Lumax AutoTechnologies Ltd

NSE:LUMAXTECH

Earnings Call Transcript 2021-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Lumax Auto Technologies Limited Q2 and H1 FY '21 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anmol Jain, Managing Director. Thank you, and over to you, sir.

[Anmol Jain, MD & Executive Director]

Thank you. Good afternoon, ladies and gentlemen. A very warm welcome to the Q2 FY '21 Earnings Call of Lumax Auto Technologies Limited. I hope you all are safe and healthy. Thank you for joining this call despite the Honorable FM's live address. Along with me on this call, I have Mr. Deepak Jain, Director; Mr. Vineet Sahni, Group CEO; Mr. Sanjay Mehta, Director and Group CFO; Mr. Vikas Marwah, CEO; Mr. Ashish Dubey, CFO; Mr. Ankit Thakral from the Finance team; Ms. Priyanka Sharma, Head, Corporate Communications; and SGA, our investor relations adviser. The results and presentation are uploaded on the stock exchange and the company website, I hope everybody has had a chance to look at it. Before we start with the discussion on the financial performance of the company, I would like to share a few highlights on the automobile industry. Revival in India's auto sales has been very encouraging in quarter 2, driving momentum gradually. Nation's biggest automakers posted significant improvement in the number of vehicles they dispatched to dealerships across the country. After a complete washout in Q1, sales revived sequentially in the months of July, August and September as people started adapting to the new normal. The festive season is bringing positive change in consumer sentiment, automakers have ramped up the production, anticipating better sales during the festive season. New product launches, which had been put on hold in the past, are also now starting again to capture the market share. Most of the automakers foresee this trend of positivity to last even beyond the festive season. As per data published by SIAM, total production of vehicles for the quarter ended September 30, 2020, showed a degrowth of 7% as compared to the same period last year, while on a monthly basis there was improvement in the performance. The total production in the month of July showed a degrowth of 32%, August showed a degrowth of 6%, while September month finally showed a positive growth of 17% over the previous year's same month. Let me now take you through the financial performance of each business entity. The stand-alone entity contributed 83% of the total revenue at INR 296 crores out of the total consolidated revenue of INR 355 crores for the half year ended September 2020. Lumax Mannoh Allied Technologies, the 55% subsidiary which manufactures manual AMT and AT gear shifter systems and has a market leadership position, contributed 10% to the total consolidated revenues. Lumax Cornaglia Auto Technologies, a 50% subsidiary, which manufactures air intake systems, commanding a 100% share of business with Volkswagen and Tata Motors, contributed 6% to the total consolidated revenues. Subsequent to the quarter ended September 2020, the company has acquired balance stakes from the joint venture partner, Gill Austem LLC in respect of Lumax Gill-Austem Auto Technologies Private Limited. However, the transaction has taken place in the month of October. Thus, for the quarter ended September 2020, it is treated as a 50% subsidiary. Further, the name of Lumax Gill-Austem Technologies Private Limited has been changed to Lumax Metallics Private Limited. Lumax Ituran is a 50% joint venture with Ituran Telematics of Israel. The company has started commercial invoicing, although at a low base. The revenue of this company is not considered in the consolidated revenue being an associate of the parent company as per Ind AS. Happy to inform you that Lumax FAE started commercial production from its facility at Gurugram, Haryana with effect from September 24, 2020, during the quarter. Lumax JOPP Allied Technologies is a 50% subsidiary, which is engaged in design, development and production of gear shift towers, automated manual transmission kits, all-gear sensors and forks. The production has started to pick up as per the OEM schedules. Lumax Yokowo Technologies is the new 50-50 joint venture with Yokowo Technologies Limited of Japan to manufacture and supply antennas and other vehicle communication products to the Indian automobile industry. We expect to commence production in the later part of FY '22. On the technology front, very pleased to share that the subsidiary company, Lumax Mannoh Allied Technologies became the first Indian company to localize the AMT and the dual-clutch transmission, or the DCT, gear shifters for various current and upcoming models of Tata Motors. On the new launches and order book, the company successfully launched the gear shifter control housing and various plastic parts in the passenger car segment for the famous Thar model of Mahindra & Mahindra. The company also secured orders of plastic parts and air filter assembly for some of the forthcoming models of Maruti Suzuki and Tata Motors Limited. On the 2-wheeler space, the company also successfully launched some plastic parts and the helmet box lamp for the CT100, Pulsar platforms of Bajaj Auto as well as the Bajaj Electric Chetak in this space. On the commercial vehicle space, the company launched an illuminated logo for the Swaraj model of Mahindra Swaraj tractors. The Chakan, PCNTDA and Chinchwad plants of the company also on CCQC Gold Awards in Quality Circle Forum of India, Pune Chapter. Our teams continue to focus on improving operational efficiencies and invest their time in R&D to create innovative products for our OEMs' future needs. I want to take a moment to appreciate the tireless efforts of our employees and the support by our supply chain partners in this challenging time, without which, it would not have been possible to meet the QCD challenges across all our facilities. All the associated people working remotely or from the factory have given remarkable support to keep our operations up and running in this difficult time. Now I would like to hand over the line to Mr. Sanjay Mehta, the group CFO, to update you on the operational and financial performance of the company for H1 FY '21.

[Sanjay Mehta, Group Chief Financial Officer]

Good afternoon, everyone. I will update on operational and financial highlights of the company. In total sales, integrated plastic modules contributed 33% followed by aftermarket at 18%, fabricated parts at 15%, lighting products at 12%, gear shifter at 10%, intake systems at 6% and others at 6% for H1 FY '21. Two and three-wheelers contributed 50% to overall revenues. Passengers car and aftermarket contributed 18% each, and CVs 9% for H1 FY '21. Consolidated financial highlights. The consolidated revenue stood at INR 284 crore for Q2 FY '21 as against INR 294 crore in Q2 FY '20, down by 3%. The shortfall was mainly on account of lower revenues in the month of July. There was considerable increase in August and September month revenues put together from previous year, resulting in shortfall of only 3% for the full quarter. The company reported consolidated EBITDA of INR 33 crore in Q2 against INR 30 crores in Q2 FY '20, up by 11%. EBITDA margin stands at 11.7% for Q2 as against 10.2% for Q2 FY '20, aided by efficient cost-saving measures, coupled with improvement in top line. Profit after tax and minority interest stood at INR 15 crores in Q2 FY '21 against INR 21 crore in Q2 FY '20. The reduction in PAT in spite of increase in EBITDA because of the extraordinary positive impact of deferred tax in Q2 FY '20, when the company opted for reduced tax rates going forward. The CapEx incurred during the H1 FY '21 is INR 24 crore. Now we open the floor for call for questions.

[Operator]

[Operator Instructions] The first question is from the line of Abhishek Jain from Dolat Capital.

[Abhishek Kumar Jain, Analyst]

Congrats for a decent set of number in this challenging time. Sir, your plastic molded part business grew 6% Y-on-Y, is it because of recovery in the volume of HMSI or additional revenue from the 4-wheeler segment? So what is your revenue target for FY '21 from this 4-wheeler plastic molded part as the company has started supply to the Maruti, Tata Motors, Kia and M&M?

[Anmol Jain, MD & Executive Director]

Well, the integrated plastic modules contributed almost 34% of the revenues. The growth in the plastic modules primarily has come on account of higher volume offtake from one of its key customers, Bajaj Auto as well as HMSI during the quarter. And we also have gotten some new orders of the 4-wheelers for plastics, but that impact would come in the subsequent quarters because right now, that is still in the order book and has not taking commercial production into shape right now. So answering to your question, it is primarily driven by the 2-wheeler demand offtake.

[Abhishek Kumar Jain, Analyst]

So what is your revenue target for FY '21 from 4-wheeler side, especially in the plastic molded part?

[Anmol Jain, MD & Executive Director]

Finance team, can I request you to give an outlook of that FY '21 plastics?

[Sanjay Mehta, Group Chief Financial Officer]

We are almost around the growth of...

[Anmol Jain, MD & Executive Director]

So we did about INR [ 1,840 ] crores last year. We do expect that, obviously, for the current year, we will still have a negative growth. But possibly looking at close to maybe around INR 250-odd crores to INR 270 crores would be my best estimate if the current trend continues. So there will still be a degrowth slightly in the plastics, but there would be a significant improvement in H2 compared to H1.

[Abhishek Kumar Jain, Analyst]

So how much incremental revenue would be from 4-wheeler plastic modeled part?

[Anmol Jain, MD & Executive Director]

Vikas, do you want to take that? In the current year, how -- in H2, how much incremental would come in the -- from the 4-wheeler plastics?

[Vikas Marwah, Chief Executive Officer]

It could be negligible right now for the 4-wheeler plastics, but as Mr. Anmol Jain has rightly said, we are currently in the process of getting ready to commercialize the production of the business awards that we have got, the impact of which would show in the subsequent quarters. Right now, the main dependence and the growth continues to come from the 2-wheeler segment.

[Anmol Jain, MD & Executive Director]

So right now, it would be still 2-wheeler segment driven, answering to your question. Passenger car, we will make inroads in the H2, but the revenue stream would be negligible in FY '21.

[Abhishek Kumar Jain, Analyst]

Okay, sir. And we have also seen a sharp jump in air intake business in this quarter. Is it because of the urea tank production or good revenue from your existing products? So just wanted to understand what is your revenue target for air intake system business for the next 2 years?

[Anmol Jain, MD & Executive Director]

I'll request Vikas and finance team...

[Vikas Marwah, Chief Executive Officer]

So for air intake system, we continue to look at a growth of almost double-digit kind of growth year-on-year going ahead from '21 till '23, at least over the next 2 years. Especially the sales growth that you mentioned coming from urea tank, you're right, we are currently peaking at about 400 units per day of supply to the lead customer, which is Tata Motors right now in the 10-liter tanks and in the 15- and 18-liter tanks, which is actually taking us a little beyond the projected RFQ volumes. Tata has decided to give a larger share of allocation to your company here, and we are now fully commercialized and running at optimum capacity levels at both Pune as well as Pantnagar, the new plant that we commissioned during the current quarter.

[Abhishek Kumar Jain, Analyst]

And how much is the average price realization in the urea tank?

[Anmol Jain, MD & Executive Director]

You mean the product price? You mean the product pricing?

[Abhishek Kumar Jain, Analyst]

Yes.

[Anmol Jain, MD & Executive Director]

Vikas, can you give...

[Vikas Marwah, Chief Executive Officer]

Mehta ji, can you...

[Sanjay Mehta, Group Chief Financial Officer]

It is around INR 2,000 -- INR 2,200.

[Abhishek Kumar Jain, Analyst]

And what is your volume target for FY '22 in the urea tank segment?

[Sanjay Mehta, Group Chief Financial Officer]

It's around INR 14 crores.

[Vikas Marwah, Chief Executive Officer]

FY'22, we intend to do about 180,000 at least. It will go beyond that, hopefully, but 180,000 units is what we are planning to gain from Pune and Pantnagar units.

[Anmol Jain, MD & Executive Director]

The endeavor would be to add -- the endeavor would be to also add customers of urea tanks going forward. Right now, we have Tata Motors as our prime customer, but we would also like to expand our customer footprint for urea tanks going forward.

[Abhishek Kumar Jain, Analyst]

Okay, sir. Sir, during this quarter, during the first half, you have made a significant repayment of the debt. So just wanted to know what is the current figure of the gross debt and net debt in books?

[Sanjay Mehta, Group Chief Financial Officer]

So as on 30th of June, we had a gross debt of INR 63 crores. And if you take the net debt, it is minus INR 30 crores around. It means that after paying full debt, we will be having the INR 30 crores of the cash and bank balance.

[Abhishek Kumar Jain, Analyst]

Okay, sir. Recently, the company has acquired balance stake of the Lumax Gill-Austem Technology. So how much the cost of the acquisition? And what is your plan for this business in medium to long term?

[Anmol Jain, MD & Executive Director]

So the cost of the acquisition is USD 100,000, which relate to approximately INR 73.3 lakhs at current exchange rates. The plan is very simple. We are very bullish about this business going forward. The company continues to enjoy a healthy and a strong order book from its key customers. And we would be definitely looking at a significant growth in FY '22 and FY '23, scaling up this business to its respectable size.

[Abhishek Kumar Jain, Analyst]

So how much incremental revenue can we expect in FY '22 from this business?

[Anmol Jain, MD & Executive Director]

So let me just give you a very broad picture that we are looking at almost close to anywhere between INR 60 crore to INR 80 crore of new order book, which will get realized in FY '22 and FY '23.

[Operator]

The next question is from the line of Bharat Gianani from Sharekhan.

[Bharat Gianani, Analyst]

Congratulations for a good set of numbers in a challenging environment. Sir, my question is given the commentary that you stated that the H2, you expect the momentum to be good as per the commentary received from the key customers. So my question is like for the OEM business, for overall business as such for FY '21, what is your revenue kind of guidance, given the commentary that we have been hearing? And my second question is on the aftermarket side, how is the growth on the aftermarket side? Whether it has reached last year's levels? So these are the 2 questions from my side.

[Anmol Jain, MD & Executive Director]

I will address both your questions. So number one, we have seen a very, very strong recovery in quarter 2, as I mentioned in my opening. September month stand-alone, you're looking at a 17% growth in the consolidated revenues on a month-on-month -- on a year-on-year basis for September. Going forward, in October, also, this momentum continues, and I would expect a record revenue to be clocked in the month of October '20 as well for the company. This momentum, we feel that in H2 would be pretty sustainable. And in H2, we will definitely look at a very strong double-digit revenue growth, which for the full year we will still possibly be at a negative growth because of the Q1 impact, but I personally do not expect a very significant degrowth on a year-on-year basis. Even though we will continue to be in the negative territory, I do expect it to be better than what the auto industry degrowth would be for the full year. Having said that, coming to the aftermarket, specifically, again, the aftermarket revival in quarter 2 has been pretty significant. Quarter 2, we almost did the same revenue in the aftermarket division as we did in FY '20. So that was a very positive sign that we recovered and came back to the last year level. And in the month of September and in the month of October, we are again looking at clocking record revenues in the aftermarket business. So answering to your question, we see a very positive turn of events in September onwards, and we do expect this momentum to continue for most part of quarter 3.

[Operator]

[Operator Instructions] The next question is from the line of [ Amit Shah from Newgen Securities. ]

[Unknown Analyst]

I have a few questions. First, can you give more details on localization of Lumax Mannoh Allied Technologies order with Tata Motors?

[Anmol Jain, MD & Executive Director]

So Vikas, you want to take that? What is the localization levels in the Lumax Mannoh, if I understood the question correctly, for Tata Motors?

[Vikas Marwah, Chief Executive Officer]

Sure. So as you are aware that we are already the -- already holding the largest share of business and suppliers of the manual gear shifters as well as the AT gear shifters at Tata Motors. What has happened is that, as Mr. Anmol Jain mentioned in his opening remarks, the AMT gear shifter also is something that we are now localizing to the extent of, I would say, more than 80% now. And that is something that we'll be very shortly introducing on the upcoming TML models. The biggest technology breakthrough that is there globally in this space is now the dual-clutch transmission, or the DCT, gear shifter, where we have already successfully passed the trial, and we are now getting the schedules for the launch of this particular gear shifter on the Altroz model. And this is the fourth generation gear shifter. This technology is currently not available anywhere in India, except with 2 global manufacturers. So Lumax Mannoh is on the right path as far as the technology road map is concerned on the gear shifter business for the Tata Motors.

[Anmol Jain, MD & Executive Director]

So just to supplement that, Mr. Shah, answering to your question, we have very high levels of localization at Lumax Mannoh, and we also have a very strong R&D, which makes this high levels of localization possible. So I would not be surprised that even on the Tata Motors platforms, we continue to maintain maybe upwards of 90% of localization.

[Unknown Analyst]

Okay. And sir, my next question would be, are we cutting down on any CapEx plan for the second half?

[Anmol Jain, MD & Executive Director]

Mr. Mehta?

[Sanjay Mehta, Group Chief Financial Officer]

No, I think we are not cutting down. What we have planned, we are at the moment on the same track. And the industry has revived, so we don't anticipate any major CapEx cutting back, particularly this year.

[Anmol Jain, MD & Executive Director]

See, most of the CapEx in the joint ventures has already been done. So we do expect the similar momentum to continue in H2. We don't expect to significantly cut any CapEx in H2.

[Operator]

[Operator Instructions] The next question is from the line of Abhishek Jain from Dolat Capital.

[Abhishek Kumar Jain, Analyst]

So sir, this quarter, gross margin expanded, is it sustainable, given the increase in the commodity prices?

[Anmol Jain, MD & Executive Director]

Yes, surely, I think, Abhishek, I have always maintained that the first milestone was to hit a double-digit EBITDA margin and then given a 2- to 3-year horizon, the goal would be to inch closer towards a teenage EBITDA margin. I think in the current quarter, we have come close to a 12% EBITDA margin. Of course, there would be some impact of certain cost-cutting measures, which were in effect for quarter 2. However, some of those cost-cutting measures may not be continued going forward from Q3 onwards. However, we are still very bullish that based on the volume recovery and our operational efficiencies, we should be able to, at least for this year H2, operate at a similar operating margin.

[Abhishek Kumar Jain, Analyst]

Okay. So sir, during this quarter, lighting business, which is one of the main business of you, that degrew 18% despite a strong volume of Bajaj Auto. So have we lost some market share or faced some supply side issues?

[Anmol Jain, MD & Executive Director]

No, we have not lost any market share in Bajaj Auto lighting. It is primarily because of their model mix. One key factor would be also the 3-wheeler because the 3-wheeler is something where we enjoy a very strong wallet share of lighting. And since you know the 3-wheeler segment has not really recovered, it has really fallen badly, that would be one of the reasons. But we continue to enjoy a strong market share or wallet share with Bajaj Auto's lighting segment, and our order books for Bajaj Auto in the lighting space also continues to look very healthy.

[Abhishek Kumar Jain, Analyst]

Okay. So are you supplying into the Pulsar 125 CC?

[Anmol Jain, MD & Executive Director]

We are currently not on the Pulsar platform of lighting. However, we are in discussions for the future models of the Pulsar family.

[Abhishek Kumar Jain, Analyst]

Okay, sir. Sir, we have seen sharp recovery in sheet metal and gear shifter business in this quarter. So what is your target for FY '21? And what is your outlook ahead?

[Anmol Jain, MD & Executive Director]

So as I mentioned to you that for H2, we are looking at a very strong double-digit recovery or a growth of revenues compared to the previous year H2. However, because of the Q1 impact, for the full year, we will still be looking at a degrowth in our revenue. However, I'm confident that the degrowth, which we would be looking at for the consolidated entity would be still better than the industry degrowth, which we should be looking at for the full year.

[Operator]

[Operator Instructions] The next question is from the line of Bharat Gianani from Sharekhan.

[Bharat Gianani, Analyst]

Yes, sir, a couple of questions from my side. We have been seeing that the company has been consistently outperforming the auto industry, OEM industry growth. And you also pointed out that the same would continue in FY '21. So probably in next 2 to 3 years' time frame, what will be the product introductions that will lead to the outperformance? Or will it be driven by increased wallet share from the customers? So if you can just highlight on these 2 -- elaborate on these 2 factors that will be helpful.

[Anmol Jain, MD & Executive Director]

So sure. I'll address that. I think I have time and again repeated that Lumax Auto Technologies' main strength lies in its diversity, diversity of products, diversity of customers and diversity of partners and that's one of the key strengths and reasons why we've been able to do better and outperform the industry in the last few years. I think going forward, our strategy remains unchanged, as I have mentioned many times before. We have a very clear 3-bucket strategy. The bucket #1 is to grow the current businesses where we are already in and the avenues to grow that is either to expand and increase the contribution per vehicle, for example, in some models where we are only on the gear shifters. As mentioned, we also went into the shift tower business, thereby to give a complete solution and increase our contribution per vehicle. In some cases, we are also expanding on our wallet share as was done in the frame for Bajaj Auto. I think in the last call, I mentioned that we are now into the KTM family of frames. Also, to scale up the recent joint ventures of our existing product lines and case in point, again, you've seen a substantial increase in Lumax Cornaglia because of entering into the urea tank space. And also for technological shift. As you see that Lumax Mannoh, for example, is going from being a manual and an automated gear shifter system supplier to a AMT and a DCT, which also adds to the contribution per vehicle. So these would be some of our key growth driving strategy for the current businesses. For the new businesses, the company constantly is engaged with our OEMs looking at future opportunities, which could arise of either the regulatory changes or the changing technological needs on the vehicle platform, also because of certain derisking measures or OEM pain areas. And the company is currently also in discussions with 2 to 3 global partners for bringing their products and technologies into the Indian auto component industry through a joint venture route, and those would probably see the day of light in the future. Of course, for confidentiality reasons, I cannot disclose more details. And the company also is looking at inorganic space to propel this growth going forward. So these would be some of our strategy. And of course, for the OEM space. And of course, as I mentioned, in the aftermarket, the strategy remains to grow the non-lighting business and also to invest in the product development side for the lighting and try to have a much wider and deeper product range across models and across customers. So I just wanted to give you a flavor of what is our strategic intent to drive growth. This has remained unchanged. We've seen the results in the last 2 to 3 years, and we will continue to focus on the same principles. And we do expect in the next 2 to 3 years, we should still look at stronger or a better growth than the industry.

[Bharat Gianani, Analyst]

Okay. So just a follow-up on that, have we added any new customers in our kitty in the last, let's say, a year or so and which -- the business of which can be scaled up over the next 2 to 3 years? If you can provide some color on that?

[Anmol Jain, MD & Executive Director]

You want to take that? Vikas, you want to take that question?

[Vikas Marwah, Chief Executive Officer]

Yes, sorry. So mainly the expansion and the future growth plans continue to be of the existing customers. As far as the new customers are concerned, they are on the sign-up stage and on the product validation stage for the new joint ventures that are there. But again, they would come from the set of existing customers only largely. Lumax Auto Technologies currently has a footprint across all the customers in the country on one product or the other. So to that extent, we do not have a challenge currently.

[Operator]

The next question is from the line of [ Priyanka Singh from Atidhan Securities. ]

[Unknown Analyst]

I had 2 questions. The first one was, what was our capacity utilization for the current quarter? And what are we expecting post the festive season is over?

[Anmol Jain, MD & Executive Director]

So I'll take that question, and maybe I can request post me Vikas can supplement it. I think, ma'am, it's a very broad-based question. Because of our diversity across products and across segments, the capacity would range from as low as, let's say, 10% to 20% capacity utilization in some of the very recent joint ventures like the oxygen sensors, which have just really started, to even a capacity utilization as high as 90% in some of our plastics and chassis businesses where we have almost peaked out. So it's a very difficult question to give you a very specific range of capacity utilization, but it would vary from product to product and from plant to plant.

[Unknown Analyst]

Okay. That was helpful. And the other one would be, we have reported double-digit EBITDA margin during the quarter. I believe it is because of the aggressive cost-saving measures. So how much correction should we expect going ahead?

[Anmol Jain, MD & Executive Director]

So ma'am, we have reported a double-digit margin, not just for the current quarter, but even in the last year, both for Q1 and Q2 we had reported a double-digit EBITDA margin. So the double-digit journey continues as back as maybe 4, 5 quarters. Yes, I did mention that we have reported a very high EBITDA at 11.7%, higher than previous quarters in the current quarter. I do expect that for H2, a similar operating margin should be sustainable despite some of the rollbacks of cost cutting, which we have done in Q2, which will, let's say, reduce the operating margins, but I do feel that those will get neutralized with the strong volume offtake and capacity utilization in H2. So answering to your question, I do not expect a significant retraction of our operating margin for H2.

[Operator]

[Operator Instructions] The next question is from the line of [ Atul from Progwell Securities. ]

[Unknown Analyst]

Sir, I'm sorry, I've just joined the call late. So in case -- so this is a question which I got. I don't know whether you answered it before or not. What is the trend of demand, especially coming from the rural market, post the lockdown?

[Deepak Jain, Non]

So this is Deepak Jain here, I'll take this question. I think the demand looks quite stable and sustainable. As you rightly said that the rural demand was the one which actually started during, basically, I would say, Q2, that was pulling the industry. But we do see now a significant change happening, which is a healthy mix in the urban demand also in the Q3. Because as the unlock is also happening in major cities, we are probably seeing a mix of both rural and urban demand. In Q1, primarily the demand which was negligible demand, but it was led actually by the agro segment, and it continued with Q1 and Q2. Going forward, we are optimistic that this demand should be sustainable because even in this entity, where the major clients are on 2-wheelers, I mean to say that they are projecting a stable and strong demand. Of course, we do remain cautious because of the uncertainty of basically the current environment. But the last 6 months learning, as Anmol was saying, there has been a lot of cost efficiencies, which we have been able to do, the only reinstatement we are doing is from October is mainly on the salary -- voluntary salary cuts, which people have taken. But I think going forward, we think that the demand being sustainable -- sustained, we would be able to give the similar kind of performance on our profits as well.

[Unknown Analyst]

Okay. So considering that the demand is reviving, as you told, in both rural and urban areas, so is it possible that we'll be able to reach the revenue figure which we were able to do in the last year? Is it possible that we will end the year on a positive note?

[Anmol Jain, MD & Executive Director]

So I'll answer to that. I think I mentioned this earlier that in H2, we are looking at a very strong double-digit revenue growth primarily because of the strong revival and offtake of the demand from the OEMs as well as the aftermarket. However, because of the significant impact for Q1, we do not expect to report a positive number for the full year. We still expect and foresee that we will still see a degrowth on a year-on-year basis. However, the degrowth should be much better than the degrowth of the entire industry.

[Unknown Analyst]

Okay. So sir, is it possible for you to give any ballpark revenue figure for the current fiscal year?

[Anmol Jain, MD & Executive Director]

It's very difficult because it's a very volatile time and the situation is changing on a every month-on-month basis. I will be very skeptical to give you a range or a specific number, but I can only give you a guidance that the degrowth of the industry would be far more than perhaps the degrowth of the consolidated entity.

[Operator]

[Operator Instructions] As there are no questions from the participants, I now hand the conference over to the management for closing comments.

[Anmol Jain, MD & Executive Director]

Well, I would like to thank you all for joining into the call. I hope that we were able to answer all your questions. For any further queries, you may please get in touch with us or SGA. We will be happy to address all your queries. And finally, I also take this opportunity to wish each one of you and your family members a very happy, bright, prosperous and healthy Diwali. Please stay safe and take care. Thank you.

[Operator]

Thank you very much, sir. Ladies and gentlemen, on behalf of Lumax Auto Technologies Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.