The first question is from the line of Viraj Kacharia from Securities Investment Management.

Just a couple of questions. First is on the sunroof announcement. Can you just provide some more color in terms of the foreign partners, what kind of a global position they have, what kind of relationship they have with OEs in the passenger vehicle space? Any perspective you can give on that?

Yes. So at first, we particularly believe that in the Indian market, if you compared to the global market in the automotive segment in pass cars, there's a huge opportunity in India to grow into the sunroof and premium features. So we believe that about 30% of vehicles in India would be having sunroof by 2030 and with a market opportunity of about $500 million to $600 million, is our expectation. With this, we would like to capture the market with a solid partner. So we have shortlisted 1 partner named HCMF from Taiwan. They have more than 29 facilities globally into the sunroof market and other closure systems into various countries. They have plants in China, Europe, even in North America and supply to almost all the OEMs in China, which are local and which are joint ventures coming from Japan or Europe and having joint ventures in the China market. So we, as following, will be now working to sign up a final joint venture with them in the next few weeks. Of course, the details, such as the location and other details, are going to be finalized shortly. But yes, we have already started eng aging with customers and started product demonstration from some weeks ago and generated interest from our OEMs in India.

But are there any set of customers or OEs with whom they have long-standing relationship in terms of sales or higher share of business? Because what do we understand globally, the top 3 guys, they have more than 70%, 80% of the market. And correct me, this particular company may not be in the top 3 or top 4 in terms of positioning. So hence, I'm just trying to u nderstand what kind of relationships they can provide an access to for us?

So HCMF has global relationships with various countries, who have again particularly presence globally. I will, again, not name the customers as I'm currently bound by confidentiality agreement. So yes, they are supplying more than 2 million sunroofs annually, globally -- at global level.

So Viraj, again, all these studies are under work. We expect the capex to be about INR 150 crores or INR 180 crores over the next 3 years' time. Of course, it all depends on the order wins and the technologies that are needed by this product and other product lines that we are working on. It is not only, as I mentioned, sunroof, but there are other closure systems as well, which once finalized, we will be coming to the market. And as it's confidential right now, please pardon me, I will not be able to share the more details on this.

We'll take the next question from the line of Shridhar Kallani from Axis Securities Limited.

Congratulations, firstly, on a good set of numbers to you, Aakash and team. Just a follow-up on sunroof systems. So...

Sorry to interrupt, Mr. Kallani, may we request you to kindly use your handset, please? Your voice is muffled, sir.

Yes. So I just wanted to understand, currently, in India, is sunroof system is also an import substitute product or mainly it is locally produced?

So at both ways. It depends on the specifications of the product category. Of course -- I mean, it depends on the technology of the product. I mean high -end solutions are still imported. Of course, the promotion is to have a localized option in India. And that is where we have signed with the opportunity to ma nufacture them locally in India to be close to the customer and hence, increasing the content per vehicle and vehicle access system solutions offering to our customers. But yes, it depends because the size of the product, it is primarily going to be localized, which already initiatives have happened.

Okay. Understood. And I just wanted to understand on the order wins, you have won INR6,500 crores. So what is the breakup of these order wins in terms of two -wheeler, four -wheeler, commercial vehicles or, say, EV and ICE categories, if you can do that? And also, what can be the peak annual revenue from these wins?

Yes. So broadly, it's about 50-50, 50% are replacement businesses and 50% are new businesses. But in this case here, of course, our new order wins that we have won are much higher in terms of, let's say, 60% to 65%, and replacement is about 35% to 40% here in nature. If I would say, again, about 30% of the orders won are from the EV segment or EV platfo rms and of course, 70% comes from the ICE or other alternate fuel platforms that have come from the customers per se. If I speak about division-wise, the mechatronics division have about 50% -60% coming from the two-wheeler space, and about 30% to 35% comes from the four-wheeler space, and about 5% to 6% comes from the commercial vehicle front. And similarly, again, the interior plastics, about 100% is coming from the four -wheeler space. The die casting products are, of course, coming from 100% four-wheeler. In the information and connection system is about 50 -50, where 50 coming from the two -wheeler space and 50% coming from the passenger vehicle.

And what could be the peak annual revenue from these wins?

So typically, again, in automotive, you divide them by 4 to 5 years. So again, some of them are replacement and some of them are new products, as I mentioned. So it is hard to tell on the call that how much of this would come in an annual year, per se bec ause 50% of this goes in replacement. So typically, if you can divide the 6,500 by 4 or 5 years, and that is where it will come on an annual basis.

Understood. Okay. And one last question on the new products that you have launched in the EV segment. You are mentioning that it's around 8,000 to 10,000 values. So what new products are these, if you could share some light?

So these are in the power electronics product lines for the segments of four -wheelers as well as the two-wheelers, and three-wheelers. So yes, these are the new products lines.

We'll take the next question from the line of Abhishek from Dolat Capital.

Congrats for a strong set of numbers in tough time. First question is on the margin side. What was the margin for mechatronics and information connected system in second quarter, sir?

So please, pardon me, but from this quarter, we will not be sharing margin details segment wise to save us from competitive intelligence leaking out and this have been advised by our customers. This also falls in line with the industry trend of not sharing margins division wise or product wise. Overall, as I mentioned, we have grown, a t a standalone and consolidated levels from 10.8% to 11% EBITDA.

Okay. And si r, in wiring harness business, you are looking for the capacity addition. So what would be the incremental revenue from FY '24 because of this capacity addition? And what would be the margin in this segment?

So, the wiring harness customers are across segments from the two -wheelers, three-wheelers, commercial vehicles etc. So, from next year onwards, we expect 1.2x of sales to come in from these additional plants. I just want to remind you that it is not that we have fully m ade this new plant, but we've consolidated our existing plants. As I mentioned earlier, for example, if there were 3 plants in the South, we have consolidated and made them one for operational excellence and having economies of scale.

So because of this capacity addition and the consolidation, the margin will improve? Because from last many quarters, this business is facing margin issues. So this is the effort to make the - - to improve the margin in particular segment?

Yes. As I've explained from particularly the wiring harness, there are 3, 4 avenues that we have always been committed and working on and which are expected to improve, and we are showing them. So of course, one is the localization of the connection systems and the terminals. The second is, getting the better operational excellence through economies of scale and the plants and the third is definitely productivity improvement from people we have.

The next question is from the line of Parag Thakkar from Anvil Wealth.

So I would like to just ask that you mentioned in your presentation that, I think, you have won some orders for smart key to be supplied to some two-wheeler company. Can you just elaborate on it? And how much I just want to know that how much is the increase in content per vehicle for that particular product in smart key? Earlier, what was the price? And now, what is the price? So how much content per vehicle? And is it a meaningful order?

Yes, Parag, I think it is a meaningful order from our side of INR 450 crores Lifetime order. So again, as I mentioned, you can divide this by 4, so adding about INR 100 crores in our top line as a new business when it comes to the smart key. As a kit value, a lock-and-key traditional lock- and-key in two-wheelers typically used to be about INR 300 to INR 400 or INR 400 to INR 500. Now with the smart key solution, it is going to about INR 2,500 to INR 5,000, depending on the configuration of the product, which could have 1 fob or 2 fob or phone as a key, different level of securities coming into the vehicle. So that is how the kit value increases. I cannot share the name of the customer as I'm bound by confidentiality. But yes, it is one of the largest legacy customers in India.

And do you expect that other OEMs will also give you such orders? And whom are you competing with when you are bidding for such contracts? I mean I meant to know the competitive landscape.

Yes. So thanks for the question. We are the only player in India, when it comes to the smart key solutions for two-wheelers. We have filed more than 29 patents now for this technology, and we have 100% market share when it comes to the access solutions for two-wheelers. Yes, the competition will catch up. There are competition who are working on this, and it will take at least 2 to 3 years for them to come and capture the market. But once they reach there, we are hopeful that we must have done more initiatives and investments in technology, we will be much ahead of our competition. So this is these are the orders which we've been sharing for the last many quarters, on the vehicle access product line, which is a core for our technology, going forward.

You said this order is for Rs. 100 crore plus per year of supply?

Yes.

Okay. And the other thing is that suppose if -- this -- for example, in this festive season, Bajaj Auto, Hero and TVS, all have guided for double-digit growth in this festive season. So I suppose that that will translate to you also, right, because all of them must be your customers? So the current quarter, the things must still improve over Q2 significantly, right?

So yes, hopefully, we would request our customers to do double digit. And whatever indents we get from the customers, our important point is to achieve them. So and more importantly, the orders that have been won recently in the recent past, based on the premiumization of these models of the vehicles, we are present across product lines. So our expectation is that we grow in line with the two -wheeler industry and, of course, outperform them with the various initiatives.

So basically, Q2, your premiumization in all the 3 segments which you are in major -- whether it's smart key or instrument cluster or wiring harness, based on that, how much we can assume your growth rate versus the industry? For example, industry, grows as two-wheeler industry grows at, say, 10% or 5% and passenger vehicle industry grows at, say, 5%, what kind of revenue growth one can expect from Minda Corp? And whether with that revenue growth, if there can be any margin expansion because of premiumization?

Yes. So again, as our objective and vision and our commitment is to grow much higher than the industry, if the industry, as you mentioned, is going to expect it to grow at 5%, you would like to grow 15% higher than the industry. So that is our target and we've been consistently delivering that over the last 12 to 13 quarters. And we would like to achieve the same, going forward. And you can see that this quarter, we have done the highest-ever revenue in spite of subdued sales from the export market. Of course, if the other markets and other segments pick up, it will further increase our growth rate now in the months to come.

And sir, you said your margins will also be higher because of operating leverage and premiumization, your margins and ROCE should also grow only, right, from these levels?

Yes it will continue to grow. Mr. Parag, may I request you to please come back in the queue. But I'll quickly answer your question that yes, of course, going forward, with the new electronics and premiumization of the products, we are looking at increasing of our profitability as well.

We'll take the next question from the line of Radha from B&K Securities.

Sir somebody -- the previous participant asked a question about the realizations for smart locks. So you mentioned around 3,000. So sir, actually, on your website, I've seen for the locks, we are supplying to Activas 6G, wherein you mentioned the product price is INR 1,150. So would this be categorized as smart lock? Or what kind of lock is this?

I'm sorry, your voice is not clear. Are you saying that the Honda smart key is which category? Is that the question?

No, I'm sorry, I did not know where you have taken these numbers from. But what I can only comment is that the smart key is a combination of multiple technologies and multiple products. So it could vary from our system to system, as I mentioned.

And sir, when we are starting from FY '24, if I'm correct, the production of smart keys?

No, ma'am. Our smart keys have been in the production for the last 3 to 4 years for domestic and export markets.

Sir, this order book of the smart key that you mentioned of INR450 crores. So...

Yes, yes, this order will come into effect from second half of next year, please.

Yes, sir. So actually, I wanted to ask that the product -- some of the products mentioned in the brochure for smart lock for locks on your website, the prices of that is higher. For exa mple, normal locks would be around INR400, the prices of that is around INR1,000. So would that be categorized as smart locks for us? For example, Activa 6G, GSX-R 150, Intruder, so it's all above INR1,000.

Ma'am, as I mentioned, there are va rious types of locks. So one is a typical lock and key, then there is a magnetic lock, which is a much higher product. And then the third category is a smart key with fob, and then one is without fob. So there are different categories of products. And I may request you to please get in touch with our IR team for further details. And I will not be able to comment on which model of the customer has which kind of a product.

Thank you. We'll take the next question from the line of Vishal from Svan Investments.

Congrats for a good set of numbers. I have a couple of questions regarding first question regarding the growth. If you see last 2, 3 quarters, our growth rate has been muted compared to what we have seen at the back and we have always been committed to have a good delta over the industry volume growth. So compared to industry volume two-wheelers, which has grown by QoQ around 12% to 13%, our two -wheeler, 3 -wheeler business has grown by around 7 odd percent on a Q oQ basis. Similarly, that is the case with the pass car industry passenger car production vis-a-vis our pass car business as well. So is it because of transitioning of old platforms and new platforms? Because our order wins are also good. INR 3,500 crores order in this quar ter. Last quarter, you have done INR 3,000-odd crores order wins. So can you throw some light on -- is this transitionary and gradually, we'll see as the new order kicks in, we'll see a good growth? Can you throw some light on this, please?

Yes. So of course, multiple factors, and its gradual increase because once you win the order, it takes about 18 to 24 months for the products to come in to start up production. And then again, another about 6 to 8 months for ramping up the production. That's point number one. Compared to last year, if you look at quarter 2 versus quarter 2, our premium buying last year was up to about INR30 crores, as we have already mentioned. And if I normalize that, then of course, our growth rate is higher. Number three, our if you look at the domestic market, we have grown by 10% year -on-year, whereas the two-wheeler industry has degrown by 2% and the automotive industry as a whole has been flat on a year-on-year basis. And the last, not the least, the exports have been subdued, which is due to the geopolitical issues and global phenomena, which the overall industry has seen. For the last 2 quarters, the exports from out of India to Europe and America are not doing well. So this is the reason that why our growth is only 7% and 11%.

Okay. Okay. Fine, sir. Sir, my second question is regarding the sunroof system, the new JV, which you are planning to get into. So currently I just wanted to ask you who are the current suppliers, who are the current competitors, to whom we will be competing in this market? And what is the overall market size in terms of value? And you said that we expect that industry penetration to grow to 30% in terms of volume, that's fine. But what -- currently, what is the in terms of value, how big this industry is?

Yes. So Vishal, as I mentioned, the industry is expected to be about $500 million to $600 million, as per our calculations, by 2030 as we believe there are about 3 or 4 players in the industry in India right now. And our expectation is that this kit value offering for sunroof has a particular product is about 15,000 to 20,000, depending on the configuration. Of course, there are other products which are under discussion, which will have also, if not such high but maybe a similar range of pick value added on in this partnership.

Great. Great. Great. My last question is regarding -- if you see, your employee cost run rate has increased from INR157 crores in Q3 FY '23 to gradually to INR180 crores INR175 crores last quarter and now INR187 crores. Similarly, in terms of other expenses, has also increased from INR109 crores to INR120 crores. Is there some one -off here or some additional costs we have paid?

Yes. So I'll ask my CFO, Vi nod Raheja, to answer. But largely, the reasons are, of course, expansion, the minimum wage increase across states from the customers -- sorry, from the government and third, of course, higher spend in the engineering to come up with new products and technology for the growth to come in forward.

We'll take the next question from the line of Shridhar Kallani from Axis Securities. As the current participant has left the queue, we'll move on to the next question, which is from the line of Jay Kale from Elara Capital.

So my first question is regarding the sunroof. If you can just throw some light on the capabilities of this JV, is it more on the TVS sunroof or panoramic sunroof, how is the product profile for this partner, globally?. And what are the I mean, I understand you will not be able to give a flavor on the customer. But whom are they predominantly strong with, is it the European customer, South Korean customers, Japanese customers? Any flavor on that because that could also help you in having relationships, from an Indian context, with those OEMs?

Yes. So to answer your question, this company, as I mentioned, is making about 2 billion sunroofs annually. Second is that they are partners to European OEMs, Japanese OEM and local OEMs across China and Mexico as well as Europe. Third, they are making sunroof particularly all top loaded, bottom loaded, TVS, panoramic is in that product portfolio. And last, not the least, I would like to add that we are, of course, also engaging for other products, which are closure systems for the four -wheeler vehicle access, which are almost to the similar kit value that they offer.

Understood. And these other products would be largely the similar products, which are -- which they have currently in their product portfolio, and you will be partnering with them for that to get that into India, is that understanding correct?

Absolutely right. And they have the product portfolio, which are in our road map for offering a complete system solution offering in a vehicle access of passenger vehicle. As I would like to repeat again that Minda Corporation is going to increase its portfolio in the vehicle access system space and products that we have mapped, which are synergies in nature, are going to be added continuously. So we believe sunroof and other closure systems in the vehicle access portfolio in line with our commitment is what we are continuing to partner and offer to the Indian market, increasing our kit value in the four-wheeler vehicle access space. We would like to increase our revenue from the four-wheeler segment, going forward.

Also, is this arrangement purely for your supplies to the Indian OEMs in this or there is also this option of then sourcing for their global supplies from India through this JV? Is that also a consideration?

Yes, that is a consideration.

Ladies and gentlemen, this will be the last question for today, which is from the line of Natasha Singh from Yes Securities.

Congratulations on great numbers. I wanted to ask what is the split of premium and value products in terms of revenue? And what is the margin guidance for future for them?

So sorry, if I understand your question, you're asking that what is the value for the legacy products versus the new technology products?

Premium and value products, the split of premium, basically.

Sorry, ma'am, that's a very vast question. But just to tell you, we do categorize all of our different products and different buckets. So there will not be uniform answer to -- because, for example, if I look at the keyless solutions as one traditional offset and then one is keyless solutions; so If I look at the wiring harness, there is this simple wiring harnesses versus now the electric vehicle complete system solutions offering. If I look at the instrument clusters and speedometers, there's traditional analog clusters, which are now going to be TFT and into pass cars moving to cockpits. There are, of course, new sensors that are coming in. And die casting, there are regular products versus much advanced technical products and of course, EV products which are new. At a broadly general level, definitely the value products, in your terms, have typically lower profitability. And with the increased content, with the increased electronics and more and more comfort, convenience features and with [pace] technologies, the advanced technology products have a better profitability. But since they are coming into the market, initially, there will be a lag of the profitability because we have to get economies of scale as well as they are in the start-up phase.

Okay. Is it possible to get blended margins for the split?

No, sorry. For the blended margin, of course, if you compare the premium products, the revenue as well as the profitability will be higher. For the legacy products, definitely, there are different margin profiles because intern ally, what we also do is we see the segment -wise product and where they should be manufactured toward products profitability they should have in order to have the right product mix as well as the profitability mix across segments and across platforms.

Ladies and gentlemen, we will take one more question, which is from the line of Jyoti Singh from Arihant Capital.

Sir, my question is on the loan side that we have given to JV, INR400 crores, as per the cash flow statement, if you can throw some light on that?

Sorry, can you repeat the question, please?

There is a INR 400 crores loan given to a JV, as per cash flow statement. If you can throw some light on that?

So, it's not INR 400 crores, it is INR 4 crores given to one of the JV companies.

Okay. Sorry. Yes.

It is INR 400 lakhs, I mean.

Okay. Okay. Then it's fine. And also, sir, second question on the export front, like it is a subdued from last 2 quarters. So if you can give some outlook, going forward?

Yes, ma'am, exports definitely continues to be the focus for the group. We continue to build order book from the export customers, which are global sourcing as well as customer -oriented across segments. Definitely, we expect them to improve in the quarters to come. But honestly, in the European as well as the American situation currently, we just would say we are cautiously optimistic.

As that was the last question for today, I w ould now like to hand the conference over to Mr.

for closing comments. Over to you, sir.

Yes. Thank you. So thanks a lot, once again, for everybody to join the call. We at Minda Corporation remain focused on enhancing our core and deepening our capabilities across product portfolio, with a special focus on EV and electronics. Our strategic approach will remain on fortifying our core products and expanding our products and customer base both by attracting new clients and deepenin g our relationships with existing ones. We are fully poised and confident of margin -accretive growth in the coming quarters. So thank you very much for joining. And please, have a great festive season.

Thank you very much, sir. Ladies and gentlemen, on behalf of Asian Market Securities Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.