Sterling Tools (NSE:STERTOOLS) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Sterling Tools Limited Q2 H1 FY 'twenty seven Earnings Conference Call. This conference call may contain forward looking statements about the company, which are based on the beliefs and beliefs, opinion, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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. Please note that this conference is being recorded.

0:52 I now hand the conference over to Mr. Atul Agarwal. Thank you. And over to you, Mr. Agarwal. Thank you. Good morning, everybody. Thank you for joining us on the call this morning. Welcome to Sterling Tools Limited's Q2 and FY 'twenty seven Earnings Call. I'm joined today by Mr. Jedi Bhadwa Mr. Anish Agarwal and our newly appointed CFO, Mr. Ahmed Tata and Strategic Growth Advisors, our Investor Relations Advisors. Our earnings presentation has been uploaded on our website at the stock exchanges, and I hope everyone had the opportunity to go through it. I would like to begin with industry overview.

1:40 The Indian automobile industry recorded its highest ever second quarter sales across major vehicle segments in Q2 FY 'twenty seven. Domestic sales grew approximately 18% year on year to 83.88 lakh units supported by improved affordability following GST 2.0, healthy rural and urban demand and vehicle replacement. According to CEAM, the industry is expected to maintain positive growth momentum in H2 FY 'twenty seven, supported by festive demand, new launches, infrastructure spending and fleet replacement. However, inflation, potential interest rate increases and geopolitical uncertainties remain important factors to watch.

2:33 Turning to our performance. At a stand alone level, we are pleased to report our highest ever quarterly and half yearly revenue along with our highest ever half yearly EBITDA. We have outperformed the broader automobile industry. While industry sales grew by approximately 18% in Q2 FY 'twenty seven, our standalone revenue increased by around 32% year on year basis. For FY twenty seven, against industry growth of approximately 20%, our standalone revenue grew by around 28%. A key driver has been strong traction in the CV segment, particularly high volumes from a marquee customer.

3:20 This reflects the benefits of our customer relationships and our continued efforts to diversify across vehicle segments. Our H1 EBITDA increased by 17% year on year to INR 58.7 crores, whereas for Q2 FY 'twenty seven, EBITDA increased to INR 27.7 crores, reflecting a growth around 8% Y o Y. Profit after tax stood at INR 13.6 crores in Q2 FY twenty seven compared to INR 19.8 crores in Q2 FY 'twenty six and INR 30 crores in H1 'twenty seven compared to INR 30.8 crores in the same period previous year. However, it is important to note that Q2 FY 'twenty six and H1 FY 'twenty six contain an exceptional gain of INR9.5 crores.

4:17 While revenue growth has been strong, profitability has faced near term pressure. As discussed on our previous earning calls, we exhausted most of our earlier low cost inventory in Q1. At the same time, commodity and non commodity input costs have increased significantly amid ongoing West Asia conflict. Our pricing arrangements with OEMs provide for pass through of input cost increases. However, these recoveries typically come with a time lag temporarily affecting margins. As the higher costs are progressively recovered, we expect margins to improve over the coming quarters subject to input price movements and broader operating environment. We remain focused on strengthening our core fastener businesses through customer diversification, capacity expansion and disciplined investment.

5:12 Against our earlier CapEx plan of INR 80 crores for fastener business, we've already incurred about INR 25 crores and our total fastener CapEx plans will be in the range of about INR 110 crores now. We are also increasing our overall FY 'twenty seven CapEx to about 150 crores across all our businesses of fasteners, DC contactors and MCUs. Our fastener business continues to provide a strong foundation for the group, supported by the healthy demand, expanding customer relationships and a continued focus on operational execution. Moving to SEM, Sterling e Mobility Limited. Revenue from this business stood at approximately INR23 crore in FY 'twenty seven. In Q2 FY 'twenty seven, taking FY 'twenty seven revenue to around INR37 crore.

6:05 This quarterly growth has primarily come from higher volumes and new customer additions. The business has made encouraging progress, particularly in the commercial vehicle and light commercial vehicle segments. Our focus remains on higher value applications and expanding our presence in commercial vehicles. The production lines for onboard chargers and multi passenger units scheduled for commissioning in Q2 has been commissioned as planned. Our priorities remain increasing volumes, broadening the customer base and strengthening the position in higher value electric mobility solutions. At STML, Sterling Tech Mobility Limited, we have made steady progress in commercializing our high voltage DC contactors and relays business.

6:55 Commercial supplies, which are scheduled to begin in Q2 FY 'twenty seven have now commenced. This marks an important milestone as we move from development towards commercial execution. To conclude, our fastener business remains at the core of Sterling Tools growth strategy, Long standing customer relationships, opportunities across vehicle segments, customer diversification and planned capacity investments position us to pursue the next phase of growth. While near term input input cost pressures have affected profitability, we remain focused on execution, disciplined capital allocation and strengthening our competitiveness across our businesses.

7:42 Our priority is to build a more resilient business and deliver sustainable long term value for our stakeholders. Before we move to the question and answer session, I would like to introduce our newly appointed CFO, Mr. Amit Dadda. Mr. Dadda brings nearly three decades of experience across finance, taxation, audit, corporate reporting and financial control. He has held senior positions at organizations including SparkMinda, one hundred ninety seven Communications and spent over fourteen years at Pricewaterhouse, including international experience in The U. K. His experience in manufacturing, finance, regulatory compliance, fundraising and corporate governance will be valuable as we continue to strengthen our financial and operational capabilities.

8:28 We warmly welcome him to Sterling Tools. And now I invite Amit to introduce himself. Thank you, Atulji, and good morning, everyone. I'm delighted to join Sterling Tools Limited at its important stage in its growth journey. The company has built strong foundation in the fastener business while steadily expanding into electric mobility and newer technology led opportunities. At Sterling Tools, I look forward to working closely with the management team to strengthen the financial discipline, support business growth and maintain strong standards of governance and reporting.

9:14 I look forward for interacting with all of you and contributing to the company's continuous progress continued progress. Thank you. With that, we will be happy to take your questions. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, a request to use handset 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 Dave, who is an individual investor.

10:15 Please go ahead. Yes. Hi. Thanks for the opportunity. Can you confirm the growth in the SEM and STML business, recently June of this year? Can you repeat that question? Can't hear you. Can you confirm the growth in SEM and STML business vis a vis the Q1 of this year? I'm sorry. I'm not able to understand. I can hear you, but I'm not able to understand your question. Can you repeat that again? Apologies for that. I was checking on the SEM and the STML stream of business. What is the growth in Q2 versus Q1 of this year? Did you want to take that STM question? Yes. It's 26%. It's 26%.

11:01 And it's largely in the STM okay. And for STML? Yes. This number is Q2 over Q1. Am I right, Jadeep? Correct. That's correct. That's all. Yes. And in STML, it has just started its operation in the Q2 only, where the total turnover is mainly in Q2 only. Okay. What is the loss per quarter that you are incurring in both of these business as of now and largely fixed costs are operational in nature? I think the losses in both the business, SEM, a substantial part is operational in nature. And yes, fixed cost always has an element to that. But yes, we need to bump up the revenue. Once we reach a revenue of INR 150 crores plus, we probably achieve breakeven point that might drive.

11:54 Sorry. Okay. Sorry, Dave. My apologies. I gave you the volume growth number Okay. Which which is not representative of the listing because we are moving from lower lower value, you know, two wheeler, three wheeler businesses to the much higher value HCV. The growth is about 80%. Is 80%. And and what's the value... What's the total value revenue in the SEM business today? For the first half, it's 30 as Atul mentioned, it's INR37 crores. Okay. And we are expecting this above INR150 crores return profitable, right? Correct. That's correct. Okay. What are the challenges that you see in the SEM business in terms of scaling? That's my last question.

12:44 In the SEM business? Yeah. Yeah. So, you know, I... As of today, we are... You know, I think a lot of the hard work has already been done in in developing the new product portfolio. For us now, it is ramping up of of volumes from our new production lines. The... You know? And and our revenue, as of today, we look at for the fourth quarter because most of the most of these programs that we are working on will go live in the fourth quarter. I'll just explain why because we've we've installed our machines, as Atul mentioned, in the second quarter.

13:30 In in the third quarter, we we are going to be doing the final validation of these products with our customers. And from the fourth quarter, we start supplying. So starting from the fourth quarter of this year and for most of next year, we already have confirmed businesses from several of our customers. And as long as they are able to meet their production production targets, we don't see much much of a challenge except the operational and supply chain challenges in meeting the numbers. One last follow-up. When Mr. Atul mentioned 1 crore 100 and above return profitable, are we talking about annual numbers?

14:15 Yes. Yes. Okay. Okay. And we expect to do that for Q2 of next year? Yes. I think we expect to outperform that number in FY 'twenty eight. FY 'twenty eight. Thank you. Thank you. The next question is from the line of Mihir from MB Securities. Please go ahead. Yes. Good morning, sir. So congratulations on a good number. So I wanted to ask that our revenue grew 32.4% in Q2, but our EBITDA grew only 8.2%.

15:00 So is this because of higher input costs still affecting our margins? Or like how much improvement can we expect in H2 as well? So it's a good question. Yes, you're 100% right with revenue growth, EBITDA has not grown at the similar levels. Like I said in my call and as in previous engagements as well, the input cost increase input price increases have been dramatic this year. This has been an exceptional year in manufacturing. We have seen where input costs have gone up by some parts, some commodities as much as 300%, some by 30%, 40%, 50%. So the inflationary impact has been substantial. We are negotiating with we are bumping up our revenue, that's one way.

15:51 Secondly, we are negotiating with our customers for price increases, not only on account of steel, which a normal practice running for years, but this year exceptional item is inflation and cost increases. We are negotiating with our customers. Some have come through, some are in under negotiation. And they'll all probably some of them will come with retrospective effect, but this is a long negotiation process. It does not happen overnight because these are long standing relationships. We do expect we'll get substantial compensation going forward with retrospective effect. But having said that, this year is going to be there will be pressure on maintaining our EBITDA margin this year because of exceptional inflation and steel price increases.

16:47 Understood, sir. So by H2, there would be a price pass on? Yes. Is this understanding correct? Okay. Yeah. And that's a mutual negotiation we do. We take some time. Okay. Understood. And, sir, another question I had was regarding commercial vehicles. So they have been a key growth growth driver this year. So is this the growth is coming mainly from higher volumes with existing customers? Or it is like new customers who are also contributing meaningfully? No, no. All these are all incumbents. There have been known really new customers or new operators in that segment. So it's existing customers like Tata, Leland, Volvo, Mahindra, Daimler Benz. It could be Mahindra's Bharat, Mazda, which earlier.

17:34 So it's across the board. It is not with startups. It's the existing operators have ramped up dramatically. Okay. So it means majorly existing customers only driving this growth. Correct. Yeah. Thank you. That's all from my side. Thank you. The next question comes from the line of Madhu Rathi from Countercyclic Investments. Sir, I wanted to understand regarding the margin of our fastener business, sir, can we expect to move to the 14%, 15% range over the next one or two quarters? Or Q1, you mentioned that we had the benefit of low cost inventory. So how should we look at the margins of the business going forward?

18:29 Madhu, so on the faster business, we've been hovering at between 1516% EBITDA. Like I said a little while ago, we hope to maintain that, But this year is an exceptional year. There's been a tremendous pressure, not only account of steel price increases, also because of inflationary impact on every input we have into our manufacturing processes, power, diesel, carbide, pooled steel, people costs, have gone up dramatically because of minimum wages increases. So it has been an exceptional year with most parameters going up. So there may be pressure on EBITDA margin this year. Are trying like I said, we are trying to negotiate with our customers for increases.

19:16 We hope to get substantial compensation, I would say, against that. For me to say whether we close the year at the same margin as last year is difficult right now. As the time is progressing, I'll have a better estimate on that. But we are under pressure on EBITDA margins. Now having said that, pressure does not mean it will dramatic. It will be a marginal pressure in terms of numbers. Sir, would it be fair to assume that by Q4, we could move to the levels not on an annual basis, but from a quarterly basis, we could move to the 15% levels by Q4 of this year? Yes, hoping that. That's correct. Got it. And sir, I wanted to understand how is the competitive intensity because it seems that one of our competitors were acquired some time lag by Italian company. So is the competitive intensity much better or the pricing is much better with OEM or how is it if you can help us understand?

20:14 So despite that acquisition of that competitor by an Italian company, we don't feel any pressure coming to us on account of that. There is no pricing pressure. There is no volume pressure. In fact, our volume levels are up almost 28% on a half yearly basis. I think we are in a good wicket because of our quality, customer servicing, volume availability, capacity availability, we are in a good wicket, I think, Abad, and obviously backed up by four decades of relationship. So we don't feel any constraint in terms of growth or pricing or margin pressure because of that.

21:06 Sir, my question was more on is the acquisition being beneficial to the whole industry? Has there been any pricing discipline for the acquisition by some large MNC kind of a company or so from that metric? It's an exceptional year. As you know, the volumes are up dramatically. I think it's too early to talk about that. For that, maybe you want to ask that question to the Italian company and try to get their sense as to what they see. From our perspective, we feel we are in a good place. Got it. And sir, what are the prospects of exporting our fasteners as well as moving into either structural fasteners that are used in either PV industry.

21:56 So is there a possibility for Sterling to move towards that as well? No, we are not looking at structured fasteners. We want to our near term plan is to stick with automotive and adjacencies of automotive. We have no plan to go into structural or construction businesses at all. We are trying to do some business with railways and we grow that business incrementally. And once we understand that business very well, we'll probably take a more strategic view on that after that. Got it. And just one final question on the STML business. As you commercialize our contactors and relays, so how is our gross margin? So have you been able to reach the desired gross margin level for these products? And how should we look at the scale up of this business going forward, if you can help us understand?

22:54 Yes, I think the gross margins will be in line with what we project next year. They're already in line as of quarter two. But once this business ramps up, which is last quarter of this year, then we'll get more clarity on gross margins as well as EBITDA margins. It. Sir, that was from my end. Thank you so much and all the best. The next question is from the line of Ansh Khimawat from Capital One. Hello. Good morning, sir. Am I audible?

23:40 Yes. Congratulations on a great sort of number, sir. I just had a few questions regarding the CapEx. So we had initially planned 80 crores on, and we ramped it up to INR 135 crore. So could you just lay out as to where we are seeing an opportunity and where this CapEx is going to be incurred? So let me break up that CapEx for you. So our overall CapEx at a consolidated level will be about INR150 crores. INR20 crores is going to happen at SEM and about INR10 odd crores at STML. Our on our standalone partner business, the initial CapEx plan was INR80 crores, which has been ramped up to maybe close to more like INR130 crores this year sorry, INR120 crores this year.

24:32 The business has been progressing, time has been progressing and we see the traction, we are building our CapEx with eye to the future of twelve to twenty four months because there's a lag for that CapEx to happen and convert to possible revenues anywhere from depending on the kind of equipment, anywhere from six to eighteen months. So we are building our we are progressively building our CapEx plan, keeping in mind what we hope to do in FY 2028 and FY 2029. So that's why the numbers have gone up substantially. We are planning our next twenty four months proactively based on the traction we have with our customers, based on revenue growth, based on our communications and our commitments with certain customers.

25:26 And lastly, keeping in mind the time lag we have to execute those commitments. Okay, sir. That's encouraging. So what kind of capacity will you be adding for the partner business then? Like, the additional INR 40 crores that we're adding, what kind of capacity would we be adding? So it's not organization that we are currently? Ansh, it's it's a very complex question. I think it needs a long conversation because capacity itself is built across different areas. It's pure hard capacity in the short flow, which will translate to numbers. CapEx also means putting up infrastructure, could be in terms of buildings, in terms of power backups, etcetera, etcetera. So not each dollar value or rupee value converting into a revenue immediately.

26:16 It's a combination of CapEx, which we do, which translates to certain capacity increase. For example, I think with about INR 120 odd crore CapEx, I think we'll probably increase our capacity by roughly in value terms, it will probably give us another 150 crore of revenue. So also, our other expenses have increased by INR 10 odd crores in the current quarter. So we were at around INR $60.73 crores in the last year, same quarter, and now we've come to around INR 87 crores. This was INR 77 crores last quarter. Is there any update as to why that is happening? Is that making your patience? Give me a second.

27:07 So yes, our other expenses have gone up. Other expenses include consumables, toolings, tools, etcetera. I'll just give you a number. Tungsten carbide prices have gone up by over 300% in the last twelve months. So this is so a, we're backed on inflationary pressures b, there's been a 28% volume growth as well. So if you look at absolute numbers, they'll probably be deceiving. But if you look at other expenses, which have gone up on a stand alone basis, they've gone up from 77% to 87%, like you rightly said. But percentage wise, that's stable. Okay. So the variable end of the expenses is increasing, which is in line with the sales. Is that the type Yes. Of I would not look at absolute numbers. I would look at percentages.

27:59 Percentages are stable despite the fact there have been inflationary price increases in input costs. Okay, sir. That's encouraging. Also, our debt has gone up considerably in this quarter. Is that mainly because of the CapEx we're incurring? Or is there any The number debt has gone up at two, three reasons. One, we have done a 40 crore investment in our subsidiaries this year, SEM and STML, which was announced in the last quarter's results. Second, because of our CapEx plan going up to about INR 150 crore, So we are getting it funding through a higher debt component. So I think these are the two big reasons.

28:50 And lastly, since the balance sheet side is increasing, our revenue is up, say, 30 odd percent. The absolute value of working capital needs have gone up. And on top of that, we have taken strategic view to add a higher level of inventory for virgin raw material, if we buy from steel mills because the market is so buoyant, steel mills are totally booked out. We are carrying a higher level of inventory for our raw materials, a combination of all these factors. Okay, sir. And sir, on the business end of phase, how is the AEM, the advanced motor ramp up coming up, sir? So are we yet in contact with the customers and have you received any update from their end?

29:42 Jerry, do you wanna take that? Yes. So, you know, I think we'd updated that we were looking at doing two POCs for the AEM product for two different product categories of vehicles. One POC is delayed but expected to be completed by the end of November. The second POC has been put on hold by the customer because of the inflationary pressure that they were facing. They put a lot of the advanced engineering projects on hold for the time being. So we are hoping to see the first POC, you know, coming through maybe by the end of the next month, which is November. Okay, sir. So by the end of November, so I'm...

30:30 As far as my understanding, said, then we'll be in the advanced stages to build the motor for them then. So right now, we are in touch and we're just trying to understand as to what their requirement is. Correct? So, I mean, I think, you know, that would be... That's probably a little bit more advanced than what the actual status is. A POC is basically to prove that, yes, the concept works. Thereafter, the customer has to figure out how to, know, to incorporate it in their designs, etcetera. So there is still a lot of time and effort that is required to take it from a POC to actual production. Okay, sir. Understood. Thank you, sir. I mean, definitely that there's a lot of engagement, but that... To translate a a brand new...

31:19 New concept or a new technology into revenue has a fairly long gestation. Okay, sir. Understood. And, sir, just if I could, do we... Have we taken any new clients in the customer business? So like we had Tata earlier, have we signed any new customers? So you know, Anshi, we're already working with pretty much all the customers. There are no major customers to be acquired in that partner space. All we need to do is we need to increase new product development with them. We need to increase our share of business spend with them. But in terms of new customer acquisition, we pretty much have all the customers in our deck. If you see the investor the customer deck, you'll find all the customers are onboarded with us.

32:13 All the customers with many material value of buying. You've got others like Volkswagen or etcetera group, we have which are totally import based. So in that sense, all the major OEMs are already on our deck. Okay. So then I think the assumption that this volume growth can be carried forward for the upcoming for the remaining part of the year and maybe in the next year as well is something which can be made on a relative basis right now? Which can be what? What's the last part of the statement you made? Which can be it can be we can go ahead with that assumption. Is that correct? Yes. I think that's what we are saying. This is this number is what I'm what I'm I'm trying to project is based on our confidence we have with our customers and where we are today.

33:03 So we'll be able to surpass the revenue what we did last year, maybe not on the stand alone business by the end of this year is Yes. Definitely. May... Maybe a 15% increase also on that is a fair assumption. Definitely. Okay, sir. Thank you. Thank you. Thank you. You. The All the best. The next question comes from the line of Yogesh Patel from Prami Investment. Please go ahead. Good morning, everyone, and thank you very much.

33:49 My question is, you rightly said 28% volume growth, and there would be a cost increase. So I... Is it very difficult to figure out piece wise? But in terms of, well, let's say, volume, tonnage wise, if I see, so the amount of value addition is... Might be reduced due to inflation. And do you see any kind of improvement realization because of product mix or any kind of price pass on? Or do you see the Kesh, we lost you in the middle. You want to start you you want to start the question again? We lost you in the middle. Sir, you you said 28 volume growth. Right? And it's very difficult to spread out on piece... Per piece basis. But I'm saying in terms of, let's say, a tonnage, if I say, like, a unit wide and value addition, maybe per kg or per ton basis. So the incremental growth or maybe revenues generated in q two is a combination of new product product mix and lack of pricing lack of prices we pass through through customer. It means I think the impact of inflation plus product mix. So roughly, can you slightly you have maybe not very exact breakup.

35:07 Mainly, how much impact of inflation is there in fastener business, roughly? So it's let me just say, our 28% is of pure volume growth, which we have in the first half. And I think our value growth is also very similar. So that mathematically, it's already saying that there's not a large part of inflation factored into this revenue right now, which is like I said, it's under negotiation. It's an ongoing process. So the inflation price increases from the customers are very nominal right now. A lot of them under negotiation and which will probably translate into our P and L in this Q3 and Q4.

35:56 Okay. And then the price we'll get a price recovery in Q2 sorry, Q3 and Q4 roughly? Correct. Sorry, Arjun. And some of those price increases will have a retrospective effect as well. Okay. Got it. Sorry, I didn't I'm asking, is there any better realization, better because of the product mix improvement in product mix or high margin product, what could be that percentage in volumes? No, I think those are marginal numbers right now. Yes. It's not something you make a dramatic impact quarter on quarter with us in our business. It's total basket we look at over the year. And if you're going above industry, roughly, we are gaining market share from other players, right? Yes, we are. Yes, we are.

36:50 And considering the CapEx in the fastener business and EV business, what is the potential revenue? Look, maybe I'm not saying you give a target, but aspiration kind of in 'twenty eight and 'twenty nine roughly from EV and fastener business, Maybe hypothetical number. Our first target is to reach INR 1,000 crore revenue in our fastener business ASAP. And we hope we are are quite positive if the current momentum continues and the kind of investments we are doing in our business. We probably will have visibility on that in the very near future. Talking about our SEM and STML businesses, there are no SEM is on a rebuilding of the business. We've gone through a big shock in FY 'twenty six, and we're rebuilding our business as of FY 'twenty six and FY 'twenty seven.

37:45 We are quite hopeful that business this year will turn around substantially by refocusing on the kind of products we are doing and the customers we are doing, and that will help us lay the foundation for the years going forward. Similar for STML, I think the validation and the testing periods are as long as twelve to eighteen months. A lot of that work has already been done, And we'll see some revenue ramp up coming dramatically next year based on top of this year's numbers. Okay. But roughly, what would be the number? Just to understand the... I don't want to put a number out there. Maybe we can have this conversation when we do our FY 'twenty seven investor call. Okay. Sorry.

38:30 Completely agree. But just want to know what is the potential even looking possible in this capacity? So like I said, I don't want to do that right now. There's a lot of groundwork happening. If certain information is confidential right now based on certain contracts we have to customers, perhaps on the EV businesses. So I would, like I said, maybe get into that conversation in FY 'twenty seven investor call. Okay. Just last question. Mr. Yogesh, sorry for interrupting. Please rejoin the queue for more questions. The next question is from the line of Ayush Abani from Sire Advisors. Go ahead. Am I audible? Yes.

39:16 Yes. So, sir, I wanted to ask that the onboard charger and multifunction unit production lines have been commissioned as planned. Right? So when do you expect these products to start contributing meaningfully to revenue, and how important could they become for SEMS growth? So if you see our lot of SOPs, our customers' SOPs are starting in Q3, Q4. So Q4, you'll see a substantial bump up in revenue compared to Q1, Q2. And I think businesses have been acquired, customers have been acquired and developed and tested, they are converting into revenue in Q3, Q4.

40:03 And FY 'twenty eight will be a much bigger year on top of that. We have refocused a lot into these new product lines and the unit prices of these product lines are much higher than we were doing for the two wheeler segment business. These businesses are primarily focused on commercial vehicles, light commercial vehicles, public transport and which has a more sustainable growth. So you'll see a lot a lot of that revenue ramp up coming in Q3, Q4 and FY 'twenty eight. Okay. Okay, understood. And sir, I also wanted to ask that, can you clarify the CapEx amount, whether it is INR135 crores or INR150 crores? INR150 crores for FY 'twenty seven at a consolidated level.

40:52 Okay. Thank you so much. Thank you. The next question comes from the line of Dev, who is an individual investor. Please go ahead. Sir, in the presentation, under the e mobility segment, you mentioned that we have 42 active programs and 23 business contracts. Just wanted to understand how many of these contracts have come in H1 of this year where you signed contracts? Jerry? We've got five new contracts that are coming into production by the end of this year. Okay. So this year, 23 number includes the five, but the production will happen this year. It's not yet started. Right? Not yet. I mean, when I said, you know, we may have supplied quantities in the tens, but not Got it. Not the full production quantity.

41:52 Okay. And, you know, are we all... Are we also working with some of the bigger commercial vehicle OEMs like Tata,, etcetera, Aisha, on the ACM business? Yes. Okay. Have you signed any contracts with them till now? Or Yes. It's under engagement? Okay. Yes. Yes. Okay. Okay. Yeah. Thank you. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I now hand the conference over to management for closing comments. Thank you everybody for joining us today and giving us time, helping us communicate to you our last six months and where we see the business going forward.

42:45 We hope to engage with you again in the future calls. If anybody has a request for additional information, please reach out to SGA, our investment advisers. They'll organize the communication with us and hopefully, we'll try and answer all their queries. Thank you very much. Thank you. On behalf of Sterling Tools Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.