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Sandhar Technologies Ltd
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Ladies and gentlemen, good day, and welcome to Sandhar Technologies Limited Q3 FY '2023 Earnings Conference Call hosted by Dolat Capital. [Operator Instructions] I now hand the conference over to Mr. Abhishek Jain from Boral Capital. Thank you, and over to you, Mr.
Thanks Neeraj. Good morning, everyone. On behalf of Dolat Capital, we welcome you all in the third quarter FY '23 conference call of Sandhar Technologies. From the management side, we have with us Mr. Jayant Davar, Co-Chairman and Managing Director; and Mr. Yashpal Jain, CFO of the company. We thank the management for providing us the opportunity to have a on. Now I hand over the call to the management for the opening remarks, followed by the question-and-answer session. Over to you, Jayant, sir. Sir, we cannot hear you. Sir, may I request you to unmute your line from the [indiscernible] please.
Pardon. Hello?
Yes, sir.
I think he is not audible.
Hello can you hear me now?
Yes, sir that's better.
Can you hear me?
Yes, I can hear you.
Okay. Super. Okay. Well, good morning, everyone. Thank you, Abhishek for putting this together. Thank you to you and to all at Dolat Capital. Good morning to all the investors and well wishes who are here with us this morning. I will begin the conversation by first of all, sharing some of the good stuff that's happening. So for one, I think something that's been on the [ parade ] for a long time are our new investments. And I'm very happy to share that these investments, whether in joint ventures or in subsidiaries have started to build revenue. In fact, to the point of JV, all of them are EBITDA positive, except for 2, where there is a little bit of a foreign exchange fluctuation that we're showing the negative. But going forward, I think this is a tiger from when we should all be in good hands of profitability. Also in terms of subsidiary, I think the large part of that investment has already been done and completed and revenues have begun. We hope to get the full aspect of these revenues in this coming year. Where the market is concerned, yes, the 2-wheeler market still be subdued because the model changes and so on and so forth. But I think the other elements of the market, whether it be passenger vessels, whether it be commercial vehicles, whether it be construction equipment are all now wearing and eroding. So we should be able to get benefit. The last thing I want to say on the numbers, of course, is you know that the quarter that has gone by has been a sure for the entire industry. And so you will see that most of the industrial -- in fact, all of the industry has gone down in revenues. But it's been a stabilizing factor. And the good news for us is that we, on a stand-alone basis, are back to a double-digit performance in terms of our margins. So that is something I thought I would begin with. I also want to mention here that there are some new customers with whom we have tied back to new orders going forward. And that work is now taking out, especially in the area of smart locks that we've been talking about for a while. We've also got some new Japanese customers who are extending and have assured that what in fact given purchase orders for large sets of orders going forward. So I'm going to leave it there. And then I'm now very happy to take your questions. Where questions are regarding numbers and so on and so forth. I have with me my [ loner ] colleague; and Mr. Yashpal Jain, who will be able to answer all of your queries to [ as that expansion ]. And in case there is anything that I can supplement it, I'd be very happy to do it. Okay. Thank you.
Sir, shall we open the floor for questions?
Yes, go ahead.
[Operator Instructions] The first question is from the line of Udit Gupta, individual investor.
Sir, my question is that you are looking at so many [ plants ] and factories. And sir, the average revenue comes to about INR 60 crores per factory. So what is the logic behind this, if I could know that?
That is not -- that is how it probably shows up if you do a simple math. However, our aim and target is that every plant that we set up needs to have a minimum revenue of INR 100 crores. There are now units that are at almost reaching [ INR 300 crore ]. Of course, what you see is work in progress. So while each unit is being built to that minimum capacity, you would realize and understand that every time it's a new product line or an engineering products. It takes time for it to reach that particular level of an [ outlook ]. So anything that you see under INR 100 crores is a unit that is wanting to be a core [indiscernible] -- so that's the logic of most of these plants. The reason why we put up these plants and why many of them is because of customer orientation. Customers want us to be right next to them. That is how this business runs for JIT supplies, which is just-in-time supplies as you may be aware. The other aspect of this is that we keep the numbers of people in each plant to a level where it is manageable. So you would see that in the last 35 years, we never had 1 day of struggle or 1 day of a breakdown in our supplies to our customers. Keeping all of that in mind, we increase at modular with the initial plan for each business to be replan to be for at least INR 100 crore. I hope that answers your [ point ].
Sir, but do we have duplicacy of the products in the plants like the same product being made in multiple plants?
Yes. In many places, we do have to have that. And the reason for that is you would appreciate and understand that in many cases, we started off with that OEM as being a second or a third supplier. We already had 1 or 2 [indiscernible], we started off with a [ third ] supplier. And because the customers are happy, while they wanted to give us more business, we obviously wanted to mitigate any risk that may arrive out of one plant. So we assured them that there would be more than one plant that would be a [ feedline ] for them. And therefore, you will see whether it's a Hero or whether it's a TVS or whether it's the other, we do have parallel capacities running at the in plants to see them [ as required ]. So for example, if Hero has plants in Gujarat or in Dharuhera at one level, they would want us to put up facilities close to our plants also for JIT, also for this integration.
And sir, my second question is that in the 4-wheeler space, sir, are you looking at new customers? Or are we making any inroads there?
Oh yes, absolutely. That's an area which is wide open for us. So the good thing was that we were supplying to Honda, which was the premium products. And based on that and we are now very deep relationship with [ underlook ] where we have an engine center here as well now, we are very, very close to tracking some major expansion deals with some of the areas. I'm sorry, I'm not at the ability to give you names of those, but you should be hearing from the [indiscernible].
Sir, the new products like the cameras and the sensors, so are they making good progress, sir?
Yes, all of them. So I've settled off this morning by saying that all the joint ventures are now at turnaround scenarios. We lost our 3 years on account of COVID where some of the product launches were delayed and the OEMs were achieved that they continue their current sources of supply, which were largely [ reports ]. All that is changing now, and our business there has started to show [ not just sports, but now good growth ].
The next question is from the line of [ Shaleen Jain ]from Dolat Capital.
Sir, in two-wheeler space the volume in payment segment is picking up very well, while the [indiscernible] segment is...
Maybe louder, please a little louder. Yes.
[indiscernible] sir.
Who did you say this was?
Sorry.
Yes. Shelly, please go ahead.
So I was asking that in two-wheeler space, the volume in premiums [ again just ] picking up while the entry segment is [ still time ]. So what's your outlook for two-wheelers for next quarter in FY '24. Can you please throw some light on that?
Shelly, and the good news is that there is a lot of talk in the industry on the new launches in the entry segment [ basis ], especially from Honda. Honda, as you may be aware, is now cracking. We have zero towards the master at some stage with [indiscernible] capacity in Mangalore and the entire market is above with the entry-level segment. You are aware that on in the last 4 years, prices of motorcycles, so an average of less than 50,000 have gone up to INR 80,000 -- therefore, the entry level has changed dramatically. Now with this new launch and the entire market being feared of this new Honda launch, everybody started working dramatically [indiscernible]. So we see a lot of that and one is we very, very helpful. We'll be very happy to know that your company [indiscernible] has broken into that foray of Honda. I remember our investors use to ask whether Honda is going to be a major play for us. I'm very happy to say that it is not only for our regular locks for the entry segment and premium segments, but now also the smart locks [indiscernible].
Yes, sir. So also, sir, in this quarter, the margin has also improved?
Yes.
Which has like due to the sharp jump in gross margin. So like going ahead, will this be sustainable?
Absolutely. I think this is the beginning of what you will see -- we'll not be just a regular or perhaps on a growth mode going forward into the next year. But on margins and numbers, let me request Mr. Yashpal Jain to come in and take those questions.
[indiscernible].
Yes, sir. Sir like, what is your margin outlook for next quarter and FY '24 going ahead?
For next quarter of the current financial you into, say, quarter 4?
Yes. Yes, sir.
So we are very hopeful of retaining our quarter margins of near about to quarter 3 itself. As the new projects are picking up, price agreement largely has been done with the customer. So we hope to maintain the same margins.
The next question is from Shailesh Raja from B&K Securities.
Can you please give us the total start-up costs provided in the last 9 months and the expected number for the full year? And in FY '21, how much is expected, sir?
You would like to say about CapEx?
Start-up costs. [indiscernible].
We have charged off, right?
Yes
Total level, you're asking at a console over INR 21 crores a year charge as a startup cost. In 9 months
Yes. How much it is expected in 4Q, sir, and also full year in FY '24?
So another -- I mean, in quarter 4, we are expecting something around INR 4 crores to INR 5 crores in between [indiscernible] may be around INR 25 crores to INR 26 crores in this quarter.
Okay. Next year, sir?
Next year, large projects will be operational. So I foresee a total year basis on the current projects. Again, we expect something around INR 4 crores, INR 5 crores in that we not beyond that.
Okay. Sir, where the maintenance...
Just to add this, we are trying to make all the plants operational in the current financial itself, so that from the next year, they start running at their full capacity. That's all.
Okay. Good, sir. Sir, other than maintenance CapEx of INR 50 crores, is there any incremental capital will be deployed in the business?
Well, as a policy, we keep our CapEx limited to the annual depreciation. We are expecting annual depreciation charge of around INR 130 crores, INR 135 crores depending on what the actual figure comes or in [indiscernible]. But as of now, we are working very prudently and conservative in terms of CapEx. So as of now, we will be requiring [indiscernible] to finish up our spillover CapEx was the earlier projects that are in the pipeline. Beyond that, we are not having any plans as of now except to keep running all [indiscernible].
With [indiscernible] debt reducing from 45 to 15 days, is there any discount we are offering for [ getting ] payment in 2 weeks? Can you please throw some color on this?
In terms of shortening of the receiver period, you need to say, [ DSO ].
Yes, correct. Yes, sir.
So in new projects, we have renegotiated the terms with our customers. That is the reason. So the payment terms has been reduced from 45 days to some 15 and 7 days in some of the projects. That is the reason. No discount is offered to any other customer. Only we have renegotiated our terms, so that it's helpful for us to boost our profitability for the new projects. That's the renegotiation we have done with the customers without compromising on the quality -- sorry, on the rate.
Okay. Good, sir. Sir, my final last question. Currently, the 2-wheeler mix is [ 58 % ] and 4-wheel is [ 22% ], and TV and others is 20% of total revenue. So how the mix will change over the next 2 years in the last next 2 years.
Well, predominantly, we'll be continuing to focus on the 2 less because we have done a lot of investments in 2-wheelers. But as Mr. [indiscernible] aware told in the previous question, that we are, I mean, keeping an eye on the full year also and trying to expand the full [ circle ]. But what I presume is that at least 45% to 50% will continue to have a recognition of 2-wheelers. And remaining, you can see from the commercial vehicles and the four wheelers [indiscernible] of time, we are expecting a good jump in the revenues also. So accordingly, you can estimate the 4-wheelers and commercial revenues will be boosting up.
Okay. So with the existing block, how much we can do, sir, revenue?
I mean we have a capacity because it depends on the number of [ fleets ] we are running in the number of quarters. So we are not running out of the capacity at the same time. We are not idle. So your another INR 400 crores, INR 500 crores for rising is required to [indiscernible] we can easily expect in the [indiscernible]. Expanded capacity, you can add another INR 400 crores, INR 500 crores.
Yes, easily you can add... without going for any major [indiscernible] assembly lines, they don't require much CapEx also. That's all. It's a very small investment. Even if we have to expand on specific requirement comes from the customer side or our new order comes up that's all.
Okay. Sir, last 7 years, rather than gross margin of 41%, so that has come down to [ 29% ] -- so we expected increase in core wheeler mix. So can we expect some 200, 300 bps improvement in gross margin in FY '24?
Yes, we are rigorously working on going back to our earlier figure. If you see last year has witnessed very dramatic changes, very ups and downs in terms of commodity pricing also market, sluggish environment and the auto industry. So we are overcoming all those drawbacks -- and [indiscernible] and we are expecting that in the coming year of time, we'll go back to our earlier profitability figures.
So what will be our depreciation number, sir, for next year? FY ‘24 will be expanded capacity...
I won't be able to give you an exact figure. But on an estimated basis, it will be rendering something around INR 135 crores, INR 145 crores… at a consol level.
Next question is from Abhisheek Jain from Dolat Capital.
Congratulate for the strong set of numbers in a tough time you are targeting double-digit margin in FY '24. So what would be the levers for the margin expansion from here on?
From?
So hereon... what would be the levers for the margin expansion in FY '24?
Like, if you ask me, as we told earlier questions that we are working in improving the margins at the cost side also, at the same time, we are doing some negotiations with the customers also in terms of price hike also. So it will be both ways, internal as well as external from the customer support. That's all. And also, the product mix is also strictly changing the revenues are boosting up to the fixed costs always [indiscernible] even if the revenue goes up. So all these factors will contribute to the increase in the margins for the [ company ].
So what part of the growth we are looking from the locking and [ begin ] systems in FY '24? And how much increase in content [indiscernible]?
Well, presently, we have good content for vehicle in terms of fuel with the higher content ranging up to INR 12,000 to some of the customers -- we see a good growth in the locking and I would say, the proprietary business will normally be call it. So we will continue the double-digit growth in the locking and [indiscernible]in the coming year also. Mr. Davar just told that we are moving into the smart locks and working closely the Honda as well as Suzuki. So in the coming year of time, you can see a good boost in the two-wheeler business also, especially in locking and [indiscernible].
Okay. And in the cabin and fabrication business, we have seen a [ impressive ] growth in the last couple of years. So can you throw more like of what your [indiscernible] there? And what is the current capacity utilization? And what kind of the margin you are making in that business?
So [ when ] like cabins and fabrication as a commercial market is -- I mean, the construction industry is again boosting the government pushing a lot of expenditure of infra -- the business is also gearing up -- we continue to maintain the same momentum in the current year of time, and we are about 8% of our EBITDA margin cabins and fabrication, and we expect to continue beyond that.
And do you have any CapEx plan for the cabin and fabrication?
No major CapEx as of now for the present capacities. We give some new good business comes up, then the call can be taken at that time. But I would know, we don't have any major CapEx, et cetera, margins [indiscernible] CapEx, sir. But if some new project comes up, some new customer comes with our idle size that we expect a revenue around INR 100 crores or INR 85 crore, INR 100-odd crores plus to set up a unit that time that can be mapped out. But as of now, nothing impact.
So since the loss of the [ passion ] is coming in the aluminum diecasting business -- so working our annual performance is also very good in this business, [ especially ] on the domestic side. So what is your current capacity utilization? And what kind of the growth you are looking from domestic and overseas business in aluminum diecasting.
Sir, we would like to answer this?
Come again, please.
Sir, the question was regarding growth in diecasting business, aluminum diecasting India and overseas.
Yes. Do you want an expansion on that? Okay. You are aware that this business was basically initiated when we acquired this company out of [ Spain ]. And post land, we have done some greenfield projects. In Mexico, we [ put ] a finishing center in Poland, and now our new facility in Romania is up. So when we bought over the business at that point of time, the revenue was much smaller. But with all of this, we've not just doubled it, but the margin growth has been dramatic. So when we bought over the business, the margins were at the level of 3%, 3.5%, now we are very comfortably into double digits. So with us having established that business overseas, we then grew that business in India -- that business in India from what I understand now is close to about INR 400 crores, INR 500 crores. And it's on a major expansion group from there. And you are aware that we have been given the entire business of TVS for their machine. Now that will increase the margins dramatically because margins in the machining business themselves are much, much higher. So we are very, very bullish on this business going forward to do the kind of precision [ trackings ] that we do and now the machining business to take over, which not only has potential for our existing customers in India, but also has a huge export potential. Going forward, I think it will be one of the main pillars of our business division for Sandhar.
In this quarter, overseas operation was impacted especially on the margin side, EBITDA margin was dented and that has come down. What is the reason?
Margin has come down, margin has come down where?
In the overseas operations.
Sir, I will answer.
Overseas operations. Yes, that Yashpal will answer.
The reason if you see the footnote in the investor presentation. We have put up a onetime commissioning and charging cost of Romania plant amounting to [ INR 27.5 ] crores in 9 months. Okay. Do we have to normalize these expenses to normalize this start-up cost. And if we eliminate this [indiscernible] premiums to be, I mean, wonderful and [indiscernible] operations. So the only reason because drawing down the margins in the quarter is just because we have put up a onetime cost because Romania was commissioned in December last week. That's the result.
Sir, will it continue for the next quarter and...
No, It's already commissioned. So large expense has already been booked. Hardly around INR 1 crore may might come in this current quarter. Otherwise, everything is booked up in Romania. They have started [ emerging ] also from [ 21 ] December last year.
And when will you start to receive the incentives from the Romania government for setting up the plant?
Yes. So one installment, we already got, close to around INR 5 crore. Second installment is in pipeline of INR 23 crores. In converted rupee terms, we are expecting something around March or in between [ April ].
So that will be shown in the other income, sir?
No, no, it's for capital investment, so will we go [ net off ] from the capital investment.
You won't show in the profit and loss account.
Because actually, all these [ plants ], they are governed by the IFRS requirement -- so based on the treatment will be [ given ]. [indiscernible] capital expenditure. So we need to go through the capital expenditure route.
[Operator Instructions] Next question is from the line of Deepak Poddar from Sapphire Capital.
Sir, what would be the current debt levels?
Currently, at the end of December, we had a gross debt of INR 573.53 crores, right? In terms of net debt, it was INR 553 crore, just not much of a [ better ].
Okay. And I just wonder why our interest cost is only, I mean, INR 9 crores to INR 10 crores a quarter?
Annually, we are expecting INR 36 crores of interest because in terms of working capital, we are not having much utilization of working that's the one reason. And our average borrowing itself, if you see the chart, it's not -- if I take an entire product of term loans and working capital, it's something about 5.5%, not beyond that. And we have...
Like we want to give a breakup of our costs in India and [indiscernible].
I'm coming to on that point sir also. So what I think like if I give a breakdown of the debt is of INR 573 crores, INR 60 crores is in India INR 313 crores in overseas, while the cost of overseas debt is ranging from 1.65% to 3.5% -- so that's the reason or the interest charge is lesser. If you straight away multiply by 7% or 6% that [indiscernible] that's the reason.
And a couple of clarification I wanted. I mean, in the previous call as well, we were looking at INR 2,800 crores to INR 2,900 crores revenue this year and about 30% growth next year. So is that the same -- I mean, is there any change in that?
No. If you see a 9-month figure, we have closed at INR 2,150 crore of total income. Correct. And quarterly, we are above INR 700 crores of more -- in quarter 3, we closed at INR 725 crores, and quarter 2 was INR 749 crores, and quarter 1 was [ INR 677 ] crores, right? So even if you take a moderate average of all these 3, INR 700 crores, we can easily add up in quarter 4. So that will be something around [ INR 2850 crore ] and plus in the current year. And with the new projects started and maturing and giving us a revenue. So next year, yes, we are very much on the claim growth that we have given an expectation in the earlier call of 30%.
So next year also 30% growth is what we are looking at, right?
Yes, because new projects will also start giving us revenue -- so that was fair enough estimate that we are sure of achieving it.
Correct. And you mentioned about 200 to 300 basis point improvement in gross margin, right?
Right.
So that's what we are targeting FY '24?
While improvement of margins is a continuous quarter -- so I may not be able to give you any assurance. But yes, we are targeting to improve our margins in terms of cutting down the cost also and in terms of pricing the customer. And we are looking forward to another increasing by at least 100 point basis in the coming financial year, 100-150 point [ basis ].
So, 100 to 150, so currently 9%, maybe about 10% to 10.5% what you might be…
Yes, we are targeting double-digit also in the current financial year.
Double-digit margin. And this 200 to 300 basis point [ water ] improvement, maybe it might come in 2 to 3 years, right, driven by both the...
It will take a time... It will take [indiscernible].
[Operator Instructions] Next question is from the line of Udit Gupta, Individual Investor.
Sir, my question is that you gave a debt picture for FY '23. So how are we looking at the debt position in FY '24, sir?
Sure. So like [ debt it's INR 573.53 crore ] as of December, right? And we are targeting that we won't be exceeding INR 700 crores by close of March ‘23. This is our target. And for the coming financial , we have kept a target from an internal [ network ]. We target to repay around INR 150 crores by free cash flow generation. So if you ask really ask me with the current CapEx, current cost of the project to fund those projects and complete those projects, March ‘24 is something more new project concern. We are targeting to be around INR 550 crores of debt, not beyond that.
And sir, on the export side, sir, by FY '24, what percentage of revenue are we expecting from the overseas business, sir?
Well, overseas business is generating revenue overseas, we are not much into exports because cost-wise and it's not viable.
My question was about overseas only, not exports.
Yes. Okay, sure. So overseas, we are expecting something that revenue might grow by another 25% with the Romania plant coming up. So we are [ expecting ] INR 300 crores we have done another INR 100 crore we are expecting -- INR 80 crore -INR 100 crore in quarter 4. So you can expect fairly something around INR 480 crores to INR 500 crores is the expected figure in the next financial year.
Next question is from the line of [ Abhishek ] from Sharekhan Limited.
Just a few questions that so we added a few new clients in our portfolio. But despite that, that [indiscernible] revenue, anything we are expecting in coming quarter or is there any other reason which need perform in the sheet metal business in this quarter?
Sheet Metal business like Abhishek, if you remember in the last call, we told that we have set new project and it takes some time for them to gear up with the revenues and the margins. So now out of our 4 sheet metal projects, 2 are industrial phase of commercialization, 2 will be by April ‘23. That's all. And we are again expecting to be above 8%, 8.5% of margins in treatment business in the coming financial year.
Any reason with this high margin expectation [indiscernible].
We are having good volume indications on the customer side. So what happens that after certain volumes, the fixed cost remains to be neutral and that [indiscernible] boost up our percent margins in terms of the revenue that's all.
But it is fair to assume that there is no price hike from the client side?
Pardon, can you come back?
Is it fair to assume that there is no price hike kind of thing as we are expecting the new margin that is because of the operational efficiency.
[indiscernible] price hike but yes, we are legit price at the current levels. Last quarter only we consider the price situation with the customer. That's all.
Okay. Any incremental orders are expected from HMSI?
Well, we are working closely with HMSI for all our verticals like ADC [indiscernible] with them for some smart products, we are expecting to materialize this very sooner. Okay.
And [indiscernible] outlook here assembly business?
Assembly business is doing fairly well. It is largely dependent on the consumer side, the [ customer ] volumes like other businesses are -- but it's going stable -- so we are not expecting much of our investment or much of a change in the assembly business.
Okay. And sir, one last question on the -- if you can share your outlook on the 2-wheeler sector, especially what you are hearing from the clients like Hero and TVS because in general, whatever we are hearing that it's 2-wheeler sector is one sector which is still lagging across the -- comparing the other segments of the automobile sector.
Sure. Mr. Davar will be right to answer this, sir, will you answer this question?
Yes, sure. Yes, you're absolutely right. We are still not at levels of what we were in 2018, 2019. As I mentioned in the beginning, and the price of two-wheelers has gone up by an average of almost 60%, 65% in a huge shock to the entire ecosystem. However, from what we understand now and from the [ greenchips ] that we here, insurers of the fall, [indiscernible] with good monsoon that has happened second year in a row. There is stabilization in the understanding. The price hike came on account of several factors. One were mandatory with the government regulations [indiscernible]. Secondly, were levels of comfort that have been brought into the system. And third was the electronification and the entertainment aspects that were added on to various [ circles ]. I think those things have kind of stabilized now. And like I said, the market is extremely bullish on this going forward, each one of the OEMs for two-wheelers have lined up profits. But I think the biggest thing would be the introduction of new models in the entry segment. So whether it is Honda or whether it is the Yamaha or whether it is a TVS, all of them are working very, very diligently on the [indiscernible] entry point [indiscernible]. And that, I think, will lead to the volumes that are necessary. Right now, like I said, probably the cheapest motorcycles are INR 80,000 to INR 90,000, which is much over the affordability levels. But these new entry points will be a game changer. And you will see that in this coming year.
Okay. Just one extension to this thing that you said that bullish on -- your customer are sounding bullish. Is it right or it is your thought process that things are [indiscernible].
No, no. It is... We are only going by the messages that we get from our...
[Operator Instructions] The next question is from the line of Kumar Gaurav from Dolat Capital.
So as we expect to grow 23% -- 22%, 23% in '23. So what is our revenue guidance by '24. How do you see FY '24 panning out for us?
So as I mentioned in the earlier question that [ INR 2150 crore ], we closed in quarter 3. And we have about [ INR 300 ] crores of turnover every quarter. So around we can [ say, we expect INR 2850 crore in ], the current. And next year, we are expecting something growth of around 30% in terms of revenue [ model ].
And if you can share, sir, major growth drivers for this revenue in FY '24, just basically some points, what you see...
Yes, sure. Basically, we set up 7 new plants out of 6 was largely in the [ power ] integration type, I would say, the new business types. So they will be all generating revenues in the current financial year in the current [ news ] FY '23 ‘24. So that [ we're ] boosting out to the revenue expectations.
Okay, sir. And second question, sir, what kind of ROC we are targeting, I mean, in FY '24 are going ahead in 1 or 2 years, sir?
Well, as of now, I may not be able to give the exact figure. But yes, we are targeting a very good ROC that loan investors were expecting us and we were generating in the year '18, '19. So we'll be moving to those figures quickly in a major span of 1 or 2 years of time. But yes, we are targeting EBITDA margin of the [indiscernible].
And my, sir, other question is on JV side. And Jain sir has already mentioned that all JVs expect the one has already turned EBITDA-positive. So could you please throw some more light on JV performance? And what is your outlook for JV going ahead?
Okay. So what is that all the deals at operational level we are EBITDA positive, [ wherein ] 2 JVs [indiscernible] because we have some part in foreign currencies and the dollar has shot up from see the levels of INR 50 to INR 81, 82. So that is an unrealized loss of ForEx that we have booked in to JV creation and [ counseling ]. Going forward, we see a very good business outlook. And even at [ EBIT, we are having 3 JV positives and EBITDA ], we are having 5 JVs positive [ turning ] to negative due to the ForEx fluctuation. In the coming year of time, we expect that all JVs in FY '23, '24, they will turn around even at the EBITA level.
And sir, my question on EV side. In our previous calls, we mentioned that we are developing some products for EVs. So what is progress there? And have we started production or anything from the site?
No. Like we have given a bar chart also with the time line. We are in the stage of development. Some products are developed there have been sales for validation. The customer also followed by the validation from the [indiscernible] other authorities -- we are working very fast quickly on migration to JV on powertrain. And in the coming financial year, I mean FY '23, '24, we expect to see some good action in JV, including starting off some starting many sections of some EV products.
Okay, sir. And sir, my last question is on RM inflation, we have seen some correction in RM, but we are hearing that there is some uptick in RM cost from January onwards. So what is your thought on that, sir?
Where it is a market driven. So if it goes up, we get a settlement in the succeeding [ partook ] on the customers. So quarter-to-quarter, it affects our profitability. That's all. But it all depends on market dynamics. So if you see the current financial year '22, ‘23, it has not been stable sometimes up, sometimes down. So that trend is coming is going on. I think that may continue in future also.
Okay, sir, as on EV side, are we adding any new products or any new project [indiscernible]? EVs because you can talk about R&D capabilities in EV, our R&D capabilities in EVs? What are we doing?
We have a dedicated R&D center Apart from that, we are tying up for new powertrain technologies to manufacture EV specific products. That's what I told, we are working on the same. And in the coming financial year, you will definitely see some action for side, including starting of manufacturing or some of those two…
[indiscernible] to that question, on EV. EV for us is divided into 2 portions. One is our current level of supplies that we do in terms of product lines, which you are aware, whether it's our locks or mirrors or sheet metal or this that and the other. They continue unabated, and we supply to several of the new OEMs that are there in the EV industry as well as the traditional ones and the legacy one. Then there are new products which have been developed, which are both for EVs the new EVs, the these are new product lines for us. For example, a CBS or an electronic staring column lock or a foldable key or a tire pressure monitoring center, USB chargers and so on and so forth, our vehicle location and security system. We have several of them. But the third element, which is the element, which is the specific EV products, which means they have to do with the powertrain, which is the electric mobility product line. Now is we'd be happy to know that your company has already in readiness for motor controllers for 1 kilowatt, 2 kilowatt and 4 kilowatt [ DPD3 ] converters, which are absolutely ready, the EV chargers, which we expect to be ready in this quarter. The hub motor is already done. The mid-drive motor we put on hold for the moment. So this is where we are. We expect like Yashpalji has said, production of these new kind of EV powertrain product lines to be in the framework and in the market in this coming financial year. I hope that answers your question.
Next question is from the line of [ Sara ] from B&K Securities.
Sir, given that we have a diverse product range. So in this market, we would be considered as a top critical [ peers ]?
That's a very general question. I don't know unless you can be a little more specific. If you're looking at competition in peers, you're absolutely right, we are in diverse markets and diverse product [ line ]. And depending on the product line that you would want to pick we would have different competitors. Locks, for example, you are aware, your company is the largest lock to due in the U.S. If you look at mirrors, we are the largest. You look at seatbelts, we are the largest. If you look at cabins, we are the most diverse company supplying to everyone. So depending now in terms of who is our competition in aluminum, I guess, in aluminum casting almost everyone who is as aluminum castings would be our competitors. But if you were to take [ spools ] as a product line within aluminum casting, we are the world leader. So it is very difficult to answer your question in terms of peers or competitors directly on -- as a company. Yes, you can pick out individual things, and I'd be able to give you 1 or 2 names for who the others are.
Sir, in the locks business who business, who would be consider as our peer?
In locks business we will have a company called Minda, Minda Corp as a competitor. We would have somebody like [indiscernible] should be our customer. But again, even with the locks, the product lines are a little blur. In some cases, we fight directly because locks kind of very, very strong entry barrier. So if you see in history, there were 5 players out of those 5 players, we as a company acquired about which was a big loss. And now there is that there is Minda Corp there is [indiscernible] and of course, there are 1 or 2 small ones, one out of Aligarh and one out of somewhere else. But in the last 50 years, we haven't seen any new player come into this market.
Other than Hero and TVS, given that we are present in [ CV ] and as well as [our 5-year ] segment, who would be the top 2 players that we are supplying in CV and off-highway?
In off-highway, we supply to everyone. We supply -- if you look at off-highway, you supply to Caterpillar, we supply the Tata-Hitachi. We supply to [indiscernible], we supply to Volvo. We supply the Kubota. We, of course, supply our largest customer is JCB. If you were to look at the entire lineup, we supply to almost everyone there is in this industry, everyone.
Thank you. Ladies and gentlemen, that is the last question for today. I now hand the conference over to the management for closing comments.
Okay. Thank you once again, Dolat Capital, and thank you to all the investors for your time this morning. I hope we've been able to do some justice to your questions. We'd be very happy to have you visit some of our plants or discuss with us face to face to be able to really understand this a little more. What I can tell you is, as I sign off today, that our company is in very comfortable position in the industry today. We have a lot to look forward to. The investments that have been made in the past couple of years are now showing fruit. And this will only grow into the next financial year. I think Yashpalji has already said that we are probably looking at almost a 30% growth in the next year as well. So it should be a good time, good margins, good product lines. And the way things seem today, and the market goes unabated. Of course, there are some [ cons ] of higher interest rates that are dropping. Somebody mentioned about the volatility in commodity prices, not withstanding, I do see that I'm happy days ahead. With that, thank you all very much. And once again, I wish you and your families a Very, Very Happy New Year, God Bless.
On behalf of Dolat Capital Markets Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.
Thank you.