Pricol (NSE:PRICOLLTD) Q1 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to the Pricol Limited Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I will now hand the conference over to Mr. Wangi Jain from Valorum Advisors for opening remarks. Thank you. Anne, over to you. Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Pervangi Jain from Valorum Advisors. We represent the Investor Relations of Pricol Limited.

0:48 On behalf of the company, I would like to thank you all for participating in the company's earnings conference call for the first quarter of the financial year twenty twenty seven. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decisions. The purpose of today's earnings call is probably to educate and bring awareness about the company's fundamental business and financial quarter under review.

1:35 Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Vikram Mohan, Chairman and Managing Director Mr. P. M. Ganesh, Chief Executive Officer and Executive Director Ms. Madhura Mohan, Executive Director, Customer Relationship Management and ESG and Mr. Priyadar Sivastiya, Chief Financial Officer. Without any delay, I request Mr. Vikram Mohan to start with his opening remarks. Thank you, and over to you, sir. Thank you, Purwangi, for the introductions. On behalf of my colleagues in this conference room, namaste, ladies and gentlemen, and welcome to the Q1 earnings call for the financial year ending 03/31/2027.

2:31 On a consolidated basis, our revenue from operations has been about INR $10.83.58 crores with an EBITDA of INR 123.69 crores with an EBITDA margin of 11.41%, resulting in a profit after tax of INR 67.02 crores with a PAT margin of 6.19%, resulting in EPS of INR 5.50 per one share. All our performance details have been uploaded, and I hope all of you have had a chance to see the same. Our revenue from operations for in comparison to the same quarter for the last financial year has grown by 23.46%, which has been aided by strong industry growth as well as our new product introductions, which has helped us with this growth.

3:36 The EBITDA has faced some headwinds, as I had already indicated earlier. Our EBITDA on a quarter on quarter comparison between the same quarter for FY 'twenty six has grown by only 21.42%. We could have grown by a much higher percentage compared to our revenue, but there have been multiple headwinds caused by the West Asia prices. Polymer prices have gone through the roof. LPG prices have gone sky high. Freight costs have increased. There has been surge pricing. There has been premium pricing. And minimum wages in three states that we are operating have also gone up very sharply because of the government intervention in the first quarter.

4:27 While these are not lost earnings, these earnings are delayed and will be recovered through indexation, not entirely but a large part in the corresponding quarters as the automotive industry typically has indexation for things like ForEx commodity, which are indexed either quarterly or half yearly. We are endeavoring to make everything quarterly indexing. So by the next two quarters, we will recover whatever earnings that we have lost this quarter on account of all these increase in costs and headwinds. Our PBT for the similar period against quarter one FY 'twenty six versus quarter one FY 'twenty seven has grown by 32.23% and the PAT also has grown by 34.34%.

5:26 In terms of industry outlook, demand continues to be robust, but the resumption of the war in Iran and those neighboring regions will continue to have an impact on the rupee, which is at an all time low against the U. S. Dollar. And since we are dependent on a significant amount of imports of electronic child parts for our business. This will continue to hamper our profitability, not the top line, which, of course, we will recover in corresponding quarters. Crude oil prices have also firmed up. Prices are increasing and expected to further increase in the coming quarters because of the ongoing crisis.

6:15 Freight rates are also at a high and expected to remain high for the next few quarters, at least from the shipping providers, the intelligence provided by them is at least for the next four quarters, shipping rates and freight rates, both inbound and outbound, will continue to be very high. In addition, raw material prices other than basic raw materials like aluminum die casting and polymer, even for memory controlled devices, which we are dependent on heavily, prices are increasing very, very sharply quarter on quarter because of the huge demand created by the AI revolution happening across the world. We are mitigating some of these increases through BAV, value analysis and value engineering and productivity enhancement activities and also requested customers for offsetting part of these costs.

7:09 But some degree of costs will be unrecovered and there will be continue to be impact on EBITDA till all these global crises resolve and there is some semblance of normalcy returning to the world. While we endeavor and promise to continue to grow the business with our revenue, EBITDA, we believe, will continue to remain under pressure for the next couple of quarters, still normalcy returns. As I mentioned, it is not lost earnings but delayed earnings, which will come in the subsequent quarters. With this, I would like to move to the question answer session. As a matter of protocol, we would like to ask people to align in the question queue and restrict yourself to one question per person.

8:03 If you have more than one question, we request you to rejoin the queue so that everyone is given a fair chance to ask their questions. Thank you, and over to you, Porkwang. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Call. Participants, in the interest of time and fairness to others, we request you to restrict to one question per participant and rejoin the question queue for follow-up questions.

8:49 One moment please. We take the first question from the line of Chandramauly Muthaya from Goldman Sachs. Please go ahead. Hi, good evening and thank you for taking my questions. First question is just around the announced demerger. So I just want to understand the thinking behind proposed demerger and also trying to understand sort of at this stage, I think we have been very successful in instrument clusters, which has been the core business. Sort of the combined entity does give us multi product exposure, but through the demerger now, the core business again becomes sort of a separate entity with a single product exposure. So just trying to understand thinking behind the decision to demerge the company.

9:40 I'll just quickly pass back on Thank you, Mr. Udaya. This has been something that we have been debating at a Board level and at a strategic level for over two years. The nature of our product in our driver information system and connected vehicles business is changing very rapidly. The human machine interface in the vehicle, be it a two wheeler or a four wheeler or a commercial vehicle, the climate control is integrating, the infotainment is integrating, the driver information is integrating and the technological change is becoming very, very rapid. For Pricol to continue to maintain its lead in this space and to take on the multinational competition, we will be required to invest large sums of money and also bring on board potential partners in order to help us strengthen this business.

10:47 When all the businesses are merged in one company, we found it very difficult to attract the right kind of investors because each of the business has a different sort of an investment appetite. So both to attract investments and because we didn't want to go with extensive borrowings, we wanted a judicious mix of debt and equity and also to attract certain technological partners that we will be forced to onboard in order to maintain our lead in the business. After multiple discussions at the Board level and with strategic advisers, we took this decision to demerge this business to give it a lot more agility in order to be able to raise money as well as look for partners to keep maintaining the lead in the business.

11:40 I hope this answers your question, Mr. We take the next question from the line of Shivam Kabra from Carnellian Capital. Thanks for taking my question. So basically in the both the Lemur's business, how we are expecting the growth rate to be on the three year basis line? And if we are looking for any global partners. Priorly also, we had a relationship with DENSO and JENSO, but that didn't work out well for us. So now what gives us the positive signals that this time, it can be better for that?

12:32 TENSO was a very, very old relationship, which started in the '80s and '90s when Pricol lacked technology altogether, and we needed it. Today, Pricol has technology for the driver information systems space. But to integrate things like infotainment, we are not an infotainment company or climate control not the climate control, but climate control, the control systems. We need to integrate all of that in order to be a credible player. So we are not hurrying to look for a technology partner. We are keeping our eyes out. We are evaluating people to fill gaps in the technology or perhaps to give us larger scale to be able to cater to a global market.

13:22 We may have to onboard a partner because many of the Indian OEMs are also going overseas. And for us to be awarded programs, even for international OEMs, they need international presence through a partner. More importantly is the capital needs of the business is going to be high in the next couple of years, as we have stated in our demerger document, why we are going for demerger. In order to give us the flexibility to seek capital and technology partners, both for technology and for market reach, we felt it was best to demerge this business. In terms of growth, we will continue to maintain this growth clip that we have been maintaining in the last two years in the coming years also in the driver information system place in the space.

14:17 In the ACFMS business, we are hoping for a larger growth clip because of our growth rate, because of the introduction of new products, first of the LOAs have started coming in and productionized. In the polymer space, the growth is going to be muted, as mentioned by me in the last call, because of lack of capacity, not lack of business. We have won a lot of business for which we are creating capacity, but that will take the next nine to twelve months to mature, after which that business also will maintain a very healthy 20% plus growth rate. Thank you. We take the next question from the line of Jatin Chawla from RTL Investments. Please go ahead.

15:07 Yes. Hi. Good evening and thanks for the opportunity. Given the RM situation in the quarter and also given your cautionary stance post the 4Q call, I think you've done a fantastic job in limiting the decline only to 160 bps on gross margin and with control on other expenses largely maintained your EBITDA margins. So how were you able to do maintain the limit the decline on gross margins to only 160 bps during the quarter? And on both gross margins and EBITDA margins, how do you see the outlook going forward, especially in the context that you mentioned that you will get some price hikes from your customers going forward? Ideally, Mr. Goel, I think we should have done at least another 1.5% to 2% overall margin would have been better because the fixed costs have got amortized on a larger top line base. In fact, the polymer business probably took a bigger impact than the driver information systems business.

16:07 And with the prices being corrected, at least about 75% of our revenue, Q2, we will get some indexation, and the balance will go into Q3 because of the half yearly indexation, which also we are trying to improve. It will help. But the minimum wage cost increase of about approximately INR 21 crores per annum because of the government regulation, we are still navigating with the customers to see how much we can absorb and how much they are going to absorb. That is a work in progress. So definitely, we can see improved margins happening in Q2 and Q3, provided the rupee doesn't further weaken because there are some indications being given when we talk to the market that the rupee could touch three digits against the dollar And prices could further increase and crude oil prices also could go back to the 90s.

17:04 So it's anyone's guess. If things remain as it stands, we believe at least another percentage half of EBITDA is still there in the system to be had through price increases and indexation from the customers. We take the next question from the line of Preet from Incred AMC. Please go ahead. Yes. Thank you for the opportunity and congratulation on good set of numbers. And my first question will be on lines of margin upfront, which you recently mentioned that if everything stays same where it is now, what will be our annualized margin level that we can expect? Our ideal margin level, if normal for normal operations should be, as I've always maintained, between 12.5% to 13%, which is the steady state margin so that we are not losing business, maintaining our share of business and because if we endeavor to increase our margins beyond that, then competition will undercut us. So 12.5% to 13% margin is what as I've always maintained is the blended margin that is right for our company to maintain our share of business. And that's what we are endeavoring to get quarter on quarter. And that's what I said, we have lost about 1.5% margin this quarter in terms of EBITDA.

18:35 Thank you. We take the next question from the line of Hitesh Goel from Origin Capital. Please go ahead. Thanks for taking my question, sir. Sir, just wanted to understand what if you can give us some sense on the growth in this quarter on a Y o Y basis in the ACFMS business and DIS separately? And also in two wheeler segment within DIS, what was the growth in this quarter? This is my first question. I would request our CEO and Executive Director, Ganesh, to answer that question. There are three parts to the question. One, what is the growth of DICBS business for this quarter? What is the growth of the ACFMS business for this quarter? And specifically, what is the growth of two wheelers for this quarter? So Ganesh will answer that in three parts. Yes. The growth of both the DACVS and ACSMS has been around 25%.

19:29 Both of them have equally grown because we supply to the same set of customers, both these vertical of products. So the growth has been the same. The second part of the question was what is the two wheeler growth. Actually, we have outperformed the industry in terms of the two wheeler growth. The industry during the first Q1 has grown by about 23% and the Pricol has grown by 28%. That is primarily because, as our Chairman explained, it is because of multiple new product introduction during Q1. And is there any other question which I have not answered? No, these were the three questions. Great. Thank you. Thank you. We take the next question from the line of Sahil Jain from Ashwa India Holdings. Please go ahead.

20:23 Yes. Hi, sir. Thanks for taking my question. Just want to ask, sir, the Ministry Ministry of Code and Transport, I will have like relaxed the norms on EVS and like for our bikes to use more of. So how will this impact our business? We are not able to hear you, Mr. Jain. Am I audible now? Yes, please go ahead. Yes. So the center of Ministry of Coal of Transport Highway, they have relaxed the norms on ABS and CBS. So bytes can now use more of CBS in their system. So I just want to understand, sir, how will that impact our ACS and S business? As I mentioned in earlier calls, ABS is not something that we are focusing on at this point in time. It is something that is in the future roadmap of the company. So that will not have any material impact for the next two years on our company.

21:26 We take the next question from the line of Bhavya Vyas from Ant and Bees Investments. We are just not able to hear you. Your voice is... There's a lot of echo, mister.

22:18 Mister, Yes. What I would request you to do is please use your How is it? Sir? Yes. Go ahead. Hello? Yes. Go ahead, Mr. Pias. Hello? Ladies and gentlemen, since there is no response, we'll move on to the next question, which is from the line of Rajat Agarwal from Nilgiri Advisors. Please go ahead. Yeah. Good evening, sir. My question is related to the capital expenditure that you shared in your last call. Could you give a breakup of the same between the two proposed entities and the timelines as in how much will be incurred in FY 'twenty seven and FY 'twenty eight?

23:12 We have embarked on a INR700 crore overall CapEx cycle across all divisions of the company, not just in the next twelve months, but over the next eighteen to twenty four months. About INR 400 crores of this is reserved for the polymer vertical where we are creating a lot of new capacity to cater to the existing business and also because we have to move out of the TVS campuses in which we had a lock in period. And about INR 300 crores is for the other two verticals of the company. Approximately INR 150 crores to INR 180 crores will be for the DICBS vertical and about INR 120 crores for the ACFMS vertical broadly speaking.

24:02 Thank you. We take the next question from the line of Subam Bhatra from Ambit AMC. Please go ahead. Congratulations on a good set of numbers. I wanted to ask about how is our business with Honda ramping up? And what kind of wallet share are we looking from them in FY 'twenty eight? I will request Ms. Madhuram Mohan, our Executive Director, who handles our customer relationships and especially Holdar to answer that question, please. Yes. Thank you for the question. Our business with Honda at the moment is quite robust. We recently won a good share of business from them for our plastics division as well totaling to a very handsome sum. So our current business at a group level is quite healthy. As I mentioned, we are also exploring new opportunities in both the DICVS and the ACFMS verticals, and we see them as one of our strategic growth customers in the upcoming future.

25:00 In fact, plastics, we have even put certain business on hold. Honda wanted to give us more business than what we wanted. But because we don't have the capacity and it's going to take some time to create the capacity, we said we will take it in phases. But Honda is going to be one of our high value customers and high growth customers in the next three years. Thank you. We take the next question from the line of Naman Golacha from Nirmal Bank Securities, BMS. Please go ahead. Thank you for the opportunity, sir. So my question is related to the cluster business. We are seeing there's a reward towards the e cockpits and the premiumized and higher end vehicles.

25:48 So where are we positioning ourselves in this e cockpit business? And do we foresee any orders coming in or potential OEMs that are working to with us for this e cockpit business? Mr. Pricol, let me just say, the e cockpit in a two wheeler is probably not going to happen in because it's there's no real estate on a two wheeler to put an entire e cockpit. Has Pricol developed an e cockpit and proved it to the customer? The answer is yes. The absorption of e cockpit in the Indian overall automotive industry space is going to be very less. It's going to be a very small amount that is happening.

26:33 We have shown the proof of concept to our customers and they have accepted it. But I must admit that some of our multinational competitors will have an edge over us in the e cockpit because of the global buying advantages. And we will continue to focus on two wheeler and commercial vehicle and off road vehicles where the adoption of e cockpit is not going to be there. But having said that, we have developed a world class e cockpit and technology shows shown it to our customers to make sure that it is available as part of our portfolio. Thank you. We take the next question from the line of Pricol Limited from Edelweiss Public Alternatives.

27:22 Please go ahead. Yes. Thank you for taking my question. My question is on the DIS business, which you plan to demerge. You mentioned about the technology tie up, right? So could you just help us understand as to when you think about increasing the value add in this segment or moving into passenger vehicles as well, what is it that we can do in house? And where is it which where we will require the technology partnership, right? And when I think about some of the technology leaders, they have tie up of some sort in India with some of the other players. So are there very few technology partnerships which are left for us to be taken into consideration?

28:12 Is that how the industry is? So just some sense on the limitation of technology partnership and what can we do in house and what will require technology partnership for us to go ahead with? I think that's many questions rolled into one, Mr. Sandhu. But for the benefit of the larger audience, let me answer that. As I mentioned earlier, not just on this call, but in many earlier calls, the human machine interface in a vehicle where the driver or the passenger is talking to the vehicle or reading information from the vehicle is not just restricted to speed or fuel level or indication, It is also integrating the infotainment, which is becoming a very important part.

29:00 And controlling the air conditioning is also becoming a very important part. This is where we will perhaps go for some technology partnerships or technology tie ups because for us to do a ground sub development will take many years. It is not impossible, but it is going to take us many years, and we may miss the bus. That's point number one. Point number two is today, Pricol has a disadvantage in we have only primarily India and Indonesia based manufacturing. Today, many models are being launched globally. So having a partner, not a technology partner, but a partner will help us offer the same platform, let us say, for example, Mexico is now emerging as a very large market.

29:55 And Honda has now started talking to us for not just business in India but also business overseas. Now will it make sense for Pricol to go and set up a plant in Mexico till the volumes reach maturity? The answer will be no because it was not going to be prudent for our return on investment or return on capital employed. Certain markets in Europe, we are being asked for products and local production, especially now with the era of tariffs. So it is prudent for us to have a partner who can manufacture our product and supply it in a geography without us having to invest in those geographies. So it is a two pronged approach that we are looking at, one for technology and for one for ensuring that our share of business with our critical customers are being maintained. Because one thing, Indian two wheeler industry probably has reached the highest level of maturity in the world.

30:55 Many other parts of the world are now Indian technology, what has been developed on a Honda two wheeler in India or a Suzuki two wheeler in India or a TVS or a Bajaj or a Hero, whatever it may be era, it is now percolating to the other countries in the world. And since we want to maintain our leadership position in two wheelers globally, it is important for us to have certain local partners in certain geographies in order to be maintaining our market share, right? And so one is on the technology side and one is to cater to certain markets and geographies where we don't have geographical manufacturing. Thank you.

31:44 We take the next question from the line of Pricol Limited from Stallion Asset. Please go ahead. Hi, sir. Thank you for the opportunity. I just wanted to know what sort of value addition in terms of product portfolio are you planning to do in the Precision Products division? And also what would be the ROC of the ACSMS segment for the company? Because the Precision Products or rather the Polymer division, but we have also now developed some high technology products. We have done some segment first, especially now for the new Tata Tiago. We have done some very interesting products and saved money for customer also. We are moving up the value chain. But having said that, we are setting up a center of excellence in polymer technology as we speak, which will completely become operational by May 2027.

32:41 But having said that, we have already started investing in product development, new product thing. We have invested in two ks molding, which is one of the first. We are now going for self healing plastics. This is a very interesting technology where a painted part or a polymer part with if there is a scratch, you don't need to go for painting just by application of heat, It will self heal and the scratch will go away. We are also looking at fiber reinforced plastics, which will replace metals and give almost the rigidity and the flexibility of a metal part in order to lightweight. So these are some of the things that we are looking at. The ROCE for that business will remain muted because we are going through a very heavy investment cycle for the center of excellence.

33:32 We are backward integrating by building our own tool room, which didn't exist, which is giving us advantages in acquiring customers, especially like Honda, Yamaha, Royal Enfield, etcetera. And also, we are putting up new plants. We have a state of the art plant coming up in Khuzur. We have a plant that is getting commissioned in Mysore. We have a plant that is greenfield that is getting commissioned in Aurangabad. We have a plant that is getting commissioned in Gujarat in Sarand for Honda. We have a plant that is just starting construction in Bibadi in the NCR region to cater to the northern customers. Because of this heavy investment cycle, ROCE will drop and then get back to a steady state of between 1618%. Thank you.

34:22 We take the next question from the line of Malik Itindrasingh Chaudhry from Monarch Network Capital Limited. Please go ahead. Hi sir, am I audible? Yes, please go ahead. So thank you for giving me the opportunity. So I just wanted to know the revenue contribution of all the three business vertical? And any update on adding a new customer in the PV side? On the PV side, we have now engaged with Mahindra. Our customer acquisition has been very robust in the polymer business because earlier that business was owned by the TVS group. And so the other two wheeler customers were the market was not open to us. So we have now acquired quite a few two wheeler customers in the polymer business. We have acquired business from Arthur.

35:16 We have acquired business from River. We have acquired business from Simple Energy. We have acquired business from Rapti. We have acquired business from Honda. We have acquired business from Royal Enfield. We are just on the final stages of acquiring business from Yamaha. A few other customers we are also talking to, but it has to be profitable. So we are only going after profitable business. For the switches business, which was the recently launched business, we have acquired our first business from Suzuki and engaging with few other two wheeler makers. I would request on our ACFMS vertical, some of the new businesses that we are in negotiation and enquiring. I will request our Head of Customer Relationship Management Director, Madhurat, to answer that, please.

36:03 SRINIVASAN Yes. So we're actively working on acquiring business for all of our product verticals within the ACFMS business. As our Chairman mentioned, we've received the first business for our switches division, which is a very positive indication and we plan on growing that particular vertical very significantly in the upcoming years. We have also started production on disc brakes for one of the major Indian OEMs as well, which is again a positive sign for that particular division and the future products that we are planning to grow there. We have also been discussing some export businesses with some of our larger customers in the European and American regions as well. So we are very positive about the growth of that division. And in the DICBS division, we have just started engaging with Mahindra to make an entry into Mahindra, which we were not reserved to present. It's early days as yet.

37:02 We take the next question from the line of Kush from Electrum PMS. Yes. Thank you for the opportunity. So my question was regarding our growth rates. So considering the new products that are in pipeline, the new business that we have won. So like you mentioned that the plastics business, our earlier target was to, I think, double the revenue on the base of 25 in the next three years. So considering there are capacity constraints, although we have orders, so how does that change? Is it still intact or pushed a bit? And accordingly, similarly for the DIS and the ACFMS business, also if you could elaborate more on the growth rates and what are we expecting over the next maybe three years? The plastics business, I said we will... When we acquired the business, whatever numbers we had in FY twenty five, which we just had one and a half months of operation, We said we will not just double, we will do 2.5x will be our endeavor to achieve.

38:10 And with the capacities we are creating and with the business pipeline that we have, my team and I are very confident of achieving that number, and that is not going to get pushed out because all the plants are coming up on schedule barring a month or two delay because of steel supplies or monsoonal unseasonal rains, etcetera, there has been no significant delays. In terms of the DICBS business, we've continued to maintain a delta over the market growth rate of at least about 5% with the new business that we have acquired. In the ACFF business, we don't want to settle for just a 5% growth rate over the market. We are aiming for a 10% growth rate over the market to ensure that, that division grows aggressively as we have introduced new verticals like switches and displays.

39:00 And the next focus is on exports, which we have started working, which will start yielding results in the next two to three years. We have already won certain committed volumes from certain export customers also. Thank you. We take the next question from the line of Pricol from Incred AMC. Please go ahead. Thank you so much for the follow-up question. My question is on the line of BI business. If you could just give some idea on the industry currently how is the DFT penetration going on across segments like two wheeler PVCD? And what would be our market share in each of the segment, if you could give some highlight? Audible, Mr. Pricol, can I request you to ask your question again? There was a lot of echo and it was muffled.

39:52 Sure, sir. My question is on the line of Lihai's business. What would be our market share across signals? And what would be the TFT penetration across the segments, two wheelers, CV, CV? Okay. That's multiple questions folded into one. Number one, what is our market share in DIS? It is segment wise, it is different, okay? In the two wheeler DIS business, we are the largest in India with between 35% to 37% volume share. In CVs, we have almost a twothree market share to CVs and off road vehicles. In passenger vehicles, we just have about 8%, 9% market share because at this point in time, we are only dependent on Tata Motors, where eight out of 10 Tata cars are coming out with a pre call cluster.

40:46 In terms of TFT penetration, I would request my CFO to answer. TFT penetration, especially in the I'm sorry, my CEO, Mr. Ganesh, to answer, TFT penetration in the two wheeler industry specifically. Okay. Two wheeler currently, the penetration has been more in the EV segment of the two wheeler. And now the ICE vehicle also is seeing traction in terms of the TFT penetration. Currently, it a very small percentage, about 7% to 8% of the total two wheeler produced is having TFT cluster. But we see rapid growth in the next two, three years of doubling this percentage in terms of TFT adaptation.

41:33 I'd just like to add there that for cost optimization, the two wheeler OEMs are also looking at a hybrid cluster, which is a part LCD, part TFT, which will also be rapidly evolving because of cost consideration. Thank you. We take the next question from the line of Shreedam from iThoughtPMS. Please go ahead. Hello, sir. Could you provide the time line for the demerging process? It's a $1,000,000 question, sorry, because it's dependent on so many governmental agencies and multiple steps.

42:22 But we have been told it will take at the very minimum four quarters or could be longer. But we hope that we don't have any roadblocks and it goes smoothly because we are not a multinational operating in multiple countries. It's a very simple operation. So and we've been told by our investors, we are not the experts with, say, the ROCE and various NCLT and all the steps concerned. But if you recall, Vedanta said they will do the demerger in six months. It is it took them eighteen, twenty four months in spite of their bite and size. Entities in terms of manpower, manning, etcetera, in terms of investments, etcetera. Internally, we will be starting to operate like demerged entities by October.

43:26 And by December, it will be fully operated as like demerged entities so that when the demerger happens, it becomes easy. We take the next question from the line of Shivam Khabra from Carnellian Capital. My question is regarding company plans on merger and acquisition. And in which segment are we planning to go ahead? You give me some light on that, please? I'm not able to understand you, Nalab. We are not able to understand you at all, Mr. Kapra. Request you to be louder and slower, please. What are the company plans on merger and acquisition? And in which segment are we looking forward to?

44:13 We have put a pause on mergers and acquisitions, though I mentioned that we were evaluating certain acquisitions earlier. The when we went through the due diligence, we were not very happy with the quality of the assets. As I have maintained, we are only looking at buying quality assets and not distressed assets or assets with fundamental issues in either technology or quality of management. So for the next one year, since we have a lot of new programs and a lot of capacity addition and also kind of demerging the company, I think we have our hands full. And at yesterday's Board meeting, we took a call that till this demerger is over, we will focus on rapidly growing our business, getting these five new factories on stream, getting our partnership with BOE, the backlight module for the screen, the heavy investment that we are putting in getting that onstream and streamlining each of the businesses, setting up the different center of excellences.

45:24 We don't want to bite off more than what we can chew in terms of management bandwidth. And so for the next one year, I don't foresee that we will pursue any acquisition opportunities unless something very attractive of the right quality at the right value comes up, but it is not a priority at this point in time. Thank you. We take the next question from the line of Naman. I do apologize. Naman has left the question queue. We'll move on to the next question, which is from the line of Hitesh Goel from Origin Capital. Please go ahead. Yes. Thank you. Can you please tell us about the disc brake revenue in this quarter? And also on the capacity, you'd said you will start with INR 500,000 per annum capacity. How is that going to ramp up?

46:13 And any new orders there? You be did you allude to disc brakes? Yes. I was talking about disc brakes. So disc brakes, yes, so revenue in this quarter so that we can track the trajectory and the capacity and how it's going to ramp up. As I mentioned, disc brakes, the real revenues will only kick in from FY 'twenty eight. We are still in early stages. I've maintained this in an earlier call, and I'll continue to maintain the same because we are just starting to ramp up and starting to supply. Display will be a product. Display and switches will start take relevance only from FY 'twenty eight, and this is what the stand I maintained in the last four quarters and I will continue to maintain the same stand.

47:02 Thank you. We take the next question from the line of Nandan Pradhan from MK Global. Please go ahead. Hello. Good evening, sir, and congratulations on a great set of numbers. I hope I'm audible. Yes, please go ahead. Hello. Yes. Thank you. So if you could just a small bookkeeping question, if you could sort throw some light on how our Polymer business has performed this quarter like you do every quarter in terms of the revenue EBITDA performance so that we get a broad understanding of our core business is also doing? So if you could just help us with that. Okay. In terms of performance, while you've congratulated my team and myself on a good quarter, I think we could have done better, like I said.

47:52 Firstly, I'm not happy with the our performance with the quarter. All our customers have declared superb results, but at the cost of Tier 1s like us because of a lot of plastics and other things we are getting delayed earnings, which is going to come in second quarter and third quarter. Was jokingly telling some of my customers the same also. In terms of the exact numbers of the polymer business, I will request our CFO to give you the numbers. Good evening, Nandan. For Q1, the Polymer division has recorded a revenue of INR $2.49 crores with EBITDA of 7.8%. As I mentioned, Mr. Pradhan, the polymer business was perhaps the worst affected because the raw material of polymer, the prices went up very high, which we have since corrected for this quarter and next quarter. And also LPG on which the polymer business is dependent on has gone to stratospheric levels, which again is getting corrected this quarter and next quarter.

48:54 So we'd have a much better healthier EBITDA and healthier top line in Q2 and Q3 the Q3 in the Polymer business. We could have grown had we had the capacity much more than this. But as I mentioned, because of lack of capacity, we are not able to fulfill the full potential of this business, which we will start seeing from FY 'twenty eight onwards. Thank you. We take the next question from the line of Pricol from Stallion Asset. Please go ahead. Thanks for the follow-up, sir. Just wanted to understand once we are done with our CapEx plan in the Polymer segment, so who will be our most comparable peer or the competition in terms of product portfolio? It would perhaps be Paroc, it would be National Plastics and it would be Premier Polyplast.

49:54 Thank you. We take the next question from the line of Shugosh Rudrawar from Purnalta Investment Advisors. Please go ahead. Thank you for the opportunity, sir. I just wanted to ask, can you throw some light on our FY 'thirty target? As you said that we are pausing our M and A, does it affect our long term target? I said I am not closing the M and A for posterity. We are taking a pause for a year because I think we have tremendous growth opportunities in our existing businesses. We are creating a lot of capacity in our existing businesses. We are looking at ramping up some of our new business verticals.

50:41 We are creating center of excellence for certain new products. So we are not and we are going through a heavy CapEx cycle. We don't want to stress our balance sheet. My forecast for FY 'thirteen what we want to achieve continues to remain the same. And it is only we are suspending M and A for a year. Again, if something compelling, interesting at the right value, the right quality asset, we are not going to turn it down, but we are not going to actively look for M and A and our my guidance for FY 'thirty one, which is calendar year 'thirty remains very much impact for each of our businesses. Thank you.

51:28 We take the next question from the line of Hetan Bhullacha from Sequent Investments. Please go ahead. Am I audible? Please go Yes. Thank you for the opportunity, sir. So my question is on the polymer business. As you mentioned, we are facing the capacity constraint as of now. So if you can guide me what is our current capacity and what will be our capacity post this INR 400 crore CapEx sir? The capacity that we are creating, we should comfortably go to about INR 2,000 crores of turnover from our current INR 1,000 crores of turnover that we are capable of producing. Thank you. We take the next question from the line of Bhavya Vyas from Ant and B Investment.

52:20 Am I audible, sir? You are audible, but could you please use your handset? Yes. Thank you for the opportunity, sir. My question is on the BMS. Could you provide an update on the program's progress? And has it handed mask or has it mask... Mr. Vyas, I have mentioned mentioned in multiple earlier calls, BMS is something that the vehicle makers and OEMs have decided to control, and we are not putting any further money into BMS. And this is something that I've been maintaining for three quarters that we are not looking at investing any further money or growing that business and that will not form part of our portfolio. Thank you.

53:08 We take the next question from the line of Rajit Agarwal from Nilgiri Advisors. Please go ahead. Thank you, sir, for the follow-up. Just a clarification on the top line for this quarter. Although we have done very well Y o Y, but sequentially, it's flattish. So could you throw some light on which businesses did well and which business did pull down the growth? Was it because of the Polymer business? And if there is lack of capacity, then how do you see this top line recovering in the next two quarters? Mr. Agarwal, this is absolutely in line with the performance of the industry. Always Q4 is a high quarter in the industry and Q1 then drops.

53:56 Q2, again, pre festive season sale goes up. Q3 drops, and that is the cycle we have maintained. And we have grown higher than the market in each of our divisions. So we have not lost any share of business whatsoever. There has been a loss of EBITDA because of external geopolitical factors and certain government statutory things of minimum wage increases, which we are trying to recover in the coming quarters. Thank you. We take the next question from the line of Pricol from Incred AMC. Please go ahead. Pricol, all my questions have answered.

54:42 Thank you. We take the next question from the line of Siddhartha Mathew, an individual investor. Please go ahead. Hello? Yes, Siddhartha. Please go ahead. Yes. Just a follow-up on your comments regarding the e cockpit earlier. You mentioned that you had developed a world class e cockpit, but some of our international competitors have a distinct advantage. Just wondering where we are lacking and how we could catch up and whether this demerger will help in that regard? Possibly.

55:34 Like I said, the amount of e cockpit, some of the international competition like a Dipon Seki or a Continental, which is now or Atenso or Visteon is able to produce is probably 50x or 40x the volume of Pricol. So we will not have a cost arbitrage in terms of the child parts or we will not have the with a very small volume. So while we have developed the capability and shown our proof of concept, in terms of cost, we will not be able to complete because of the absolute volume disadvantage that we have. And perhaps one of the reasons why we are looking at a partner also is to give us certain cost arbitrages in terms of scale.

56:19 That's also one of the reasons, not the primary reason, though. We take the next question from the line of Saket Sarawgi, an individual investor. Saket, please unmute your line and proceed with your question. My line are you getting a voice? Hello? Yes, Saket, please go ahead. So my question was that like seeing the industry growth in this quarter, the sales figure of our company looks muted as compared to that. So what do you have to say on that, if anything? Like we have lost some revenue in this quarter because of some reason? All the industry put together weighted average grew by 22%.

57:13 We grew by 26%. We have outgrown the industry growth by 4% across all our divisions. I would not call that muted growth. I would grow we have outperformed the market. Thank you. We take the next question from the line of from Najket Kalia from N. K. Please go ahead. Yes. Hi. Thank you for the opportunity. I'm very glad hear that. Thank you so much. Best of luck for the quarter. Thank you. Take the next question from the line of Ritesh, an individual investor. Sir, can you please give guidance for revenue for like next three to five years or any target which the management wants to achieve in next three years?

58:18 It will be good. I have given a revenue guidance for... I've told you polymer business, what capacity we are creating. We have also, in the past, given a revenue guidance for our DICBS business. And we have said we hope to achieve INR 8,000 crores by a combination of primarily organic and some amount of inorganic growth for calendar year 'thirty or FY 'thirty one of INR 8,000 crores, and I continue to maintain that. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. I now hand the conference over to the management for their closing comments. Thank you very much, ladies and gentlemen, for your active participation and to also my team led by our CEO, our Executive Director, Madhura our CFO, Mr. Bhastia and the rest of my operating team for having delivered this set of results.

59:20 And we do endeavor that we will be able to deliver a better set of results in the coming quarters and continue to outperform the industry. And my prayers to the Almighty for normalcy to return to the world so that all of us can work on productive work and proactively work on strategy rather than firefight and run war rooms instead of running company. Thank you. Good evening. Thank you, sir. On behalf of Pricol Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.