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Lumax AutoTechnologies Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '20 Earnings Conference Call of Lumax Auto Technologies Limited. 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 the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions]I now hand the conference over to Mr. Anmol Jain, Managing Director of Lumax Auto Technologies Limited. Thank you, and over to you, sir.
Ladies and gentlemen, a very warm welcome to the Q4 and FY '20 earnings call of Lumax Auto Technologies Limited. I hope everyone is safe and doing well during these unprecedented times. Along with me on this call, I have Mr. Deepak Jain, Director; Mr. Sanjay Mehta, Director and Group CFO; Mr. Vikas Marwah, CEO; Mr. Ashish Dubey, CFO, Ms. Priyanka Sharma, Head, Corporate Communications; and SGA, our Investor Relations adviser.The results and presentation are uploaded on the stock exchange and 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. The Indian auto sector was already suffering from an 18-month long slowdown due to fall in demand followed by the NBFC crisis and regulatory changes. The outbreak of COVID-19 pandemic has further added to the industry's pain. The lockdown announced to prevent the spread of the pandemic had a huge impact on the demand. It has resulted in a sharp decline in the planned investments by the automobile industry. Similarly, Indian auto component industry is also headed for tougher times. The sector, which registered a 15% degrowth in FY '20, may witness a similar or even bigger degrowth in FY '21 if situation does not normalize soon. Labor migration and cash flow issues are serious issues faced by the industry.Various industry bodies have made several representations to the government to reduce the GST rate for the short-term in order to provide some support to stimulate demand. We are hopeful for a positive response from the government. During the financial year 2019/'20, industry produced approximately 2.64 crore vehicles, including pass cars, commercial vehicles, 3-wheelers, 2-wheelers and quadricycles, posting a degrowth of 15% year-on-year. Passage vehicle sales witnessed a degrowth of 18%. Commercial vehicles degrew by 29% whereas 2-wheelers registered a decline of 18% year-on-year.Let me now take you through the performance of each business entity. The stand-alone entity caters to Integrated Plastic Modules, After Market business, Chassis and swing arm for 2-wheelers, trailing arm for 3-wheelers under the metallic business and 2-wheeler lighting of the Bajaj Auto. The stand-alone entity contributes 83% of the total consolidated revenues post the merger of Lumax DK with the company. Lumax Mannoh Allied Technologies is a 55% subsidiary, which manufactures gear shift resistance. This company has a market leadership position and has the capability to manufacture manual, AMT and automatic gear shifters. This company contributes 11% to the total consolidated revenue. Lumax Cornaglia Auto Technologies is a 50% subsidiary, which manufactures air intake systems and 3D ducts. The JV commands 100% share of business with Volkswagen and Tata Motors. Lumax Cornaglia currently contributes 4% to total consolidated revenue. The company has started commercial production of urea tanks and is confident of increasing the revenues in FY '21 with the start of this business.Lumax Gill-Austem Auto Technologies is a 50% subsidiary, which manufactures seat frames and is a Tier 2 supplier through LEAR and TM Seating. This company contributes 2% of the total consolidated revenues. The parent company, Lumax Auto Technologies Limited, is hopeful for a favorable outcome in the ongoing negotiations for acquiring the balance stake from the JV partner, Gill-Austem, and thus does not foresee any material impairment in this regard for the JV company.Lumax Ituran continues to generate various business inquiries, and we expect to realize revenues in this financial year. Lumax FAE is expected to realize revenues by Q3 of FY '21.Lumax JOPP Allied Technologies is a 50-50 JV with Germany-based JOPP. This JV will engage in design, development and production of gear shift towers, automated manual transmission kits, all gear sensors and forks to start with. It gives me great pleasure to share with you that commercial production has commenced at our existing facility in Manesar, Haryana from February 27, 2020. Lumax Yokowo Technologies is the most recent 50-50 joint venture with Yokowo Technologies Limited Japan to manufacture and supply antennas and other vehicle communication products to the Indian automotive industry. We expect to commence production in the later part of FY '22. The company has also signed an MOU with Ananda Drive Techniques of China for manufacturing electric vehicle products for 2-wheelers and 3-wheelers.Let me now brief you on the proposed acquisition of the auto component business of OK Play Group. Due to this unprecedented pandemic situation and extended lockdowns leading to disruptions in the business continuity, the proposed acquisition is being put on hold pending further review and appropriate decision in the future. We continue to keep a close watch on the revival of industry and will be prudent in our M&A strategy, considering long-term opportunities and immediate capital allocation and cash flow management. The company has made following new launches during the quarter. In the 2-wheeler segment for Honda motorcycle and scooters, plastic molded products for models Dio, Dream 110, CD Shine and Activa 6G. For Bajaj Auto, we also started chassis manufacturing called KTM, RC and Duke models. In the passenger vehicle space, we started the control housing for Mahindra & Mahindra's Thar model; and in the commercial vehicle space, we started the urea tank production and supply for Tata Motors, Ace, Magic and 712 platforms. The company has also won the prestigious gold award for top 100 best annual report for excellence within its industry for the past fiscal year.Despite the adverse impact of COVID-19 on our business, we viewed this situation as a period of realignment and readjustment. We at Lumax give utmost importance to the safety, wellbeing and protection of all our stakeholders. Desperate times need desperate measures, and our people has been our strength. Their magnificent contribution towards the growth and success of the company has borne results in the past, and we will together sustain and sail through this tough period as well. We at LATL consider this as an opportunity to collectively lay the groundwork for a better future. The changing regulations provide us with prospects to diversify into new segments. We aim to have a higher content per vehicle as the new generation architecture evolves. Our strong team, global partnerships and vast experience continue to focus on new opportunities that will propel us to greater heights and help us maintain our leadership position, both domestically as well as scale up globally.Now I would like to hand over the line to Mr. Sanjay Mehta, group CFO, to update you on the operational and financial performance of the company for H1 FY '20.
Good morning to everyone. Let me take you through the operational and financial performance for the -- of the company.Operational highlights. Integrated Plastic Modules contributes 30% to overall revenues, followed by After Market at 18% each, Chassis at 16%, Lighting Products at 13%, Gear Shifter at 11%, Air Intake Systems at 4% and balance is contributed by other products. 2- and 3-wheelers contributed to 48% to overall revenue. Passenger cars contributed to 20%, After Market, 18%, CV 7% and others 6%.Now consolidated financial highlights for FY '20, post disposal of PCB division relative to continued business. The consolidated revenue stood at INR 1,141 crore for FY '20 as against INR 1,187 crore in FY '19, down by nearly 4% against industry degrowth of 15%. This is due to almost flat growth in Bajaj Auto and After Market division, which contributes about 55% of total revenue. The revenue was affected by our country-wide lockdown due to COVID-19. EBITDA, including other income and share of profits from the JVs, stood at INR 109 crores this year vis-à-vis INR 124 crores in FY '19, degrowing by 12% on a year-on-year basis. EBITDA margin for FY '20 stood at 9.5% versus 10.4% in FY '19. The contraction in margin is on account of lower profitability in Lumax Cornaglia Auto Technologies Private Limited and Lumax Gill-Austem strategies of the company.The profit after tax and minority interest stood at INR 50 crores in FY '20 as against INR 53 crores in FY '19. The company has opted for reduced tax rate, the impact of which has been taken in Q2 FY '20. PAT margin for FY '20 is 4.4% vis-à-vis 4.5% for FY '19. EPS stands at INR 7.3 per share for this year as compared to INR 7.81 in FY '19. The CapEx incurred during FY '20 stands at INR 50 crores. The Board of Directors has recommended a final dividend of INR 3 per equity share subject to the approval of shareholders it the ensuing annual general meeting of the company. The recommended dividend includes an interim dividend of INR 2 per equity share paid in the quarter ended March '20.So I will brief on the company-wide revenue. Lumax Auto stand-alone post merger with Lumax DK Auto, the revenue stood at INR 942 crore as against INR 958 crores in FY '19, witnessing a degrowth of 2% with EBITDA margin at 9.7%, excluding dividend income from subsidiary. Lumax Mannoh revenue stood at INR 125 crore as against INR 143 crores in FY '19 with EBITDA margin in the double digits. Lumax Cornaglia revenue stood at INR 47 crores as against INR 44 crores in FY '19, with EBITDA margin near to double digits. Lumax Gill-Austem revenue stood at INR 25 crores as against INR 37 crores in the last year with negative EBITDA margin.Now we open the floor for the call for questions.
[Operator Instructions] The first question is from the line of Abhishek Jain from Dolat Capital.
Sir, your quarterly run rate for other expenditure and employee cost is still high. In last con call, you had mentioned it is because of the merger expenditure of LDK with LATL which will normalize in 4 quarters. So however, again, expenditure is high. Can you throw some light on it, sir?
Sir, I will take this question. Hello? I'm audible?
Yes, sir.
Yes, yes, go ahead.
The reasons for increase in the other expenses in Q4 are mainly because certain legal and due diligence expenses have been incurred on the [ weightage of that ] proposed acquisition of OK Play as well as there are [ regrouping ] of some of the income -- other income -- you will see the other income is higher by [ INR 1 crore ]. So that is taken in income and [indiscernible] is taken in the expenses. Besides that, there was some balance writing off in the year-end. So all together, the other expenses have grown by around INR 8 crores in Q4.
Okay. So can we expect...[Technical Difficulty]
[indiscernible] not a recurring expenditure.
Okay. So can we expect some decline in other expenditure, employee cost from next quarter?
Yes.
And that will be positive for the margin?
It's -- yes because a lot of one-time expenses we have booked in Q4.
Sir, most of your high-margin segments are under significant stress, and SMT business are already transferred to the Lumax Industries. Many new products like urea tank and oxygen sensor are at a very early phase. So my question is that what is your plan to bring your margin at 9.3% what was in FY '19 level in the medium term?
So I'll take that question. Number one, I think the business model of LATL is across diverse product portfolios. And as Sanjay had mentioned in his remarks, I think there are multiple businesses, which still hold stead and -- in terms of good operating margins in the double digits. So yes, the SMT business was transferred. But going forward, the current businesses also hold a lot of potential to scale up and also the After Market business, which is also a high-margin burner, will be key players going forward in terms of the EBITDA margin protecting. So even for FY '20, if you see, our EBITDA margins are just almost close to double digits. We ended at about 9.5%. So we do expect that going forward in a medium term, the margin would also continue to expand further.
Sir, your After Market business was impacted in the last quarter because one of OEMs had forbidden to supply lamps in After Market. So what is the current status now? Have you got approval to supply components in the replacement market items?
Yes, we have got approval from that specific OEM, and we have also made substantial revenues in Q4 for those products, which were forbidden earlier.
So what is the incremental revenue from that?
The incremental revenue on an annualized basis is roughly close to about INR 30 crores.
Okay, sir. And INR 30 crores on a quarter basis?
INR 30 crores is the annual incremental revenue only for those products which were forbidden earlier and now have approval.
Okay, sir. My next question is related to the Air Intake System. So what is your revenue target for the FY '21 and FY '22? Because next -- this year, 2 new products like urea tank and oxygen sensor will add in this segment.
You're absolutely right. So current year, obviously, I would not be able to give you any outlook because the situation is very fluid. And as the situation becomes more clearer and as the OEM's volumes become more stable, only then the situation or the numbers or visibility for this year would emerge. However, giving you a more medium-term perspective, you're absolutely right, the urea tank, which we have just started, should substantially add to the revenues. Also, there are talks with penetrating into other customers for the existing products of the emission systems. So we do expect revenue to substantially go up over the next 2 to 3 years for both the air intake systems joint venture as well as the oxygen sensors joint venture.
So what sort of the incremental revenue you are targeting for the next 2 to 3 years from this business?
Let me give you a very different picture. I think if you look at the stand-alone entity and the JVs, currently, it's an 80-20 mix, where 80% of the revenue comes from stand-alone and about 20% comes from all the JVs. Going forward, in the next 3 to 5 years, our expectation would be that the JVs would probably contribute to 1/3 of the consolidated entity. So that is the kind of incremental revenue increase we are looking at from the JVs.
Okay, sir. Sir, my last question is related with the seat matter business that has gone down 4% in FY '20. Earlier in FY '18 and '19, this business witnessed a very strong growth around 50%. So what are the key reasons for this decline? And what sort of the incremental revenue you are targeting from this business?
So the metallic business on the contrary in FY '20 has actually had stable, it has not degrown. We did a revenue of approximately about INR 185 crores on the metallics business for the 2-wheelers. So it has not de-grown, whereas the 2-wheelers segment degrew. Bajaj Auto, which is the largest customer, also degrew by approximately 8% last year. However, we continue to maintain our wallet share and maybe also made some inroads into acquiring certain other businesses of other models. So I would say that we, in FY '20, were able to do better than what the industry paid on the 2-wheeler and specifically what Bajaj Auto did. And going forward for the current year and going forward also, our endeavor would be to keep on increasing our wallet share with Bajaj Auto on the metallic business.
The next question is from the line of Ronak Vora from AUM Advisors.
Can you give me the revenue breakup in terms of subsidiaries for the full year?
Sanjay, I would request you to give the breakup.
Yes. So if we -- I've already explained in my particular message, the revenue so far as the Mannoh is concerned, Lumax Mannoh has contributed almost around INR 125 crores in the total revenue, then Lumax Cornaglia has contributed around INR 47 crores in my total revenue and Gill-Austem has contributed around INR 25 crores in my total revenue.
That is the -- those are full year numbers, right?
Yes, it is a full year number and, as explained by Anmolji, the mix of JVs and the stand-alone is almost around 83% to 85% to 16% to 17%.
Okay. Okay. And secondly, by the third quarter, we are starting the oxygen sensors business. So what kind of revenue can we see on a long-term basis? Say, by the end of FY '22, what would be the full year revenues and income picture?
Vikas, would you like to take that up, on pie what is the visibility over the next 2 to 3 years?
Yes, please. So thank you for the question, and this project, actually, the gestation period has been a little higher because also precipitated by the latest COVID situation when first China got affected and then the OEMs had to make sure that they stick to the time lines for this launch due to the BS-VI urgency. So we have a ready business order book. We hope to go on a commercial steam production by Q3 of the current year as soon as the machines are installed, which are already now arrived in India. And being a Spanish JV partner, this has taken some time. So coming back to your question, for revenue visibility, we hope to record a double-digit revenue figure for this venture in terms of revenue even for the current year, expectedly on the lines that we are able to get off on Q3 with the situation normalizing. And of course, this product has a great future, being a very critical product for BS-VI. And also, when the OBD II norms kick in, hopefully, by 2022, then instead of 1 oxygen sensor, 2 oxygen sensors would be required in every vehicle, thereby giving a 3-digit revenue visibility over the next 3 to 4 years, for sure.
And what type of margins do we see in these businesses?
Well, we would expect a double-digit margin on EBITDA on pretty much all the product lines which we enter into. That is the strategic call. And this joint venture or this product line would not be any different.
Okay. Okay. So do we have any OEMs -- like, the product approved for how many OEMs, if you can give a number?
Vikas, I will request you to, again, throw some light on that.
Yes. So we already have ready-to-supply OEM approval with 1 OEM. It is under the approval process having crossed major test and validation parameters for 2 more OEMS. So definitely in FY '22, we are hoping to expand the footprint further. As I mentioned, this is a very, very high technology, critical component. And here, Lumax is taking some major technological steps in terms of standing up against the world giants in terms of the technology. And from an Indian perspective, this will be the first Indian localized solution from an Indian partner, which will be Lumax. So from that point of view, over the next 3 to 4 years, we hope to have a maximum footprint of 3 OEMs to be able to cater to this, keeping in mind the stringent quality parameters.
Okay, sir. And one more last one. What would be the order book for the overall business for FY '21?
When you're talking about overall business, you're talking about specific to the oxygen sensors?
Sorry?
Are you talking specifically to the oxygen sensor? Or are you talking about -- in the consolidated entity?
Yes, yes, consolidated entity.
So when you talk about order book, you're talking about new business orders? Because we already have an ongoing recurring order book for the existing products, which would depend on the volumes of the OEMs for the current financial year. But in terms of getting into new product lines, I think both the Lumax JOPP and Lumax Cornaglia, the urea tank business, both are, let's say, new entrants into new product lines, and also, as Vikas mentioned, starting the oxygen sensors would add to the revenue for the current year. So it would be very difficult to give you a quantification of the revenue in terms of what is the exact order book. But surely, depending on how the industry fares in this current fiscal, we would be able to throw some light maybe perhaps in the next quarter.
So can we say in terms of revenues or the outlook that we can do the same amount of revenues throughout the year as we did in FY '20?
It would be very difficult because I will be able to answer that only if you can answer to me what would be the industry's outlook for the whole year. As you know, the situation is very fluid. We have seen some good recovery from our key customer, Bajaj Auto, but it would be very difficult to predict how the entire year goes in terms of volumes across segments. So I would request you to just hold on for at least one more quarter for us to be able to shed some light on that.
Okay. And sir, do we have any import from China?
So we have very negligible imports from China, which was earlier there for certain other models. As of now, it's pretty much close to 0.
[Operator Instructions] The next question is from the line of Bharat Gianani from Sharekhan.
Yes, sir. Just touching on the earlier point, in FY '20, we highlighted that the industry had dropped by about 15%, 16% and our revenues declined by about 4%, if you exclude the discontinued operations. So my question to you is that in FY '21, given that the new products that you have talked about, oxygen sensors and urea tank and some of them getting operationalized in quarter 3, so do we tend to maintain the same kind of performance vis-à-vis industry as you did vis-à-vis industry in FY '20? Or are you trying to outperform more? So that would be my first question.
Sir, I had just mentioned to the previous caller that it is very difficult to give you a number for the current year or even state whether we will be able to achieve a flattish growth or a positive growth. I think the situation is extremely fluid. However, we already start -- have started to see some green shoots. As I mentioned, Bajaj Auto, which continues to be our largest customer, has already started to come back to almost 60% to 70% of their pre-COVID levels. So that is also really a good sign for us. And as you rightly said, certain new product additions like the urea tank and the oxygen sensors will also add to the revenue pie for the current fiscal year. I can only say that our endeavor would be to do better than the industry as we have done in the past year as well.
Okay, sir. And sir, my next question would be, what is the CapEx guidance for FY '21?
For FY '21, from a capitalization point of view, we would be looking at somewhere around INR 70 crores for -- of capitalization, out of which almost close to INR 50 crores would be capitalization on account of these new product lines, the urea tank and the oxygen sensors, which would come into play, and the remaining would be just maintenance CapEx. We strategically are very clear that we would not be going for any major capital allocation, and we would be resorting to preserving cash flow as best as possible for FY '21.
The next question is from the line of from Resham Jain from DSP Investment Managers.
So I have a few questions. First is -- so this quarter, what is the normalized EBITDA, excluding other income, given that you mentioned there are several one-offs in the quarter? So what is the normalized EBITDA?
You're talking about Q4 of FY '20?
Q4. Yes, yes, Q4, Q4.
Sanjay, would I request you to give that figure if you have that or Ashish, anyone? Sanjay? Ashish?
Yes. The normalized EBITDA for the current quarter is closer to around 8% because there are certain one-off write-offs that have happened in other expenses explained by Mehtaji, which have been basically nullified by increase in the nonoperating income, which includes certain write-backs as well. So if we take into both the accounts, the normalized EBITDA will be closer to 8% for this current quarter, Q4 '19/'20.
Right. And sir, my second question is, you mentioned about -- there's 2 new business, which is going to add up to the revenue this year. Obviously, we don't know the volume. Is there any other business where -- the base business, where you have lost or you have the kind of orders between you and other guys? So is there any base erosion is what I was -- I'm trying to understand.
So we do not have any businesses where we have lost certain, let's say, share of business to our competition. On the contrary, there are few products, for example, the Chassis business for Bajaj Auto, where we have made inroads and actually increased our wallet share in terms of eating into our competition pie. Similar is also the case for the gear shifter systems. So answering your question, no, we have not eroded any business to our competition.
So then does it mean that, obviously, with the new product getting included in your basket, your growth has to be better than the industry? Because you just mentioned that whether you'll be able to outperform industry is something which you can't comment. But if there is no business erosion, then is it fair to assume that we will do better than the industry as a whole?
So that is fair to assume because, as you rightly said that it's the -- we have a diverse product portfolio and also a diverse segment. And also, there is a substantial chunk, which comes from the After Market, which is not necessarily dependent on the volumes of OEMs. So yes, it would be fair to assume that our performance should be better than what the industry performs in FY '21. And the same has already been exemplified in FY '20, whereas you saw our revenue numbers better than what the industry numbers were.
Yes. Absolutely. And sir, my last question is on distribution. In After Market business, I think a couple of quarters back you mentioned that you would like to double this revenue over the next 3 to 4 years. So just want to understand, will it happen to new SKUs? How much will happen because of incremental distribution reach? If you can just give, overall, your thoughts on how this number will double over the next 3 to 4 years?
So we continue to maintain that, yes, our endeavor would be to double the After Market revenues over the next few years. Specifically to your question, the growth would come from new SKUs, both in the segment of lighting, where we are very strong and the market leader, and our brand is very strong for lighting as well as non-lighting products. If I give you a pie today, almost close to 30% to 35% of our After Market revenues comes from non-lighting products. And the endeavor would also be that perhaps going forward, it should be about 50% of the pie. So absolutely right, we will be adding a lot more SKUs and perhaps also new product category. Adding distribution not necessarily means revenues, but it just basically means that our presence across the country will become more solidified and that is more of an operational matter to me, but the revenue increase would largely come from new products and new SKUs.
And just a related question. Do we have a wholesale model? Or do we have a distribution model?
It's a distribution model where we have, pan-India, our own channel partners or distributors who sell our products further to retailers in the retail over-the-counter sales.
Okay. And is there any still the problem -- I think a couple of quarters you rightly mentioned about the debtors issue which was there and that's why you were going a little slow on the After Market business. Obviously, in the COVID situation, this must have further got stretched, but how do you see that part playing out?
So I'll answer that question in 2 parts. Pre-COVID, our recoveries were absolutely bang on track. We had no issues in terms of our recoveries from our debtors. Obviously, post-COVID, there has been a setback like in -- across segments. But as of today, as of June, we have very strong recoveries, and we have been focusing very strongly on our recoveries. And we do expect that, let's say, in the month of June itself, we would be able to come back to about 40% of our pre-COVID levels in terms of revenues of After Market. And as the markets open up across the countries, this would expect to grow in quarter 2 as well. So on the recoveries part, we don't have any red flag.
Okay. Okay. Sir, just one accounting question. We have overall increase in profit this year. But when I see the net worth, actually, net worth has come down compared to last year. Is there any adjustment to net worth other than P&L?
Sanjay, I would request you...
Because that OCI adjustment, which comes to that way, that is the reason.
What is that OCI adjustment related to?
That is whatever the investments we make in the industries and all because the market size has come down.
Okay. And that's why your investment has also come down. Is it because of that?
Yes, yes, yes.
Okay. So that INR 50 crore reduction in investment is also visible in the net worth?
Yes, yes, yes.
The next question is from the line of Apurva Mehta from A M Investments.
Sir, just wanted to ask that we were expecting to acquire OK Play thing, so are we negotiating the pricing also? Or are we just relaying this acquisition? What is our stance on this?
Sir, I'll take that question. So number one, the reason why we were going ahead with that acquisition was strategically to strengthen our position in the commercial vehicle space, which currently contributes only to 7% of our revenue pie, was to expand into that segment. Clearly, because of the COVID situation, the commercial vehicle segment is the hardest hit, which has declined by almost close to 70% to 80%. And hence, it did not make any sense with the current valuations to go forward with this acquisition. However, so we've put it on hold. We will, once things are back to normalcy in the commercial vehicle space and things revise, we will reinitiate the dialogue with OK Play. It would be too premature right now to suggest at the same valuations or a new valuation. We will see when we get there. But we still -- our intent still remains to be interested to going forward with -- in the business and in the segment.
Sir, coming to this -- on when we get to the normalized situation, what will be the contribution from oxygen sensors maybe next year or urea tank and the new JV JOPP, which is there, what would be our contribution really sir, individually? Can we get a new ballpark [indiscernible]?
So, sir, it will also greatly depend on how the volumes pan out, and you mentioned 3 specific joint ventures and all 3 operate in very different segments. For example, the oxygen sensor is completely a 2-wheeler play, whereas the Lumax JOPP is more specific to only 1 OEM right now, which is the first OEM, which has -- for which we have started commercial production. So it really depends on how these segments fare out in terms of their volumes and how specific OEMs fare out in terms of their volumes. So it would be very difficult for me to give you numbers, but I think the overarching strategic intent is that currently, the ratio of stand-alone to all the joint ventures remains at about 80-20. And every year, our endeavor would be that at least these joint ventures should start contributing more, and over the next perhaps 3 to 5 years, our strategic intent would be at least 1/3 of the consolidated entity should come from JVs.
Particularly maybe next year, we can just ballpark some kind of figure where you can -- urea tank maybe from INR 20 crore to INR 30 crores -- between INR 20 crore, INR 30 crore or oxygen sensors maybe INR 50 crores, INR 70 crores. Some ballpark figure which you have when you are estimating. Definitely, you must be estimating.
Absolutely right. Sir, I would just request your patience till the next quarter because things, as I mentioned, are very, very fluid right now. But I can assure you that all our joint ventures are coming back to normalcy. The emission systems or air intake systems or the urea tank through the Lumax Cornaglia joint venture is already back to about 70% of pre-COVID levels in terms of revenue. So we do not anticipate any major bottlenecks or setbacks. But clearly, because the volume guidance from the OEMs is still bleak for the remaining full year, it will be very difficult to give you a number. But I think next quarter, we will have much more clarity on this.
Sir, one question from the accounting side. Q3, we had a turnover of INR 292 crores and, at that time, the other expense was around INR 34 crores. Now Q4, we had a turnover of INR 280 crores, including the other income and other expenses INR 42 crore. So it's difficult to think that -- is it one-off -- or major thing one-off is there -- basically, INR 7 crore, INR 8 crore of one-off is there? Or it's just -- I'm not getting how this other expenditure is moving.
Sanjay, would you want to take that?
Yes. Sir, as explained earlier also, in Q4, because of -- as you also raised about OK Play, et cetera, we have a due diligence, legal expenses, which is one-off in nature, which has been accounted in Q4. Besides also around [ INR 1.5 crores ] in other income and other expenses that accounting treatment was there. The answer is that largely, it is one time.
So what will be the amount that one time means? Is it INR 7 crores, INR 8 crores or is it...
Out of INR 8 crores, I mean, INR 5 crores is one time.
The next question is from the line of Bharat Gianani from Sharekhan.
My question is that for -- we are stating that we'll outpace the industry -- continue to outpace the industry. So what would be the triggers about -- I mean, in terms of new products, I think you highlighted oxygen sensors and urea tank and, obviously, you try to -- so I was just trying to understand whether apart from these 2 products, are there any new products or any new triggers that would help us also as an industry in FY '21?
There are 3 new products, which we will be starting revenue for the current year, 2 of them you mentioned, urea tank and oxygen sensors, and also the Lumax JOPP joint venture, even though it's small, but it would also add some revenue to the consolidated entity. And also, we will be perhaps also increasing our wallet share on certain specific businesses like the Chassis business of Bajaj Auto. We've already, as I mentioned earlier, started the supplies for their KTM model, and that is a completely new model and a new entrant for us. So we will eat into the wallet share of our competition. So these are the 2 reasons, which will also add to the revenue pie for the current fiscal year.
So your JV will be for which product, sir?
Our what?
The JOPP JV that you mentioned will be for which product?
So the JOPP JV in totality is for multiple products like the shift tower and AGS and also automated manual transmission kits. But currently, we have started the manufacturing of control housing for Mahindra & Mahindra's Thar model.
[Operator Instructions] The next question is from the line of Abhishek Jain from Dolat Capital.
As most of the 2-wheeler players are adopting e-carburetor technology versus the fuel injection system below 150 cc segment. Will it hurt revenue opportunity for the oxygen sensor?
So Vikas, may I request you to take this?
Sorry, can you just repeat the question? There was a break in the signal.
So most of the 2-wheeler players are adopting e-carburetor technology versus fuel injection system in our below 150 cc bikes. Will it hurt revenue opportunity for some oxygen sensor?
Okay. So good technical question to clarify. There are only a couple of OEMs who are looking to go the e-carburetor route, whereas there are at least 3 big OEMs which will be sticking with the oxygen sensor technology in terms of their long-term plans. And that is how they have panned out their BS-VI strategy. The playing field for us will continue to be that particular operating segment, and we do not see any turbulence on account of those numbers because in terms of our own OEM approval, the 1 OEM that we will be now starting our SOP with very much remains on the oxygen sensor path and the other 2 OEMs that are doing a validation also for those particular models, including the scooter models, will be on the oxygen sensor path only.
Okay. Sir, my next question is related with the plastic molded part. You have started production of plastic molded parts in 4-wheeler space also and have started to supply to the Kia Motors. So what is the revenue opportunity in the coming years? Are you looking to win new business from Maruti and other peers?
I'll answer that, Anmolji. Hello? Shall I answer this, Anmolji.
Yes, yes. Am I audible?
Yes, you're audible. Please go ahead.
Yes. Okay. I'm saying, I will just add 2 lines and then, Vikas, maybe you can supplement wherever required. Largely, we have already -- always been largely a 2-wheeler plastics part maker and, strategically, yes, we wanted to foray into the 4-wheeler space. The Hyundai or the Kia arrangement is a small step towards the strategic intent as a Tier 2, and we continue to be engaged with Maruti Suzuki and several other OEMs directly for discussion and business inquiries on plastic parts, and we are hopeful that, going forward, we will be able to start revenues on 4-wheeler segment as well.
Okay. So what sort of the incremental revenue was in FY '20 from a 4-wheeler plastic molded parts?
Vikas, any light you want to throw on that?
So it was a very negligible volume as far as FY '20 was concerned, but going ahead, as Anmolji has mentioned, of course, the supplies to Kia is currently under Tier 2 model, where we are supplying to another company and then those particular molded parts for the certain mirror assembly are going and more number of these products will be increasing. Another substantial step that we will be now taking is that we also have a technical collaboration with the major plastic kinematics company based out of Japan. And hopefully, in the coming year, we will be able to actualize our first business wins from that particular technology for the plastic kinematics part. And going ahead, we will be very happy to share with you that it will be a significant number that will be coming, but probably we'll be able to give a more clearer outlook over the next 2 quarters on this.
Okay. My next question is related with the seat frame business. So what is your plan to resume or revive this business? Because you had almost a return of your seat frame business in the last year because of discontinued business with the Ford. So just wanted to get some clarity on this business.
So strategically, we remain committed to serve our customers for this kind of seat frame. As mentioned already, the company is already in advanced negotiations with the partner, Gill-Austem, to buy the residual or the remaining equity of the partner. And once we have a complete control on to this joint venture, we will definitely make our best efforts in terms of opening more customer doors and growing this business, but we remain committed to servicing our customers going forward for this business as well.
Okay. Sir, my last question is related with the interest cost that has gone up significantly in the last 2 quarters. So can you throw some light on this, whether the run rate will be continued to be around INR 2.5 crore? Or will it go down?
Sanjay, can I request you to...
Yes, sir. The reason of increasing the interest cost is because utilization of the working capital at least in the last month of the year. But if we simultaneously see the -- our cash reserve, free cash reserve, so the answer is that it will be not like that way forward. It is as an [ additional ] precaution, we have used our limit and, in fact, we have paid to creditors currently also. If you see the creditors level, it has been substantially reduced.
So what sort of the run rate we can assume for FY '21 on a quarterly basis for interest cost?
I think it is definitely better -- right now [indiscernible] because if I use my free cash as it is in that way, still I am having the sufficient cash. So depending on the company, so we judicially use the limit going forward according to the situation.
The next question is from the line of Resham Jain from DSP Investment Managers.
So I've just one more question. So on the current situation where the overall volumes are lower, how are you looking at the overall cost rationalization part? And what kind of -- let's say, if your overall volumes are down by 15%, 20%, as you mentioned initially, for the industry, what kind of margins -- how are you able to protect margins? So basically, the overall sensitivity of various cost items with respect to sales, if you can give a broad thoughts on the same.
Yes. So I'll take that question. So number one, I think we are very well cognizant of the fact that these are unprecedented times, and we're actually reviewing each and every cost head. Obviously, the variable costs are going in line with the revenues. So that is something which not much can be done. But on the fixed cost, we're actually evaluating all opportunities for cost-cutting and fixed cost rationalization. And this would be a permanent feature because once we take care of our fixed costs during these challenging times, whenever the revenue pie starts to increase, it will have a much more incremental impact on our margins. But going forward, we, as I said, cannot have a guidance on the revenue, but we can only say that we would fare better than the industry. But in terms of margins, I think the endeavor across the company and the top leadership is to protect the margins as best as possible, at least try to protect in line with the last year margins what we had mentioned.
Okay. Any number which you can share, like, let's say, in the last 3 months what kind of fixed cost reduction might have happened on various cost heads, including employees?
So Ankit, do you have a specific number on the manpower cost reduction? What in Q1 would be the impact?
It will be closer to, sir, INR 5 crores for the Q1.
Okay. So for Q1, it would be INR 5 crores only on manpower, but there are several other things which are still in the working, and I would expect that perhaps from Q2 onwards, those impacts will start coming in as well. So as I said, overall, there is almost 18 different fixed costs, which the company and the management is very closely monitoring and seeing how can we reduce them. Some of them, we will be able to reduce to a great extent, maybe even to the extent of 60% to 70% of it. However, some of it may be -- so we are looking at rentals, we're looking at traveling, we're looking at manpower cost. So be rest assured that this management is doing its best efforts to try and protect the margins as best as possible.
The last question is from the line of [ Karthik Bhat ], individual investor.
Most of my questions have been answered. And just a couple of questions. One is there's been a lot of articles that we've been reading about 2-wheeler market now showing some traction and used car market also seeing some demand. So what kind of recovery have you seen so far? I mean if you could throw some light in terms of numbers as to what kind of recovery have you seen post Unlock 1?
So as of now, in the month of June, our primary customer, which is Bajaj Auto, has already recovered to almost 60% to 70% of their pre-COVID volumes. And as you know, most of their production is exported, almost half of it. And hence, that also fares well for us because it's not driven by the domestic challenges, and these export markets have -- are pretty ahead of India in terms of post-COVID times. So Bajaj Auto is almost at 60% to 70%. After Market is probably back to about 40%, but going forward, I do not anticipate any reason why in Q2 we should not be as a company. So company as a whole, by June end we will be back to 50% level. And I do anticipate that in Q2, we should be looking at maybe even around 70% to 75% of pre-COVID volumes in terms of revenues. And post that, when the festive season comes in, hopefully, by then the COVID curve has also flattened and there is some positivity and buoyancy in Q3. So we expect every quarter, the situation would perhaps improve from here on as long as there is nothing unforeseen which comes up.
Okay. Okay. And in terms of -- I was going through the investor presentation, client-wise revenue and segmental revenue had seen a growth in Others pie, so -- in Q4 Y-o-Y. So if you can throw some light on what does it -- Others constitute? Also in terms of segmental revenue
Do you want to add, Sanjay? Or Ankit, do you want to take that question why the Others pie in Q4 increased?
Ankit?
Yes, yes, yes. I guess just, if you see the export and all, it was basically, in Others, 1 [ more ] sales happened in our seat frame business, around INR 5 crores. That is why it increased in Others, basically, for this quarter.
I would now like to hand the conference over to the management for closing comments.
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. I wish each of you safety and good health. Thank you very much for joining the call.
Thank you. On behalf of Lumax Auto Technologies, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.