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Sandhar Technologies Ltd
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Ladies and gentlemen, good day, and welcome to the Sandhar Technologies Q4 FY '24 Earnings Conference Call hosted by Dolat Capital. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jayant Davar from Sandhar Technologies. Thank you, and over to you, sir.
Yes. Good morning, and thank you to Dolat Capital for the opportunity this morning to talk about the major highlights of the results that we declared yesterday. So the cost of reiteration, everybody probably knows, but for many who don't, the 2-wheeler industry in the last year grew at a rate of about 9.83%. And you'd be happy to know that Sandhar against this growth grew by 26.14%.
In the 4-wheeler industry, the industry grew at a rate of 5.92%, whereas Sandhar grew at 15.41%. So we are very happy with the fact that our new capacities that have been set up in the last few years went into more -- or closer to optimization, and that is what has reflected in the results.
We, at Sandhar achieved a total income growth of 19% in quarter 4 and 21% versus FY '23 on an annualized basis. We expect to continue this growth momentum over the last year. And the current schedules of the customers, the demand in the market and the geopolitical situation, at this point, shows that we should be very comfortable with achieving what the numbers that we are expecting to on a similar platform that we did in the last year.
On a consolidated basis, EBITDA registered a growth of 140 basis points higher year-on-year basis and the investors will be happy to know that...
The management line got disconnected. We'll connect them.
[Technical Difficulty]
We have connected with the management line. Yes Jayant sir, go ahead, please.
Thank you. I don't know where I got disconnected. Can somebody remind me?
Sir, you were talking about consol EBITDA.
Consol EBITDA. So I was saying that consol EBITDA registered a growth of 140 basis points on a Y-o-Y basis, which is quarter 4. And on an annual basis, we grew by about 100 basis points. I'm also happy to say that our joint ventures have significantly improved. All joint venture companies taken together registered a revenue of INR 325 crores.
Very happy to announce that our helmet company, Sandhar Amkin turned positive, contributed an EBITDA of 14.58% and a PAT of 4.71%, while Sandhar-Hanshin reached a level of EBITDA of 12.41%. Also, Sandhar Whetron turned around and registered an EBITDA of 19.19% and PAT of 11.6%.
Again, Winnercom, Sandhar, Sandhar-Hanshin, too, are PAT positive. While Kwangsung Sandhar is EBITDA positive. So these are on the joint venture front. In terms of new projects that the company had invested in, the 4 sheet metal plants in Nalagad, Halol, [ Atibala ] and Mysore are in mass production. Romania plant also is in commercial production, and we expect to see major ramp-ups in '24, '25.
The machining for casting plants at Hosur and Mysore are also now operating at full scale. And the future has a lot of potential, both in terms of volume and the customer base in this business. To meet the increased demand for casting components, the company is expanding its capacity in Western India to cater to the demand in that region.
We expect to commercialize this by August of '24. The major focus would be to tap passenger vehicles, OEMs, in addition to 2-wheelers and commercial vehicles. Our EV projects. We now have a wholly-owned subsidiary called Sandhar Auto Electric Solutions Private Limited. We are happy to inform that the infrastructure development is almost complete, and we expect to go into commercial production from July '24.
We have 2 technical collaboration agreements here, and we are working closely with them for the development of progress. So going forward, the focus areas are going to be generation of more free cash flows. We want to deleverage the balance sheet, improvement in return on capital employed, that's an agenda that we've had for the last few years, and you've seen the improvements.
We want to continue that path and give you better results, improving operational efficiency, reduction of costs, control on new CapEx, maximum utilization and optimization of this CapEx, integration of manufacturing plants continues and of course, we are always in the market for diversification of our product portfolio, expanding the customer base and increasing content per vehicle.
So those are largely the points that I wanted to mention in my opening remarks. I'm very happy to take questions. With me today, I have with me Mr. Yashpal Jain, who is the Chief Financial Officer, and he'll be very happy to answer question on any numbers that you may have in this regard. I'm happy to give you a market review or any questions in that regard. Thank you all very much once again for being here.
[Operator Instructions] First question is from the line of Pranay Roop Chatterjee from Burman Capital Management.
Am I audible?
Yes.
Great. My first question is with respect to understanding that this is the current capacity that you have expanded over the last 2 years, which is the 5 sheet metal plants, then the Romania plant, domestic aluminum capacity expansion, you had [indiscernible] Pune plant in the fabrication and any expansion in terms of locking and vision. How much can the revenue further expand, right? And...
The line got disconnected, sir. We move to the next. The next question is from the line of Aditya Sanjay Kondawar from Complete Circle Capital.
Very happy to see EBITDA margins move quarter-on-quarter to double-digit margins. So congrats on that. My first question was on the debt, how much debt are we planning to repay this financial year? And number 2 question is just some guidance on margin, if you can. I have more questions, and then I'll come back in the queue.
The management line got disconnected. I will connect them.
[Technical Difficulty]
Management line is connected. I just request the participants to repeat your question, please.
Yes, sure. Sir, congrats, very happy as a shareholder to see the margins move from 7% to almost 11% now. My first question was on the debt repayment. Any guidance on how much are we planning to prepay this financial year? And number 2, if you could give any color on the margin guidance? I have more questions, but I'll come back in the queue later.
Yes. This is Yashpal Jain. So I'll answer this question. Regarding debt repayment, like we are having term loan facilities, as you know, we have been showing the balance sheet also. So we'll be doing our term loan repayment as per our schedule be around something INR 100 crores of repayment is passed for this year financial year '24, '25.
And any guidance for margins, sir?
Yes, as we have given guidance for last 2 years, that we are -- on a year-on-year basis, we are seeing a -- marking an improvement of around 50 point basis. So last year also for '23, '24, we gave the guidance, 50 point basis we'll be imposing for again, the same guidance we'll be following for current year also.
The next question is from the line of Krishna from Lucky Investment.
Am I audible?
Yes, please.
My question was on the CapEx that we've done, what kind of asset turns are we seeing on this CapEx? And when will we see the peak revenue potential coming in for this CapEx?
Normally, we keep our asset turn on 3 points, it's a moving asset turn but that is over a period of time because, as you know, in the auto component industry, it takes time to stabilize our plan in a range of 2 to 3 years, the plant gets stabilized. So while planning for any new cases or projects, we take a time line of 2 to 3 years to turn into an asset turn of 3 times. The 4 chief other plants that have been [indiscernible] buyers in the last 2.5 years, part of them has started partially in last year. Some of them are into mass production in the last quarter of last financial year. So gradually, over a bit of 2 to 3 years from today, we see that they will be working out there. I would say the crossing the asset turn of more than 3x.
The next question is from the line of Pranay Roop Chatterjee from Burman Capital Management.
I was the first one to ask a question, and somehow it was presumed that the line had dropped. So I'll just continue. I just wanted to understand that you had added a lot of capacities, right? And this is linked to the last question. What would be the utilization levels in the older and newer plants in like sheet metal and aluminum die casting? So I'm just trying to understand because Q4 FY '24, your annualized revenue was INR 3,700 crores. Can this be substantially higher 40%, 50% higher within the existing capacities without doing any growth CapEx?
Well, let me answer this question a little differently, and then maybe Mr. Yashpal then will be able to give you solid numbers. Pranay, thank you for that question. Our business, as you're aware, constitutes diversified portfolio in terms of its product line. So there are existing product lines, for example, whether it's locks or whether it's other proprietary parts where you need only incremental CapEx to grow capacity.
However, these businesses or whether it is sheet metal or whether it is casting or some of the other areas require monumental changes in terms of new plants and new [indiscernible]. The way we stand today is we believe that a large part of the CapEx has already been done. However, there are still 3 plants under at different stages of going into commercial production, where you will see the capacity. So on an overall basis, it is impossible for me to give you the capacity utilization. Suffice to say that in many plants, we add capacities, especially in the newer ones, which range from 0% which are going to go into commercial production to about 50% is what we have achieved in the new plants that have been set up in the next -- in the last 2 years. To your question as to whether we can increase it by 50% on the same CapEx, yes, we can. But that doesn't mean the new CapEx will not be added because we are also looking for the future. But your answer whether we can grow it by 50%, my direct answer would be, yes, close to 50% could be.
Management line got disconnected. We're connecting them again.
[Technical Difficulty]
We have connected the line of Sandhar. So go ahead, please.
I don't know where I was when I got disconnected.
Sir, in fact, 50% -- close to 50% expansion is possible, is what you said last quarter.
Yes. Yes, it is possible. It is possible. However, that doesn't mean, like I said, that new further CapEx will not happen because our growth continues and we also have to build the pipeline for the future.
Perfect. That make sense. Sir, next question, I heard your -- an earlier statement of yours where you said that given the demand and order visibility, you are expecting a similar growth next year as past year. So should I extrapolate that to say that you can grow at a 20% growth, if all things play out as you expect it to in FY '25 as well?
Well, I won't put a number to it, but I don't see why not.
Got it, sir. And I just wanted to understand, in terms of the growth CapEx that you mentioned, the casting plant in West India and also the EV businesses that are supposed to start from next couple of quarters, in these 2 segments, how much CapEx have you planned for this year? And how much can they contribute to revenues this year and next year.
Well, yes, I'll answer these questions. So largely, we are through the projects. The projects will be commissioned in the month of August. And like as we said in Western India, we are going with a die casting business. So we'll be coming at [indiscernible] close to INR 30 crores on an overall basis for that plant. Large portion has already been released in the market. We are just waiting for the final base to come up for the payment.
And on the EV parcel?
EV funds, we have -- if you remember our last investor call, last year, we kept a target of crores of investment with us, so an idea INR 20 crore, so INR 10 crore, we have already spent, another INR 10 crore we'll be spending this year.
Any [indiscernible] could keep in mind that we are using our existing infrastructure to launch the EVs. So while the numbers that Mr. Yashpal Jain are giving you are actually direct equipment and product line services which are being added. The infrastructure is already in play, and we're using the existing infrastructure as of this moment for the Sandhar auto electric business.
Got it, sir. Sir, last question from me on the overseas front, after the plant, new plant Romania came in, in Q4 FY '23. The revenue sort of increased from INR 100 crores quarterly range to INR 130 crores range. But since then probably because of slowdown or reduction in schedules, it has gradually come down and Q4 [ slots ] slight uptick, but still at INR 110-odd crores, which is down Y-o-Y. So just wanted to understand, are you seeing any signs of recovery there? And when do you expect a meaningful pickup starting?
So basically, it was in the growth in the revenue, did not come so much from Romania. That is still behind what we had budgeted, especially on account of the Ukraine war that was going on in closed neighborhoods. The drop in revenue in the last quarter or the quarter before that, a little bit came because of the strikes in the United States. And because of the strikes in the -- labor strikes in the car unions had strikes, so there, the revenue in Mexico and some portion of Barcelona dropped. In the case of Mexico, the pickup dropped by almost 50% for a couple of months. It is, however, back again now that the strikes are over, and we are back into our normal [ GP ] and the growth in Romania will be an additional factor to whatever we are doing.
[Operator Instructions] The next question is from the line of Himesh Desai from Dolat Capital.
So my first question was now that the JVs have turned profitable, what would be your outlook on the future growth?
Well, my first reaction to this is that once they've turned around and they come into the regular aspect of things, one would expect them to have a normalized growth in line with the growth of the company revenues.
Okay. So my next question was on the cabin and fabrication business. So what are the current utilization and margin levels of this business? And what kind of margin expansion are we looking at going forward?
Management line got disconnected.
[Technical Difficulty]
We have connected the line of Mr. Jain. Can you just repeat your question, please?
So my question was on the cabin and fabrication business. So what are the current utilization and margin levels for this business? And what kind of margin expansion are we looking going forward?
Do you want to comment?
Yes, sir. So cabin and fabrication, we operate on a margin of 8%. I mean, there's not much change in the margin structure of cabins and fabrication being a heavy equipment as items are very heavy, sheet metal [ base ]. And we expect that there can be an improvement of 50 to 100-point basis in the coming year once the new unit facility starts continuing to improve.
And what would be the utilization levels?
As of now, it's based on which you asked me in the other [indiscernible] complete space in cabin fabrication, that was the reason. In Pune, we did an expansion from one of the existing plants has been expanded with an additional plant in [indiscernible], which we are expecting to operate.
Okay. And my last question would be for the locking and vision system. So what would your outlook be for the same? And are we expecting an increase in content per vehicle?
Locking and vision -- yes, sir, would you then answer.
Yes. So locking and while we call it locking and mirrors, there are several elements that go into it. There are new product lines, which have been added. But the largest part, again, is smart locks. And the group today would be very happy to know that there are 2 major product lines, one for Suzuki and one for Honda that move on to the smart locks program starting in October and November.
And this, of course, is a major turnaround and a pivot for the company, which we've been expecting for the last few years. So that will take your OpEx into a different scenario altogether. So that is -- those are the most important forward-looking growth areas for us.
The next question is from the line of Pranay Roop Chatterjee from Burman Capital Management.
Sir again, my next question is on our data point you disclosed the product-wise segment that you've given the presentation. I was comparing the Q3 numbers versus the Q4 numbers, and it seems like it could be correct because if you've offset some part of the other segment revenue has been moved to sheet metal because sheet metal contribution has gone up and others have almost halved. Is this true? Or is this indeed the actual trend?
No, basically the utilization of the new facilities that were set up. We mentioned about the 4 plants that were set up for sheet metals. This is basically utilization of those plants, which have obviously increased the element of sheet metals. So while the others remain the same and continue to grow, the growth in this particular segment has been the highest.
Sir by others, I meant literally the other segment that you disclosed, which used to be 14% of revenue in Q3, and it has become 7% of revenue in Q3. And sheet metal has gone from 12% of revenue to 19% of revenue.
Okay. Yashpal, do you want to take this and give them the details of this?
Yes, exactly. So basically, the content of other remains the same because other businesses are used for plastic business, the tools and dies and our aftermarket business. But with the -- if you see the total figures like the revenue base of quarter 4, we compare to quarter 3, the element as sir told of sheet metal was literally lesser compared to the growth of -- in quarter 4 of the sheet metal. So there has not been any shift on the product from others to the sheet metal line, right? Secondly...
We might give them the increased bridge -- bridge here between last year and this year closing, where is that revenue comes from, that might be useful to answer this question.
Which on an annual basis. So like if you ask me out of the total revenue from [ 2,908 ], we have grown up to [ 3,521 ]. INR 200 crores has been contributed by sheet metal and [ allied ] business. That has been a major contributor to the revenue. And die casting has been close to INR 180 crores. These 2 majors are the contributors in this one. Other then given us a total revenue yearly basis, INR 66 crores.
So on an average, it comes to INR 15 crores, INR 16 crores a quarter. And that's our [ maintenance ] business, we cannot classify into any segment because our volumes are very low, like 2 [ dies ], we have plastic business, we have aftermarket on which are in the stage of being growing. Margins are coming, yes, they may also find a position like other products.
Got it, sir. And is it possible to disclose because this other segment is a significant part of the total business, double-digit percentage, that performance margins you clock here. I know it's difficult because it's a model of multiple different things. But it would be possible to figure out if it's at the company level or dilutive or accretive, something on those lines.
On an overall basis, it is very difficult as we told as because cluster of many type of products. But yes, if you ask the aftermarket business, one of the contributors, it contributes around 8% of margin for us. And it has been a larger contributor, tools and dies are there. Again, they are in a double-digit margin. They are the 2 major contributors in other segments.
The next question is from the line of Shubrut, an individual investor.
So my first question is regards to one particular product that you are developing, which is the motor controller. Could you...
Sir, could you use the handset?
I'm on the handset mode, is it better now?
Yes, it's all right.
Yes, sir. I just wanted to understand a little bit more about 1 particular product, which is the motor controller. So could you speak about the potential market size which will have maybe in the next 2 to 3 years the competitive landscape? And what kind of competition we face from the foreign players? And what are our aspirations in this product?
I have to answer this question in summary, we have a motor controller and our rated power is 250-kilowatt -- 250 watt, 2 kilowatt and 6 kilowatt. The application of this is towards the 2-wheeler and the 3-wheelers. We expect that our product readiness in the 3 different configurations is June '24, July' 24 and November '24. Now you are aware that the market size of India in EV segment, especially in the 2-wheeler space is large. The USP that we have is that most of our product is localized. And we, as a company, do a lot of sub constituent parts in-house whether it is the aluminum body, whether it is the plastic body, whether it is the PCB, we have our own line compared to many other competitors who are today importing these subparts from China and other places.
So the customers obviously want to have a localized product. And therefore, we don't see an element of an issue of demand. We are now in the process of working in conjoining this with our customers. Our ICAT approvals have already been done. And we see that once the supply starts, the volumes, of course, are dependent on the Indian market, and that is as much your guess as mine. But we don't see too much of an issue in having a demand for the product lines on motor controllers for us.
Sir, just to take this forward, what would be the total contribution of the total unit cost for a motor controller?
I understand that the value of this can range from INR 4,000 to INR 9,000 per vehicle.
The next question is from the line of Shivam Darvesh from [indiscernible] Investments.
As there is no response from the participant, we'll move to the next.
The next question is from the line of Rajat from [indiscernible] AMC.
Am I audible?
Yes, you are.
Just one bookkeeping question. I was just going through your balance sheet and I think that your receivables have somehow short of significantly at the end of this year, which is up like 37% on a Y-o-Y basis. Could you give us some color why receivable days have gone up?
Receivable have gone up, you mean to say?
Yes. It's currently at INR 402 crores versus INR 293 crores at the end of last year.
Yes, so what happens is that like as we mentioned in our call is the new plants they have come into mass production, which were not there last year if you compare it to last quarter. So obviously, that receivable, the payment is not due, which we have received in the month of April. That is one of the reasons. With the increase in the turnover, the size of the receivables has also increased. But you can see our effective receivables there, they have come down and they have improved. We are close to 35 days of receivables today overall.
The next question is from the line of Jay from Dolat Capital.
Am I audible?
Yes, please.
So my first question is like, was there any one-off during this quarter in terms of any onetime costs in your price appreciation?
Can you repeat your question, please?
All there any one-off in terms of price compensation or incentives for this quarter?
Incentives from the government bodies or from the customer?
Yes, sir, on the government bodies.
No, this quarter doesn't have any incentives from government bodies. It's a normal revenue for the operation.
Okay. Okay, sir. And sir, could you just throw some light on your locking business, like were there any new customer acquisitions or some incremental business from your existing clients during this quarter?
Like locking business, sir, would you like to answer?
No, no, I just want to again reiterate the fact that the locking system business is a new platform with smart locks where the value of the smart locks can be anywhere between 8 to 10x of the lock that we produce. So for the company, it's a big thing and with 2 launches now happening in October and November, the landscape of that particular business will change dramatically.
Okay. Okay. So apart from that, were there any interest by the EV segment for the smart lock, like we have TVS for [indiscernible]? Or from Ola or other players which are into EVs. Are they interested in the smart locking business?
Yes. We are talking to all of them. But the first launches that will happen in India will be Suzuki and Honda, which will take it on a mass scale. Now obviously, there are others which are doing it, whether we are supplying now to M&W. There are many who are talking about it and some have launched in very, very small volumes. But obviously, our interest was mass volume. So the mass volumes are the ones that I'm talking about, which will take on to the market for its first direction and gradually, all of them will move on to that particular platform on a mass basis.
Okay. Okay. Sir, I do have one more question. Sir, so TVS being your largest customer, how do you expect it to contribute going ahead?
Well, I think the capacity that has been set up, especially in the sheet metal division in the last 2 years, new plants that have been set up. They have largely been set up for TVS. Therefore, you have seen that pocket grow a little higher. But I think we are now at a stabilization stage and TVS today being the largest. Whenever that happens, even in the previous scenario of Sandhar, if Hero was higher, our IT is to bring that percentage down not in terms of the volume of business, but to grow the other businesses faster. So that exercise will continue.
Okay. Okay, sir. Sir, can you just throw some light on the -- on your Romania plant? And how do you see it going ahead post the strikes and after the geopolitical issues happening?
So see, the geopolitical issues, we have set up that plant. And to that end, we are utilization of capacity -- of the existing capacity is less than 25%. So obviously, there is a huge upside. And now things are changing. Things are improving. And our 2 customers that we have there are growing their businesses in terms of sourcing it more from the Eastern European nations like Romania. So we expect that number to now continuously grow month-on-month in terms of the revenue that we generate from that. However, the site was in North America, so there Romania was not at all, it was Mexico that dropped its revenues.
The next question is from the line of Shivam Dave from Prodigy Investment.
Yes. Am I audible?
A little louder would be better, Shivam. Thank you.
Yes. Is it better?
Yes, go ahead.
Congrats on the good set of numbers. I had one doubt on the smart lock segment. What is the order size that we have got from Suzuki right now?
The Suzuki order book have a level of INR 550 crores over 3 years.
INR 550 crores over 3 years, right. And this should start from -- when will it start contributing to our top line?
October or November launch this year. Obviously, it's gradual, and therefore, we will only get a part of the revenue in this year. We gradually add on to vehicles and vehicles and vehicles. But that, I think, is the overall summary of what we're looking at.
The next question is from the line of Rahil Shah from Crown Capital.
Hello. Can you hear me?
Yes. Yes, we can.
So earlier, you mentioned about some developments with regards to the capacity expansion. So for example, you said expanding capacity for casting components in Western India. So can you just reiterate on that? And any other key developments with regards to capacities you're taking this year?
Well, I can give you broadly and maybe Yashpal give you gather details. We are setting up one new plant, which is coming up in Khed City in Pune, and we expect to have it commissioned by August of this year. In terms of other capacity, we had 1 big plant, which had 4 divisions in Oragadam in Chennai, which was the base for our cabin and fabrication division, our casting division, our sheet metal division and the auto division. That plant has now been given completely to the [ patient ] business for the growth plans in Chennai.
And other 3 businesses are moving out to set up their own facilities, some in rented premises, some in a new facility. And therefore, all core businesses are growing and that capacities are being set up in place as we speak. In the meantime, the Mysore facility that we had set up again for sheet metal where the capacity utilization was very low, is going to get to a higher capacity utilizations in this year.
Okay. And I believe, so for EBITDA margins, I think you said it will follow the same guidance and we'll see an improvement of 50 basis points. Is it for the whole year you're expecting?
Yes, it is for the whole year or year-on-year basis. .
So FY '24, so expecting a 50 basis point increase.
Yes 50 basis is our target.
And just for overall the business, a general directional guidance and outlook, so which like segments are firing on all cylinders and will take the company to -- will give a good amount of growth in FY '25, you can just explain that? Because in 2-wheel and 4-wheel industries, we've also seen like more than 2x volume growth. So is it likely to continue? So how are we faring well?
I don't know why -- how to answer this question, but largely, from our understanding, we are [indiscernible] other schedules. A lot was made up -- can you hear me?
Yes.
So even last year, while there's a lot of [indiscernible], the industry overall grew by 8.99%. And like I said, Sandhar grew by 21%. So we are conservative on the numbers that are presented by the OEMs, but we ourselves are very confident of the new content per vehicle that we've taken on in the last few years, and this will continue to grow. So at this point of time, we are quite happy.
I believe your voice was breaking, but I got the gist of it.
Yes, all right.
[Operator Instructions] The next question is from the line of Pranay Roop from Burman Capital Management.
So just one question, how much maintenance CapEx and growth CapEx totaling everything you mentioned, would be due in FY '25?
Well, if you ask me for maintenance CapEx and growth -- for maintenance CapEx, it would be around in terms of you asked me turnover, 3% to 4% we spent on the maintenance CapEx. Because what happens is the government guidelines also in terms of running the generator for each [indiscernible] ESG requirements. So 3% to 4% goes to the maintenance CapEx.
So sir, that would mean around INR 150 crores to INR 140-odd crores of maintenance CapEx?
Yes, yes. That is obviously.
And growth CapEx.
Growth CapEx, another INR 100 crores, you can take up. Part of the maintenance CapEx will also go through the growth CapEx. Some CapEx are common. So on an overall basis, you should see it. .
So overall, if I were to sum it up for the investors, overall, the gross [indiscernible] by INR 200 crores.
Roughly by INR 200 crores. What happens in terms of maintenance CapEx, we are doing some increase in the efficiencies of the machines also, which ultimately leads to the more efficiency in running the operations. So you can call it as maintenance CapEx or you can call it a growth CapEx. It commits on both.
Got it. And FY '26 levels should also be similar in terms of maintenance and growth?
Maintenance, as I said 3% to 4%, we'll continue to do it so that we keep -- I mean the new requirements. Growth CapEx, as of now, we need to be measuring the plants once we call in September in sometime in current financial year.
The next question is from the line of Shinak Shah from Atul.
Am I audible?
Yes, please.
Sir, I wanted to ask, sir, what are our 3 to 5-year plans. Can you please elaborate on that?
3 to 5-year plan?
Where do we see the company going in the next 5 years' time frame basically?
Well, I think a lot of groundwork has been done in the last few years. And the idea is that we are ready with new technologies, with new content per vehicle with capacities, with infrastructure, with the team that has been restructured. So the momentum of growth that you have seen in the last 2 years, we expect that momentum to continue over the next 3 to 5 years.
So are we saying that we can grow for like 20% every year for next 5 years -- 3 to 5 years?
Well, like I said, there are many hits and busts, especially with a lot of uncertainty whether it is geopolitical or it is health or it is company's economic growth or political scenarios. But keeping in mind that India, everybody being bullish about how India is in terms of its demographic dividend, in terms of its projected growth, I see no reason why we should not be able to achieve comfortably what we have in the last few years. .
And one more question, sir. Sir, what kind of revenues can we expect at full capacities in our -- all the joint venture in EV businesses? Like we have 7 [indiscernible] around the globe. And we have a very high amount of capital employed over there also. So please, can you elaborate on that businesses?
Well, there are 3 things. One is the international business. The joint ventures are all in India. The international business is 100% subsidiary. There, while capital is employed, a large part of that capital is employed in working capital and because the payment terms in international markets are much longer than they are in India. So that point one. Two, where joint ventures in India are concerned, we are continuously in talks with our joint venture partners to introduce new levels of technology. And as technologies are changing and being adapted in India, we see a very satisfactory momentum in the growth targets that are being kept. I would say that they would be in line with the overall growth of the company.
Okay. And sir, one more question, sir, what kind of margins can we expect in steady state over next -- I mean what kind of margins are attainable for the company as a whole? I know we are expanding it. But...
I mentioned this several times -- I've mentioned this several times that our stable company margins can be between 12.5% to 13% in terms of EBITDA. However, there are many restrictions that come in, which bring the margins down, especially for a company that is in a growth platform. So in the last few years, our margins have dropped on account of large investments that were being done. And a lot of our operational EBITDA was being lost towards these growth capital. However, now that we've stabilized -- you've seen the change, and that change is bringing back the margins back into operational parameters. Therefore, that is the reason why Yashpal Ji has just mentioned that even in this year, you will see about a 50 basis point improvement in the margins that we will have over the last year.
[Operator Instructions] The next question is from the line of Aditya Sanjay from Compete Circle Capital.
Sir, just wanted to ask you and just get some qualitative thoughts from you. In addition to the 3 products that we have in the EV segment, are we having any conversations with other OEMs? Or are we looking at any other products? Just qualitative comments, don't want any number around it?
Yes. So yes, the answer is yes on both fronts. While new products will not be launched besides these 3 in the current year, we are working on several others, several OEMs and codeveloping with several OEMs. So you will see many more of them in the [indiscernible] as we go forward.
And sir, just another question. These EV products, how -- what percentage of the revenue pie would they contribute to, say, in the next 3, 5 years? Do you have any internal targets in mind? That's my last question.
Well, I would not be able to give you any forecast on the percentage in terms of overall revenues. But suffice to say that over the next 3 or 4 years, they would become a significant number in the overall revenues of the company going forward and profitability.
The next question is from the line of Himesh Desai from Dolat Capital.
Just a couple of questions. The first one is on the aluminum die casting business. Have you added new orders in this segment? And have you added any new customers or new products in this line?
You are talking about aluminum die casting?
Yes, sir.
Yes, revenue development, I mean, the new product development is going on. That's the reason you can see that the vertical has grown -- it's shown a very good growth in the last 2 years of time. And in fact, we are expanding this capacity to Western India also in Pune as I mentioned in Khed City. So largely, we are catering to [indiscernible] customers in aluminum die casting. And we see no reason as to why we should not grow in this vertical in the coming period of time.
Okay. And just my second question was on the tool and die business, what outlook do we have for the next couple of years?
No, its tools and dies business, it's not a very, I would say, recurring business. I mean it goes up based on the demand of the customer base. It's seeing a good demand of 20% to 25% over the last 2 years. I think you should go in the same...
[Operator Instructions] The next question is from the line of Jay from Dolat Capital.
Sir, I just wanted to ask what is your outlook on the RM basket going ahead?
What market going ahead?
RM market, raw material costs.
Raw material cost is an [indiscernible] call. And very difficult for me to ask -- answer that question. You have seen some commodities starting to go up. Our standard answer and our standard line of approach to this is that this is a straight pass-through to the customers. However, there is a certain lag when the prices start to go up, and there is a little bit of pain that comes. But overall, on a larger platform, this is a pass-through. So whatever happens, it really doesn't affect the overall volume of profits for an organization especially in the auto component arena.
And could you just throw some light on how much this lag is, is it a 1 quarter lag or it is [indiscernible] lag when the largest partner include the customers?
The lag is typically, our costings are done every 3 months. Because of a lot of volatility that started to happen about 3 years ago, there are some companies that shifted on to a 1-month platform, but more often than not, costings are done over a period of -- after a period of 3 months, every 3 months. So the lag is 3 months.
Okay. Okay, sir. And sir, one more question from my end. Can you just throw some light on your assembly business and the outlook going ahead?
The assembly business is a part assembly business part manufacturing business, where we manufacture steel rims. We do the plating, we do the handles and so on and so forth. That continues to grow, but the rate of growth is that of the industry. So if you look at that business, if the entire industry grows at 9%, 10%, that's the growth that we get in that particular business. The other growth or the accentuated growth is coming from new product lines.
As that was the last question. I now hand the conference over to the management for closing comments. Over to you, sir.
Well, I want to thank Dolat Capital, and I want to thank all the people who joined this particular call. We are very happy that you could make it. And we, at our end, to work together to take advantage of the Indian landscape and the Indian auto industry. And we hope that we will be able to give you results, which are probably better than what we have done in the last quarter. With that, thank you all very much once again.
Thank you. On behalf of Dolat Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.