Minda Corporation Limited (NSE: MINDACORP) Q2 2025 Earnings Call dated Nov. 12, 2024
Corporate Participants:
Aakash Minda — Executive Director
Vinod Raheja — Group Chief Financial Officer
Analysts:
Prateek Ladha — Analyst
Raghunandhan NL — Analyst
Shridhar Kallani — Analyst
Nihal Shah — Analyst
Jay Kale — Analyst
Nandan Pradhan — Analyst
Unidentified Participant
Shweta Deshmukh — Analyst
Shailly Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Minda Corporation Limited Q2 FY ’25 Earnings Conference Call, hosted by Nirmal Bang Institutional Equities Private 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. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Prateek Ladha from Nirmal Bang Equities. Thank you, and over to you, sir.
Prateek Ladha — Analyst
Thank you, Joshua. Good evening. On behalf of Nirmal Bang Institutional Equities, I welcome you to the Q2 FY ’25 Earnings Call of Minda Corporation. From the management team, we have Mr. Aakash Minda, Executive Director; and Mr. Vinod Raheja, Group CFO; Mr Sameer Sharma, Senior VP and Group Head, Strategy and M&A and Mr. Nitesh Jain, Lead Investor Relations.
I now hand over the conference to Mr Aakash Minda, for his opening remarks. Over to you, sir. Good afternoon. Thank you very much, Prateek, and I thank Nirmal Bang Institutional Equities for hosting this call. Good afternoon, everyone, and welcome to the quarter two and H1 FY ’25 earnings conference call from Minda Corporation Limited. I hope you’re all doing well. It is a pleasure to connect with you all today and I look forward to presenting our performance for the quarter and offer insights into the recent developments. We will begin with an overview of the industry performance, followed by a detailed discussion of Minda Corporation’s financial and operational results for the quarter. In quarter two FY ’25, industry growth has been moderate with the two-wheeler segment leading in demand. The passenger vehicle segment experienced a slight decline, reflecting softer market demand. While the utility vehicle category showed robust performance, underscoring strong consumer interest in the SUVs and multifunctional vehicles. The commercial vehicle segment faced challenges due to a high date [Phonetic] effect, prolonged monsoon delays and adverse weather in all which constrained the market activities. Coming to the company performance highlights, I am very pleased to share that Minda Corporation continued its journey of balanced growth. The company achieved highest ever quarterly revenue. The revenue from operations for the quarter were INR1,290 crores, an 8% year-on-year increase and 8.2% quarter-on-quarter increase. In domestic, OE business performed better than the industry, though it faced some headwinds due to subdued export demand from the European market, slowdown in ASEAN markets and downturn in the commercial vehicle segments. In terms of profitability, for the quarter, the company reported its highest-ever EBITDA in value terms at INR147 crores at an EBITDA margin of 11.4%. PBT stood at INR96 crores with a PBT percentage of 7.4%. PAT margin was INR74 crores with a PAT margin at 5.8%. Now, let me take you through the key developments during the first half of the financial year. In the quarter two, lifetime order wins surpassed INR2,400 crores with EV platforms making up over 25% of these order wins. In the first six months of financial year ’25, the company’s order book exceeded INR4,750 crores, reflecting our expanding product portfolio, product premiumization and rising demand for IT and EV products across segments and geographies. To meet this growing demand, the company is coming up with four new facilities, two in diecasting, one in the instrument cluster division and one in the wiring harness component division. In line with our strategic vision, Minda Corporation has also acquired a 24-acre land in Uttar Pradesh for future expansion. The company also signed a technological license agreement with Sanco, company from China to enhance its wiring harness product portfolio in line with offering our complete system solutions in the EV segment. I will now take you through the presentation and cover the key highlights of the quarter two and first half of the financial year ’25 performance. I request you all to now look at the presentation uploaded. From the Page 2, which shares Spark Minda at a glance. In the financial year ’24, we recorded INR4,650 crore company with INR514 crores of EBITDA, 28 manufacturing plants, 17,000 people, five business verticals, customers spread across the world, focused on engineering, products, partnerships and stable financial structuring. Moving on to the next slide, which shows the Indian automotive industry performance. In the quarter two FY ’25, the industry overall grew by 8.8% where two-wheelers grew the highest of 12.5%, passenger vehicles were almost flat. Three vehicles grew by about 6%, commercial vehicles de-grew by about 13.3% and tractors were also almost flat, but grew by about 3%. In the two-wheeler space, the premiumization trends remain in the focus with premium two-wheeler segments in the demand. The expectations of good monsoon and festive season is likely to grow demand further in the H2. Passenger vehicles showed a slight decline during the quarter due to softer demand in this segment. However, the utility vehicle category showed its overwhelming performance during the year. Commercial vehicle growth was lower due to various factors, including extended monsoons as well as the higher base. The tractor segment showed some signs of recovery with expectations of above average monsoon is also likely to demand in the next half of the year. Moving on to the next slide, which is the key highlights and the key strategic developments. On the left side, which is the quarter two developments for the financial year. The company delivered its highest ever quarterly revenue with 8% year-on-year increase. EBITDA margin stood at 11.4%, increased by 38 basis points. Total lifetime order book won was INR2,400 crores with EV constituting to about 25% of the total order book. The company signed a technical license agreement with Sanco, and required eight new patents, taking the total patents to 285, showing our commitment towards innovation and investment in the technology and R&D. For the first half of the year, the revenue grew by 9% despite macroeconomic challenges. We posted highest ever EBITDA margin of 11.2%, growth of 38 basis points. Total lifetime order book in the first half was about INR4,750 crores and we signed two strategic partnerships and total patents in the first half were filed about 14. Going on to the next two slides, which shares about the technology license agreement signed with Sanco. This partnership is for the products [Indecipherable] to the wiring harness segment and the backward integration of the connectors in the high voltage and the EV area. This partnership will deliver comprehensive and customized electrical distribution systems for the electric vehicle market and there will be various new products, which we’ll bring into the portfolio of Minda Corporation such as the connectors, charging gun assemblies, sockets, bus bars, cell contact systems for batteries, power distribution systems and battery distribution units. We are further expanding in our brownfield facility in our component division to come up and offer these products to the Indian market and even exports. Moving on to the next slide shows the quarter two financial numbers, which shows our operating revenue increased by 8% year-on-year. Gross margin increased to 37%, which is 38 basis points. EBITDA stood at INR147 crores. EBITDA margin was about 11.4%. PBT was INR96 crores at 7.4% and PAT was INR74 crores at 5.8%. Moving on to the next slide, which shows the year-on-year and quarter-on-quarter growth momentum on the financial highlights. On the top of the table shows the quarter two numbers and the bottom part shows the half year numbers. If you look at again on quarter-on-quarter and year-on-year movement, on the quarter-on-quarter, we also moved from INR1,192 crores to INR1,290 crores. In the half yearly from crore INR2,270 crores, it grew by 9% to INR2,482 crores. At EBITDA, to show our balanced growth, our EBITDA for the fifth straight quarter has moved from consistent 11% to 11.4% in this quarter, marking 11% jump from quarter-on-quarter basis and 12% jump from year-on-year basis from INR131 crores EBITDA to INR147 crores EBITDA. On a half yearly basis, the EBITDA has grown from INR246 crores to INR278 crores from a 10.8% margin to 11.2% margin with a growth of 13%. PAT has dropped from INR59 crores from previous year to INR74 crores, showing a growth of 26%. And at a half yearly basis has grown from INR104 crores to INR139 crores, showing a growth of 33% on year-on-year basis. Moving on to the next slide, which is the business vertical performance for the quarter two and first half. On the top-left, it shows the Mechatronics, aftermarket and other businesses, which has grown from INR575 crores to INR639 crores on year-on-year basis which is at 11% growth. And on the right side, on a year-on-year basis on the first half, it has grown by 12% from INR1,088 crores to INR1213 crores. The major factors that led to growth was the strong demand in the domestic two-wheeler segment and premiumization of the existing products. However, it was challenged by subdued export demand and slowdown in the ASEAN market. In the bottom part, which is the Information and Connected Systems, the sales grew from INR621 crores to INR651 crores, marking only 5% growth. Major challenges were due to the commercial vehicle downturn. And on a half yearly basis, we grew from INR1,182 crores to INR769 crores, marking a 7% growth. Moving on to the next slide, which is the revenue breakup for the year by product and by geography and end markets. If you look at quarter two ’24 to quarter two FY ’25, wiring harness continues to be about 30% to 35% and this quarter is 32%. Lockset and vehicle access about 23%, die casting division, which is DCD, stands for about 18% as this segment is growing as well as our instrument cluster business is also continuing to grow, which is now contributing to about 17% and other new products, which is the EV products and other products such as the sensors are also moving towards 10%. By geography, Indian domestic market continues to be on the growth, which is contributing to about 88%. Pure exports to Europe and North America is about 8% and South Asian market, which is the Indonesia and Vietnam are about 5% of the revenues. By end-market, two-wheeler and three-wheeler constituted about 46% to 47%. Commercial vehicle is about 26%, aftermarket is about 11% to 12% and passenger vehicle is about 15%. On the next slide of consolidated leverage position and the financial snapshot of the first half, the net worth has increased from INR1,981 crores to INR2,102 crores in six months. Long-term borrowing has reduced from INR203 crores to INR170 crores. On a short-term borrowing has increased by INR20 crores from INR145 crores to INR164. Our gross debt has come down by about INR14 crores, making our total net debt to INR160 crores and net-debt to net-worth is about 0.08x. Next, capital employed at INR1,873 crores and our ROCE is about 21% with our focus to increase this to about 25%. We now move to the last section on the ESG and transforming towards sustainable mobility. At Minda Corporation, we are focused on sustainable operations, care for people, ethical businesses, inclusive growth and responsible value chain. Further details can be taken online from our company website. On the next slide, we continue to give back to the society by various — our various activities and initiatives such as the World on Wheels for training people and students across villages for empowerment of PWD people and employing them at our facilities and plants. Our prison programs, which are the most exclusive programs in India and other activities as well. The last slide, which shows about awards and achievements, where our customers and industry bodies continue to award Minda Corporation on account of quality, technology, development, employment and HR practices. Beyond this, there is a group company profile and presentation, which I believe and I request that all of you can read and understand more and if there are any questions, we’ll be more than happy to answer. With this, I will now request to open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you so much. We will now begin the question-and-answer session. [Operator Instructions]. The first question is from the line of Raghunandhan NL of Nuvama Research. Please go ahead.
Raghunandhan NL
Thank you, sir, for the opportunity. Congratulations on strong set of numbers. Firstly on Sanco, now that you are working towards building a series of products, which you highlighted. Number one is, how does it open new revenue opportunities for you? And number two is, in your efforts relating to localization, how can this help and how can the percentage of localization increase?
Aakash Minda
Hi Raghunandhan. Thank you for your question. So, Sanco is a very well-known company in China, supplying to almost all the OEMs in China, whether they are German, Japanese or Chinese or even American OEMs. So, this product category is in our short-term and long-term plan for doing backward integration and making our own competitiveness and building our company capabilities for connection systems. While the EV penetration is increasing, we are focusing on how we can continue to localize and backward integrate and build our competitive edge.
There are various products that are part of this alliance as a first step in terms of the technical license agreement. As I mentioned before, there are these high voltage connectors, then there are the EV charging guns and charging sockets, bus bars, battery cell contact connectors and various other product lines. We are already working with various customers in two-wheelers, three-wheeler, commercial vehicles, passenger vehicles OEMs in India, where we’ve already received RFQs and almost towards business nomination as of date for increasing our competitiveness. So this is going to be as a system solution offering. And with an immediate EV penetration that is there in the current market, this can increase our business potential to more than INR1,000 crores in the current products that are offered in the first phase.
Raghunandhan NL
So this INR1,000 crores is the potential revenues you are looking at, sir?
Aakash Minda
No, this is the current immediately available — total available market in the current products that are there as well as new market that is available.
Raghunandhan NL
Understood, sir. And given that Sanco has tie up with German, Japanese, American OEMs, would that also — would you be able to leverage Sanco’s relationship to win new businesses?
Aakash Minda
Yes, of course. So, we already have received various RFQs from Sanco’s customers in India. So, we are working with them in order to cater to these customers also.
Raghunandhan NL
And sir, with the efforts on localization and also your revenues are seeing a decent scale improvement plus your ongoing cost reduction efforts, you have already posted a wonderful margin this quarter. How are you in the journey towards the 12% margin target?
Aakash Minda
So thanks for that question, Raghunandhan. See, as Minda Corporation, we are pivoting the organization to be a more stronger company and being more competitive in our vision to create long-term shareholder value creation. So, we are focusing on quality of revenue by focusing on sustained customers. We are focusing on quality of product mix with the new order book and new products and technology that we are launching. We are focusing on quality of earnings, which are more economically value-accretive to Minda Corporation. So, we are taking conscious call on all of these parameters when we are approaching and winning any new business or customers going forward.
In spite of within our core, you know, we are able to deliver about 8% growth. We are not in the race or sales growth race. We are focusing on how we can be more competitive and build our core. And while building our core, we have been able to deliver 8%, which I am very confident that with the initiatives and the investments that we are doing, we are going to grow this even beyond. Of course, in one or two segments maybe in a quarter, for example, this year, this quarter, the commercial vehicles may not have supported us, but with the right customer mix, with the right product mix, we are building a more sustainable and long-term company.
So in the line of our — with our commitments that we have made in the past few quarters and years to grow to about 12%. In the last five quarters, we have sustainably and consistently delivered a higher than 11% EBITDA margin, while growing our top-line as well, which is again in our commitment to build our core and being more competitive.
Raghunandhan NL
Got it, sir. Thanks for that comprehensive answer. Minda along with HCMF is setting the new plant in Pune to be commissioned in FY ’26 for Sunroof Closure systems. Can you talk about how the status, how that work is progressing? Any orders you can talk about?
Aakash Minda
Yes. So, as we’ve already explained before, we are under discussion with various customers. The customer models that are expected to launch soon with our HCMF customers being in India. We are working with them aggressively. The facility that we have already started commissioning with our partners is underway. Also with the other products that HCMF is offering, we are under advanced discussions with Indian OEMs to win those products and start SOP maybe two years or in the upcoming models.
Operator
Sorry to interrupt. Yeah, sir [Speech Overlap]
Raghunandhan NL
Got it, sir. Yeah, I’ll fall back to the queue.
Operator
Yeah. Thanks so much. The next question is from the line of Shridhar Kallani from Axis Securities Limited. Please go ahead.
Shridhar Kallani
Thank you for the opportunity and good evening, Aakash sir. My first question is continuing with the previous query regarding Sunroof and
Closure systems. So are we on track for the plants to be commissioned in FY ’26?
Aakash Minda
Sorry, we can’t hear you clearly,
Shridhar Kallani
I am asking are we on track to commission the plant in Q1 FY ’26, the Sunroof and Closure systems [Indecipherable].
Aakash Minda
Yes. So yes, we are in line with the quarter one. Of course, there could be maybe a month or two delay. But, yes, we are in line in order to move forward and set up the facility. Hello.
Operator
Thanks so much. The next question is from the line of Nihal Shah from Prudent Corporate Advisor. Yeah, please go ahead.
Nihal Shah
Hello. Thank you for the opportunity and congratulations for the great set of numbers. So, as you’ve alluded as well that the four-wheeler [Indecipherable] passenger vehicle number has been a bit soft for this quarter. So, how do we see ourselves positioned in such a difficult time for the auto industry as a whole and how do we — how do we expect ourselves to grow in such an environment? And how much of the premiumization trend do you feel is behind us now?
Aakash Minda
So thank you, Nihal, for this question. As I mentioned, yes, see, in the long run, the automotive industry in India, particularly is expected to do very well. While there are a lot of macroeconomic factors, which shows that industry is expected to do very well, all the customers which are the manufacturers are enhancing their capacities and many of the Tier 1 component players or automotive system solutions like us are also expanding capacities. So, we have been directed by our customers to invest in building capability, competencies and capacities which we are doing across segments and across products.
Also for the order wins that Minda Corporation has done, we are creating and setting up more facilities, as I already explained in this call and before, in order to deliver to the order wins that are already happening.
Yes, in a quarter-on-quarter basis, maybe in the mid-term one-quarter or two-quarter, one segment may not do as better as the other one. But in the mid-term, the long-run, the automotive industry is expected to do well. Of course, with the export opportunities that are coming up from the Indian space, it’s something that Minda Corporation is looking-forward to harness.
Our growth drivers, as we have already shared before are going to be three or four. Number one is the product premiumzations across our product segments. So number one is the vehicle access systems, where we are offering new and new products as well as the annual selling price of our products are increasing. In this particular category, we have added new products in terms of the power tailgate, the flush door handles, the different latches coming in and other some products which we’ll be launching soon.
Yeah. In the second business domain, which is the Electrical Distribution System, for not only the wiring harness, but also other connectors, power distribution unit, battery distribution unit and other products like Sanco that we are looking at for the offering to the market as system solutions offering.
The third is the die casting or the lightweighting where is more four-wheeler driven and we’ve already won a lot of orders in terms of motor housings or battery casings and other such technologies even for domestic and export.
Fourth is our Driver Information system, where we are offering a system solution product, so not only standalone clusters, but cockpits, heads-up display and other technologies coming up increasing with it value and our newest vertical, which will be electronics, which offers products like shark fin antenna, telematics, intelligent transportation system, EV products as well, there’s also adding new product lines. So this is the first category of products.
Second is the markets. So the additional new markets in terms of exports. Third is the customers. So, deeper penetration will be existing and new customers that we have in India are across segments. So, these are the three, four areas on how Minda Corporation is expected to grow further in terms of the market.
Of course, as I mentioned, we are building our — we’re taking our conscious call in terms of quality of our revenue, quality of our product mix and quality of our earnings putting all together to become more agile going forward.
Nihal Shah
Okay. Thank you very much for the detailed answer. And what is the level at which we expect our debt to stay given the level of capex that we are expected to do in the next couple of years?
Aakash Minda
So, I will ask our CFO to take this question.
Vinod Raheja
Well, we are net zero debt company if you consider the value of investments that we have. And over a period of next two to three years, we feel that we should be doing capex of about INR300 crore INR350 crores per annum. And given our internal accrual and cash flow generation, largely this should be funded through internal accruals only.
Nihal Shah
Okay. Okay. Thank you very much.
Operator
Thank you so much. The next question is from the line of Jay Kale from Elara Securities. Please go ahead.
Jay Kale
Yeah. Good evening, sir and thanks for taking my question and congrats on a good set of results. Sir, my first question was regarding your product segment. If I see your locksets division contribution on a Y-o-Y basis has declined. And I understand you would be — locksets is mainly two-wheelers and while segment-wise your commercial vehicles would have seen pressure. So just wanted to understand what would be happening in the locksets division? Are you seeing some kind of slowdown in terms of the adoption of the smart key solutions or what exactly is the scenario over there? And in similar lines, we’ve seen a very strong growth in your DCD division. So if you can just throw some light on are we gaining share over there? Are there any addition of new products, new geographies, anything on that side.
Aakash Minda
Yeah, hi, Jay. So again, our SSD division continues to grow, but it is just that the other divisions are continuing to grow a little faster. So, that’s the only thing. Of course, the smart key penetration continues to align with our forecast before, particularly in the two-wheeler area and now going into other segments. So we have for the first time launched new products in other vehicle segments, which you will see in the upcoming months with new vehicle launches. Due to confidentiality I can’t share, but we’ve been present in the two-wheeler and four-wheeler space and now you will see in other segments also coming out of products — coming out of Minda Corporation.
So coming to the die casting division per se, that is a division which is growing fast as because of the kit value offering that is there, particularly in the EV segment and the four wheeler space. So, here we are offering a good amount of exports business to Europe and US markets, both for ICE as well as EV powertrain products and further penetrating into the Indian four-wheeler market as well. So these are our initiatives that we are seeking for the die-casting and we are also coming up with two new facilities in — one in West and one in North for catering this demand and expanding into other segments within the aluminum cast business.
Jay Kale
Okay. Understood. And also on your export side, we have seen that being a drag on your revenue growth for last few quarters. Now it seems to have stabilized in terms of contribution. So, how do you see exports going forward? Are we — have we seen the bottom over there or there is still some more pressure going forward?
Aakash Minda
So as far as exports are concerned, I think compared to last year until previous quarter there was a year-on-year decline, but now I think we are flattish when it comes to the states. Of course, the order intake continues. However, we do not see a higher uptake in the next six months when it comes to new exports, primarily in Europe, region, various macroeconomic factors. And now with the new elections in the US, we have to really see on how this market pans out, but we have put in our actions in place in order for dual shoring, near shoring when it comes to the opportunities in the American markets.
Jay Kale
Okay, understood. And also just lastly on the TLA with Sanco. Will you be — of course, you had mentioned about connectors, but you’ll be providing the entire high voltage battery system — Electrical Distribution System, rights, along with all the components. So, when you do RFQ or you have an order from the OEMs, it will be directly to the OEMs and not necessarily the — as a Tier 2 supplier to the wiring harness players who would be taking your connectors. Is that understanding correct? You’re providing the entire high-voltage system to the OEMs?
Aakash Minda
It is both ways. In most of the cases, it is a direct to OEMs. And in some cases, yes, it could be directly to — it could be to Tier 1s also. And again, for the battery pack, I would just like to correct you, we do not — we will not make the battery pack. It is because contact systems that go through the battery, which of course will be a Tier 1 supply. But the connector systems, the charging guns, the BDU and the DDUs [Phonetic] will exactly go to the OEMs.
Jay Kale
Yeah, I meant to say battery-wise that correct. Okay. But just wanted to understand, wouldn’t the — you know larger wiring harness players would also want to make the connectors or localize the connectors themselves rather than buying them out or are you seeing a kind of request from larger wiring harness players to get them trying to source connectors from outside players like you?
Aakash Minda
So it depends on the customer, right, where the directed source is and how we are able to incorporate these products into customer drawings. So, yes, that’s what we’ve been able to do. So, as explained said, we’ve already received various inquiries and in anadvanced stages of closure of businesses while putting our products into the architecture of the vehicle. So, that will depend and whether it will be from us or it could be others. But since having the localized opportunities in India, we have the early-mover advantage, you can say, in order to offer the products to the customers in the design [Technical Issues].
Jay Kale
Understood. And does this accelerate your journey of [Speech Overlap]
Operator
Sorry to interrupt. Sir, I just please request you to join the question for questions?
Jay Kale
Sure. I’ll come back [Speech Overlap]
Operator
Thank you so much. The next question is from the line of Nandan Pradhan from Emkay Global. Please go ahead.
Nandan Pradhan
Yeah. Hi. Am I audible?
Aakash Minda
Yes.
Operator
Yeah.
Nandan Pradhan
Hello, sir, thank you for the opportunity and congrats on a good set of numbers. My first question is along the lines of the smart key order, we had mentioned in the Q1 call that it was meant to start from this year, so this quarter. So just wanted to understand the progress on that.
Aakash Minda
Smart key orders continue to get deeper penetration. And depending on the SOPs of the of the customers that are there. Of course, in quarter one, now we had sales, you know, the two-wheeler OEMs, but in quarter two, our sales to Japanese OEMs have also started. So, yes, that is the SOP or the start of production has already happened within the quarter two.
Nandan Pradhan
Okay. And sir, secondly, on the TLA with Sanco, since we are developing it locally, just wanted to understand would the materials would be also sourced locally or would there be some level of import content in these products?
Aakash Minda
So there is a localization roadmap always, right? And so we already have that aligned with our customers and partners on how we are going to have phase wise localization, but to achieve the higher domestic value-add from day one, we will be achieving that as per the government requirements.
Nandan Pradhan
Okay, sir, I think. Thanks. That’s it from my end. Thank you so much and all the best.
Aakash Minda
Thank you.
Operator
Thanks so much. The next question is from the line of Parag Thakkar from Parag Thakkar from [Indecipherable]. Please go ahead.
Unidentified Participant
Yeah. Hi, sir. I’m audible?
Aakash Minda
Yes, Parag.
Unidentified Participant
Yeah. Thanks a lot for the opportunity and congratulations for a very strong set of numbers. Sir, basically what we are observing is that as you rightly said that macroeconomic environment is tough and so the revenue growth is, say, below 10% at around 8%. But say you managed to grow your EBITDA by around 12%. So do you feel that this trend will continue because of, as you rightly pointed out, that you are are focusing on quality of growth, so the EBITDA growth will outpace the revenue growth. That was my first question.
The second question is, we have seen good numbers in October months from some of the two-wheeler companies and some of the OEMs in the four-wheeler also like to be specific, M&M and all. So, do you see that at least in second-half, the revenue growth will also accelerate better than what we have seen in Q2?
And the third thing, which was — third thing, I’ll just ask that, that for example, many of your good customer OEMs like M&M and all are launching electric SUVs and all. So whether we’ll be also part of their supply chain and whether content per vehicle will also increase in those kind of models which are going to be launched by OEMs like M&M to be specific.
Aakash Minda
Yes, perhaps I’ll answer the last question first. Yes, we are part of the various products that are going into the battery electric vehicle of our customers. And yes, we continue to have a deeper penetration in line with our commitment to grow the four-wheeler products in our customers and our product range. So yes, you will see the products when that product launches.
On your first and second question, when it comes to the revenue growth and the EBITDA growth, as I stated, we are in the midst of pivoting the group and the company towards making it a more competitive organization, in line with our commitment to outpace the industry as well as grow in the line of the industry growth.
So while the revenue has — domestic revenue has grown ahead of the industry. However, some factors like we sport [Phonetic] and the commercial vehicle segments have pulled us — pulled us back. Also when it comes to our quality of revenue with sustained customers is very important. While we had won some orders in the previous years from large two-wheeler EV OEMs, but we have not seen light in those customers due to some reason. As a customers they have not started production yet. So, that is, slightly most important where we are pivoting.
Second is the quality of the product mix, which is going to give us higher revenue in terms of the order book that we have done in past and we have been very, very conscious in terms of the customers and the products that we are [Technical Issues].
And third is the earnings which you mentioned. Quality of earnings is the focus for being economically more value-accretive. So, in this quarter and the last five quarters with our — with our commitment to consistency and sustainable EBITDA numbers, we’ve been growing our EBITDA value, absolute value as well as percentage quarter-on-quarter for the last five quarters and more.
So, yes, we will — and we are going to achieve towards 12%, but most important for us is consistently and which is what we are delivering. So in the process of building our core, I am very confident that achieving the double-digit sales growth number is just for us very mean. But in this overall scheme of being competitive, I think achieving an 8% at the moment is something that we are where we are. So very, very positive in terms of the future outlook and taking this organization towards a double-digit growth as well as the 11.5% to 12% EBITDA numbers.
Unidentified Participant
Sir, last question, congratulations for achieving 20% ROCE and of course, the net debt is also very negligible. So, sir, definitely you will be looking out for inorganic opportunities also. So, — to grow your business. One thing which as a shareholder, as a investor, I would like to say is that the — whenever you do any organic — inorganic acquisition or something, the ROCE metrics will be kept in focus, right? You will not compromise too much on ROCE, even if you are exploring inorganic opportunities, right? Because see definitely EBITDA growth is paramount of course and the PAT growth of course, but ROCE, you are saying that you are aspiring for 25%, which makes us very happy as a shareholder. So, while exploring inorganic opportunities, ROCE will be a metric, which you will consider, right?
Aakash Minda
Absolutely, we have very strong financial prudence metrics internally approved by board of directors on capital allocation and any kind of inorganic or capital allocation cannot dilute our ROCE. So, ROCE above 20% is our prime capital allocation financial [Technical Issues].
Unidentified Participant
Excellent, sir. Thanks a lot. All the best.
Aakash Minda
Thank you.
Operator
Thank you so much. The next question is from the line of from Shweta from Arihant Capital Markets Limited. Please go-ahead.
Shweta Deshmukh
Hello, am I audible?
Aakash Minda
Yes, yes, you are.
Shweta Deshmukh
Yeah. Good evening, sir. There is a couple of questions with regard to export revenue. So, with export sales like flat year-on-year, what additional measures the company is taking to boost the demand in Europe and the USA now, particularly in response of — in response to the subdued demand for die casting business.
Aakash Minda
Yes, Shweta. We are taking various measures. Of course, I will not be able to share them due to our competitive advantage in that and, you know, but yes, we are always on creating new avenues and new opportunities on how we can grow our export market, now whether for the existing order ones already or for the new businesses.
Shweta Deshmukh
Okay. So any specific growth targets for exports over the next 12 or 18 months?
Aakash Minda
Ma’am I can share with you that in the mid-term to long-term from current about 7%, our growth from the exports is expected to be — and our target rather is to be about 10% to 15%. And in that respect, we already have the order book in place and we’re continuously booking orders. I may not be able to comment in the next 12 to 18 months as there are various macroeconomic factors that are [Indecipherable].
Shweta Deshmukh
Okay. And sir, could you please provide the breakdown of export revenue by product segment, if possible?
Aakash Minda
Thank you. Ms. Shweta, if I may request you could get in touch with our IR team after this for a detailed breakup and we’d be happy to share whatever we can.
Shweta Deshmukh
Okay. Okay. Sure, sir. Thank you so much.
Aakash Minda
Thank you.
Operator
Thank you so much. The next question is from the line of Shridhar Kallani from Axis Securities Limited. Please go ahead.
Shridhar Kallani
Thank you for the opportunity. Am I audible?
Aakash Minda
Yes, Shridhar. Good evening.
Shridhar Kallani
Yeah, good evening. So sir I have a question regarding the order book where you have mentioned that you have INR4,700 crore and — INR4,750 crore of order book. If you could help us understand what is the end yser segment mix for the same and annual peak revenues that we can generate from this order book.
Aakash Minda
Yes, the annual peak revenue typically is divided by four or five and the peak value basically starts coming in from, let’s say, second year after startup production. And again, in the automotive, once you win the business, typically new startup production happens about 12 to 18 months from where we win the business. So if we won the business in H1 for about INR4,700 crores divided by 4 or 5, you can say about INR1,100 crores. That would start coming in from the 18 to 24 months from now. And the peak value should come into two-and-a-half years from here on. But out of this INR1,100 crores, it also depends on how much is replacement business and how much is new business. So, that also plays a factor. And typically it’s about 60/40, 60 is new business and 40 is replacement business.
Shridhar Kallani
Understood. And sir, what would be the end-user segment mix like in the order book two-wheeler order book — percentage for four-wheeler and commercial vehicle, what would be the mix?
Aakash Minda
So it is in line with our current revenues. So again, two-wheelers and three-wheeler continues to be, I think about 40% of the total order book. And four-wheelers is somewhere about 20% and the rest is the commercial vehicles and offroad.
Shridhar Kallani
Understood. And does the order book include any orders for the Sunroof and Closure systems?
Aakash Minda
Yes, as I’ve explained before, we are setting up the facility there. So we are under advanced discussions with customers, some of the product launches have been finalized or has been finalized with the customer. So I’ll update as and when we will do that.
Shridhar Kallani
Understood, sir. And my second question was regard to the commercial vehicle business. So we mainly deal with LXCV [Phonetic] segment or LCV segment, sir?
Aakash Minda
We are getting to all the segments of commercial vehicles which is SCV or medium and even higher commercial vehicles. So further details, of course, our IR team can give you, but yeah we get into all these segments on the commercial vehicle, one ton, two ton, 13 tons, 20 tons.
Shridhar Kallani
I understood. So my main reason to ask was at the ground level, how are you seeing the trajectory of the commercial vehicle business going ahead since it has been subdued for quite some time over the past one year. How is the ground level purchase orders or anything you could share your trend view in the commercial vehicle speak.
Aakash Minda
So I would request you to ask those questions to the commercial vehicle OEM manufacturers, they can tell you better. For our customers, I cannot comment, but for the industry outlook, definitely, with the new government coming in and the macroeconomic on the company, the infrastructure expense and the other investments that the government is doing, I think definitely is going to improve. If you see the — before a year, the mining authority as well as the 15% extra in terms of the weightage allowance that the government had done has created extra capacities for commercial vehicle segments.
So as and when you know our policies as well as the — the government changes and increases the expanding — expenditure, I think you will start seeing commercial vehicle to pick up more.
Shridhar Kallani
Understood, sir. And my last question is a bookkeeping question. With regards to employees as a percentage to sales, which we have seen a decrease in this quarter, has there been any appraisals dealing in accounting or there has been some reduction in employees or any major steps that we have taken with regards to the employees?
Aakash Minda
So I will ask our CFO to answer. But on the employee front, all I can share is that as an organization, we are — we value the employees team the most and we are taking various measures strategically to build our talent and capability and competency of people from within — from university be high. So we are taking various measures in order for optimization, better productivity and talent growth from within the organization.
Shridhar Kallani
Understood.
Aakash Minda
Thank you.
Operator
Yeah. Thank you so much. The last question is from the line of Shailly Jain from Dolat Capital. Please go ahead.
Shailly Jain
Hi, sir. Good evening. Thank you for the opportunity. Sir, where do we stand in terms of localization and what are our targets for next coming one or two years for local — how are we localizing and what steps are we taking on?
Aakash Minda
Hi, good evening, Shailly. That’s a very broad question. So — but if you look at our R&D [Phonetic] is about 63% we are not importing too much, but there are some commodities and components like semiconductors, displays and some connectors that we are currently importing from China or if there are some directed materials from our — from our customers.
As a localization, we as an organization are investing in terms of building our capabilities as well as our supplier mix in order to beat the localization or import challenges and creating competency within India. So, we continue to invest some of these equipments equipments as well as their technology capabilities for offering localized solutions to our customers as end-products, which we are really currently boarding and selling or for our backward integration in terms of the child parts or the component that I explained to you, which open up new avenues for us as a business segment as well as our creating competitiveness for our customers in terms of the electronics or connectors and other such commodities. So I may not be able to give you a percentage or a number on the call at the moment, but we have created a small team in order to focus on reduction in — or increasing localization and reduction in import costs.
Shailly Jain
Perfect. Thank you.
Aakash Minda
Thank you, Shailly.
Operator
Thank you so much. As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Aakash Minda
Thank you very much and once again good evening for joining this call. I would like to again share that Minda Corporation is on the trajectory to honor our commitments for consistent and sustainable growth on quarter-on-quarter and year-on-year basis. We are pivoting and building more competitive organization and investing further in our competency, capabilities and capacities in our manufacturing as well as in our engineering footprint. Our focus is how we can invest and become a technology-led company in India with focus on best operational excellence.
Our growth focus is on how we can outperform the market as well as become the leader when it comes to the financial parameters within the automotive segment. We continue to look for inorganic partnerships and this is going to be driving force for us going forward. Thank you very much for joining us and calling and we’d be happy to take any questions outside. Thank you.
Operator
[Operator Closing Remarks]