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Ladies and gentlemen, good day, and welcome to Q1 FY '24 Results Conference Call of Samvardhana Motherson International Limited. [Operator Instruction]. Please note that this conference is being recorded. I now hand the conference over to Mr. V. C. Sehgal. Thank you, and over to you, Mr. Sehgal.
Thank you very much. Good evening, ladies and gentlemen. Thanks a lot for joining the Q1 financial year '24 results of Motherson. I'm glad to announce SAMIL Board has approved the quarter 1 results. Motherson outperformed the industry in spite of inflationary headwinds on account of interest rates and wage bills across the geographies. The company has delivered strong performance and healthy growth of the top line as well as the bottom line on a year-to-year basis. All of our business divisions have performed well with double-digit growth on revenue and EBITDA. The leverage ratio remains at 1.4 level, which is well within our target max of 2.5x. These results demonstrate that with our continued focus on operations and delivering value to customers. Motherson is in a strong platform for growth. I have with me on this call, Vaaman, Pankaj, Kunal Malani, Char, and Rajat to help me answer any questions that you might have.
I now hand it over to Vaaman to provide you an update on the quarter highlights. Thank you.
SAMIL has had a strong start to the financial year with quarterly revenues of INR 22,500 crores and absolute EBITDA of INR 1,940 crores. At the outset, I would like to make clear that this is all organic growth. Out of all the acquisitions that we have announced, only INR 26 crores, 2-6 crores, is what is part of the acquisitions in this top line figure. So as you can see, this is a phenomenal growth of 27% in revenue and [ 64% ] in EBITDA on a year-on-year basis. I would also like to highlight that the PAT has grown from INR 142 crores to INR 601 crores in comparison to the previous corresponding year. Further, as papa already mentioned, the leverage ratio has been maintained at 1.4x despite the M&A payout and higher engineering inventory. SAMIL as a platform is now able to take full benefit of group synergies and inter linkages. And under a simplified structure, the outcome, which is demonstrated in our momentum and consistent performance in front of all of you. We believe that the macro environment is stabilizing, although at some elevated levels and there are still some headwinds that remain, such as rising interest rates and wage bills across geographies, which we are dealing with. By and large, though, the disruptions have normalized, and Motherson has now moved into business as usual mode. I'm moving into a year-on-year overview for all of you, which takes into perspective the consideration of the seasonality of the automotive production, which is, as you all know, significant. This quarter, the light vehicle production was around 22 million, which is a 16% increase year-on-year. And for the commercial vehicles, it came in at 842,000, which is about an 18% increase year-on-year. We believe the better availability of semiconductors has aided the stabilizing of volumes as the demand-supply lag is improving with the supply chain also easing. We are seeing strong growth coming from the organic side due to stabilizing automotive production and tailwinds on account of uptick in zero emission vehicles and the premiumization, which dovetails well with our new order wins resulting in seven new greenfield being set up in emerging markets. As we have mentioned to you before, six in India and one in China.
We expect the CapEx for the year to be at the upper band of INR 3,300 crores with this growth momentum. And we also believe that with the M&As going ahead, we may relook at the CapEx construct in coming quarters and see what that brings. However, this is all really good news as we continue to grow in this environment. We would like to thank our customers for their trust and support, and we continue to deliver as per the production schedules. There are ongoing conversations with customers with respect to the certain headwinds that we still see which is definitely resulting in a few of our plants, which are still operating at suboptimum levels due to issues such as inflated cost structures, labor, pricing issues, et cetera. We continue to maintain our focus on improving the red units, helped and also stay focused on improving profitability on a sustainable basis. M&A is another key pillar of our growth strategy. We are happy to highlight that we have closed seven acquisitions since April 23. Order which, like I said before, only INR 26 crores has really covered in the top line. So you will really see more of this momentum come in the coming quarters and in the new year, where all of this will really be captured. The customers have really supported us during these challenging times, and we are thankful for that. We are working in close collaboration with them, and we aim to bring innovative solutions to streamline and solve operational issues that our industry is seeing. These acquisitions will add a lot of value to our offerings and will definitely provide new growth opportunities for Motherson. We believe this will contribute to additions in our yearly revenues of almost USD 5 billion in gross levels and about USD 1.1 billion in net levels. We've added 41 facilities into the Motherson ecosystem. And again, we are very grateful to our customers for their continued trust and we also welcome 8,500 employees of these new companies into the Motherson family. On top of this, three M&As that we have announced are still pending closure, [ Sumi ], Yachiyo and Dr Schneider which would further add revenues of 1.4 billion next year. It is important to note that all of these above are strategic in nature and all are also cumulatively cash flow EPS accretive -- cash EPS accretive. The faster integration of these assets will enable us to go after even more M&As. The automotive industry continues to evolve with changing technologies required for zero-emission vehicles and the premiumization. As a result, we believe there are even more opportunities and customer-driven deals with fewer players to really be able to conclude these. We believe we are in the driving position here and exciting times are up ahead for Motherson. With this, I would like to conclude the highlights and open the floor up for the question and answers. Moderator, can you please support that?
[Operator Instruction]. The first question is from the line of Siddharth Bera from Nomura.
Sir, my first question again is on the acquisitions where you have mentioned that we have added about INR 26 crores of revenues. Where will this be mainly accounted with these coming as a part of the stand-alone or any particular segment? Can you just indicate where will it be getting accounted right now?
Kunal, can you take that?
Yes. A little bit in the polymer side, a little bit on the emerging business side. The two we have closed is YMAT and Bolta, Bolta lies at polymer, YMAT lies at emerging business side. All of them are in the consol, none of them are in standalone.
Okay. Got it. Got it. And second question is on the stand-alone side, sir. So if you see the growth has been quite strong at 25% on the revenue side even if I look at the passenger vehicle industry volume growth, it has been quite soft, like about 7% in the quarter. So are we adding any new orders or what is driving this strong growth according to you? So if you can just highlight a few reasons there.
Yes, I'd like to take that and maybe the team can support. Look, we've always told you that SAMIL with all the JVs that we had signed and see did in the past are now coming to a very good place where they are ready for exponential growth. The orders taking, which has happened in the past is now being executed. And these are very exciting JVs that have come in to the [indiscernible] side, and the order execution is happening, which is increasing our value content as well. So definitely, we are placed to grow perhaps a bit faster than how the market is growing because of our strategic positioning in the products that we're offering to the customers and the premiumization that we talked about and our value content growing up. So that's a result of the hard work of teams to bring in the right products, and that's what you're seeing.
Got it. Also, sir, if I look at the standalone numbers, there is a credit loss provision, which has been reassuring every quarter. Even in this quarter also, I see that about INR 11 crores, INR 12 crores provisions have been factored in. Possible to highlight what is this exactly and why it is coming up every quarter in the past few quarters?
Kunal?
I will continue working in trying to turn them around. And as part of it, there are ongoing conversations around this, where we're obviously taking a strong stance on some of these aspects. So conservatively, we are building some of these provisions in order to highlight that we'll be happy to take losses on board, but we won't be running businesses at lost perpetually. So it is more a conservative piece. You would also have noted that some bits of improvement is visible when we look at the minority interest has turned positive now. Share of profits from investments have turned profitable now. So it's heading in the right direction, taking still some time, but we're heading in the right direction.
Got it. And sir, lastly, if we look at the net debt, that also has gone up quite a bit. If I look at all compared to the last quarter. So any particular reason why it has gone up? Is it more seasonal? Or how should we understand this?
Kunal?
It is seasonal in nature. You would see this trajectory happening pretty much every year, where there is a buildup as we move into the summer months. And then there is a ramp-up again in H1, summer months come down. So this is part of that bid of that approach. Besides that, I think we have also built up some of the engineering revenue. Last quarter, we disclosed $70 billion worth of order book. That incremental growth and as these production volumes come into play, the engineering associated with it is the other piece of the pie, which is adding to the inventory piece of it. So -- and there is a working capital expansion pretty much similar to how the net debt has played out.
Next question is from the line of Raghu from Nuvama.
Congratulations. Good to see extremely strong performance. Sir, firstly, on the profitability at Vision Systems or SMR, any cost pressure being seen here, cost seems to be higher in this quarter compared to the past two quarters?
Rajat?
So look, nothing in particular. It is -- as we shared, there are some softening on the commodity side, which is helping. And then there are some pressures on the base side that we are facing in certain geographies. So it is a mix of various factors moving around. But I mean what we also have seen last year is that we have had settlements with the customers or the discussions that we've been having and supported us during that process. And as we go into this year, this again is there some discussion with customers wherever it is required. So that's something which will carry on, but I would say nothing in specific.
Got it. Sir, so...
Sorry, if I just may add a few so that you appreciate this a little bit more. I think last year, we had mentioned very clearly that we should not be looking at it only on the quarter-end phenomenon and how the margins are performing, but more at an aggregate level for the year is a more reflective picture. That if you look at SMR or Vision Systems, that was at 9.8%, if I remember right, for the aggregate. And this performance is -- it is an absolute levels, highlighting a little bit the growth rather than the growth from that perspective. So just bear in perspective, and this is first quarter, which seasonally is not the strongest quarter.
Very helpful. The seasonality, which is associated with the first quarter, is there any specific costs which are -- one is I understand employee costs. But apart from that, is there any other costs which are generally on the higher side in first quarter?
So this is again, that's for the business system, right? This question.
Yes, sir.
Look, as I know, there is nothing unusual other than the seasonal factors that we have. But again, I mean, if you're comparing quarter-on-quarter, as Kunal also highlighted, there are some year-end final settlements that happened. And also, I think it would be worth noting that there were also some pending settlements that happened for the prior period, which actually got converted on the last 2 quarters. So maybe that is something which if you compare with those last 2 quarters, it might be giving you a bit of an anomaly there. But I think if you compare Q1 to Q1, quarter-on-quarter, you can actually see an improvement. And that I think will be a more appropriate comparison for you.
Very useful. And Kunal, in terms of energy cost, in recent months, gas prices have again started seeing a bit of increase, would you consider taking hedges? Or is gas prices now part of customer contracts going forward?
There are some pieces hedged. A lot of it actually not hedged because a lot of it has been discussed with customers, either in terms of indexations or in terms of coming back to them as and when there is a change in the pricing structure. So it's a mixed bag, but I think the industry in general and Motherson, I would imagine, has started both evaluating this a lot more closely and working with the customers to work parallelly to see if there are any inflection points at which we need to discuss one way or the other on the pricing front.
Got it, sir. On the EV side of revenue, it's very good to see INR 1,600 crores number. And directionally, EV transition is helping increase in content revenue and profit in dollar terms, does EV business also have better margins?
I think, look, we have a lot more clarity on that in the investor day that we had last year. Definitely, we believe that the shift towards EV vehicles definitely has a good positive impact for most of our products. And as you know, we are actually engine agnostic in that sense. But for the EV offerings that we have because they have a lot more, let's say, aesthetic part of more technology embedded into the offerings even the [ via Hanson ] has constantly changes if you're looking at EV, it only augurs very well for us. Although definitely is to be seen how these offerings are accepted by the market and how they continue to grow. Like I said, from a Motherson side either which we were on both the platforms, so you are seeing that we are there on the new platform, we are there on the traditional platforms. So regardless of which was really play out, I think we will continue to grow.
One last question on share of profit from associates, there is an improvement. So it would reflect better profits from Motherson [ buying ], but losses have reduced from other associates. Any major associates that you want to call out where there is an improvement?
Look, I think Kunal can help me on this, but there are multiple companies. There are multiple joint ventures that we have and also on the India side, we're seeing a lot of progress that's coming up with all the smaller companies that are now growing to a good level. Of course, there remains some companies with some certain issues, which is normal with the size of the group that we have. But we are quite focused on it. I think we already told you that we are very much focused on each and every trade unit that is there, and our goal is to reduce or bring to 0 as many as possible. in this 5-year plan and the aim is to make all of them green. So those efforts are paying off, as you've seen a reduction in those numbers, the market is coming back, some tailwind in the numbers that's also coming that's helping the whole scenario. But we are quite focused and there's a special team that's only looking after these reg units, making sure that we are working together with the entire stakeholders, including the customers to make sure that we have good solutions for [Indiscernible]. On top of that, as you know, we're also acquiring companies, which will help to bring more scale to some of these issues that we have on a global basis. So yes, so overall, there's a multipronged approach to solve this issue. And definitely, this number should continue to go down. And if you have some luck with the numbers continuing to increase, that should really help it.
Next question is from the line of Amyn Pirani from JPMorgan.
Yes. So my question was on the wiring harness business. So on the consolidated segmental you've seen a very sharp improvement in the profitability of the wiring harness on both Y-o-Y and quarter-on-quarter. Given that Motherson wiring -- Motherson Sumi, wiring harness not really seen any margin improvement. Is it fair to say that part of this improvement is driven by PKC? And if that is the case, what is the outlook for the PKC business and the margin improvement trajectory there?
Pankaj, can you take that one, please?
Well, the margin improvement has been all across, and the business is not only consisting outside MSWIL of PKC, but also [ MWSI ] and various other units of summer. It includes also exports from India as well as our entities in [ China ], in Thailand, Mexico and U.K. So there are multiple areas. And the focus has been in terms of making improvements. As one mentioned earlier that wherever the reg units were for one reason or the other, they have been in the past from sharp drops of the customers' volumes in some of the regions and in many others, there were erratic production, which have been causing a lot of pain and some of these areas have improved. So that is what is reflected and also the settlements with the customers to bring the cost levels to the real situation which is there. And the situation is always moving, and we all work towards that, so that we can keep making the improvements and keep part of that pace with the changing environment model.
Okay. Okay. And just a broader question. Last quarter, we had heard from you that the conversations with customers with respect to cost inflation pass-through has been concluded. We had seen the benefits also of that. So as we stand at the end of 1Q, are there still some costs which are yet to be fully like pass through to the customers? And are there conversations going? And are there any benefits that we expect in the coming quarters?
Look, these are moving parts, right? I mean, can you tell me where energy prices are going to be in the next couple of quarters? I don't think anybody really can. So all those things which are still really moving, which are volatile, those conversations will definitely continue until we don't see stability in all of that. I think definitely on the -- perhaps on the wage increases, obviously, that happen once a year. So those product cemented, already done. But some of these bits which are moving parts, there will be continuing conversations still we don't see stability in there and the customers also acknowledge that this has now become part of the daily operations. So wherever there is volatility that is not in our control, those conversations will continue. So -- and I think the customers also appreciate that and acknowledge it.
Next question is from the line of Pramod from Incred Capital.
So first one is with regard to the EBITDA margin expansion in the volumes business, especially in recent quarters, it seems to be feeling [Indiscernible]. Any key drivers you can share of? Or can you make it a part of PPG now your disclosures are more becoming vision-wise, what you're driving might be similar fund modules are providing what are the drivers and how sustainable they are so that we can get more productivity on their expansion or build them to a model.
Kunal, I couldn't hear the question very clearly, there was some [ casting ] and the noise. If you heard it, can you answer it or direct it?
Sorry, I didn't catch the question either. Could you repeat again?
Sure. So I was saying the wiring and modules in both the divisions, it seems to be scaling a new high in terms of EBITDA margins in recent quarters. As your disclosures has improved on this division side, would you be able to give more color where it's coming from, what parameters are leading to this so that we can try to predict them and try to bring them in a part of our projections. Or can you just give us some sort [Indiscernible] which is driving this EBITDA scaling new highs in use to be.
And look, I think, first of all, it is not only wiring, polymers, but I think all our divisions have done well, and the teams are actually commonly playing out for all the divisions. There is a piece of operating leverage that is playing out given the expansion in the order book and the execution of some of the earlier contracted orders. Vaaman spoken enough about, I guess, premiumization and value content, et cetera, that is all getting embedded in there. So that's adding on the operating leverage side. There is a tailwind on account of some of the commodity prices, et cetera, especially when we start looking at it from previous year to current year perspective, again aids the [ productivity ]. There are headwinds, however, that still remains on the inflationary side, both on supply chain as well as on the [ bid ] side.
So some pluses and minuses are the cases. But as we've been saying now, things are looking relatively more stable. There are obviously still work to be done on many of the reg units that are there. Those conversations are ongoing as some of the variables change, we need to be continuously discussing with the customers to figure out ways of getting those compensations in place. So that is now pretty much business as usual construct now is the way we see it. And hence, we should be seeing again improvement, as I said, on a year-on-year basis as we move ahead as well. So the trends are clearly favorable in that direction where as a pure volume construct sector, I think the industry is in spite of all the recessionary talk around still continues to showcase growth. So I think we are looking at better times ahead.
And the second one is the September quarter seems to be bulky with two large acquisitions to be part of the revenue, if I see your SMRPBV, the presentation, right? So can you indicate -- have you decided where you will place the large acquisitions in terms of division disclosure? And any impact we need to see on the margin profile, if that is the case for those divisions?
Kunal, can you take this? I'm not sure how much we can speak about these acquisitions at the moment.
Look, I think SAS, which we have closed will -- is a relatively newer line of business in the sense that it has a much larger assembly component to it. And hence, we will likely classify this as a separate division, along with some of the other similar kind of businesses that might be lined in some of our existing divisions. So that's the most likely outcome. We're obviously still looking through some of these aspects and then take a call around it. I think the other large one is you're referring to the Yachiyo one, that is still some time away, so we really haven't given it a thought around that construct. And if you're thinking about Dr. Schneider, that will be part of the Modules & Polymer business.
And the last one is with regard to the M&A wins. The speed at which you're closing the deals, it looks impressive. So at the same time, if I had to look at your PPT, when you are talking about global growth and as you referred to the -- even though recession fears are there, but the actual volume momentum seems to be steady double digit. So I wanted to know your thoughts these discussions were always on and is there a change in fund availability for these entities, which is making you to get the deals at your valuation or terms and hence you were able to close it? Or what's happening in the environment, which is turning favorable to you?
Kunal, I can start, and you can add. Look, I think we've always told you that we stay true to our vision to be a globally preferred solution provider. And I think we have really focused on making sure that wherever the customers have issues, we are really the people there to be able to give them a lasting sustainable solutions to these things. And our track record is speaking for itself. So whenever there has been acquisition that Motherson has done in the past, we have solved those problems. We continue to hold those assets, we invest in those assets, we are growing together with the customer. And the track record all really speaks for itself. So I really can't comment on the others, but I can tell you that definitely, we are extremely focused on the customer. And working together with them, finding sustainable solutions and trying to get out of the mess that we've seen in the last few years with all these impacts that have come and hit on all sides, and finding good solutions to these companies, which have good technology or have a strategic location advantage or many things that could be working for it, which the customer wants to preserve and make sure that when a company like Motherson comes in, not only do we preserve that, but we enhance it. And that's why the trust is there. And I think that's all I can say. Of course, the seem hard work done by the team, the board really appreciated. This is a large number of acquisitions that have happened in a short period of time. The entire Motherson team has been working around the clock to make sure that the customers requests have been answered, and we've given it our best shot to come up for lasting solutions for these companies. And we're really quite proud of our efforts. And we've been patient in the last few years waiting for the right moment to really go out there and do acquisitions. So that's a combination of all these things coming together and definitely very, very hard work done by the teams to get us here and to make sure that the customers trust is full in us.
And if I might just add, in spite of all our leverage is still going to be below 2x that highlights how our existing business is performing as well as the comfort we have on some of the newer assets that will come on board. And things are where they are, we will probably be, give or take, in and around where we are today on the leverage as well. So this is not coming about much expansion on the leverage ratio side.
Next question is from the line of Vibha Bharadwaj from Capital Insights. You did not respond. We move on to the next participant. Next question is from the line of Nishit Jalan from Axis Capital.
Congratulations on very good set of numbers. Just two clarifications. Vaaman, in your opening remarks, you mentioned that there are a few M&As which are pending and which will lead to -- which will add $1.4 billion of revenues next year. Just wanted to understand which three acquisitions you're talking about because if I understand correctly, there are more than three acquisitions which are pending closure. And secondly, you also mentioned that a part increase in debt from Q4 to Q1 is also because of payment for the acquisitions. Is it possible to quantify how much did you pay in Q1 to complete all the acquisitions. Just wanted to understand how much is seasonal and because of increase in engineering inventory and how much is because of M&A?
Second one, I'll ask Kunal to go through. But look, what we were saying was that the three acquisitions that are still to happen are some, which is the aerospace one, the Sumi, which is aerospace one. The Yachiyo which is the Honda-san one that we announced. and Dr. Schneider. So there are antitrust approvals that need to happen, there are closing things that need to happen. So all these are moving parts. And as they close, that's when they start to get added. When I said that they will add $1.4 billion, that's the pro forma for the full year, that will come. So obviously, as every quarter comes depending on which quarter of the seasonality as well. That will get added to the top line of the company. And of course, the ones that are profitable, that will add there as well. And we believe like we said that they're all EPS accretive. I believe that we have structured them well to get off the ground running with these things. And they will immediately add to both the top line and bottom line of Honda-san. So that's just depending on the closing time for these acquisitions. As you know, these are all regulatory things that happen. But a couple of them have already closed. So you will see some of them already kick in, in the next quarter. Some of them will kick in. Definitely Yachiyo will be more towards the next year somewhere around March, we believe the closing will be. But the work doesn't stop for us. I think, obviously, once we announced the acquisition, we already start working together with the customers, together with the teams as much as we are allowed to do in a [ lease ] manner to start preparing ourselves so that as soon as it closes, the impact is immediate. So that's what I meant in the first part. I hope I'm able to answer that. If you want further clarification, please see that now.
I think it's clear. I just wanted to -- just one doubt, SAS acquisition has been closed now, and it will be part of revenues in 2Q?
Which one?
SAS Autosystemtechnik, which we announced in February.
For next quarter onwards. So Kunal, correct me?
Yes, it will be part of Q2.
Yes. And Kunal, if you can just answer that part, it will be very [Indiscernible]
I think this quarter, we basically closed YMAT and Bolta and Prysm as well. Altogether, I think the payout would be somewhere in the INR 150 crore reason.
Next question is from the line of Amar Mourya from IndiaNivesh.
This is Rajesh Kothari from AlfAccurate Advisors. So, I have just one question. I actually missed the opening remark, if any, by the management. Just wanted to know in your view, how the -- you think the capacity utilization from here on, do you see significant improvement in capacity utilization based on the key customers' outlook on the industry?
Yes. Thanks. Look, capacity utilization is a broad term for us. Thousands of products and we also -- as you know, if you've been following us that we did a significant part of the CapEx for the order book that we announced in the last quarter was already done. So all that you are seeing where we are investing now is for future growth taking due for all, of course, the new orders that we are getting and also, of course, the new acquisitions that are coming in, which will add on their own CapEx there. But on the capacity utilization rate, I think for the order book that we have, we are substantially covered. We're only gearing ourselves for future growth that is coming. And happy to answer any more around that if you have further questions.
Basically, my question is a little bit different. What I'm saying is, over the next, say, 12 to 24 months, do you see significant improvement in capacity utilization from current levels based on the outlook from your customers?
Rajesh, this is Chaand here. I think you are -- just wondering, can you that if capacity utilization, if you imagine that if we are working on 100%, then we will always fall short and stop the customer line. So we don't want our capacity to be utilized more than 75%. If it goes to 75%, immediately, we start to make it half because that means the models are doing very well, and we have to have it on the front on the ground. Because 1 month to another, the capacity sometimes needs a tremendous amount of growth. So it's not -- we are not a cement producing company that capacity utilization 100%, 100% is great. In the component car production we don't want to go beyond 80%. So the whole planning of setting up a greenfield happens when the plant has already hit 80% capacity.
True. No, no. So you are absolutely right. So my point is basically, currently, where are we? And of course, we are putting up CapEx and the capacity based on the customers' outlook and the guidance. So currently, where are we...?
We are 32,000 parts here, which capacity are you worried about?
Overall generally because I'm sure you can't give me product-wise and plant-wise.
We don't make one part. So we [Indiscernible] wiring harness, polymer. It's so many parts. I mean we don't sell in the open market in anyway.
And they are still below the coverage levels of the automotive industry. So there are still, we believe, 15%, 20% to go for the highest that we have reached, and we are toiling back. But I think the outperformance that you're seeing by Motherson is because we grew faster than the market. We grew more value than the market and the premiumization and these trends that we have talked about are we playing out in a fee which helps our products which are directly impacted as the numbers grow. So look, no one really knows the 12 to 24 month thing. I think were to grappling with quarter-on-quarter as the last couple of years being with multiple different issues that have been hitting us. But we are optimist. We are diehard optimists and we believe the next 12 to 24 months will be much better.
Much better We've grown 27% in this quarter also anyway. Year-on-year.
[Operator Instruction]. As there are no further questions, I will now hand the conference over to the management for closing comments.
Thank you. I think it is important for you to understand that we are very customer-focused. And when we are growing, it automatically means that the customer is growing. We don't sell anything in the open market. We've never done that before also beta we're doing it now. So capacity utilization and all that for us is to some extent, is relevant.
But if it helps you, moment, we will touch 80%, we will try to bring it down by a new plant and try to bring to 40%. That's the way we have to be, because in the automotive business, it's required. But I think the Board, again, congratulations that under such tough circumstances, the companies have done such a good job on all engines are firing. We are also would like to say that in the first quarter, we've just over -- in March, April, we have actually just closed all the past years whatever increases and decreases had to happen. We've done that. And first quarter, we are waiting for whatever is going to play out, then it has -- we have applied and put pressure back on the customer or on the other forces to make sure that the price stay. I hope and wish all of you a good week, weekend tomorrow, later. Thank you very much for all the questions. Bye-bye.
On behalf of Samvardhana Motherson International Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.