Endurance Technologies Ltd (CN)

NSE:ENDURANCE

Earnings Call Analysis

Endurance Technologies Reports Strong Q3 FY24 Earnings

For Q3 FY24, Endurance Technologies experienced significant growth with consolidated total net income increasing by 22.8% to INR 25,881 million, and the consolidated EBITDA jumping 29.9% to INR 3,260 million. Standalone total income also rose by 25.1%. Net profits surged by 40.7% to INR 1,523 million, achieving a net profit margin of 5.9%. The European subsidiary saw a 5.4% increase in sales, albeit with a 13.5% increase in EBITDA margin. Despite no Maharashtra mega project incentive, the company had no net debt and net cash of INR 4,636 million. CRISIL reaffirmed a stable AA+ long-term and A1+ short-term rating, citing operational strengths and diversified revenue streams, while noting moderate risks due to customer concentration and industry cyclicality.

Strategic Client Wins and Progressive Business Growth

Endurance Technologies has demonstrated significant progress by securing strategic contracts across various segments. Notably, Endurance has captured new business worth INR 1,247 million for supplying front forks and rear shock absorbers, along with a separate INR 253 million contract for Suzuki's new scooter front fork. These deals augment a previously won INR 1,400 million front fork contract, with operations for both slated to commence in the third quarter of the next fiscal year. The company has also embarked on new business with HMSI, an INR 294 million brake assembly contract, and a Royal Enfield alloy wheel deal valued at INR 657 million, both launching soon. The foray into the four-wheeler segment is marked by a INR 582 million casting machine business with Punch Powertrain and a INR 400 million annual contract for air suspension front forks with KTM Austria, set to start by the third quarter of the next fiscal year.

Expansion into Electric Vehicle Market and New Product Launches

Endurance has successfully added Jaguar Land Rover to its client portfolio, bagging an export business contract worth INR 240 million. This move complements Endurance's engagement with Maxwell Energy Systems, emphasizing the battery management systems (BMS) for electric vehicles. Maxwell, in which Endurance has increased its stake to 56%, secured INR 1,190 million in FY '23 and INR 793 million to date in FY '24 for BMS business. A pipeline of RFQs valued at INR 1,050 million and projected business realization of INR 3,785 million by FY '27 underlines the company's commitment to the EV space. Moreover, the partnership with Maxwell bodes well for future avenues in advanced electronics.

Sustainability Initiatives and Environmental Consciousness

Emphasizing sustainability, Endurance is prioritizing efforts to achieve carbon neutrality. By harnessing solar and wind power and promoting afforestation initiatives, the company aims to create dense forests and reduce its carbon footprint. Additionally, Endurance has discontinued the use of furnace oil and has set a goal of 50% carbon neutrality by FY '30. These efforts are aimed not just at environmental responsibility but also at aligning with global trends towards eco-friendly manufacturing practices.

Optimistic Outlook and Future Strategy

Endurance Technologies exudes confidence in its future growth prospects, propelled by substantial order wins over the past four years. The focus lies on technology enhancements, quality improvements, cost-efficiency, and health and safety standards. Underpinned by values like customer centricity and innovation, the company is poised for organic and inorganic growth. This growth is envisioned to outpace industry averages, driven by increased business with existing and new clients, a strong foothold in the EV market, a burgeoning advanced electronics segment, and a targeted share growth in the four-wheeler industry from 26% today to 45% by FY '30.

Earnings Call Transcript 2024-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to Endurance Technologies Q3 FY '24 Results Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Nishit Jalan from Axis Capital Limited. Thank you, and over to you, sir.

[Nishit Jalan, analyst]

Thank you, Ria. Good morning, everyone. Welcome to Q3 FY '24 Post Results Conference Call of Endurance. From the management team, we have with us Mr. Anurang Jain, Managing Director; Mr. Ramesh Gehaney, Director and COO; Mr. Massimo Venuti, Director and CEO, Endurance Overseas; Mr. Satrajit Ray, Director and Group CFO; Mr. Raja Gopal Sastry, CFO Designate; and Mr. Raj Mundra, Treasurer and Head, Investor Relations. I'll now hand over the call to Mr. Jain for his opening remarks, post which we can have the Q&A. Over to you, Anurang.

[Anurang Jain, executive]

Thank you very much, and good morning to all of you. I would like to share our details of how we have done in the third quarter and the first 9 months of this financial year.

In India, in the third quarter of FY '24, as per the CM data, the 2-wheeler industry sales grew by 18.74% compared to the previous financial year. Scooters grew by 24.48% and motorcycles grew by 16.16%. The automotive industry India as a whole had a growth of 15.89%. In Europe, in quarter 3, there was an increase of 6.2% in the European Union automotive sales with U.K.

On the financials, I will now briefly talk to you about the third quarter of FY '24 and then the first 9 months of this year. During quarter 3, our consolidated total net income grew by 22.8% to INR 25,880.76 million from INR 21,067.54 million in quarter 3 of the previous year. Consolidated EBITDA grew by 29.9% to INR 3,259.74 million from INR 2,510.24 million in quarter 3 FY '23. Consolidated EBITDA margin was at 12.6%. The net profit grew by 40.7% to INR 1,522.78 million from INR 1,082.3 million in quarter 3 of FY '23. And the net profit percentage was at 5.9%.

There was no Maharashtra mega project incentive in quarter 3. There was no net debt as there was net cash available of INR 4,636 million in consolidated books. During quarter 3, our standalone total income grew by 25.1% to INR 20,069.73 million from INR 16,047.46 million in quarter 3 of FY '23. Standalone EBITDA grew by 31.8% to INR 2,446.74 million to INR 1,856.33 million in quarter 3 of FY '23. The EBITDA margin was at 12.2%. Standalone net profit grew by 43.6% to INR 1,324.02 million from INR 922.06 million in quarter 3 of the previous year. The net profit consolidated was at 6 -- standalone was at 6.6%. There was no Maharashtra mega project incentive in quarter 3.

The Endurance Overseas sales growth in quarter 3 FY '23 was at 5.4% at EUR 63.38 million as compared to EUR 60.1 million in quarter 3 of FY '23. The Endurance overseas EBITDA margin grew by 13.5% to EUR 9.81 billion in quarter 3 FY '24 from EUR 8.6 million in quarter 3 FY '23. The EBITDA margin was at 15.5%.

As far as Maxwell is concerned, there was an EBITDA loss of INR 33.7 million in quarter 3 FY '24. The main reasons are the postponement of new product EV launches. Our full focus is now to have a throttle growth from the next financial year. The in-house Endurance surface-mounted technology line for manufacturing of BMS and the growth in new products with lower raw material percentages and higher business total income will lead to profitable sales at Maxwell.

During the first 9 months of FY '24, our consolidated total net income grew by 15.5% in INR 76,151.72 million from INR 65,943.19 million in the first 9 months of FY '23. Consolidated EBITDA grew by 28.7% to INR 9,976.60 million from INR 7,754.83 million for the first 9 months of FY '23. Consolidated EBITDA margin was at 13.1%. The net profit grew by 37.1% to INR 4,703.34 million from INR 3,431.09 million in the first 9 months of FY '23.

The net profit was at 6.2%. This includes -- this included the Maharashtra state mega project incentive of INR 589.01 million. During the first 9 months of FY '24, our standalone total income grew by 13.5% to INR 58,273.52 million from INR 51,361.31 million in the first 9 months of FY '23. Standalone EBITDA grew by 23.7% to INR 7,439.81 million from INR 6,016 million in the first 9 months of FY '23 with an EBITDA margin percentage of 12.8%. The stand-alone net profit grew by 33.2% to INR 4,054.8 million from INR 3,044.06 million in the first 9 months of FY '23. The net profit was at 7%. This included Maharashtra state mega project incentive of INR 589.01 million.

There was no net debt as there was net cash available of INR 3,939 million in standalone books. CRISIL has reaffirmed our rating as AA+ stable for long-term funding and the highest rating of A1+ for short-term funding and have cited the alluring strengths in operations, financials, customer strength and diversified revenue streams. The risks which have been cited were moderately high customer concentration and industry cyclicity.

The detailed financials are available with the stock exchanges and on the Endurance website.

I would now like to share certain key points for the first 9 months of this financial year. In the first 9 months of this year, 77% of our consolidated total income, including other income, came from Indian operations, and the balance, 23%, came from our European operations.

In India, till quarter 3, INR 9,410 million of new business was won from OEMs other than Bajaj Auto, which included Royal Enfield, TVS, Hero MotoCorp, Tata Motors, Honda 2-wheelers, Jaguar Land Rover, Mahindra & Mahindra, Punch Powertrain and Suzuki. This business win of INR 9,410 million constitutes INR 5,679 million of new business and INR 3,732 million of replacement business. This INR 9,410 million of business will reach peak in financial year '26. The total 4-wheeler business win till date in this year is INR 1,285 million. The orders are mainly from Punch Powertrain, Tata Motors, Mahindra & Mahindra and Jaguar Land Rover. I would also like to mention that we have [ INR 17,266 million ] worth of request for quotes from OEMs.

Since FY '20 in India, INR 39,009 million of business has been won, out of which INR 27,458 million is new business and INR 11,551 million is replacement business. The INR 39,009 million new business will reach peak sales in FY '26 and is mainly for suspension, castings and brakes in India.

TVS business win has been INR 5,278 million till date, and it's growing. The business won is for brakes, aluminum castings and suspension. The INR 5,278 million sales will reach peak next year in the financial year '25. The total business win for electric vehicles till date is INR 6,777 million. These orders are mainly from HMSI, which is Honda 2-wheelers, Ather Energy, Bajaj Auto, Hero Electric, Greaves Electric, Bounce, and Aptiv. This is apart from the INR 3,785 million business won by our subsidiary company, Maxwell.

Some of the significant new business won till quarter 3 of this financial year is as follows: TVS, INR 266 million inverted front fork and rear mono shock suspension business. Also INR 404 million has been won for front fork and rear shock absorbers, which SOP has been planned in August 2024. Hero MotoCorp new business win includes inverted front fork new business win of INR 240 million, and SOP is planned in June 2024. Brake assembly new business won of INR 263 billion, and the SOP is planned in April 2024. And the front fork and rear shock absorber win of INR 1,247 million, and this business has already started. We have also won Suzuki new scooter front fork business of INR 253 million. This is in addition to the previous year's INR 1,400 million front fork business already won, and SOP of both will be in quarter 3 of the next financial year.

We have won the HMSI or Honda 2-wheeler brake assembly new business of INR 294 million, and the SOP is planned in quarter 3 of the next financial year. We have also won the Royal Enfield alloy wheel new business of INR 657 million, and the SOP is planned from this month onwards. Punch Powertrain 4-wheeler aluminum casting machine business has been won of INR 582 million, and the SOP is planned from this month onwards. The new 35-dia air suspension inverted front forks for supply to KTM Austria will start by quarter 3 of the next financial year with the help of KTM Technology from our E93 Waluj, Aurangabad plant. The value of this business is INR 400 million per annum and will be exported directly to KTM Austria.

Our battery management system assembly surface-mounted technology line has started SOP from the 6th of this month at our Waluj, Aurangabad plant. The peak value of this business will reach INR 1,200 million per annum for BMS as well as ABS ECUs, which we should reach peak in the financial year 2026.

For EV scooters, electric vehicle scooters, we are ramping up our sales to 240,000 sets per annum of parts for EV battery packs and motor housing aluminum castings. The total value will be INR 1,000 million per annum, which has started and will reach peak in the next financial year. For our aluminum forging business, we are increasing our sales from 1,250 metric tonnes per annum to 1,750 metric tonnes per annum at an additional business value of INR 750 million from our Waluj, Aurangabad plant. This business has started and will reach peak next year -- in the next financial year, the SOP for the third aluminum forging press has already started this month, and the fourth aluminum forging press will start in quarter 1 of the next financial year.

We also added Jaguar Land Rover as a new client, new customer for the EV passenger car with an export business value of INR 240 million. The aluminum forging business is a new opportunity for growth for both the ICE as well as the EVs.

At Chakan plant, we last year started a niche business of structural aluminum castings like swing arms, subframes and structural fairings for both the electric vehicle and ICE models, which have gone in for lightweighting. This was done for Bajaj Auto, KTM, Piaggio and TVS. This business has already started for Bajaj Auto, KTM, and Piaggio, and the SOP of TVS business is planned for April 2024, which will reach peak in FY '25. The business value is approximately INR 1,000 million per annum. Endurance has a very good process and product technology in this business, which is helping us in almost being a sole supplier for these structural castings.

Our customers recognize us as a trusted and capable partner in the value chain in terms of both technical and financial strengths. The electronic vehicle market continues to offer significant opportunity for growth to the auto components sector. As you know, Endurance has taken a major step forward to harness this opportunity by executing a share subscription and purchase agreement for acquiring 100% of equity share capital of Maxwell Energy Systems Private Limited in a phased manner.

We have already last year, increased our equity stake to 56% in Maxwell as per our agreement. Maxwell is in the business of advanced electronics, particularly in the battery management systems for 2-wheeler electric vehicles and for automobile and 2-wheeler battery packs. At Maxwell, we have won Battery Management Systems business of INR 1,190 million in FY '23 and INR 793 million till date in FY '24. And we have a pipeline of RFQs of INR 1,050 million. Till date since FY '22, INR 3,785 million business have been won by Maxwell, which is expected to fully realized in the financial year 2027.

We are also happy to inform you that Royal Enfield has awarded us in this month, new BMS business, which SOP will start in January 2025. So with the current order book or the pipeline and technical strengths between both Endurance and Maxwell, we are very confident of achieving our goals in the advanced electronics space.

As disc brake assembly business is growing with the addition of Bajaj, TVS, Royal Enfield, Yamaha, Hero MotoCorp, Ather and HMSI, our second plant at Waluj, Aurangabad has been started for this increase of volumes and already has started SOP last year. We will also start disc brake assembly supplies to Hero MotoCorp from April 2024 and HMSI or Honda 2-wheelers from the end of quarter 3 of the next financial year. With this new plant, our disc brake assembly volumes have increased to 6.2 million numbers per annum and for break disk to 8.1 million numbers per annum. As you are aware, the supply of 2-wheeler ABS assemblies to Bajaj Auto and Royal field has started. We have reached a run rate of 400,000 ABS assemblies per annum. As you may be aware, competition is mainly from Bosch and Continental, both German companies, which control the major market share in Indian ABS 2-wheeler market. We are now in the process of supplying a dual-channel ABS from June 2024, and we have also scaled up additional assembly lines by 240,000 ABS assemblies per annum, which has taken our capacity to 640,000 APS assemblies per annum.

We are further planning to increase the capacity to 1.2 million single and dual channel ABS assemblies per annum for the second half of financial year 2026. We have in March 23, started manufacturing the ABS valves, which is not only a technology component, but has helped us in substantially lowering our costs and make better profit margins. Due to increased orders in aluminum alloy wheels from Bajaj Auto, Yamaha India, TVS, Hero Electric and now Royal Enfield, we have added a new plant in July '22 at Chakan to help increase supplies to 4.5 million wheels per annum. With now the new order wins from Royal Enfield and TVS, we've now expanded the capacity to supply 5.5 million wheels per annum, and the SOP will start from April 2024 onwards.

As Europe is concerned, till date in FY '24, we have won EUR 29 million business, mainly from the Volkswagen Group and Mercedes Benz. In the last 21 months, out of the EUR 113 billion order, EUR 60 million orders are for the growing battery EV business, which penetration in Europe has increased to 15% for the calendar year 2023.

I would also like to point out that Endurance both in India and Europe is actively pursuing its focus on gaining access to new technology and focusing on new product organic and inorganic growth. At Endurance, our future focus will be on the following projects for a better product mix and better profit margins.

We want to increase our 4-wheeler share of consolidated business in the 4-wheeler industry from 26% today to 45% by FY '30. This increase will come from aluminum castings, aluminum forgings as they will be increasingly used for lightweighting and from proprietary products through acquisitions, joint ventures and technology agreements. Our focus will be is on increasing our share of business with all customers on premium bikes greater than 150 CC for brake assemblies, for ABS, for suspension and clutch assemblies with upgraded product technologies and process.

We are focusing on increasing the business for electric vehicles for existing as well as new products. We want to increase our advanced electronics or embedded electronics business by becoming a significant player for the battery management system and new electronic products required for EVs and other applications. We want to focus on increase in nonautomotive business, which has large opportunities, especially in aluminum casting. We've already started this focus and are building up a special team for this. Our focus is to reach 10% of India sales in the aftermarket business by FY '28.

In the first 9 months of FY '24, our aftermarket sales grew by 5.58% from INR 3,085.15 million in the previous year to INR 3,257.26 million in the first 9 months of this financial year. We are exporting our aftermarket parts to 33 countries. We are now planning to add 2 more countries in this financial year in Central and Western Africa and supplies should start. The aftermarket sales growth is a very large focus area for us. We have our challenges, especially for exports, and we are now targeting a good growth in the next financial year.

In the first 9 months of FY '24, the export sales for India's standalone business grew by 7.37% from INR 1,385.13 million in the previous year to INR 1,487.27 million in the first 9 months of FY '24. The major sales growth has come from 2-wheeler suspension exports for KTM plants in Australia, China and Southeast Asia and from aftermarket export sales.

On the environment front, I would especially like to mention that sustainability is a huge focus at Endurance, and we are striving to be carbon neutral in our plants by effective use of solar power and wind power, creating carbon sinks by driving tree plantations and thereby creating dense forests and driving use of natural gas and LPG in case of electric power and furnace oil. Furnace oil use has been completely stopped. We have achieved a paved percentage of 30% till date in FY '24, and our aspiration is to reach a carbon neutral percentage of more than 50% by FY '30. We are also focusing on lowering hazardous waste generation and to achieve 0 waste to landfill.

At Endurance, it will be a continuous endeavor to grow through organic and inorganic growth with a focus on technology upgradation, quality improvement, cost, and environment, health and safety. We will do our best to fulfill our stakeholder expectations by following the 5 values of customer centricity, integrity, transparency, teamwork, and innovation.

We at Endurance have a very positive outlook based on our new large order business wins in the last 4 years, including electric vehicles, both in India and Europe. With these opening remarks, I would like to invite questions from all of you. We also have from Maxwell, Mr. Akhil Aryan, and Mr. Alex Collet, and Vishwas, who is our CEO at Maxwell, to answer any questions which you may have on Maxwell. So thank you, and now we can take your questions.

[Operator]

We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Aashin Modi from Equirus Securities.

[Aashin Modi, analyst]

Sir, my first question is regarding the new orders during the quarter. So we have added around INR 160-odd crores of new orders, wherein we have added INR 60 crores of new EV business and also 4-wheeler casting business. Could you please highlight -- give some more highlight on that?

[Anurang Jain, executive]

As far as castings are concerned, the major order has come from Punch Powertrain, which, as you know, has tie-up with TACO in India. And in fact, Punch Powertrain is becoming a very good growing customer for us. Because even in Europe, we have won a large business from Stellantis, which also has a tie-up with Punch Powertrain. So I would say one is, of course, Punch Powertrain, I'm talking about castings now. Then we have from Jaguar Land Rover, which is for aluminum forgings. And we have from Tata Motors and Mahindra & Mahindra for castings.

As far as the suspension is concerned, it's largely from Hero MotoCorp, as I mentioned, from TVS. These are the 2 major customers. And of course, whatever I mentioned didn't include Bajaj. So Bajaj will increase our share of business, and with the growing Triumph and KTM and Chetak. So that's not counted in this INR 9,410 million of business. So you should be clear on that. So that is extra. So this is all the non-Bajaj, which I normally say. Because Bajaj, as they grow, we just increase our business with them. We have a fixed SOB with them for all our products.

So suspension is mainly from them. Brakes is from Hero, from -- I mean, from HMSI. TVS, we are growing. We were doing largely motorcycle brakes. We have reached about 75,000 sets per month. And now we have started scooter brakes from this month, and that will be also growing. Our target is to reach 100,000 brake assemblies per month for TVS. In fact, they are our second largest customer after Bajaj for brakes.

Then, of course, from castings, we have alloy wheels. I mentioned we have increased because of TVS and for Royal Enfield. TVS will be going to almost 65,000 sets a month from April, and Royal Enfield we'll be also starting from April '24. We've got a very good order of, I think, 20,000 sets a month -- 17,500 sets a month. So we are slowly growing these businesses. But of course, the whole issue is to improve the profitability and product through product mix and focusing more on those businesses which give us higher profit margins.

[Aashin Modi, analyst]

My second question is regarding -- so if you look at the current ramp-up of our order book, most of it is happening in FY '25. So how do we see growth from FY '26 onwards, which would be the key segments which would be driving the growth? And in which segment do we see incremental orders from here?

[Anurang Jain, executive]

So you will see the largest orders in aluminum casting business in including alloy wheels, you'll see in suspension, braking and ABS. This is what is going to drive the growth. And of course, as we speak, I've mentioned a large focus is getting into -- more focus on 4-wheeler, which will start, whether it's starting with aluminum castings and forgings, but also we are looking at acquisitions, joint venture collaborations in the 4-wheeler space. Nonautomotive, we've already taken for nonautomotive, especially on the casting front, we have already taken like a head for focusing on this business as well as for very specific EV parts. And already the work has started on this because it offers huge opportunities. We are already doing business for Generac Rack. This is an American company for supplying castings to them, and for Sanmina, which makes for the [indiscernible] aluminum casting.

So nonautomotive is becoming a very huge opportunities, and we have a very large focus on 4-wheeler. We want to increase it from 26% to 45% by FY '30. This is in spite of the increase in 2-wheeler business, which we're doing.

So talking about the growth, I mean, just to give you an idea of what has happened in the first 9 months. As you know, the motorcycle, which is our major business, has grown only 3% in 9 months. Scooters, 10.66%. 2-wheelers as a whole, 5.29%. Bajaj, our major customer, only 1.4% motorcycles. Largely, the growth has come from 3-wheelers. It's about, 34%, okay? In spite of that, we have grown 13.5%.

So like I said, we believe in profitable and higher than industry growth, and that's our focus. And that's happening because we have won so many new orders in the last 4 years. So that's helping us to grow. In spite of motorcycle being not as big except in quarter 3, which was really good. And in fact, in quarter 3, the growth was very high. I think in motorcycles, quarter 3, the growth was 16.16%. Scooters, 24.48%, including EVs, and 18.74% in 2-wheelers. So of course, quarter 3 also helped us in this growth. And we grew at 25%, as you know, in quarter 3. And this was without mega project incentive. Like I mentioned, there was no mega project incentive in quarter 3.

And just to let to add as well on this question, just for everybody's information. If I take -- without mega project incentive when I compare quarter 2 to quarter 3, the EBITDA was at INR 2,336 million at 11.9% in quarter 2. Quarter 3, without megaproject incentive, we were at INR 2,447 million at 12.2%.

Even if I take with megaproject incentive the sales, the sales were INR 19,843 million with mega project in quarter 2, which increased to INR 20,070 million, in fact, we have had the best quarter 3 in India for a very, very long time. And also because, like I said, the 2-wheelers did very well, our major customer, Bajaj Auto, did very well with, the growth in Triumph, KTM, Chetak. So all this will help us in future. The growth is going to come largely from I think, of course, the high-end bikes, I mentioned, our focus will be on all the 150-CC-plus bikes with high-end brakes, suspension, products with new technologies also the clutch with assistant slip clutches.

We have to grow our market share, casting is a huge opportunity, where it's for 4-wheeler, it's for 2-wheeler, it's for nonautomotive. So I would say that there's a lot happening with us. And we'll see it in the future. But I've always said, I will go higher than the industry, which we will.

[Aashin Modi, analyst]

And sir, my last question is regarding Maxwell. So congratulations on the orders win from Royal Enfield. So with the sea of new launches in the electric scooter space, how do we see order wins over there? Again, how do we -- so with conventional, there's like Hero coming up with new launches. How do we see orders over there?

[Anurang Jain, executive]

See, as far as Hero MotoCorp is concerned, we are a major part of their business. And we just won order from Royal Enfield. We have won orders from people at Hero Electric, but because of the same 2 subsidy, there's been a postponement. And we think from quarter 1 of next financial year, they will start. Because they were the #1 company pre this same 2 subsidy going out or not going out, likely going out.

So we have large orders from them. We have large orders from Greaves Electric. So the order book, we are slowing because we are a late entrant in this. So if you ask me, Maxwell has a maximum experience on Indian roads. It's got more than 150,000, 160,000 BMS in roads. So we are looking at new products also after the battery management system.

So it's taking time, but Maxwell is an acquisition for us, which is a part of the EV journey, which will happen. Maybe it will be a bit delayed. But the volume, especially I would say in scooters and 3-wheelers, is really going to go up. And the highest penetration will be in scooters and 3-wheelers. So the issue is we cannot lose these opportunities. But I would say from next financial year, it augurs well for maximum is what we strongly believe.

[Operator]

Next question is from the line of Jinesh Gandhi from Ambit Capital.

[Jinesh Gandhi, analyst]

Continuing on Maxwell. In terms of [ bundle of key ], customers have been facing this issue of [ paint too ]. How far are we in terms of getting [ includes ] with mainstream OEMs like Ola, Ather, Bajaj, Hero, TVS. What we need to do to get orders from them?

[Anurang Jain, executive]

So see, I would only like to say that for Royal Enfield, there was the best competition in the fray. And the fact that Endurance or I would say Maxwell has been selected proves itself that how competitive we are, what are our strengths on technology, and that's how we won this order.

So the question today as far as Ola is concerned, I think they are mainly doing it in-house, what I have understood. But definitely, our efforts are on with TVS, with Bajaj. We are making efforts with everybody. But it's not only the battery management system, we're looking at new products in the future also.

So slowly step by step, we're also looking at exports. We are looking at -- so I think with time, the orders which we have won and I've said will peak in FY '26, I think I said. I think slowly you'll see as the sales grow, we get into better products with lower raw material percentage with semiconductor shortages behind us and prices coming down. all this augurs well with sales growth and with RMC percentage down and our technical strength. So we strongly believe we have a very good future going forward.

[Jinesh Gandhi, analyst]

Okay. But then with Bajaj, are we expecting it to take longer time for us to get orders from Bajaj for BMS, given that probably [ interest from ] relation?

[Anurang Jain, executive]

The issue is we are a late entrant. We were actually as a third company. They have given our commitments to the existing. So I would say, as volumes grow, and they are very, very aggressive on the EV space, both Bajaj and TVS. And so I think as the volumes grow, we will do our best to get in based on our technology and our competitive strengths. So I would just say that our efforts are on, we are really focused on this. But right now, we have no wins from Bajaj.

[Jinesh Gandhi, analyst]

Got it. Got it. And 1 clarification on the 4-wheeler focus, which we talked about taking share up to 45%. So that, particularly on the aluminum side, this is the doubt, including alloy wheels which currently [ we don't do ], right? Or are we looking at that as well?

[Anurang Jain, executive]

No, no. 4-wheeler alloy wheel is another product in our mind. I'll be, I mean, okay, honest about it. But yet, we have not finalized on that. Because there are many opportunities coming our way. Like people like Punch Powertrain, you look at some other companies also. You have a lot of export orders also which are coming up.

So I would say that we will capitalize on the orders, both in ICE and the EV space, on the aluminum castings front, mainly. And it may include alloy wheel in the future. It will include proprietary products in the future, existing as well as new products, could be through acquisitions, joint venture collaborations, and we are very actively involved in this. But we have to be careful that we do it properly, you know what I'm saying, I mean, we don't rush into things. We should be sure that in terms of acquisitions, what we are buying also, we are able to manage and make money. That's our philosophy. So maybe it's going a bit slow, but definitely that 45% is a clear target in front of us, which we want to achieve by FY '30.

[Jinesh Gandhi, analyst]

And on the structural custom parts order, which you talked about. So this is for ICE or EV side?

[Anurang Jain, executive]

Right now, it's for ICE, but it's also required for EVs at this. But it's a very niche market. It's goes on higher tonnage machines. And there's a real technology involved in these structural parts because they're very sensitive parts. And we have done a lot of work, I would say, last 2, 2.5 years, our engineering team in castings. And that's why, to be honest, any customer wants to do [ he wants ] to come to us because of our know-how. It's not that we don't expect competition in the future, but we're always try and be a leader. But this area is becoming a very large area for growth. So already INR 100 crores or INR 1,000 million of orders we have done, and this is growing by the way, it's growing.

[Jinesh Gandhi, analyst]

Right, right. And this obviously can be a fairly -- will lead to increase in content per vehicle on the aluminum side on the 2-wheelers...

[Anurang Jain, executive]

No, these are -- I mean, these are high value-add items. Very high value-add items.

[Jinesh Gandhi, analyst]

Right, right. Got it. And last question or other observation was that in the passenger vehicle business, both in India and Europe, we have seen some bit of lower growth in the underlying industry in 9 months. So is it more true with the timing difference because of the product launches of key customers in India and Europe? Or there is something else there?

[Anurang Jain, executive]

See, I don't know the reasons because to be honest, I even had said when the 2-wheeler industry were not doing that well, the first 6 months. My belief is at Endurance, we have to be in all the segments plus the nonautomotive because we don't know where the industry takes us.

I mean, in December, 4-wheeler was only 0.3%, like 2-wheeler was much ahead. So question is it keeps changing. At Endurance, there could be various reasons, which I am not aware of, to be honest. But we have to derisk ourselves and be present substantially in 4-wheeler, 2-wheeler. 2-wheeler, we are already substantially present, 3-wheeler, and I would say nonautomotive is bringing us really good profitable opportunities, I would say, in the future. But I don't know the reason for -- it keeps changing. I've said this, but at that time [indiscernible] were doing very well, I agree. But it keeps changing. It depends on the rural market also uptick. We believe the base was low for 2-wheelers. This year, we should do INR 21 million. The peak was INR 24.5 million in FY '19. And if the rural grows, I think with household incomes doing better, the good financing of the 2-wheeler vehicle, which I believe is happening. I think there's no reason it should not do well.

But to be honest, we don't know the future. I mean that's why I always say profitable growth and higher than industry. I really -- since we went for an IPO, I don't know the future. I only know how to derisk and ensure profitable and higher than industry growth. That's our focus at Endurance.

[Operator]

Next question is from the line of Mumuksh Mandlesha from Anand Rathi.

[Mumuksh Mandlesha, analyst]

And congratulations on the strong revenue growth of new order wins and the future diversification plans. And sir, firstly, on the revenue growth for this quarter. So Q-on-Q basis, we have seen a double-digit growth in the die-casting and suspension segments. Can you help us understand which new orders have ramped up and supported growth in Q3?

[Anurang Jain, executive]

Let me correct you, we have also won -- we've also grown the brakes business. In fact, I would say the brakes may be the fastest growing, then it's suspension and plastics. That was the second plant, which came up in last year. So I would say the brakes, suspension, casting plus alloy wheels, it is really leading this growth. And to be honest, we have a lot of pipeline of orders which are coming up. So what was your question, actually?

[Mumuksh Mandlesha, analyst]

So basically, I want to understand on Q-on-Q basis, Q3 versus Q2, the die casting and suspension have grown by double-digit versus the industry growth being flattish. So just to understand more which new orders would ramp up this quarter?

[Anurang Jain, executive]

I would say what went into the production was alloy wheels. It was structural castings. It was castings for EVs, which have really grown. And what else, then premium bikes. I mean premium bikes. I mean today, when you take an item like prime cases, people look because like for prime cases, we are bit of an export to be honest on technology. So customers come to us for prime cases largely. So I think, vis-a-vis, you were only asking for castings, right?

[Mumuksh Mandlesha, analyst]

Casting and suspension, yes.

[Anurang Jain, executive]

Yes. So in suspension, we have got into one is Hero MotoCorp, I said, that huge order of about INR 120 crores has gone into the production, okay? Triumph, KTM, Chetak, Royal Enfield also has increased because we have a major share of business with Royal Enfield. Then inverted front forks has gone up for exports also. I mean, off the mind which I'm telling, I don't have all the data in front of me, what is coming to my mind, I'm just telling you.

Bajaj has done very well quarter 3. I mean, so all suspension has gone up with them and very high value at front forks. Bajaj uses even for the Pulsars, inverted front forks, which are much, much higher in price than the conventional front forks. So -- but I would say, Bajaj, Yamaha, and Hero are the 3 companies which have really led the growth in quarter 3, if I could choose 3 customers.

[Mumuksh Mandlesha, analyst]

This is helpful, sir. Just on the other expense, was any one-off this quarter? Because other expense have grown broadly in line with the top line growth. We have not seen any positive leverage benefit. Any reasons for that, sir?

[Anurang Jain, executive]

You are talking about India right now?

[Mumuksh Mandlesha, analyst]

Yes. So yes, India -- consol other expenses, if you look at, it has been broadly in line with the revenue growth.

[Anurang Jain, executive]

Consolidated and India both or...

[Mumuksh Mandlesha, analyst]

Yes. Both, sir. Both case. And I think in India, also, we have seen the increase. So if you can help us understand.

[Unknown Executive]

India, there has been no significant increase in other expenses. Some preventive maintenance expense we normally undertake in December. So that's something, but if you see other expenses as a percentage of revenues, especially the fact that metal prices are coming down, so revenues have to be adjusted for that. Actually, as a percentage of sale, it's not gone up at all. But one-off item would be preventive maintenance costs, but nothing very significant there. So Europe other expenses quarter-on-quarter, would Massimo, you would like to add something?

[Massimo Venuti, executive]

Yes. Compared to 2022, more or less, we are -- there is an increase that is due to the increase of labor cost. Because starting from the 1st of June 2023, we have had an increase of 6% with our employees linked to the inflation and also in the other expense is for the leasing contract. If you compare the third quarter compared to the second quarter, the increase is only due to the increase of stock, so -- and the product mix. But the other expense and the labor cost are completely aligned compared to the previous quarter.

[Operator]

Next question is from the line of Pramod Amthe from InCred Equities.

[Pramod Amthe, analyst]

So the first question is with regard to the Page 7 -- or sorry, 6, which you talked about the model wins, how they're going to plan out into the sales, where you've called out for FY '25 almost around INR 2,400 crores of business to come through. It looks huge, if I had to top it up on the existing sales. You are basically talking about a 25% plus growth from the new order wins, which I think is one of the best in the last 5 years, which you may have done.

So if I had to track what are these customers we need to watch out for? Because you also alluded to the fact that in case of EVs, one of the customer missed out and hence be deferred for next year. So I wanted to get some more granularity when you are projecting that much of a lumpy rise for next year?

[Anurang Jain, executive]

When I mentioned about INR 3,900 -- INR 39,000 million, some of the business already got started in '21, '22, '23 and '24. Okay. So you must keep that in mind also. But I would say the major growth is going to come from all customers. Suzuki, it's a small player. It's INR 1,650 million new front fork and rear shock business starting in quarter 3 of the next financial year. That's a huge order. And Suzuki is a very small piece in our scope of things, which is there.

But I will give you just 1 example. The way the EVs are going up, Bajaj, the Chetaks, the Triumphs, the KTMs. Plus, I would say they have really captured. They have grown in domestic market. Export, we'll have to see. And I would say all. I mean, if you take Yamaha, the brakes business, which is increasing. The alloy wheels, which is increasing next year. TVS, that s all inverted front fork orders, which are there, the TVS, the Hero MotoCorp, with the first Bajaj is increasing, KTM exports are increasing.

Actually, there -- I mean I would say we are growing with all customers. In EVs, it will be mainly Ather, electric they really start doing well now. They've got their act in order, TVS and Bajaj as far as EVs is concerned, what we are seeing today, and of course, we'll be a part of the journey with the HMSI. We have already won business for castings for our South India plant from HMSI. That's how you see the figure has gone up, which is there.

So we are focusing on EV with all the original OEMs and new OEMs, I would say, mainly would be Ather, would be Greaves Electric, it would be Hero Electric. Ola we are not present right now. We are trying, let's see how we succeed. But new ones will be there. But OEMs for EV, I see it's all. It's all the original, it's all.

[Pramod Amthe, analyst]

Sir, and the second question is with regard to the Punch Powertrain, where you alluded that you have won and supplies are immediately starting considering that it's a first of its kind bond you have been able to make inroads. Surprised to see the short lead time of win versus your delivery. So is there anything to see if we extrapolate the similar one for other EVs coming in car business? Or how are you looking -- or it's a one-off of to have a short lead time per say?

[Anurang Jain, executive]

Yes, see, Punch Powertrain, of course, for the first this business, of course, that lead time was not that big. But I think our engineering strengths, our tool room, our capabilities will help us to get into SOP very fast, production very fast. And that will be one of the key things in future, whereas for castings. And that's why I think our strong R&Ds, our own test track as far as the proprietary products, are really helping us to do quicker, the development quicker first-time right.

And as you know, technology is a very, very huge focus, which is helping us to get into new products very fast. And castings, I think our own engineering team, our own tool room shortens the lead times. But I think, to be honest, this could be the order of the day if you have to win business quickly because you have to meet the target timelines. So this could happen. It's not happening with everybody. We do get good timing. But now there are many customers whose lead times are quite -- I mean, they are getting shorter for sure.

[Pramod Amthe, analyst]

And looking at the opportunity in the EV Powertrain, how much you might have addressed in this case of Punch? And is there more headroom available for you to expand your opportunity in that? How do you look at it?

[Anurang Jain, executive]

I think the opportunity is huge, and you will see new order wins in the future.

[Pramod Amthe, analyst]

Just as a rule of thumb, like how much you might have been able to address now with this win?

[Anurang Jain, executive]

See, our focus is like in India, to get everything, to be honest. I mean to get 100%. In case we don't want a second source, and we can with our competitive strengths manage to do it. But we are -- but to be honest, we are looking at a lot of other EV opportunities in the battery casting space. And there are a lot of -- I cannot talk too much on the call, to be honest. But I'll just tell you that 4-wheeler EV, ICE will be a huge opportunity going forward.

[Pramod Amthe, analyst]

Okay. And a similar question to the European operations. If I had to look at the order wins in 9 month FY '24, they look dismal versus what you have done in the last 2 years. Any color why it was a case and how you expect -- was the new product development itself was weaker or your wins were lower in Europe this year and how that will have a repercussion going forward?

[Massimo Venuti, executive]

So speaking about Europe, we acquired only EUR 30 million win in these 9 months, but please consider that in the last 4 years, we acquired EUR 250 million per year. The total turnover of Endurance overseas is more or less EUR 260 million. And so in this moment, we are investing something like EUR 50 million in this financial year to implement the production capacity.

And so this is due to the fact that it's normal that sooner or later, we have to refuse business, because the space we have entered the possibility to continue to grow from the [ field ]. This is from our point of view, the normality. In this moment, we are quoting other business. Regarding your previous questions to Mr. Jain also, with Punch Powertrain Europe [ we're importing ] for them, other components for electrical vehicle for the plug-in technology. Important business, 150,000, 180,000 per player. But at the end of the day, please consider that the major focus in Europe in this moment is to implement as soon as possible the production capacity because we have a lot of new projects. And so the target is to start as possible with good volume.

[Anurang Jain, executive]

I would just like to add here to Massimo that we are acquiring new land and making new buildings also. But at the same time, the business, which has been one of EUR 250 million, I said it's mainly largely for the EV products as well as hybrid. So there is a delay on the EV product side. So we have already invested. We have taken the order.

But you will see -- so already the -- I mean we are going to take more orders, but there has been a delay. So you will see in future larger shares in the coming years because there has been a delay especially in the electric vehicle space, that whatever the SOP was planned has been delayed. So you will see higher business from the next financial year.

[Operator]

Next question is from the line of Arvind Sharma from Citibank.

[Arvind Sharma, analyst]

Sir, first question would be on the margin trends in the India business. On a quarter-on-quarter basis, there has been a slight decline. Any reasons for that, sir, the EBITDA margin?

[Anurang Jain, executive]

No, and I don't believe that there's a decline because the mega project incentive was not there in quarter 3. Quarter 2 has the mega project incentive so you have to compare it with that. So if I do not take mega project incentive, EBITDA was at INR 2,336 million, 11.9%, which went up to INR 2,447 million, at 12.2%, both if I take without mega project. And as you know, we don't get mega project every quarter, largely it's in the first 2. So you have to compare it apple to apple.

[Arvind Sharma, analyst]

Got it, sir. And do we expect any mega project incentives next year?

[Anurang Jain, executive]

Of course, there's going to be...

[Unknown Executive]

Arvind, let me explain that. See, we booked about 90% of our entitlement as per accounting standard, what we've discussed with the auditors as and when we clock up GST based sales. So we've been doing that [indiscernible] now for the initial years will be due to us once the GST audit is over, the report is filed with the authorities and they clear the balance in percentage. As far as we are concerned, with under the current mega project incentive, that is 2013 to 2019 scheme. This was the last big year of close to INR 60 crores booking. Now what you will see going forward would be smaller amounts pertaining to previous year, which we've held back for getting the GST audit done.

So quarter 4 onwards, I'm -- it's difficult to say how much you will see, but you may see something in quarter 4 of this year. I'm not able to give you a number. But from next year, this particular thing will start tapering down the bookings under 2013 to '19.

[Arvind Sharma, analyst]

Sure, sir. Sir, next question will be more on the demand trends that you are seeing. Yes, there have been new order wins, which will help the revenue. But on the demand front, especially in the 2-wheeler segment, what are your views for next year, say, fiscal '25, leaving the new order part, purely from an industry perspective?

[Anurang Jain, executive]

Honestly, I can't answer that question because I don't know. The first 6 months, you know where the 2-wheeler was. These 6 months it's fantastic, quarter 3, quarter 4. And it depends a lot also on the -- how fast the scooter EVs will grow with the FAME II subsidy practically going out from June '24 and how the rural sector is doing.

Right now, we see an increase in demand as well as a good financing. So let's hope it continues. So -- and that's the reason though we had Endurance continue to focus on 2- and 3-wheeler, 4-wheeler and nonautomotive becomes a very major focus for us now in the future.

[Arvind Sharma, analyst]

Sure, sir. So just 1 data point. For the European business, you've shared the revenue and EBITDA in the presentation in euro terms. What would be the PAT, sir?

[Massimo Venuti, executive]

We closed the third quarter with EUR 63.4 million of turnover, 5.4% higher compared to the previous year. EBITDA, EUR 9.8 million, 15.5%, 13.5% higher compared to the previous year. Net result of EUR 3.3 million, 5.2%, 7.5% higher compared to the previous year.

[Anurang Jain, executive]

So 5.2% was the PAT.

[Operator]

Next question is from the line of Viraj from SiMPL.

[Viraj Kacharia, analyst]

A couple of questions. First is, you talked about us having an aspiration of 45% of mix from 4-wheelers by 2030. So what product segments will drive that for us? That is one.

Second is, if you can talk about the suspension segment performance. So you gave a brief color in terms of how the 2-wheeler end market has done on a 9 month and how we have done. But that our performance has led more by suspension or is this other product categories?

And the third question is just lastly on the competitive dynamics in suspension. So will it be -- both within 2-wheelers and if at all, we are looking in 4-wheeler?

[Anurang Jain, executive]

So see, one is suspension casting and brakes, which has driven the India business. Just to answer that first, the second question. The first one was which one -- I forget when you ask too many questions at the same time.

Yes. So see, the 4-wheeler 45% is going to come from aluminum castings, from forgings. It could also include 4-wheeler alloy wheels. It will come from die shops, business which is there. And in proprietary, I mean, it could come from brakes, from suspension for 4-wheelers or it can come from new products which are required for both ICE and the EV in the 4-wheeler space. And of course, it could come from acquisitions. It could come from collaborations. So we are very, very focused on this.

[Viraj Kacharia, analyst]

On suspension, what my question was, you talked about having a sizable amount of new wins. So you talked about the Hero Motors, close to INR 130 crore order, and then even from Suzuki and other players. What would be your share now in the 2-wheeler space? And if you can just help us understand the opportunities for further growth in the 2-wheeler space and suspension?

[Anurang Jain, executive]

See, one is the growth, which can come automatically if the 2-wheeler industry grows. Then the higher-end suspension, one is the suspension of the above 125 CC bikes, which are 150 and above, it is new technologies of inverted front forks rear mono shock absorbers, which will come in suspension in a [ bigger ] way. You're talking about only 2-wheelers right now, isn't it?

[Viraj Kacharia, analyst]

Yes. For us, it's largely 2-wheelers, right?

[Anurang Jain, executive]

So it will be growth in the 2-wheeler market. Higher growth in the premium segment, which is 150 and above, where we have all the products required for suspension. There is inverted front forks. It's rear mono shocks. It will be exports to KTM in all the regions of the world, which is there.

We have got -- we're also working with other foreign players in the 2-wheeler domain to be able to increase our exports on the 2-wheeler front. So suspension, I think, will be a factor of this and increasing our share of business. Like in Suzuki, we're not present -- now this huge INR 160 million or INR 140 million order to bring -- this makes us a major player in that space. So how to get more share of business also.

[Viraj Kacharia, analyst]

And who would we be replacing in terms of competition?

[Anurang Jain, executive]

Well, you know the competition. Don't make me say it myself. I'm sure you people know all the competition. I don't like to talk about competition. It's not right. But you all know the names. There are not so many names. And in all the products which Endurance is in, there aren't many names. There's been a lot of consolidation over the last 20 years.

[Viraj Kacharia, analyst]

Okay. Just last question on the Maxwell business. If you can just give some color on the competitive dynamics in the product segments, their participants, who will be the larger players and their share as of today?

[Anurang Jain, executive]

I think the Maxwell team is there. I think I'll request Akhil, Alex, Vishwas to please answer this question.

[Vishwas V S, executive]

This is Vishwas, here. Could you repeat the question, I couldn't get the entire...

[Anurang Jain, executive]

The question is -- sorry, yes, please ask.

[Viraj Kacharia, analyst]

My question was largely on the competitive dynamics. In the product segments we participate in and all the other larger players and their share as we speak today.

[Vishwas V S, executive]

Yes. So regarding competitive dynamics, let me also come to how the industry is also a little bit shaping up because that will help you understand that much better.

So In terms of how the industry is shaping up, of course, EV segment as such is still a volatile segment. There is a lot of consolidation happening. There are a lot of regulations, which are transforming the industry in one way or the other. And BMS also has an -- has had an impact on, for example, the FAME II as well as the AIS-156 and so on. So when it comes to the competitive space as such, the initial competitors were, of course, mainly coming from China with respect to the low-cost PCMs and so on, which many OEMs were using.

Now with AIS-156 coming in from last year. So that has majorly gone off. And there are -- and also a lot of localization support and things like that with respect to FAME II, that has largely gone off and smart BMSs was the order of the day, for example, since last year. When I say last year, last year April onwards, right?

Going forward, how we are seeing the trend within the industry also is that many of the OEMs are realizing that they have to move towards a more functionally safe BMS. So when I say functionally safe in automotive at BMS, which, for example, has the power to manage the battery, even when the vehicle is for example switched off and so on.

So this trend is going to continue, and that's where Maxwell is getting a lot of advantages. And Anurang already mentioned we won the business with Royal Enfield mainly with our competition with respect to our expertise on the functionally safe BMS with reps designing the hardware, but mainly it's related to the software side of things.

So regarding the functionally safe BMS, there are -- I don't want to build up the news of the competition in this call. But in terms of the competition, it is very few, and that's where we see the niche being developed from Maxwell. So from that viewpoint, even with the functionally safe or nonfunctional safe at BMS, we are confident of our USPs, and we are confident of our advantages and many of our customers as well as new customers we're going to acquire are already seeing that impact.

[Viraj Kacharia, analyst]

Okay. If I can just squeeze in 1 last question, it was on the margin side, especially in the standalone business. Now despite such a healthy performance. You're seeing the overall key raw material costs also being softer now. Still margins on a standalone, if not recover to the levels as you say, around the 14%, 15% or 16%. So is there any particular segment which is dragging the overall piece in the standalone businesses? And any perspective you can give?

[Anurang Jain, executive]

So see, I had mentioned in the earlier call, when Endurance did 14.5% to 16%, 16.5%, the raw material percentage to sale in India was 62% to 63%. And you can see the record of the last 4, 5 years.

Today, we are at 12.2% without mega project incentive, or I would say 13.1% in the 9 months with the mega project, where the RMC is about 66% or 66.5%, what's the exact figure, the RMC percentage? So there's a huge difference of minimum 3% there or even more than that. So we have been improving. But definitely, there's a mathematical figure. What you have to see is how much EBITDA amounts we are making. It is 66.3% in this financial year. And we have done better than the last financial year so far in terms of EBITDA margin.

[Viraj Kacharia, analyst]

That is really appreciative. And we can clearly see that, it's just that if you look at the end segments, especially the OEs, they are making on of the best spread on a per unit basis. And if you look at the overall RM contacts, it's been around -- it's been benign now for the last few quarters. So just in that perspective, I was trying to understand, is it more to do with the segment or the product mix? Or it's more about cost recovery, which may play out further in coming quarters?

[Anurang Jain, executive]

What you have to see the OEM figure is only on operations, what kind of money they are making. Today, Endurance is making money only on operations. So you have to see OE on operations income and other income. So -- but of course, don't compare as we are OEMs, OEMs. I mean -- and most of the -- I mean, original OEMs are very, very strong. So I can only say that we are trying our best to improve the profitability, trying to see how we can with our Endurance vendor association keep focus on raw material percentage to sales, see how best we can achieve lower figures and grow the business with a better product mix, whether it's 4-wheeler, it's 2-wheeler, it's nonautomotive.

So the question is, I think it's a product business -- I mean, the product mix and these new business initiatives, which I purposely mentioned in this call, is I think going to take us to a better EBITDA margin percentage, and that's the focus. But if you're comparing 15%, 16%with today, 13.1%, this year, it's because of the raw material percentage. And you can see the figures of the last 5 years how the percentage has moved up. Of course, it's moved down compared to last year. That's why you see a better EBITDA margin percentage compared to last year.

I think it was 11.9% versus 13.1% if I see the first 9 months. So you can see the improvement there with EBITDA. But of course, the focus now will be on better product mix in 2-wheelers and focusing on nonautomotive and 4-wheelers for sure.

[Operator]

Next question is from the line of Prateek Poddar from Nippon AMC.

[Prateek Poddar, analyst]

Just one more question. Just wanted to confirm. Are the Royal Enfield BMS orders start from Q1 FY '25? Is that a fair understanding?

[Anurang Jain, executive]

Sorry, the?

[Prateek Poddar, analyst]

The BMS orders for Royal Enfield. They start from Q1 FY '25 or Q1 FY '26?

[Anurang Jain, executive]

January 2025. January 2025.

[Prateek Poddar, analyst]

Okay. Because the presentation mentions that Q1 FY '25, so it got me a bit confused. .

[Unknown Executive]

Prateek, it should be January, it should be Q1 of...

[Anurang Jain, executive]

It should be January, so that must be a mistake.

[Prateek Poddar, analyst]

Okay. It's calendar year, right?

[Anurang Jain, executive]

January 2025.

[Prateek Poddar, analyst]

Okay. And sir, just in Maxwell, how much of your total revenue potentially, let's say, the peak revenue of INR 380 crores, how much would come from Hero Electric, is that around INR 70-odd crores?

[Anurang Jain, executive]

Just a minute. Vishwas, would you like to answer? See, we don't give actually the breakup. Have we given the break up, but to be honest...

[Vishwas V S, executive]

Was the question regarding the Hero Electric revenue?

[Anurang Jain, executive]

What is the size of business in that total business wins, which I gave, how much is Hero Electric and that is what he's asking.

[Vishwas V S, executive]

Hero Electric will be in the region of INR 70 crores, yes.

[Anurang Jain, executive]

Yes. Note is already there, INR 7 billion, we have mentioned it. [indiscernible]. So let's hope they do well. They were #1 when the same 2 subsidies didn't go out largely. So let's hope they come back.

[Operator]

Ladies and gentlemen, that was the last question of the day. I now hand the conference over to management for closing comments.

[Anurang Jain, executive]

No, I don't have any further comments. I've already given my comments in my opening remarks. And so I mean, thank you, and thank you, everybody, for joining this call. Thank you.

[Operator]

On behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.