Suprajit Engineering Limited (SUPRAJIT) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Superdeal Engineering Q1 FY27 earnings conference call hosted by Anandrati's Share & Stock Brokers. 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Mumuksh Mandelesha from Anandrati Shares and Stock Brokers. Thank you, and over to you, sir.

Yeah, thanks, Shruti. On behalf of Anandrati Shares and Stock Brokers, I welcome you all to the Superdude Engineering Q1 FY27 results conference call. I thank the management for taking time out for this call. From the management side, we have Mr. Ajit Kumar Rai, the founder and chairman. Mr. N.S. Mohan, MD and Group CEO, Mr. Akhilish Rai, Director and Chief Strategy Officer, and Mr. Medapa Gowda Jay, CFO and Company Secretary. Request Ajit, sir, and team to give an introduction review about the results, and then we can follow up with the Q&A session. Over to you, sir.

Thank you, Mummux, and good morning to you all. Greetings from Suprajit. Thank you for joining us for the Q1 call. As you all know, the Middle East conflict, the oil and commodity prices, trade restrictions, and shipping disruptions continue to be in play. Global automotive and non-automotive business have been not growing. They also have stayed muted. Thank you. We had a very good quarter in terms of the automotive numbers with the sector growing at about 22 percent, and both passenger vehicle and two-wheeler segments had a solid double-digit growth. From our point of view, I think our team will talk briefly about how we performed, but on an operating level, I think we have had an exceptionally good quarter. Consolidated revenue grew up by about 24%. EBITDA was up by nearly 57%. We had the highest ever quarterly operating revenue of 1,070 crores in this quarter. Standalone margins came under pressure, and Mohan will be walking through that as to what happened and how it's going to be a temporary phenomenon for us. And, uh, then we'll take on the questions after all our briefings done from our team. Uh, first of all, I'll hand over to Merapa for a brief financial detail. Merapa.

Yeah. Thank you, sir. Good morning, everyone. Uh, the consolidated revenue for the quarter ended June 2026 was 1,070 crores as second is to 863 crores for the corresponding previous year, recording a growth of 24%. The consolidated operational EBITDA for the quarter ended June 2026 was 129 crores as against 82 crores for the corresponding previous year, recording a growth of 57 percent. The standalone revenue for the quarter ended June 2026 was 470 crores against 390 crores For the previous year recording the growth of 20 percent. The 10,000 operational EBITDA for the quarter ended June 2026 was 60 crores, I finished 61 crores for the corresponding previous year, recording a growth of big growth of 0.3 percent. The total debt level was 776 crores as on June 2026. Surplus cash balance was 243 crores as on June 2026 invested in the mutual funds and bonds. For further query shaping, you can connect with me even after the call. Thank you very much.

Mohan? Very good morning. Thank you, Mr. Paul. So, let's start with the global cables and mechatronics, what we call it as GCM now, which used to be formally called as SCD or Subject Controls Division. First of all, the revenue went up by 27, almost 28 percent, and EBITDA moved very smartly from 5.8 percent to 12.6 percent. This has been an outcome of the global restructuring that we have been explaining over the last few quarters. Thank you for all your patience, and we are finally seeing the results. GCM continues to work with our customers and also with some of the governments for a fair recovery of the tariffs, particularly in the USA, and we have certain BAT back recoveries in China, Canada, and Germany, which was a part of the acquisitions that we had done there. In terms of new business, we are ramping up new projects, both in China and in India. The China, we have one of the largest OEMs that we are now working with, and we are going to launch the product with them. It is a Chinese OEM. And again, in India, we are launching quite a few lines and products. for a large U.S. OEM, who is specifically looking to building a resilient supply chain as they describe it. These are all driving good volumes at the, you know, GCM. This quarter was very strong. I have recorded business wins across India, Mexico, China, which I think is showing the customers' various preferences. that we have today. With this, I moved to India. And before I get into the specifics, let me just talk about something in general. First things first, I think we need to recognize that we have strong headwinds that has hit us, not in terms of the market, if the market is doing good, but the raw material prices are really gone. Compound with that, what we have had is an increase in employee cost. So, this happened, as you know, in the NCR region, all those unrest happened and elections happened. Therefore, we had a lot of migration of labor going back to their vote, to vote in their constituency. Therefore, these were the kind of headwinds we faced. While we have mechanisms with our customers to tackle that the material cost increases, So, employee cost increase has been a different animal for us, and for the first time in many years, we have approached the customers to pass this on too, and quite many customers understand this pain point, and some of them have already agreed to make amends. I am sure that we should be able to see reason in the industry and make good of it net of the productivity measures that we are going to take. Having said that, let me start now with the specifics. To India, Cable and Mechatronics, or ICM, which we used to call it as DCD earlier. The revenues went up...

From the sensors and electronics and displays division, it had a very strong... EBITDA up 100%, margins close to double digits. This is because of a lot of new projects that ramped up very well in the quarter and will be continuing to ramp up. A lot of strength is in the digital clusters and electronic total grip area where that is driving the growth of the business. We also have a very good pipeline of new wins, which is why we are now on a wall footing, expanding capacity of our electronics division to cater to this increased demand and our pipeline. The SCD has also picked up a lot of good awards worth noting. Firstly, from Mahindra Last Mile Mobility, we got an award for our extraordinary efforts in ramping up the throttle supplies that we had this year. This is all because of the rare earth curbs that were put on India, and we had developed a rare earth free throttle, so they had to very quickly move to Suprajit, and that ramp up was extremely difficult this year, but we managed successfully, and we have now won further businesses with Mahinda. Similarly, we also on operations continue to have excellence in operations as well, and that's shown with the ACMA Manufacturing Excellence Award, which SCD won this year, this quarter. Coming to STC, because SCS is now part of GCM, so I won't be covering it. It is already covered with Mohan on the GCM. So coming to STC, it, of course, is our R&D engine, continues to support a lot of projects, including the ABS and sunroof cable projects, which are now progressing towards... And STC and ICM have jointly picked up the Ather's Most Innovative Supplier Award, really showing the kind of capability that we're building as a true technology provider in India. The new STC building is on track now for completion in Q3, and we would look forward to hosting our investors there sometime. General updates. I think we also have won a lot of good awards from Bajaj, a JIPM TPM Excellence Award. TVS Motors gave us a platinum award for our TPM process as well. And those show that we continue to have great support from all our customers, whether it's ICE or EV. So with that, over to you, Chairman.

Thank you, Akhilesh. Just to sum up, I think the GCM restructuring is completed, and the numbers of the quarter clearly show that the restructuring has yielded the right results for us. ICM and PLE margin pressure, as Mohan has explained, it's a timing issue and a price pass-through, and we expect that to be recovering well in this and the next quarter. So the guidance we gave, I mean, despite all these things, the guidance that we gave in our press release dated 25th May, 2026, still holds for the year. I don't think there is any concern on meeting the guidance that we have already set out. Thank you all for joining. Now I hand over to Shruti at the chorus to start organizing the call and the 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 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj from Simpil. Please proceed.

Yeah, yeah.

Yes, you are, Pagaj.

Hi, sir. Congratulations on decent set of numbers and a very good environment. Just a couple of questions. First is on the GCN. So, if you look at the console numbers also and the segmental which you gave, you know, the margin which we are this quarter, was there any one-off in terms of ridebacks or any FX element in this?

In operation research, there is no. Yeah, GCM, whatever the operational number that we have set out, there isn't anything that is a one-off number in that. I mean, there may be small one-offs, but nothing that is material, no.

Okay, because, you know, if you look at the control margin, if you look at the control margin, Contribution margin for us, we've seen a very healthy expansion, given, you know, this is despite the, you know, the pressure we have seen on the RM and the standalone of the India business. And, you know, also considering that, you know, the raw material environment has been very inflationary. So despite that, I've seen a very healthy gross margin in the consult. So I'm assuming that in the subsidiaries of the global business, you've seen a very healthy expansion and contribution margin. So I'm just trying to understand what is driving this.

I think one is, please understand, the restructuring has made our operations, you know, very tight, and it is much leaner now compared to what it was earlier. That is number one. Number two, there is a top-line growth of whatever, 20-plus percent. Now, automatically, when, you know, when the operations are tight and lean and efficient and the top-line grows, it automatically drops into the, you know, gross margins, you know.

Got it.

Please also note, during the course of last year, we have initiated quite a few cost improvement projects within the group, globally. So that also has yet had its effect. So there is nothing one-off in this, actually. It's a few improvement in margins, yes.

Okay, so this margin of 12, 20.5% which we earn, this is what should broadly sustain.

We did mention about 10 and a half, I think 10 and a half to 12 was what we said in the beginning of the year. At this moment, it is at about 12 plus percent, but I will still stick to my guidance that we have given for GCM at whatever, you know, 10 to 12 percent. Again, it depends upon the product mixes as we go forward. So, you know, new projects are getting launched, so we have to actually see how the margins are. The 10 to 12 percent at GCM is very much on the cards. Right now, it is on the higher side, a little bit, yeah.

Okay, and the question was on the India business. See, I understand, you know, there was a raw material impact and the wage inflation. But typically, you know, do OEs, you know, they do give the escalation from the wage impact or, you know, do you see any continual impact of that in coming quarters?

It's a, you know, honestly, you know, we are in discussion with the customers. I think the pass-through of materials is not an issue. Pass-through of wage increases, which has been significant, particularly in the northern region, is pretty significant. I think customers understand our view. Some of them have agreed to pay. Some of them are still dilly-dallying. So, that's why I said, you know, it takes one or two quarters to convince this part of the increments. But having said that, we are also working on a lot of cost reduction within the organization. So my view is that, you know, by Q2, Q3, let's say latest, we should be recovering most of that, you know, last 100 basis points here and there on the wage.

Okay. Thank you.

Thank you. The next question is from the line of Anubha Mukherjee, some person, Capitan.

Hello, am I audible? Sir, congrats on a great set of numbers, and thanks for the opportunity. Thank you. My first question is, will it be possible to share separately the revenue contribution? And the beta margin for SCS is in Q1, sir?

No, we have very clearly said last year itself, end of the year, even when we acquired itself, that the SCS will be separately disclosed for a year till March this year, just to show how the progress we have done post-acquisition. And that it will... We are going to combine that in global cables and mechatronics. They're numbered at the end of the year. No meaning, actually, because the way we have restructured, it's such a way that the LDC entity has been, a Rescon entity has been shut down and merged with the LDC, you know, SCS in Germany has been restructured, you know, the warehouse of SCS has moved to old LDC. There are so many things have happened. So, separately disclosing has got no meaning anymore, which you have explained earlier, phone calls also. So it will be under...

Got it, sir. And, sir, there's a very strong revenue growth of 28% in GCM. Can you share some perspective on, like, what kind of growth you expect for the rest of the financial year in GCM?

Let me, also, let me clarify a little bit. I think the second tranche of SCS Canada and China happened in May. So we didn't have the revenue of April and May of the second branch of SES last year. You know, at least a month's number that we see as of July, it is still very strong. August is a month where, of course, it is the same thing for last year also, is a month of holidays in Europe and most of the places, so revenues are, whether the revenue growth will be there or not compared to first quarter, I do not know, but compared to last quarter, still strong double-digit growth for this quarter also for GCN.

Perfect. So, my last question is, the other income for Q1 compared to Q1 last financial year, that has seen a sharp drop. So, can you explain the composition?

Yeah, the compositions are multi. I think there are so many things, but I will summarize this way. Few elements in it. One is restatement of our, let's say, loans across our divisions. It gets restated. We have, you know, quarter-end creditors and debtors, which is in different, different currencies. That gets restated. There is also forward covers that we have made. There are certain portions of the forward covers which does not go through the balance sheet. It comes into the, you know, P&L. And there is also some other incomes that accrue. For example, last year we had some subsidy came into Morocco, which is not there this year. So, these four or five elements, if you see last year, from the beginning of last year to end of the last year, the, you know, dollar, rupee dollar, rupee euro, all was very positive in terms of change. That's why you saw a large number end of last year.

Since March 9th, So, my final question, before I get back in the queue, sir, in the SEDE division, can you share some light on, like, what is driving the growth, and is it, like, mainly driven by the digital cluster business, and what kind of new business means are we getting in that?

Mohan, will you answer that question? Sure.

Well, we need to break it down into three major product groups. One, I would call it as display systems, that is instrument clusters. The second one, I would call it as actuators and sensors. And the third one specifically, you know, within sensor, it would be the throttle position sensor, or TPS, as we call it. So, on the three counts, we are seeing growth. We are seeing growth happening. And it is not just across one customer. We have got a couple of customers. In fact, if there is one problem, and it's a good problem to have, this month and next month is multiple launches. I am facing about six launches in my plant with various customers. Therefore, is it a problem? The answer is yes, but it's a good problem to have. So, are we gaining traction on all these? Product groups, the answer is yes, with multiple customers.

And to add to what Mohan said, just as a matter of general information, I think July has been an exceptionally good month at the electronics division, clocking the highest sales, and I think the trend seems to be continuing at the moment.

Thank you.

Thank you. Thank you. The next question is from the line of Rakesh from Access AMC. Please proceed.

Yeah, hi. Congratulations, sir, on a good set of numbers. I think some good delivery from last four to eight quarters, what the efforts we have taken. You know, looking at your presentation, the FEQs clearly, you know, highlight one thing, that the... So our product portfolio today do not cater the EV power trend in a very significant way, while the market is moving in a direction, at least in 200, 300 MPVs, where currently a large part of the growth is being driven over there. So, you know, how is the management thinking in terms of, you know, catering to this journey of EV right now? I mean, organically, you know, how are we placed? And I mean, if I missed out any of your products, which are not there in presentation, and how should we, you know, think about our participation in this growth phase of EV?

I will ask Akhilesh to answer this. Akhilesh, on our EV journey and what we are doing and what are the products that are going in?

Yeah, sure. So, you know, of course, we are very much and very deeply involved with the EV, with many EV customers. I would say, you know, EV has been a great... Great driver of our growth, especially at SED, but also in our ICM division. So, you know, I understand your question is just around the drivetrain. We don't specifically look at the drivetrain itself, but we look at very agnostic products that will support EVs and non-EV programs. Please understand that, you know, just like an EV has to, you know, a drivetrain makes a vehicle go forward, we also need to stop that vehicle. So our focus has been on the stopping side and looking at braking as a key technology going forward. Because EVs, just like the drivetrain has changed, also the requirement of the braking is changing. And we are in the right place at the right time with a lot of good technologies in braking to support this change. And I think that's why, you know, for example, Aether has given an innovation award, and they gave us their key braking system products. It is because of this kind of knowledge and technology that we are building. And I think Aether, as you know, is a well-renowned technology name in the EV industry in India. And similarly, we supply to all the new age EV brands for some of our products. I mean, it depends on whether it's clusters or actuators or braking products or even our core cable product. We're still supplying to practically all the EV people.

Sure. Can you help us, you know, how the content of breaking or actuation products would have, or is it how different it is for EVs versus I's in whatever customers we are catering to?

The content per vehicle, for the most part, is the same in terms of EV versus ICE, but because, you know, we're going from, you know, our co-product of 100 rupee, you know, cable to a product of braking, which could be anything from, you know, 400 rupee CBS to, you know, 1,500 rupee, 2,000 rupee brake systems, or from speedometer cables to digital clusters, which can, again, span from, you know, 700, 800 rupees to 7,000 rupees, depending on the cluster. So, you know, each of our product lines are increasing by at least 3 to 4, 5x in terms of price that we sell to our customers. But in terms of whether EV and ICE, there is no real difference. I mean, you know, EV or ICE could pick any of these products going forward.

I think just to add what Achillesh has said, I think it's important to understand between ICM and SED, both are significantly in the two-wheel kind of space. And if you add them together, the kind of growth we had is ahead of the automotive industry growth. So what I'm trying to say is that, you know, a couple of years ago we have sort of said that some part of our cable portfolio may become or change it over to something else. But at the same time, we have said our content per vehicle will increase. We still hold the same view, whether it is ICE, whether it is EV, our overall content in the two-wheeler. Per vehicle, I think it's only increasing as we see it now.

Great, great. That was helpful. I'll fall back in the queue.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two for participants. The next question is from the line of Gopal Maheshwari from Auriga Capital. Please proceed.

Yeah, thank you for the opportunity. I just have a couple of questions. So one is on the GCN business. Is there an element of Forex which would have come in with respect to enhancing your growth rates, or if you could just provide what could be a constant currency kind of growth rate, which we would have experienced in Q1?

As you know, Gokul, we have not been announcing the constant currency rate for all this, because there are so many multi-currencies involved. So, yes, there would be some. I would not deny that because, you know, but in the last quarter, at least, there has not been a much change in the, no significant change in the rates, whereas I think during the course of last year, there has been an increase in, you know, dollar-rupee conversion significantly, but I think now it has been. You know, around whatever 95-96 has been more or less stable. I think that would be the rate at which it has been used, that has been used.

And any tariff recoveries happen in this quarter?

Yeah, please understand, tariff recovery is a double-edged sword. If the customer has given the tariff relief to us, we'll have to give it back to them. And if they have not given it, that is the only thing that we can recover. So, as we have always said, most of it has been passed on in our last year's, what is that, our press releases. Most of us that has come back also needs to be going back. There will be some delta, if you ask me. I mean, we always like to hold on to something. But, you know, that is something, you know, it is difficult to, you know, quantify it here. But that would not be very significant.

Okay. Just lastly, on the domestic business, this year, this quarter, we grew 20%, which is fantastic. If you could just give us sort of a flavor with respect to the broader breakup between the core traditional business in terms of the cables and... How this is, how newer products within this segment are actually helping driving the growth? I am not talking specifically of the numbers, but just more qualitative comment that how the new products are really contributing and ensuring that the growth rate is now matching with the sector growth rates. Yeah.

I think in this Gokul, I would say the other products, the non-cable are... Beyond Cable products are basically some of these breaking products, like CBS and, you know, some of those related products. That is, although they have grown very good, very well, as Mohan has sort of mentioned in his commentary, but they are still a small, you know, low base. So, will there would have given it a, let's say, couple of percentage of traction to ICM? The answer is yes, but it is not beyond that. That's what I'm trying to say. So, it's still a small base. Let's see how the whole year goes. Maybe next year we will segregate breaking separately out or whenever the time is right. Then I think, you know, we'll also get to know more clearly that. But the base is still small. But they are growing at a much higher rate, yes.

Okay, great. Thank you so much, and all the best.

Thank you. The next question is from the line of Nishita Sharqalesha from Sophia Capital. Please proceed.

Hello, am I audible?

Yes.

Yeah, so I'm just attending the call for the first time and hearing about the company for the first time. So if you could just reiterate the guidance that you've given earlier, that would be great.

Okay, what we did was in May, after finalizing the Q4 and the year-on-year, I mean, annual numbers, we have said that on a consolidated basis, we will grow in double digits, and that the EBITDA margin range would be, these are all operational numbers we are talking, 12 to 13.5%. We have said the global cable and mechatronics will also have a double-digit growth. With the EBITDA margin operationally, it's between 10% to 12%. ICM, we have said around the last year's number, which is, I think, about 5%, 15%. PLD, that is Phoenix Lighting and Electricals, you know, we have again said around last year, which is about 12%. And SED, we have said again in line with the last year, which was... Touching 10%. So, basically, we are aiming to do the 10% again. These are the guidance that we have given last year for the current year.

Okay. Okay. Understood. Yes. Thank you so much.

Thank you. The next question is from the line of Poor Nima from Karen's family office. Please proceed.

Yes. Please talk a little louder. I think you are a little weak. Sorry. I'm not able to get your question. Any separate numbers for this? I don't think it is large enough to disclose. But Mohan, do you have any idea on what is the LED status on our retrofit? General comment, maybe?

I don't have specific information. I do know we track what we call it as beyond halogen, but specifically, is it such a significant number that we can disclose?

The answer is no. Yeah, we don't have that number. Okay, and is that segment profitable? Do you have any idea about that?

It is profitable because the point is... Go ahead, Mohan. You can comment on the retrofit generally, maybe.

Yeah, that I can confirm, yes. There is quite an amount of localization that we have done. There are some amount of imports that happen, but there is quite an amount of localization that we have done. And again, when you say LED, you have to understand that we are doing what we call it as a drop-in solution, a retrofit drop-in solution. Therefore, this almost looks like, in the way it is handled, More like halogen, but it is an LED-operated, you know, lamp or a bulb. So that's how we are doing it. So in terms of profitability, the answer is definitely yes.

Thanks. Thank you. That was amazing.

Thank you. The next question is from the line of Jinis from Auriga. Please proceed.

Good morning, Dean, and congratulations for a good set of numbers and execution, Subraji team. So, almost a year back, Ajit, sir, there was a time when you guys had given, you know, some of the order bins initially and said that, okay, you know, you kind of wanted to show it one time. So, just when I look back in the last four quarters with the SPD division, we're kind of, you know, we've been in that 40, 45 crores of revenues kind of a run rate. We, you know, we kind of consolidated there. Yes, there was a slight uptick in this quarter, and EBITDA obviously have been in that. 4 plus crores on a run rate basis. So just trying to understand that earlier when these order wins were given, one thing that I want to understand is the execution and timeline of how that flows through. Because in this quarter, you mentioned that there's been certain wins from the US and the Chinese OE. So in that sense, will that kind of show up? And when you speak of order wins? What are we, timelines are we certainly talking about? And the kind of quantum over the next two, three years in terms of contribution to revenues.

This is for GCM you're talking? Because order wins in US, China is mostly on GCM. You started talking about the electronics division.

In effect, I'm talking about both because one thing I refer to is that a year back, you mentioned about order wins. Yes, sir. Yeah, that's not the fact that I'm talking about the U.S. and the Chinese OEF as well.

Yeah, what's happening is that, you know, how we are growing so much when the global business is at 0% growth, even if you're, you know, adjusting for the two months, you know, of that small last years between SES, China and Canada, you know, we are growing at 22%, 24%. How is that possible when the global business is at 0%? So that is because of those orders that we have won a year ago or 18 months ago is now starting to come into production, number one. At the same time, some of the businesses that we have been producing also going out of business. So there are two things happening. One is some of the old contracts are going away, but the new contracts are so much more that the growth has been at that particular percentage, which we are expecting to continue. So it's a solid performance, and that also, along with the restructuring and, you know, most competitive buying and, you know, new contracts are coming at current prices, that all has added to the margin improvement. That's why the margins are more than doubled from the last year's same quarter time. So that is where the whole thing, the whole color is changing, actually. I don't know whether that's what you are expecting as an answer or whether I got the question right.

So to add to that, so when you speak about the order wins with the U.S. and the Chinese, is there a possibility to kind of give a perspective that over the next two, three years? What is the opportunity there in terms of any size or any number that you can share broadly?

I think in terms of the size of the business, I think we have made a press release, I think, a month ago, particularly about three large contracts. I don't know whether you have seen it, but that was a very important announcement we have made, which, I don't know whether I got that number here, but that was very significant. I think about three contracts we have talked about. One is a largest EV cable contract, which is an annualized value of 5 million and a lifetime of about 37 million. Second one is a European luxury OEM, which is a 2 million a year, a lifetime of 12 million. And another one is from a Japanese OEM, again, 1.2 million a year, lifetime of 6 million. But they are all going for different, different plans of ours. For Metamoras, for China, et cetera, and for probably some of them also going to Morocco. So what I'm saying is that the order inflows are pretty strong. These are only three major ones we have talked about. Subsequently, we have won additional new businesses. So I think we are in a position where from, you know, last year everybody fighting the tariff war, today we are fighting for the order wins. So I think the scenario has changed, and I think we have been winning them pretty handsomely. But in terms of how it will change the profile of margin, I think let's understand this. It is still a very competitive business globally. But there is a consolidation happening, and I think the consolidation only leads to eventually the stronger players to probably eke out slightly better margin. But we have just completed a major restructuring, so any change in guidance we don't want to do now. Maybe end of the year, you know, we have said 10 to 12 percent. After seeing the actual, you know, outcome of this restructuring, if you find that the margin profile needs to be revisited, we'll probably only do end of the year.

Okay, and lastly on the SED, so the current run rate that we are heading, is that? Something that over the next couple of years, in terms of the visibility that you all have, is there something that we can see a kind of major push up there in terms of all the pipelines that you have currently?

I'll let Akhilesh answer this. Akhilesh, you want to take care?

Yeah, sure. So, you know, firstly, you know, when we made our disclosure before launching the electronics division, you know, and we talked about the pipeline and the businesses that we had won for that business, it also included at the time who was one of the largest, you know, EV players and a significant portion was their business, which, as you know, that player didn't really. Continue with the volumes that they were at, you know, two, two years, three years ago. So, you know, the loss of that. Thank you. There are a lot more projects that came in, which more than overtook what we had, you know, the volumes that we didn't get from this number one player at the time. So I think that is one point on electronic division. And what's good is that right now the electronic division, a lot of the business is not just driven by EVs, but also by ICE customers who are, you know, picking up a lot in, you know. Especially in the south region, a lot of the OEMs here are doing pretty well. So we see this strong growth continuing in the next few quarters. We see, like we said in the release, that we are expanding our capacity on a wall footing because we just are, you know, we are flooded with orders and new launches. So, you know, I think, you know, of course, a lot of these EV things, you never know how they... Are they going to go up or down? But at least in terms of the current market scenario, EVs are doing great, and therefore, you know, this SED should also do well, along with the fact that ICE is also doing well. So, our business is looking strong for at least the next 12 months. We see a good traction to continue at these levels that we see this quarter.

Actually, you can also talk a little bit about some of the businesses we are working on on the connected side.

Yeah, I think, you know, I mean, like Chairman said, you know, we have, of course, we have also, you know, our tech center continues to work on a lot of projects, and one of that is into telematics, and this quarter, actually, we won three projects in telematics and connected clusters and TCUs. So, this is a great opportunity also for us to grow into the telematics side of the business. And that should launch in the coming year and then gives us a new platform to take to all our other OEMs as well. So, yeah, I think that's on telematics.

And to add to what Achillesh has said, you know, we have now decided to move out of the current location temporarily. We already found a larger leased-out premises nearby. I think in the next, I don't know, the timeline, maybe six months or so, we'll be completely relocating to that site and completely rebuilding the current plant by demolishing and coming out with a much larger facility for electronics. So all that shows that, you know, we are very clear that the original plan at which we said that, okay, we probably, this place is okay for some, say, let's say 250 crores of business, But now we are seeing much higher traction. So what we are doing is relocating the plant, except a part of it, and then completely rebuilding and coming out with a multi-story electronics division.

Thank you for these responses. And if I may, in the PLE, there were two comments, one comment made in the last quarter about one European competitor having trouble. And in the current quarter, you mentioned about the U.S. large retailer order revamping. So with this, you know, we've been in that 90 crore run rate per quarter. Do we see that kind of we kind of breaking out of that zone in the coming quarters?

You know, it's a, you know... The volume globally is obviously reducing, right? I mean, it's in that old part. The insolvency in Europe, which is still an ongoing, they're still operating. There are some customers are trying to support them and all that stuff. The whole thing is still not yet fully rolled out as to how it will pan out. So, in the meantime, we are in discussion with multiple opportunities to do business. But I think ultimately it depends upon whether this particular player who is in insolvency, how he comes out of insolvency. Does it shut down? Does it get taken over? I mean, these are the kind of questions. So we are in discussion with multiple customers, prospects. I think in the next quarter or so we will start seeing much better. Clarity on those inquiries. So I think there is a good opportunity for us, and I'm pretty sure that we will capitalize on it over the period of next three to six months' time. This U.S. business is ramping up nicely. I think we have had much higher, I think, this year. It will be a much larger business than last year. And again, it will go into much larger business for the following year, in the next year. We'll probably triple or go four times next year. So I think that...

We appreciate your detailed responses. Good luck to the team.

Thank you.

Thank you. The next question is from the line of Chirak Shah from White Pine Investment Management. Please proceed.

Thank you for the opportunity and congratulations for the set of numbers. Sir, before I ask the question, I have a request and a suggestion. If you look at some of your peer sites, there are disclosures on new order wins. It is a reasonably well-organized in India quarterly update. If possible, you can think about it. And when I say new order wins, either an edition of a product or an edition of a model or a new customer or a new geography, etc., etc. So, if you want, we can take it offline. But it's because this question keeps on coming every time. And it will save time on discussion also. So, you don't have to repeat a lot of things. Yeah. Sir, the question is, sir, one, the India business or the standalone business where we have seen margin pressures, which you have explained, on annualized basis, can we assume that margins will be similar to the last year, once the fast year, et cetera, happened?

I would say almost like similar. Let's say taken, let's say plus or minus 50 basis points. Probably. It's difficult to say because ultimately, you know, it depends upon what price you are able to strike with customers. Our feeling is that it's probably not more than 100 basis point, if at all. But we don't expect that also, but I'm just saying probably as an extreme case.

No, fair point. Yeah, that's why we're asking, because quarterly variation will be...

The only problem is not about passing on the material cost increase, Chirag. I think the issue is about the wage increases. That is where the real debate is going on. I don't think anybody is questioning our material cost increases. I think on the labor cost increases, because we are still a fairly large labor-intensive operation, I think that part is what is being strongly debated.

Great point.

The second question was, Akhil has alluded to the different price points of different parts that is attached to customers. If I have to ask it in a different way, what will be the medial price for unit realization that we would have, because we have product from 100 rupees going up to 7,000 rupees?

But it's difficult to say, Sharaz, I can't give you that number because it keeps changing. It's a dynamic situation. Our product range is like that. So giving a median price is like, you know, throwing a dart. We don't know where it's going to hit.

But structurally, three years or five years out, can we expect a 25-30% increase in this median pricing, whatever the number it could be? Is that the right direction we are in, given with the product?

Again, yeah, yeah, I think our, again the question, you know, the point here is that, you know, cable has got one range of price, right? I've got a 6 rupees cable, I've got also, I've got a 600 rupee cable. Now, how do I give a median of that, and then on top of that, we have got these other products coming, where the volumes are different than the cables. Cables are all high volume ones. And the median value of our purpose on a consolidated basis is like, absolutely, I think it's a wasted exercise, if you ask me.

No, fair point.

I think the content for vehicle is a fair question, I think. That's what I'm trying to say.

Okay, fair point. Content for vehicle is also a good way of looking at it, but...

It doesn't matter what it is, yeah.

Directionally, we can see a 5-6% improvement.

I can't answer that question without me having done some homework, but I just explained earlier, if you combine our FED and ICM, you can see the growth. Right? That growth is more than the industry growth. Now, at the same time, there has been some of the table operations are not there now compared to what it was, let's say, a year ago. So, the content for vehicle, we will try to see how we can accommodate that and whether we can see whether we can track something like that. Maybe it's a good idea to do it for us on an internal basis, but whether we'll disclose, we'll decide on that. But I cannot give an answer to your question, no. No, fair point, sir.

Maybe if it goes down the line, once you do your work internally, you may choose to...

There are a lot of new things. The breaking cable, the breaking products are coming up now. Electronic division is, you know, ramping up fast. At the same time, the new baby is growing, starting to grow. So, we don't know the trajectory of all these products as how it will be over two or three years' time. So, it depends. Something may take off. It depends upon how the customer volumes are there. There are so many, you know, variables. So, it's impossible to put a target there.

In the last question, in the break-and-break release system, we have mentioned TVS and HMSI as the customers. Sorry, sorry. In the break-and-break system, you have mentioned CBS and SMSR as the customers.

That is for the CBS, I think. That is for CBS, yeah.

Okay, that is only for CBS. And is that, if you can throw more, like, is it that we have just made entry in one or two modules, or how it is, and how should we look at it two, three years out?

I, Mohan, you have, you can do any clarity on the CBS situation now, where all we are?

Sure. First of all, let us understand one thing. The braking system or brakes is a safety critical item. Therefore, any OEM, before they take a plunge, they do a lot of, you know, confirmation, product validation, design validation, etc. Therefore, we are going through that process with multiple customers. With some of the customers, we have completed it. Some, we are in the process. And second portion that I need to explain here is, unlike many other, I would say, players in the market, we are looking at a total technology stack here. That means we are looking at the levers, we are looking at the cables, we are looking at the hoses, we are looking at the reservoir, we are looking at caliper, we are looking at the rotor, you know, brake pad, ABS. Therefore, we are looking at a complete technology stack in the braking system, and CVS also as a part of that. Therefore, what we are doing is making inroads with certain customers with certain proportions of it. So, our general vision or guideline, what I would like to say is, A, we would like to own a complete system responsibility. So, that's our direction. Second thing is, we would like to have a claim on the real estate, a specific real estate in a two-wheeler architecture. Therefore, this is the way I would be looking at it. Therefore, to answer your question, You know, hands or legs or brain, if you are asking me, it is very difficult. I would say that there is an overall growth happening in the body and I am maturing, both as a technology and also as a player in the market.

Fair point, because this is a very effective, if you are able to do the transition, it would be a unique one, and it could give you a lot of profitability also to the company, as I was asking about.

I agree with you, Taylor. Absolutely agree. I think that is the idea. I think I have made this comment in some previous calls also. This is a long-term story, even longer than the electronics division story, in terms of how it will mature, which product will get launched first, which product will... Grow faster, which product will launch later. But the idea, as Mohan said, is to give a complete breaking solution. I think that is our North Star statement.

Thank you. Thank you.

I think what is the time we have, 12 o'clock, so we'll take two more questions.

Alright, the next question is from the line of Rakshar Srivastava. Due to no response from the current participant, we move on to the next. The next question is from the line of Ravi Purohit from Security Investment Management. Please proceed.

Yeah, hi. Am I audible?

Yes, you are, Ravi.

Yeah, hi. Congratulations, sir, on a good set of numbers. This is one question most of the other questions have been answered. So I think, you know, we had discussed a little bit on actuation systems, right, from the LDC acquisition. And I think last quarter, Concall, we had mentioned that we have kind of done a refresh of the, you know, of the tech or the, you know, products that we are kind of doing in that. So, if you could kind of, you know, throw some light, because that was one opportunity which kind of allowed us to, you know, if I can use the word, forward integrate from cables to kind of actually providing actuation systems. And the addressable market for that similarly is significantly larger than just the plain cable. So, if you could throw some light on any order wins or anything that we are looking at on that aspect over the next couple of years.

Yeah, sure. Akilesh, can you answer both on our product development status and maybe on the business side of it, please?

Yeah, I mean, on product development, I think the product has been developed now, and we are taking this to our customers in the U.S. especially, and then next to Europe. You know, this will, of course, take some time to filter into actual business wins, so, you know, this will not be something that will be an immediate kicker, but what we are seeing is that in India also there is a lot more talk about bringing these kind of actuation systems. In the U.S., it is a standard on premium vehicles, but in India, it is barely there even in the top-end vehicles of most of the cars. So, you know, now I think a lot of customers are looking at it. You have seen, I'm sure, in your, you know, in the analysis of these industries, a lot of new tie-ups in seating-related companies coming to India to bring their technologies. And in those technologies, you know, a lot of them are also talking about activation for all these seating companies. So we are also in discussion with seating companies in India, but, you know, this is a mixture of both that the technology has to come to India plus, you know, we need to win that business. So I would say it's still a little bit down the line before we can really win seating activation businesses in other than what we already have. I think that's an ongoing process. But at the same time, you know, I would say that, you know, with some of our key passenger vehicle customers, and I won't name one of them, but it's a leading EV OEM, you know, they have looked at us for almost four or five different actuation-based projects, which are all on the, you know, very much in the R&D space. So this may take, again, two, three years before it even comes into the market. But this is with, you know, very deep advanced engineering that we're working very closely on very, you know, on interesting actuation projects. So, I think this is a matter of time to play out, but, you know, I think the signs are strong on actuation that we will have a lot more business going forward.

To add to what Achilles said, Ravi, is that, you know, the current businesses that we have in actuation continues. Some new projects were launched in the two-wheelers in the last two, three years. They are also continuing. Now, I think the Indian, you know, larger passenger vehicle side, you know, OEMs are seriously looking at some of these newer technologies on seating, and I think that's where we are fitting in, and I think we had some very interesting conversation with at least a couple of them, and as Achilles said, we are in discussion. In terms of the products, I think we are working on, you know, as you said, it's more or less finalized at least to, you know, what I would call as the level of actuation based on the force. I think they are all in the final, you know, approvals are in the process. So I think they will all be launched as an upgrade on the existing actuation products that we have. So I think it's a journey, but I think there is a very exciting new opportunity that we see.

Great, great, sir. Good to know that. The other question is on the non-auto side, right? So, historically, I think a few years back before we acquired LDC, we used to kind of discuss non-auto side of the business. Over the last couple of years, I think the discussions have mostly reared towards auto. So, is there anything, any update that you can share on, you know, what's happening on non-auto side of, you know, any products that we have developed or anything that we are working on or anything that looks exciting?

I think non-automotive has been fairly the business in the U.S. I mean, it's large. Most part of that business is out of U.S. They have continued. In the last two years, unfortunately, I would say it has remained very muted, and hence our conversations have also been fairly muted. So what we are doing, though, now is, you know, in those days, what we are talking about is on opportunities in cable, but what our business development guys are doing now. is that we are pitching in some of our new products, particularly from the STC products on the displays and on sensors, etc. I think that is, you know, we already started supplying some of the sensors already in the last couple of years. But I think there are quite a few new ones, including some of the displays, are being presented and discussed with these non-automatic customers. The cable side of the business, honestly, is not growing, but I think these new products... It's where we expect the traction to come over the next few quarters.

All the best.

Thank you. And we'll take one last question if it is there, madam.

Yes, sir. Thank you. The next question is from the line of Devish Payal from Boarding EMC. Please proceed.

Sir, I just want to understand, you mentioned regarding the Chinese OEM. Sorry?

What OEM?

Chinese OEM.

Yes, okay.

Yeah, so what we have been hearing, Chinese guys making inroads in Europe and other places globally.

So, for us, how it has grown, and what would be your contribution to revenue, and how do we see from here on?

I think Chinese OEM business is done out of Lone Star in China, actually. How we pitched to this OEM was simple, that they have global ambition. They are the largest, you know, EV maker today in the world. And they have global ambition. They are, I think, already in Hungary. They are talking about Mexico. So how we pitched it a year and a half ago was that, you know, we have footprint in these places where they want to go and that we want to be their global supplier. They have a local couple of suppliers, but they are purely local. They have no global footprint. Eventually, after good rounds of discussion, they have said, okay, let us try you out, because if that's really needed, we will be able to use your footprints globally. But the starting point was China. Okay, we are making, still making most of it out of China. You supply to our current product. So in the process, I think we have won nearly 25 different cable projects with these customers. And I think five or six of them have been launched already, and the balance will be launched over the next 12 months or whatever time frame, depending upon the development time. The growth is very clearly seen. If you look at Lone Star, you know, last two years, there have been a flat year for Lone Star. But we are seeing something like a 20% growth at Lone Star. And I think that trend is likely to continue with the kind of business wins that we have. And eventually the idea is to go to, you know, take that from there to try to offer to the same OEM out of Europe for North American launches. So that is the overall plan.

Okay. That's it from me. I wish you all the best.

Thank you. Thank you all. Thank you very much for your time and patience and continued interest in Suprajit. I would also like to thank Mumuksh and Anandrathi and Chorus Call to organize this call, and all the best. Thank you very much, Chruti. As far as we are concerned, from our side, there is no more brief from our side. So thank you.

Thank you. On behalf of Anand Draghi's Share and Stock Brokers, that concludes this conference. Thank you for joining us, and you may now disconnect your line.

Thank you.