Q3 20/21

Feb 12, 2021

Quarterly report

Ladies and gentlemen, good day and welcome to the Q3 FY 'twenty one Earnings Conference Call of will be in a listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Anupam Gupta from IIFL Capital Limited. Thank you and over to you, Mr. Gupta. Thanks, Margaret. Good morning, everyone, and welcome to the post results conference call for Tube Investments. From the management, we have the entire team joining us for the call led by Mr. William Sundar, who is the Managing Director. We also have Mr. Arun Murugappan, who has taken over as the Chairman of the company recently. We have the respective business heads, Mr. Mukesh Haridha heading the tubes business, Mr. Srinivasan, who heads the Metal Forming Business Mr. Paul heading the Cycles Business and we have Mr. Mahendra Kumar, who is the CFO. We have the finance team also joining Mr. Ramanujan from there. So I'll hand over to Mr. William for CUES Investing for the comments and then take over for the Q and A. Over to you, sir. Thanks, Anupam, and good morning, everybody. Just quick highlights for the quarter. Our revenue for the quarter was at INR 1309 crores Compared with INR976 crores in Q3 of last year, our profit before tax before exceptional items was INR 145 crores and the growth of 53% over the same period last year. Now return on capital employed was at 26% compared to 20% for the same year for the previous year same period. Also the weakness is that we continue to kind of keep a very high free cash flow to PAT ratio and This quarter we generated free cash flow of INR130 crores. The company also declared an interim dividend of INR 2 per share At an aggregate level for the first time this quarter, the company has actually gone to negative working capital. So the path for the quarter was 107 versus 78 for the corresponding period last year Because last year in this period, we actually had a lower tax regime because we amortized the move to 25% over 3 quarters. The individual businesses, engineering had a very strong quarter. Revenue was INR 7.33 crores compared to INR502 crores. Part of this obviously is due to the steel price increase as well and and CDIC was 15 crores compared with 1 in the same quarter last year. Metal forms, the one area that was not as strong was in railway. But overall revenue of $393,000,000 versus $370,000,000 in the same quarter last year and PBT of $46,000,000 as against $33,000,000 in the same quarter last year. This year this quarter, obviously, for CONSOL results, we also have 1 month of CG Power results in there. So including that revenue, our CONSOL revenue was at $1700 as against $1087 and profit at $159,000,000 as against $99,000,000 As you all know, we took a controlling stake of 53.16% in CG Power Industrial Solutions over this time period. It actually consummated on 26 November 2020. And the revenue for the company for December 2020 276 and a PBT of INR 7 crores. This is the PDP. Anpikir, the other subsidiary had revenue of 65% versus 58% in the corresponding quarter and PBT of 10% versus 8% in the corresponding quarter. So commenting on the financial results, Mr. M. A. M. On Nachalam, Chairman of CII also said Yeah, yeah, it delivered strong results driven by the overall revival in the economy and easing of the lockdown restrictions of COVID-nineteen. The company is witnessing improved performance in most of its segments and expect that this momentum is likely to continue as the economy, which has started showing signs of revival, improves So that's a quick summary on the quarter, Anubam. And overall, I think kind of The environment like Mr. Arun Mungarpur mentioned continues to be showing good signs of recovery and we're quite bullish about things going forward. So let me talk to that and then turn it over to the audience for questions. Yes. Margar, can you go ahead with the question, please? Thank you very much. We will now begin the question and answer session. Tube Investments. Symbols. The first question is from the line of Nikit from Motorola Lothwal AMP. Go ahead. Yes. Thanks for the opportunity and congratulations on yet a good set of quarter the entire team. I have few questions. First, if you can, is it possible to give a big sense of how much was the volume growth across segments because This quarter would have seen substantial amount of realization work as well. Yes. So I think if you see kind of and obviously kind of We don't we've got some data like but we don't kind of give data in too much kind of granular detail. But the if you take, maybe you can give it just For kind of an overall aggregate level across kind of engineering and Yes. Of course, I think it is there in the segment Results also in terms of the total revenue, but in terms of volume, if you see, cycles had a very good growth of close to about 70% year over year in terms of volumes. Engineering also pretty strong growth, including large dia and also the normal flutes. The overall growth was anywhere between I mean, depending upon the segment, anywhere between 28% to 30% to almost like 50%. And metal form products also, It ranges anywhere between, of course, leaving aside the railways, it is ranging anywhere between 10% to 30%. Sure. That's very helpful, sir. The second question was on the metal form part of the business. If you have to look at the Y o I numbers, the growth appears to be lower compared to the other businesses. Is it largely on account of railways itself? Or Because there are other categories like door panels, fine blanking, industrial chains, auto chains. I'm assuming all of them would have done far better in this quarter. So is it just on account of Railways that the growth is lower? Or is there something else that we should be Yes. There are a few new business also which we will club under this, but that's not a big number. Okay, it's mainly right now. Okay. And the last question was on the PLI scheme, which the government has kind of rolled out. How are you looking at that As an opportunity from Tube perspective, that's the final question. Thank you. Yes, we're evaluating that. I still don't think we have an answer on it. We're looking at both sides, which is like our existing businesses can add any adjacencies that we can get to or are there new things that we can get into. We don't have a perspective on that yet. I think when it's quarter past, we can kind of have a better perspective on it. Perfect, sir. I'll come back and see for more questions. Thank you. Okay. Thank you. Questions from the line of Sujit Jain from ASK Investment Managers. Please go ahead. Hi, Valan and team and congratulations on a good set of performance, Remarkable improvements both in TI and as well as the turnaround in TV that you are on. I have few quick questions, you can just note them down. In Media, there are articles that TI could be looking to enter into auto manufacturing. TG Power, obviously, 2 steps at a time. But if I look at the competition, competition is already moving in the direction of OpEx rate opportunity. So Siemens, MindSphere and ABB Ability. These are the templates they are developing worldwide and taking those use cases, putting sensors on equipment and have started selling those solutions for IoT based. So directionally, eventually, how does the group Retail HD Motors, there will be no complete agreement between Gigi and Crompton Wheels. When does that get over and if there is a thought that if you can launch them, that was a very strong segment for the oil Company. And in the CG Power call that you did post acquisition, you had spoken that you will update on the contingent liability overseas business. I missed the opening remarks, but if you have some remarks here. Thank you. Yes. Sudip, so thanks so much for the question. What I would request is that here we stay focused on PI questions. What we've said, I think kind of is that after the April quarter, I mean like quarter, we'll basically start doing As well. But otherwise, it kind of gets confusing because we'll have to like to know a lot of strategic questions coming in here as well. So that will be our preference. So first to address the TI question, yes, we are entering the Electric 3 wheeler business. So basically, we're going to start manufacturing and selling electric 3 wheelers in So that will be around, I mean, so in our sense kind of perhaps the December to January timeframe. Just a quick kind of response. Like I said, all the CG strategic stuff, I would just say, you kind of we move and kind of address more on our CG call. I think from a TI perspective, it's just suffice it to say that we are more than satisfactory with kind of we are more than satisfied with rate at which we are seeing kind of performance come back at CG those early days there. Sure. Appreciate that. In 3 wheelers, if you can just elaborate whose technology you want to deploy, is it in house and the battery sourcing, etcetera. Yes. So obviously, we won't start discussing revenue component level. The technology is a combination of in house plus we used a Korean firm. So we partnered with the Koreans on the design Okay. And one quick question is on the cycles business. The opportunity that is there over Fitness bikes, which are high end bikes. Anything that we are doing to tap into that? Yes. This call here, I had the bicycle business back to you. What we are doing is we are wrapping our ante very much on exports. This year almost will be like 4 times the volumes of last year And we are taking a very aggressive purchase for the next 4 years on selected markets, on medium to high end price. And we believe that, that will form a very big cornerstone of Cycle in terms of driving the top line growth as well as the bottom line growth. And we are actually at the back end Thank you. Good luck. Thank you. Thanks so much. Thank you. The next question is from the line of Akshay Bhore from CNG Investments. Please go ahead. Hi, Valen and team, and thank you for the opportunity. I just have a couple of questions. First one is, So, given that your role in some of the other group entities has expanded over the last few months, What does that mean for your tenure and engagement with Tube? What implications does it have? Sorry, I think we I don't know if it's us, Margaret, but we can't hear so clearly. Sorry about that. Can you hear me now? Yes. This is better actually, actually. May I request you to the Peter Calkindale? Sure. Hi, Willen. And My first question is regarding your role in some of the other 2 entities, what does that mean for your engagement and tenure and your involvement in Cube itself and if you can just give us some color on that. Yes. So thanks, Hari. That's a good question. And I think it's kind of come up in different ways in the past in past calls as well. And I think kind of our stance and our perspective remains the same. I've always said even prior to kind of Mr. Marupan's retirement last November That there will be kind of slightly expanded kind of role that I will play. And so I think you're referring to kind of the role in Chola as well. So basically, as you know, kind of both The teams are teams I've worked with extended periods of time over extended periods of time. And so yes, I will be providing kind of Supervisory oversight there as well. I don't see that kind of taking away from the role at TI. And so basically, it's kind of And obviously, kind of at all 3 companies over time, we will look at succession planning, but my role in TI will continue, as I've always said, for the foreseeable future. Sounds good. And just a clarification on the electric 3 wheeler opportunity side. Would you be like competing against some of your customers in the existing businesses and the stack like how does that like balance play out? Honestly, kind of as you see, I mean, it's an environment where we don't see kind of too much against kind of our existing customers, Especially not in the businesses that they are in. We don't supply too much into the free wheeler space today. Got it. Thank you. Thank you. Thank you. The next question is from the line Smith Fotodia from Motorola Nusswal A&P. Please go ahead. Hi, good morning, everyone, and Congratulations on a phenomenal quarter. It's quite commendable that you have negative working capital. I think it's quite a big achievement. First question, Ryan, is if you could give us some update on the length, thank you. Yes. So, Sushmit, thanks and you are doing well. The Yes. I think the lens rental, like we told you, basically got slowed down because we're using all the Korean equipment And the guys who had to install the equipment basically had a challenge because they've not been able to come here during COVID. So our sense is now that we will have somebody coming in this month. So we are basically Producing in multiple operations except for the coating of the lenses themselves. But we're hoping that by next month, we will have quoting in place as well, in which case that I think fairly shortly after that, we'll get to the capacity of the existing facility, Which is a 500,000 Lens a month. So my sense is that we should be able to keep that in the April, May towards the end of the April, May, June quarter. And then basically, if we do that and are able to maintain quality, then we'll start thinking about an expansion plan there. But basically the like I said, the only delay on that has been because the Korean equipment manufacturers were not Able to kind of come during this COVID phase. Okay, got it. So Q2 FY 2022 Should be a quarter of full ramp up and if things go well then the next steps in that. Yes, yes, that's my Okay. And second thing, the line is just to step back is you're now embarking on this 3 wheeler project And you have the lens to ramp up and you have CV power. So is there enough on the plate or there is more space on the plate to do something? No, I mean, I think we've already articulated kind of a path, right, Sushmit? Kind of our path has been like you know, it's been TI1, TI2, TI3. Here. Lens and 3 wheelers are part of TI2. And the thing we've always said is that, see, honestly, kind of None of the stuff is on my plate actually, right. It's kind of it's all distributed on multiple plates. Electric 3 wheelers on KK Paul's plate. The Lens business is on KRS or KRS Srinivasan's place. And like you know, Enes is running CG, who's kind of an old hand with the group as well. So a lot of it, Cedric, is more from a bandwidth perspective. CUES Invest. I think if we don't enhance capacity, we also have to show that we can grow. And it's constantly a question of how much capacity we can enhance as a company. And so a lot of what we are talking about personally internally from a talent perspective as well It's how we build organizational capacity. And I think kind of that is where a large portion of our effort is kind of focused. So honestly, I think that we've already articulated that both PI2 and TI3 have to be firing along with PI1. And hopefully, kind of over the next couple of years, you can see that coming into reality and we can deliver numbers from those 2 as well. That's really our intent. Doesn't mean obviously kind of PI3, we've told you, it's kind of like a Danaher like approach. So the one good thing is that once TI is kind of So both when we can kind of get leverage down in both companies, it's an approach that we're taking, right? So basically, it's kind of it's Not kind of just a one off acquisition, which says that we have to keep on acquiring over time, but we won't do it and put too much stress on the balance sheet of the company. That's something we're very particular about, right? So we don't want stress on our balance sheet. And so I think that this is a direction that will continue, Sushmit. Got it. And just lastly, just to clarify if I heard it right, what would be the time lines of 2 wheeler business, when would be the first prototype? 3 wheeler? You mean electric 3 wheeler? Yes, yes, yes. We already have working prototypes now. Like I said, we've been working with a Korean design firm on this. Correct, correct, correct. We plan to go to market in the January timeframe. Okay. Got it. And last question, what is the net debt now at the books of PI? Yes. So end of Mahendra here. End of December, it was about INR 60 crores. INR 60 crores. Yes. Okay. Okay. Thank you and all the best. I mean, you have a great year ahead. Thank you very much. Thanks, Usman. Thank you. The next question is from the line of Abhishek Ghosh from DSP. Please go ahead. Investments. Hi, team. Thanks for the opportunity. Just a couple of questions. How should one look at the gross margin in the current Given sharp increase in commodity prices, is there an impact of that in the numbers? Mahindra, why don't you kind of respond? Yes. So if you're referring to the commodity prices, mainly the steel price increase, which will start reflecting from Q4 onwards. And there will be some kind of a time lag in recovering it. But as of Q3, there is no significant impact because of the commodities price increase in the margins. Okay. So 4Q, we'll see impact of RM and we'll have to negotiate with your customers to kind of get that thing. Is that the way to do it? Correct. Okay. We have always been able to recover it. That's why there could be some time lag, but we should be able to manage it. Okay, great. And in the Metal Form division, is there also an impact of export being a little weaker or in the other segments because of For container availability in Agustin? Karen, you want to answer it? Yes. The exports have been slightly lower compared to last year in industrial chain, of course because of the overall global scenario due to COVID. And there are some challenges in getting the containers also, that is true. But the real issue in metal form is the slowdown in railways due to the railway coach factories have not ramped up their production, which is likely to get corrected in the coming quarters. Great. And if we can also get clarity about the development in the truck body part of the business and the Overall scrappage coming through, how should one look at that part of the business? So I think obviously kind of last So this coming year, I mean, again, right, so I mean, Like we told you with some of these businesses, they'll take a little while to pick up and so kind of we don't expect them to be in contribution numbers in the And just one last question from my side. You are at just barely with any net debt now. Most part of the CG The cash outflow has already gone and you are generating close to INR 100 crores of cash every quarter. So how should one look at Balance sheet more from a 2 year, 3 year perspective. From that perspective, you can just give us a broad outlook. How can one look from managing? So where I'm coming from, the one part of the cash outflow to CG Power has already happened. Despite that, you are at only you barely have any net debt now and you're also generating INR 100 crores kind of a cash flow every quarter now. So INR 200 crores goes into 3 wheeler, but that's just about 2 quarters of cash flow. So there will be a significant amount of cash flow generation Over the next and CG Power will also start to throw cash flows. So how should one look at it? Are you already kind of evaluating or will you wait for some time to Consumate the CG Power thing and then probably look at it. How should one look at it? You can just help with them. Like we said, right, I mean, overall, the thing is in our control books, we don't want too much leverage, Now what you have to look at and again, kind of this is a process we're also learning when we look at companies like Danaher and kind of a lot of Right. So just do this, how they do it well, right? Basically, you need to I mean, it's like you guys do in the investing business, right? We need to create a continuous pipeline, But timing to kind of move out 1 quarter or 2 quarters, right? But so If your question is kind of are we evaluating, we're always evaluating, right? What I wanted then is, Hey, specifically is and we've said this before, which is we won't take too much debt because we don't want to have much debt on our consolidated balance sheet, right? We won't do transactions that basically kind of levels us up too much. And honestly, we're not To answer your question directly, we're kind of nowhere close to looking at any acquisition right now in any level of detail. We said that First, what we wanted was for CG to fully consummate. But still we get very comfortable with CG and we get the test down there. We're not going to make another acquisition. That was your question. Okay. So that helps. So CG free cash flow We'll have to be used for prepaying CB debt anyway because they have back on their balance sheet. I I think the relevant number to then look at is a consolidated not the standalone net debt because you want group overall net debt to be at manageable levels and then only look forward for future. That's the way to probably look at it. Is that correct? That's a good way to look Right, which is as long as we have consolidated I mean, a large amount of consolidated and large zeroes to defend, right? Whatever we told you, we're South Indian. So large is Smaller amount of debt in the south. Until we are comfortable with overall debt, we will not do Great, great. Okay. Thank you so much and wish you all the best. All the thank you so much. Thank you. The next question is from the line of Ashutosh Tewari from Equinox. Please go ahead. Hi, sir. Congrats on the strong set of numbers. So I have a question on engineering division. We have seen a very sharp increase in sales volume wise. So is it driven by, I mean, the pickup in CVs and construction equipment that we saw in the last quarter? And even going ahead, I think these sectors are expected to do further well. Can we expect this top line that we did in this quarter on the GIM side, we can see some build up on here as well? Yes, you want to answer that? Yes, yes, Bharat. Yes, your observation is right. Especially in this quarter, all the 3 segments we are engineering Business is based on, one is automobile industry, second is related to construction industry, which is off road vehicles as well as the exports. All the three segments have done pretty well this quarter, and we hope that we're going to go forward. We'll be doing well only year on year. The base is already corrected a lot in this year. So there is only headroom for growth available going. Okay. So my question is that can we, let's say, the revenue that we did in this quarter, can we reach out from there as well? Because I think our CDs will obviously be higher than What the industry volume was in last quarter and probably the social equipment also can pick up from here. So can we assume that this base has probably now remained there and we'll build upon that? Yes. TV industry is going expected to do well because government is also pumping a lot of money on the construction industry. And like you rightly said, base is corrected too much So there is only going to be growth going forward, and there should be a bullish growth going forward. That's what is our estimate. Sure. So secondly, on this, so we are developing basically a product for export market on the engineering side. Any update on that From what time do you expect that to come, right? So those product developments are already going as per our plan. We've already submitted the samples for new project what we are running it and it is expected to sample gets approved by quarter 1 or quarter 2. And beyond that, our growth in the particular new segment where we are investing it will start clocking for quarter 2 and quarter 3. Okay. So from Q3 second half maybe you'll see some benefit of that Yes, yes. And then on this lastly, on this Indian division, only the margin part, so we have despite this very ramp up, I think margins have come down a bit on a quarter on quarter basis. Is it because of the commodity pressure that we saw in this quarter or Sumit, may exchange is the reason? Like Mahindra already explained, this quarter there is not much of impact Because commodity prices have started coping up from Q4 basically very high, Q3 whatever impact was there, which is already recovered. And we could see a time lag in the Q4, but ultimately, we'll get recovered fully. That's what is the arrangement we have with our customers. So my question was, let's say, Q2 to Q3, despite the revenue growth, we have seen margin compression in the engineering division. So is that because of mix basically, a change in mix in the year? Yes. A couple of things. One is mix. The second one is, see, quarter to quarter, it is Okay, got it. Thanks a lot, sir, and all the best. Thank you. Thank you. I would request participants to please submit your question at the time. The next question is from the line of Aditya Baghul from Axis Capital. Please go ahead. Hi, Valan and team, congratulations on a great, great set of numbers. Thanks, congrats. Yes. So sir, my question is more in terms of our long Over the last 2 years, we've sort of checkmarked our ROCs, we've been checkmarked our cash conversions and PBT margins. Coming to the 4th point, which is revenue growth, how do you see that as a trajectory? You earlier highlighted that 8% to 10% would be a sustainable sort of Investor. So actually, I think, thanks for the question, right. Again, revenue growth, it depends whether you're looking at standalone accounts already. Now because the basic way the basic challenge, right, in India Because in India, it's kind of more driven by standalone. Now the challenge like you know with the Fiji acquisition is that does not It's basically it ends up being a separate entity. If you look at it, Kanal, the way we've articulated it is TI1, TI2 and TI3, right. So TI3, like CG, we're using free cash flow from the company to go and buy another entity. So unless kind of that growth is also kind of seen as part of our overall entity's growth, It brings a different lens to how we look at or evaluate the company's growth, right? So that's the first thing, right? So you guys need to kind of think of how are you going to solve for that. You can basically take kind of our ownership interest in CG. I mean, however you want to think about it. But I think From an analytic perspective, you need to think of how you're going to solve for that, right? Because clearly, if we're going to take cash flow from the main entity and use it for acquisitions, We need to think if those acquisitions end up being standalone entities, how that kind of drives into the growth, right? The growth drivers from so like you said, we have 3 engines of growth. The growth within TI1 itself, which is the organic businesses. And I said that, that can range from 6% to 8% over the cycle. Right now, obviously, we're seeing kind of move growth in that I mean into next year. And then you're basically so here like you said, over the cycle, we see PI1 growth in 6% to 8%. Now TI2 has not started kicking in yet, right? But Our belief at least next year is that TI3 will kick in with series numbers because But how you choose to have that to your model, I think it's something that you have to drive. I mean, it depends on how you would do it. Right. No, sir. My question was more to do with PI1. Just wanted to understand, you've seen a robust growth in cycles. Athleisure has been a the focus area during the last 10 months and even during even within the engineering segment. So specifically TI-1s. Are we seeing a step up there? TI-1, I mean, it is a step up, but we've also got to realize that TI-1 is a bit more cyclical, right. So I don't want to kind of move away from that thought that over the long term, putting too much more than 8% to 10% pressure on TI1, I don't think it's the right way to look at it, right? TI2 has to kick in. TI2 will be part of TI standalone, but it has to kick in, Which is where the electric 3 wheelers come in, which is where Lens comes in. And those businesses have not kicked in yet. Understood, sir. Sir, my second question is again trying to understand, you've talked extensively about Japanese influencers who Driven TQM and Productivity Management. Where are we in the journey there? And how do you see the next 2 years or 3 years? I'd say it was very, very early. I mean, I think we're barely kind of not even got to go. We're in kindergarten, I think. And so again, we've been trying to kind of work more with kind of more folks from Japan. Unfortunately, kind of everything has got shut down because they can't travel here right now. And so I think we're just waiting and just kind of so but the more we kind of try and understand that, It's just like an ocean that we have to basically kind of drink from. And so there's a lot to learn in that space, right? And I do think it's highly exciting in terms of the prospects of what that can do for TI. But I would just say that we are absolutely in our infancy in that right now. That's very encouraging to note. Thank you, sir, and best of luck Tube Investments. The next question is from the line of Rimal Gohil from Union AMC. Please go ahead. Yes, sir. Thank you for the opportunity and congratulations to Virendra and team Sir, my question is firstly on TII standalone. And just following up on Aditya's question, my question is on margins actually. The company is way past the 10% PBT that you had guided for. What would be the outlook there going forward? Clearly, despite the revenue growth not You still have achieved and over achieved that number on PBT front? That is point number question 1. The second question is on the Lens business. I think what you mentioned on the volumes that you're targeting or the production that you're targeting is 500,000 a month, right, if I have not got it wrong? Correct. Yes. And the third question, sir, would be the negative working capital, is it sustainable? I mean, the factors driving it, Will it sustain on a negative trajectory going ahead as well? And lastly, if you could just comment on the metal forms business, excluding the railway towers has grown? Thank you. I asked you so many questions. My RAM is only so much. RAM is very small RAM. Okay. I'll remind you. My thought was PBT are using and we're expanding our target. We do believe that PBT will expand over the next few years. We Don't want to particularly set a target right now, but we do believe that we will be able to expand PBT. Okay. Your second question was on negative working capital. Honestly, part of the challenge right now is that even if you want to buy steel, you can't buy steel, right, in a sense like there's not enough available to go Right. And so that's also basically driving down our working capital levels. I think We still have to determine what will be kind of a stable level, whether it will settle like kind of close to 0 or a number slightly above that. I don't think we're going to go back to the 300, 400,000,000 levels we used to be at. But it may settle as a number slightly above this, Just depends on I need to dig into a model or something. Last question was Like what I mentioned, it's in the range of 20% to 30% and varies from segment to segment. Great. Thank you so much, sir, and we're looking forward to this separate daily call maybe Q4 onwards. Thank you so much. Thank you. The next question is from the line of Kruti Aras from UTI Mutual Fund. Please go ahead. Hi. Good morning, sir. Congratulations to you and your team on the strongest and market performance. Sorry, this is repetitive. My question is on the 3 giga XM business. If you could provide us a bit of background on how we've wheeled in on this business, what is your assessment of the current market size and potential. At this point of time, we understand the segment is dominated by lead acid Battery driven electric business. So and it's highly fragmented. So and also if you can tie it back to our strength and what is our right to win in this segment? I'll answer my call here. I have the back of the business I'll try to answer this question in 2 parts. The first part was we are basically update How the EV space will play out in India, there are a number of factors, I mean, What the government is doing with the environment, now post COVID. So that optimism I think we've looked at design, we've looked at the value proposition, we've looked at why some bigger buyers, we've looked at the Total cost of ownership and how does it compare with the current wave and how will we get him to adopt Easy. We must also remember that there's a lot of environmental factors like drop in prices of battery, etcetera, that will happen, That's how we zeroed in on this. And then we are in bicycle business, so we raised our vision To say Eco Friendly Mobility. And therefore, the vision got enlarged from the cycling to Mobility and Eco Friendly and therefore, we need. So there's a fit of EV into our vision and therefore what we are pursuing. Coming to specifics, broadly at this stage, we've done a lot of reliability tests. We've done design tests. Consultation with our design partners. And we are very hopeful that we'll deliver something Does it answer? Yes, sir. And if you could highlight any synergies with the cycle business in terms of non cost stream on distribution? So again, right, I mean, I think the synergy question has come up multiple point times in the past, right? And one of the things we said is Sainal, like there's a reason why TI is kind of taking this approach, right, which is we want to kind of move away. If we only want to say synergy, then we're going to be an auto component supplier of entire life, right? And honestly, Kenneth, we do not want to be that. We want to kind of we want to Reduce kind of our dependence on kind of just auto because being an auto component supplier, We see 2 challenges with it. 1 is it's very capital intensive and the second is it's very cyclical. And the cyclicality kind of doesn't create an ability to generate consistent and constant cash flows, and we don't see that as kind of good for our company That has to be able to deliver consistent growth over time, right? So hence, I mean the same question was asked even with CG. What we see as common principles, there's common principles, right? So I think I forget it was I think that Aditya or Sushmit that had asked the question on the Japanese. Japanese lean principles, Japanese production systems like the Toyota Production System and PQMs, We see as applicable across businesses and we believe that that is what creates leading manufacturing businesses. Our interest and intent is to Create leading manufacturing business in the country using those principles as a way to compete, right, using lead, using TPS, using GQM. And we believe that those principles are applicable across various industries. So, sir, great to hear and good luck to you. Yes. Thank you. Thank you so much. Thank you. The next question is from the line of Anupam Gupta from IIFL Capital. Please go ahead. Yes. Hi, Valin. So two questions. Firstly, on the cycle, you said that there's a significant emphasis on exports. So just to What sort of current revenues coming from export and what is in terms of The normal Indian business, how fast is that growing and can that sustain? And exports, you mentioned, will get twice in a will get doubled in this year. But just give me some picture on the domestic as well as the export in it separately? I think in the bifecycle business, the way we look Currently, the revenues coming in from exports is about 5% of our turnover. Moving forward across the next full year, the way we have planned it out that it will start contributing between 20% 25% of It's completely in this market. I think there are a lot of favorable events that are happening in this business. Okay. And that domestic business, how fast is that growing? Is that pent up demand or do you see that sustaining? Domestic demand this year has been very good in terms of the market if you take post opening of the COVID, the market has grown Between 20% 25%. But if you look at our historical perspective of the domestic market, you know that Having said that, we're on the right to explore. I think we have to build our Of competitiveness and velocity and compete on Q3 really. And that's what Mr. Lan was explaining The initiatives that we are taking on with the Japanese, etcetera, utilizing those principles that help us to We're very competitive in the manufacturing space. And with that, then we have all the markets that are disposed to be able to compete. Right. So, first, that I'm looking at this export scenario, we're looking because we mostly have the dominant position in the domestic market, Sure. The second question for just relating to CD Power is not necessarily about how it is doing. They have given a lot of reduction in the contingent liability. So the question for you is, do you see any further investment from TI going into CG Power or meeting any cash shortfalls for contingent liability? Do we see that happening at all? We don't believe that there will be a need at this stage. Okay. So CGPA should be able to handle all the cash flow internally? Yes, yes. Okay, understand. That's all. Thank you. Thank you. The next question is from the line of Prashant Fujara, an individual investor. Please go ahead. Hi, Mr. Villain and team, congratulations for a great set of numbers. Thanks, Kashyap. And Kashyap, it's great to see you at the center of the line. Actually, I think to all on the conference call, I just want to say a big thank you to Kashyap. Kashyap has been hosting our conference calls from Axis for the last 10 years, I believe. Actually kind of seeing Kashyap from kind of the other side. So Kashyap, congratulations and CUVE Investments. No, thanks. I think this was one of the first companies we covered when I started covering. And I think it's been a Great journey because over time TI has gone up 10x and apart from that there has been Chola Financial Holdings and Chola that have kind of come out. So it's been a great journey over that time frame. But I'm sure to look forward to Mr. Milan, I just had one question. I think most everything has been kind of spoken about. It's very encouraging to see Q3 PBT at INR 145 INR 1,000,000,000 in fact of above INR 100 crores. So actually, we are annualized run rate is any which way now INR 600 crores 400 crores plus And we are at 11% margin. So I think I remember discussing in calls prior with you and you said that For a mid term, maybe a 3 to 4 year horizon, aspirationally, you wanted to kind of get to that 15% mark. So I hope that is that continues and there are no changes to that plan. Yes. So I think broadly, like I said, right, I mean, a lot of this is driven on operating discipline, right? And As I said, the reason that kind of slowed us down this year is the fact that we've not been able to get a kind of some of the Japanese in here. I think there's a lot for us to learn from them. I mean, we still have to learn a lot more. So our belief is that we're able to kind of apply those We will be able to get to those numbers, right? I mean, so that continues to be our belief. Great, great. Thank you, sir, and wish you guys all the best and look forward to being in touch with you. Thanks, Ashish. Thank you. The next question is from the line of Rohit Oury from Progressive Shares. Please go ahead. Hi. A couple of questions for Shanti. Just wanted an update. Last time when we spoke, you were talking about our CapEx plan, that is a growth CapEx of INR 15, 20 crores for Shanti. So any developments or how much of the intended amount has been spent for CapEx? Nothing significant because of this COVID impact on ourselves. A lot of deferral has happened. So the CapEx, I think, will now happen between Q4 and maybe Q3 of next year You were at an evaluation stage for some robotic processing for Shanti. So any developments in that case? Yes, very, very early. I don't think we haven't discussed this. I'm actually surprised that you guys didn't don't worry. But I think And in terms of the pending order book, which Shanti is having, which gives a visibility of around 9 to 10 months from today, In next 2 years or so, do you think Shanti will be able to do EBITDA margins of 20% also? Again, we don't get forward looking guidance, especially on Shanti. So I don't get Okay. Okay. Last question, Shanti has been accumulating quite a lot of cash, which is in the form of FD, I believe. So are you building watches for Shanti then? School. Again, right, I mean, Santi had accumulated cash before. We distributed cash on back. I mean, we drove a buyback at that point. So it's not that you'll be going for incremental dividends and reward the shareholders then? No, please don't draw any information, right? Because Shailesh accumulated quite a lot from around 30 crores to 45 odd crores in last 6 months. That is the reason why I'm asking that what does Shanti intend to do with the money that is lying. I think like before also, we said this we maintain a same stance, right, which is now we'll continuously evaluate at a shanty level. These are all independent public companies. So we continue to evaluate at the Santi level, whether the cash is to kind of use it like a watch list or something else Or to bring some of it back to the parent. Okay, okay. That's good. Thank you. Thanks a lot. Thanks a lot. Yes. Thank you. Thank you. The next question is from the line of Prasmit Bhatodia from Autonomouswar AMP. Please go ahead. Hi. There's a question for Mr. Paul, actually, I didn't realize we have on the call. So Mr. Paul, if you could Give us like a 3, 4 year vision excluding the EV. Can this business be like a INR 1500 crores revenue business with nearly double digit margins. Is that possible? You're talking about EV or cycles, Jaya, we couldn't hear you. Cycles, cycles, cycles. Cycles, cycles. It's digital to give, again, as you said, forward looking and prediction. But all I can say is that we are pretty upbeat in terms of the future. Looking at India plus some countries in the globe with the favorable movement. So combined together, we believe that we will be in a position to deliver And sustain our performance is what I can say. I think and also with the introduction of Our approach towards some of these Japanese philosophy should help us improve the velocity in which we do things And the way we manage the business, the sustainability that we can get out of it. And this combined formula actually Couple of ways also talent management, I think, is what Mr. Gulen alluded to, to help us to see superior results No, over the future. That's what we are working towards actually. Okay. Thank you. Thank you. The next question is from the line of Ronak Vora, an individual investor. Please go ahead. Sir, can you just explain the terms that you were using in the call earlier, TI1, TI2, TI3, I'm just new to the company? Yes, I think that this is Zeyer, if you can go into our transcripts, which has been an approach we've been using for a long time. PI1 refers to kind of the 4 existing divisions in the company. PI2 refers to What we call kind of more venture capital led approach to growth like our expansion into lenses For the electric three wheeler business and PI3 refers to more what I would call an operational theme on the growth, which is through acquisition and CD is an example. Any other questions, Mr. Voda? No. Thank you. Thank you. The next question is from the line of Vipul from Sumangal Investments. Please go ahead. Hi, sir. Congratulations for a great set of numbers. My question relates to TI2. So any progress on the TMT bar business, which I think you discussed Few quarters back on our call. Yes. Like I said with CIS too, it's tough to kind of keep asking for Progress every quarter and kind of delivering on that. Like with COVID, quite a few like the construction business, CUES Invest. The CV business, all of those businesses got hit quite badly. And so with some of the smaller businesses, We don't see kind of discussing progress on them. It's just like I think as long as if we're planning to kind of Get out of our business, we'll let you know. But otherwise, they have to kind of grow kind of organically to a certain scale before it becomes relevant to discussing on these calls. And lastly, on Lens business, what will be our CapEx, sir? We have not determined the CapEx number. When we do, obviously, we do report it through the Board and kind of we will discuss it publicly as soon as we have a number. Okay, sir. Thank you very much and all the best for the future. Thank you. Thank you so much. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Mr. Wazin, if you have any closing comments? Hey, Anupam. I think like we said, I think we'll continue to kind of be, I mean, optimistic going forward, the biggest challenges continue to be on kind of supply on the raw material side. So we just have to see how demand kind of plays out over the next thank you. On behalf of ISL Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.