Oppo mobile manufacturing entered execution.

How do you see the industry volume growth for Q1 and full year FY27, and how is Amber seeing growth for this year? Also, on the margin front, there could be an impact of 50 to 100 basis points - which segments would see most of these pressures?

On the volume side, in FY26, Q1 and Q2 were very flattish or down by 30%, but Q3 and Q4 saw recovery. The complete year was on a flattish side. But Q1 FY27 has started at a very positive note. Initial 10 days of April were sluggish because of rain, but since 12th April, South, West and North have all kicked in. The industry expects to grow by around 20% in Q1. On the complete year, we are estimating growth of around 12% to 13%. Price increases: one in January because of star rating change, one in April because of commodity increase - both together, price increase is around 14% versus last year.

Follow-up on margin pressures - which segments would see the most pressure?

There are 3-4 forces in play. First is the minimum wage increase - 35% in Haryana, which led to UP government increasing minimum wages by about 22%. Second is commodities like copper clad laminate and gold used in PCB business. In PCBA, we are Tier 1 and can pass on commodity and currency risk within a quarter. But in PCB business, we are Tier 2, and the lag to increase cost is about 2 quarters. On Indian Railway, contracts are fixed term. But defense contracts, telecom contracts, and data center air conditioning contracts have pass-on mechanism. This is temporary - in last 7 years, we have been able to pass on. Next 1 or 2 quarters should see this hit coming in.

Government has imposed import restriction on RAC compressors and other appliance compressors. What is the manufacturing capacity in India? How much does Amber manufacture? Do you think this and next year could see some pain in terms of shortage?

At Amber, we are not producing or manufacturing compressors - we buy from outside. We have a long-term agreement with GMCC and also buy from LG and other manufacturers. We don't see any shortages on the compressor front. Regarding quality control order, 5 investments have kicked in India in last 3 years: LG, Daikin, Mitsubishi have put up plants, GMCC has increased capacity, and Highly is also thinking of increasing capacity. For commercial air conditioner division, companies like Copeland or Danfoss manufacture those compressors. Current manufacturing capacities built are below 2 tonne. Government has allowed import of 30% of last year's imported volumes to cater to the shortage. On the 2-tonne front, complete compressors can be imported for 1 year. We don't see any big problem because of compressors.

Can we say at least for FY27, there will still be a shortage of about 40% given industry will grow at 12% in terms of volume?

No, we don't think so because if you map each and every manufacturer's capacity versus the requirement in the industry, looking at a CAGR of about 13% to 15% growth, I believe it is adequately placed. The capacities are adequate enough. The shortage part has been addressed by the 30% allowance of import of compressors below 2 tonnes. So that bridges the gap.

On the inventory side, you're talking about components and parts, not finished products. What sort of benefit do you think you've got in terms of savings from current component prices? And how do you balance going towards higher-margin businesses versus high volume, low margin, but high ROCE business?

On inventory buildup, we proactively increased our inventory level looking into supply chain constraints. We are not getting a very big advantage on the pricing side, but we are getting advantage on the supply side - we are able to fulfill our contracts on a timely basis to each and every customer. On going towards higher business model: we acquired ILJIN in 2018 when it was a INR300 crore company with about 3% EBITDA. Now last year, we crossed close to about 8.8% EBITDA in Electronics division and crossed INR3,200 crores of top line. We expect a 40% growth while getting closer towards double-digit EBITDA numbers. In B2B business, we are trying to balance left and right. Left side is volume, which is important for scale and purchase leverage. On the value side, there are more sticky businesses with entry barriers like industrial electronics, industrial automation, power electronics, aerospace and defense, medical electronics. We will continue to balance both. On Railway side, we started at INR157 crores with 13% EBITDA, now EBITDA is 17-18% type and growing in value-oriented products like metro, doors and gangways, and data center cooling.

In last quarter you had said capex would be about INR800 crores, but the number has been much higher. Is it some front ending of capex and how should we look at FY27 capex?

There is some front ending of capex. Out of the overall capex, capitalized capex is only INR550 crores. The balance is under CWIP, which is under process and will get operational in the current financial year. The overall capex is around INR1070 crores. For FY27, there is Ascent and other entities. Ascent will be around INR1200-odd crores, including the capitalized portion out of this INR547 crores. Apart from that, there will be around INR700 crores to INR800 crores capex in all the other entities put together.

On EMS, this quarter if we strip off the acquisition, growth seems undervalued. How should we think of organic growth and growth coming through acquisitions in the context of 40% growth guidance?

There were 2 customers who shifted from purchasing agreement to job work agreements. That's why on the top line side, organic expansion is looking a little subdued. But on the margin side, this quarter delivered 10.8% margin. We are on line to deliver what we have guided. Everything is organic because we've already acquired all entities. We are very confident to deliver about 40% growth this year.

In the CD consumer durable segment, you said 47% of revenue for FY26 comes from RAC CBU. If I look at 47% of total revenue, it gives me around 33% growth. How should I understand this - is the full complete built-up unit growing faster than components, or is there realization front growth?

This keeps changing because sometimes customer wants full boxes, sometimes semi-knockdown conditions, sometimes only components. It varies from customer to customer and quarter-to-quarter. The trajectory shows we were about 80% banking on finished goods when we got listed in FY18. Now despite growth in top line, the whole FG has come down to about 40% or something. In FY26, the contribution increase is majorly because of conversion of gas charging customers to ODM solutions. We onboarded them in FY25 but the last quarter - so now FY26, it has been for the whole year.

On the electronics segment with Unitronics now consolidated, how is the mix of PCB versus PCBA segment with Shogini and Ascent also there? And any indication on margins for both segments?

PCBA is INR2,281 crores, almost INR2,300 crores. The other side is about INR596 crores which is Power-One, Unitronics and Shogini and Ascent crossed INR402 crores. About INR1,000 crores is the other, out of which Shogini plus PCB will be about INR600 crores is PCB. INR2,200 crores is organic PCBA, around INR600 crores is PCB and remaining is Power Electronics and Industrial Automation electronics. In PCBA, we are at about 5%. In PCB, we are at about 12%, 13% - this business is about 16%, 17% generally but because of CCL and gold prices and currency, they are taking price increases that's underway. We think from next 2 quarters, we should be able to get it. Power-One is about 15%.

Can you throw some light on the pricing of PCBs globally and in India, given the cost inflation would have been felt by everyone across geographies?

Right now, 90% of PCBs are getting imported and 10% is India. There is antidumping duty imposed by government to about 30%. The commodity increase of CCL and gold has been a global phenomenon - not particularly to India. Even Chinese or Taiwanese PCB imports have gone expensive. Up to 6 layers, it is protected through antidumping duty. So the demand has not shifted from India to China or other nations - it's very much intact. CCL is continuously increasing - it's touched 60% increase in last 1 year, and you cannot go to customers every time. The first increase we got was 2 quarters back, about 15%. Then another 18% increase we got. But still, there is a remaining percentage of increase because currency is also depreciating. We are standing in front of customers every quarter now. Earlier, when we started asking for price increase, there was a big backlash, but when they started comparing costs from global suppliers, they started giving increases.

Can you talk about the key project delays - Ascent multilayer PCB, Korea Circuits, Yujin JV and Railways? What is the confidence on timelines now?

There is no large delay - about a quarter delay in Ascent Hosur construction. The construction got delayed because of ambiguity due to a Supreme Court guidance about a river going in the diameter of 3.5 kilometers from the land. Tamil Nadu government was very fast in formalizing a committee, deciding it and giving it up. Construction is moving perfectly fine now. Trial production will start by Q3 and commercial production will start by mid-February 2027. For Ascent-K Circuit, this was dependent on ECMS clearance. Post clearance, UP government released land. It has been registered in our name, possession granted. We are preparing to get maps approved and thinking of groundbreaking in June. Construction will finish in 15 to 16 months, then 3 to 4 months for trial production, and from Q3/Q4 FY28 onwards, mass production of HDI plant. For Yujin, there is no delay - factory came up as expected. It's under RDSO approval which is a process of 12 to 15 months. We have received INR178 crore order book in Yujin for Couplers.

Can you throw some light on the Sumitronics JV - what is the plan and what kind of opportunity?

There is no Sumitronics JV. There's an alliance - a cooperation agreement. They have large customers on the automobile side and want to collaborate with us to participate for automobile PCBA businesses. There's no joint venture happening with Sumitronics, but we are excited with this collaboration because it gives us an edge. Earlier, ILJIN faced large entry barriers to enter the automobile sector. With Sumitronics, that barrier has been broken.

On the 40% revenue growth guidance for electronics - is this post the job work conversion? What is the margin expectation? Would it be driven by PCBA or PCB business in terms of margin?

Considering the job work change, we are expecting a 40% growth on the top line. The margins we are expecting should be in the range of 9.5% to 10% range.

On the RAC business consumer durables - how do you see the margins there? Is the percentage appearing lower because of price inflation or is there impact on rupees per unit margin as well?

Percentage will look dipped because with 14% price increase in finished goods, we work on absolute numbers with customers. The real impact of commodity and currency, we pass on to customers, and that happens from last so many years - on a quarterly lag basis. Whatever changes are happening this month, this quarter will be passed on to customers for the next quarter. Rupees per unit margin is intact - in percentage terms there will be impact because the price increase will increase finished good price, but we have a fixed price margin per unit. Fixed margin will remain same in terms of value but in percentage terms will look a little less because of the higher base.

How large is the non-AC component business now of the CD business?

Of CD business, it's about 25% right now (Please read it as Non-RAC business forms about 32% of our consolidated revenues ). It's also maintaining a good growth - PTS has delivered a good growth on the bottom line basis, they are already touched 13% EBITDA now. And our other businesses of refrigerator and washing machine, that's also doing fine.

Clarifying the segment guidance: CD business 25% revenue growth with some margin decline, electronics 40% growth with 9.5-10% range, railways 30-35%. What are railway margins and order book breakdown between Indian Railways and Metro? And on capex, should we expect INR1,800-2,000 crores for FY27 and INR1,200-1,300 crores for FY28?

On the CD front, markets are expecting to grow in about 13% to 14% range - that's how we are also expecting to move in tandem with the markets. It's not 24%, 25%, Rahul. On electronics, post conversion of job work basis, we expect around 40% range bound and margins in the range of 9.5% to 10%. In railways, 30 to 35% looks doable if there is no disruption of offtake from Indian Railway and Metro. Margins in the railway side, we expect in the range of 16% to 17%. On capex, we will be doing around INR1,800 crores to INR2,000 crores of overall capex, including Ascent new project, some part of Ascent-K and the other divisions. But from the cash flow perspective, since we have negotiated better terms from many suppliers of Ascent circuit for PCB, we are expecting the cash outflow will be much lesser - around INR1,100 crores to INR1,200 crores from cash flow perspective.

On fiscal FY28, if you have a budget from a cash flow perspective for capex?

In FY28, our new Ascent-K circuit larger capex will happen. There also we'll have better, much larger pay terms from the capex suppliers. So you can expect a similar or a little higher around INR1,400 crores, INR1,500 crores of cash outflow for the capex in terms of cash.

How should we think about overall gross debt and net debt relative to Q4 levels considering capex spending and working capital associated with project ramp-up? What would be the impact on interest cost and other income in FY27?

FY26 reported net debt of INR511 crores. Looking into the capex and cash flow, slight increase in net debt position by year-end - it could be more by INR200 crores to INR300 crores. You can expect around INR700 crores to INR800 crores of net debt by year-end.

Your earlier commentary suggested 20% growth in Q1 and 12% to 13% growth in FY27. Is this for the broader industry or specifically for the consumer durable division?

We were mentioning about the broader industry trend. Post 12th of April, we have seen a positive offtake of goods because of the heat wave in South and West and North. Quarter 2 and quarter 3 are generally lean quarters for the industry. That's why we expect that the industry will be in the range of 12% to 13% growth phase this year. We should move in tandem with our industry.

Do we expect to receive any capital subsidy in FY27 or do we expect to get it in FY28 once we commission the Ascent plant?

Capital subsidy - we have already got land subsidy at around 25% price. Balance capex subsidy of building and other capex will come over the period of 5 to 6 years once we start commercial production. You can expect the subsidy will start flowing in from next year onwards, like financial year '28 onwards for Ascent.