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SJS Enterprises Ltd
Earnings Call Analysis
Summary
Q1-2025
In Q1 FY '25, SJS Enterprises achieved a 60.9% year-on-year revenue growth, reaching INR 1,886.2 million, primarily driven by the Walter Pack India acquisition and robust performance in passenger vehicles and consumer segments. EBITDA grew by 60.8% year-on-year to INR 505 million, with margins at 26.6%. Net profit increased by 56.6% to INR 282.4 million, and export revenue rose by 13%. The company anticipates outpacing industry growth by 1.5x through diversified product offerings and strategic expansions. Looking ahead, SJS aims to enhance capacity, drive innovation, and increase its global market footprint, expecting continued strong performance across all segments.
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Ladies and gentlemen, good day, and welcome to SJS Enterprises Limited Q1 FY '25 Earnings Conference Call hosted by JM Financial. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ronak Mehta. Thank you, and over to you, Mr. Mehta.
Yes. Thanks, Lisa. Good morning, everyone. On behalf of JM Financial Institution Securities, I welcome you all to 1Q FY '25 Earnings Call of SJS Enterprises. From the management team, we have with us today Mr. K. A. Joseph, Managing Director and Co-Founder; Mr. Sanjay Thapar, CEO and Executive Director; Mr. Mahendra Naredi, Chief Financial Officer. So as we do always, we'll start the call with a brief opening remarks from the management team followed by a Q&A session. So with that, over to you, Mr. Joseph. Thank you.
Yes. Thank you for the information, Ronak. Hello, and good morning, everyone. I trust you would have had a chance to look at our investor presentation and the results published yesterday while Sanjay and Mahindra will take you all through the presentation later. The first quarter of FY '25 started with an optimistic note with overall demand in most of the vehicle segments growing on both year-on-year and also in a sequential basis.
The growth was primarily driven by strong economic activity and continuous support from the government. Despite geopolitical tensions, supply chain challenges, evolving customer preferences and inflationary pressures, India has continued to demonstrate strong growth. I'm also pleased to announce that SJS Enterprises has appointed a new group COO, Mr. Mahindra Singh with over 25 years of experience in the automotive industry. Mr. Singh's extensive background in operations will be key in managing and expanding our multi-location operations. This position will increase our management bandwidth and drive operational excellence as we continue to scale.
Now turning to some key updates. During the quarter, we continue to achieve strong financial performance and growth trajectory. The increase is largely attributed to the strategic WPI Walter Pack acquisition growth enhanced also the growth in Automotive and Consumer Durables segments. For the 19th consecutive quarter, SJS has delivered a better than industry growth, primarily driven by Walter Pack acquisition, premiumization trends and innovation.
SJS has delivered a strong growth of 60.9% in revenue on a Y-o-Y basis. The EBITDA margin reached 26.6%, a slight increase from 26.1% in Q1 of FY '24. This has been achieved on account of the Walter Pack addition and SJS's standalone business. Furthermore, I'm excited to announce the addition of Bixton Technologies as a new client which will open avenue of growth in the coming quarters.
Our plans for new product launches and capacity expansion at Exotic facility in Bunina processing as planned, setting the stage for future growth. Moving forward, we remain focused on delivering quality products to our customers, driven by premiumization and the adoption of advanced technologies and building long-term relationships with all our stakeholders.
We continue to focus on gaining momentum in the elastics and cover glass business, maximizing operational efficiencies while also looking into new prospects and making for growth. With that said, I would now like to hand over the call to Sanjay to take you all through some of the business and the industry highlights for the quarter. Thank you all, and over to you, Sanjay.
Thank you, Joe, and good morning, everyone. Talking about the quarter 1 by Q1 FY '24 was marked by yet another quarter of better than industry by SJS. Our consolidated revenue growth of 16.9% year-on-year to INR 1,886.2 million compared to the 17% Y-o-Y growth in the automotive, both two-wheelers and passenger vehicle industry production volumes.
So this growth was primarily attributable to the successful integration of Walter Pack India alongside strong performance in our passenger vehicle, consumer and export businesses. During the quarter, automotive business has grown well for us, both for the domestic market and the export markets with a 66.6% and a 13% Y-o-Y growth, respectively.
On the back of robust margin performance delivery by all businesses, I'm delighted to share that the consolidated EBITDA margin for the quarter improved 33 basis points on a quarter-on-quarter basis and 51 bps Y-o-Y to 26.6%. During Q1 FY '25, the company generated strong cash flows of INR 397.2 million and our overall cash and cash equivalents at the end of the quarter stood at INR 766.6 million and net cash at INR 2,233.7 million.
In terms of production volumes, the industry, two-wheelers plus passenger vehicle markets grew by 17% year-on-year in Q1 FY '25. SJS is two-wheelers and four-wheelers delivered a growth of 43.1%, which was 2.5x the industry growth. This performance was mainly driven by the passenger vehicle segment despite the industry growth in this segment being only 5.8% Y-o-Y basis for this quarter.
Overall, SJS consolidated sales saw a substantial Y-o-Y increase of 60.9%. Organic growth from SJS and Exotech was 21.1%, an due to growth across automotive, consumer and export businesses. Our strategy to diversify across various product categories and multiple industry segments, coupled with a broad customer base has effectively helped us derisk this business and reduce dependence on any specific segment.
During the quarter, our export revenue grew by 13% year-on-year to INR 142 million. The growth was primarily driven by the passenger vehicle segment and the consumer durable segments. We continue to expand our share of wallet by building new businesses from key customers like [indiscernible] Mahindra, Tata, TBS, Honda, Yamaha, Continental, Bajaj Auto, Oil & field, Foxconn, Sirma, amongst others.
We've also added Dixon as a new customer, and this will open significant new opportunities for us in the consumer durable segment. Before I hand over to Mahindra, I would like to give a quick update on our ESG and CSR initiatives. In SJS, our commitment to environment, social and governance responsibilities is integral to our business strategy. Our sustainability initiatives focus on reducing our environmental footprint promoting social welfare and ensuring ethical governance practices.
As a part of our efforts to lower carbon revisions, we are expanding use of renewable in the resources, we are making investments across our group to increase our captive solar capacity from 4 megawatts to 10 megawatts for the FY '24 [indiscernible] Furthermore, our effluent treatment on and sewage treatment plants have enabled us to recycle significant amounts of wastewater.
We prioritize investments in advanced technologies and initiatives focused on promoting eco-friendliness optimizing natural resource use and improving energy efficiency. By prioritizing sustainability, we have minimized the environmental impact through operational efficiencies.
SJS continues its commitment to foster a diverse range of sees our initiatives, our focus areas encompass education, skill development, high teen and health and various community improvement projects aim to create a lasting social impact. You can also visit our ESC profile, which is placed on a corporate website now. We provide highlights of ESG initiatives that can be easily accessed by all the stakeholders.
I would now like to hand over the call to Mahendra, our CFO, to update you on the financial performance of the company before I talk about the future growth outlook. Over to you, Mahendra.
Thank you, Mr. Thapar. Good morning, everyone. Let's delve into the financial stat. Slide 11 to 14 provide a concise overview focusing on the consolidated picture of SJS. In Q1, our consolidated revenue reached INR 1,886.2 million, showcasing growth of 60.9% Y-o-Y basis. This robust performance is attributed to the Walter Pack India addition and a strong contribution from passenger vehicle and consumer segment.
Moving to EBITDA. We achieved INR 505 million representing a Y-o-Y growth of 60.8%, with a margin of 26.6%, thereby incremental 33 bps quarter-on-quarter and 51 bps Y-o-Y. Our consolidated PAT for the quarter stood at EUR 282.4 million demonstrating a robust Y-o-Y growth of 56.6% with PAT margin standing at 15%, including by 42 bps quarter-on-quarter primarily due to higher EBITDA margins.
Our consolidated ROCE during the quarter stand at 23.3% and ROE at 19.1%. During the quarter, the company achieved robust free cash flow of INR 397.2 million and our cash and cash equivalents reached to INR 766.6 million with net cash position of INR 233.7 million.
With the addition of Walter Pack products in our portfolio, we have increased range of new generation products that contribute to 25% of our consolidated revenue during quarter 1 FY '25. Walter Pack India acquisition has effectively balanced our portfolio across two-wheelers, passenger vehicle and the consumer segments in the right manner.
During Q1 FY '25, export witnessed growth of 13% Y-o-Y to INR 142 million. Q1 '25 exports constitute 7.5% of total consolidated sales. As you know, both Exotech and Walter Pack are primarily domestic business, and hence, export as a percentage of console sales is at 7.5%, while exports are 13.5% of [indiscernible].
I would now like to hand back the call to Mr. Thapar to discuss about our future plans and growth outlook.
Thank you, Mahendra. Moving to our outlook for future growth. We are confident that we will continue to outperform the industry growth by over 1.5x leveraging our presence in multiple industry segments, our global footprint, extensive product portfolio very strong customer relationships and inorganic growth strategies.
Our potential content per vehicle for PV has over the last 2, 3 years, increased by [indiscernible]. As a one-stop solution provider for Exotech products, our focus has been to introduce new products and technologies that meet the futuristic needs of our customers and increase our addressable market. Execution of our organic and inorganic strategies will help us achieve a high rate of business growth in technologies that are complementary or an extension of our existing businesses.
A key inorganic strategy is to enter new geographies to accelerate our business penetration with key and new customers and significantly enhanced cross-selling opportunities for an extensive product portfolio. With our focus on premiumization, we believe we will continue to surpass the industry performance in the future as well.
With that said, I come to an end of my quarterly updates. Thank you, and we are now open to answer questions, if any.
[Operator Instructions] The first question is from the line of Amit Hiranandani from SMIFS Limited. .
Congratulations to the team for the strong operational performance and many congratulations for adding Dixon to our client list. Sir, my first question is basically, what products we will supply to this Dixon customer and when we can expect the revenue to start flowing in? And how large this customer can be in the long?
so Dixon, as you know, is the integrated manufacturer of electronics and have many -- So currently, what we are addressing is their consumer newer books and the telecom segment. So we've won businesses and these businesses have started in a small manner. We hope that this will scale up very rapidly. Volumes are very large. So we are very excited with this collaboration edition. And I think we still don't have a dam or the number that what can be a reach. But all I can say is that this is a very large business, which we hopefully should grow in the coming quarters and years.
And from when the revenue will start flowing in?
As I said, we've already started supplies to them for some parts for the telecom segment. we will soon start supply to the consumer durable segment businesses as well, and we hope to engage with them in a more meaningful manner to take forward in the future.
Sure, sir. Sir, 2 bookkeeping questions, what will be the annual total capital expenditure for FY '25, FY '26, including any planned expansion? And secondly, could you provide the revenue and EBITDA figures for Exotech and WP separately, please?
Yes, Amit. So the CapEx we announced and we told in the last meeting as well, we have a plan for expansion for our subsidiary, especially Exotech. The investment would be in the range of INR 80 crores. And we also continue to expand for our -- the glass business where we were going to be tinkered around INR 30 crores. And apart from that, there will be maintenance CapEx to the tune of less around INR 15 crores per annum. So that will be going to happen in the current and the next year. So roughly, you can consider on a broad level around INR 170 crores to INR 180 crores.
And sir, numbers for Exotic and WPS?
In terms of margin, we please see us from a control perspective rather than seeing the subsidiary. So we delivered a consol number, and I think we're always guiding on the same, rather focusing on the individual company, let us focus on the control as yes. I mean as we've said earlier, we have a strategy of cross-selling products. So we've taken a decision whether to sell these products to SJS or to Exotech. So that gives us that leverage in terms of a competitive advantage. So we've said this before. So please look at this as an integrated business moving forward. where we are focused on growth and expansion of margins or maintain of margins.
Sure, sir. Sir, one observation is that basically on a Q-on-Q basis, Exotech and WPI combined revenues increased by about 9%, but the EBITDA margin has declined by approximately 125 basis points. So what factors contributed to this decline?
So as I said in my earlier calls, we are winning a lot of new businesses, both at Walter Pack and Exotech. So there are some new technology started. We started some painting business in Exotech. We started some new generation technologies at Walter Pack. And what I've maintained is that when you ramp up any new product, there could be a temporary blip or a very small number in terms of EBITDA margins. So we are not worried about that. So any time if you start a new project, we do a lot of trials, those parts don't about the customer. You bear the material cost, you bear the manufacturing costs for those parts. So this is just a temporary blip. But on the long term, as I said, on a consolidated basis, we are still guiding that we'll maintain EBITDA margin of 25% for our group companies.
The next question is from the line of Yash Agarwal from IIFL Securities.
Congratulations on a great side of numbers. My question on the margin dentin case of the subsidiaries has already answered. I just wanted to know if you could provide the breakup of revenue across segments in the stand-alone business between two-wheelers, PV consumer developers?
So yes, we have informed in our presentation. If you have the investor presentation, we have given the the segment-wise [indiscernible].
That's split across the consolidated numbers. So I just wanted a split on the stand-alone basis.
So cannot broadly for the quarter, our two-wheelers -- we don't -- normally, we try and avoid giving you guidance on specific numbers across segments because it's a very sensitive matter. But any other questions you have on this topic. I mean largely of broadly answering you, two-wheelers is roughly about 50% of our sales of our stand-alone business.
The next question is from the line of Hitesh Goel from Radesh Abo Advisors LLP.
Sir, can you -- in this quarter, I believe if you see the ramp up of some cheaper have been slowed. So can you give us [indiscernible].
Could you repeat that, please?
No, I said if you look at in the Walter Pack side, right, I mean, your key customer ramp-up has been slow because of the election. This quarter has been slow, right? Despite that, you've reported a good sales, right? So going forward, can you give us a sense on -- in terms of ramp-up of programs will this run rate in [indiscernible].
You're talking specifically for Walter Pack?
Yes, Walter Pack.
So Walter Pack, we continue winning the large businesses. So it's a new business that we acquired now most 1 year since we acquired this business. So here we are doing businesses across customers. So outlook is very strong. And at the moment, a lot of development that will be happening. There's a lead time here because coring is -- takes about 8 to 9 months to develop drilling and validate parts. So that's typically when these programs start. So we have new programs that are starting from October this year to next year, June. So there are a whole lot of programs that we've already been on...
My question was actually more guided towards 1 vehicle, which your customers go to launch, right? I don't want to name the customer, but a key vehicle which 1 customer -- big customer in multipacks going to launch, I think you have a decent content there, right, in terms of -- so that -- is it right that the coming quarter, we'll see that benefit -- I mean the second quarter, third quarter, you will see.
Yes, yes, absolutely. So there are -- so while we are secret about it. But yes, there are -- there's a big launch a very significant loan from a customer happening, which should happen soon.
The next question is from the line of Abhishek Jain from Alpha Qurate Advisors Private Limited.
In this quarter, on a stand-alone business, we have seen a significant expansion of the operating margin. It is around 2 to 3 [ bps ]. So will this margin will sustain?
So as I say, I answered this partly earlier. So look at us on a consolidated entity because we today have delayed that flexibility in the company. to address the needs of our customers across our various good companies. So SJS margin, Walter Pack margin and Exotech margin are all completely interplay. But yes, our business at SJS continues to grow strongly and the margins are sustainable.
So if you look at our [indiscernible], we've been close to about 15% EBITDA margin of SJS for the last many, many years. So that continues to remain that way.
Sorry to interrupt, sir. The line of the current part in the question queue seems to have disconnected. Maybe move on to the next question.
Okay.
The next question is from the line of Abha Podar from Ines Alpha Investment Management.
Just wanted to understand in the presentation, we said that Brazilian industry has grown by 21%, whereas our growth is around 12%. We've seen slower in the industry coming. So anything to call out here because last year, obviously, we've been [indiscernible] So is it just a timing phenomenon? Or is there anything else to talk a bit about margins?
Your voice is -- there's a little bit of echo. So I can't hear you so well. So could you just repeat the first part of your question? You're talking about -- what the two-wheeler industry?
Yes, I'm talking about the 2-wheeler industry growth. I'm saying in the presentation, you said that the industry growth is 20% and our growth is 12% odd. So just trying to understand, is there anything to call out here since our growth is not higher than the industry?
No, nothing really. So this is just a seasonality that you have when your model get launched. So sometimes the customer is down the existing products. So we've already won -- there's a very strong order intake for the new models that have already awarded to us. the customer will launch it. So nothing very significant. It varies quarter-to-quarter. But overall, our two-wheelers industry growth has been quite significant from the last year, you see we've grown very strongly. And our numbers -- so close to about the industry grew at about 10%, and we grew our business broadly. So that was the growth last year. So we doubled the industry growth FY '23 to '24. And '25 this quarter, as I said, we've got multiple new businesses across all key customers. We don't supply. But our goal with Baja, oil and feel, Honda, TVS, all have been very strong in terms of new or successful models that are coming in. So they will get launched and I think that will normalize during the course of the year.
So just to clarify, if I were to extend this for the entire year for F '25, you would be confident of the fact that you will grow 1.5x of the industry growth for two-wheeler as well for F '25? Would that be a fair assumption?
So in my previous commentary, I have said that as a company will grow 1.5x the growth rate of the industry, that is two-wheeler and four-wheeler combined. Separately, the two-wheeler industry growth will be more in line with the organic growth of the industry. And we will outperform the automotive industry because we've added a lot of new generation products, which are very high-value premium products that are being launched. So on a blended basis, we'll outperform the industry volumes by 1.5x in terms of our sale revenue, which we have delivered. Two-wheeler will continue to be organic rate of growth, as I said earlier of the industry.
And just lastly, if you could just update on the cover glass, where are we now, how close are we to delivering and any guidance on revenue that you would have for the covered loss opportunity? That's it from my side.
Yes. So [indiscernible]Covera continues to be work in progress. So we've got ISO certification. There's a requirement for very critical parts. So there are standard that we need to meet. So what 1 has been awarded the ISO certification that has been extended to power glass. We are continuing to engage with customers. And as I said in the last quarter, we expect to get our first per order for this business within this quarter, and we will supply -- start supplying in the phase man. So I think [indiscernible].
The next question is from the line of Abhishek Jain from Alpha Qurate Advisors Private Limited.
Your stand-alone business this quarter, both was around 6% Y-o-Y. So what is your growth target for the stand-alone business? And what would be the main driver for the near term and the longer term?
Abishek, your voice is echoing a little bit. But what I understand is that you want to know what is our growth target for the organic stand-alone business, right?
Yes, yes.
So as I said, it will go almost in the industry growth rate, which is performing well, and we continue to win new businesses. Our export businesses are performing well. We are engaging with some bidding for some very large businesses, which we hope to get some in the next few months. So the outlook is very optimistic, but the guidance still remains at 1.5x the industry growth rate.
Okay. And how much the current contribution from the consumer durable in revenue?
Stand-alone or consolidated?
On consolidated.
So the tender goods has contributed 21% in the total revenue.
And how the mix will change in the coming days?
So as we said, you've already done a large amount of rebalancing, thanks to the strategic acquisition that we've done, both of Exotech and Walter Pack, which includes four-wheelers revenue. So there are deeply balanced. So I would imagine this trend will continue because even the export market growth that we see will happen more in the core misere segment and we can do for second. So two-wheeler is largely the India plant, which will continue to grow organically. In terms of product mix, I would imagine that we are already equal it in terms of mile and dealer and consumer is about 22%, and there are a whole lot of other segments that we are working on to add -- to expand the marketing.
Okay, sir. And my last question on the -- this -- your guidance on the consolidated margin that is around 25%. But in this quarter, you have already done at 26%, despite that lower margins from subsidiary side. And most probably that the subsidiary margin will start to improve from here on with the ramp-up of the new business. So can we expect another 150 bps of the margin expansion and it will stand around 26.5% or 27% in the coming days.
[indiscernible] we are not so worried about EBITDA margin because we have demonstrated a resilient quality that we have to maintain margins at 25%. I am now looking at, I mean the new orbit of growth for the company in terms of new technologies, new products. So growth is the driver here. We will launch new technology products. In the short term, that could impact EBITDA margins because we will do a lot of development in our trials before we launch these products. what we got the power glass, of course, there will be extensive primes that are done across previous stages. Now they cost money, which impact the P&L statement. So EBITDA margin, my guidance remains at 25% considering or these sectors.
The next question is from the line of Yash from Stallion Asset.
Congratulations once again for a great quarter. I just wanted to understand on your passenger vehicle business, the industry is just on about a 6%, but you've grown by 9% on a consolidated basis. So what is driving this growth? I'm just trying to understand how you're able to outperform the industry by this margin?
So basically, this is in the last part contributed by the Walter Pack acquisition that we did. So that is primarily a four-wheeler business. and that has contributed to that large growth in the four-wheeler segment. But on a stand-alone basis, also, we have done some very good businesses in the PV segment. So SJS grew by close to about 40% with new business wins from our customers, new cognition -- new generation products. For example, data now and introduce a secret to lit steering wheel loon their vehicles. So this is the first that maybe for the industry, which SJS launch. So that has contributed to our sales plus Exotech has commenced mass production for companies for their customers. So Mahindra [indiscernible] models, the black edition, the XO. So all of these -- so very strong wins in our passenger vehicle market, and that's what I've been guiding that now that our product portfolio for four-wheelers is very robust and very high-value products. So the future growth of the company, four-wheeler market will play an important role in our growth. And even for the export market, so we are the dominant market outside India. And our play in the -- in that -- in the export businesses also will help grow our fee revenue in product.
And so, I mean, just sort of a best case at Taber, how do you think the industry will grow this year, if I just combine a 2-wheeler, passenger vehicle and all the other segments? You think as can grow by 20% to 50% in volumes this year?
No. So you had a better case to me because you try to all these companies. But the view that we have from our customers is that passengers, there was an issue of inventory line and dealer points close to our 5 days in the last quarter, which I believe is being rationalized now that we have a past season coming, which would boost sales. There are good rain, so that should improve demand in the rural sector. So one would imagine that the industry would keep pace. My bet would be that wheeler, which has grown about 19% could be -- our estimates are a little lower in terms of growth of market -- but formula, it shouldn't catch up because they are at a loan, has to be new launches. So we will wait on what we see. But as I said, our sanity of the company is no matter which segment growth or not, we are diversified in the products that we get market and for us, the four-wheeler growth is primarily on account of premiumization and new product launches. And that is why growth while we are first to the industry growth, but we outperformed the industry growth in a significant manner because of this new division product.
Right. And the last question...
Sorry to interrupt. May we request that you return to the question you follow-up questions as there are several participants waiting for their turn.
The next question is from the line of Rakesh Jain from Axis Asset Management Company.
Am I audible?
Yes.
Congratulations to the team for a good set of numbers. Sir, my question is with the...
Rakesh, louder.
The current participant seems to have been disconnected. We will move on to the next question, sir?
Yes, please.
The next question is from the line of Pravin [indiscernible] from JM Financial.
Congratulations on a great set of numbers. So I've got 3 questions. First is a follow-up to a previous participant question. So in the 2-wheelers, we seem to have lagged the industry growth. And you mentioned that that's largely to do with certain models being run down. But given that some of our key customers and we have reported very good Q1 growth. Is that the only reason? Or is there somewhat maybe in some of the models we've lost some business. That's question one.
Question 2 is we recently got to see some of the planned EV model launches for napa major passenger vehicle clients. So 1 thing I opened was they don't have a metallic goes for their EV portfolio rather they have plastic or glass logos, which get lightened up. So are we supplying such parts to them? And if not, do we see a risk to certain parts of the venue if more and more models start coming in this new kind of low book?
And third is a more generic industry even question in terms of production, should you that being shared by on, how are you seeing the demand because July particularly seems to have been quite weak across the industry.
Okay. So let me take them 1 by one. So your first question was two-wheeler growth, whether there is something that needs to be -- I mean, that I've already answered that question earlier from a participant. So we continue to win large businesses. We have not lost the business into either. So everything is as per plan. Now we don't supply to all the models. So while the companies do want to, for example, I don't supply to up. But I supply to some customers now depending on within these specific customers, I would not like to call out separate customers. but some models have not done so well in terms of demand in this quarter. In some models, there is a change that they are launching a new model. So we have the businesses that are awarded to us and these will come into production maybe this month or next month. So it's purely a product mix issue, nothing to do specifically with the industry or our trend, which I say that whatever the two-wheeler organic growth is, we hope to be buy or in line with that for a two-wheeler. The second question you had was on EVs where you see that in some vehicles, you've seen that the content is the it different from the IC engine. So I repeat what I've been saying earlier. So when the competition intensity increases, which is low at the moment in electric 2-wheelers, it will increase. So the need for differentiation will be dominant. So the aesthetic, the feel of a product is the key factor or a person buying a vehicle today, performance is by and large in terms of what is the range of the battery, what is the empowerment overall, the high quality of the bike. So most of these are pretty sorted. So I would imagine that this would normalize and you would have it more and more new generation requirements of action these companies and that we will see on the volume increase. So at the moment, we deal -- we already supply to all we supply to Eper. What I said earlier in my call is that there's a transition that's capping from the conventional kilometers that you have with two-wheeler electric additional cluster. We are already working with supply that to a very major two-wheeler EV manufacturer. So we are ready with these technologies. And depending on the model that they launch and what the consideration that the dishes for that particular model, that is define the content really. But in the long term, I think the value increase on account of the digital cluster that we will have will compensate or something else that you see is different from the IT engine. But always, there will be no more than the need for differentiation. So I hope I answered all your questions, there was a third point, which I have forgotten modestly.
The third was regarding the production, can you be seeing from OEM given the drive was particularly weak across industry segments.
You're talking primarily with respect to two-wheelers?
No, across industry segments, two-wheelers and four-wheelers as well as consumers.
So two-wheelers is okay. So we see strong demand and strong part of outlook. Four-wheelers is still picking up. So they are hoping that these new model launches and effective season, things should improve. So many customers, which reported a little subdued number roles first quarter still maintain that they will catch up to the volumes that are planning in the [indiscernible] September onwards. So that's the outlook broadly.
Next question is from the line of Rakesh Jain from Axis Asset Management Company.
Sorry, my line got disconnected. My question was, can you help us remind what are the priorities now given that you are doing a lot of stuff and there's a lot of inorganic additions, which we have done. And can you just help us prioritize what are the areas, which are more from near term? And what are some medium- to long-term opportunities which we have in the [indiscernible] I mean, the new customer addition or the new content, where are you focusing more on the near term and more on the longer term? And I'll take up the second question after that.
Okay. So in the short and the medium term, we see a very strong demand for our products, so capacity expansion at Exotech is on the end. We want to grow this very quickly. And the plans are highlighted on final stages of finalization. So expanding capacity at Exotech and Walter Pack, that's 1 agenda or 1 focus area. The second really is to get the cover glass business started. We have a good engagement with the customer. So getting the business and setting up a new plant for cover glass is only annual. So that is again something that we will do over the next 1 to 2 years, and we will start supplies in a fast manner. The third thing in terms of the market release that we have now a very strong product portfolio. And we are looking hard on the doors of these global OEMs to track large global businesses. So that is the third focus area that I have. And as I said, we are very competitive. We benchmarked ourselves globally. We have a strong customer connect. We have an impeccable delivery rating and the respect of our quality -- so we will take all the boxes in terms of the global businesses. Now that we have scored behind us and then the semiconductor chip shortage behind us, the buyers of these global companies are now looking at launching new models. There were some supply chains and say that they face because of some shipping embargo and some unrest that you see. So the war still continues, but I think it's more getting back to normal. So we are very focused on driving export growth, and that's an area where I think we are making good progress. And hopefully, we'll give you some good news in the next quarter.
Great. Good. The second question is how should we look at your business mix? I'm not saying over the 1 year, it's the next 3 years with consumer durables addition of this large client and the opportunities you are seeing over there. And anything if you can guide on what new segments you can look at beyond the consumer durable?
Yes. So as I said, the global automotive market is a very interesting area for us because of parts are very light and easy to ship I already shipped parts to more than 22 countries and we have a connect with all the marquee global names. So that is something that we want to drive fast. So if we look for a three-year perspective for my business. So that's an area that I think will grow. With these technologies that we have, both in terms of the acquisition of water we see a large opportunity in the consumer businesses using the Walter Pack technology that we have now acquired. So we need to grow the Walter Pack business, both in India and globally. So that's, again, a strong runway for growth. The third area that we see is the technologies like medical devices, which has been on our radar. So we've started work with a few companies. We now need to scale that up and take them to the global majors. So that's a new category of products that we will work on. But then with the portfolio of technologies that we have now with us and our capability for doing avenue design and styling, partnering with OEMs. So I think that could be another growth driver in the future. So largely, growth will come from 4 meters, as I said, in the next 2 to 3 years. Exports will grow to be a larger part of a term. So today, 7.5% of consolidated revenues exports. My target is to go to almost about 14%, 15% in the next 3 years. So that is an area that is very exciting for us, and that's what we want to continue to drive.
Yes, that's really helpful. Congratulations.
The next question is from the line of Amit Hiranandani from SMIFS Limited.
Sir, how is the export situation progressing? And have we begun executing orders for the Exotech export orders, the Whirlpool customer?
Yes. We've started the supplies of graded part to Whirlpool. That's one part of your answer -- question. What was the other question, Amit?
In general, the export situation.
The macro exports is coming back for us. So this quarter, export revenue on a Y-o-Y basis for this quarter grew by about 13%. And overall, we are quite bullish on exports, as I said -- but the most of the export businesses, there's a lead time from you get awarded to that converting into sales. So I think the big impact would be felt from next year onwards.
So the double-digit growth will continue in exports, right, for FY '25?
Yes, barring some unforeseen circumstances in the global economic scenario. So people have been closely watching what's happening in the U.S., what's happening what will happen with this war that's not going to be in the Middle East. So there are some issues. But overall, the body language of the customers that we see is that they are now -- it's more of business as usual, and we are looking at launching new models, which is an opportunity for us to get into new exports because typically, a customer has to onboard a new supplier based on the new programs that they've done. In some cases, they have a great problem with the incumbent supplier, they may resource it, but largely the growth is driven by new products and volumes which from award will start takes about 6 months to 9 months depending on the specific program and investment.
All right. Sir, my second question is basically on the cover glass products or the revenue potential for this over the next 3 years. And secondly, the debt status presently and the likely we are going to repay it completely or not?
The cover glass or, as I said, 1 day or in India will have a larger play or a digital display. So that is changing across customers. So even [indiscernible] was typically focused on cost vehicles are now moving in that direction. So I think it is basically the byte. They would like to have a display, you would like to have a rearview camera, infotainment all 100-meter in large is required and a cover glass. So I think we are in the absolute right spot. How large the market will be is still to be assessed. But one could imagine that all the will start with the high-end gas first, when handrail be first with the HUB 700, then Honda followed in their models. And now I think almost all the customers are asked by the end consumer to introduce larger areas. So the pace of growth of this business will depend largely on the take for the vent competition that the OEMs have. So the average price, prices vary from panel. So typically, a large play a small display to the price point would be from INR 500 INR 1,000. So that's the broad range that we have. And maybe 25% of the cost will start looking at the 10 and 15 and 20. So it's a long-term game, but the last thing the technology that will be there for many years. And so I have to put a number today because it's dependent most on how much, what are the OEM do. So at the moment, largely, they're imported, people are setting up capacity and now to loading screen and by cover glass. So localized elite around. And depending on the solubilization that these OEMs demand I think that will determine the sign of the market and how soon does it ramp up to be very significant. Of course, the humble policies of meeting there because even we expect it near tariff restrictions or fully imported fully build displays. And that is the reason why OEMs are driven for the vehicle manufacturer localize it, which is a good business for us.
And sir, we'll be supplying this as a Tier 2 supplier, right, Tier 2 supplier because the largest clients...
Yes. many times the OEM overseas is because this is a critical part. But yes, it will be a Tier 2 supply patents manufacturers who will integrate this and make integrated at this pace.
And Amit, I'll give you debt question. The total debt for the quarter 1 end is INR 533 million. During this quarter, we have repaid INR 150 million to the banker. And we have taken the loan for the acquisition of Veltec, and there is auditorium for tier 1 year. So that is going to be over now. So you will see that the reduction of this term loan of acquisition in this quarter 2. So net debt, total debt is iNR 533 million for the quarter end, and we have a cash and class equivalents INR 767 million. So our as on presume, our cash position is a net cash position of INR 234 million.
So that is what we write in the market also. We generate a large amount of cash, so we get to for the order back addition largely will be repaid in quoting this quarter. So that's what we -- on grades grid all the best on the less.
The next question is from the line of Kaushik from AK Investment.
Great set of numbers, sir. And my question is related to guidance part. So if I see the current run rate you are blocking suppose 750 to 800 out of revenue, can we cross INR 1,000 crores of revenue? That is my first question. And based on the capacity, you also -- based on the capacity also, how you are building the company for the next 3 to 5 years? What is the vision do you have for this company? And how the mix would be changing? Because I see have onboarded Dixon as a customer, right? So how the mix would be copper, let's say, 3 to 5 years? How do you want the mix to should be? Consumer heavy or it will be passenger heavy? What are your thoughts, sir?
So we -- so let me answer the last part of your question first. So in the future, see extremely optimistic for right -- we are marching to that and creating capacities across all our business to cater to this demand. So we see very strong growth coming back to where will be the in terms of numbers. So I would not like to give a guidance. I would say we will see a very strong growth, again, growing at close to 1.5x the industry growth rate. the opportunities or the segment. So we focused strategically on derisking our business so that over dependence on any 1 segment reduces. So we've done extremely well on this front. So FY '19, 70% of my revenues came from two-wheelers. Today, two-wheelers is down to about to 34% to 32% of my business. So we are predominantly have pivoted to become a co-leader supplier for the simple reason that we saw that the large opportunity outside EDA is primarily four-wheelers India and maybe the ASEAN region are the only 2 regions outside China, where two-wheeler is a meaningful play and there's a limited content that you can offer to -- so I think we are absolutely right. The consumer businesses, I would certainly like to grow my medical device business, I would like to grow. So I would imagine that will be 25% consumer close to about 30% titer and the rest would come from four-wheelers. And exports, as I said, my target is to be at 15% of export revenues on a consol basis in the next 3 years. So that's the outlook that what I see. Our vision for the company is very simple. So we created a skill set in the organization where we are truly an end-to-end design to delivery companies. We have our own sale studio. We have factories in in factories handling these multiple technologies. So there is no stress on growth for any 1 segment. All these are centers of excellence. So I think we are very well structured, well positioned, and we are expanding capacity. And there is no reason why we should not be one of the predominant aesthetic suppliers in the world. the ambition really is to grow the export market. And I think we should be able to crack that. So wind optimistic.
Yes. And any company, do you expect to become in this Exotech market? That is my question.
May we request that you return to the question for follow-up questions as there several participants waiting for their turn.
Yes. Yes. I just -- this second question. Yes. So any company that you wish to aspire to become in this aesthetic segment, that is my expression. And based on the assets, how much tumor can we make based on the current capacity? These are my last question, sir.
So 2 things. There is no role model that we have. We want to be an old model. That is our target. There are no company which does everything that I do a trade that and now we get that global scale, I think we will be a company that other people want to be copied this, not the other way around. So that's the vision part of the question. And what is your question in capacity?
Based on the assets, how much time can you make? I mean based on the current capital?
On the capacity front, our LGS, we are currently have around 65%. So you can work out what is the number we can achieve. Exotech, we almost achieved which is running 95%, and that is how we are planning to have expanding and putting more CapEx in the next one. So we are going to add more capacity out there. Walter Pack is somewhere 75% kind of a current run at this level. So there is an ample amount of ample growth we could be able to do. We have ample lines available and with more of a construction and adding more merchants. So there is a good amount of capacity available in the company.
The next question is from the line of Pratit Vajani from Union Asset Management Company.
Sir, can you elaborate a little bit further on this diction opportunity as to...
Pratit, can you be a little louder?
Am I audible?
Yes, now it's better.
Yes, sir, can you elaborate a little further on this diction opportunity considering that you have not been a part of the telecom space and even on the consumer your and you are yet to fully ramp up on the ILD part what you've acquired with WPI. So what is the technology which you are trying to foray into with Dixon kind of...
So we have multiple technologies, as you are aware. So we have, at the moment, business segments or big on is what we have 1 business is with One is the telecom segment. And this is -- the technologies are similar to the products that we already have. So we've made a lot of logos. We make a lot of overlays. We make a lot of other aesthetic parts. So these are these parts that we will supply to them. We've also won businesses targeting businesses with their consumer appliance segment to their large contract manufacturers for some companies. And it is a traditional line of business that we have. So for refrigerators and washing machines, we have a whole set of products that we offer and that is what we'll be offering to Dixon as well. This is just starting. So I think start of the relationship with Dixon. We hope to grow this business along with them.
Okay. So sir, just to clarify, this would be the new generation products, which you highlight in your PPT?
New generation products, yes, it could be partly new generation, more generation, so business is business, right? So our business for new donation products was mostly in terms of the IMD technologies that we have and we have the cover glass and the IP technologies. So those potential also could exist because these are all futuristic you will machine interface technologies. But as I said, let's take it 1 step at a time. It's a good customer to have. We are starting with some products, and we hope to grow this because I think the ambition of action and -- so became. So we want to grow this business and scale it up.
The next question is from the line of Lokesh Manik from Vallum Capital.
A couple of questions from my end. One was a few years back where we had aspirations to achieve exports 25% of our revenue and you're stuck in single digits since a long time. So has there been a change in the strategy and focus where we are seeing good potential in the domestic markets, we would want to focus here versus exports. That's one. I know you're knocking on the doors of the global OEMs like you mentioned. That is one.
And second was, by when do you expect the CapEx that has to be done to commence production that is for Exotech and for the cover glass. Those two are my questions.
Okay. So very quickly on the question on exports, and we said that to be 25%. So typically, the exports that we did was from Asia, and we were at 19% of SJS sales were exports when we went for the IPO in 2021 and that was that context. Since then, we acquired -- I think we had already acquired Exotech, which was 100% domestic business. We also acquired undertake, which is 100% domestic business. So with the denominator increasing the percentage of export on the consolidated revenue came down -- but our overall exports and when we made that statement, it was that we will be -- we were hoping that in the next 3 years and last year, we 25% of us solid value, which we will still reach based on the target of the product portfolio of products that we've added to our portfolio. At the moment, the number that I'm talking about on a consolidated basis, where there is close to about INR 170 crores, INR 160 crores coming from Exotech and almost INR 300 crores of the revenue. It's purely domestic added to the denominator. So what I'm saying is that at the moment, 75% of my console revenue is sports which I hope will go in the next 3 years to be 15% of mine. So we are...
Sorry, can you repeat that, that will be 13% to 14% going forward?
Sorry?
Can you just -- what is your aspiration for the next 3 years in consolidated level? You said it was 13%, would I get that right?
Yes. So 13% to 15% is what I expect it to be. So that's what the new businesses that we are having. Of course, we will try to do more. I mean our target is really to take that product.
Sure, sure. And on the capacity commencing production, but what year can be expected or quarter?
So for the -- this capacity you're touching more for what, [indiscernible] or for Exotech?
Both, both. Exotech and [indiscernible].
As I said, we hope that by the end of this quarter, we should have our worst order. We will start to be manager to supplies meaningful manner will start next year. and the full impact of the revenues would be felt the year after that. So FY '26 is when to class revenues would start to make a significant impact on our revenues. And Exotech, we expect by quarter 1 of next year, the capacity should come steam and we should be able to augment [indiscernible].
So FY '26 both should be online and showing some revenue sort of super time capacity. Is that fair enough understand?
Yes.
The next question is from the line of Sahil Rohit Sani from Monarch Network Capital.
Excellent set of numbers, sir. Sir, any update on the inorganic side of the acquisitions? I mean, are we excluding couple of assets. What is the update on that?
Absolutely. So organic is an integral part of our strategy. So as you all know by now, we are debt averse. So we don't like anything debt. So we just finished the acquisition of Voltaire, which we and we will hopefully repay the debt that we took for the action by the end of the quarter. We hope that we will generate -- I mean we are already generating a large amount of free cash -- so we will show up revenue and by the end of this financial year, we should have corpus available with strong cash generation abilities. I think sometime in next year is when we would like to do this. But as you know, inorganic acquisitions, we have marked in the business or acquiring companies just what we see of acquiring they have to energy, we should be able to get a good strategic fit and get it at a good price. So the migrate of companies that we lowered is maybe about 10%. So if I look at 10 companies, maybe a Zenon. So we are in the process. But as I said, we are in no hurry. We have close to 1 year by the [indiscernible] cash on the side to [indiscernible].
Right. No that makes sense, I mean, we would appreciate you make justice to the acquisition in Exotech. And one last question is that for Foxconn, we -- right now, what do we supply right now? I mean, apart from what we're trying to count last anything else what do we do right now?
Yes. Foxconn, they need a display for a TV, and we have the technology or we have some special technologies for the display what we supply. So it's a sort of a cover glass or a 2-year.
Ladies and gentlemen, that was the last question for today's call. I now hand the conference over to the management for closing comments.
Thank you. I would like to thank everyone for joining on the call. I hope we have been able to respond to all your questions adequately. For any further information, we'll quest you to please do get in touch with our Investor Relations team. To stay safe, stay healthy, and thank you once again for joining with us.
On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.