Ladies and gentlemen, good day and welcome to SPR Auto Technologies Limited Q3 and nine months FY 2026 earnings call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Today from the management we have with us Mr. Krishnakumar Srinivasan, Managing Director and Chief Executive Officer, Mr. Prem Rathi, Executive Director and Chief Financial Officer, and Mr. Pankaj Gupta, Deputy Executive Director, Head Legal and Company Secretary. Before we begin, let me remind you that this discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties, and other factors.
It may be viewed in conjunction with the business risks that could cause future results, performance, or achievements to differ significantly from what is expressed or implied by such forward-looking statements. I now hand the conference over to Mr. Krishnakumar for his opening remarks, post which we will open the floor for an interactive Q&A session. Thank you, and over to you, sir.
Thank you, Bhumi. I hope all of you are able to hear me well. Good evening, everyone, and thank you for joining us on this earnings call. I appreciate the time taken by you all to be with us today, and I am pleased to walk you through our Q3 and nine-month FY 2026 performance, progress on our strategic initiatives, and the overall direction of the company. Q3 FY 2026 has been an eventful quarter for the company, as we delivered the highest ever total income in a quarter, along with the successful completion of SPRL's 100% acquisition of Grupo Antolin's three Indian entities and many other important milestones. SPRL reported a 21% year-on-year growth in consolidated total income during Q3 FY 2026, supported by a strong broad-based demand across all segments as the auto industry witnessed a very strong operating environment and reported record production and sales volumes during the quarter.
Sales in passenger vehicle and commercial vehicle segments grew by more than 20% year-on-year, while two-wheeler segments grew by almost 17%, and three-wheeler segments grew by 14% year-on-year. This growth has been driven by various macroeconomic factors like the implementation of GST2 reforms, which improved affordability for end customers, along with successful repo rate cuts by RBI, which eased the financing costs, along with one of the strongest festive seasons this year. This broad-based growth was also observed in the production volumes as the total production grew by 17% year-on-year in Q3 FY 2026. Consolidated EBITDA also witnessed a very strong growth of 21% year-on-year in Q3 FY 2026. This growth in profitability was driven by improved operating leverage and the company's continued focus on productivity, cost optimization, and operational efficiency.
Over the past few quarters, we have made steady progress in strengthening our manufacturing systems, enhancing automation and improving throughput, all of which are now contributing positively to our profitability. The actions taken in all the subsidiaries has also given very good results, with all of them performing exceedingly well. The consolidated profit before tax, PBT, before exceptional items grew by 22% year-on-year. During the quarter, of course, there was a non-recurring exceptional expense of INR 252 million pertaining to the statutory impact of the new labor codes introduced by the government in November 2025. Still, our PBT after exceptional items grew by 6.4% year-on-year in Q3 FY 2026. During the nine-month FY 2026 period also, we reported a robust performance as our consolidated total income grew by 16.8% year-on-year, and despite the one-time exceptional expense, we were able to achieve a strong 10.6% year-on-year growth in the bottom line.
A key strategic milestone and an important highlight for the company is the 100% acquisition of the Grupo Antolin's three Indian entities, namely Antolin Lighting India Private Limited, Grupo Antolin India Private Limited, and Grupo Antolin Chakan Private Limited, which are the leading providers of automotive interior and electronic lighting solutions in India. This acquisition marks a significant step in our long-term growth strategy and represents a meaningful diversification beyond the legacy business. With the successful closure of this acquisition, SPRL has become a well-diversified and a multi-product organization, thereby de-risking its business model. Antolin manufactures products such as headliner substrates, modular headliners, sun visors, door panels, door trims, central floor consoles, dome lamps, ambient lighting, touch panels, and electronic capacitive pads for major OEMs across the country, including Tata Motors, Mahindra & Mahindra, Volkswagen India, Toyota, Hyundai, Renault, and others.
By entering the automotive interiors and lighting space, we significantly expand our addressable market and enhance our ability to offer diversified and integrated product solutions to our customers. The transaction was completed in the first week of January 2026 at an enterprise value of EUR 159 million or INR 16,700 million approximately on a debt-free cash-free basis. We believe this acquisition positions SPRL on a strong growth trajectory by complementing our existing strengths with new capabilities, technologies, and customer touch points. The integration of these companies will enhance SPRL's financial performance and strengthen its position in the overall market. Post the consolidation of Antolin India operations within SPRL, the overall sales revenue of the powertrain-agnostic products would increase to over 35% of the consolidated revenue, including previous acquisitions of TGPEL, Takahata, and EMFi.
Alongside this strategic expansion, we continued to invest in the legacy business of pistons, piston pins, piston rings, and engine valves through capacity expansion, asset modernization, and automation. This includes the signing of an asset purchase agreement with Sunbeam Lightweighting Solutions Private Limited, a wholly-owned subsidiary of Craftsman Automation Limited, to acquire piston manufacturing lines and related machinery and assets for a total consideration of INR 280 million. The first tranche of this agreement was concluded during the quarter. To further strengthen our supply chain, we inaugurated our state-of-art assembly center at Bhondsi, Gurugram in November 2025. I am also very happy to state that in November 2025, as committed earlier, we have inaugurated the state-of-art world-class facility at Coimbatore for manufacture of motors and controllers, and the manufacturing has already started from there.
These initiatives are focused on improving efficiency, ensuring consistent quality, and strengthening delivery performance to all our customers. Our diversified customer base across geographies and vehicle segments continues to provide resilience and stability to our business model. I would now like to take a moment to highlight a significant milestone for our company. As many of you are aware, I have been discussing our strategy to diversify our business, and I am proud to say that we have been consistently making significant strides in this direction. Being a multi-product organization, it has also become necessary for the name of the organization to represent the multi-product domain that it works in. We believe that we are now at a pivotal inflection point in our journey.
As a part of this evolution, we have proposed a change of name of the company from Shriram Pistons & Rings Limited to SPR Auto Technologies Limited, subject to receipt of all necessary approvals from shareholders and government authorities. This change clearly reflects our commitment to enhancing our business activities in the automotive domain and expanding our operations while staying true to our focus for newer technologies. This name change will also ensure that while we diversify into different areas, we will continue to stay focused on our legacy products and also grow our business in the other powertrain-agnostic products. I am sure that this move will be very highly value accretive to all our stakeholders. While the company is consistently growing, it has also followed a policy of rewarding its shareholders throughout the years by the way of dividends.
In line with this, the board has approved an interim dividend at 50% of face value, that is INR 5 per equity share during the meeting held yesterday. Going forward, we expect the overall atmosphere in the auto industry to be very buoyant, thanks to the GST reforms and the recently announced trade agreements with Europe and U.S. The Union Budget FY 2026-2027 also strikes a very constructive and forward-looking note for India's automotive manufacturing and electric mobility ecosystem, balancing the near-term demand supports with long-term supply chain reform. The focus on rare earth mining and building infrastructure is going to further strengthen the demands in the auto industry. Looking forward, we will continue to maintain a strategic and growth-oriented approach. We are focused on diversifying our business model and expanding our portfolio and have a clear strategic roadmap to ensure sustained growth momentum for the company.
This will be well supported by strong tailwinds in the Indian automotive industry, with macroeconomic factors showing positive outlook for the industry. From a financial standpoint, we of course remain focused on maintaining a strong balance sheet, prudent working capital management, and healthy cash flows. We remain confident in our strategy and execution capabilities and are excited with the opportunities that lay ahead of us. I once again extend my heartfelt appreciation to all our employees for their dedication and commitment, to our customers for their continued trust, and to all our shareholders for their unwavering support. Together, we will continue to build a strong, innovative, and sustainable SPR. Thank you once again for joining us today. We will now be very happy to take your questions. Thank you 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Chirag Jain from Emkay Global. Please go ahead.
Thank you for the opportunity, and congratulations once again for a very strong quarter. Sir, just wanted your thoughts in terms of outlook for both quarter and probably the next financial year. We have seen a sustained demand momentum and wholesale numbers in the automotive industry across categories for January, and even the outlook seems to be quite strong based on the OEM commentary. So just your thoughts in terms of the standalone operations for the core business, and also maybe if you can touch upon the individual subsidiaries. For now, they are almost 35% of our overall revenues. How do we see those individual subsidiaries in terms of their growth outlook for, let's say, two, three years standpoint? That also would be very helpful.
Yeah. Thanks, Chirag. First and foremost, as I said in my address just now that the overall automotive segment is seeing a very good growth last quarter, and we expect this growth momentum to continue this coming quarter also. This quarter also, all the indications are quite buoyant, and we expect that we should be breaking records month after month. The same issue is there continuing in all the subsidiaries also because most of the subsidiaries are also all linked to the automotive business. So obviously they also have excellent outlook for the next quarter. We expect that the precision plastics business, both at Takahata as well as with TGPEL, should be doing extremely well. We have, by the way, also moved our production to the new locations in Coimbatore for our electric motor and controller manufacturing.
I am very happy to state that we are hitting records almost every month in terms of our output there and increasing our overall sales. If everything goes well, we expect to continue this in the coming quarter. In the long term also, we expect it to be really doing well. Also happy to state that post-closure of the Antolin M&A takeover, we have had our initial meetings, and all the figures look extremely positive. We are seeing that they also are breaking all various records that they have done earlier to be beating the numbers in this quarter. Hopefully, this will continue this quarter. We are also, in the long term, also seeing many new programs on which they are working with their customers, which is a very healthy sign in terms of the overall growth that we see for this business.
Overall, I must say that our plastics business will do extremely well. Our interiors business will do well. The electronics lighting division, the capacitive touch panel is doing extremely well. Lastly, of course, our legacy business doing extremely well in the coming year. Hopefully, fingers crossed, I am hoping that this run will continue for some time.
Thank you, sir. Sir, if you can elaborate in terms of the actions undertaken in various subsidiaries. I think you did touch upon. Just to understand as to what kind of initiatives we typically take when we acquire a company. Also with this reference to Antolin, while obviously it is still a bit early days, but still maybe a few plans that you can share that you plan to undertake in terms of accelerating growth and probably improving profitability. That would be quite helpful.
Yeah. Chirag, frankly, we do a number of initiatives. Thanks to the number of M&As that we have done over the last five years. We have a set kind of a rule book by means of which we ensure that not only we focus on the core areas, we also bring in a lot of agility in the organization in terms of execution capabilities, and also build on various growth programs that most of these companies are working on. We have continued this style with all our subsidiaries so far, and we plan to continue this also for Antolin. Frankly, all the Antolin group companies, the kind of growth initiatives that they are working on looks extremely exciting.
What it needs is speed and speed of execution with all our customers, and that is what we are going to focus on while focusing, of course, on technological and digitization and other areas that we want to improve with regards to bringing in more focus in terms of improving the output and improving the agility in the organization.
Okay. Just last thing, then I will come back in the queue. In terms of the current capacity across businesses and any expansion plans or CapEx plans, probably if you can share.
Frankly, that was one of the major reasons why we were looking at the kind of volumes that were growing and looking at all the schedules that we are getting from our customers. We thought that we might be a little bit stretched on our piston manufacturing. Hence, one of the very important initiatives that we took was to do this asset purchase agreement with Sunbeam, thereby getting their piston manufacturing lines. Thanks to that, we have now fairly good capacities available, and we can scale up very fast. Most of the other places we have put in all required capacity expansion machines to be able to take care of all the requirements of expansion that we see in the coming at least two quarters plus more.
Okay. Thank you so much. That is it from my side. All the best.
Thanks, Chirag.
Thank you. Our next question comes from the line of Radha from BNK Securities. Please go ahead.
Hello, sir. Thank you for the opportunity. Sir, the FY 2025 annual report mentions that the company has taken steps to phase out low margin and non-strategic product lines, reallocating resources to high margin value-added product lines. Please help us understand which products are we talking about, what changes have we made, and what kind of delta in margins was achieved through this?
Yeah. So thank you, Radha, for this question. Frankly, I must say that this exercise we started almost five years back. We started screening all our, I will put it this way, bleeders, and leakers and bleeders, as we call it in the company. We ensured that we work on two ways. One is, of course, going back to the customers to see if we can get some improved prices. For areas where we were getting priced out because of our competition being on a much lower price target, we decided to actually exit those businesses. A number of businesses we have actually done that in the past to be able to ensure that we are meeting our targets on profitability.
I am very happy to state that all the improvements that you see over the last five years in terms of the margin improvements have actually come that way. This is not something that we continue to do continuously while we continue to look at leakers and bleeders, but frankly, we have more or less now covered most of that, and you see that there is some kind of consistency that is coming in our profitability achievements. That is what is extremely good, that even with all the new expansion areas that we are working on, with extra efforts that we are putting on the new expansion areas, including some of the money that we are spending for due diligence and others, we are still able to maintain all our margin targets in terms of maintaining the margins.
And that's a very healthy sign, and we expect to continue that way.
Since you mentioned that this exercise was started five years back, I believe that you're talking about the legacy business where all this exercise was taken. There, how do you differentiate between low margin products and high margin products?
It's a very detailed exercise that we do in terms of overall part profitability. And we have a very detailed internal benchmarks, and based on that, there is a profitability working for all the SKU sizes that we manufacture. And when we compare that, we are able to easily make out which are the ones which are the bleeders for us, and probably take required actions.
Sir, is it fair to understand that two-wheelers would be considered lower margin as compared to PV for the legacy products, or this is not a correct understanding?
No, not at all. It is on a per product line basis. It has got nothing to do with the two-wheeler industry or three-wheeler. There are some two-wheeler industry where we probably get some of the best margins. There is no such distinction coming out of industry segmentation. It is coming purely from a product segmentation. What happens normally is you have to focus on the product manufacturing strategies and be able to meet the requirements of the. There are also some products, and believe me, in two-wheelers, some of the best technologies we have to give today to the two-wheeler industry in terms of meeting not only the Euro 6 norms, but also meeting the required targets in terms of fuel efficiency and others.
Like some of the coatings on the rings, some of the coatings on both the first, the top, and the middle ring, as well as the bottom ring. There are multiple technologies which goes into this. We work on all those technologies.
Sir, within the legacy business, in case there is a product mix change towards four-wheelers compared to three-wheelers, that would have no impact on the margins.
Frankly, we were thinking that this is what will happen because of the introduction of EVs and two-wheelers. But frankly, I must say that both the two-wheeler legacy business as well as the four-wheeler legacy business are actually growing in numbers. Even though the penetration is going on the EV side, we find that there is also a huge requirement in terms of the CNG vehicles and the new vehicles that are coming in even in the legacy business. Legacy business is actually also growing very fantastically.
Yes, sir, I understand the growth part, but what I want to understand is, in case there is a change in product mix within the legacy business, will there be any fluctuation in margins because of that?
Well, the product margins could vary, but I don't expect any major change to happen at a company level, because we expect that we have brought in a lot of fungibility on our lines, and we are very confident that we can still meet all the demands based on the actions that we have taken in terms of making the two-wheeler, four-wheeler pistons on multiple lines.
Fungibility, you mean that within the same product line of two-wheeler-
Sorry to interrupt you. Can you please rejoin the queue for more questions?
Okay, sir. Sure. Thank you, sir.
Thank you.
Thank you, Radha.
Our next question comes from the line of Anubhav from Prescient Capital. Please go ahead.
Hello, sir, am I audible?
Yeah, Anubhav, please go ahead.
Sir, my first question is that if you look at your standalone revenue growth, it is slightly lower than what you shared for the overall auto industry production or series volume. Can you share some color on that?
Yeah. Basically, see, you must realize this, that on the legacy business, on the standalone numbers, the actual industry started picking up only post mid-October. In fact, I would put it only from November and December, actually. October was more or less remaining almost at the levels of August and September, primarily because there was too much of capacity buildup, or there was too much of volume buildup that was done by the OEMs. As a result, what happened was all the sale points, the volumes were quite high. So the production was still kept at a lower level, thinking that people wanted to really understand what will happen with regards to the volume, how it will go up. Once it started picking up in November, that is the time when actually the OEMs actually started, and October also had Diwali holidays and all that.
Mid-November is what the volumes actually picked up. December also, the volumes were there, but still in December, some of the OEMs also take what is called their annual shutdown to do all various preventive maintenance on the machines. As a result, what happens is, normally November and December, if you see all our previous quarters, November, Decembers are always the lowest production, primarily because of, one is, Diwali is normally peaking and then November, December goes down, and then December you have the thing. But fortunately for us, this time, that has not happened. Actually, quarter-on-quarter, we are seeing a growth and a healthy growth. On the production volume, the volumes have started picking up only in December.
If you take that entire effect for the quarter, we see that the effect is only slightly on a lower side as compared to the other actions being taken on all the other subsidiaries where is more of tier 1 supplies.
Okay, sir. And sir, for the subsidiaries in the consolidated revenue, did we see any contribution from the Grupo Antolin entities?
No. The Grupo Antolin entity, the whole listing was completed only on January 8. Nothing from Grupo Antolin is added in these numbers.
Okay. And sir, it seems like the combined revenue of the subsidiaries has shown a very strong growth, like double year-on-year. For each of these two businesses, like the electric motor, the controllers, and for the precision plastic molded parts, can you share some color on what's driving such strong growth, like whether it is new client addition or increasing volume shares? That would be very helpful.
Yeah. For our plastics business, we have had, number one, increase in volumes coming out of the increased volumes coming from OEMs. Number two, we have been able to win some new businesses in both Takahata and TGPEL, which has really helped us to increase the sales. Number three, the overall tier one requirements have actually gone up because of the requirements from the customers. So that has really helped us to increase the volumes in both these companies. In electric motors and controllers, we have won new businesses, we have increased volumes with our existing customers, and we have done massive improvements in terms of the number of motors that we are manufacturing. Moving on to the new plant has really helped us to scale up our output. And we achieved some of the best outputs both in November and December.
It has been a good story in electric motors and controllers also. So all these three companies put together have really helped us on the subsidiary side.
Yeah, got it. And sir, for electric motors and controllers, are we catering to all EV segments like two-wheeler, three-wheeler, and cars?
Yeah, we make motors right from 2.5 kW, 1.5 kW right up to 250 kW. We are also now venturing into another 300 kW platform that we have recently won. There are a number of programs on which we are working. We make all kinds of motors. We make hub motors as well as mid-drive motors. We have both the motor lines. We have multiple motor lines now in the new plant, and we have multiple lines for making the controllers, including we make controllers, a fair amount of localization has happened in the controller side also, thereby helping us to maintain our margins as well as bring in the localization level that is required for getting the PMEC I catapults.
Understood. And sir, last question from my side is, can you share some color on how exports have done for us in this quarter as well as for the nine months?
Yeah, exports also have done quite well, even with a very tough and a very difficult geopolitical situation that was existing till around a week back. I think the overall up to December, it was a very, very tough kind of a market situation. But our teams have done well to get newer markets, work on newer programs, work on newer areas, thereby helping us to actually improve our sales. And frankly, we have actually increased our sales as compared to last year.
Good. And sir, just a follow-up question. North America is a small contributor to our exports compared to Europe and all. Are we focusing especially on increasing that share, especially given now, I understand it's a very temporary phenomenon, but the tariffs are also conducive now here.
In fact, in North America, we have won some very good businesses, new businesses that we have won recently. With the tariff situation now, I think it should only help us to further go up. So the quantities will certainly increase going to America.
Thanks. That is all from my side.
Thank you, Anubhav.
Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Our next question comes from the line of Divyansh Gupta from Latent Advisors PMS. Please go ahead.
Hi, sir. Sir, first question on the Craftsman acquisition. Does it only bring us capacity or does it also bring us some products or business that we were not catering earlier?
Yeah, it does both.
Got it. Understood. Sir, only from a top-line perspective, is the following understanding correct that December 2024 did not include TGPEL acquisition, rather revenue contribution from TGPL?
Yeah, a small part was included, but majorly it was not included.
Got it. If I build on this and whatever has been covered in the call.
Yeah.
TGPEL, a very small number was done. EMFi was operating on a small base. Now this quarter we have scaled it up and we have also increased export sales. If I combine all these three points-
Increased sales in Takahata.
-Takahata as well. Takahata is still in December 2024 base, right? Therefore removing, I am trying to see that what has
[inaudible] December base.
Sorry, sir, your voice was cracking.
All of them except the TGPL was there in the December base of last year.
I am saying that we showed a 20% revenue growth, but if I remove the EMFi scaleup, export scaleup, and TGPL, which is now in December 25, then a 20% revenue growth against a 17% production volume growth. That number seems a bit. Seems like we might have lost some business. Am I missing something or let's say lower-
No, that is not.
-specification of the car sold.
No, that is not the way to be done. In overall, even for the auto numbers, when we say the overall 17%, if I include all categories of the business, the 17% was primarily for the two-wheeler and the four-wheeler segment. If I include commercial vehicles and all, it comes down to as low as around 13%, 12% to 13%. So if we look at the overall business that we do, it is still very accretive. I do not think we have lost any business.
Got it. Because I was trying to collate that remove TGPL base, some approximation EMFi and.
That is not the right way to do it.
Got it. Understood, sir. Understood. Yeah, that's all. Those two questions were there. Thank you.
Thank you, Divyansh.
Thank you. Our next question comes from the line of Harsh Shah from Seven Rivers Holding. Please go ahead.
Hi, good afternoon, sir. Sir, can you give us the breakup in terms of what was the growth in OEM aftermarket and export business?
Yeah. All segments of our business have actually really grown well. We do not give individual segment-wise detail, obviously because competition is tracking us very, very closely and very, very diligently. We have to be very careful. But at the same time, I want to highlight that our aftermarket business has done some record sales in some of the months, and it has actually done very well. Exports have grown quite well. Our domestic markets have grown quite well. And product-wise, all product segments have grown very well.
So sir, if I only have to look at your standalone business, the legacy business, say for the next four to five years, then should we take your growth at par with the industry growth? Whatever the OEM industry growth would be there, our growth would be similar to that?
Yeah, we have a sizable share in the market, there is no reason why we should not take that we will grow at the level of the market growth.
So in standalone business, what can bring in the incremental growth? Because if you look at the industry report, the OEM industry is expected to grow at 6%-7% for the next five years. Then what can get us that incremental 4% or 5% growth to reach 10%, 12% growth for our legacy business?
Harsh, there are multiple areas on which we can actually grow. Number 1 is newer products, newer product range in the exports market. We are having newer segments of the market on which we are working. As I said in the last call, I think last couple of calls, I have said that we have entered into marine applications, snowmobile applications, et cetera. So which has really helped us get new business. Then we have also been very successful in penetrating the Indian aftermarket, and as I said, we are catering to hardly, though we are among the biggest as far as the aftermarket is concerned in our category of products that we make, but we still cater to a fairly, I should say, good amount of segments which we can increase, thereby increasing our market share.
There is a huge scope for us to improve the market share there.
Okay. And sir, how do you look at these recent FTAs signed by India with Europe and U.S.? Because export is a significant chunk of our business now, standalone business, almost 18%, 20%. Do you feel, and I think in a few of your last calls, you had explicitly mentioned that while your competitions want to shy away from the ICE business, you want to double down into this segment. So with this FTA signed now or almost in a verge of being signed and tariff being conducive for us, do you look at export as a key driver for your growth?
Well, I did not last time say that I will double down on this legacy business, but I did say I will be the last man standing.
Yeah.
I want to continue that, and in fact, I am happy to state that with all the new businesses that we are winning, we are actually looking at, and you can see that we are investing into our legacy business also. As a result, our investments into both our legacy business as well as the new business, plus the new takeovers, will continue so that we can grow the franchise. Now, coming to the effect of the free trade agreement between India and Europe, I think there are a lot of possibilities where we can actually support the requirements in Europe, and this really positions us quite well with some of the Chinese manufacturers who are exporting into Europe and thereby helping us to actually win some of the businesses there. Overall, looking at the geopolitical situation, India is certainly preferred.
Okay. Sir, just one last bookkeeping question. Just one last question on the INR 1,000 crore NCD raise, if you can clarify on that. What would be the tenure of these NCDs? When would we plan to repay it?
The tenure is for two years, and we plan to take it in two tranches. We plan to pay off as soon as possible.
Got it. Thank you so much.
Yeah.
Thank you. Our next question comes from the line of Viraj from SIMPL. Please go ahead.
Yeah. Hi, am I audible?
Yeah, Viraj, I can hear you.
Yeah. Hi. Thanks for the opportunity. Just a couple of questions. First is, sir, just wanted to understand on the standalone piece a little bit better. You said the aftermarket, we have seen a record sales. Export also seeing a healthy growth. So, if I deduct that 12%, if I give a quantitative read, then somewhere the growth in the standalone seems to have lagged compared to the production run rate we have seen across segments in the industry. Just trying to understand, is there been any loss of share or any color you can give?
No, as I said, I think I answered this question. Number one, let me reemphasize and state it very clearly, we have lost not a single share, not even 1% share, okay, to any of our competitors. Number two, we have in fact grown our market share in almost all segments of the business. Number three is the production volumes as compared to the sales volumes are lower. The sales volumes were higher because the stock positions were extremely high as of beginning of October for the finished vehicles, both in the two-wheeler as well as in the four-wheeler industry. As a result, the OEMs have not produced at the manner at which they would have produced if the stocks were not there.
Number four is, as far as we are concerned, all segments of our business, whether it is OEM, whether it is aftermarket, whether it is exports, everything has grown as compared to the previous quarter.
Okay. Because I was referring to the production numbers only for the industry, which we get from SIAM. When I compare to that, there seems to be a material-
One minute. You must also keep in mind one thing that even within the segmentation of the OEM business, while the numbers will look on the higher side, you must also keep in mind that it is actually the small cars which are doing well. The small cars, the value is certainly going to be lower than the mix that we had earlier for the big cars. So actually, the GST advantage is seen more on the small cars. Most of the OEMs have actually shifted to making more of small cars and selling it. As a result, the numbers are looking distinct. But overall, if you see the value of the product that goes into the small car is also lower as compared to the value that goes in the big car.
Okay. Can you give growth trends which you have seen either for the quarter or nine months in each of the segment in standalone?
No, we do not give.
Whatever you are comfortable. Okay.
No, no.
Second question. Sorry.
Overall, you have to see that even with the change in the product mix, we have been able to maintain our margins.
Right. Which is what I was coming to. Second question was on the gross margin in the standalone business. We have seen a trend, I think, this quarter you are seeing it modulating from 61% last year to around 58%. I think, in last quarter, we alluded that the aftermarket and the export piece was weak, and hence the margins moderated, year-on-year basis. Even this quarter, we have seen something similar despite the aftermarket and export, recovering and growing at a good rate.
No. We have more or less maintained the overall mix, as I stated. If you really see, some of the businesses in aftermarket as well as in exports have actually grown. The effect of the gross margin that you see is primarily because of the mix, which I stated earlier.
Okay. Just last two questions.
Sir, I am going to interrupt you, sir. Please rejoin the queue.
Yeah, ma'am, just two
The participant is waiting in the queue. Please rejoin.
Okay.
Thank you. Our next question comes from the line of Raman KV from Sequent Investments. Please go ahead.
Hello, sir. Can you hear me?
Hi, Raman. Yeah.
Yeah. My first question is on the piston side. Pistons including piston rings and piston pins, can you give us a ballpark figure of what percentage of the total sale is pistons? One is that, and the follow-up on that is, post-acquisition of Craftsman Automation Limited's piston business, how much on a percentage-wise is your piston capacity increased?
First and foremost, we normally do not give these percentages.
What is important to state here is that we have now sufficient capacities to meet the increased demand.
Understood. On the second question on the Grupo Antolin business, what was the integration cost with respect to this, and how much of that has been taken during this quarter?
No. Again, we don't give sub-elements of our cost parametrics anywhere. But whatever was there has been considered, and we have already cleared it. The overall integration has already happened, and we have already taken over management control. We have started working in our style the way we'd normally do with all the other takeovers that we have done so far.
Understood, sir. And sir, on the last question on the part of NCDs, we have raised INR 1,000 crores. Is this for the working capital or is it for an acquisition-related fundraising?
It's primarily acquisition-related. We don't require any capital. The company is self-sufficient to stand on its own legs.
Company is doing extremely well. There is no reason for us to raise any more capital required for working capital, et cetera, in that company.
And just the tenure of NCD is two years, right?
Yeah. The NCD is for two years.
And at what rate have we raised this NCDs?
Ladies and gentlemen.
Hello.
The line for the management seems to be disconnected. Please wait for a moment while we reconnect them. Thank you for patiently waiting. The line for the management has been reconnected. Over to you, sir.
Yeah. Thank you, Bhumi. I am very sorry for this. We suddenly lost the line. Raman, but I think I have answered your question, right?
I just want to understand at what interest rate have we raised the NCDs? That was my final question.
We have raised it at very competitive rates and we do not normally give the percentage, yeah.
Understood. Thank you, sir.
Thank you, Raman.
Thank you. The next question comes from the line of Mehul Panjwani from 40 Sense. Please go ahead.
Hello, sir. Thank you so much for the opportunity and congratulations on a great set of numbers.
Thank you.
Yeah. Thank you, sir. I am referring to slide number 22 in your presentation. I can see the subsidiaries are listed for the company. Can you throw some light on how have we classified the subsidiaries? I mean, is it based on business products or is it the size of the subsidiary or?
It is based on-
Also if you can-
Yeah.
Yeah. Go ahead, sir.
As you can see, it is based on the shareholding and there is no such, any other specificity with which we have listed that. If you-
Sir, what would be the Yeah, sorry, sir. Go ahead.
The classification-
Yeah, you can hear, sir.
-of shareholding that we have and whether it is 100% subsidiary on SPRL, whether it is 100% subsidiary on SEL.
Sir, what would be the revenue contribution from each of these subsidiaries?
As I said, we do not give those breakups and you can see the annual accounts, yeah.
And sir, what would be the I can see Antolin, those are two new subsidiaries.
Yeah.
But apart from that, we have SPR Engineers. So Engineers is completely dedicated to electric vehicles?
No. SPR Engineers Limited has got three companies under its fold. One is the SPR Takahata, which we have a 62% stake there, SPR EMFi with a 73% stake, and SPR TGPEL with a 100% stake. Apart from that, SEL in itself has its own production center, which is at Pitampura.
Okay. And sir, when we refer to legacy products in the-
Sorry to interrupt you.
Ma'am, last question. Ma'am, last question because it is very relevant.
One more question.
Yes.
Yes, sir. I just want to know about the legacy business. So when we say legacy business, which are the products which come in legacy? Because I am new to this company, yeah.
Oh, so you are new to this. Okay. It is basically our pistons, rings. If you go to our core product pictures, all the pictures-
Right
-that we put in, let me see which slide it is. It is on
Oh, yeah. Slide number 20. Yeah, slide number 20. Yeah. Right.
See slide number 20. We have written very clearly what is a legacy product, like pistons, piston rings, piston pins, engine valves, and piston rings. Now, mostly when I say legacy product, it does not mean the product is an old product or a design is an old design. It only means that just to give a clear classification, we call it as legacy product because those were the legacy business with which Shriram Pistons actually started. Now, frankly, we are producing some of the technologies that we have on these products are unbelievable technologies, which are the most recent ones, like the thin-walled pistons with very special coating. We do multiple coating on our pins also.
We do multiple coatings on the rings to enable that we get the least friction in the vehicle, and thereby giving the best performance for our customers, both for needs of the Euro 6 requirement as well as also for the needs of improving fuel efficiency.
Thank you, sir. It is a pleasure talking to you. I will join back with you.
Thanks, Mehul. Thanks.
Thank you. Our next question comes from the line of Jinal Sheth from Awriga Capital Advisors LLP. Please go ahead.
Yeah, Jinal, please go ahead.
Jinal, your line has been unmuted. Please go ahead with your question.
Hi, sir. Is my audio audible?
Yeah. We can hear you now.
Yeah. Hi, sir. Thanks for the opportunity. This is Rana. My question was on exports. You've really been talking about what is happening globally in terms of capacities being given. Just to know your view, what is the opportunity do you see for SPR to add on some of these new programs which are starting or probably are starting now? Which are the sub-segments you would be most excited within that, if you could talk about that?
Yeah. Actually, in exports, we are finding that some of the legacy players are actually vacating capacities, which is helping us. There are also many of the OEM customers have to actually go through the overall validation cycles are quite long, and it takes some time. But our exports have been growing quite well, and all the programs that we are actually working on is also quite good in terms of the number of programs and the number of new programs. Most of our program managers are really very busy managing those new programs. That's point number one. Point number two, as far as the kind of products that are getting interested in the market, I think we have fairly good inquiries, including inquiries for our electric motors and controllers, which we are working on.
There are some export requirements which we have already given samples and they are under validation and testing. It's a very interesting phase now. We are quite excited with all the opportunities that are in front of us.
Sir, would we please have to assume that export-
Sorry to interrupt you, Jinal. Can you please rejoin? There are still participants waiting in the queue.
Ma'am, just one last bookkeeping question, and I'll join back the queue. Sir, can you just quantify the amount of depreciation which the company will take in absolute amount for next year, given that you've made a large acquisition this year? That's the last question.
Well, I never said that I've made a last acquisition.
Oh, okay.
The large acquisition that we have done does not stop us from making more acquisitions. Please be clear. I think we are still fairly under-leveraged and I think we can do much more, and there is no reason for us to assume that we will stop here.
Understood, sir. But could you quantify the depreciation amount, sir?
We normally do not do that, but you can easily take that all the depreciation amounts that have been going on so far, more or less will have to be maintained to maintain the kind of growth trajectories that we are seeing ahead of us.
Perfect. Thank you so much, sir.
Thank you.
Thank you. Thank you. Our next question comes from the line of Karan Gupta from ACMIIL. Please go ahead.
Yeah, hi. My question is regarding to the subsidiary part. Am I audible, right?
Yeah, Karan, we can hear you.
Yeah. So subsidiary part has been mentioned, 35% contributing. So that we are assuming all, as you have mentioned, Takahata, TGPL and EMFi, right? Contributing 35%.
And Antolin also.
Can you share some bit on growth part that these 35% of piece over the next one or two years, any growth guidance on that? How much it is growing and what's the margin of these piece?
Yeah, Karan.
20-25 range.
No, Karan, you can easily see that all our segments are in the automotive domain. Okay?
Correct.
Every segment will be more or less growing with regards to the kind of automotive market that we see. And the automotive market growth is now clearly seen by most of the people. There are also good forecasts available through IHS and others, which you can take those numbers. What is important is, apart from that, we are also working on a number of areas to actually penetrate sales deeper into the aftermarket, as well as increase our sales in the exports, which will continue. That's going to be more accretive to the kind of growth targets that we have. Most of the times, if you have seen earlier, we have actually outgrown the segment.
Okay, so the margin expansion we are seeing is largely as of now because of aftermarket and export side.
No.
Going forward, this subsidiary will contribute.
No, I think this assumption is completely not correct. The margin expansion is there across all our segments of our business.
I am saying except SI business.
Sorry to interrupt you, Mr. Gupta.
No.
Yes, sir.
These have actually grown in all segments of the business.
Yeah, thank you.
Thank you. Please note that we will only be taking one question per participant from now on. Our next question is from the line of Harsh, an individual investor. Please go ahead.
Hello, am I audible?
Yeah, Harsh, go ahead.
Yeah, thank you for the opportunity. I just wanted to clarify something. In terms of our raw material prices, you mentioned that we have back-ended contracts with our customers. The passthrough, what is the transmission of the raw material increase passthrough? Is it with a lag or does it happen automatically?
No, it has normally a lag because we also carry inventories in the pipeline. It is normally, in most of the cases, it is a lag of one quarter.
Okay, a lag of one quarter. Okay. That's it. Thank you.
Thank you.
Thank you. Next, we have a follow-up question from Radha from BNK Securities. Please go ahead.
Hi, sir. Thank you again.
Yeah.
Sir, in your legacy business, if we consider only the two-wheeler and four-wheeler market, that is excluding the marine and snowmobile, et cetera. If your current base of market share is X percentage, then how much can this be increased in your opinion in the next three years from India?
Yeah, but in our legacy business, we have two-wheelers, we have four-wheelers, we have CV business, we have industrial engines, that is all the industrial gensets, then we have snowmobiles, we have marine engines, we have railway engines, all of them. What happens is, some segment of the business, if it goes down, the other segment is going up. So we have seen over the last five years, even when the market was growing at around 3%, 4%, 5%, we were actually growing at around 10%. We have more or less maintained the trajectory over, even if you see this year, I expect at least 12% and above growth. Even though the industry will end up with something like around 8%. So we are outgrowing the market in all segments, including the two-wheeler as well as the four-wheeler.
So how much is non-auto in legacy business?
Pardon me. Non-auto?
How much is non-auto in legacy business?
Yeah, it is a fairly big number, but I do not normally give those percentages, Radha.
Okay, sir. All the best to you.
As I said, the non-auto business consists of all the engines that I said just now. The marine engines, then we are supplying to railway engines, we are supplying to gensets. We are in fact even supplying to compressors.
Is there a potential to increase market share everywhere in all the domains?
Yeah, why not? Because in all segments of the business, we are only looking at not only the Indian business, but also the international business. With people getting capacities, we do find that there is a good possibility for us to keep increasing the business.
Okay, sir. All the best to you and team.
Thank you, Radha.
Thank you. Next, we have a follow-up question from Anubhav from Prescient Capital. Please go ahead.
Sir, in the aftermarket, what will be our market share and how large is the unorganized part? With this GST cut, has that driven a large shift towards organized player like us? Because of GST cut, whether unorganized business moved to organized.
Yeah, you are asking whether because of GST cut, any unorganized business has moved to organized business. Right? If I understand your question right.
Yeah, sir. My question is how much was-
First and foremost, I think, when we say unorganized and organized, this market, as far as the aftermarket is concerned, I would put it overall as a fairly unorganized market. In the sense that the market is free to buy from various areas. It can even import some of the pistons from China, which are at very throwaway prices. But people over a period of time have tried all this and have tested and seen that the quality and other things, parameters don't work that way. They come back to either the original manufacturers or those who supply to OEMs or to some of the known names that are existing in the industry. We have found that many of the people have already come back, mainly because of the quality and the requirements on the product.
Because piston is not a product which is very easy to just make and sell in the market, even in the aftermarket, because it has a huge amount of design parametrics as well as coating parametrics. What actually happens is when in the aftermarket, when you have to actually re-bore the engine, you have to also have different sizes of the piston. We call it as oversize, undersize and all that. All those segments will have to be catered to. It's not very easy. Both in terms of manufacturing and supplying, and at the same time also in terms of fitment. You require specialized players who work on this to do that.
Get that. Sir, what I understand is that the GST rate would have been cut from 28% to 18% in the aftermarket.
Yeah.
Is that a big driver for us to gain market share in aftermarket?
Well, see, it is not happening to one particular producer. It is happening all across. What normally happens is, the industry carries some inventory, and there is always an issue of the inventory getting liquidated and then the new product coming in. All the new products that are coming in are at the lower GST rate, which thereby helps to give the price advantage to the end customer. There has been a good amount of time lag post the GST introduction, after which the aftermarket has started picking up. If you remember in our previous quarter call, we had stated that our aftermarket, to some extent was affected because of the stocks that were lying and people wanted to actually get rid of those stocks which were sold at higher GST rates.
Those kind of issues we always have in business, and we have to see how we overcome that and start ensuring that we are still able to grow. That is what we have done as a team. I think overall, quarter on quarter, with all those troubles, we have been able to grow the business.
Sir, when you say an organization that-
Other folks, please rejoin if you have more questions. Thank you. Our next question is from the line of Viraj from SIMPL. Please go ahead.
Yeah, hi. Thanks for the opportunity again. Just two questions. Can you give some color in terms of customer concentration and segment concentration for each of the subsidiaries? Any color on an annual basis?
Yeah. So frankly, Viraj, actually, our customer concentration has come down drastically, because of all the mix that we have and the product segmentation that we have now. We are fairly well-represented in almost all the OEMs. Name any OEM and we are there. Name any customer, we are there in some form or the other. So I think we are present with all of them, and we have a fairly good relationship with every one of them.
Yeah. So my question was specific for the subsidiaries. Say top five, top 10 customers or the largest customer, if you can just briefly talk for each of the three.
If you really see our investor presentation, there is a clear listing given in terms of all the customers that we have for each of the subsidiaries. If you see there, we have given all the names of all the customers.
No, I understand, sir. I was just trying to understand, you have a single customer who is more than 10% or 20% of the sales in each of the subsidiaries, or is the concentration more diversified? Any color you can give on the subsidiaries, sir?
No. We just said, there is no concentration of any one customer in any of our businesses.
Okay. Second question was on the EV subsidiary. Any color you can give in terms of the order book and the pipeline. Which segments you are seeing the highest traction in terms of order book and scale up?
With the amount of validations that are going on with all the customers, order book will be very huge here. Let us go step by step here. We are growing very well. I think from last year to this year, we would grow almost five to seven times. I think since the base is small, that growth will continue. We expect our growth in the motor and controller segment to really grow well.
Okay. Last question. What is the cash and debt post the payment towards the acquisition?
Yeah, total we have paid EUR 159 million. I have, I think, stated that in the-
Yeah, I am just trying to understand, what is your cash and the debt level now, post the acquisition?
Just go to our figure of what cash we had in the previous P&L to what debt we have taken now. It gives a very clear picture of what is the cash and debt we have taken.
Okay, fine. Thank you.
Thank you.
Thank you. Next question comes from the line of Divyansh Gupta from Latent PMS. Please go ahead.
Hi, sir. Just one question. What would be the maintenance CapEx for us, either last year or, let's say, going forward, how should we understand maintenance CapEx?
No, maintenance CapEx, normally what happens is we don't give any percentages, but as I said, it is well within limits, and there is no such thing as we are spending anything extra for our maintenance CapEx.
I was trying to understand that example-wise. Let's say last year, we did about 170 odd crores of CapEx. How much was, let's say, growth CapEx versus just for maintenance?
No, we don't give those breakups. But as I said, it's within the industry norms and within our planning parameters.
Got it. Understood.
Thank you.
Thank you.
Thank you very much.
Thank you. Next question comes from the line of Ravi Purohit from Securities Investment Management Private Limited. Please go ahead.
Yeah, hi. Thanks for taking my question. Congratulations on a good set of numbers. Sir, just one question. Historically, we have seen running of this company at very good and strong ROC levels, right? Even the acquisitions that we have made in the past, like Takahata, have ended up giving us reasonably good ROCs. So how would you judge this new acquisition of the Grupo Antolin's assets? Would you aspire to bring this asset also to be at the same ROC level as the company? I am not talking of margin, but essentially, is it going to be ROC dilutive or do you think we can, over the next two, three-year period, bring them at par with the company level ROCs?
Well, all our initial working shows that we can make it at par.
Okay. That will be great, I think. Yeah. Thanks a lot, and congratulations.
Thanks, Ravi. Thanks.
Thank you. The next question comes from the line of Harsh, an individual investor. Please go ahead.
Yeah, thank you for taking the follow-up question. I just wanted to. Obviously, now the company is different from two years ago or so. So what is our management structure like with respect to our subsidiaries? Is it the same core team that manages all verticals, or do we have vertical-wise or client-wise, et cetera?
Yeah. The structure that we have followed, and we find that is really working very well for us, is to ensure that the existing management structures in the subsidiaries are able to work along with a core group of the central management team, which is able to give all the support that it requires in terms of all the growth requirements and everything. Thereby ensuring that we are able to be very agile and be able to make quick decisions in terms of all the requirements.
Okay. Fair enough. Thank you.
Yeah.
Thank you. We take that as the last question for today. I would now like to hand the conference over to Mr. Krishnakumar Srinivasan for closing comments.
Yeah. Thank you. I think really a good set of questions. The kind of questions really shows the kind of interest you have in our company. And I would like to assure you that we will do everything to grow the organization and the franchise. I would once again like to thank everyone who joined today's earning call. Your active participation has greatly enriched our discussion today. Our focus remains on achieving our strategic goals, and we are committed to driving the sustained positive results that we are seeing. If you have any further queries or any additional information that you need, please do contact us on our investor relations call, as well as our investor relation partners at Ernst & Young. On behalf of the company, we deeply appreciate your time and engagement. Do take care, and goodbye. Thank you.
On behalf of Shriram Pistons & Rings Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.