Lumax AutoTechnologies Ltd

NSE:LUMAXTECH

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Lumax Auto Technologies Limited Q2 and H1 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on 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, MD from Lumax Auto Technologies. Thank you, and over to you, sir.

[Anmol Jain, executive]

Thank you. A very good afternoon, ladies and gentlemen. A very warm welcome to our Q2 and H1 FY '24 earnings conference call. Along with me on this call, I have Mr. Sanjay Mehta, Mr. Vikas Marwah, Mr. Naval Khanna, Mr. Ashish Dubey, Ms. Priyanka Sharma, and Mr. Ankit Thakral from Corporate Finance, along with SGA, our Investor Relations adviser. The results and presentations have been uploaded on the stock exchange and the company's website. I hope everybody has had a chance to go through the same.

The Indian economy has been expanding rapidly, robust manufacturing and rapid credit expansion are likely to fuel GDP growth of more than 6.5% this quarter. This will result in heightened customer spending, and thus, the demand outlook in general will remain positive. On the industry landscape, government initiatives, including substantial spending and supportive schemes like pain and PLI has significantly contributed to the recovery of demand in the sector. The emphasis on green mobility has led to major OEMs planning multiple EV launches in the upcoming quarters.

Additionally, the introduction of these schemes has fostered the emergence of start-ups in the green mobility sector, further encouraged by the favorable environment. With 4 crore jobs and a significant economic contribution of approximately 7% of the nation's GDP, the automotive sector is vital to the nation's program. The Honorable Prime Minister has recently emphasized the industry's pivotal role and visioning its contribution to Propel India from being the fifth largest to the third largest industry globally.

Speaking of the performance of the automotive industry for the quarter, the quarter gone by has witnessed robust growth with multiple OEMs reporting highest ever monthly volumes in the past few months. On a segment-wise basis, passenger vehicles continue to be robust and is at its highest level on the back of increasing demand, high disposable income and aspirational value. The premiumization trend is playing out well, giving us an opportunity to increase our wallet share across product categories. The overall passenger vehicle dispatches from automakers to dealers were up by 4.7% in Q2 of FY '24 compared to the same period last year.

The demand for two-wheelers has not fully recovered as anticipated, primarily due to inflation and rising prices of the lower TC models. Nevertheless, a new trend is emerging, metering the premiumization seen in passenger vehicles with major brands introducing high-end bikes featuring top notch specifications. Overall, the premiumization trend seen in passenger vehicles and 2-wheelers with high-end specifications required constant innovation and high-end engineering and technological capability. This gives us a huge opportunity, and our endeavor is to increase our content per vehicle with our wide range of products under one group.

The electric vehicle segment has been seeing an unprecedented rise post-COVID, especially on the 2-wheeler side, led by emergence of new edge players and focus on traditional players on EV 2-wheelers. Currently, the industry is highly fragmented, but eventually only a few players with robust infrastructure and technological capabilities we'll be able to strive. We are in touch with all the major OEMs in this industry. The growth in 4-wheeler EVs also has been robust with a handful of major OEMs dominating the industry. However, the industry is still in its early phase and would only be an alternative to IAC vehicles once the costs related to manufacturing come down.

Going forward, we anticipate the second half of the year to outperform the first half on account of the beside season and multiple new model launches in the pipeline by the OEMs. The transition to electric mobility, energy efficiency, lightweighting of vehicles as well as alternate fuel usage at some of the outcomes of the emerging trends. Leveraging our decisive experience and strategic partnerships with global players, we strive to maintain a leading position within the industry. On the financial front, for Q2 FY '24, our consolidated revenues grew by 44% on a year-on-year basis and stood at INR 700 crores. Our EBITDA stood at INR 99 crores, up by 67% year-on-year with an EBITDA margin of 14.2%.

Speaking of entity wise, the stand-alone entity caters to the integrated plastic module business, aftermarket business, chassis and swing arm business for 2-wheelers, trailing arm to 3-wheelers under the metallic business and the 2-wheeler lighting. The stand-alone entity has contributed 48% of the total consolidated revenues for H1 FY '24. IAC India, the recently acquired 75% subsidiary, which is a Tier 1 interior systems and components supplier to key automotive OEMs in the country, including Mahindra, Maruti Suzuki, Volkswagen India and Volvo Eicher commercial vehicles. The entity has contributed 31% of the total consolidated revenues for H1 FY '24.

The ISE management team, along with Lumax, will certainly continue to drive the business growth going forward. The Board of Directors of ISE India has approved the scheme of merger with its holding company live on August 1, 2023, with effect from the appointed date of March 10, 2023. Further, the scheme has been filed with the honorable NCLT Mumbai bench on August 28, 2023. Lumax Manoeli Technology, the 55% subsidiary, which manufactures manual, AMT and automatic artist systems and as the market leadership position contributed 13% to their total consolidated revenues. Exports business of automatic gear filters systems for a global platform is on track and is performing well. We are also working in tandem with a joint venture partner to increase our reach to newer markets.

The company is sitting on a healthy order book of around INR 60 crores. Lumax Bonavia Auto Technologies, the 50% subsidiary, manufacturing air intake systems and ureatank, commanding 100% share of business with Volkswagen and Tata Motors contributed 6% with the total consolidated revenues. The joint venture holds a strong order book of INR 80 crores. And keeping in mind of the same, the company's new facility is expected to commence from quarter 4 with the addition of plastic fuel tank as a product. Lumax Telematic Private Limited has successfully commenced supplies of the telematics parts to Daimler India in the current quarter. The volumes are expected to grow significantly in the remaining part of the financial year with the addition of new range products.

Lumax Alps Alpine India Private Limited, the 100% subsidiary for the manufacturing and sale of electric devices and components, including software related to the automotive industry has contributed 1% of the total consolidated revenues. However, we have aggressive targets for this joint venture and are in discussions to make India a global production base for few components. Lastly, on the order book front, the company has a healthy order book of INR 1,050 crores, out of which, 93% is new business and the TPV contribution is 40% of the total order book. Now I would like to hand it over to Mr. Sanjay Mehta, Director and Group CFO, to update you on the operational and financial performance of the company.

[Sanjay Mehta, executive]

Good afternoon, everyone. I will brief on the operational and financial performance for Q2 and H1 FY '24. For H1 FY '24 integrated plastic modules post ISC business contributed 47% of overall revenue, followed by aftermarket at 14%, gives us 13%; fabrication at 8%, emission at 6%, lighting products at 5% and others at 7%. For the first time, share of passenger vehicle has overtaken 2 and 3-wheeler with PV at 47%, 2 and 3 wheelers at 24% to overall revenue. Aftermarket at 14%, CVs at 9% and other 6% for H1 FY '24. For more detailed operational highlights on can refer our investor presentation uploaded on taxings and complete website. With respect to financial highlights, the consolidated revenue for Q2 and H1 FY '24 stood at INR 7,001,332 crores, respectively, up by 44% and 47%, respectively. Revenues for IAC India stood at INR 419 crores, and EBITDA stood at INR 77 crores. EBITDA margin stand at 14.1% for H1 FY '24 as against 11.9% for H1 FY '23.

Absolute EBITDA for H1 FY '24 stood at INR 187 crores, a growth of 74% on a year-on-year basis. PAT after minority interest for the half year stood at INR 49.5 crores as compared to INR 50.9 crores in FY '23. PAT margins stood at 3.7% for H1 FY '24. The lower PAT with respect to last year is because of higher interest costs on account of long-term debt of INR 400 crores and higher depreciation of intangible assets on account of acquisition of IAC India. The net debt as on H1 FY '24 is INR 88 crores. The CapEx incurred during H1 is INR 41 crores and full year estimated in INR 100 crores to INR 110 crores.

[Operator]

[Operator Instructions]

The first question from the line of Resham Jain from DSP Asset Managers.

[Resham Jain, analyst]

So I have 3 questions. First one is on the base business itself, if I just remove IAC acquisition. It seems that the base business has seen almost like a flat or marginal degrowth. And within that, I think the run rate of aftermarket as the kind of growth, which we saw in the last 2 years, '22, '23, we have seen a significant kind of momentum loss in that in terms of growth. So if you can just share your thoughts around it? Then I'll ask other 2 questions.

[Anmol Jain, executive]

So thank you. You're absolutely right. I think if I look at H1, without the IAC business, the revenue compared to last year is almost flat. The key reason is the further bifurcate, the joint managers have actually grown by almost about 20%, 25%. However, the stand-alone entity, which is largely the plastic business and the chassis business, that has grown by about 80%. And the reason for that is largely Bajaj Autos business of the frames has degrown along with some of the business of the plastics for HMSI. These are the 2 fundamental reasons why there has been a degrowth.

And again, there are certain models which we are catering to for the frames business of Bajaj has actually degrown by almost 35% to 37% on a year-on-year basis. And that's the single largest reason why that impact is coming in the stand-alone entity. Referring to aftermarket, the growth in H1 has been about close to 5%. However, that is primarily because there was a little bit of a cash flow crunch in the aftermarket business from recoveries from the channel partners. And we were very clear that for us, the cash flow realization is equally important. But for the last couple of months, we have seen a pretty good recovery on that aspect. And going forward in Q3 and Q4, we're actually looking at a much robust growth and aftermarket for the whole year, it's still likely to grow somewhere around 15% or north of that.

[Resham Jain, analyst]

Okay. So basically, second half looks like 20% plus kind of growth in aftermarket?

[Anmol Jain, executive]

Yes, for sure. And for H2, aftermarket would definitely grow upwards of 20%.

[Resham Jain, analyst]

And just a follow-up on your answer to stand-alone business. So are you seeing any improvement over there or any alternative plans to utilize capacity because some of this volume loss, if it has not come in the last 6 months? And if you're not seeing momentum, can you utilize that plan for some alternative customers also?

[Anmol Jain, executive]

These are dedicated plants, for example, and the lines are dedicated for the particular models. So the frame business is anyway consolidated between 2 plants, which is in Aurangabad and in Pune. And just to give you an example, we are a single source on one of the export models of Bajaj, which is called PM, and that has degrown by 36%. We are single source. So it's not like we have lost this share to our competition, but the overall volumes have declined by 36%. Also the Platina model of Bajaj Auto has declined in Aurangabad by almost 33% on a year-on-year basis. We're again single source of this model. So there is not much we can do in terms of utilizing this asset or other production of other things.

However, we are in talks with Bajaj Auto to try and get certain new businesses for their premium pipes of triumph and also for some of their forthcoming electric vehicle models in terms of getting the overall frames as well as certain painting parts. So that is still in discussions, but that will still take some time to fructify. I still expect probably a degrowth in the Bajaj frame business, even continuing in H2.

[Resham Jain, analyst]

Understood. Very clear. Second is with respect to the acquisition, there has been a good uptick in terms of the overall revenue since you have acquired, should one expect similar momentum in the coming quarters also?

[Anmol Jain, executive]

So I think in H1, if you look at IAC, we did about INR 419 crores revenue. I expect a slightly, maybe a single-digit incremental growth in H2 compared to INR 419 crores, which we clocked in H1, largely because, again, Mahindra is the single largest customer there. And I think Mahindra by itself is pretty much strapped on their capacities. So by the -- because we are pretty much very strong 18%, 85% presence in Mahindra Cross models. So as long as Mahindra output continues to increase, the revenue for IAC will also continue to increase.

But having said that, in the forthcoming year, FY '25, I think we're sitting on a pretty strong order book of around almost INR 650 crores for IAC India. And again, a lot of the models of Manson Mandra as well as Maruti Suzuki, we have acquired businesses, which will rectify in FY '25 and FY '26.

[Resham Jain, analyst]

Understood. And the last one is with respect to your comment on electric devices and software business, which is just 1% as of now. And you said you are looking to manufacture sudden product for global requirement. So if you can explain what exactly is this business? And what kind of business you are expecting from this one?

[Anmol Jain, executive]

So fundamentally, the joint venture of Lumax Alps Alpine is obviously to make foray and go deeper into the Indian market, which continues to run. The joint venture has also acquired certain recent new order books to the tune of approximately INR 60 crores to INR 70 crores, again, by Indian OEMs, and we are getting into not just expanding switches, but also the sensor business and also talking to certain OEMs for certain in-vehicle entertainment -- in-vehicle infotainment devices. So these are very high in electronics they're very high in embedded software and technologies. But this is the first strategy for the domestic presence and expanding the domestic presence.

The second strategy under this joint venture is also to relocate the production date for some of their components, which they make globally, relocate those facilities or the family lines and the entire production to India. Of course, this would be sold to OEMs globally through our partner internationally. So while we will utilize the cost efficiencies of India and relocate the production here, the joint venture will clearly get a huge headway in terms of the revenues and obviously, operating margins as well.

[Operator]

The next question is from the line of Mr. Aman from Carnelian Capital.

[Unknown Analyst]

Congrats on a good set of results. My first question was on just have been doing 18% kind of EBIT margins for the last 2 quarters. So like would this be a regular run rate for this business? Or like how should one think about a consistent margin for the business?

[Sanjay Mehta, executive]

Well, if you look at our EBITDA, the total EBITDA reported in H1 is 14.1%. So I'm not sure what is the 18% you're referring to.

[Unknown Analyst]

Then talking about IAC India, the acquired business?

[Anmol Jain, executive]

So IC India EBITDA, yes, has been consistently at about, give or take, 18.5% in quarter 1 and quarter 2. I think going forward, we do expect some marginal correction because there are certain product mix, which will change in quarter 3 and quarter 4, but we do not expect more than 100 bps change going forward as well. So I definitely feel that anywhere 17% to 18%, 18.5% should be a sustainable EBITDA for IAC India, at least in the subsequent quarters.

[Unknown Analyst]

Understood, sir. Second question India business again. Like after acquisition, like how have been our talks with other OEMs and also to reasons here with OEMs like Maruti, like, how has that stocks been progressing? If you can touch a bit on that, sir?

[Anmol Jain, executive]

So the talks have been very -- we have had very strong engagement with specifically 2 OEMs, Martiuzuki and Tata Motors. We did a technology show in both OEMs, which was attended by not just a top management and the senior leadership team of both Narciso and Tata Motors, but almost more than 400 footfalls were there right from engineering and sourcing teams. I think we already have a business relationship with Maruti Suzuki, though it is on certain models, and it is for more of consoles and certain other products. I think the intent here is to try and become a full-service supplier to get into certain other parts like broad panels and perhaps even the cockpit. So Maruti has also visited our facilities in Chakan to evaluate further how IS India can expand its wallet share with Martius forthcoming models and specifically the new plant in Kukura.

Tata Motors also similarly. We have had some very strong engagement, and the engineering and marketing teams are continued -- whole continued discussions for their forthcoming models on the Avina platform.

[Unknown Analyst]

Understood.

[Anmol Jain, executive]

I'm sorry, I lost you. The moderator could intervene and I cannot hear maybe it's important.

[Operator]

We take the next question from the line of Abhishek from Dolat Capital.

[Abhishek Jain, analyst]

Sir, what is your revenue guidance for Lumax Technology, excluding ISC India in FY '24?

[Naval Khanna, executive]

So the guidance will be about a single-digit growth for Lumax Auto Technologies without the IAC. Again, if I were to give you 2 buckets, I think the joint ventures in totality will still have a strong growth of 18%, 20% or even more beyond that. But the stand-alone entity for reasons which I've already explained largely being Bajaj Auto and HMSI where we are expecting a very flat or a degrowth because of that, there is likely to be not much of a growth in the stand-alone entity despite aftermarket, which is expected to grow maybe 15% or north of 15%. So overall, I would say, a single-digit growth is what I'm looking at for this year for Lumax Auto Technology without IAC.

[Abhishek Jain, analyst]

2-wheel export volume is expected to improve from the fourth quarter onwards. So can it be positive for you as well?

[Anmol Jain, executive]

Well, we are hoping that the export volumes recovered, but this is something which we will have to wait and watch. As I mentioned, these are, again, business dynamics when the domestic volumes were down about 1 year, 1.5 years ago, the exports were thriving and that was a time when we continue to have some handsome rewards. So again, this is just the dynamics of business, but one will have to wait and watch. But as I said, for the long term, we are trying to derisk our portfolio with Bajaj by entering even the premium spaces KPN is something which we have already entered. And as I mentioned, Trami something which we are under discussions with.

[Abhishek Jain, analyst]

Sir, your depreciation rate is very high, around 1.3% of gross look. And EBITDA growth is very much in place by around 76%. But most of the growth was offset by the higher depreciation and interest costs. So from which quarter we can see some normal depreciation rate around 7% to 8%?

[Sanjay Mehta, executive]

So actually, at the time of acquisition of ISE has created the intangible assets of almost around INR 213 crores, and that will be depreciated over the period of 7 years. The depreciation will be there for, I mean, a reasonable period for. But definitely, that advantage we are getting the tax, et cetera, will accrue after the merger of IT the life. So for interest is concerned because we have taken a debt of around 400 TR, there's a docking period of 18 months. So after post merger, the debt is going to be decrease on the basis of INR 1 crore. But if you see the less that is on INR 88 crores at the group level, I mean a legal consolidated level.

[Abhishek Jain, analyst]

Okay. So what is your data repayment plan?

[Sanjay Mehta, executive]

0.5 debt-equity ratio I present, which will reduce after 1 year. In the next financial year, it will be going in the downtrend.

[Abhishek Jain, analyst]

Okay. And sir, tax rate is a very higher side in the first half, around 30%. So what would be the attractive tax rate for the full year '25 and FY '25?

[Sanjay Mehta, executive]

The tax rate is at 25% because of interest portion, which is a live there. And some of the JVs are having the losses where the auditors will not allow to create an effort asset, which will be created in the next year. So the tax rate for the next year would be down by almost 4.5%. So right now, it is at 13%. The next year will be in the range of 25% to 26% post-merger.

[Abhishek Jain, analyst]

Okay, sir. And my last question on the revenue from the Lumax industry, that is consistently going down. So what is the reason because of the more captive work they are doing or what?

[Anmol Jain, executive]

I don't think that is our core business. And I think that over the next few quarters or perhaps in FY '25, will possibly strategically continue to decline. And again, the idea is to be a more Tier 1-oriented system supplier and not yet Tier 2.

[Abhishek Jain, analyst]

So is there -- will be there any impact on the aftermarket because of this strategic movement?

[Anmol Jain, executive]

No. The Lumax Industries business has nothing to do with the aftermarket. This is a pure business which we do for the Lighting segment. And as I mentioned, strategically, this is a noncore business area for us.

[Operator]

[Operator Instructions]

We take the question the next question from the line of Harshil Shah from AM Investments.

[Harshil Shah, analyst]

So my question is about the potential of the exports from the spin that you mentioned. How big can it be, sir? Just rough cut like what you -- what our indications you have?

[Anmol Jain, executive]

Well, the first product which we are talking about, if we are able to get the global production base. We're looking at somewhere upwards of 3 million units per year with an annual business of approximately close to between INR 150 crores to INR 200 crores annual revenue, and this is just for one product. And again, if it is successful, then it would open doors to discussions on multiple other products. So as I mentioned, I think Lumax helps Alpine joint venture. I think the partner has a global presence with very strong technological products. And I think if we are able to establish this strong pace of manufacturing footprint in India, it will definitely open doors for further growth within the partners, other subsidiaries and presence across the globe.

[Harshil Shah, analyst]

And.

Can you expect it by next year like if we break through?

[Anmol Jain, executive]

So I think the SOP of this would be somewhere around quarter 3 of FY '25 or perhaps quarter 4 of FY '25. So FY '26 ideally should be the first year you should be trying to get some significant revenues out of.

[Harshil Shah, analyst]

Is consolidated on [indiscernible]...

[Anmol Jain, executive]

And can you put yourself on me?

[Harshil Shah, analyst]

And Anmol have you started relocation of the plant? Is it done? Like...

[Anmol Jain, executive]

No. So the current relocation discussions are ongoing between our partner and the OEMs. As I said, this is a relocation for us globally. So once the OEMs, in principally, the OEMs have been informed, but I think now the teams are working on doing the more feasibility. And again, one of the key factors is the geopolitical aspects. A lot of this production will be moved out of China into India. So again, just to [indiscernible] from China supply chain, the OEMs are pushing the partner to relocate it to elsewhere. And India is the front end tender, as I mentioned, for this global production.

[Harshil Shah, analyst]

Okay. And Anmol, in the presentation, you have mentioned that like not in the presentation, in the results the company has gone guarantees to job to raise money. So is the subsidiary ready to contribute from Q3? And what is the size this year?

[Unknown Executive]

So I'll Vikas to take that.

[Vikas Marwah, executive]

So referring to your question. [indiscernible] has passed the significant order book with its first customer being Maruti Suzuki. Typical product development time for this since 12 to 18 months to get into SOP and the models awarded or for the new Kakula facility that are coming. So the revenue will not certify let's say, to that extent in the next 2 to 3 quarters. But this is the FY '26 preparedness as Maruti has rolled out plans for its 4 million. So that is their joint venture has made a very strong entry now as a shift to our supplier.

[Harshil Shah, analyst]

Okay. And sir, on [indiscernible] also, can you just elaborate like what is the kind of revenue we did and we can be doing this year, FY '24?

[Anmol Jain, executive]

Yes. So we went into the -- cost there are 2 products that are cleared for SOP with a major commercial vehicle customer time joint venture. One product went to SOP in the month of May. The second product is currently under initiation, and we hope to start recording monthly run rate revenues for it in effect from December. And we will have 3 months of the SOP volumes coming in this financial year and then thereby going ahead further. There's a very highly advanced [indiscernible] product. And currently, the guidance for the Lumax joint venture continues to be, of course, on INR 30 crores based on the current indication for the current year.

[Harshil Shah, analyst]

Okay. And Vikas sir, anything -- any other subsidiary can start contributing from the current financial year? Like in the second half, we can expect INR 100 crores from other subsidiaries which are not contributing anything right now?

[Vikas Marwah, executive]

So there are 2 subsidiaries or 2 joint ventures, which are already at a significant run rate, of course, one in [indiscernible] as Alpine and Dipra would be ramping up towards for sure in the coming year, that is the growth path at which they are.

[Harshil Shah, analyst]

Okay. But any like you poor anything that will contribute in the second half?

[Anmol Jain, executive]

I think these joint ventures have a good order book, but in terms of a significant contribution to the revenue and profitability, I would say that FY '25 should be the base here. FY '24, we have done very nominal revenues from these joint ventures. And as Vikas mentioned, the gestation of the lead time for development right from discussions to engineering at least is about 12 months. So we are sitting on an order book on all these joint ventures, a healthy order book, but they would only fructify FY '25 onwards.

[Harshil Shah, analyst]

Okay. And Anmol, what do you think will be -- will FY '25 look like? I suppose we end this year at INR 2,800 crores, INR 2,900 crore types out INR 2,700 crores. So where do you think FY '25 can be -- given the current situation, the stand-alone business will grow at a slower pace? Manu and Carnegie are becoming slightly like towards the short subsidiary. So what will FY '25 look like?

[Anmol Jain, executive]

So I think FY '25, if you were compare to FY '24, whichever, I think, I mean, anywhere around 27, 28, 28.50, that's what we are probably expecting for the full year. But again, next year, I think 2, 3 major change points. I think number one, we will have the joint ventures grow significantly, again, largely because of some strong order books, which are there in -- across joint ventures in Lumax [indiscernible], Lumax Mannoh as well as taciturn -- as I mentioned, the supplies would start and we will get some full year revenues as well as as.So the joint ventures will definitely grow -- continue to grow at a much faster double-digit growth rate.

In terms of stand-alone, I think aftermarket, as I mentioned, I'm still very bullish. We will continue to grow at around 15% to 20% on an annual basis. The stand-alone, which has the other business, that is, particularly on Bajaj and HMS side, I do expect growth to come back in next year. It may not be a double-digit significant growth, but definitely close to perhaps 7%, 8% growth is likely. And on IAC, we continue to have a very strong focus. As I mentioned, there is a very strong lineup of new models, both from Indra as well as from Maruti Suzuki, for which IT enjoys the healthy order book of almost INR 650 crores. So with that and certain organic volume increase, I think ISC India will continue to grow in double digits for next year as well.

[Harshil Shah, analyst]

Okay. And sir, margin like ISC margins declined 100 is 150 bps on the company level, can we maintain like 14% type margin?

[Anmol Jain, executive]

Yes, definitely. I think at an overall consolidated level, we will be able to sustain the current margins of 14%, give or take at EBITDA level.

[Harshil Shah, analyst]

Okay, sir. That's it from my side. And one more thing, sorry. Is there any one-off in the employee cost, it's too high, it's INR 94 crores, right?

[Anmol Jain, executive]

You're talking about the overall employee cost?

Staff cost in current quarter is INR 94 crores. So which was INR 84 crores in the last quarter.

[Unknown Executive]

No. So there would not be any significant onetime impact barring just maybe a few people who have been given certain annual performance bonuses, but that's not a significant amount. But IAC, as I said, continues to have a manpower cost of around 15%, and that's probably why you're seeing a significant increase in the manpower in Q1 and Q2.

[Harshil Shah, analyst]

But I see the total cost of employees last year was INR 72 crores and rose like INR 50 crores employee cost. So if we add -- or was like INR 200 crores, sorry. So if you add up, it comes to around INR 270 crores. And even if that goes up by 10%, it should be around INR 300 crores, INR 325 crores. Now this is like at the half year level, we are at INR 175 crores. So that translates INR 350 crores.

[Naval Khanna, executive]

One more factors. If you recall the Lumax Metallic has been merged with this company. And Lumax Metallic, this particular has come in the legal and legal charges. So after mandate cost has now been closed in on so is cost. And sending in other expenses there is another sector where you're seeing in part...

[Vikas Marwah, executive]

Just an accounting change. It does not impact the bottom line. But yes, you're right, if you look at particularly a line item of manpower, it would go up. And if you look at the corresponding amount in other expenses, it would have gone down.

[Operator]

[Operator Instructions]

We take the next question from the line of Nitin Ghandi from InQuest Advisors Private Limited.

[Unknown Analyst]

2 questions. Can you share with us what's the sourcing done from China by helping our partner -- that's the question number one. And the second is, what's the maximum revenue potential of all relies put together if you can share individually or collectively whichever?

[Naval Khanna, executive]

Number one question is we are not doing any sourcing from China in Loma Alpine. There are other ASEAN regions, Japan and, let's say, Thailand and Vietnam and Indonesia. We are doing some imports across the different joint ventures from these regions, but we do not have any specific import directly into the JVs from China. What I was referring to is that rumor, as our partner has a presence in China where they manufacture this product for the requirement of global OEMs. And as a strategic goal, they are wanting to relocate the production out of China into another region, and that is the global production, which we're talking about getting in India and other Lumax joint venture. So that's answering to question number one.

The second part of your question, which is what is the joint venture's potential put together? I mean, it's a very every difficult question to answer because, again, across the 9 joint ventures, the wallet share, which we enjoy is very, very different. Cation like the Mannoh where we already have the market leadership position, the growth would come out of organic volume growth or geographical expansion into export territories or technological changes. We already are seeing that, but I think the growth would definitely be not the same as some of the other joint ventures like Lumax, all tomato it's very difficult to give you a specific figure. But I think without ISP, all the joint ventures are right now doing close to about INR 150-odd crores on a quarterly basis. easily, I would say that the potential would be to probably go at least 20% to 25% growth in FY '25. And probably that gross momentum should continue on an annualized basis.

[Unknown Analyst]

Just let me reframe the Alpine issue. What is the Alpine sales at China at this point of time or last year?

[Sanjay Mehta, executive]

Well, Aside is a very large $8 billion company globally, and they have multiple production facilities across the globe. So I would not have the exact number as to what is the contribution of China within the Alps global portfolio. But I think -- and that probably, to me, is relevant for Lumax Alpine because for Lumax, as I said, the strategy for Indian joint venture is to penetrate the Indian markets, joint venture is primarily to service the Indian market. This just happens to be an additional business because of the global production hub.

[Operator]

We take the next question from the line of Jia Shah from Wealth Securities.

[Unknown Analyst]

My question is post the IoT acquisition, what are the potential synergies we have observed? And how has that been reflected in the financial numbers in terms of revenue growth margins, customer acquisition and product additional?

[Anmol Jain, executive]

I think there are various synergies. Number one would be clearly the customer expansion. And again, as I mentioned earlier, customer expansion does not happen overnight, but there is a very strong engagement now both at the top level as well as the working level, specifically with Maruti Suzuki and Tata Motors who are the, let's say, focused customers for IAC India to grow our wallet share with them. So I do expect that in the probably next 2 years, give or take, we should have a significant order book from both Maruti Suzuki as well as Tata Motors.

This again, would be clearly one of the key reasons why we got into this business of expanding the portfolio of customers. The second synergy is also, of course, with respect to the sourcing. So we are a large plastic consumer. And again, to optimize the cost synergies with these global raw material suppliers because of scale. And again, the synergies would work both ways from IAC India into Lumax or vice versa. And we've already started to see some of that sourcing synergies play out, not just in raw material, but even the Tier 2 subsuppliers, which remain common in certain regions. The net strategy is, again, at a group level, more for the lighting piece, the ceded lighting. So while it is not related in this company at a group level, that synergy still holds true.

And number four, again, the idea is we do a lot of components into multiple joint ventures today. So for example, we do power window switches in one joint venture, we do gas [indiscernible] in one joint venture. We also do, let's say, certain other interior parts like the air conditioning vent in the stand-alone entity. How can we package this as a full service supplier to the OEMs, along with IAC and give them as a complete module. So that -- this is the third synergy, which is being worked out and talked about it. I don't think it's possible at this point to give you a revenue and a margin outlook because of synergies. But I think, as I mentioned before, the order book for both IAC as well as the non-IAC business continues to look very positive for the future.

[Operator]

The next question is from the line of Ramesh Shah from Opel Securities.

[Unknown Analyst]

So my first question is on what is the CapEx done during H1 FY '24? And what is the total CapEx guidance for FY '24 and FY '25? And where do these funds we deployed this CapEx made?

[Vikas Marwah, executive]

So Page 1, we did a CapEx of INR 41 crores, which largely about INR 10 crores to INR 12 crores was in IAC India and about a similar amount went into the Lumax Mannoh and about INR 6 crores to INR 8 crores went into the frames business of the Jagat. These 3 would be the largest contributor of INR 41 crores. As indicated earlier, the outlook for the full year is estimated to be anywhere around INR 110 crores to INR 120 crores. And again, this would go into -- across multiple entities from IS India as well as to the others. I will be the biggest buyer of it. But again, [indiscernible], and even the gearshifter business and the Mechatronics business would add almost close to, let's say, INR 12 crores to INR 15 crores of outlay for the current year.

FY '25, still too premature to give you a CapEx guidance. But to give you a very different scenario, we're sitting on a INR 1,000 crore plus order book, as I mentioned earlier. And to deliver that, I think over the next 2 to 3 years because FY '25 almost 45% of this order book would get realized. And in FY '26, it would be another 30%. And then FY '27 would be about another 25%. So we do expect in the next 2 to 3 years, perhaps our asset turns would be much better compared to what we have traditionally been doing.

[Unknown Analyst]

Understood, sir, to give us a detailed answer. I have one more question. So how much does M&M contribute to IAC India's business? And what the other major customers do it doesn't cater to -- that is that? And also the major customer additions in IAC or Lumax business for the current period?

[Vikas Marwah, executive]

So Mahindra accounts for almost 70% to 75% of India business. The other 3 customers, which are there are Maruti Suzuki, Volkswagen and Volvo Eicher. So these are the 4 customers. We do also very nominal business with [indiscernible] motors, and we do a lot of design and engineering revenue even with Tata Motors, but not at a product component level on yet. As I mentioned, that is the next step on how do we get into a full service supplier understanding with the likes of Maruti Suzuki and Tata Motors. And what was your second question? I mean...

[Unknown Analyst]

My second question was any major customer additions in ISE or Newman business on the current period?

[Anmol Jain, executive]

We do not have any major customer additions. We are going into different product lines, but the customers remain the same, which is the same. So we don't have any -- this thing, but the only other customer addition for Lumax technologies would be Hero MotoCorp, where we started the plastics business in our Pantnagar facility.

[Operator]

Thank you, sir. As there are no further questions, I would now like to hand the conference over to Mr. Anmol Jain for closing comments.

[Anmol Jain, executive]

Well, I'd like to take this opportunity to thank everyone for joining in to the call today. We will keep updating the investor community on a regular basis for updates on your company. I hope we have been able to address all your queries. For any further information, please get in touch with us or Strategic Growth Advisors, Power Investor Relations advisers. Thank you once again. Have a good day, and I also take this opportunity to wish to all of you on the call and your families a very happy and prosperous Diwali. Thank you.

[Operator]

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