in quarter three, we have now signed the joint venture, which is a 50/50 joint venture between the two companies. We are going to establish the plant in Pune, and the plant is expected to be commissioned in quarter one FY26. We are in advanced discussions with various customers. Hopefully, we should be having some business in the next few days. Probably due to the delay, we will communicate and share with you once we receive the orders in the immediate future. I now move on to the next slide.
Ladies and gentlemen, the management line has been disconnected. Please wait. We will be reconnecting them shortly. Ladies and gentlemen, the management line has been reconnected. Over to you, sir.
Yeah, sorry for and apologies for this. We now move to slide 6, which is marking the key performance highlights, the financial snapshot. Our operating revenue was about INR 1,192 crores, which is an 11% year-on-year basis. The gross margin grew by 15 basis points to 37.3%. The EBITDA margin stood at INR 132 crores, which is a 15% year-on-year increase. And EBITDA margin percentage was at 11.1%, with an increase of 38 basis points year-on-year. The PBT was at about INR 84 crores, 33% year-on-year. And the margin, PBT margin was at 7%, which is a 114 basis points year-on-year increase. PAT margin stood at INR 54 crores, at 42% year-on-year growth. And PAT margin percentage was at 5.3%, which is a 115 basis points increase over last year.
Moving on to the next slide, which shows our growth momentum, where it shows our year-on-year and quarter-on-quarter performance, whereas our revenue has grown on a year-on-year basis at 11%. But on the quarter-on-quarter basis, it has come down. On EBITDA margin, we have grown from INR 115 crores to INR 132 crores. But from quarter-on-quarter basis, it has come down from INR 139 crores to INR 132 crores. And at that level also, we have grown 42% from INR 45 crores to INR 64 crores, but have come down from INR 71 crores to INR 64 crores from quarter-on-quarter basis.
Moving on to the slide 8, next slide, which is our business vertical-wise performance, which is the mechatronics, aftermarket, and other businesses grew year-on-year by 12% from INR 513 crores to INR 575 crores, which was led by the strong demand in domestic two-wheeler business and passenger vehicle business, along with the premiumization of our existing products contributing to the growth. We had subdued demand due to the exports and flourished growth in the ASEAN countries like Indonesia and Vietnam. We have won orders. One of the orders is from the European OEM for our vehicle access systems. On the right side, which is the information and connected systems, business has grown by 10% on a year-on-year basis from INR 562 crores to INR 617 crores. Here, one of the key businesses is that we have won on the lifetime order business of INR 250 crores from one commercial vehicle OEM.
We have done SOP for one of the largest two-wheeler EV OEMs in India. We have also started this production for the TFT instrument clusters for one of the European OEMs, which is directly exporting from India. Moving on to the next slide, which is the revenue breakup by products and by geography and end market. By products in quarter one FY25, wiring harness contributed about 32%, vehicle access business contributed about 25%, die-casting business contributed about 16%, instrument clusters about 15%, and other businesses like sensors, EV, etc., contributed about 12%. By geography, India continues to be about 88%, whereas direct exports from India are about 7%, and the South Asia market is about 5%, totaling about 12% of our international and global revenues. By end market, our two-wheelers and three-wheelers contribute about 47%. Commercial vehicle segment is about 28%.
Passenger vehicle segment is about 14%-15%, and aftermarket segment contributes about 11%-12%. Moving on to the next slide, where I'll try and move a little faster on the strategic priorities to deliver growth. Are basically four, which is focusing on enhancing the core innovation and technology, electric vehicle growth opportunity, and strengthening our passenger vehicle offerings. Slide number 11 showed our various well-diversified product range across vehicle segments in the areas of electrical distribution system, advanced electronics, mechatronics, die-casting, interior plastics division, and aftermarket division. On slide 12 shows the various customers across industries in electric vehicle mobility, as well as other IT in India and overseas.
In the next slide, focusing on the innovation and technology, it shows that our R&D spend has significantly improved and increased from about 1.4% in FY21 to about 3.1% in FY24, in line with our commitment to invest in technology with our indigenized and localized approach. Here, we now have two advanced engineering centers and seven engineering centers, more than 900 engineers, and more than 280 patent files. Our products are focusing on how we can increase the capability in our own product line in electronics, mechatronics, embedded software, hardware, and creating robust testing validation laboratories. In the next slide, all our Minda Corporation products are agnostic to the source of power of the engine. We, as an organization, are continuously innovating and advancing our product lines to meet the global requirements and mega trends.
In the first, you can see how in the vehicle access from a traditional lock and key, we are moving into an intelligent and smart vehicle access system solution provider. The second is on the wiring harness and connected business. We are moving into an electrical distribution system company, increasing our kit value, as well as offering end-to-end electrical distribution systems. In the third, moving from a cluster and sensor company to a connected and safe mobility company, where we are offering all the driver information system-related products, such as the displays, instrument clusters, and other products. In the light weighting and interior plastics, we do value-add components and export for our die-casting products and interior plastic products, which are into kinematics.
And the last, not the least, for our latest vertical on the electronics, which is focusing on EV products, as well as new technology items like shark fin antenna, telematics, etc. Moving on to the next slide, which is slide number 17, on the comprehensive solution for EV two-wheelers. This is just a snapshot on what Minda Corporation as product offerings are into the two-wheeler, per se. And on the right side are the products which are under development, where we are under decision and discussion with the customers and already have proof of concepts along with working with them. So here, the products include keyless solutions, various sensors, EV SE or charging solutions, die-casting products, wiring harnesses, EV products like such as DC-DC converters, battery chargers, vehicle control unit, as well as other charging infrastructure-related products.
Moving on to the next slide, which shows the increased content per vehicle in the two-wheeler offering as a snapshot, is where we can offer from about 22,000- 27,000 products, which are already developed and under mass production. Moving on to the next slide, which is on the strengthening the passenger vehicle, where it shows a snapshot on the various products that we offer for the four-wheeler under standalone Minda Corporation and to our joint ventures, which is again on the vehicle access, instrument clusters, sensors, antennas, sunroof, interior plastic parts, power liftgates, charging solutions, charging guns, various sensors, ECU products, wireless chargers, as well as wiring harnesses and telematics. Also to the next slide shows our mass production products related, which are offered to the commercial vehicle and bus segment, which are again all the products of Minda Corporation, which are agnostic to the source of power.
Moving on to the next slide shows the schematic representation of Minda Corporation from the shareholding perspective, as well as our companies and joint ventures that are there. Moving on briefly about the Minda Corporation, other board directors. Next slide shows the leadership team, which runs the Minda Corporation and commitment to deliver the consistent and sustainable numbers and achieve the growth that we have committed to the investors. Moving on to the last part, which is the CSR and ESG. We continue to transform towards mobility and beyond to our sustainable operations, care for people, ethical business, inclusive growth, and responsible value chain. We continue to organize various corporate social responsibilities events across India and give back to the society.
Last but not the least, most importantly, are the awards and recognitions by our various customers across segments in two-wheeler, four-wheeler, commercial vehicles who acknowledge and give us awards for our performance. With this, I would like to conclude our earnings presentation. Thank you very much for patient hearing. We will now request to open the floor for the questions. Thank you.
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 Raghunandan from Nuvama. Please go ahead.
Thank you for the comprehensive opening remarks and congratulations on strong results. Firstly, on the sunroof and the power liftgate, good to see the progress on HCMF tie-up, and thanks for announcing the timeline. Can you kindly indicate Minda's share in JV, total investment for the venture, the debt equity mix, and the peak revenue potential?
Yes, Raghun. So we have started the company with a very nominal investment of about $1 million in the ratio of shareholding to start the operations. Secondly, as a milestone, we are also looking at commencing the operations of our facility in the quarter one of next year. Thirdly, we are under discussion with customers, which are for the various products that come in the joint venture, which are on the power tailgate as well as on the sunroof. Hopefully, we should have received something just before this call, but maybe in the next few days, we will hopefully hear about some of the order wins from our key customers. So the investment that we currently look at investing in this business is to the tune of about INR 8,200 crores for various product lines that we have.
The peak value, as we see, the market is expected to grow to about INR 7,800 crore or INR 8,000 crore market potential by 2028, and we expect our market share to be in the tune of about 20%-30% is what our focus or our efforts are moving towards.
Processor, and on an INR 8,200 crore investment, typically, what can be the gross effect turnover? Would it be 2.5-3 times?
Yes, it should be in the similar range, and the profitability margin should be in the current range of Minda Corporation. Of course, it will take at least 2-3 years' time now when the business becomes break-even and then profitable.
Thanks for that, and wishing you all the best on the orders. On the order booking which was announced in the quarter, INR 2,100 crore is very impressive. If you can indicate some breakdown, EV, non-EV shares, and also the shares between mechatronics and ITS?
Yeah. So with respect to the order win that we have done during the quarter, so about 65%-70% comes from the IT, and about 25%-30% comes from the EV business. And as I mentioned, 50/50, which means by 50% of the replacement business and 50% coming from the new businesses.
Any color, sir, on the mechatronic ITS?
Sorry, come again, please?
Any way to break up the order book between mechatronics and the ITS segment?
So usually, it is spread across our various product lines and verticals. We can again put in terms of 50/50. And yes, the focus at least in this quarter has been in terms of the wiring harness businesses, whether from exports as well as from the domestic OEMs. So yes, that is where we have received some orders more, I would say, in this quarter from the wiring harness side.
Specifically, that wiring harness order, that large order of INR 250 crore from a CV OEM, any more details you can share, whether it is for ICE or electric, and when would this order start commencement? What would be the period of the order?
Yeah. So the business is regarding the EV product line, and it is expected to have an SOP in about 18 months from now. And yes, is that the question or anything else?
Yeah. And how long would be the life of the order?
Typically, all orders are in the range of about 4-5 years. Of course, the peak value comes after SOP of about 1 year. So let's say from now, you can see you can expect about 2 years, 2.5 years from now, we'll have the peak value in our sales.
Got it. Wonderful. I'll come back in the queue.
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 Jay Agarwal from Elara Capital. Please go ahead.
Yeah. Thanks for taking my question. So my first question is regarding the exports revenues. Pardon me if you've already answered this. I joined a little late, but how are you seeing exports now in FY 2024? We understand that that was a drag on your overall top-line growth. Which are the markets that you are seeing any green shoots, and what is the outlook over the next 12-14 months?
Yes. Hi, Jay. So exports contribute about 9% in this quarter of our revenue. The exports from year-on-year basis is lower by about 2%-3%. Primarily, it is due to the two aspects. One is the recreational vehicles that are being sold in Europe are seeing a downtrend. And secondly is in our die-casting business, where the USA and Europe are having lower shift and lower demand due to the EV and ICE, as well as on the macroeconomic situation. These are the major two reasons where our exports are looking subdued. However, in the entire remaining of the year, I believe we should be flat compared to the last year for our exports because while we are looking at the global macro situations, we are looking at that to be flat as compared to last year.
Hello, Mr. Mishra. Does that answer your question?
Hello. Am I audible?
Yes, sir, you are.
Hi, Akash. Congratulations on the recent quarter's numbers. So I just had one question. Last time, we tried to acquire a company in the instrument cluster segment. So are we still looking for other companies in this segment? Because we were very bullish in this segment. So I think we have cash in the balance sheet. So are we still looking for opportunity in this segment?
Yes. We continue to look for M&A opportunities as a part of our growth strategy. Yes, we are open for these segments. Again, our main areas are in the five product domains that we are currently working on, which is into the vehicle access. Second is the electrical distribution system. Third is in the die-casting or lightweighting. Fourth is in the driver information system, which includes the instrument cluster. And fifth is the electronics. These are the five product domains that we continue to focus on. And yes, as a plan, we are continuously evaluating as well as looking for M&A opportunities, but we have clearly set aside our financial proven matrices on how and what we will not do. Secondly, we are also very clear that we are not looking at any M&A which is having large overseas operations or outside India.
Third, in terms of the product lines which are related or synergy to us. Fourth is the engine agnostic product lines that we are looking. Fifth is we're not looking at products which are into the rubber or glass or all these product lines. So these are some of the things that we have put in place. But yes, we are also open to look at maybe some kind of a diversification, but which are related to the businesses that we do.
From EV segment, what kind of revenue you are seeing this year? I mean, given whatever order we have, we have only last 1.5-2 years. So any significant revenue contribution you are seeing in EV segment?
Yeah. So typically, in the last few quarters, and even in this quarter, our EV revenue has been to the tune of about 5%-6% of our total revenue. And it is expected to continue in this range. Major reason is because there are order wins from across segments and across product lines. But there are many startup OEMs which are not doing well, if I may say, which continue to be a challenge when it comes to our growth in that respect. So yes, we have a bit from the leading four, five EV two-wheeler makers, but there are also orders from other OEMs which are not performing so well. So keeping that in mind, we're looking at about 6% plus minus in our order book or our revenue.
In terms of content for vehicle in EV segment, what is where we have reached in terms of that with the particular customers?
Yeah. So if you refer to our slide number 18, in the two-wheeler segment, we can offer a kit value of up to from INR 22,000-INR 27,000. We are under manufacturing or on the development of various other product lines which are going to take SOP or startup production, which is going to add another kit value to this offering. So potentially, we can offer much more, but what we are showing here is in terms of the products which are in the mass production are already being supplied.
Okay. Lastly, if I can get the die-casting revenue in this quarter, and what is the growth in die-casting? Thank you.
Yes. Just allow me 1 second. Our die-casting business in this quarter is about INR 220 crore. And here, again, the business has been continuously growing on quarter and quarter and year-on-year basis. Of course, the driving factors are exports as well as the lightweighting that is coming up in the industry in India as well. And we are continuously expanding capacities here, like we have shared before, expanding 2 new facilities, 1 in North India and 1 in West India. So yes, this product line is looking at ICE as well as, more importantly, the EV product line, such as the motor housings, the battery casings, and other related products.
Okay. Thank you all the way.
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 Deep Shah from YES SECURITIES. Please go ahead.
Yeah. Hi, Akash and team. Thanks a lot for the opportunity. So a couple of questions. First is, again, on the top side itself. So if you can throw some more light on content per vehicle because some of the recent years those who have entered the space are talking about content in the range of about 25%-30%. So first, what do you think in terms of the overall involvement of content for you? And also, how localized it will be? I mean, from day one, I mean, if you can share the level of localization for some of the products, that would be helpful.
Sorry, your voice is not clear. Can you repeat your question? Please answer the part of it. Which product are you speaking about?
If I be clear on the question. What I'm asking is, if you can share the content of some of the business, what the content that you guys are looking at. The related question to that is, what would be the localization level for that product to begin with?
Yeah. Okay. So the question about funding. Yeah. So see, the kit value typically goes from about INR 20,000 to it can go to about INR 30,000 ±, depending on the configuration of the customer and depending on the volume of the business. So that is the kit value that one looks at. In terms of the localization, there are, of course, key critical components in the entire bill of material which need to be first imported, which is to the tune of about 30%-35% of the bill of material. The rest will be localized.
To give the solution in terms of the faster penetration to the customer, we are going to start with importing and assembling here, and then moving on to a localization phase manual, which is where the profitability of the business will increase over the next 2-3 years, and where we are going to become profitable as well as we get the volumes as well as other businesses.
Okay. So basically, you're saying with the scale and all that, the existing margins which you are guided for in terms of the average company margins, that should further look up in a way once the scale goes up and the localization is right. Is that the fair understanding?
Yes. As I mentioned, it's a 50/50. So it is not being consolidated at the moment. But yes, as a business, this is where the margins are expected to be.
The second question which I had was on your smart kit business. I think if I'm not wrong, my numbers, FY 2024, this revenue is about INR 130-INR 140 crore, including domestic and exports. Where do you see the business down the line 2-3 years? If you can throw some light on recent order wins from that space.
Yeah. So typically, the smart kit business in this quarter is somewhere about 10%-11% of our division revenue of the security systems division. And that, as the new and new model launches are coming in, whether EV or ICE or even export businesses, this is expected to grow further. As I mentioned, that this expected kit value is somewhere to the tune of about 2,000-5,000, depending on the customization of the products. So while the export orders, of course, have a higher kit value and profitability margin, the domestic customers, as well as the platforms, are towards the lower end of the kit value. The penetration currently is expected to be about 3%-5% in the Indian market.
By 2030, we expect this penetration to go to at least 30%-40% with the businesses that we have in our hand, as well as the penetration of the new customers and new businesses. Of course, the premium products or the premium segment of the two-wheeler are getting these features before as compared to the commuter segment vendors.
Any new customer onboarding happening in the smart kit segment, let's say in the last couple of quarters, if you can throw some more light?
Sorry, I can't hear you clearly. Can you please repeat the question?
Yeah. What I'm asking is, if you can share the new customer wins from the smart kit segment that you sent to me. Have you onboarded any new customers in this segment?
Yeah. So customers, in terms of the customer per se, there are repeat orders with multiple platforms within the same customer. So I believe there is a customer from the south part of India where we have one business which is in the premium segment space, where we have won this business from the smart kit perspective. That's one. Number two is one of the large EV two-wheeler OEMs where we have also won this business in this quarter. Third, one more customer in the exports in Europe, where we have won the smart kit business. These are the key three new customer additions that we have done for this particular business.
Got it. Yeah. Thanks a lot, Akash, for your answers. Thank you.
Thank you.
Thank you. The next question is from Jay Kale from Elara Capital. Please go ahead.
Yeah. Thanks for taking my question. I got cut. So my question was on your view on inorganic opportunity. Where do you see which segment do you see things moving up pretty fast, either die-casting, instrument clusters, or any new product segments? Which are the segments that you are most excited about in terms of growing your presence? And also on the instrument cluster side, we did mention while we were trying an inorganic opportunity, one of the reasons that one of the rationales for doing that was that this segment is expected to go technologically advanced in terms of digital clusters. And if we don't make strides, then the global MNCs could pose a threat to us. Where are we in that journey currently? Do we still feel that we require a larger presence in instrument clusters and any headway in inorganic activity in that space?
Sorry to interrupt, sir. We have lost the management line. Please wait. We'll reconnect them shortly. Ladies and gentlemen, the management line has been reconnected. Over to you, sir.
Yeah. Sorry. I heard your question, but if you could complete the last bit of it in terms of the instrument cluster.
Yeah. So where are we in terms of our progression in expanding our presence in instrument clusters, given that there will be competition from MNCs also in this space? Are we making any further strides in expanding in this space by way of inorganic activity?
Yes. So firstly, to share with you about the generic approach, we continue to look for M&A opportunities as an organization. Number two is also on the partnerships in terms of the product lines that we do and also the synergistic product line based on the mega trends as well as what we are focusing on, the 543 product domains. So we are continuously under discussion for M&A opportunities as well as joint ventures TLAs. We continue to invest in our own R&D facility and setup. As you can see, we have gone or increased from 1.4% to about 3.1% in the last financial year. Now we are continuously increasing that even beyond to develop our core competency capabilities. Number two, when we speak about the inorganic opportunity in terms of an M&A, we are very clear on what we will not do.
First, of course, the financial proof that we have set in place for us as an organization. Number two is on the large operations. We will not look at any companies which have large operations outside India. Number three is the engine agnostic product line. Number four is not the product lines in terms of the rubber, sheet metal, or glass, or etc. And the fifth is, of course, the product line that we know the best on where we are doing. So these are some of the inorganic opportunities that we're currently looking at from the M&A perspective. When we look at, particularly from the sake of die-casting or instrument clusters or the product lines that we have, the highest amount of growth that we're expecting is coming from the instrument cluster business and the die-casting businesses.
The wiring harness business that I shared earlier is going to continue in the same rate of the market growth. When it comes to the instrument cluster businesses, we continue to invest in our own capacity, capability, competency. We are also working with multiple partnerships in order to come up with various other product lines and making it a complete system solution offering to the customers. We are in discussion with companies from East as well as West for offering product lines. We have already started supplying TFT clusters for passenger vehicle OEMs as we had won the order about a year and a half ago, which was already shared. So our focus on the instrument clusters business coming from Minda Corporation R&D Center itself has grown from the two-wheeler space as well as in the passenger vehicle space, as well as exporting the instrument clusters.
That's with regard to the instrument cluster space. Yes, when it comes to the EV product lines or sensors or the products which have high kit value, we are continuously scouting for partnerships in this respect.
Understood. And also, one thing on your margins. I mean, yes, in the last couple of years, in terms of the stability of margins, that has been pretty good. However, we've seen a strong cyclical upturn in the auto industry. And our margins are still in that 10.5%, 11% odd range. What should happen in your view, either in terms of industry growth or your product mix or which segment should go faster for you to inch up towards this 12% margin or 12% higher margin? Because we've seen the commodity upcycle and downcycle. We've seen the demand upcycle also coming in in two-wheelers and passenger vehicles. But we've not yet breached that 12% odd EBITDA margin. So what should happen, according to you, for us to get to that?
So Jay, firstly, I think you will appreciate that where we started our journey 3 years ago, we averaged about 9%. We have committed to everybody to give sustainable and consistent performance, which is where we have always committed to be in the 10.5%-11% EBITDA. For the last 4 quarters, our performance has been above 11%, I think 11.4% in the last quarter. So that is something that we believe we have committed and we have delivered that at least until now. Number two, going forward, we have also shared that our focus is not on the RM raw material. Our focus is how much value add we can do in terms of the products, as well as how we can offer some solution offering, increasing premiumization and kit value to our customers.
There have been, of course, various factors for the improvement in the EBITDA profile, as well as in the way forward. There are various pillars that we are continuing to focus on. One is the premiumization of the product that is happening. Number two is on the export orders that we continue to look at. Number three is our operational efficiencies that we continuously monitor because we have come from the manufacturing excellence space. Fourth is on the wiring harness, where we continuously share that we are going to go from our lower single digit to a higher single digit, and where we have successfully kind of transitioning into that phase with our commitment of localization of connectors and other initiatives. Last but not the least, that, like you must have also seen and explained, that our technical center is continuing to grow and invest into our own R&D.
So there are some initiatives and investments that we are doing from the CapEx and OpEx perspective in order to come up and compete with the product lines from the global competitors, even in India or overseas. That is where we continue to deliver this number and actually go up to the highest margin percentage at a blended level. This is something where we have always shared that we would be in the range of about 11%-12%.
Okay. Sure. Great. Thanks and all the best.
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 Raghunandan from Nuvama. Please go ahead.
Thanks again, sir, for the opportunity. Sir, on the smart kit side, we had won a INR 450 crore order for smart kits from an ICE two-wheeler OEM. Wanted to understand when this order is expected to come in?
So the SOP were expected to be in the next quarter. So the SOP is in line or the startup production is in line. But our customer orders or customer intent or the forecast that we have shared is lesser of this particular technology. Yes, of course, we have the LOI as well as the order book and the capacity. And the customer has to take the startup production in next quarter and then, of course, expand to the other models, which is where we are ready, and customer intake has to happen.
Got it, sir. And over the last two quarters, in the ICS space, there had been some orders which had got delayed in terms of execution. Any status you would want to share there?
Yes. Thanks for sharing this. So we have, again, created our capacities and other areas. The prime focus has been to make these products into launch and process. So yes, out of those businesses, some of them have got into the startup production, and some of them expect to go into this production in this quarter.
Thanks for that update, sir. Within our revenue mix, the other segment, which includes sensors, EV parts, that has seen a strong traction and has increased as a percentage of revenue to 12%. Any thoughts there how you see that segment going forward and what are the triggers?
Yes. So these product lines pretty much include our interior plastics, sensors, aftermarket division, electronics, EV products, etc. So these are the products which are contributing to the other parts of it. So yes, as I mentioned, while more innovation and more electrification is coming in, these products are going to continuously increase in terms of penetration as there have been new products to be built over the last few years coming out of some joint ventures or technical assistances, and more importantly, our own R&D center. So these products are now coming into SOP sooner or later, which is where we continuously invest. So as I mentioned, in these products, some of them are standalone or some of them are part of our system solution offering that we have put in place in terms of EV, electronics, interior plastics, starter motor division, etc.
Thank you for that, sir. R&D you spoke about. Within R&D, you are spending 3% of revenue. Also, recently, there has been a new larger R&D center. So if you can talk about the focus areas, how it is augmenting your capabilities, and how you see the new products as well as cost savings as an output here.
So yes, Raghu, again, we will be launching that technical center soon. But the focus is how we can grow our products more and more with premiumization, making the products more safer for the customers, making them more and more electrified, electronification, as well as integrated system solutions offering. So these are the product lines where we are working on and, of course, building capability, capacity, competency in our own products that we can grow where the markets are demanding. So we are working aggressively with customers and with their engineering teams in order to develop products for their needs. And of course, we can see that the cadence that is rising in our portfolio is something that showcases where we are investing and how that is relating to.
Thanks, sir. Last two questions from my end. You spoke about localization in the wiring harness division, and localization gradually has been increasing. What would be the current percentage of localization? And over the next one or two years, what is the target?
Yeah. So Raghu, we had less than 5% of our localization in the past 2-3 years. And as we have committed, our reduction in our imports has gone down. So now, currently, we are almost in between of about 50/50, depending on the sum of the businesses. But the 50% is localized, out of which about 13%-15% comes from our own internal capacities and capabilities and company, as well as the remaining 35%, more or less, comes from the Indian partners that we have. So this is where we are looking, and this expects to grow to a higher number and around 20% beyond in the next 2 years or so.
Thanks for that, sir. Lastly, in terms of industry outperformance, given the strong order book, new products, and collaborations like Sunroof, over the next 2-3 years, would you be confident of beating the industry by 5%-8%?
So Raghu, our focus has always been how we can grow ahead of the industry and outperform them. So yes, within various initiatives that we are doing for order booking, for adding new products, premiumization of the products, and growing other business segments and geographies, we hope to outperform the industry, and we are all committed, and our plans are in place to do that.
Thank you so much, sir. Wishing you all the best. That's all from my side.
Thank you so much.
Thank you, ladies and gentlemen. That was the last question for today. We have reached the end of our question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you. Once again, ladies and gentlemen, thank you so much for joining the call. We remain confident in our short-term to long-term growth prospects, supported by strategic investments and our focus on developing advanced production technologies. Our customer-centric approach will continue to create value for our shareholders and other stakeholders. Like we have always committed, our focus is to give consistent and sustainable, profitable growth for the organization. We continue to invest and focus on capital allocation, as well as the growth of our organization to outperform the industry. Thank you very much for all the support.
Thank you. On behalf of Nuvama Wealth Management, that concludes this conference. Thank you for joining us. You may now disconnect your lines.