UNO Minda Ltd
NSE:UNOMINDA
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
802.85
1 366.3
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
This alert will be permanently deleted.
Ladies and gentlemen, good day, and welcome to the Uno Minda Limited Q3 and 9 Months FY '25 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions 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. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil Bohra, Group Chief Financial Officer, for his opening remarks. Thank you, and over to you, sir.
Thanks, Sagar. Good afternoon, everyone, and a warm welcome to all the participants. On the earnings call today, I am joined by my colleague, Ankur. We have uploaded our financial results and investor presentation for Q3 and 9 months FY '25 on the stock exchanges and our company's website. We hope everybody had an opportunity to go through the same. I would like to begin by giving some insights on the economy, followed by the current scenario in the auto industry and our financial and operational performance for the quarter and 9 months. Post that, we will open the floor for Q&A.
The global economy is projected to grow at 3.3% in both 2025 and '26, remains below historical average of 3.7%. The U.S. continues to grow at 2.7% in 2025, driven by strong consumption and a resilient labor market. In contrast, the euro geography seem to be weighed down by weak manufacturing and geopolitical concerns. Despite fiscal support, China's growth is expected to remain at 4.6% in 2025, as property market challenges persist.
Further, global outlook looks challenging due to trade and geopolitical risks. This may disrupt global supply chains, reduce investments and delay growth prospects, particularly in trade-intensive sectors. The geopolitical scenario, including tension in the Middle East and some other provinces remain unresolved. Meanwhile, emerging markets are showing mixed performance. India, on one hand, continues to shine with growth holding steady at around 6.5%, supported by strong domestic economy.
India's growth is expected to remain stable with limited downside risks compared to some of the other emerging markets. This stability is a testament to the country's ability to navigate global headwinds, including potential trade policy uncertainty and geopolitical issues in some of the regions. In this uncertain environment, agility and strategic planning will be key. As a company, we must remain vigilant, adapt to changing conditions and seize opportunities where they arise.
Moving on to the automotive industry. For the quarter ending December '24, the Indian automobile industry demonstrated growth in Q3 FY '25, achieving a steady year-on-year volume growth of approximately 7%, with total production reaching around 78 lakh units. This positive performance was largely driven by robust demand in the 2-wheeler whereas PV segment contributed with marginal growth. However, the commercial vehicle segment saw a decline in production, as it has faced sluggish industrial activity and delayed government expenditure.
In Q3 FY '25, the passenger vehicle segment demonstrated production volumes growth of 3% year-on-year to reach 11.7 lakh units. The growth in passenger vehicle slowed a bit after a stellar last few years. Meanwhile, as per product, dealers anticipate strong consumer pull from new SUV launches, [indiscernible] and its maturing EV ecosystem, though price-sensitive buyers and interest rate fluctuations remain watch points.
In Q3 FY '25, the commercial vehicle sector experienced a modest decline of approximately 2%, reaching around 2.4 lakh units. This subdued performance was largely attributed to a slowdown in industrial activity, delayed government fund disbursement and sluggish financing approvals, prompting many customers to defer purchases. However, optimism is building, particularly in regions benefiting from infrastructure projects. The sector is expected to see a gradual recovery, supported by an accelerated pace of infrastructure development and government incentives, which could drive fleet renewals and expansion.
The 2-wheeler segment delivered a solid year-on-year growth of approximately 8% with production reaching around 59.2 lakh units. In contrast, the 3-wheeler segment witnessed muted growth, reflecting broader market sluggishness. However, towards the end of the quarter, the 2-wheeler segment experienced a month-on-month decline primarily due to a delayed government fund releases and a stricter financing norm imposed by lenders.
These factors dampened market momentum and had some impact on softness in demand. Despite these near-term challenges, the long-term outlook for 2-wheeler and EV segment remains positive. Improved supply chains, new model launches and strengthening rural demand are expected to provide a significant boost. Recently presented Union Budget 2025 is well balanced in terms of supporting India's aspirations of emerging as a global hub for tech and innovation. While supporting MSMEs, the nation's backbone and creating more job opportunities for the nation's youth. The most newsworthy and important announcement is the increase in income tax exemption limit to INR 12 lakhs.
For consumers, this opens access to more disposable income, which has the potential to translate into increased spending and may have positive impact on automotive demand. Presenting the Union Budget 2025, the Finance Minister highlighted a strategic push for the EV industry, focusing on enhancing both supply and demand. The government's commitment to indigenous manufacturing is clear from substantial allocation of funds to various schemes like PM E-DRIVE, AUTO PLI and ACC PLI. Personal income tax relaxations aim to boost private consumption, complementing these supply-side measures.
Customs reforms include exempting basic custom duty on lithium-ion battery scrap and critical minerals like lead, copper, et cetera, ensuring a steady supply for local production and job creation. To further support the EV sector, BCD exemptions have been granted to additional capital goods to bolster lithium-ion battery production. Overall, the budget was encouraging for the industry and likely to support medium- to long-term growth of the industry. Before we dwell into our financial and operational performance, I would like to highlight about our impressive showcase of innovative technologies and solutions at the recently concluded Auto Expo Components Show 2025.
We highlighted our commitment to personalized autonomous, connected and electrical mobility solutions. We are a dedicated green mobility zone featuring 3 technology demonstrators TD125 electric skateboard, TD425 electric buck and TD225 electric bike, highlighting cutting-edge product portfolio for e-2-wheeler, e-3-wheeler and e-4-wheeler specific solutions as well. In that zone, we unveiled state-of-the-art products like highly integrated e-axles, intelligent battery management systems, dual charging capabilities and seamless connectivity, all designed to redefine the electric mobility experience.
Our advanced lighting solutions included connected pixel-based digital tail lamps, OLED lamps and adaptive lighting. Personalized and smart innovations featured augmented reality heads-up displays, Capsense switches, AVAS, ADAS, and vehicle control units and software-defined vehicle controls. We are delighted by the overwhelmingly positive response received from customers, government officials who visited our stall including some of our investors and analysts. Thank you.
Moving on to financial and operational performance for Q3 9 months FY '25. You can refer to Slide #8 and 9. Uno Minda delivered yet another quarter of strong financial performance, outperforming industry. The group revenues for the quarter grew by 14% to INR 5,056 crores, whereas growth is more pronounced in consolidated revenue, which grew by 19% year-on-year to INR 4,184 crores, driven by broad-based growth across multiple product lines and further supported by consolidation of Minda Westport and Minda Onkyo in the current financial year.
Notably, the lighting, alloy wheel, switches, EV components, sensors and controller segments exhibited strong performance. EBITDA for the quarter reached INR 457 crores, reflecting a 20% year-on-year increase. EBITDA margins improved to 10.9% in comparison to 10.8% in corresponding quarter previous year. Finance costs for the quarter increased to INR 47 crores due to higher borrowings to fund CapEx, land acquisitions and working capital.
Depreciation also rose in line with capitalization of new projects. The company's share of profit from associates and joint ventures is INR 40 crores in Q3 in comparison to INR 44 crores in the corresponding quarter previous year. The share of profits of associates JV was lower primarily on account of Minda Westport and Onkyo becoming subsidiary and their profits being consolidated. Besides all JV, namely Denso Ten, ROKI, TRMN, TGT, TG JV entities have reported strong operating and financial performance.
The tax rate for the quarter was lower due to onetime accounting of tax benefit on past losses at Kosei Minda consequent to approval of merger by NCLT. Uno Minda's profit after tax increased by 21% year-on-year to INR 233 crores in Q3 FY '25, reflecting the overall robust financial performance. For 9 months, we have achieved consolidated revenues of INR 12,246 crores, registering a growth of 20% on a year-on-year basis.
The EBITDA for the period grew by 21% to INR 1,347 crores. The profit after tax, which is Uno Minda's share for 9-month period was at INR 677 crores as against INR 588 crores in the corresponding period, reporting a growth of 15%. Coming to the business segment-wise performance, you can refer to Slide #12. Our Switching Systems segment delivered outstanding performance in Q3, generating revenues of INR 1,045 crores and contributing 25% to our consolidated revenues.
This marks a year-on-year growth of 10%, driven by increased kit value from high content, greater share of business with some customers and a robust recovery in domestic 2-wheeler segment. The 2-wheeler switch business continues to thrive, supported by strong industry volumes and improved export [Technical Difficulty] capacity switches in a recently launched passenger car. The consolidation of our 4-wheeler switch plant from Manesar to Farrukhnagar is progressing as planned and is expected to be completed by Q3 FY '27. Moving to lighting. Our lighting business remains a key growth driver, significantly contributing to the company's performance.
In Q3 FY '25, the segment generated impressive revenues of INR 982 crores, marking a 15% year-on-year growth and accounting for 24% of consolidated revenues. This quarter also saw the lighting business achieved its highest ever quarterly revenues, driven by strong growth in both the domestic 4-wheeler and 2-wheeler lighting business to OEMs. During the quarter, we commissioned our new 4-wheeler lighting project at Khed, starting supplies of pixel-based digital tail lamps for recently launched passenger car.
This innovative product has set new benchmarks in the Indian lighting industry, receiving rave reviews from customers. As announced last quarter, the implementation of our expansion project in Indonesia has begun and is expected to be commissioned in phases starting from Q4 FY '26. Moving to casting business. The business showcased robust performance in Q3 FY '25, generating revenues of INR 768 crores and contributing 18% to consolidated revenues. This includes INR 408 crores from 4-wheeler alloy wheel segment and INR 223 crores from the 2-wheeler alloy wheel segment and the remainder from the die casting business.
The casting business experienced a 13% year-on-year growth led by the 2-wheeler alloy wheel segment, thanks to the ramp-up of the enhanced capacity added last year. Both the 2-wheeler and 4-wheeler alloy segments have witnessed substantial growth supported by capacity expansion initiatives. We are expanding our 4-wheeler alloy wheel facility in Bawal by an additional 30,000 capacity scheduled for commissioning in Q4 FY '25.
Additionally, the construction of a new greenfield plant at IMT Kharkhoda with a capacity of 120,000 wheel per month and a 2 million alloy wheel plant for the 2-wheeler segment at Supa, Maharashtra is progressing as planned. Our aluminum die casting business has grown approximately INR 200 crores -- from INR 200 crores in FY '21 to over INR 500 crores now. Starting with engine covers and other body casting products, we have expanded to applications in the seating business and electric vehicles for battery housing and chargers. New opportunities are emerging, requiring us to increase our capacity.
Consequently, the Board has approved a CapEx of INR 72 crores for the expansion of the aluminum die casting plant in Hosur from 11,000 tonnes per annum to 15,000 metric tonnes per annum. The enhanced capacity is expected to commence in phases from Q4 FY '26. Moving to Seating business. It generated revenues of INR 273 crores in revenue during Q3 FY '25, contributing 7% to consolidated revenues. While domestic business demonstrated steady growth, the export segment faced headwinds due to a downturn in the European market, particularly impacting one of our key customers.
Overall, export for seating year-on-year is lower by around 18%. During the quarter, we commenced supplies of pneumatic suspended seats to a domestic OEM. Additionally, we secured a substantial export order from a new customer that is expected to bolster our export growth in the coming quarters. As we progress into the subsequent quarter, we anticipate boost in revenues from a ramp-up of volumes of a newly added OEM customer, driven by 4 new model launches by them, increased volumes from e-2-wheeler OEMs and the commencement of supply of pneumatic suspended seats. Therefore, we remain confident in the growth potential of our Seating business.
Moving to Acoustics business. The segment generated revenues of around INR 184 crores for the quarter, representing a stable 4% contribution to our consolidated revenues. While India Acoustic business remains stable, our European subsidiary, Clarton Horn was adversely impacted by downward trend in the European auto industry. Moving to other product businesses. The segment achieved revenues of INR 933 crores for the quarter, contributing 22% to the overall top line.
Of this, almost INR 150 crores came from controllers, around INR 209 crores from sensors and ADAS, INR 119 crores from blow molding products, INR 136 crores from Minda Westport and INR 123 crores from the UMESPL. Most of the business under the others category are performing exceptionally well. Our alternate fuel system business continues to grow, reaching new heights every quarter with many OEMs focusing on increasing their presence and volume in the CNG segment. The controller business was supported by strong volumes for offboard chargers for [indiscernible] and our diverse sensor offerings are driving growth of our sensors and ADAS business.
Following our large order win for 7.2 kilowatt EVSE from Japanese OEM last quarter, we have secured another order for 3.3 kilowatt for their EV PV models. Our European engineering service business under CREAT GmbH has been working on groundbreaking innovative technologies. In yet another milestone, they have won an order for engineering services for headset displays and sunroof illumination systems. Moving to electric vehicles, you can refer to Slide #16 and 17.
Revenues from EV 2-wheeler OEM was INR 238 crores in the quarter as against INR 228 crores in the last quarter and INR 164 crores in the corresponding quarter last year. During the quarter, we started supplies of 500-watt onboard chargers and 950-watt onboard chargers. With SOP of multiple orders lined up in the next 3 to 6 months, outlook for e-2-wheeler specific component business continues to be very promising.
Besides e-2-wheeler, we have also been supplying components to e-3-wheeler and e-4-wheeler. Our revenues from e-3-wheeler is around INR 74 crores, primarily comprising of EV-specific components. Supplies to e-4-wheeler mainly comprises of our existing and traditional products. Moving to aftermarket and international revenues, you can refer to Slide #14, please. In terms of our revenue pie for the quarter ended December '24, OE business accounted for 92% and aftermarket business at around 8%. Our aftermarket division revenues have grown by 17% to INR 319 crores in Q3 in comparison to INR 273 crores in corresponding quarter last year.
Our increased focus on marketing and distribution for aftermarket products is reaping benefits. Our international sales represent approximately 11% of revenues. Though exports were slightly better than last quarter, they are still down from the peak. As highlighted last quarter, due to lower industry volumes in EU and U.S., our international sales continue to be negatively impacted on account of lower exports and lower sales in European subsidiaries.
International sales revenues share is also decreasing as our domestic business takes higher share due to more pronounced growth. We are happy to inform the Board has also approved and declared interim dividend of INR 0.75 per share, which is 37.5% of face value, reflecting a commitment from the company to return value to shareholders on a consistent basis. The interim dividend for FY '25 is over 15% higher as compared to last year's interim dividend.
Moving to cash flow and debt levels. Our net debt as of December '24 was at INR 1,964 crores compared to INR 1,319 crores as on March 31, '24. The net debt has increased on account of expansion CapEx as well as expenditure for land bank at Kharkhoda, Hosur and Bawal of around INR 340 crores. The total capital expenditure, including the land bank for the 9-month period was INR 1,324 crores. While sustaining and growth CapEx has been financed from business cash flows, the capital expenditure primarily on land bank and increased working capital requirement has resulted in incremental debt.
Our net debt to equity as at 31st December stands healthy at 0.34. We have achieved a return on capital employed of 18.6% basis annualizing profits of 9 months FY '25. Kindly note that the capital employed considered for calculation does include the CapEx for land bank as well as CV, which is currently not generating any returns. ROCE would be even higher if we exclude these non-deployed assets. Moving to strategic business update. We have received the final NCLT order for merger of Kosei JV entities with Uno Minda Limited.
Consequent to the order, all 3 Kosei JV entities, namely Minda Kosei Aluminum Wheel Private Limited, Kosei Minda Aluminum Company Private Limited and Kosei Minda Mould Private Limited has been merged with Uno Minda Limited with effect from 1st of April '23. The merger is expected to result in significant synergies in 4-wheeler alloy wheel business with removal of various duplicate administrative costs of maintaining 3 different legal entities.
Moving forward, we remain very optimistic on medium- to long-term outlook of domestic auto industry. Indian automotive industry is on a path of rapid evolution driven by innovation, sustainability and a favorable economic environment. Our company has rightly positioned itself by continuous investment in R&D, capacities and key resources like land and people to seize the potential growth opportunities. With our existing diversified product portfolio, new products and technologies, we are confident of sustained outperformance over the long term. With this, I would like to now open up the floor for questions.
[Operator Instructions] Our first question comes from the line of Chandramouli Muthiah from Goldman Sachs.
My first question is just related to the comments that you made on fast tracking some capacity expansion at your Hosur plant. And I think you also mentioned that there is some new opportunity that's emerging. So I just want to understand what the nature of the opportunity is? And also if it has anything to do with some of these electric SUV launches that we've seen more recently at the Auto Expo.
Second question is just around the budget-related tax savings that large part of the tax filing community might get over the next year. What your views are initially on what that could do to production run rates at your 2-wheeler and 4-wheeler customers? And the third question is just on your capacity expansion over the next 2 years. How we should think about start-up costs around that capacity expansion? And if there's any indication that you'd like to give around what the margin ranges for the business could be as a result?
Yes. Thanks, Chandru. So moving to your questions, starting from first, about the Hosur plant expansion. So this -- we have a casting plant, as I said, in Hosur, where we manufacture both traditional products for 2-wheelers like the engine cover or some aluminum casting parts, et cetera. Plus we also manufacture the parts for EV like battery housing and products for fitting, et cetera. So that business has been doing phenomenally well.
So until now, we have been expanding capacity in the premises and behind based on whatever small, small expansions possible. But now we have reached a situation where we need to significantly increase the capacity from almost 12,000 tonnes to 15,000 tonnes. And this is primarily for all the existing products. There is no new product per se. So you have EV products also, you have non-EV products also, which this business will be catering to. And that is why we are -- in this year, we will be expanding this capacity. So that's what the nature of opportunity as basically existing products, both EV and traditional segment.
In terms of budget tax saving, you said what is our view on production run rate for 2-wheeler and PV. So as I said, we are definitely very, very optimistic because at the end of the day, it will put almost INR 1 lakh crore of money in the taxpayer hands next year because it's a very, very big amount. And we do firmly believe that there will be a positive friction of this on a lot of industries, maybe consumer driven, et cetera. And that's what the government intention is to put more money in hands of the end consumer, which is expected to drive the demand.
So from that, we also expect that mobility being one of the key aspect of today's life because it is not only what we always say about food, water and shelter. Mobility also is one of the key aspect because, while the cities continue to grow, the infrastructure in terms of public transport is not maybe seemingly growing up with that pace. So the demand for mobility is becoming very, very of an essence. So considering all those aspects, we do hope and expect that this INR 1 lakh crores of annual money, which is coming in people's hands, good quantum should come to the automotive industry and hence, should have positive friction on 2-wheeler and PV segment both.
In terms of capital expansion for next 2 years, we know that today, we have 12 projects which are undergoing expansion. Last quarter, it was 13. We added one 14 and 2 have been commissioned. So 12 projects are under expansion, and we might have something as we move forward, given that we have bought -- we have been adding land for our future expansions and a lot of businesses are growing very well. So they will definitely need at some point bigger facilities. So for that, we are gearing up in terms of the core infrastructure, be it land or other resources in terms of people development, et cetera, we have been working in totality.
You also asked in terms of start-up costs. Yes, definitely, there is going to be a start-up cost, which is there because all the projects which the Board approves, as we have been discussing, we have to look at third full year of production as a target for our returns -- or our target returns. So in the first year, it's maybe part year and second year is normally you tend to have all the costs which are incurred and not the profits. So somewhere it will be negative or 0.
So those costs are baked into our assumptions. And this year, we have guided for our EBITDA margin range of 11% plus/minus 50 basis points. And those -- the guidance factors in that start-up cost as well. Moving forward to next year, maybe I will be better placed to answer to this question what that range will be next year when we discuss our Q4 numbers. I think that was your question -- last question on the margin range. So I hope I've addressed all your questions.
Got it. That's helpful. And just if you could repeat the numbers that you mentioned on sensor controller, ADAS, blow molding, FRIWO. I think we couldn't catch all those numbers. So if you could just repeat that once. I think that's just the one clarification I had.
Okay. So you wanted the split of that others?
Correct. Correct.
So of the INR 933 crores, controllers is roughly INR 150 crores, sensors and ADAS is roughly INR 209 crores; blow molding is INR 119 crores; our CNG business is INR 136 crores; and our JV with FRIWO, which is UMESPL, is INR 123 crores.
[Operator Instructions] The next question comes from the line of Aditya Jhawar from Investec.
Congratulations reporting solid growth despite a weaker PV and CV production. My first question is on the 4-wheeler charger business. So what I understand is that earlier we had one Japanese OEM as a customer, and we added one more customer. If you can help us understand how is the ramp-up plan here, how are the margins in this product line as compared to company average? If you can talk a little bit about the new growth avenue that we're looking for in chargers? That's the first question, if you can take this?
Yes, second one?
Yes. So second is on Europe. So you mentioned that the outlook is not that great. So if you think about from the next 3 to 6 months perspective, are you seeing any line of sight of improvement? Are there any OEM specific issues that you are facing? Or overall, you are sensing that across OEMs the demand outlook for the next 3 to 6 months seems to be on the weak side? That is the second question.
Right. So thanks, Aditya. Thanks for the compliments. In terms of 4-wheeler charger business for EVSE last quarter, we received one business and this quarter we received another business. So this is -- both are for the Japanese OEMs.
And in terms of ramp-up, obviously, they will be linked to the vehicle SOP and the vehicle volumes in terms of how do we ramp up. So we know -- you know that our production is straight mirroring the OE volumes. So from that perspective, we will be ramping up as and when whatever customer demands. In terms of margin versus company average margin, initially, we do expect these margins to remain lower until they reach some better threshold. But what good thing we have done is rather than putting these products into a totally new business, we have -- we are doing this as part of our controller business.
So from that perspective, it will help us spread out our fixed cost efficiently and make sure that even though it's a lower margin, we have some positive contribution from these products to our financials.
And moving to your Europe question, whether it's next 3, 2 months, are we seeing any improvement? It's very difficult, Aditya. As of now, things are not significantly better. In fact, they are what they were last month. And we are keeping ourselves prepared for maybe a bit longer hiatus in terms of the challenge what we have so that we are preparing ourselves to those lower volumes and seeing how we can bring down the breakeven points in those regions because as of now, it looks difficult that -- difficult to visualize whether we'll have significant improvement in 6 months of time frame.
Any OEM-specific issues is very difficult. But one thing which is visible is that, and I think we have been reading in a lot of other coverages as well that the very, very high-end vehicles, the demand seems to be not that impacted as we see in the low end and mid segment. That's what the current visibility is in terms of our revenue split as well.
Yes. That's very helpful. My next question is that on the land bank, out of the INR 1,324 crores we have spent 9 months, how much we have spent on land bank? And what is the thought process on this CapEx going ahead?
So of the -- sorry, what you said, what was -- of INR 1,324 crores, how much is land -- as your point was?
No, no. Yes, yes. So in 9 months, the CapEx that we have incurred, what proportion is for land bank and what is our thought process on this subject going ahead?
Right. So of INR 1,324 crores in 9 months, we have spent roughly [ INR 350 crores ] in 9 months on the land. And our strategy is, as you know, to be ready because in the past, we have seen 2 to 3 projects where we have faced significant delays in land acquisition and eventually, we delayed constructing our plant and had impacted directly to our volumes.
So there are 2, 3 advantages. One, definitely, once you have the land, we need to be closer to our customers. So to get a large land is always difficult. So earlier what is it -- and you would have visited some of our plants as well and a lot of the people on the call that they are spread out at various places.
Now when we buy a big block, it also helps us in consolidation in a way that we can have our own industrial park. We can have commonality of services like your security, like your canteen, like a lot of other infrastructure which you need for that setup. So you bring synergies. Another advantages, when you talk of large investments, you also get that support from the government in terms of maybe better support in terms of approvals, clearances, incentives, there are a lot of advantages, which come because you are looking at that scale.
And last is that in terms of availability resources also our people once we are closer to the cities in the area we are looking land, the availability of talent also is there. So there are multiple things we do. Yes, in short term, it is a drain. But as you would have noticed, the land which we have bought Khed for -- of almost 83 acres, almost 20 acres, we have already put a plant on for solar lighting business; of around 95 acres we have bought in Kharkhoda and roughly 20 acres is allocated to our [ Pune, Maharashtra ] plant where construction is going on.
At Hosur, we are in the process of buying this land and part of the land is allocated for future growth of a couple of businesses, which we operate in that region. So the whole idea is that we are prepared for the growth in the medium term where we will not look after all land.
Sure. That's helpful. Now final question is on gross margin. So clearly, we had some benefit of operating leverage, which was offset by a contraction in gross margin. So any comment on sequential and Y-o-Y decline in gross margins?
So in terms of gross margin, it is primarily first factor is what we call the different volumes or the mix, if I may say so, there are -- so if you see this quarter, the mix of alloy wheel business where the margins are a little better, the ratio is lower. Number two, in last quarter, in one of the business, we had some settlement with our customers, which was -- which improved the gross margin. But overall, if you see from an individual business perspective, there's not much of a difference in gross margins.
The next question comes from the line of Siddhartha Bera from Nomura.
Sir, first question is on the lights business, both for lights and LMT. What will be the current capacity utilization and do you think with this new capacities now coming up, we should expect a step up in the growth momentum from where we are currently, given that [ POR ] is gaining a lot of orders and market share, so will that be the right assumption? That is one.
Second question is -- and also if you can share the mix between 2-wheeler and 4-wheeler segment for the lights and switches business? Second is on the 4-wheeler on the Seating business, so we indicated that we have got a large export order. If you can quantify that amount and how to think about growth in the coming year because this year has been quite soft? And lastly, sir, any update on the new businesses on Inovance and EV motors, also which we have, how to think about ramp-up, manufacturing...
Sorry, your voice missed -- sorry, Siddhartha, last question was?
Any updates on the Inovance JV and EV motor segment also, which we are ramping up in the coming years?
Thanks, Siddhartha. I think a lot of points. So let me try and cover one by one. In terms of the lighting and you said LMT capacity utilization with the new capacity growth momentum, will it be a right assumption to have higher growth in coming quarters?
So definitely, Siddhartha, that is the endeavor. We have been trying to put capacity and that has been -- this has been one of the strong feedback from all the investors that our capacity at alloy wheel have been actually running hand to mouth. And why don't we preponed some of our CapEx, that was the question -- that suggestion which you are getting, and that's what currently we are doing. So in terms of capacity utilization at light, we do have now a good capacity available and with a new plant at Khed, and also at LMT, which is the 4-wheeler alloy wheel business and 2-wheeler alloy wheel business.
Starting with alloy wheel business for 4-wheelers, we will be having another 30,000 capacity up and running from maybe 3 months from now. So with that, we'll have a good capacity available for future growth. And at 2-wheeler, we are actually currently also expanding from 6 million to 8 million. The 6 million is running at full capacity and 6 to 8 million obviously is currently under the construction phase. And hopefully, it should start maybe in the next couple of quarters.
In terms of 2-wheeler, 4-wheeler light and switch business split, you asked. So in terms of switching 4-wheeler and 2-wheeler for the quarter. The 4-wheeler switching sale was roughly around INR 414 crores and 2-wheeler was INR 465 crores. And for lighting, 4-wheeler was roughly INR 432 crores and 2-wheeler was INR 385 crores.
Moving to Seating business. About quantification of this business. The business is roughly around INR 70 crores of peak annual value in terms of sales. And the last was update on Inovance So we are in discussion with our -- a lot of customers, as you would have also seen at the Bharat Mobility show, the kind of products we have displayed and our partner, our technical partner is also there.
We are currently in discussion with them, as you know, for converting from our TLA to JV. So that's a parallel exercise, which we will work on. So we are currently working on based on the TLA. The team is still working jointly to prepare the detailed project report and we're really working for closure on the JV.
And EV motors business, we know that we had some headwinds initially because a couple of customers based on which alloy we have set up the business, both have faced significant challenges from that government action on subsidiary recall, et cetera. So post which we have been working with a lot of customers, and we have got good traction with some of the large customers. And hopefully, from next year, we will see some significant value add from this business. So I hope I have got all the questions, Siddhartha.
Yes, yes. Sir, last question on the PLI...
Sorry to interrupt. Siddhartha sir, may we request you to return to the question queue for follow-up questions? The next question comes from the line of Ajox Frederick from Sundaram Mutual Funds.
Sir, one question. You mentioned that the demand for high-end premium vehicles will not be impacted as much. So how much of our 4-wheeler business is index to UVs or EVs?
How much of a business in, you said, 4-wheeler EV?
Yes, yes. EV and UV, utility vehicles, the larger vehicles.
Yes. So as you would have noticed, Ajox, from a EV perspective, we have got a significant business from e-2-wheeler and e-3-wheeler. I had shared the numbers also in terms of revenue in case you have that handy or if you want to share that, again, I can share it. In terms of...
No, sir. I was talking about 4-wheelers, 4-wheelers EV...
So as I said, 4-wheeler EV, our current business is only for our traditional products, be it our Switching segment or be it the alloy wheels, et cetera. Plus in terms of CV you asked, right? So CV, we don't have much of exposure at our group level.
No, no. What I meant, sir, was, let's say, going forward, the small cars are not growing as much as the utility vehicles or the electric vehicles. So from our 4-wheeler business, about 46% of our revenue is coming from 4-wheelers, within that how much of that quantum will be indexed to a utility vehicle or electric vehicle? So that is the question.
I'm still -- I'm sorry, I'm still not clear. Maybe we can take this question offline if you don't mind.
Okay. Okay. No problem, sir. No problem. And sir, the second question I had was on the casting. So the Bawal plant, it got delayed a bit. So from next quarter, we'll see a decent ramp-up in castings happening?
So you are right, Bawal plant has been delayed quite a bit, and that is the capacity we're adding. But simply addition of capacity does not necessarily mean that we will see volume growth because volume growth is again linked to the vehicle growth and the OE demand.
The next question comes from the line of Mumuksh Mandlesha from Anandrathi Institutional Equities.
Congratulations on the strong growth numbers. Sir, firstly, just recently, your new plant in the seatbelt and airbag has commenced where you've done about INR 375 crores CapEx both together. Just want to understand how will the ramp up of this plant? And just on the revenue potential if you can indicate?
Yes. So thanks, Mumuksh, for the compliments. In terms of the seatbelt plant which recently commissioned, I presume you are referring to the plant in Rajasthan at Neemrana. So there, the total asset turn we are expecting at peak is roughly around [ 2 ] of the total investment.
And this ramp-up will be by when you see the high utilization of the plant, sir?
That's normally the third year of production.
Okay. And for the airbags, sir?
Yes. Airbag is separate. That is in the JV with TG, that's another plant, and airbag plant has already ramped up. And you would have seen that OEs have already gone with 4 airbags for quite some time now and that mandatory 6 airbag is no longer applicable. So in terms of the impact in financials, we are already seeing that growth.
Got it, sir. Sir, just on the sunroof side, do you want to indicate how is the order book shaping there? What are the key customers? And any light on how we see the profitability for this business? And just lastly, head-up display anything you want to share, how is the order there?
Yes. So sunroof, as Mumuksh, you know we have been working to set up this facility in Bawal based on the LOI we have got from one of our Japanese OEM. This is expected to be -- to go into SOP for a couple of years from now. This is linked to the new model launch. That's number one.
Number two, we have been working with a lot of other customers, but this current model, which you have secured it's a premium segment. But a lot of our customers are looking for low-cost slick model, which we have also now showcased in the Bharat Mobility show. So with that, we are currently in discussion with a couple of more customers and they are at different stages. But as of now, we don't have the second LOI in hand, which is currently in process. So as of now, it is only back with LOI from 1 customer.
Got it. And on the head-up display, anything you want to share, how is that, you mentioned in initially comments in the business, sir.
No, so head-up display, as we have been working with our customers in Europe, and we are also currently working in terms of having a cost-effective model in India, which currently is better R&D level. So there is still some time to have a product which is we can commercially -- what we call exploit in the market.
Got it, sir. Sir, lastly, the off-road segment, which is a small segment of our revenue has grown very well over the last few quarters. I just want to understand which segment in off-road -- I mean, which category of segment that growth has come for the segment?
So OR, we have -- the key business is the Seating business. And that's what I have shared that we have been seeing significant traction in terms of suspended seats, which are very premium seats. And last quarter, we also updated that we have got an export order from an aftermarket customer for this segment. OR does pretty well in terms of our Seating business. There are some other products also, but they are very small.
The next question comes from the line of Mukesh Saraf from Avendus Spark.
My question is related to the alloy wheel business, specifically 2-wheelers. So we are expanding capacity here. And I did notice that 2 other large alloy wheel players are also expanding capacity this year. So my question is more on the industry. I mean, where do you see this now in terms of the import subscription -- with this expansion, are we more or less covered now and most OEMs are now locally sourcing all the alloy wheel for 2-wheelers?
So Mukesh, very good question, first of all. So alloy wheel 2-wheeler is -- we are doing pretty well, we are running at capacity. And while I can't comment about our competition, but we are also expanding and our expansion is based on the orders which we have in hand. Are we more or less covered on where do you see future. Honestly, there are still discussions going on with OEMs, even beyond this 8 million capacity.
So currently, we have 6 million capacity, we are expanding to 8 and there are discussions going on to take it beyond 8. But as of now, I can't confirm that unless it is -- the business is confirmed, but having said that, that does not mean that there is no further growth in the business.
Sure. So basically, there is still a lot more opportunity in terms of the import subscription because in terms of [indiscernible] 2-wheeler alloy wheel is already at peak. So you're saying there is more opportunity to grow beyond this expansion as well?
Yes, absolutely.
Right, right. And similarly, on 4-wheelers, could you kind of give a sense now where are we in terms of penetration on the alloy wheel side?
You said 2-wheeler or 4-wheeler?
4-wheelers. On 4-wheelers.
4-wheeler. So for 4-wheeler the penetration ratio has a little bit softened versus the previous quarter from 45% currently at around 42% to 43%, that's for the current data is. But more credible data, I would be able to give you at the end of the year, because that's mostly annual exercise we do. But as of now, it remains in the existing range between 42% and 45%.
The next question comes from Rishi Vora from Kotak Securities.
Congratulations for a good set of numbers. Just one clarification on the share of JV, you said that because of Westport and Onkyo got consolidated there was an impact on JV. So incrementally on revenues on a Y-o-Y basis, what would be the impact on revenues and EBITDA, if you could share that number?
Yes. Thanks, Rishi, for the compliments. In terms of impact, if we see -- so the revenues from Westport, even though they have grown significantly last year to this year, but if I have to take out from the top line, both this Onkyo and the Westport, this is roughly around 3%, 3.5% of the total top line. So of the total growth of roughly 20%, this is around 3.5%, rest is all from existing businesses.
And EBITDA contribution would be similar?
It's -- the percentage margin is roughly same.
Okay. Understood. And my second question is on PLI. So is there any update on PLI, which you could share? Have we applied or we have not applied? So any update on PLI?
No. So we have actually applied PLI on -- actually 2 PLIs now. So we have got approval in auto PLI for some of our sensors. We've also got accrual into the white goods PLI for some of our LED components, which we manufacture at our lighting business.
So what would be roughly their contribution to our overall top line?
It's very small, Rishi, because of the total business, the large part, which is your alloy wheels, lights, and switches, they are not part of the PLI scheme.
Understood. And have you done any exercise on what proportion of our products will be eligible, if you apply -- could be eligible for PLI in totality?
No. So there is definitely going to be a huge possibility for high value in future as we continue to add our EV products specifically for 4-wheeler as well. But the PLI window is not -- as we know, is not a longer window, three years almost have already gone by, it's only 2 years left. And by the time, we have a significant ramp-up after SOP, the scheme is almost over unless government chooses to extend the scheme.
And also the second part is important even though this scheme is for 5 years, there is a limited funds which are allocated for this scheme. And whatever we hear based on the info we have the government might actually utilize this amount much before the 5-year window.
Understood. And we've not applied charges, EV charges -- because that could be a decent size, right, for us?
Yes. That is currently under validation because you have to get the DVA certified.
The next question comes from Amit Hiranandani from PhillipCapital India Private Limited.
Yes. Many congratulations to the team for a good growth numbers. My 2 questions is basically our Seating and acoustic business contributes about 11% of the consolidated revenue. But that is something which is not growing at all as the absolute numbers are broadly the same or even lower on a Y-o-Y basis. So what step the company is taking here to grow this piece of business?
Yes. Thanks, Amit, for the compliments. I said in my update at the beginning, both seating and acoustic business are totally different. acoustic business, large part is in Europe, which is facing significant headwinds in terms of volumes.
The last quarter itself, there is a drop in revenue of almost INR 25 crores in the Europe, Spain business in acoustics. Otherwise, the domestic business is doing pretty well in line with the industry. And in terms of seating business. As I shared, again, seating has a lot of exports, and the exports have dropped by almost 17%, 18% last quarter to this quarter, last Q3 versus Q2. And we are -- we have actually secured a significant new business for almost INR 70 crores, as I said earlier on that annual peak value of business.
So we are working very, very aggressively. Plus we have got a business from an incumbent OEM, which is launching our kits into 4-wheeler models in this quarter. So we do expect growth coming from that. So overall, we are very optimistic on seating business in short to medium term as well.
Right. So it's generally the macro issues which has impacted these 2 businesses?
That's right, Amit.
Correct. And sir, secondly, I was just observing that consolidated EBITDA margin is hovering around 11% since last many quarters now. So we understand that there are some start-up costs, which is restricting some margin improvement. But our scale is also increasing, right? Because quarterly revenue run rate of a few years ago was around INR 2,500 crores, but now it is above INR 4,000 crores now. So I wanted to understand the company's aspirations for the midterm perspective for this please?
No, absolutely. Amit, our aspirations are the same as your aspirations or expectations. So we do expect to get out of this 11% range in next couple of years because we still have a lot of products, as we spoke a lot of projects, almost 12 projects, which are under construction and they will hit the operation in next 12 to 18 months and they do tend to dilute the margins for initial couple of years. So after that, once they stabilize, definitely, we do expect the margins to improve. But at this point, it's difficult to comment what that range will be.
Right. Sir, lastly, just 2 bookkeeping question. The finance cost increased higher by 60% in 9M FY '25. Can you help us with the gross debt number, including the working capital and the current cash and investments as on 31st December, please?
Yes. So we -- if you see the net interest is actually in line with the previous quarter. Previous quarter was INR 46 crores, this quarter is INR 47 crores. So not much of increase there. In terms of net debt, we are roughly around INR 1,970-odd crores of net debt in this -- at the end of December versus the opening debt of roughly INR 1,320 crores. So there is an increase of roughly around INR 640-odd crores in the last 9-month period.
Okay. Gross debt is INR 1,320 crores, right? Is it?
I said net debt.
Okay. Net debt is INR 1,320 crores, including this working capital?
INR 1,320 crores was 31st of March. Closing net debt is INR 1,964 crores.
The next question comes from Neel from Valuequest.
So I have 2 questions. Firstly, if we were to look at the 2-wheeler industry, the volumes growth rate have been coming down, especially on the motorcycle side. So are we seeing any major deferment or change in schedules coming from the OEM side, either in 2-wheelers or in 4-wheelers? And if any, there any particular category where we are seeing this? And second question is on EV. So are we expecting to see any major products on the EV side to see SOP in FY '26?
Okay. So thanks, Neel. In terms of 2-wheeler volumes growth, you said growth is coming down. But as we just spoke, and I think this has been in discussion since the budget was announced that with this INR 1 lakh crore of extra money in hands of the customers and with almost INR 1 lakh, [ INR 1.5 lakh ] per person or individual taxpayer, we do hope that with the mobility being a life necessity, it will have a significant impact in future, not in long term, even maybe next year starting.
Once people will start getting this money in hands, have some positive friction on both 2-wheeler and 4-wheeler. But if you ask us, if there is a deferment in schedules? No, we are not seeing any significant delta in terms of the schedules which are getting month-on-month from our customers.
And in terms of EV, any major production in FY '26 coming? Yes, there will be production of, as we spoke, some EVSE, both 7-plus kilowatt and 3-plus kilowatt during the current year plus also some new products which are coming on stream from existing business for some of the BMS chargers, et cetera, for 2-wheelers.
The next question comes from the line of Abhishek Jain from AlfAccurate Advisors Private Limited.
Sir, Maruti is coming with the new EV model eVitara. So how much share of business in this model and how much increase in content per vehicles versus ICE?
So first of all, we are part of the businesses with the model you spoke about. We have significant businesses received both on traditional vehicles and also the e-specific vehicles. But I'm sorry, we are -- we normally don't share the product-wise or the model-wise kit value or share of business.
Sorry for letting you down on this. But otherwise, be rest assured, we have a business secured in that model for both the EV-agnostic products, which are traditional products plus also the EV products.
So what are the parts you'll supply in the EV segment, apart from the ICE products?
Abhishek, I'm sorry, we don't give product-wise, model-wise details.
Okay, sir. And sir, in the casting, multiple new plants is coming in 4-wheelers, 2-wheelers side and even the die-casting segment as well. So just wanted to understand how much incremental revenue you are expecting in the medium to long term in next 2 years because of these capacity expansion?
Yes. So in terms of these capacity expansions, there is a huge growth possible, Abhishek. As we just spoke for 2-wheeler, we are expanding capacity from 6 million to 8 million wheels. So straight 2 million, we already have a business in hand and we just spoke that there is a possibility to even work beyond this announced capacity in the future.
So that straightaway will add once commission to our revenues. We are also putting a new plant at Kharkhoda for 4-wheeler alloy wheel that is also expected to get commissioned sometime within this calendar year. So that will also add straight incremental capacity and revenues. And also this casting business, what we announced today, that also is expected to commission in later part of the current financial. So it will have maybe material impact to top line from the next fiscal year. So all these businesses, we do expect to continue this growth momentum based on these capacity additions.
Sir, most of the new business is coming from the casting, switching and from the EV side, especially on the sensor and other parts. So all are the high-margin business. So what are the constraints to improvement in the margin by 50 to 100 bps to medium term, sir?
I wish they were all high-margin businesses, Abhishek, as you mentioned, but that might not be the case. We are in a competitive world. And just because their PV does not mean they are high margins. But to your point, whether should we have 50 to 100 basis point margin improvement in next -- in the medium term?
Absolutely, why not. And that has been our endeavor. And we just spoke about once we commission all these operating plants under construction. It should help in terms of improving our margins because a lot of these start-up costs, which currently we are expecting in next year or 2 should be behind us. So within that time frame, we do expect our margin profile also to improve.
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments.
I would like to thank everyone for joining the call. I hope we have been able to respond to all your queries adequately. For any further information, we request you to please do get in touch with us. Stay safe, stay healthy. Thank you once again.
Thank you. On behalf of Uno Minda Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.