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Good day, ladies and gentlemen, and welcome to the Q2 FY '23 Earnings Conference Call of Pricol Limited. [Operator Instructions] Please note that this conference is being recorded.
At this time, I would now like to hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, sir.
Thank you, Michelle. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations for Pricol Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and of financial year 2023.
Before we begin, let me mention a short cautionary statement. Some of the statements made in today's con call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is clearly to educate and bring awareness about the company's fundamental business and financial quarter under review.
Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. P.M. Ganesh, Chief Executive Officer and Executive Director; Mr. Siddharth Manoharan, Director of Strategy; and Mr. Priyadarsi Bastia, Chief Financial Officer.
Without any further delay, I request Mr. P. M. Ganesh to start with his opening remarks. Thank you, and over to you, sir.
Good afternoon to all of you, and welcome to the earnings conference call for Q2 FY '23. I will go straight into the financials of Q2 of FY '23.
The operations have been at the highest ever in the history of Pricol at INR 480.17 crores for Q2 of FY '23. The EBITDA stood at INR 55.01 crores. And in terms of percentage, it was 11.46%. We have to mention here that the strong headwinds continue to be there in Q2 as well with the ForEx going to as high as INR 82 and you know that many of the components used by Pricol are import dependent.
So we had strong headwinds because of ForEx appreciation. And also the semiconductor shortage continues in Q2 as well, and we expect the same trend to continue for a few more quarters as well. Margin-wise we have done 11.46%. On a consolidated basis, we have crossed the INR 500 crores mark; we are at INR 501 crores. EBITDA stood at INR 65 crores and the EBITDA margin on the consolidated level was 12.97%. At the consolidated level, long-term borrowing was made in Q2 of FY '23. During the same period of last year, it was at INR 142.45 crores.
The key financial highlights for Q2 has been that when compared to the previous year same time, we have grown by 27.70% on a standalone basis. The PBT has grown by 61.41%. The cash profit has doubled when compared to the same period last year. And the profit after tax has grown by close to 150%.
On a consolidated basis, more or less the same percentage of growth. You can see that 26.64% was the growth when compared to the last year. The profit before tax was at 81.34%. The cash profit has doubled again here and was at 104.51%, and profit after tax was at 157.53%.
These are the details we have highlighted for you on the quarter end of Q2 and also the half year of this year where we stand. At half year where we start, we are at the total revenue of more than INR 900 crores of sales, INR 922 crores. And our EBITDA stood at INR 103.93 crores for the half year and INR 55.01 crores during the quarter ended September. As a percentage, EBITDA has been at 11.46% for the quarter ended and at the half yearly, we are at 11.62%.
So I'll just go to the last slide, so that I could -- just the last slide. The cash profit for H1 has been INR 97.22 crores, and for the quarter ended has been at INR 61.98 crores on a standalone basis. I'll just touch upon the cash profit on the consolidated basis. It has been at INR 112.42 crores for the H1, and the quarter ended, it has been at INR 69.83 crores.
The next one, please. I can highlight some of the select launches which have happened. You would have seen in the India and press reports that we have launched state-of-art driver information system, the first of its kind in the industry with Hero Motor Corp and which has one big recognition for Pricol. Even 2 days back, there was a ceremony that wherein Mr. Pawan Munjal has awarded the best technology award for Pricol for making the state-of-art tender information system for their first ever EV scooter.
Also, we have had a slew of launches during the last quarter wherein we have launched new products for TVS Apache, Bajaj Pulsar, and also our new touchscreen PST type of clusters for TVS VIDA.
I think that ends my presentation, and now we are open for the questions.
[Operator Instructions] We have the first question from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
So a few questions from my side. Firstly, how has been trend in our exports? We hear about a broad-based pressures and exports across players in auto component as well as auto OEM side? Are we also seeing similar trends?
Jinesh, our export has been at 10% of the total revenue quarter-on-quarter. Of course, we are seeing some slowdown in the U.S. and Europe, whereby it has impacted the export in a very minor way but not to be really concerned at this point of time because we have been winning a lot of export business as well. We have highlighted during last call that we have started the production for Caterpillar, which has been supporting us to offset some of the slowdown in the industry, both in the U.S. and Europe market. We are confident that we will be in a position to sustain at this 10% and growing up to 20% in the next 2 years' time.
Okay. So the 10% growth in exports is for second quarter or for first half?
No, it is not the 10% growth.
10% of sales.
Overall revenue, 10% contributes to our export sales.
Right. And this you expect to increase to 20% in the next 2 to 3 years?
Yes. But it all depends upon, again, the industry situation. As you know that U.S. and Europe has gone into a little bit of slowdown at this point of time. So we anticipate that there could be some delays happening because of the start of new programs. But the vision of the company is that we should be at a 20% export in the next 2 to 3 years' time.
Okay. And with respect to imports, how imports would be as a percentage of sales for us?
Sorry, Jinesh, can you just…
Imports, can you give flavor of imports as a percentage of sales, how much it would be for us?
Imports?
Yes.
See, let me -- so I will break it down into 2. We have 2 category of products. One is the dollar information system and the second category of the product is -- comes from mechanical products or we now call as actuation and fluid controls. The actuation and fluid controls have very, very minimal imports. It is hardly very, very small number, but the drive information system where it is becoming more electronic. That is where there has been more import content and the import content has been increasing, primarily the screens, the semiconductors. Those things are not available today in India and have to be imported.
Percentage would be very difficult for me to say because it varies from product to product. But overall, there has been an increase in trend in terms of imports, primarily because of the electronic content, which is there in the driver information system.
Okay. And how does the pricing of ForEx volatility work for the imported components for us?
Can I please request that if you could restrict your question to one because there are others in the call. I would request that each one of you…
Sure, I'll fall back in queue.
[Operator Instructions] We have the next question from the line of [ Vipul Shah from Sumangal Investments ].
Congratulations on good set of numbers. So my question is real 2 verticals: this driver information system vertical and actuation control and fluid management system. So can you split that turnover between the 2 if that is possible?
Yes, it is approximately 70% and 30%. 70% is from the driver information system and 30% is from the fluid control and actuations.
And what is the margin profile for both the verticals?
Fluid control systems are more into the exports where the margins would be a little better than the driver international system, which is predominantly into get domestic.
[Operator Instructions] We have the next question from the line of [ Amar Naidu ], an individual investor.
Sir, I have 2 questions. One is on the other expenditure, which has gone up from INR 20 crores to INR 30 crores in this. Are there any onetime items in this or it's a general uptrend? That is my first question.
Second question is you said that change of tax regime has made a change of INR 15.5 crores difference in the tax expenditure. Can you break that into current tax and deferred tax?
Yes, Mr. Naidu. I will request to my colleague, Priya, CFO, to answer both your questions.
Mr. Naidu, to answer your first question on other expenditures, there is no onetime nature of expenditures, which have been captured in the quarter. It is all in the regular nature.
The second question is on the tax. The tax impact, the INR 15.5 crores is the impact which we have shown in Q2. That is the majority of it is coming from deferred tax because of the tax regime change and the balance of the current year nature.
My first question is still portion is there. It's from INR 20 crores to INR 30 crores is a 50% increase. So what could be the reason for that 50% increase in that item?
Mr. Naidu, there are multiple items. Actually you can get a detailed breakup from our company on that. Most of these expenditures are of recurring nature, the regular nature expenditure. There is no onetime expenditure booked in other expense.
[Operator Instructions] We have the next question from the line of Nidhi Babaria from Envision Capital.
So where exceptional item in this year, which we have booked, is there any more part of the erstwhile subsidiary, which is expected to come in the coming quarters?
I will ask Siddharth, Director of Strategy, to answer this question, please.
Thank you. Ms. Nidhi, I think we have required almost all the claims that are due to us. And I think at this point in time, we don't see any more exceptional items coming in, in the upcoming quarters.
Okay. And if you can quantify the opportunity for PSN Caterpillar book, which we have got, orders which we are expecting like the production, which has started in this quarter?
Nidhi, it would be difficult for us to quantify the exact numbers. But we know that Caterpillar is a global leader in the off-road vehicle. And the orders is quite sizable. Since we have an NDA with Caterpillar, we are not able to disclose the exact value. But it would be quite significant as we are going along.
Okay. So does this order has an opportunity for us to increase our exports from 10% to 20%? Like can it grow in like, what say, 60%, 70% kind of growth numbers from current lineup?
That's right. That's right. You're right. Because Caterpillar is a very big ticket account for us, so we see that there will be good growth in the next 2 to 3 years' time because there are multiple opportunities that we're working with them in development of funds and actuations.
Okay. And then what about the balanced export contracts which we have with other players? Like how does their growth aspects look like?
See we have been growing consistently with the majority of our existing portfolio also. For example, Polaris has been our customers for several years. So we have been continuously growing with them and there are new opportunities that we are working with them as well. And also there are many of the recreation vehicle and then the higher CC motor cycles that are like KTM, Ducati, Harley Davison, where we have been traditionally working with them for many, many years. So we see lot of growth opportunity with them in the next few years.
Okay. And sir, can you elaborate a bit more on export products, like what are the upcoming products which we will be focusing? And how is our, like, current products doing in export market like the major products, not all?
Yes. actually speaking, that today, majority of our exports is coming from the pumps and mechanical products that is what the majority of the export is. But going forward, we see very good opportunity in the driver information system as well. So we are working already with multiple customers through the Indian origin also, where it is exported through the Indian JV partners and then it is exported to their parent company. So we feel that there is a good opportunity in front of us for the driver information system using the new technology like the TST clusters, whatever we have launched in the domestic market with these export customers as well.
So at this point of time, the pumps and mechanical products are more on the export. But as we are going along, we find that it is going to have equal opportunities on both segments growing.
Okay. And sir, can you give some guidance…
Ms. Nidhi, sorry to interrupt.
Yes.
I would request you to rejoin the queue, please. We have the next question from the line of Vinayak Mohta from Stallion Asset.
So just wanted to understand that -- just wanted to understand your guidance for the next 2 years, maybe FY '25, where do you see the company moving because after a very long, we are consistently profitable for a number of quarters now. And even on a PBT level, if we see them, we kind of a little the mark of that INR 70 crores, INR 80 crores this year even if we remove the exceptional item, just looking from a broad PBT level. So just wanted to know what kind of growth are you looking for the next 2 years? And where do you -- if you have anything in mind internally as a target where can we see Pricol moving towards, because you have this presence in the EV segment as well, which is a high-growth segment? So just wanted to understand. And what would your EV contribution may be in the next 2 to 3 years?
Vinayak, pardon me if I don't make any forward-looking statement, how do we look in terms of our profitability for the next 2 years. But barring that, I can tell you that definitely we are in the growth path, primarily because of our new technology products, whatever we are seeing in the market. We have gone upstream in terms of value add into our driver information system. You know that a few years back, we were only in the mechanical type of instrument clusters. We have migrated to LCD, instrument casters and thereby we [indiscernible] TFT clusters.
This is how the technology migration has been happening in the industry, #1. And then you know that all the EV vehicles primarily go into this type of technology, whatever we are. The recent launches of EV vehicles by the OEMs are fitted at the Pricol. So you can see that is how the technology is moving about. Also we are working with multiple new companies who have started with EV manufacturing with the new entrants into the market with these type of technologies. And also there is opportunity for us on the telematics space as well because for you to monitor the battery performance and the vehicle performance, you require telematics also.
And as we know that Pricol has been in the telematics space for more than 10 years. We started with JCB more than 10 years back. And as we speak, there are more than 300,000 telematics successfully running in the field. So we find opportunities, both in our driver information system and also on the telematics for the EV vehicle, which has picked up momentum. You can see that last month, the EV vehicle production has been 75,000 vehicles. It's an all-time high and we expect this trend to continue in the few years. With rising crude oil prices, EV could be an alternate. There the industry is working.
So we are well positioned, if you ask me in terms of the technology that what we can offer for the EV. And we have also announced that we have entered into a partnership with BMS PowerSafe, a French pioneer in making the battery management system. And then we have started our activity with connecting with the various customers to explore opportunities into the battery management system space as well. So that is where we are positioned and I hope that it answers your question.
Partly. So I just wanted to broadly understand at least something on a flavor of what kind of growth. Even if you could give me -- is there any CapEx that the company is currently undergoing on a major scale? I'm sorry, I'm really new to the company, so I'm just confirming.
Vinayak, again pardon me. The growth whatever would be again a forward-looking statement. I can only explain to you the new technology and the growth that whatever we can look from these new technology products with our existing customers or a new foray of EV customers and also we explained about the export opportunities, which is going to be there for the next 3 years on this new technology. We are well positioned in terms of the new technology products. We are ahead of the curve and we'll come back to what others can offer in the market. So this gives us into a good position. You know that we also outperformed the market continuously quarter-by-quarter. If you see the last 8 quarters, we have outperformed the market. Our growth has been much more than the market growth.
So we are quite well positioned going forward. In terms of percentage, it would be very difficult for me to make a statement.
No worries. And any CapEx that you're undergoing currently?
CapEx has been quite commensurate with whatever we are doing. It's all very planned CapEx that whatever we are having. Because as we are going into the new technology products, we keep investing on the lines and then the subcomponents whatever we need to manufacture the products like the SMP line. So we need to keep investing on those. But we don't see any abnormality in terms of the CapEx going up significantly high in the next few years. But it will be commensurate to the opportunities, whatever is going to be there.
[Operator Instructions] We have a follow-up question from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
My question was on the product's volatility, given our import content in DIA. So how is that priced to customers? Is it direct pass-through with a lag or we have to negotiate on timely basis? Can you throw some light on that?
Jinesh, the good portion of it, we are indexed with the customers back-to-back with all our customers, okay? So the ForEx is not going to impact the company in the long term. Of course, there will be a lag of 3 to 6 months because that is how the customers operate, the OEMs operate. What happens is the dollar has been very sharp in terms of the escalation against Indian rupee in the last like 6-7 weeks, as you can see.
So those types of sudden impact is what could affect the quarter. But barring that in terms of the back-to-back arrangement, I think we are quite well protected in terms of ForEx activation and raw material with all our customers. The only thing is there would be a lag of 3 to 6 months before we can regularize that EV customers.
Right. So effectively, the export side benefit of ForEx will stay with us, whereas the import side will be passed on to customers with a lag. That's correct?
Absolutely. You're right.
Got it. And secondly, with respect to the DIS side, I mean given that we have launched first of its kind our driver information system for Hero. Can you give some color on how will content for that DIS versus your average content on DIS currently that will give some context of how things are shaping up for us on that side?
If I understood your question, Jinesh, you're asking me to explain a little more about the product, right? The features of the product and…
Not the features, because at the side, features are -- no, I'm saying what -- how much that could be in terms of the INR per unit for Hero DIS versus our current average realization on DIS side?
No, realization point of view. Again, I will not be in a position to comment because of the NDA with the customer. But what I can tell is this new technology product when compared to what we will be doing in the past years, the value addition has been significant, significant, okay? That is definitely something which is notable. In terms of technology, we are moving into the next technology product. Whatever we have launched with Hero on the VIDA cluster has got a touchscreen. That's why I said it is the first of its kind. It has got a touchscreen, then it has got a connection of Wi-Fi, it has got Bluetooth. I will say that it is a, what they call, lower version of a mobile, something like that.
So this is a direction of technology that we are going to. So as we have been mentioning that there has been a see-through change in terms of the technology, moving from a simple mechanical clusters a few years back into really high-end DFT clusters now whatever we are talking about. So there has been a significant improvement in terms of our value addition into the instrument cluster.
So Jinesh, just to answer your question further, even if the industry is going to be flat, for example, in terms of the numbers, our value proposition has been growing. That's the reason why we are able to outperform the market because of the value addition that whatever we are offering to the market in terms of products.
We have the next question from the line of Anirudh Singhi from Dalal & Broacha Portfolio Managers.
Could you give us some breakup in terms of 2 wheelers, pass car and commercial vehicle?
Anirudh, if you ask you on the total portfolio, 65% of our revenue comes from the 2-wheel segment. That is how the manufacturing in India happens. For example, if 30 million vehicles are produced in a year -- I'm talking about a normal year -- 20 million of those are of the 2-wheel. So that is where we are in terms of our revenue also. So 65% of our business of the total pie comes from the 2-wheeler segment. As we know that into the personal passenger vehicle, we have started into with Tata Motors a few years back, and we have been growing good with them. The first car customers after we have the joint venture with Denso and Johnson Control about 8 years back.
So we had a non-compete until 2019 into the personal passenger vehicle segment. And after 2019, we have re-entered into the personal passenger vehicle segment and we have been going with Tata Motors, and we are exploring other opportunities in the personal passenger vehicle segment as well.
Commercial vehicle, our share of business has been quite significant. 20% of our revenue comes from the commercial vehicle segment, and we hold the major share of business with the micro in series, medium and heavy-duty trucks and also the light commercial vehicles. So overall, we have more than 70% of the market in terms of the driver information system on the commercial vehicle. 5% goes into the tractor segment. I'm just giving you a very, very rough estimate, Anirudh. I don't have the exact numbers. I'm just giving you rough estimates. So 5% of our total revenue goes into the tractor segment. That is how basically display capers.
Okay. And aftermarket would be how much?
Aftermarket see, our products are not very aftermarket-centric products. So you have remember when have changed your speedometer it outperforms the vehicle life. So our product is not very aftermarket. But however, the population of vehicles have been increasing in the Indian market. So we find that there has been growth in the aftermarket as well. But as a percentage, it's a very small number.
Okay. Secondly, on our margins. So they've been quite stable for the past year, 1.5 years. But now with commodity coming off, do you think there's room for improvement there?
Sorry, can you just repeat your question? I'm not able to hear you, Singhi.
I'm saying in terms of margin, with commodity prices coming off, do you see -- is there any room for improvement in margins?
See, as I explained in the previous call that we are back protected with our customers in terms of both commodity and ForEx, okay? But unfortunately, what is happening is the rate of increase of -- rather the strengthening of dollar has been very steep in terms of week-to-week basis. With a lot of import content in our -- the product, whatever we offer to the customers, it will be very difficult for the customer to compensate you on a weekly basis. So there is a lagging effect of 3 to 6 months by the time we could get compensated from the customer. These types of stock of increase is something that tends to reduce our profit, but it is a very temporary position.
So after a quarter, we find that it will normalize, provided the ForEx doesn't continue to grow the way which it has been happening in the last few weeks. So once it stabilizes, I think 3 to 6 months' time, we will be in a position to catch up with the compensation from the customers.
Okay. So margins will be in the 12% sort of a range?
It will be very difficult for me to comment on that because there has been a lot of fluctuations, both in the raw material and ForEx. And semiconductor shortages has also been a perineal problem. In fact, as we speak, there are a lot of allocation and shortage of semiconductor parts. So if you ask me, it has been highly volatile in the semiconductor pricing in terms of premium price that we have to bring into the semiconductors and then on the ForEx fluctuation and raw material fluctuations.
So these trends have been continuing as you know the last 3 to 4 quarters. So it will be very difficult for me to tell about the percentage going forward. But you can see that, yes, we have been managing on -- despite these strong headwinds, primarily because of our new product and new technology, whatever we are offering in the market.
Okay. And in terms of…
Mr. Singhi, sorry to interpret. I would request you to please rejoin the queue. There are many in the line. Thank you. We have the next question from the line of Vipul Shah from Sumangal Investments.
Sir, can you comment on our recent partnership with Sibros and BMS? How they are going to help us in increasing in our market share? What type of products they are offering, products and services? Your brief comments will be welcome. And second, there is an exceptional item of I think INR 9.75 crores. So what is that about?
Vipul, the first part of the question, I will request to my colleagues Siddharth, the Head of Strategy, to explain to you about the partnership and what are the things that we are looking forward in the future in terms of the partnership. And the second part of the question, I will request my colleague, the CFO of the company, Priyadarsi.
Over to you, Siddharth.
Mr. Shah, on both the partnerships, #1 with Sibros for end-to-end solution on the telematics front, and secondly, on the battery management system with BMS PowerSafe, both the partnerships have been well received from the industry forum and also the OEM members. On the Sibros front, it is giving us an edge to offer an end-to-end solution on the telematics sense. We have been pioneers in giving the hardware for the OEMs for more than a decade now. But with this partnership, we will be in a position to offer an end-to-end solution along with the software platform, the cloud connectivity part, including the cybersecurity area.
And both our engineering team and the Sibros engineering team, both from U.S. and their Indian counterparts, have been working very closely for the last couple of months and have come up with completed the entire integration activities. And the POTs have been completed, with which we will be undertaking the road shows with our customers very soon. Which will -- which we anticipate will bring in new revenues of growth on the telematics front, both in domestic as well as the international markets.
Our second partnership with BMS PowerSafe has been an exclusive revenue for adding a new product to the EV portfolio offering from Pricol's standpoint. Again, both the engineering team from our end as well as the BMS PowerSafe team have been collaborating for the last couple of months in understanding the product offerings suitable for the Indian market. As you know, there has been a very stringent regulations given by the ministry on the EV vehicle perspective and also on the battery management system standpoint with the new regulation phase 156 update.
So whatever the solutions which are currently with the BMS PowerSafe are compliant and meeting most of the requirements of the ministry norms. And we just completed the roadshows with many of the traditional OEMs as well as the new age startup EV companies. And our partnership, again, has been well received. And as we speak, both our teams are conducting workshop in our engineering premises to further fine-tune and work on the next set of activities.
So we are paying royalties for both these types, means…
In case of Sibros, there will not be any royalty because it is -- I mean, the end-to-end solution is a joint partnership activity where 1/2 of the solution, as Pricol, we bring into the table, which is the hardware platform and Sibros is bringing the other half of the solution, which is a software angle. So it is a combined solution offering to a customer.
In terms of BMS PowerSafe, yes, there will be a royalty element involved because we are -- we have intelligent technology licensing arrangement with BMS PowerSafe. And the entire manufacturing and localization will be done by Pricol in India, and we will be front-ending to the customers.
My second question regarding the exceptional item.
Yes. Vipul, the exceptional item of INR 9.75 crores is -- it is the settlement amount which we received from the seller of Phase II subsidiary, we had on Phase I subsidiary recollection systems check. The sellers were supposed to settle this. We received this amount in Q2. So we recognized it and so now it one item INR 9.75 crores.
We have a follow-up question from the line of Nidhi Babaria from Envision Capital.
I just wanted to understand like how can we quantify the Sibros opportunity? And even on telematics side, like we have been in the industry like we were the earlier players in the industry. So what helps us versus the all new age peers which are now entering the market?
Nidhi, it would be difficult for us to quantify the quantity at this point of time. But as we explained to you, every EV vehicle is fitted with telematics unit, primarily to monitor the performance of the vehicle, including the battery. An update to you is that we are supplying telematics. Now we have started developing telematics for the battery pack companies also. The recent venture has been with [ somebility ] for developing telematics for their battery pack. So as you know for EV vehicles, telematics is mandatory to monitor the vehicle performance. With the EV rate is growing and expected to exponentially grow in the further months, we expect that there would be a good opportunity for us on the complete telematics solution. Quantifying at this stage would be difficult.
Ms. Nidhi, to add on to what Mr. Ganesh also spoke about, our telematics hardware, we have also made sure meeting both domestic as well as the global connectivity norms. So the opportunity for us are available both in the domestic as well as the international market and the partnership with Sibros is also will be fruitful in the upcoming years.
Okay. Sir, also if you can give some understanding on how did the entire Sibros opportunity worked out for us, like is it also approach them or they were looking for some partner in India, and that's how we got. If you can just give some color on that.
Ms. Babaria, if I had understood your question right, how -- you had asked how did we approach the partners or how the partners have approached us, correct?
Yes.
So we constantly keep evolving our technology roadmap and then we look for the complementing solution partners, and we do work with various consultants. And wherever we see a big potential with the upcoming companies or in a collaborative manner, it has been both ways. Some of the companies have reached out to us and we have also reached or to certain companies. But we constantly keep evaluating new avenues of growth and new opportunities for our company for value add.
We have the next follow-up question from the line of Jinesh Gandhi from Motilal Oswal Financial Services.
Just a couple of questions. One is on CapEx for the core business. First half was about INR 33 crores. Do we expect similar run rate for second half? Or it should further increase in the opportunities which we are seeing?
Jinesh, as I told you, it is commensurate with the business growth. We continue to do backward integration, which is going to help to improve our profitability. More we are going into the electronic driver information system, there is a need for us to do a lot of backward integration in terms of populating our own PCB. So we do the PCB manufacturing ourselves. And we are expanding those portfolios, so it becomes easiness of operations.
So the CapEx would be very difficult to quantify the CapEx. As I told you, there will not be any sharp increase in CapEx. It is quite commensurate to the rate in which we are growing. So I don't think that there's any abnormality that we are looking in terms of CapEx. It has been more or less in line with whatever we have budgeted.
Okay. And secondly, for the BMS and telematics part, have we finalized investment required or that will be done at the later stage?
Telematics has been our core product in the last 10 years. So is it going to be the same set of manufacturing methodology that will be adopted for telematics. So again, the CapEx would be commensurate to the business growth in terms of telematics. As the telematics requirements are growing, we will invest on those lines to be commensurate again. Battery management system is totally a new product for Pricol. This is where currently we are evaluating with our partners. We already had discussions with the various existing customers of ours and the new age customers like what Siddharth explained.
So this is currently under evaluation. So what is going to be the top line and what could be the ForEx -- sorry, the CapEx has still not been, what we call, finalized I yet. It is still on the, what I would say, finalization stage.
[Operator Instructions] We have the next question from the line of [ Amar Naidu ], an individual investor.
Would you please comment a little on PLI scheme, which is applicable for our products like which -- what part of the turnover will be covered under this? And which are the products actually covered on this? A little more insight into that.
Yes, I will request my colleague Siddharth, the Head of Strategy, to explain this.
Mr. Naidu, so Pricol has been selected by the ministry and have been approved for the PLI scheme. So we have been -- we have applied for many of our products from our portfolio which are eligible for the scheme, such as, like, for example, telematics on our gateway devices, so on and so forth. But at this point in time, the ministry is still evaluating and certifying the products, and there is a process to be followed. And there has not been any clarity from the ministry's angle on what products have been qualified because they're also taking their own time. We are working with their third-party affiliated agency for certifying and qualifying the products, which has been applied for. So at this stage, we will not be in a position to comment on the top line or the revenue that will get quantified for incentive as part of the scheme.
We have the next question from the line of Vipul Shah from Sumangal Investments.
Sir, what is our average content for driver information system in a 2-wheeler and in a 4-wheeler?
Sorry, Vipul, can you just elaborate your question, please?
So in rupee terms, what should be your content for the driver information system in an average 2-wheeler and an average 4-wheeler, sir, if you can quantify?
Today, I see the adaptation basically of the 2-wheeler starts from the 4-wheeler. If you see a few years back, the 4-wheeler has already started adopting the technology of touchscreens and then going for larger displays and going in for TFT type of clusters. Now you find that the 2-wheeler also has started adopting the technology. Primary it starts from 4-wheel and then goes down to 2-wheeler and also commercial vehicle, okay?
So if you ask me an entry-level car compact to a high-end motorcycle, more of us we use the similar type of technology in whatever we are offering today. High-end cars are something very different because high-end cards use a different type of technology in terms of going for larger screen size and then the features are very, very different. But if you ask me an entry level with the high-end motorcycle, more or less the rupee content of driver information system is similar in nature whatever we are offering.
Okay. But any numbers, sir?
Numbers actually vary from what are the features that we are offering. So it is a very, very large, what they call, variant that we have in terms of numbers. So it depends upon what customer. The electronic cluster could be like even starting from INR 1,000, even going up to more than INR 10,000 also. So that is the range that we offer to the customers.
Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.
Thank you, everyone. Thank you for participating in this call. Thank you so much.
Thank you. On behalf of Pricol Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.