Ladies and gentlemen, good day, and welcome to the Sandhar Technologies Q1 FY 2024 Earnings Conference Call, hosted by Dolat Capital. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Jain from Dolat Capital. Thank you, and over to you, sir.
Thanks, Seema. Good afternoon, everyone. On behalf of Dolat Capital, I welcome you all in the Q1 of our 2024 Conference Call of Sandhar Technologies. From the management side, we have with us Mr. Jayant Davar, Co-chairman and Managing Director, and Mr. Yashpal Jain, CFO of the company. We thank the management for providing us the opportunity to host the call. I hand over the call to the management for their opening remarks, followed by the question and answer session. Over to you, Jayant, sir.
Thank you, Abhishek Jain. Thank you, Dolat Capital, and thank you, Seema, for moderating this session. I also have my colleague, like Abhishek said, Mr. Yashpal Jain, on the call. Good morning, everyone, or good afternoon, everyone. Thank you all for taking the time out for this conference. To begin with, let me just make a few points, and thereafter, we can open up this conference for question and answers. For one, if I look at the market, our internal calculations say that the market, with all the sectors that we operate in, whether they be passenger vehicles, two-wheelers, construction equipment, off-highway, all put together, the overall market in India should be in maybe high single digits, is the growth that one could anticipate.
However, we as a company are being a little conservative for the market, and our growth, which we expect to be in the region of double that number, or maybe close to 20% or odd, comes from all the new product lines and all the new investments that are now being monetized now. That is the situation for this particular year. Now, when I go into a little more detail, I wanna mention that our joint ventures, many of you have been asking about those joint ventures in the last few years, and they've taken their toll. However, like I did in the last quarter, I'm very happy to report that most of them are now profitable and very well, so not just at EBITDA level, but also at EBIT levels.
If I begin with Sandhar Amkin, which is the helmet company, we have positive EBITDA, positive PAT. Winnercom Sandhar, Sandhar Hanshin also brought PAT positive. Sandhar Hansung Technologies, also PAT positive. Sandhar Vectron, again, is EBITDA positive, and in this particular year, we will see... In fact, in the coming quarter itself, you should be able to see positivity there. Kwangsung Sandhar is still negative, but if you look at it, the losses in year 2022, 2023 were INR 8 crore, while in quarter one, they've dropped down to only INR 35 lakh. Again, very, very positive moment on the joint ventures. In terms of Sandhar, we achieved a revenue growth of about 23% in quarter one, which is over the last year quarter, and 8% versus quarter four, at the console level.
We expect this momentum to continue at the consolidated level over the last year's numbers on the number that I gave you in terms of growth that we are looking for revenue. Our consolidated EBITDA registered a growth of 60%, which is I mean, in terms of value, 0.6% in terms of the overall number, which is 9.1% in Q1 2024 versus 8.5% of Q1. With the production now being ramped up in new projects and various cost control and saving initiatives that are being taken, the company expects to see a healthy improvement in the consolidated margins as we move forward.
The operational EBITDA of Q1 2024 is 9.1%, which is actually the same as it was in Q4 2023. Typically, you're aware that Q1 is probably the slowest, and Q4 is the best. We've started at best levels, and we hope to move forward even more aggressively as we go forward in the year. In terms of new projects, mass production has already started in three of the sheet metal plants in Nalagarh, Halol, and Attibele. Development and product validations have also been done by customers, and mass production is expected to begin by first week of next month, which is September. Our Romania plant, again, production has started. Mass production has also been started in the machining for casting projects at Mysore and Hoskote locations.
This business is a high-value-add business. It's only on a job work basis, so therefore, the EBITDA margins are much higher. Due to initial developments, commissioning costs, validation, sample testing, and one-time expenses, the new projects have registered a loss of INR 9.75 crore. This would have been that much higher if they, they have been taken into effect. Coming to EVs, we're very happy that three product lines are now developed. They are either going through the ICAT approval or product validation approval for the specific customers and their specific requirements. These are the DC controller, which is both isolated and non-isolated in 10 amperes, 15 amperes, and 20 amperes.
The EV charger, which is in 750 watt, 1 kW, and 1.5 kWs, and then the motor controller, which is in the spec of 1 kW, 2 kW, and 4 kW. For this EV business, you're aware, a new company has been incorporated. It's Sandhar Auto Electric Solutions Private Limited. The premises and the infrastructure development is in process, and we expect to go for trial runs in the fourth quarter of the current financial year. The company's already executed technical collaboration agreements with 2 providers, and we are working jointly with them for the customer requirements. Going forward, what will be our focus areas? A reduction of debt, improving operational efficiency, reduction of cost, control on new CapEx, and maximum utilization of the OpEx already incurred.
This is something I meant in the last quarter as well, and we continue on that journey. Integration of manufacturing plants. Some of the manufacturing plants can be put together, and that's what we are trying to do to cut down overheads there. We continue on our mission and a vision of diversification of our product portfolio, expanding the customer base and increasing content per vehicle. I just thought this should be in my opening remarks to you. I'm very happy to take questions from here on. Mr. Yashpal Jain, of course, is here with me, and he will take on any questions on the financial parameters, if you like. With that, thank you all once again. I'm happy to take questions. Thank you very much.
Thank you very much, sir. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone 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. Thank you. We take the first question from the line of Radha from B&K Securities. Please go ahead.
Hi, sir. Good afternoon. Thank you for the opportunity, and congratulations on good numbers. My first question was that, our investments in the overseas business and the joint ventures, if we see, totally, we have invested around INR 500 crore in these two businesses. Overall, the ROCE of these businesses are very low, so that is why it is pulling down the overall ROCE of the company. Specifically with regards to the overseas business and also separately for the JV business, could you tell me the revenue potential of these two businesses versus the capital employed that we have already deployed till now?
Thank you, Radha, for that question. Well, if you're taking the working capital that's been employed in the overseas business, yes, that can be taken into perspective, but then the cost of that capital is very low. That's point one. Point two, of course, Mr. Yashpal Jain will supplement me in this business, on this, in this particular question. In terms of joint ventures, the joint ventures are largely very scaled in terms of the asset term. We expect the asset terms to be even higher than the our existing business. It has taken time to take off.
If you look at the revenues and on the margins, we expect that the margins of these businesses, the EBITDA, in any case, even for our overseas business, is higher than that of our Indian business. We expect the joint venture margins also to be much higher in that particular perspective. In terms of specifics, can I request Yashpal Jain to kindly come in and weigh in on that question, please?
Yeah, sure, sir. we have a total investment of INR 87 crore in the joint ventures, and for this quarter itself, we have registered a sales of INR 78 crore for the joint ventures. roughly by the end of year, we are expecting asset term of nearly four times from the investment that we have done in the joint venture. it's basically our share that I'm referring here now. as, as Davar told that joint venture, largely they were set up during the time when the auto industry was just passing through the recession, and then we had a Covid time, but now they are on the full-fledged working. We are having good orders from the customers, and they are facing a turnaround also. I don't think ROC would be a issue.
Going forward, by the close of this year, we expect that at least the ROC may be in double-digits from the joint venture taken together, as far as Sandhar's investment is concerned. The large cool down has been from the bar, the Romania project, as we all know that it was commissioned last year, but it still it is yet to come into mass production now.
Initially, there are always a cost in the new project that we start, and these are the long-term projects, but still our EBITDA margin remains above 11% in overseas business after taking and netting off the one-time cost that we are incurring in Romania on account of the products validation and development that they are going on. There are good potential of ROC also, even double-digit ROCs are there. Yes, they will take some time. By the end of this year, we expect the Romania plant will be stabilized and start generating the revenues that we were looking for. I hope this answers your question.
Sir, just a little further going, going further in the question. Firstly, on the JV, you mentioned INR 87 crore we have invested, right? This quarter, INR 78 crore revenue we have reported, that is on the basis of Sandhar, that is 51% JV, only for our share revenue you are mentioning, right?
INR 78 crores are mentioned the entire sorry, entire turnover of JV. Our share is INR 39 crores.
Just 39, okay. For full year, sir, just how, how much you, you said, sir, for full year, how much you are expecting from this JV?
Quarter three and four would be quite higher. You can expect that 39 is always a minimum figure for, per quarter in our share. Regularly, it will be moving up in quarter two, three and four.
Sir, you mentioned asset turn of 4x, potential from this INR 87 crore investment.
Yeah, it can easily go up. As I told that the production now has been ramped up, customer demand is coming up, market is pushing up, obviously 4x asset turn. Even in some of the JVs, we are having a turnover more than 4x . Thing is that I am telling you the average of all the seven JVs. Some of the JVs are yet to come up to the turnover, like Viatrans, they are slowly going up. As far as if I say that Winnercom Sandhar, their asset turn is quite high, as compared to the investment that we have made. On an average basis, I am saying 4x asset turn we can as easily achieve.
Sir, by when can we achieve the 4x asset turn?
At least by a year end, three times is possible. Maybe starting next year, it can be above four times also.
4x would be the maximum potential?
In such cases, actually, you see, it depends on the orders from the customer. We need not go for any expansions. We have the capacity, at the same time, it is not an idle capacity. It can go up, even up also, based on the customer demand. We don't require any further investments in the JV to carry on the present business.
Sir, you mentioned from the JV, double digit. Hello, sir?
Yeah, sorry. I just wanted to mention also that any increase in orders or doubling of these orders, or even more for that matter, doesn't require the same level of investments even going forward. They will require only incremental. The asset size, the turnover on assets actually keeps on increasing from now on. 4% is a stable thing that we realize should happen in the short term itself, but going forward, obviously, we are looking at larger numbers.
Okay, sir. Sir, you mentioned, from the JVs, we are expect-
Radha, may we request you to join the question queue, as we have several participants waiting for their turn?
Sure. Thank you, ma'am.
We'll take the next question from the line of Gaurav Sachdeva from ICICI Securities. Please go ahead.
Hello. Good afternoon, sir. Sir, in the last con call, we were targeting around 25% revenue growth on a console basis. Now, we are talking about less than 20%, so have we revised the guidance for this FY24?
We are not revising any things that were said in the past, but, but obviously, there are things that are beyond our control. Like I said, while the industry is looking to grow at maybe high single digits, we haven't anticipated too much of growth from the industry. We are talking of growth on a very, very conservative platform. These numbers, I think, have been discussed several times. We feel that at this point of time, while we are where we are, the numbers that were given and the numbers that are being spoken of today seem to be very realistic numbers, Gaurav.
Okay. Sir, what is the EBITDA we are targeting for this FY 2024 on a console basis?
Well, we.
Yes.
Yeah, go on, Yashpal Jain.
As we spoke in the last con call also, that we achieved the EBITDA of around 9.1%, operational EBITDA in quarter four, last financial year. We are going forward with at least some improvement in the same. You can expect that this momentum will continue, what we have reported in this Q1. There will be a improvement going forward in quarter two, three, and four.
Yeah. Just for reminder of everyone here, I don't know if I mentioned these numbers, but the total income has gone up by 23%, EBITDA has gone up by 31.6%, EBIT by 58.2%, and PAT has gone up by 69.2%. That has been the Q1. We expect this growth to continue in the balance quarters as well. Like I said, a lot of this is being taken in the investments that have already been done and the current orders in hand that we have from the customers.
Sir, we, we used to have, I think, double digit margins few years before, so can we expect this?
Yes.
In maybe one or two years from here?
Oh, absolutely. Absolutely. Why, why one or two years? We, we expect to reach that number sooner. Obviously, I'm, I'm not in a position to be able to confirm that today, but that's what our aspiration is, and we should be there. There is no reason why we should not be there, in fact.
Okay. And sir, will our existing cash flows, since we have a lot much cash flows, will these be sufficient for the increasing working capital needed as we will be growing further, or we will be taking more debts?
Yeah, yeah, I'll answer this. We have sufficient working capital limits, and I think even for expansion purposes, we can manage it without going for fresh borrowings.
Okay. sir, we, in the last ConCall, we discussed about manufacturing of PCB for the captive consumption. Are we going for that for the smart locks?
Yes, that has already been initiated. The plant is now fully operational, and we are trying to add to the capacity that we have, so that the utilization and monetization of that plant happens very quickly. In fact, all the future electronics that are being envisaged and are, for which we've received orders, the idea is that all of their PCBs would be made in-plant.
In terms of, sir, percentage, what is the cost, I mean, of PCB in a 1 smart lock? If we talk in percentage terms, what is the component cost?
Well, it again ranges, right? We, we, we will use it for, let's say, our, parking sensors. We plan to use it in our antennas. We plan to use it in smart locks. We plan to use it in controllers for smart locks. We also plan to use this for several of our EV product lines. Obviously, there is a big range in the value, that is determined by the product line that we are going to use. Even in smart locks, depending on the kind of smart lock it is, it ranges. There are big ranges. It's very difficult for me to give you an exact number, so unless you're asking for one specific, component.
Yeah.
It is otherwise very difficult for me to, to give you a, a, a, an exact number.
Sir, I was asking about smart locks.
Yes. Yes, again, in smart locks, there are different kind of smart locks. Smart lock could be INR 8,000 worth. A smart lock could be INR 1,100 worth. Now, in all of these, obviously, the difference is a PCB plays a large amount of difference. Typically, I would say that the cost of a PCB in most of these componentries range between 15%-30% of the cost of the product.
Okay. sir, is the mechanical lock and the Smart Lock has the same margins, or there is a difference in the margin we will be getting?
Well, initially, I would imagine that the smart locks would have a higher margin. Going forward, for some period of time, these margins will keep growing, because as localization comes into perspective. Over the years, when they become a standard product for all vehicles, you know, to begin with, less than 5% vehicles will be using these, especially the two-wheeler segment. Going forward, we expect this number to go up to 100%. So there, obviously, when you have volumes, margins do drop, but the volume of profit or the value of profit obviously goes up dramatically.
Okay. Since, sir, all your products-
Thank you, Mr. Gaurav. May we request you to connect, join the question queue, sir, as we have several parties.
Yeah, sure. Sure.
Thank you very much.
Thanks.
The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead, sir.
Thank you for taking my question. Sir, the first question is on the JVs again. Just to clarify the opening remarks made by Yashpalji. INR 87 crore is our side of investments. I assume the JVs would have put in similar, roughly INR 175 crore. There would be debt on that balance sheet also of the JVs. On that overall number, we are saying we can do 4x sales. Is that the right understanding? More than INR 700 crore?
Yes, we can do, combined together.
Right. Of the INR 700 crore, roughly INR 350 crore potentially could be our side of the revenues at double-digit margins, EBITDA margins.
Yes.
Perfect. Sure. Thank you for this. Sir, the second one is in terms of the Romania start-up costs. How much longer do you expect this to continue? I mean, it is what it is, but would it be two more quarters, or at what point in time would we start, start seeing scaling up?
Yeah, it may go for next two quarters also.
Sure. FY 2025, we could probably see it moving towards a normalized production. Is that the right understanding?
Yes, absolutely. Absolutely correct.
Sure. The final question is, in terms of, the four-wheeler piece. One of our large clients is setting up a facility or setting up a global model, in India. Would we be supplying only for the local sales, or would it be for the entire product, so wherever the product goes, our content would go into?
Arjun, I know what you're referring to. Unfortunately, I'm not in a position to talk so much about that. Suffice to say that most of the customers in India, or let me say, all the customers in India, we do have inroads with, and some of the people who are coming in, we are already suppliers to them, and I see no reason when we supply to them overseas why we will not supply to them in India.
Sure. Even for the export models, et cetera, it would be the similar product from us?
That's right. Like I said, if we supply to them overseas already, that is probably the reason for them to obviously use our local expertise and our base for their consumption.
Sure. Perfect. Thank you very much. Wishing you all the best, sir. Thank you.
Thank you, Arjun.
Thank you. We take the next question from the line of Puneet Singh from CCIPL. Please go ahead, sir.
Hi, thank you for this opportunity. Can you please share some light on your order book and, I mean, what, what is the composition of the, the orders that you have received?
Well, this, this is a difficult question in some sense. When I mention a number of those, obviously it comes from the, the, you know, I, I've heard some of our peers give you lifelong numbers on the new orders that have been received. I don't know how that calculation is done. difficult to say that some of the new orders that we have... If you're talking of new orders, new orders are orders, a part of which comes in this year, some part comes in the next year, but it's a very, very dynamic number. Let me talk about some of the ones that are in the public domain. Suzuki, for example. If you look at Suzuki, that order book is worth about INR 500 and something odd crore over a period of five years.
This is for smart locks and for their regular locks. We have Honda new business, which is coming. There is the Honda car business, which is coming. There is the Tata business that is coming. There are several orders, several scenarios. The only thing that I can say is, there's an aspiration of the company that we target to keep our revenue growth at double that of the industry. A large part of this will come out of the monetization of investments that we've already done, and we continue to get orders in that particular respect. That is the only statement that I can give you there. In terms of pure new orders, like I said, we do have a calculation. The calculation is that the orders which were received by us in the last year, for annualized numbers, ranges from INR 278 crore-INR 350 crore.
All right. Thanks for elaborating. Hello, thank you for elaborating. I mean, in terms of FY 2024, what kind of, I mean, execution do we see, I mean, in terms of the order book that we currently have, including new orders and previous orders? What kind of execution are we seeing in FY 2024 and FY 2025?
Again, you know, this question can be broken down. Let me, let me put it another way. We were, we were making parts where the share of business to us has gone up. You know, so if we were making, let's say, some sheet metal items that where we had a 50% share of business, if that share of business has gone up to 70%, should we call it new business or should we call it the existing business? That is difficult for us to ascertain. When I gave you the numbers, we spoke about new product lines completely, that we have got. The annualized numbers for those, when we calculated last year, worked out to between, or let's say an average of INR 300 crore additional business year on year.
This number obviously increases every year as new businesses keep coming in. We cannot give you numbers of how long these are gonna last, because changes happen. Sometimes when we get the orders, there are afflicted to change depending on what the success of their models are, how long they're gonna last, and so on. There are some models that last 15 years, there are some that peter out in 3 years. That is how it plays up in the Indian context and scenarios.
All right. Got it. Thank you very much, and wish you all the best.
Thank you.
Thank you, sir. The next question is from the line of Saurabh Chand from Sunidhi Securities. Please go ahead, sir.
Good afternoon, sir. Congratulations for wonderful set of numbers once again. Sir, my first question is: What would be our market share in two-wheeler locks, both conventional and of course, smart is now beginning. Who are the other players in the industry in both conventional and players who are getting into smart locks?
Well, I am only. When you talk about market share, let me say the biggies are all with us today. There were some in which there was a dramatic import of parts and some assemblers did try and give it. I would say that in terms of localized platforms, we expect ourselves to be the largest player in that particular field. It is still a little premature to say, because the effective utilization in two-wheelers of smart locks is extremely, extremely small.
We will have to go forward, but like I had said in the last quarter, the large number of orders that have been announced have come to us. In terms of our peers, we do have one or two peers, who are doing this, and working in some case scenario, where there could be some, apportioning of share of business. As we stand today, we expect and we hope that we are the largest player, especially in the two-wheeler in India.
Okay, sir, thanks. Sir, on the conventional side, would it be possible to, you know, present some market share figures?
Well, we do have the numbers. Do we have them ready right now, Yashpal Jain?
Sir, I mean, the share of business or no?
Share of business. Well, to give you, to give you a broad perspective, sir, let me say that, you know, you are aware that we are by far the largest player in Hero. We are now in Honda. In fact, their new model, which has just been launched, we have a 100% share in all of their locks. We are-- We will be in their smart lock scenario as we go forward. TVS, I think we are almost 100% suppliers, the same thing as with Royal Enfield.
We are also there in almost, I would say 60%- 70% of the new EVs that have been launched, where we are, the suppliers. That's where the entire thing is. In terms of actual numbers that have been produced or are going to be produced, if you want, we have those numbers, but I don't have them handy right now. I'll be happy to take on your question on the side. You can write to me, and I will reply.
Yes. Thank you, sir.
Exactly.
Thank you.
Is that good?
Yeah, yeah. Sir, my last question is on gross margin. This quarter, we saw gross margin expanding by 150 odd basis points. Partially, the positive impact of gross margin was, you know, offset by increase in employee and other expenses. How is the trend looking for gross margins going forward? Is there any further scope of improvement in gross margins from 63 odd %, 37 odd %?
Yeah. Yashpal Jain, you want to answer this question?
Yeah. Yeah, yeah, I'll answer. Yeah, as, as you mentioned, there has been improvement in the gross margin. Going forward, we will see further improvement in gross margins with the volumes increasing and the new investments turning into the volumes. As far as the increased employee cost is concerned, it's a one-time activity as the annual appraisals are complete for the staff. We are seeing that impact. As in the opening remarks, Mr. Davar has said, we are working on integration of plants also, we are working on the cost reduction initiatives also. You'll further see a very healthy improvement in our gross margins, and going forward with the increase in the volume, it will keep on having a positive upward trend. That's what I can say.
Yeah, that's great to hear, sir. Thank you. All the best.
Thank you.
Thank you, sir. We take the next question from the line of Abhishek Jain from Dolat Capital. Please go ahead, sir.
Congratulations for a strong set of numbers, sir, in a very tough time. In sheet metal, sir, you have set up three plants. What is the current capacity utilization, and how much revenue potential for the next two years?
So-
Yashpal Jain, want to take this?
Yeah. Yeah, I'll answer. Sheet metal, like currently, as I told last time also, it's, I mean, it's a continuous process plant. Capacity-wise, we have a lot of capacity to continue manufacturing. While as we mentioned, like Nalagarh and Attibele, they are into the mass, so they are already into the mass production. Halol, with the facilities we have set up, they are into mass production. Second phase, we have deferred. Mysore will be coming to mass production by the end of, I mean, by the beginning of the Q3. Another, going forward, we have a good potential in sheet metal businesses, and we have confirmation from the customers also. This business is going to grow even in current financial year and coming financial years also.
What would be the revenue, incremental revenue for FY 2024 and FY 2025 from the sheet metal business?
Like we have given an indication, guidance on revenue growth, sheet metal will also grow according to 25%-30% on a normal basis, not beyond, below that, sorry, not below that. We have good, but again, it depends on the customer volume. Presently, we have a good set of revenue guidance from the customer. You'll see a healthy growth, but again, the numbers remains the numbers. Quarter-to-quarter-wise, you will see a good growth coming in sheet metals and the volumes picking up.
In ADC business, you have won many business in domestic as well as international. What kind of the incremental revenue are you looking from FY24 and FY25, and what would be the margin of those business? Because most of the business are from the machining side, so margin would be slightly higher than the conventional margin.
Like aluminum die casting in India and overseas, we are already into double-digit margins in ADC. Machining is something that we are doing on a job work basis. Obviously, with the arrangements with the customer, we are having a higher set of margins. You will keep on witnessing double-digit margins in the aluminum die casting business. The only drawing factor in the overseas was, as we mentioned, the Romania, the first year, so it will be on a sluggish note this year. From next year onwards, Romania will also again pick up. You'll see a healthy growth in overseas businesses also. India will continue to show a strong growth. We have indication from the customer which shows that die casting and the machining business will be seeing a good growth in the coming years also.
Okay, sir. Sir, in cabin and fab- fabrication, we are seeing very strong traction from the last two, three years. Just wanted to know what kind of the revenue growth outlook for the next two years, I mean, FY 2024 and 2025, because you have won the many new business apart from the JCB. If you can throw some more light there.
Like cabins and fabrication, again, it has to be depend on the construction industry. There has been a good push by the Government of India on the infrastructure projects, so I think they will continue, and the same growth momentum as we have given in the revenue guidance will continue. Yes, I mean, our normal auto, two-wheeler, three-wheelers, the growth is different and the guidance is different compared to cabins and fabrication, which is highly dependent on the infrastructure push. If the government is committed, we, we are seeing, and 2024 is general election, we have to see how it goes beyond 2024. Till 2024, we expect to continue our good momentum in our cabins and fabrication. We can repeat the performance that we have delivered last year or, and also in the Q1 of this year.
My last question is on the growth and the net debt of the company, what is your CapEx plan for the FY 2024?
Yeah, our debt, sorry, gross debt as of close of June 2023 was INR 551 crore, and net debt is INR 525 crore. This is the status of the debt. Going forward, CapEx plan, as I mentioned in the last investor call, we have a spillover CapEx of new projects of INR 110 crore. Part of that we have already spent in the current quarter, around INR 31 crore we have spent. Remaining that we will be spending in the current financial year. Obviously, another INR 60 crore-INR 70 crore of the maintenance CapEx we will be having to meet our tooling and other requirements with the new models of the customers coming into picture, and we'll be adding to our profitability more.
Thanks, sir. That's all from my side.
Thank you.
Thank you, sir. We take the next question from the line of Udit Gupta, an individual investor. Please go ahead.
Good afternoon, sir. Sir, I would like to know a little bit more about your four-wheeler businegss, sir. Like, are we adding new models like the Honda Elevate, or are we just, in the old models only?
No, no, Elevate is a very much part of our business and all the product lines that we do, all the locks are ours. All the handles are ours, so all of that continues. Honda is a very, very strong customer for us. Unfortunately, Honda has not done much in the last few years, but I think the Elevate and the new models coming up should change the scenario for Honda and will help us grow even faster.
Sir, in our, one of our earlier presentations, sir, we read about your shark fin antennas and your cameras and all those things. Sir, are those-
Yes.
products picking up in these brands?
Yes, absolutely. We are, we are, of course, Hyundai. We are now the major supplier for all of these, and we should soon be making announcements for some of the others who also gratified of that platform.
So the margins in these products are similar to what we're guiding about double digits or so?
Yes, that is the aspiration for us. As volumes grow, as technology grows, the margins grow.
Sir, we, we were talking about the integration of plants, sir. How many plants do we have running right now, and how much can we bring that down to or something of the sort?
Yashpal, do you want to answer that?
Yeah. We have total 42 plants as of now, out of which eight are into joint ventures, which is out of the question of integration. Four overseas operations are separate, so we are left with 30 plants in India, effectively, yeah. We expect that at least in the current financial year, two to three plants we will be able to integrate.
Yes, sir. Is the plan only for this year, or are we looking at something next year at all?
It's a regular, it's a continuous activity, but you see, we need to see from a broader perspective. Secondly, there's a customer validation and approval, so normally it takes a time. We are, I mean, it's a regular, it's not a very one-time activity, it's a long-term activity that we are seeing to integrate the plants, integrate the facilities also, and it will depend on case-to-case basis and customer-to-customer basis.
See, consolidation is a part of the aspiration, and we will be consolidating as we go forward, whether it is plants or whether it is better capacity utilization, or whether it is monetization of unused assets. We are looking at all these three things from a very, very holistic dimension. From time to time, so we have the immediate plan of consolidation of some of the units, but the other plans also continue on a dynamic basis, and you will hear this in our plans every year, one form or the other.
Thank you so much, sir. Sir, customers like Maruti Suzuki or Toyota or the other Japanese customers, are we also looking at them for four-wheelers?
Oh, absolutely. That's something that, that is a part of our new customer acquisition strategy. We are talking to all of them, especially with the new product lines that we have now introduced and will be introducing in the future.
Sir, does it make any difference to them that we are already supplying to Japanese people like Honda?
Oh, yes, it does. It does. You see, we have to follow with the scope of what they do. There are some cases, for example, if we supply to a Honda, their specs could be higher and therefore the cost could be higher. We not only have to meet the tech specs, we also have to meet the cost specs, the delivery specs, the development specs and so on and so forth. It's a, it's, it's a wide combination, suffice to say that we are growing in every dimension of this with almost all customers that we are engaging with.
Thank you so much.
Thank you.
Thank you. A reminder to all the participants, if you wish to ask a question, you may press star and one on your touchtone telephone. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touchtone phone. We take the next follow-up question from the line of Radha from B&K Securities. Please go ahead, ma'am.
Yes, sir. Thank you. Sir, what is the total revenue potential from the four plants that we have in overseas?
Revenue potential from four plants. Last year, we have closed above INR 400 crore mark from the three plants. Obviously, I will count them as two plants because one is a machining facility in Poland. Romania will be coming into mass production, I would say, in the year, for, in, picking the volumes in the next year itself. Figure-wise, it is difficult for us to tell you what is the exact, but yes, if the two plants can generate above INR 400 crore, with the three plants, we can continue the same momentum in the coming.
So total INR 600 crore?
Yeah. As I told, there can be there cannot be a fixed number. Yes, we can easily achieve INR 110 crore starting in Romania and going forward to your higher numbers. This is the customer demand, so.
Okay. Sir, secondly, Honda Lock has sold its business to MinebeaMitsumi Inc., and they are more into electronic products. Just wanted to know, are we getting any support from them for manufacturing?
Can you repeat that question? Can you repeat that question, please?
Yes, sir. Sir, Honda Lock has sold its business to MinebeaMitsumi Inc.
That's right. Mm-hmm.
They are, they are more into electronic products.
Yes.
Are we getting any support from them for manufacturing smart locks, and how can we leverage their capabilities?
Yes, Radha, for your understanding, I think it's in the public domain that we've already signed the new agreements with Minebea, as Minebea has absorbed Honda Lock. Minebea, you're absolutely right, is into various other electronic componentries as well. Our task would be to work with them together. We are working on three platforms. One is development of our own engineering capabilities through our Sandhar Centre of Innovation and Development. The other is working with Minebea. We also have other partners who do similar stuff, whether it's a Vetron or whether it is some of the Korean companies that we operate with.
We have built different lines of technology for several products, and depending on which customer wants us to tie up or work with the design of which partner, we have that availability today of multiple technology sources to be able to offer the customer wh-whichever one he chooses to, depending on the technology, depending on the cost, depending on the futuristic mode that they have in terms of their idea and structure for their product lines.
Okay. Thank you, sir. Lastly, we are seeing that the ramp-up in the overseas business has been slower than expected, and India business is doing much better, so- We have invested in the overseas business in last year as well. What is giving us confidence for this aggressive CapEx plans in the overseas business? Is it because of any additional share of business win or customer win? Could, could you give some light on this?
Radha, again, I won't be able to give you specifics. All I can tell you is the Romania plant was set up with its capacity already being blocked for the future. Unfortunately, because of the, the Ukraine war, a lot of delays happened in the Romanian context, whether it was the building where the steel that used to come from Ukraine stopped, or whether it was cement, the costs went up and the entire project got delayed. Now, it's the delay that has cost us and cost our customers, but obviously, we have a full plant set up that has been. The idea now is to grow the utilization of that and grow revenues out of that. We do expect that our revenues from overseas business will continuously grow at a pace which is probably going to be faster than how it has been so far.
Okay, sir. Sir, just one last, if I can squeeze in. In terms of smart locks, is it possible to manufacture them in the existing lines, or do we need to set up new lines for manufacturing smart locks for the same customers? What would be our investing-?
For the same customer, no. No, no, no. Radha, let me explain this to you. In fact, for different models, we have different lines. If we supply to, let's say, today, we probably supply to 60 or 70 different models. We have separate lines for most of them. There are some which are close to each other, but smart locks, again, to answer your question, we have separate lines. We will have separate lines. These are incremental costs. These are not really huge costs of setting up. It's the development cost that takes... It's not the line setup that takes too much.
Okay, sir. Thank you. All the best.
Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.
Well, thank you, Seema. Thank you, Abhishek, once again. Thank you to all the participants today who spared time to give us and try and understand us more. As you would understand and appreciate, there are limitations to the exposure that I can give as per the Indian law. I hope I've been able to answer many questions, but in case there are more specific ones, which you would like to write to us and we find within the ambit of the law to respond, we will. I'm also very happy to invite all of you to some of our plants, to come and get a feel of what we do, and that will add to your bullishness about the company. Thank you all very much, and hope to talk to you again soon. Thank you, and thank you, Dolat, once again for setting this up, and Seema for moderation.
Thank you very much, sir. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.