Minda Corporation Ltd. (MINDACORP) Q4 FY22 Earnings Concall Transcript

Minda Corporation Ltd. (NSE: MINDACORP) Q4 FY22 Earnings Concall dated May 17, 2022

Corporate Participants:

Jay Kale — Jay Kale from Elara Securities Private Limited — Analyst

Aakash Minda — Executive Director-Finance & Strategy

Ashok Minda — Chairman and Group Chief Executive Officer

Neeraj Mahajan — Group Marketing Officer

Analysts:

Ronak Sarda — Systematix — Analyst

Bhargava — Emkay Global — Analyst

Abhishek Jain — Dolat Capital — Analyst

Noel Vaz — Asian Markets Securities — Analyst

Shashank Kanodia — ICICI Securities — Analyst

Mohit Khanna — Banyan Capital — Analyst 

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q4 FY ’22 Minda Corporation Limited Conference Call hosted by Elara Securities Private Limited. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Jay Kale from Elara Securities Private Limited. Thank you, and over to you, sir.

Jay Kale — Jay Kale from Elara Securities Private Limited — Analyst

Yes. Thank you. Good evening, everyone. On behalf of Elara Capital, I welcome you to the Q4 FY ’22 result conference call of Minda Corporation. Today, from the management, we have Mr. Aakash Minda, Executive Director Finance and Strategy; we have Mr. Ashok Minda, Chairman and Group CEO; Mr. Neeraj Mahajan, Group Marketing Officer; Mr. Vinod Raheja, Group CFO; Mr. Anshul Saxena, Group Head, Strategy and M&A.

I’d like to hand over the call to Mr. Aakash Minda for his opening remarks. Over to you, Aakash.

Aakash Minda — Executive Director-Finance & Strategy

Good afternoon, good evening, Jay. Thank you so much to Elara Capital for hosting us our quarterly and yearly presentation. I would now like to invite Mr. Ashok Minda to give the opening remarks.

Ashok Minda — Chairman and Group Chief Executive Officer

Thank you, Aakash. Good evening, everyone, and welcome to the quarter four financial year ’22 earning conference call of Minda Corporation. I would like to thank you all for joining us on this conference call here today, and hope you are staying safe and healthy.

In the fourth quarter of financial year 2022, auto industry delivered a mixed performance. Revival in economic activity helped in slight demand pickup for commercial vehicles and passenger vehicle segments, while the 2 million investors [Phonetic] continued to post some part numbers. The industry as a whole continue to face challenges of semiconductor shortages and global geopolitical tensions. Even under these circumstances, I am pleased to report that Minda Corporation has continued to deliver strong performance. Our focus is on consistent and sustainable performance. Minda Corporation has achieved highest ever quarterly revenues of INR9,478 million with EBITDA of 11.4% at INR1,078 million.

For the financial year 2022, we delivered a consolidated revenue of INR29,759 million with 25% — 27% year-on-year growth. EBITDA for the full year was 9.9% at INR2,946 million. Profit after tax for the year was INR1,919 million. In line with our current performance, Board of Directors has announced final dividend of 35% which is below 0.017% [Phonetic] per equity share. Total dividend for the year is 50%, which is INR1 per equity share.

Now I would like to update you on important developments of the quarter. The PLI application filed by the company has been approved under the component champion incentive scheme. We have also successfully completed the transaction of Minda Storage acquisition and from this quarter company will operate as wholly-owned subsidiary under the name of Minda Instruments Limited.

To drive the growth at Minda Corporation, our continued focus is on a, driving technology from in-house initiative and global tie-ups; b, operational excellence through cost leadership; c, growing customer and market segment and generating higher free cash flow and right capital allocation. Looking ahead, industry growth prospects is expected to improve further with increasing demand for personal mobility and supported by easing supply chain issues. We at Minda Corporation remain confident in delivering accelerating growth by strengthening the core business and capturing the emerging opportunities.

With this, I would now like to hand over the call to Mr. Aakash Minda to discuss the financial and the operational performance of the company during the quarter and financial year 2022.

Aakash Minda — Executive Director-Finance & Strategy

Thank you, sir. Good evening, ladies and gentlemen. I now request you to look at the slides, which have been uploaded for the quarterly and the annual earnings call. Referring Page 3, I would like to state the highlights for quarter four and financial year FY ’22 performance. Our focus is enhancing the core and deepening capabilities, for the quarter four the revenue growth of the quarter continues to outperform the industry performance. We have improved double-digit EBITDA margins for the third straight quarter on sequential basis.

Total lifetime order book booked in the quarter four has been for INR14,500 million, eight patents have been filed during the quarter, and we’ve been granted PLI application. For the full year, some highlights, our FY ’22 revenue growth has been 25.8% year-on-year despite challenging macroeconomic scenarios and other shortages. Our EBITDA margins increased by 73 basis points to 9.9% for the year ’22. Total lifetime order book in the year was INR59,300 million, 28 patents have been filed in the year and four partnerships have been endorsed in this financial year for technology advancement.

I’d like to now move to the next slide, which is Slide 4, which shows the consistent and sustainable market bidding profitable growth, which is the focus of Minda Corporation. If you see on quarter-on-quarter basis, we have delivered the highest ever quarterly operating revenue at INR9,478 million with a growth of 19.4% on year-on-year basis. On the EBITDA, it’s again the highest ever quarterly absolute EBITDA of INR1,077 million and margin improved by 70 basis points on quarter-on-quarter also highest ever PAT margin from INR75.9 million. In revenue, we’ve grown by 19%, EBITDA we’ve increased by 21%, and PAT has grown by 39% on year-on-year basis.

I would now like to move to the next slide, which shows the overall landscape of Minda Corporation. The revenue has been about INR29,759 million. Our business vertical and key customers are shown on the left, while green customers marked the EV customers. This quarter, we have added Ultraviolet and global Tier 1 as one of the customers for us. We have 32 manufacturing locations and R&D capabilities across various divisions.

I would like to share that we have — over the last one year, we have increased our number of shareholders from 49,200 to 83,653, and the shareholding is on the right side. I would now move to the next slide, which is the revenue breakup for the financial year. If we look at by geography, this is on year-on-year. India contributes majority to about 84%, exports of Europe and North America contribute to about 10%, and Southeast Asia where our plants contribute about 5.5%. By end market, our two wheeler is about 48%, passenger vehicle is about 17%, commercial vehicle is about 18% and aftermarket is about 15%. By business verticals, Mechatronics and aftermarket is about 55%, 56%, and information and connection system is about 43.3%.

I now move to the next slide, which is on the industry performance. If I look at the financial year ’22 growth, the industry had a muted growth of about only 1.2%. And if I look at quarter four, which is on quarter-on-quarter then industry de-grew by about 16.6% [Phonetic], there were of course, supply chain issues globally, global macroeconomic issues, subdued sentiments all across India and infrastructure spending and other replacement demands seem to have also factored in terms of growth. We remain cautiously optimistic about the Indian auto industry due to the low penetration and rising income, but we are also aware of the certainties which will have impact on the automotive demand and supply.

I now move to the Slide 8, which is on the consolidated performance. Our focus on continued momentum of growth and outperforming quarter-on-quarter and year-on-year. The company consolidated net revenue for the quarter four stood at INR947 crores at EBITDA 11.4% at INR107.7 crores. These numbers are including Minda Instruments Limited, I request you to look at the first column on the left. If I compare this from quarter three to quarter four, the growth was about 28.4% in top line, whereas the industry only grew by 2%. Our EBITDA has grown from INR78.7 crores INR107 crores from 10.7% margin to 11.4% margin.

Our PBT has increased from 6.7% to 7.6%. If I compare year-on-year growth, INR794 crores is now translated into INR947 crores, which is a growth of 20%. EBITDA margin has grown from 11.2% to 11.4%. If I look at our numbers without Minda Instruments, then year-on-year INR794 crores has gone to INR800 crores, and 89 EBITDA has gone to 88.

If I look at for the full year on the right side, including Minda Instruments Limited, we did about INR2,975 crores with 9.9% or 10% EBITDA at INR294 crores and 6.1% PBT margin and PAT margin of 6.4%. If I compare to the FY ’21, then we have a growth of about 25.7% and our EBITDA margin has grown by 73 basis points from 9.2% to 9.9% from INR217 crore EBITDA to INR294 crore EBITDA, and PAT has increased from 93 to 191, there are some exceptional items, which I will explain.

So our — in the revenue front, our operations outperformed the industry’s new businesses and increasing share of businesses in existing customers in all our divisions has supported this growth, along with growth in exports and aftermarket. Our EBITDA margin at 11.4% in quarter four delivered double-digit despite higher commodity and adverse impacts of supply chain issues, but this was supported by sustained productivity and operational efficiency drives. In quarter four PAT, it includes one-time tax benefits of INR22 crores on based on past corporate guarantee of Minda [Phonetic] which has now been reverted. Based on this performance, the Board of Directors have declared final dividend of 35% at INR0.70 per equity share with a payout ratio is 20%.

I now take you to the next slide, which is business vertical performance for the quarter four. If I speak about the business vertical Mechatronics and aftermarket, the year-on-year quarter revenue has grown from INR445 crores to INR470 crores and EBITDA margin has gone to 13.4% from quarter three to quarter four INR445 crores revenues INR470 crores and 13% EBITDA has grown to 13.4%. The revenue stability was supported by strong fundamental increase in various customers and segments, and EBITDA grew favorably due to the recovery of raw material indexation from customers and various initiatives taken for the permanent measures for cost savings internally.

If I look at the Information and Connection Systems, which is primarily wiring harness division, in quarter three, we did INR293 crores with 7.2% EBITDA and this quarter we have done INR338 crores with 7.4% EBITDA. The two wheeler market de-grew, but increased in share of businesses and sustained sales and uptick due to commercial vehicle has given us this growth. Our EBITDA margin stood at 7.4% due to favorable product mix and also tight control on fixed costs and neutralized lag between commodity and other cost initiatives.

If I look at full year, our Mechatronics division has grown from INR1,305 [Phonetic] crores to INR1,687 crores, increase in EBITDA from 11.8% to 12.3%. And the information system has grown from INR1,000 crores to INR1,150 crores, increase in EBITDA from 5.6% to 5.9%.

I will now move to the next slide, which is Slide number 10. I would like to share this slide as the initiatives and the actions that have been taken in the last few quarters and how they have resulted. I would like to share that while the industry has grown from 6% to negative to now 1.2%, Minda Corporation revenue has grown 19% and at much higher than the industry in all these years. If I look at the bottom part of the table, before our loss-making — before exiting our loss-making businesses, we can see variable performance. But on the right side, you can see quarter-on-quarter growth and consistent and sustainable performance both in top line and in EBITDA numbers going forward. This is a slide, just to share confidence on how Minda Corporation has performed after our transformation in the last two years.

I now move to the next slide, which is a consolidated leverage position. Our net worth has increased from INR1,146 crores to INR1,330 crores. Our gross debt has reduced from INR483 crores to INR391 crores. Cash has come down from INR499 crores to INR336 crores, we can — in the last part of the slide, you can see the details. Our net debt is about INR55 crores right now and net debt-to-net-worth is 0.04. If I speak about our ROC on the focus to move towards 20% to 25% and higher, in last year, we did about 12% ROC and this year annualized because the quarter one was COVID impacted, we’re about 18.4%. Working capital days have come down from 46 to 41 days. Credit rating agencies have reaffirmed our ratings.

I’ll now move to the next slide on our performance of the wholly-owned subsidiaries and joint ventures. Minda Instruments Limited, which is a 100% wholly-owned subsidiary. If you see our year-on-year performance, we did a INR389 crores in FY ’21 as a turnover, which is now INR484 crores, EBITDA of 11.7% in FY ’21, and this is 11%, and the debt is — the net debt, it is having fixed deposits, so from INR69 crores to INR63 crores. If I look at Minda VAST, our sole focus has been on order booking and turning around this organization, where Minda Corporation holds 50%. If you can see on the right side the FY ’21 was INR143 crores. We have now did a turnover of INR218 crores. EBITDA was negative last year and we have now done a 6.9% EBITDA in spite being a COVID and all the efforts of turning around.

Minda INFAC, which is the latest joint venture formed for the antenna solutions with Korea, now has order book of INR131 crores lifetime based on all the four wheeler customers of Maruti Suzuki, Mahindra and others. Spark Minda Green Mobility is the new initiative, which is a wholly-owned subsidiary, which we formed last year. This is primarily focusing on design, development, and manufacturing of the electric vehicle components and systems.

If we now move to the next slide, which is on the business performance in the order one. If we see this full year, we have orders booked towards INR5,900 crores, out of which INR2,400 crores have been replacement and INR3,500 crores have been as for the new businesses. If I look at quarter four on the extreme right, about INR1,450 crores worth of orders has been booked for this quarter on the lifetime basis, INR565 [Phonetic] crores were replacement and INR885 crores are the new businesses which is in the Group.

In the center, they have Mechatronics division, which is the first vertical, so INR2,070 crores — 2,700 lifetime order book has been booked in this year, and out of which 70% is primarily two wheelers and three wheelers and other segments are about 30%. In quarter four, we booked INR424 crores, in Information and Connection Systems in the entire year, we booked INR2,550 crores worth of order book, out of which 53% coming from two wheeler and three wheelers and 47% coming from other segments and about INR900 crores of orders have been booked during this quarter. Export orders, one in the entire financial year have been for INR635 crores on the lifetime basis, and EV order book stands at INR952 million or INR952 crores for the entire year.

We now move to the Slide 15, which is sharing on the strategic pillars of the growth for Spark Minda. So as shared in the beginning of the year, our focus is on narrowing — focusing deepening capabilities and entering the pillars of growth. Focus on enhancing the core which is on the our core product lines. Electric vehicle growth opportunity, which are our product clients which are EV agnostic. Innovation and technology through in-house initiatives and investments as well as global tie-ups, in the areas of new product lines, as well as existing. And strengthening passenger vehicle offerings in all our product lines that we currently do.

The outcome is to transform and become complete solution provider to the OEMs, achieve cost leadership in operational excellence and thought leadership in technology, premiumization and product innovation of all our products and drive better than industry growth, which is more profitable.

We now move to the next slide, which is enhancing the core. Our focus is on safety and security systems, wiring harness division, die casting division and instrument clusters and sensors. In the safety and security systems, we are the only company in India with a developed capability for keyless entry solutions, we have filed more than 23 patents and a preferred supplier to most of our OEMs in India and globally and gaining 100% RFQs which are converted for the keyless entry solutions in the IC and EV platforms.

Wiring harness division, we’re setting up the state of the art component division for our localization needs and focusing on export and aftermarket and most important is the raw materials indexation and the lag along with the customers has now been with strategic initiatives aligned with the customers, as well as with our suppliers. Die casting division continues to be our focus for growth than exports area, and we’re looking at preferred cost effective global partners for turbochargers to our customers globally. In all the four areas of technology, which is in the castings.

And developing complete in-house process to supply all these die casting parts. In the instrument clusters and sensors, which is now Minda Instruments Limited, now we have full control and access of this business, which gives us opportunity to grow in the global markets, as well as develop products and technology coming from our technical partners for the — all the segments in the industry.

Moving to the next slide, which is the innovation and technology, our approach has been setting up our own R&D unit, looking at technology licenses and setting up joint venture with global cloud partners. In the last year, we have developed path breaking smart key solutions, set up of the new Electronic Manufacturing Excellence division and also started production of Intelligent Transportation System. The important achievements in the last 12 months from the partnership perspective, we have converted one TLA with right vision of designs for two wheeler at ASH, converted a joint venture with INFAC Elecs of Korea for antenna solutions, acquired equity stake of 26% in EVQPOINT in Bangalore for EV space, and acquired Minda Instruments Limited from these tonnage joint venture, technical collaboration continues.

Just to focus on the engineering capabilities that we’re developing in-house to our technical center, focusing on vehicle architecture, vehicle connection systems in electronics and vertical access and light-weighting. We have more than 200 patents filed about 2% is on the R&D spending and we have now about 500 engineers working across our divisions. The focus is on looking at software, electronic, hardware embedded software, upgrading our testing facilities and Mechatronic engineering.

We now take to the last few slides, focus on the electric vehicle mobility. So this slide, we’ve shared before, but on the left, you can see the two wheeler which all our product lines. So all our product lines that Minda Corporation does are EV agnostic. So when the EV can comes in, they’ll be going through more of a premiumization route, which is through electronification and light-weighting and also premium. Customers are going to go from analog to digital, telematics being embed, castings being light-weighting, various sensors being added, wiring harness going from BS IV to BS VI to EV, various EVs, product lines like DC-DC converters, battery charges and some under development like motor controller in BMS.

Our keyless, of course, irrespective of IC will be going in all vehicles. If you look at on the right side, potential EV kit value from the current business of about 4,000 to 4500 in a two wheeler is expected to go to about 16,000 to 20,000 as a potential indicator. On the next slide, which are just some business wins on the — my key products as well as new products from Minda Corporation. So DC-DC converters, our target customers and customer wins are someone like BMW, TVS, etc. Battery charges like Hero Electric, Revolt. Keyless entries is like Ola, Piaggio, Bajaj, etc., wiring harnesses like Revolt.

Our EV customers in the shown bottom are both two wheelers, four wheelers and commercial vehicles, even domestic and export. Our last slide, on the value proposition of Minda Corporation. We want to be a high valued technologically advanced products global presence with 32 plants, achieve cost leadership in manufacturing and thought leadership position in technology and products. Offering advanced technology products and systems solution in Light Weighting, Active Safety, Connected, Electronification and Electrification. Technology tie-ups and partnerships with global automotive component companies well diversified customer base product portfolio and business segments, lower leverage providing significant flexibility for organic and inorganic growth.

For the year governance structure to excel corporate governance and high focus on sustainability and strengthening the framework of ESG. With this, there are some more slides just on the company’s snapshot which you can refer at your own convenience.

With this, I would like to conclude my presentation and hand over for any questions. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] We have the first question from the line of Ronak Sarda from Systematix. Please go ahead.

Ronak Sarda — Systematix — Analyst

Yeah, hi. Thanks for the opportunity and congratulations on a great set of numbers. Aakash, first question, just a couple of financial clarifications, one, on the net cash position or net debt position. This includes the cash balances from MIL right for the year ending — FY year ending ’22?

Aakash Minda — Executive Director-Finance & Strategy

Yes. This includes the — hi, Ronak, first of all, sorry. Yes, this includes the cash balance which is in Minda Instruments Limited.

Ronak Sarda — Systematix — Analyst

Sure. Okay. And the tax write back that, is that a cash item or a non-cash item? The INR22 crores of one-off which you have highlighted in the quarter?

Aakash Minda — Executive Director-Finance & Strategy

Yes, it’s a cash item.

Ronak Sarda — Systematix — Analyst

Okay. Thanks. Perfect. So yes, I mean I think the overall growth trajectory has come back like weak industry and given our new order win. How should we look at next let’s say FY ’23 and FY ’24? I mean even assuming industry remains that same level on overall basis, how should we factor in growth for hope for Minda?

Aakash Minda — Executive Director-Finance & Strategy

Yes. Thank you, Ronak. Again our endeavor is always to grow higher 10% to 15% than the industry. While the next financial year, it looks to be again cautiously optimistic here, because some segments are expected to do well and some may not, but again as Minda Corporation we are wanting to grow higher than the industry and looking at various segments, whether it’s two wheeler, four wheeler, commercial vehicles, off-road tractors, monsoon is hopefully going to do good this year. So we may look at that as well.

So our expectation is to be 10% to 15% higher, when it comes to the EBITDA numbers with these current challenges and the global tensions that we’re seeing, we’d like to first sustain these numbers as committed before. So consistency is most important around the 11%, 12% is what we are forecasting.

Ronak Sarda — Systematix — Analyst

Okay, great. And if I look at the overall order. How do we see now of — we had a fairly customer — diversified customer base. But with this new order win of almost, let’s say, 3,500 odd crores in the current year. How does our customer mix look like, or how does our end segment mix will look like. Will we go back to fairly diversified 33%, 35% each segment kind of a mix now? Or how are we looking at the overall mix?

Aakash Minda — Executive Director-Finance & Strategy

So I’ll — see as I — the current order wins that are there are not significantly going to transform the end customer, it is going to be primarily two wheeler segment, it may come down from about 50% to somewhere 46%, 47% depending on the market, but our focus is to grow other segments. I’ll request Mr. Mahajan to maybe add some comments on that.

Neeraj Mahajan — Group Marketing Officer

Thank you very much, Aakash, and hi, Ronak. I think most important for us to consider two important aspect. We are trying to balance for — review our balance between two of these, two other segments, which we are looking at significantly. I can share that apart from the EV segment, our main focus is to strengthen our business order books from our existing customers. Because at these given point of time, we clearly see there is opportunity for us to strengthen order book situation with our customers either through gaining the share of business or introduction of the new products, which we have worked hard, our SMIT has worked hard in last three, four years fine to strengthen and increase that penetration.

So kit value is very, very important for us, we are trying to strengthen, which is reflecting in INR35,300 [Phonetic] million new order book, especially in this particular deal. I hope this answers.

Ronak Sarda — Systematix — Analyst

Got it. That’s really helpful. And finally on the EV order book, right, so we are now gaining a lot of new component orders here as well, which are, thanks to our R&D center. So how should we look at the EV orders ramping up and what was the overall top line in FY ’22?

Aakash Minda — Executive Director-Finance & Strategy

So, Ronak, here again, while the order books are there and both for various segments, mixed can export, it depends when these orders are going to start kicking in. Typically, again the order book is spread between five to six years when it comes to electric vehicle mobility customers as of now, because more important is that uptick. I can give a fair number, but somewhere about INR75 crores to INR80 crores should try and come in this year, if the two wheeler market picks up for a while.

Neeraj Mahajan — Group Marketing Officer

Yeah, I think just to add, we possibly can do much more with the EV segment right now, but you know the semiconductor situation of the EV segment is affecting, then not able to produce as much they would like to. So this number can be positive up-tick with if in case they are able to, we are able to get more semiconductors and receivers. So has the INR80 crores upwards — it would be what we would look.

Ronak Sarda — Systematix — Analyst

Right. Perfect. And just what was the FY ’22 — EV contribution in FY ’22 absolute number?

Aakash Minda — Executive Director-Finance & Strategy

EV you are asking.

Ronak Sarda — Systematix — Analyst

Yes.

Aakash Minda — Executive Director-Finance & Strategy

It was about INR20 crores-odd.

Neeraj Mahajan — Group Marketing Officer

Okay, thank you, and all the very best.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. We have the next question from the line of Bhargava [Phonetic] from Emkay Global. Please go ahead.

Bhargava — Emkay Global — Analyst

Hello, sir. Am I audible?

Aakash Minda — Executive Director-Finance & Strategy

Yes, Bhargava, hi.

Bhargava — Emkay Global — Analyst

Hi. Thank you for this opportunity. I just wanted to know whether the company is looking at any inorganic growth opportunity. And if yes, then what are the areas that the company would be looking at, which are the areas, which are the places?

Aakash Minda — Executive Director-Finance & Strategy

Yes, Bhargava, so again, we’ve been definitely looking at various opportunities for inorganic, there are three avenues. One is, of course, how we can grow our own Marty products and legacy businesses through technology with partnerships or alliances. Second is, look at new product lines that we continue to add in our portfolio, but the focus remains on how we can grow our own core areas. And the third is on the M&A front, when it comes to the M&A, we have decided very clear norms internally on what we will look at and where. So we are very clear that we are not going to look at large operations based companies overseas.

We want to stay in our own core areas, we want to stay in our own product lines and we know this country better with huge opportunity, so we will focus in India. So we — of course, we keep continue to get opportunities, but they have to tick box all the norms before we finally decide to take a plunge.

Bhargava — Emkay Global — Analyst

Thank you so much, Aakash. That’s was helpful.

Operator

Thank you. We have the next question from the line of Abhishek Jain from Dolat Capital. Please go ahead.

Abhishek Jain — Dolat Capital — Analyst

Thanks for the opportunity. Sir, in this quarter wiring harness businesses improved slightly, so what is your margin target for FY ’23?

Aakash Minda — Executive Director-Finance & Strategy

So, like we have shared, our endeavor is to go from current about mid single-digit numbers to higher single-digit numbers in the next few quarters and sustain in those numbers by various initiatives that we are taking. So move towards about a low double-digit number in about six to eight quarters from now. And there are various initiatives that have been taken in that respect. The first and most important is the localization of various imported connectors that we’re looking at, and also improving our productivity and manpower related efficiencies, because it’s more manpower upgraded product. And third, there are lot of strategic initiatives being taken with the suppliers or others, which will help us reduce our raw material fluctuations and other things.

Abhishek Jain — Dolat Capital — Analyst

So during this quarter you have seen a significant growth in the EV segment, so most probably that [Indecipherable] in the wiring harness business, despite that we have seen only the improvement of [Indecipherable]. In this situation what could be a junction for the FY ’23 sir?

Aakash Minda — Executive Director-Finance & Strategy

Sir your voice is not clear. I’m sorry can you repeat the question, please?

Abhishek Jain — Dolat Capital — Analyst

Sir, I assuming wiring harness business, we have seen both 70 bps margin improvement, despite the strong product mix because of this quarter’s CV numbers was very strong. So what we can take for the FY ’23 number in terms of the margin improvement?

Aakash Minda — Executive Director-Finance & Strategy

So if I understand your question correctly. The margins for wiring harness division for next year, right?

Abhishek Jain — Dolat Capital — Analyst

Yes, sir.

Aakash Minda — Executive Director-Finance & Strategy

Yes. So as I mentioned, so currently about let’s say 7.5 we would like to increase it in the next four or five quarters, it may not double-digit, but yes, significant improvement over the next four quarters.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. My next question is related with the die casting business. So how is the current utilization, and what is your capex plan for this particular business?

Aakash Minda — Executive Director-Finance & Strategy

So if I speak about our die casting business on the quarter three to quarter four. So quarter three, we did about INR128 crores, in quarter 4, we have done about INR154 crores. If I speak about the full year number for the die casting, we did about INR425 crores in the last year, and this year we’ve done INR529 crores, which is a 25% jump, of course, this division focuses a lot on the exports and the formula market, when it comes to the investment definitely, it’s a capex intensive listing, but it has a high EBITDA growth, as well as exports.

So we are very cautious when we invest, because businesses are backed up by our customer requirements. Typically, our investments in this year for the die casting is close to around about INR30 crores for the die casting for the businesses which are going to have SOP in the next few quarters.

Abhishek Jain — Dolat Capital — Analyst

And how — the current capacity utilization in this…

Aakash Minda — Executive Director-Finance & Strategy

So in the current capacity utilization of — just one second, please, so yes, the die casting facility with the current capacity utilization, would be somewhere about 60% to 70%.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. And sir, one last question is related with the outlook for the ASEAN, keyless locking system business. How is the progress right now?

Aakash Minda — Executive Director-Finance & Strategy

For the Security division you mean?

Abhishek Jain — Dolat Capital — Analyst

Yes.

Aakash Minda — Executive Director-Finance & Strategy

So you’re speaking about the ASEAN, are you speaking about the Security Systems division?

Abhishek Jain — Dolat Capital — Analyst

Security Systems division both in India and ASEAN.

Aakash Minda — Executive Director-Finance & Strategy

Right. So if I speak about the Security Systems division in the quarter, we did about INR250 crores in the quarter three, and we’ve done about a pretty similar numbers in about quarter three this year — quarter four this year. If I speak about year-on-year basis, we did about a INR739 crores in the last year. We had 23% jump in this year to about INR908 crores.

Abhishek Jain — Dolat Capital — Analyst

Sir, despite the de-growth in the two wheelers volume, the growth is 23%, is it because of increase in the realization only?

Aakash Minda — Executive Director-Finance & Strategy

No. There are couple of factors. One is really focused on the exports market and the aftermarket increase from this division.

Abhishek Jain — Dolat Capital — Analyst

Okay. Thanks. That’s all from my side.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Noel Vaz from Asian Markets Securities. Please go ahead. Mr. Noel Vaz, can you hear us?

Noel Vaz — Asian Markets Securities — Analyst

Can you hear me? Hello.

Operator

Yes, we can hear you now.

Noel Vaz — Asian Markets Securities — Analyst

Sorry about that. Yes, thank you for the opportunity. Yes, so I just had one query. So right now about the disruption to coming out of China for most of 1Q, as a company any kind of disruption in terms of spares of certain components, which are coming from China? Also one other thing is that, so regarding the increase in indigenization or even say the internal sourcing of components. What is the progress has been on that front? That’s my only question. Thank you.

Aakash Minda — Executive Director-Finance & Strategy

Yes. Thank you, Noel. So definitely China imports do continue to be a very big threat and concern going forward which may hamper the entire industry, as well as Minda Corporation’s performance in the upcoming quarters, if — again, primarily on the electronics and other logistic cost issues and increase in the raw material prices or from China, it’s definitely impacting and this also impacts Minda Corporation and will be impacting in future if the things continue, but we need to work out this way. So we are definitely working on various initiatives, but there are some things something which are outside our control which will definitely impact in the upcoming quarter, in the quarter one and quarter two next year.

Noel Vaz — Asian Markets Securities — Analyst

Thank you very much.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Abhishek Jain from Dolat Capital. Please go ahead.

Abhishek Jain — Dolat Capital — Analyst

Sir, how is the product mix in the wiring harness business in FY ’22?

Aakash Minda — Executive Director-Finance & Strategy

How is the, what, sorry for — wiring harness?

Abhishek Jain — Dolat Capital — Analyst

Product mix in the wiring harness business specifically two wheelers [Technical Issues]

Operator

Mr. Jain, this is the operator, I would request to go off the speaker phone as we are not able to hear you very clearly.

Abhishek Jain — Dolat Capital — Analyst

Hello.

Operator

Yes, this is better. Please go ahead.

Abhishek Jain — Dolat Capital — Analyst

Yes. So, just I was asking about the product mix in the wiring harness business, I mean to say two wheelers, PVs and CVs contributions in FY ’22.

Aakash Minda — Executive Director-Finance & Strategy

Yes, so in the wiring harness about 50% contribute is not by two and three wheelers. Four wheelers contribute about 10% and commercial vehicles contributed about 30%, 35%.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. And how the mix will change in the coming year, I mean to say that in FY ’23, well, we are looking at a strong growth in the commercial vehicle segment.

Aakash Minda — Executive Director-Finance & Strategy

So, of course, if the commercial vehicle segment grow it is going to get positive impact to Minda Corporation. But again, we have to really wait and watch how each segment really perform in the upcoming quarters.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. What is the margin difference between the wiring harness business in CVs versus the two wheelers?

Aakash Minda — Executive Director-Finance & Strategy

I can just say that in the commercial vehicles, this rate is higher.

Abhishek Jain — Dolat Capital — Analyst

So it would be the higher by the 200, 300 base.

Aakash Minda — Executive Director-Finance & Strategy

Sorry?

Abhishek Jain — Dolat Capital — Analyst

I would be the higher by 200 or 300 base.

Aakash Minda — Executive Director-Finance & Strategy

Sorry, that’s very confidential, I wouldn’t be able to share. But yes, it is higher.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. Sir, you have also already into the interior plastic business in the domestic market and you have also given the order books. So how is the outlook for this business, and what is the breakeven?

Aakash Minda — Executive Director-Finance & Strategy

So this business is again a very small division right now. But the focus is on the four wheeler aspects of this business, in this year now again, we have a few SOPs coming in from the likes of our four wheeler OEMs, largest OEMs, as well as the largest XUV manufacturers or even in light weight. So this division is definitely being a small base it’s going to grow faster, but definitely it is not a big impact on the Minda Corporation numbers as of now, currently it is about a INR50 crore business for the last financial year.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. My last question is related with the capex, so how much capex you have done in FY ’22? And what is your capex plan for FY ’23 sir?

Aakash Minda — Executive Director-Finance & Strategy

So typically our capex is about 4% to 5% in our — compared to the revenue. Now most of this basically goes into the engineering or technology as well as our regular capex and maintenances, as well as our Brownfield initiatives that we’re looking at. If I speak about the last financial year in FY ’22, we’ve done about INR100 crore of capex.

Abhishek Jain — Dolat Capital — Analyst

How much sir?

Aakash Minda — Executive Director-Finance & Strategy

INR100 crore, one double zero.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. Sir there is a one bookkeeping question. Can you please provide us the Minda Stoneridge, and the EBITDA and PAT for FY ’22?

Aakash Minda — Executive Director-Finance & Strategy

Yes, it is Minda Instruments Limited now. And just to share with you the numbers for Minda Instruments Limited. So if I speak about quarter four numbers, the sales was INR137 crores EBITDA stood at INR18.7 crores, and EBITDA percentage was about 13.5%, but we had some extraordinary customer recoveries this quarter. And if I speak about the entire year, for the full year FY ’22, we are about INR485 crores as top line, and EBITDA percentage is about 11%.

Abhishek Jain — Dolat Capital — Analyst

Okay. And how much revenue we’re targeting for the next year? And what would be the growth drivers for this business sir?

Aakash Minda — Executive Director-Finance & Strategy

So for this business, again, the growth drivers are on the premiumization and the customer segments. If I speak about the product, so the instrument clusters are now moving from analog to digital. So they will definitely be giving premiumization on our product lines. Adding products into the sensor portfolio and definitely increasing our penetration into the other segments beyond two wheeler and looking at exports also will be the growth drivers for this division.

Abhishek Jain — Dolat Capital — Analyst

And what would be the content for vehicle’s instrument cluster sir?

Aakash Minda — Executive Director-Finance & Strategy

So see a typical instrument cluster currently is about 600 [Phonetic] to 700, now going in future depending on the segment, depending on the customization of the product, it may go to about 2,000 upwards, again, we can keep adding many features, but the important part is that this product will have more of customization, individualization, styling, designing, electronics going forward. So yes, it will help us increase the content per vehicle.

Abhishek Jain — Dolat Capital — Analyst

Sir, instrument cluster is one of the important part of the EV’s two wheelers. So the content per vehicle will increase significantly in the EV side.

Aakash Minda — Executive Director-Finance & Strategy

So again, irrespective of EV all the product lines of the Minda Corporation, including the clusters, whether it is EV or ICE, we’ll go through premiumization, again, we have started getting orders which will soon come into the market, whether it’s an ICE engine or an EV vehicle, they will have these product lines, which are upgraded and improved and premiumized clusters and products.

Abhishek Jain — Dolat Capital — Analyst

Okay, sir. Thanks, sir. That’s all from my side.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. We have the next question from the line of Shashank Kanodia from ICICI Securities. Please go ahead.

Shashank Kanodia — ICICI Securities — Analyst

Yes, good evening, sir. Congratulations for [Technical Issues] performance. Sir my question is potentially the end market share that you’ve shared in terms of the vehicle category, regarding two wheeler, passenger vehicles, CV. So [Technical Issues] PV segment system nearly double from INR260 crore-odd to INR520 crore this year. So — but any significant customers and investors there.

Aakash Minda — Executive Director-Finance & Strategy

Sorry, which segment are you speaking about? I think there is line issue at my end.

Shashank Kanodia — ICICI Securities — Analyst

Passenger vehicle segment, sir.

Aakash Minda — Executive Director-Finance & Strategy

Passenger vehicle segment. Yes. So again the passenger vehicle segment segments, there are the product lines, for example, as I mentioned the interior plastics, the die casting exports are primarily for the four wheeler customers, also our partnerships like the INFAC for the antenna which will come into play, but that’s another aspect of it. Also in terms of the Minda VAST, all the product lines are focusing on the four wheeler vehicle access systems solutions. So these are how I will look like. And again, wiring harnesses and other such connection system that you’re looking at is also for the passenger vehicles now as well.

Shashank Kanodia — ICICI Securities — Analyst

Okay. But there were no new customer wins in this space, right or where they?

Aakash Minda — Executive Director-Finance & Strategy

Yes. So the customer base is definitely expanding in growing both domestically and exports, again, as just Mahajan mentioned earlier, our endeavor and focus is to increase the share of business in the existing platforms and the products that we are into, and then grow with them by delivering them with the new launches and more and more products. That’s the endeavor.

Shashank Kanodia — ICICI Securities — Analyst

Okay. And sir, similarly, if I do this mathematics of CV space, so you’ve largely underperformed the category right? So last year your CV sales are roughly INR500 crores and this year you added about INR550 crores, just 10% growth while the market has gone up by 30%. So any specific reason for it?

Aakash Minda — Executive Director-Finance & Strategy

So see in the CV space, definitely the market is growing now and all our products are now going to see in the end of the light in terms of the customer wins. So you’ll start seeing the results very soon with the higher customer sales happening.

Shashank Kanodia — ICICI Securities — Analyst

Okay. And lastly, sir, what would be the company-wide capacity utilization, there wasn’t peak turnover that if we can do of the current asset base.

Aakash Minda — Executive Director-Finance & Strategy

Sorry, you’ll have to repeat the question, please.

Shashank Kanodia — ICICI Securities — Analyst

Yes. Sir, what is our company-wide capacity utilization levels for — as of last financial year? And what is the peak turnover that it can do out of our current asset base?

Aakash Minda — Executive Director-Finance & Strategy

So every plant and every product has a different capacity utilization, depending on the customers and the segments each plant is selling. If I have to generally speak about, it’s currently about 65% to 70% is the capacity utilization all across. Now it may vary depending on the product or the plant or the segment.

Shashank Kanodia — ICICI Securities — Analyst

Understood, sir. Thank you so much. Wish you all the best.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. We have the next question from the line of Mohit Khanna from Banyan Capital. Please go ahead.

Mohit Khanna — Banyan Capital — Analyst

Good evening, and congratulations on a good set of numbers here. First of all just drawing the attention on the last slide of the presentation, where we have the free cash flow numbers. And then when we did the net debt numbers, the position for the company has moved from the net cash position to a net debt position. Just trying to understand what exactly has worked into the cash, and how did you move from net cash flow to a net debt position?

Also because BSE filing that you guys have done in that, then those two accounts are actually not really visible, maybe some error in terms of printing or something. So if you could just negative in that? Thank you so much.

Aakash Minda — Executive Director-Finance & Strategy

Yeah, so the cash flow from operations have been about INR208 crores. The change in working capital has been negative INR70 crores, and we’ve done about INR108 crores of capex, as I mentioned earlier. In this year, again, we haven’t done investments in the subsidiaries, as well as other partnerships of about INR170 crores, which is including Minda Instruments Limited takeover. Yes, so these are the major reasons where the cash flow has been utilized.

Mohit Khanna — Banyan Capital — Analyst

All right. And is there any plan for the next year on the Group level to continue consolidating the other subsidiaries, we are still left with Furukawa and other subsidiaries and joint ventures. Is it a internal plan to continue on the same path?

Aakash Minda — Executive Director-Finance & Strategy

So Furukawa is 25%, and that is a joint venture, which we don’t expect to consolidate, because nearly of the shareholding. There are other partnerships, which we will, we don’t intend to consolidate as of now, because we want to first grow these businesses along with our partners, and we believe in partnerships. So that is what we would like to do.

Mohit Khanna — Banyan Capital — Analyst

Okay, thank you so much.

Aakash Minda — Executive Director-Finance & Strategy

Thank you.

Operator

Thank you. We have the next question from the line of Jay Kale. Please go ahead.

Jay Kale — Jay Kale from Elara Securities Private Limited — Analyst

Yeah, thanks for taking my questions. Sir, just one question on your wiring harness division, you mentioned at the start of your commentary that the orders that you’ve got caused the OEMs you mentioned, you mentioned wiring harness is one for reward. Just wanted to understand in the BS VI to EV transition, how — what is the company doing to kind of get more orders of the engine type of wiring harness, because it looks like that in the new age start up or even the incumbent, you’ve got orders for many of your other products like smart key solution or DC-DC converters, but somewhere you’re wiring harness division seems to be lagging to a certain extent. So anything that you can mention that how — what the companies doing to kind of piece up this technology or kind of gain more share in this?

Aakash Minda — Executive Director-Finance & Strategy

Yeah. Jay, so there are two things, okay, firstly wiring harness is for electric vehicle mobility would be classified into two, one is high voltage and low voltage. Low voltage still remains the same, which are currently going in the existing two wheelers or any other customers or product lines. Let’s speak about high-voltage wiring harness, which is how the technology shift is going to happen when it comes to the high-voltage cables and high voltage connection systems.

Again for Minda Corporation, we are developing and have a team in-house working on the various EDS of the complete vehicle architecture and wiring harness is one part of it. And also, definitely we are targeting other customers to win businesses from them as well to grow this opportunity. So there are various initiatives that are going in-house for the electric vehicle wiring harness across all segments.

Jay Kale — Jay Kale from Elara Securities Private Limited — Analyst

Understood. Thanks, and all the best. Operator, if there are any further questions.

Operator

Mr. Jay Kale, do you have any further questions?

Jay Kale — Jay Kale from Elara Securities Private Limited — Analyst

No, that’s all from me.

Operator

As we have no further questions, I would now hand it over to the management for closing comments.

Aakash Minda — Executive Director-Finance & Strategy

So, thank you very much, ladies and gentlemen, and once again for joining the quarter four and annual presentation earnings call of Spark Minda and Minda Corporation Limited. Again, we continue to focus on our consistent performance and sustainable growth. That’s our endeavor and as Mr. Minda mentioned in the beginning, our focus is on focusing on cost leadership and operational excellence, thought leadership in technology, driving technology from enough initiatives and global tie-ups, growing customers and market segments, generating higher free cash flow and very important is strike capital allocation. So that is how we would like to proceed further. And again, thank you very much for joining the call. And if you have any questions you may reach out to Mr. Anshul Saxena, and he can provide you all the details. Thank you.

Operator

[Operator Closing Remarks]