Automotive Axles Ltd
NSE:AUTOAXLES
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
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 |
1 738.35
2 344.35
|
| 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.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Automotive Axles Ltd
You don't have any saved screeners yet
Ladies and gentlemen, good day and welcome to Automotive Axles' Q4 and FY '24 Earnings Conference Call, hosted by Batlivala & Karani Securities India Pvt. Ltd.
[Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Sailesh Raja from Batlivala & Karani Securities. Thank you.
And over to you, sir.
Yes. Thanks, Steve. Good morning and thanks to everyone who has logged in to Automotive Axles' 4Q and 12 months FY '24 Earnings Conference Call.
Let me introduce you to the management participating [ with today's ] call. We have with us Mr. Muthukumar N., India Leader, Cummins-Meritor; Mr. Nagaraja, President and Whole-time Director, Automotive Axles; and Mr. Ranganathan S., CFO, Automotive Axles Limited.
Now I'd like to turn the call to Mr. Muthu, sir, for the opening remarks, followed by Q&A.
Sir, you may begin now.
Thank you, Sailesh. And good morning, ladies and gentlemen. Thanks for taking time. And really appreciate you all for joining these investor calls of Automotive Axles Limited.
As you all know, that Automotive Axles Limited is a joint venture between Kalyani and Meritor [ earlier ]. And now Cummins [indiscernible] [ company and it has become ] a joint venture between Kalyani and Cummins-Meritor.
As usual, [ I think ], we have my team members Nagaraja [indiscernible] operations space; and Mr. Ranganathan, who's our CFO. I'm sure that yesterday we had a very good meeting. And you all know that, even though the market is looking a little [ well ] at this point of time, the indication with this market is going to be quite good next year, at least flat for this year. And going forward, it is going to be good. We are going to talk to you about and clarify all your questions that you have.
I will give this to Mr. Ranganathan to explain the [ earning features ] of the financial, followed by -- we will take Q&A session. And we, me and Nagaraja [ and Ranganathan ], will try to answer all your questions.
Go ahead, [ Mr. Ranga ].
Thank you, Muthu. A very good morning to all of you. Welcome again for the quarterly and also the year ended 2024 earnings call.
Overall for the year, if we look at it, market this year was close to about 420,000 [ vehicle level ]. There is a marginal recovery overall, compared to last year, to the tune of 3% to 4%, and -- but a lot of the growth is -- by and large, is in the bus segment, mainly the main customer [indiscernible]. Your company is continuing to focus on all the revenue optimization with all of the customers.
This year, we ended with a revenue of INR 2,244 crores or INR 2,245 crores, with EBITDA of 11.7%; and with a PBT of INR 223 crores, which is close to 10%.
All of you know in the earning calls also we have been -- emphasized our focus is basically the -- improving the revenue with the customers' cost optimization through -- or strategic initiatives and preserve cash. It's the main focus of our organization that is pursued this year, though, as I said, the market has grown about close to 4%. And we are marginally lower than the market growth, by and large. There are 2 reasons. One is about the growth. Largely it's come in the bus segment, one of our major customers. And more -- probably we can take it up during the Q&A., but also we have -- accommodate the price -- commodity price settlement with the customers, which is also close to about 0.5% for the financial year.
In spite of that, our approach on the cost optimization -- and which has improved the overall margin, though -- by about 0.4%, though the revenue was lower by [ 0.3%, 0.4% ], so -- and during the year, your company has generated about -- close to -- about 196 crores of cash. And we have no borrowings at this moment of time. And all the balance sheet parameters are quite strong.
And with this introduction, probably, I may give it to the question-and-answer session.
[Operator Instructions] The first question is from the line of Amit Hiranandani from SMIFS Limited.
My first question is basically I wanted to understand what is the exports growth in this quarter on Q-on-Q basis and how the brakes business performed in Q4 on Q-on-Q. And any gains in the market share in the brakes division?
[indiscernible] you can go ahead and [ give answer ].
If we really see: The export business overall for the year has grown on value terms close to about 4% to 5%. And of course, there's a little bit of dip in the brakes business for Q4. So overall basis, it's purely based on the OEs' requirements, so...
And sir, exports on -- in Q4, is it growth on Q-on-Q basis -- [ okay ]. So sir, my next question. Basically the MHCV production on Q-on-Q basis has increased by about 8%. And our key customer's volume has grown by 15% on a Q-o-Q, and -- but Automotive Axles' revenue was just increased by 5.6%. So what is the reason for this?
Thank you for the question. I think, if you look at the quarter growth like what you have indicated, the commercial vehicle market has definitely grown up [ by a key customer ] [indiscernible]. [ Unfortunately ], the growth is more on the ICV segment and that segment where our presence is looking less because of the [indiscernible] the team is developing a new product. And because of that segment where we are not present which has substantially gone up in the last quarter because of the government orders [ which have ] come from them, mainly from the STUs with [indiscernible] vehicle on that segment, but the teams have done a good job in terms of penetrating more in exports, defense and other businesses and aftermarket, to compensate this, the drop, actually. I think that's the main reason, but if we look at the [ competition ] revenue, it is 15% they've grown in volume; and I think it's not on value. I just wanted to -- sorry. Our key customers is on value, not on volume.
We have also realized more in terms of revenues because of higher-value-added products that the team have launched [ it ]. And this year, the team is launching 2 new products. I think Nagaraja can touch about this, where the [indiscernible] going to substantially grow up, which is going to be used for [ above-49-tonne ] vehicle of haulage [ and the new people where it's going to get large in ]. If that answers your main question, I will leave it to Mr. Nagaraja to talk about the new product that is going to be launched [ to take up our axle ] revenue.
Yes. Thank you, Muthu. So we are planning for 2 new axles which will be applicated for 49 tonne and above. Like what Muthu mentioned, this not only increases the value for us, but also it helps us in consolidating our share of business in the growing segment. Apart from that, we did talk about our less presence in the bus axles. We are at this point of time mainly present in the 12-meter buses. So we have a new product coming in which is optimized specifically for a 9-meter bus, which we'll be launching this year. And also we are getting into launching dia 325 and 360 brakes with one of our key [ OEM ]. All these product launches should help us to not only improve our product line but also help us in growing the revenue. In future, whenever there is a -- bus segment growth is there, we should be able to actively participate in it and make the best advantage of it.
Yes. And great to know about the new products lined up for you. Sir, my next question basically is on if you can...
We can't hear you. Nagaraja can you hear?
No.
Yes, sir. He is connected. I think there's a network issue from his side.
No worries. We'll wait for him.
Or should we move on to the next question, sir?
Yes. [ It will be ] better.
[Operator Instructions] The next question is from the line of [ Rada ].
So my first question was: In our current revenue, what is the contribution of bus segment? And what is the contribution of LCV, ICV segment?
While -- we normally don't give the split-up of segment-wise sales, but I can tell you [ one general tip ]. In terms of commercial vehicle [indiscernible] in terms of [indiscernible], but if we look at [ bus ], I'm talking -- in terms of the models, our percent will be around 50%, 55%. Nagaraja, please correct me if I'm wrong, but in terms of models at 9-meter and smaller buses, our percent is less. Is that right, Nagaraja? Or do you want to add anything?
Yes, yes...
The segment we are introducing a new product, right, [indiscernible].
Yes. It's the 9 meter segment, which is a high-volume segment and -- high-volume, low-margin kind of a segment. And also it is a little bit cyclical. It -- like you mentioned in your opening remarks, it's based on the government orders, so that's where we are going to introduce a new product so that we can take the best advantage of it.
Sir, sorry. Your voice was breaking. If I heard it correctly, you mentioned that you are present in 50%, 55% of the models in the LCV, ICV segment of the industry. And in the bus, currently it is in 12 meter. And you are entering into 9 meter, which is more cyclical.
Yes.
Okay, understood, sir. Sir, secondly, you mentioned some -- 2 new products, product launches, dia 325 and 360, so what -- how do you see your revenue mix change -- product mix change, because of these 2 launches, in the next 2 to 3 years? And what could be the margin scenario because of changing product mix?
Sometimes it is -- probably Muthu can answer it better, but what we are focusing on is our presence in all the segment so that, during the quarter or during the year -- one particular segment grows. Or another segment in the -- segment stagnates or degrows. We should be able to still protect our revenue and share of business. Just to give you kind of a rough numbers: With the addition of these new products, potentially we will be able to address another 5% to 10% of the market which currently we are not present in or those markets which are going to grow.
See -- thank you, Nagaraja, for that clarification [indiscernible] specifically, we have...
Sorry to interrupt, sir. Your voices are not clear. Could you please repeat?
Can you hear me now?
Yes, sir.
Okay. [ Rada ] -- thanks, Nagaraja, for that clarification. [ So I think you asked specifically the ] how the shares and how much we are [ present in ], in different segments. What happens within the market [indiscernible] situation of changing, depending on the government orders or [ be it international on orders ]. And it keeps changing. Currently, if we look at overall, our presence in the commercial vehicle segment of [indiscernible] will be around 65% to 70% of the [ last year's customers ]. What Nagaraja is trying to say is, in the smaller commercial vehicles like [indiscernible], by introducing this new product, what Nagaraja was saying, on the 9-meter buses, our coverage will go up by [ maybe 8% to 10% ], which means we'll be going up to that range of about 75% to 80%. However, still there will be some segments which we cannot [indiscernible], but we need to understand [indiscernible] we have [ 10%. Also it ] will be very less because [ we play 100% in ] most of any commercial vehicles [indiscernible]. And 12% is very, very strong base.
So just to make sure that, when the market changes [ with kind of weakening orders ] for the end customer, depending on the different situation, like government order or the construction equipment or infrastructure, we are trying to [ gear up to present ] as product in -- across 100%. That's our wish, but in reality what happens is we are not able to present 100% because of competitiveness, because of various things. And the team is working to launch a product. Every product that we launch should be competitive. I think the team has identified a 9-inch -- 9-meter bus product now which is going to be competitive and going to become -- bring the value for what we are looking at [indiscernible] at the same time, meet the customers' aspiration of [indiscernible]. So at this point in time, like what we said, we'll be touching up to 75% to 80% now. And then further, we may have to go further to 100% at some point of time.
Sorry to interrupt, sir, but the current participant has been disconnected. We will move to the next question. It's from the line of Amit Hiranandani from SMIFS Limited.
Yes. Sorry. My line, earlier, got dropped. Sir, my question is basically can you just give me broad revenue breakup for axle brakes, exports and others.
Ranga -- [ do you want to answer, Ranga ]?
Yes. Amit, generally [ we don't ], the revenue breakdown and as we have mentioned in the previous calls also, and yes, but definitely the -- axles is -- [ plays a significant ] portion of the total revenue size.
Understood, sir. And sir, current capacity utilization for axles and brakes. And what would be your annual CapEx plan for the next 2 years?
Yes. See. As we have mentioned in the earlier calls also, investment basically -- apart from the sustenance CapEx, what we do it, we're consciously working on improving our productivity as well as capacity as we introduce new products as well as in terms of automizing the plant towards efficiency and all the stuff. So probably, these areas, we are currently positioning towards the investment in the next 2 years kind of about 40 crores to 60 crores level but apart from sustenance CapEx; specific, automation projects, new product development and all that stuff.
And just to add to what Ranga has mentioned. We are really focusing on a lot of automation, digitization so that we can not only meet the new product quality requirement but also help us in optimizing our capacity utilization. So next 2 years, the investment will be coming in our housing line and gear manufacturing and then overall assembly areas.
Yes. We are basically doing this to make sure that we are ready when the market demand goes up. And this investment [indiscernible].
[ Great, sir ]. So we were supposed to come out with a mid-term growth strategy, so any update on this front?
Some of these new products, what we are already talking about -- in fact, last time, last call, Muthu did mention 60% of our -- last year's revenue has come from the new products. And as we mentioned during this call, we are introducing 4 more new products, so this is a plan what we are having to not only [ probably ] try to be present in all [ 7.5-tonne levels ] in all the segments, but again we are also kind of looking at how we can bring in the value for our end customer. So there are a lot of new products that is being developed in terms of [ nice sensitive ] gearings, [ quite right ] gearing for bus and coaches. And the largest axle, which is called MS 185 with a 500 mm crown wheel diameter for a 49 tonne and above. So those should really help us not only in the domestic market but also make us competitive for the potential export opportunities as and when both North America and European markets come back.
Great, sir. Sir, my next question is basically, annually, if we look at, we have already crossed the previous peak [indiscernible] in FY '24. And despite increase in the exports of highway defense business, our annual EBITDA margin excluding other income is hovering around 11% level. The earlier peak margin of around 12% was achieved at a lower top line in FY '19. So what is the reason for this? And what steps the team is taking to cross its previous peak level margin of 12%.
[indiscernible] your questions on the [ volumes later ] [indiscernible] profitability [indiscernible] peak volume. I think...
Sorry to interrupt, sir. Your voice is coming a little muffled, sir.
Can you hear me now? Yes [indiscernible] hear me?
Yes, sir...
Okay. If you look at our volumes of FY '19, which was the previous peak, the industry did about 476,000. And it is about 8.7 million tonnes because it's not only the number of vehicles but also the capacity of the [indiscernible] that we have produced. Last year, the year which is past, the FY '24, we ended with 423,000, which is about 9.2 million tonnes. So in fact, in looking at the number of vehicles, we are 10% less when compared [ to there ], but we are slightly above in terms of tonnage. So I just wanted to bring it to the fact that we are not [ comped ].
So at this time, our revenue was about 1,700 crores or 1,800 crores. Now it is about 2,300 crores, which means we have grown in other segments even though, if we have taken the commodity -- commodity went up, came down. And of course, it has only about 2% impact, not more than that between that time and now. So that is the reason from the market volume and tonnage-wise. Okay, having said that: The company continues to improve the cost reduction. We have improved the reliability of product. And we have also enhanced the value of the product. Thereby, our product [ realization ] has gone up, but of course, the planned -- [ one of the gears ] in terms of cutting down the costs -- I think COVID gave us a lot of insights, [ post 2019 peak ], to find out how we can enhance our operational capability.
Those things have really helped us to grow and that -- almost the same margin, even though the volumes is quite less on this particular segment. Of course, we spend a lot of money on the CapEx on the defense, but the real realization of defense is still not started. The government [indiscernible] here and there but in this amount of investment. With that, I leave it to Ranga to answer specifically on the profitability comparison between 2019 and now.
Yes. Thank you, Muthu. I just want to take your point. Amit, if you really see, 2018, '19 was a peak in terms of the market. That year, we did about 1,940 crores, if I am not -- my memory serves right, okay? And as of today, if we look at it, our revenue is close to about 2,100 or 2,200 crores now. See that -- between 2018, '19 [ to then now ], it is more than about the commodities. Change is quite huge and in terms of -- so that is one of the significant aspect which is value terms which is impact -- which has got an impact on the revenue perspective. And that's one of the reasons probably it is showing up or showing low, okay? Last 2 years, you see significant commodity reductions have happened. In '18, '19 to close to [ '21 ], there is only an increase, [ but ] the last 2 years is commodity is in a declining stage.
So as Muthu said, the revenue -- the overall market is down by about 10% to 12% compared to '18, '19 peak. Still we not reached to that. Maybe -- probably, in terms of tonnage, we may be closer to that, but -- so -- though, the [ product ] axle revenues improved, but realistically, if we look at it, the overall revenue is still much lower than the 2018, '19 volume. If market come closer to that, you can really see [ the same ] 1,900 level with our market [ presence ] with all customers, with all initiatives we have taken with all the customers in terms of improving our share of business with them, with the introduction of -- product gaps what you have and [ what with ] the new products we introduced recently. We definitely will be not less than -- at or about 400 crores to 500 crores will be added as compared to 2018, '19 level, so very comfortably, we'll be reaching around 2,500 crores to 2,600 crores when the current [ presence ] in the market reaches to '18, '19. So that's a perspective [ I'll ask you to ] understand because, one thing, we really see a value comparison but -- in terms of the commodities plays a significant role. And today, we'll be able to show up the revenue up is only because of our active presence with our customers in terms of the share that comes purely based on our delivery and quality performance and also the new product introduction to fill the gaps and the customer requirements.
As far as the margin perspective concerned. Though the market still not reached the 2018, '19 -- we touched the point about 12%. Percentage is really one piece of it. If we really look at absolute value, we are really [ creating ] absolute value in terms of -- the real measurement we look at is the EPS. And EPS has significantly grown compared to -- '18, '19, to now.
So sir, are you indicating more juice left on the volumes and margin side for Automotive Axles?
The margin, by default, will come through our initiatives. There's no doubt about -- I will -- I told you very clearly. We are -- really work on the initiatives of -- as we have our internal mission 25 initiatives. And we really drive our performance on the costs, and year-on-year -- especially on the material and commercial costs. We have taken significant efforts in terms of bringing the value in terms of the material cost optimization as well as the commercial cost optimization. That effort will continue. Year-on-year, we [ stretch ] ourselves to find new avenues to bring the value through -- early through the financials. And definitely juice [ left out ], our pursuit is there to improve the margins. As market grows with the current efficiency, we will be doing much better. That's the point I'm trying to drive here.
[ Absolutely ]. We can take it with confidence the market is [indiscernible] peak, I think, whatever the indications have been, given in terms of [ how the cost and bottom line ], will certainly happen, but we've been working hard to make sure, even before the [indiscernible] market, [indiscernible] profitability. I think that's the challenge the team is working on.
Great to hear this. Sir, just last 2 bookkeeping questions...
Just -- Amit, sorry to interrupt. Just to give data for your confirmation, [ the way to see our EPS ]. In '18, '19, the peak [ value is at INR 80 ]. And now with a 10% to 12% [ reduction ], our EPS is about INR 109 per share. So this is one of the parameters internally we'll see how we -- are we really increasing the value [ in question ]. So just an indication to you. That's it. Amit...
Sir, are you still facing any commodity...
Sorry to interrupt, Mr. Amit. Could you please go hop back in the question queue for further questions?
Yes.
[Operator Instructions] The next question is from the line of Pratik Kothari from Unique PMS.
Sir, just one question. It's been about 2 years since this -- Cummins acquired Meritor, so -- and we had highlighted in the past about kind of getting some new products, new orders from this. If you can highlight anything which has happened in the past 6, 9, 12 months...
So the -- [ we are exactly seeing ], with this August, it is going to be 2 years. I think 2nd of August is what -- we announced the actual acquisition even though we have communicated about February '22. On 22nd of February '22, we announced the [ equities make-up. So we've seen an amount of OpEx ] happening. You all talked about penetrating into another OEM where Cummins [indiscernible] company has various capacity in their own plant and [ creating that axle ] with our...
Sorry to interrupt, sir. The voice is coming muffled now.
Again. So the team is working with the customer and, along with the Cummins support, to seen then how we can penetrate into other OEMs where Automotive Axles does not have [ big ] share today. So we are trying to work with the combination to make sure that -- how we can get [ fuel ] efficiency. A good amount of activity has been done in the last 1 year. And we are coming into some stages, but we are not in a position to announce anything [ that, yes, we made a big win ] at this point of time, but I don't [indiscernible] [ acquisition bringing with all the synergy ]. First and foremost, we're bringing a lot of good systems into the company in terms of [ the like -- with the ] talent management, in terms of the launches. And we are improving the synergy coming in within both the best practices [ being into a -- with a ] great company. So we are working on this, but at this point in time, we are not in a position to announce that, "We have made this business win." We have made this, but definitely a lot amount of progress is happening both in our [indiscernible] business as well as in the regular business.
Sorry. So this, you highlighted that, I mean, it is helping us penetrating other OEMs. So this is largely off highway that -- the focus is -- or even EVs globally.
Even in non-highways, right. We are not present like Tata Motors [indiscernible] Cummins has a very good leverage with them [ of working ]. So we -- and Cummins-Meritor is working with all the customers of Automotive Axles, working with all the customers we see that -- where we can penetrate. I think the team is working extremely work on -- working with all the new vehicles that are coming up, so everywhere, the team is making sure that we try to penetrate. A lot of new players are coming in the EV segment where it is not a new axle segment but remote mounted segment, where also this company is continuing doing the business [indiscernible].
All right, fair enough. And sir, earlier, we had an aspiration that, once obviously the volumes come back, once we have scaled, I mean, we should be able to see some early-teen margins. I mean, does that aspiration still stay given the current context and things that you operate in?
Ranga, over to you.
Yes. I couldn't hear [indiscernible]. Can you repeat again?
So sir, 2, 3 years back, we had an aspiration that, once the volume comes back and we are at scale, we should be seeing some early-teen margin, 13%, 14%, 15%. Does that still hold?
Absolutely. I, we have already mentioned that we are -- our continuous pursuit of -- every initiative what we have taken is about -- is to be present in the market and dominant player in the market and keep the customers happy and, parallelly, see, how to bring the value to the organization. That is continuous focus. It still holds good. And there is absolutely no doubt about it, but [ as Nagaraja ] was explaining earlier, the automation process is more -- make the operations more efficient. And more [ future ] deliveries can be made to the customers and all the stuff. Definitely we are committed to grow in terms of the bottom line; and every initiative is taken, [ at least towards that only. So ] as we've said, market, it goes up. Definitely margin will much -- grow much higher than what we are having it today, but this 13% or 14% depends on the product mix and [ where we sit ], but definitely we'll see a significant growth in the margins.
The next question is from the line of [ Deep Shah ] from Yes Securities.
So a couple of clarifications since voice was not very clear. So in the opening remarks, you had said a price hike of about 0.5% with the end customers, so can you elaborate? Is this over and above the RM inflation pass-through? Or what it is exactly.
No, no, no. This is not over and above. I said the commodity settlement which has lowered the revenue by 0.4%, which is a commodity which we accommodated in year '23, '24, I said. So nothing impacted to the P&L. Whatever the customer settlement, the same supply settlement, so your P&L is well protected.
Okay, okay, okay. That's one. And the second is the new launches, especially on the [ exercise ] that you just mentioned. Are those for FY '25? Or it will come in [ FY '24 ] also.
Yes. So yes, these are all the ones. So in fact, as we speak, we are launching these products. So like we keep on iterating that what Automotive Axles -- the value what it brings in is, along with our partners Cummins, Meritor, we develop a product and then be ready well ahead of time even before the market is ready for it. So our MS 185 axle is already launched with one of the customers. It's going pretty well with a 55 tonne tractor. And the product has been updated and then being launched with our key customers. So that is going to happen this year. So both the of [ those ] axles; and our largest axle, MS 185; and then the brakes, all of them will be launched this year. And we'll be realizing some revenue out of these new product launches.
Perfect. Perfect -- and sorry. I missed the number you had shared. So the share of revenues from the new products, was it about 16 or 60? Sorry. I couldn't get it...
So again, it is a little bit of challenge, right? It's -- yes. So we -- it also depends on what customers, what our OEs are realizing from the market. So our focus is, from somewhere around 65%, where we are present, we'll take it all the way up to 80% with the launch of these products. So [ that set coverage ], we are going to have for all the "7.5-tonne and above" trucks and tractors, applicated in the market.
Got it, got it. And sir, last question, on the industry outlook itself. So when we hear the commentary of, let's say, the OEMs themselves, let's say Tata Motors ad Leyland both, they both have a [ liability due ] in terms of FY '25 outlook, especially the M&HCV segment. While one is saying kind of growth and there is some kind of a muted -- maybe a mixed commentary, one from the other ancillaries. So what is -- I mean, as per your view, what is the overall outlook for FY '25 in terms of the volumes that the industry can achieve? Because in last call you had mentioned it was something close to the flattish earnings for FY '25, if I'm not wrong. So what is that today?
You're right. When compared to FY '24 to '25, we are projecting flat or about 4% to 5% less. If you see the start of this quarter, the first quarter, it's not going that -- going good. And most of the activities needs to be picked up. And they are talking about the reasons could be many. They are talking about election [indiscernible] election [ could start ]. We're also likely to get average or above-average rainfall, which means we [ don't any ] interference in that side. The infrastructure push from the government continues to be good. That's what they [ commented committing ], but we need to wait for the new government to come back. We as a component supplier [indiscernible] if you look [indiscernible] with the OEMs' preparations [indiscernible] something even though they are predicting [ in the future targeted years ], they are talking about a target that, "Yes, we need grow," even if they want to grow and expand the margin. We as a company -- like what Nagaraja presented, the market could be minus 5%. Or it can even [ work at plus 7% ] or something because, even though we are losing [ infrastructure ] for the next 3 quarters [indiscernible], one good thing is the industry would be -- has come down substantially in the last quarter. Even though, in the last quarter, [ production is less ], [indiscernible] pipeline [indiscernible]. I am sure that, this year, we'll have a positive, let's say positive, outlook. [ Let's say in the single-digit term ] growth would -- is still there. The company, internally we are [ preparing ] for whatever the number changes from the customers [indiscernible] the organization need to run efficiently and convert it very, very positively to make sure that, every bit of opportunity that we can convert to the top line and every opportunity that we have to cut down the costs, we should add it up to the bottom line. I think that's the theme in the Automotive Axles team, continues to work, but industry outlook at this point in time, looking at the industry inventory, the government spend, the push for passenger buses, everything, if you look at it, I'm positive about it.
Ladies and gentlemen, due to time constraints, this will be your last question for today's call. It's from the line of Chirag Jain from Emkay Global.
Just a couple of clarification. Do we supply to the defense space from, let's say, this entity?
Yes. We supply to the defense entity, not -- I think, not directly to the defense. We need to sell it to the [indiscernible] now [indiscernible] making axles where [indiscernible]. So our supplies are going to Ashok Leyland on [indiscernible] customers through the [indiscernible] defense, [ but we are, again ], defense axles from this entity [indiscernible].
Okay. And in terms of future of, let's say, product pipeline, let's say, e-axle, will that be part of this listed entity? Or could be potentially a part of -- let's say, the part of the group but may not be in listed company. Any thoughts on that?
See [indiscernible] e-axle and this, let's say...
Sorry to interrupt, sir, but the line for Mr. Muthukumar has been disconnected.
Yes, okay, yes. So the thing is we still have a capacity to manufacture some of the key components required for the e-axle. So at this point of time, e-axle, it is basically a part of Cummins-Meritor, but we supply them the parts wherever it is required. And the volumes, at this point of time, it is still too early for us to tell how this overall e-axle business is going to develop. Having said that, we are already supplying to key customers for the [ e- or battery ] vehicles our special axle which is being applicated on that. Most of the OEs, at this point of time, are preferring to -- remote mount type design, which is the cost of [ 50 volt at this point of time ]. So just to confirm, that e-axle still requires quite a lot of components which we are producing, which we have a capacity for that. I'm sure that we will be a part of any future e-axle production in one way or the other.
Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to Mr. Sailesh Raja for closing comments.
So thank you all for attending this session. We especially thank the Automotive Axles team for their time. Muthu, sir, would you like to make any comments?
Yes. Thank you, Sailesh. Once again, ladies and gentlemen, thank you very much for your time.
[indiscernible] that in the -- on top of, I think, whatever we spoke, I also wanted to congratulate your team. They have got the JIPM award last year. Nagaraja and team did a wonderful job of last 3, 4 years on the [ journey of the team ]; and they've been now awarded by the [ JIPM team ]. I think the team went to Japan and got the award. [ We view ] the confidence on the ability of -- and the capability that we have created in the plant to increase [indiscernible] demand; that we will continue to put the efforts in terms of new product launch, in terms of improving the reliability, at same time increasing the flexibility in the plant to make sure that multiple models -- and delivered at the shortest time. We'll continue to put the effort and looking forward to -- I think my team is there in the next 2 days, in the conference, in Mumbai. I think [indiscernible] to seek you, talk to you and give you all [indiscernible], but rest assured that [indiscernible] on -- we'll do everything to make sure [indiscernible] all the stakeholders.
Once again, thank you very much for taking time to join today. And thanks, Nagaraja and Ranga, for taking the call. Thanks, Sailesh, for [ calling, I think the ] -- and really appreciate [indiscernible] of your time. Thank you very much. Thank you.
Yes, thank you.
Thanks, everyone.
Thank you very much.
Thank you very much. Thank you.
Thank you. Bye.
On behalf of Batlivala & Karani Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
Thank you.