Volume growth in the engineering segment for Q3?
On YTD basis, it is double digit. That is what we share and which is reflecting in the segmental results.
Update on the potential acquisition mentioned in 2Q (Rs.200-300 Crores)?
This is a continuous work we do it so there is no definitive timeline what we can give it to acquisition as a possibility. We are looking into the market and whenever we find there is some suitable possibility, we will surely share with all of you.
Where do you take a call that enough of these investments and you would like to end it?
I do not want to give like a deterministic answer to that now. I still have a lot of conviction that IC is basically going to move to EV. We do not know the rate at which acceleration is going to happen. We are still very convinced that this is a segment that we have to invest in.
E-cycles — what kind of TAM and what kind of penetration in India?
I think the TAM is not deterministic right now. So it is like a conversion of a segment. So I think all of these things, it is not like there is any data or anything that says the TAM is going to be slow.
Would not it be an opportunity now to consider some consolidation, eliminate things which may not be working and double down on TI2 and TI3?
I would say that we went through things that are definite learning curve. I made some mistakes, kind of I have not perhaps performed as well as we could have in certain segments. Capacity has been built out and we are beginning to see green shoots in a lot of the new products. So I would actually say that now is the time to double down on that business. The fundamental thesis is still intact — IC components are going to get replaced by EV. The first step is just EBITDA and cash flow breakeven. On 3xper, we got caught in getting permissions to build out the facility — delayed by almost more than 18 months. On TI Medical, the number of targets to acquire in India have been limited. TI2 is taking longer than I thought it would take.
Coming back to the core business, engineering and metal forming — auto industry post GST cut has got a fillip, can we speak about levers?
Where we thought exports would drive it, actually we have seen the opposite because Europe demand has been weak and US between tariffs and everything else, on the engineering side, we are still shut out because of Section 232. We basically still have a 50% effective duty going into the US. Domestic growth levels and plant expansions will continue to allow us to grow more. Organic business in TI1, where we thought it would be like more like 6 to 9%, we have seen double digit growth in those businesses.
On metal forming, if the Korean customer who got listed does well, will we have more opportunities?
If one of the Korean customer does well, obviously we will do well. And at the same time, we are spending time on building capabilities for some other customers as well as some new product lines in the MFPD.
On CG Power services — could we double down there as well as a lever?
Yes, services is a big lever there and we are now in the process of recruiting one or two key people to drive the growth of that business. The team should be on board in the first quarter of FY2027.
Update on the railway business — last call mentioned commencement pushed to early FY2027.
That project is little bit running delayed. Prototype samples are getting submitted between March and April, maybe quarter one and in March, it will get submitted. We are hopeful FY2027 should be better.
On TI2 and doubling down on EV — given losses continuing, what incremental investments are you okay doing from the parent balance sheet over next couple of years?
I would say that it will definitely be at least Rs.500 Crores and it could be so my sense is the range is Rs.500 Crores to Rs.750 Crores. From the parent balance sheet.
What incrementally different do you plan to do to get back on track in EV given incumbents are more aggressive?
Strategy is going to be different for different products. Where we made mistakes and where the incumbents have now taken the lead has been in the three-wheeler side. The objective is to bring down all cost structures. In L5M category, predominantly Mahindra and us are in the 10.6 category. The good thing is that all the product issues are behind us. On M&HCV, still we have got over 40% of the products sold in the market today. We are beginning to develop use cases — for the cement segment.
Will you not incrementally be wanting to take anything new under TI2 or TI3?
Right now, definitely Sujit's point is also valid, which is, it is unlikely we will do anything significant in TI2 anymore. TI3 if something were there, it would still be open to, but definitely there is no thinking of doing so much significant in TI2 anymore.
Volumes in each EV category for Q3?
The volume for quarter three for the big trucks, M&HCV, 56 numbers. For three-wheeler business, 1,816 numbers. For small commercial vehicles, 301 number. And for e-tractor, 29 numbers.
Why is there a divergence between Engineering and MFP growth rates?
In MFPD, we are having today two challenges — one is railway business, second particularly whatever exports we do in MFPD for the European market. European markets are going a little bit weaker that is why there is a little bit divergence. From domestic market size, other than railway, it is going good.
Plants in West — have they started commercial operations?
That is also a little bit deferred. We are maybe hoping, I think it will get delayed by six to nine months' time. Maybe because machine suppliers are facing some challenges.
Shanthi Gears revenues declining sequentially 4-6 quarters — what is happening?
On a long-term basis, we are always bullish about Shanthi Gear business, but in the short run, order book is a challenge. The group philosophy is to always keep eye on the margins which we do not want to dilute. We see a little bit of slowdown in the order book — temporary nature, maybe another one or two quarters.
Engineering turnaround — new customers, new products?
It is a combination of 2 to 3 factors. One is after GST cut, domestic market is absolutely bullish. We have done a lot of regional balancing as part of strategy — a plant for CRS in Nasik and another tube plant in Phaltan. Both capacities are getting utilized. Hopeful by quarter of next year that will get fully booked. China plus one strategy is also helping. Exports is a challenge.
With the recent change on US tariff, would we expect duties to come down to 18% or under section 232 still at 25%?
There has been no indication right now that section 232, the duty of 50% is going to come down. The current stand is still that, that sticks. There has been active lobbying by India to try to bring it down. But there does not seem to be any indication of that yet. So 50% sticks for us.
With EU FTA bringing duties to zero, do you see Europe as a relatively bigger opportunity?
Europe is a big market. It will have a lag of around 12 to 15 months. There is one more challenge — non-trade barrier in terms of CBAM, which adds further challenge. Our government is negotiating that.
Three-wheeler market share in older South India markets and percentage of addressable market present in?
Today we cater to about 117 dealerships in E3-wheeler and we cater to in the L5M category about 65% to 70% of the TIV. About 52% to 55% of these dealers we are primarily focusing more on, which can give us about 75% of the volumes. In South, our relative presence is better as compared to in terms of market share vis-a-vis North, East and West.
Among four EV products, which one has highest confidence to turn around in 12-18 months?
I definitely say that the two which we are pushing towards breakeven in the next 12 to 18 will be in the heavy vehicles and in the three-wheeler, because those have had the longest track records. And then that will be followed by SCV and then tractor.
Rs.500-700 Crores in EV business — at TICM level overall? What is current capacity utilization in engineering division?
We are covered for FY2027 fully and we always access capacity utilization and future demand on a regular basis. So if anything is required for FY2028, we will put up the capex.
Three wheelers — distribution and product corrected — what else can drive volumes?
There are two sets of things we can do. One is BOM cost reduction to make the product more competitive from a pricing perspective. The second is when you think of the channel and the network, building that out as it is comparative to competitions.
Update on the L3 foray?
At this point of time, we have seeded in certain volumes and only in select markets. We are testing out the product in terms of product acceptability, price points etc. This market has been dominated by the typical lead asset players. There are more than 250 players in the market, hugely fragmented. We will take a call on the future of the product based on feedback.
Bookkeeping — what are the losses in EV during the quarter?
During the quarter, it is Rs.164.31 Crores.
Cycle segment doing really well — what is driving this?
We are trying to develop new products which at least takes care to some extent the cyclicity. So e-bike was one of them. Last year e-bike sales were almost nothing and this year it has picked up pretty well. Focus on the fitness business and the spares business — these three initiatives will surely help us to mitigate to some extent this cyclicity.