Ppap Automotive Limited (NSE: PPAP) Q3 2025 Earnings Call dated Feb. 11, 2025
Corporate Participants:
Abhishek Jain — Chief Executive Officer And Managing Director
Analysts:
Unidentified Participant
Raman Kv — Analyst
Presentation:
Operator
Please wait while your joined to the conference, the conference is now being recorded Good morning, ladies and gentlemen. Welcome to the Q3 FY ’25 Earnings Conference Call of PPAP Automotives Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star than zero on your touchstone phone. Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not the guarantees of future performance and involve the risks and uncertainties that are difficult to predict. I now hand the conference over to Mr Abhishek Jain, Managing Director and CEO, PP — PPAP Automotives Limited. Thank you and over to you, sir.
Abhishek Jain — Chief Executive Officer And Managing Director
Yeah, thank you very much. Good morning, everyone. I would like to extend a very warm welcome to all the participants joining us on this call. Accompanying me today are Mr Beni Puri, our Head of Accounts, along with LGA, our Investor Relations Advisor; Mr Sachin Jain, our CFO, could not join this call due to health reasons. I trust you have had the opportunity to review our results and investor presentations, which are available on both the stock exchange and our company’s website for easy access.
I will start with some industry overview and current business environment. In nine months of financial year ’25, the Indian automotive industry continues to evolve, shaped by structural shifts in-demand patterns, regulatory changes and electrification trends. The total domestic passenger vehicle sales increased by 1.8% to 31.4 lakh units, driven by 12.6% growth in utility vehicle sales.
The trend reflects changing consumer preferences towards SUVs and crossovers over sedans. We are completely aligned towards this shift of consumer preference and are — and are focusing on generating a higher pie of business, especially in the SUVs being planned by our customers. The two-wheeler domestic sales saw a robust 11.6% year-on-year growth with SCUTA sales up 19.1% year-on-year and motorcycle sales increasing 8% year-on-year, reflecting strong urban and rural demand.
As we in the previous con-call, we have already received a sizable business from Suzuki motorcycles and we will continue to focus on getting more business from the two-wheeler industry for future growth. On the commercial vehicle front, domestic sales declined 2.3% year-on-year to 6.8 lakh units, indicating a moderate slowdown in fleet expansion. Our exposure to commercial vehicle is minuscule. The three-wheeler segment remained resilient with a 6.4% growth in nine months financial year ’25, largely driven by the increasing adoption of electric three-wheelers in urban areas.
Our company is completely aligned with the changing dynamics of the industry and we are well-positioned to outperform the market by leveraging our diversified portfolio, expanding our customer-base and improving our operational efficiencies. Now let me shed some light on our individual business segments. The automotive parts business remains the cornerstone of our company’s success. PPAP’s expertise in automotive body ceiling systems and interiors and exterior injection molding parts positions us as a key player in both ICE and EV models.
During the quarter under review, we have started deliveries of our products for Marute New Swift as well as Honda Amaze. We continue our active engagement with all the passenger vehicle makers for securing new business for their future models. During quarter three financial year ’25, I am delighted to share that we have secured lifetime new orders — orders of value INR192.8 crores comprising of INR107.6 crores from EV vehicles and INR85.1 crores from non-EV vehicles.
Since the previous con-call on 13th November, we have received an additional business of INR75 crores comprising of INR58 crores from EV vehicles at INR16.78 crores from non-EV vehicles. These figures reflect a healthy and balanced portfolio, showcasing our growing footprint in the EV sector, while continuing to maintain strong ties with the non-EV market.
The total new orders of INR459 crores for the year so-far with INR110 crores coming from EV vehicles is a testament to the rapid expansion in this emerging space, while securing solid growth in the traditional automotive sector. This underscores our commitment to growth and diversification, capitalizing on the shift towards electrification and premiumization of the vehicles. Our strategic focus remains clear and centered on three key priorities that are essential to driving long-term growth and success.
The first being enhancing our value-added products to drive higher margins; second is to strengthen our customer relationship with OEMs to secure long-term businesses with them. And third is to expand our presence not only in the domestic market, but in the international market as well. Now I will briefly explain you about our commercial tool room, which is operated under the brand-name of Precision Molds.
The commercial tool room business is gaining significant traction with 102 molds order year-to-date and 30 new orders secured in Q3 alone. This growth is not only a testament to the increasing demand, but also highlights a successful strategy in diversifying beyond the automotive sector. With plant utilization on-track to reach 80%, operational efficiency is also showing positive momentum.
In Q3 financial year ’25, Meraki contributed 5% to the total revenue and delivered a solid multipold growth on a year-on-year basis. This expansion marks an important shift demonstrating not just growth but also resilience in the face of changing market dynamics. 41% of the orders came from the non-automotive sector, underscoring the success of the company’s diversification strategy.
By reducing reliance on the automotive market, this shift helps derisk the business, ensuring a more balanced portfolio and positioning the company for future sustainability and growth. Now coming To the aftermarket business. This business is operated under the brand-name of Automotive Parts, which is a 100% subsidiary of the parent company. The aftermarket business is thriving with strong momentum reflected in key growth areas. Expanding the portfolio to 1,300 SKUs is a significant lead for us, broadening the options available to meet the diverse needs of the market. Supported by a vast network of 151 dealers across India, this division is well-positioned to serve a wide customer-base. The business grew 30% year-on-year in-quarter three, contributing 4% to the total revenues. Over the next few years, this business is expected to contribute about 10% to the total revenues of the Group. We are expanding our online presence through our own website and major e-commerce platforms like Amazon and Flipkart. On the international front, the focus on expanding into neighboring countries and the GCC nations is a pivotal step-in the company’s long-term growth strategy. This geographical diversification opens doors to new markets and reduces reliance on any single region, creating new avenues for revenue growth. The strong combination of domestic expansion, digital engagement and international outreach positions the aftermarket division for even greater success in the future. While the lithium-ion business has failed its share of challenges, it’s encouraging to see that the strategic pivots made this year are starting to show positive signs of progress. This indicates a shift towards better alignment with market demands and operational efficiency, setting the stage for future growth. The green shoots emerging from this pivot suggest that the groundwork has been laid for a strong recovery and that promising results may follow soon. Now let’s discuss about the financial performance for quarter three financial year ’25. On a standalone basis, the revenue grew 13% year-on-year to INR135.3 crores. The gross profit increased 16.9% year-on-year to INR58 crores with margins improving to 42.9%. EBITDA surged 38.1% year-on-year to INR15 crores with an EBITDA margin of 11.1%. PAT surged INR3.3 crores, reflecting strong year-on-year growth. For the nine months for the financial year ’25, the revenue stood at INR395.3 crores, which is up by 6.4% year-on-year basis, while EBITDA increased 42.9% year-on-year to INR44.9 crores. PAT for nine months financial year ’25 stood at INR10.3 crores as compared to INR1.3 crores in the corresponding period last year. Our current capacity utilization for the nine months stood at 73% and we anticipate further improvement in-quarter four due to increased sales and cost optimization measures. On the consolidated basis, for quarter three for financial year ’25, the revenue grew 13.8% year-on-year to INR139.2 crores. The gross profit increased 17.1% year-on-year to INR59.5 crores with margins improving to 42.8%. EBITDA surged 43.3% year-on-year to INR14 crores with an EBITDA margin of 10%. I’m happy to share that we have turned PAT positive on a consolidated basis for this quarter three, which is at INR1.6 crores compared to a loss of INR2.7 crores in the previous year same quarter. For nine months financial year ’25, the revenue reached INR406.8 crores, up 5.1% year-on-year, while EBITDA rose 49.5% year-on-year to INR42.2 crores. As we move ahead, our focus remains on sustaining growth and improving operational efficiencies. The passenger vehicle industry is witnessing a shift towards utility vehicles, a trend we are capitalizing on by aligning our focus with the market trends. Our order book of INR459 crores reflect a healthy business pipeline, reinforcing our confidence in achieving our financial year ’25 targets. While the industry faces macroeconomic uncertainties, we are well-positioned to outperform the market through our cost optimization initiatives, product innovation and customer diversification strategies. Thank you very much for your active listening. Moderator, we can now open the floor for.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question may please press star in one telephone. If you wish to yourself in the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shah from Wealth Securities. Please go-ahead.
Unidentified Participant
Good morning. My question is with respect to the order book. Can you provide me insights into the order book, key orders secured and any revenue visibility for the next few quarters?
Abhishek Jain
Thank you, Mr Shah. In the last — in-quarter two, we have received orders of quarter two, we have received new orders of INR192.8 crores, which are — which is comprising of INR1076.6 crores from EVs and INR85.1 crores from non-EVs. In the total nine months, including quarter one, quarter two and quarter three put together, our new order book is for INR259 crores, which will be executed in the next four to five years.
So out of this INR110 crores total will come from EV vehicles on the balance INR349 will be from the traditional ICE vehicles.
Unidentified Participant
Okay, got it. And my next question is with respect to the cost pressures. What are the key cost pressure that the company is facing in the next one or two quarters, like what do you envisage? And how are they being mitigated?
Abhishek Jain
Of course, there are lot of inflationary related pressures that the company continues to face, like rising labor costs and power has been quite stable this year. We have certain contracts with the customers that at the end-of-the year, we go and represent our increase in all these inflationary expenses and they have a mechanism of addressing this as well. The next — the next cost pressures that we face are basically from the raw-material side, almost 50% of the company’s business which comes from the injection molding products.
On that front, we have a 100% contract with the customer, so it is a complete pass-through. On the other extrusion side, the materials that we use are all special materials. And this year we are not seeing any major increase in the trend so-far. So it’s more or less of a stable situation. In some places, the cost of materials are actually going down. And we are continuously working on finding better cost optimized cost-competitive materials.
So this year, I think it should be a stable situation when it comes to cost pressures for us.
Unidentified Participant
Okay. This is helpful. And my last question, like in-quarter three, can you provide me details on the volume versus price-led growth in revenue? How much of the revenue growth is driven by higher realization versus increased sales volume?
Abhishek Jain
So in Q3, mostly it is driven by the volume growth. There is no such price on the variation growth with respect to the last year quarter three, it is primarily on the volume growth.
Unidentified Participant
Okay. Okay. All right. This was helpful. Thank you.
Abhishek Jain
Thank you.
Operator
Thank you. A reminder to the participants, anyone wishing to ask a question may please press star in one. The next question is from the line of Waibal from Honesty and Integrity. Please go-ahead.
Unidentified Participant
Yeah. Hi, sir. Thanks for giving the opportunity
Unidentified Participant
. So sir, in termsof the raw materials that we used in both exclusion side of the business and injection molding. So if you can help us understand what are those specific raw materials and what are the benchmarks that the customer follows to decide on the movements of these raw materials
Abhishek Jain
On the on the injection side, we use our primary material is polypropylene and other than that we use lot of materials like a BS engineering plastics basically,
Unidentified Participant
Okay.
Abhishek Jain
On the exclusion side, our basic materials are PVC and thermoplastics and EPDM rubber. So these are the main commodities that we use and in extrusion we use lot of steel as well. So every so the customer uses various indexes like comes up with a lot of index for materials which is primarily used by them. For the extrusion materials our contract with our suppliers is basically based on international indexes.
Yeah. So we follow all those — all those indexes to fix the prices.
Unidentified Participant
You’re right. Okay. So this on the exclusion side, because historically, we have faced this situation with the customer in terms of ability to transfer the price. So these are international indexes, right? So the raw materials that you mentioned are traded commodities. So it should be pretty evident and clear to the customer that what is happening on the raw-material side.So is it that — is it that we are facing more competition on this segment that is what is restricting the price transfer ability or there are some problems on the customer side that is stopping us from getting the relevant price increase in this side of the business?
Abhishek Jain
Additionally, you know, if you look at the history of these parts, these materials, they always have been stable materials. Only during COVID we faced some very difficult situation when the prices went north of 25% or 20% in one year. Otherwise, generally, the prices remain stable in plus/minus 2% range. Sometimes it goes up, sometimes it goes down. So everything out happens and we’ve never had any any problems with the cost of all these materials and these are all specially made proprietary materials, while their indexes are clear, but the relation between the material price and those index is basically controlled by us.
It’s not controlled by the customer.
Unidentified Participant
Got it. And the suppliers of these material to us, are they — are they specified by our customers itself or we have the liberty to choose suppliers of these materials?
Abhishek Jain
For the extrusion business, we have the liberty to choose our own suppliers. We have to guarantee them the relevant standards which are available on the — on their drawings, we have to make sure that all our parts and materials meet those standards, but who to buy from and which grade and all that is basically our responsibility to decide.
Unidentified Participant
Got it. And sir, second question on my side is that this — the JV that we have for EPDM rubber JV that we have. So I believe that the raw-material is mainly this rubber, right, rubber, if I’m not wrong? Right. Yeah. And in terms of the outputs, I mean in terms of the product that these JV make, if you can just help us understand what are these products and how are these products different than what our standalone entity ma standalone entity makes?
Abhishek Jain
Yes, I can explain you very well in this. Basically, this joint-venture makes EBD and rubber products focusing on the Japanese customers like Honda and uki and. So these products are made by using EPDM rubber and what the standalone company is expert in is making products from both PVC and thermoplastics. So two different materials are used by both the companies. However, now the standalone company also is expanding its product range in EPDM rubber to focus more on the local customers,
Unidentified Participant
Okay,
Abhishek Jain
Like Tatas and. We also have the capability now to set-up all these parts. So PPAC basically will do all these parts for all the customers, whereas the JV company will focus primarily on the APDM parts and the glass run channel for the Japanese customers only.
Unidentified Participant
Okay. Got it. But in terms of the end-use of those products, so is it mostly be the same or it would be it would be different in terms of end-use.
Abhishek Jain
Different categories of products like the broad category is called automotive body feeding system. In that automotive body system, there are two types of sealing system. One is the static seals and one is the dynamic seals. So what standalone has been doing for past 35 years is focusing on the static seals. So the products are completely different. What this JV does is focus more on the dynamic series.
Unidentified Participant
Okay. Okay. And I mean, you know, as far as the industry trend is concerned, I mean, do you think that the industry will shift more towards dynamic seal systems and that’s why we started this JV?
Abhishek Jain
No, these are different products altogether,
Unidentified Participant
Okay.
Abhishek Jain
And in a vehicle there is always a combination of static and dynamic. [Foreign Speech] either or situation. It is a combination of products which go in a vehicle.
Unidentified Participant
Got it. Understood. Understood. And sir, lastly on — from assets. So for exclusion business and jection molding difference, if you can just broadly provide us how are the margins different? You know, I understand that obviously exclusion will have lower margins as of now, but if you can just quantify — quantify it for us, it would be helpful.
Abhishek Jain
This is from business point-of-view, if you look at the total pie-chart, injection business roughly is about 48% this year and extrusion business is roughly 52% this year. And of course, everybody knows injection business is very competitive business. There are lot of lot of competition and lot of players are there in it. So margins are much lower, but exclusion business, the margins are higher compared to the injection business.
Unidentified Participant
Okay. Okay. So exclusion is higher. Okay, got it.. Okay, sir. I think that’s it from my side. Actually, I will come back-in the question queue.
Operator
Yeah. Thank you. The next question is from the line of Anupam Jain from Securities. Please go-ahead.
Unidentified Participant
Hi, sir. My basic question was the orders that we got from EV.
Operator
Sir, can you speak a bit louder? We’re not able to hear you, Mr Jain.
Unidentified Participant
Yeah. Can you hear me now?
Operator
Yes, sir. Please proceed.
Unidentified Participant
Sir, my basic question was, do we get a better margin from EV products that we are going to supply that we received recently orders?
Abhishek Jain
Thank you, Mr Jain. From our products are basically engine agnostic products. So any product that we make is equally compatible for EVs and ICE vehicles.[Foreign Speech] So we are in developing a lot of new Premium products for our customers, especially for the local customers like Tata and, there the value addition done by us is more. In the traditional products, whether it is EV or i if it’s a similar technology product, there is no cause differentiation, which happens.
Unidentified Participant
Sir, then my other question is up with my guidanc,[Foreign Speech], the expected to progress. That is much lower than what you used to do historically. But the EBITDA margin in[Foreign Speech] even if the raw-material cost stabilizes on, almost[Foreign Speech] competition again, what is the reason behind this
Abhishek Jain
So last year[Foreign Speech] JV, this year is going to be a year of recording for us, wherein the last two years of performance that was not good at all. We are coming out of it. So if you compare the last nine months-to getting better on the top. And what the guidance that we’ve given is basically for this year onwards, which is I think much better than what we’ve done for last year.
Unidentified Participant
Yeah, yes, sir. I get that. My question was what has changed from beyond 16 to 2020 that you are guiding for lower margins now? Will we eventually reach those margins? That is my question.
Abhishek Jain
Yeah yes, sir. May I just
Unidentified Participant
Got it.
Abhishek Jain
So basically on the margin side, if you see the major component that hurted in last two to three years was the metal cost. Earlier our — the gross margin used to be more than 50%. So eventually in last two to three years, it has gone down significantly if this comes down to around 43%. So that has majorly resulted in the deterioration of margin if we compare with our previous performances. So now we are doing the things and steps and currently we have came out-of-the last year bad situation to the positive environment.
Now we need to stable those margins. Then gradually you can see the improvement of those kind of margin. But having said that because of the competitive situation and overall changing in the raw-material prices. So it is difficult to achieve those margins of 18%, 19%. However, our internal margin — our internal target is still higher, which we have given in the guidance.
Unidentified Participant
Okay, sir. Okay, I get that. Another question will be, can I get a segmental revenue bifurcation of automotive, commercial tool, industrial products?
Abhishek Jain
Yeah. So the segmental wise is 84% is from the automotive side, 5% we have done from the business side. And if you see the overall tooling side, it is — it was around 10%. Aftermarket is again 4% and industrial product is 1%.
Unidentified Participant
Okay. And what is the non battery business share?
Abhishek Jain
It is around 1% this 1% this year.
Unidentified Participant
Is it loss-making or profit currently?
Abhishek Jain
Yeah. Currently, as in the opening speech also, MD has mentioned that we are still facing the challenges in that. So there is a negative EBITDA of INR1.2 crores in this quarter also.
Unidentified Participant
So any guidance for breakeven or maybe a positive quarter next year or somewhere around that?
Abhishek Jain
Could you repeat your question?
Unidentified Participant
Just any guidance for breakeven in this Leon business and/or profitability that we can see in this business?
Abhishek Jain
Yeah, profitability side, first, our focus is to make it the cash-neutral in the coming two to 3/4. Because we have the product and we are still not able to get the good customer or the good order from the segment. We have developed the batteries for the storage segment, telecom segment and the solar side, we have done with the battery. So now we are working closely with those customers where we can get the order. So primarily first focus is to make it cash-neutral and improve the capacity utilization.
Unidentified Participant
Okay, sir. Or may I want to understand see if not the cost advantage, a lot of companies are doing this, but why are we going to win in this in this business?
Abhishek Jain
In the battery business?
Unidentified Participant
Okay up, this is your battery business currently,
Abhishek Jain
Okay.
Unidentified Participant
A lot of companies are doing this. But why are we here come to the thing, yes, ma’am, why will customers take orders from you and not from bigger guys? That’s my first question, sir. If you’re thinking that two, 3/4 in battery business.
Abhishek Jain
So for the lithium-ion battery business, of course, yes, there are a lot of players who have started this business. But our differentiation point is that we come from the automotive industry and we understand what is a good process, what is quality, what is reliability and how do we make the right product which is suitable for the — for the application being done by the customer.
So we have our internal R&D team complete testing, validation, everything which we have to do to make the right product. And that is what is attractive for the customer. Size-wise, we are not that big in the — we don’t have a very big setup. So that makes advantage for the customers to do a lot of customization and trials and all that with us. If we were a big player like what you’re referring to, maybe doing all these customization and products and all that is difficult. So that is where we have an advantage.
First, that we can customize product for the customer. And second is whatever product we make, we can guarantee that it has been made on the right process using the right materials and it will deliver what is being promised. It is not going to be a fly-by-night kind of a thing or we commit something and we don’t deliver that. There are no shortcuts in that business. Unfortunately, in this industry, there are many players in the market today who are creating shortcuts and in the end-of-the day, the final product quality and the life becomes less.
But we are not in that kind of a business. And all the customers understand that.
Unidentified Participant
Okay, sir. Let’s say around next year also business will turn profitable. So will you continue this business or will you look to diversify away from this business?
Abhishek Jain
No, currently, we have no thoughts about getting rid of this business. I think it is too early to. We are getting good green shoots in this business right out. And I think it is better for us to first explore all the opportunities, exhaust all that and then only think about divestment or something.
Unidentified Participant
Our last question will be on the borrowings front. What’s-ON your guidance?
Abhishek Jain
Sorry, on the
Unidentified Participant
Borrowing
Abhishek Jain
Sorry, I didn’t understand. Can you repeat it please?
Unidentified Participant
Borrowings.
Abhishek Jain
Yeah, borrowings will keep at the same level only.
Unidentified Participant
Okay. Sorry, I couldn’t hear you.
Abhishek Jain
We are saying that we will maintain the borrowing at the current level only. We will not increase the overall borrowings.
Unidentified Participant
Okay. Thank you, sir.
Operator
Thank you. The next question is from the line of Rohit Mehra from YES Securities. Please go-ahead.
Unidentified Participant
Yeah. Thank you for the opportunity, sir and congratulations for turning to our PAT positive this quarter. And my first question is regarding how does the company plan to scale-up its aftermarket and industrial Products segment to reduce reliance on OEMs.
Abhishek Jain
Rohiji, like I said in my opening remarks, we are expanding our aftermarket business by adding more-and-more products, adding more distributors and adding more sales team to the — to interact with all the distributors and all that. So now we have a total team size of about 25 odd people who are working in the aftermarket vertical, who are doing all these businesses, all these relationship management and everything with all the customers.
So domestic side, we have already set-up our network and this year we’ll be further expanding these 151 dealers to a higher number, maybe around 165 for this year, so that we can distribute more-and-more people with our products. Apart from this, we have already started supplies to our neighboring countries , although the volume is little small, but at least, but the start point has already been done. Apart from this, I think by end of this quarter or by next first-quarter, we will be finalizing our complete strategy for entering the GCC market and the UAE market. So we are quite focused on developing the aftermarket business by adding new products, by expanding our sales network also and by expanding our dealer distribution network as well. For the industrial product side, we — this business is also growing quite rapidly compared to last year. Our focus is basically on finding applications and developing different solutions for the customers. We’ve already started our exports to US market for one application, although the size — because this was the first year where we started, it takes time for the customer to understand the product and to do the trial runs and all. But I’m pretty sure that next financial year, this will become a sizable business. In this business, our basic focus is to develop opportunities in the injection molding area. So we are working on certain projects which are yet to be productionized. And for from extrusion point-of-view, like we make automotive body ceiling system, we are making ceiling systems for other applications like containers, like AHUs and all of these. And then we have a portfolio of these sale buckets which are used for adhesive and fertilizer storage applications.
Unidentified Participant
Got it, got it. Thank you for the elaborate of
Abhishek Jain
Diversification, which you have not asked is the — is the tool room.
Unidentified Participant
Yeah.
Abhishek Jain
As I was telling you in the opening speech, this year, out of these 102 holds which we have received, 41% are from the non-automotive sector. So this is also a very important strategy for us to derisk ourselves from the automotive business.
Unidentified Participant
Yeah, got it, got it, sir. The next question was in continuation to previous participant regarding the debt levels. So how do you see the long-term plan to manage debt levels and interest cost and overall financial leverage?
Abhishek Jain
Yes, sir, long-term debt side.
Unidentified Participant
Yeah, please go-ahead,.
Abhishek Jain
Yes. So long-term debt side, as I mentioned that next year, we will try to maintain at this level only because we also have certain that the plans capex plan also. So on the next two to three years, we will try to maintain it that table only. But after that, we will try to reduce the debt at the net level.
Unidentified Participant
Okay, okay. Got it, sir. Yeah, that’s it from my side. Thank you and all the best.
Abhishek Jain
Thank you.
Operator
Thank you. Thank. The next question is from the line of Raman Kevi from Sequent Investments. Please go-ahead.
Raman Kv
Hello. Can you hear me? Hello, can you hear me
Abhishek Jain
Yes, please go-ahead.
Raman Kv
Yes, sir. Sir, I just want to understand at peak capacity utilization, what will be the asset turn of the company?
Abhishek Jain
Yeah, current budget turn is around 1
Raman Kv
Current asset turn is around 1 are you planning plan or is the company planning to improve this or this is the maximum possible?
Abhishek Jain
No, it is not maximum possible as the current capacity utilization is only 73% only. So we are trying to improve that. But simultaneously, because of nature of business, it is capital-intensive business and we need to go to the close to the customer to sell our — all the customers. So there would be some capex. But as we mentioned in the last Q2 con-call also, now we are going to the leasing options while creating any new facility.
So we are not investing in the land and building infrastructure or how we are investing on the machine side or the equipment side? So that will also help in reducing the capex and improve our ATR in the future.
Raman Kv
So then what is the planned capex for this new machineries and equipments?
Abhishek Jain
So this year our total planned capex is around INR35 crores to INR40 crores. And out of that, because we are also our in the South in. Yeah. So there could be some capex out of that around INR10 crores using that. And the new infrastructure side basically which is required to cater the new orders and the — and new SPMs to meet the customer new order, it would be around INR10 crores.
Rest 50% would be the maintenance products.
Raman Kv
Okay. Thank you, sir
Operator
Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
Abhishek Jain
Thank you very much everyone for attending our conference call today. Thank you very much to the moderator for moderating the call and to make sure it’s fine. In case you have any more questions, please feel free-to reach-out to us or Mr Akash Mehta at SGA. We’ll be more than happy to answer all your queries.
If you happen to be somewhere in the vicinity of NCR, do drop-in. We would love to show you around the hard work that has been done by the company in all the facilities. Thank you very much for joining us today.
Operator
Thank you, members of the management team. Ladies and gentlemen, on behalf of PPAP Automotive Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.