Q3 19/20

Jan 29, 2020

Quarterly report

Good morning, everyone, and a warm welcome to the Q3 FY 'twenty earnings call of tube investments. From the management, we have Mr. Esvelyan Managing Director, and Mr. Mahindra Kumar, Chief Financial Officer. I shall hand over the call to Mr. Valayan for his opening comments post which we shall open the floor for Q and A. Thank you, and over to you, sir. Purposes. Thanks, Anithya, and good morning, everybody. The, for the quarter ended 31st December, you know, I think, you know, I'll just go through the quick highlights. You know, and basically, you know, given the end overall environment, we've been hit on the revenue front. Our revenue basically was at 9.76 crores for the quarter which is a drop of 27 percent over Q3 of last year, mainly because of the growth in the auto industry. PBT, however, before exceptional items was at $95. Our PBT last year for the same period was 90 3 crores, excluding the special dividend of 29 crores that we received from Chantiggers. So on a PBT basis, you know, like to like PBT basis, actually, we've been slightly better off than we were last year. That's predominantly driven due to kind of the efficiency drives and focus we've had, you know, the bottom line focus we've had as a company over the past 2 years. The ROCE basically was at 21%, that just moved up from 20% in the corresponding period last year. And free cash flow was at 3.41 crores, which was 133% to Pat. So basically, we've also taken the lower tax rate of 22% and, we're taking that result and benefit recognizing that over three quarters. That gives us a benefit on the path side well. The, in terms of individual businesses, your engineering revenue was at 502 crores compared with 747 crores in the same period last year. So that business has been the most hit The PBIC for that business was at 60 crores for this quarter as against 59 crores for the same quarter last year. And, ROCE for the division was at 41% as against 36% for the same quarter last year. Cycles, basically, our revenue was at 146 compared to 298 in the same quarter last year. Predominantly due to, you know, our exit from the institution business. The PBIC for the quarter was at 1 crore as against the 6 crores the in the corresponding quarter in the previous year, again, driven by by institution. And then, for ROCE for the division, improved to 17% as it was 8% of this quarter last year. And that was driven by predominantly by our work reducing working capital and therefore, the overall capital employed. Metal forming has basically had a growth of 5%. This is a metal form products and a real waste business. So revenue for the quarter was at INR 3.70 crores versus IN the same quarter last year. PPIT was at 33 as again 35, in the corresponding quarter in the previous year. And, you know, we've had growth in railways, industrial chains, and in fine banking, which basically helped, you know, compensate for some of the degrowth in auto in that segment. Our ROCE for the segment is 31% as against 28% in the same year last year. Consolidated revenue was a 1087, again, 10,458, and that was at 82 as again 5. And, Chantigy has also had a lower quarter at 58 crores versus 62 crores in the same quarter last year. And PBT PBT for Chantigas is 8 crores versus 12 crores in the same quarter last year. So that's a quick summary of kind of our current position and we'll stop now and be happy to take questions from the audience. Thank you. Thank you very much. You. Ladies and gentlemen, we will wait for a moment when the question queue assembles. The first question is from the line of Ashwatoshiwari from Equities. Please go ahead. Mister Tiwari, your line is in top mode. Kindly go ahead with your question. Yeah, yeah. Hello, sir. Congrats on a strong ROIC performance over the last 1 year. Firstly, I wanted to understand that, definitely we're cutting down in the crucial sales in cycles. But if I look at the engineering business also, there was a sharp decline over the last two quarters. Obviously industry was doing very badly in 2Q, but there was some recovery in third quarter. So is it that we're also cutting down on the low margin business in NewLink as well, or this is more to do with our mix or the OEM that we are servicing? Yes, so it's more driven by mix The, there has been so basically, like, you know, we have a higher dependence, and we have, you know, 2 wheeler, which is a basic kind of a very large dependence for us as well. But, you know, we, we are seeing quite a bit of a of a mix change. The second thing Also, in that business is that you are right, which is we're not dropping price significantly. And that has led to a little bit of loss in market share. But basically, you know, the way we see it is that, you know, it will come back to us over time, right, because, guys who are just dropping price again share has been our preferred strategy in order to do that. And so those are the 2 factors that are driving it there. And is it also that, like, say, steel would you mean raw material in this segment? And I think over last 2 or near, if repairing the last 2, 3 months, there was a steep dropping steel prices. Obviously, your pricing also in terms of pass through of the steel prices would also impacted the directions of it. Is that correct? Correct, correct. You're right. So secondly, in this engineering segment, I mean, going ahead, what will the key drivers for us apart from industry, I will, we had talked about, like, we entered as large diameter tubes as well. So just, some picture on going ahead, how do you think the business will grow? Yeah. So basically right now, right, if you take the mix of businesses, we've got, you know, our tubular front folk business, which is a fairly large business for us, which is quite linked to the 2 wheeler segment in India, right? Yeah. Now the good news with that is that as some of the new products move to, with BS VI, we're seeing some of the new products and even scooter products move to tubular found in front of So that will help us grow in that segment. Okay. So tubular front folk, I think we'll go in India. It's what we're seeing now kind of a near term blip in that segment will come back. What we're focused on heavily is kind of developing you know, a couple of new products that we think can be like Tubular Fun folk, you know, for us going forward, right? We've ordered a mill for one specific product like that. And just to, just so, you know, kind of delivery times for these things are like, you know, 9 months So, you know, we've we've placed the orders for that. But we see that the new products that we can get into are at least as large as a tubular front fork business is not larger. And then the second trend, like you correctly pointed out, is that you know, large diameter tubes are also down right now, both in India and globally. But we do see that that will also come back when the demand comes back either globally or in India and we're kind of open to demand coming back in either space. We don't know when it's gonna come back. But when demand picks up in either of the geographies, you know, we're ready for that as well. So, basically, 3 sets of opportunities. 1 is existing for growth in the existing products. You know, and that's happening by new products like scooters and all that coming in with BS VI. The second is, you know, totally new products and the third is large meter. Okay. Can you just mention roughly what's the content in a scooter of this front box for you in terms of some color on that? No, I don't think we discussed kind of because then basically we've got one product. We'll be giving you effectively the pricing on that No. No issues. No issues. I think the recently active has moved to front Jose. So maybe that would be what are you referring to? Yes, that will definitely help us because that's a large product. And we've already kind of we've got a large share in that product already. Okay, okay. And so, lastly, on this cycle side, I mean, will the revenue rate similar to what we've seen in the current quarter in terms of going ahead or there could be variation? No, we I would say there'll be a slight no, there will be a pickup from this. The next question is from the line of Sachin Shah from MK Investment. Please go ahead. Yeah. Good morning, sir, and thank you for this opportunity. And, really nice to know that in spite of, such large top line, variations we've been able to maintain our profitability. So a very, very hardening to know that. What I would like to understand is that on this large diameter, pipes in your engineering business, you did say that the demand are both domestic and globally seems to be subdued at this point in time. But what exactly are the demand drivers for this product? And, what should we be really be looking at where we will get some sense that this is now about to, you know, it's going to gain some traction for the next few couple of 2, 3, 4 years. You're talking about large band specific? Yeah. Yeah. Something like that. Yeah. Large band, basically, you know, is there are 2 things. Right? One is as we offer broader range. Right? So basically, we export that product and we sell it, domestically, largest applications are, you know, in a lot of these differs and moving equipment, right? And So obviously kind of some of that is linked to what's going on in the overall industry where, you know, both CVs and tippers are significantly down. Right? And it's linked to we also export that product to China and we export it to some parts of Europe as well. But, what we're seeing is that those markets are also down, right? The Chinese market has been down significantly this year. Right. And, so as a result of that, basically, what we are linked to is, you know, the return of that whole, you know, construction equipment space and diverse segment. And when that segment comes back, we will a large guy will grow with that when it comes back. Okay. Okay. Got it. And, on the on the metal form products, we have this decent amount of business from coming from the door frames, in the order. How's the outlook there? Because, I think we've been present where, a couple of the these companies or their models are actually doing quite well. In the market. So is that helping? Right. Yes. So actually just to give you a sense, I mean, I would say that we've seen less decline in that segment versus the others, but even our customers have seen a decline in that segment. Okay. Okay. And it's the first time that kind of some of them have dropped And so that is a challenge, right, which is, but the decline has been less than others. Right. Okay. And, the other thing is, that, we've been hearing or talking to a few large way companies on the auto side, on the domestic business. The sense that we get is that, at this point in time, most of them are optimistic in terms of a high single digit volume growth or so, say, for the next 12 months, right? Any sense that you are getting in terms from because you are you are some of the key suppliers. So what is their outlook that they're giving it to you and you have some sense for the next 12 months, what do you see the domestic auto volume growth? Honestly, we don't want to develop too much of a sense. Because, you know, on, like, you know, everybody is kind of it's, you know, like we've I've often said on calls before, you know, kind of crystal ball gazing is not kind of what we get what we do or do well. Right? Right. But, you know, our general belief is that even if growth did not come back into the market next year, We will deliver the next 12 months with a better performance, with quite a bit better performance than we've delivered this year. That's what we that's what we have confidence that we can do. And where can you can you elaborate a little bit 2, 3 drivers which will which will do this? For you? So basically, like you know, in existing businesses, we started we've done a lot of work to turn around and start strengthening cycles. So those cycles revenue will be down. We're convinced that cycles will deliver better numbers for us, bottom line numbers for us next By the way, I'm talking about bottom line. I mean, because I can't predict top line. Okay. So I'm saying bottom line wise. Okay. Cycles will deliver stronger numbers than it will this year. Right? 2nd is that photo change, we made a significant change in strategy and started focusing on the aftermarket. That as a strategy is beginning to pay off and we're getting better margins from that business. So that will begin to pick up as well. In our fine banking businesses, we started turning towards, you know, external customers, which are non auto But, or basically, I would I should say export customers that are non driven by the Indian auto environment. Okay. So that will also help us on the growth side. Railways as the business will continue to grow, industrial chains will continue to grow. And on our existing businesses where there's no growth, we're still focused on a lot of driver that we've been talking about for the last 2 years. So that will continue to yield results. So as a combination of those things, we feel quite convinced that we will deliver a stronger year even if there's no market growth. And this is really hardening to know that in spite of not taking top line growth into consideration. You will be able to manage your costs and efficiency so well that we will we will not be hurt on the bottom line, which is very hardening now. Congratulations. Thank you so much. Thank you. The next question is from the line of Aditiya Bagul from Axis Capital. Please go ahead. Yeah. Thank you. So two questions from my end. Firstly, Mr. Valener, if you can talk about how is the capacity utilization moving towards, in terms of the first two segment? Know, your engineering and your metal form product. What was it in maybe FY 'nineteen and what is it today? Yeah. So in both, I would say, you're talking about engineering and metal forms. Right? Yeah. So I would say definitely, you know, the good thing is that in engineering, we do have capacity plus we added some more capacity in Rajputra as well. So, you know, now not only do we have capacity, I think we're better geographically balanced as well. So, you know, now about over 80% of NOK's demand has been satisfied by Northern production this year. Which again helps with our efficiencies because we're spending less on transporting, tubes from the south to the north. Right? And we've got adequate capacity in the north to handle growth of our northern clients as well. That number from 80% will go to north of 90 end next year. So pretty much all northern demand will be catered for the north. That then gives us excess capacity in the south to push into export markets as well. And South are plants because they're on the coast in Chennai are well positioned to basically export. So I would say kind of across large data and in the south, north, and west geographies. In all areas, we've got adequate capacity for the next 2 years growth. And then in addition to that, we've ordered a new mill for the, for a new product that we're basically going to get into on the tube side, that mill will come on stream as well in the next financially, towards the end of it because it takes 9 months for them to kind of get the bill to us. So that will also help us on capacities in the engineering segment. On metal form, obviously, kind of, you got to break that down a bit. Auto change is adequately capacitized, kind of given the current environment. In the, as far as railways is concerned, we continue to add capacity for various products there. And we're seeing growth. So there, the capacity utilization is high, but we are continuing to add capacity. And then, finelanking, I'd say, that, you know, we have and kind of, and are kind of unleashing more capacity with productivity improvement as well. And finally, on the door frame side, right now, because, I would say, we've got adequate capacity across all of our products, cater to the customers who are currently serving in the offering. Right. So that's very helpful and quite encouraging as well that got sufficient capacity to fuel growth as and when that comes in. So my next question is actually on the newer growth opportunities that we've talked about previously. You know, the TMT bars and the, the truck body parts, etcetera. So if you can just involve a little more as to what are the new developments that have happened over the last 3, 4 months, what is the size of the opportunity and which are the customers that we target? So like I said, right? I mean, basically those businesses is best because they're kind of more like, you know, venture capital style businesses at this stage. They're not going to move either our top line or our bottom line in the near term. Right? So the main question is kind of when are those businesses starting and kind of, you know, but I don't think they're going to have any significant impact on top line or bottom line for even the next financial year, right? There are some, so the if you take, if you take, for example, we've talked about this business and the optic space, that facility, we think that in the current quarter, or early next quarter, we should start getting output from there. But again, in these early years, the revenue that comes from these businesses is going to be fairly small. Right? So I wouldn't kind of factor that into models right now. You know, we have started talking about how we need to drive growth. And what we see potentially coming up, if the environment continues like this, is we see opportunities for inorganic growth coming up, right? So, obviously, clearly, one of our advantages this space with a stronger balance sheet is, like you know, basically our net debt is down to 103 crores at the end of last quarter. And we continue to pay down net debt. So we should have a fairly strong balance sheet by the end, by in the next two quarters, I would say. Potentially, we can also go debt free. And, you know, in a, in a, if the environment continues to be very tough as a matter of fact, quite a few, based on kind of early discussions. Also, I mean, we've been approached with a couple of few opportunities for inorganic growth as well. So that's not an option we will rule out as a potential avenue for growth for us going forward. Perfect, sir. So in just digging a little deeper into this inorganic opportunity, what are the attributes that you would look for in a in a target, right, would you go for a geography, or would you look for a product niche or Yeah. So we're very clear that we wanna focus it on acquisitions in India early. So we don't wanna look for manufacturing assets that are outside of India right now. The second is that we are also very clear that we don't want to get into, you know, either auto supply, right? So kind of tier 1 or tier 2 auto supply, unless there's kind of tremendously compelling reason to do that kind of a a preference is to kind of move to, I mean, there are kind of some key themes that we're working on. Right? One is kind of looking at more B2C businesses or B2 Small B businesses versus B2B, our current B2B businesses. Our customers are much larger than we are. So we'd like to kind of, you know, look at businesses where our customers are either consumers or small businesses. That's one axis that we're looking at. The second is that we're looking at, definitely, like I said, kind of non auto is the current thinking at this point in time. And that's the second that we're clearly interested in is if people manufacture here for export markets, right. So we're quite keen to kind of grow our exports business we see kind of businesses that manufacture here for export markets that's working on developing that. And The third also that we've said is that we don't want to go out and pay top dollar for a business. So our preference is to kind of acquire a business where similar to what we've done in TI for the last 2 years, there's an opportunity to improve performance characteristics like PBT, free cash flow in the inherent business itself. Perfect, sir. That's very useful. Thank you so much and best of luck for the quarters to come. Thank you. The next question is from the line of shyam Sundar Sreedam from Sundar Mutual Fund. Please go ahead. A wonderful performance on the margin front, sir. Many congratulations on that. Yes, sir. So just on the engineering business, you have spoken about it. But if you look at on a year on year basis, there has been 33% kind of a decline. How would you split between the volume and the value? Any color on that? Just trying to, you did talk about the steel price being cut if you can, if it will be possible to quantify, that will be helpful. Yes. So basically, yes, the volume drop has been significant for us. Just, you know, last quarter at the same time was our peak quarter. Right? So basically, volume is off almost, it's like close to between 25 27 percent, right, is the volume drop. And we do believe that this is a combination of because basically exports volumes, domestic volumes all got hit in the last quarter. Now as, you know, this JFM, we're beginning to kind of I mean, like, there will be some pickup because export markets will begin to kind of get a bit better. In that last quarter in generally kind of it can kind of sometimes be a down quarter for export market. The last quarter of the calendar year And, the second thing is that, you know, not even if we see a little pickup from domestic markets, we see these numbers coming back. The second thing, obviously, there's some base effect because, when you take that last quarter, the comparable quarter last year was a strong quarter, versus, you know, then is when kind of things started to go off a bit. So, you know, so that's also going to change things going forward. That's just kind of a quick take on that chunk. Sure, sir. So, you can talk about some market share loss. Is it on the Tubular side? Is that where we have lost some market share? In the No. No. All I was saying is all I was saying is that we weren't dropping price, but it's not been on the two wheeler side. Okay. It's not been on the tubular front. Like we said, we see some opportunities on tubular front fork because products are now in BS 6, there are products like somebody mentioned in the scooters, which are now adding tubular front folks. So that's a good opportunity for us. Correct, sir. Correct, sir. And broadly on the export side, you have spoken about export being weak. So sequentially, obviously, as you mentioned, December will be weak. Any outlook on the exports or ports is, will be around 8%, 9% of our consult sales. And, are you seeing that improving, going forward, either because of our actions or the market picking up, anything on that? Yes. Experts, you're right. They consider about 8% to 9% of our total sales. And we are saying that it could pick up in the coming quarter. On top of that, we are also introducing certain new products, which will take some time. It won't happen immediately, but in the next 12 months period, that's another uptick, which we can expect to see. Okay. And on the new products into that you spoke about in engineering you that you ordered a mill also for that, that is on the 2 wheeler side itself, sir, or is it on the non auto side? Any It is auto, but not 2 wheeler. Okay. It's auto. Okay. Okay. It's CV plus CV. Okay. Okay. Understood, sir. Understood. Okay. And this will be more like a structural part, let's say, in that, for the vehicle? Yes. It's a safety critical part, and it's basically, It's a good opportunity for us because it exists in actually we're there. We're going to take a different strategy where we're going to focus on export markets first and then bring the product to India. So initially, all the production from that mill will be exported. Understood. Sir, on the metal forming side, on the railways, I believe railways contributes roughly 25% of the metal forming. What has been the kind of growth and the opportunity that we're seeing there that we have spoken about that. Hanika, anything you can talk about on the railway side? We've had about 60% growth from last year on railways. Yeah. We've had about 60% growth from last year on railways. Sure. Okay. So is there a shift from, some weaker players to us, sir? Is that what is driving this? Or No. Basically, we're adding new products because we are adding, for example, Metro that we weren't in before. And we didn't within the railway itself, we're adding new product offerings to our current customers. So it's not a shift in share, but it's basically new products that are causing. Okay. Also, by the way, also railways's volumes are picking up. So do our share remains the same? You know, we're getting increased from the increase in railways volumes as well. Okay. Okay. Understood, sir. Understood, sir. And one thing on the margin front, we have seen very good improvement in the gross margins either we see on a sequential basis or on on your basis, is it more because of a function of a mix of the cycles going down? Is that one of the reasons for the gross margin improvement in that sense or has it something got to do with the supplier changes that you have spoken about in the past? If you can comment on that, please. So, I think the biggest drivers are some of the efficiency things that we've been working on the past couple of years, right? And that is the biggest driver of the margin. Okay. Okay. Okay. Understood, sir. And cycles is completely exited from the institutional business. Institutional business earlier would have been around 400 crores per year. Now it is completely 0. Is that how to credit? There'll be a few which are left out, which are being supplied this year also, but it won't be 0. And also it wasn't for the extent of 400 crores last night. It was about maybe 250 to 300 crores. Yes. So Okay, understood, sir. I understood. Thank you, sir, and all the very best. Thank you. Thanks, Sean. Thanks a lot. Next question is from the line of Sri Manu Durya. From Unified Capital. Please go ahead. Yes. Good morning and thanks for the opportunity. So firstly, on the aftermarket business, you highlighted there is a shift in the strategy and there's a lot of focus on that. So what initiatives have been taken in the aftermarket segment? Is there a kind a new product launch in the aftermarket or there's a change in distribution, can you please highlight us on what is happening there? Yeah, Shimon, good, good question. I think both of those things are true, which is first off, we significantly deepening our distribution, right, So when we looked at kind of the country, there was almost like, you know, you know, almost, I'd say, 40% to 50% of the country where we did not have deep enough distribution. We're definitely deepening our distribution and that will continue, I'd say over the next 2 2 years, right, where we can we will focus on getting much stronger on the distribution side. And then second, yes, we have been, we have, we started with new product launches that will product launches, both catering to the higher end of the market, catering to higher CC bikes And so really new products, right, including kind of new types of chains that we're introducing to the market as well. So all three, it's a combination of both. Is it possible to share which products you're launching, sir, in the aftermarket? No, I think we prefer not to at a specific level, but I think that a lot of that information will be out there. It's going to go out to the market. You can kind of see it. Okay. And on an absolute level, for the 9 months, what's been the contribution from the aftermarket and where do you see this number going? Again, we don't share contribution at that level of granularity. Obviously, like, you know, it's kind of higher, much higher contribution for us than than our OEM does. Okay, okay, sure. And secondly, on the new product launch, which you talked about the optics, I just wanted to understand a bit more on this. Is it for the automobile sector or it's a non auto product? Yes, it's for the auto sector, but it's 100% export. So initially, we won't focus it on the Indian market. So I'd say for the 1st year's capacity, it's already actually, I'd say even the 1st 2 years capacity is fully bought out at this stage. In a sense, it's already contracted for. But, definitely, is that demand for it in India? Yes. And so, we will basically bring it to India also at the right point in that. And what kind of investment are we making to this specific product? So initially, it's smaller. It's a sub it's smaller, but basically, the way we see it is if we can start producing this product successfully and our export customers like it, we'll start investing more into that product or in the near future. But right now, kind of it's a sub-fifty crore investment. Sure. Thank you. I'll get back in the queue. The next question is from the line of Abhishek Ghosh from DSP Mutual Fund. Please go ahead. Hi, good morning. Thanks for the opportunity, sir. So just a couple of questions. In terms of these sharp revenue decline that we have seen in the distribution. This is also because OEM, the channels, auto and antibodies, the feedstock for the beer deferitions that weather might be too reduced to higher? Sorry, Abhishek, Hi, Abhishek, but, so is your question saying, is the magnitude of the drop higher because of destocking? Yeah. Okay. So definitely, I think we saw a lot of production days that were basically kind of cut So though we didn't see it in retail sales, our belief is that production in that quarter was even worse than, what, then the sales number drop in that quarter, right? Okay. And that I think is beginning to kind of pick up a bit. I don't think it'll be kind of as bad anymore. But, whether that was in turn kind of drop destocking are kind of about which cause what I'm, you know, I I wouldn't actually kind of I'm not in a good position to comment on that. Okay. And you also mentioned that in the BS 6, now you'll have, also a lot of these products now. So will there be iranently better margin products or would you continue to have similar margins on those BS VI products as well? Similar market. Similar markets. Okay. And lastly, in the, so while your gross margins have improved sequentially, it's a very positive sign. But if I look at your, so your margins have been constant just largely because of negative operating leverage, But what I see in the, metal form division is quarter on quarter, your margins have declined on an EBIT level. So how should one read into it? Because there you have seen some amount of revenue growth as well. So how should one read into it? Yeah. So I think, that is, so the way I look at it is that there are a couple of businesses within there that got a bit more hit right, predominantly kind of our auto and our fine banking businesses. The, like I said, that is driven because of kind of significant volume drops in those businesses. And the other businesses have seen margin, either margins being steady or margin growth, right? So if you take the chains business, industrial chains, and auto chains, railways, all of those have grown. So, these two got hit. And our belief is that as some volumes begin to come back in those businesses, those margins will pick back up again. And just last one, in terms of if you look at the free cash that you have generated, implied free cash condition for the quarter is almost about close to 200 That would be a correct number? No, it's more than that. It's about 341. For the quarter, it's about $178 or $200. One second. We'll give you If you have any other questions, I'll start. We'll get that number for you. If I can ask you one last question is in terms of the Now we have seen a reversal in the steel prices. What was the declining one is now starting to move up? Hello? Yes, no, sorry, you were saying it's 186 crores for the quarter. Yes, but so large part of it also driven by working capital because your tax debt depreciation is only about $120,000,000. Correct. Yes, definitely. We've been working a lot on working capital. Okay. And just last one, the state price, what we are seeing are downtrends has not reversed quite sharply at least in the, you know, last 1 month or so. So in terms of, you see, do you think some amount of efficiency gain that was there can go away or you have to go to the customer to get your pricing reset again? Yeah. We'll have to go to the customer for that. We have a lot of our customers that will have to be the pattern. I mean, that is the pattern we've usually followed, and that's what we will continue to follow. Okay, sir. Thank you so much for answering the questions and all the best. Thank you. Thank you so much. The next question is from the line of Pratik Poddar from ICICA Prudential. Please go ahead. Hi. This is Patipo from Nippon India Mutual Fund. Sorry. So just one small question. We have seen a substantial improvement in the gross margins and you alluded to this was efficiency gains. Is it fair to say that this is sustainable and going forward, whenever growth comes back, you even look to build upon these margins. I'm talking about company as a whole. Or sorry, Pratik. Yeah. Yes. So the answer is yes, definitely. I do believe that a volume comes up and comes back. We will be able to hold on to this and and gain on that. Okay, great. So just month, last clarification, mix has nothing to do with these in the sense, if I were to if like your commentary also, you talked about cycles coming back strongly next year. Would mix have an impact or or this is purely efficiency gains that you have seen and there's nothing to do with mix? Yes, so the gains that we've seen have very little to do in Right? If things like cycles come back, like, you know, cycles are traditionally free in a low margin business for us, right? So if we can improve the margins on those business, that, you know, that's why, you know, in my earlier commentary, I do feel confident that we will be able to deliver a better year next year than we've done this year. Thank you so much and all the best for the future. Thanks, Pratik. Thank you. The next question is from the line of Nimisha from MK Investments. Please go ahead. Yes, sir. Thanks for the opportunity. I just wanted a few data points from you. So, what will be the non auto mix in the engineering segment? We have about 25%. Okay. And this non auto mix is largely large diatitudes? Yeah. Large day on regular cubes also. We also do boiler cubes during that, no. Okay. And so the boil. So what else? So apart from, off road vehicles, where else will this be used? Using refineries, oilers. Okay. And, in the metal form division, the mix for railways and non auto will be this quarter? We want non auto. So just give non auto versus auto. Sorry? We'll give you that number. We're looking for that number. We'll get get it to you. Oh, no. That's it. Okay. We'll we'll we'll give you that number. Give us a minute. We'll get back to you Yeah. We'll take the next question. Thank you. We'll be able to 85% out of 15% on auto. No. No. No. It's okay. Within within for full metal form, what is the percentage that is non ordinary? Should we move to the next question? I see on my US. Yeah. And that's more than the same person. And if you could give railways mix as well, please. No, we don't discuss it very specifically. We'll be given non auto. Yes, it will be about 75% to 80% if you take, entire metal components. 75% to 80% will be non auto. Correct. Oh, man. We'll get you that number. Sorry, we'll get you that number in a minute. But we'll go to the next question. We'll get you that number. Thank you. The next question is from the line of Ashutosh Tiwari from Equities. Please go ahead. So you talked about entry in a bigger way in the auto change aftermarket. Can you throw some light on aftermarket size percent? What is our current share roughly? The, our belief is that we have, auto aftermarket size for auto chains do we have a sense of the share that we have? Our share is in our estimate about 15%, right? 10%, yeah, somewhere between 10% 15%. And the market size, roughly? Okay. We'll we'll we'll try and get you that number. Yeah. Sorry. What is, if we don't get it on the call, we can get it to you after this. So what is what is your name again? I missed that. Ashutosh. Ashutosh. Ashutosh. Ashutosh. Okay. It is 70, 30, 50, total metropolitan products. No, no, okay. He's answering a different question. Okay. Just, yes, to your point, on the market sizing, we'll try and get you an answer we don't get it during the call, we'll get it to you after the call. I'm sure. But also I wanted to send Keith roughly in this, aftermarket, what would the share of an an organized clears, roughly? So the unorganized guys are actually, I mean, yeah, so if you take the unorganized guys in our segment chains, you know, maybe like, 10%, 15%. Most of it is organized. Okay. So when you talk about taking more share vis a vis the major will come from the competitors only? That's correct. Okay. And what would be the CapEx number that you're looking for for 'twenty one? Also, how much we spent in this year and what the plan for full year? This year so far, we spent about BRL140 1,000,000. Okay. Next year, it could be in the range of about BRL200 crores. And out of this 140 crores, what would be the on the new product development roughly? I mean, most of it is for new products only. I accept the capacity expansion, which we did in, Rajivra. It is about this year, about 30 crores. So 110 crores is a new because so I mean, the the benefits are not arrived this year, maybe in future or next 1 or 2 weeks. Yeah. That'll really come in next. Yeah. Okay. And sir, I mean, we obviously have done very well in terms of cost cutting, an ROC improvement, but if you look at further going ahead over the next 1 or 2 years, do you think there's still opportunities to cut costs and which will remain areas? See, I think like the answer to the earlier question, obviously kind of now we have the advantage that some of we've improved efficiencies But, utilizations, there's still bandwidth for growth, right? So obviously, kind of, if our utilizations go up, then there, that will benefit our margins kind of significantly in those businesses, right? So that is the first thing. And but again, kind of now, I would say that clearly, as leadership, our focus is now turning to how we deliver revenue growth. And so that is kind of the bigger, that's basically what we're beginning to spend more time on. Because of the 4 parameters that we had kind of defined earlier, that is the one that we have not definitely not delivered on this year. So we need to basically kind of figure that out. And we definitely see that one of the challenges in delivering it with our current business mix is a huge auto dependency. That's why I talked about some of those approaches earlier to start focusing on the revenue growth, which is now what we're moving our attention to. I mean, we started almost like 6, 9 months ago, but it takes a little while, to do that. Okay. And so, in the large diameter tubes, which will be the key sport market that we are looking at, what do we have currently? Yeah. So there we're we're looking at where we serve, like, 3 geographies. Right now, we serve, Europe, China, and, and not U. S, but North America. I mean, like, basically, some spots in Latin America. Okay. So is the China big over there or? China is a big export market for us. Yes. Okay, okay. Okay. So thanks a lot and all the best. Thank you. So I think to the earlier question, Mahindra had an answer, which is 70% is what? 30% is auto and 30% is non auto. Thank you. The next question is from the line of PTRS from UJ Investment. Please go ahead. Good morning, sir. Thanks for taking my question and congrats on great numbers in a challenging environment. So I have two questions. 1 on the cycles business. So last time, we did talk about some asset rationalization to happen. Since both the plants are operating at suboptimal utilizations. So any update on that, on that topic? No. I think we didn't we didn't, basically, we said that this is something that we would evaluate over time. Right? It's nothing that we've basically taken a specific call on at this point in time. We already have one facility that has not been used, which is an Arctic facility. But we've not kind of done anything beyond, nor nor are we kind of committing to do anything on the specific assets within kind of a name time frame. But broadly, we see that we have to kind of address the issue of low asset rationalization across those two things. One of the ways we might do it, Preeti, is use some of the assets for other things as well. Right. Got it. And second question is on the door frames business. I want to broadly understand who are the customers and what could be a broad market share because I'm under the impression that some of this is actually made in house at OEMs. Or this product is actually optional in some of the models? Correct me if I'm wrong. No, I mean, obviously, door door frames are needed in all the models. Okay. It's only a question of kind of how they're done, right, which is You can either have them roll formed or you can have them pressed, right? So some customers choose to press them, in which case, obviously, we don't use that. Some customers choose to roll formal. And, but obviously, it's a required product. And if customers choose to press them, we try to convince them that, that our technology is better. And that takes development cycle, which we're obviously focused on with some of the larger customers as well. And in terms of market shares and all that, we don't discuss specific market shares with individual customers. But do we supply to the largest OEM Maruti? Some Maruti presses that offering. Okay. So we are in the role formed, part of the business. As there are no further questions, I now hand the conference over to Mr. Aditi Fable for closing comments. So, thank you so much everyone for participating on the call. Before we close the call, Mr. Valin, if you could just share your outlook, over the near term and possibly over the next 3 to 5 years, where do you see it you go in? Alicia, thanks. I think I alluded to some of it during the conversation itself. I mean, we, it's definitely tough in this market to predict where the overall market is going. So the broad commentary I made is that even if we do not see the market growing next year, we feel fairly confident that we will be able to deliver better bottom line results than we will deliver in this year in this financial year. And I think that's kind of something that we have a good level of confidence on. So that is the first comment. Obviously, over the 3 to 5 years, I continue to remain significantly bullish, both for kind of the country and, you know, for the company. I think that there's a lot of opportunity for TI given the mix of businesses it's in and some of the businesses that we want to get the eye into in the future as well. Growth will have to come from both organic and potentially inorganic means over that time period. And like I said, we're staying focused on a set of businesses that should hopefully kind of produce our dependence on the auto sector and therefore kind of reduces some of the cyclicality that we're seeing in terms of the performance that we're delivering from year to year in terms of top line performance, right? But overall, kind of, our story remains intact, which is We want to deliver a company. We're committed to within 3 years kind of articulating a clear path to deliver a company that will be able to give us 17% revenue growth, move our PBT to sales to double digit you know, we've committed as that within a 3 year period as well and we're getting pretty close to there, deliver free cash flow to path of 85% that will then allow us to pay down our debt and strengthen our balance sheet, and push the ROCE to above 30%, right? So that kind of continues to be our focus And we feel convinced that we can do that and continue to deliver an engine that does that over a 3 to 5 year period. Perfect, sir. Thank you so much for taking out the time and answering all our questions. Thank you to all the participants. Thanks, Aditya. Thanks a lot. Thank you. It