Good afternoon, everyone. We will start the first investor call of our journey as a listed company. Some of you who have engaged with SEDEMAC before would have come to other calls like this. We had six of them, in fact, prior to us initiating the IPO process. But for many people, this will be new, and of course, for us, this is the first as a listed company.
There are three people on this call. Amit will be the main talker. Amit is the Joint Managing Director, and he will do the presentation. I will take over for the Q&A.
Yeah, thanks, Shashi. Good evening, everybody. The standard disclaimer, we will make some statements which may be forward-looking in nature based on our today's beliefs and assumptions, and actual results may be materially different. Since there can be several people who have not engaged with us, I will just spend a minute in providing a brief introduction about what we do, et cetera. We design and supply critical control intensive ECUs, that is Electronic Control Units, to major vehicle and industrial equipment manufacturers in India, U.S., and Europe. When I say critical, it means the products that we sell are critical to the application. If our products do not work, then some core functionality of the vehicle or the industrial equipment will not work. It is critical to application.
Control intensive means our products will incorporate some sort of non-trivial understandings of physics, maths of the application, and of the system for which they are applied. Many of our products incorporate novel control technologies that we build in-house. The entire technology building, product design, manufacturing is all done completely in-house. We do not have any technical collaboration. We sell these ECUs in fairly large numbers, in millions, as you can see from the bar chart. In FY 2026, we sold more than 3.9 million of these control intensive ECUs, which was more than 60% compared to FY 2025. In fact, since majority of our revenue comes from the sale of control intensive ECUs, this number of ECUs is actually a good proxy for our revenue. A change in the number of control intensive ECUs gives a ballpark idea of the change in revenue.
Coming to Q4 FY 2026 financials, there is a very big revenue growth that we have seen in Q4, more than 60%, along with even higher growth in our profitability, that is EBITDA and PAT. Of course, profitability growth is higher than the revenue growth is because of several reasons. One of them is the operating leverage. A similar trend of growth is also seen for our annual results. Our FY 2026 revenue was INR 1,058 crore, the first time that we have crossed INR 1,000 crore in revenue, highest ever. It was a 61% up compared to FY 2025 revenue. It was a three-year CAGR of 36%. In our business, we feel that this three-year CAGR in various metrics is a good way to look at because of the nature of the business.
This strong revenue growth has also come with a growth in profitability percentage as well, as well as much higher growth in the absolute terms in profits. All this is happening with very excellent ROCE percentage. Our ROCE for FY 2026 was 40%. Overall, this is a story of high growth, profitable growth, while being capital efficient. It is a very strong sort of performance. If you look at the business segments that we are operating in, there is mobility and industrial, and the split is also shown here. As you can see from this split, the growth has come from both the mobility as well as industrial segments. The strong growth is on both mobility and industrial, which is also not usual. In the next slide, we will give more insights about this FY 2026 performance, the non-numbers, the qualitative insights.
The markets that we serve today, of course, today's revenue has come from these markets, current markets. On the mobility side are two and three-wheelers, both ICE two and three-wheelers, that is engine-powered, as well as electric. On the industrial side, the backup power generators. The main products that we sell are motor controllers. ISG ECU is a motor controller for ICE. ISG+EFI, of course, also has motor controller. The MCUs, which is used for EVs. Then engine controllers, the EFI ECU is an engine controller, both for the mobility as well as industrial. Then genset controllers, which are supervisory controllers. More details about these products, et cetera, are in our RHP. Now coming to the key updates. The first is on the ISG ECU for ICE three-wheeler.
There was a big ramp-up in FY 2026 of our ISG ECU for ICE three-wheeler. This happened along with the OBD-II-B norm change that came into effect from 1st April of 2025. As a result of that, now in the domestic ICE three-wheeler market, there is a widespread adoption of SEDEMAC ISG. The adoption of ISG on exports is also happening. It has started, and we expect it to ramp up further. The second update is on the ramp-up of our MCUs for electric two and three-wheelers. Our E three-wheeler MCU was launched in Q4 of FY 2025, and it saw the ramp-up in FY 2026. Our E two-wheeler MCU SOP happened in FY 2026, and a partial ramp-up has also happened. This, of course, is important for us because now our EV MCU volumes have also come to decent numbers.
There was a significant ramp-up of our ISG+EFI ECU, this product, and this is important. This happened along with the OBD-II-B norm change, and this is relevant because the ISG+EFI product, where the ISG ECU and EFI ECU are combined together in a single electronic unit. This makes the ISG proposition even more compelling because with respect to buying the ISG ECU and EFI ECU separately, if OEM decides to buy ISG+EFI ECU, then there are significant cost benefits on account of integration of electronics. We believe that this ISG+EFI proposition is going to be crucial in increasing the adoption of ISG technology. Finally, in terms of just the number of two, three-wheelers produced with ISG in India, it was 8.4 million in FY 2026 compared to, if you look at three years back, it was 5.1 million.
So it can be seen that as a technology, the penetration of ISG has been increasing, and importantly, SEDEMAC is crucial in making this technology adoption happen. If you look at the FY 2026 volume growth, more than 80% of that came because of SEDEMAC. That is, it was with SEDEMAC ISG ECU. We are crucial in driving this adoption of ISG technology. And now three out of the top four two-wheeler OEMs in India use our sensorless ISG. Again, those who are not familiar, our ISG incorporates our sensorless motor control technology. We call it SLC technology. It's a fundamental motor control technology, which has wide applicability, including ISG, EV MCUs, as well as different other applications. On the industrial side, there was a market launch and ramp-up of our EFI ECUs of the North American genset market.
What happened there was that the dominant market leader adopted our EFI ECU as default in some of their key models. These were the key updates from FY 2026. And importantly, if you see, it is not just the significant revenue and profitability growth that is the number growth that has happened, but there have been several developments which have made the business more robust. For example, ICE three-wheeler ISG ECU, then this three-wheeler MCU, and then this EFI ECU, these three are with three different customers. The share of other customers is also increasing. The growth is coming across different customers. Then, of course, this E two, three-wheeler and E three-wheeler MCUs ramping up is a sign that we are making a dent in the EV market as well.
Overall, it's not just that it was a great year in terms of numbers, but it has also made the business more robust. The developments have made the business more robust. Now coming to the markets under development. These markets are, of course, we are not selling to, but engaged with, which include on the mobility side, the commercial vehicle, both engine powered as well as electric, and the power tools on the industrial side. On the commercial vehicle, our aftertreatment controller is likely to get into production in H2 of FY 2027. The development is on track. This will, of course, be the first SOP for us for the CV market. Then this market basically becomes the current market for us. And then the EFI ECU and MCU development is also on track.
Importantly, on the power tool side, we have had the first business win, done with a small but established power tool maker for the motor controller with the sensorless control technology. Now, this power tool market, in terms of numbers, is a massive market. More than 300 million power tools are sold every year. Of course, the first business win is with a small player, and we don't know how big we can get in the overall market. Purely in terms of numbers, it's a massive market, so it's an important development, and it is a motor controller with our sensorless control technology. The start of production is likely to happen over the next four to five quarters. Then this strong revenue growth has basically meant that our capacity utilization, the manufacturing capacity utilization, has been quite high.
We are also investing in new manufacturing plants. So this MF1 is our current manufacturing plant. We are also putting together this MF3, which has a much bigger shop floor space compared to our current plant, and the shipment of ECUs from this plant is expected to happen from Q2 of this financial year. Then there is also this MF4, which is a plant that is made for manufacturing of electric machines, electric motors, and we expect the shipments to start from Q3 of this financial year. In addition, we have also acquired land in Shoolagiri for future shipments to customers who have plants in the Southern India region. We are expanding our manufacturing capacity significantly. One thing to note here is that what we are doing here is that we are laying out the basic infrastructure for increasing the manufacturing capacity substantially.
The actual line CapEx that is actually putting the manufacturing equipments is something we will do in accordance with the business forecast. Now, when we are expanding the capacity or when you talk about revenue growth, a natural question that arises is: How is this growth going to get funded? So this chart that is made is to provide some pointers towards that. So what you see here, the area charts are the sources of funds. We have debt, then the internal accruals, and the equity capital, these three. The bars are where the investment is happening. There is working capital, then tangible investments. Tangible investment mostly is the plant and the plant-related investments. Then the cumulative product development expenses. We invest into building products, the ECU products. This is the investment that goes in that.
Some things that are useful to note is that if you look at the plant CapEx, so if you just look at this number, this INR 227 crore is the cumulative plant CapEx that we have done till March of 2025. Usually what happens is that the plant CapEx is what will lead to a revenue. If the utilization of capacity is high, then this plant CapEx to this revenue, next year's revenue, because of course the plant CapEx has to be done a few months ahead, gives you a good relationship for high capacity utilization. A certain plant investment will result in what sort of revenue. Okay? So if you simply look at these numbers, then this year we did INR 1,058 crore with high capacity utilization, which essentially means that this INR 227 crore of tangible investment that we have done[audio distortion].
[Presentation]
That has led to roughly you can say INR 1,058 crore of revenue. In fact, it is a little bit more because our Q4 annualized revenue rate was more than this. Okay, so roughly you would say 20%-22% sort of plant CapEx is required, or tangible CapEx, is required for us to generate additional revenue compared to what we have today. Similarly, if you look at the working capital number, which tends to be less of a delay between the investment and the realization of revenue. So for INR 1,058 crore revenue, we have had INR 135 crore of working capital investment. So that gives you a ratio of about 13% or so.
Okay, so for INR 100 crore of additional revenue, we would need a one-time investment of about INR 20 crore in fixed assets, and so plant CapEx and roughly INR 13 crore-INR 15 crore or maybe INR 12 crore-INR 15 crore in working capital. That sort of gives you an idea of what sort of investment is required. And if you look at our internal cash accruals, you can see that it is quite significant. Our EBIT percentage, you see our EBITDA has been more than 20%, and our EBIT is roughly 15%. A large portion of the growth or the EBIT can fund a significant amount of growth is what comes out from this.
Also, if you look at the orange bar, that is the product development investment that we have done. It is about INR 256 crore. And this design of unique products is what propels growth. And this INR 250 crore is quite a bit of investment that we have done so far. That has been crucial in attaining this sort of a revenue growth. Now coming to the risk assessment survey. In the first week of May, we had conducted this survey of risk assessment, where we had invited about 20 of the investment professionals to provide feedback on the risks in our business. There were a set of risks covered, including customer concentration, then ISG penetration, product quality, delivery, then the markets going down, EV relevance, et cetera, several factors.
And what you see here is the overall summary. So the number of responses for this risk, eight people had assessed this risk as low. That sort of a thing. And then the overall risk score, this is a weighted average of these three responses. So zero for low, 0.5 for medium, and one for high. So this is the weighted average, and this is a summary of the result. And as a couple of comments here, first of all, if you look at the top three of this, it is 0.37, 0.38, and 0.34. So in each case, it is less than 0.5, which was the medium score that we had assigned.
Essentially what we are saying is that the top risks as assessed by the people who took the survey are between low and medium. None of them is actually in a weighted average sense is even medium. Secondly, these risks themselves are quite reasonable. As an investment for an investor, we would think that these are the right sort of risks that the investor should be looking at. In the next slide, we'll comment on these top three risks. The first is about customer concentration.
And the metric that is shown here is the percentage revenue from the biggest customer minus the sum of revenue from the next four. We think that this is a reasonable metric to look at. It gives you a sense of how the customer concentration is shaping up. As you can see, over the last three financial years, this metric is coming down, which is not surprising given there has been a significant growth in different markets as well as with different customers. Apart from just the metric, there are a couple of comments that are worth noting. The sort of entity that we are, the sort of business that we have, where we take some unique propositions to the market and attempt a widespread deployment of that.
It is often the case that initially there is an anchor customer who adopts the solution, and once it is deployed in good volume by the anchor customer, then the other customers come in. It is very natural that in the early stages of when the adoption is happening, there is some sort of a customer concentration. We have seen this in the past in the other propositions that we have made. And what we have found is that if we succeed, then over a period of time, the customer concentration comes down. Also, fundamentally, we are in the automotive industry where the number of big customers itself is small. Also the products that we are selling, like I mentioned, they are complex products. They are critical to application products, which means that there is a significant investment done by the customer in adopting our products.
It is a sort of a sticky business with mutual dependence. Then coming to the two, three-wheeler EV relevance, I think just the metric itself is enough. In FY 2026, we had about 7.4% of the two, three-wheeler revenue coming from EV products, that is E2W MCU, essentially. And if you look at the penetration of EVs in the E two-wheeler market, or if you look at combined E two-wheeler and three-wheeler market, then we feel that as long as we are broadly in the same ballpark as the EV penetration, we are in fact robust because we are not overly dependent on EVs as well as not overly dependent on ICE. And in time to come, we do think that this penetration will also further increase. The third risk was about R&D efforts not yielding future compelling propositions.
Fundamentally, because R&D, this new technology development, is fundamentally a high-risk thing. It's an uncertain thing. This risk is never going to go away for anybody. It's not just SEDEMAC. This is not going to go away for any innovative company, wherever the company is. One can only argue looking at the track record. So far, our track record has been quite good. We have consistently been able to come up with new propositions and see the widespread deployment of that. We will essentially have to leave it at that. Now, coming to the FY 2027 outlook, we are listing both the key growth drivers as well as the key anticipated dampeners.
On the growth driver, the SEDEMAC ISG ECU is going to get introduced on three popular, that is, models that consistently feature in the top 10 sold in India, motorcycle models of three of the top four OEMs. This is likely to happen. So three motorcycles, which are popular motorcycles, that they appear in top 10 are going to have ISG from SEDEMAC.
[Presentation]
Okay, these three are three different customers. All these motorcycles are with wet magneto. The wet magneto configuration and wet magneto configuration essentially means that the sensorless control technology that we have becomes very crucial. The standard hall sensor-based ISG cannot be used for this. Out of these, two launches are expected in Q1, and for one of them, at our end, the production has already started. Production and dispatches have already started. The third launch is expected in Q4 of this FY. The second driver is going to be the E two-wheeler MCUs. It got launched in Q3 of FY 2026, and the partial ramp-up had happened. We expect it to ramp up further this financial year.
The ramp-up of ISG ECUs for the export three-wheeler, I briefly mentioned this, that for the India market, the three-wheeler ISG ECUs is now widespread, and for export, it has started. The SOP has already happened in Q4, and now we are in the ramp-up phase. Now coming to the dampeners, as everybody would be aware, over the last year, there has been significant inflation of commodity prices. In addition, we are also seeing some tightening of the semiconductor supply chain. As a result of that, some RM cost increase is likely, and it is expected to put a mild pressure on EBITDA percentage. We do not expect this to be anything dramatic, but some pressure is to be expected. I think this will be the case across the industry.
Secondly, there are reports of a strong El Niño in CY 2026 being active. If that happens, then it could potentially have a negative impact on Indian monsoon and also on the U.S. hurricane season. The potential impact on Indian monsoon could translate to impact on the India's two-wheeler market. The U.S. hurricane season, if it gets impacted, it could have some impact on the U.S. home standby generator market. Both are the markets that we are selling to in quite some volume. Okay, to summarize, we have had a very strong FY 2026, strong revenue growth, 60%+ , and now we are a INR 1,000+ crore revenue company, more than INR 200 crore EBITDA, 21% EBITDA percentage, and more than INR 100 crore PAT, with extremely strong ROCE. There are very few companies with this sort of a combination of numbers.
FY 2027 is also looking good with the introduction of ISG on more models, so more ISG penetration, and that too in the top models. Then continued E two-wheeler MCU growth. Like I mentioned, we do see some challenges, but we do not expect them to be significant. Over the year, because of various developments, there has been evidence of risk mitigation, including on customer concentration to three-wheeler EV relevance. We are also putting up plans to ease the capacity utilization.
Okay, that's it. We can go to Q&A.
Yeah, I think I'll go by hand raises. I may not go by exactly the same order in which you raise the hand, but I'll see the people. We'll start with Priyansh. Maybe you can introduce yourself and then ask your question.
Sir, my name is Priyansh. I'm an analyst at NGP Family Office. A great set of numbers, sir. Congrats to the execution and the whole management team.
Thanks.
My first question is on the MF3 and MF4, as well as the Shoolagiri CapEx that we are doing. What sort of product that we are going to target from the production standpoint, and what is the 100% utilization or max potential revenue out of this CapEx? If you can throw some light on that.
Have you looked at our RHP carefully?
Yes, sir. Size, land size and[crosstalk].
The RHP sort of sets it out. Amit, can you go to that slide? MF3 will produce ECUs, things that we are selling today. It will effectively become our mother plant for ECUs, and it will provide the 3x opportunity to grow. Our current mother plant is 40,000 sq ft. This is 120,000 sq ft. If we have the same product mix, you can think 3x. We can grow up to 3x. Second is that MF4, we have already mentioned to you that we will produce electric machines, which are motor specific. We will start selling electric machines for the two-wheeler industry soon. These are the two things that we will sell, controllers and electric machines. Even in the Shoolagiri plant, whenever it comes up, we will sell the same things.
Okay. Sir, I just want to understand, are the plant fungible or dedicated to specific product type like--
No, they are fungible.
ECUs? Yeah. They are fungible.
The lines themselves are fungible.
Understood, sir. I will join back on this call.
Yeah, Mukesh?
Yes, sir. Good evening. I hope I am audible.
Yeah, of course.
My first question is more on the ISG penetration. Based on what you have mentioned, 8.6 million kind of ISGs that the industry has already seen. We are at about 35%-37% penetration. The same number, if I look at F 2025, was probably 25%. Given that you are 80% of this incremental number, could you give some understanding on how you see this penetration evolve next couple of years? That will probably give us some sense, given that you have three new motorcycles, et cetera, coming up.
Yeah. Can you go to that slide, FY 2027 outlook? Or maybe the FY 2026 number, maybe you can go to that first. Okay. First thing is that the numbers should be clear. India produced about 27 million, two, three-wheelers, including exports, if you look at exports. Some of our stuff has started going into exports, but like you mentioned, most of it is in domestic. One way to think about whether the penetration is really happening in a significant way is to look at the question of whether the penetration of the top 10 models is working out right. It's not a secret anymore on which models in the top 10 have ISG.
There is the Honda Activa, there is the Honda Shine. These are the two top 10 models from Honda which have ISG. Then there is TVS Jupiter, there is TVS XL100, and one variant of the Pulsar which have ISG. There is TVS Raider, sometimes comes in the top 10, sometimes not in the top 10.
Then there are vehicles which are in the top 10, which have not yet gotten ISG. The Splendor Plus, then the Apache, then many variants of Pulsar, et cetera. There are various things, vehicle models that have not fully adopted it. The increasing penetration that we mentioned to you on motorcycle models coming up in FY 2027, it's not very difficult to figure out which models this will go into.
Sure.
What we have maintained as the proponents of ISG, and also given the ISG adoption and given ISG+EFI making it easier and easier for ISG itself to be consumed without seeing a significant cost delta, we think all ICE two-wheelers will have ISG eventually. So when that eventuality will happen, we don't know. And how fast it will happen also, we don't know. It's dictated by decisions of OEMs who look at competition, who look at whether their engineering abilities are suited, aligned. Also their own plans of various features and various models. What is global product planning, for example. All of that put together leads to the decisions for people to adopt or not. But overall, we believe that it will be there in everything.
All eyes will eventually have ISG, is what we believe. When we make a statement like that, we are talking about very large percentages. So like you mentioned, currently it's about 35%, 37% or so. With these three motorcycle models coming, it will shoot up. There will be more others coming in, et cetera. So, that journey is going to continue for several more years.
Got it. That is clear. Second question is, again, in relation to this, you mentioned about the ISG+EFI ECU in the early growth phase. While we do understand the reasons why it kind of makes sense for the OEM to adopt, is there a reason why they will just buy only the ISG ECU from you and not the EFI ECU?
Yeah, they can do that.
The reason I am asking this question is, I mean, we know your ISG volume, so can we kind of assume a very aggressive ISG+EFI volume for you? Because it just makes a lot of sense for the OEM.
What you assume about us, we cannot assume for that matter.
No, the question here is there a reason for them not to buy the ISG+EFI product?
Yeah. There is a reason. It depends on whether they want to depend on both ISG and EFI on us. Okay? EFI has had a history of its own sources, and for various reasons, the commitments that they've made or some performance that they've seen or integrated something else with it, et cetera, they may want to maintain the EFI source, but in many cases, they may not want to maintain it at all. Ultimately, it is a very hard proposition to argue against. Okay? ISG+EFI will win. On numbers and on performance, it will win. So you will have to have a strategic reason. Strategic reason means something other than money.
Right.
You have to have a reason for why you may not want to go with one source on that, and those could be valid reasons. We are not saying that everywhere it will be the case that ISG+EFI will happen, but increasingly it will happen because it will keep eroding into the strategic argument.
Got it. Excellent. Just the last one very quickly, would you be able to provide any sense on the markets under development? Like for example, you have the ACU SOP starting the second half. Any sense you are providing on the potential volumes, potential revenue of some of these new product lines? If you are providing, I would be happy to hear that. Thank you.
No, we are not providing any quantitative numbers. I think it will start becoming more and more evident as the months and years progress by. Once that gets some degree of steam, I think you will start seeing some of it in the volume numbers that we share. Also you will hear a little bit about that during our future calls.
Got it. Thank you so much. I will get back into queue.
I do not know if I am following the order in which the hand raises have come. I have six hand raises. I will go to Nisarg Shah.
Thank you so much, sir, for the opportunity. I am an Investment Associate at Pkeday Investments . Also, congratulations on great set of numbers. My first question comes on the EV market side. I understand that we are producing MCUs in EV. Which are the customers that are adopting it in early stage, and what is the next phase of growth in this? What is SEDEMAC's right to win for MCUs as compared to legacy players in the MCU market?
[Presentation]
Yeah. First of all, we will not say who we are selling what to exactly. If you are aware of the marketplace and you open up vehicles, and there are a lot of YouTube videos, and you will know which vehicles our stuff goes on. We can tell you that we only engage with the top players. Okay? We are talking about the leader or leaders in the market who adopt our MCUs. Secondly, regarding what is special about our MCUs, again, I do not know. It seems like you have not read our RHP. If you have, you will know that one of the things that will become significant for us in the future is that we will be the only company in the world which will have sensorless enabled, even in EV two-- electric two-wheelers.
Okay? Are you aware that we have something called sensorless commutation?
Yes. I thought it was--
That is a technology. Every single EV electric machine, whether it is hub-mounted or mid-mounted uses some sort of physical sensor to tell it the position of the road with respect to the stator, and therefore uses that information for a job called commutation. Without commutation, you cannot run the electric machine. Especially in hub motors, these are prone to failures. There are a plethora of videos for that. Even our website hosts some. Essentially, we will be the first to do that. The right to win is not only on this technology, but it is also that we are already one of the largest makers of motor controllers in the country. We produce more than 3 million motor controllers a year already. There is nobody else except Shindengen and maybe who produces as many for mobility application.
Not only is the technology strong and unique, where we have a global first position, but we also have a very well-oiled supply chain, very well-oiled set of designs, which are well tested across various applications. We think if anybody from the supplier space is going to win the motor controller game, we are definitely one of the players.
Thank you so much for that clarity. The second question was related to margins. Is there any guidance? Because there are new products coming in, what is the margin impact going to be moving ahead in the quarters?
We won't provide you any information on product level margins. You will have to wait for the future quarters to see that. In general, the basic comment is very simple, and I think everybody knows it, is that your long-term competitive advantage determines your long-term margins. Our pricing in the automotive market is not, you can't simply increase or decrease prices easily. They get ossified over a long period of discussions with customers. And the numbers we have presented to you also includes AV motor controllers. It also includes gen set controllers. It, of course, includes two, three-wheeler ICE as well. So it's a blend, but we will not be able to comment on individual margins of product lines.
No worries. Thank you so much.
We can go to Radha.
Hi, sir. Am I audible?
Yeah.
Thank you for the opportunity. Sir, ISG ECUs are often perceived to be more suitable for cost optimization in the mass market commuter vehicles. How competitive is SEDEMAC's technology in the slightly premium and high-performance two-wheeler segment where OEMs typically prioritize responsiveness, performance, calibration accuracy, and refinement over cost? Are there any examples of premium platforms where your sensorless ECU has been adopted against established global competitors?
[Presentation]
First of all, the first statement is wrong. It is not that it is only in commuter vehicles that ISG is adopted or can be adopted. You may have seen that in Activa, and therefore you are making some conclusion like this. I do not know what you call Raider, what you call Ronin. Is Ronin a premium vehicle to you?
No, sir.
Then what is a premium vehicle?
400cc.
For you, what is a premium 400cc?
Yeah.
Okay. 400cc et cetera is not one that is going to give us big revenue. But there is nothing fundamentally that prevents us from utilizing that, and there are various demos that we have done with various customers as well, potential customers. Right now, we do not have anything beyond 230cc, which is the three-wheeler as well as the Ronin sort of category that have so far adopted ISG, but there is nothing that prevents this from getting utilized in larger cc vehicles as well. There is no technology limitation as such. But in the sort of mass market, the premium, I thought you were asking about Pulsar, Apache, et cetera. Those things are going to definitely have it in the time to come. Okay? That's the first market.
Then you seem to comment as though there are many competitors in the market in ISG, and then we have to compete with some global players, et cetera. There are very few in the world, okay? And in true sensorless, that is motor control, we are the only one. It's not that there are five, 10 competitors for ISG, and we are also trying to enter that marketplace or something like that. We have mentioned the key competitors in our RHP, globally because of their presence with Honda. Shindengen is one of the significant competitors who have succeeded very well in engagement with Honda. Not too many others have succeeded. Denso has succeeded to some extent.
Thank you, sir. Secondly, does the sensorless ECU product fully eliminate the need for physical sensors, or only reduces their count? How does the performance, reliability, and response accuracy of the algorithm-driven sensorless ECU compare with the conventional sensor-based systems, especially under challenging conditions like higher RPMs or higher engine temperatures?
Yeah. First of all, we are talking about one set of sensors that completely gets eliminated. It is not like there are 10 sensors and we are eliminating five. There is a set of sensors which gets completely eliminated. This is now running on 10 million , 12 million vehicles, so there is no question of high temperature and blah blah being an issue. So it is a highly tested technology at this point in time. In 2018, maybe this question was relevant.
All right, sir. Thanks and all the best.
Yeah, thank you. So maybe we will go to Hitesh next.
Thank you for taking my question. My name is Hitesh. I am a part of Origin Capital, Singapore-based fund. I want to understand on the export side, like you had suggested, that you are the only one with the sensorless technology, right? In Indian two-wheeler system is, and globally, actually, there is Honda, Yamaha, or Chinese players, right? In the EV space, Chinese are pretty big, right? There is no competition for you from a Chinese EV perspective globally? Nobody is making, in Chinese ecosystem, these sensorless controllers?
Not that we know of. By the way, this is not about just making. This is about the invention of a technology. We are not aware, and we have also engaged through potential partners with having initial discussions with the Chinese folks, and we know where they are. We do not think that currently there is a direct competitor to the technology.
It saves cost, basically, right, sir? Performance similar, and it saves cost. That is the key USP? Or the performance is also better versus sensorless versus-
I think you should spend a little bit more time on understanding what the technology can do. For example, in EVs, the main proposition is not costs. The main proposition is reliability. If you call that as performance, then it is reliable. There are various walk home situations that this avoids. Whether it is due to dust ingress, water ingress, et cetera, all of that is eliminated. It is not a cost proposition.
Okay, so any outlook on exports? Basically, exports, you are talking about more from Indian two-wheeler exports, basically, which will be your first target, or you are talking about penetrating into Honda, Yamaha, and Chinese players globally? If you can just give us some sense. Over five years time.
First of all, our current exports is all in the genset space, okay?
Yeah.
About $10 million, I do not know what the export number was. Maybe it is something like $10 million in FY 2026 we exported. All of that is in the genset space, okay? Our current sales for the two or three-wheeler market is all Indian, in the sense that we build Indian entities and they export. Our products, of course, are used in various countries in the world, maybe 100 countries in the world right now because the people we sell to, they export in a very significant way. In the future, we hope that we will be of relevance to the Japanese biggies. We are having some conversations, but we hope to be of relevance.
At that point in time, whether it will be to the Indian entity or to the various global entities, we do not know what we will sell to. Right now, this is our split of exports and domestic.
Great, sir. Thank you. All the best.
Thank you. Keshav?
Hi, sir. Keshav this side from Xponentia Capital. Sir, I have two questions, one with respect to ISG+EFI. What is the contribution of ISG+EFI product in our current revenue, and how is that mix expected to change going forward?
We will not be able to comment on individual product lines and their contributions, et cetera. We will be giving too much information. The only thing we can say is you will have to wait for milestone announcements. Let's say we get 1 million ISG+EFI, et cetera, we give you some sort of idea of what is the rate of adoption. But we will not be able to tell you that today we are at so many percent and tomorrow we are going to be something else. That will be too much information.
Got it. My second question is with respect to power tools market. What is the ASP of power tools sales compared to our ISG product? In terms of volume, ISG volumes are roughly-- Power tools volume are roughly 4x- 5x of ISG volumes. But in terms of volume--
Not ISG, two-wheeler one.
Two-wheeler volume. In terms of volume, what is the rough estimate of the market size?
This also we have sort of mentioned in the RHP. One thing we are learning for you is that motor controllers, their pricing largely scales with kilowatt. Okay? Similar kilowatt products across markets will tend to be similarly priced, even though the components may change a little bit. Some automotive grade may be more expensive, industrial grade may be less expensive, et cetera. One of the things about power tools is that their kilowatt ratings are very similar to kilowatt ratings of two-wheelers.
Okay.
They are all in the same category of small powertrains, and one of the reasons why we are addressing them fairly easily. The prices of motor controllers will go by kilowatt largely, and these are 1.5 kW sort of motor controllers that will enter the power tools. I would say comparable, but maybe a little lesser. But comparable.
Got it. Thank you so much, sir, and congratulations for the great team.
Thank you. Prashant-ji, you were there, I think. Are you still there?
I am there. My question just got answered.
Okay.
No, no. Thank you. Many congratulations.
Yeah. Thanks. I am just going by the order. Maybe it is teams is playing games. I have Deep Gandhi. Please go ahead.
Yeah. Hi, sir. This is Deep Gandhi from ithoughtPMS , Chennai. First question I had was around ISG. You can correct me if I am wrong. But broadly, what I understand is ISG also requires starter generator, right? I understand that we are making the ECU and we are quite good in that. But are we also making the starter generator, or are we buying it from some other OEM as of now?
We don't buy. The OEM buys. By the way, the word OEM is used for the vehicle manufacturer by me. You seem to be using it for something. The MF4 plant that you saw there will start shipping the electric machine also, which is what you are calling as a starter generator. The electric machine plus the controller, the ISG ECU, that becomes the starter generator together. Okay? The electric machine will also, to some extent, start getting shipped from our facilities. Beginning Q3 is our expectation.
[Presentation]
Sure. You mean to say from the new plant, you can start getting into that product also? You'll make the complete ISG then?
We'll make electric machines, and we are already making controllers. In systems where both the electric machine and the ISG ECU goes, the complete ISG system goes from us.
Sure. Any understanding from the OEMs? Will they still want to buy it from their partners, or do they think this might be more cost-effective for them? Have you had any conversations with the OEMs?
It's not just cost. Everybody seems to be bothered only about costs. It's not just cost. The electric machine and controller maker can have technical synergy. Because your electric machine design can shape your controller matters, and controller design can shape your electric machine matters. It's not just cost, but in some cases, it could be that as well. It's not that we are going to do something special in the electric machine market insofar as ISG-relevant electric machines go, because they're already out in the market, 10 million , 12 million of them. Here it'll be more about this, exploiting the synergy in favor of the OEMs who want quicker development. That's their primary motivation.
Whether they will buy lots from us or continue to buy from other people and use us as a sort of speeding up of their projects, it remains to be seen. But we will be in business, and we will try to win what is meaningful for us.
Sure. Sir, second question is again on the ISG side. As of now, for FY 2026, can you broadly mention what kind of volumes, even say in percentage terms, we saw coming from two-wheelers and also from three-wheelers? I think in the opening remarks, you talked about some change in the regulatory requirement, because of which three-wheeler volumes are also expected to pick up. So, what kind of opportunity you see in next two-three years on the three-wheeler side for ISG?
It's all done to a good extent. I don't know if you registered it. Except for one big manufacturer, most three-wheelers that are produced domestic have our ISG already. Okay? In exports as well, they've just started going, and over FY 2027, most exports will have it. One manufacturer still remains, and we are working. There is a good likelihood that we will win, but we do not know.
Sure. Sir, lastly, just on the competition side, normally what we hear from the OEMs is they don't want to be dependent on any one supplier for any of their products. So, for now, in ISG, you are the sole supplier in a way. Do you see someone else coming up in next two-three years? Although you might still have major wallet share, but maybe 10%-20% of the volumes getting allocated to some other supplier. Do you see someone very close in that sense?
Nobody maintains a monopoly forever. If you have this sort of dominance in the marketplace, there will be people who attempt to crack it in various ways. It is not that people have just been sitting and suddenly they woke up to SEDEMAC. From last seven, eight years, people have been trying to crack. I am talking about competitors. It is not an easy problem to solve. We do think that over a period of time, some of the more technically competent people may solve it, and there may be some competition. We will have our own improvements. We are in Gen 4 right now. We will keep doing something to maintain a good share is our hope.
Okay, thank you. That is it from my side.
There are five or six more people here, so maybe my request is keep it to one or two questions and not a series of questions. Swami?
[Presentation]
Thank you, sir, for the opportunity. Am I audible?
Yes.
Thank you, sir. Great set of numbers. Very happy with the initial performance, and congratulations to cross the INR 1,000 crore revenue mark. Just very small question. Do we need anything? Because of all Hormuz and all of these things, there is a lot of worry that I have when we have to acquire anything from outside of the country. Anything that we manufacture, do we require anything that we have to import from any other country?
Yes. By the way, nobody makes electronics in India. All semiconductors are imported.
Okay.
And so all semiconductor components come from outside.
I see. Is there a supply chain risk ever you see that may come in future?
Because of the Iran war?
Not just Iran war, but just geopolitical tensions where one country doesn't want to supply.
Yeah, it can comes-up.
Okay.
Just after COVID, because of the massive movement towards consumer electronics, just after COVID, there was a big shortage of components for electronics, for automotive. That sort of thing, we are not immune to. We are buyers of semiconductor components, and we actually came across very well during that phase. Supply chain shocks coming from some global issue is something that we naturally have to deal with, and we are very well-equipped to deal with that because we have the ability to conjure up new designs, and we have complete control over what we are doing based on available components, et cetera. We are not immune to supply chain shocks, but so far it doesn't seem like the Iran situation is like the really bad COVID situation that was there.
Right. That's it, sir. Thank you, and all the best. Congratulations again.
Thank you. Yeah. Thanks. Saurabh?
Good evening, Professor. First of all, I think this is one of the most transparent presentations I've seen in the listed space. I hope you keep it up. The second is one small question. Could you disclose what is the CapEx budgeted for FY 2027 and 2028?
No, we won't disclose it. If you go to that slide, Amit. We have given you the history so far, okay? I think it's best to just look at the history. Part of the reason why we will not tell you future numbers is that we also do not know it, because it all is dependent on business demand and what we want to invest in at what point in time. I don't think that you get a whole lot out of it. For example, what will you do with a number of INR 333 crore? It gives you a sense of the extent to which our business can potentially grow, but it will not guarantee that the business can grow that much.
We will not be able to give it to you, and I don't think it helps you very much either.
Okay, sir. No problem. Thanks.
[Presentation] [Non-English content]
Parikshit?
Yeah. Thank you for this opportunity, sir. I just had two small questions. This ISG+EFI product, we have a quite good share in two-wheelers. Aren't we looking to introduce our product to four-wheelers?
Yeah. This is a common question for someone who does not know exactly what we have done. The two-wheelers have a specific architecture of crankshaft-mounted alternators. That is not there in four-wheelers at all. This is not like a stripped-down cousin of the four-wheeler, okay? Crankshaft-mounted alternators naturally allow you to implement ISG smoothly. In four-wheelers, the equivalent of this is the belt starter generator, BSG. That has been around for a while. We do not intend to move into the BSG market. We had some early discussions with the BSG leader of the world around 2016, 2017, of incorporating our sensorless, et cetera. In terms of the delta impact that we can make there, we did not think it was the right time, and EV momentum, et cetera, was there, so we did not think it was a worthwhile thing to do.
ISGs for passenger cars is not on the anvil.
The same case will be for MCU also?
No, no. Please do not put. It is not something we cannot address.
[crosstalk] No, I was asking for EV MCU.
EV MCUs are already in LCVs. I do not know if you saw that we are going to be in production on EV MCUs for LCVs. That car is the same kilowatt rating.
Okay, got it. My second question was, in the RHP, you mentioned that you will be producing rare earth free motors. Can you throw a light on that, when will the production commence?
First of all, there seems to be some big thing about rare earth free. Every ICE two-wheeler already has a rare earth free ferrite-based electric machine. In the electric space, because of torque density desires, rare earth based designs have gained popularity. You can keep the compact volume, while providing the same sort of torques. But it doesn't mean that either ferrite or other material cannot be used, which do not use rare earth magnets. We do have a set of designs, where we have electric machines as well as electric machines integrated with controllers that we are testing out, both internally and in conjunction with customers.
If some development happens there, we will let you know, but for now, there is nothing more to share than that we have designs. And we will definitely be interested in that market, both just from electric machine side as well as electric machines integrated with controllers.
Got it. Thank you so much, sir.
Okay, so we are past the one-hour thing, but we will take the last five. So Praveen, Venkat Siva, Shreya, Prasad, Chaitanya. Anybody else wants to put their name on? Vinay, I don't know if I have spoken to you. So maybe we will go with Vinay. So this will be our last six, because I think we have to keep track of time as well. Yeah. Go ahead, please. Vinay?
Am I audible?
We can move to. Now you're audible. Go ahead, please.
Yes, sir. Congratulations, first of all. What I would like to ask is what is the actual attrition rate that you are seeing in your company, in your core R&D and engineering team, and what are the measures that you. Because yours is an R&D-focused company, basically. What are the benchmarks that you have set for the current fiscal year?
Yeah, we have already declared this in our RHP on what our attrition numbers are. For us, attrition has never been some big issue. The main reason for it is that the founders, as well as the core team that the founders have built around themselves, they are all themselves very strong engineers. Because they are very strong engineers, they are able to attract other people to come and work with them. It's like a football team or a cricket team. If you have strong players, other strong players will want to work with you.
Will RCB really be bothered about some attrition of some batsman? The answer is yes, to some extent, but it's not like you cannot get other people if you have Kohli and other people playing for you. It's very similar in our case. We do have some attrition, but we also have very good influx every year. In several of the campuses like IIT Bombay, IIT Madras, and Surat, et cetera, we are one of the favored people. There are lots of alumni who are telling people that this is a good company to work for. Attrition has never been a big issue for us.
Sir, for the magnet-less motors, you have this MF4 coming up.
What motors?
The motors, the electric motors.
Yes, okay. Electric motors. Yeah.
You have the MF4 coming up in maybe the third quarter. What is the kind of capacity that we are looking for in terms of the numbers? Will it be targeting to initially for two-wheelers or three-wheelers?
Two and three-wheeler, the market is the same. Just the sizes will be a little bit more in the case of three-wheeler. At this point in time, we will not be able to tell you what volume numbers et cetera we are targeting. If we get to the point that we want to share the motor numbers, once they get some steam, you will hear only at that point in time. Right now, no comments on it.
Thank you. Thanks a lot.
[Presentation]
Yeah. Praveen?
Hello, sir. Praveen from Allianz Global Investors here. Just one question. Given analog chips are used in senior ISGs, and the expectation, at least on the Street, is that say, for your Infineons or onsemis of the world, that the prices of these MOSFETs, et cetera, would increase meaningfully over the course of this year due to AI. Would you expect any disruption due to that in the sense that if the price of these chips goes haywire, would OEM stop[crosstalk].
Nothing goes haywire.
Putting ISGs into their production? That's sort of just--
I don't know if you know the market. This is a mature market. It doesn't go haywire or anything like that. Yes, there could be some price increases, and we have mentioned that actually, that the supply chain situation is tightening. But it is not like it'll go haywire or anything like that. We don't expect that. If at all it had to go haywire, it did in COVID.
Yeah, but say a similar scenario, right? That if the cost increase is meaningful, would that mean that the OEMs could make a choice not to include ISGs in their, like you know[crosstalk].
They can make any choice. They can today decide not to put ISG on anything. ISG is not a requirement. But the reason they are putting it is not because the cost is lesser. In fact, in most situations where ISG was introduced, it increased the cost of the vehicle. We do not expect some dramatic changes where this will impact the OEM decision to implement it or not. It could have some impact on our EBITDA numbers being a little bit under pressure if our costs go up. That is about it.
Sure. Thank you.
Venkata Siva?
No questions, sir.
Thanks. Okay, Shreya?
Hi, Shashikanth. Am I audible?
Yes, you are.
A few quick questions. From your RHP, I saw that we do currently 80%-85% capacity utilization. It is fair enough to consider that we will be maintaining this rate for our MF3 and MF4 as well?
No. MF3 is 3x the size.
No, I am talking about capacity utilization of 80%-85%. We will see it[crosstalk].
Yeah, if we utilize 3x the size facility at 80%-85% capacity, we will be 3x revenue in the coming year. We won't do that.
Okay. If you could give a little guidance over there?
No, we won't give any guidance. See, the whole point of the establishment of MF3 is to ease the capacity utilization in MF1. That's one thing, and if you're going for something like that, you are thinking about the future as well. So, we think MF3 is rightly suited to become the mother plant. How much of it will get utilized, it all depends on how much business we get. So, we cannot decide its utilization. Our customers will decide its utilization.
Right. So, like[crosstalk].
We will not be able to comment on that.
Okay. Is there anything which you can provide that this is the current demand which we are getting, but because of capacity utilization.
No, we don't have such situations. We are meeting current demand.
Okay. If you could provide the amount of current orders standing in our books?
No, nothing will be provided. By the way, one more thing about automotive industry, it is not like you have a set of orders. You are an enlisted supplier for certain critical, in our case, certain critical parts, and depending on what the OEM wants to produce, you are given firm orders for a short period. That is how automotive world works everywhere. The OEM also treats you as a long-term partner, so the OEM gives you a broad idea of what is going to happen in the year, what is going to happen in the quarter. It's not like they are saying, "I will order this many number of pieces from you for the entire year."
They are giving you a broad idea, and then giving you a better idea for the quarter, and then they are giving you firm orders for a month. This is how it works everywhere. This order book idea is, I think, not relevant here. This is not a project business.
Yeah. Very right, Shashikanth. Just one last question. Where do you see SEDEMAC three to five years down the line?
No response to this. Sorry. This sort of question, in three to five years, [Non-English content] we don't venture into that at all.
But in terms of where we stand in the market or any aspiration which you guys have.
The only aspiration since the beginning of the company has been the same. We want to produce fresh control technologies and see widespread adoption. That will never change, and that will continue to remain.
Okay. Got it. Thanks and all the best.
Thank you. Prasad? Prasad? Okay, I think everybody's getting tired. Chaitanya, you're the last person.
Yeah. Hi, sir. Good evening. Congratulations for the great numbers, sir.
Thank you.
Am I audible?
Yes, you are audible.
Yeah. Hi, sir. Just a quick question, sir. If you can just focus on the revenue mix only from product sale and service sale, so out of this INR 1,058 crore.
Services will be very little. It is actually mentioned in our this thing. So, it is almost all products.
Okay. How you will differentiate yourself from the auto ancillary company, from the traditional auto ancillary company?
[Presentation]
[Non-English content]
I believe it is more a technology company.
Yeah. [Non-English content] You are able to produce fresh technology, and you're able to see widespread adoption. Very few Indian auto ANCs manage that. Largely, what the play of the Indian auto ANCs has been that something that has worked in the West. [Non-English content]
Okay.
So, there is a departure from there. You look at the founder group. Look at the auto ANCs founder group. There are several differences, but it should have been obvious.
Okay. Yeah. Thank you, sir.
Thank you. [Non-English content] one last question. Saumya, you, because you are a shareholder.
Hello.
So you are the last now.
Yeah. So, Shashi, this power tool business that you have got a first visibility in, just want to understand, what is the first application that customer is looking? Which kind of power tool is going to apply this? If you can give some colors on that.
I do not know. I think, Amit, do you know? Is it angle grinder or something like that? I don't know what it is.
Yeah, it is a concrete grinder.
Concrete grinder. Okay. So application, I mean, there can be lots of applications. First[crosstalk].
No, I thought it is a more battery-driven.
First tool is going to have this apparently. I don't
is going to have a first application. I thought its first application going to be more cordless or battery-driven. Is it same?
No, battery.
Okay.
This will be a battery-powered tool. In some cases, if it is a higher kilowatt, it could be a corded tool also. So battery as well as corded both will probably get addressed. Concrete grinder requires quite a bit of power, so corded tools are also there.
Got it. Okay. Thank you.
Hello?
Yeah.
Sir, I am audible? Prasad Hase this side from Spark Capital. Sorry. Sir, I have two questions. One was a very simple bookkeeping question. Sir, can you provide a revenue contribution from non-critical components? The reason why I am asking, sir, is on the volume which you reported in April 2nd. That seems to does not incorporate this segment. That is why for apple-to-apple comparison.
No, apple-to-apple only. Everywhere, we have reported only control intensive ECUs.
[Presentation]
In the RHP, I think it's very clear if we are doing 85%-90% from control intensive ECUs, non-critical components is the rest of it.
Okay.
That component, the percentage is going down as we become more and more relevant in the marketplace.
Right. Okay. Sure.
Yeah. It's not a very important thing.
Sure. Second question was, so quarterly run rate for industrial segment was a bit suppressed this quarter. We understand that it is largely coming from genset products, and gensets are largely export-based. Are you seeing any demand challenges on industrial segment, mainly from [crosstalk].
First of all, the genset market is not like the automotive market. Amit, can you go to that FY 2023 to 2026 revenue? In this you can see FY 2023 to 2024, actually, there was a dip. There was a 10% drop, [Non-English content].
Okay.
Even at a yearly level, there are drops, but it is a fairly stable industry, because it all depends on who is buying gensets and in what sort of situation. One of the things that we have mentioned in our FY 2027 outlook is that, because that 94- 146, that growth is heavily around U.S. customers buying our genset control products. If there is a demand drop there on account of a poor hurricane season, it so happens that gensets get produced more if the hurricane season's strong because power outages are there. People get scared, snow storms can kill people and all that. If that hurricane season is weak, generally the genset demand is weak. It's a little bit like Indian monsoon.
Okay. Sure.
Those sort of things we have no control over and we'll always be exposed to. But in general, it's an industry which is a very stable industry. You can rely on it on a three, four-year basis.
Sure. Sure, sir. Thank you. That's it from my side.
Yeah. Okay, great. Thank you very much for participating. Hopefully, it was a useful session, both the presentation as well as the Q&A. We do want to mention to you that we do not intend to meet you every quarter. We intend to meet you every six months. Okay? We think each of our sessions should be meaningful. We hope this one was. We don't want to just simply come and say something because something has to be said in a quarter timeframe. Of course, we will report as per requirements of our listing obligations.
We do think a six-month timeframe is a better timeframe than a three-month timeframe because some significant developments could have happened in our sort of industry. If for some reason we think that there is enough that has happened in the three months, then we could hold a call within three months. It is more likely to be six months from now. We will keep updating the audience for anything that we think is price sensitive, whether it is on volumes or any other major developments that do occur. Thank you very much for participating.
Thank you, Professor . Bye.
Thank you. Bye.
Thank you.
Thank you, sir.