Suprajit Engineering Ltd
NSE:SUPRAJIT
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Suprajit Engineering Ltd
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Ladies and gentlemen, good day, and welcome to Suprajit Engineering Limited Q4 FY '24 Earnings Conference Call. hosted by Anand Rathi Share and Stock Brokers Limited.
[Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Mumuksh Mandlesha from Anand Rathi Shares and Stock Brokers Limited. Thank you, and over to you, Mr. Mandlesha.
Thanks, Rancho. On behalf of Anand Rathi Shares and Stock brokers, I welcome you all to the Suprajit Engineering Q4 FY '24 Conference Call. I thank the management for taking time out for the call. From the management side, we have Mr. Ajith Kumar Rai, the Founder and Chairman; Mr. N.S Mohan, MD and Group CEO Mr. Akhilesh Rai, Director and Chief Strategy Officer; and Mr. Medappa Gowda, Jay, CFO and Company Secretary. Request Ajit sir and team to give an introduction review about the results, and then we can follow up with the Q&A session. Over to you, sir.
Yes. Thank you, Mumuksh Mamus, and thanks -- thank you, Anand Rathi for hosting this Q4 quarterly call. Good morning, everybody, welcome to our fourth quarter discussion on the numbers as well as for the year. I will, as usual, start with our team, and then I'll give you a quick brief to cover -- before we go on to the question and answer. I'll start with Mohan, our Group CEO, Mohan.
Yes. Thank you. Good morning, everybody. I'd like to give some general overview of the economic and the business situation and the territories that we are operating. The big trend that I'm seeing in the world, if I can say so is, one is the interest rates, these are the political shifts that are happening more towards right debts, which is, again, leading to trade barriers, protectionism, nationalism and also regionals. And the third big impact that I'm seeing is obviously that we all talk about the EV impact. I would say, as Suprajit we are also uniquely positioned to handle these kind of effects. One is, of course, on the onshore, shore and offshore model that we have, be for U.S. or for the European market [indiscernible] well for us. .
The second thing is in the area, I think our position with various players. Both I talked about the new players and also some of the established players, also augurs well for our business on the long term. Now I would like to just move on to the specific divisional updates. Starting with Suprajit Controls division, we had announced that we have what's called MAX teams, which are in opinion doing a splendid job in integrating and cross-pollinating ideas across the globe and also within the various divisional facilities. We continue to work on long-term restructuring of the division of both revenue and the margin growth.
Our orders will continue to be strong with automotive division. The SCD recently won largest single contract to the U.S. customer. This will be produced in a sale that is automotive limited here in Asia, warehouse in Downsell U.S.A. and supply to the customer in the U.S. .
DSCM,this contract was won on no China content, and this was a requirement from the customer. And I presume this contract was a follow-up of this China Plus One strategy of the customer. Overall, if I look at what's happening in U.S. in Europe, I see that markets are subdued. And I think this is putting a lot of pressure on OEMs and the Tier 1s to find ultra alternatives, I would say.
This interesting is putting a lot of financial stress on the pure local cable players, which I think would possibly lead to more consolidation in the cable business within the largest in the world of cable space with players like us. Let me now build down to specific facilities within SCD. I would like to start with the China facility the Lonestar. On 24th April, we relocated ourselves into a larger and more modern facility. And this plant was inaugurated by the [indiscernible] in the presence of our Chairman.
This showcases our commitment to grow in China and demonstrates our intention and seriousness of not just being but growing in the Chinese market. Moving to Europe, Hungary showed volume growth. What's very interesting is the ownership assumed and the operational improvements made by Ranger. This is very much akin to our Indian Suprajit model. The local team has assumed a complete responsibility, and we are now confident of showcasing the [indiscernible] plant to customers in Europe more as our onshore facilities.
Moving to North America. We have identified projects and products which were not greatly profitable out of Mexico, and we are in the process of moving them into India into the sale and the focus will be given to good market products being manufactured out of those. The labor arbitrage is becoming more and more between Mexico or due to the increased wage rates in Mexico. We will further focus on Mexican operations to make that more economically successful.
There was -- we had talked about this earlier, the China tariffs we have gone a peak, and we are hopeful of a favorable decision from the U.S. tax authorities, In terms of nonautomotive business in U.S., it has stabilized at lower levels. But I would say we are making inroads into the rotary sensors and other noncable products, which are made in Suprajit Electronics division and also our unit line, which is here in [indiscernible] in Bangalore, and that would be supplied out of [indiscernible]. Suprajit Europe and Suprajit Automotive Limited has had a solid growth and profitability during the year, and we have also continued to build significant global contracts. And moving on to Domestic Cable division. The India stable business has performed well, both in 2-wheelers and the 4-wheeler business market. The aftermarket business was muted, after a long period of low due to the GST, COVID effect, suddenly, we see the gray market operators have raised their [indiscernible]. We are seeing them cannibalizing the market with our brand. That is what we generally call [indiscernible] and also look like. So there are something which is exactly Suprajit or something which is called Suprajit [indiscernible] or something like that. There have been multiple rates that have been organized by us through the local authorities. And we see this trend not just in cables, but also [indiscernible]. Therefore, I think it is industry trend.
Sticking to Cable division, the beyond cable projects, Mantra is catching up, the tech shows that we conducted last year has generated a lot of interest and now it is getting translated into new business beyond cables. Phoenix Plants division continues to grow despite all the LED penetration. We have made strong inroads with the aftermarket, direct exports and also through our arm in Luxembourg, that is not in slide. And margin improvements have been pretty solid, a fantastic team effort, not just to contain, but also reducing cost by our operations team.
The restructuring of [indiscernible] has almost been completed the last scale of it is remaining, and this is Trifa would be closed in a few months, in my opinion. [indiscernible], who has been taken she has taken over as the new Managing Director at Luxite. Talking about future in terms of investments, we are looking at a CapEx of about INR 180 crores, covering all divisions and all over the globe. Out of which we are looking at ballpark INR 45 crores to INR 50 crores being earmarked for new products, new projects our infrastructure buildup and the rest is for the normal CapEx spend that we would generally do coming primarily for modernization, EHS, capacity buildup quality, productivity, automation, those kind of things. So this gives a general player, and I would like to hand it over to Akhilesh to talk about Electronics division and STC.
Thank you, Mohan. At Suprajit Electronics division, we've seen a solid growth and margin improvement. We had a good double-digit EBITDA margins in both the last 2 quarters. The delivery increase for actuators, digital clusters and broader provision centers from both marquee EV and ICE scooters as well as 3-wheelers and our off-highway segments. Internal manufacturing also started supporting Phoenix lamps for their LED retrofit lamps as well as for HCP for exports of controller boards. This is expected to ramp up significantly in the coming years. After certain reorganization from Q1 onwards, we will be including mechanical speedometers also in the numbers of SED, we see a robust outlook with our visibility of growth, both internally and externally.
And so our expansion CapEx has been budgeted. SED continues to support the company's transition toward a more sophisticated electronic and a global actuation platform crucial for premiumization in both EV and ICE vehicles. At Suprajit Technology Center, the core purpose is to develop platforms for actuation, focusing on digital clusters, actuators and sensors and braking systems. STC is the source of multiple new order wins at various divisions and has multiple products under customer evaluation focusing innovative solutions tailored to Indian customer needs. We're also working with global customers along with our teams in the U.S. and Plans are in place for larger premises to accommodate our growing team at STC, ensuring that there will be sufficient space and resources for ongoing and future projects. The technology we have built at STC is wholly owned and globally [indiscernible] applicable across geographies, industries and large customer base. With that, I hand it back to Chairman for some general updates and closing.
Akhilesh, Okay. Thank you, Akhilesh and Mohan. Medappa will you give you a quick update as well.
Yes. Thank you. Good morning, everyone. We have announced the financial results for the year ended March 31, 2024 yesterday. The consolidated revenue for the year ended March 2024 was INR 2,896 crores as against INR 2,752 crores for the corresponding previous year with a growth of 5%. The consolidated operational EBITDA for the year ended 31st March 2024 was INR 326 crores as against INR 319 crores during last year with a growth of 2%. The stand-alone revenue for the year ended March 2024 was INR 1,537 crores as against INR 1,431 crores last year, recording a growth of 7%. The stand-alone operational EBITDA for the year ended March 31, 2024 was INR 276 crores as against INR 250 crores for the corresponding in the previous year, recording a growth of 10%. The total net debt level was INR 624 crores as on March 20, 2024. The surplus cash balance was INR 513 crores as on March 2024, invested in mutual funds and bonds. For further for you may approach me directly even after the call. Thank you very much.
Thank you all. Just a quick summary is the same substance is that the 3 divisions, domestic cable division, electronics division and phoenix Lamps division did well. Suprajit Controls division had a challenging year and probably a slightly improved quarter. This is largely considering for various points that Mohan has raised. But I would say that operationally, they are doing well. And in fact, we think that they had a decent quarter and year. The -- so again, I believe that the worst is behind us as far as the Controls division is concerned, and looking at the Q4 number, which I think has been a good quarter for us. I get a feeling that the worst is not only behind us and as we will continue to improve on that performance going forward. The outlook for the year is pretty good.
We have given outlook as well for various divisions. What we see today, unless, of course, the global scenario changes for the worst, we expect to have a decent and satisfactory year. So the basic model of our ability to meet the customer, both with onshore abilities, near shore abilities and low-cost destination, like India is making us a preferred vendor with most of the customers. I think that's why we have been winning contracts multiple contracts, and we have been talking about it Mohan just mentioned about the largest 1 with no China content. I think these are the things that are really are the ones which are giving us wings to take Suprajit Controls division to the next level, I think.
So that's in some and substance of the quarter as well as for the year from all of us. We are now ready for questions and I ask our moderator to start collecting the questions and directing to us. Thank you very much.
[Operator Instructions]
The first question comes from the line of Ravi Purohit Securities Investment Management Private Limited.
Thanks for a detailed update on what's been happening at Suprajit. Sir, just 2 questions. One was I think we've mentioned a couple of times in our press release and also on various con calls in the past about FY '24 having a lot of one-off issues, be it wage increases, be it duty, leavy, be it. Can you generally quantify in terms of how much of expenditure we would have had to make in this year in terms of loan less percentage of revenue? That was one. And the second question was we have given a guidance of about INR 180 crore CapEx. Could you just kind of break this down in terms of where and what areas this CapEx and how much of it is being to, how much is actually growth and greenfield CapEx, so if it is give a little more insight into this INR 180 crores CapEx that will be very helpful?
I think in terms of the one-offs, let me address that first. I think the really one-off is the relocation of China plant, I think, that would be the only 1 that I would call it one-off. Others are ongoing challenges that you mentioned about whether it is Mexico wage cost, which has been going up in the last 2 years in excess of 20% every year, that will continue to be there on the balance things like China tariff that is happening in the U.S., which, of course, we are fighting it. But at the moment, that is another major cost. So they are an ongoing cost. They are not exactly one-off.
So One-off is, technically, I would say, is only some significance for a balance sheet of China price is probably China, which is probably I don't know the number, it's in -- it's probably less than USD 1 million in between USD 0.5 million to USD 1 million, I think. Now in terms of CapEx, I would say that is for maintenance CapEx, various units having minor replacement changes, changing of layouts, blah, blah, blah, another 50% is probably on more on strategy. And I think strategy, I would say this, for example, we are setting up a greenfield technology center in Bangalore for AFTC. We already are 100-plus now, and it's expected to go to 200 in the next couple of timeline. So we need to see in a modern, more spacious space. So that is 1 investment decision. We are also trying to buy some additional land and industrial building within Bangalore for some of our ongoing projects. That's the other expenditure that is not maintenance CapEx.
We are also setting up an additional floor in our Chakan plant. So that's an additional like CapEx. I think these are things that are coming additionally. So I would say 50% is for ongoing operational maintenance kind of related and balance 50% is towards these one-offs, which will be there for [indiscernible] for our improved future performance for new products as well as strengthening our team.
Next question comes from the line of Amit Hiranandani with SMIFS India Limited.
So congratulations to the team for the very good set of numbers considering the challenging macro situations in the exports. Sir, I joined a little lead. Just the first question is on the Suprajit Control Division is my question.
So here, we have been observing a gradual quarter-on-quarter improvement in the margins. Now things are getting better in a better shape for this division as the company is winning large contracts, Hence, we believe that double-digit growth is for sure in FY '25. We want to understand what is restricting this division to reach double-digit EBITDA margin? Are we observing now any kind of tailwinds? And how soon we can achieve this level?
The -- yes, I think we actually touched an EBITDA margin of 3% also, I think, in the second quarter, if I remember correctly, whereas from there, it has improved. Last quarter it was 7%. And for the year, it has been 6%. So it is difficult to give you a guidance because we still are little struggling with the global macro situation at various places and the economic scenario. But I'm pretty sure that margin 6% will improve. Now when will it go to 10% is difficult to say. But our aspiration and interest this year, we may be able to cross the 8% EBITDA kind of a number, consider if things are what it is and that's what we see today at our end. So I think there is an improvement. But let me also say that the global business technically, in all auto component industry that we have seen now is that they are typically single digit in auto components space, they're all single-digit margin businesses. So I think we will be there by end of this year in a comfortable way. But the aspiration will certainly go to double digits, and I think it will take a little more time.
Great, sir. And sir, my second question is on the PLD division. So the PLD medical 56% margin in Q4 was a commendable job from team. I want to understand the core reasons of this improvement? And how much of this is sustainable? What was the one-off cost associated with the restructuring of [indiscernible] Light? And I wanted to understand, continue how much is the LED retrofitting retrofit contribute here along with margin difference between the [indiscernible] and the LAT retrofit product?
I think LED retrofit is still small compared to our overall business of whatever INR 350 crores, INR 400 crores. I think. Mohan, do you have a number on the LED retrofit, maybe INR 20 crores, INR 25 crores.
No, I don't have it off hand.
Okay. I think that is the kind of number that is on that. It's not more than that in any case. In terms of margin improvement, I think it is the way operationally, we improved in India and the restructuring in Luxlite and [indiscernible], although it is not technically closed for. It's basically close. I mean there's some paperwork pretty completed. But I think it will be done in the process. I think Luxlite, of course, the previous Managing Director also is no longer with us. So the cost structure in Luxlite itself has come down significantly.
So -- and then there are improvements in terms of the way we work together between Luxlite and Phoenix land has improved significantly in the last couple of quarters. So Beyond that, I think it is the way the team has performed operationally that has been responsible. In the first half of the year, there has been certainly some one-offs approve, I think December, there has been one-offs, but we are very comfortable that this year there will be good growth despite whatever LED penetration concerns and margins will be comfortably in the double digits..
Any more juice left in this. Pardon. Like any more juice left in the improving the margin?
Of course, we always believe that we want to think that there is always useless in any business. But I think doing 10%, 12%, 14% margin EBITDA is pretty good for this business. which is technically a lot of people have been asking why are we doing this business and why are we still having this business. And we've always said that this is the last-man-standing strategy, and we will prove that, that strategy works and that's what we have done. And I think it will continue to be very profitable for the improvement in margin, I cannot comment at this moment.
Sir, my last 1 question is basically on the Suprajit Electronics division, which has been showing exceptional numbers in the first year of operation. Sir, which products are driving the growth? And what is the growth of I mean, within this Suprajit Electronic division, you have a few products, digital [indiscernible]. So what are products are...
Over all the products. I will ask maybe Akhilesh, he can answer because what are the products and things that we are doing at AD.
Yes. So this year, the growth was driven mainly with the growth in digital clusters. These are your TFT, LCD and clusters and actuators. So where actuators, steering log actuators, charging and lock actuators, set lock actuators, these kind of actuators. This will be the 2 main products that grow growth this year.
Sir, this question only, what are the top 3 customers we have? And is this 13% margin level peaked out? Or there is something more here in this?
I think on the margin, we always aspire to improve our margins without any question. But it all depends upon the product mix as we are scaling up. There are more products coming into production what the product mix will be there from when it will start production. There are a lot of unanswered questions. I think end of this year, we will see probably a more, what I would say, steady-state margin understanding of electronics division. But as we said, double-digit margins is quite comfortable. I must, of course, sort of for warn all of you that this year, we are also adding our old mechanical perimeter, which is actually a lower-margin business into this division because it all operating out of the SIM premises. So just to keep the accounting and monitoring easy, we have combined it under the same division. So the growth will be still very good. I think margins will be double digit. I think this will be another good year for Electronics division.
Next question comes from the line of Mumuksh Mandlesha with Anand Rathi.
Continuing on the last question, sir. On the SCD business, how do you see the growth trajectory ahead. So can you update what would be the annual order book size, sir? And a little more on the recent wins from the new customers?
Akhilesh?
Yes. So I think we had disclosed and for -- we did a onetime disclosure of order book. We don't really disclose order book for our division. But I can say that, that same order book looks strong and it is certainly, there have been even more wins on top of that in this year. So I think our forecast that we made in that release still valid that I think in the next few years, this will be a significant part of Suprajit Indian revenue stream.
Got it. And just can you mention what would be the revenue of this chemical cluster business?
I don't have the number with me, Mumuksh, but I think you can certainly get it offline with Medappa later on, if you want.
Sir, coming to the non-auto overseas business has been rated this year because of weaker market. Just can you help us understand what kind of fall we are seeing in that kind of business? And can you be how the margins have the surpress there? Because if the same market rebounds in the next 1 to 2 years, then we can again see the margins coming also back. So business margin goal can improve from that level. So can you...
Mohan will you probably can make a comment and the commentary on automotive a little bit.
Yes, sure. When we talk about nonautomotive, basically, we are talking about 2 portions on us what's happening in Wescon what we used to call [indiscernible] earlier has got 2 portions. One is the Wescon portion in the U.S. and the Unit 9, which is the India portion. India portion has traditionally been at a good EBITDA margin of 30-plus percent. And we look at Wescon would be somewhere around in the single-digit number. So mix all put together, we would be looking at as decent margin profile both as same.
Specifically, in terms of what's happening is that we are trying to push into beyond cables in the nonautomotive segment. Which should mean 2 things. One is the share of wallet with the customer will go up because highly priced products goes in, and it also leads to a better margin profile there. So this is the transition that we are going to go through. And we had 1 of the customers recently visiting our Suprajit Electronics division to validate our plan. They have gone back confident, and we are pretty much confident that we would be able to land up with some good business with this customer, which is a U.S.-based customer. So net-net, to answer your question, do we see a margin improvement? Definitely, yes, as the winds catch the sales.
Just to add to what Mohan said, just to give you a little more color. Last year, nonautomotive business in U.S. dropped by something like it dropped, and it is sort of stabilizing at that lower level. But we are still expecting to grow despite that drop is clearly because of also some of these new business wins, what Mohan mentioned. We've recently won after a much wave, I think, on the gearboxes with one of the customers. We also won in the final stage of binding a [indiscernible] sensor of additional business with another customer. They're all going beyond cables actually. So while we are also winning certain contracts on cables in the nonautomotive space, we are also winning contracts in the noncable space. So I think going forward, despite this weakness in the U.S. market, we are comfortable to grow the business and also improve our margins as Mohan said.
Sir, lastly, on the aftermarket side, are you a muted for some time, and you talk about the gear market has grown up. So can you indicate how that should shape up next year, sir?
I think last year, just to be clear, I think in the Phoenix Lamps division, the aftermarket did grow, whereas in engineering work the DCD, it did not grow. I suppose it is much easier to probably do a -- making a cable in some little space and doing a packing in selling [indiscernible] products is much easier. But spurious products, which sort of were on the sidelines for almost 3, 4, 5 years, curtain last year, we have seen that it is growing its assembly ahead, we are at least at a more than a dozen or at least half a dozen rates conducted. Recently, we did a major rate in 1 of the North Indian states. .
And we have been able to find people manufacturing and packing exactly our cables with the exact pack. I mean, there is a collision not just in manufacturing but also with the packaging industry. and also dealers and distributors. So it's a bit of -- I think people are still trying to avoid the GST and that kind of stuff scope. I suppose those old habits die hard as they scale. That still seems to be there. It has been sort of noticed last year significantly because when you are assessing why there has been some kind of a drop, we realized that this was happening.
So it is there. It is difficult to quantify it. But with these rights, I think they also get a little smart and alert and probably, again, go into the shadow say a little bit, but it's always a shadow boxing I guess. So -- but this year, we are expecting a growth. I mean, having said all that, we do expect the aftermarket to grow this.
Next question comes from the line of Gokul Maheshwari with Awriga Capital Advisors LLP.
Sir, 2 questions. One is that you mentioned in your note about the tariff on foreign Chinese products in the North American market. can you give a context in terms of how these are changes in the American notice? And if this were to come through, how does it?
Mohan, will you answer the tariff-related point?
Yes, sure. This is a legacy product when we acquired the Kongsberg, the LDC, the light-duty cable division, this product came along with it. And this problem also came recently along with it. The issue is very simple. There is a specific motor which comes in from China, which is imported from China. And there is a very substantial value addition, which is done in Mexico. In Mexico, our plant buys a lot of things like the PCB populated PCP, completely assemble tests and then supplies it to a customer in USA. Now the fees customs have classified the entire thing as something that has come from China. Just to give you an analogy, let us say the rate is coming from China I am making the boats, and I am assembling the [indiscernible] and selling the boats. Somebody comes and tells me that the boots is imported from China. Therefore, I'm going to slap additional duty on that. So that's the issue. We have represented ourselves gone on and appeal to the U.S. customs. We have gone with a detailed video shoots showing that what is being done in Mexico, what is the part which is coming out of China. And therefore, it doesn't qualify it to be penalized to that extent. So that's the status.
Okay, right. And just on your Wescon business, I mean, that business data is mainly to the loan laws, et cetera, the nonautomotive, which has seen a big decline the industry has seen a decline. Would it be fair to say that the industry or the revenues from that division can come back in the next 2 years that you can achieve what you achieved in FY '23?
I would say, yes, maybe not necessarily with the volume revision in the North American market. but probably with the additional products that also will be introducing to the same customers. Let me also say it is not only in Wescon, even in our -- the whole LDC entity, that means the Matamoros plant also supply to the same or similar segments in U.S. That also had a major downtrend. In fact, Matamoras did grow last year purely because of -- not because of the automotive, that side grew but the nonautomotive didn't grow. So it has been affecting both these plants, actually, both these places. Having said that, in 2 years' time, will we go back to where we were the -- I think that certainly is what our aspirations and plans are, and I think it is possible.
Okay. Lastly, can you give an update on the braking business you had put in a press release that you're putting up a facility for that.
Sorry, sorry, I didn't get that to focus. .
The braking products.
Braking products. Okay.
Yes. You had putting in a press release that we are putting up a specific facility for it. So what's the progress of it? And in terms of offtake, whether that's where we started with any of the customers?
Akhilesh will give us an update on braking products.
Yes. So we're currently working with 1 of our key customers who will introduce various baking products. We've actually gone live with systems like the CBS mechanism and the related braking systems that are now going to at least 3 OEMs, all [indiscernible] related to a more advanced braking system, we have got the land in place. We're now working on the plans for putting up a stand-alone facility for braking and for the braking division that was announced recently. We're seeing traction. Of course, this is a safety critical products, and this is quite a big innovation in the industry for braking. So for the advanced braking system that we have, we are working very closely with 1 of our right customers to production we're opening in the next 2 quarters that we will productionize and start production of that braking system
Just to add to what Akhilesh said, I think electronics division, we sort of got everything is done and set up the place and started solid traction. Whereas the braking products is a little longish scale because if that actuated safety critical as well. So customer is also very careful in assessing our abilities. So we have done good strides, I would say. And I think these are areas where we want to invest to make sure that we give through alternative to some of these global competition in this space, completely homegrown wherever it's possible. And the aspiration is to give a complete breaking product to the customer. So there are multiple things that we are working within the space. I think this is the space to watch. I think in the next couple of quarters, I think there will be a lot more developments, hopefully, and we'll be able to also update better. The fact that we have earmarked on entire recently acquired property for a braking division means that we have a very clear longer-term perspective and ambitions to be there in full strength. That's it.
Our next question comes from the line of Senthil Manikandan with ithoughtPMS.
Sir, my first question is with respect to the initial comments on the global store on enabling possibly more opportunities. So if you can share a little more detail in terms of...
I can't hear you properly. Can you just repeat what you said?
Sir my first question is with respect to the [indiscernible], are you not going to opportunities that more due to the global flows we can some more insight from that.
Yes. I think what we are seeing in the marketplace is that -- it's important to have a geographic reach. It's important to have geography site. And also, it is important to have a financial stability and strength to survive this marketplace, particularly where there are many players trying to take the same business from each other. So there has been a price, I would say, price competitive bidding happening with some of our customers. And there are players who -- if they lose that particular business as an incumbent, they will have a much bigger challenge. So they have been trying to fight to name to make sure that they retain the price at any cost, and that's actually putting them in a greater financial risk. .
So we believe that we -- I've always said this in many previous conferences and calls, the consolidation meets the way forward, and it is a key for success in this business. So we do see stres in certain incumbent players in this marketplace and some of them have very interesting geographical locations, very interesting customer profile. So I think it is important for us to see what fits us that, and we put something focused use of this on-shoring, near-shoring and low-cost opportunity of manufacturing. And if you get strengthened with such opportunity, I think we'll be seriously looking for it. So that is the statement that we are.
Second question is on the actuators side. So what would be our share of sales coming from the passenger vehicle segment? Is it prominently from the EV side?
I think I'll let ask Mohan to answer. I think it's more international in PV, I think. Mohan?
Can you just repeat? I could understand that it is something to do with passenger car vehicles. What...
Actuate where we are in actuators in the car passenger vehicle is the question.
Actuators are primarily two-wheeler when we are talking about Suprajit Electronics division. Whereas when we come to cables that is into electric passenger tasks, cables are going into electric passenger.
Mohan on is talking about EMA, what we do with the LDC entities, I think
That portion is more going into passenger cars, not electric vehicles, but ICE engines primarily. These are more into like, for example, the headrest has to move or the seat has to move those kind of actuators, yes.
I think what we have done with Electronic EMA is that actuated, particularly the passenger vehicle is what has come from the Kongsberg acquisition. Basically, we're in the headrest and seat folding movement, that's where the EMA that we do under those. We're also trying to present that to Indian customers today. But on the 2-wheeler, I think Akhilesh has already answered that FTT is doing actuators for various applications like lock, et cetera. So that's where we are.
And the last question is on the [indiscernible]. So how in this any update on the...
Akhilesh any thoughts on the electronic controls on the 2-wheelers that you are doing?
We are getting traction on the electronic process, probably not it is overshadowed by the kind of interest in the digital clusters and actuators. On eat, there is a significant amount of, let's say, competition from both import components and local suppliers who already have this technology. And I think over there, the traction in [indiscernible] in these other areas. But certainly, there are at least 2 businesses that are ramping up in [indiscernible] for India.
Globally, I would say we are in a very good position because we are already supplying, let's say, I mean, [indiscernible] is a type of road recent. In fact, we use our OT center that was applying to our U.S. customers, we use that for India. So globally, there is a lot of potential for these sort centers. And in fact, 1 of our marquee customers, well, 2 of our marquee off-highway customers, both audited our SCD location this year. and also have given us we have won orders from them for their road free sensors and electronic sensor businesses. So it's a good start for them for us, but certainly, the traction has not been as fast as the other products.
Just to wrap it up also just to say is that Electronics division, 1 focus is on the 2-wheeler related digital actuator kind of thing. Second 1 is also to see how we can address through our North American marketing and business development team in the nonautomotive space. That's where rotary sensors, electronic controls and few other even digital talents are all being under made gearboxes, for example, are all in the major stages of discussion and conclusion. So that's what we are comfort saying that nonautomotive business also will grow with a year or so.
Next question comes from the line of Subham Siegel with SiMPL.
Yes, sir. So my question is regarding the domestic control division. So if we compare our growth versus the end 2-wheeler production growth, we seem to have underperformed. So even if you adjusted for the muted aftermarket sales, has there been any share loss?
No, I don't when you share loss at all. As we have said, particularly with the EV coming up, some of the content in the EV has come down. That's number one. The aftermarket last year for us, unfortunately, which has been a big business for us, has been, I think there has been more growth there. So obviously, that sort of mutes it. But if you look at the Q4 number, we are at a 21% growth in -- on the stand-alone business. So that you see a clear picture or 15% in the DCB level itself. So I think it's just a question of -- by the way, you should also not forget that last year is a year of price reductions because of the commodity price dropping, we also had quite a few -- not quite a few -- most of the customers who had given a price increase for has also flowed back quite a bit of it. So there is a multiple effect of it. Certainly, there has nothing to do with the market share.
Okay. Sir, Got that. And next, so how is this spread in terms of our product mix and customer mix based on current order book and compared to 2, 3 quarters back, how was the order book invoiced?
The domestic cable division.
Yes, so for the domestic cable division.
Yes, pretty strong. I think we have also made a clear year outlook saying that we are comfortably expected to have a double-digit growth.
Okay. And so lastly, in terms of margins among the products in the DCB division itself. So can you give any color on how the margins are in your products? And what could be the share of noncable products also both...
I'm missing you on the question. Margin profile well.
So in your DCD division, among your different products. So where do the margins vary? Could you give some color on that? And what could be the share of noncable products in DCD?
At this moment, the noncable is a fairly new entrant to the domestic cable region. As you know, DCD is INR 1,000-plus crores. I think our noncable is still a very small part of it. I think it is not probably worthy of talking about the margins. But generally speaking, I would say the margin of this -- I mean, in the next 2, 3 years, it will grow to some size. But at this moment, it is pretty small. So I don't have an immediate answer, but it is certainly in double digit, but whether it is at 15%, 17%, what DCD is flowing, I'm not able to answer. But what I'm saying that it is a very small part of our business, but with a clear strategy to grow that piece.
Got It. Just one last thing, if I can side.So on the CapEx of INR 180 crores, how is the split between cable plant and new products?
I think cable division is probably around INR 50 crores Mohan. Do we have a color on this INR 180 crores. I said 50% of that is for basically a...
I was on mute. Yes, INR 44 crores is what we have earmarked for...
About INR 50 crores for domestic and rest for various other divisions.
Next question comes from the line of Devesh Kyle with Monarch AIF.
So out of the approximately INR 820 crores automotive revenue in the SCD as far as your nonautomotive revenue from approximately INR 1,400 crores in FY '24. What would be our exports from India share for the full year?
You mean under the SCD from India exports?
Yes.
Last year, between Unit 9 and probably SCL would be about INR 200-plus crores.
Okay. And sir, like the previous participant asked. So we are not able to reconcile domestic division growth because of this aftermarket revenue. So if you can share is that aftermarket revenue in DCD that would be helpful for us to reconcile we have industry growth?
I think you can connect with them with Medappa post-call later on and try to get some data. I don't have it immediately with me. .
Next question comes from the line of Amit Hiranandani with SMIFS Limited.
Sir, just 2 small questions. One what is the reason for higher other income Y-o-Y as well as Q-o-Q? And secondly, on the inorganic opportunity, so just wanted to understand which location and this is for the cable product or any other product we are looking for this and how fast we can see this?
I'm not able to comment on your second question, Amit, obviously, we are all. So on the quarter-on-quarter on income, I answered the opportunity that is available, how it is happening in the marketplace. Obviously, it's in our core business, I don't think we are looking at anything beyond that. On quarter-on-quarter, other income growth, I think it is probably -- I think we had a good run in our investment portfolio of mutual funds, I think. So probably that is the reason. Medappa is there any other reason why other income increased?
Additionally forward the contract gain.
And also, there is some forward contracts gain. Those are the 2 things. .
I think 11:56, another 4 minutes, maybe 1 or at best 2 questions.
Yes, we have 1 question at this point of time. So we'll take this as a last question. This question comes from the line of Jinal Sheth with Awriga Capital Advisors LLP.
Fristly Mr. Rai and team, I would like to commend you for the detailed press release that you guys come out every quarter. It really helps in how you guys think about all your businesses across. Secondly, just a couple of bookkeeping questions. One is what would be the effective tax rate in FY '25 and '26? And secondly, how much of the mechanical biometer sales in FY '24, we will get clubbed in SCD?
I think our tax rates won't change as I know, because we are in a full tax bracket here in India. So I don't think there will be any change in whatever the range that we have been in the last couple of years, we will go ahead. I think in the same way. Sorry, what was the second question?
The contribution of mechanical speedometer sales.
Okay, okay. I don't have the data with me immediately, but I think you can get this from Medappa later on.
Yes. Thank you very much. With that, I would like to thank you all for the continued interest in Suprajit, and we appreciate your patience in understanding how Suprajit is doing the business. If there's any further information that you need, you're welcome to connect with us with Medappa and our team. And I would like to thank you all for your interest in Suprajit. With that, I return to -- I also would like to thank Anand Rathi and Mumuksh for organizing this call. And I now hand over to the Rancho the moderator to conclude the call. .
On behalf of Anand Rathi Share and Stock Brokers Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.