Ladies and gentlemen, good day and welcome to the Sandhar Technologies Limited Q1 FY 2026 Earnings Conference Call hosted by MK Global Financial Services Ltd. As a reminder, all participant lines will be in the listen-only mode. 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 has been recorded. I now hand the conference over to Mr. Sher Singh from MK Global Financial Services Ltd. Thank you, and over to you, sir.
Thank you, Anushka. Good morning everyone. On behalf of MK Global Financial Services , I would like to welcome you all to the 1Q FY 2026 earnings conference call of Sandhar Technologies Ltd. Today we have with us from the management team Mr. Jayant Davar, Chairman, Managing Director and CEO, Mr. Neil Jayant Davar , Director, Mr. Gurvinder Jeet Singh , Whole Time Director and Head of Corporate Strategy, and Mr. Yashpal Jain , Chief Financial Officer and Company Secretary. We'll begin the call with opening comments from the management team followed by the Q&A session. Over to you, Mr. Davar.
Good morning everyone. Thank you, Anushka, and thank you for putting this together. Let me begin by first of all saying hello once again to this Trump-affected world. I think where India is concerned, I do believe that we will probably win in the end rather than lose in today's call.
I'm sure that all of you have received the presentation, the industrial presentation. You have a copy of it. Let me focus on this. Three or four things to begin with. Can everybody hear? I hear some kind of a hit. Can everybody hear me? Sher, Anushka?
Yeah. It's audible, sir.
Yes, sir.
All right. Okay. Let me begin by a few of the comments or a few points to make. First of all on Sandhar's growth. We are happy to share again that we have achieved a growth of 21% over the quarter one of financial 2025. In fact, in the India business, the growth is 22% at a consolidated level. We expect to continue the growth momentum over the last year's numbers, depending of course on the geopolitical situation, uncertainty with tariffs. Not that we get affected by the tariffs, but in the overall sentiment growth in the auto and OSG sector and of course other related events that could come. Our consolidated EBITDA stood at INR 9.18 crore in the current quarter versus INR 9.85 crore in quarter one of 2025. These are exceptional reasons.
There is a reason of the foreign currency translation loss which is notional, which is INR 4.5 crore. There is a commodity price impact in this quarter which will be covered up of course in the next one, but that's close to INR 3 crore. We have a one-time old lag of power change cost in Mexico. That's one time, that's again cost us about INR 2 crore or so. There were two of our customers who because of their supply issues on demand supply issues lost us a business of about almost INR 20 crore. There is the changeover that is happening in the commercial in the construction sector from BS4 to BS5 and that also put us in on the sales for this particular quarter.
It is a part of the presentation, but I thought it's good I have to give my comment on it as you open for comments there as well. In terms of joint ventures, the company has reviewed its strategy to continue in the daily business format. We are consolidating our business activities and focusing on core business. I'm very happy to announce that besides the two, one is Jinyoung Sandhar Mechatronics and Quang Sandhar Technology where we sold off our six. In these companies, the balance JVs that we have are all profitable. Currently, the company has an investment of INR 62.72 crore in the 5G and I'm happy to announce all of them are positive, both EBITDA and past.
In terms of our overseas subsidiary, you're aware that the European and other global markets have faced severity growth marked by unstable geopolitical conditions, are now being exaggerated by the U.S. tariff uncertainty. There's been a slowdown in Europe, there is decrease in consumption there and most of the countries there are facing degrowth costs, there are increasing. These are also affected by our overseas operations, and we've registered a loss of EUR 1.06 million. This is including the foreign exchange translation loss of EUR 0.46 million. Half of it is on account of foreign exchange translation loss in quarter one compared to a profit of EUR 0.04 million in quarter one of 2025. You'd be happy to know the company has taken many steps now to reduce cost, increase operational efficiency, and expand the customer and product base.
We are very, very hopeful that 2025-2026 would be crucial to turnaround at overseas operations and bring them into profitability. The last aspect I want to speak about is our PD foray. The company has started commercial production of battery chargers, motor controllers, and DC-AC converters and is getting very positive response in the market. The customer base is gradually increasing with more customers, and we generated a revenue of a little less than INR 2 crore in the first quarter to begin with. With that, I open the house for questions. We have with us today Neil and Vijay who are joining me as Directors, and we have Mr. Yashpal Jain, who's the CFO, will take on any questions regarding to any number or so on and so forth. With that, thank you very much once again. We are open for questions now. 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 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 questions queue assemble. We take the first question from the line of Aditya Konwar from Complete Circle. Please proceed.
Hi, good morning. Thank you . First question was on the INR 500 crore QIP. Any thunder on how the pro will be used? Second, my question on debt. I know, of course, last point also called Chance. The debt may speak a bit, but then since the content and update of the thing. Thank you.
Yeah, morning to your first question regarding the QIP. We have put up a proposal to borrow up to authority raise up to INR 500 crore and largely we are focusing on some more acquisitions which may come up during the year. As you know, the validity of this approval from the shareholders is for a year.
We thought to put it before the board to subsequently take it over to the shareholder and the last part will be used or I would say the major portion will be used for the further future acquisitions as well as some acquisitions as you remember in the month of March we have done and we are expanding those lines also to increase the capacity. This is regarding the QIP. Coming to the debt portion, we had a gross debt of INR 862 crore as of school and the net debt of INR 825 crore. I think as I spoken in the earlier calls also last year, I mean for a while being update on the Q4 FY 2024, FY 20 25 the best person might continue during this year because of the past acquisitions that we have done in the month of March and some of the new projects that are coming up.
Here we plan to keep the test levels of debt within the present limits. Actually, we don't want that it crosses INR 900 crore at any point of time. We will try to recognize it between INR 850 to INR 900 crore at the maximum side.
Thank you for all the best.
Thank you.
Thank you. Before we proceed with the next question, a reminder to the participants. In order to ask a question, you may press star star and one on your touchpoint telephone. We take the next question from the line of Saurabh Jain from Sunidhi. Please proceed.
Hello. Yeah, thanks for the opportunity sir. I have few questions. To begin with, what was the revenue and EBITDA contribution from the acquired business during the quarter?
The revenue was some above INR 100 crore. You can say it's around INR 103 crore for the quarter one. As far as the data is concerned, it was a data business. At the PBT level, we have sustained losses. As I mentioned in the earlier calls, the cost has been higher. The EBITDA has been at a level of INR 4 crore. It was around 4% because operational costs, we started operations from April 1, 2025. As I mentioned in earlier calls also, this year would be a little bit tough because we are operating from a short premises from the seller, stimulating front, which is a common complex for other companies also.
This year it can be at a break-even level by the time we close the year. Yes, from next year onwards, it will be back to the normal margins that we expect from our darkness.
Even at different levels or not?
no EBITDA level, we try to sustain around 6%, 6.5% at the year end. EBD level can be flat. EBT can be a flat level. Yeah.
Okay.
This was the first quarter APMG started the operation, so the quarter was a little bit challenging also in terms of organizing the activities, organizing the operations. The costs are higher.
Okay, my second question is, what was the point you think from smart lock and this, what is, you were expecting to, you know, the revenue recognition to begin in this quarter. How do you see that moving in the coming quarter?
For a smart lock, it's just the beginning.
As we saw, some pilot projects, pilot lots have been coming to the customers. You need to wait for year end, at least this year end, when the volume shoots up because it's mostly dependent on the sales of the OEM. From our side, we are ready to supply any quantity that they require. As of now, for this first quarter, the volumes are quite, I would say, just a very minuscule type of volume survey for smart locks. I think by the year end, 2020, you should see, depending on how the country performs, how the consumer demand takes us, and the preference of the consumers with respect to the models which are carrying their smart locks.
Just to add to that, let me put it into perspective. We are looking at the first year. Expected volumes of smart locks are about between 60,000 -7 0,000 numbers.
Yes, I could. Yeah. 60,000 to 70,000 numbers for customer one and about half of that for customer two.
Okay. And that for this FY 2026.
That's it. Basically, the offtake, like let's say Yashpalji, the pilot lots have all been validated and are fitted onto vehicles. The attempts will start from quarter two, but the overall impact of this would largely come in the second part of the year. Of course, it will go on to a regular platform from year two, which is the next financial year.
Great, sir. Coming to cabins and fabrications, this recorded a moderate degrowth. Was that due to the new norms with respect to air-conditioned cabins? Do you see, since second, and could there be a rebound? This has nothing to do with air-conditioned cabins. This has to do with the engine norms of BS4 to BS5.
For the BS5 engine change, there's a difference. The customers had built and supplied in the market with the BS4 vehicle. BS5 changeover is happening now. When that happens, the entire ecosystem kind of changes and therefore we expect that from the next month onwards, probably sales would get back into normal level.
Okay. So the pent-up demand of last two quarters could eventually make up for the rest of the year.
That's difficult for me to say. That's difficult for me to say what the new demand is going to be because the newer vehicles will also cost a little more. The market needs time to get used to new prices. Therefore, the construction equipment manufacturers had pushed larger numbers to get rid of those Euro 4 or BS4 vehicles.
The new demand is being built, but in the meantime, there is a lag that happened in quarter one and will probably continue till next month onwards. You will get, let me say, a regular demand from the half of the second quarter, please.
My last question is on if these are category-wise split. Four wheelers, OICs, and CVs have seen a lower contribution both on QoQ and YoY basis. Of course, that may be due to good growth in two-wheeler. At the same time, if you see these revenues from four wheelers, OICs, and CVs in absolute terms also, there has been hardly any growth. How do you see this split shaping up for the full year and FY 2027, if you can comment.
I had started today's call with telling you that two of our customers had suffered their production on account of supply issues.
For example, I can even name, to some extent, or let's say the business of Hero . They had supply issues, so they literally manufactured a little over half of what they normally do in the month of April and May. They, of course, are ramping up now, and they don't want to change the business plan for the year. I'm sure they will recover. In the meantime, that suffering that happened in the first quarter affected all of us.
Okay, and one small question to second Stephen. We were expecting like half of percentage signs of EBITDA margin expansion in this fiscal. In the first quarter, we have, of course, few one-off which you explained. Do you agree on that? To have that half a percentage of EBITDA margin expansion at this point of time, we see no reason to change our projection.
Gurvinder, do you want to add something to it?
Yes sir. Adding to that, we are very much on the targets of improving the margins by half a quarter. First quarter has been successful with few of the exceptional items that we have mentioned in the investor presentation also. Quarter 2 to quarter 4, the recovery would be coming up, especially in the acquired businesses also as well as the overseas business figures.
That's all from my side, sir. Wish you all the best.
Thank you.
Thank you.
Before we proceed with the next question, I would like to again remind participants in order to ask a question, please press star M1 on your touchstone telephone. We take the next question from the line of Saket Kapoor from Kapoor and Co. Please proceed.
Am I audible? Sir, if we summarize the first quarter operational performance and we take the one-off out from the sale from the profitability part, the pricing first quarter. In terms of profitability also, if you could just give some sense, although there is an increase in revenue, when we remove the other income component, the profitability has taken a hit. Is that understanding correct?
No, no, no. Let me just answer this in my form and then of course let's call. You will explain this better. You have to understand that 10% of the revenue which came from the new acquisition had a negative content to it in terms of bottom line, both at EBITDA and PAT level. We suffered losses and the EBITDA margin, like he said, was only INR 4 crore which is about 3% compared to the other numbers which pulled the entire thing down.
If you have the analysis of reasons and normalized margins, I think that's a part of the investment presentation that we have given. If we look from that perspective, then our EBIT margin, if you were to take those one-off, comes to a level of 5.64% at EBIT level, so it is higher. Normalized EBIT on our understanding here was in the level of INR 78 crore compared to what we have. There is a huge difference in this entire ball game. Just like you can explain more on this.
Yes, so basically if we come from operations wise, after eliminating this one-time or I would say boxer from the items, there is not a fall in the property because we review on a unit to unit basis, especially there are only four or five units which are at the maturity level, especially the newly acquired business and few other units which we have commissioned in the last year and they are yet to achieve the value. Taking these together plus the overall operations, these have contributed negatively. All the other businesses are performing well and in casualt and savvy casing at 50% of the margins we got ahead this year compared to the corresponding quarter because of the lower volumes. As in the previous question answer told, the migration from BS4 to BS5 is Chimatan, the wall rates are lower from the customer.
Rest all other operations, all the units are working perfectly and as per our projected plan.
Sir, in the PNL on a consolidated basis, you find this other expenses line item to be not in support to what it has been earlier. What does this other expense line item of INR 176 crore of this quarter say?
These also include the foreign calculation losses, also nothing. Secondly, as we told, we acquired Sims cables business. The first quarter has been finished, so there have been some initial costs also which we had passed to the P&L account, and three of our plants which were commissioned last year, their expenses are testing, development, all those stuff are coming up which cannot be classified because this other expense is a very category. It's comprised of nearly more than 50-60 accounts, so that is the reason.
These are the initial costs, initially you can say development cost, initial setup cost, which has been classed off, and outside include the foreign exchange substitution also within it. That is the reason the translation situation, as you answered to another earlier participant, that the translation loss is only to the tune of INR 2.5 crore. Was this the number which you mentioned earlier? The application is INR 4.5 crore. If you see the analysis in the normalize also, the competition is INR 4.5 crore for the overseas. You need to understand how it happens. Like in Romania, we operate in RON, Mexico we operate in USD, and Barcelona we operate in EUR. Barcelona is a holding company for overseas operations. First consolidation is done versus RON versus EUR and USD versus EUR, then portrait the function reporting currency of the parent company is INR.
Then the entire EUR is again reconverted. If you see the currency fluctuation between March and June, EUR is by 9% to 9.5% compared to INR, and the same is the case with USD versus EUR. So INR 4.5 crore has been taken in terms of Indian rupees, which has been accounted for. When you take the translation from Romania to Barcelona and USD to EUR for the Mexican operation, that is a profit one. When we consolidate, the entire expenses come to a final end. That's how. There has not been any abnormal cost in various expenses in a referred category. That is the reason it's going on.
Okay, just to conclude on this point, what should we expect on our, if we remove the one-off item for this quarter?
that should be the render.
I think if you compare it on a Q1Q bright case, it is around INR 28 crore-INR 29 crore. Barring this currency fluctuation, which we do not know how the currency will, the balance INR 32 crore-INR 34 crore is what I assume is the one-off item. There should not be. That should not. That should be in a non-recurring manner. That should. That should hold. I would request if you just go through this analysis of reasons. If you go through it you will see total exception 1x is INR 15 crore. In the new projects which are yet to achieve is INR 10.65 crore. That makes the impact of INR 27 crore. As our Chair has also explained to the earlier participant, that foreign currency translation loss, the INR 4.5 crore that we have shown, that is from the conversion from overseas to India. It all depends on currency size.
If INR 100 goes down to INR 90, this is a reverse situation in the next product, bearing the commodity price intact and that one-time power cost in Mexico. The commodity price cost is dependent because what happens is the customer reimburses us on basis of your pattern, and during the quarter the buying price might be higher than the average price because of buying price of the current quarter, it's a lag of one quarter. This continues. In case the commodity prices come down, it will be a positive impact in the coming quarter. Power cost is a one-time long recurring INR 10.65 crore. It includes the TUNAM projects and other new projects, which is an exception, I would say, because second quarter we are expecting the volume could come up and quarter one is always traditionally a lower volume quarter in terms of the auto industry.
Majority of them are the exceptional one, bearing then if we eliminate INR 27 crore, we are back to the normalized EBITDA margins and I think they should continuously improve. Also, what it would have been, a question as to what it would have been. I think it's written in the chart, a normalized profit would have at EBITDA level would, I think, INR 61.434 crore. Yes, compared to what we have, compared to the number that you have.
Okay sir, on the aluminum die casting business, the consolidation part, if you could change the narration and the benefit that flows into. I have one suggestion sir, what we find as investors and analysts is that our presentations are uploaded around midnight at around 11:40, 11:45.
and then the call is held very early in the morning at 10:00 A.M., so if you can adjust that sir, that will provide us more opportunity and more repetitive questions because in the presentation. All right, not a big issue. What we will do is next time onwards you probably give 24 hours before we have this meeting because you know the meeting was held yesterday.
By the time we send our documents to SEBI and then prepare this, it obviously takes time. Next time onwards we will make sure that we give a one day gap before we have this conversation. What was your question, sir, on the aluminum die casting business component? If you just explained that last night and what the benefits are going. S o what we have, what we are doing, sir, in the entire case scenario, we are consolidating businesses.
Aluminum, which is now becoming a big entity. Sheet metal, which is becoming a big entity. Our automotive proprietary business, which is becoming a big category, and the fourth portion is the construction equipment. These are being rationalized into large businesses. As such, these grew out of supplementary growth areas. When we made loss, we started making zinc. Then we started making aluminum parts and so on and so forth. As we grew, we felt that there was an outside demand, and to meet that demand, when we started to grow these businesses, each one of them is now at considerable levels and are poised to grow much faster than some of the other businesses. Aluminum business, as you would see, I don't know what guidance we've given so far, but our internal business plan is literally to double from where we were last year.
Similarly, sheet metal business, with the addition of three supplementary plants and appeals, is also growing at a level which is very, very aggressive. We are developing these four verticals to grow much faster, and each vertical is being given the autonomy to become like an independent company. That, sir, is the case scenario where we will be able to use volume, scale, growth, and core competence for these businesses in a much better fashion than when we do it together and hybrid. As you remember, three years back we were operating predominantly into locks and mirrors or during the proprietary business, and gradually then we started leveraging to the markets in terms of our new products. In sheet metal, we did a set of investment also in these.
The purpose of hiving off these businesses to the corporate management is to create large size companies to take on the competitors and the market effectively. Because earlier you are working in the hybrid company, the parent companies and our technologies used to contain four different verticals. Now we are focusing on specialized companies with dedicated teams looking and confirming and focusing on the specific area. Pilot Sundaram Escast will be dedicated to aluminum die casting business for aluminum and zinc and they can effectively take on and capture the market. The same is the aim behind hiring of the sheet metal business to Sandhar Engineering so that they can effectively create a large fabrication company more focused on that. While the parent companies will continue to develop and market the technologically driven products.
This is how the strategy is and you want to create value for all shareholders in terms of creating these three to four entities who are very sizable in size and they can take on the market share very effectively and can create a, I would say, a long standing effect in the market in terms of the product that we are operating now.
Okay, can we finally just clear in one more on the CapEx and the new capacity addition for the year in the different vertical. What is the CapEx that we have outlined for the current year? How much have we spent for the first quarter and the new capacity that will get commercialized during the year and its contribution to the total top line.
In the first quarter we have some INR 101 crore which includes the balance consideration of INR 50 crore that we had paid to single pay attention. As you remember, we bought it for INR 163 crore. INR 114 crore we discharged before March and INR 50 crore we have discharged on 14th of April. Another INR 50 crore is to our existing which includes some portion to bypassing also and some portion to the sheet metal business. Also this year in terms of more expansion plans we are tending to spend something around INR 200 crore more. This includes, so if you assume it would be INR 300 crore and INR -50 crore of the upfront that we paid to Sundaram Glue. It's a few to INR 50 crore of growth and as well as maintenance capacity there.
Okay and the new capacity which will get commissioned or will continue to the top line for this year, what are the new capacities would be ready by the year end. It's actually the contribution would be coming from the next year because normally die casting, sheet metal, whenever we start making the plans or extending the capacity, six to seven months it takes to build up the capacity, then the customer trials, verification, the development cost, handling all these concepts. Factory, the revenue additions will be coming from FY 2026-FY 2027.
Okay, any comment you would give for this quarter? How traditionally quarter two is for the company and the industry? Q1 is softer as you mentioned in your opening remarks.
Yeah. Going forward, Q2 is a monsoon-affected quarter, but since we are present globally in many countries, how should we look at Q2?
What we are hearing from the new theory is that the demand for the automobile has changed month on month. Will that have any effect, what could be having effect on our business profile or our business program? If you would just. I personally feel that quarter two will be considerably better than quarter one. One reason, one of the contents will not be there. Businesses that have been set up in the last few years are stabilizing. The new acquisition itself is stabilizing. I personally feel that we will get a much better and a considerable improvement over quarter one. Sir, I joined the Q follow up, but there is lack of awareness for investing community. Since the IPO, valuations on the enterprise value have remained subdued.
I think with the variety of businesses and lines which we operate, more understanding for the investing community is the need of the hour. Otherwise, the valuations are not aligned towards the other listed companies in the market. They should look into the access of what are the reasons why investors are not unable to figure out the value and leverage in our company. I think you are coming with this QIP offering, so a lot of work should be done before going for raising capital because that is a very conscious effect on that is capital coming in the company, so diluting the equity and then sending the equity is going to be a purposeful drop.
My thought process was this. Absolutely. I see trust exactly.
I think we need to play our game or make sure that the effect and the constituents of what we want to do in the future is much more elaborated. It is in an elaborated form for the investor community. You know the. The. If you look at verticalization that I spoke about earlier, that in itself is a way forward, and explaining how we want to branch out on each one of these branches has its own value. Because today embedded and has not been monetized in the way it should be. We will sit with your community, sir. We will understand your points better. We will try and make presentations in a format where people can understand us today and understand our vision for the future. Thank you.
Mr. Kapoor, I just told and adding to what our care is, like we were operating in a hybrid model with the different product line, different margin profiles. That's the reason we are going to the segmentization now. I think we are meeting all the leading investors also, and we welcome you also to join us. Nearly in a year, around six to 10 conferences we are attending and hosting also through our partners, and in the coming period of time, by this year, we plan to do the entire restructuring so that we have a very clarity picture on the plans of each of these companies, how they want to take on the market in the coming period of next five years.
I think that will be very helpful for the investors to take a while decision, and soon you will be hearing that all these companies, die casting, sheet marketing products, they'll be running into good successes.
Yeah, very positive because in my.
right and we should look for IR also, sir. Going right, pointing and firm is also the need of the hour because only for the team to handle these affairs in such a big market on a day to day. I agree. I agree absolutely. In fact, if you look at our business, maybe it's gone under the radar. Let's say a die casting where a few years ago, maybe till about three or four years ago, we were one of the hundred players and now we are at the top five, similarly in sheet metal.
The jump has been dramatic and we've taken advantage of the opportunities that have been presented to us. I think we have not been able to present our vision properly to the venture community. You're right, we will consider having an investment agency maybe for investment relationships, and that will help us in broadening the overall scope of and the reach to who we want to reach. Thank you.
Thank you, sir, for all the elaborate answer. I reached. Aluminum die casting business guidance will be doubling the revenue in an ES time or I think for 3% was contribution from for the current year. What should we look forward with this consolidation from the aluminum die casting business going for the next year?
Yes. Raji, can you give them some reference on the business plan rations or what numbers details for this year including the new acquisition?
Actually, we will be ready with that by the end of second quarter meeting with more customer addition. In the second quarter the call we will be able to show more light on the same.
Okay. Okay. Thanks. Thank you sir.
Thank you. We take the next question from the line of Preet from InCred Asset Management. Please proceed.
Thank you, sir. Thank you for the opportunity. My first question will be in the line of revenue guidance issued in quarter four of around 14% - 15%. Is it that important of crores? Are we spending in maintaining this target? And it's your STEM transit segment. You see the growth would go by it. This is regarding overseas operations, right? Hello. Hello. Am I audible, sir?
Yeah. Can you just repeat the question again? Because
I was saying there is a new guidance which you gave in quarter four was 14% - 15%. In quarter one, the revenue growth comes at only 7% - 8%. Do you still know in this guidance, and if yes, then from which segment will you be getting this growth?
Let me just bring it up and then I'll leave it for Yashpalji to pull this forward.
I did mention to you that there were two customers who had supply issues, and therefore they cut their manufacturing or their production output to a little over half. They do have plans to cover the gap. In a normalized way, it would have been higher, and we do expect to cover up a large part of what we've lost in the subsequent quarters of this year.
Yes, sir.
We maintain our sales target that we have released in the recent console. Quarter one has been affected due to the customer side, but starting quarter two, I think we should be able to achieve the targets that we have set up. Next question would be in the line of margin. You have guided for 50 basis points margin improvement.
I just wanted to ask, will it be extrapolated on EBITDA or are you talking about reported basis?
Like in FY 2025, we have done margin of around 10%. So 10.5% would be each of them or it will be overall business?
Like Sundaram, as I said to you earlier, performance would be not to our expectation that we extend in the current year, but still we have targets to improve by half a percent. Which means anything starting up to half a percent, we'll try to improve it, including Kundam Gitan. When we say half a percent, it means the entire consolidated finances will try to improve up to half a percent, starting from 10 basis to 50 basis, any improvement would be there. Yes, the profits or I would say the margin from Sundaram's return would not be up to that level in the current financial year, but there are other businesses who are doing good, so they should offset this gap in the Sundaram pattern margins.
I think up to half percentage anything between 10 just to succeed this we should see an improvement in the coming.
My last question would be in the line of your long term plans like now you have been doing INR 500 crores of QIP and you are still planning to do your market acquisition. I just wanted to understand what is your aspire segment mix say five years down the line what kind of segment mix are you targeting to achieve?
I will answer your question differently. Now our focus area would be those fragments which could yield us higher margins, profitability, and stability in the market and a good ROC to our esteem investors. That is still open.
We are evaluating all the segments within the industry and we'll choose the best one to utilize these proceeds as and when we go to the shareholders or the investor to raise this money.
Got it. If you can leave the pecking order for the margin in our segment, what are the top EBITDA margin segments?
Automotive business locks and headers is the oldest, is the highest margin driven business in terms of as well as EBITDA, smaller bag followed by die casting and I think by the year end sheet metal will also come under the stimulus because most of the projects they've achieved the equity level and they have grown a very good turnaround this year with a more than 50% improvement in their EBITDA margins compared to the corresponding quarter of the last year.
Okay, got it. Thank you sir. Just one question.
If you can mention segment wise FHC utilization option all the segments.
Capacity wise if you really ask me, like sheet metal we were earlier operating around 60% to 65%. Now it has gone up to above 70%, 70% to 75% and similarly in others also we are operating like around 60% to 70%. As far as because you operate at different segments or product makers are the same, the lines in terms of business are different. Statistically, if you ask me how many machines are running at what capacity, I would say composite average figure. Yes, we have capacities to achieve that. This target that we have set, the revenue targets that we expect for another three years of time, that much of capacities we had built up. Further, we will be going for some inorganic route also as well as Chairman. That will be anything else.
If I done that in the tour. Thank you. Okay.
Thank you. The next question is from the line of Ashish Soni from Family Office. Please proceed.
Regarding this acquisition which you are planning with QIP money, any particular business value you are looking to diversify and what's your typical parameters in terms of acquisition? In terms of ROC or margin accretive, what's your typical guideline? Can you throw some light on that?
This fundraising of INR 500 crores, first use is the first step towards going for any inorganic or a big investment. We have sought the board's understanding. Now we go to a shareholder approval, and once we get this approval, in parallel we will be working on a couple of opportunities in the organic space. The thing is that it comes with good valuations as well as good future prospects in terms of return on the investment or acquisition price that you have paid. Then we will be considering this.
QIP approval will be valid for a period of one year from the date of shareholders' approval in the upcoming region which is planned on 19th of September. Between this period of time, we are required to, but we will not be in any rush or hurry to acquire any of the businesses just to invest the money. We will be prudently evaluating it, and if it proves the valuation price as well as the future prospects in terms of returns and earnings, then only we'll opt to go. Otherwise, you'll see how to move it, because it's not a compulsion or a car to just raise the money. We really value this very prudently. That's what I need to say.
What's your technical criteria, right? When you acquire a company now, like in terms of ROC or return on investment, what are your technical parameters?
I'm trying to understand that. If you are saying acquisition will be in the similar business line you are already there, is it something new? I'm trying to understand that.
We are operating through auto industry, auto industry very wise. Within auto industries, even we can switch on the products also. As I said, if the opening is good in terms of ROC, yes, we are looking at the ROC which is above 18% post cost. That's a target to acquire the businesses. It might not be possible that within the same year we acquire any business and generate 18% ROC. Then I see 18% from our perspective two to three years from the acquisition, and I think this is the best return which an auto component company can give to its shareholders or the investors.
About 18% post checks, I don't think it's possible for any company to deal from the core manufacturing activity.
Last question. In terms of Trump tariffs, how much of your or your customer business are getting affected across the world? If you see our revenue mix, more than 89% is coming from Indian operations, which are not supplying directly to any U.S., so it is unaffected. As far as the overseas business is concerned, the Mexico plant is supplying to the U.S., but tariffs are not on us; it's from the customers. They are bearing it, so directly we are not affected. Yes, the volumes have been down in the entire Europe and U.S. markets.
That loss of business, or I would say slowdown in the business, is affecting. Rest directly we are not affected because of this.
Okay, thanks. Okay.
Thank you. We take the next question from the line of Radha Agarwalla from BNK Securities. Please proceed.
Hello sir. Thank you for the opportunity. A lot of changes have happened in between management position in the company over the last two quarters. What are the internal standards that the company is looking to achieve with these changes?
You mean to say the manager reshuffling of portfolios.
Yes, like we are giving a lot of new appointments have been done with new management positions.
Okay. Rather, the thing is that as we have mentioned, now you understand we are bifurcating the businesses into the subsidiary company, which are very productive successes like data. Now the time has come that we nominate, appoint the persons who are directly responsible to take over those businesses in the market. This exercise of nominating attempts as well as increasing the number of KMPs and resourcing their portfolio is a part of that entire process. We want to appoint the person, make them responsible, delegate them the powers and authority to go and tap the market, explore the market, and grow their businesses. If one has to extend, then these sort of languages have to be given to the staff. That's the reason we are creating a custom whereby the separate companies are identifiable. They have a separate set of management.
The people are free to take decisions up to a certain level as approved by the independent individual companies' board in terms of financial autonomy, in terms of operational autonomy, and this entire refurbishing is the beginning of the same. Rather, you would have noticed that it's not as if it's internal refurbishment, which basically means we are concentrating on the right attributes of the right people to run the right businesses. That's what's been done. Most of it is internal. There is not too much of external incoming into the company. We do believe that we have a strong team, and the strong team now placed where they are in this new structure would be able to deliver the vision that the company has for the next few years.
I have, secondly, Mr. on the call this time. We wanted to understand and defeated from him regarding the company legacy wants to keep the company in the next three to five years.
Neem, you want to come in? Is he on the call? I don't know. Maybe he has a bad connection. He was in the car. Okay, should I answer, sir? You are answering?
Yeah, yeah, go ahead and answer.
Rather, the question is that like you see, we are working on successions also within the management team and familiar is a part of the promoter family also. The purpose is he is aligned with the same vision that we are having as an organization. He would be driving along with Mr. Jayant Davar to achieve the vision of the organization. His vision remains to be the same vision that under which we are working as a management team. Rather, to answer your question in simple forms and supplementing what Mr. Yashpal Jain has said, the vision is not my vision or his vision or somebody's vision.
It is the entire company's vision and everybody is working in tandem to make sure that the future as we explained to you in whatever form we could today is those targets both executively and in terms of delivery are better.
Thank you, sir. The last question is, till date, how much have you invested in the EV product? You have seen that the customer feedback from the EV products has been good. With regards to that, how much are you expecting in terms of revenue for the next two to three years from these products?
You are referring to the investments. The first part was the investment that we have done in evaluation.
Yes, next to your academy.
Investment as of yet, including all the operational development costs, is close to INR 21 crore that we have invested into the E business. Largely, if you see, the entire money has gone in developing the product, paying some fees to the technological partners, and marketing expenses in the coming period of time depending on the UE offtake within the country. They have orders, they have customers. Largely, it all depends on the volume. We are positive. Yes, two to three years. You can't assume that it sends us across INR 100 crore within a year. This year, this quarter, we have been just close to INR 2 crore of the revenue. Going with that, you can expect that the coming years would be good for you. As of now, it's very difficult to give any ballpark figure also. Product wise, we are ready now.
All variants of the product are ready, and now we are ready to kind it then in the market. We are reaching out to all customers, existing companies as well as a new age.
Awesome. All the best for the team.
Thank you.
Thank you. We take the last question from the line of Pree from Increased Asset Management. Please proceed.
Thank you for taking my question back. I would like to ask about the daily. Like I've seen that in the last three years you have exited two or three JVs. Are you planning to stay with all five JVs? What was the revenue and EBITDA margin for quarter one and what do you expect in the full year? Thank you.
Sure. I'll answer the second part of your question first. This quarter, if you ask me, the revenue of all these five JVs together, our share of revenue was INR 37 crore. The JVs achieved an EBITDA margin of 10.72% and a PAT of 5.15%. I think it's very decent compared to double-digit margin and 5.15%. As of now, all these JVs are performing very well.
As in the opening remarks, our Chairman has said that we are evaluating the JVs, how they are performing, whether they are aligned with the motto and vision. In the future, at the right time, we will take the right decision. As of now, we are continuing with the five JVs. That's the truth. Hello.
Yeah, thank you so much, sir. That was helpful.
Thanks.
Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Once again, let me thank Sher Sighn from MK and Anushka for organizing this call. I want to thank all the people and all the participants who were present today and gave us a patient hearing. I want to assure them that there were a lot of suggestions that have come from you, and we would make sure that we listen to each one of them and see whichever ones are appropriate and make sense in the overall growth and vision of the company. We incorporate them accordingly. Thank you all once again and look forward to having a chat with you again in the next quarter. Thank you all once again. Thank you.
Thank you.
Thank you. On behalf of MK Global Financial Services Ltd., that concludes this conference. Thank you for joining us. You may now disconnect your line.