The first question is from the line of Mumuksh Mandlesha from Anand Rathi Institutional Equities.

Sir, for the Q4, Can you reshare the absolute amount of the revenues for the OEM aftermarket and export and also the brake production number for the quarter?

Yes. I would request our CFO to take this question.

Yes. Mumuksh, for the Q4 24-25, we have done INR 466 crores in the OEM segment, aftermarket INR 124 crores and export of products of INR 297 crores. Apart from that, we also have export of services of INR 112 crores. What was the last question?

And the production number for the Q4?

Are you talking about vehicle production?

Vehicle production is 1,19,000.

Sir, secondly, on the time line of the regulation, sir, in the draft, how are you seeing the OEM preparedness for the October date, sir? Or do you see any chance of being delayed in the final implementation, sir?

Yes, so the government has indicated the 2026 October timeline, we expect pushback from certain stakeholders. So we need to really wait for the final date. Our own internal estimation is sometime in 2027.

Got it. Got it, sir. And sir, can you reiterate what would be the content of this new regulation, which I understand it includes EBS for ADAS function and also sir ESC, right, sir?

Yes, yes, that's right. So it doesn't include EBS. Basically, the regulation calls for the M2, M3 vehicles that are buses, and then N2 and N3 category of vehicles, which are necessarily trucks, which means it covers all the vehicles that are related to our segment, by and large. Because you know the M2 buses are the buses that are more than 8 seats in addition to the driver and M3 is remaining buses. So most of the buses above 8 seats and 5 ton GVW is covered. Truck also, anything above 3.5 ton trucks are covered, which is a large category. N2, N3 covers everything above 3.5 tons. Same case for the buses. So then if you come to what is included in the regulation is the stability control. Electronic stability control is a part of the regulation. Now the buses, second category of buses are already covered. We expect that those categories which are actually no t factory fitted, which got excluded in the first notification or regulation, now it gets included from September in any case. Then we have truck segment, which is completely excluded, but that will come as part of the ADAS regulation. With the ADAS regulation, most of the vehicles are covered. So in the ADAS regulation, first thing is vehicle stability function, that is ESC included. Then we have advanced emergency braking system, essentially the forward collision avoidance is included. Lane departure warning system is included. Driver drowsiness and attention warning system is included. Blind spot information system is essentially that covers those parts around the vehicle that is blind to the driver, now that is also covered. Then movin g off information system is covered. So virtually it covers about 5 regulations. So a major chunk of the ADAS regulation is largely covered. So in terms of the actual impact, I have earlier also communicated, in the case of ESC, when it is in the f ull volume and people localized, the prices should be in the range of maybe around INR 25,000 delta. On the ADAS, I'm not in a position to really indicate any number, but the market is evolving, but it could be quite substantial. All this put together, in my view, it should be in the range of at least above INR 40,000, but we have to see, because it also depends on the type of solutions that is offered and the localization content, et cetera. But these 2 put together is a substantial volume growth. For us, that's a great opportunity available in front of us.

So, if I understand, sir, INR 25,000 for the ESC and the ADAS function INR 40,000 -- about INR 40,000. And sir, AEBS also will be separate addition above this amount or this includes as part of ADAS?

ABS is already mandated. Most of these vehicles are already fitted with ABS.

I mean AEBS, advanced emergency braking systems.

Yes, yes, AEBS is also included. Normally what happens, the basic hardware and those things are, by and large, common. Against the hardware, you try to provide various functionalities with add-on hardware features and software solutions. So actually, we have released ADAS in India with 11 functionalities to some customers, which is not through a regulatory route. But then out of that, 5 functionalities are coming through the regulation route. When it comes to the regulation route, because of the huge volume opportunity, it is too early to really make a judgment of prices etc., So whatever I'm giving is very indicative, depends on the kind of solution that will come to the market, because it will be, by and large, a cost -driven solution, because the community position also should be evaluated, et cetera.

INR25,000 plus INR40,000 broadly, right sir?

Yes.

The next question is from the line of Lakshminarayanan from Tunga Investment.

A couple of questions. I just want to understand your product sales for the full year FY '25. And when you split the product sale into exports and domestic, what is the other income. Second question is that we have been talking about getting into the LCV business. Just want to understand what will be our edge in the LCV business and what will we provide? How long it will take for us to reach a steady state? And if and when we reach a steady state, what would be the revenue potential in that LCV segment?

Lakshminarayanan, the second part of your question was not that clear. Can you say it again? This is related to LCV...

Yes. So on the LCV side, I understand that we are getting into LCV over a period of time. I want to understand if the business potential exists. What will be our edge? And then at a steady state, what is the revenue potential it can actually offer?

For the first question, I would request the CFO to answer those numbers.

For the full year sales, we have sold about INR 2,176 crores in the domestic market. This is INR 1,671 crores in the OE customers and about INR 505 crores to the aftermarket customers. We have exported products worth INR 1,164 crores and service exports and other income is adding up to INR 598 crores.

Yes. Now coming to your question on the LCV. We will be able to supply entire braking system for the LCV segment. It's hydraulic technology based from the air brake for the commercial vehicle, heavy and medium. And we have lined up quite a few products in that space because, the customers are also more or less the same. Already, we have launched one product there, which is hydraulic electronic stability control. Volumes are low, but it's from a ZF global portfolio. We have already localized in our Oragadam site because it was needed when the ESC regulation was coming into India. We are currently selling about 400 numbers a month, roughly. But this volume will increase from September 2025, when the coverage extends to all the buses. Right now, it is only factory -fitted buses are using. So it will increase. That is number one. Number two, when the new regulation comes, along with ADAS, this ESC, electronic stability control is applicable to all vehicles. So the vehicles which are essentially 3.5 tons to probably 7 tons. For those vehicles will need hydraulic ESC. So we are already ready with the product, which is largely localized in India. This will be one of the first products. Then, of course, there are many other portfolios that are available, which are very differentiating in nature, where there are not many customers who have those products. So one by one, we are going to localize. To your question, roughly, our estimate right now, maybe in a matter of 5 years from now, it should be in the range of EUR 90 million. Very rough estimate.

And who are you displacing here? I mean, is there another competitor, because in the heavy commercial vehicle, we do have -- we have a clear majority in terms of market share. In LCVs, how does it pan out, sir?

Actually, in this particular segment, where we are supplying the hydraulic ESC, there is no player in India right now, because this is a light commercial vehicle, not a passenger car segment. Light commercial vehicle segment, while there are players who are supporting the market with certain products, but the one that we are offering right now, there's no one. So it all depends on technology-wise. The hydraulic ESC to those customers, for example, customers like Force Motors, Mahindra, Swaraj Mazda type of customers, where it's a particular segment. That's why volume today is less, as I said, but it will increase. We're not displacing anyone. We came to the market because there was nobody available with the product at the time 3 years ago. Customers, I think competition will emerge, but still, we will be playing a major role there.

We will take our next question from the line of Shravan Iyyappan from Avendus Spark.

Yes, So see, basically, in India, without localization, it is difficult to sustain and grow. So our model is, we generally do a phased localization. In the normal time frame, the volume is not very clear. But in this type of regulatory -driven requirement, the volume is clear. Volume is generally very viable to do localization, at least in many of the parts. So we are already having clear plans to localize many of the systems, except some, for example, a camera or a radar, it may still be economical to source from global locations where there's a huge global volume, so you get a scale advantage. The other part s, we will have a phased localization of all other parts. Mechanical parts definitely we'll be completing. Even some electronic parts, based on the scale, the volume, we have plans to localize. Things like radar and camera, we are still exploring, because the advantage of ZF is that we have a business with the passenger car segment also. At least in future, there is some plan ts happening in India and other legal entities. But then we are exploring if there is a possibility to initiate localization. We have clear plans, except that camera and radar, most other items we will localize.

Okay, sir. Understood. Just one more question on how is the competitive landscape around this segment, like these products that we're entering? And what can our market share be in this segment?

It's very difficult to say now because the regulation time line has been already announced now, but there are a few players globally who have the products. Our advantage always is our footprint, our competency, our connect with customers. So we would like to remain as a strong lead player. But then we are definitely having a lot of competitive advantage in terms of local engineering strength, local manufacturing capability, very strong national footprint. Also excellent connect with the customers, service function people, so that any issue that comes in the field, we'll be able to support, and multiple differentiation we have created over the years. So we believe we will maintain our lead position.

The next question is from the line of Shubham Bhatra from AMBIT AMC.

I have 2 questions. First is, in the last 2 quarters, we have shown significant improvement in the margins. And going ahead, could we get some kind of a guidance on what kind of margins are we headed in? Can we further see some improvement? And secondly, o n the LCV side, the product that we have launched, what would be the approximate content per vehicle for this product?

What is the second question, which product you're referring to?

LCV.

Okay. So the first question, you have to evaluate us based on our past performance. But generally, we don't give guidance on this matter. While our key focus is to continue to improve our margin, but okay, we can say we will try to at least protect the current position. LCV, again, it's an evolving thing. There are a few products already we have lined up. Maybe too early to commit. But if you look at the product that I indicated, it's typically about INR 20,000. If you add some more products, maybe we can talk about INR 25,000 value per vehicle could be a target we can start with. Again, most of the sales will start coming once the ADAS regulation kicks in.

We will take our next question from the line of Rakesh Jain from Axis AMC.

Sir, can you just a bit explain us on your gross margin change quarter -on-quarter? How should one look at it, let's say, from your product mix perspective?

Yes, I would request our CFO to answer.

Our gross profit change has been in the range of about 7% to 10% quarter -on-quarter with the last quarter being a 4.5%. On an average, you can say that we've been improving our profitability by about 4% to 7% overall. This is driven by, of course, our product mix. Our highest margins are on our aftermarket segment. And whenever we improve the share of aftermarket, we see an improvement in our margins. But our largest driver rather than the product mix is our focus on cost management, improvement in our material productivity and focus on our production costs.

Okay. And just to reconfirm, what has been our overall export number, including the product and service business this quarter?

This quarter, our exports of products has been INR 297 crores and export of services has been INR 112 crores.

The next question is from the line of Preet from InCred AMC.

I would like to ask on the working capital. Although revenue were down in FY '21, I can see that there was still increase in the working capital and majority of the increase pertains to the increase in debtor days. So if you can just brief about is this onetime or we have changed the terms?

In the last year, we did change our terms for some of the customers from 45 days to 60 days and some even to 90 days. it works on both sides. So it's always a commercial negotiation in terms of balancing the payment terms with other commercials that we see.

So how do we expect it in coming? So now will we take FY '25 base or how much should we expect in the coming years?

You can take FY '25 as a base. We would not provide a guidance on how this is going to develop.

We are expecting to have a capex spend of about INR 190 crores for FY '25-'26. This would be more towards expansion of our Oragadam plant and introduction of some lines at some of the other plants for export support and all that.

Okay. And one last question from my side. How much will be onetime impact in the quarter 4 in the margins like we had in quarter 3? Is there any onetime impact?

There are no onetime effects in the quarterly results this time. All routine and repeatable.

The next question is from the line of Arihant from Bowhead Capital Advisory.

Sir, please, can you just say once again what were your expectations regarding ADAS regulations? When are they expected to come?

Yes. So see, the government has already notified. Draft notification, I think, calls for implementation from October 2026. There's a lot of discussions happening. And of course, there are many stakeholders. OEMs put forward their proposal because these thi ngs need time to implement. So our assumption is at least it will be from October 2027, before then. But then for your planning, roughly that could be a time line.

And sir, will this be implemented like for all vehicles at the same time? Or will it be in phases? Like for some category of vehicles, it will be earlier, and then later for some other categories?

Again, this is a decision of the government of India. So we can only read from our past experience. AEBS was mandated 100% in all the M3 vehicles full on time. There are a few technologies adopted for select vehicles. But this draft regulation calls for im plementation almost all the applicable vehicles. But we have to wait and watch how the discussions happen, how the government is going to finally decide. Even if it comes in a split manner, again, maybe next within a year, the rest of the vehicles will be covered. For example, in the buses, I think April 2024, the ESC was mandated for certain applications. Now by September 2025, the government covers other buses as well. So we have to, again, just wait and understand how this is going to come. But this time, most likely, it may come for all applicable vehicles also.

Okay. Sir, and my next question was like for export, can you give some color on how like the compressor sales have been? Have we onboarded any new customer? And also, can you give some color on how the actuators and brake chamber sales are proceeding to Vo lvo? And have we onboarded any new customer in that space?

Okay. So one new customer we have onboarded for actuators. That's what I said, it is Actuator 4.0. This is for Volvo Global. And of course, we expect the actuators and brake chambers will keep expanding, because these products are doing very well, and in t erms of competitive positioning, we are in a much better shape. Compressors per se, in the last year, we onboarded 2 new customers. Daimler AG globally, heavy-duty compressors. So we started now almost 1.5 years, we have started supplying. So we expect the volume to keep increasing because, again, our understanding is these products are doing well. Customers may expand this to certain new regions, new locations. So these are all the possibilities. Similarly, we started with compressor plate DAF, one version 440 cc, then it got expanded to 563 cc. So again, these products, in terms of performance and in terms of competitive positioning, we are in a good shape. The electronic control for air suspension, which we were supplying it to BMW, there are some challenges, maybe the challenges related to all this global EV transition and all those things. So some drop in the numbers today. But then the technology is there . We will look at possibilities to sell, of course, this year. We're not directly in touch with the customer. We are depending on our product line colleagues to expand these products to markets where we can add value. So right now, beyond this, we have not added any new customers with certain global challenges now with all the geopolitical issues. If certain new opportunities emerge, then volume could further increase. But we are waiting and watching the evolving situation. But as such, we are well positioned to support from our, not only Mahindra City, now we have expanded this to Oragadam site. Th e actuators and brake chambers, we have already shifted partly the new business to Oragadam. So getting ready to support whatever increase that can happen in the near term.

Ladies and gentlemen, in the interest of time, we will take this as our last question. I now hand the conference over to the management for closing comments.

I would like to thank all of you. All are very interesting and very good questions. So I hope our answers were able to help you to understand the evolving situation. But we see huge opportunity in front of us in terms of new regulations. We also see some p ositive numbers in vehicle production in the past 2 months. And we are getting ready to test the new opportunities that are evolving in front of us. Thank you.

Thank you. On behalf of Batlivala & Karani Securities India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.