Fiem Industries Ltd
NSE:FIEMIND
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Fiem Industries Ltd
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Ladies and gentlemen, good day, and welcome to Fiem Industries Limited Earnings Conference Call Q1 FY '24 Conference Call hosted by Monarch Networth Capital. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on the date of this call. These statements are not a guarantee for future performance and involve risks and uncertainties that are difficult to predict.I now hand the conference over to Mr. Sahil Sanghvi from Monarch Networth Capital. Thank you, and over to you, sir.
Thank you, Neeta. Good evening, everyone. On behalf of Monarch Networth Capital, I welcome you all to the Q1 FY '24 conference call of Fiem Industries Limited. We will start the call with the initial comments about the results and the future outlook of the company then we'll open the floor for question-and-answers. So without much delay, now I hand over the call to Mr. J.K. Jain, Chairman and MD of the company. Over to you, sir.
Thank you. Good afternoon to everyone, and welcome to the Q1 FY '24 earning call of Fiem Industries. Joining me on today's call are Rahul Jain, Director; Vineet Sahni, Director and CEO; Rajesh Sharma, Director; Arvind Chauhan, Company Secretary; O.P. Gupta, CFO; and other members of the finance team. The investor presentation and the results have been published on both the company's website and the stock exkange. I trust that all of you have had the opportunity to review you the same. As we celebrated 77th Independence Day, it is heartening to observe the remarkable progress of our nation's economies. Our strong fundamentals have laid a solid foundation for sustainable growth in coming years. Our Indian automotive industries has also shown a strong performance, the passenger vehicle industry has grown 7%, driven by robust growth in the utility vehicle segment. The 2-wheeler industries has posted growth of 1.6% in the production volumes and 11.6% growth in the domestic sales volume in Q1 FY '24 as compared to the same quarter of the last year. The sales growth has been driven by a combination of the factors, including the growth in the country [indiscernible] green shoots of recovery in the rural market and the new product launches.Within the 11% increase in the sales during Q1 FY '24, helping with the improved consumer sentiment, the industry is poised to sustain this positive momentum through the year. During the quarter, the EV 2-wheeler segment experienced a significant policy shift with the [indiscernible] grade 2 subsidiary from 40% to 15% effective from June 1, 2023. This change led to a decline in the June sales for electric vehicles, EVs, and against a strong performance in the May 2023. Despite of this segment, the overall sales for the quarter remained strong with EV's 2-wheeler sales reaching 2.7 lakhs units, marking a 66% increase over the same quarter last year. Looking ahead, we are confident that the EV industry will find its footing and stabilize during the course of the year.Now let me shift my attention to the operating performance of the Fiem Industries in Q1 currently. We are pleased to report a strong start to the fiscal year Q1 FY '24, net sales of INR 471 crores, EBITDA of INR 52 crores and a PAT of INR 35 crores. This comes on to the book debt of record FY '23, which once again reflects our diversity of our [ Indian ] model and portfolio. We have a strong balance sheet and are well positioned for growth. On business front, I am expected to update you on our engagement with Hero Motors.As you are aware, Fiem Industries is working closely with Hero on several new projects. I am thrilled to announce that we have commenced production of the prestigious Harley-Davidson X440, which was launched by Hero Motors Corp. during this quarter. This model has received positive market response. As seasonally the quarter witnessed the launch of Simple Energy's EV scooter marking another significant milestone in our ongoing pursuit for the leadership in the EV segment.Now I would like to draw your attention to an unfortunate event during the quarter. Despite our best [indiscernible], we had an incident of fire at our Rai factory. The fire caused substantial damages to the plant and merchandise and part of the building. However, all sectors of the companies are adequately covered under insurance due to the presence on the Rai safety measures and the timely action by the management and its employees, we could save substantial part of the injection molding, surface treatment, facilities, et cetera, et cetera. We are happy to announce that there was no loss or injury to the human life. Company resumed production within 3 days, and there was no business loss. I must extend my heartfelt gratitude to our employees and [indiscernible] who responded swiftly and worked tirelessly to restore normal operations.Now I hand it over to Mr. O.P. Gupta and the finance team to update its operational performance.
Thank you, sir. Good afternoon to everyone. I would like to present the Q1 numbers for FY '24. The company registered a sale of INR 470.71 crores in Q1 of current financial year against INR 441.98 crores in corresponding quarter of '22-'23. This represent a growth of 6.5%. The EBITDA for the quarter stands at INR 61.66 crore translating into an EBITDA margin of 13.1%. The EBITDA in corresponding quarter of '22-'23 was INR 57.5 crores and percentage was 13.02%. PAT of the company is increased by 19.67% to INR 36.44 crore as compared to INR 30.45 crore in Q1 of FY '22-'23. During the quarter, the company has made a CapEx of INR 18.12 crores. During the quarter, an unfortunate fire incident happened in part of one building of our Rai unit. The company had identified various assets, including stocks and plant and machinery, which were affected due to this fire. The carrying value of inventories impacted is INR 25.8 crores and plant and equipment impacted is INR 25.2 crores. This has been written off in the statement of profit and loss during the current quarter ended on 30th June 2023. The above amount has been shown as recoverable on account of insurance plan as on 30th June 2023. In view of this, there is no impact on profit and loss. The company has a [indiscernible] insurance policy, which adequately covers the losses for the inventory and property, plant and equipment.With this, I end the financial brief, and now the floor is open for question and answers. Thank you.
[Operator Instructions] The first question is from the line of Priyash an individual investor.
Yes my question is mainly to Mr. O.P. Gupta regarding the accounting treatment of the fire insurance -- regards the incident. So one part is very clear wherein it's mentioned that the loss to the inventory as well as to the [indiscernible] has been written off. So that's absolutely clear -- [indiscernible] P&L account. But the second sentence is a bit vague and unclear, wherein it has been mentioned that it has been shown as recoverable. Recoverable is fine. Recoverable means it is an asset item. So where it has been credited in the second entry? Second entry has been taken for liability or to the P&L account?
Yes. Once you enter -- once you write off an asset, you debit to loss on account of fire and credit to stocks and plant and machinery. And then this loss is not he loss of the company, the money is to be recovered from the insurance company. So what you do next is we reverse this loss and then show as recoverable for insurance company. So the exact amount which is shown as written off is nothing but recoverable from insurance company. So there is no impact on P&L account.
Gupta-ji, again, you're not clarifying. Second entry, did you credit the P&L or did you credit the liability?
No, no, there is no liability. There cannot be a liability because liability is --
Hold on. Let me explain you. I'm also chartered accountant, let me explain you. Like once the loss is incurred you have to pass complete written off, but this claim from the insurance company is not yet determined, is not fixed whether you will receive full amount. So ideally, you should have taken only the debit and not the credit. If you want to take credit, you can take to the asset as recoverable and corresponding liability. You cannot take through the P&L account. So since you assumed that you will get full amount, which is doubtful because the insurance cannot like give the full amount because they will also have their [indiscernible] like they also have their own way to calculate. So you will not getting any way the full amount.
So that is what I think it is not clear to you. This is the carrying value of the asset in the books -- it is not the full amount. It is only the written down value, which is shown in the book, which is not --
Written down value, your value, but they calculate differently. They get likely to dispose of, but how much will get -- so the point I'm trying is that you may not get the full amount, that's what I want to say to you. So ideally, you should not have created the full amount to the P&L account. I mean generally, companies -- all the companies, their debit first the loss is done by the incident, you have to get the loss -- hit to the P&L account. But the credit entry they don't pass it to the P&L. It is that you can see a lot of -- I think in the case of [indiscernible] I think, so you can see their balance sheet also. So they don't send this insurance claim issuable in the P&L account because it is not determined, it is yet to be filed. In your case, it's not yet filed.
Actually, you are not understanding that you have not seen the insurance document. Insurance document the insurance is for the cost, including the restatement of 15%. So what is recoverable from the insurance company, they have deduced the [indiscernible] and the surveyor has seen and assessed that the value of -- written down value and the stock in the books of accounts. That document they have -- I think you can take this clarification offline because this is a discussion going on and the other people are also waiting. So better if you can take --
Yes, no problem. My second was regarding employee benefit expenses, which is significantly up from INR 56.8 crores to INR 68.01 crore like corresponding to Y-o-Y. So almost increase of about we can say 18% increase. So what's the steps are we taking to reduce the employee costs?
So this employee cost is annual increments are happening in the first quarter and sometimes also goes into second quarter. So this is nothing but the yearly increments of the employees.
Sir, my humble request to you, you are the majority owner, you a significant owner, we are the minority shareholder. We do understand the concept of increment , but it's not mandatory to keep such increment that the employee cost is increased by INR 12 crores and corporate -- only by INR 8 crores. So it means that the increment given to the employees are way high than the performance of the company like motivation has to be there. So but I think this has to be really calibrated properly in the future, like in case of other companies, even the CEO has taken a cut in the salary not like, for example, increment in Wipro, for example, although this is net profit. But in our case, we have wage hike for talent, sir, so a very humble suggestion to you, please reconsider this point going up like in the future sir because we --
Sir, we have taken your advice, but anyway, this is the internal appraisal that all things happen. So we've well taken your point.
Appraisal is fine. Appraisal is just process, but to give or not give to give how much is your call sir, we are only telling you that INR 13 crore -- INR 14 crore like salary has increased 20%, profit is not even 20%, that's what I'm saying sir. Please don't distribute high salary, sir.
Yes, I think you have not fully understood that turnover in March quarter 4 was INR 432 crores. And the turnover in this quarter is INR 478 crores.
Only 10% increase, salary is gone up 20%.
Salary -- no, no, the 10% increase of INR 430 crores comes to INR 40 crores and whereas the salary has increased by INR 8 crores, you are not understanding. The 10% you are calculating of INR 438 crores will come INR 40 crores, you are taking the percentage, you are not taking the amount.
[Operator Instructions] The next question is from the line of Aashin Modi from Equirus Group.
-- starting production from the Harley. So my first question is regarding our business with Hero. So we have launched one scooter earlier, and now we've launched this Harley. So are there new product launches lined up with Hero? And if you could quantify our revenue with Hero, that would be helpful. And also on these lines, if you could also help us our content per vehicle on Harley compared to your normal content?
Rajesh Sharma this side. The vehicle launch by Hero is already extended like under Harley-Davidson umbrella, X440 is being launched. As of now, product volume is very difficult to say from our side. This is all customers' input, and we are ready for any kind of volume, which Hero will ask from us because we have already available all the products lineup, which is being assembled -- assembling condition and all is well [indiscernible].
I was asking are there any Hero during the quarter? And are there any new product launches apart from the scooter and Harley launch which we have done?
Yes, there are 4 models, further models are under pipeline that might be launched during a few coming years.
Okay. And sir, content on the Harley, is it physically different from our normal content per vehicle currently, like in content?
Sorry?
So lighting content per vehicle on Harley, is it physically different from our normal lightning content?
Yes. All lighting. This is all lighting and -- contents are high, of course all are in -- so value is high.
Okay. And sir, secondly, on the revenue with Yamaha. So are there any new model launches which are lined up with Yamaha? And within the existing business, how do you see the demand for the export models of Yamaha? So overall, how do we see the revenue with Yamaha going forward?
There are additional 4 models are under pipeline, and [indiscernible] during coming months and years, these all will be launched. We are looking for a very good product sales as against our customers' input and customer requirement, wherein the models, export models are mostly based on the requirement of individual countries, and we are following that. And we are very optimistic for the phase towards the Yamaha [indiscernible] for domestic as well as exports.
Okay. And sir, my third question is regarding the other business, which we did. So that business has come down so that used to be INR 30 crores or INR 40-odd crores per quarter, it's almost down to INR 18 crores this quarter. So what is the reason behind that?
Other business means what you are referring is -- can you please --
The other business which we in the product-wise split the rearview mirror lighting plastics and the other business, which is there, which was INR 19.2 crores during the quarter. So that is approximately 10% of our revenue at INR 40-odd crores so.
Yes. See, this other business is actually other than the lighting, the mirror and the plastic parts so it remains [indiscernible] as per the requirement of the customer.
Okay. I'm asking apart from the rearview mirrors and plastic moving parts, there is a fourth element, which is considered as others. So that has significantly dropped from historically. I was asking about that business.
Yes, it remains as per the model, because even the rearview mirror and the plastic parts. Yes, they remain stable there.
Okay. And sir, lastly, on margins. So there was a dip in gross margins during the quarter. Was it more because of mix or was -- hence the RM prices increased for --
So we've always guided for a -- if you recall, earlier, we were guiding for a margin of 12.5% to 13%. Last quarter, you saw a substantial increase in margin. It was exceptional last quarter, but we had indicated that we continue to guide for 13% to 13.5% as our overall EBITDA margin. And that is something we will get to. This quarter also we are around the same level. You should actually factor that 13% to 13.5% and looking the overall year because there are some marginal variance from one quarter to another.
The next question is from the line of Nikhil Upadhyay from Security Investment Management Private Limited.
One question was if we look at the HSMI (sic) [HMSI] business. So Q4, we had mentioned that there was some disruption and all. And to some extent, we've seen sequentially, the revenue contribution has increased. Do you think it will sustain at this level or any outlook that you can share on the HSMI part? That is first part. And secondly, have we lost any market share there what we used to have at HSMI? Has that market share gone down? Anything on the model with any other products?
So HMSI, the overall volume, which is being predicted by HMSI is 4.72 million, and we are having the same percentage of share, which is being given to us. And next question is -- there is no market share being down from our side and it is stable. Yes, as per the requirement of HMSI, it is stable.
And as far as your question on quarter-to-quarter, if you -- we did mention Q4 was exceptional for HMSI. There was some blips there. But Q1 is back HMSI is doing better. And as we see even July seems to be better. So HMSI also seems to be on track, and we have our market share impact absolutely.
Okay, okay. So that inventory rationalization and all what they were doing is now behind us, and it's normal business product --
Q1 seems to indicate that as of now, they seem to be on course.
Okay. Secondly, because of this fire loss, did we have any production loss or is this -- would you say it was not significant to impact the sales for this quarter at any point?
No, not at all. We were able to begin production back within 3 days. So even the customers and our employees worked overnight. So there was no production loss at all -- because what we were able to do is to use our facility across and were able to fulfill the requirements for the customer from other facilities. So there was no production loss at Rai.
Okay. And if you can talk about the new initiatives on Gogoro and Toyo Denso, how are we progressing there? And when do you see -- so just how are we progressing there in terms of the business and overall profile?
Yes. As we -- during our last communication, also we did about overall SKD production, we have already started. And this will be ramp-up in coming months. And further on, we are working for localization, domestic production, 100% domestic production. For that, we have taken the next 6 to 8 months' timeline, wherein we will do the complete CKD into -- SKD into CKD and the complete domestic production will start for MCU and motor controller. This is about Gogoro.
And on Toyo Denso tie up?
Toyo Denso we are already working for bank angle services. Further on, we are working for some new projects, which will be announced very soon.
Okay. Just last 2 questions. On Yamaha, you said there are 4 models in the pipeline. So are these a replacement of existing business or are they completely new models? So how should we understand this?
These are all new models for domestic as well as for export market.
Okay. And in export, are there any new countries or is it like largely same regions which we were earlier supporting?
Same. We are -- this is -- all are with the same regions.
Okay. And lastly, on the 4-wheeler business. So any kind -- what kind of investments have been done as of now to the P&L? And how large is the team build up which is happening? Anything that you can share on the progress on that space?
Yes. So Vineet Sahni this side. Yes, at this moment, we have formed a small team and we are actively engaged with 4-wheeler customer. As a result, we have inquiries and RSUs. We are now enhancing team in technical area so that we can cater to the requirements of 4-wheeler customer. So we are proceeding in a step-by-step manner to enhance this business.
[Operator Instructions] The next question is from the line of Rohan from Multi-Act PMS.
So my question is on provision for warranty. So if I look at FY '23 numbers, there was a sharp jump in provision for warranty. So just wanted to check the reason for that.
So I think you are referring the balance sheet of FY '22-'23.
Yes.
Yes. The provision for the warranty is made considering the evolving landscape in automotive industry as almost all OEMs are revising their supply agreements wherein the warranty period as well as the warranty amount for defects, so rejection is more in comparison to the earlier practices. So considering that development, we made this provision.
So should we expect this kind of a run rate like around INR 11.8 crores kind of a run rate on expenses side?
No. Actually, this is a provision only, and there is no actual outflow of cash in the provision. So it will be reviewed after say, some quarters, it will be reviewed and it will be looked at what is the actual things.
Okay. But basically, this kind of a run rate should be expected going forward as well?
No. No, no.
Okay. But it was a big jump like from INR 1.95 crores to INR 11.8 crores, so out of that, around INR 7.3 crores was in noncurrent and balance was in current. So what was the reason for that? So is it like a tenured kind of a provision that we are making?
See, what I already explained, this is a matter of abundant portion this provision is made. And we can definitely relook and review it after 2, 3 quarters or 1 quarter. So it is a provision-only. There is no actual outflow of the cash.
The next question is from the line of Nirvana Laha, an individual investor.
Am I audible?
Yes, please.
So can you tell us then the money, when do you expect the money from the insurance claims to come separately for the inventory claim and for the equipment claim?
See, this process is going on. So it is definitely a long period to assess on this thing and even the insurance company takes time. So we will update you as and when something happens [indiscernible].
Okay. From past your experience from past such claims any idea on whether it will come in this financial year or longer?
No, we cannot comment. So we will definitely update.
Okay. And you mentioned something about the claim clause. I didn't get it exactly. Did you say that it was -- the claim clause states that whatever the written down value is, you're entitled to 15% above that?
No, no. Actually, this is what was explained to the earlier analyst actually that we have to see the insurance policy. So there is different insurance policies for different coverages. So unless you go through the insurance policy coverage, that is difficult to explain. So that was the reason.
Okay. So the reason that I'm asking is I'm trying to understand the claim value that you will get and the replacement costs that you will incur. Do you expect significant difference between the two? Because if these are old assets, then there will be a lot of difference depending on the insurance -- the clause of the insurance claim. So I'm just trying to understand that.
Yes, of course, of course. You are very right in understanding. This is the written down revenue. And of course, the replacement value will be definitely higher and the actual assets will be definitely higher. That is what the insurance policy is for. So the replacement value of the actual assets and further reassessment to the extent of 15% is all covered under insurance policy. It is not only the written down end, the actual cost of the new assets will come.
So the replacement costs are covered. Okay. So on Gogoro, I just had a few questions about the partnership itself. So is the partnership limited to Gogoro's models in India or like are we also entitled to sell it to their models outside India and China, for example?
As of now, this agreement between we and Gogoro is for India market. And going forward, it can be discussed further in coming years.
Okay. And have they -- has Gogoro already launched their model in India?
Not yet but very soon, they will be launching this vehicle.
Okay. All right. And I think you had said in the last call that initially, you'll start from CKD and then you will gradually move to localization. So I know it's new technology, new experience for you, but do you have a timeline in mind, how much time does it take you to indigenize the production?
Yes. Total, 8 to 9 months has been discussed with the customer -- with Gogoro. And we hope by coming next year -- financial year, we will be localized this part and start supply to Gogoro.
Okay. And what percentage will be localized, are you in a position to say that? Will it be 100% or will it be less than that?
As of now, no. We are working on that very closely with our suppliers as well as Gogoro.
Okay. And last question from my side is, you said that there was some softness in EV 2-wheeler sales in June. So if you can tell what -- how much did we come down from May to June in EV 2-wheelers? And how are we seeing volumes in July, August? Is it at the June kind of numbers or is there an uptick, if you can comment on that?
So what we did mention was that at the industry level, April, May were good, May was the highest impact ever on a monthly basis. June saw a dip from May and July seems to be, as per the data available, has improved as the external data. So -- but as far as -- this is the industry later. As far as we are concerned, our EV sales is increasing. Our share now is close to 6%, which is fairly good number and that will continue to ramp up during the year because we have a significant leadership in this segment. So what we were giving was the overall overview because of that [ Fiem 2 ] subsidiary that there could be a couple of months here and there. But directionally if you look at, over the next 12, 18 months, the industry will continue to grow, and we will get a decent share.
Okay. And one last thing. Can you talk about seasonality in your business in terms of quarters? Is quarter 1 seasonally a little weak?
So I mean, of course, Q1 is relatively lean, then the season is when the festival season and festival season also depends on the timing. Sometimes it's in September, sometimes in October. So you will see a sort of a ramp-up around festival, then there is sort of a little bit of lull then March was up. So I think there is a little bit of seasonality if you look at quarter-to-quarter.
[Operator Instructions] The next question is from the line of Sahil from Monarch Networth Capital.
First of all, congratulations for delivering results better than the industry. My question -- first question is regarding the [indiscernible] the one that you mentioned in the earlier report, the USB charger and [indiscernible] center. Could you provide any details on that? I mean, what exactly is that? How it would shape up and the timelines?
So Sahil, this is Arvind. Actually, for Toyo Denso, we are already in relationship of technical collaboration for the bank angle sensors. And whatever is new is for the specific product and customer. So as of now, nothing to share more about that.
Got it, sir. Secondly, this is a question about the overall 2-wheeler industry. We saw a 9% decline in July Y-o-Y for the overall 2-wheeler sales. So on the demand front, what do you see? What is the outlook as such? Do you expect some near-term weaknesses -- weakness?
I think the rains did have an impact on a short-term basis, which would be probably for a month or 2, I think we are expecting a good season again. The coming quarters should be over the next 3 to 5 months and for the season should be good. And we are yet optimistic over as far as the full year is concerned, we're still hoping to get a double-digit increase in the 2-wheeler industry.
Right, right. And another question on the EV front. So Ola did come out with the Ola S1 X yesterday, the unleashing happened. So are we going to give -- I mean, are we going to give them supply the lightings for Ola this model also S1 X?
Yes. All Ola models as of now, whatever is being produced by them is [indiscernible]. So yesterday, 15th of August, whatever is -- S1 X being launched, all lamps are being supplied by Fiem.
Got it. And one last question [indiscernible]. Sir, I would just want to understand the interest cost, which seems abnormally high, even if you look at the borrowings and maybe the interest cost as a percent of borrowings, even if I remove the lease obligation still it used to be very high. So what's exactly over here and what consists in the interest cost?
There is no interest -- see this is a 0 debt company. There is no interest cost, except that the interest cost of bill discounting what the company has taken from SBI. So there is very little interest cost now. So that is a bill discounting charge. So there is actually no interest cost on the company. And in the recent quarters only, just bill discounting is also going to be over because the banker is now making arrangement with the customer and the customer will have a tie-up with the customer and the customer will in turn give us the discount. So we will not be probably having this variable discounting charges in the current quarter.
So the INR 5 crore kind of interest cost that was there in FY '23 whole year, that could be attributed to bill discounting itself I mean some part of it?
Yes. On the bill discounting.
The next question is from the line of Nikhil Upadhyay from Securities Investment Management Private Limited.
Just one question. This is on our gross margin. So like last quarter, we had reached almost 40% gross margin and growth contribution margin. And this quarter, we are at around 38.3 -- in the range of 38%. So while for most of the players fortunate thing is that RM cost and deflation has actually -- the auto ancillary. So why -- how is our case different from most of the auto ancillary players? So have you seen more -- what part of the cost element has seen a higher increase? Or is it more because of product mentioned? If it is product mix, if you look at our LED contribution is the highest in this quarter across like 16, 20 quarters. So I would have thought that the gross margin and EBITDA margin would have improved year-on-year and both sequentially. So if you can just help us understand that.
So are you comparing it with sequential, let's take the sequential, I think you're looking at that. If you see our sequential margin has declined, right? If you look at EBITDA also, that has declined. Even the LED share was higher last quarter. This -- for the full year, it was lower, but for the last quarter was exceptionally [indiscernible] So this a -- quarter here and there, you will see various things with product mix. One particular model, which is doing well, that supply is going, that has a higher LED contribution then it will normalize. So for example, on the LED, we've been guiding that we will hit over the next 18 months, 60-odd-percent. We are at 53.5% now. Last quarter, it was 56%. So the LED front, that's where the journey ends. And we did mention that last quarter, also, we had some sort of escalations which had come through which is -- and hence, the normalized margin should be looked at in that range of 13%, 13.5%, which is where we are, right? And on the third -- I think the first question you asked around RM cost being [ passed ], our is basically pass through. So with the quarter effect here and there, lag here and there, we will end up with a similar kind of structure. So it doesn't really benefit --
It depends on the receivables.
Okay. But sir, one just a follow-up here. But if you look at sequentially, the sales is also much stronger than what we were in Q4. Like we are almost INR 60 crores, INR 70 crores higher than what we were in Q4 of last year, INR 40 crores higher. So wouldn't have that contributed towards the better EBITDA margin, maybe gross, I understand the product mix was inferior of lesser LED versus Q4. But EBITDA should have improved, right, because the sales and operating --
The answer there is escalation. So one is, as you rightly sort of understood and answered yourself the higher LED share is in the last quarter. But also escalation had come through last quarter, which is why the margin might have normally shot up suddenly. If you see a normalized margin, this is where we are between 13% and 13.5% is what we are getting.
Okay. And the full year CapEx would remain around INR 50 crores, INR 60 crores or any rethought thinking on that number?
No. No, that is -- not at this point.
The next question is from the line of Gopinath, an individual investor.
Yes. I have 2 questions. So the first question is when we can expect revenues from Gogoro?
Next year. We have recently started the production and might be by next year, we can see the revenue from over to the individual customer.
Okay. And the second question is regarding this fire accident. So just I want to understand if is there any difference between the actual amount, for example, around INR 50 crores. But is there any final plan if you receive around, for example, INR 40 crores, then that INR 10 crores, we have to show it in P&L. Will it happen only after insurance claim is done? Is that correct?
No, no, no. The amount receivable will be much more than what is shown because this is only the carrying amount. This is the first amount which is shown in the books have written out. So there is no question of anything, even any less than this.
Sorry, I didn't get -- so what I want to understand is, whatever loss occurred, right, incurred or occurred, so the whole amount we are going to get from the insurance company?
So that is what I'm saying. This is only the impacted assets have been written off. What amount the company is likely to recover is when the final details will be made and then the claim will be filed. That is the time when company will know what is the actual amount to be recovered but it will for sure be more than what is written.
Okay. Got it. And the final question, what about this FY '24 outlook with respect to revenues?
Outlook is very good. Basically, there are 4 factors, 5 factors. One is the auto industry growth that itself is one of the factors than the new projects, which we have more than 18 owned that we'll going to be another factor for our growth. Third is increasing contribution of LED because the more LD usage will be the better growth for the company. And fourth is the indirect export to the LED group. So basically, what we are supplying to the OEMs here, they are exporting. So basically, it is indirect export for us. That will also -- for example, Yamaha, Honda, Suzuki, Piaggio like that, these customers are having the are having indirect export through them. Then higher market share in EV that also is going to be the driving factor for our company. And then last 4-wheeler segment will also going to give us a mix set of growth in future to come.
The next question is from the line of Aashin Modi from Equirus.
So this last quarter, you indicated a order book of approximately 9.5 billion. Could you please give our current order book? And also, if you could give some color on that, what is the equipment business and what is new business? And some SOP of this order book, what will come this year what will come next year?
Yes, order book is same what we declared almost 90 -- 85 to 90 projects are online right now. And we'll be expecting 25% to 30% sales revenue within this year and [indiscernible] would be next year and so on.
Okay. And in terms of LED value share currently stands at approximately 56%. What would be a volume share? And what would the volume share of LED be in the industry currently?
See industry is now growing and whatever new facelift models are coming or new models are coming, those are coming with that, and it is only. So this contribution year-on-year will increase, and we are expecting every year 5% to 10% -- in between 5% to 10% LED increase will be there in the product.
Okay. So volume share of LED would be approximately 20%, 25% currently in our business?
It is very difficult to comment on that. But we are seeing -- we are considering 27%, but we are seeing the increasing trend in that.
Okay. sir, I think can we expect that currently we're at 56%, and we have a target of 60%. So given that volume share is low currently on [indiscernible], so we can easily surpass that in the next 18 months?
So we are seeing [indiscernible] every year, so this is what we are targeting over the next 12 to 18 months. Of course, it depends on the industry, but I think a 5% to 7% shift every year is a reasonable number to do.
[Operator Instructions] The next question is from the line of Karan Gupta from Varanium Capital.
My question is related to the 4-wheelers that we are trying more to win it. So the competitor where you already -- they are majorly in the 4-wheeler market 4-wheeler lighting segments where the margin is around 7% to 8% or maybe 7% to 9%. So here in Fiem what's the different strategy we are using or what difference we are trying to approach the market to not compromise with our margin?
Yes, this is a good question. See the products in 4-wheeler and as you mentioned in the earlier company, that also has many legacy products because that company is a lot of halogen products and [indiscernible] products. What we are trying to enter is into a new technology product as well. Secondly, Fiem has very deep integration of processes, which leads to frugal manufacturing, basically catering to 2-wheeler market. So we are going to use this strength to enter into 4-wheeler market and maintain the margins and even try to grow. So that is our strategy.
Okay. So new products in 4-wheelers all will be in LED or more advanced technology?
We are trying for that. It will be a mix, but then we will use our deep integration capability to continue to increase the margins.
Okay. And any CapEx we are planning to [sustain]?
No. At this moment, we are in the process of market study and preparation of business plan. We shall update the investors as soon as we are ready.
[Operator Instructions] The next question is from the line of Gopinath, an individual investor.
Just I have one question. Is there any plans for stock split [indiscernible] bonus?
Can you any repeat your question, please?
Is there any plans for stock split up bonus?
As of now, there is no plan, but appropriate time, board will consider this.
The next question is from the line of Radha from B&K Securities.
Sir I wanted to ask a bit on the industry perspective for the new products, hub motor, MCU, et cetera. And since we are expecting our revenue to come from FY '25 onwards, so what will be the margin trajectory of these products, I mean, initially and how will it pan out in the next 5 years, given that many other players are trying to enter this product? And also secondly, I mean, currently, is there any import of such product in India?
As of now, for Gogoro, we are using SKD products, all products are being import from Gogoro, wherein the product is being had as per agreement is only for Gogoro as of now. So we'll be accepting overall revenue from Gogoro itself. And further on the technology and the partnership can be seen for the new opportunities wherein we can serve for this model to other customers.
And with this addition of new products like hub assembly and -- per vehicle, per participation will be totally around 15,000 to 17,000 per vehicle.
Okay. Understood, sir. And sir margin [indiscernible]?
We are still in the -- we're working out, but definitely, it will be in line with that.
In line with?
With our existing margins.
13%-13.5%?
Yes, approximately.
That would be over a period of the next 3 to 5 years when we reach an optimal utilization.
Yes, it's going to be very, very high in the next couple of years.
So initially, it will be less because of imported content. And as we localize, it is planned to increase.
Okay, sir. So sir, over a period of time, we can increase our overall margins beyond 13.5% because of these products?
We are working on that how to improve our margins.
As there are no further questions, I would now like to hand the conference over to Mr. Sahil Sanghvi for the closing comment.
Yes. I just wanted to thank the management for patiently answering all the questions. And also on behalf of Monarch Networth, we thank all the participants for joining the call. Gentlemen, would you like to give any closing comments?
Yes. I would like to thank everyone for participation in today's conference call. I do hope that we have provided satisfactory answer to all your queries. If you have any further questions, please don't hesitate to contact us. Thank you, and have a good day.
Thank you. On behalf of Monarch Networth Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.