Just want to understand what has been the acceptance or penetration of electronic stability control in buses? And what is the mix of hydraulic and pneumatic kits we have actually been supplying?

On the electronic stability control from the 1st of September, of the buses which are on the roads other than the exempted type 1 city buses have been fitted with electronic stability control. So Internal CV supplies to most of the major OEMs. So in that area, we are seeing an uptick in the numbers that are being produced and sold to the OEMs to the tune of around 40% to 45% over the previous year same time. And on the hydraulic portfolio, we see a marginal increase in some of the segments where the hydraulic EFC is being used. Still the legislation for the school buses, even though it is under draft, it has not been enforced. So once that legislation is enforced, we are expecting that there will also be a significant increase in the hydraulic ESC. So at this moment, there is a marginal increase in certain segments where they are using the hydraulic ESC in the nonschool bus application.

So when we -- I mean approximately what 40,000 buses are made in India every year. And do you think this would be fitted in how many buses? This has become banded what percentage of buses it would be?

So we would see about 60% of the buses play because the balance are covered under city bus application.

Okay. Okay. Okay. And the second question is in terms of the ADAS -- I mean, advanced driver assist systems and the advanced emergency braking system. Where is the regulation stand now? And what has been our progress in the existing OEM?

At this moment, the draft legislation is only what we have in the public domain. There are talks going on between the government bodies and the OEMs on a date of legislation when it is expected to be launched. Looking at current estimates, April 2026 seems to be very close. So there is a delay anticipated. The exact dates may be public in a couple of months. So we are yet to get the exact fix on when that is expected to come about. But where we are today, and we are in continuous engagement with each of the OEMs to see how we are able to work with them on this product.

And do you think this would actually applicable in anything which is above 6 tone? Or is there a tonnage - based gradation for ADAS and ABES?

So ADAS and AEBS currently, the draft legislation talks about a mandate in M2, N2 and M3 N 3. So that is everything that is greater than 5 tonnes buses and trucks.

Got it. Sir, what was the electronic braking systems? What has been our progress there? And when do you think this would actually would come? This would come after the ADAS and AEBS comes in? Or like how do you think about this?

Electronic braking system is more in practice for the electric vehicles, less so for the ICE platforms. So on the electric vehicles, the additional advantage that the EBS provides is regent capability in addition to improved braking feel, almost like feel. So due to these 2 key buying factors, it is more penetration in the electric vehicle platform. Internal So as the e - bus segment grows and the increased comfort levels start growing, we see an increased penetration happening in the EBS.

Got it. And then last question is related to the disc brake system. Can you just help us understand where we are in terms of brake...

So on the disc brakes, there are a few segments and sectors which are adopting disc brakes. In certain cases, EBS and disc brakes are going in tandem, where you have improved braking feel as well as improved braking efficiency. However, the definite increa se is not seen to that level because the cost of a drum brake is still cheaper than a disc brake today in the market. So cost - sensitive segments, you don't find that level of adoption. In the typical use case applications are the 13.5 meter, 15 - meter buses, which are usually the cheaper buses. In those segments, you find the adoption of disc brakes more prevalent.

The next question is from the line of Ajox Frederick from Sundaram Mutual Funds.

So my question is on exports. You mentioned in your comments that the next steps, we will be working with air compressor actuators for balancing out the weakness. So those are in work in our Oragadam plant already? Or can you give some color on what's happening in Oragadam plant and eventually, what are the products we are working on and some outlook on the exports?

On the export side, the products that we referred to are currently being planned out of our Mahindra World City SEZ plant. These products are with current businesses, which we are already having with our key OEM customers, partners in Europe and U.S. So some of the products that are identified are actuator compressors and OPR - based compressors, which are mostly looked at for growing the business and improved profitability for the group. And actuator and advanced actuators for other global OEMs are again, most of the current upgraded actuators from the double diagram disc brake actuators and spring brake actuators, which are being produced out of our Mahindra OCD plant will be upgraded to smart actuators as the next - generation actuators, which are being planned for European market.

Okay. Okay. That's wonderful, sir. And sir, secondly, on the LCV, I know it's too soon. Where are we on that opportunity? And are we in the development stage? Or like what are we doing there?

So on the overall ILCV segment, if you look at, we are already present in hydraulic ESC, as I just mentioned previously. So the segment where we are already present in hydraulic ESC, we are trying to grow our market share and also the penetration. Apart from that, in the LCV portfolio, we are looking at other products that is on the braking system platforms where we are already having a few products in our current range as well as some other products that we are looking in the near term.

Got it, sir. That's helpful. Just a final data keeping question on U.S. exports, sir, how much was this time around versus, let's say, last quarter or last year? Internal

So the U.S. volume reduction was around 20%. And it was somewhat offset by EMEA volume increase, but not fully offset.

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

Sir, firstly, sir, if you can help us understand in this quarter, we have seen a gross margin improvement Q - on - Q by around 160 bps. What led the improvement? And also in H2 in the cash flow, we can see almost like INR 187 crores of working capital improvement in first half. So can you just explain what led to the improvement?

Okay. Answering your question first on the best improvement, we've worked actively on our material costing and efficiency production efficiency in the plant. So that has given us the improvement both on the material to sales ratio as well as on the direct labor costs, and that's what you're seeing in the bottom line expansion. On the cash flow side, we have worked very actively on our working capital management and reduced our debtors. So we've worked actively on collections of debtors and as well as, of course, better utilization of our ideal cash, investing it more, I would sa y, in a sustained way rather than leaving it completely passive.

Param sir, the compressor e - buses segment. I just want to understand what kind of a market share currently we have for the compressor for the EV buses? And how do you see the growth for the segment? Paramjit Singh Chadha : Yes. In EV buses, if you ask for the compressors, I think from the India OEM suppliers, we are the only supplier for the compressor. There are some little imports some companies are doing. But predominantly, it is our compressor only.

Got it, sir. And sir, on the H2, second half, for the U.S. market, how do you see the run rate for the sales, sir? And just I mean, overall basis, over a medium term, how do you plan to tackle this challenge of tariff, sir? Paramjit Singh Chadha : Yes. We shared last time also, as we indicated that our products are basically safety critical products. Any new source in production will take time for the OEM to switch over. So we see that it will not be immediate impact. The current drop, which we expl ained is more because of the overall market, which is down in U.S., not only considering tariff, but otherwise also. But good point here is that we have seen Europe volume increasing. So if you see around 9% improvement is there in our sales for the Europe as compared to drop more than 20% in the U.S. So some compensation is already happening. We are looking at more customers in Europe also and trying to see that we -- somehow we balanc e this through addition of customers and also looking at product portfolio.

The next question is from the line of Mukesh Saraf from Avendus Spark. Internal

First question is on exports. When I look at your FY '25 annual report, the related party transactions, which kind of cover majority of your exports to the group entity. U.S. as such seems very small in that. So is it that we are indirectly supplying to U. S. via entities in other geographies? Because this year, first half seem to suggest that U.S. weakness has impacted the entire exports. So just trying to understand that.

Mukesh, our arrangement for the sales to the group is that we bill out to our European entity. And then they, in turn, invoice it to other countries. And that's why it looks like we are not supplying to Americas. But if you look at the split on an actual, it would be about 50% Americas and 50% Europe for FY '25.

Understood. Understood. That clarifies, ma'am. And second question is on the regulation. While the draft regulation mentioned about October '26, and I think we are expecting a delay there. Just trying to understand the delays primarily because the OEMs are concerned with the cost? Or is it some other operational homologation or technological issues? I'm just trying to understand what's the thought process there from the other stakeholders? Paramjit Singh Chadha : I think the answer to this is exactly not with us, but it depends upon the OEM strategy on this. Definitely, cost is one factor. But just to update you that we have a special solution for India market, which is not as costly as what we are providing abroad .

Okay. Okay. Right, right. Understood. And just the last bit, you had mentioned about your strong portfolio on the buses segment. Any sense you can give us on your overall kit value for a bus versus a kit value for a truck? Because I think last quarter, you had mentioned overall, generally, your kit value is around INR 45,000 for CVs. I just want to understand how this differ between a bus and a truck.

So typically, in an electric bus, we are talking about electric buses here, right? So normal ICE buses versus electric bus, the major jump is in the e - compressor. That is the major cost driver when it comes to an electric bus apart from the battery and oth er products that are there. So our contribution in an electric bus almost jumps about fivefold because of the e - compressor addition. And then apart from the e - compressor, you already have the standard braking system, which is also, in certain cases, ABS based or in certain other cases, EBS based. So EBS based typically will be around 2 to threefold of the existing ABS plus ESP - based sol ution. So this would be the impact at a vehicle level.

Right. But an ICE bus and a regular ICE truck, the con tent would not be too different?

It would not be very different. It only product mix range wise? So its typically multi axles right? maybe more axles, more actuators.

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

Sir, 2 questions regarding what's happening globally. It's clear that there is -- if there is an increased tariff, it would actually make our products or our sourcing location from Chennai at a Internal big disadvantage. Now I mean what is -- is there a possibility that maybe reallocation of whatever is being procured from Chennai or the long plan for Chennai gets derailed if this tariff remains at 50% or something like that? And the second question is that there has been a lot of reorganization as well as the financial position of the parent is a little precarious as I see because your bonds are also being -- I mean, downgraded to a junk status. So I just want to understand, if I just put this together, how the parent is thinking a bout exports and all the challenges which that of parent is having, what does that actually mean to us?

Crystal gazing based on the tariff would be very difficult, Laksmayan. So it would -- I mean we can only talk about our preparedness rather than about how the situation will develop. What we have observed over the first half of the year is more around the production volumes itself being low in the U.S. rather than any discussion around sourcing changes. So that's not the driver of the discussion. It's more about what do we do for the spur in the economy itself of the U.S. Like I said, crystal gazing and probably not our remit to really talk in details about that. We are prepared either way by stock flexing as well as being prepared to supply whatever volumes are required by them. That's how...

Just on that because I think the DAS compressors/BMW car compressors, etcetera, were actually being sourced from India. And there has also been some reallocation of certain factory production to India. Now what percentage of our production or where we are actually the single source for the entire ZF state, which would make it comfortable for us to export irrespective of the tariff situation?

I'm not sure what you're talking... Paramjit Singh Chadha : The question is that since we are -- for compressors, we are exporting, we are single source. That is clear. So that's why I said that to develop a new source, it takes time. So we are -- like everyone is waiting for this tariff issue to resolve. So we hav e time to react. And also, as we explained that we are compensating the sales by the market improvement seen in the Europe, which we have seen in the last quarter as well.

Got it. Got it, sir. And regarding the parent situation, what -- because there have been some talks of restructuring, at least some part of being getting already restructured. What does actually that mean for the India entity? Paramjit Singh Chadha : I would say that the new organization, the new changes are also having as high focus as the previous management was. So we don't see any focus on India. India is always on radar as India is doing well and India market is also doing well. So this will be always on the forefront.

Sir, and what has been our outperformance of our OE products with respect to the sales above 6 tonnes because that is one number which you always track how we outperform versus our target markets. Internal Can you just give that number for the first half? What has been the above 6 tonne production? And then how our sales are actually benchmark to that from an OE product point of view?

Speak about market outperformance, it is always in comparison to the previous year. And in that aspect, if you look at, we are almost flat this current year. The main reason being the BP vehicle production, while it has grown, it has adversely shifted in terms of the model mix. So as was already shared by Mr. Paramjit a little while earlier, there is a significant reduction in the heavy vehicle demand and the p roduction, and this has adversely affected the model mix. And what we have been able to do is mitigate the impact of this adverse model mix with certain new product growth and certain other share of market improvement ideas. So this is the way that we have been able to maintain our leadership position in the mark et.

Got it. Got it. When it comes to ES or ADAS or AB E S, what kind of competitive positioning we have? Will our presence be more than 70% to 80% plus or we are almost virtually 100% in those 2 markets, ESC, ADAS and ABES from a domestic capability point of view.

Yes. On ABS and ESC, we are already in the market. The data is there for itself. We are one of the majority market players. On ADAS right now, it is at the early stages of discussion. And as was already discussed a little while ago, we are engaged with all the OEMs. We are looking to see how we can partner with them to launch this product in the field towards meeting the regulatory requirements. So here again, we are expecting to be one of the majority partners for each of the OEMs. So that is still work in progress.

Sir, and one last question is related to AMT. What percentage of your business is AMT as well as what has been the growth of AMT in the last 6 months versus the previous 6 months?

Percentage of AMT versus the

Sorry to interrupt sir but there is disturbance in your line management. Shall I reconnect you?

Yes. Answering the question on AMT, I think today, the market itself is at a very low level of penetration. So if you see in the last 6 months, probably we are seeing an improved number in the mining segment, specifically in mining segment, where we see so me of the OEMs launching higher speed, higher torque engines in these segments, which are largely AMT driven. And AMT is proving to be a comfort factor as well as an improvement in the turnaround time. So these are the key focus areas which are driving the AMT growth in these segments.

And what kind of growth we have seen in the AM T , maybe just to get a sense of it with respect to last year as a base?

If you look at numbers perspective, it's still in the hundreds segment only. We have not seen the numbers grow beyond very high. So maybe the last year to this year, probably we are seeing the volumes double, but still not... Internal Paramjit Singh Chadha : Base is very low. So in terms of percentage, it will not be correct to say. So it is still in hundreds.

Got it. I mean hundreds as in 100 unit per month.

A couple hundred. A couple of hundred per month. Yes, a couple of hundred per month, yes.

But why is it not picking up? Because I thought that would -- at least 4, 5 years back, we thought that would actually pick up in a big way. What is impeding this? Is it acceptability, product acceptability or viability?

There are multiple reasons on this particular topic because as the contribution of the pricing of the product at the price level at the OEM vis - a - vis what comfort and savings or features that it offers to the driver would be the key focus. So that is why c ertain segments like mining, for example, is where it is picking up because there you have the higher powered engines with the higher transmissions. There you have high - speed engines and high - speed transmissions be shifting and focus will be more. And there, you want a higher turnaround time with minimal driver intervention. Those segments are adopting it faster. You also see this partially in some of the bus segments. where you want the city drivers to have the comfort. But there, again, adoption is driven by SCU tenders. So ag ain, cost becomes a key factor. So due to these various factors, penetration has remained low, but there is a promise that this could grow further because there is also a shortage of drivers in the near to long term, and there is also a focus of gender diversity in driving. So when you look at drivers as well as shortage of drivers in the near term, driver capability will become a big focus rather than focusing on what would be the cost.

And just one last thing, sir. Do we actually have some kind of a driver sensitization program or something where we actually introduce drivers to these products so that they can be kind of an ambassador for us? Or do we actually let the OEs actually do the work there?

Communication and training through our aftersales network. So where we have interaction and connection with driver training associations as well as driver training institutes to talk to them about our technologies. And the state transport unit undertakings are also jointly working with us on how we can help them in using technology to improve their driver efficiency, to improve their fuel efficiency focus and so on and so forth. So there are multiple initiatives that are spearheaded through the aftermarket and sales network, where we work on extensive communication as well as training.

Thank you. As there are no further questions, I would now like to hand over the conference over to the management for the closing comments. Paramjit Singh Chadha : Thank you very much. Some nice questions, good questions, good interactions. So thanks for your participation, and thanks for your support. Thank you. Internal

On behalf of B&K Securities India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Paramjit Singh Chadha : Thank you.