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Subros Ltd
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Ladies and gentlemen, good day, and welcome to Subros Limited Q2 FY '23 Earnings Conference Call hosted by Batlivala & Karani Securities India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Annamalai Jayaraj from Batlivala & Karani Securities. Thank you, and over to you, sir.
Thank you, Virav. Good evening, everyone. On behalf of B&K Securities, welcome to 2Q FY '23 [ post-result ] conference call of Subros Limited. I also take this opportunity to welcome the senior management team of Subros Limited. We have with us today Mr. Parmod Kumar Duggal, Chief Executive Officer; and Mr. Hemant Kumar Agarwal, Chief Financial Officer and Vice President, Finance.
I would now invite Mr. Duggal for the opening remarks, to be followed by a question-and-answer session. I also may remind you of the safe harbor. The company may be making some forward-looking statements that are to be understood in conjunction with the uncertainty and the risk that the company faces. Over to you, sir.
Thank you, Jayaraj. Good evening, ladies and gentlemen. My name is P.K. Duggal. A warm welcome to all of you on Subros' investor call for quarter 2 for FY '23.
The automobile industry started the year '22,'23 on a very promising note, and our first and second quarters are very good from a growth perspective. The market is showing a sharp recovery and order booking is high. Passenger vehicle industry has grown by 38% on production basis in quarter 2 of FY '23 and commercial vehicle industry truck has registered a growth of 32% during the quarter.
I think there are much more positive sentiments for the growth of auto industry in India now. While on the one hand, we see a revival of vehicle demand, on the other hand high commodity prices and inconsistent semiconductor availability has aggravated the problem for auto manufacturers, which is causing a major concern for the industry post-COVID. The increasing price of commodities in India has resulted a record high price of new and used vehicle in the country.
The results of quarter 2 for FY '23 has been shared with the stock exchange and also posted on the website. Let me elaborate the summary of the result one by one.
First, I'll update about the industry relevant to our business. In this quarter, passenger vehicle industry has grown by 38%, as I mentioned before, in comparison with the corresponding quarter of the last year. Whereas Subros PV segment thermal product growth in quarter 2 is 34% on a sales basis in comparison of the corresponding quarter of the last year. So our performance is more or less in line with the industry performance subject to some difference and some model mix.
Commercial vehicle bus is also improving. Tourism sector, school bus business is also reviving now. But AC fitment ratio is yet to be improved in the bus -- fitted from the OE side. The company has registered a growth of 2% in the comparison of a corresponding period in this particular segment.
Further on, the commercial vehicle truck segment for N-2, N-3 category, which is relevant for the AC or a blower business for us. Industry has shown a upside trend after 2 years. Industry has grown by 62% in first half of FY '23 as compared to the corresponding first half of the last year. Subros growth in this segment is 88% during the same period. Growth is mainly because more AC fitment ratio we observed in this particular market. Consumer preference is shifting towards AC truck as compared to normal truck.
This year, the big impact of environment change has been seen in the various part of the country, impacting our home AC space. This sector is showing a promising growth now. In this half, home Aircon sale has grown by 33% as compared to the previous figures. Revenue from operation finally is recorded at INR 695 crores in this quarter. Corresponding quarter was INR 529 crores. Overall, there is a growth of 31% in the revenue over corresponding quarter of last year.
In this quarter, car and non-car segment has contributed 94% and 6%, respectively. Maruti and Suzuki Gujrat has contributed 85% of the total sales of our company. In this half, home AC has contributed INR 77 crores, which is almost 5% of the total revenue contribution. Our share of business in passenger vehicle air conditioning market is 40%, and share of business in truck segment is 49% and bus AC it is 20%.
Now I'll talk about the operational performance. As I mentioned before, there is a lot of challenges in supply chain, which has never been experienced by anyone in the industry. Commodity price fluctuations, logistic cost escalations, U.S. dollar at the highest ever level has impacted the margin in a big way. Significant increase in the lead time of import shipments and subsequent fluctuation of schedule by the OEM due to semiconductor shortage, the availability of [indiscernible] has impacted our inventory levels by almost 10% to 15%.
Commodity price fluctuation during the last 6 months has had a substantial impact on material sales ratio. Though there are trends now for building out these fluctuations, but it will take another quarter or so to normalize the impact on the financials. Although we have a compensation formula with our key OEMs, but this is on a periodical-led basis. So it will have impact in subsequent quarter.
The company has realized EBITDA of INR 44 crores -- INR 44.05 crores in quarter 2 of FY '23 as against EBITDA of INR 37 crores in the corresponding quarter. So if we compare EBITDA from the corresponding quarter of the last year, it has improved by 19%.
Profit before tax in quarter 2 is INR 14.72 crores, which is 2.12% of the net sales. And if we compare this with the corresponding quarter of the last year, it has improved by 92%. Profit after tax is INR 9.82 crores, which is 1.41% of the net sales, and it has also improved by 92% as compared to the corresponding quarter.
So finally, the summary of financial results is revenue of INR 695 crores in quarter 2, with a growth of 31%; EBITDA of INR 44 crores, with a growth of 19% with the corresponding quarter; EBITDA of INR 14.72 crores, with a growth of 92%; and PAT of INR 9.82 crores with a growth of 92%.
Now let me update on the business side on the various aspects. Business performance for quarter 2 is better than the corresponding quarter of the last year. Semiconductor availability has now become against our tenants. And now it has had an impact in quarter 3 and quarter 4, but not significant, it would be a mild impact. Container costs started easing out now, which will ease out on our logistic costs as well. Growth in coming months is expected to be increasing trends as comparison to the last year, and we'll watch the situation and see for ourselves adjusting to the situation. This time, we are also expecting the double-digit growth in this year as we planned at the start of the year.
As I mentioned in my previous update, the mobility landscape and the fundamental shift will happen in next 8 to 10 years with a [ ACE ] trend, autonomous driving, connected car, electrifying and shared mobility, amplified their impact in making Subros [indiscernible] aggressively manage this transformation. We are in discussion with our collaborator, Denso Corporation, Japan for necessary technologies required for this transformation.
Today, only 2% to 3% of new vehicles sold globally are electrified. This opportunity ahead is much larger and Indian players can become home of innovation, both for domestic as well as for international market. This year significant success we have received in new business acquisition from our OEMs, and business up to 2025 has already been tied up, which will ensure the sustainable growth in our future.
The company is also focusing in grabbing new opportunities in the business of EV, hybrid and CNG space. Since the focus of the market is to move for non-ICE technologies on alternative fuel technologies, our focus is on driving such business in a very high pace. So far, almost INR 125 crores worth of business in this particular segment is already secured. And as a long-term direction, we set a target of 10% of our total turnover should be contributed by EV, hybrid or CNG technologies.
Business expansion in rail coach is also improving. And we are now getting businesses into coach Aircon as an initial order, and we will progress as we enter into this market with a full pace. Development activities for the new program and also along with the customer engagement phase is in progress and all the projects are within the milestone as set by the customer.
As we reported in past calls, we secured business from Maruti-Toyota alliance project, which is a country in Toyota plant in Bengaluru. Our Chennai plant has already started supplies for this plant and we already secured 2-month of sales in this project. So this is for Grand Vitara. This has started in August '22, both for mild hybrid and also for the strong hybrid car. And also for the future programs of Maruti Suzuki, our alignment is there, and we already secured business in this as well.
So thank you very much from my side, I now hand the [indiscernible].
[Operator Instructions]
The first question is from the line of Aashin Modi from Equirus Securities.
So sir, firstly we -- my first question is regarding the revenue growth. So you have highlighted that this quarter you have had a 32% year-on-year revenue growth. Could you -- please tell us what would be the ASP growth? And what will the growth in terms of volumes?
So you're referring to the growth in volume versus the revenue?
Yes. PV [indiscernible] that you have utilized 34% year-on-year.
So PV, out of the total turnover of INR 694 crores has contributed INR 553 crores. That is on a PV space. And on the ECM space it is around INR 98 crores. So put together, it would be around INR 651 crores.
Okay. So, telling that you have grown in passenger vehicle AC by 32% year-on-year. So could you give us a guidance on -- could you -- what would be the volume growth in it? And what would be the pricing growth in it?
Okay. So volume growth would be in the range of around 30%, and 4% is the price differentiation, which is because of the fluctuation, which is from [indiscernible]
Sir, on a year-on-year basis, what would be the raw material fluctuation would be there? I mean if you had grown -- if our ASP does increase by 4%, so there is still a lot of pace of recovery from the OEMs that is there?
So the net impact on us is roughly 7% to 8%. Out of that 3% to 4% is compensated so far from the customer side. And balance is a quarter lag impact. It is maybe another 2% to 2.5% will be compensated, but there will be a quarter lag on that.
Okay. Okay, sir. And sir, continuing on the margin front, what would be the other levers driving margins and commodity in your budget cost? And when can we expect this margin revival to start?
So margin stress is because of majorly, I'll say, 4 elements have contributed to that. Cost is, of course, logistic cost is extraordinarily high, and the impact of logistic cost is roughly 2%, 2.5% of the total revenue so far. That is on a periodical basis. Although it started easing out now, but it will take another 3 to 4 months to come back to maybe not the same level as before COVID, but it would be substantially lower than that.
Second is about commodity, which are mainly from aluminum, copper, steel. And the last is about PP, that is polyplastic. So these are 3 commodities which has contributed higher trends in last 6 months' time. Although PP has started normalizing now. And the third impact is because of the various economic sectors in various parts of the geography. The fabrication cost has also gone up. So the cost of manufacturing of raw material converting into our usable product has also increased.
So we are expecting it will take another 6 to 8 months' time to see a revival -- fully revival into that. But our effort is now to offset these impact with either customer claim or to expedite cost on projects internally at Subros.
Thanks for the detailed answer. And sir, the last question is that our share of business in PV has stayed at 40%. So how are we growing in Maruti and our secondly client, M&M. Our share of business in Maruti and M&M [indiscernible] where do you see that going forward?
So share of business within 40% in Maruti, we have grown by almost 2% to 3% so far in last 1 year. And going forward, it would be another maybe 3% more by maybe '24 or so, based on the business engagement, we already tied up.
In Mahindra, we started 2 years back roughly 17%. Now we have reached to 25% of share of business in Mahindra, and it will further grow maybe 8% to 10% going by the current engagement we have in next 2 to 3 years' time.
[Operator Instructions] The next question is from the line of Abhishek Jain from Dolat Capital Markets.
Sir, what is the reason for the lower gross margin from last many quarters? From last 10 to 12 quarters, we have lost around 1,000 bps. The gross -- other cost has increased from 57% to 77%. So is there any impact of the constraints for the pricing actions with the OEMs, or it is only the impact of the logistics cost? Logistics cost is also passed on quarter-on-quarter basis, but we have not seen any improvement in -- from last many quarters, even from last 2 year.
So Abhishek, last maybe 6 quarters, this impact is there, when the COVID started and maybe slightly after the COVID got matured in November or so. The impact, as I -- in the previous questions, tried to reply, the 4 elements, not only the logistic cost, but the commodity cost and the fabrication cost. And also coupled with the new businesses which we started are definitely with a lower price than the past models which got replaced. So this is a cumulative impact of that.
But as you mentioned, commodities are back-to-back compensated by customers, but it will not be in the same period. It helps to have either 6 months or a 1 quarter lag. Container cost was not a part of the pricing formula to be compensated by customers. We made a special request from customer last year to get partial compensation. And this year, again, we are approaching back to the customer for compensation. Still under negotiation, final amounts will be considered based on that.
So this is a dynamic market situation where customers are also -- the contracts are not fully hedged for all the fluctuations, but we are learning from the environment and negotiating with the customer time-to-time basis.
It will take another maybe 2 quarters to ease out this situation, but we are working towards that.
As the fabrication cost is -- now you are talking about [indiscernible] from the last many quarters. So what is the client feedback right now to take a price action in this regard?
So far, this was not part of compensation formula because normally it is linked to the LME. But now since compensation has become a major cost escalation. So negotiations started, so they are positive to compensate, but not yet concluded with the set formula. So once we decide for fabrication cost reimbursement, it has to be based on the formula agreed between us, then the decline will happen, they will keep back the benefit. But right now, we are seeking for escalation compensation.
And what is the impact of the currency depreciation on the gross margin?
So currency depreciation, since it is a quarter lag business, maybe 0.5% to 0.75% will be the impact. Because dollar has gone up, but yen has come down. So cumulatively, with all currencies, it would be roughly 0.5 to 0.75% -- 0.75%.
And that will be a negative impact?
As of now, it is negative.
So as you are talking about that this logistic cost is easing up that freight rate has gone down significantly from the last 3 months. And metal prices is also going down, and these cost was not passed on earlier. So you will get a direct benefit into your EBITDA from the next quarter or no?
So it may, because if we get this compensation, then we have to revert back. But there, we are not getting compensation, then it will directly contribute to the bottom line. But considering the total cycle of import, which is almost for 90 days, including 1 month of inventory. So in fact, will come after 4 months.
In fact, on the gross margin is from last many quarters, and it has not been compensated from last many quarters, 800 to 900 bps of contraction of the gross margin. So will it not be reversed in the coming years?
It will come. It will come. That's why I'm saying it will reflect to the bottom line directly. But there may be a time gap on that. Definitely there will some impact to that.
So can you give some guidelines for the second half margin, especially for the gross margin side?
So I'll not be explicit by numbers. But yes, there would be a better recovery now in fourth quarter. Third quarter is almost mid of year -- into mid of third quarter. But fourth quarter onwards, we'll see some recovery. But definitely the quarter on -- from that fourth quarter onwards, there would be a recovery coming in gross margin as well as on EBITDA margin.
And sir, other operating cost side also, we are seeing the continuous -- it is growing up. Is it because of the increase in the power cost -- power and the fuel cost?
But I believe other operating cost has come down. Because if you see overall EBITDA differential between corresponding quarter and now is just 0.5%, whereas [ diesel ] cost has increased by 3%. So we have offset this impact of 3% by improving on the operational efficiency. So that's why it is compensated.
But other operating cost is around 8.6% of the sales versus the last year of -- the last quarter of 8.3%.
Which data are you referring to?
I'm talking about the quarter-on-quarter, it has gone up.
So 8.37 was last year and 8.62% is the current year. That's what you are referring?
Yes. Current quarter 8.6% versus the last quarter is 8.3% -- last quarter -- I mean, first quarter FY '23.
So there may be a small impact of some inflationary costs in consumable and power, but it is not substantial.
Okay.
Yes, there will be a small impact of these inflationary factors.
Okay. And sir, in this quarter, passenger vehicles segment growth was very strong on a quarter-on-quarter basis. The fact that the company has not reported growth in the revenue. Even you have won the business of the XUV700, which is high-selling model. So what is the reason for this sort of underperformance?
So if you take out -- if you're comparing this last quarter versus current quarter, that's it?
Yes. Yes, yes.
So INR 706 crores was the revenue of last quarter. And if you separate out, only of INR 70 crores from there. So it was around INR 630 crores. And against INR 630 crores that this quarter, the revenue is INR 693 crores. Whereas the home AC is just INR 7 crores. So from that comparison, there is a growth in particularly PV segment per se.
But you won also business from the -- this Suzuki and Toyota alliance, and you've got some incremental revenue from there. So just wanted to know what is the number from these alliance? And why the underperformance is there?
So let me correct the first figure, which I mentioned, out of INR 707 crores, the PV segment business including ECM is INR 600 crores in the corresponding quarter and -- in the previous quarter, quarter 1. And this time, it is INR 651 crores. So roughly, there is a INR 51 crore growth in this particular segment. And now addressing your second question, which you asked about is the quantum of business which we got from Toyota alliance and that's -- what was the question?
Yes. Yes, sir.
So this business is roughly for 190,000 of units as per the RFP volume, and this would be roughly INR 200 crores -- INR 220 crores of incremental business to us. And it has started in August '22. So it is just a month before the end of quarter.
And how much incremental revenue we can generate from the -- in FY '23?
FY '23, may be roughly INR 110 crores or so.
INR 110 crores. And sir, you were talking about that there were some production constraint in the Q3 and of Q4. So most probably that second half revenue will be some big -- I mean, the third quarter and fourth quarter numbers will be more than the second quarter?
No, we are not expecting that because what we have planned for, although our quarter -- first half is almost from our plan, it has covered substantially. But quarter 3, maybe slightly but quarter 4 is looking very promising.
And my last question is the -- is there any impact on the old inventory in this quarter? Because the last quarter, you had a very high inventory line in your plant.
So there's no [ obsolesce ], but say it's the aging of the inventory is spilling from 1 quarter to another quarter. This is a kind of safety for business continuity which is required because in case import lead time is uncertain.
Earlier, with the full efficiency, it was between 21 days to 28 days when the container was reaching India. But nowadays, it is 40 to 45 days. So to just offset this risk, we increased the inventory level in our plants. So it is not obsolesce, but it is 50 [indiscernible].
Is it also impacting the gross margin because earlier that inventory price was at higher prices, but now the cost of raw materials has gone down so you need to take this up.
Yes, it would be. There would be a marginal impact of that also.
[Operator Instructions] The next question is from the line of Mitul Shah from Reliance Securities.
Sir, I have two, three questions. First one, again, on the currency, as you highlighted, 75 basis impact. Can you give broader details as of Q2 in terms of how much as a percentage exposure in yen terms and how much in USD terms?
So $2 million is the monthly exposure and JPY 300 million.
Okay. And this is more of less similar range over last year or it has suddenly -- sharply changed in last 1 or 2 quarters?
So last year the dollar exposure has gone up by $0.5 million. And yen exposure has come down by JPY 50 million.
Any hedging do we do or still it is not open?
So we have a hedging policy. So we do both our currencies as per our hedging policy.
Sir, what would be approximate average hedging, right, for the next 6 months for both the currencies, [ it depends ].
For next 6 months, if you talk about dollar average rate will be around 81. And for yen, it will be around 57.
Okay. Second question on -- in terms of various commodities, if you were using metals, then plastics has a different long-term contract and lag effect of commodity cost. So how these contracts now shaping up when fluctuation is very high within a month also compared to earlier 3 months, 6-month contract? So what is the change in terms of your procurement for metals segment as well as on the plastic side?
So there is no change as far as the commodity contracts are concerned. So like aluminium, we have a defined timelines with a vendor with a quarter lag, same as with the customer. Copper is always at a spot whenever you are placing the order with a 15 days plus/minus, you can take LME rate. So there is no change as far as process for commodity procurement is concerned. It is all linked with the LME at the time of listing the order.
So based on this aluminum 3-month contract, so whatever sharp commodity correction happened in last 3 months that sizable benefits should come in Q3 and Q4, is it right?
That will majorly come in Q4. Because quarter 3 contract is already released in quarter 2, that will get consumed in quarter 3. Then quarter 3 ordering will impact in quarter 4. So partially quarter 3, fully in quarter 4.
And the same is the case with plastics also?
Yes.
The plastic price has also corrected sharply in last 3 quarters. And lastly, sir, in terms of price reset with the OEM, as all those things are again passed through with a lag effect, how do contracts there? Is that is also quarterly or a monthly reset, or how it works there?
No, customer pricing contracts with the different customers, this is a very different price lag. So few customers, it is on a quarter lag, few customers this is on a half yearly basis. And international customers where we are exporting so [indiscernible] is on annual basis. So the contracts are different from different OEMs.
So just last -- again, the last thing on this. If you assume the prices remains at around current level of October, November, considering the lag effect on both the side with your vendors, so roughly quarterly as well as on the customer contracts of 3 months, 6 months, what should be net impact in Q4 or Q4 onwards? And which we assume that prices remain at this level now. Should it be positive more than 100 basis, or...
No, I will not quantify this specifically, but yes, there would be a positive impact on the bottom.
Q4 onwards, right?
Yes.
[Operator Instructions] The next question is from the line of Abhishek Jain from Dolat Capital.
Sir, what is your CapEx plan for FY '23 and '24? And how much CapEx you have already incurred in the first half of FY '22?
So Abhishek, we are keeping CapExs in the range of INR 70 crores to INR 90 crores net of customer recovery every year. And now since '23, '24, we are seeing certain capacity ramp-up plan by the customer, including Maruti setting up new lines in the new location, Kharkhoda. So we will be now planning our CapExs in the range of INR 100 crores to INR 120 crores in the next FY '23, '24. But of course, the guidelines are very clear that we need to manage within the internal accruals to spend for our new capacities. So that's how we are trying to keep the financial prudence positive.
But in the first half FY '23 presentation, it's showing that you have done a CapEx of around INR 96 crores. So full year guidance...
These are the payments incurred for the CapExs which has already been done carried over from the last year, a few advances which have been paid for the movement of equipment, accumulated of that. And including -- there was a land purchase, which was a contract done based on currently our plant and machinery as the plant and land and building is on rental basis, which we converted to ownership, which will offset certain recent payments and move into the depreciation.
So for -- are the new plant, what -- how much CapEx is required?
It's not a new plant. It is the existing plant of our die-casting, which was on lease before. Now we have converted this lease in our name. Earlier we were sublessee, now we become the main lessee. That's the change for that we have paid an amount to the [indiscernible] INR 26 crores approximately, only state of [indiscernible].
And sir, in the railway segment, what is the outlook, a delta in the railway segment, government spending has gone up significantly in the last couple of quarters. What kind of the opportunity you are seeing there?
So railway has changed complete business model now, and now [ CMOs ] are given the complete projects to take care of the complete wagon. So we are aligned to all big players in railway, and we see a huge potential coming in next 2 to 3 years' time. I think from the current level of railway sales, which is roughly -- maybe INR 10 crores to INR 12 crores, we see 5x or 6x growth coming in from this segment.
So what is your target for FY '25 -- sorry FY '24, '25 in the railway segment?
So that's what I said, 5x to 2x. So that means it could be roughly INR 70 crores around.
And what sort of the margin you make in this segment?
In railway side?
Yes.
So these margins are better than the PV segment.
Okay. And in the home AC segment, as you mentioned that there is a INR 77 crores revenue in the first half. So what is the full year target? And are you looking for the further CapEx in this particular segment, especially in the backward integration off of the thing?
So right now, we are going to slow on this home AC segment because the fluctuation of commodity has a direct impact from this segment. There the margins are shrinking because customers are not compensating in a very structured manner as the mobility OEMs are doing. So here, the contracts are on month-on-month basis, which is highly putting pressure on us. So we are not going very aggressive in second half in home AC segment till the time market is stabilized. And so far, we are using all the investment in this particular segment. We'll first utilize with our existing capacities, only then we'll go with the new [indiscernible].
And sir, just -- if you can give the numbers again for this PV, non-PV revenue from the PVs, railways in the first half?
For first half?
Yes.
So roughly INR 1,200 crores out of INR 1,400 crores has come from PV. And balance, INR 200 crores is from non-PV, which is substantially contributed out of INR 200 crores, around INR 75 crores from home AC INR 77 crores very substantially, and INR 123 crores from -- other than that, that didn't contribute, bus Aircon, truck Aircon, rail and other aftermarket [indiscernible].
And what is the contribution of the bus Aircon and truck Aircon?
So bus Aircon would be roughly INR 20 crores and truck would be roughly INR 40 crores.
And in our INR 1,200 crores, what is the contribution from this ECM segment, sir?
ECM?
Yes.
ECM is roughly INR 185 crores in half -- first half.
INR 185 crores. And you are supplying only to Maruti or you have started supplying to some tractor dealers also?
So tractor supply for this new Mitsubishi project will start from January. So we have already developed our product and it will be rolled out now.
And then you will also supply to Toyota new plant, you think?
Yes. ECM is getting supplied to Toyota-Maruti alliance project also, including hybrid.
[Operator Instructions] The next question is from the line of [ Harish Kumawat ].
Yes. Sir, my question was more on the non-PV side. So a mix for non-PV was only 6% currently. So are we looking at any potential order book visibility in the PV or the rail segment, like in the short term, say, 1 to 2 years?
So as I mentioned before that this contribution currently which is around 6% is -- our target is to take it to 12%. So we are looking at a huge expansion in bus side, railway side. And truck side will be the result of the regulation, which is on hold as of now, which is AC mandatory for N-2, N-3 categories. So if that is revised, then it would be extraordinary high, then it would be roughly 15% contribution from non-PV side.
Okay. Understood. Sir, just on the truck side, as you mentioned, sir, what is the current mix of AC and blower truck segment? And where do you expect it to see in the next 2 to 3 years?
So in N-2, N-3 category, currently, the AC fitment ratio is roughly in the range of 15%. It is between 15% to 17%, roughly, it is 15%. So 85% is blower. So if that is converted 85% into that AC part, the pricing gap between blower and AC is almost 7x. It would have a multiplier impact.
Okay. Understood, sir. And sir, on the EV side, so we started supplying to this Grand Vitara hybrid model. So is there a potential content increase in those vehicles?
Yes. It is having for strong hybrid, it is almost the 10% to 15% type differential, which is on a higher side.
And for the mild hybrid, it is at similar level I am assuming?
So there's no product change required.
Okay, understood. Sir, overall, so we got INR 125 crores of orders in EV and hybrid segment. So this is more towards the Grand Vitara only, right? Or is there some other...
No. So Grand Vitara has already done, INR 125 crores is the future order which we received other than Grand Vitara. So if we add Grand Vitara hybrid, it would be roughly 200. So the additional business which we receive is the future model of Maruti EV, it will be a purely EV segment. And also from Mahindra side. So that's how it would be in '24, '25 the start of production will be.
Okay. Perfect. Okay. That's very helpful. Another one, sir, I think you mentioned the SOB for Maruti and Mahindra, I think I missed them. So if you could just repeat them, sir please?
You need to repeat your question, please.
Sir, you had mentioned the share of business from Maruti and Mahindra earlier, I think I missed it because of bad connection. So if you could just repeat it, sir, please?
So share of business in Maruti, I mentioned about roughly 74%. Mahindra was 17%, it has now moved to 25%. Overall share of business in the market for PV is 40%. In the CV, it is -- truck segment is 49% and in the bus it is 20%.
That was very helpful. And sir, one last question I would like to ask is on the import content side. So what is our current level of import content, percentage of import content?
Current import content is roughly, 17% of the revenue is our current imports. It has substantially reduced some 26% that was there in, maybe 2018. And now we are targeting to reduce it by another 6% to 7% by another 2 years or so.
[Operator Instructions] As there are no further questions, I now hand the conference over to the management for closing comments.
So we have discussed enough on this subject. So right now, our priority as a management and from a company side is to improve the margins and improve the bottom line. Because on the top line, we see a lot of excitement, double-digit growth so far, 30% plus growth and finally by the end of the year, we'll be in a better position in terms of revenue.
So finally, the bottom line has to reflect the whole effort going forward. So we see that in next financial year, first half would be much more promising. So our efforts are on. That is the first priority. And the second priority is to align ourselves with this EV mobility transformation. So we are in discussion with all customers now, mapping our products with their product lineup or the vehicle lineup. So that is our second major thrust where this non-ICE engine-based product alignment we have to expedite. So these are -- that focus. Thank you very much to all of you for participating in this investor call. Good luck.
Thank you very much. On behalf of Batlivala & Karani Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.