Pricol Ltd
NSE:PRICOLLTD
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Ladies and gentlemen, good day, and welcome to the Q3 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 Ms. Chaiti Gujarati from Valorem Advisors. Thank you, and over to you, ma'am.
Good afternoon, everyone, and a very warm welcome to you all. My name is Chaiti Gujarati 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 third quarter and 9 months ended 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 which 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 and to make 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. Unfortunately, Mr. Vikram Mohan will not be able to attend this call today.
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 it is very, very nice to reconnect with you. Warm welcome. Again, during Q3, we have outperformed the market growth by a significant way. Quarter-on-quarter, we have been able to outperform the market growth.
This is due to a host of new products, which we have been launching quarter-on-quarter. Our presentation has been uploaded, and you can see the various new products that we have launched during Q3.
We also had our Auto Expo where we had displayed the next generation of products, which is -- continues to be highly focused on the EV vehicle and it has a rousing welcome from the various customers. We continue to launch a whole host of next-generation technology products and solutions that can be deployed across all vehicle segments.
However, during Q3, we had a setback in terms of, a significant impact of our top line got affected due to acute IC shortage due to one of our key IC suppliers due to their internal consolidation activity. This has led to loss of both top line, top line and also our profit, causing losses of sales and other costs increasing due to premium price.
However, with all our collective efforts, we have overcome these challenges and reported a healthy set of Q3 numbers, as you can see on the board. And we believe that the work is behind us on the supply chain front, and going forward, it looks like that there is a good amount of consistency, which is expected in the supply chain.
On the key financial highlights of Q3. As a standalone Pricol, our revenue stood at INR 449.7 crores with an EBITDA of INR 49.94 crores with 11.11%. The PAT was at 5.85%. On a consolidated financial, our revenue stood at INR 458.16 crores with EBITDA of INR 51.81 crores with an EBITDA margin of 11.31%.
Some of the key highlights of Q3, the financial highlights were. The revenue grew by 15.49%, much higher than the industry growth of 4% during the Q3 period. Our profit before tax stood at 45.4% growth. The cash profit grew by 39.85%. And at a PAT level, we had a growth of 99.58%.
We have no long-term debts during Q3 when compared to INR 100 crores during the same period of last year.
Continuing with the key financials of Q3 when comparing to the previous financial year during the same period. Our revenue has grown by 16.07%. At the PBT level, we have grown by 21.24%. The cash profit stood at 25.79% growth, and the profit after taxation at the PAT level we are at 54.27% growth during the same quarter previous year. The details are there for you to see.
I would now hand it over back to the operator for the investors to please ask the questions. Thank you so much.
[Operator Instructions] We have the first question from the line of Jinesh Shah from Congo Commodities.
My question was regarding our recent partnerships with BMS and Sibros. I just wanted to know at what stages of development are these products right now?
On the Sibros, which is going to be an integral solution with our telematics, the end-to-end solution, where Pricol already has been a supplier of telematics in the last 10 years and more than 300,000 units of telematics already successfully running in the field. Sibros is going to value add by bringing the cloud solution along with our hardware.
We have already integrated the software of Sibros with our hardware. The POC has been demonstrated. The proof-of-concept has been demonstrated. And we have already given samples of this integrated solution to our customers, which are running successfully in the field.
And also in the recent CES show at U.S. Sibros and Pricol has jointly participated to exhibit that the integration has been successfully completed, and it is ready for going towards mass production.
Similarly, during the Auto Expo during last month, we have again kept the working integrated samples, which many customers have shown interest for their product testing. That is where we stand on the Sibros.
On the battery management system, our partners are very, very closely working with us in terms of the feasibility for the Indian market. And we have got a number of inquiries already from customers for the battery management solution, which jointly we and the partners are evaluating for the solutions to be offered to the customers. That's where we stand on the both the projects.
Right. And what is the kind of CapEx we have incurred so far with these partnerships? And what do we see in the future kind of CapEx that we're going to do with them?
See, it is going to be CapEx light in the Sibros project, because already telematics has been a part of Pricol ecosystem, and we have been manufacturing telematic units for the last 10 years. So it's going to be very CapEx-light on the telematics solution.
Battery management system is still under evaluation, as I have told you. And then maybe during the appropriate time, then we will consolidate the CapEx and then we will let you know.
[Operator Instructions] We have the next question from the line of Hemant, an individual investor.
Sir, 2 questions from my end. Sir, first of all, we are targeting to double our revenue. We are basically targeting INR 4,000 crores of revenue by FY '26. So if you can kindly break it up here wise, like what we are targeting for FY '24, '25? That is my first question.
The second question, in the opening remarks, you have mentioned that we had a loss of revenue due to some IC supply shortage. So maybe if you can quantify the amount, how much revenue we fell short of and how much profits we will start off?
Hemant, thank you for both your questions. Question number one is little forward-looking statement, so I would not be in a position to tell you on the year-on-year growth what is that we are looking.
Yes, we have set a target that we should reach INR 4,000 crores with the host of new technology products, where we have clearly outlined the various new products, which we are developing, which have also been displayed at Auto Expo in terms of the new technology products and the partnerships that whatever we are working there. Year-on-year, at this point of time, it would be difficult for us to explain. That is the vision of the company that, yes, we should reach the INR 4,000 crores.
Now coming to Q3, it's again very difficult for us to quantify or in terms of the loss, if you ask me if the top line loss has been quite significant, because number of customer requirements we were not able to meet during Q3 of this year because of acute IC shortages. Quantifying that into a top line and bottom line would be a little difficult for us at this point of time, but a significant portion of that has been lost.
However, to inform you that this has got regularized from January onwards, and the supply chain situation has streamlined quite well, and we are back to normalcy from Q4 onwards in terms of the supply chain situation. We foresee that there should not be any major issues in terms of chip shortage of supply chain disruption going forward.
Sir, so we should expect that Q4 should be better than Q3?
Again, I'm so sorry, it's little forward-looking. I will not say so. But generally, in the auto sector if you see, Q4 is always better than Q3, Hemant, as you're aware, because Q3 has got a number of maintenance closures by the various OEM, especially in the month of December.
Q4, generally, the automotive industry will see up growth primarily because of the festival season at various parts of India. And then Q4 being in year-end quarter, you will always find the automotive industry would be at the best during Q4.
[Operator Instructions] We have the next question from the line of Asher Mann, an individual investor.
I wanted to ask that in investor presentation you have written that -- I know you said that you can't quantify the amount of revenue. But I wanted to ask that healthy order book, so can an investor think that the orders which you were not able to fulfill has been transferred to order book or something like that? Will it mean accrual?
Actually speaking, it will be a loss of production at both ends. That is at our end for Q3 and also at the OEM end. That is where when you have shortage situation. However, we have managed the situation quite well in terms of having the materials sent by premium freight, so that we could minimize the loss of production at the customer end. We have worked on Sundays to compensate the loss of production.
So we have tried to mitigate this issue as much as possible during Q3. That's why we are not able to quantify the exact numbers. But we have minimized the risk to a good extent by working on the Sundays and also sending the material by premium freight. However, Q3 could have been better than what we are today primarily because of this acute IC shortage which has happened during Q3.
Right. And I wanted to ask that the IC [Foreign Language] supplier, we only have one IC supplier and due to which -- due to whose internal consolidation, we are facing this difficulty or what? We might have 2 or 3 more IC suppliers, right?
Yes, we have got the multiple IC suppliers. But for model specific, we have one IC supplier because that is the integral part of the system for Pricol and as well as for our customer. So whenever there is a major IC supplier is not able to supply, because there are very few IC suppliers in the world, and we are with all the big IC suppliers in the world.
If one of them have got an issue, certainly, it is going to have an impact on the top line. That is what we found. It is generally not a very, what they call, common phenomena. Generally, it happens because of the systems are very, very strong with those type of companies. But this has been quite unfortunate that they had an integration problem during Q3, which has led into this situation.
Okay. And you mentioned about Sibros's partnership product on mass production -- mass scale. So when as an investor I can look forward to the revenue numbers for that product?
See, as I explained to you, the proof-of-concept has already been completed, and the samples also are that the customers which are under testing. So from FY '24 onwards, we find that there would be introduction of the integrated solution products to some of the key customers. And then during FY '24 onwards, we expect the start-up production into mass scale.
Okay. And just a last question from my end. So on the basis of your explanation, can I conclude that the September quarter's revenue were not like one sort of revenue [Foreign Language], we assume that this is onetime revenue, right? It would continue.
No, I didn't understand your question. Your question is that yes, Q3, we had…
Highest revenue.
Setback because of IC shortage and that is behind us and Q4 is normalized, correct? That is your question, right?
No. I'm asking Q2 revenue was highest revenue, right, in the history of Pricol. So it is not one set of number. It is not a onetime number, right? We can assume it to be growing.
Yes, you can see that every quarter-on-quarter, we have been posting growth when compared to the previous year during the same period. With the host of new products, whatever that we are launching, we are hopeful that, yes, we should continue to grow.
So the INR 4,000 crore revenue target will be from the new products or the continuing portfolio range?
See, it will be a combination of both. Because we have the whole set of existing products also which is growing. -- transforming into new technology. And also, we have got a set of -- new set of new products itself, like the battery management system is completely new to Pricol and Sibros integrated solution. And many of the products that whatever we are talking about is, first of its kind for the call.
So there will be a combination of the existing products transforming into new technology, plus the new product portfolio itself. The combination of both is what we are aspiring to reach the numbers whatever we are talking about.
And the margin profile on both, on old products and new products, would be in the range of what?
That would be very difficult to explain in terms of each of the product separation. Where we are in terms of the EBITDA, you can see that there has been a certain EBITDA level that we have been baking quarter-on-quarter. We hope that we will continue and try to improve those EBITDA numbers as we are going along.
So this is the normal EBITDA range for new product also, I can assume that, right?
It's very difficult, again, for me to explain like that. Because each of the product portfolios will have the EBITDA numbers depending on the demand and supply situation and the requirement from the customer. But as the combined Pricol, we expect certainly that whatever we are having the EBITDA, we will keep improving on those numbers. That's where we are hopeful.
[Operator Instructions] The next question is from the line of [ Vipul Kumar Shah from Sumangal Investments ].
My question is, I'm surprised by your comment that there were IC shortage, because we read on global media that there is a lot of semiconductor and prices have collapsed. So could you explain in some detail what has happened?
I think your information is not fully correct, Mr. Shah because there is no such information that IC -- the market has collapsed and then the prices have fallen, so there is no such information. IC continues to be under allocation, even as we speak. It has started to ease out during the last 6 months.
When compared to the last 2 years where the acute IC shortage started from the financial year '21, ever since COVID situation started, we had acute semiconductor shortage, because of the high demand in the white goods, that is where the issue started. Yes, it is easing out, but it is not that the IC has -- the manufacturers have got a lot of capacity, it has collapsed and the price has collapsed. There's no such information. IC continue to be under allocation, but we find that it has started easing out. That's where we are.
Okay, sir. Because a lot of the chip companies price I follow in the international market like Samsung, NVIDIA all collapsed -- 6 to 7 months, they've collapsed meaningfully, and -- anyway. So can you give certain figures, sir? So out of the turnover in last quarter, what is the split between 2-wheeler and 4-wheeler?
I'll explain to you in 2 parts, because your first question, you spoke about the white goods industry, okay? Now, whatever IC we are using, we call it semiconductor, which is generally a nomenclature used in the automotive industry. Each of the automotive has got their own unique ICs actually, which is very different from the white goods that whatever you are talking about.
These are very specialized ICs, which has to run number of features on the product that whatever we are offering. So I would not compare that with the white goods' ICs, because there are a number of varieties of ICs, which are there in the world. The ICs that whatever we are talking about of the automotive still continues to be under allocation. But yes, of course, the situation is easing out. Okay? This is number one.
Second question, can you just repeat your second question? I just didn't pick it up.
So can you split your sales in the third quarter between 2-wheeler and 4-wheeler?
Yes. Generally, about 65% of our revenue is from 2-wheeler. You know that, that is how the automotive industry is there. Like if you see the total automotive industry production, 2/3 of the production is coming from the 2-wheeler, that is where we are, 65% of the revenue comes from the 2-wheeler.
And the remaining 35% is a split between the personal passenger vehicle, 4-wheeler and then there is a portion which comes from the commercial vehicle, and then there is a portion which comes from the off-road and tractor segment. So we are very equally distributed in terms of our revenue comparable to the automotive industry.
Okay, sir. So it's a mirror image of the total vehicles sold in India, that is what you are trying to say, right, sir?
Yes. Absolutely. Since we are spread across all segments of the market, and we are present equally in each of them. So that is why you find that the Indian automotive industry, the percentage of split, whatever is happening among the segments, same thing is depicted in Pricol revenue also.
So can you further split your revenue between telematics and driver information system and another vertical actuation control and fluid management systems, sir?
See, Telematics is an integral part of the driver information system, which contributes to, again, about -- the pie is about 65% of the driver information system and telematics put together, as a single bundle. And the remaining 35% is coming from the actuation and control systems.
Okay. And can you further split your sales between domestic and exports, sir?
The domestic was at around 12% of the total sales and the remaining comes from the domestic market.
Sorry, would you repeat? Export is 12%, right?
Yes. Export is about 12%, and the remaining comes from the domestic market.
And sir, a few quarters back, Mr. Mohan had spoken about one order from Caterpillar, I think it was regarding some fluid pumps. So what is the ramp-up? And so can you comment on that, sir?
Sure, sure. See, the Caterpillar has already gone into mass production 6 months back. And we are in a quite a steady state with Caterpillar in terms of the water pump, actually. That's what -- sorry, it was water pump, yes, yes.
These are the large water pumps, which is, again, first in kind for Pricol. These are very large water comes, even each one of them weighing more than 80 kilograms. So that already has gone into mass production, and they have been supplying those parts in the last 6 months.
So it's a recurring order or it's a fixed quantity order, sir?
Yes, it is continuous, because we supply to Caterpillar online. So they are the OEM for us. We don't supply to any retailer. It is direct online. So it is going to be a continuous effort. And we see much more opportunities to come from Caterpillar as we are going along.
Okay, sir. And regarding this our -- this various partnerships, which we have in recently, do you expect our content per vehicle to go substantially over next 2, 3 years?
That's right. That's right. You can see all the value addition of -- in the per vehicle has been continuously increasing for us. We are hopeful that it will continue to increase with these type of new range of products and technology products, whatever we are working with.
So if you can give any ballpark figure, what is your content per vehicle for a 2-wheeler and 4-wheeler and where you see 3 years down the line? Means any ballpark estimate will be really very helpful, sir.
Yes. That is very, very difficult. If you ask me, we have the driver information system supplying from INR 300 for a motorcycle going up to even INR 10,000. So it's very difficult for us to give you an average number. It depends upon the type of vehicle is used and the -- what they call, whether it is an entry-level motorcycle or a big size or it is a high-end motorcycle. So the value of the products whatever we are offering completely differs from vehicle to vehicle.
And sir, regarding your EBITDA margin for 2-wheeler and 4-wheeler vehicles, they are same or they are different? And same applies for your EBITDA margin for telematics system and actuation and fluid management system, they are same or different? Your comments, please, sir.
See, it would be different. It cannot be exactly the same, because each one's application are different, and it addresses different segments of market and customers. So it may not be exactly one to one. It is very difficult for any of those products to have identical EBITDA margins. Whatever you see on the screen is the consolidated once that whatever we have as a combination, which are the driver information system along with the telematics and along with the actuation and fluid controls. So a range of products, they not have the same type of EBITDA margins.
Okay. And lastly, Mr. Mohan was not present on last call also, please request him to join the call. Please convey on message, please, sir.
Definitely. Next quarter, Mr. Mohan will certainly participate. He has been on continuous travel, and that is the reason why he was not able to participate. Thank you. Thank you so much.
[Operator Instructions] We have the next question from the line of Mousumi Paul from Equitas Wealth.
I wanted to know will we see any margin improvement in the coming future?
See, ma'am, actually, we have been having a number of cost escalations, which has happened in the last 3 years, primarily because of semiconductor increases. And then you would have seen that the dollar parity with the rupee going up. The ocean freight from overseas, whatever we are importing and exporting has significantly gone up. So there has been continuous cost escalations, which has been happening in the last 3 years.
However, things are looking to ease out in terms of the freight coming down. And also, we find that the dollar is getting into more stability with the Indian rupee in the last 3 to 4 months. And you know that the chip escalation, whatever has been happening in the last 3 years, also finds it that, yes, it is easing out. So we definitely expect as we are going along, the margins should improve.
Okay. And when do you see the supply side challenges to be solved?
Supply chain situation, ma'am, as I explained to you that, yes, it has easing out quite significantly, barring the last quarter where it was purely an integration problem, not because of the shortage of wafers by the chip supplier. The situation definitely has improved in the last 6 months. We expect that the supply chain to become better and better as we are going along. We have seen that in January itself, yes, definitely, the supply chain situation is easing out.
Okay. So can you give any estimate as to how many new products will you be launching in the coming quarter or FY '24?
We continue to launch a host of new products. You would have seen in our presentation that what are the new products that we have launched during quarter 3. And the new technology products that we have displayed during the Auto Expo. And then we have also put it in the presentation about the new products that whatever we have shown during the Auto Expo.
These are the new host of products that we will continue to focus, and we are focusing, which is across all segments of the market, whether it is the IC engine or the hybrid vehicle or EV vehicle. This is the advantage that, perhaps it can cut across all segments of market. And we continue to have our high focus on the EV segment, as I mentioned to you.
Okay. But any estimated figure for all the products like for all the segments?
It's very difficult for us to say -- to bifurcate that. But you can see that the new technology products has been significantly growing in our pie. That is the reason why we are able to show a quarter-on-quarter growth when compared to the previous years.
[Operator Instructions] The next question is from the line of Nikhil Jain from Galaxy International.
I just wanted to get a qualitative sense on the new products that you launched or displayed in the Auto Expo. So how has been the response? What's the management take on this going forward, which is, when will they start to get commercialized?
And the third question with that respect is that, these products are not all linked to the driver information system and, let's say, pumps and other things, right? So these will, let's say, expand the scope of company's products into new areas. Is that understanding correct?
If I have understood your question, Nikhil, the new products, whatever we have launched, what is the takeaway in terms of the growth potential, that's what you're asking. Maybe that's the first question.
And the whole host of products that whatever we are talking about, does it have a connection with the existing products of driver information system and ACFMS products. Is it there is what you're asking, correct? Have we understood your question correctly?
Right.
Yes. The new products are very promising, as we have been explaining to you. Many of the products are highly EV focused, because that is how the industry is working towards. So you would have seen in the Auto Expo, which we have uploaded in the presentation as well. The new products are highly EV focused, that is where the industry trend is going. So we are expecting that, yes, these new technology products are going to have a significant growth as we are going along in each of the quarters, is number one.
Second thing is there are a lot of synergies of the new technology products that whatever we are launching. For example, the Sibros -- the partnership with Sibros is something that is integrated with the telematics solutions, whatever we are already been supplying for the last 10 years. So the platform product has already been there, and this is going to be an add-on feature that we are going to offer to the customers.
Battery management system is, again, a very integral part of the EV range of products that whatever we are talking about, so that, again, is very similar in terms of the manufacturing to the driver information system. So we are bringing a lot of synergical products into the foray of what already we are doing. That is where we find that both the existing products and the new technology products, whatever we are talking about, are complementing each other.
Okay. By when do you expect these products to come into, let's say, commercial production? So let's say, the new range of EV products that we are talking about or the BMS systems that we are talking about. So, yes.
Yes. On the driver information system, for the EV vehicles already, we have launched a number of products during this financial year. You would have seen in the presentation that we have been continuously launching new driver -- new technology driver information systems, which are TFT next generation screens with, for example, TVS iQube, the whole host of products. I'd just give you one example. There are many more that we have launched during this financial year, which have the next-generation TFT clusters when compared to normal LCD clusters whatever we have been having.
And also on the Sibros integration, we just explained some time back that already the integration has been completed successfully, and then those samples are there with the customers. And during FY '24, we are expecting mass production to start with.
Battery management system, we are in very close -- we have got a number of customer inquiries, which we are evaluating along with our partners for India specific, then how do we go, which is under -- currently under evaluation.
Okay. So over the next 2 to 3-year period, do you expect some of these new systems to actually contribute significantly, let's say, more than 25% of your turnover?
I cannot attribute any percentage to this. But of course, yes, the new product, whatever we are talking about is going to play a very significant role in terms of the growth, whatever we are talking about.
[Operator Instructions] We have the next question from the line of Avinash Gupta, an individual investor.
I just wanted to get some confusion clarified. Can you hear me?
Yes. Go ahead.
I just wanted to be a little confusion clarified. In the results, you have said that there is a loss of top line because of the non-availability of ICs. And right now in an earlier question, you mentioned that we have been able to make it up by working on Sundays and having special freight -- excess freight payments and all this.
Now first issue, if the first situation is correct, then there is a complete loss of EBITDA or contribution. Whereas in second situation it is a case of reduced contribution. Where exactly do we stand?
Avinash, as I told you, the Q3 could have been much better in terms of the top line if the ICs would have been available, okay? This was our first statement. Managing is so that the customer does not lose his vehicle production to a very significant level is where we have to work on the Sundays and send it by premium freight to avoid as much as production loss from the OEM front. This is what we did. But if you ask me, overall, there has been a significant loss in our top line, because of IC shortage.
Okay. There is actual loss of production is there? You would have produced much more?
Of course, yes. So today, for example, whatever the pipeline stocks that we had has got completely depleted, that's the reason why we have to send it by premium freight. So we have been mitigating this risk by continuously working on all the 3 shifts whenever the ICs are coming. And then spending money in terms of the premium freight so that we minimize the customer loss of production. So these are the activities that we did. The top line could have been much more significant had the IC shortage not being there.
Fine. Excellent. Now can you give me an estimate as to what was the quantity that was budgeted for the -- this quarter and what actually we got as the top line?
Again, this would be a little forward-looking statement, Avinash. But I can say to you…
I'm asking -- I'm inquiring about the past -- I'm inquiring only about Q3. What was budgeted for Q3 and what you actually got?
Q3 that's what I'm building again. The top line losses have definitely been considerable, as I've explained to you. Again, the percentage would be very difficult, because we are supplying to multiple customers, multiple products. And for me to give a specific number would be very difficult. It may not be accurate whatever I'm giving it to you. But there has been quite a drop because of the shortage of ICs. Like you can put any number to that. It could be like 15%, 20%, something like that. But very difficult for us to…
No, that's okay. I'm just little -- I'm little, any way okay, whatever best information you are giving you fine.
Thank you, Mr. Avinash.
There is a follow-up question from the line of [ Vipul Kumar from Sumangal Investments ].
Sir, can you give me an estimate of what percentage of our turnover is coming from the products which have been introduced in the last 2, 3 years?.
The driver information system, as I explained to you, where we have launched the new technology products in the driver information systems segment, that contributes to 65% of our total revenue. This is including the existing products and the new technology products, number one.
The ACFMS products, that is the actuation control and fluid management system, contributes to 35%. Again, there are existing products and the technology upgradation products, whatever we have. This is the broad split up between the products that whatever we offer.
No, no. My question was, what percentage of our current turnover -- out of what percentage of our current turnover, new products which were introduced in the last 2, 3 years, their contribution is?
See, whatever you see as growth is where the new products are getting added, okay? You can see that there has been a significant growth, which is happening quarter-on-quarter, primarily because of the new products, whatever we are launching. So every quarter, there is a portion of new products. Like certain quarters, there are like 15% of the total revenue is contributed because of new products. In certain quarters, there are 20%, which is contributed because of new products.
When the BS-VI started a very significant portion, like more than 30% of our revenue came from new products. So the conclusion of this is that, every quarter due to the new products, there has been addition in terms of our revenue going up.
The next question is from the line of [ Suruchi Parmar from NX Wealth Management ].
Sir, I wanted to ask what is the percentage of EV right now in your revenue or order book, whatever you can tell us? And secondly, going forward, how much you think will be the EV portion in your portfolio? So you would just give an breakdown on this.
I'm sorry, if I've understood your question, you're asking how much EV contribution is in the total revenue?
Correct.
Okay. EV has just started from this year, and we have been launching a number of new products. Currently, it will not be very significant value. It will be less than like 5% of the total revenue in the total pie, because EV is a new entity for the various OEMs.
As we are growing with our focus on the EV range of products, whatever we have explained and the OEM's high trust all the EV vehicles, we expect that the EV pie to grow in terms of the new technology products that whatever we are offering, which will find a significant growth in the coming years.
Okay. Okay. And can you throw some light on your present order book and what you're expecting in next few quarters?
This is again a little forward-looking statement. But you would have seen that our order book has been quite robust, and that is why we are able to show a quarter-on-quarter growth. You would have seen in the last 2 years, we have been showing quarter-on-quarter growth. This is primarily to have continued order books, healthy order books that we have.
For me to quantify for the next quarter would be a little difficult because of the very customer requirements. So it will be very difficult for me to quantify a number to that now.
The next question is from the line of Hemant, an individual investor.
Sir, when we are targeting to develop our revenues by FY '26, sir, first thing is, are we seeing any sort of delay by 1 year? Because I went through some of your previous con calls and it was mentioned somewhere that there can be a delay due to some semiconductor shortages.
My second question is just a follow-up question. If we are not delaying it by 1 year, then sir, when do we see the actual growth coming from? Because we are, I think, CapEx light till FY '23. So can we expect that the actual will -- that the actual growth will kick in from FY '25?
No, no. But Hemant, if you see, every quarter, we have been showing growth. So if you see the last few quarters, we have been continuously growing because of the various new products which have been launched as I explained to you. And we are continue to launch a host of new technology products and the various partnerships, which we have announced, which is, what you call, EV -- in line with the EV focus that whatever we are talking about.
And then in the existing product itself there are number of new technology products that we have been launching quarter-on-quarter. So we will continue to grow in the pace. So it is nothing like that suddenly 1 year that we are going to have a steep growth. Our growth has been continuous.
Okay. So, sir, no postponement in the target by 1 year or something? I mean for doubling the revenues?
See, again, it depends upon the various customer programs that whatever we are working with. There's nothing called that will be delayed by 1 year or something like that. The target is that we should go towards the INR 4,000 crores, is a target that we have as a management to reach by FY '26, and we are working towards that direction, okay?
At this point of time, yes, of course, during last year, there has been a very unfavorable market conditions, primarily because of the semiconductor shortages. Yes, we are seeing that the situation is easing out, as I explained to you. We still focus in our new projects and the various partnerships that whatever we are talking about. We are sure that we are going towards the growth, whatever we are aspiring for.
And sir, what is the current capacity utilization? The capacity actually is built upon the customer demand, actually. We keep adding capacities. Even during last year, we have been continuously adding capacity. We have been enhancing our backward integration in terms of electronic instrument cluster manufacturing. This is again a very continuous process.
So it is not that one particular quarter or one particular year that we are going to have a heavy CapEx spend or something like that. We have been continuously investing on our engineering as our managing director has been explaining in the previous calls also.
Our investment on R&D continues to be at 4.5%, which is one of the highest in the industry. So we continue to invest in those areas, primarily on the software area, including the testing and other infrastructure. And also, all the lines, we continue to invest depending on the customer programs. So whatever we are talking about is a continuous activity, and it is going to continue in the next few quarters also.
There's a follow-up question from the line of [ Vipul Kumar Shah from Sumangal Investments ].
Sir, how do you share the development cost of a new product with your vendor?
[ Vipul ] is it with the customer, you are asking, how do we share the development cost?
Yes. Suppose Bajaj gives you a mandate for developing new information system for their upcoming model, there will be a cost because it's a long gestion, it will take some time, so you will spend a lot of money and time. So how that cost is recovered from OEMs? Or they share or they give you any upfront cost?
Yes, yes. [ Vipul ] with the changing technology and then becoming more electronic and software intense, you are right to say that, that is why you find that the D&D cost of ours have been continuously at a high number, primarily because of the focus on the new technology products. So there is -- when our customer is going to ask for a new inquiry, we do charge them upfront D&D cost, which we have been getting it from the various customers in the past years also, and we'll continue to get in the future.
So, definitely, the customer recognizes the efforts that whatever is required for the new technology products, and then we do get the D&D cost upfront from the customers.
So is it, you charge them 100% of the cost or you charge them only a portion of the cost? And a portion you bear it yourself?
Again, again, it depends upon what type of business scenario you are and what is the type of product that you are looking at. Sometimes, yes, it is 100%. Sometimes it is more than that. Sometimes it could be less. It is a business call that depending on each of the projects that we take. But your question is that, do we have upfront D&D cost charged to the customer, the answer is yes.
As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir. [Operator Instructions] Over to you, sir.
Thank you so much.
Sir, any closing comments?
I would request Siddharth, my colleague to have the closing remarks, please. Siddharth are you there on the call?
Yes, sir. We have got back in. Apologies for the inconvenience, please.
Siddharth, your closing remarks, please.
Thank you, sir. Once again, apologies from the management team for the technical issue of logging out of the call.
Thank you once again for all the investors participating on today's call. Hope you had a fruitful discussion and insights being generated from our side. We have uploaded our presentation online for your further perusal. If you have any further clarifications please reach out to the company through our website, you have the contact details or in the presentation as well.
Thank you, once again for all for taking your time and participating in our investors call. Much appreciated.
On behalf of Pricol Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.