Ladies and gentlemen, good day, and welcome to the Sandhar Technologies Q2 FY 2024 earnings conference call, hosted by Dolat Capital. As a reminder, all the 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, you can press 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. Thank you, and over to you, sir.
Thanks, Sagar. Good morning, everyone. On behalf of Dolat Capital, I welcome you all in second quarter FY 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. Now, I hand over the call to the management for their opening remarks, followed by the question and answer session. Over to you, Jain, sir.
Good morning, everyone. Thank you all for joining in. Thank you to Abhishek Jain for organizing this, from Dolat Capital. Well, as we said today, after the declaration of results, that we did yesterday, I'm happy to understand the queries that you have, and will try and respond to them, hopefully, to whatever you're looking for. Along with me is Mr. Yashpal Jain, the CFO of the company. To begin with, yes, a good morning once again. The auto industry in the last half year has not performed to what we had expected. But we are happy to say that the company has performed much better compared to the industry.
In fact, if I look at the overall industry, the growth ranges from negative in some sectors to 1% or so in two-wheelers, 6% in passenger vehicles. The only growth, main growth has come from the construction sector. Against all of this, Sandhar has achieved an income of about 20% higher in the first half of the year, and if you compare it with what we had said, we are in line with our budgets, accordingly. I'm also happy to say that all the new projects, the 4 projects of sheet metal, whether they were at Nalagarh, Halol, Attibele and Mysore, have now reached mature production levels. Our Romania plant has also started production, and we expect to ramp it up in the year 2024, 2025.
Full-scale operations have also started in machining for casting projects at Mysore and Hosur locations. The one thing that we are very, very excited and looking forward to is the introduction of smart locks, which will happen in the next financial year, where we are now completely geared up. And I'm happy to today even tell you that the Japanese, especially Honda, Suzuki, have given us exclusive orders for the smart locks. This, you know, will be a game changer as these are adopted on a mass scale by the two-wheeler industry. Besides of that, we are all in readiness now for the EV product line. You're aware, I had told you in the last meeting that our DC controller, our EV charger and motor controller, and the hub motor are being readied, and we start to...
We plan to begin operations and production of this in the first quarter of the next year. In terms of focus areas, we are concentrating and are on route to some areas that we feel are important for us: reduction of debt, improving operational efficiency and reduction of cost, control on new CapEx, and maximum utilization of CapEx already incurred, integration of manufacturing plants, diversification of product portfolio, expanding customer base, increasing content per vehicle. But we also, I must be, I'm happy to tell you that our consolidated EBITDA has registered a growth of 1.2% year-on-year. So the margins that all of us were talking about have started to flow in.
In terms of joint ventures, also happy to state that in the half year, our revenue from the joint ventures has reached a level of INR 151 crore, and against a loss of INR 5 crore that we had last year, this year we are in profit, INR 90 lakh or so of profit. So basically, the drag on the bottom lines, which was coming in from the joint ventures, have started to reverse. With all of this, I am going to stop here and request all of you to ask your questions, and I'd be happy to respond in terms of operational numbers and so on and so forth. Mr. Yashpal Jain will weigh in with whatever questions you might have. Thank you, Abhishek, once again.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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 Nitin Agarwal from UTI Mutual Fund. Please go ahead.
Thank you for taking my question, and festive greetings, sir. And congratulations on this continued improved performance at your end. So my first question is regarding if you can give us some color on, you know, how are the orders panning out from our two anchor customers, Hero and TVS, and in line with that, what kind of growth momentum can we see in the second half and maybe FY 2025 also, if you have that visibility?
To be honest with you, I will not be able to give you projections as per the norms that have been advised to us. But suffice to say, that if you look at our history, the first half of the year typically is much less compared to the strong second quarter, second half of the year, and I don't see why that would change. So typically, I don't know, Yashpal Ji will weigh in. I think it's about 40-60 is how we do it. So, yeah, that should give you some idea. Of course, it depends a lot on how the industry performs. But from our side, with the growth and the investments that have been made in the last few years, all of them have started to be fruitful, and we expect that particular momentum to continue.
In terms of TVS, TVS has now become our, probably the largest, customer for us. And again, Yashpal Ji will give you details on what is the share of each customer in this scenario. For next year, next financial year, again, early to say, we are still on the drawing board, getting the orders. But the pace of growth that we see now, according to me, should continue irrespective of how the market goes. Yeah. Yashpal Ji, would you want to give him some of the numbers on TVS and so on and so forth, share of business and so on?
Sure, sir. So out of our total business, 30% is being derived from TVS. So TVS is now our biggest customer for us. And Hero share is 18% now, because TVS is growing larger if you compare with Hero. And JCB stands at 9%. So these are three prominent customers for us. And gradually, the share of Honda motorcycles, HMSI, has also grown up. It's around 3.5%, and I think in the coming half year, it will significantly grow up with the new products and as I talked about s mart locks. Once they are introduced, the share of business with HMSI will also rapidly grow up. And the total overseas business accounts for around 15% of our revenue, which includes Bosch, Continental, Autoliv and TRW. These are the major customers over there.
Sir, a few quarters, say seven, eight quarters back, Hero was somewhere around 28% of our top line, and now it's 18%. So is it that the others have grown significantly above that, above Hero, or have, like, what is attributed to that?
Absolutely. Absolutely. You, you have said it correctly. Hero in itself is growing for us in terms of absolute numbers, but in terms of percentage, the others are growing fast.
Or you can say we are go, we are growing more rapidly than Hero, so, like, where our content increasing with other customers, that's, and, I mean, the absolute numbers of Hero are more or less going up, but our content is increasing, business is increasing with other customers, so that's the reason we are rapidly growing up. And the proportion on an overall basis, the share looks to be lesser as far as Hero is concerned, but our share of business with Hero has not declined, to confirm it.
Okay. And,
If you were to do a simple calculation, 18% of our revenue now versus 20% of our revenue at that point of time will give you the answer, right?
Right. Right. Right. No, I can see that on absolute term, Hero business has also grown, but, yeah, TVS has been, the joker in the pack for us. And, sir, also, on, from the JV profitability, you know, we have seen, now continuously three quarters, we have been positive. We have turned from a negative over there. So if you can give some insights on, you know, where are we on each of the JVs and how are we progressing? And, you know, are, are we looking out to, you know, stop operations in any of those loss-making JVs that are still continuing to be dragged, and what is the possibility for turnaround in those, JVs?
Yeah. Well, this will be a long answer if I go into individual one, but let me say some of the... So all the units, all joint ventures, are now in positive. There are two which still have a drag, but that drag, fortunately for us, is not on account of operations. It's on account of foreign exchange issues.
Yeah.
So if you were to put that aside, then each one of the joint ventures is now on its own feet. So that is a big blessing, and we see that from now on, there should be acceleration in the performance of all of the JVs. I mean, if I break it up, our helmet, which is Sandhar Amkin, I'm happy to state that we are now at record numbers per day in terms of our production capacity. And it is getting profitable by the day. Whether it is in the Winnercom, which has been profitable, Hanshin, which has been profitable, Han Sung, which was a drag on the line, is now positive. And not just positive, it has an EBITDA margin, I think, which is in very healthy double digits. Same with Sandhar Whetron.
So Jinyoung and Kwangsung are the only two drags, but they are largely on account of foreign exchange, where we are reviewing how the methodology of accounting in terms of the materials that are exchanged between Korea and India could be looked at from a different perspective as we go forward. But overall, we are quite satisfied with the performance of the range.
Okay. And sir, we see that the EBITDA margin has improved and is holding on strong.
Yes.
From here on, you know, what are the additional levers, you know, to increase it further to that double digit kind of levels? What levers are we looking at, going forward, and what is the timeline, target timeline that we have in our mind, to reach that double digit?
Again, I think we are in line with our thinking of how to improve the margins. I had mentioned this to you earlier as well, that the margin drop was also on account of new products. And while our subsidiary, which is the sheet metal subsidiary, where the Sandhar Engineering, which is still a drag in the company, because it's still to reach maturity levels. Once those come online, which we see happening soon enough, our target of reaching double digits and, and well over the beginning of double digits should not be far now.
Okay. Thank you, sir. That's all from my end. Thanks so much.
Thank you so much. Just a reminder to all the participants, if you wish to join the question queue, please press star and one now. The next question is from the line of Radha from B&K Securities. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations on very good results. So my first question was that, so we, like you mentioned in your opening remarks, that we have started all the sheet metal plants and mass production and all of them, barring Mysore, which will probably be reflected from this quarter. So, sheet metal revenues should have increased on a quarter-over-quarter basis as well, given that new plants have come up, but that has not happened in this quarter. So could you please give us some insights on the reasons for that, and how do you see this in the coming quarters?
Well, Mr. Yashpal Jain can give you the numbers on sheet metal as to how we've grown compared to last year and up to the quarter, in last quarter. Yashpal, do you want to come in?
Yeah, sure. So we have grown in sheet metal, because if you see like the percentage is 13.5%, but in terms of the total revenue, if you multiply with 13.5, revenue is pretty high if you compare to last year. So in sheet metal, the, in the turnover-wise, the sales has been started generating, and in Sandhar Engineering itself, we have generated a revenue of INR 87 crore in first half. And the same is the case with Nalagarh, which is above 37-38 crore INR. So these new projects have started generating the revenue, and if you multiply with the absolute numbers versus the, share of the sheet metal business, the, I mean, the increase in turnover is clearly visible.
Sir, actually, in the presentation this quarter, we are, we are not given, I think whether the red color is for, two QFY 24 or the blue one. So we have, we are not given the legend. So what I understood, given that, previous quarters we used to give the red highlight as the, current quarter revenue, so that's why I've taken 12.6%. So that's why my question was based on that.
No, no, the red-
You mentioned, sir-
The current, the red ones are for the quarter that's just gone by. The gray mark that you see is for the corresponding quarter of last year, and the blue is for the immediate quarter preceding this one.
So, so sir, then as per that, the sheet metal revenue mix is 12.6% instead of 13.5%, which you just mentioned?
Yeah. So quarter is comparatively higher if you go on a year-on-year basis. So that is the reason-
Yes.
Other sectors have also grown up. It's not that all alone sheet metal is growing up. From 746 in the last corresponding quarter, we have grown up to 885. So 12.6 of, or I would say, yeah, of 889, so 885, versus that 30.5 of 746, the growth is visible in sheet metal.
Yes, actually, I was talking on a sequential basis. So, if we, if we multiply the product mix that you have given, so it was INR 114 crores in 1Q FY 2024, and that is INR 112 crores in 2Q FY 2024. So given that, why I'm seeing sequentially is because of the new plants that have started.
... So as I told, like, Sandhar Engineering is dedicated to sheet metal, 87 is there, roughly 38 is in Nalagarh, so automatically it goes to the same level that we have mentioned earlier in our call, sir.
Yeah. So once again, Radha, the Nalagarh plant is an inherent Sandhar Technologies, and the Sandhar Engineering is the new subsidiary, which has added three plants while the Nalagarh plant has been consumed into Sandhar Technologies itself.
Yeah.
Okay, sir. So secondly, in the other segment, we are seeing very high sequential as well as YOY growth. So could you give us some insights as to the reason for this? And you also mentioned that this MQU, DC-DC and the new products that we have planned. So in the presentation, it is mentioned that it will come in 2023 itself. I assume that this is calendar year 2023. So have you completed any trial runs, and how is the customer response for these products till now?
So let me, if you want it, on the basis of product wise, if I look at the motor controller, we have completed the POC sample. We have done sample A, we've completed sample. Sample Bs are in the process, some of them have been completed. The 250 watt is already completed. The others are coming in soon. Validation we expect to happen by the end of this calendar year, and the ICAT approval is to come in in the first quarter of next year. Sorry, in the last quarter of this financial year. And production, like I said, will roll out from the first quarter of next year. This is the same for the motor controller, it is the same for the battery charger, and it's same for the DC-DC converter.
Sir, reason for the such high growth in the other segment that we have reported in this quarter?
Yeah, I mean, Sure. No, no, go ahead.
Sorry, sir.
So we have been registering growth nearly in all segments. Next growth is coming in the Die Casting business in India as well as overseas. Die Casting is performing well, and as, I mean the, as far as lock and mirrors are concerned, they are going at a, in a good pace. So growth is coming nearly from all sectors. These all together have contributed to the present, I would say, the growth that we are seeing on a year-on-year of 20% for the half year. All products, all segments are contributing, all are involved.
Yes, sir, but particularly if we see only the other segment, the revenue mix has gone up from 12.2 to 15.3. So could you give us some insight on this?
See, what happens, percent is just a, I would say a, numerator and denominator thing. Thing is, absolute figure is INR 885 crores, or INR 750 crores. 10% of 750, for example, becomes INR 74 crores, whereas 10% of 885 becomes INR 88 crores. So you, you should see on basis of absolute numbers.
Okay, sir.
Yeah.
Thanks, and all the best.
Thank you. The next question is from the line of Mr. Abhishek Jain. Please go ahead.
Good morning, sir, and congratulations for this term set of number in very tough times. The first question was on a locking system. So there is a sharp growth in the locking system quarter-on-quarter basis. What is the reason for that, and how is the outlook for FY 25 and 26? And as you mentioned about the smart locking business, so what sort of the penetration we can see in smart locking in next two years?
Abhishek, I will not be able to give you exactness on 25 and 26 right now, but suffice to say that the two major customers, which are Honda and Suzuki, which are leading the way from smart lock perspective, are exclusively with us. From what I understand there, because they are exclusive, they have given us clearances for almost five to seven years of their output. Now, there could be some differential in what they are planning and what they actually achieve. In some cases, it is possible that the adoption of smart locks could be faster than what they have anticipated at this point of time as well.
However, from that perspective, if the market, by the year 2026, goes up to 10% of the output in smart locks, and smart locks correspond to almost 400% of the value of the regular manual locks, one should be able to do the calculation.
Thank you, sir. Sir, in the Die Casting business, when can we expect the TGS machining revenue to start to contribute in the profit and loss account?
It's already started. We are running, so, if you ask me the number of machines, we already have almost 70%-80% of the machines that were planned inside the shop floors, which are working to full maturity. And within the next few months, we will reach the levels that were anticipated. So this business is not only operational, it's also profitable.
Okay, sir. And, for full year FY 2025, what would be the contribution of this particular business and on the revenue and EBITDA terms?
... Well, very difficult again for me to answer futuristic questions, Abhishek, for reasons you are aware of. We are not allowed to give forward-looking statements in that particular manner. But again, I would like to reiterate that these are new businesses. Where the machining business is concerned, this will be fully operational in the next year. And from what we understand and what our understanding with the customer is, that all the routing of machining that goes into TVS will go through these particular plants.
Okay, sir. Sir, in this quarter, subsidiary business performance was impressive. Revenue is around INR 200 crore on the revenue side on a quarterly basis, plus EBITDA margin is. There's a significant improvement. So, what is the reason and when can we expect that Romania will start to contribute in this business?
Yashpalji, Yashpalji has just been to Romania, so he'll be able to answer your question better.
So Romania, like, we have started the production, but the Romania will go into the ramp-up of production starting next financial year, in 2024-25. I think this we have mentioned in our earlier calls also with our investors, that Romania will see a mass production in 2024-25. That time it will start contributing positively and a healthy growth in terms of profits and margins, and adding to the value in the overseas business.
So what would be the quantum? It would be around INR 100 crore kind of the numbers in FY 2025 because of this.
Well, I cannot say about INR 100 crore, but yes, it will be moving in the direction that we anticipated, that it will reach quickly the INR 100 crore mark, that we have set as a benchmark to start up any manufacturing facility, yeah. So we'll be trying to get it to pass through INR 100 crore, but I cannot say as of now as a committed thing, because it all depends on the customer schedule. Maybe by the end of the fourth quarter, we would be in a position to say how much the Romania will contribute next year.
What is the margin and ROC of this business of Romania?
Well, it is more or less equal to Spain only. Once the production ramps up, and it's, as we know, the overseas business is always in double digits in term margin.
Okay, sir. Thank you. That's all for my side.
Yeah.
Thank you so much. Just a reminder to all the participants, that if you wish to ask questions, you may press star and one to join the question queue. The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead.
Sir, what will be the peak revenues in Romania?
Romania, as I just mentioned before this question, I mean, it all depends on the customer schedule, so there's no such as such capacity constraints, or we can say, like a number of pieces that can be done on a daily basis. So it's, I mean, the installation of the facilities that we have created is competent enough to take any kind of volumes in it. It all depends. We have a target to achieve INR 100 crore as quickly as possible.
For the capital that you have invested of INR 90 crore, what kind of revenue maximum utilization is the number in Romania?
Actually, we always keep an asset turn of 3 x while investing in any of the projects, sir. But over a period of time, once they achieve a maturity level, in auto type, I mean, auto component type of industries, from the starting of the year one or year two, it's not possible to reach 3x of that asset turn. It gradually matures over a period of three to four years.
Okay. So basically it will reach something like INR 250 crore in four years?
Yeah, I mean, going by that calculation.
Okay. What is Romania numbers in FY 2024? We started using the asset?
We have started using that facility, but still it is yet to break even now.
Okay. On, is the company thinking on improving the ROC number, by relooking at, a large capital which is invested in the international operations of Diecast? Which is basically 4 plants now, Barcelona, Mexico, Poland, Romania, where our ROC is an extremely low single digit. So do we want to relook at this, piece of the business?
Actually, we are working on improving the ROC, so even if I tell the current half year figure, for half year, we have a ROC of 7.2%, after excluding the capital work in progress, which is not yet put to work. Annualized basis, it becomes 7.14% roughly. We are, for this year, we have set up a target of something around 15% on an overall basis, so I am hopeful. Even, I mean, the second half is always a good half as far as Sandhar is concerned and auto industry is concerned. We are hopeful to, I mean, reach the target, ROC of 15% in this financial year, and gradually we have set up a target of improving every year, so at least we reach by 20% in the coming years.
This 7% you are mentioning at the company level, right?
Yeah, at the control level, including all-
Yeah.
in case
My question, my question was only on the overseas operation. Your ROC-
I was saying the overseas is also a part of our business. The same methodology that we are putting in here, we are developing in overseas, and gradually they will also reach to this level.
What is the utilization? I think the other plants, which is Barcelona, Mexico, and Poland, they are running at full utilization, no?
Yeah, they are running at full capacity.
... So then, you have INR 700 crore capital which is invested in these international operations, out of which INR 100 crore is Poland. So you have INR 600 crore capital, which is in Barcelona, Mexico, Poland, but that INR 600 crore capital, at the 100% utilization also generates a single-digit number, so there you cannot improve your ROC.
No, there is always a scope, and the capital input is something INR 470 crore in overseas business. It's not INR 700 crore, sir. It's INR 470 crore of capital input out there. And if I remove the Romanian operations, we are already at a very I would say, ROC of 10% roughly there.
Okay.
If the Romania, as I told, it's not at a break-even level, bringing a new plant up. It will take a, I mean, this year to ramp up the capacity, I would say the facilities. Maybe next year they'll start generating the profits on certain break-even level.
Okay. On the sheet metal side, did you mention that the sheet metal run rate is INR 100 crore for first half? What you mentioned, I didn't get that sheet metal revenue number.
Sheet metal for the new projects I mentioned. For the new projects I mentioned, they are above INR 120 crore, sir, for first half.
In first half?
Yeah, new projects, not the existing ones. I'm just talking about the new projects.
So which means 120 divided by 6. So basically you're running the new assets at 100% utilization?
No, it's not 100%. It, again, I will say, it's not like a consumer goods industry. We have the machine set up, we have the facilities ready. It all depends on the customer schedule. Some of the plants have worked part of the year, some have worked full of the year. Like, Mysore has contributed only for one month, sir. So we cannot just take a median or an average of the six.
No, excluding Mysore. So let's, keeping Mysore aside, the other three plants are running at full, full, full utilization?
No, we have the capacities. It depends on the number of shifts that we are working.
Okay. Can you just-
We are competent enough to take more orders from the customers if they increase the schedules, sir.
The sheet metal, those four plants, what is the peak revenue possible there? In one of the call you mentioned INR 30 crores per month. Is that the number?
30 crores?
Per month.
Yeah. This is all sheet metal business that we had contracted was at 30, but it was done on a single shift basis. So if you were to calculate that-
Oh.
Then you can duplicate all of that.
Okay.
INR 30 crore per month is something that we will achieve very quickly and very soon.
That is just single shift?
As of today, as of today, we have schedules of something like INR 15-16 crore a month.
Yeah.
Mysore, we expect the same number. Halol is at INR 5 crore a month. Nalagarh is, Yashpalji, where are we?
INR 6.25 crores-INR 6.5 crores per month.
So that gives you the number. We are very close to those numbers right now, but the idea is now to ramp up with the new schedules and take it over that number of INR 30 crore.
Okay. So just reconfirming, INR 30 crore is per month, single shift for the four plant?
Yes.
Okay. You are having schedules of 16 + 16 + 6 + 5, so about 11 + 32 is about INR 43 crore today?
Yes, that's it. That's it.
Okay, when do you-
This is what the current scenario is. We have reached maturity levels in terms of the product line, but in terms of output, we are still working on it. See, these are new plants, and therefore, their efficiency has to improve, their margins have to improve. Those only come along as we become mature in the business.
Okay. Okay. When do you see yourself reaching INR 50 crore?
Productivity is an important aspect, and productivity goes up once the utilization and the maturity of that plant grows.
Okay.
Uh.
Thank you, sir.
Thank you so much. The next question is from the line of Nitin Agarwal from UTI Mutual Fund. Please go ahead. Mr. Agarwal, your line is unmuted. You can please proceed with your question.
Yeah. Thank you again. Sir, can you share your gross debt and net debt number as on September, and what is the plan of debt repayment? What do we have, and what is the target net debt EBITDA in our mind?
Like, gross debt, as of now in September is INR 258,558 crore, sir. And net debt is INR 4,543 crore, sir.
So this is a quite good number versus March end. So have we like delevered in the six... How much have we paid off in the first six months?
Well, in the cash flow statement, if you see, there has been some fresh borrowings on account of new CapEx, and there are the repayments are already started. So I would say the in or an out though, but yes, we have generated a cash from operations of INR 159 crore, sir. That is a very positive side for us. And largely we are using internal net worth and not heavily borrowing. And our plan is that we start paying the debt starting next year onwards.
Okay. Sir, from an OEM's perspective, we have seen that, you know, some of their volumes have shifted from two to three due because Diwali has been in late November. From our perspective, when have we recorded the volume? Like, is it, everything done in two Q or even for us, we see some spillover in three Q of the festive volumes? If you think you can give some color on that.
...Go ahead, go ahead, yes, baju. So basically, like as we told you, work basis the customer schedules, sir. So, and the customers have started planning for the festival season starting September. So as of now, also for the coming quarters, we have good schedules from the—so I believe the momentum will continue even post the festival season also.
Okay. Okay. Sir, one last thing, are we going to receive any incentive for the Romania plant from the government?
Yes, there is a capital incentive, 30% of the total investment from Romanian government. Two of the installments we have already received from them, and it is based the investment that we are doing and the plant put to use. So the plant has been already put to use, two installments we have received. Further, one installment is will be received in due course, might be next year onwards.
So 2 we have received, 1 more we'll be receiving, and that will be full and final for this 30%?
Yeah, exactly. It is based investment. If you reduce the investment, then it is 30% of the invested amount. It's not that it's a fixed any absolute number. It's a 30% of eligible capital investment, sir.
Does it go through the P-
New plans for new machines to be brought in. Once they are brought in, again, we would be eligible for the subsidy.
Yeah, so this gets routed through the PNL or it's directly adjusted in the assets, in the balance sheet?
It does not go through the PNL because being a capital subsidy, it goes through, I mean, the Indian Accounting Standard or IFR has a different treatment for the capital.
Right. Right. So, so basically it will just help improve the ROC better because capital-
Add to cash flows also.
Right. Right.
Because the capital investment goes down.
Definitely, definitely, sir. So, to and can you quantify how much it would be in total, the 30% and how much you have received?
So we have received close to INR 25 crore we have already received. I'm telling in Indian rupees, because-
Yeah, yeah, yeah, yeah, yeah. Right.
INR 25 crore we have received, because earlier Euro was down, so the figure was less.
Right.
Now it has gone up, so it becomes higher.
Right. Right. Okay, thank you, sir. That's all from my end.
Thank you so much. Just a reminder to all the participants that in order to join the question queue, please press star and one now. The next question is from the line of Shubro, who's an individual investor. Please go ahead.
Congratulations for a good set of numbers, sir. My question is regarding the smart locks that you have been speaking about. One of your competitors is already very aggressive in this segment and has quite a lot of market share, quite a high market share. In that context, I just wanted to understand how do you, apart from the two customers that you named, Honda and Suzuki, how do you plan to address the other segments, other customers? Thank you.
Very quickly, I mean, you mentioned my competitor. I don't know who you are referring to, but there are still no smart locks in the market. So if somebody is supplying and where is it going, then I'm not aware of this. But from what I understand, that the leaders in this space are with us, and we have confirmed orders, and they actually get introduced into the market. So there are some new EVs for which we was also contracted. Those, those will probably be first of the block. But if you ask me, there are no mass-produced motorcycles that carry smart locks today. Am I audible?
Hello?
Can you... Am I audible? Can you hear me?
I think this line is not audible.
Abhijit, can you hear me?
Yes, sir, we can hear you. I believe the line for the questioner seems to have some kind of a problem. Mr. Shubro, if you can hear us, you can join back the queue. We'll move on to the next question. The next question is from the line of Radha from B&K Securities. Please go ahead.
Hi, sir, thanks again. My question was on the smart locks. You mentioned about a Japanese customer wins and you being an exclusive supplier to them. Sir, could you give us some insights on what kind of volumes are we expecting to supply from next year?
From what I understand, Radha, the numbers that have been given to us constitute about 10% of their overall output. So 10%-
Okay.
will carry smart locks to begin with, and then, of course, they will be adopted on a mass scale as things go forward. You, you are well aware that once a new technology is introduced, it takes a few years for it going down the line, because, you know, there is also the expense portion. A manual lock costs an average about INR 400, while a smart lock goes anywhere between INR 1,600-INR 3,500. So there is a dramatic difference. So some of the ones that we've contracted are in the regions of about INR 3,500-INR 3,600. So there will be a huge impact of that, and most of the OEM will adopt them on a gradual basis. But I understand that the initial volumes that they are considering are about 10% of their output.
Okay. So any insights on how the adoption of smart locks has been in the global markets and especially in U.S. or Europe? And given that we are getting it from the Japanese customers, so any insights on how the adoption has been there?
Well, the adoption has been so if you look at expensive motorcycles, for example, or scooters, for example, those have a constituent of smart locks now becoming a regular part of it. So if you look at vehicles that emerged from the likes of BMW or Honda or some of the others, including some in China, for example, have smart locks. The adoption has been exactly on the same platform, which has spun over a period of time over the last five to seven years, starting from about 10% levels that India is considering, and then going into full adoption.
Understood, sir. sir, so you mentioned that we are planning to integrate some of the plants in India out of total 27 plants that we have in the standalone business in India. Maybe it will happen this year or next year. Could you give us a timeline on how much cost reduction can happen due to this?
Well, I will not be able to give you details on the cost reduction. All I can tell you is that very genuine efforts are on to consolidate some of the plants. So, for example, Nalagarh, we are planning to consolidate two facilities into one. We are considering the same in Mysore, for example. We are considering on similar levels in Attibele. The idea is that depending on the order book, depending on the space availability, depending on several other factors on machine and output, these efforts are being made. We are very confident that starting from next quarter, this consolidation exercise will be in place, and the numbers will start improving in terms of the consolidation that happens. What those exact numbers are, I am not at liberty to say today, because we are still working on them.
It also depends on the order books that we receive. So all of this will have to be... So today, for example, in two plants, we employ a certain number of people. Yes, some of the overhead numbers, of whether it is security people or XYZ, will obviously drop down, but the significant portion of it will come from several other factors in terms of improvement in productivity. So once we have, and we can tally them all, we will be able to answer this question better, perhaps in the next quarter.
Okay. Sir, lastly, we are also targeting the aftermarket segment in India. Wanted to understand what are the key products that we are pushing there, and are we seeing any higher traction in the aftermarket? What is our, you know, key strategy there?
Sure, sure. Yashpal is in charge of this, so he can answer this question better.
So, like, aftermarket, we have started recently. I would say it's not so mature business. We have multiple host of products. It's a diversified product range that we are dealing in, aftermarket, starting from automotive, and we are now planning to go for non-automotive segment also. So we see a good growth in the aftermarket business in the coming period of time.
Do you want to go over what numbers there are, Yashpalji?
We are expecting something around INR 80 crore of revenue in the, by the close of this financial year. And we have targeted our EBITDA bottom line of around 9%-10% in the aftermarket business.
As compared to any numbers for FY 2023?
FY 2023, as I told you, we started in FY 2023 in a separate setup for aftermarket, and I think it was around INR 60 crore, something that time. So we are expecting a, we have set a target of at least growing by INR 100 crore in the coming financial year.
Okay, thank you. Lastly, on the non-auto segment you mentioned.
I mean, non-auto segment. When I use non-auto, the normal, there will also be non-auto as we go there. Yeah.
Okay.
Customers can be auto and for the both, both set of customers. That's what I meant.
Okay, sir. Thank you, and all the best.
Yeah, thank you.
Thank you so much. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
All right. Once again, thank you, Abhishek. And Dolat Capital, thank you all of the participants for the meeting today. I know there were certain questions for which we are not allowed to give you any forward-looking projections. However, we did our best to kind of give you where we are today. I am happy to state that we in the company are extremely bullish and happy with not only the results, but with also the market sentiment now beginning to change a little bit, also going in for lower value of motorcycles that's coming in, which wasn't there for the last four years.
So with that change, I hope and I expect that the company, which is already on the growth path and has grown by 20% in the first half, despite the automotive industry being in very, very low single-digit numbers growth, I think we will be able to accelerate the growth, not only in the next half year, but in the coming years as well. So once again, I want to use this, take this opportunity of thanking everybody in Sandhar as well, and Mr. Yashpal, again, for joining the call today. Thank you all once again. Thank you, Abhishek. Thank you, Dolat Capital.
Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.