Ladies and gentlemen, good day and welcome to Varroc Engineering Q1 FY 2026 Earnings Conference 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. I now hand the conference over to Ms. Vishakha Maliwal. Thank you, and over to you ma'am.
Thanks, Avinash. Good evening everyone. From Varroc Engineering , we have with us Mr. Tarang Jain, Chairman and Managing Director, Mr. Arjun Jain, Whole-Time Director and CEO of Business Unit I, Mr. Dhruv Jain, Whole-Time Director and CEO of Business Unit II, Mr. Mahendra Kumar, Group CFO, Mr. Bikash Dugar, Head IR and Finance Controller of Business Unit II, and Mr. Vishal Raval, Group Finance Controller for Business Unit I. We will start the call with brief opening comments from the management, followed by the Q&A session. I would now like to invite Mr. Tarang Jain for the opening remarks. Thank you and over to you, sir.
Thanks, Vishakha, and thank you team ICICI Securities for hosting the call. Good evening to everyone from Tarang Jain here. To start with, the Indian economy is showing resilience and momentum. Real GDP growth reached 7.4% in Q4 of FY 2025, up from 6.4% in Q3, and the full-year GDP growth was at 6.5% for FY 2025. The inflation in India is moderating, and in May 2025, the CPI dropped to a 75-month low of 2.8%. Considering this, the Central Bank reduced repo rates by 50 basis points to 5.5% in June 2025. Globally, the rising tariff barriers, strategic competition, and geopolitical tensions are increasing uncertainty for businesses. Supply chain resilience and digitalization are becoming key corporate strategies amid this uncertainty. The automotive industry is also preparing to deal with these challenges. Despite these uncertainties, we remain confident about the medium to the long-term growth prospects of the automotive industry.
In terms of automotive production in India during Q1 of FY 2026, all the segments registered moderate growth on a year-on-year basis. Two-wheelers grew by 0.7%, passenger vehicles grew by 3.4%, commercial vehicles grew by 2.6%, and three-wheelers grew by 9.8%. In terms of domestic sales, the two-wheeler industry registered degrowth of 6% year-on-year. On a quarter-on-quarter basis, due to the seasonal impact, we saw a degrowth in almost all segments other than two-wheelers. Two-wheelers grew by 0.9%, three-wheelers degrew by 1.5%, passenger vehicles degrew by 11.9%, and only commercial vehicles degrew by 13.7%. Before moving to the operations discussion, I would like to bring to your notice that the annual report for FY 2025 is already available on our website, and we would encourage our stakeholders to go through our management letters to the shareholders to understand our progress so far and our future course of action.
Coming to the operational performance during Q1 of FY 2026, the company registered a consolidated revenue of INR 20.3 billion, with a growth of 6.8% year-on-year, with India operations growing at 7.2%. Our EBITDA for the quarter was at around 9.5% as compared to 9.1% on a year-on-year basis. Our PBT before exceptional items and JV profit was at 4.1% of revenue in quarter one FY 2026, as against 2.8% in quarter one of FY 2025. We've also established a dedicated R&D setup in China to support four-wheeler electronics business, which has also impacted our employee costs in the quarter. We continue to strengthen our balance sheet. The net debt of the company in Q1 of FY 2026 was reduced by INR 3,002 million, and as a result, the net debt-to-equity is reduced to below 0.3x . The absolute net debt figure was at INR 4,478 million.
In quarter one of FY 2026, we also achieved net new business wins with annualized peak revenues of INR 2,905 million. Our focus will continue to be on timely execution of the new business wins, adhering to the best QCDD norms. The near-term outlook in India, especially for electric vehicles, is challenged due to supply of rare earth magnets. However, at Varroc, we are leveraging our supplier relationships, global footprint, and have developed alternative solutions with the help of a strong R&D capability to help the industry and our customers to overcome the challenges at the earliest. We continue to adopt a positive mindset to find opportunities during this period of uncertainty. As emphasized earlier, we continue to remain focused on revenue growth, improvement in gross margins, control on our fixed costs, and optimization of CapEx and working capital.
All of this would enable us to generate a healthy free cash flow going forward. In future also, further strengthening the balance sheet and improving the return ratios. I will now ask M K, our Group CFO, to walk you through the presentation and give more insights into the financial performance. We've uploaded the investor presentation to the stock exchanges as well as on our website. Thank you.
Thank you, Tarang. Good evening, everyone. Let me take you to slide number 7 of the presentation, which has the highlights for Q1. As our CMD explained, we had a 6.8% growth year-over-year with a revenue of INR 2,028 crores, with India operations registering a 7.2% growth. In the context of a moderate growth that we saw in the industry, we were ahead by about close to 6% - 7% ahead of the market. In terms of PBT, if you see, we were at 4.1% compared to 2.8% in Q1 of last year. EBITDA was at 9.5% compared to 9.1% same time last year. The net debt was reduced significantly by INR 300 crores, bringing the debt down to INR 448 crores as of end of Q1.
In terms of the new annual peak revenue for the order that we won in Q1, it was about INR 291 crores of peak revenue. The revenue from supplying to EV customers grew to about 11% of revenue. As we announced earlier, the sale of China JV space brought us about INR 340 crores in the month of May. In terms of patents, we filed another 10 patents, taking the total to more than 130%. On the renewable energy, we previously communicated to you that there will be a second stage, which will be starting in May or June. That has started in June. It will be ramped up further in the current month also. With this, we'll be taking the total sourcing from renewable energy to close to 50%. Going to the next slide about industry performance.
On a year-over-year basis in Q1, the two-wheeler grew by just about 0.7%, which is more or less like a flat growth. Three-wheeler grew by close to 9.8% and passenger vehicle by 3.4%. Similarly, on a sequential basis, two-wheeler grew more or less, again, flat at around 0.9%. All the other segments had a degrowth. The EV two-wheeler volumes also on a quarter-over-quarter basis degrew by 6.8%, mainly impacted by the rare earth magnet issue and, of course, some seasonality impacts also. Year-over-year, it was strong at about 53%. Coming to our consolidated financials for Q1, which is there in the next slide. 6.8% growth in the top line meant an EBITDA of 9.5% compared to 9.1% in Q1 of last year. The PBT is INR 2 crores. This is without the JV profit, which also meant about 4.1% in terms of PBT percentiles.
We also see an exceptional item of about INR 61 crores of gain. This is basically the recognition of exchange gains on the JV value in the investment books. It's more like a transfer between FCTR and P&L, so a transfer between two or more, more like a book entry. With that, the PTC is adding up to INR 144 crores. Another important point to be noted here is we also set up a dedicated R&D team in certain overseas locations to support our four-wheeler licensing and electronics business. That is also one of the reasons we see a moderate growth in employee costs. Now, coming to the balance sheet items like net debt and all, INR 448 crores was the net debt.
In terms of ratios, if you see the net debt to equity, it was very healthy at 0.3, and net debt to EBITDA was below 0.6, it was 0.58. The next slide, we talked about the revenue breakdowns for Q1. We also changed the classification of different businesses to bring in line with the end-use characteristics. This is also the way we are operating our businesses now. If you see the breakup, the three major segments, the licensed solutions now add up to 18% of the total revenue. Body parts add up to about 34%, typically the polymer kind of products. ICE powertrain adds up to 26%, followed by e-mobility, which is 6%. The other segments are, of course, the smaller segments. The aftermarket, of course, is at around 10%.
In terms of the overall two-wheeler and three-wheeler plus four-wheeler, two-wheeler and three-wheeler adds up to 75% and the rest 25%. The business in India is 87% of the total. Bajaj revenue of the total is at around 45%. In terms of the annual peak revenue, we already spoke about, so INR 291 crores based on the Q1 order wins with two and three-wheelers constituting about close to 67%. Bajaj revenue was only about 38%, with most of it coming from non-Bajaj customers. Revenue from EV customers was close to 25%, and the others are 75%. Let me stop here. I will be happy to take your questions. Thank you.
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 the 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'll wait for a moment while the questions are assembled. The first question is from the line of Jyoti Singh from Arihant Capital Markets . Please go ahead.
Thank you for the opportunity, sir. Congratulations on the good show on the PAT side, though it was exceptional from China. Sir, my question majorly I wanted to understand going forward how will revenue growth will drive? Another on the order win side, as mentioned in the presentation, INR 2,905 million. Can you elaborate how this wings align with your long-term growth strategy when especially for the EV category?
Yeah. I think from a growth perspective, you see that we have a relatively healthy order book. Of course, the ambition is to keep building this order book further, in particular in some of the places that you mentioned, in particular with respect to EV models. Over the last few years, you will have seen that our order book has leant heavily towards EV models. That has translated also, as you will see in this quarter, to significant growth from EV models. Q1 of last year, we were at around 5%. This year, we're at around 11%. Like I said, going forward, the aspiration is to grow faster than markets. We're in a sluggish market now, but the aspiration is still to grow I think at your double-digit levels going forward as well.
To add on, we have always said that we want to grow 6% - 8% more than the market. One is on the Q1 sales and everything, where the sales grew only by 6.8%. Talking about the business wins, going forward, definitely, we had, I think the Q1 was not so great for us from the point of view of business wins. Going over the rest of the year, we're looking at substantial business wins on the EV space, whether it's for two-wheeler or if it is a four-wheeler, even looking at a broad. We are confident that we can declare from Q2 onwards better sales wins numbers. This way, we're quite confident going forward because we are quite well aligned with the various customers from our side.
Understood.
Jyoti, one more update. From this quarter onwards, we will be only declaring annual peak revenue, not the lifetime revenue of any business win. That's why optically, it might look like that the order wing which we are supporting is small, but these are annual peak revenues. These are the revenue which we can do in one year. This is not lifetime revenue.
Just one more question. Like you mentioned, order wins on the two-wheeler, three-wheeler, and the four-wheeler side, major revenue is coming from the two-wheeler and three-wheeler side. If you can give us more insight on the four-wheeler business insights.
I think four-wheeler, when it comes to India, our focus is more on lighting, four-wheeler lamps, and our plastic molding business, which includes painted parts for various four-wheeler customers in India, mainly passenger cars. This is where we expect a good growth and order wins in India. Abroad also, we are in touch with certain customers, especially in America, for some new business wins to do more with electronics and also for lighting. This is also where we are looking at a decent amount of business wins in the foreign markets also. I think that we are fairly confident that we will be reporting some good business wins from Q2 onwards.
Okay. Thank you sir.
Thank you. The next question is from the line of Arvind Sharma from Citig roup. Please go ahead.
Hi. Good evening sir and thank you for taking my question. Sir please pardon me for questions on the presentation because the format has changed. First would be on the peak revenue, which you have highlighted at INR 2,905 million. We have a chart on the top left. Could you please explain how exactly you read this chart, please sir?
Yeah. One second. Yeah. The annualized peak revenue is essentially the peak value of the business in the particular year that it achieves its peak value. Generally, whenever we quote a business in automotive, whenever we quote a business, it is not necessarily always based on lifetime revenue, but the volume is projected over time. What we have considered is the volume, the steady-state volume at full program ramp-up, right? That is how we calculate what is the peak annual revenue. The chart on the left...
The chart on the left speaks about that at the end of calendar year, the first bar shows that at the end of FY 2025, what is the business, the annual peak revenue, which will SOP in FY 2026 that is INR 8,400 million .
Out of that, how much SOP has already been done in Q1, that is around INR 3,800 million, the peak revenue of that. In Q1, we have further won more business and all those things. That INR 8,400 million now has increased to INR 8,500 million, whose SOP will start in FY 2026. Similarly, the graphs are for FY 2027 and FY 2028.
All right. This INR 3,800 million number, the SOP in 1Q FY 2026, shouldn't it be equal to the INR 2,905 million number because this is the peak revenue order that we have won?
No.
How do we link these two numbers?
INR 2,905 million is the order which we have won in this quarter. The business, whose SOP has started, that peak revenue will be INR 3,800 million.
Got it. Got it. Thanks so much. Secondly in the methodology just a small accounting question. When you're given the revenue breakdown for 1Q FY 2026, you said 3% overseas revenue. However, when we go down, which we are thankfully you know thanks so much for sharing the previous data, there is no mention of the other business, the 3%. Where is the 3% accounted for in the previous quarter sir?
That is accounted. This 3% is our IMS business in Italy. That is accounted in our ICE powertrain.
Got it. Thanks. Thanks so much. Just one final question if I may ask. Given the debt has gone down definitely FCF should have been good. What exactly drove the FCF this quarter?
You mean?
Yeah the net debt reduction sir.
Yeah. Net debt reduction is a combination of FCF as well as the realization from China sale.
Got it. Got it. Thank you so much. That's all from my side. Thanks so much.
Thank you. The next question is from the line of Vinay Jain from Karma Capital. Please go ahead.
Yeah. Hi. Good evening sir. Thank you so much for the opportunity. Congratulations for the numbers against the challenging macro, at least on the domestic front. I have just two questions. Basically when I look at the consolidated and standalone numbers at the standalone level, if you see which is largely now our India operations, so to say, we currently are at around 11% + EBITDA margins and almost 6.5% PBT margins. Vis-a-vis at the console level, as you said, it's at around 9.5% and 4.1% PBT. This difference which is there is it largely the loss which is coming from the overseas business for us?
Yeah, that's right. It's a combination of the IMS business in Italy plus the other overseas businesses which we have. As we explained in the previous calls, the overseas businesses are going through some kind of a transition now because we are rebuilding the order book. Most of the order book will get converted into, they start converting into sales starting from next year, middle of next year. We'll see a gradual revival there.
For the current year we should expect this sort of a run rate to continue. Is that understanding correct?
Yes correct. Because the good news from the new order wins in overseas will only happen next year, by second half of next year.
Once that comes on board, once the execution over there starts, what kind of margin trajectory are we looking for especially the overseas business?
I think we don't want to give any guidance, but yeah, it should look better than obviously what it is right now. Let's wait for some time and then talk about it.
On a full-year basis, FY 2027 should we be able to break even on the overseas business?
Yeah, it should be moderately profitable also. It should be better than break even.
Understood. Just one bookkeeping question. What would be the gross debt as of the quarter end?
It was about INR 825 crores. We also have about close to INR 377 crores in cash and cash reserves.
Okay. Do we eventually like envisage to repay this debt with the cash which is there on books?
Y eah yeah. Obviously there are certain restrictions also on bringing the money into India. You need to consider the tax implications and all those other things. That's what we are working on. Plus we'll also be using some cash overseas also for our R&D purposes also.
Okay. Lastly, please go ahead.
No that's it. Go ahead.
Yeah. The last question was on this litigation which is ongoing with Plastic Omnium in Netherlands court. Could you just give any update on the same?
Yeah. It's still in early stages. As we indicated earlier we actually filed a legal suit against Plastic Omnium for violating certain supply agreement conditions. Subsequently they also raised a few claims against us, which we are disputing. Of course this may go through the arbitration process. We'll update you more on this in the coming quarters.
Got it sir. Thank you so much.
Thank you. The next question is from the line of Shridhar Kallani from Axis Securities Limited. Please go ahead.
Thank you for the opportunity. Hello sir. I just wanted to have a few questions. Firstly regarding the order book which takes INR 290 crores annual peak revenue, if you could share a number excluding Bajaj, what would this number be? Hello?
Yeah one second.
Bajaj was 45% of this new order win.
Okay. From the INR 290 crores 45% consumes Bajaj in the peak annual order revenue.
Sorry. Bajaj was 38.4%. It's given in slide 12 of our presentation. Bajaj was 38.4%.
In the new order win also?
Yeah yeah. This slide is all about new order wins onlly.
Right. In the e-mobility space just wanted to understand because of the non-availability of rare earth magnets specifically for HRE motors, how well do we have expertise on the LRE motors as well? Is it in the production pipeline for us?
Yeah. From a design readiness perspective, I think along with our customers, both on existing and future programs, we are already either on LRE or, in some cases, rare earth-free motor magnet, let's say ferrite-based magnet motors. Having said that I think there are still topics around achieving the supply even for LRE magnets or in general magnets from China. Of course we work with our different supply partners in China to build that pipeline, but yes I think even for the LRE, there are definitely restrictions. The logistics are not as easy as they used to be.
Okay. If my understanding correct, there is some supply chain issue with the LRE motors but we are prepared on the R&D and technology front given availability of current resources.
Yeah yeah yeah. In fact there are some rare earth applications which we have completely derisked to not necessarily on e-powertrain, but on other electrical products we make. There are certain rare earth applications we have already derisked and started supply also with you know with ferrite-based magnet solutions. Even with the LRE I think we've made some level of progress in terms of actual supply. Having said that like I said I think getting magnets from China in general is logistically harder than it used to be. It's not to say that magnets don't come. Magnets do come but the focus right now is to make sure we build a pipeline that is strong enough to really cover our existing demand and also potential backlog demand.
Any disruptions that we could face in this quarter two or second half of FY 2026?
I think in terms of total vehicle production our customers are already talking about what is the level of disruption in Q2. Having said that despite that disruption our focus would be that as supply chain becomes more streamlined to really be able to recover the backlog also as quickly as possible.
Understood. You just mentioned that in Americas, there is a possibility of rewinning the lighting solutions. I just needed some clarity. Are we talking about North America or South America over here?
We did not say that. We said with electronics, there is a potential in the Americas, and even there we're talking about North America.
Okay.
Again to be further clear we mean North American customers. It does not necessarily mean the supply location in North America.
Okay. Got it. With Bajaj coming up with a host of new products in the pipeline in the current year in the KTM 160 segment, the EV two-wheelers and three-wheelers, how well are we placed with these orders? If you could share any content numbers or direction of our position with these new launches in the coming next quarters?
Of course. I don't want to comment on customer-specific launches, but I think broadly in terms of content that we have shared in the past, on a two-wheeler, we have on a two-wheeler EV, we have the ability to place anywhere between INR 30,000 - INR 35,000 worth of content. Similarly, on a three-wheeler EV, it is a little bit higher than that. It's between INR 35,000- INR 40,000 of content. In the 150cc+ segments, our ability to place content is it depends, of course. You know it depends really on what is the technology level of each individual model but that ability would be somewhere between INR 15,000 - INR 20,000. As we go lower to the 100ccs, 110ccs it reduces because the technology level in those platforms is a lot lower. There I would say we're probably around INR 8,000, INR 7,000.
Understood. Sir any comments on your directionally how we are seeing the two-wheeler and passenger vehicle market being created in the domestic space? What is your thoughts or any guidance if you could share us with regards to the production levels in general and capacity migration at your plants?
Here I would just like to say that it's very difficult nowadays to predict what's going to happen going forward. There are so many uncertainties and because of the geopolitical issues, it impacts the volumes in India. For example the rare earth magnets are definitely a dampener on the EV production at least in the short term till alternate solutions are found. Q1 for us actually from a volume growth angle was quite a surprise for the Indian market. I can only say that the coming season normally when the season is there maybe September, October the couple of months we will see definitely an increase because of the season. Other than that it's very difficult to predict the volumes. Even nowadays customers are not really giving us any forward directions on the volumes very clearly because even they don't know what's going to happen.
For us to comment whether Q2 or Q3 is going to be much better it's very difficult to say except during the season time where we feel it should be higher volumes.
T hank you so much for your patience answering . Thank you so much.
Thank you. Before we take the next question we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Rahul Kumar from Vaikarya . Please go ahead.
Hi. Just to the RE how much of the sales or volumes were impacted in the last quarter? Do you expect the resolution by let's say next quarter end this quarter end?
Yes. I think we started to see some level of impact towards the back half of Q1 I mean the absolute very end of Q1. I think we had a decent stock position before that. Like I said with the previous question I think in terms of the derisking of design in terms of the adaptation of manufacturing lines all this work both for current as well as future programs is done. In some cases we have already not necessarily just in terms of e-powertrain but we use rare earth magnets in other places also in other products also. In some places the derisking is executed and supply has also already begun. Having said that with magnets I think the supply chain is definitely more complicated than it has been in the past even though we are looking to import what is restriction-free so non-restrictive grades.
The focus now is really to make sure that as and when magnets arrive we are able to convert quickly and recover potential backlog.
Okay. Second question I think you mentioned about some new order wins which are expected in from quarter two onwards. Can you tell us which segment are they? Is it Indian two-wheeler EV space or international or something else?
Sure. Having speaking of India, I think our focus continues to be on e-mobility, lighting and high-end electronics. I think it is a similar focus globally as well also. The expectation is that through the balanced portion of the year we should be executing a significant uptake in order wins also.
Okay. Understood. Last question. I think if I look at your India business, I think the gross margins were pretty strong. I think this quarter at 35%. What exactly drove it?
I mean if you're comparing with the previous quarter Q4 generally has certain special items like we also had a higher level of tool sales. Plus there were also certain year-end inventory taking adjustments etc. That actually reduced the gross margin. That's why if you compare the last quarter yes there was an improvement.
Okay. The operating margin in the India business which is 11.3% now do we expect this trajectory to now continue for the next two three quarters?
Again we don't give any guidance but yeah I mean it should sustain or should even improve. That should be our effort.
That's all. Thank you.
Thank you. Participants who wish to ask questions may press star and one at this time . The next question is from the line of Arvind Sharma from Citig roup. Please go ahead.
Hi. Thank you so much for taking my question again. You've highlighted the new order wins. Is it possible to share some of the segments where these orders would be there? Like you showed the segment-wise revenue which ones would see a share of new order wins the new orders participating over the next couple of years?
It would be really across all segments right? It would be across all segments. I would imagine that the supply into EV models and I think this is called out also right? I did not call that out. The supply into EV models is disproportionately higher. I think 75% of the new order wins, no sorry, in this particular quarter 25% of the new order wins are into EV models. 75% are into ICE models. In terms of product segment I would say it is relatively evenly split. I think the leaders would be body parts and lighting.
Got it. Thank you so much. If I may just clarify once again sorry for asking this multiple times. When you see the chart for example in FY 2027 around INR 13 billion peak revenue. Does it actually mean that FY 2027 revenue would be at least INR 13 billion higher than FY 2026? Obviously like-to-like you would have some orders exhausting too. How should we read it?
As compared to FY 2025, at least it should be as compared to FY 2025 then.
As compared to FY 2025. Got it. Got it. Thanks. One quick question on the elevated employee cost. You said it was because of R&D outside India. Any specific reasons for establishing R&D outside India? The ex-India revenue is still quite low. Where exactly is this R&D establishment, geographically? Will this remain for some time or is it sustained at these levels the employee cost?
Yeah. Like we explained earlier also I think we look for where exactly the competency lies. At an overseas market we see this kind of competence in certain areas. That's where we keep adding. These are more or less like distributed.
Maybe just something to add is that this is also mentioned that for our overseas locations we are expecting the cost to announce new order wins in subsequent quarters. Of course this is also being influenced by some of the R&D that we have, by the increase in R&D that we've talked about.
Got it. Thank you so much for answering my questions. That's all from my side.
Thank you. Before we take the next question we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Apurva Mehta from AM Investments. Please go ahead.
Sir, can you quantify the overseas loss on EBITDA basis and on the PBT basis for current quarter? We find it substantially higher on the overseas basis.
We don't comment on individual segments but yeah I mean you more or less have the standalone and you have the consolidated now so you can derive.
On the consolidated there are two Indian subsidiaries which are extremely profitable also. If you remove I don't know about that. If you want to just quantify the overseas loss which are specifically to the European side of the business because even our subsidiaries from Asia are profitable. What sense does it make to continue this business? Is this, what kind of ROC are we looking at even in the next two years' time to continue this business? I don't want anything which is yeah because we are investing again more into this overseas business to make it profitable. Does it really make sense in the next two three years to have a substantial ROC coming from the overseas business which are extremely loss-making?
Yeah. I think we explained it in our previous calls also. Basically we should not come to this kind of conclusion based on the current performance. Like we explained earlier these businesses were doing well earlier then there was some loss of business unexpectedly. We are now trying to rebuild the order book. If once everything gets converted into sales starting from the second half of next year you will get to see the result.
Okay. It could be really that it could be ROC accretive businesses. It could be the kind of ROCs which we are doing in India?
Yeah. I mean see these are like low-capital intensive businesses. Obviously the ROC has to be better.
Okay. Okay. From the EV side are we getting any four-wheeler EV orders other than plastic components or like general but any other components we are looking at four-wheeler OEs or something like that for EV?
Maybe just to you know I think it was maybe two quarters back that we announced that we had a business win with the North American EV OEM for their front drive unit and rear drive unit inverters. This is something that we've already secured . It's actually from the overseas side I believe the largest new business win that we have mentioned over the last year at least. Of course, this you know the plan and we are confident of also duplicating this again or replicating this again.
On the India side any wins we are missing or any wins we have done and we are confident of winning on the India side?
Of course . You cannot comment on RFQs that are live.
Only we want to know that are we bidding for some RFQs which are there and we are hopeful of getting some of them or just to get a sense of what's happening.
Yeah. For passenger car our products are essentially engine-agnostic, right? Whether it is light just to give from an India perspective whether it is a thing whether it is a plastic whether it is an ICE vehicle or an EV vehicle we pursue all.
Okay. Not on any other brand like where we are there in the four, on the two-wheeler side like motors or traction motors or something like that?
No. So far passenger car e-power train we have not looked to bid.
In India it's not there on the electronics side but abroad is where it's like you know we have won some of the electronics business for the North American customer. That is going to be continuing you know with some North American customers going forward on the electronics side where we will see you know more wins coming in on the electronics side.
Okay. Okay. And that thing over the period can be brought in India also?
No that is for the electronics plant in Romania, which will see you know substantial growth you know going forward. Today the issues which you mentioned abroad are there because the revenues are very low. The competency and capability at a plant level is of the highest order and it is world-class. The facility is world-class. Even our engineering is world-class.
That is something we do not want to give up just for short-term losses. We are very confident that going forward, you know, the business abroad on electronics for us will do very well. That's the reason that you know we want to actually maintain that yes we have to carry on with the losses for a year or so more and then we can you know properly see the turnaround.
Great. Great. Great. Great. Great. Thanks for you know explaining us in detail because it was really helpful for us. Thanks so much. Yeah thanks.
Thank you. The next question is from the line of Ketan Sanghvi , an individual investor . Please go ahead.
Thanks for the opportunity. I think we're good for the numbers sir. Just one question. Now that our net debt is down to about INR 450 crores, can we expect any savings on the interest cost? I'm not sure what the growth rate is, but given the net debt is at INR 450 crores, what kind of savings can we expect on the interest cost?
Yeah. Interest cost should be significantly lower than what we saw last year. In fact it should be lower than what we saw in Q1 also because most of this repayment happened towards the later part of Q1. Having said that like how we explained earlier we continue to generate free cash flow in line with the CBT percentage that we've seen. There will be some additional investment in land and all, which we explained earlier also, of close to INR 150 crores. Between now and end of the year, the debt may come down by about INR 100 crores-INR 150 crores. We can compute the average, and that should describe the interest cost for the rest of the year.
Thank you. Participants who wish to ask questions may press star and one at this time. We would like to remind participants that you may press star and one to ask a question. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
No, thank you, ICICI Securities Limited, and to all the investors once again for joining the call and also for your continuing support. Thank you.
Thank you.
Thank you. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect the line.