Pricol Limited (PRICOLLTD) Q4 FY23 Earnings Concall Transcript

Pricol Limited (NSE:PRICOLLTD) Q4 FY23 Earnings Concall dated May. 11, 2023.

Corporate Participants:

Vikram Mohan — Managing Director

Analysts:

Anuj Sonpal — Analyst

Kaushal Kedia — Wallfort PMS — Analyst

Rushabh Shah — RBSA Investment Managers — Analyst

Bhaumik Shah — Individual Investor — Analyst

Chirag Singhal — First Water Capital — Analyst

Himanshu Singh — Prabhudas Lilladher — Analyst

Dhairya Trivedi — DJT Investments — Analyst

Shreyansh Agarwal — Individual Investor — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Q4 FY ’23 Earnings Conference Call of Pricol Limited, hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Anuj Sonpal from Valorem Advisors. Thank you, and over to you, Mr. Sonpal.

Anuj Sonpal — Analyst

Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Anuj Sonpal from Valorem Advisors. We represent the Investor Relations of Pricol Limited. On behalf of the company, I’d like to thank you all for participating in the company’s earnings call for the fourth quarter and financial year ended 2023.

Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s beliefs as well as assumptions made by an information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements and making any investment decisions. The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.

Let me now introduce you to the management participating with us in today’s earnings call and hand it over them for opening remarks. We have with us Mr. Vikram Mohan, Managing Director; Mr. P. M. Ganesh, Chief Executive Officer and Executive Director, Mr. Siddharth Manoharan, Director of Strategy; Mr. Priyadarsi Bastia, Chief Financial Officer.

Without any further delay, I request Mr. Vikram Mohan to start with his opening remarks. Thank you, and over to you, sir.

Vikram Mohan — Managing Director

Thank you, Anuj, for that introduction. And a very good evening on behalf of my team participating today, and thank you all for your participation in this earnings call for Q4 FY ’23 and also for the financial year ended FY ’23. Without further ado, I will just go straight into the presentation and we’ll be able to take questions at the end of the presentation. Can we have the presentation, please.

The key financial highlights consolidated of the company. Our revenue from operations, EBITDA and EBITDA margin of 12.23% for the quarter ended FY ’23 are in the top-left corner. And for the financial year ’23, our revenue from operations has been INR19,028 million, EBITDA of INR2,358 million and an EBITDA margin of 12.39%, with a PAT margin of 6.4%. This has — this excludes exceptional items of INR97.5 million. Without the exceptional items, we have had our highest ever annual and quarter four sales in the history of our company.

Some of the business highlights in this quarter have been significant production capacity enhancements in our Tool room, Plastic Component Manufacturing Shop and PCB assembly line by adding new state-of-the-art lines from top-notch manufacturers in Japan. We have also been fortunate to receive two awards, one from CII as Trendsetters in Business Innovation for the various innovations done on Driver Information and Connected Vehicle Solutions, which in helping us in the premiumization of our product range. We have also received an award from Honda Motorcycle and Scooter for Best Delivery Management at their Annual Supplier Conference.

Next slide, please. Our quarterly consolidated performance. Our revenue from operations has grown by 26.26% over the corresponding quarter in the previous financial year. Our cash profit has increased by 33.65%, EBITDA by 14.06% and profit after tax by a record 126.87%. On a financial year FY ’22 versus FY ’23, our revenue from operations have grown by 26.85%, which is far in excess of the market growth, EBITDA growth has been 23.41%, cash profit, 45.5% and profit after tax by 125%.

Next slide, please. These are again figures in detail which are already uploaded and I’m sure all of you’ve had an opportunity to go through. The key point to note is our EPS has more than doubled in this and we have hit an EPS of INR2.45.

On a historical statement FY ’20, ’21, ‘ 22 and ’23, we have the numbers. FY ’22 has been restated because of the merger of our small wiping division, which was erstwhile consolidated as a subsidiary and now has merged as a division of the company and hence the need for the restatement. There was no significant impact on account of that, but these are the numbers. And FY ’23, we’ve had an EPS of INR10.23 per share.

Some of our balance sheet statements. You would notice that we are almost debt free and have a very favorable debt-equity ratio and also have a very favorable financial ratios in our company that we have achieved in this financial year. Just to give a synopsis of our stock performance, where we stand today versus the Sensex, you would realize that we have fairly outperformed the Sensex.

Thank you very much, and all other details are in the slide that has been uploaded, and we would be happy to have some questions. Some housekeeping rules for the benefit of all the people in the call today. Kindly restrict yourself to one question at a time and join back on to the call for your next question. Thank you very much.

Questions and Answers:

Operator

Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Yash Dantewadia from Dante Equity Research. Please go ahead.

Yash Dantewadia — Dante Equity Research — Analyst

Hi. Congratulations on a good set of numbers. Am I audible?

Vikram Mohan — Managing Director

Yes, Yash. Good evening. Please go ahead.

Yash Dantewadia — Dante Equity Research — Analyst

Yes. So my question is regarding your target of topline of INR4,000 crore, which you’ve given. So, how do you plan on reaching there and by when do you plan on reaching there?

Vikram Mohan — Managing Director

Topline of, sorry can you repeat again, please?

Yash Dantewadia — Dante Equity Research — Analyst

Topline of INR4,000 crore, you’ve given a target, right, in the next by FY ’26, if I’m not mistaken.

Vikram Mohan — Managing Director

That’s right.

Yash Dantewadia — Dante Equity Research — Analyst

Yes. So how do you plan on reaching there and by when do you plan on reaching there?

Vikram Mohan — Managing Director

I have expressed it in the earlier Investor call, but I would be happy to answer that again. We have a clear order pipeline for the next three years, number one. Number two, the area of concern is our exports, which we will not achieve our desired target. As of now, we have a visibility to hit about INR3,600 crores. We have a capex spend of about INR600 crores also that we have undertaken, which over the next seven quarters to eight quarters we will complete. INR400 crores of which will be used for organic and INR200 crore of which will be used for inorganic. And we are fairly hopeful of with this inorganic spend reaching that INR4,000 crore topline with a steady state EBITDA of about 13%.

Yash Dantewadia — Dante Equity Research — Analyst

Okay, thank you. I’ll just come back into the queue.

Vikram Mohan — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Kaushal Kedia from Wallfort PMS. Please go ahead.

Kaushal Kedia — Wallfort PMS — Analyst

Yes. Hi, sir, thank you for the opportunity. Sir, I just wanted to know in DICVS [Indecipherable] what are we doing? Are we doing built to spec or are we doing build to print?

Vikram Mohan — Managing Director

Good evening, Kaushal. That’s a good question. The product is co-evolved with the customer. So it’s not a build to print or a build to spec product, it is co-evolved with the customer as to what is going to be the positioning of the vehicle, and what will be required to attract a ultimate end customer to the vehicle and we co-evolved the product with Pricol’s proprietary solutions. Does that answer your question?

Kaushal Kedia — Wallfort PMS — Analyst

So you’re saying, you’re doing something in the middle, you’re doing more of value additions in build to print. Is that what you’re saying?

Vikram Mohan — Managing Director

Yes. So we could evolve the product. We arrived at what would be the right pricing for that product. And in that what should be the value of the driver information system and what features can be offered on that. So it’s co-evolved as a solution with the customer. I don’t think we are really building a product, but rather we are moving towards building a solution for the end customer based on market research of the OEM and then they work closely with us. I think gone are the days where like in our other division, ACFMS, where we build to spec, build to print, here it is a solution that we are co-evolving with the customer based on the market research done by the customer.

Kaushal Kedia — Wallfort PMS — Analyst

Okay.

Vikram Mohan — Managing Director

Thank you, Kaushal.

Kaushal Kedia — Wallfort PMS — Analyst

Can I ask one more question?

Vikram Mohan — Managing Director

I request you to just join the queue again please, if you don’t mind.

Kaushal Kedia — Wallfort PMS — Analyst

Okay. Sure, sir. Sure, sir. Thank you.

Operator

Thank you. We have the next question from the line of Rushabh from RBSA Investment Managers. Please go ahead.

Vikram Mohan — Managing Director

Hello. Good evening, Rushabh. Please go ahead.

Rushabh Shah — RBSA Investment Managers — Analyst

Yes. Thank you, sir. So, just from a strategic perspective, for the next three years, four years, the target that we’ve set for ourselves. Are we pivoting through a multi-segment as a multi-product, multi-customer company, wherein the concentration of each segment could be say less than one-third or so, as a total revenue by — is that a direction that we’re heading towards?

Vikram Mohan — Managing Director

We are focusing on three product, three vehicle segments. Two-wheeler being a large part of that, followed by commercial vehicles and off-road vehicles. All of these, which we already have lead positions. We have re-entered the passenger vehicle four-wheeler segment, and today have a 70% market share in Tata Motors for the Driver Information Systems. And we are in the process of entering a few other four-wheeler Indian-based OEMs. Our plan is not to become a market leader in the personal passenger vehicle segment, four-wheeler in India, but focus on two-wheeler, off-road vehicle and commercial vehicles, not just in India but globally.

In terms second is, from an inorganic standpoint, in order to remove the dependence on auto, which is cyclical, we want to enter into instrumentation in the industrial segments where the margins are better, and it is de-risking our business model and we are evaluating the same, how do we enter in using inorganic means.

The third vertical we are in today is ACFMS, which stands for Actuators, Controllers and Fuel Management Systems. We anticipate between 60% to 65% revenue coming from Driver Information Systems and Connected Vehicle Solutions and about 35% to 40% coming from the ACFMS vertical. This is the — where we hope to be in 2,000 for FY ’26. I hope I just answered your question.

Rushabh Shah — RBSA Investment Managers — Analyst

Thank you. I’ll just get back in the queue, sir, for more queries. Thank you.

Vikram Mohan — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Bhaumik Shah, an Individual Investor. Please go ahead.

Bhaumik Shah — Individual Investor — Analyst

Hi, Good evening, sir.

Vikram Mohan — Managing Director

Good evening, Mr. Shah. Please go ahead.

Bhaumik Shah — Individual Investor — Analyst

Yes. Sir, just wanted to check with you, as a recent development actually, in which the Minda has just one week — one week before only have given the application to Competition Commission about raising their stake into our company. So as per our last con-call and actually our — your last press release, what is our current standpoint of the management on that? So in the last statement, you had committed that we are the fully committed — present management is fully committed so to be with the company. So we are maintaining that and…

Vikram Mohan — Managing Director

Yes. I would like to break-up my answer into two parts. Minda Corporation had very clearly stated that their intent was to only acquire 15.57% as a financial investors in our company. Now, on the 2nd of May, they have announced that they are applying to CCI to increase their stake to 24.5%. We undertake all legal measures whatever is required to oppose that petition for the simple reason, they are competitors and they have not sought prior permission from CCI, number one.

Number two, I would like to reiterate that the current management stands absolutely committed to running and growing this business in the coming years, and I have absolutely no intention of ceding control of our business at — not just now but any point in time in the near future. We will take whatever steps necessary legally and financially to maintain absolute control of management and Board of this company to continue to nurture value for all of our stakeholders.

Bhaumik Shah — Individual Investor — Analyst

Thank you so much, sir. This was really helpful for us actually because as stated earlier, actually the Minda Corporation intention does not look like just a financial investment, as their — most clearly suggests that their intention is something else, which you stated correctly. And we are taking a word of commitment from your side that you are fully with the company. So that is a great — great. This will be taken as a great agility for the market as well actually. Thank you.

Vikram Mohan — Managing Director

Mr. Shah, I would like to further reiterate, this is a statement that I have made in person to the leadership at an MD and CEO level to each one of our key customers, number one. I have publicly made it to each and every employee of ours and each and every significant supplier of ours. So I have made the statement publicly to all of our stakeholders, and I will do whatever it takes legally and financially to ensure that I uphold this promise that I have been.

Bhaumik Shah — Individual Investor — Analyst

Thank you so much, sir. Thank you so much and all the best.

Vikram Mohan — Managing Director

Thank you, Mr. Shah.

Operator

Thank you. The next question is from the line of Chirag Singhal from First Water Capital. Please go ahead.

Chirag Singhal — First Water Capital — Analyst

Yes, congrats on good set of numbers. So, just two questions. First, on the INR4,000 crores target that we’ve set. So, is this based on some commitments under the existing contracts with our clients or you are factoring in some growth based on the outlook that you have over the next three years?

Vikram Mohan — Managing Director

Good evening, Chirag. I will answer this in three parts. Number one, we have assumed that the India growth story is going to be muted in the next three years. So, in all of our assumptions, we have taken very muted growth because we believe that whatever economically is happening in the rest of the world will have some resultant impact on India. So we have factored that into our growth projections. Point number one.

Point number two, we are working on many of our products, our solutions and not like a casting or a wiring harness, which are just built against the specification and delivered to our customer. So many of our products from being given the LOI confirmed commitment from the customer to start of production, is anywhere between 18 months to 24 months. So we know what our topline and what our capacity utilization is going to look like for the next 24 months to 30 months. It is against that, that we are creating capacity for investments and we are projecting what our turnover is likely to be. And as I mentioned earlier to Mr. Dantewadia when he had asked this question is we have failed to grow in certain areas, whereas we have grown better in certain areas. So we have put all of these probabilities into projecting that number.

Lastly, we are also looking at product premiumization, where we see a mechanical Driver Information System moving into electromechanical, and electromechanical moving into an LCD, and an LCD moving into TFT, which means even if vehicle production remains fairly flat, the value for product is going up, which is going to give us topline and bottom line growth. I hope I’ve been able to answer your question.

Chirag Singhal — First Water Capital — Analyst

Yes, that definitely answers. Thanks for the elaborated answer. So, what I understand is that the — most of the growth in the topline that you are targeting to achieve in the next three years will mainly come from the existing commitments that you have, because you mentioned that you already have a visibility of the next 24 months based on the orders that you get from the clients?

Vikram Mohan — Managing Director

That’s right, Chirag.

Chirag Singhal — First Water Capital — Analyst

Right. Sir, coming to my next question, so you mentioned…

Vikram Mohan — Managing Director

Chirag, can I just request you to follow the housekeeping rule and come back into the queue. I think many of the other people have come back on to the queue for their next set of questions.

Chirag Singhal — First Water Capital — Analyst

Sure. I’ll come back in the queue. Thanks.

Vikram Mohan — Managing Director

Yes.

Operator

Thank you. We have the follow-up question from the line of Yash Dantewadia from Dante Equity Research. Please go ahead.

Yash Dantewadia — Dante Equity Research — Analyst

Hi. So my next question is regarding EVs. What percentage of your sale goes towards EVs for information systems as of today? And how do you see this shaping up?

Vikram Mohan — Managing Director

Yash, that’s a good question. We are completely EV-ready and we are engaging with multiple players on multiple EV platform. As a percentage of our Driver Information System and Connected Vehicle Solution vertical, our sales to EV is just about 7% to 8% now, but which will keep growing in the years to come, because I would just like to explain to you the — in a Driver Information System, whatever be the form of propulsion, the Driver Information System will have to work. So, whether it is filled with fuel or hydrogen or electricity or fuel cell, the Driver Information System continues to do its job of showing speed, left/right navigation, Bluetooth connectivity, fuel level, whatever form of fuel and other indicators. And currently, we are working with almost 22 EV vehicle makers in the country, small and big.

Yash Dantewadia — Dante Equity Research — Analyst

So, right now your percentage of sale is only 7% to 8%. In the next two years, how do you see this shaping up? And is it a higher margin business compared to the rest of the business?

Vikram Mohan — Managing Director

So, the margins of Driver Information System will continue to remain the same, because I don’t see any reason what is — whatever is the form of propulsion, the product is going to remain the same. So there is going to be no impact on the margin. Okay. And this will keep growing as the sector keeps growing. Whatever is the sectoral growth of EV penetration, we will be maintaining the same thing, because we are working with all the key EV makers.

Yash Dantewadia — Dante Equity Research — Analyst

Thank you. Thank you for taking my question.

Vikram Mohan — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Kaushal Kedia from Wallfort PMS. Please go ahead.

Kaushal Kedia — Wallfort PMS — Analyst

Sir, how much of market share do you have in TVS iQube?

Vikram Mohan — Managing Director

100%.

Kaushal Kedia — Wallfort PMS — Analyst

So, if TVS, as per the monthly update, they sold 1 lakh units till now since inception. You have supplied 1 lakh DIS to them in their electric vehicles. Is that a fair assumption?

Vikram Mohan — Managing Director

Yes. No, it’s not a fair assumption. It’s the fact.

Kaushal Kedia — Wallfort PMS — Analyst

It’s the fact. Okay. And so we can assume, so if TVS iQube keeps growing, I think, it’s a proxy — it’s a proxy to — maybe our products [Indecipherable]. So, okay, I’ll get back in the question queue.

Vikram Mohan — Managing Director

Yes. Many of the platforms we have single vendor. So whatever is the growth of that platform, we will also be going at that level, not just in TVS, but with other customers also, which I will not be at a liberty to discuss because that would be a conflict of interest with the customer.

Kaushal Kedia — Wallfort PMS — Analyst

Okay, sir. Thank you. I’ll get back in the questions. I have one more question.

Vikram Mohan — Managing Director

Thank you.

Operator

Thank you. The next question which is a follow-up question is from the line of Rushabh from RBSA Investment Managers. Please go ahead.

Rushabh Shah — RBSA Investment Managers — Analyst

Yes, thank you again, sir. So just wanted to understand what’s the Pricol’s pricing strategy across the product segments. Is there a range that you can share versus the competitors?

Vikram Mohan — Managing Director

We do — are you talking about strategy or are you talking about market share? Can you be clear, Rushabh, please?

Rushabh Shah — RBSA Investment Managers — Analyst

I’m just asking in terms of pricing versus competition, is there — let’s say, are you charging at par with the competitors, is it slightly premium or discount, so just give a range across the product range wherever we are not a single vendor?

Vikram Mohan — Managing Director

[Speech Overlap] Rushabh. Okay. So it is based on the hardware and the software that goes into the product. But let me also reiterate, I will not be paid a huge premium over the competition, because end of the day the vehicle maker also has to maintain his EBITDA and his profitability. So that is how — in fact, very recently I had someone asking, there is so much of software going into your DIS compared to three years ago. The software companies enjoy an EBITDA of 35%. Why is Pricol not having an EBITDA of 30%, 35% in its products, especially in the DIS? And my answer to that is, I’ll have to be in line with what my customers are enjoying in terms of profitability. I can’t have a 30% profitability when my customer has an average EBITDA of 11% to 12%. If my customer has a profitability of 11% to 12%, utmost in some of my solutions, I can go up to 15%, which is wise. To improve our profitability, we are looking at non-automotive industrial instrumentation, which in terms of technology is at least a decade behind automotive instrumentation, where the profitability is much higher and that will help overall from our instrumentation business improve the profitability.

Rushabh Shah — RBSA Investment Managers — Analyst

Okay. Thank you, sir. Is there — I have one more question. Can I ask or should I come back?

Vikram Mohan — Managing Director

No, please come back to the queue, if you don’t mind.

Rushabh Shah — RBSA Investment Managers — Analyst

Okay. Okay, sir. Thanks.

Operator

Thank you. We have the next question from the line of Himanshu Singh from Prabhudas Lilladher. Please go ahead.

Himanshu Singh — Prabhudas Lilladher — Analyst

Hi. Good evening, sir. So, I just wanted to understand what are your growth cost or your growth assumptions for the two-wheeler industry over the next three years?

Vikram Mohan — Managing Director

Good evening, Himanshu. I think, I had answered in an earlier question or context of an earlier question, we are assuming fairly muted growth for the next two to three financial years because of various global incidences and global economic meltdowns. While we — see we still believe in India story, we believe that the India story will be a slightly muted story. So at least in our internal cash flow assumptions, we have assumed very — 7%, 8% growth of the two-wheelers or 5% to 6% two-wheeler growth in India. And we have based our assumptions on that.

In fact, I’ve told our CFO, please assume 0% growth and work on your cash flows. So where our growth will come from is premiumization of the product, as I mentioned earlier, which will keep growing our topline to achieve our desired level of INR3,600 crores to INR4,000 crores based on the current order pipeline and share of business and LOIs that we have.

Himanshu Singh — Prabhudas Lilladher — Analyst

Okay. So, most of the growth should come from electric vehicles and ICE should be flattish or declining. Is that a fair assumption?

Vikram Mohan — Managing Director

ICE will not to be declining. ICE — we now see a lot of entry-level ICE launches also like the Honda Shine, etc., which is going to see some growth. EV will grow at a much faster rate than ICE vehicles. I’m talking two-wheelers segment as a whole, I believe, will grow at around 5% to 8% average over the next three years.

Himanshu Singh — Prabhudas Lilladher — Analyst

Okay. Okay, thank you.

Operator

Thank you. The next question is from the line of Dhairya Trivedi from DJT Investments. Please go ahead.

Dhairya Trivedi — DJT Investments — Analyst

Sir, good evening. I just had a question on the debt. How are we — sorry, on the capex. How are we planning to fund this capex of INR600 crores over the next two years? Are we looking to any kind of take on debt or is it all through internal accruals?

Vikram Mohan — Managing Director

Good evening, Mr. Trivedi. That’s a good question. I think I’ve answered it in an earlier Investor call. And I would like to — I’m happy to answer it again for the benefit of participants on today’s call. We are anticipating about INR600 crores of capex over the next 24 months. Most of which is going to be funded by internal accruals or rather all of it is going to be funded by internal accruals. The timing of investment versus the cash inflow into the company could have a mismatch. So I had mentioned in an earlier call that about INR200 crores of debt we will be taking on, but it’s not going to be long-term debt, it is going to be bridge capital that we will be taking up because of the timing of the cash flows.

Dhairya Trivedi — DJT Investments — Analyst

Perfect. Got it. Thank you so much.

Operator

Thank you. There is a follow-up question from the line of Kaushal Kedia from Wallfort PMS. Please go ahead.

Kaushal Kedia — Wallfort PMS — Analyst

Sir, what — in what products we compete with Minda?

Vikram Mohan — Managing Director

In the Driver Information Systems. It’s the common product. Of course, they are significantly smaller than us. We have a very large market share vis-a-vis Minda.

Kaushal Kedia — Wallfort PMS — Analyst

But isn’t our products are far superior like it’s not even like comparable. Would that be a fair statement to make?

Vikram Mohan — Managing Director

I would not like to answer this question, Kaushal, because I think it’s not ethical on my part to comment about a competitors’ product. But the fact that we have a significant market share had grown significantly. It’s probably a testament to our product and its product quality.

Kaushal Kedia — Wallfort PMS — Analyst

But sir, the market share is more because iQube has a larger market share, right? Is that again a fair statement to make.

Vikram Mohan — Managing Director

You are only talking of one platform, iQube. There are 40 vehicle platforms in India that we supply to. You can’t just base it on platform iQube from TVS. That is not ruling the market or having a very large market share in the market.

Kaushal Kedia — Wallfort PMS — Analyst

IQube has had [Technical Issues].

Vikram Mohan — Managing Director

In terms of value terms — In terms of value terms, we have about 50%-plus of the two-wheeler market in India of the Driver Information System. But I think it’s unfair on your part to or my part to say, how good my competitor’s product is or not, but obviously my product is good. I can attest to that because my market share has grown over the last three years significantly.

Kaushal Kedia — Wallfort PMS — Analyst

Okay, sir. Without being derogatory, I was asking that. So, sorry if I’ve hurt any standards. Thank you.

Vikram Mohan — Managing Director

Thanks you.

Operator

Thank you. The next question is from the line of Shreyansh Agarwal, a retail investor. Please go ahead.

Shreyansh Agarwal — Individual Investor — Analyst

Hi. Am I audible?

Vikram Mohan — Managing Director

Yes. Good evening, Shreyansh. Go ahead.

Shreyansh Agarwal — Individual Investor — Analyst

Yes. So, just following up from the earlier answer, where you had mentioned about premiumization. Just wanted to understand that, are we also looking to enter into a market segment of bikes like BMW or Hayabusa. Or are we satisfied with the likes of TVS or Hero Honda. Any plans around for that regarding [Speech Overlap]?

Vikram Mohan — Managing Director

We are very actively working, Shreyansh, with BMW. We are not just working on products but supplying products to BMW. And not just to BMW, we are supplying to Harley-Davidson, we are supplying to Triumph, we are supplying to Ducati, we are supplying to KTM. And just for your information, we are the world’s second-largest Driver Information System manufacturer for two-wheelers.

Shreyansh Agarwal — Individual Investor — Analyst

Got it. Thank you. Thank you so much.

Vikram Mohan — Managing Director

Thank you.

Operator

Thank you. There is a follow-up question from the line of Rushabh from RBSA Investment Managers. Please go ahead.

Rushabh Shah — RBSA Investment Managers — Analyst

Yes. Thank you, again, sir. Sir, sometime back, there was a news article — you know, a news interview, wherein we are looking to split the Pricol entity into two entities. So is there any update on that, sir? We were trying to appoint a strategic partner with us. So I’m not sure if there is any updates?

Vikram Mohan — Managing Director

We have prepared the company from a manufacturing footprint and from a — and a management organization to be split into multiple company if and when the need arises. We have not appointed any one of strategic consultant to do that. Now, let me elaborate a little bit more on that. This is primarily to unlock better value for the shareholders. Today, we have two completely different product verticals under one company, right. If there is a need to align with some other company, let us say a multinational, that will help us increase our global footprint or give us access to technology that will be very, very difficult for us to develop in the short to medium term, then we will look at this. So which is why we have plants four by DICVS, which is our Driver Information and Connected Vehicle Solutions vertical in the South, in the West and in the North for each of the auto hubs. We similarly have plants for the ACFMS vertical in each of these hubs. We have segregated the engineering, also to have engineering ecosystems for each of these verticals and supply chain and manufacturing ecosystems for each of these verticals. What is common is corporate finance, secretarial IT, HR and business development. So, if and when an opportunity arises, and there is a need which will help us catapult each of these businesses to other geographies and other technologies that will help us significantly increase our footprint and value to our shareholders, we want to be prepared for that. And that is what I had mentioned in an interview some time ago.

Rushabh Shah — RBSA Investment Managers — Analyst

Okay. So we might look into whenever it’s required. Okay. Thank you so much, sir.

Vikram Mohan — Managing Director

Either require or an opportunity arises that will add tremendous value to our shareholders and the organization, either or. So we wanted to be ready when an opportunity arises or when a need arises, we want to prepare the organization, which is what my management team and I have worked on over the last two years to three years and created that.

Rushabh Shah — RBSA Investment Managers — Analyst

Do you see it happening over the next one year?

Vikram Mohan — Managing Director

Highly unlikely over the next one year.

Rushabh Shah — RBSA Investment Managers — Analyst

Okay. Okay. Thank you.

Operator

Thank you. [Operator Instructions]

Vikram Mohan — Managing Director

Ma’am, as there are no questions, can we perhaps close the call?

Operator

Yes, sir. Surely. Sir, there is nobody in the queue now. Hello?

Vikram Mohan — Managing Director

Please go ahead, ma’am.

Operator

Yes, sir. Thank you. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.

Vikram Mohan — Managing Director

Thank you, ma’am. Thank you, Valorem, for organizing and hosting this call. Thank you to all the participants, and thank you all for the valuable questions and your patient hearing. On behalf of my able CEO, Mr. Ganesh; CFO, Priyadarsi; Siddharth, Director, Strategy and myself, I thank you all for participating in this call and look forward to connecting with you all for the H2 call of FY ’24. Thank you. Good evening.

Operator

[Operator Closing Remarks]