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Ladies and gentlemen, good day, and welcome to the Minda Corporation Limited Q1 FY '22 Earnings Conference Call hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Abhishek Jain from Dolat Capital. Thank you, and over to you, sir.
Thank you, Janice. On behalf of Dolat Capital, I welcome you all for the Q1 FY '22 Earnings Conference Call of Minda Corporation Limited. From the management side, we have Mr. Ashok Minda, Chairman and Group CEO; Mr. Aakash Minda, Executive Director, Finance and Strategy; Mr. Neeraj Mahajan, Group Marketing Officer; Mr. Sanjay Gupta, Deputy Group CFO; and Mr. Bikash Dugar, Lead Investor Relations. We'll begin the call with a brief overview by the management, followed by the question-and-answer session. I will now hand over the call to Mr. Aakash Minda for his opening remarks. Thank you, and over to you, sir.
Good afternoon, everybody, and thank you so much, Mr. Abhishek from Dolat Capital for hosting the earnings call for quarter 1 for Minda Corporation. May I request our Group Chairman, Mr. Ashok Minda, to start with a few words, please. Over to you, sir.
Thank you, Aakash. Good evening, ladies and gentlemen. I welcome you all to the quarter 1 financial year 2022 earnings conference call of Minda Corporation. I would like to thank you all for joining us on this call and hope all of you are doing well. The first quarter of financial year 2022 started on a subdued note as the country was hit by second wave of pandemic, which also adversely impacted. [ Technical Difficulty ]
Sir, you may go ahead. Mr. Mahajan had placed us on hold.
So -- which was also adversely impacted auto sector, which resulted in demand slowdown as sequential recovery subsiding. Despite the challenging business conditions, I'm pleased to inform that Minda Corporation has been able to deliver a consolidated revenue from operations of INR 559 crores for quarter 1 financial year '22. And EBITDA for the quarter stood at INR 31 crores and profit after tax of INR 7 crores with a margin of 5.5% and 1.3%, respectively. Customer capacity has been our ethos and we have jointly worked with our customer during the challenging times. In order to service our customer better and with a positive future outlook, we continue to invest in expanding our capacity and put us on...[ Technical Difficulty ] All this is helping us to increase our kit value and content per vehicle. We are working to achieve more products per customer and more customer per product. As Minda Corporation, we are giving utmost focus on electric vehicle space. We have received business award of lifetime orders of INR 230 crores in quarter 1 financial year 2022. I'm extremely proud to share that so far in quarter 2 financial year '22, we have already built significant order book in EV space. These orders are from both incumbent as well as the new players in the EV space. In last 2 quarters, we have gone order for our new advanced technological products such as smart keys, digital cluster, center console, antenna solution, DC-DC converters, battery charger, et cetera. I would also like to highlight, this has been possible due to the foundation, which we laid in our Spark Minda Technical Center and advanced engineering team a few years ago. I'm also proud to share that we have entered into a joint venture with INFAC Electronics, a South Korean-based company, for manufacturing of vehicle antenna system, a segment which has tremendous growth opportunity in India as demand for autonomous vehicles and connected mobility increases. We have continued to maintain operational efficiency to navigate through the challenges faced by the auto industry. Our primary focus in these times has been to create a very strong order book, higher operational efficiency, increased free cash flow and work towards disruptive technology. I would like to reiterate that Minda Corporation will continue to remain committed towards right capital allocation. With this, I would like now to hand over the call to Mr. Aakash Minda, Executive Director, Finance and Strategy, to give further details, how we are strengthening the business to enhance shareholder value. Over to you, Aakash.
Thank you, sir, for your future outlook and inspiring words for all of us. Good afternoon, ladies and gentlemen. Thank you very much for joining the call today organized by Dolat Capital for Minda Corporation earnings call for first quarter. I would refer to the Page 3 of the presentation, which is already uploaded on our website. Your company, Minda Corporation Limited, is an organization having more than INR 3,300 crores of top line, more than 17,000 people, and have 33 plants and offices globally. We have more than 6 partnerships in the automotive space. I now move on to the next slide, which is Slide 4. Here, I would like to share our focus on narrowing focus and deepening capabilities. As we see a triangle in the middle, this is our focus for enhancing the core technology and digitalization and customer centricity. On top, we are restructuring the organization by simplifying the structure over the last few years by merger of wholly-owned subsidiaries. Introduction of CAM structure to focus on our key account customers and strategic customers and, of course, exiting loss-making subsidiaries. We have strengthened our leadership by getting on board rich knowledge and global exposure professionals, which have come across in various spheres. They are leading the organization to growth and, of course, deliver consistently and on growth aspects. On the strategic partnerships, we have delivered a successful PLA with an Israel-based two-wheeler ADAS company. We've also converted our PLA through a joint venture with INFAC Elecs of South Korea. And also, we have done an operational partnership with PHI Capital. And this is looking at the overall transforming of the Spark Minda Group, Minda Corporation Limited. I now move on to the next slide, showcasing our engineering capabilities. I'm very happy and proud to share that even in such tough times of quarter 1, Minda Corporation has filed 6 patents in this quarter. And more importantly, there are -- a few of them are for our joint venture companies, which gives back technology to our joint venture partners also. As I've already shown this slide previously, we are ever enhancing our engineering capability in the areas of advanced engineering and electronics by strengthening our members in the Spark Minda Technical Center, focusing on electrical and electronics and light-weighting technologies, power electronics, vehicle access, electronic hardware, embedded software, product validation, mechatronics. I would like to proudly share that the foundation laid by us 4 years ago in Spark Minda Technical Center is now giving us fruits with the new order wins and conversions that we are seeing in the last quarter and the years to come. I'm also proud to share the two-wheeler ADAS partnership that we have done has now completed 10,000 successful kilometers on the testing validation of the roads of India in order to get the local adaptation and the environment. I would like to move on to the next slide, which is focusing on the electric vehicle space. Here, as Minda Corporation, starting from the top, we are offering many advanced technology products such as connected clusters, telematics, die casting for light-weighting, various sensors, wiring harnesses, vertical control units, battery management systems, motor controllers, DC-DC converters, battery chargers, and smart vehicle access systems. I am proud to share that most of these technologies are developed in-house by our own advanced engineering team. Other motor controller and BMS, we have orders for all the products, which are shown here. We have won orders from the incumbent as well as new start-up OEMs globally. Just to share, on the right, we have 1 order from Ashok Leyland, Bajaj, Hero MotoCorp, Ola Electric, Revolt, TVS BMW, Virya. In the first quarter, we have won more than INR 238 crores worth of lifetime order book from these customers. I would also like to proudly share in the quarter 2 so far, in the first 45 days, we have won orders from these customers and beyond to a huge amount in these product lines. One such example is the order won of smart key systems of one of the largest OEMs -- two-wheeler manufacturer OEM in India. We will share the details with you in the quarter 2 and in the next phase. Minda is now -- Minda Corporation is now going to be a very prominent player in the EV space, especially in the homegrown technologies such as smart key, and our focus is to increase kit value per EV. I move on to the next slide, the focus on sustainability and -- sustainability framework and ESG. Of course, in the center, our Board is looking at strengthening our ESG framework. We have created a core committee which has our Board members of Minda Corporation Limited. There's a steering committee. And of course, it has people from various divisions and departments in order to win this focus all the way bottom-up. We have a framework available, which is developed by 1 of the big 4 companies, who is supporting us in execution and planning of this -- of the ESG framework. Going forward, you will be able to see the framework on our website as well as on other forums. I now move on to the highlights for the FY '22 quarter 1 and industry performance. Referring to Slide #9. On this slide, you may see the key customers such as green, which are -- which have newly added, which are depicting the EV space. I would again like to share here by geography, India still continues to be our focus area. And by end market, two-wheelers is about 50%, passenger cars has increased to about 15% and commercial vehicle about 23%. From the business vertical, Mechatronics constitutes about 60% and information and connected systems about 40%. I would like to highlight, again, these numbers are not comparable as of quarter 1 and -- as well as quarter 4 because of the changing dynamics of the month. On the next slide on Slide #11 -- sorry, Slide #10, on the highlights. Our revenue continues to grow better than the industry. Electric vehicle manufacturers give strong lifetime orders of INR 238 crores. New business won exceeds replacement business for the quarter. We signed joint venture with the INFAC Elecs of South Korea. We have filed 6 new patents in quarter 1 and one such is in cybersecuity. Nearly 95% of our temporary and permanent workers are vaccinated, as Minda Corporation started a drive to vaccinate 100% of our staff employees, permanent and contractual. I move on to the next slide to share about the Indian automotive industry performance. As we all can see, the -- from quarter-on-quarter growth, the industry has degrown by 35%, whereas Minda Corporation has degrown by 29.5%. The year-on-year volume grew as last year was complete lockdown for most part of the quarter. Onset of second wave of COVID-19 had an adverse impact on automobile production for the quarter. The production volumes declined by 35.1% quarter-on-quarter to 48.3 million. Volumes were impacted by lockdown in most of the states and lower consumer sentiment. We remain cautiously optimistic for the remaining part of the year going forward. On the consolidated performance for quarter 1 FY '22, we have posted an operating revenue of INR 558 crores with an EBITDA of INR 30.8 crores with a margin of 5.5%. Our PBT or tax is positive in spite of all the challenges at 1.3% at INR 7.1 million (sic) [ INR 7.1 crores ]. Our exports helped us in the resilient business performance and better than the industry despite challenging macroeconomic scenarios. Our EBITDA margin stood at 5.5%. It is impacted by higher operating leverage due to second wave impacting the industry. Lower aftermarket sales, product mix due to lower commercial vehicles as well as aftermarket, and lack of commodity price indexation had adverse effect. Company continues to implement several cost control measures which are fixed in nature as well as permanent in nature. Our focus is lowering our breakeven utilization levels, so we can cope up better with any revenue shocks which may come in future. I would like to also highlight that our share profits from our JV has increased over quarter. And from the last year, there was a loss of about INR 5.8 million (sic) [ INR 5.8 crores ]. There's now a profit of about INR 2.6 million (sic) [ INR 2.6 crores ]. And I would like to share here the concern of Minda VAST, which has been always there, is now a turnaround story, and they're now coming positive along with the order book. One thing I would also would like to highlight that we see month-on-month recovery in sale, and we are cautiously optimistic that quarter 2 FY '22 onwards we will again start delivering double-digit EBITDA numbers. And by the end of the year, come close to about 12% is what we have indicated earlier. Moving to the next slide, with the business vertical performances. If I start from the Mechatronics, Aftermarket and Others divisions, our revenue has seen a year-on-year increase because, of course, last year, there was complete lockdown. The degrowth in revenue on quarter-on-quarter is seen due to the second wave. Our EBITDA margin is at about 8.8% due to lower operating leverage and support by various cost control measures. I would like to highlight here that the capacity utilization at this division was about 60% due to higher exports on this division. Aftermarket impacted by this division, and it fell by 41%, where we were seeing strong recovery in the aftermarket. Export continues to remain an engine for growth for this business as we have long and strong relationship with our customers. As we gradually recover in the economy, we are cautiously optimistic on the quarter 2 FY '22. In the Information and Connected Systems, this division, which is a wiring harness division, continues to be challenged. In some respect, our capacity utilization in this division has been below than 50%, primarily due to the domestic and two-wheeler customers in nature. That's, of course, lower fixed cost adoption. Fall in commercial vehicles impacted margin on quarter-on-quarter basis. The rise in commodity prices, especially copper and lag in indexation also impacted the margin. As we see gradual recovery, we hope and we are working towards delivering mid-range EBITDA numbers in quarter 2 and eventually take it to high single-digit numbers in subsequent quarters. Moving to the next slide of business performance and order book. I'm again very proud to share that in the first quarter, we have won a lifetime orders worth INR 1,281 crores. INR 50 crores come from export and INR 238 crores come from electric vehicle space. In the -- about INR 500 crores comes from the replacement business and the growth engine, which is INR 786 crores from the new businesses. In the Mechatronics division, we have won orders worth INR 500 crores. And then in Information and Connected Systems, we have won INR 725 crores. In Plastics and Interiors division, we have won INR 53 crores lifetime order businesses, which are 100% new. And in Others, we -- this is more so on the DCD -- the ITS and other businesses that lead to about INR 1 million due to the government nominations to the truck manufacturers. The next slide, which is our joint venture update. I'm again very happy and proud to share that we have signed up the joint venture with INFAC Elecs from Korea for the antenna system for the four-wheeler industry. And here, I'm proud to share that we have already won an order book of about INR 130 crores in the lifetime basis. Moving to the awards and CSR. Again, very happy to share that we have won many awards from the customers in this quarter, plus more importantly, we have various drives across India, plasma donation drives, COVID-19 vaccination drives, Arogya health kit distribution and of course, new school project under adoption. With this, I would like to conclude our presentation. Thank you very much. And we now handover for any questions, please.
[Operator Instructions] We take the first question from the line of Ronak Sarda from Systematix Shares.
Aakash, first question on the under recoveries due to the commodity cost increases and the lag impact. Could you highlight, I mean, what's the overall impact of those under recoveries? And do you have it segment wise, so what's for Mechatronics and Others and what's for the Information and Connected Systems?
Sure. Ronak, thank you for your question. I hope you're doing well. But firstly, I would like to highlight that our lag in the commodities per se is primarily coming from the business vertical 2, which is the wiring harness division More so, if you see the copper has jumped more than 80% in the last 1 year, and it still continues to increase quarter-on-quarter. So our quarter 1, again, the copper prices as well as the other commodity prices have also increased. If you see, again, quarter-on-quarter, it's 15% from quarter 1 to quarter -- sorry, quarter 4 to quarter 1 in the copper aspect. So here, we have back-to-back arrangement with our -- all of our customers. In some cases, there are about 3 months lag. In some cases, there are about 6 months lag. So this money is, of course, recoverable, but it is just a matter of time when we get recovered and paid from our customers.
So what's the impact assuming the commodity price remains stable from here on. So -- I mean, is it like more of a 200 to 250 bps kind of an impact, which it has on the EBITDA side?
Yes. So Ronak, the amount is about INR 6 crores in the quarter 1.
Which is yet to come for all the inflation?
That's right. It'll come in next quarter.
Sure. Sure. Right. Perfect. And the second question was on the electric vehicle order wins. Congratulations on that. It looks pretty large number given the volume visibility has improved in the segment. Can you help us understand more on what kind of products are we going to supply? Which are the big ticket items in here?
Yes, absolutely, Ronak. Thank you very much for highlighting that. Absolutely, it's a very proud moment for us, and we continue to give extreme and utmost focus to the electric vehicle space. Our focus currently has been on the two-wheeler, three-wheeler and the commercial vehicle space. In the two-wheeler, we have won various orders from the large OEMs as well as the new OEMs, including the largest two-wheeler OEM, Ola, Revolt, Polarity, Bajaj, et cetera. Here, some of the products are legacy in nature or rather, I would say, more of premium in nature, like we've been always sharing our vehicle access in two-wheelers. So the lock-in key is now being transformed into the keyless and smart keys. So I'm very proud to share that we have won orders north of INR 200 crores from the largest two-wheeler OEM in this quarter, which is just about 2 weeks ago. Hence, you do not see it in our presentation, but I'm very proud to share that. This is, again, as I mentioned, the foundation of the Spark Minda Technical Center that we did. So we are seeing the fruits now. Also to add, in terms of Ola, we have won orders, which is the electronic steering column lock as well as seat latches. Again, these orders are already here. With the peak volumes as well as the lifetime, we see orders north of about INR 150 crores in this. Going on to our EV products per se, we have won products on the DC-DC converters, battery chargers, telematics from various other OEMs, including the new ones. In our wiring harness also, we have won orders in the electric vehicle space in the quarter 1, which is reflected in the INR 238 crores that we show.
Sure. Sure. So just to summarize, the smart key order is not part of this INR 238 crores, but it is for an EV product from an incumbent player, right? That's what you said, is that correct?
That's right. Ronak, it is not in the INR 238 crores. It will be coming in quarter 2 presentation. So this is from the incumbent player -- in the EV project of the incumbent player in the legacy businesses of Spark Minda Group.
And purely on the new age EV component, like DC-DC converters, rechargers, so how large is that order book of this INR 238 crores? And what content does it translate into when you would know the value and the volume, right? So just on the content, if you can highlight.
Yes. So the EV products out of the INR 238 crores is about INR 170-odd crores.
Right. And what could be the content for this? I mean, we were talking about INR 6,000 to INR 7,000 content extra when we were talking about electric vehicles. So is this roughly half of it or...
No, this is about INR 3,000, you can say.
Sure. Sure. Right. And last question on the joint venture side. I mean, pretty decent profitability despite weak volumes during the quarter. So this is largely an in-line quarter, right? And the numbers should continue over the full year period or were there any one-offs which has led to profits there?
So Ronak, of course, our endeavor is to improve quarter-on-quarter. So definitely, that is our endeavor. And if again, there is no such disruptions, we continue to perform in these lines.
The next question is from the line of Pritesh Chheda from Lucky Investment.
Sir, one question on this lifetime order addition that we saw. So there was a INR 2,500 crores order -- new orders, which you reported in FY '21. And then in this quarter, there is a new business order of INR 800 crores and all this totals to about INR 3,300 crores. Now this is lifetime. I wanted to know how much of it would be executed annually for this year and next year, which obviously should be a growth over and above the volume growth of the specific vehicle class that you operate in, right? So if you could help us understand that absolute value to be executable this year and next year? And how this INR 3,300 crores we eventually built up on execution?
Yes. Sure. So of course, there are various customers have different start-up production time lines, some ranging from 6 months to even 24 months depending on the vehicle as well as the overall dynamics. Definitely, volumes will come into picture when we go along, but I will be happy to get back to you in detail in terms of the built up year-on-year for these order books.
Okay. Will a certain portion come in next year, let's say, about 1/10 of this, at least, some INR 300 crores, INR 350 crores additional business to be executed will come next year or these are all far-dated orders?
No, no. Absolutely, it'll start coming from next year, which is FY '23. So yes, you can say around 1/3 -- 1/10 of this will start coming, of course, month-on-month and quarter-on-quarter.
Okay. My second question is, last year, we started supplying for the wiring harness, and I think it was -- if I'm not mistaken, it was a half year's supply of the BS-VI product. So first of all, is that correct that we had a half year number and hence we should get the benefit of the other half this year in terms of the top line?
So Pritesh, excellent question. But I like just to -- I'd just like to share with you that no customer or no OEM manufacturer has reached the pre-2019 levels after in spite of investing in the BS-VI regime. The story still continues. And of course, there are challenges now from the EV perspective. So though it's an opportunity, but when we speak about BS-VI, there are, of course, challenges in achieving the peak volumes and peak numbers for which the capacities have been set for all product lines for BS-VI. So gradually, it will increase. Gradually, they will go positive. But of course, it'll take some time.
The next question is from the line of Mrunmayee Jogalekar from Trivikram Consultants.
My question has been answered.
[Operator Instructions] We take the next question from the line of Mayur Milak from BOB Capital.
So just about your new joint venture, you said this is on the vehicle antenna manufacturing. Have we done any investments in this JV? What kind of JV is this?
So thank you, Mayur, for your question. I hope you're doing well. Yes, Mayur, this new joint venture is on account of antenna systems for -- primarily for the four-wheeler industry. So just to tell you about the product, the shark fin or the antennas that you see on top of a vehicle or a car for connectivity, it is this product that we manufacture. Happy to and proud to share that we have won businesses from Hyundai, Kia, Maruti Suzuki. And of course, there are other customers in pipeline whom we are waiting orders from. In terms of the investment, we have made somewhere about -- we will be making somewhere about INR 10 crores worth of investment, and this will be more so on the account of the production line transfer from Korea to India.
All right. So it would be nice if you could share some more details on the JV. So is this like a 50-50 JV? Will we be paying a royalty to INFAC? Or how does this work?
Yes, absolutely. So here, we own 51% and INFAC has 49%. So we own majority here. So of course, there is royalty like any other joint venture. Maybe I'm not able to disclose these numbers to you here. But yes, there is not a significant amount of royalty to be paid. It is in line with the industry best practices.
All right. And what kind of revenues should we look at? And in terms of -- will it be a typical margin profiling of between 10% and 11%? And what could be the time line, the earliest time line that we could build these estimates for?
Yes. So of course, it is a four-wheeler product. And -- so of course, the content is also higher, a; b, in terms of the overall order book, as I just now mentioned, as of date, we have lifetime orders of about INR 135 crores. Maybe by the next presentation, we'll be updating these numbers when we get the LOIs officially from other customers, which are in pipeline for various other businesses. So of course, the profitability of this is not going to be in line of 10% to 11%. We are expecting it to be higher. But because the import content because of electronics, the first few months of the next year will continue to be a challenge. Post that, once we localize, it will start delivering higher numbers.
All right. And on your operating efficiency, so we [indiscernible] on the opening remark that the operating efficiencies came through, but you've seen a huge dip in your margin performance and surprisingly, it does not come through gross margin. In fact, we've actually reported a better gross margin than previous quarter despite lower volumes. So I want to believe that there could have been a good pass-on of the increase in RM cost. But what kind of level capacity utilization you would actually need to consistently maintain that 10% plus kind of margin run rate?
So Mayur, thank you for the excellent questions. So of course, as I mentioned and rightly pointed out, the gross margin has first increased in quarter-on-quarter basis. However, the capacity utilizations definitely continue to be a challenge here. Our product mix, as I mentioned earlier, for commercial vehicles as well as the profit from the aftermarket has come down here. And there's lag in commodity indexation that we have seen, and I have already explained before on this. Definitely, initiatives such as the productivity improvement, employee performance, those have been challenged this quarter because of the reverse migration of employees going back to their -- in spite of below 50% capacity utilization, we've been able to generate positive PAT of 1.6%.
All right. So is it safe for you that as you reach 70, 75, you could read back the double-digit margin?
Yes. Yes. If you also see in the last quarter as well, even we were more so on the 80% -- 85% capacity utilization, we have posted strong results. So our endeavor is to go back once the demand picks up.
The next question is from the line of Chirag Shah from Edelweiss.
I have 3 questions. The first one this localization. So when BS-VI came, we were also hoping that we would be able to localize the content in wiring harness over a period of time and our margins will improve. Where are we in that journey because it appears localization is lagging and hence, our gross margin versus what they were pre BS-VI era are lower? This is for the wiring harness business. So that is my first question. And why is there a delay?
So Chirag, I hope you're doing well, first of all, and thank you for the question. As we've been explaining in last conversations also, localization continues to be our priority, and we are well within our targets and journey. However, of course, due to the low intake of the customer, the low priority of the customer for testing validation of these components, they continue to be a challenge. Definitely, I will not maybe name the geopolitical issues and the import issues, et cetera, that might create this. But our endeavor is to localize more and more. And as I can promise and assure you that we are very well in the line of our plan in order to turn around our wiring harness division in terms of connection systems and localization contents.
Can you shed some light when do you expect the acceptance from OEMs? Are their interactions have increased? Is it still a year away because, first, they have to accept they have to inspect and maybe another 6 months, it will take time for it to flow in our P&L?
So Chirag, see, the localization is not only the factor, okay? For our complete division, there are various avenues that we are working on and to begin with is the copper or raw material indexation. So we are, again, taking a very -- a lot of strategic initiatives in order to reduce this impact as low as possible from quarter 2. Number two, on account of productivity improvement, as I mentioned, we could see the quarter 4 results, which are improving. But quarter 1 has taken a downturn due to the reverse migration and the efforts there. Third, on account of localization, definitely, we will see quarter-on-quarter improvement. It is hard for me to share an annual number or a quarterly number because of the reasons I just now mentioned. But definitely, from a year perspective, we see about a 1% from the wiring harness division improvement. And let's say, about 2 years from now or 18 months to 2 years, we see about 2% improvement in our wiring harness division EBITDA percentage if those are the numbers you're looking for.
So this improvement is due to localization you are saying and not operating leverage benefit, right?
That's right.
Okay. This is helpful. Similarly, on the INFAC JV, you mentioned initially the import content will be higher. Is it possible to indicate what part the import content is higher? And hence, how fast it can get locally because ideally, this shark fin business should be a reasonably high margin, at least, high ROC business for us?
So Chirag, see, firstly, these products are currently being supplied in Korea by our JV partner. So they are going the same products will be supplied to the companies or the customers in India. We, as suppliers, cannot make changes because that calls for many technical validations, which are required by the customer, which takes time. Hence, going forward by end of the next quarter, we will be working towards just starting supplies and validation from the Indian perspective to our customers in India. The SOP is around starting -- will be as planned about end of this year to begin with. And in our plan, what we have proposed is to localize these components by mid of next year because these are some -- the regulations and of course, customer requirements that after SOP of at least 6 months, then only a supplier can work towards localization. Regarding the components that are currently being imported, it is most of the assemblies related to electronics that are being reported from them. Again, mechanical parts are being already developed locally here. So we say about 90% is still imported.
This is helpful. And just one follow-up on this INFAC JV. So I presume there is no restriction in approaching any customer, right? You could get business from -- and who would be your competitors today in India, say, Outshine, Tata Motors or M&M or Honda or the other Japanese names, for example, everybody would be importing and that would...
So to, first of all, share with you, there is no bindation to go to any customer. We are happy to serve all the segments and all the customers, including four-wheeler, two-wheeler, commercial vehicle, tractors. As I mentioned, with even our JV partner, we have on order from Hyundai, KIA, Maruti Suzuki. Again, we are waiting for the LOI from 2 of new customers. And, of course, additional volumes and additional platform from the existing customers, which, of course, I cannot disclose until unless I get the LOI, but the order is confirmed, to give you that composition. Regarding our competition, of course, there are a few players from Korea as well as from Japan. Of course, it's a public news, so you may look for yourself as well. And everybody is importing right now. And I can share with you that we are the company who has localized most in our BOM compared to others.
And the last piece of question was when we INFAC very well. Is it possible to indicate about the other new JVs, Ride Vision and that [indiscernible] in terms of what exactly the product will be, the revenue potential and -- as well as our holding in these 2 JVs, it would be helpful.
So the Ride Vision is not a JV. It is a TLA, technology license agreement, from -- with this company, Ride Vision, from Israel. So they are the only company in the world who is manufacturing camera-based two-wheeler collision avoidance system. As you know that, again, in India, we are the only company to offer this technology. Of course, there are various challenges and opportunities. From the challenge perspective is the regulations. So of course, government is working towards -- coming up with safety and ADAS-related regulations, and we are hopeful that they will support us as well. We are, of course, requesting various bodies to support us and get this technology. Regarding the potential, of course, we are already in touch with various customers. We have already demonstrated this product on road to our various customers and customers are showing interest. Definitely, we have to do it -- we have to do the local adaptation due of the Indian environment. As we all know, our infrastructure is not the best compared to the world, but with the local expertise that we have, with the rain environment or dawn or dusk as well as other challenges, we are successfully now localizing this in terms of the adaptability. So we'll have to give us at least a couple of months' time to adapt it to the local environment. In parallel, we are working with the customers. And -- but more so, looking at the premium product, it is expected to come in the high-end bikes or more so cruisers, which are pan-India compared to the commuter segment. So this is what we foresee right now.
Chirag Shah, does that answer your question?
Hello? And the third entity -- sorry, I was on mute. Because your presentation indicates 6 partnerships, Ride Vision, INFAC, and the third entity, if you can brief, it would be helpful.
So we have 6 partnerships, Chirag. First is the Stoneridge, which manufactures instrument clusters and sensors, where we have 51% partnership. So this partnership is going strong. We offer products in terms of advanced electronics and technology. The second product -- second partnership is VAST, which is manufacturing four-wheeler access systems. Here, the partnership is 50%-50%. This is a product line which is going forward, going to be on the premium side as well as comfort and access. The third is the Silca, where it is into key systems or machining systems. The fourth is, INFAC, which I just now explained. Fifth is Furukawa Electric, where we are manufacturing wiring harness for four-wheeler Japanese OEMs, where Minda Corporation owns 25%. And Ride Vision is TLA, which I just now explained.
So I was referring to Silca. If you can just also brief the way and indicate on Ride Vision on Silca what exactly the product is and how big the opportunity is and when we can see that flowing?
Yes. So again, Silca is making keys for our vehicle access systems. And again, it's a very insignificant amount in our own portfolio. Bikash will be happy to provide you details after this.
The next question is from the line of Apurva Mehta from A M Investment.
Yes. Sir, can you throw some light on how is July and August is spanning? And what's the capacity utilization currently we are doing?
Yes Thank you, Apurva. So July and August are a good index. But as we know, the industry is still picking up. Four-wheeler or pass cars is doing better compared to the two-wheeler and commercial vehicles. And of course, as our organization, we are about 50% comes from the two-wheeler space. So when we really look at the July and August numbers, we are expecting to go towards the 70%, 75% of our capacities in order to service these customers here.
And on the keyless side, where we won orders, and -- what is your feeling? And how are we -- what's the customer feedback you are getting from different customers? And how are we planning to go ahead? And what is your feeling of getting more orders for this?
So Apurva, again, keyless systems is our most talked about product, and I'm very, again, proud to share that we are the world leaders in this. We have filed 21 patents only in the last year globally for this technology. So I would say that there is no other player in the world who is competing with us in this technology. Since it is a product which goes through premiumization and electronification, it'll add content per vehicle for Minda Corporation in the bikes to come. To begin with, of course, we have won orders. I just now explained to you the recent significant order, which is won maybe 1 week or 2 ago from one of the largest or #1 motorcycle player in the world for about north of INR 200 crores, especially in the EV space. There are, of course, other customers that we are supplying to. And also happy to share that this is already into start of production, into mass production. We're exporting this product into Europe already with our customers. We are in discussions with various products -- customers, which are, again, incumbent as well as new in nature. There are 8 current programs, which are running with various customers whom we are engaging with and the talks are in advanced stages. But surely, we are hoping to get these orders soon.
So any wins for the four-wheeler side maybe in export or in domestic, any wins on the -- likely wins on the four-wheeler side?
Yes. So on the four-wheeler side, our joint venture company, Minda VAST leads all these initiatives. So again, we have won orders from Maruti Suzuki and Toyota with a new upcoming platform in Bangalore. We've also won orders from Volkswagen India in such technologies, which is vehicle access in terms of outdoor handles, indoor handles and other product lines. So -- but the four-wheeler is catered by our joint venture company.
So on the keyless side also, that will be catered by joint venture?
That's right.
The next question is from the line of Rahul Jagwani from PGIM India Mutual Fund.
I just wanted your view on this chip shortage and the semiconductor shortage. I mean, how do you expect that to impact volumes in this quarter going ahead? I mean do you think utilization will still be low? I mean what's your view on that?
So thank you, Rahul. A great question. I think this is a concern which is bothering at the global level, so to say. We can see big OEMs being closed for weeks and months around the world and as late as Maruti Suzuki having challenges in Gujarat facility last week. So definitely, this impacts the overall supply chain, and we are also a very integral part of it. In terms of the semiconductors and electronics, most is impacted in our clusters business. And rest, we are not a big consumer of the electronics, so to say. Of course, going forward, we will be. But as of the current state, we are not. We have taken various actions and activities to make sure that because of us, the customer lines do not face any issues. And rather, we are extending our support to our peers also by various actions, which is unconditioned and nonnegotiable price settlement, noncancelable and non-reschedulable orders given to suppliers. Lead times are extremely high, so -- which has suddenly increased from 26 weeks to plus 52 weeks. So we continue to find various new avenues. We've asked our engineering teams to come up with value-added and value engineer proposals to come up with alternate proposals to offer these products. So there are various initiatives that are ongoing, which I think every supplier and customer jointly are taking. And of course, we are also working with our chip suppliers as well as our esteemed customers.
Okay. Okay. And secondly, I think, I mean, now you have sort of a sizable cash in the balance sheet. So I mean, have we formed up any plans for that?
Yes. Rahul, thank you again for the question. So Rahul, we are very prudent in our M&A going forward. We have clearly created and listed down norms, out of which we are not going to step out. More so, these are directed by the Board. So we are happy to have our cash in our balance sheet, but I know it is impacting us, but we will simply not go out and invest or do any acquisitions just by the pressure of having cash in our books. We are going to be looking at companies in our own area of expertise, in our own product domain. We are not going to do any acquisition in Europe or anywhere else, which is having a large operations or manufacturing base. That we are very clear. We are open to look at engineering centers and anything which gives us technology rather than only top line. Wherever our customers ask us to go, we will go. So there are various opportunities in hand, but we'll come back to all of you when there are something significant going to happen.
Okay. And just can you help with the gross debt number at the end of this quarter?
So our gross debt is about INR 502 crores.
[Operator Instructions] The next question is from the line of Abhishek Jain from Dolat Capital.
Sir, how is the geographic mix for the aluminum die casting business in first quarter? And what is your revenue guidance on this business?
So you'll have to give me 1 second on that. Maybe -- yes, so our business in the quarter 1 FY '22 has done about INR 122 crores. If I look at our quarter 4 numbers, we did about INR 150 crores of die casting business. So it is maybe of course, impacted by the overall outlook of the industry. But going forward, we have won significant orders in terms of our exports as well as domestic customers for the die casting question.
So what is your revenue guidance for the full year from the domestic and export side in aluminum die casting business?
So we don't give future guidances, but what we can assure you or what we can share with you is that this division would aspire to grow at a CAGR of about 15%. And we are looking at growing this further by our extreme and best relationships with our export OEMs per se as well as with the light-weighting opportunities coming in the EV space as well as aluminium content increase per vehicle is what we are focusing on. So definitely, we would like to grow this division much higher. But again, looking at the global outlook scenario, we are giving you maybe a pessimistic to a real estate number of about 15%.
Okay, sir. And what sort of the CapEx you're looking for in this business?
So for this quarter, we have invested, in this division, I think, about INR 6 crores for the die casting capacity increase going forward. But again, our being prudent i nature for the capacity going forward, we are demanding and requesting our customers to maybe give us upfront or looking at shorter depreciation time rather than the long ones looking at the various nature. But yes, this is a capital-intensive business, which requires CapEx going forward.
Okay, sir. Sir, the company has also started production from a new facility in Gujarat for the Interior & Plastics division and also expanded capacities in Mysore and the Pune as well. So what is your revenue and margin target from the Interior & Plastics division in FY '22?
So our Interior & Plastics division is growing significantly, and thank you for asking that question. So this year -- last year, we did a very small, about INR 30-odd crores from this division. But more importantly, we won businesses for the first time in India as well as for the group in products such as advanced air vent systems with the new customers, such as Toyota. Also, we acquired first-time businesses for our group, like center consoles for the upcoming models of Maruti Suzuki from Gujarat. So this is going to be being manufactured in Gujarat. Start-up production is going to be happening in the month of October, November. And this is, of course, a significant increase in content per vehicle from the group perspective as well as focusing on our exposure in the four-wheeler space. Going forward, we've also launched and won order for the oil pan, which is light-weighting from various engine manufacturers such as Tier 1 and other OEMs. We are working with them hand in hand while everybody is now focusing on light-weighting content per vehicle. We even strengthened our top leadership in the last month by getting 2 very known experts on board from the Interior & Plastics industry from India. Going forward, for the next year, again, we are looking at tripling our revenue from the last year in order to gain big sales. We already have order book in hand for catering these requirements. Of course, we have to invest in these businesses, looking at the overall opportunity, but this is surely going to give us return going forward.
Okay. Sir, my last question is related with the wiring harness margin. So in this business, RM inflation is paid by the customer with the lag effect of the 3 to 6 months. However, in the past 6 months, copper prices have gone up significantly, but it still looks, it is not passed on the -- passed on fully. So what is the margin outlook from this business going ahead? How much can pass on RM inflation impact?
So as I mentioned earlier, we have a back-to-back arrangement with our customers, which is maybe somewhere 3 months and 6 months, like you pointed out. With most of these -- again, if the copper prices continue to increase and the increasing trend, maybe an average of 15% to 20% every quarter, it becomes more so very difficult for us because of the lag that we get compensated from the customer. But internally, at the back end, we are working on various strategic actions and activities, which will reduce the impact and the losses for such RM increases. So this is what we would like to see. But going forward, with various activities on the profitability of the wiring harness division, we plan to come back to about mid-single-digit numbers to high single-digit numbers towards the next quarters.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to the management for closing comments.
So thank you so much. I maybe now hand over the call to our group CEO, Mr. Ashok Minda, for giving closing remarks. Thank you very much.
Thank you, Aakash. Thank you for your explanation. So I would like to thank all of you for joining us here today. If no COVID wave further or under disruption, Minda Corporation will definitely do very well in financial year '22. And I would like to again thank you once again for all of you and stay safe and healthy. Thank you very much.
Thank you very much. On behalf of Dolat Capital, that concludes this conference. Thank you all for joining. You may now disconnect your lines.