Gabriel India Limited (NSE: GABRIEL) Q3 2026 Earnings Call dated Feb. 03, 2026
Corporate Participants:
Atul Jaggi — Managing Director
Analysts:
Unidentified Participant
Mumuksh — Analyst
Nikhil — Analyst
Aditya Ketan — Analyst
Amit Hiranandani — Analyst
Runway — Analyst
Puneet Zaveri — Analyst
Ananya Khanna — Analyst
Abdul Joshi — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Gabriel India Limited Q3FY26 earnings conference call. This call may contain forward looking statements about the company that are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance and involves risk and uncertainties that are difficult to predict. As a reminder, all participants line will be a listen only board and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchdown phone.
Please note this conference call has been recorded. I now hand over the call to Mr. Atul Jaggi, Managing Director from Gabriel India Ltd. Thank you and over to you sir.
Atul Jaggi — Managing Director
Thank you. Good evening and a very warm welcome to everyone on the call. Although it’s a bit late, as this is our first interaction in the New year, I would first like to extend my warm New Year wishes to all the participants. Wishing everyone a very happy New Year. Joining the call today with me Today we have Mr. Mahindra Gaurav who group CEO Mr. Mohit Shirvastava, our CFO Mr. Nilesh Jain, our company secretary and SGA our investor relations Advisor. We have uploaded our results and investor presentation for the quarter ended 31st of December 2025 on the stock exchanges and on the company’s website.
Hope each one of you had a chance to go through the same. Let me start by highlighting a few recent developments. The conclusion of long pending India EU Free Trade Agreement after nearly two decades of negotiation for the auto components, it creates opportunities in exports, technology partnerships and investments positioning India as a trusted manufacturing and sourcing partner for European OEMs amid diversifying global supply chains. Additionally, U S India trade deal announced yesterday reduces reciprocal tariffs from 25% to 18% with the agreement expected to be finalized soon. Together these deals are a major boost for the Indian economy, driving capacity expansion, greater MSCME involvement and a growth of industrial clusters in key states.
Union Budget 2627 arrives at a great time with strong growth, low inflation and robust capex as the country aims to become the world’s third largest economy. The auto sector, already number one in two wheeler, three wheeler and number three in car trucks, received strong support. To increase PLI funding, electronic incentives, duty cuts on EV materials and new mineral corridors to lower cost and accelerate local manufacturing. Let me now turn to our company’s performance and share. A brief overview of our operations and key highlights in Q3FY26 our standalone operating revenue grew by 16% YY reaching 2,072 crores supported by higher volumes and strong sales performance in all our segments.
EBITDA grew by 21% year on year reaching 96 crores with margins improving from 8.6% in Q3FY25 to 9% in Q3FY26. This improvement in margin is attributable to higher volumes and the continued impact of our Operational Excellence initiative under the Core90 program. As per the new Labor Code act, the one time impact of 13 crore has been accounted as an exceptional item. This impact has been optimized pursuant to our conscious efforts in the past to streamline the components of salary in line with the wage code. Moving on to the business wins this quarter has seen really good progress being made in the stand alone business with winds flowing in CV two wheeler, solar and E bike segment.
Specifically in the two wheeler. I’m very happy to announce that we have made inroad into Hero Moto Corporation since this has been a point of discussion for quite some time and we also have additional business wins on inverted front folks with multiple customers on the EBUY segment. Again happy to share that we have received our first development orders from a customer in Europe. With respect to solar dampers, we are progressing well on multiple fronts with samples submitted for validation to two customers and feedback being awaited from them. Additionally there are two more developments under progress in Q3 FY26 in Alpha Gabriel Sunroof System Private Limited reported revenue from operations of 107 crores and EBITDA margins at 13.5%.
With respect to the business wins in the Sunroof segment, very happy to share that IGSS won new business with Hyundai for three model variants. This is in addition to already shared models under development with both Kia and Hyundai. On a consolidated basis our quarterly revenue stood at 1179 crores showcasing an impressive growth of 16% on yoy basis. EBITDA for the quarter stood at 111 crores with margin standing at 9.4% adjusted pad after excluding one time exceptional expenses of 13 crores for the quarter was 68 crores marking a 13% yoy growth coming to nine months performance.
For FY26 the consolidated revenue stood at 3457 crore reflecting a growth of 16% as compared to nine month period for for FY25. EBITDA stood at 335 crores marking a growth of 19% on yoy basis with margin standing at 9.7% PAT after excluding one time. Exceptional expenses of 13 crores stood at 199 crores marking a notable growth of 10%. Coming to the Industry Highlights the auto industry delivered a strong Q3 FY26 performance with total sales up 18.9% while the production volumes were up by 16% to 9.2 million units. This was driven by broad based growth across segments.
Festive demand GST cuts export surged 24.7% to 1.7 million units reinforcing India’s growing role as a global manufacturing and export hub. Q3 FY26 two wheeler segment posted a strong 18% growth reaching 7 million units, one of the best quarterly performance in the recent few years. On three wheelers the segment grew by 29.9% to 3.54 lakh units driven by higher demand in passenger and goods segment, a better supply chain and export surging 70% year on year to 1.3 lakh units. Coming to the passenger vehicle, the segment achieved a historic high with total sales reaching 1.5 million units up 19% in year on year driven by sustained SUV UV demand, a meaningful revival in the entry level in small car, strong festive momentum, GST rationalization and easier finances.
The commercial vehicle segment again staged a strong recovery with 20 around 21% year on year growth to nearly 3.1 lakh unit making one of the best quarterly performance recently led by higher freight movement and rising infrastructure activity. The Indian auto industry is expected to keep up the strong double digit growth momentum in the quarter four also on that note I come to the end of my opening remarks. I now request the moderator to begin the question and answer session.
Questions and Answers:
operator
Thank you, thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen we will wait for a moment while the question key assembled. The first question is from the line of Mumuksh from Anandraathi Institutional Equities. Please go ahead.
Mumuksh
Yeah thank you sir for the opportunity and New year wishes to the management and good to hear new sunroof and hero orders. So firstly I can give more flavor on this new orders. It seems major orders if can help us understand what kind of timeline would be there in the sunroof side this three variants is it A half sunroof, full sunroof. And when the business starts, if you can also give more favor on the business side potential for these two orders.
Atul Jaggi
Okay, sure. So this is as I said, this is a Hyundai order win with three variants. This is a TVS type of sunroof. The total volume expected is 130,000 with an turnover of roughly around 120 crore. The start of production is expected to be by December of 2020 27.
Mumuksh
Great, great. And for the hero.
Atul Jaggi
We are already developing Mooch. We are already developing one model with them. The we are working on the SOP date. I think I’m expecting the startup production to start by end of quarter one financial year or maybe start of quarter two. And then there are a couple of models under discussion. So as of now there is one one win. But then now since the the account is open I think we are expecting more orders to flow and we are already in discussion on couple of new further models.
Mumuksh
Great to hear that sir. So on the sunroof second line expansion, has that started now and how’s the ramp up lined up for that capacity?
Atul Jaggi
Yeah, so as I’ve shared earlier while the second line investment has happened but because of one of the models, the Ciros which was not doing well, the second utilization was not great. So one I think we are, we are waiting for a refresh of that model around March or April which would improve the utilization of the second line. But we intend to make that line as hybrid and with the recent wins, the few models under development that I had already shared with you and then this, the recent business acquisition, we are looking at a very good utilization of the second line moving forward.
So the second line will get converted into hybrid line to ensure that we can make BLT as well as the TVS type sunroofs and so utilization will not be a major issue moving forward forward once this model come into the plate.
Mumuksh
Got it sir. Finally sir, just on the financial part this quarter the expenses increased by 8cr q 8cr q and q. Any nature of the increase sir. And any one offs as per se on M and a part which are we doing in the numbers?
Atul Jaggi
Yes. So yeah. So the the increase is primarily in the other cost is for two reasons. One is the enhanced technical support from the partner where we would like to expedite the new business support and localization support to improve the localization in India to reduce the RMC percentage on the Sun Group business. This is also evident from the recent business win and our increased customer engagement with the other OEMs. And second, on the account of the restructuring cost basis, the the milestones. So these are the two reasons why, why we see an increase in the cost so broadly.
Mumuksh
This is a one time, sir.
Atul Jaggi
It is a mix of one time and recurring technical support modes.
Mumuksh
Got it. Thank you so much. I’ll come back for further questions.
Atul Jaggi
Thank you.
Mumuksh
Thank you.
operator
Thank you. The next question is from the line of Nikhil from Simpl. Please go ahead.
Nikhil
Yeah, good evening and congrats on numbers. I hope I’m audible.
Atul Jaggi
Yes, yes, yes. Nikhil.
Nikhil
Yeah. Two questions, sir. One is if we look at the two wheeler industry and map it against our growth in the two wheeler and same in the passenger vehicle, it seems we’ve lost some share. If you can just like share your thoughts on what has led to a lower growth versus the industry growth or the production growth for both two wheeler and PV for us.
Atul Jaggi
So Nikhil, thanks. So in terms of the loss in share, there’s no loss in the market share that is there. If you look at the production numbers. Yes, this quarter we see against the two wheeler, if you see the. The production value, sales number are different but obviously we go with the production numbers. So the market has grown between 15 to 16%. The Gabriel growth is around 13% is primarily because of two reasons. One, this quarter the hero growth has been much higher than in the previous quarters. And secondly, I think it is a mix of the.
It’s more to do with the model mix factor that is there. But there’s, there’s nothing abnormal. Rather in this segment, as I mentioned, I think we had further business wins with multiple customers including tvs, Bajaj, Kawasaki and a couple of other customers. So we have a solid business pipeline that is there in the two wheeler especially on the inverted front folks on the passenger car side, I think again our share of business with MSIL continues to improve. But again you see in this particular quarter the growth with Tata and Mahindra is there and it is again a model mix issue if we take out the MMAS part because if we take out the models that we are supplying from the Chakan 2 facility then we are obviously in line with the market.
Nikhil
MNAS is broadly on the EV side.
Atul Jaggi
Oh, there are some models that we are supplying in the passenger car side from there like Tata, Harrier is there, Safari is there, Nexon is there both for EV and ice.
Nikhil
Okay. Secondly on this, the new initiatives on dampeners and E bikes, like what is the progress and when do you see commercialization?
Atul Jaggi
As I shared again, finally, I think we were always discussing about development of the E bike forks. As I mentioned in the opening remarks that I’m happy to share that we have secured our first orders win. Currently the sort of the development orders are being released by the customer. This is for an E bike in Europe for an upside down front foot good technology product and we are looking forward. The start of production expected is around I think the quarter three. Now the development will start and around quarter three of the next year we will be seeing the start of production.
There are certain other businesses under discussion but the LOI is not received for them.
Nikhil
I will keep sharing the progress and the solar.
Atul Jaggi
Solar. As I said there are three business wins already. Two products are under develop, under validation with the customer. One is under development. So once the validation happens we will get into the mass production timeline.
Nikhil
I think in last call we mentioned commercial should start. Are those timeline still meeting or is there a delay there?
Atul Jaggi
Sorry Nikhil, I think your voice cracked. Can you repeat?
Nikhil
I think our last call our idea was we should see commercialization of solar dampened FY27 I think first half. Is there some delay there or.
Atul Jaggi
No, we are on track. As I said, I think the validation is on for a couple of the models. Once it is done done we will get into the mass production timeline. So as of now there’s no delay. Rather I would say that with the tariff being changed for the US market I’m really positive about because North America is a big market. I’m very optimistic about more traction from the customers.
Nikhil
Okay, just last request. We are merging all the entities and like in Q1 we had shared their pro forma numbers. I think if we can share the pro forma numbers on a quarterly basis it will be really helpful to the investors. Just a request and if you can just think about it.
Atul Jaggi
Yeah, no take on the point. We are as you know we are progressing very well on the. On the restructuring part. I’m sure we will start disclosing the numbers in all the quarterly sort of calls moving forward once we go through the entire process. I think we are quite close to it.
Nikhil
I’ll come back. Thanks.
operator
Thank you. The next question is from the line of Aditya Ketan from SMIFS Institution Equities. Please go ahead.
Aditya Ketan
Yeah, thank you sir for the opportunity. So just a couple of questions for onto the sunroof as you had mentioned earlier. So last quarter we had mentioned that. So Cyros is not picking up which is why we were facing some volume losses. Now you’re saying like with this new order wins it would largely offset and you’re using that line as a hybrid. So any. Any guidance you can give like how much we could recoup the volumes which were earlier lost because of Cyros and what sort of numbers should we build in for FY27 and FY28?
Atul Jaggi
See, I will not be able to give you the numbers for FY27 because forward looking projections normally we don’t give basis the. I think two things are there. We have always mentioned that by say 20, 30, 31 around that number number we are now with the wins that we have seen recently. I think the one thing I can confirm that we are on track on the. On the projected number in the long run. In the short run since there has always been a discussion on the utilization of the second line with this recent win on the TVA side we are because the first line is completely utilized now we have three variants coming in and then two models under development.
So we are looking at comfortably more than around 60 to 70% utilization on the second line also moving forward.
Aditya Ketan
Got it sir. The new order wins into the sunroof. Is it superior in terms of margins, in terms of pricing or EBITDA per sunroof compared to the base business? What we have in phase one I.
Atul Jaggi
Will not be able to share the margin profile because obviously as you know when the model is under development it goes through multiple changes iteration. But obviously any business win when it meets our threshold then only we go for the acceptance of the loi. So that is generally as per the. The. As per the policy.
Aditya Ketan
So got it in this quarter. So the two wheeler peg share has dropped to 61% versus 60% last quarter. Is there any change?
Atul Jaggi
I think we lost you. Can you hear me?
Aditya Ketan
Hello? Hello?
operator
Yes sir, you’re audible.
Atul Jaggi
See obviously because the MMAS numbers also come into the play which is primarily on the. On the PC side, the CV that would change the. I would say the overall distribution of the. Yes, those numbers are much higher and they are all in the passenger car. That is why you see here and as I mentioned earlier, the market in the two wheeler has grown by 15% because of the model mix and the Hero extra growth 13%. So maybe one odd percent is from quarter is coming from the model mix and 2% is coming primarily from the increased passenger car and commercial vehicle.
Aditya Ketan
Got it. Just one last question. So during the quarter other expenses have also gone up. Is there some one off into that?
Atul Jaggi
So as I have already answered this question in detail when mumuksh asked this so it is Basically a mix of both. And it is on account of two things. One is on the increased technology support from the partner, on localization, on design and development, on the sunroof. And second is on the restructuring. So that is, that is how you see an increase in the cost.
Aditya Ketan
Got it. Thank you.
Atul Jaggi
Thank you.
operator
Thank you. The next question is from the line of Amit Hiranandani from Philip Capital. Please go ahead.
Amit Hiranandani
Yes, thanks for the opportunity, sir. Basically how best the company will be able to utilize these ongoing FTAs because we have a target to increase our exports. So your take on this please?
Atul Jaggi
Yeah, so two, two parts of it. One is when we look at the. The deal with the Europe FTA with Europe, you know, we already have our tech center there. We have an entity where we are working on various technologies. I think with this would help us enhance the technology support there. Definitely find more avenues on the technology front, number one. Number two, definitely be because of the change in the duty the FTA coming in. Clearly you compensate on the transportation cost of it. So your the competitiveness goes up. So we are looking at building on it.
Just to share with you while it is too early, but just after this has announced, I think we already have got couple of meeting requests from customers in Europe to have discussions on it. So clearly not only us but the customers in Europe are also looking positively at India. This is on one part. Secondly, you know, because of the additional tariffs, the whole solar damper thing that we were quite optimistic about slowed down in North America and then we started focusing more in Europe now with the yesterday’s announcement. Again quite optimistic on this. So I think moving forward, hopefully we will see this supporting the export journey.
Amit Hiranandani
Yes, and this is good to hear, sir. Secondly, any kind of cost we have incurred for the SKNMU entity in quarter 3.
Atul Jaggi
We are concluding the CPS and, and we have formed the company. So we are expecting to contribute equity during this quarter and we expect the start of operations from quarter one of FY27. A small operation to begin with. There are costs related to forming a company and initial expenditure are being incurred. But we do not see any substantial expenditure.
Amit Hiranandani
Okay, noted. And sir, just on the. On the basic question, on the sunroof Q3 numbers, if you can share the revenue EBITDA please.
Atul Jaggi
Q3 I just shared number one. Yeah. So the revenue in the quarter three was 107 crore with an EBITDA margin of 13.5. I shared this during the opening remarks.
Amit Hiranandani
Okay. And in Q2 basically the margins were higher, right. On the sunroof yes.
Atul Jaggi
So that is what I think a couple of times I mentioned when Aditya and Mumuk asked the question, I think we have had some additional expenses on account of more technology support and localization support for some new business Win. So I just shared that.
Amit Hiranandani
Yeah, the lastly, just last one question. These three new variants of AND I which we have received for the Sun Group, so are they able to offset the crater business which we, which we are, you know, going to exit from FY28, 28 comfortably?
Atul Jaggi
Because I think I’ve been clarifying this quite frequently because there are two models and three variants already under development. These business wins have been shared with you earlier and I think what we are looking at with this business win is to build on that. So we are not looking at this compensating, we are looking at this building on the further growth.
Amit Hiranandani
All right, sir, good to hear. All the best, sir. Thank you so much.
Atul Jaggi
Thank you. Thank you so much.
operator
Thank you. The next question is from the line of Runway from assetsi Meta Investment Intermediates. Please go ahead.
Runway
Hi sir. Thank you for the opportunity. Am I audible?
Atul Jaggi
Yes, very clear. Good.
Runway
Okay, so a couple of questions on the Samroop side. Firstly, the new Hyundai models that we have received, are these existing models or new models that the company would be launching?
Atul Jaggi
There are model codes that are available generally because the model names are normally not sort of announced before earlier. They are a combination of new as well as refresh as far as.
Runway
The. Development will be new in any case. Right. Okay. And so one thing with regards to these realizations of the like per unit realization of Sandru, has that seen some kind of pressure since the time that we have started, since we are seeing more players also entering the segment that.
Atul Jaggi
Is very normal and very natural for any product because when there is an increased competition, the pressure both on the margins as well as on more localization requirements, et cetera, keep increasing. So definitely the answer, I will not say the answer is no. The answer is yes. We need to, as I mentioned earlier, we also need to, like any other organization, we also need to find ways and means and different avenues to keep maintaining a healthy profitability. And that is how we are looking at more support from the NALFA global team on localization and fast localization there.
So to ensure that the pressure on the margin reduced. But yes, with multiple players coming, it is very natural to have more competition.
Runway
Okay. Okay. And so on the standalone financials, there’s a very high other income in this quarter, any one of them.
Atul Jaggi
So I think the other Income is the. Yeah. So other income includes this time a dividend receipt from the subsidiary.
Runway
Okay. Okay. And so just one last question. If you can indicate the revenue of MMAS in the quarter.
Atul Jaggi
Normally plant wise breakup, we. We don’t share because it is one of the plants. So normally we don’t share the plant wise breakup.
Runway
Okay, got it. Thank you.
Atul Jaggi
It’s doing little better than what it was doing. I can only share.
operator
Okay, Thank you. The next question is from the line of Puneet Zaveri from the very and company. Please go ahead.
Puneet Zaveri
Yes, thank you for the opportunity. You mentioned about the line to utilization plan to go to 60 or 70%.
Atul Jaggi
Are you at the liberty to share what is.
Puneet Zaveri
Where is it right now?
Atul Jaggi
So the second line is not utilized at all. Currently we are utilizing only one line.
Puneet Zaveri
Okay. And in terms of your sunroof also.
Atul Jaggi
You, you mentioned that you want to increase the utilization localization effect.
Puneet Zaveri
So is there any way that you can qualify how much is it already done and what is the expectation in terms of increasing localization if not percentage. Any qualitative highlights?
Atul Jaggi
Yeah. So current status of the localization is around 33%. It used to be around 26%. I think when we first started, if I’m not wrong. And we are. The target is to take it to 60%.
Puneet Zaveri
And is the target for 60%, is it till 20, 30 or any. Is it next couple of years or.
Atul Jaggi
Something within the next one and a half years. We are now working. I think while we are having this call, there are already workshops going on. The entire global team is here and we are looking at expediting this process. So by end of 26, 27, we intend to do that. And obviously for the. The new developments in localization will be much faster. For the existing one you have to go through a lot of validation etc. So that is generally a slower process. But when we are, we intend to launch with much higher localization.
Puneet Zaveri
And in terms of realization for sunroofs, I think you, you mentioned that the competition has increased and it’s a natural.
Atul Jaggi
State of the how the business is.
Puneet Zaveri
So is it fair to assume that the realization has dipped a little bit compared to a year ago and that is expected to increase once your localization increases as well. So is there anything. How should we look at this?
Atul Jaggi
Obviously there are two aspects to it. One is the existing business. It is not a product which anybody comes and you develop it tomorrow. So it doesn’t impact the existing product. Obviously the model mix there something may have a higher profitability, something may Have a lower profitability because every model doesn’t have so much model mix can play a role. I think the discussion point was more on the new RFQs and new discussions with multiple customers. So there. If the RFQ goes to three players then obviously you compete in an environment. So there extra localization etc.
Would help. But nothing on the running business.
Puneet Zaveri
And just one final question because you.
Atul Jaggi
Do provide, you know, a really honest.
Puneet Zaveri
Assessment of things on your fta. Both us, is it that the. The existing competitors who already have plants there, you will be able to better compete with them and hence you feel that it’s just that the road is just upwards from where you are right now. Is it that your existing products can have and find a market there much quicker now basis of cost amongst other key factors.
Atul Jaggi
Sorry, I’ve not been able to hear you. Well maybe if you can you can repeat some part of it. I think I was not able to. Am I audible now sir? Yeah, you’re audible. Maybe little shorter question may be helpful sir.
Puneet Zaveri
So I was just asking on FTA if you can provide some feedback if how will you better compete with the existing players, both Indian and local who already have their plants there? Is it largely just cost or is there any other factor that you’re considering?
Atul Jaggi
So one thing is all the competition that we are talking about are in the process of coming in. It is not before currently before IGSS there was one competitor who had a full fledged facility here in India. All the other are coming in with different joint ventures, different configuration. I think none of them have been able to as of now win a business. Moving forward the competition would not only be on, I would say on price. I think technology will also play a role there definitely. I think in Alpha being very strong in technology, we are also trying to offer some new, newer technology products to customers.
So it will be I think moving forward, not in the immediate run but long term it will be a combination of standard products and a new technology product where obviously margins profile would be different. In both the idea is to bring more technology.
Puneet Zaveri
Thanks so much for the opportunity and wish you the best.
Atul Jaggi
Thank you.
operator
Thank you. The next question is from the line of Ananya Khanna from Alpha Alternatives. Please go ahead.
Ananya Khanna
Hi. So my question is when can we expect the statutory approvals to start rolling in for the scheme of arrangement?
Atul Jaggi
So on the scheme of arrangement we we received the NOC from Stock Exchange and post that we filed our application to nclt. I’m happy to share that first portion hearing happened in early January and the scheme has been submitted and order has been pronounced by the end of January. Now the soft copy of the order is available on the NCLT website. We expect a certified copy to be received in this week. And we will follow the due course of action coming from that order. So we are very much on track. What original time plan we had planned for this scheme and we have been progressing very well on this front.
Ananya Khanna
All right, sir. Thank you.
Atul Jaggi
Thank you.
operator
Thank you. The next question is from the line of Abdul Joshi from 3 Vintage Capital. Please go ahead.
Abdul Joshi
Hi. Thanks for the opportunity. Considering the enroll we have made into Hero, do we.
Atul Jaggi
Of course we will see rise into the volumes.
Abdul Joshi
I just wanted to know about the capacity. Our capacity.
Atul Jaggi
Do we intend to add capacity in line to that?
Abdul Joshi
And what’s our current utilization?
Atul Jaggi
See in the two wheeler. I think if you look at the market growth in the last few years. If you look at the Gabriel growth, we are continuously adding capacity. So obviously with new businesses coming in not only from Hero but from all the other customers also I think the share of business has been continuously improving. In line with that we have been adding capacities in the existing plants also. And we are looking forward to maybe adding a location specifically in the coming sometime. So capacity enhancement in two wheeler to be honest is a continuous affair.
Even today also we have cleared two more lines in our board meeting there. So we continue to invest.
Abdul Joshi
Okay. So currently we are operating at around 70%.
Atul Jaggi
Yeah. So normally the way you know the two wheeler works is there is a. There is a normal demand and then there is a festival season demand. So we try to operate at around 70% during these times. So that we have some idle capacity to meet the festival season demand. So the utilization is in line with that.
Abdul Joshi
Understood. So there is more change into the or a larger capex expected into the next year. Is that correct? Understanding?
Atul Jaggi
Yes. Yes. We are looking. We are anticipating that for the next year. Yes.
Abdul Joshi
That’S it from us. Thank you.
Atul Jaggi
Thank you.
operator
Thank you. The next question is from the line of from Anandrati Institution equities. Please go ahead.
Unidentified Participant
Yeah. Thank you sir. For the opportunity again sir, Mindra is available. Just want to hear his thoughts. Sir. How is in the progress on 30ambitious plan? Just want to understand how are you seeing the M and A opportunities? What kind of areas where the Anand group can expand? And secondly with the four companies completion happening very soon how do you see the further group strategy searching happening say next year?
Atul Jaggi
Okay. Thanks.
operator
Thanks.
Atul Jaggi
Manoj. Maybe Mr. Goyal is there. So you would like to address this? Sir.
operator
Sorry to interrupt, sir. The line for Mr. Courier has been disconnected.
Atul Jaggi
Okay. Okay. So maybe I’ll take this.
Unidentified Participant
Yes, please. Yes.
Atul Jaggi
So yes, the. As far as the bigger target for the group is concerned, multiple opportunities are being evaluated in line with the expectations there as and when something materializes we will definitely come back to and share the updates on that. But there is a. Just to share with you, there is a. There is a property review mechanism for that. There is a proper monitoring for that. In terms of the progress. In terms of what are the opportunities that are being evaluated both on the organic as well as on the inorganic side. So hopefully we should be able to share some updates in the.
In the coming time. What was the second question? Sorry.
Unidentified Participant
So with the four companies consideration happening now, very soon now, how do you see the plans ahead for the further group?
Atul Jaggi
So I think as we have discussed multiple times, so we are completely on track on this. Hopefully I think as of today we are completely meeting the timelines we would go. We would like to go through this process and then surely come back to all of you on the next update. Okay.
Unidentified Participant
Thank you so much for the opportunity. All the best.
Atul Jaggi
Thank you. Thank you.
operator
Thank you. The next question is from the line of Virat from Simpl. Please go ahead.
Unidentified Participant
Yeah, hi. Thanks for the opportunity. Am I audible?
Atul Jaggi
Yes, yes Viraj, yes.
Unidentified Participant
So just two questions on the standalone. See the motherson. Sorry. The Marinelli acquisition we started consolidating from Q1 and if the run rate in Q3 is better than Q2 then we would basically be seeing a flat growth for us in two wheeler segment in this father which is so I understand has grown better and there might be more of it but the deviation itself quite large.
Atul Jaggi
I. I don’t know if you were there because I think couple of times I have tried to answer this question again this you also understand that is sometimes it can be a model mix issue. I just mentioned that I think there’s no business impact that is there because the production number while the sales number are more but the production growth is 16%. Against that we are looking at a 13% number one impact is coming from Hero. Second, maybe because of the model mix part that is there. Rather I shared that I think we have further very strong winds in the two wheeler side on the inverted front forks and on the normal front forks and we have a very healthy pipeline there.
So I’m not seeing a lynch on this front at all.
Unidentified Participant
Okay, just a clarification. When you say Marelli acquisition will the concentration be largely two wheeler or it’s again spread out between two wheelers, four.
Atul Jaggi
Wheelers and is mostly a combination of. I would say maybe 70, 80% would be passenger car and then balance would be commercial vehicle. There’s no two wheeler. So that is the reason you would see a 63, 64% normal coming down with some businesses getting increased there or some volume changes happening there. So the overall the two wheeler would come down. That is on account of increase in the other segment and not because of any loss in the share.
Unidentified Participant
Understood. Any color you can give in the revised terms in terms of tech license fee, service fee, you know how would that now be? And the question is also you know since we have the second line now commission is there an opportunity for exports to make up the shortfall?
Atul Jaggi
So I don’t know if you were there Viraj, maybe you joined late. I think we discussed that and we shared that there is a good business win for three variants of TBS type of sunroof where we would be now getting into a very healthy utilization once the SOP happens on the second line. Also as far as the export is concerned one of the variants that we had, I think if you remember I had shared earlier that there are two models and three variants under development. One of the models is also for export. This is called as a BC4T but this is not a product.
One, this entity obviously is set up to service the local customers. Second, this is not a product which is so easy to transport and handle. So any opportunity that keeps coming in on export we will be very happy to sort of engage on this. But primarily we are looking at increasing the domestic share of business and on tech.
Unidentified Participant
What is the new arrangement now?
Atul Jaggi
Yes, there is an. I think I have explained on the increased cost because of the two reasons. But yes in terms of the new arrangement we I think we numbers have changed and we are seeing an increase of around 1.9% there.
Unidentified Participant
So this will be a permanent.
Atul Jaggi
Yes, this will be permanent as of now because we a lot of other activities and technical support is needed to expedite the new business wins and localization activities here. So additional resources are being needed.
Unidentified Participant
Thank you and good luck sir.
Atul Jaggi
Thank you.
operator
Thank you. The next question is from the line of Amit Hiranandani from Philip Capital. Please go ahead.
Amit Hiranandani
Thanks for the opportunity again. So this strategic question wanted to understand how do you see this semi active shocks industry in the next five years and Gabriel’s readiness for this product. Also if you can touch base whether you know this Marily at least open tech partnership and the KYB tech agreement we have how best they can support faster development for this product.
Atul Jaggi
See on the first. I’ll answer on the semi active part. The semi active product is completely ready with us now. We just. I think in last two, three months we have done a complete tuning on two vehicles. Now the two POCs have been done on different, different customer vehicles. One independently and one with potential customers and the product is completely ready. As far as the technology proving is concerned, obviously it all depends upon the new opportunity that comes to bring it to the mass market. But yes we are ready. So we are not looking at any support coming in from outside for this because as you know we have invested quite a bit in the European Tech center and we have enough expertise available there.
As far as the agreement with KYB etc. Is concerned, I think that is all working fine on the existing businesses depending upon the customer requirements and the kind of wall wings and the kind of technology that is needed. So it is always a combination of what if. If it is a standard platform coming in from some global or being developed in India. So it is. There’s a combination both with the local developed technology and one of the partners. But for the specifically on the electronic suspension we are not looking at any support that is needed as of now.
Amit Hiranandani
But do you see this industry evolving? 5 years the industry will evolve.
Atul Jaggi
One variant has come into the market. As I said, I think we have been working with one customer as a proof of concept to demonstrate the technology. The penetration will be slow. Obviously the cost impact is also significant even today. Also whatever is being made is not made locally. They’re all imported. So you need an ecosystem on the electronics, on the assembly, on the dampers etc. So it will be. It will be a slow progress there on the passenger car side while it’s one odd variance will keep coming. I think maybe when you as you ask five years down the line.
My estimate is that maybe top end variants of some models may have this. I’m looking at some opportunity coming in the two wheelers much faster because there are a couple of customers. The PoC has already happened, we have already done that. That may happen much faster than the passenger car but we’ll have to wait and watch. But Mark may not happen looking at the cost pressures normally on the vehicle.
Amit Hiranandani
So I think then frequency selected damping would be the best looking at the Indian condition and the cost of.
Atul Jaggi
So it will be obviously different kind of walls. The passive walls would be. Would keep improving. That is number one, number two FSD or HRS or double FSD kind of can be an interim solution to this where we see more traction currently and then maybe at some stage semi active but I don’t see it happening in the immediate term on the.
Amit Hiranandani
Okay. All right sir, thank you so much. Thank you.
Atul Jaggi
Thank you. Thank you very much. Thank you so much.
operator
Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand over the conference to Mr. Atul Jaggi for closing comments. Over to you sir.
Atul Jaggi
Yeah. Thank you. So I take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information kindly get in touch with any of us or sga, our investor relations advisor. Thank you so much.
operator
Thank you. On behalf of Gabriel India limited. That concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.