Jtekt India Ltd (NSE: JTEKTINDIA) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Rajiv Chanana — Director & Chief Financial Officer
Minoru Hatanaka — Chairman and Managing Director
A. D. Rao — Advisor, Design and Development
Unidentified Speaker
Analysts:
Aman Vora — Analyst
Tushar Khurana — Analyst
Unidentified Participant
Manoj Bahety — Analyst
Presentation:
Operator
Sam Sa Sam Foreign. Ladies and gentlemen, good day and welcome to the Q4FY 202425 earnings conference call of Jtech India Limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to the management of jtech India Limited. Thank you. And over to the management team of jtech India Limited.
Rajiv Chanana — Director & Chief Financial Officer
Good afternoon everyone. My name is Rajiv Chana. I’m Director and CFO at JTech India Limited. I would like to introduce our team here. Atanaka Sen is our Chairman and Managing Director. Then we have Pujeevara sen, our director. Mr. A.D. rao is the advisor technical. Mr. Ashish Singh is Divisional Head Strategic division. Kuvana Sen is heading the department Sales and marketing. So these are the team members present here. And I would like to request Hasanaka Sen to deliver the inaugural speech. Thank you.
Minoru Hatanaka — Chairman and Managing Director
Thank you. Jonathan. Good afternoon. My name is Minor Hatanaka. Welcome to the JTech India Limited annual earning call. I would like to thank all participants for joining this call and the organizers. For the financial year 2024-25 passenger vehicle segment achieved sales of 5.1 million units compared to 4.9 million units sold in. 23 24, thereby achieving an annual growth of 3.7% as per CIAM. High base effort of financial year 2324 resulted in moderate growth in 24 25. Several initiatives such as an attractive discount and promotional offers help the industry to sustain volumes and maintain growth momentum. Another positive news in the passenger vehicle saw their highest ever export in 2024-25 of 0.8 million units registering a growth of 14.6% as compared to FY2324. Growth in exports have been driven by demand of global models being manufactured from India and are supplied in Latin America and Africa. While 2425 marks the fourth consecutive year of year on year growth for the industry, the growth rate is the lowest in the past four years. In the first half of 2425 we observed events like elections, heat waves and heavy rains in certain regions and called these events contributed to slow growth and all sectors in the first half of 2024 25. However, the industry recovered in the third financial quarter due to feasible sales and promotional offers by OEMs. Well, looking ahead, CIEM expects the auto sector to continue its growth in 2025 26. Stable economic conditions, proactive government policies and infrastructure spending are likely to support this growth and normal motion as forecasted is also expected to boost the demand particularly in rural and semi urban areas. Now review the company’s financial results. The financial results for FY24 25 are now available with you. During the financial year 2425, Jtech achieved sales growth of 7% compared to passenger vehicle market growth of 3.7% during this period. Margins were however under the pressure due to several external uncontrollable factors. EBITDA margins are down from 9.5% achieved last year. Fy 23. 24 to 7.6% in the current FY24 25 due to lower than budgeted sales growth, we could not absorb the increases in employees. Cost, which is a percent of sales increased to 10.4% in FY24 25 compared to 10.1% level last year. However. However, we were able to contain administration cost at 455 million rupees in FY2425 compared to 494 million rupees incurred during the last financial year 2023-24. Therefore, at the fixed cost level, management assured that there was no negative impact on profitability. On the variable cost front, we faced several external challenges. In our presentation uploaded on the Stock Exchange yesterday, we explained these external factors which resulted in increase in variable cost. I would share a few major factors with you. 1 Exposed sales to our US customers declined, reducing share of export sales in our overall sales from 4% to 2.4% in the previous year. In a current period, the export volume has now come back to its normal level. This decline in export last year resulted in a reduction in margin by 0.6%. The second we faced quality defects in manual gear supplied to one of our customers and had to jointly decide for product recall. For a total quantity of around 2,500 units, most of the replacement jobs have been completed. This factor impacted our margin by 0.3%. Third point due to increase in process costs, converting employee wages, power costs, consumables and so on and the company has received the result from the vendors for the price increase for which the company has made certain provisions in books. At the year end, we have started communication with our customers for recovery for this additional cost as per accounting policy. The company has then taken the expense provision which has impacted margins by 0.4%. As I started earlier, most of these cost impacts are exceptional and one time with this I would like to thank you for your participation and open for the conference. For the questions and I would like to share that I have the dismissed meeting shortly for my personal occasions. Thank you very much.
Questions and Answers:
Operator
Thank you. 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 queue assembles. We’ll take our first question from the line of Aman Vora from Premier Capital. Please go ahead.
Aman Vora
Hi, good evening to the management and thanks for the opportunity. My first question is on our capex. So we’ve done about 275 crores of capex this year. While our parent company JTE Corp. In its investor presentation presentation has highlighted 30 billion yen which is 1800 crores of capex in India till FY28. So I just wanted to understand what segments would this large CAPEX entail and what is the thoughts of the management and the typical asset turnover that we see on the capex.
Rajiv Chanana
Thank you. I’ll start with the answer. I will first explain you the capex which has been incurred during the current financial year. Then I will give you the picture about the last year, current year and the next year about 3 years period. So for 2425 the company incurred a total capex of 287 crores primarily towards expanding production capacity. So when we look at the total expenditure on creating new capacity out of these 287crores 191crore was deployed towards that.
Then we had some maintenance capex of 39 crores IT expenditure of 7 crores and dyes which are used in the manufacturing about 50 crores. So this was a broad breakup of 287 crores. Just to explain you where this money has gone. So at present the company is working on the third CEPS line. We got two lines at our bowel plant. We are setting up a third line and this will help us to increase our production capacity from 10 lakhs to 15 lakhs units. About 100 crores kind of a CAPEX is the total requirement for this expansion.
Then we are working on the fifth manual gear line Daru Hera facility where we have most of the manual gear production capacity. And this will increase this. Setting up the fifth line will increase our capacity from 24 lakhs to 29 lakhs units. Again this will unwall about a capex of about 35 to 40 crores. Then we announced to stock exchange in December 23rd and February 24th. You must have seen our announcements about setting two more manual gear lines. The sixth line will be at Daru Hera. And there will be one line one. Additional line which will be line number four at our Chennai facility. All these when once it’s completed will increase our production capacity from 29 lakh units to 36 lakh units. Further in February 24th we announced about setting up a new CVJ line. And this will involve a capex of about 90 to 100 crores. And this will be happening during July 25th period. So. So all these capex are happening as we are speaking these capital expenditures are happening. Few activities started last year, few will continue to the next financial year. How we met this capital expenditure just to explain that. So 2425 we had a cash generation of 156 crores. We had some cash available from last year. As a result the increase in bank warning was pretty small like just about 43 crore required from outside. And the entire 287 crore was funded out of the internal accruals. Our debt equity is still at 0.17 level which means that we have still more borrowing capacity available. Now I tell you about the three years period. So capex for last year 2324 was about 172 crores. Current year as I told you about 287 crores. Assuming 300 crores of capital expenditure for next year we will end up with about 760 crores of capex over the three years period. So this. Out of this 760 crore 430 crore will be utilized for our capacity expansion. Like whatever I told you. CPS line, three Ms. Gear lines, one CVJ line. These will be requiring about 430 crores of capex which include plant and machinery as well as the civil and building infrastructure. You know because currently we do not have space available. So we are constructing additional space at our Bawal plant, at our Darwera plant etc. So together that total expenditure will be around 430 crores. The remaining will be like maintenance capex about 80 crores. Dyes which are used for production 150 crores IIT about 15 crores. And then you know certain 80, about 82 crore. We have kept for activities like backward integration. Our pressure die casting plant which we have. So we are setting up one additional 850 ton machine. We have a technical center. We are expanding facilities there. And we have for our building safety certain civil expenditure will need to be incurred. So when we look at this 460 crores over the two years period when we incurred about 460 crores kind of a capex the increase in borrowing was just about 95 crores which mean that 80% of the capex was met of the internal improvement. So now coming back to your next point about JJP explanation that we will be spending about 1800 crores. So I’ve given you explanation about 760 crores. As we reported on 7th of October to Stock Exchange 2024 about setting up a new facility in Sana. Sorry, in the state of Gujarat, not Sanan, this is at Jalisana, very near to the Suzuki plant. So we expect this facility and currently the layout and other planning process is on. This is required because we do not have any facility in the western region. So this will be the first plant in western region. It currently is very difficult to cater to the requirements from Haryana. So it’s a good step. It will help us meeting the quality and logistics standards we have at this point of time. We have allocated about 250 crores for this project. However, when we look at the overall plan for this project by expanding the including the production capacity which we are planning to set up there, the total project cost will be around 650 crores. So these are the broad breakup, you know I’m not going to very specific details because there will be maintenance capex, there will be production dies, etc. So that all together. So this number which has been quoted is more or less tallies with my number which I’ve just communicated to you. There is some question, right? So maybe JJP normally keeps some question available. They need to allocate funding for the entire world for the Ganpo. They allocate money so. So some money has been allocated. We are happy that a good amount of money has been allocated to us and JJP will be supporting that. So this is the answer if you have any further things.
Aman Vora
Yeah, I just have one follow up sir there. What. What is the like we identified 460 crores of incremental capacity that we have added. What is the typical asset turn that we would expect out of this capacity and how much time does it take to. For you to realize full. To reach full potential? So what is the typical asset turn that we expect?
Rajiv Chanana
Okay. Asset turnover typically depends on asset to asset. It’s not that it’s. It’s common for all the products. If you have seen our investor presentation which we uploaded, our current FSR is about four times. So I think which we have been able to maintain for almost two, three years. Just to give you example, like you know when we set up a new line for cps the asset turnover can be. Can be pretty good, you know because it’s a high value product.
It requires lot of assembly operation rather than machining operations and therefore the asset turnover can be high, it can be up to five times. But when we come to a product which requires lot of machining, for example CVJ where we have to do the complete setup there. The FSCR may be slightly lower, say 1.5, maybe little lower than 2, but, you know, this is an average game, you know. So on an average, when we combine all the asset capitalization in our company, we are able to achieve. So far, for the last two, three years, we’ve been able to achieve four times fscr, which is considered very healthy. From a component manufacturer perspective, yeah, there are opportunities we will try to improve further. But that’s the current picture.
Aman Vora
Yeah, so that is that. So we’ve introduced new CVG products, we’ve expanded capacity in our current portfolio. But if I see the incremental between the volume growth which is 3.7% and our top line growth which is 7%, the differential is very less. I’m just. What I want to understand is that how our top line growth can be, we can grow quicker because of all of these interventions that we’ve done in the last two years and we continue to do so that the differential between our revenue growth and volume growth of these players is higher because we are introducing newer products in the market.
Rajiv Chanana
So I think, let me answer you by giving an example of cvj. So this particular introduction of CBJ is a step, you know, we wanted to gain a share in the driveline segment of the auto component market. We are not, we do, we are not a system supplier at this point of time. Like we are system supplier for the steering side for the driveline. We still have a mileage to go. So we set up this facility at Daharu Hera. The first line was set up, there was a total capex, about 880 crores. And then we infused some more capital expenditure for this line. It got a capacity of approximately 3.7 to 4 lakh units.
Currently we are using this facility for Grand Vitara and Toyota Highrider which is Toyota and multi joint production. And currently our line utilization is just about 65, 70 kind of a number, you know, for example 24, 25, we sold about 2.7 lakh units which is about 1.35 lakh sets of CVJ. And that’s just about 65, 70% capacity utilization. Now what’s happening, we are planning to start one additional model of Maruti Suzuki and once that starts the capacity will be short, you know, so that’s why, you know, if you recall we already have started working on the second line.
So while currently the capacity utilization is less, we are simultaneously working on the capacity expansion. So it’s like a, you know, when the delays which have happened, I think this particular model has been delayed by almost six months now. But there are no good news that this will be starting now sometime in July, once the program, our second line will also be ready around July. So we are planning that not only the previous line will get fully utilized but for the new line also we will have a sizable business. So we are waiting for that. I mean this is one of the examples.
Similarly, to give you another example, we got an export order from Brazil. Again, that is slightly delayed. These are normal features. You know, there’s a lot of testing and validations are required at the OEM front. So many parts goes into the car and they need lot of testing to be done. So we have seen these launches get. Been delayed in the past also. So these are the two examples and but just to give you number is that we are moving ahead and these facilities will be fully utilized. But I have told you the capital expenditure which we have planned, we have a good visibility in terms of orders already available or in the pipeline and we will be utilizing even at this point of time our capacity utilization on say manual gear and CPS is approximately slightly more than 100% and we have a good visibility that going forward also we should be able to achieve 100% say and end of March 27th our facilities will be fully utilized.
Aman Vora
Got it sir. So just one last question is on margins. You highlighted in your presentation how there were so many one offs in the margins. So if I think about next year with all those one offs behind, should we get back to that earlier trajectory of 9.5% and you had highlighted last year that we can. We have a lot of opportunities with the merger of our subsidiary to even expand margins. So should we get back to that trajectory also like with CVJ being a better margin product than steering’s. So should we get back to our margin original margin trajectory?
Rajiv Chanana
So I don’t know if you have read our disclosure to the stock exchange made yesterday in our presentation. You know we have tried to explain that on the fixed cost front, like even though there was an increase in the employee cost by about 0.3%, we were able to that increase by improving the cost on the administration cost. So almost the same level we were able to bring about reduction. So on the fixed cost which is actually controllable at the level of management, we have made sure that we do not increase that cost. So that’s one activity which has already been done. Now coming to variable cost, as Hatanaka Sen explained in his presentation is that almost 80, 90% of these factors are external. Like these were uncontrollable on the part of the management. For example, when we look at US exports they declined over the second and the third quarter started picking up again. There were many, many factors. I think you people know better what conditions are prevailing in United States for the past few months.
But we have turnaround like in the month of May. Just to explain you, the number is exactly the same which we had in quarter one of last financial year. So we have reached to the normal situation which means this factor will not impact us badly in the current year. Last year it impacted 0.6% which is a huge against 1.9% dip in the margin. When we try to analyze that. Just one reason costed US 0.6%. Then as Adana Khasan explained, the process cost which we have as per accounting policies, if there are claims available from your vendors which we need to disclose to our stat auditors as a listed entity and as per the accounting policies, we are supposed to make provision despite knowing that most of that will get recovered. But this. This settlement process take lot of time. While the provisions started coming in the last quarter, we could not settle that with customer. But there are good opportunity, good possibility that we should be able to recover at least a significant part of that. And then the third point which Hatan Akasen told about the recall, you know, you say it happens, it doesn’t happen. We do not allow it to happen. That’s our promise to you. We’ll be more quality conscious. Our quality team is taking it as a challenge that we do not face this situation again. It was contained like, you know, it was not unlike last time. You know, there was good traceability systems available in the company. We were able to contain it at a very, very low number. Otherwise this could have boomerang. But despite that it impacted 0.3%. There are other small, small factor like you know, the Red Sea issue resulting in higher inward freight cost. There were certain provisions which you have done which are required, you know, if certain inventories cannot be used. There are claims which are pending with our customer because there was a early EOP. So about 10 million claims are also pending which are yet to be recovered. But in the books we have taken a provision for inventories. There are, you know, the actuarial valuation which is done in the employee cost. One of the reason for employee cost going up is our actuarial valuation which we get it done at the end of the year. You know, there are financial factors which impact the valuation. This is a future liability valuation. And the discounting rate plays a very important role. So this year the discount rate was reduced from 7% last year to 6.5% considering the interest rate fall. And that immediately increased our liability because the entire future liability got discounted at a lower rate and the volume and the value got up. Another thing was that for employee motivation we started leave and cashmere policy. So we had so that also we have few changes which have happened in the actuarial valuations. So these are all these factors which I was explaining you which costed about 1.8 to 1.9% decline are all one time exceptional and should not be happening again. Having said that, yeah, there are many areas where the company need to work to improve profitability. How we negotiate our orders with our customers, how we expand our export with which we are very serious about it. How we do more localization for this. For example, last year we were able to localize a drop shop Excel which is the main component for our CVJ and that helped us to improve profitability of cbj. Yeah, you rightly said, the merger is giving us a lot of opportunity for production rationalization. We are shifting our jacket assembly production from the old GFIN plant to our main bowel plant so that the entire CPS can be at under one roof. This will help us to save inventories as well as the logistic cost and then we will continue to work on cost optimization. By involving our vendors etc, there are a lot of ideas which are available on the table and we’ll keep working towards that. Thank you.
Aman Vora
Thank you so much sir. Thank you.
Rajiv Chanana
Thank you so much.
Operator
Take our next question from the line of Tushar Khurana from Peace Wealth. Please go ahead.
Tushar Khurana
Yeah. Hi. Thank you for the opportunity. Sir. My first question is regarding this capex that we have lined up in our Gujarat facility. Like you also mentioned that while initially we mentioned that there will be a capex of about 250 cr which may go up to 600 cr as well, I would assume that there will be more expansion in the other products that we make that we’re making there. So I just want to understand how much of this capacity would be going into exports like exporting to the other JTEC entities. Because if you see the presentation of jtech Corp. You also talk about positioning India as a global hub. So when we talk about positioning India as a global hub, what does it really entail in terms of, you know, exporting things from India to maybe other jtech entities or to some clients overseas. So if you could talk about this please.
Rajiv Chanana
Just like you, we are also glad to see JJP presentation where it said that about global restructuring paragraph. They mentioned that they are strengthening Indian sites which means they are promoting India as a global site. So it can have many meanings. Yeah, but you know, as you are aware the process has started. So the big order which we got from Brazil, you know jtech Brazil is a group entity of our group and they will be sourcing manual gear which is where we are quite, you know, in terms of being cost competitive.
We have in Indian market also we got a good market share of this particular product. We have been exporting this product to us and this production has stabilized along with the supply chain which is required which has to be, you know one of the main factor for increasing is a very strong supply chain. Fortunately we have been able to manage that. We have been able to establish a very strong supply chain for us and we are in a good position to start exporting now. This is the start and it will impact our share of export in the overall sales volume from around 2% currently to about 4%.
So around 4% currently to 6%. So we will move forward. I think this is one opportunity once we prove that there will be more opportunities available. We feel like that and we will gear up for that.
Tushar Khurana
But if I, if I talk about from an aspiration point of view, what kind of exports are we looking at saying in next four to five years.
Rajiv Chanana
Look, normally we do not ask futuristic as a. On this web, on this investor call. But I can only give you the past number. We touched 10, 11% earlier. But I cannot, would not like to put any futuristic number on the table at this point of time. But we, you know, we know that how important this is for our profitability. We very well, the management very well understand that this can change the shape of our EBITDA margin. So we are very serious about it. That’s what we can tell you.
Tushar Khurana
Okay, that’s very helpful sir. My second question is regarding this, this Maruti EV that will be coming for sale in near future. I believe we have a dedicated facility where we’ll be manufacturing the components for that EV model. So can you please tell me when have we already commenced this production of these components? And I believe most of these vehicles will be going for the export markets, especially to Japan. So if you could talk some, some bit about this particular thing and what kind of volumes are we looking at initially for this EV model?
Rajiv Chanana
So yeah, we are 100% supplier for this model. So whatever exports and domestic production will happen, we’ll be supplying for that. And good news is that we are a complete system supplier for this particular product. We will be supplying manual gear, we will be supplying CPS and we’ll be supplying CVJ also. And we are very hopeful for that. Our lines are ready. We have already we are ready with our production facilities. And as for the current information, July will be they will start exporting and we. We don’t know the exact thing that something which Maruti has to decide. But just like you, we.Whatever information we have from the market, we are pointing like that. They will be starting soon now.
Tushar Khurana
Okay. And enter which facility will be will we be using for this? Is it the Dharuheda facility or so?
Rajiv Chanana
Daru Veda will be for the Ms. Gear and CVJ and bawal facility will be for CPS.
Tushar Khurana
Okay. Okay. And Mr. Minoru mentioned about the promotional offers and discounting that was there because of the slow demand last year. So was that also the reason that we also provided discounting to the OEMs? Do we do that?
Rajiv Chanana
No, no, no, no, no. Not like that. Promotional offers are basically for the end customer, retail customers. Not. You know, our understanding is different. You know as we have told several times is that we have arrangement for back to back compensation for any increase in the raw material cost foreign exchange. So those rules still apply. There has not been any change in the rules. The only shortcoming is that the process cost change need to be negotiated. That’s the only shortcoming but that also the customer has been very forthcoming. We have never faced any big challenge, but yeah, it requires to be documented. Explain.
Tushar Khurana
Okay. And what is our current revenue mix from the different OEMs? Yes, for this quarter.
Rajiv Chanana
Yeah. I will give you for the full year. Is that okay?
Tushar Khurana
Yes, yes.
Rajiv Chanana
Also. But better will be a full year because that will be more representative number. So Marcus, Suzuki is 56%, Toyota is 12%, Honda is 8% Mahindra and Mahindra is 8%. Tata is 2% Renault, Nissan is 3%. Then 1% Isuzu and 1% Stellantis. And breast is like others like including spare supplies etc. And then 3% exports. 2.4% exports.
Tushar Khurana
Okay. And enter. Have we added any new model from other than Toyota or Maruti like MLVM or Tata?
Rajiv Chanana
Yeah, we are working with many customers. Like we are working with Tata Coral which is a Tata Ace platform is a small commercial vehicle which will be launched sometime in as per our current information, sometime in July. So we are working with that. We are working with other customers also. Honda, we are working. We keep working with Honda because almost all the supplies to Honda are from our factory. So yeah, we are working with few other customers also.
Tushar Khurana
Okay sir, and my last question on the CVJ front, now you mentioned that CVJ currently we are only providing for two models which is Highrider and Grand Vitara. So I just want to understand like how big this can be in terms of when we provide this product to different OEMs and not just Suzuki or Toyota. How do you look at this product especially? And also we announced about CVJ forging also which is backward integrated with cvj. So how will that also help in further improving the margins for CVJ product?
Rajiv Chanana
So like we are hoping to increase our share of business for cvj. We got two models now we will be getting third model which we expect that the requirement will be large. So currently we are at around 5% market share. I think we should be expanding to within a year or so. We expect that we may touch seven and a half, ten kind of a number. We will keep increasing. This is one opportunity which is available to us because every car requires set. So there are two CVJ required. Unlike manual gear which is one you need set of cvj. So it’s a good opportunity. And the price is better when we compare it with manual gear because of the. Need to be supplied. So let’s hope that we keep on expanding this. I do not want to put any number at this point of time. I can. Can. We will be doing, you know, we’ll be growing in this field and let’s see, there are many, many opportunities available. So far we are only talking Maruti and. And Toyota. We can go for the other. Other customers also. Yeah.
Tushar Khurana
Okay. Okay. Okay. Thank you so much, sir. I’ll join them. Thank you.
Rajiv Chanana
Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Vishal Maheshwari from Avenue Capital. Please go ahead.
Unidentified Participant
Thanks for the opportunity. Am I audible, sir?
Rajiv Chanana
Yes, please.
Unidentified Participant
Yes sir, follow up to the previous question on the cvj. Can cv. Can CVJ technology be used for you know, commercial vehicles also? And are there other CVJ suppliers in India? Basically. And one more question that you know, can any point of time CVJ technology be, you know, mandatory for CV commercial vehicles?
Rajiv Chanana
There’s no difference between commercial vehicle and it can be used, you know, there’s no difference. Not that it’s a compulsory use of CVJ for commercial vehicles. Not like that. Will you please explain? Mr. Rao will explain. Just a minute.
A. D. Rao
Good evening. My name is AD Rao. In the commercial vehicle, you know, I mean most of the times it is a driven so rail wheel. Driven means like the drive from the engine goes through propeller shaft to the rear wheel and that’s how it is driven. Whereas in the passenger vehicles is a front wheel driven and from the engine, the wheel, I mean the driven wheels are connected through this cvg. Of course like you know there are some light commercial vehicles where you have a different thing. And this is like, you know, I mean more for passenger vehicles than commercial vehicles.
Unidentified Participant
Okay. There is not much opportunity for commercial vehicles when it comes to cvj.
A. D. Rao
Small, small vehicles we can consider. But I think our focus would be more on passenger vehicles. As of now there’s a lot of potential in the passenger vehicles.
Unidentified Participant
Okay. Right. And sir, my next question is in FY23 and 24 we did combined 460 crore CAPEX. And then we, you know, we had launched a new product also. But despite that our revenue growth was only 7% in FY25. You would like to know your view on that.
Rajiv Chanana
So I think I replied that there are certain production need to be kicked in. For example, the new CVJ line which is now being set up will go. Into commercial production from July. Similarly, as I was telling, I was replying to the previous question is that our export for to Brazil will start little later whereas the facilities are already. So you need to be prepared, you need to spend the CPS line, Ms. Gear line, etc need to be ready maybe 3 to 4 months in advance before the sales will kick in and then there will be a ramp up. Also you know, it doesn’t matter, it doesn’t happen that the production will be on day one will be equal to the day 10. So it there will be a gradual ramp up of these. But as I told you, the current facilities which are already available, Ms. gear and CPS they are 100% utilized at this point of point of time. And if you want me to be very specific, the current utilization of our CPS line is about 110% and MSG is about 92%. So that’s a current utilization. And we have visibility as we’ll be setting up these new lines through this capital expenditure they will be as they will start getting utilized. So we expect that by March 27th as we keep on adding more and more product, the capacity utilization will again touch toward 100% in tarring period. Maybe they will be as the production will be ramping up, the utilization may come slightly lower, say about 85% or something but over a period of time it will ramp up to 100%.
Unidentified Participant
Okay sir, can I just ask one more question
Rajiv Chanana
Please? Please.
Unidentified Participant
Yeah, just a broad question that you know what revenue CAGR company has planned over next three to four years. Is there any internal revenue target, you know, for JP in the entire.
Rajiv Chanana
Look, we do not talk futuristic, you know, you know and you know we are a component supplier and we are actually dependent on our OEM performance and the market demand situation. As I told you that we supply about 50, 55% of the total Maruti Suzuki requirement. So our growth has to be linked with the growth of Maruti, Suzuki, Toyota and all other customers. So we will look at market situation and we the news coming from Kisil and SIAM are very positive that anything between 3 to 5% on a continuous basis the market can continue to grow.
And one of the news which came yesterday is that India will be within India. The sale of Vickers will be 5 million by 2030 and that will be the largest in the world. Those kind of statements are very very positive. And I think we will grow as the industry will grow, as our OEMs will grow. And that’s why our movement to western region is because we expect that the western region. There will be more growth. We have there are public news about Toyota expanding in Maharashtra and Maruti setting up a new plant. We. Know the exact details, timings etc. But there are positive news about the western region. So that’s how we plan about capacity expansion in the western region. So we are moving as we as we understand from our oem, as we understand our business situation and we as we understand the future, we’ll keep taking our actions.
Unidentified Participant
Okay, thank you sir.
Rajiv Chanana
Thank you so much.
Operator
We’ll take our next question from the line of Manoj Bahati from Carnelian Asset Management llp. Please go ahead.
Manoj Bahety
Hi, good evening Rajiv.
Rajiv Chanana
Good evening. How are you sir?
Manoj Bahety
All well sir, all well. Two, three questions from my side. See as you mentioned that our capacity for manual gear it is starting in July and also ceps in July CVJ also in July. So as this new capacity comes into play, I just wanted to understand whether our all fixed admin cost, it will also grow proportionately or you will see with the ramp up good operating leverage once you commence this facility. And also is there any expenses pertaining to these facilities right now forming part of our P and L which is not revenue generating right now.
Rajiv Chanana
So I don’t think the admin cost should go up because that’s already planned. In terms of our insurance cost, in terms of our rates and taxes, in terms of our indirect manpower, SGA manpower, we don’t see any change happening there. In fact you know when we look at the line readiness, you know we have, we are already training people for that line. So there are people who are getting trained on that line without any production happening.
So second thing, a lot of activities are happening. For example we spend lot of money on product development. Just to give you a number, 112 million we spent on testing charges for the new product development. All these products, three, four products on which we are working, there’s a huge expense which we have incurred during the current year. So these expenses are one time will not impact your profitability for next year.
So rather my understanding is that it will be a positive scenario as the production will start and the lines get started getting used only increase will be the depreciation. Because currently these lines are not capitalized though they are ready for production. But all other expenses like employee administration, cost etc will not change. I think at least in terms of percentage of sales this will definitely improve in future.
Manoj Bahety
Got it? Got it. Second question is just extension to previous participant question. As your Jtech Japan they are like planning for almost 1800 crore kind of capex in India. So does it mean that there will be a new product introduction also on that along with that Capex or that Capex will happen on the existing products and along with that? Because I think on the exports generally it is long gestation. Like if you have to start preparing today for at least like next 12 to 18 months. So is there any discussion happening on incremental exports also along with that as well as on the new product introduction.
Rajiv Chanana
So primarily you know, at this point of time, even though as I was explaining you, there is a limit available, like some extra money is available because my total will add up to 1500 and we got flexibility up to 1800. So there is some flexibility available because these are more like limits assigned to different reasons based on our planning for production etc. So we have some opportunity. But at this point of time we do not have any concrete plan of launching any new product in India because CVJ need to stabilize at least for one more year and we want to expand that not only to Multi and Toyota, we need to expand to other customers also.
So this is where we are struggling and we are working and we want this to be a big success story for India and this is a possibility and we are very, very hopeful about expanding cvj. There are several parts of CBJ which can be, they can. There are possibility that, you know, over a period of time, not only the full Banville gear, there is a possibility that we can start supplying some components also to overseas entities. So those opportunities are always under discussion at all point of time once the people have, you know, the way the people have explained that they want to strengthen the sites and promote India as a global side which means that there will be more opportunities available.
We will keep on discussing on this. So that’s all I can say. But we will keep reporting to you as we get another opportunity on the table. We’ll definitely keep reporting to you sir.
Manoj Bahety
Because I think Rajiv, the 1800 crore kind of Capex on a current base of fixed assets which we are having in the balance sheet is a big one. And when your parent is making this announcement and they are also saying that they want to make Jettech as like global hub. So in that means is there any futuristic discussion happening at least on the export side? Because I think domestic market, whether it will be able to absorb output of 1800 crores unless it is supported by exports.
Rajiv Chanana
You are right now we, you’re right, we have, we should be looking at exports simultaneously. It’s not that we are ignoring that. Opportunity we will keep on, we’ll keep trying to explore that opportunity as well. But yeah, you know the current expansion which I told you for which we are spending about 759 crores that will be for orders which we have visibility, you know, over and above that, you know will be primarily expansion in Gujarat which will happen which will start from 27 kind of in 27, 28. And there we will keep looking at what are other opportunities available. So it will be phase one and phase two kind of a scenario. So phase one, I’ve already explained you today because I have visibility. Phase 2 I cannot explain at this point of time. But we are hopeful. Yeah. And that’s why we have kept our resources lined up for that.
Manoj Bahety
My another question is on cvj. So CVJ how we are seeing the margin component because right now we are just operating one line that to attach suboptimal capacity utilization and hardly we are there on the replacement side which is a higher margin. So on CVJ like how do you see the margin outlook going forward?
Rajiv Chanana
So as you know the new product will be a better product. And we expect that from the current level of margin the margins will improve once we supply or start supplying for a bigger vehicle. The technology is slightly different for which we have, we have already done all the testing and development work. The pricing will be better compared to the one which you are supplying now. So profit margin in the CVJ category will improve from the current levels
Manoj Bahety
And replacement part.
Rajiv Chanana
Say again sir.
Manoj Bahety
Replacement market cvj.
Rajiv Chanana
We will wait. We’ll wait. We. We need to strengthen ourselves first with oem. We are not hurrying up that you know, because. But definitely that’s an opportunity. We know GKN profitability is huge because they do a lot of supplies to the aftermarket. But we are aware about that. But it’s not on the table at this point of time. Let us establish for the next one or two years, one year or so with OEMs cost.
Manoj Bahety
And one last question, Rajiv ji, I have see margins have two components I think cost part and one off part. You have explained pretty well in the presentation. The second is the competitive dynamics in the market. The kind of competitive intensity which is there which will drive your gross margin. So when you are having a negotiation or discussion for the fresh products, new products, how do you see the margins in the new products which are getting introduced? The gross level margins visa with your existing contracts.
Rajiv Chanana
We expect these to be better sir. Despite competition being there. We expect that the margins will improve two ways. Not only through the customer negotiation but also that we are. Able to do our own cost reduction activities. We know that we have targets set for different cost levels. We expect that that’s a very serious business here. And the way we conduct our cost of a and other activities. We are very very sensitive that it’s not only that the customer who should improve our profitability. We are also responsible to take necessary action to improve ourselves. We expect that our employee cost will reduce next year. We have optimization plans on the table. We know that how to contain our administration expenses and ensure that we are able to fully utilize our assets up to 100%. So many, many things are on the table. Management is very very sensitive. What optimal utilization of the available resources. We’ll make sure sir, the profitability will keep improving.
Manoj Bahety
Great. Rajiv ji, thank you for taking my questions and wish you all the best.
Rajiv Chanana
Thank you so much.
Operator
Thank you.
Rajiv Chanana
I think we have time is over so can we close the meeting with a closing comment from Poojeevarasan?
Operator
Sure sir, please go ahead.
Unidentified Speaker
Thank you so much. Okay. Good evening. My name is Huyosuke hujwala, director of Jtech3 India. Nice to meet you. I would like to thank everyone for joining on this call. I hope we have been able to respond to all your questions adequately. We are really positive about growth in automotive sector and wood. Continue with our effort to expand to meet industry requirements. Thank you very much and stay safe and stay healthy. And thank you once again for joining with us.
Operator
Thank you on behalf of jtech India limited That concludes this conference. Thank you for joining us. And you may now disconnect your lines.