Concall — clean across the call.

On the mobile business and the export opportunity. Can you give us some color on any discussion with OEMs around this export opportunity and potentially tapping in the benefits of PLI?

Well, Santhosh, on the mobile business, because we have yet to start from January. So we want to do a gradual ramp-up because this is a new segment we are adding up. Yes, we are in discussion with them about the export opportunities and they are also excited about it. But it's too early for us to comment because we want to first go and launch this product category as a new product category for Amber, which will be starting from almost about quarter 4, mid of quarter 4 somewhere and then commercial production has to start from 1st of April. But moving ahead, I think once we complete 1 year of our first domestic production, then we may think about the export opportunities.

Are we eligible for PLI given our HDI PCB expansion? And on the PCB business, can you give us some color on the pricing structure here?

So yes, all the -- there are 3 approvals which we have received on the ECMS scheme on the HDI PCB part. One is for INR3,200 crores in Jewar Airport, then about INR1,000 crores in Hosur, and INR500 crores in Shogini, Pune. All 3 have been approved. On PLI benefits for mobile backward integration: Draft guidelines have yet to come. Let the draft guidelines come, then we will be able to comment or answer to your questions. On PCB pricing: we are a B2B company. We pass on currency and commodity issues to the customers. In Amber, we can do it in quarter lag because we are tier 1. At PCB, we are tier 2. So there is a quarter lag. There are 2 quarter lags. But what we have seen in July is that there are some customers who have increased the cost. So our margins are coming back to where it was.

On the margins that we recorded in this quarter - pretty much we haven't really seen any impact of raw material inflation or of rupee depreciation at least on the consumer durable part. Was there any benefit of inventory that we may have been carrying?

See, actually, what has happened, because everyone knew that there was a QCO enforcement for the compressors and copper IGT. So there was a lot of stocking that was happening. So obviously, that stocking of the compressors and copper has helped us to secure, I would say, the raw material at a better price. This was the one part. The second part was that, so, whatever products probably we have made in this quarter were majorly driven by the premium side. So whatever products we have made are majorly on the 5-star category and the 2-tonne category. So because of that, the realization of the margins are better. But every quarter, this mix keeps on changing. I think the better is to see on an annualized basis. So on an annualized basis, I think so we should be in line to our projections only. It's not like that the margins in this quarter will be reflecting in the complete year outlook.

On some of the disruptions that we have seen on the IL JIN side, the unfortunate incident that happened. Is it something that is impacting production or things are going smoothly over there?

Aditya, basically, we have received permission to reconstruct the facility just yesterday from the departments. So the assessment is undergoing, and we will intimate the exchanges. But let me just tell everybody on the call that the guided number of what we did last quarter, we are hopeful that we should be in line to deliver despite of this disruption.

On the Electronics division - while you have reported about 29% revenue growth, if I kind of strip off the acquisition benefit, the growth seems lower. How should we look at the guidance of FY '27 for the division for both margins and top line?

Dhruv, so, actually, what has happened is that in the EMS segment, we have 3 segments in Electronics division now. One is EMS segment. The other is the PCB segment and the third we categorize as Industrials and Automation segment. So in the EMS segment, yes, the growth compared to last year same quarter got a little stunted. The main causes have been that our customers who are in the consumer durable segment, they were carrying quite a lot of inventory. And so the order book got reduced. Then some of the customers, they have shifted from sales to job work kind of category. So obviously, the revenue got impacted because of that. The energy segment, that is the smart meter segment, degrew. The smart watch segment also degrew. Apart from this, let me assure you that our full year guidance for the EMS segment, whatever we gave still remains intact. We are quite confident we will achieve that.

On the mobility side - how should one think about the sustainable margins in this vertical starting in the second half given margin compression from raw material and labour-related issues?

Dhruv, there are two, three factors here. First is in the railway segment, Indian Railway segment, these are fixed-price contracts. You can't go to railways and say that my commodity has changed or my currency has changed. So you need to fulfil the tender obligations as you have submitted the tender. Second, apart from the railway, the other businesses like metro division business, defense business, the bus air conditioning business, the data center air conditioning business, that has a price variation clause. On the revenue front, 30% to 35% looks doable. And the margins in this financial year, we look at around in the range of 15% to 16% for this division.

I can see the minority interest have turned negative this time. Why is that so sharp swing? And what is the EBITDA margin guidance for the consumer durable business?

Maybe like I need to check that, that why it has happened. I'll come back to you separately on the -- after this call. On EBITDA margin guidance: So as of now, we are not giving any guidance in terms of percentage because that all depends on the product mix as well as the prices of the commodities and the foreign currency. So it's very difficult to give you any guidance. So we maintain that on the quarterly lag basis, we are able to pass on the price hike and the commodity exchange rate difference as well, and we get the margins accordingly.

How has IL JIN fire will get it the guidance you have maintained for the division, but what will be the impact on the business because of this? What sort of impact should we expect in Q2?

Yes. As I explained that we have received a permission just yesterday from the authorities. So today, the work will start, and we'll reassess the complete loss. But let me tell everybody on the call that we are adequately insured. So we don't see any issues on the refurbishment side or extra capex, which we'll have to bring in because the building inventory, machines, everything is insured properly. The impact on the business side, we have been able -- because of our multi-geographic location in ILJIN, we have been immediately been able to shift businesses to other locations. So we don't see a very big impact, but exact amount, we will be assessing and we'll let you know within the coming week.

I wanted to understand in terms of the increase in input costs and how you pass on to your customer. And what is the potential for CCL to be manufactured in India?

In consumer durable, we are tier 1. So we are able to pass on currency change or the commodity changes. Impact of the total of that is passed on, on the next quarter. PCBA also business, same thing. The only PCB business is where we are tier 2, where it requires 2 quarters. On CCL manufacturing in India: So as a country, we are already -- the first CCL plant is almost operational now, Wipro's. So I think they have started meeting the customers. And there are 2 more CCL plants being planned, which we are aware of. But on the other side, Amber is also in discussion at a group level with the prospective JV partners. We will let you know once it matures. But looking at our growth phase for PCB business, this becomes an important backward integration for us to have going forward. And I think by '29, '30, we expect that we should be having our own CCL plants by then.

In terms of consumer durable, the growth looks a little moderated. Just wanted to understand this base would be a normalized base, right? And on the festive season, are you expecting any strong demand from AC?

Yes, perfectly. Yes. So this base will be a normalized one. And if you see from last probably, I would say, 4 years, we can see the pedigree of the customers that we are catering to is very, very different. And we have always been addressing this, that in market, there are kind of two product categories that are operating. One is at an opening price point. One is at the high-value side. So as a strategy, probably we have always tried to stick on the high-value side and the premium side. On festive season: So like last year, this year, again, there is some confusion in the market because from 1st of July, so there is a regulation change in our product category. So the tonnage has to be mentioned on the BEE level. Now because of that, what is happening is that in the market, there is a mixed inventory. So what we are expecting is that by Diwali, we are expecting this inventory to be liquidated. Post that, we see that the market to be at equalized level. And we expect a strong summer starting from November month. So we are not expecting very, very high demand on this coming festive season.

Just wanted to recheck on the electronics guidance. So for the full year, we have earlier given a 40% plus guidance. So are we sticking to this number? And update on the mega AC plant?

Yes. I mean, as guided earlier, we hope that we will be able to deliver that number. On the mega AC plant: So basically, the groundbreaking of the plant because these are 2 plants in vicinity to each other. HDI plant construction has started. The plant of air conditioners, that construction will start next year. So it is under -- we are just at a planning mode right now. And we expect that '28, the construction will start. And by '29, it will start the trial production.

What is the extent of impact on this PCB margins? And if you could give us some sense in terms of the -- you said you are hopeful of achieving that 40% revenue growth guidance for electronics -- which segment will drive?

Achal, the standard PCB margins, which we were enjoying earlier was about 16%. Right now, we are hovering around 12%. But we expect this to come back gradually because the price increases have started happening. So on a gradual basis, I think on a normalized level, this business is in 15% to 16% range. Currently, it will continue to be impacted for next quarter as well. But from quarter 3 onwards, you will see the margins coming back to normalized level. But only subject to no further CCL price increases are happening. On Electronics growth drivers: All 3 divisions within the Electronics division is growing. So PCBA is growing. We have -- we are adding new customers, and we are adding new applications. On PCB, you all know about our journey. And on the industrial automation -- industrial side, industrial power electronics side also, we are witnessing a good growth. So all 3 put together will lead to this 40% mark.

On consumer durable, it will grow in line with the industry -- does that guidance still hold? And on the EBITDA margin, the earlier guidance was overall margin will decline 50 to 100 basis points for the full year. Does that guidance hold?

Well, I mean, currency and commodities are still very volatile. So I think we were earlier expecting 50 to 100 bps. But now we think that these margins are normalized at where we are in case there is no further disruption in the currency and commodity. On consumer durable guidance: it should range between 13% to 15%. So we are in line to that.

On the Oppo partnership, do we have any clarity in terms of how the revenues will be recognized -- on a sales purchase basis or on a job-work basis?

It's very at the final stage. I think another 15 to 20 days, the clarity will come, and we'll let you know.

Last month, the Board had approved fundraising options at the IL JIN level. Any progress on that in terms of some quantum and where would the funds raised will be utilized?

So currently, it is difficult to tell you the exact quantum. So we have given the clarification that we'll be raising up to INR5,000 crores. So we'll tell you that by -- whenever we finalize that how much fundraise is happening, we'll update everyone that how much is the fund raise. And -- but in which form also we are raising a fundraise. We'll update you as soon as we finalize the same. This is the enabling resolution we have passed from the Board.

At Oppo level, we understand the revenue recognition is still being finalized, but have we decided, will it be at Amber Group level or at IL JIN level?

Indrajit, both are at a final level because we are -- there is an ERP integration, which has to happen between both the groups. And so looking into that, we are evaluating whether it should be in IL JIN or whether it should be in Amber. Whatever suits and whichever formalize the timelines, we will go for it. I think we have to formalize it before the mid of September. So we'll let you know in the next call exactly.

Just give us a revenue buildup over the next 3 years between ILJIN and Ever versus Ascent and versus the newly acquired entities. It will really help us to appreciate the growth better and the margins profile better.

Yes. As I explained that all the 3 verticals within Electronics division are growing. So PCBA, we are growing in the applications. And we are adding customers in existing applications. Then PCB divisions, you all know about the capex, which we have announced. So you can map out along with the capex. Generally, the asset turns in this business is 0.8:1, depending on what level of complexity of the printed circuit boards you are producing. We have already announced a capex of close to about INR3,200 crores in Jewar and about INR1,000 crores in Hosur. The plant will be up and running this financial year of Hosur. And for Jewar, it will take about 18 months from now for the trial production to start. So that is on the PCB side. As far as on the power electronics side, which comprises of programmable logical controllers and human-machine interface, HMI, and all the power electronics products, solar inverters, UPS, BESS, there's a very decent growth of 35% to 40% coming in. But it will be very difficult to give you a 3-year kind of a number because all the 3 divisions are -- all the 3 verticals, I would say, in the electronics are moving very positive.

In commodity de-inflation kind of scenario, do you hold on to the margins or again, you have to pass it back? And can we achieve a margin of closer to 14%, 15% on the Electronic division on a 3- to 4-year basis?

To be very fair with your customers. So if it goes down, you have to pass on that also at a quarterly lag. So now you can be lucky if it is a peak season, so you can earn a little more, but sometimes they get lucky. So that's a normal thing. But over a period of few quarters, I have seen that because of a B2B nature of the business, you are able to pass on. Positive, negative, you have to do it. On the electronics side, as explained that we have travelled our journey from 2.8% to 10.5%, 10.8% now. Yes, our endeavor is definitely to go upward north. But giving a year and giving a number is very difficult. That's the endeavor which team is attempting. That's the strategy that we have to add more value-added businesses and that's how we will maintain this double-digit number moving forward.

Can you please give the breakup on the consumer durables side into RAC and non-RAC in this quarter?

RAC and non-RAC actually, it's a standard. We have been operating in a range of 75%, 25% kind of a range. So when I say RAC means RAC finished goods plus RAC components. It should be around 60%, 55% to 60%. It keeps on changing from quarter-to-quarter because sometimes customers ask us to supply semi-knocked down kits, which comes under components. Sometimes we have to give full boxes, which is finished goods and sometimes only the components. So it's very difficult to map on a quarter-to-quarter basis.