Sansera Engineering Limited (SANSERA) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Sancerra Engineering Limited for Q4F526 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 touch-tone phone. Please note that this conference is with a quarter. I now hand the conference over to Mr. B.R. Pritam. Thank you and over to you, sir.

Thank you. Good morning and welcome, everyone. On this call, I am joined by our CFO, Mr. Vikas Goyal, CEO of our ADS division, Mr. Hari Krishnan, CEO of Automotive Division, Mr. Rahul Kale, Head of our Corporate Strategy, Mr. Praveen Chauhan, and our Investor Relations Advisors, the SGA team. The results and the presentations have been uploaded on the stock exchange and company website. I hope with a limited time that everyone has had a chance to review them. Before I walk you through the quarterly highlights, I would like to take a moment to reflect on the strong progress made during FI26. This year has been a pivotal year for Sancera Engineering as we delivered record revenues, sustained healthy profitability, accelerated our non-auto diversification journey via ADS business, expanded our manufacturing footprint with the inauguration of the new facility at Kanthanagar, and entered into a strategic joint venture with Nichidai Corporation Japan. The fact that these achievements came amidst a challenging macro environment marked by global tariff uncertainties, exposed slowdowns, and continued geopolitical volatility make them even more special. On this special occasion, I would like to thank the entire team of Samsera who has put in a lot of effort to achieve what we have done. I also would like to thank all our customers for continued confidence in Samsera. Our FI26 marked our highest ever annual performance with a top line of INR 34979 million and improved EBITDA and PAC margins, reflecting strong operational resilience and a successful delivery of our growth objectives. This also includes achievement of our ADS segment guidance with ADS revenue from product sales reaching INR 3155 million, representing an exceptional growth of 155% during the year. Full year revenue including scrap sales for ADS would be around INR 3498 million. Coming to Q4 FI26, we continued our strong growth momentum and delivered our highest-ever quarterly revenue of INR 9987 million. Throughout the year, we saw margins improve every quarter and Q4 margins showed a marked improvement primarily led by the revenue mix and operating leverage. We continue to see strong opportunities emerging across both automotive and non-automotive segments. As domestic automotive OEMs continue to undertake large-scale CAPEX and capacity expansion initiatives over the coming years, this creates strong opportunities for precision engineering players like us. At the same time, the pace of EV adoption, particularly in the two-wheeler segment, continues to accelerate amid ongoing energy transition and geopolitical development, creating long-term opportunities for our HEV and tech agnostic office. In non-auter space, global aerospace order books remain at historically high levels, and India is increasingly being recognized as a strategic manufacturing and supply chain hub. The Government of India's Semiconductor Machine 2.0 also strengthens our conviction in the semiconductor opportunity and aligns well with our ADS diversification strategy. AI has become the single biggest driver of the semiconductor upcycle, fundamentally changing both demand intensity and capital allocation across the global chip ecosystem. Despite the strong structural tailwinds underpinning the business, the operating environment remains fluid. With inflationary pressures across steel, aluminum, energy, tooling, consumables, and freight, etc., we are proceeding towards FI27 with caution. Zooming in on our performance for the quarter, our core auto ICE business delivered its highest ever quarterly revenue of INR 6426 million, registering a healthy YOY growth of 21.6%. The growth was primarily driven by strong momentum in the passenger vehicles and commercial vehicles, with passenger vehicles being broad-based across OEMs and commercial vehicles led by the strong growth in Swedish subsidiaries. At the same time, our auto tech agnostic and XEV segment also registered its highest ever quarterly revenue of INR 1217 million in Q4 F526, reflecting a healthy growth of 19.8%. Our non-auto business sustained its strong momentum, delivering a record revenues of INR 1736 million, registering a robust growth of 70.5% year-on-year. Within this segment, the ADS business more than doubled on a year-on-year basis. As of March 2026, our peak annual revenues for new business stood at INR 19.2 billion post-hour annual reset exercise. New order booking for the quarter-demand shop has largely from international customers due to global uncertainty. If we look at the cumulative unexecuted lifetime order backlog for five years, especially for the ADS business, It stands at INR 44.6 billion. Looking ahead, we remain confident of sustaining a similar growth trajectory in the coming year while maintaining healthy profitability. Within the auto business, FY27H1 is expected to be relatively stronger than the H2, aided by favorable base effect. To capitalize on emerging opportunities, we are scaling capacities while simultaneously enhancing our management bandwidth. Mr. Rahul Kali, who joined us a couple of years back As CEO has been elevated to CEO for the automotive division, which is over two decades of extensive industry experience, he forged healthy relationship with Sonsera ecosystem, and he is well positioned to take Sonsera to its next phase of operational excellence. Further, I would like to announce the appointment of three new independent directors on the board as part of ongoing board succession activities. The company has appointed Ms. Pradhika Govindarajan, Mr. Deepak Keshav Gaisar, and Mr. Venkataram Mamilapalle, subjected to the approval of the shareholders. Notably, Mr. Muttaswamy, Lakshmi Narayan, and Mrs. Revati Ashok will step down from the board effective 27 July 2026 upon completion of their tenures. The company expresses its gratitude to the retiring directors for their strategic guidance and contribution towards the strengthening of the organizations over the years. On the CAPEX front, during F-826, we incurred a CAPEX of INR 5097 million, and we expect a similar level of investment in F-827 as well. As a part of this outlay, a part of this outlay is directed towards expanding our ICE capability, as our existing facilities are currently operating at neck peak utilization. With this, now I would like to hand over the call to our CFO, Mr. Vikas Goyal, who would walk through the financials.

Thank you, Vikram. Good morning, everyone. Let me take you through our consolidated financial performance for the fourth quarter of FY26. Revenue from operations grew by 28% year-on-year to 9987 million or 999 crores, to make it simpler, Marking it as our highest ever quarterly revenue achievement, with notably strong growth in the ADS and Sweden businesses. To a positive product mix, higher ADS revenue contribution, we witnessed margin improvement during the quarter, leading to a 306 basis points increase in the operating margins. EBITDA for the quarter stood at IR1929 million, registering a strong growth, while the EBITDA margin has improved to 19.3% as compared to 16.3% in the other income for the quarter increased by 170% year-on-year to IR266 million, largely on account of IR54 million as interest income and INR 172 million. The employee expenses for the quarter stood at INR 1 to 98 million, with a year-on-year increase of 14%, reflecting an operating leverage effect on the revenue increase of 28% during this period. Expenses came in at INR 953 million, which grew by 28% year-on-year. The increase was driven by business growth, coupled with elevated logistics costs, and certain others stood at INR 1231 million, registering a strong year-on-year growth of 108%, with pad margin expanding to 12.3% from 7.6% in the Q4RF. Now, talking about the full-year performance, we recorded an annual revenue from operations of INR $34,979 million in financial year 26, deflecting a year-on-year growth of 16% over INR $30,168 million in FY25. EBITDA for the period stood at INR 632-1 million, registering a year-on-air growth of 23%, while EBITDA margins improved to 18.1% from 17.1% in the previous year. Other income for the year stood at INR $596 million as against $203 million last year, comprising largely of interest income of $233 million and forex gain of $311 million. Profit after tax for the period was INR $3269 million, registering a strong 51% year-on-year increase, with margins We also see an improvement in our return ratios with ROC at 18.0% as against 16.2% and ROE at 11.1% against 10.5%. 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 the touch-tone 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. 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 per participant. The first question is from the line of Pankaj Tipriwal from Ikigai Asset Managers. Please go ahead.

Good morning, Nikanji Vikasli, and congratulations on a great set of numbers. And very heartening to see the trajectory change for the company. My question is that when you look in the next two, three, four years, and we have set a very ambitious target for ourselves on ADS moving to 1,300, 1,400 crores, overall company revenue moving up to 8,000, 9,000 crores, can you give us a strategic roadmap on where we are? Because this is a year-end FY27, 26 call. So, next 2, 3, 4 years, how do you visualize the company? How the shape and size of the company will look like? Will be very, very helpful for us.

Thank you, Kansara, and thank you very much for your confidence. We as a company, when we got listed, as you are aware, we said that while we stay committed to our growth trajectory, In auto eyes, we also said that as a company on the overall de-risking strategy, we would like to move more aggressively towards non-auto, technology agnostic and XEV components, and we have set ourselves a target that we should be reaching closer to 40% of all XEV, the auto eyes to be restricted to about 60% of our business, which was almost 80% on a much lower rate. So, we said 60% will come from auto eyes and another 40% will come from non-auto as well as tech agnostic and XEV components. While we have progressed in that journey, if you really see how we have, I think the entire year end, we have reached 30% on non-auto and And only if you look at the quarter, and it is 32%. So, we are quite confident that we will be able to achieve whatever we have set forth. In fact, if you see, the company has also secured a lot of additional business in ADS, and as we speak, our growth trajectory on our non-auto business, especially on ADS, looks much stronger. So, every year, in fact, we have just taken up the expansion of our new factory building, and as we speak, we expected to complete the construction by July-August. And as we speak, we have a visibility of the entire course India in terms of we have demonstrated over the years. We in this, especially in the segment of EDS, as evident from our performance also and our strong order book, we have grown our capabilities both vertically as well as horizontally, which means that we have increased our component offering sizes From earlier, it used to be limited to one and a half meters was the maximum component size we could handle. Now we can handle up to four meters five-axis machining. So this has enabled us to address much larger, much complicated components coming out of structural parts, coming out of engines, and very, very complex geometrical parts. So this has not It has not only increased the confidence with customers, it has opened up a lot of different kinds of packages from coming out of the aerospace industry. While the aerospace looks very strong, the Semicon also has added to the growth trajectory in the ADS. This was something that we started So, as we go towards the end of this decade, We already have a visibility of closer to, as you said, about 8,000 crores, 8,200 crores on the order book front for the execution. We still have a couple of years where we can fulfill the order book and take the company towards 10,000 crores. So that is, you know, the time frame could be, depending upon the macro condition, it could vary by a year or two, but then our order book visibility is quite clear. And here also, we will, while we had set ourselves target of 20% non-automotive, 20% XIV and tech agnostic, we may have some change in this mix of non-automotive, could go up higher than 20%, but overall, the team remains strong. And auto also, we see a lot of opportunity to grow. We have added Nichidai joint venture where we want to address other precision forged and machined components which we are not into, like driveline and steering systems. And these are precision force components and force, primarily precision force with a reasonable amount of missioning. So with all these things, we are well poised to, you know, achieve whatever objectives that we are setting. Thank you very much.

Thank you and wish you all the best. And though on the numbers it looks like 8,000, 9,000 from the current levels, but I'm sure management can achieve it. Thank you. All the best.

Thank you, sir.

Thank you. The next question is from the line of Arjun Khanna from Coton Mutual Fund. Please go ahead.

Thank you for taking my question, and congratulations for the great set of numbers. My first query was on the ADS piece, so we have given a guidance for next year, which we retained roughly 550 to 600 crores. In terms of the question was, in terms of utilization, we have stated that once we actually build out the full facility, a margin should move closer to 25-30%. So would that be the right understanding that since the size of this facility is maybe 600 crores and we'd be running at peak, margin should head towards those levels?

Yeah, I think I'll first take the question, then maybe Hari has to add. So, yes, Arjun, primarily the facility which we are operating is relatively full now, and with the execution of this year's current order book, which should be around 600 crore plus minus the thing. So we should be on a reasonably good utilization. And with the additional building getting added this year, which will also start contributing revenue towards the third and fourth quarter of this year, because a lot of FAIs have to be delivered and that will get into production. I think it is the margin profile should move towards the number that you indicated.

Sure. In terms of KPEX, we have indicated that further KPEX of 250 crores, and we have given an asset turn of 2x. So, potentially, that takes our turnover to maybe 1100. Given that we have a sizable order book, would it be a fair assumption? We should see further KPEX announcements on the ADS space?

I will reveal that.

Good morning, sir.

It is, you know, very clear right now, the asset turn ratio in the ADS space is very clearly one has to have given. It is not confident that this number by 2031, the number we are going to be doing or targeting or achieving is going to be much, much higher. So the CAPEX will increase as and when what we have published as a confirmed order backlog, we see another Yeah, Arjun, just to add to

what Hari said, we are looking at, you know, full facility utilization and our, yesterday, in fact, at the end of the board meeting, we have taken an approval to acquire about 10 acres of land very near to the international airport, which is closer to the aerospace path. The way we see the momentum building up in ADS, I am very, very pretty sure that we will run out of space in this thing. So, we have requested, the board has consented purchase of the land. So, we expect that the accelerated growth will happen in this segment. So, that is the momentum and, you know, the indications that are coming from both Aerospace and Semicon.

Perfect. Sir, I know we don't break up this number in terms of individual components, but in the press release, we've seemingly indicated semiconductors doing exceptionally well. In terms of our expectations, say, for this year of 315 crores, have all segments contributed as what we had anticipated, or maybe semiconductor has done better and aerospace may just pick up in the quarters to come?

You know, I would say in whatever we have done in the years gone by, every sector or every division has done in line with expectation, but semiconductor being the outperformer because the expectation was also, you know, 63.3% was the growth in the aerospace business. In Semicon business, obviously, we grew from almost a zero base, but that has resulted in a huge surge, and even our defense business is up significantly from a small base. So, I would say, in line with expectations, all the three verticals are performed, with Semicon being the major portion of the growth driver, because that was an opportunity which came by, and we capitalized to the fullest.

Perfect. Just a final question is, on our core business, on the non-auto side to the U.S., essentially we were impacted by tariffs. Now that tariff rates are substantially lower, we have seen good growth this quarter. Is there any one-time element to this in terms of inventory refilling, or do you believe this is the run rate one should assume going forward?

No, there is no one-time refilling that has happened. In fact, we would see that because a lot of our, some of our clients, US-based clients had a rough, especially on the EV segment had a rough year. So, we would see that going forward, I think we will have a better update from the exports. Things have started looking more positive there. We are yet to see. The conversions, there are a lot of discussions that are going on, but decision is still not been coming forth. So, we expect that business-wise, there will be good momentum in the exports this year, but order inflows could take one or two more quarters to see the conversion that is happening.

And our plant in the U.S., has there been any further movement in thought process?

Yes, there has been movement in the sense that discussions have restarted with a little more energy. We were always very keen, but now they have seen an indication at 10% tariff. Buyers are excited for sure, but what they are waiting for is a little more period of stability that this tariff will not again swing up and down. But the answer is we are seeing some positive momentum in our discussions on the U.S. plant.

Sure. Thank you, and wishing the team all the best, and congratulations again on a great set of numbers.

Thank you, Ajil, for your support. Thank you.

Thank you. The next question is from the line of Nitin Arora from Access Mutual Fund. Please go ahead.

Hi. Thanks, Pritam. Just a first question you articulated on the EB search, what you have seen. Can you talk about it a little, because you are a supplier to, on the two-wheeler side, on the EV-specific player, as well as, you know, doing both ICE and EV, and globally, though, you know, the fastest-growing companies slow down, how are you getting the inquiry pipeline both on the export side on the EV and on the domestic side? That's my first question.

Yeah, I think on the domestic tubular front, we see a lot of strongly growing TV segment, as well as we have a lot of offering on a few of the very prestigious projects. Here, a lot of that has been going to be put into production. Apart from that, we have also got some traction into the energy storage solution where we will see the mass production starting this year into that segment for the same company.

And this was my second question on that energy storage side, which the same customer is, you know, pretty full in terms of his orders, what he's talking about in his calls. How big is this can become for you, energy storage?

And I feel that once we, you know, production is there, there are other opportunities to look other than the only customer that we have been working on. We just wanted to explore more possibilities once this is established. But one thing that we also are careful of, and these are large volume businesses in steel currently, But then we have some very exciting, very, very technology-intensive product in aluminum as well. So what is important is to make sure that we have our, you know, planning well distributed for the forcing requirement because we are also, you know, either a majority or a single source for a lot of our auto OEMs, And the growth trajectory has been quite strong. And we feel that going forward, forging could be a very, very, there could be a shortage as we see. Because last year, we have produced close to 120 million components. And we have already seen that this needs to happen in the next couple of years. So we are already on that program. So, while we are very excited about various other opportunities that are coming our way, we are also mindful of the fact that we need to, you know, focus on our expansion, on our forging division, which also requires, you know, long lead time for any CAPEX approval. So, this is going to be one of the key points as to how much more we can take in each segment.

And just lastly, on the complexity of the aerospace side, can you share some which component, because we have seen your components started with very complicity, but on the aerospace specifically, as the complexity or the sizing has increased, like the way you're talking about three meters, four meters, but any specific component where you see scale-up is happening pretty decent?

Yes, this is Hari. What we have done earlier, we have increased our offering both horizontally as far as complexity is concerned. We are now winning business. We started off with cargo, then lighting, then we are making parts for landing gear, engine casing, structural parts, very limited period by getting ourselves. It's happening in, yeah, and also for a large engine manufacturer, started engaging with us. That is one of the latest addition and a very prestigious customer to our customer list. We have a package for engine parts, for the engine blisk and other parts, And the real driver here is coming from the increased production of aircraft at both Boeing and Airbus. And in their largest selling platforms, like the E350 and the 737, there end up presence in many, many more components.

But Hari, engine bliss, what we have seen in gas turbine, this is the same thing you are seeing in the aerospace now. Okay, and does that the whole part is coming to you? And, I mean, I'm just asking this because India, we have not seen too many places. People are doing for the gas turbine. We have not seen too many for the aerospace so far. You can correct me on that. If you can throw some light on that aspect.

Yeah, see, the BLISC, you're right, probably is not done by anybody in India at this point of time. You know, an opportunity to tell on the capability in a small way by, you know, offering to machine a capability which was, you know, they were really surprised to see what we delivered first time, right? And now, the opportunity is already being awarded as far as machining of the full Blisk is concerned. The numbers and the study and evaluation, but right now, the focus is to deliver the fully machined Blisk in about two months' time. I'm confident that is going to open up many, many doors, not in the Blisk area alone, but once the word goes around that we are in the Blisk segment. You know what I mean when I say that, you know, it will open a lot of many opportunities in the very complex machining space.

I got it. That's why I was asking that, yeah. Yeah, please go ahead, yeah.

There is cold chamber and hot chamber. So, we are working on both cold and hot chamber. We are working on cold chamber, which is with stainless steel and with hot chamber, it is inconel. It is a very, very complex missioning with almost 600 diameter, it's a thing. Our chief engineer and CMD, Shekhar Vasanonli, is totally involved in this project. He is the one who's, you know...

In fact, honestly, our conversion from an inquiry to a confirmed order is 100% due to his involvement and what he brought to the table in record time as far as precision engineering capabilities went.

Great to hear that. Just lastly, on the semiconductor, sorry if I'm taking this question, name a client here, but what we are seeing, and I just want to know from your thought process, is, you know, this applies to your semiconductor client as well who are listed. How is the situation with you, especially on the semiconductor, the other one as well, the door opening with the other bigger, you know, because there are two only, who are the largest? Just one on that. Second, because earlier we have seen in a semicolon, the EMS content is pretty high. How is the content moving to you when you have already executed things for them? These two questions.

Okay, I'll take the first point first, which is cleaning capacities, blocking, like, things that, you know, we are seeing...

Hello, from Katamaran, please go ahead.

Hello, sir. Thank you for this opportunity. Sir, I had a couple of questions. One is on the automotive side. Is it fair to assume that, like, the American customers, like, Ford, Delantis, GM, for whom we are planning to supply this connecting rod, Can that be of the potential of like 1 lakh per month for each of these customers?

It's grossly understated. There is opportunity sizes would be to the tune of 2-3 million connecting doors per each of them for their couple of programs. Definitely, the opportunity sizes are quite large.

And sir, if you look at the domestic dealer segment, like this quarter, 4Q, Bajaj and TVS, they grew like 28% and 20%, whereas for us, motorcycles and scooters were just 10% and 14%. So, can you help understand where the disconnect in these numbers are?

Basically, our representation does not represent the number. It is the revenue that we represent, and there you would look at the number of vehicles. I don't think it is correct, because, see, if I look at what we have grown in Q4 in Bajaj, on a year-on-year basis, it is 29.9%. TVS, we have grown by 13.3, HMSI, yeah. So, all this, we have been growing much compared to the market, but, of course, it is not a direct correlation to the number of vehicles, because we represent ourselves in revenue and customers represent in terms of number of vehicles. So, but I can very safely tell you that with all our major customers, we are working on programs to increase our share of business, to increase the number of component offerings, and also look at opportunities to take the outsourcing opportunities that are available with a few of the key customers.

And we are making very good progress in these discussions.

In fact, we have recently, as you know, that we have commissioned a second plant in Pantanagar. It is totally focused on two-wheeler expansion, and we have taken up a newer place in Naumanasar. We have just signed up. It is on a lease, long-term lease. That we want to also focus on both passenger vehicle and two-wheeler components. So, for us, this segment is a strong growth driver going forward as well.

Certainly, in domestic MHCV, as you had mentioned last time, we are not present. But increasingly, we are getting some order from one model of Tata Motors or maybe in future with Ashok Veland. So, based on all the offerings that we have, sir, what can be our content per vehicle in MHCV?

See, look, the automotive landscape itself is changing. Today, we are looking at from a pure ICE vehicle, there are a lot of people moving towards hybrids and then flex fuel engines. Then I think we also are looking at an opportunity to work on other offerings that are now taking. So for us, content per vehicle, because we have offerings on only ICE vehicles, we are working on hybrid platform. Depending upon which platform that we are working on, the content per vehicle will vary. So, and now with newer Nichidai programs that are going to get added on to our core products, I think it is a very, you know, changing scenario. So, I would say anywhere between 5,000 to 10,000 rupees per vehicle is what we generally target per vehicle. So, that is what we look at.

But even on the commercial vehicles, or that can be...

Domestic commercial vehicles, we are only working with Daimler and Volvo Aishar. For us, those two are the major in domestic vehicles. We are yet to penetrate other domestic commercial As I said in my previous question also, we are focused on distributing our resources into margin ROC businesses. So that is where our focus is on. So currently, we are looking at passenger vehicles exports, passenger vehicles domestic, two-wheeler exports, and ADS as a prime revenue. We are also focused on getting stronger on agriculture. So these are the areas That's where we are working on.

Understood. Thank you very much.

Thank you.

Thank you. The next question is from the line of Mukesh Taraf, from Everdesk Park. Please go ahead.

Yes, sir. Good morning, and thank you for the opportunity, and congratulations on a good set of numbers. Just focusing on the domestic ICE business, especially on the Tuvula side. I think last time you had mentioned about the outsourcing opportunity in the sense of OEMs, which are currently insourcing, especially on the branch at assembly, et cetera. Now that your plant expansion is done, the PUNC number 16 plant, and you're looking at the PUNC number 6 expansion also, are we kind of at a stage where we can say that this F27, we will see benefits of this outsourcing opportunity? And probably the probability there of adding, say, new large OEMs, which we are not working with right now in tubulars. Could you give some sense there?

Absolutely, absolutely. We believe and we are confident in FY27, the conversion will happen, and there will be, you know, activity on line installation and probably even production starting. Discussions are on. Discussions are progressing very well, are in the very, very final stages. Details are being worked out as we speak, and the answer to your question is, yes, in FI27, we will see, in Pantanagar and Manisar, we are setting up additional capacities for grantshafts, for OEMs, with whom today we have a relationship, we don't have a relationship. We will see both happening this year.

For the expansion, what Hari mentioned is like Kanthanagyan and Manisar, but we are also expanding our pool with what we are trying to encourage in the market. From last year, we have already started to do almost all the lines, whatever coming in as new lines are fully automated. To the extent that if we really compare today's manning ratio to new lines, we are running with only 20% of manning and 80% of automation or abutic line, number one. Number two, having said this, and with the growth, what we are talking about, our machine building plant is heavily, you know, the order book, in-house machine building plant is like I booked for almost next one year. And with all, we are also searching and work is in progress for some strategic partner for automation. We do have our own automation team, but we feel the kind of expansions what we are talking about, our own pace or speed for doing automation won't be enough. So that also work is in progress.

Great, great. Good to share that. And secondly, on the Nichidai partnership, any progress made there, and maybe it could give some sense on the opportunity size, be it, is there a possibility of captive requirement for Nichidai itself, which we can supply from the JV as well as external customers? So, some sense there would help.

Yeah, yeah. Let me just try to briefly cover the points what you raised. There are no capture requirements from Nichidai because Nichidai is a technology provider, point number one. Point number two, the progress, what we have made is the introduction to the customers is happening or happened in many cases about this joint venture. Our rescue has been generated. Discussions are going on. We have responded. We hope the facility is getting ready, and a machinery installation should come in September time frame. Normal process will follow of the sample execution and production.

Mukesh, a very important thing is that while we have customers who are interested, the technology is definitely, Nijidai technology is well known in the automotive segment, but it will be, I think the acceleration will happen once we have the facility in place. So I think that is very important that we have also been only meeting the customers And then taking them through what we want to do. While they are all quite excited, I think everything depends on how fast we can put the facility in place. So we are working on getting this up and running towards the third quarter of this financial year.

Just about that, I mean, what's the kind of capex we are pencilling in this GD? Sorry to interrupt, Mr. Kesh.

May we request you to return to the question.

This year we have kept about this year as our contribution towards the JV. We have already procured one forging press which has come into India currently as a part of that CAPEX. So, we expect that this year, Santera, from our side, we may have to invest about 50 crores. So, that has already been as part of our overall group, KPEG.

Thank you. The next question is from the line of Siddhartha Bera from Nomura. Please go ahead.

Yeah, thanks for the opportunity, sir, and again, congrats on a great set of numbers. Sir, first question is on the PV business. I mean, after a long time, we have seen a very strong growth coming back here, And you talked about a good order or revenue pickup in the European markets as well. So some color there, how sustainable it is, how you are seeing the growth coming, and because last year we have a very low base as well, where do you see the PV segment going and any more cluster customer additions are you expecting in this geography?

Yes, that, see, the programs that were actually stalled both in North America as well as Europe have started picking up, and we also have got some indication that there could be some more upsurge in the requirement. So, we are working closely with, see, everything is very fluid as of now because of the ongoing war situation, the price escalations that are happening, I mean, the fuel prices have significantly gone up. I don't know how sustainable the demand will be for across the geographies, but as of now, currently, we see a good steady demand flow from all our overseas clients because all the new programs have started, and we are quite hopeful that this will sustain. Okay. Even in domestic OEMs, our largest Marathi, we see a lot of increased, you know, upsurge in the requirements that have been indicated. In fact, we are going to expand our lines for both Tata Motors as well as Marathi. We are hopeful that we will also be able to add a couple of more OEMs this year into that. So, we are working towards that. So, with that, PV should be a very continued momentum into this year as well.

Understood, sir. So, second question is on the ADS. So, we have talked about a very strong traction on the revenues. And with this, I think we will probably continue seeing a very strong increase in the percentage share of this segment as well, maybe from 10% this year to 50-20% in the next two years. So I just wanted to understand how does it impact our working capital because we did see some increase this year. So how is the requirement for some of these businesses and how do you see that changing for us at a company level in the next few years?

Yeah, Vikas, sir. So, that's a valid question. And we have actually, if we break up our business into two parts, one is the auto segment and one is the ADS segment. In the auto segment, we've actually improved our working capital ratios this year because of the ongoing initiatives that we've had, both on inventory as well as on retrieval side. But ADS, major growth, partly because of volume increase and partly because of the new segment getting added. So a new set of working capital has been built up during this year. Because of that, you would have noticed the pressure on the operating cash during the current year. We are down from 12% last year to 11% this year. We believe that this is the initial capital build-up in this segment. As we move forward, as the flow becomes more, we have opportunities to further improve the overall or optimize the working capital.

Siddharth, just one more point to add here, what Vikas said. There are opportunities in areas where, especially in the Semicon space, where the entire surge has happened probably in the working capital cycle, the customers are working to localize a few component raw material sources, and that is underway. And the moment that happens, and we are directed to buy from that source, there will be a nice significant impact on the reduction.

Voting periods will come down significantly. Lead times will shrink, and that will help a lot.

Okay, great, sir. So, last question is on the labor side. We did see a lot of inflation coming up in some parts of the country. How do you see this affecting you? Do we expect any meaningful cost inflation there as well, going ahead, or not much from our side?

As Rahul explained, we see a lot of pressure on availability of both skilled, semi-skilled labor across geography, across the different things. So, we are trying to increase our diversity. So, one of our second plant in Panthanagar is intended to be 100% women employed. Today, we have about 65-70% women employees there. ADS, we have increased significantly the number of women employees. While we are working towards more and more automation, I think this is going to be one critical component where the availability and the attrition of the labor workforce is going to be one of the key challenges in this year for our execution efficiency. So, we are working on various, see, we have always been above minimum wages, so that pressure for us was not there, but then for us, what is important is that we de-skill the operations and do as much automation as possible, while Rahul and team are working on improved efficiency there. What we are doing in aerospace, where we have opportunity for multi-manning, we have introduced kind of different, you know, skill-based incentive system to handle multiple missions and multiple components. This should ease pressure on the thing. So there are various schemes through which we are trying to motivate people to do the thing. But labor definitely is going to be a challenge.

Thanks a lot, sir. Very helpful.

Thank you, Siddharth.

Thank you. The next question is from the line of Nishant from Prem J Invest. Please go ahead.

Thank you. My compliments to you and the entire team, Mr. Priekam, fantastic set of numbers and performance here. My question was actually on one other company that you have in your fold, MMR FIC, which is obviously very close to you. I just wanted to spend a minute to understand, is there a bamboo shoot waiting to happen in this company? How has been the performance there? You've obviously been sort of taking a stake higher there in this franchisee as well. Thank you so much. I just wanted to invite your thoughts on this particular entity.

Thank you, Nishan. This has definitely been one of the strategic investments which is also very, very, our chairman has been quite interested in because of the deep technology that has been the thing is also very important that we are working with the Make in India program very, very deeply in this company. From the time that we have invested in this company, we are very clear on the path that this company is going to take. It is definitely a long haul. It is not going to be a short-term thing because there are multiple agencies, government agencies, aggregators that are involved in this business. But as a company, we have got a lot of confidence in the abilities of the promoters and the way that their products are going on. With that confidence, we have already increased our stake. I think by end of, you know, with the conversion of CCPS for the year ending FY26, we should be upward of 45 percent. I don't know the exact percentage we'll come to know once the balance sheets are finalized, but I'm sure that it would be between 45 and 50 percent. So, with that, we also see a lot of opportunity here. The opportunity sizes are large. As you rightly said, there is a lot of expectation and also time and effort and energy is being put into this business. We are quite confident on the long-term opportunity that this business has got. I can't talk a lot on the products that we are working on because it is quite sensitive in nature. So, but we believe in the story. We have continued to invest into this. We are working with them as to all the support that is required. We are extending that.

Thank you.

This is fabulous what you guys are doing.

And thanks and wish you a very well potential. Thank you. Thank you, Nishant.

Thank you. Ladies and gentlemen, we'll take the last question of the day, and I would now like to hand the conference over to the management for closing comments.

Thank you very much, all of you, for this opportunity to interact with all of you and present our story. With this, I would like to conclude the call. I know that we have had a little break in the call, so we lost some time. So, if you have any further queries, please contact SDA or Investor Relationship Advisors or any of us directly, and we will look forward to meet you and engage with you at an appropriate time. Thank you very much, everyone, for joining us today on this earning call. Thank you. Thank you.

Thank you. On behalf of Sanseira Engineering Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.