So, my first question would be o n the smartphone side. So , we did see some ramp up in Q2, but I think Q2 and Q3 volumes are same. Could you give highlights?

Sorry, we didn't get you. You want to know the volumes for Q3 for the smartphone?

Yes, sir. Yes. Yes, for smartphone feature and if you can segregate between Ismartu, Samsung and non-Samsung.

Yes. So, I can tell you the total smartphone volumes for Q3 and 9 months excluding Samsung. So, in Q3, we did a volume of almost 8.3 million. In the first 9 months, we have done a volume of almost 21-odd million, 20.5 million. And Samsung is over and above this volume.

Okay. This 8.3 million is including Ismartu?

8.3 million is including Ismartu, yes.

Okay. And feature phones?

Feature phones, we did volumes of 9.3 million in quarter. And overall, in 9 months, we have done a volume of 25 million.

Great. And some insights I wanted on the camera modules. We were highlighting that we are getting into camera modu les. So, can you share the market size and any -- currently what -- who are the players -- who are the large players in the segment? And what are we aiming here?

No, we never mentioned camera modules in our opening remarks.

No, not in this, maybe previous quarters. So , are we getting into camera modules anytime soon?

So, we are pursuing camera modules as a part of a component strategy. We are in discussions with the potential partners who are large suppliers to our existi ng customers. So that's a part of our component strategy. And camera module in all probability is going to be also a component which will be getting the PLI under new component policy with Government of India. So that's the path being pursued, but it's still in works.

The next question is from the line of Vipraw Srivastava from PhillipCapital.

Right. So firstly, on the Vivo tie -up with Dixon, so -- I mean, is there any PLI sharing happening with Dixon -- with Vivo for this tie-up?

So that's something commercially confidential. It's not really possible to share those contours as much.

Sure, sir. Sure, sir. No issues, sir. Sir, secondly -- I mean, with the mobile phone PLI ending in FY '26, which is t he last year, and recently, Tata Electronics also came up with announcement regarding phone manufacturing. We have other players like BYD, ZETWERK’S, all wanting to enter phone manufacturing. So how Dixon is seeing the competition shaping up post the mobile phone PLI ending?

So, please appreciate that our business has grown from 5 -odd million to almost 28 million to 30 million in the current fiscal. The order book that we have, and in the Android ecosystem, we have all the brands as a customer, t op 8 brands as a customer. And also, the order book we have, we feel that it should be enhancing to almost 40 million to 45 million and then going up to 60 million. That's almost 65 % to 70% of the outsourcing opportunity in India. Further, we are investing huge resources in automation, robotics and taking the efficiency level to the best in the world. Further, we are investing heavily into the component space, which, coupled with the PLI advantages is going to put us ahead we feel of the competition, so t hat's where we stand.

Sure, sir. Sure. Sure, sir. Sir, last question, on the Longcheer deal with Oppo, Redmi and all these guys. So Oppo currently has a 60 million manufacturing facility in India, which is owned by them. So, I mean -- and Oppo India annually sells around 20 million, 25 million phones. So, I mean what makes -- what's in it for Oppo to share volumes with Dixon for their mobile phone manufacturing?

So here, what we are offering to Oppo is a Longcheer ODM design so lutions, which are always going to be an outsourced mode.

Okay. Right. Right. So -- I mean what kind of volumes we expect to get? I mean, any targets you have to get from Oppo? Because it is one of the largest players in mobile phones.

So, we feel that in the next fiscal, we should be somewhere around 8 to 10 -- 7 million to 8 million, something like that.

Okay. Fair enough, sir. And if I'm allowed to ask last question. On the display fab, which Atul Lall Ji told in the opening remarks, so -- I mean, obviously, it's a very capital -intensive industry, and you already have HKC for display modules, right? HKC also owns display fabs in China. So, isn't it a likely possibility that you might actually tie up with HK C for these fabs or you will get a different partner?

So, we are going to be pursuing with our existing partner, and it's a large project for any company and so is the case for us. So, we will be partnering with HKC and -- yes.

The next question is from the line of Aditya Bhartia from Investec.

Sir, my first question is on the KHY acquisition. In respect of that acquisition, you spoke about some export order. Could you just kind of explain how large is the opportunity? What are we looking for? Is it just capacity expansion that we were aiming in Ismartu facility, which is why we kind of acquired these assets?

So, Aditya, in Ismartu, we're going to be starting exports of smartphones. We are targeting to export almost 3 million phones. It's a beginning, which is going to generate a revenue for us of almost INR1,500 crores to INR1,800 crores. The exports start from next month onwards. So , we need to add capacity to existing Ismartu capacity. Also, please appreciat e that there's a migration from 4G to 5G phones, wherein the component count and the product configuration requires additional capacity. Then in Ismartu, we've also acquired a new customer, Nothing, which is the high -end phones, IP68 transparent enclosure, for which also we require this capacity. So that's the reason we are buying this asset. And it is coming to us at a very reasonable cost. The actual value of the asset is much higher. And there is more than adequate cash lying in the company and Ismartu to make this purchase. So that's what this transaction is all about.

Understood, sir. Sir, my second question is on the fab manufacturing facility. Just a couple of quarters back we had started -- or we had started speaking about display mo dules and now we are speaking about complete fab. What has really changed? What kind of capex may be required for this facility? And do we get any kind of soft indications from customers as to what their offtake could be?

So, I think the electro nics manufacturing industry in India has reached a level of maturity as far as the device and product creation is concerned -- manufacturing is concerned. And now for that to sustain and grow, definitely a component ecosystem is required. And we had shared with the stakeholders that our first foray is into the non -semiconductor side, wherein we've already launched the display module, which is going to become operational in the next 2 to 3 quarters and also mechanicals and other modules. Now we feel, and we 've had active discussions with our potential partners, that India industry and Dixon should be looking at a fab for displays to actually create the moat for the industry. But everything has to align with the business case and financials. Also, we are awai ting the government guidelines for the ISM 2.0 for this fab. The earlier ISM 2.0 guidelines were 50% capital subsidy from the center on a part and parcel basis. 20% from the pertinent state governments on a part and parcel basis. The number crunching, please be rest assured, I don't want to share more details as of now. It's slightly premature. It's an extremely attractive project with hugely margin accretive and a very fast payback period. And we are seeing that this will be globally competitive. A large p art of it, it adds value to us through captive consumptions in mobiles, in televisions and in our notebooks business. And of course, it's going to be offered to the other players in the market. And also, it's going to be globally competitive. So that's the reason at a conceptual level, we are deeply diving into it and we are building a team to take it to the next level.

Sure, sir. That's very encouraging to hear. Any rough details that you can share about the kind of capex that would be requ ired and the kind of bill of materials that we'll be able to service through it?

So, the capex is to the tune of around $3 billion. And display in television is almost 60%. And mobile, it's almost 12% to 15%. In a notebook, it's again around 12% to 15%, so it varies, but it's a high EBITDA margin business globally and for us also. Now obviously, it's dependent on the government scheme rollout. So , we are awaiting that, and we are expecting ISM 2.0 to be rolled out, but we are internally within Di xon putting in a lot of thought -- a lot of working in pushing this product.

That's great, sir. And just one last bit on this aspect. Is there an obsolescence risk also in a fab facility? Pardon my ignorance, looking at this part of the equation for the first time?

Sorry, just come again, Aditya.

No, Aditya, I think for on all the future technologies like the micro-LED, the OLED...

The OLED, the micro-LED, it will be ensured that the project sees any technological evolution is going to be built into this infrastructure.

That's great to hear, sir. Sir, my last question on our foray into PCBA business, which is what we had started thinking of as an isolated vertical as well besides the backwa rd integration that we do for our existing verticals, any progress that we have seen over there in vertical -- in segments like autos and industrials?

So, our teams are in discussions. We are in advanced stages of discussions with a large industrial buyer, and that's the first focus that we have. It's going to take some time, but I'm fairly confident that we are going to have a breakthrough there for our Chennai campus.

The next question is from the line of Madhav from Fidelity.

I just wanted to check that when -- and I think you have mentioned that we can be 60%, 65% of the outsourced part of the manufacturing of mobile smartphones in India. I'm just thinking from a supply diversification risk like 1 or 2 years out, wouldn't brands at some point think that they need to diversify their risk? Because even in other sectors, like if you look at pharmaceuticals or chemicals, any other sector in India globally. Generally, they would want to keep 2 or 3 vendors at least to kind of hedg e the risk. So, is that a risk that you think for our volumes 2, 3 years out that they might want to diversify and Tata, etcetera, probably are, credible vendors as well in the market? That's my first question?

So, your question is very pertinent, and that's the way it should be. Now it's for us in Dixon to be most efficient. It's for us to be in Dixon to be absolutely customer obsessed and create value for him. I know there are going to be challenges, but that's what we have to build within Dixo n to be most subservient, obsessed with customer, deliver to him what he expects, nimble with new product introductions. I think if we are able to achieve what we are aspiring to, then I think we'll be able to cover a lot of ground and protect our turf. But the first thing is to have a large share of a market. Yes.

Yes, yes. So, you are moderately audit right, but that -- please understand, a large part of that capex, as Mr. Lall mentioned, will also be subsidized by the government, so we are awaiting the policy guidelines under the ISM 2.0, which will come out, guidelines for the display fab. So, a large part of that capex’s or -- should be subsidized by the government. So , our share of capex contribution should be lower. But, yes, the overall capex requirement for a display fab is around $3 billion.

The next question is from the line of Siddhartha Bera from Nomura.

Sir, first question on this display capex, over what period do you think this will be spent? And even if you assume, say, a 30% share of ours, the investment do you think can be funded through internal accruals? Or do you think there can be other funding requirements you may look to sort of close this?

The gestation period for setting up this project is around 3 years, right? We are awaiting the government guidelines under ISM 2.0 to take this going forwar d because they are the essential piece for execution of this project. And this will entail requirement of internal accruals or funding by internal accruals and also support by the stakeholders.

Got it. And second, sir, on the mobile side n ow, if you can just highlight how much Ismartu volumes we did in the quarter? And as we go in the next few years, how much do you think the volume ramp-up can be and same for some of the other bigger customers like Xiaomi, where are we seeing in the next few years our number reach up to?

Yes. Ismartu, I don't have the number right now with me, but broadly out of this 8.3 million number, I think so Ismartu volume should be somewhere around 1.7 million, 1.8 million. And yes, so basically -- so that we have done a volume of almost 20.5 million. And the last quarter also, we hope the order book that we have across Motorola, Xiaomi, Oppo and Ismartu and also the large global brand through Compal, I think so we should be doing another 9 million to 10 million kind of volumes.

So, we should be around 30-odd million at the end...

30-odd million by end of this financial year -- for this financial year, yes.

Got it. And sir, for the next year, what are the number s we are thinking about right now, any internal estimates, and given that Vivo is also sort of ramping up? So , some color there if you can share?

So, it's going to take some time to arrive at Vivo numbers because please appreciate Vivo transaction requires regulatory approvals from the government. It requires approval under Press Note 3, which takes some time. So , it's difficult to predict how those numbers are going to come into the company. But, otherwise, apart from Vivo, we'll have a signific ant growth, the kind of order book that we can see.

Understood, sir. Lastly, sir, on the capex side, if you can share what are the numbers for this year? And given the recent acquisitions we have closed, what is -- any initial guess of wha t is the ballpark number for next year we are looking at?

Yes. So , we have done a capex of almost INR620-odd crores in the first 9 months, and we should hopefully close at somewhere around INR800-odd crores plus INR50 crores to INR60 crores is the monthly going run rate right now. And, yes, the next year budgets are being worked out, so I think so I'll have a better visibility in the next couple of months. But broadly, you can assume a similar number of anywhere between INR600 crores to INR700-odd crores. So that should be the run rate. But yes, we will have a better visibility in the coming months on the budgeted numbers for next year.

The next question is from the line of Indrajit Agarwal from CLSA.

I have 2 que stions. First, going back to the display fab. Globally, what kind of ROCs these entities generate or these facilities generate? And does it make sense for us to go for it if there is no government subsidy?

So, government subsidy and support is essential for taking this going forward.

And what could be the...

Sorry?

And what will be the ROCEs broadly without -- I mean in global examples if you have done any study on that?

So, if the government support is in line with what was there in the first ISM, then the ROC is extremely high. It's extremely margin accretive, and the payback is very, very short, but we are awaiting the government guidelines. And that's the way the project is being conceptualized.

Sure. Secondly, sir, you mentioned that mass manufacturing for a couple of brands and laptops has already started. Have we recognized any revenue from laptops in this quarter? Or will it all come in 4Q?

No, we have st arted recognizing, but it's a very small number as of now. We have started supplying to Lenovo, and we have already been supplying to Acer, but these are trial productions. The commercial productions in a small way have started. The volume buildup will take some time. The actual commercial production is going to start, the trials in February and the commercial production in April for the other larger global brands, that's HP and Asus.

Sure. And does the delay in import restrictions change your timelines of the revenue that you had forecasted on a 5-year horizon? Or does it still remain intact?

So, we are still maintaining that. And as we shared in the opening remarks, we are very close to signing a JV agreement with one of the la rgest ODM players globally in the IT product range. And that will give a very significant flip to our revenues in this particular business and also expand our product portfolio.

Sure. My last question is on TVs. What kind of volumes or to pline we did in this quarter? And was it significantly down Y-o-Y broadly?

Yes. So, Indrajit, TV volumes are definitely down. So , we did a volume of 3.8 lakhs in this quarter. And in the 9 months, we have done a volume of 19.4 lakhs. So ther e is a degrowth both in 9 months and quarter 3. So, yes, if you exclude -- in our presentation, we have shown that the refrigerator revenues have contributed INR166 crores out of the INR650 crores. So broadly, if you remove that, the TV revenues for quarter 3 was around INR470-odd crores.

The next question is from the line of Pulkit Patni from Goldman Sachs.

A couple of them. Sir, first one is on PLI incentive. There was an article in newspaper a few -- I think a couple of weeks' ba ck, which spoke about some difficulty in receiving these PLI incentives. So could you just talk about, a, since inception, how much is the total incentive that you have booked versus how much is the incentive that you have received thus far? That's question number one.

So the detailed numbers, our team -- Saurabh can share with you separately, I request. However, our incentive in mobile up to December '24 has been cleared. Our incentive for telecom for last fiscal has been cleared. For lighting a nd AC components, we are expecting to receive our PLI for the last fiscal in the current quarter. That's what the status is. For January to March quarter of mobile is under process. That's what the status is. The exact numbers, Saurabh, will be able to share with you.

So approximately, what would be the receivable on PLIs?

So PLI, our portion of receivables, which we have booked as an income...

Yes, basically to the extent of almost INR200 -odd crores if we include all the 4 PLIs excluding...

This is like just for the fiscal or this is cumulatively so far?

So this is basically our share of income which has been booked in the P&L.

Okay. And receivable out of this?

Receivable basically would be this -- receivable, of course, would be a slightly bigger number because there's always a kind of a sharing also. So receivable number will be slightly bigger, but -- yes, so that number will be almost INR1,000-odd crores.

Okay. My second question is on other expenses. If I look at sequentially, our revenue is slightly down. Let's assume it's even flattish. But we've seen other expenses come down by almost about INR60-odd crores. Just wanted to know were other ex penses higher last quarter? Is it under absorption last quarter? Because it's fallen from about INR298 crores to about INR227 crores in this quarter.

No, no. Other expenses is around INR155-odd crores. I don't know where you're looking at to - - last quarter you mean to say?

Yes. I'm talking about sequentially. Just sequentially, our revenue I'm saying it's fallen a little bit, but it's almost flattish, but other expenses sequentially are down quite meaningfully, Saurabh. So I ju st wanted to understand like is it a quarterly phenomenon? Is it just that last quarter there were start-up costs?

No, no. It's basically a quarterly phenomenon. A lot of our operator wages cost gets booked under this set. So definitely, if you look at quarter 2, we had a revenue of INR11,500 crores. This year -- this time, it's around INR10,400 -odd crores. So accordingly, the wages cost, the power cost and so would be the case of other overheads also would be slightly lower. And also, there's some exchange income, which is also booked. So last quarter, we had some exchange loss. And this quarter, we have an exchange income. So that is also kind of positively reflecting, which is having an impact on the expenses as well. So part of the exchan ge income is booked under other income. And some part of the exchange income is booked under other expenses. It's netting all the other expenses, basically.

The next question is from the line of Renu Pugalia from IIFL Securities.

Firstly, I would like to congratulate for the way the business has ramped up, pretty impressive. If you see last 5 years, revenues have -- probably be almost 10x. Profit would be almost 6x to 7x. So my bigger question to you is, if you look at the diversifi cation that you've announced and the existing growth in mobile EMS space, in the next 3 to 5 years, both for core portfolio as well as new diversification, what are the growth contours that we're looking in terms of size and scale of the business? Obviously, you have highlighted, you would also look for probable equity funding for growth capital. And how are you investing in people and talent for these new diversification initiatives?

So I feel that in India, in electronics manufacturing domain, we are sitting on a very, very large opportunity. And the first phase because of the prudent government guidelines, and also our team delivering fairly well of devices manufacturing and build large scale has already had happened. The second phase is to m ake this much more efficient, much more cost -effective, have the factories which are world -class, even more frugal, more automated and robotized. So that, the government intervention, which has been through PLI, we are able to stand on our own feet and be most competitive. That's what partially has been achieved and in the future is going to be achieved. Also along with this, the whole endeavor was to build a very large scale to generate an operating leverage because electronic manufacturing service indust ry is a low-margin industry and it requires a large operating leverage. Then we have always played extremely conservative in our capital allocation and management of our working capital and managing the balance sheet. Now comes a large opportunity, which has to be again aligned with the thinking in the government that the future is going to be the component ecosystem. And that's what we are foraying into. We have already got into the display modules, and we are working on the other parts like mechanicals, the other parts. We also feel that now is the time, the kind of scale that we are having and also India is having, that display fab is the future. So with the multiple businesses, large -scale foraying into components, foraying into a possibility of a larg e investment, again, in components through what I just shared, in certain products to have the design capability and India -- and Dixon to become globally competitive, that's the future. So I feel the numbers are going to be very, very large. And your ques tion was extremely relevant that that requires a talent pool. So we are working on...

Slightly different talent pool compared to what we have inducted over the last 5 years.

That's right. So it has to be of a different order. For o ur component foray, we've already brought in a very senior resource from the industry. We've also recruited some expat talent. We're going to be building on much more expat talent. So that's the way it's going to be. So I think India and Dixon sits on a large opportunity. What do numbers are going to look like? Yes, it's -- we have our internal numbers, but I think it will be slightly premature to share it with the stakeholders at this stage. But we are working on a larger picture.

Got it. And just a small bookkeeping for Saurabh. If you look at ref portfolio, which is a part of consumer electronics, while revenue numbers are shared, how does the profitability of the ref business look as in today? And now when do we expect it to turn profitabl e? Because on a blended basis, margins of ref should have been much better than the television portfolio. So just trying to compare the margin mix and its impact of the business turning profitable.

So, Renu, the margins are profitable -- we are already profitable in the first 6 months -- or 9 months, sorry. We have done a volume of almost 0.6 million on the total capacity of 1.2 million. And because of the order book, we are further expanding our capacity. It's 100% ODM business, where we hav e 100 -odd models across 190 to 235 liters. We're getting into new categories also. So we did a turnover in 9 months of almost INR500 -odd crores. And it delivers to us a margin of around anywhere between 9% to 9.5% -odd. So it's delivering very good numbers. And the working capital is also pretty much in control. And, yes, the gross blocks are higher, but the margin profile looks very promising, and we are now looking to get into other categories as well. So this -- within a short period of time I think so -- 8 months I think so, we have been able to take -- acquire some large marquee brands and take a large market share in the Indian market.

The next question is from the line of Bhoomika Nair from DAM Capital.

Yes. Sir, just one -- couple of questions. One is on the TV segment. If I look at it, the volume decline has been quite severe. So if here you can talk about what has been the reason for this volume decline, is it just purely demand or market share loss? And if I net off the pr ofitability that Saurabh just spoke about in terms of refrigerators and the margins also seem to have fallen, so if you can just clarify firstly on that.

So undoubtedly, this particular category, Bhoomika, the demand has been subdued. And also this year, Diwali was at a different time zone, so that also has an impact. So it's a combination of both these things, which has had a significant impact on this business. So when the volumes fall, obviously, there is a loss on the operating leverage side and the margin is impacted. So that's the state of this business.

Okay. So what kind of volumes can we look at for the full year?

So we have done...

We have done around a volume of 19 lakhs, Bhoomika, and I think so we should close at somewhere around...

2.4 million or something...

Yes, 2.4 million or something. Yes.

Okay. Fair point. Sir, second is on a clarification on the PLI that you spoke about where INR200 crores kind of a PLI across all our schemes have been accounted. Now is this for the 9 months or for the full year?

This is for 9 months, Bhoomika.

And in this, how much would be only mobile?

So mobile will be a large part, almost to the extent of INR150-odd crores, yes.

Okay. And you said till December '24 our dues have been cleared for this...

I think the disbursement is about to happen. And the January to March 2024 should hopefully also get concluded in the next 1 month or so, hopefully, in this quarter, yes.

Sorry, until December '23, it has been cleared. So the fourth quarter of '24 is yet to be cleared. Is that understanding correct?

Okay. Understood. And when you are accounting for the INR200 crores or the INR150 crores of the mobile PLI, that is for the current year volumes that you're doing, correct? So next year, once we complete the year, then we will give in for the processing a nd everything, and next year, we will actually get the money for the same.

Yes, that's the way it works, Bhoomika.

Yes, yes. That's the way it works.

And in this, as mentioned earlier, there is no Xiaomi-related PLI that we have booked.

Yes. In October, December, we have not.

Yes. We have taken a view to not...

Yes. We have taken a view not to book it as of now.

Understood. Sir, the other thing was on the display fa b that you spoke about. Can you give some color on what kind of asset turns, margins and return ratios that business could have possibly?

So, Bhoomika, it is still in works, what we are looking at 8.6 generation technology. We are looking at 60,000 substrates a month kind of capacity. And this will be churning our products for the whole range of televisions, mobiles, laptops, tablets, automotive displays. It entails a capex of almost $2.7 billion to $3 billion. It can generate a revenue of almost $1.7 billion to $2 billion. It has a very decent operating margin. So I'm not in a position to share more details.

But, Bhoomika, it will be double-digit margins.

And similar profile of return ratios that we have in our core business as of now?

Absolutely.

That's right.

Yes.

The next question is from the line of Onkar from Shree Investments.

Sir, if you look at the FY '25, it was all about mobile and EMS division. So c an we safely assume that for '26 and '27, this will be the biggest driver for growth, for the next 2 financial years, at least?

So mobile undoubtedly is going to be the largest piece. Please appreciate. It has the largest addressable market. Apart from that, we are also focusing a lot on IT products. As we shared with you, we are pursuing a potential JV with one of the largest ODMs. Also, telecom devices is a very high -growth business. Please appreciate. This is a JV with Airtel. This is a busine ss and we generated a revenue of INR700 -odd crores in '23, '24. We want to close at almost INR3,000 crores in the current fiscal, and we hope to double it in the next fiscal. New capacities have already been created for that. Similarly, refrigerator is al ready at INR600 -odd crores. We are going to generate almost INR800-odd crores in the current fiscal, we are adding our capacity in two phases. In the first phase, we're going to take it up from 1.2 million to 1.5 million. And then we finally want to take it up to 2.2 million, adding new products in this particular business. So these are all drivers of growth. And then, of course, we are looking at the component area very deeply. The first project of display module is already in works. The factory construct ion is happening. We hope to start production by Q2 of the next fiscal. And in that, we are planning and looking very seriously at expanding that product portfolio. So these are all drivers of growth for Dixon. And yes, so -- but obviously, mobile is the largest piece.

Okay. With so much, with the plate being so full, I mean, what kind of funds you would require to support that kind of growth? I mean, looking for any fund requirement? I guess you had a proposal to raise, but I guess you haven't applied for it.

So just wait please.

The next question is from the line of Amarnath Bhakat from Ministry of Finance of Oman.

Just want to ask two small questions just on the investment fund. Just two small questions. One, you can see this revenue is growing, but on quarter -on-quarter also on a 9 -month basis, why our margin profile is slowly going down and operating margin is also 9 months basis came down from 4% to 3.5%, 3.7%, also EBITDA margin is slowly coming down. Anywa y, our margin profile is very clean. Any particular reason why this profile is slowly deteriorating?

Yes. So basically, it's on account of the mix. So if you look at a large part of our growth is coming from mobiles as a vertical, which is r elatively a lower gross margin, lower EBITDA margin business, and almost 70% of the revenues are now being contributed by mobiles. So that is the reason why because of the mix change, the margins at a company level look lower. But if you look at all the ot her parameters apart from the margins and absolute growth of revenues and profitability, the ROCE expansion, the current asset's management, all of them have been very, very positive.

That's true. I'm just trying to understand the trend, b ecause basically, most of your revenue comes from mobile, and it seems that the same trends continue. So how we look in going forward with this margin trajectory, how it will look like? It will be slowly going down in the way it is happening. Overall, the absolute numbers may be growing, but this margin profile will go down. Is it the trend we will look for? Or do you have a plan to change the product mix so that at least to maintain this 4% of margin?

So we are -- as we mentioned, we are investing in backward integration. So display is already - - we have narrowed down on a partner, and we are also looking for investment in other backward integration projects of precision components, mechanicals, die cuts, camera modules. So all these backward integration projects are generally are double -digit -- are margin accretive. They are mostly double -digit margins. So once they have -- once they start reflecting in the numbers, you will see the margin expansion. So we feel confident that in the next 24 to 36 months, our margins in mobile segment, which is the largest play for us, can expand by almost 100 bps on account of this backward integration. And this display project will further be margin accretive. So you should see that margin expansion happening -- see that margin expansion happening every year starting H2 of next financial year.

Okay. The second part of the question is relating to now...

Mr. Aamrnath, can you please come back in the question queue. The next question is from the line of Keyur Pandya from ICICI Prudential.

Congratulations on consistent performance. A couple of questions. First, on the mobile segment. So FY '26 being the last year of PLI incentives. Post that, in that segment, what kind of profitability that you expect in terms of margin? And I agree probably the absolute EBITDA would grow based on the increased volume. So how do you see, say, financial metrics changing in the mobile segment? That is first question.

Yes. Keyur, as I mentioned, our investment in backward integration, even after netting of that PLI income that we are booking, we feel confident that margins will expand in the next 24 months in this business. It will start reflecting in the numbers from H2 of next financial year as we get into the display business as well. So please be rest assured that the margins in this category will expand because of this backward integration projects. So I've already mentioned that there is a possibility that margin can expan d by 100, 120 bps over the next 24 to 36 months in mobile business. So a lot of work is being done on the manufacturing excellence side on automation robotics. Operating leverage is kicking in this business on account of higher volumes and also the backwar d integration. So a combination of all these factors, the margin should expand in this category.

Okay. Just one follow -up to this. You have mentioned Q2 FY '26 as the period for commissioning of this project. Now this being, I mean, critical component and are we being new entrant and with approval cycle, when should we assume say real ramp-up in the volumes, revenue profitability from this segment, display module?

So we feel that this should come in by '26, '27. See, this is a compl ex product. It requires approval from the customer side. It has to be aligned at the POC stage for every model, every SKU, so '26, '27, it should start kicking in.

No, it's not fair to look at it from that quarter-to-quarter angle, please.

Fair enough. Just second and last question on the laptop side. So with -- I mean, government support or I would say some resistance from the brands on the import restrictions. You mentioned 5-year timeline more or less remains same. But over th e next 2 years, what kind of ramp-up you see the numbers we have quoted in earlier con -calls that TV interviews, any change from those numbers to FY '26 or '27, what should we expect from laptop segment?

So we'll still stand by...

We maintain those numbers, Keyur. And hopefully, this potential JV that we are targeting with a large global ODM, the numbers has the potential to increase from there. But yes, one has to wait and watch. But yes, we at least stick with those numbers that we had guided earlier.

So that would be just to -- I mean, there is a lot of confusion. So just next year or -- next to next year, any ballpark number?

Yes. So next year, Keyur, I think so which is '25 -'26 financial year, I thi nk so we should be somewhere -- if not more, we should be somewhere at least around INR2,500 -odd crores to INR3,000-odd crores.

The next question is from the line of Achal Lohade from Nuvama Institutional Equities.

So first questio n is just on the PLI, just a clarification. There was some media article about companies which have exited the target are also entitled for the unclaimed or unutilized PLI quota. If you could help us giving some clarity there, what kind of quantum if it wa s to be approved, what additional PLI we could be entitled for?

So there is a provision in the mobile PLI of overflow. And that's what we are pursuing in line with. And yes, so we are pursuing with the government for that particular reimbursemen t. So that is it.

Any quantum you could indicate or...?

Quantum and all, you can separately discuss with Saurabh.

Sure, sure. The second question I had with respect to Ismartu, if you could help us with the revenue and EBITDA PAT for the quarter because we see the minority interest has jumped quite a bit during the quarter. I presume that is partly driven by this particular entity.

Yes, sure.

Yes. So we have mentioned that in our investor u pdate as well. So in the quarter, we did revenues of almost INR1,900 -odd crores for Ismartu out of that INR8,900 crores mobile revenues. So revenues from Ismartu was around INR1,800-odd crores.

Sir, first question is on the Vivo JV. I mean I want to check how much is the current outsourcing percentage right now for the Vivo India considering they have their own manufacturing facility and the press release mention ed that only part of the outsourced orders would be translated to this JV. So any ballpark figure that you can share as in what is the current outsourcing percentage? And what can Dixon expect in this JV like the volumes for the next 2 years?

So as per the term sheet signed with Vivo, 67% of what Vivo sells in India would be manufactured in this JV. Does that answer your question, please?

Yes, yes, great. That was very helpful. And this JV is expected to ramp up from 2H FY '26. Is that right?

Yes, hopefully. So basically, this JV would require an approval under the Press Note 3 as a new JV entity with the shareholding in which, yes, in which Vivo also hold 49%. So as and when that approval comes in, the JV would get o perationalized and then the manufacturing should start, yes. So broadly, you can take around 6 to 7 months from here onwards.

Sure, sir. And sir, just some bookkeeping question on the volume. So is it also possible to share the Samsung phone volume for this quarter and the home appliances, how much were the volumes for the semi-automatic and fully automatic machines?

Samsung volume for this quarter was around 17 lakhs, 1.7 million. And the semi -automatic washing machine volumes for the quarter was around 3.6 lakhs and fully automatic was 0.8 lakhs.

The next question is from the line of Nattasha Jain from PhillipCapital.

Sir, firstly, congratulations on the brilliant scale -up of your portfolio of brands and within the stated timeline. I have two questions. One is, until Diwali, there was slight cheer in the market. But post that, we've seen slowdown in all the white good categories, barring room air conditioner. Now you're not there in RAC definitely. But on the other side of the white good category, sir, what are you hearing from your customers in terms of the near to medium -term demand? How is the market shaping up?

So, Nattasha, the market is still slightly subdued. There has been some positi vity in the current month as compared to the last quarter because the last quarter was post Diwali. But still the buoyancy that will excite us is still awaited.

Understood, sir. And sir, my second question is a couple of weeks, rather a month ago, we read on the secondary sources that Apple is now looking into diversifying its supplier base for component assembly, especially on the non -iPhone portfolio. So Dixon has always maintained a stance that we want to become leaders in the non -Apple ca tegory or the non -Apple ecosystem. Firstly, are we still maintaining that stance? If not, are we in talks with Apple or any of their partners for AirPods or all the other non-iPhone category?

Nattasha, I'm sorry, we have never said that we are going to be leaders in the non...

Non-Apple category.

That you're talking about. What we had said was that we have pursued and we have been fortunate to build a large portfolio in the Android category. So that's all what I can say. Any other thing, it will not be prudent for me to comment on, please. Please appreciate.

The next question is from the line of Deepak Krishnan from Kotak Institutional Equities.

Just wanted to check on a follow -up from Pulkit's question. You indicated close to INR1,000 crores of receivables while you indicate for PLI, but you've indicated that you've got money till December of last year. Just wanted to double check is this number correct, the INR1,000 crores number that you're indicating?

That's right. So that number is correct.

But this INR1,000 crores is also to be passed on to the customer and the cash is passed on to the customer only when we receive the money.

So there is no working capital from...

From Dixon side.

Okay. So the net impact would be just, say, 33%, 40% for us.

INR200-odd crores.

That INR200-odd crores that we mentioned is our share basically.

That's the number.

Sure, sir. And maybe just wanted to sort of understand, I think you've sort of given a good insight into the display, the cost, the asset terms, all of it. But when we're sort of looking at doing this, how are we looking at outsid e the PLI period? I assume we get 70%, 75% PLI incentives, you set it up for the first 5, 7 years, that works. But how do you look at this business because the real risk is essentially generating ROCs even after the incentives go out. So just wanted to sort of understand your viewpoint over it.

So this is not an operational PLI. This is a capex subsidy.

This is a capex…

Yes. So yes, it's similar to the OSAT facilities, all of that. We get that 70% capex subsidy comes through. That's for the first, whatever 60,000 substrates that you indicated. But what happens after that? How do you look at incremental investments beyond the PLI period and ROC?

No, no, it's not a PLI period or anything. The cost compresse s significantly and your payback is amazingly fast. And in any case, you're producing a product, you're producing at a cost which is produced anyway, anywhere globally. So that's the math. It's not dependent on PLI. It is dependent on the government's capex support.

Yes, sir. Sorry, I'll probably take it offline with Saurabh because I understand that 3 billion, you will get 70% subsidy. Let's say, you go for next round of capex. How do you sort of catch that essentially, that was my question? But if not, I'll take it offline with Saurabh.

The next question is from the line of Shrinidhi Karlekar from HSBC.

Sir, would it be possible to comment on the telecom business profitability for the current year? And how is it likely to improve as you aim to double that business?

Yes. So broadly, the margins are similarly or slightly better than what we do in the mobile business. So it's around 3.5% to 4% kind of an EBITDA margin business. And the revenues, you mentioned that we did almost INR1,000 -odd crores. We have a strong order book. So that INR1,000 crores run rate should continue. In fact, it should get better in the upcoming quarters. So you can broadly assume a, yes, 3.5% to 4% kind of EBITDA margin business.

Right. And second, sir, you alluded to the Oppo volume being around 7 million to 8 million next year. These are just Oppo volume or these include Oppo plus Realme?

So this is basically Realme.

Realme volumes.

Right. Okay. And the last one, if I may. Would it be possible to tell us the broad range of investment that you would be making to acquire 51% stake in the Vivo manufacturing JV?

If you don't mind, that's slightly...

As of now it is confidential. At an appropriate point of time, we will definitely disclose that.

Thank you. Ladies and gentlemen, that was the last question for today's conference call. I now hand the conference over to Ms. Bhoomika Nair for the closing comments.

Yes. I would just like to thank the management for giving us an opportunity to host the call and all the participants. And thank you very much, sir, for answering all the queries. Thank you very much, sir.

Thank you, Bhoomika, and thanks all the participants. Really appreciate it for your support. Thank you so much.

Thank you, everybody. Thank you.

On behalf of DAM Capital Advisors Limited, that concludes this conference. T hank you for joining us, and you may now disconnect your lines.