Rane Holdings Ltd (NSE: RANEHOLDIN) Q4 2025 Earnings Call dated Jun. 06, 2025
Corporate Participants:
Harish Lakshman — Vice Chairman
Analysts:
Sidish Chawan — Analyst
Sunil Kothari — Analyst
Manish Goyal — Analyst
Ankur Jain — Analyst
Kush Naha — Analyst
Munjal Shah — Analyst
Unidentified Participant
Rajkumar Vaidyanathan — Analyst
K. Mohan — Analyst
Presentation:
Operator
To ladies and gentlemen, good day and welcome to Rani Group FY ’25 Earnings Conference Call. 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 in the conference call, please email an operator by pressing star than zero on your touchstone form. Please note that this conference is being recorded. I now hand the conference over to Mr Sidish Chawan [Phonetic] from Ernst; Young. Thank you, and over to you, Mr.
Sidish Chawan — Analyst
Thank you,. Good afternoon, everyone. Welcome to the FY ’25 investor call of the Rane Group. To discuss on the announcement and-answer your questions today, we have the management team from Rane Group represented by Mr Harish, Chairman of Rane Group; Mr P.A., President of Finance and Group CFO; and Senior Executive Vice-President of Secretarial and Legal Services; and Mr Jay Anand, Senior Vice-President of Finance and Group CFO of Holdings Limited. Please note that the results and presentations have already been made to you and you can also view it on the company’s website. In case anyone does not have a copy of presentation or you are not marked in the mail, please do write to us and we will be happy to send you the same. Before we start, I would like to say that everything that is said on this call that reflects any outlook for the future or which can be constructed as a forward-looking statement must be viewed in conjunction with risks and uncertainties that is that we face. These uncertainties and risks are included, but not limited to what we mention in the prospectus and subsequently in annual report, which can be found on our websites. With that said now, I will hand over the call to Mr Harish. Over to you, sir.
Harish Lakshman — Vice Chairman
Thank you,. Good afternoon, ladies and gentlemen. Thank you all for dialing-in. I’d like to welcome you all on behalf of Group for this teleconference. I’ll now start with a few comments on the industry. The Indian automobile industry recorded a positive performance in Q4 of FY ’25, supported by improved demand across most segments. The passenger vehicle segment saw moderate growth with strong traction in utility vehicles, indicating a clear shift in consumer preference towards this category. The commercial Vehicle segment registered modest growth better than previous quarter though still impacted by certain infrastructure-related disruptions. The Farm Tractor segment witnessed robust growth driven by favorable weather conditions and improved farmer sentiment. The two-wheeler segment continued its upward trajectory, backed by steady domestic demand and significant growth in exports. So coming to Rane Holdings Limited, the FY ’25 was a transformational year for the Rane Group. Despite global and domestic headwinds, we made meaningful progress on several strategic priorities, achieved record sales and strengthened customer partnerships. I’m pleased to share that the Group recorded its highest-ever turnover of INR7,413 crores. The RSL consolidated total revenue was INR4,380 crores and the EBITDA was INR347 crores. The consolidated numbers are not comparable with the previous year since the Earthwell NSK, which is RSSL, Systems became 100% wholly-owned subsidiary of RHL during the year. Coming to Mitra, the key milestone this year was the successful completion of the merger of Rani Engine Bal Limited and Rani Brake Limbing Limited into Rani, Mitra effective April 7, 2025. The entity will now operate two five focused businesses, each aligned with specific product groups and customer segments. The steering and linkage business, the light metal casting business, which was part of the and then the engine components business from REVL, the freight components business from RPS and we have also created the new aftermarket products business. The aftermarket product business across products was brought under one business to help create synergy. The aftermarket remains a priority area for RML and efforts are channelized to enhance synergy amongst the sales team and cross-beverage product and market strength across the aftermarket portfolio. While these business continue to be operationally managed independently, they benefit from shared governance, centralized services and enhanced cross-divisional collaboration. We believe this structure better positions us for agile execution, focused growth and long-term value-creation for all the stakeholders. RML reported a revenue of INR905 crores in Q5 FY ’25, which is a 5% — 5.8% growth on Y-o-Y basis. The EBITDA improved by 72 bps due to favorable mix and lower other expenses. We also won new orders worth over INR230 crores during the quarter across product categories, primarily for steering and business and the light metal castings business. As part of the restructuring, we are also in the process of exploring monetization option of surplus non-core land parcel to reduce debt and liabilities. We have received the shareholders approval for this. We will pursue the sales disposal at an opportune time and keep the investors informed. Coming to Hearing Systems Limited, which has now become a wholly-owned subsidiary of Rani Holdings, we have strengthened the partnership with through a license arrangement for all column drive EPS for passenger car application. We also continue to work on diversifying the customer-base for electric power clearing. So coming to our joint-venture, Automotive India. Following the carve-out of the Global passive Safety Systems division globally by under the LifeSec brand, the Board of Zeddar AI has approved a draft scheme of arrangement to demerge the occupant safety division into a new entity to be called LifeTech Rame Automotive India Private Limited. This restructuring being on — is being undertaken on an ongoing — on a going concern basis is aimed at enhancing strategic clarity and operational focus for the occupan safety business. It is subject to regulatory approval. Some of the key order wins during Q4 was the steering division — steering gear division secured orders worth INR14 crores from a domestic OEM, including an order for an EV application. The Occupant safety division received a significant order of INR557 crores from a leading passenger vehicle customer for airbag.
Now coming to the outlook, the Indian automotive market is expected to benefit from favorable interest rates and income for discretionary spending. The CV segment is expected to grow with the expectations of revival of construction and infrastructure projects, better financing and increased replacement sales due to aging fleet. With the ongoing tariff — US tariff situation and trade protectionism measures, we see this creating eventually a positive impact for India and particularly for the auto component industry. At a broad level, India remains in a favorable position against other countries, specifically China on the tariff level. We have not experienced any dip in the volumes in the past two months and with the bilateral trade — trade agreement discussions between US and India, we believe this will create further opportunities for the Group. To enhance our financial performance, we continue to prioritize operational improvements and cost-savings. With these remarks, we’ll now open for any questions that you may have. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question, I press star and one on touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Thank you. The first question comes from the line of Sunil Kothari with Unique BMS. Please go-ahead.
Sunil Kothari
Thanks for opportunity., congratulations for completing all these merger-related activities and taking a very — very important decision of selling non-core assets getting approved from. My party conversation because since many years, we were waiting for these things to happen. You have qualitatively talked about the benefits of the merger in the past. And you promised that what type of benefits it can give — you will elaborate. So my request is, if you can talk what type of the non-core assets realization we are over maybe two, three years we are planning to do, what type of debt reduction is possible? That will be really helpful if you can talk numbers that will be really creative.
Harish Lakshman
Yeah. So yeah, yeah, so thank you for your comment. So yes, obviously, the merger has started giving some benefits. You know the debt level and the balance sheet has become much healthier. As you’re aware, run-in Medras, the Earthwell Rany Medra’s debt position was at an uncomfortable level for all of us. And now with the merger, straightaway, the debt has come to almost 52% of the total capital employed. And now as we have been telling all the investors, we are very committed to further reducing the debt in the company and this monetization of land surplus real-estate is towards that. As you can see in the shareholder approval, I think we have taken approval for about four parcels of land. Yes. And I’m — while I cannot guarantee anything, our intent is to monetize at least two or three of them and two or three of them are significant, two of them are significant in terms of value. We are hoping to achieve that during this financial year, while I’m sure all of you know that with real-estate transactions, nothing is certain till the final registration happens, but the intent is to do some of them this year. Now it is still too early for me to have full clarity on whether some properties will be an outright sale, some will be a combination of some development, co-development, etc. So multiple options are being discussed. So as and when there is clarity, you know, the intent will be to immediately do this on priority and share with all the investors. As far as numbers are concerned, you know, again, it is difficult to put an exact number because of the nature of transaction, what kind of sale we do, outright sale, what extent of land, there are still multiple options being discussed. But the intent is, of course, I have to net off all the capital gains tax that needs to be paid and also some incremental debt for some of the business growth. But considering all that, I’m hoping to see about INR150 crores to INR200 crore reduction in debt before the end of this financial year.
Sunil Kothari
No, very, very fairy. Great. Sir, second question is, last your 20 25 years experience, now you very well know that which are the businesses which is not giving us a reasonable reward or profitability or ROI? And now you have already taken a bold decision of merging this three company and we are restructuring Rane Group. And with your experience with working with, Bos, Mando, all the world’s top-tier 1 manufacturers, where you want to move maybe some new products, some exports activities, some restructuring or of some activities, which is a list reward giving. So if you can talk maybe qualitatively that what is directionally where you want to go, which are the businesses which you feel you are very strong and you want to do something maybe over next two, three years. Some qualitative we can will be very helpful.
Harish Lakshman
Yeah. So yeah, I’ll answer it in two-parts. I think one is, you know, the creation of the — of this new is not only to have a better balance sheet, but also to create a scale so that at least we are one INR4,000 crore listed company and hopefully we will start doing a double-digit EBITDA with a — which is very less — a very comfortable debt-to-capital employed and I think we are heading in the right track. Now in terms of adding new products, as I’ve articulated, there is definitely a very strong aspiration to add more products into and we are slowly preparing to be the future vehicle for the Group for having accelerated growth. But as far as adding new products through M&A, as I have articulated, we are going to take some more time. We still believe that both our debt position as well as cash position both needs to improve. The debt needs to come down, cash needs to improve. And hopefully through some margin improvements also, we will achieve that. So if you ask me, I think growth through M&A, we are still maybe 12 15 months away from taking any concrete steps. As far as the existing portfolio of products are concerned, yes, you’re right. Now this merger clearly provides the ability to allocate capital far more efficiently because the — being one company, how much money we allocate to the steering and linkage business versus engine components versus break components. I think going-forward, we will be able to allocate more efficiently. So — but to answer your question where which product has a bright future, which may not have, I think that is still evolving. I mean, if you ask me clearly the steering and linkage business, we continue to remain very optimistic. Brain components business, we are getting increasingly optimistic because we over and above our strong position in the OE, domestic OE and aftermarket, exports is steadily increasing and we are seeing more-and-more opportunities because for Raney — Raney breaklining, we never tapped much into the export market for various reasons, including some restrictions with our collaborator, which no longer exist. And in fact, they’re even working with Nishimbo to see how we can enhance the export. So both steering linkage and brake components, we are quite optimistic on the — on the export front. The engine components, we are extremely happy that the business is now consistently making profits and we are also confident that it will continue to make profit with slow and steady margin improvement. And potentially the Engine valve business also can hit a double-digit EBITDA margin. Now, at the same time, you know while the whole EV discussion or dialogue is up in the air with so many uncertainties globally, we believe that the IC engine will have a much longer life. So the engine components, as long as we are able to grow the business and we are able to make a decent return on the business, I do not see any need for revising our strategy. And the last business, of course, the light metal casting business, while that business is yet to fully turnaround and make the profits, we continue to make improvement. And I’m hoping that during this year a lot of the improvements that will happen because still operationally that business has not fully turned around, but we are clearly seeing steady improvement. So the hope is that within the next year or two, that business will turn-around. See, the opportunities there are significant because aluminum content is going up in vehicles steadily and export market for casting is there. But at the same time, die-casting is not an easy business. There are a lot of operational — operationally, we need to be very, very efficient that we are not yet fully there. So we are still optimistic about the business, but we are not yet able to show the performance. So we will keep continuously monitoring the progress we make in these two product lines, engine components and casting and see the progress we make and then depending on how we perform, we will appropriately allocate the capital.
Operator
Thank you. MR. Kothari, please rejoin the queue for more questions. Next question comes from the line of Manish Goel with Wealth Manager LLP. Please go-ahead.
Manish Goyal
Yeah. Thank you so much, sir. I would also like to congratulate on the many initiatives you have taken at the Group level., congratulations, sir. And again, congratulations for increasing dividend at Holding to INR38 versus INR25. So I have a question here, sir that the payout ratio seems to have increased to 80% versus 50%, which historically was our. So will it sustain going-forward and any particular reason to do that? That was my first question. And sir, on Rane, sir, two questions, particularly on, if you can give us an update on the US subsidiary where earlier we have already taken provisions to the extent of amount to be realized on the sale. So what is the status on that? First question. Sir, second question on — you did allude to margin improvement, but would it be possible to like guide us to — due to synergy benefits of amalgamation of three companies, what kind of benefits we can see due to merger or synergy benefit and then maybe another operational improvement? And I have couple of questions for other group companies. I’ll come back on that, sir. Thank you.
Harish Lakshman
Thank you, Manish. Yeah. So to answer your first question regarding dividends, yeah, because our Holdings because of the profit and the cash position in the company and also post the merger of Rane, as I explained, we are planning to use the operating company that is Medras as a vehicle for growth. So given these two objectives, we don’t see much cash utilization in RHL. So we therefore decided that the best way is to distribute it as dividend. So this 80% jump, I expect it to continue in the foreseeable future unless there is again some significant reason to change our strategy and say that RSL will also be involved in some growth opportunities. But since that is not there, the Board after some discussions, decided that the — all future growth will be driven through and therefore, a decision was taken to increase the dividend. So I expect this 80% payout to continue in the short-term future as well in the subsequent years. As far as Ranim Adras is concerned, yes, there are multiple things going on in terms of cost-savings initiatives one is through the consolidation, the merger itself, some basic costs have been eliminated. Now then we have also started several initiatives on commonizing certain support services, the setting up a shared service and doing all the you know financial processing, HR processing, things like that we have started commonising indirect purchasing for across all the businesses we have logistics yeah sorry logistics and warehousing we have started commonizing some of those things. And of course, I also forgot to mention when Punil about in also our aftermarket, we have combined the businesses together and now we have — each business was, let’s say, Rane was doing INR200 crores, Rani is doing INR200 crores. Now suddenly, we have created a INR700 crore aftermarket business. We did about INR660 crores last year and we are expecting to do INR750 crores this year. So we now have one aftermarket division. So our ability to enhance sales across dealers, ability to negotiate with dealers and make sure our products are positioned across the country, we are seeing a lot of opportunity. So to summarize, you know, there are multiple initiatives that are going on, which will help us realize these synergy benefits. I believe that all these benefits — even in a — our objective is even in a down-market, in a not-so-great market like we are currently in right now to have a double-digit EBITDA. And I think that visibility is something that we are having and we are working towards realizing.
Manish Goyal
And Visha, Arish, on the first question on the subsidiary
Harish Lakshman
On the Americas subsidiary. Yeah. I think that we still keep discussing internally that I think we took a right decision in exiting that business because we continue to be in touch with the new owners and the business has — even though they were turnaround specialists, the owners that purchased from us, they seem to be struggling to still turn-around the business. So we have not yet received the amounts that was owed to us, I think about $2.5 million, which of course we have written-off. But at the same time, you know, I think I’ve explained in the earlier calls, we still have some possibility of getting some money back because we do have some second charge on some of the assets of that business. So in case they go into bankruptcy or liquidation, etc. So it is still too early for us to give an accurate forecast on whether we’ll get the money, so how much etc. All I can say is that there is still a possibility and as and when we have clarity, we will share with the investors.
Manish Goyal
Sure, sir. And sir, you did mention that we are now having five businesses under RML. So really appreciate if you can give a revenue breakup and the growth in all these businesses because now a consolidated entity with INR3,500 crores, how each of the businesses are doing, if you — it would be really appreciable if you can share those details as well in the presentations going-forward.
Harish Lakshman
Yeah. I thought the presentation already has that. If you see the investor presentation.
Manish Goyal
So business-wise revenue breakup.
Harish Lakshman
Yeah, so what we have now — so Manish, I just wanted to clarify, one of the things that we have done now because of some feedback we received from investors, we are uploading two presentations. One is an RSL investor presentation, earnings presentation and the other is a Mendra earnings presentation. There are two separate presentations. And if you download the Mendra earnings presentation, all the delays that you ask will be there, including division-wise revenue breakup as well as domestic, how much is domestic, how much is export, etc.
Manish Goyal
Okay. So has that been uploaded, sir?
Harish Lakshman
Because we are both and Rami Holdings.
Manish Goyal
Okay. Okay. I will have a look at it. And also as we are discussing about presentation, sir, in the RHL presentation, probably this time we have missed out on disclosing the revenue breakups for, which is a very large entity. So any particular reason for that or how should we at that?
Harish Lakshman
So there are two reasons. Manish, of course, we’ll share the information with you. One, as I mentioned, since we prepared these new presentation, as I mentioned earlier, we are carving out the occupant safety business into a separate joint-venture, which we are expecting to happen during this second Q2, second-quarter between June, July or August. So our view is once the demand is over, anywhere the information we will be providing as two separate businesses because they will be separate legal entities. And the other thing is, based on some discussions, we felt that — and we did an elaborate benchmarking with many other investor presentations and based on that, we took a decision that we will share certain information in the investor presentation. However, if investors have some specific additional information that they want, we will share it during the teleconference. So today, we will share what are the questions that you may have. If you want to come back and ask us, we’ll be happy to. And we have also taken a decision that going-forward, we will reintroduce the quarterly calls. If you recollect, we were doing that. So that way during the investor call, we can share the additional information.
Manish Goyal
Okay, wonderful, sir. So I’ll just squeeze in one question and come back-in the queue on Ranish Systems. So just probably over there, we are seeing this quarter net level losses have increased to INR22 crores. I was probably under impression that we have repaid debt after receiving compensation from NSK and we have also sold a land worth, I believe, INR45 crores. So the debt should have ideally gone down and losses should have come down at net level despite EBITDA being muted. So that was first question. And second is, by when do you see the low-margin legacy orders to get over and probably we see improvement in margins at operational level at Stearing Systems yeah.
Harish Lakshman
So the — yeah, the — one of the reasons — main reasons for the increased losses during Q4 is Ranish Systems has also adapted the new tax regime during this year, they were following the earlier tax regime. So there is a — almost 50% of that INR22 crores that you mentioned, close to 50% is because of this tax regime. As far as 50 as far as the land sale is concerned yes I’m happy to share that we have sold one portion of a surplus land that was available in Ranish steering systems. But that transaction happened only during this Q — this quarter. The transaction happened in the month of April. And I think we also shared that information in the stock exchange. The financial impact of that, you will see when we announce our Q1 results.
Manish Goyal
Sure, sir. Thank you. I’ll come back-in the queue. Thank you so much.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Ankur Jain, an Individual investor. Please go-ahead.
Ankur Jain
Hello, sir. I have a question regarding the capex for the Group for FY ’26, please ’26,
Harish Lakshman
Yeah, at a group CapEx. So at a group level, we are hoping to — we are looking to invest about INR400 crores for INR400 — between INR400 and INR450 depending on how the market continues to perform. If I think if the — both the pass card segment and CV segment is start showing strong signs of picking-up, especially in the second-half, we may go up to 250. Otherwise, we will curtail it to between 375 to INR400. And I expect
Ankur Jain
Any weaker, very good.
Harish Lakshman
And I expect about approximately INR400 every year for the next three years. I mean across the group, I’m talking this includes joint-venture also.
Ankur Jain
And what will be the breakup between and Rane and a brans?
Harish Lakshman
Yeah. So approximately about INR200 crores to INR220 crores in, about 150 crores to INR160 crores in the Rane and about INR70 crores, 70 crores in Ranish gearing
Ankur Jain
Industry and my second request actually will be actually our Investor Relation is not very, you know, proactive in replying the emails. Like when I have the email I sent, I got reply after one month. So if we can be very proactive in replying to the at least investor queries or concerns.
Harish Lakshman
So yeah, so you know so I’m not I’m not clear why that is there. You know there are multiple IDs. So what I request is, in fact, we now have a new team member. In addition to, of course, EY, any queries you can reach-out to EY, but any specific clarification on the numbers, etc. We also have a new team member who has been — who has joined us recently and he is going to be focused on making sure all investor information is available. So if you see in the last page of the presentation that we have uploaded, there is a gentleman by the name. In future, feel free-to send him an email directly on anything related to the investor presentation requirement, etc. Of course, if it is anything related to DMAT of shares or some share allotment, then please continue to use the investor services because that is more for secretarial and from a SEBI standpoint, governance, etc. So that is why — so now we have a personnel I specifically identified for answering business-related queries of two investors. So is the name and his email ID is in the last page of the presentation.
Ankur Jain
That’s great. I see the email now on the last page. Yes. Thanks a lot. I will come back-in the queue if I have more questions. Thank you.
Operator
Thank you. Next question comes from the line of Kush Naha with Electron PMS. Please go-ahead
Harish Lakshman
Yeah, we can’t hear you.
Kush Naha
Rahar, please speak a little louder. Am I audible now? Am I audible now?
Harish Lakshman
Yeah. Yeah, we can hear you.
Kush Naha
Yeah. Thank you for the opportunity, sir. So just couple of questions. Number-one, in terms of product, can you elaborate more so in our steering business and what kind of new products if you are working on something apart from the steering columns? And can you elaborate more on the rig driven power steering, I think a few months back, we had an — we had an exclusive agreement with JDF. So can you elaborate more on the products overall?
Harish Lakshman
Yeah. Sure. So yeah, we — as we had put out a communication, I think sometime in January, we have reached an understanding with Zedeff on the future of the electric steering technology for the Indian market. That is basically broken into two-parts. One is all the column-driven EPS, which is more than 95% of the Indian domestic market. That we have entered a license agreement and Clearing Systems will be the sole supplier. Then there is a more future product, which is called the Rack drive EPS. These systems typically come in much larger SUVs like Jaguar Land Rover type of SUVs. Of course, there is one Mahindra platform where they have introduced this recently. But typically these tend to be the highest SUVs over the next 10 years, we believe that product may be maybe 15% of the total market. Those products will be made in the joint-venture, ZF Rani. So the — so we have — so we have two technology agreements, one is with a wholly-owned Rani subsidiary and the other is through the joint-venture. So between these two entities, we will cover the entire future technology requirements of the Indian domestic market. As far as the occupan safety products are concerned, I think two significant developments that I’ve shared in the past is, one is we have localized the inflator, which is the heart of the airbag through the PLI scheme and this will — while it doesn’t increase product revenue, it definitely goes to improve the margin because of the localization. The — in addition, on the occupan safety side, the other product that we have added is the steering wheel. This was a company based out of Delhi, which was a joint-venture between and a another Delhi-based promoter family. We — our joint-venture has purchased 100% of those shares. And of course at some point, we’d be combining that business as well into the safety business. So that is also a new product-line that from a Rani Group perspective that we have added. So these are the additions that have happened during the last 12 months. As far as the — as far as Rani Medras is concerned, as I said earlier, there are no new product additions for now, maybe 18 months from now, we will be adding more products. Right.
Kush Naha
So in terms of top-line growth, so considering we have Rane Madhras, steering and ZF, so what kind of top-line growth we are seeing because we are new orders and we have these new products also. So any guidance in terms of top-line growth and EBITDA margins that we can do across these three division segments?
Harish Lakshman
And it’s very difficult for — given the uncertainty globally and the domestic market, we are also struggling to give a clear guidance. Our aspiration is to grow minimum 12%, even if not more, is the aspiration. But since almost 65% 70% of our revenue comes from the Indian market, passenger car and commercial, it fully depends on how those segments grow, which especially in today’s environment is difficult to predict. But the aspiration is to grow 12 — minimum 12%, going up to 15% in the next three years. So it’s just that the current uncertainties globally is not allowing us to be confident about a clear number.
Kush Naha
Okay. Thank you for being please.
Operator
Thank you. Next question comes from the line of Manzal Shah with NSFO. Please go-ahead.
Munjal Shah
Good afternoon, sir. Sir, a couple of questions. One is what are the one-offs in RML about the EBITDA line?
Harish Lakshman
Sorry, can you repeat your question?
Munjal Shah
No, what are the one-offs in case in RML above the EBITDA line? Because if I see the numbers, the turnover is close to INR300 crores INR3,400 crores, the EBITDA comes to INR282 crores. In your opening remarks, you mentioned somewhere around some INR340 crores. I missed that part actually.
Harish Lakshman
INR340 crores is Rani holding. Ranik Holding consolidated a INR340 crores,
Munjal Shah
Okay. And on the working to EBITDA
Harish Lakshman
Around INR280 crores right.
Munjal Shah
So there is no one-offs there.
Harish Lakshman
So when they come across. Is there any one-offs? No, there is no one-off there.
Munjal Shah
And sir, in future also whenever there are one-offs, because historically, we have not been giving one-offs actually, okay? So in future is the one-off it can just write-in the node bill, it will be better for us to annualize actually.
Harish Lakshman
Sure, we will do that.
Munjal Shah
And sir, one is the equity one is you are showing a INR16.3 crores.
Harish Lakshman
Sorry, what is the
Munjal Shah
Equity balance sheet, okay, we are showing a INR16.3 crores, right post-merger, I guess our number of shares is 2.76 crores in, if you look at the equity share capital, it’s showing a 16.27 crores
Harish Lakshman
We understood your question one minute yeah, so the reason for that is you know the — you’re right that the INR16 crores will be growing going to about INR21, 21 or 20 points something. But while the merger is approved, the share allotment is not yet happened. So all the earthwhile RBL and RBBL RDBL shareholders are yet to receive the RML shares. In fact, there has been some delays. It has taken longer than we also expected because of some, you know, I don’t know some paperwork and semi-related matters. So once the share allotment happens, which we are hoping will happen during this quarter, you will see the increase in the share capital.
Munjal Shah
So is it fair to assume the rest of the numbers are coming of all the three companies consolidated debtors and everything?
Harish Lakshman
Yes, yes. All the others are consolidated. Only the share capital because the allotment hasn’t happened and post allotment it is in 27 is
Munjal Shah
Basically while we are hesitant to give guidance, okay. But there are — what is the benchmark that you use when you do internally your performance evaluation, not your company’s performance evaluation vis-a-vis other auto banks, okay? And there are lot of auto hands which mentioned that they will be outpacing the OEM growth by doing lot of things like components per vehicle, etc., etc. Do we have that benchmark internally? And how do we compare ourselves with other offerings so
Harish Lakshman
I think your question is valid. We have — we are still discussing internally what kind of guidance do we want to set that we can share outside and be able to deliver on that performance. While as I’ve been indicating in the past, you know, in a — we want to hit double-digit EBITDA even in a not great market. So therefore that when the market improves, if you start seeing strong double-digit growth in passenger car and CV, then automatically our EBITDA margin should be upwards of 12%, 13% that is the aspiration. In terms of growth, as I said, again, a 12% CAGR consistently is what we are aiming for. But how to have a better articulation strategy with our investors, we are still discussing internally. I think once we are clear, we will come back with better guidance in the coming quarters.
Munjal Shah
So that’s — sir, not worried about the guidance. I’m just what is the internal evaluation that you people use, okay, vis-a-vis the growth achieved by other autoines actually, okay? So somewhere we are seeing much better growth from them vis-a-vis running months
Harish Lakshman
Yes, yes. I mean, we have clearly the benchmark, especially with the people who are growing faster than us and doing better margins than us. I mean, I think that benchmark we are definitely doing and if you’re constantly doing. And of course, we share the information also in our investor presentation on a quarterly basis. But in terms of long-term guidance, I think we’ll come back. Sure. Thanks a lot, sir.
Operator
Thank you. Next question comes from the line of with Financial Research. Please go-ahead.
Unidentified Participant
So thank you for taking my questions. I have two questions, sir, what is the consolidated debt on the books? That is one question. And secondly, sir, what is the status of the legacy orders in Stearing Systems Limited and how should we look at margins playing out in Ranesh Stearing Systems Limited in the medium-term, sir? Thank you so much.
Harish Lakshman
Your first question was on Rani Medras or Rani Holdings.
Unidentified Participant
Rani Holdings, sir.
Harish Lakshman
Rani Holdings. Okay. So the consolidated debt is INR995. Yeah, INR995 crores is the consolidated debt. Yeah,
Unidentified Participant
That is of Rane Holdings.
Harish Lakshman
Correct, correct. As of as of March 31st 2025, yeah
Unidentified Participant
INR995 crores.
Harish Lakshman
Correct, correct.
Unidentified Participant
Okay.
Harish Lakshman
And as far as the your question on steerings and I think even Manish had asked this earlier, I forgot to answer. The unfortunately, the legacy business, the margins when I say legacy business, these are new — new businesses that went into production sometime in 2022 and 2023. And now we are seeing the full impact of those businesses. While I’m happy to share that we have reached some sort of an understanding with Maruti for correcting the prices and improving the margins of those businesses. And you will start seeing the impact of that from Q2, definitely if not Q1, but still the margin improvement is — is will not take us back to the old levels. I think it is going to take another three years before we see much healthier margins. For sure, you will see margin improvements, but the — whether they are sufficient enough, the answer is no, and it will take another two to three years. The reason is we have — we are winning and we have already secured some orders for new business with much better margins, but those go into production only in 2027 timeframe and come into 2028. So as a result, you know, it is going to take another 24 to 36 months.
Unidentified Participant
So that another two, three years, sir, where do we aspire. Hello
Harish Lakshman
Yeah, just one second. The margin one second. Yeah, so I mean, as I said, it will still continue to be only in single-digit for the next two, three years. I mean, after that, we may start seeing improvements to about 7%, 8%.
Operator
Thank you. MR. Jikar, please rejoin the queue for more questions. Next question comes from the line of Raj Kumar, an Individual investor. Please go-ahead.
Rajkumar Vaidyanathan
Yeah. Good evening, sir. Thanks for the opportunity and congratulations for getting the merger consolidated as per the plan. Sir, just few questions. First one, you mentioned that you are planning about INR150 crore to INR200 crore debt reduction. So that number kind of seems to be a bit on the lower side because I just looked at your cash-flow, you have generated almost INR300 crores of free-cash flow for the last year. So assuming you will generate a similar number and you will also have the money through the monetization of the land holding. So you should be able to reduce your debt significantly, because you said you are going to incur a capex of only INR200 crores for that same year.
Harish Lakshman
Let me just check. I don’t think we are generating INR300 crores of free-cash in talking Rana
Rajkumar Vaidyanathan
Yeah
Harish Lakshman
One second
Rajkumar Vaidyanathan
Rani Metro’s consolidated cash flows.
Harish Lakshman
But that is not free-cash, that INR300 crores is before capex. If you see in the cash-flow statement, we also have a capex for regular business at about INR180 crores during last year. Thank you.
Rajkumar Vaidyanathan
Yeah, yeah. What I meant is the cash-flow before capex is INR300.
Harish Lakshman
Correct.
Rajkumar Vaidyanathan
So you are going to incur about INR200 crore of capex, that’s the guidance you mentioned. So you will have INR100 crore cash, right? Plus we will have money from coming from the monetization of land. So you should be able to reduce the debt much more than the 1: 50 number that you indicated
Harish Lakshman
Just once again just hold-on one minute. We’re trying to clarify another. Yeah, yes okay. Okay. So I think we have assumed — the reason we have taken INR200 crores is because we have taken some increase in working capital based on some enhanced in export business, et-cetera, which is why have assumed this. And also the second is this INR150 crore INR200 crores that we indicated on debt, it is just a guidance because we don’t know what real-estate transactions will get consumated, what will not, what will be the extent, etc. So based on that, I had indicated some numbers. So it could change.
Rajkumar Vaidyanathan
Yeah. So all I want to know is that’s the kind of bad minimum number you are looking at. There is an opportunity to upsell, right?
Harish Lakshman
Correct. Yes. Yes, you’re right.
Rajkumar Vaidyanathan
Yes. Yeah. Thank you, sir. And sir, continuing on that same thing, I just want to know what is the impact of the synergy-related benefits can we take a number of 100 bps improvement in your margin or is it a two bigger — larger number?
Harish Lakshman
Again, it’s very difficult. Definitely there is an improvement. As I said, so those three, four initiatives that we have that we have told, just one second. And yeah, I mean, if you see our consolidated last year was about 8.6% EBITDA. So for sure, we are looking at a 1% improvement during this year.
Rajkumar Vaidyanathan
Okay. Okay, great, sir. And sir, the next question is on your JV with. I see they have done exceedingly well this quarter. So are there any one-offs in that or is it something which you can take as a steady-state performance going-forward? 18.5 crores. Yeah, Q4 they are you showing the bottom-line of almost INR18.5 crores as your share after tax
Harish Lakshman
Yeah, there’s no one-off, so this is just from the performance. So yeah, so we, we can expect the same level of performance to continue.
Operator
This is the operator. We have lost the line. We’ll promote the next. That is Mr Manish Kwell from ThinkWise Wealth Manager LLP. Please go-ahead.
Manish Goyal
Sir, thank you again. Sir for continuing on the ZF Rane, so this quarter we have shown 12.5% EBITDA margin. And so now have we started seeing the full benefits of backward integration and this level of margins will be sustainable for the entire financial year going-forward? That was first question. And revenue growth continue to be remained strong and so how should we look at it both for the domestic market and exports market and what is the opportunity we see and when do you plan to introduce Zag drive EPS and what is the opportunity you see in near-term for ZF.
Harish Lakshman
So I’ll answer the first three questions. Yeah, Manish definitely the — all the PLI related investments have not only been completed, we have also gone into production and some more investments are also underway under the PLI scheme. And I’m — we are quite happy to share that in the occupant safety side of the business, there is a clear 1.3%, 1.4% improvement in margin because of this backward integration and this will continue for sure. So therefore, we will see the occupant safety business also start delivering double-digit EBITDA margins consistently like the steering business. As far as the order book is concerned, you know, the order book continues to remain strong, both domestic as well as exports. We are continuing to win many new business as I explained, even in Q4, we won a INR157 crore orders for seatbuilt airbags with a large domestic customer. So we have continued to be optimistic on the strong growth on the occupant safety business with a double-digit EBITDA. The clearing business has always been profitable. Of course, the fortunes of that business is fully tied to the domestic CV market. So if there is an upswing, that will further improve.
So overall, the margins and growth prospects look quite good. I didn’t understand the last question that you had asked. You said something —
Manish Goyal
I asked on the new tie-up which we have done with for. So when do you expect to launch that and how big is the opportunity for us?
Harish Lakshman
Yeah. So as I explained, the opportunity is — it will be — will gradually become large. Today, the rack EPS in the Indian market is less than 5%, I think. And we are expecting that 5% to grow to 15% of the total market by 2033 2034. So you can do the math. So approximately 15% of the Indian market will go towards that track EPS. Now in that Rane and ZF together, we’ll aspire to capture maybe 40%, 50% of that market-share. So the revenue impact, honestly, I think we will start seeing for this product only after 2028, so it is more a long-term initiative, but it’s a — it’s a high-value item, maybe even double the price of a column EPS. So as and when we win and secure a contract and start involving, there’ll be a good addition to the top-line.
Manish Goyal
And sir, would it be possible to share the debt number at Ranish, because I believe both are incurring quite significant interest cost because even at, the EBITDA is quite strong, but it seems that interest and depreciation is very-high. So maybe if you can share those numbers, it will be helpful.
Harish Lakshman
For Rani spearing visit
Manish Goyal
Finish trading and also if possible for JDF sir
Harish Lakshman
The total debt is approximately 700 crores is the total debt for has consolidated. And most of that debt is in the occupant safety business. The steering is only INR100 odd, sorry collect 100 odd out of that INR700 crores. As far as Rani systems is concerned, the total debt is approximately INR220 crores and — but some of that debt has also from Rani Holdings given to its own wholly-owned subsidiary. So the external debt is around 175.
Operator
Thank you. MR. Goyle, please rejoin the queue for more questions. Thank you. Next question comes from the line of Kush Nahar with Electrum PMS. Please go-ahead.
Kush Naha
Yes, sir. Thank you for the opportunity again. Sir, could you provide us the revenue split in the between occupant and sharing? Hello, am I audible?
Harish Lakshman
Yeah, yes, you are audible. So last year, the occupant safety business includes 50 crores, including the wheel acquisition was around INR1,450 crores. Yeah. And INR1,450 crores and the steering division is about INR880 crores.
Kush Naha
Okay, sir. Thank you. Thank you. The last question comes from the line of K. Mohan, an Individual investor. Please go-ahead.
K. Mohan
Hello. Can you hear me?
Harish Lakshman
Yes, please.
K. Mohan
Hello. Can you hear me? Yeah, okay. Hello. Hello. Yes, congratulations. Congratulations, Mr Harish and the team. My name is Mohan and I’m from Bangalore. I’m one of your investors for a long-time. First of all, my congratulations on the steady changes and the improvement that the financial performance of the company has undergone in the last three to four years because one-by-one, all the legacy problems with regard to the light metal testing division in the US and the losses in the warranty claims and so many other things and also the merger with MSK, all the tremendous benefits to the shareholders of holdings. And my congratulations to Mr Harish and your team and the Mr Ganesh and for having brought about this kind of significant change in the finances of the company. Okay. And also a tremendous — tremendous financial year that we’ve just finished in terms of the turnover increase and the profitability increase in-spite of a difficult year in terms of trouble with the export front, which Ran the glass has faced.
So having said that, I have a few questions with regard to the new technology agreement with Rane. If I understand that this technology which you are buying or performing agreement with was not there in the MSK or didn’t MSK have this technology? Is it continues? That’s my first question. My second question is that, of course, you said that part of it is for the new ATS for longer SUVs and bigger vehicles. And some part of it is for your general electric column driven. So my question was no surprise that NSK did not have the technology, number-one. Number two, now that we’ve become 100% owner company, owned company they are running, what about the export prospects of RSS? What about the business which MSK has with their worldwide customers? Has that come to us or is it continues to remain in real-estate Japan? So these are two questions. And the third is that — my — with regard to the legacy orders, my surprise is that as far as I know, I can see Rana is one of the most efficient manufacturers in the country. And so when you say that you are not able to get sufficient price hikes from Maruti, is it the competition which is able to supply at prices equivalent to or is it imports from China, et-cetera, which is the main hurdle, which is main competitor. So I’m a little surprised that the legacy orders will still continue to be below cost and RSF continues to incur loss in the business. So do you think that we can turn a decent profit on the turnover of INR2,000 odd crores, we should be able to turn out — I know you’re not giving the guidance, but when can we turn positive — that traffic comp to say INR50 crores, INR400 crores, will it take one year or two years or even longer than that because of the existence of the legacy orders? And I know is a very big customer, 70%, 50%, 60% maybe your supplies depending on. And so it depends on ability to give you price hikes for existing products and also of course, the new products you’re taking on, which there may be a slightly higher profit margin. So these are my two or three questions. Thank you.
Harish Lakshman
So thank you, Mr Mohan. First for your comments. While I think we are — I think as you said, we have fixed many of the problems that were financially impacting the Group and I think we are slowly and steadily showing improvement in our financials. And I still believe we have a lot more potential and hopefully, we will be able to show even better performance in the coming years. As far as your queries on the rack EPS and column EPS is concerned, what we have done with Zedep. NSK definitely has the column EPS technology. But rack EPS, they did not have the — they don’t have the technology, but they had some designs in the bookshelf. They globally are not a big producer of RAC EPS the way ZF makes or JTEC makes or Mando makes. So MSK definitely their technology capability for Rack EPS is not on par with what Zeddar has, which is why, you know — and NSK also, as you know, globally has been struggling in the steering business, they carved it out and brought in a financial investor, etc. So which is why we decided we will do this tie-up with ZDF. So the good thing about the column technology about the ZF is also that there — the column EPS is also in a way future-proof — future-ready because as we go-forward, there are more-and-more ADAS features coming into the vehicle and which also needs to talk to the talk to the steering. So having a column EPS that is also ADAS compliant is becoming more-and-more important in the coming years. So the ZF technology gives us that capability as well. So there are some features even in column EPS that we feel more confident with than with MSK. As far as the margins of RSSL, the legacy, as I’ve explained in some of the past calls, some of those businesses, the contracts were negotiated directly by NSK in Suzuki, Japan and some of these contracts were secured and you know and this also was a significant point of discussion between NSK and Rane as to why this happened and how we could — the joint-venture could take on business, which is making a loss. While we got some price correction from Maruti, as I said, it’s not enough, but the problem from Maruti’s perspective is they went through a proper RFQ process and you know NSK obviously quoted super competitively and won the business. And now Maruti is taking a view that without justification, how can I increase your prices if there was a material cost, steel price increase or plastic increase, some associated logical increases asked for, then I can accommodate the request. But if you just say that you quote aggressively and won the business, their point-of-view is then I would not have given you the business in the first-place and this was all contracted based on first expectations from our side. So therefore, there is a limitation on how much they can do because obviously from perspective, they don’t want suppliers to undercut during the quotation process, win the business and then come back and say now give me a 15% price increase. So obviously, there is limits to how much we can get increased from Maruti. But at the same time, I think Maruti really understood our financial position and did help us a little bit, while I wish it could have been more, but unfortunately, it is not, but we’ll keep working. I mean you know it’s a slow process, especially with large companies like Maruti. So during this financial year, in the last three months, we were able to reach one understanding maybe eight, nine months from now, we’ll again reopen the subject and do some correction. So given that we are still stuck with these very low-margin of business for the next three, four years, the EBITDA margin will continue to remain in the slow single-digit as I explained earlier. So this is going to take another three years before we see improvement. But to answer your question on breaking even and showing a profit of INR40 crore INR50 crores, I am hopeful that we will start seeing those kind of numbers from FY ’27 onwards?
K. Mohan
Thank you. Then a related question is with regards to the technology agreement. So there are already 51% shareholders. Is there a substantial technology fee that they are paying for the new technology or is it kind of subsidized because they own the host the company?
Harish Lakshman
Look, the technology fees are generally at arms-length basis because even they have their transfer pricing requirement even though it’s a subsidiary, all the valuation of the technology and the costing, etc., has to be done in an basis. But however, I can share with you that these technology agreements are linked to its business — future businesses that we will win. So only as and when we secure contracts, these amounts will be spent. So that is a good thing. It’s not an upfront unlike in Ranish steering where we — since it’s a whole owned subsidiary, we are paying for the technology and absorbing the technology costs during last year this year, whereas for the joint-venture, it will get spent only as and when we secure contracts.
K. Mohan
Thank you. Thank you very much, Mr.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Harish Lakshman
So thank you all for your time. And as explained, we are very excited about this with the new structure we have created in the group and the opportunities that we see going-forward and hopefully, we will continue to improve our performance quarter-to-quarter and as I explained you know, we will also having — be having more interactions with the investors on a quarterly basis. So we’ll have an opportunity to share more. Thank you.
Operator
Thank you. On behalf of Rani Group, that concludes this conference. Thank you for joining us. You may now disconnect your lines