Rico Auto Industries Limited (NSE: RICOAUTO) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
Arvind Kapur — Chairman, Managing Director (MD), and Chief Executive Officer
Analysts:
Hazel Rathod — Analyst
Bhaskar — Analyst
Jyoti Singh — Analyst
Rohit Balakrishnan — Analyst
Abhishek Kumar — Analyst
Presentation:
Operator
Good day. Ladies and gentlemen, good day and welcome to the Rico Auto Industries Q4 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 during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Ms from SNCL Technologies. Thank you, and over to you, ma’am.
Hazel Rathod — Analyst
Thank you. Good evening, everyone, and thank you for joining us for Eco Auto Industries Q1 FY ’25 earnings conference call. From the management, we have with us Mr Arvind Kapoor, Chairman, CEO and MD; Mr Varma, Executive Director; Mr, Executive Director; Mr Rakesharmas, Chief Financial Officer; and Mr Gupta, Company Secretary. I now request Mr Kapoor to take us through the key opening remarks, after which we can open the floor for the question-and-answer session. Thank you, and over to you, sir.
Arvind Kapur — Chairman, Managing Director (MD), and Chief Executive Officer
Good evening. My name is Avan Kapoor and I’m sitting here with my colleagues. I have Mr Rakesh Sharma, who is the CFO. And along with them, I have Mr Varma, who is a Director of Board then Mr OP Agarwal and I have my other colleagues by looking after marketing and company secretary and everybody sitting here. And in the outside, on a further note, the GDP of India will be growing by 6.2% this year, even though it’s been lowered by the World Bank and also by RBI and we are talking of 6.2% plus.
And the last-time I had said that we should be between 6.5% to 7%, that’s what we had indicated based on the information that was provided to us by the government and by all the industrial bodies as well. We have — we must congratulate ourselves. We have become the fourth largest economy in the world and hopefully we’ll become the third-largest in the next three years. And as the economy keeps on growing way, certainly before the end of three years, we should be the third-largest economy.
There is a lot of geopolitical tension that is there these days primarily one is of course the wars that are going on in the Middle-East and as well as in Europe but also because of the trade tensions that are there primarily because of — they all originated from the US. And so as a result of which we are seeing FTAs being signed by bilateral arrangements being made with various countries. The UK, we have signed even though implementation might take a while.
But I’m sure the Indian government is very aggressive on signing further a bilateral trade agreements with EU and many other countries around us. And hopefully, one day we will also sign with the US, but that might take a little while and the target was September, but we’re not very sure as to what really happens there and it totally depends on the team of the president of the United States.
Talking about RICO, our turnover has gone up by 2.5%. We had estimated a better growth this year, but there were some issues with the exports. If I talk about exports in the year ’23, we had exported INR500 crores worth of goods. ’24, we came down Down to INR422 crores, but this current day we are talking of that is 25 our exports came down to INR351 crores. That was primarily because BMW the electric vehicle business dropped by almost 40% in Germany, in Europe and that had a major impact on our sales. Now this current year that we are ’25-26, the exports will go up to INR380 crores. And by ’27, the orders that we have in and we should be crossing INR500 crores back to the ’23 — the year ’23 position. Our turnover this year is INR22.12 crores and we are estimating our turnover to go up to INR2,650 crores this year. These are based on the projects which have been implemented last year and which have come into production this year and some of the projects which are getting into — getting live this year. And everything seems to be doing well so-far and primarily driven by the domestic demand, but the export demand will also go up. This is exports going up to INR380 crores or INR351 crores, but our shipment will be much more, primarily because we would be stocking in the US for the sale to start from January, February next year onwards. And that’s the reason that I’m very confident that next year we’ll be crossing INR500 crores as far as exports are concerned. So this year, our sales turnover expected is INR2,652 crores. That’s what has already been that’s almost 20% higher than the this current year. And we are after that the plan that is already in-place where the orders are placed is also another growth of about close to 15% plus.. Last-time I had announced that we had — last year we received orders worth about INR720 crores and these would be — these would be implemented in the next — this year and next year and the year-after that and that is the three financial years. And this year, our target is to pick-up another INR650 crores worth of orders for — which would be implemented partly this year, partly next year and the year-after that. Out of INR60 INR650 crores, we’ve already picked-up orders for INR70 crores, which have — where the deliveries have got to start from this year onwards itself. So we are very happy about that. These are the add-ons to whatever budget we have prepared for, but we are sticking to crores, INR5 crore crores of turnover this year, this current year. That’s INR26 we are talking about. So the business seems to be good, but the only — the only problem that we are facing is the uncertainty of what happens in the US. The exports are taking place, the new orders that we had received, we have started delivering those goods. Their shipments are being made here and the tariffs have been applicable. But at the moment, I don’t think the customers also have a choice. They need to pay-up the tariff and we have settled with some customers, but we are settling with the other customers as well. So this should be okay till there is a trade which is signed between India and the US where there could be some negotiations on the reduction of the current tariffs that are there. So this is this current year that we are talking about 26 is going to be a good year, 20% growth that we are anticipating. That will also help us to utilize the equipment and like I had mentioned in one of the meetings that our foundry — iron foundry, our utilization capacity was only 50%. This will go up to almost about 60%, 65% this year. And next year, we’ll be crossing 80% utilization of the gray iron foundry. And in the aluminum side, there we were at 62% 64% and we should go up to about 60 to almost about 75% this year and then next year we should be in the region of about 90%. That’s the current equipment where the investments are already being made and capacities which had freed up partly because of the efficiencies that had come into the system and also there was some reduction of some export orders and that also up the capacity. But we’ll be able to utilize the total capacity in the next two years. The investment in Hasur is going on, the building is getting ready and the total investment that will take place there is a — is close to INR220 crores, but spread over three years, partly this year, this year would be what INR70 crores and next year would be about INR100 plus INR100 crores and the balance would mean the third year. That’s how the — and there Hasuru is going to be catering primarily for the — for Toyota as well as and these components are for the hybrid as well as electric vehicles that Maruti and Toyota would be producing the defense is also doing well and the shooting ranges that I had mentioned last-time that we’ve delivered, I think over — close to 40 of them and we are delivering almost 10 to 12 ranges per month and there are future orders of that we are expecting and that should be interesting business. We’ve also started delivering to the — we went into the railway business using the current capacity of casting as well as machining that we already possessed. We’ve already started supplying to the people who are supplying to the railways. And in the meantime, we are getting the RDSO and other approvals which are required to be done and we are hoping that the growth would be very good in the railway side. And this is primarily utilizing the current capacity we have, but the minimal investment that would be required to be done. This is what — this is the new business that we have taken-up so that one is to add-on additional lines of business of defense like it took us almost 10 years to come into defense to actually start delivering. But railway, we’ve been fortunate we could start delivering within, I think, two, three months of — after we had decided that we will get into the railways. So things are fine, things are moving good. We have not factored the railway business in the current year, but we are hoping that we should be in the region of INR70 crore INR80 crores plus this year in any case, if not 100. That’s what the target is. And that’s what I wanted to say and we are open to questions and my colleagues also sitting here to answer all the questions.
Questions and Answers:
Operator
Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star N1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles a reminder to participants, please press star and one to ask a question.
The first question comes from the line of Paskara, an Individual Investor. Please go-ahead.
Bhaskar
Hi, everyone. Good afternoon, sir. Thank you for giving me the opportunity to ask the questions. The first one is, in the current quarter, how much difference we actually deliver the turnovers how much turnover we did in the defense?
Arvind Kapur
In the last quarter you mean?
Bhaskar
Yeah, yeah, last quarter Q4. The consolidation and the standalone difference is only INR26 crores and we have showed, I think one-time loss of INR6 crores. So if I remove that INR6 crores the profit will be like around INR600 crores. So that is a good margin. If I look at the only consolidated revenue after removing the standalone. So I’m not sure whether it’s from the defense or it’s from the wheels business.
Arvind Kapur
I’ll just give you the right figure on the defense.
Bhaskar
Okay.
Arvind Kapur
Yeah. And — but that loss is that I had mentioned last-time also and that is a one-time loss of INR6.25 on the sale of assets and that will not appear there this quarter that was the sale of about INR6.8 crores in the defense.
Bhaskar
Okay. So in the The defense revenue will come into standalone, sir, or in consolidation?
Arvind Kapur
They have come into consolidation.
Bhaskar
But the difference between standalone and consolidation is only INR26 crores, right, if I’m not wrong? In Q4?
Arvind Kapur
So let’s say it is 1607 in standalone. While in consol, it is 2212. For quarter also in standalone, it is INR415 and consol it is 545. This is only the sales portion. If we include total income also, then it is INR449 crores in consol, INR549 crores in consol and INR422 in standalone.
Bhaskar
Got you, okay. So out of 164 revenue like we think the margins will be around 20%, right, if I’m not on what is the margin business?
Arvind Kapur
The defense and the margins are definitely better than the auto any day. And so since we are ramping-up and for the modules keep on improving over-time.
Bhaskar
Okay, okay. So basically, as per your comments earlier, so every quarter we deliver 36 container site,
Arvind Kapur
We have the — we have the capability of delivering one container a day and we are wrapping up to deliver two containers a day. And now we are trying to seal the orders with Navy and Air Force and others and hoping that as those orders come in, that we are ready for it now.
Bhaskar
Okay, because the line was not clear while you are giving the initial comments. So I didn’t get. I didn’t get that figure actually. How much defense revenue we expect in the — in the current financial year?
Arvind Kapur
Well, it’s going up and we are hoping to now railways and both put together, I think we should be 100, 150 plus that’s what we are looking at and we want this business to grow terms. In consol, we also have Rico electronics there the growth has been very good and in consol that also adds up to the total figure.
Bhaskar
Yeah, thanks. And one last question is that about the new plant that is under-construction side, like it’s going to take some time. For Tejata specifically, we are taking some new plant, right?
Arvind Kapur
Yeah. We bought crores of land and the land — the building is under-construction. And by July, I think we’ve got to deliver samples from there this year and by November, December, we’ve got to start delivering samples from there and the — and we need to start — the building — building first portion of the building would be ready by July, August so that we can start installing the equipment and other things there.
Bhaskar
Okay, thanks, sir. That’s it from my side, yeah. Thank you.
Operator
Thank you. Participants, please press time one to ask a question. The next question comes from the line of Joti Singh from Arihant Capital Markets. Please go-ahead.
Jyoti Singh
Yeah. Thank you for the opportunity. And sir, congratulations on the good execution. Sir, just wanted to ask on the capex side, like you have mentioned now around INR220 crore capex. So this year, how much we are targeting to expand? Like next year, I heard INR100 crore and this year how much we are targeting to expand? And which are the products that we will going to supply and which are the OEM that we are targeting. And any unlocking is happening also on the new client side?
Arvind Kapur
And the INR70 crores I mentioned and the INR120 crores I mentioned, that is primarily for the plant I was talking about, that is for this current year, that is 2026 and at ’27 and but if you look at the expansion that is also taking place from Marupe and for primarily Marti and for some Marti and Toyota, Toyota, Hasur and as well as in Chennai. And so as and there are there are customers where they — we have been supplying for a couple of years, GKN, there our sales will double almost and with the other customer is brands there also our sales are going to go about very — this is going to be very good there.
And the advantage is with the utilization of the current capacities that we already have, that’s the casting capacity that we have, both in the aluminum as well as the iron. So we are very excited about that. That also helps us to improve the bottom-line and the — also utilization of the plant and equipment and also the people. And the — but if you look at the total investment that would take me this in ’25, ’26, we are talking of the region of about INR150 crores to INR155 crores, but that includes the dives, etc also.
Jyoti Singh
Okay. Thank you, sir. And sir, just if you can guide us on the margin side, like earlier we have guided 13% 14% margin on the orders for the domestic and 17% to 20% margin on the export side. So it does it remain same or any changes?
Arvind Kapur
Let me redefine it. Export is always in the region of — it’s always 15% to 20% or that’s the minimum margin we work on exports. We are fortunate to get those margins. But if you look at the domestic — in domestic, if we look at the two-wheelers, there the margins are on the lesser side. They are the — they are totally commoditized. If you look at the car industry, we get better margins. There we are in the range of, 13% 14%, 15%. That’s where the margins are and the commercial vehicles we also get better margins.
But it’s a two-wheeler that — but two-wheeler is very important for us because it acts as a filler for the plants also, utilizable capacities and other things that are required to be done. And because the volumes are very-high there. So we do take advantage of that. And so we will — in the domestic, we will average out around about — I would say about 11.5%, 12%, that is the car industry and the two-wheeler put together.
But with the competition of the exports, our margins dropped slightly this year only because exports came down. If the exports we had the market had carried on, we would have — our margin would do much better. And this year we are increasing our exports by about — it is going up marginally though this year and it’s going up to about by INR30 crores, which is about 10%, but next year we INR500 crores plus back to the ’23 level. And there you see that complete change in the balance sheet.
Jyoti Singh
And sir, what has to be that much positive? Any new orders that we have not? If we can discuss on it?
Arvind Kapur
Yeah. We mentioned that, that we — last year, we picked-up — see, we pick-up orders in one particular year and the total orders we picked-up last year was to this tune of INR720 crores, 72720 plus. And that we had declared also. Now those are the orders in-hand, which we received from both the domestic as well as the export customers — overseas customers. And we — the years before that, we had picked-up orders worth about INR350 crore INR400 crores.
And those are what we picked-up the year before that, those have started maturing and we already started production of those. Out-of-the INR720, there we would be adding about INR150 crores this year and almost about another next year, INR320. INR320 crores additional next year that would be INR420 out-of-the INR720 crores and the third year from now, it will be this — we will be doing 720 crores a year. Now these are the confirmed orders where the advances have been received, where the letter of 10, everything has been received.
Jyoti Singh
Okay. Thank you, sir. And sir, if you can guide us on the top-line side and margin side overall.
Arvind Kapur
So I did mention that this year our target is INR2652 crores, INR2,652 crores and say INR2,650 crores. That’s what and having said that, the orders we received just a couple of days back, which will — which some of them will start production by October, September, October this year, we should have — we should actually be able to process those.
Jyoti Singh
Okay, thank you so much.
Operator
Thank you. A reminder to all participants, you may press time one to ask a question the next question comes from the line of Rohit from iThought PMS. Please go-ahead.
Rohit Balakrishnan
Yeah, good afternoon everybody. Sir, some questions from my side. I’m fairly new to your company, so pardon if they are very basic. So sir, if I’m looking at your company for the last couple of years, we’ve sort of stuck at this stagnant level of INR2,2300 crores. This year was a bit lower. So — and I was going to some of your previous calls you mentioned and just to your previous participant also that exports were a bit lower and that is probably one of the reasons for your margins to go down.
So if you can just maybe step-back and explain what was the reason for the general sluggishness since FY ’23 last two years that was my first question and then I have a couple of more
Arvind Kapur
Hello, just a minute. One is the if you look at the — our exports coming down, it primarily happened with BMW, their sales of electric vehicles in Europe came down by 40%. And we were the single-source supplier to those EV components for Germany. And that — that reduction was huge and we had extra stocks also there in Germany and the shipments — further shipments had to stop here, we had to reduce our production here. That was one.
Number two was PSA, they had extended a program of till the end of end-of-the year, but they — they didn’t realize that. So sale was also pretty large, which it could not be — the goods are ready. And now they’re going to start consuming it this year and that’s what happen on the export side. In the domestic side, Renault did not perform at all. Their performance was very poor last year, on Hassan and that impacted us.
Now they are picking-up, but primarily because of the exports. For the domestic, we have very cautious in picking-up orders for the domestic market as far as Nassan is concerned. But for the export market, we are more confident and we have diverted that portion of equipment for the export market to Nassan for this year. And Kia, their performance was also lesser than the previous year. And so these are the four, three, four customers who actually brought our sales down.
The capacities were already created. Then there were two programs which got delayed. One is by Toyota itself and that was a turnover of almost INR100 crores and ISIN. So it’s the same program. And Toyota, but ISIL was going to supply the transmission and Toyota was going to supply the complete hybrid — hybrids. Now this year, they are increasing the capacities. Our capacities are already in-place and we are excited about that and the utilization is going to be much better this year.
So this was the main reason why the sales dropped. So this year, we are expecting a sale of INR2650 crores plus. And next year we already have a budget because of. Next year. Next year, we are about 3,100 based on the current orders in-hand and current programs that are already with us and which we are implementing and/or — which we should start delivering by the end-of-the year or beginning of next year. So these programs are in-place.
And having said that, there could be some delays in some programs, but now we’re not anticipating delays on Toyota and others because they are after us to deliver them in time and because their — their hybrid sales are suffering at the moment. And so there we are very confident. And right now, we have discounted absolutely for the domestic market, but for the export market, they have picked-up — started picking-up the goods. So there’s a lot of excitement in that direction as well.
So we’re full of confidence of 2650 this year-plus and 3,100 next year. Now having said that, we’ve already picked-up further orders, some to be delivered this year onwards, which were not factored in this. That would be an add-on add — that would also add to the figures over next year.
Rohit Balakrishnan
Got it. So thank you for the very elaborate answer. Sir, the second question was in terms of margin. I think you’ve been saying that you are very — I mean, your aspiration or you want the margins to be around 13% 14% at a company-level and that is where your endeavor is. And of course, you had mentioned that exports were down, so hence the margins got impacted. So in that journey from, let’s say, 8%, 9% or 9%, 10% which right now, so to get to that 13%, how do you see that journey over the next one, two years, if you can share that.
Arvind Kapur
Yeah. So if you look at the cost, we have been able to prove as far as the like power cost, that is actually — we’ve saved a lot of the power cost. There’s a lot of working that has happened on the power cost, mainly because we’ve gone into solar and hybrid power through windmill, et-cetera and that’s helped us to do.
And number three, we’ve invested in very efficient furnaces where we’ve been able to save a lot of power. So the full impact of that would appear this year. In the last year, we since it was being installed over the year, we could still do some savings there, but this year you’ll see a larger impact on the par. So as far as the various costs are concerned, there is full pressure around the — on monitoring what is happening there.
Now the problem was the utilization of our plants. We had — we have surplus capacities as far as the castings are concerned. And those castings where there’s a lot of investment involved, those castings were not running at full capacities, which now are being utilized better with the addition of railways and also some of the components we picked-up in the iron side, in two years’ time, we’ll be running at almost 90% and we’ll need to add some furnaces to further capacities, but that we’ll do two years from now.
And that would change the whole picture. And because the manpower remains the same, the plant is fully automatic, the same people run the plant at 24/7 and we were running it only for 15 days or 16 days a month. Now we’ll be running it for 20 days and then going up to, 24 25 days or 26 days a month. So that utilization itself gives us a lot of savings. Then in the casting side also in the aluminum side, we’ve improved our casting capacities by improving our efficiencies.
And we are getting more per day from every machine than we ever got. It’s almost 20% improvement we did as far as the casting concerned. So rather than running the machines, we shut some of the machines so that we could run — the machines which are running would run at full capacity.
So these changes which are happening and now with new orders coming in and those — the balanced capacity is the die-casting which we had shut and besides utilizing those capacities, you will see a change — complete change taking place. So this 13% is doable and so we’ve worked it out and once we have — at about 2,600, our utilizer capacity is much better and you will see the change this year itself.
Rohit Balakrishnan
Thank you, sir. Again, very helpful. So just two more questions if I’m allowed, if I can go-ahead, sir.
Arvind Kapur
Yeah, yeah. Yeah.
Rohit Balakrishnan
So, sir, if I look at the balance sheet right now, so we have about INR750 odd crores of debt, probably around INR700 crores to INR800 crores of debt, if I’m not wrong. And of course, as you mentioned, you’ve expanded the capacities based on certain orders, which got delayed. So over the next one, two years or two, three years, how do you see this balance sheet evolving? Maybe if you can share a bit on that? And also, sir, I think we have some surplus land in Gurdau, which we have mentioned in the last — I mean in our interactions previously.
So any thoughts on that and how are you thinking about this whole leverage situation right now?
Arvind Kapur
The total debt to control is about 660, yeah, 660, but you see comes out this year itself and the — that’s a pressure from our Board also. The land you’re talking about is the Gurung land where we are currently sitting. And this land — this is about 26 27 acre parcel and very prime land right on the main road, Delhi highway, prime land and so we have been talking to various people who — so that we could monetize this land and we have it in mind. But if I cannot distribute enough money to my shareholders. We are not going to do it. There were people offering the land that a certain rate Certainly we are not prepared to sell the land. And because shipping, this is a very large plant. Almost 2,500 people plus the working year. We need to shift equipment machines. We are ready for that. We have the space for that, we have the capacity to do that. But we also need to take permissions on the customer because anything that we shift, the customer has got it towards the clearest. Be it BMW or be it Bharupi or be it or anybody else. And we are mentally ready for that, but we should have enough money that we should get. If I’m getting only INR200 crore — if I’m making a profit at INR200 crores, we are not going to do it. If I make a profit INR1,000 crores, we are certainly going to do it. So that the shareholders also by that.
Rohit Balakrishnan
Got it.
Arvind Kapur
And so let me tell you — let me tell you the talks are on. We have — we continue to talk to the big builders like we’re talking about Tatas and the and others.
Rohit Balakrishnan
Okay. Okay. And sir, one question on this export. So I think BMW, I mean, we were — you have expanded on the EV side in the last few years and of course, the slowdown because of the competition from the Chinese side, but you were again about the exports launching back. So what is giving you that comfort because whatever we are reading on some of the German or European manufacturers or CVs, they are still like trying to fight this competition and they are still quite sluggish. So what is giving you that comfort on the demand-side? And one more question on the debt, you said it will come down from INR660 crores. Any ballpark number on how it will come — what kind of quantum it will come down there? Thanks.
Arvind Kapur
Hey, our Board has told us that we should try to reduce the debt by about 10%. That’s the target they’ve given us. But at the moment, we are working on it and we are determined to reduce the debt. So that’s the decision the Board has given us and they are — they’re going to monitor that on a quarterly basis. So that’s on the debt side.
And — but we will be taking new debt also for the investments that are taking place, but we are also paying-off and — but we are also knocking off or we are trying to make our working capitals more efficient. So that’s where we — we are working on and that’s what — in fact, most of our Board members are financial guys and they are totally clued on to this. And so I think they have very particular. Which is very good for us. Working capital will definitely come down. Yeah. Long-term, yeah, we’ll try to bring it down. So long from, because of Utra — it’s a challenge up these are lonely lower. Than so on the small front, also give an example of GPN from INR80 crores, we’re going to INR120 crores this year.
So that’s a major increase lap of GPN one particular customer. And that customer is catering to Ford and GMs and BMW also in the US and various other customers. So we are very confident of that. And then the other customer is there, right. That’s a new addition and there also the supplies have started picking-up and we are — and that also helps us to utilize. That’s the best part.
Rohit Balakrishnan
Got it, sir. Got it. I’ll come back-in the queue. These are very useful to me. Thank you so much. I’ll come back-in the queue.
Operator
Thanks. You. A reminder to all participants, you may press time one to ask a question. The next question comes from the line of Abhishek Kumar, an Individual Investor. Please go-ahead.
Abhishek Kumar
Hello. First of all, congratulations for the projections you have provided for this year. There’s few things that I want to understand. The number-one, you call about how the export is going to pick-up and the aluminum prices gone down. So can we expect a better margins?
Operator
Yeah. I’m sorry to interrupt, Abhishek, you’re not quite clear. The project is coming closer to the microphone.
Abhishek Kumar
Yeah. The next — you told about the plant, which will have a capex of INR220 crores to INR230 crore. So how much revenue we are expecting from it? And what would be the EBITDA margin because you told the — for the exporter, it will be higher for the passenger because it is higher, but for the two-wheelers it is very low. So what is the margin we are expecting from this INR220 crores project?
Arvind Kapur
They are the turnover there also is expected to cross — be close to about INR300 crore to INR400 crores, so that’s what the expectation is. And with the — the investment is in-land building and also in the equipment that we are talking about, the land building is almost about INR50 crores about INR50 crores and the balances the corporate that is required to build — install that. And we expect that we should cross a turn of INR400 crores there. And that’s one.
And the margins are — like I mentioned earlier also, the car business, the four-wheelers, the margins are better than the two-wheelers and this is all car business and this is also a car plus, I would say, mainly because this is related to the electric vehicle and also the hybrid vehicles very these are very complicated components that we are able to supply and these are premium components
Abhishek Kumar
Okay and this have margin was the — this quarter we are expecting some improvement to happen because aluminum price has gone down. In our the last balance sheet that, there is a carryover
Arvind Kapur
Of almost about INR14 something crores in the aluminum side and which we will — because now the prices are coming down, so that advantage we will get this year. And I hope the annual pricing keep on coming down. So that’s the important part. But — but thanks for congratulating us, but I think we could have done a better job. We should have done a better job and we should have got better margins. Our target is to improve our margins. We are not that margins do.
Abhishek Kumar
What is our long-term debt, which we are planning to pay this year apart from what we are going to raise, but what is standing as on-date, how much we are going to pay for this year?
Arvind Kapur
We will be 140 CI. 4
Abhishek Kumar
0 okay, perfect. Thank you. Thank you so much.
Operator
Thank you. Participants, please press time one to ask a question ladies and gentlemen, you may press time one to ask a question a reminder to participants, you may press time one to ask a question a reminder to participants, please press try and one to ask a question ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for the closing remarks thank you very much.
Arvind Kapur
Ladies and gentlemen, thank you so much for taking the time-out to listen to us. But let me tell you that we are not satisfied with our results and we need to improve them — we need to improve them and we are all working in that direction. And you will see it this year with better utilization capacities, the margins coming back to whatever we had. We have been mentioning to you and those are achievable margins, those are right there.
The cost reductions that we’ve been working on manpower reduction and others, those are effective and we see those and the power saving and the touring costs, et-cetera. And the improvement in productivity on the equipment and all those things are actually on place now and you will start seeing the results in this year onwards.
And hopefully, hopefully there is no — the major disruption that takes place and we are very hopeful that this year would be a good year and this year and the next year are going to be very good years. So very excited about the orders in-hand and the growth is primarily coming from the exports as well as the domestic market.
But in the four-wheelers, not — two-wheelers also grow, we don’t leave the two-wheeler business because that is very important as a filler like I mentioned earlier. But our focus is primarily on the on the four-wheelers and commercial vehicles and now, of course, railways and defense and also the exports, which are better margin items and You will see the change that is going to come forward. We’ve been saying it last year, but this year we assure you that we will achieve those results. Thank so much.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Rico Auto Industries, that concludes this conference. Thank you for joining us and you may now disconnect your lines