Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Samvardhana Motherson International Ltd (NSE: MOTHERSON) Q4 2026 Earnings Call dated May. 20, 2026
Corporate Participants:
Vivek Chaand Sehgal — Chairman
Laksh Vaaman — Vice Chairman
Gulshan Pahuja — Chief Financial Officer
Pankaj Mital — Whole Time Director and President
Analysts:
Siddhartha Bera — Analyst
Raghunandhan NL — Analyst
Neel Shah — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q4FY26 results conference call hosted by Samvardhana Madhasan International Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star on your Touchstone phone. I now hand the conference over to Mr. V.C. Sehgal from Madhasan. Thank you. And over to you Mr.
Segal.
Vivek Chaand Sehgal — Chairman
Thank you. Good evening everyone and thank you for joining US in the quarter 4 in the full year 26 financial year earnings call of some other months on International Limited FY26 has been a year of strong execution and steady progress. We delivered our highest ever quarterly and annual revenues alongside steady profitability and further strengthening of our balance sheet. Our performance reflects the resilience of our diversified business model and disciplined execution across businesses. These results were achieved despite elevated commodity prices, especially copper and inflationary pressures and ongoing geopolitical uncertainties.
Our continued focus on execution, cost discipline and operational excellence helped us navigate these headwinds effectively for the full year. Financial 26 we maintained capex discipline in line with the guidance with investments largely directed towards future growth and new capabilities. I am pleased with further improvement in our Zbridge position which now stands at its lowest level even as we continue to invest in our growth. These provide us flexibility to support future expansion. Our book business value of US$96 billion remains strong and diversified, providing a good visibility for the coming year.
We are making steady progress on our Vision 2030 roadmap. With that I conclude my opening remarks for in depth details on results. I would request I’ll hand over to Varman and team for a walkthrough in the business Insights. Thank you. And over to you Varman.
Laksh Vaaman — Vice Chairman
Thank you papa. FY26 has been another defining year for Mahlersan.
Siddhartha Bera — Analyst
We continue to demonstrate the strength of
Laksh Vaaman — Vice Chairman
Our diversified business model, the resilience of our operating structure and our ability to consistently outperform underlying industry growth despite an increasingly volatile macroeconomic environment. I am pleased to share that we achieved our highest ever quarterly as well as annual revenues during the fourth quarter and the year. These milestones are not only a reflection of the strong execution across our businesses, but also validate the strategic direction we have taken over the last several years building a globally diversified, multi technology and increasingly non automotive platform through our 3×10 strategy and Demel capabilities.
Starting with the quarterly performance Q4, FY26 was our highest ever revenue quarter with revenues growing 17% year on year. Growth was broad based across businesses and geographies and was further supported by the successful integration and scale up of Atsumitech. What is encouraging for us is that the growth was not dependent on any single customer, geography, platform or technology, but came from the strength of our diversified portfolio. EBITDA for the quarter grew by 42%. EBITDA margins improved by 200 basis points year on year.
In the fourth quarter, margin expansion was supported by improving profitability in our emerging businesses, particularly lighting and electronics and also aerospace. Over the years we have consistently communicated that several of our newer businesses are initially investment heavy, but once scale is achieved they begin to meaningfully contribute to our profitability. FY26 is another example of that strategy translating into results. Normalized PAT for Q4FY26 grew by 66% driven primarily by scale up in operations, operating leverage and improving business mix.
As you are aware, the reported PAT includes exceptional adjustments pertaining to provisions made in respect of business transformative measures in Central and Western Europe which amounted to 177 crores post tax. These measures are aligned with our ongoing efforts to optimize our footprint, improve our competitiveness and structurally strengthen operations in the region over the medium term. For the full year we crossed another major milestone with annual revenues exceeding 1.25 lakh crore growing by 11%.
Year on year. Growth was driven by strong momentum in emerging businesses complemented by resilient performance. Across our core automotive businesses as well as FY26. EBITDA grew by 11% while margins remain resilient at 9.5% despite significant inflationary pressures in the commodities during the year. This demonstrates the effectiveness of our operational excellence initiatives, cost optimization programs and improving efficiencies across plants, particularly within the modules and polymer business.
Normalized PAD for FY26 grew by 17% supported by improved operating performance and lower finance costs. The reported PAT for the year includes adjustments related to transformative measures in Europe amounting to 328 crores post tax rupees. The impact of the new labor code of approximately 25 crores post tax, an accelerated amortization of certain intangible assets amounting to around 45 crore rupees post tax. Importantly, these results were delivered in a reasonably supportive external environment.
Passenger vehicle industry growth globally for FY26 is estimated to be around 2%, primarily driven by emerging markets such as India and China. We also expect planned European OEM launches in FY27 to support passenger vehicle growth going forward on the commercial vehicle side, the developed markets ended FY26 positively with an estimated annual growth of 5.4%. We continue to remain constructive and bullish on the CD outlook for FY27. However, the operating environment was far from easy. Copper prices increased sharply by about 16% sequentially during the fourth quarter and were nearly up 38% year on year.
In addition, geopolitical tensions in the Middle east led to crude linked inflationary pressures towards the end of the quarter. Polymer prices in Germany also increased significantly following the escalation of the conflict, while global freight and container costs also moved up meaningfully. That said, Mothersan’s business model is designed to navigate such cycles. We have long term pass through arrangements with our major customers for all material price variations. While there may be a timing lag one or two quarters before settlements are realized, these mechanisms provide structural protection over the medium term.
Similarly, our globally local manufacturing strategy continues to be one of our biggest trends. We manufacture in or near the markets we serve which substantially reduces dependence on long distance supply chains. As a result, disruptions arriving from Red Sea shipping challenges and broader geopolitical tensions have had minimal impact on our operations. For customer nominated components. We also maintain back to back supply arrangements to mitigate cost escalation risks coming to the businesses.
Highlights for the year Our automotive business division achieved an all time high in revenues supported by strong execution across divisions. Detailed divisional performance has been covered in the presentation, but what is particularly exciting is the accelerating contribution from businesses built using our demo platform and capabilities. Our consumer electronics business scaled up significantly during the year with revenues increasing approximately 7.5 times year on year. Q4 revenues further grew around 46% sequentially supported by operationalization of the second facility in Q3FY26.
During Q4 we achieved production run rates in line with our targeted annual guidance of 14 to 16 million units. Importantly, the business achieved EBITDA profitability during FY26, a major milestone in our scale up journey. The third facility remains on track for commissioning in the third quarter FY27 and will include additional upstream integration capabilities which should support both growth and the margin enhancement. Similarly, our aerospace business continued to demonstrate strong momentum.
Revenues grew 40% year on year taking the top line expansion to nearly 10x. Over the last three years the order book increased by over 20% to USD 1.6 billion, providing strong long term visibility. We also expanded our product portfolio across multiple platforms, securing orders for metallic parts, sub assemblies and wire harness across business jets and rotary wing aircraft programs. Aerospace remains an excellent example of how our core manufacturing, engineering and system integration capabilities can be leveraged beyond automotive into high value adjacencies.
On the inorganic growth front, we continue to deepen our relationships with global OEMs and strategic partners. FY26 marked the full first year of Atsumitech integration and we are pleased with with the progress. We also completed the acquisition of another Honda SAN linked asset, further strengthening our strategic relationship with that customer group. The acquisition of Yutaka Giken will mark a third Honda San related acquisition and remains on track for completion by the end of first half. FY27 the proposed acquisition of Nexen’s automotive harness business will also significantly enhance our passenger vehicle and commercial vehicle wiring harness capabilities globally, deepen relationships with large OEMs and create meaningful cross selling opportunities for the group.
In logistics. Our partnership with Hellman represents another big strategic step allowing us to evolve from 3 PL to 4 PL capabilities and provide increasingly integrated solutions to customers. Before we move ahead, I would now like to invite Gandhar to take you through some of the key financial highlights and performance metrics for the quarter and the year. Over to you Gandhar.
Gulshan Pahuja — Chief Financial Officer
Thank you Varman. Another major highlight for the year was our all time high book business of USD 90s experience. This gives us strong visibility for future growth. Around 22% of the book business comes from EV programs while non automotive contributes around 3% and continues to grow steadily. Importantly, the book business remains highly diversified across passenger vehicles, commercial vehicles, off highway, rolling stock, towlers and other segments. It is also diversified across developees and business divisions with a growing share of higher margin businesses expected over time.
Emerging economies continue to increase their contribution within the order book. These geographies not only offer superior growth potential but also provide efficient manufacturing ecosystem that can support exports to adjacent developed markets under our globally local strategy. Another key enabler of our long term growth continues to be sustained investment in capex. Fiscal 26 capex stood at rupees 5,911 crores representing 49% of yearly EBITDA. Investments were directed towards growth projects, backward integration and maintenance initiatives aimed at supporting future expansion and improving profitability.
For FY27 we expect capex of approximately rupees six thousand crore plus minus 10% of this 50% will be growth capex and 50% maintenance capex. Within growth capex we will continue to allocate disproportionately higher investment towards emerging businesses, especially consumer electronics where we see substantial opportunity. Currently 16 facilities are at various stages of development globally with 13 scheduled to come on stream during fiscal 27. We also announced four new facilities post last update, two for wiring harness and two for logistics business.
Notably, all 16 facilities currently under development are located in emerging markets reflecting our continued focus on these fast growing manufacturing and consumption hubs. Despite continuous investment in growth, our leverage ratio improved further and reached an all time low of 0.8 times. This remains well within our long standing financial policy of maintaining leverage below 2.5 times and our internal aspiration of staying below 1.5 times. This reflects the financial discipline embedded within the organization.
Rose return on capital employed moderated slightly to 16.1% this year from 17.2% the previous year, largely reflecting record capex investment towards capacity creation and future growth platforms. As scale improves, synergies from acquisitions are realized, backward integration increases and operational efficiencies continue to strengthen. We expect growth to progressively improve. We remain committed to our Vision 2030 aspiration of achieving 40% growth across businesses over time. Our diversification strategy under 3 Cx10 also continues to strengthen risk management capabilities.
Diversification across customers, geographies and components remains one of the biggest structural strengths of Mathersen. Overall, FY26 has been a very strong year for the company. Gross revenues stood at USD 22.9 billion as FY26 marks the first year under Vision 2030. FY25 revenue have been restricted to USD 21.2 billion using a constant exchange rate of INR 84.55 per USD in line with the Vision 2030 reporting methodology. To ensure better comparability across periods, we continue to move steadily towards our Vision 2030 aspiration of reaching USD 108 billion in gross revenues while simultaneously improving diversification, strengthening returns and maintaining financial discipline.
In line with this progress, the Board has approved a final dividend of rupees 0.25 per share taking the total FY quantity dividend to rupees 0.60 per share. This translates into a payoff ratio of 16.4%, an improvement of approximately 1% over fiscal 25 and reflects our commitment towards progressively moving closer to our Vision 2030 dividend payout expiration of up to 40%. As we look ahead, we remain very positive about Madrasan’s growth prospects supported by increasing content per vehicle, electrification, electronics integration and supply chain localization trends backed by our deep OEM relationship, diversified technology portfolio, global footprint and our proven DEMO capabilities.
We will continue scaling both automotive and non automotive businesses while maintaining strong financial discipline and operational excellence. We are fully charged up and excited about the opportunities ahead as we continue building a stronger More diversified and future ready medicine. Thank you. And we will now open the floor for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their 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 will wait for a moment while the question queue assembles. We will take our first question from the line of Ragun and then Anand from Nuama Research. Please go ahead.
Raghunandhan NL
Congratulations on strong numbers to the entire team and thank you so much for sharing the segment wise geography breakup along with the results. My first question was on integrated assembly. Can you talk a bit directionally about the outlook for FY27? You have highlighted 2x new program launches in comparison to 26. Would that mean that this segment can have a strong growth in double digits high teens for next year?
Vivek Chaand Sehgal
Go ahead Bhavan.
Laksh Vaaman
Yeah, look, I think this is a very important year for MSAs. I think you’ve seen that MotherSun has very strong capability in integrating large size acquisitions and of course you can see the hard work done by the entire MSAS team and how they’ve been able to of course leverage on motherson ecosystem and our customer relationships and our purchasing and the entire ability to look into more opportunities of growth within the within the customer group. So look, we are extremely pleased. I think Fredrick and the team have done a fantastic job over there.
They have really looked at all the places where we had leakages in terms of small red units converted those worked closely with the customers in winning new programs and also diversifying the base and bringing different product groups also in with meaningful discussions. So definitely we see growth to happen this year as well. Of course it all depends on how many cars the customers sell. That’s not in our control. But I think in terms of program wins and where we are looking at in terms of diversification of the things that they are doing and the growth opportunities, we should definitely see meaningful growth come in MSAs.
Of course I can’t guide you exactly on the numbers because like I said, a lot depends on the customer sales that happens since they are completely correlated to that. But we are extremely hopeful and positive that they will continue to grow from here.
Operator
Thank you. We will take our next question from the line of Joseph George from IFL Capital. Please go ahead.
Neel Shah
Hi. Thank you for the opportunity. I had three questions. I’ll take them one by one. The first question is on the cost increases that you highlighted. So for example, you know, overheads going up, energy costs, polymer prices going up, etc. So you know, from the past, I recall that during the Russia Ukraine crisis, when the same thing had happened, gas prices, polymer prices, etc. There was a lag in, you know, getting the pass throughs from the customers. And if I recall right, while copper is contractually, you know, arranged in terms of the pass through, overheads and costs such as polymers, etc.
Are negotiated. Can you please help us understand what the situation is now? Is it contractual with respect to these overheads in polymer or is it negotiated?
Laksh Vaaman
Yeah, it depends on customer to customer. There is a mix of both because all customers follow their own styles. And definitely the partnership with the customers is only getting stronger with the volatility and everything that there is in the market because they want meaningful supplier partnerships. And then no one’s really looking to pull each other under the table just because of one macro or economic event which benefits one over the other. So I think in times like this, the partnership and the things that the relationships that we have with the customers really comes to the front.
As you know, we’ve done numerous acquisitions, turned around companies for them, entered new products, and they’re also understanding that there’s something that are out of our control. So yes, in some customers there definitely is a lag. Some customers follow the contracted approach, but there are always meaningful conversations to be had. And there is definitely a lag also that that happens depending on the commodity. But if you remember, even through the entire year, we were also putting a lot of reorganization kind of measures in and driving operational efficiencies and also trying to reduce some of our units.
And we’ve also had a very strong order book win. So a lot of those things are all playing off. Some of the new units have also launched which are now taking businesses. So those fixed costs are being covered. So it’s a combination of all those things that you’re seeing that the strong performance has led to. And definitely a lot is to do with close communication and relationship management with our customers.
Neel Shah
Sure. Thank you. A couple of other questions. One is, when is the Nexon’s deal going to be completed and when will we start booking revenues?
Pankaj Mital
This is Pankaj here. We expect the closure sometime in the end of June, beginning of July, and that’s the time when it should get consolidated with military approvals in place. So some of the management progress. So that’s our expectable timing.
Neel Shah
Sure, thanks. And the last one that I had was, you know, when we look, world over we are seeing that yields are going up across the board. So wanted to understand your debt. Is it protected from short term spike in yields or will, will be or should we account for higher interest cost going forward?
Gulshan Pahuja
So we have a combination of both fixed and floating. It’s a diversified portfolio. To a certain extent it’s protected and for the balance it’s a conscious call which we have exercised.
Laksh Vaaman
I think at the same time the net debt to EBITDA NR is probably at the lowest level that we have seen even though we have had the strongest capex outflow. So I think we will continue to reduce this number going in the year. So wherever it is unfavorable or moving in that direction, with the cash flow generation that we are doing, we will have a significant opportunity to actually pay that out through our positive cash flow. Absolutely.
Neel Shah
Sure. Thank you. That’s all I have.
Operator
Thank you. Next question is from the line of Kapil Singh from Nomura. Please go ahead.
Siddhartha Bera
Yeah, good evening sir and congratulations on a very good performance. My question was on consumer electronics division. I think the next plant will open in 3Q FY27. So just wanted to understand what is the utilization level currently and how the revenues will pay here also when I look at the top customers, you know, consumer electronics customers are not reflecting in that list. So have we included those customers also or where are they?
Laksh Vaaman
Yeah, so I’ll, I’ll take some of it and Gandhar will probably support me on, on this. Look, the, the third plant utilization is zero right now because it’s in, in startup phase and then you will already do the testing, prototypes and all of that and that’s when it will really come up like I said. And once it comes up, actually the, the timing is, is it goes very fast. So, so unlike automotive, which takes a couple of quarters to ramp up or a year also to reach the highest volumes in the consumer electronics side, when the order starts it really comes at full fledged levels.
So the timing that we’ve given you, that’s when it will come up and the utilization will go significantly higher at that time. Right now it’s the smaller units GF1 and GF2 which we are using, which are almost practically fully used up in what we are doing. So the meaningful kick will come as soon as the third plant is operational and takes on revenues and then you will see those numbers as they come because the order book for that only comes immediately before that the program kicks off. That’s when we get the full visibility.
But we think that it will be at very, very good levels, better than or as we budgeted for it, for what the construction that we have made. So overall, extremely positive on that aspect. And I think that this will really support contribute significantly. And on the orders, on the customer split, they still are fixed in that other segment. That’s
Gulshan Pahuja
Right. This particular customer is included in others. And just to support what Bavan rightly mentioned, between GF1 and GF2, our annualized production guidance was around 14 to 15 million units. And which is what we have already achieved in the fourth quarter of the year gone by. And from third quarter of the current fiscal year, we should be able to see GF3 going into the stream. And from there we should be able to take the growth label to the next level. As far as this particular business is concerned,
Siddhartha Bera
Sir, this top 20 customers includes all divisions or it includes only automotive?
Gulshan Pahuja
All divisions.
Siddhartha Bera
Okay, so there is no consumer electronics customer in top 20
Gulshan Pahuja
And we are not also allowed to talk about few of those customers. And those names have not been included in the reporting.
Siddhartha Bera
Okay, okay, understood. Secondly, just on the restructuring, can you give us an update? What percentage of the restructuring is complete? Should we expect more benefits to come through going ahead or are we already seeing most of the benefits?
Laksh Vaaman
Are you talking about the European one that we spoke about? Is that the one that you’re talking about? Yes,
Siddhartha Bera
Yes.
Laksh Vaaman
Yeah, look, I think a big chunk of it is done. Of course you’re seeing the situation that is happening in Europe and a lot of macroeconomic issues continue to plague the region where volumes growth are not as meaningful as we have expected in the past. But yet Mother sun continues to grow acquisitions and increase in, let’s say, the value content that is going up. But yes, I think we definitely do see more possibility for us to restructure operations. And I think we will also continue to acquire operations and resize them to make them perfect.
So as you can see, we have significant headroom for acquisitions. All the acquisitions that we have done have integrated really well. You can see the performance of that. That is what’s leading to record top line for us and also the holding of the margins because we bought this diversification in all the businesses in. And I think the customers will continue to look at us for solutions. And at that time more resizing will be required because that is why those assets have come into problems. Right.
So from that sense, I think we’re operating at a fairly strong base. We will further drive efficiencies in our business, but the more meaningful volume growth will definitely come from acquisitions that we envisage will come just like they have in the last few years. And when they come, they’ll come in quite a bundled manner.
Siddhartha Bera
Okay. And finally, just one question on EVs, it’s 22% of order book. Can we also get an idea of what percentage of revenue the EVs currently? And you know, will most of the ramp up in revenues now come from EVs given the scale of order book?
Laksh Vaaman
No, not at all. I think the revenue component is 11% around that. But look, the split. Well, first I want to say that look, we are engine agnostic, right? In the sense that we are not really doing too much parts which is directly impacted. We are able to support those variants that are both EV and non ev. That’s the majority of the business. Even though we have done some strategic acquisitions to start looking at that. But the majority of the business is still hugely agnostic to what the powertrain is.
The customers moving forward from only moving into an electric kind of a mindset have now shifted and said that they will move in all kind of powertrains. I’m generalizing, but they will offer all solutions. They will also offer ice, they will also offer electric and they will also offer hybrid. So really to tell you what models get picked up, that’s really dependent on the, on the customer preference, how much the governments are supporting what is being sold by the dealerships. But we are fully capable to supply the variants.
You know, of our interiors, exteriors, wiring harness, plastic parts, mirrors. I mean all of these relatively can be picked up depending on what the customer pulls from us. So that will only be determined when the volumes is actually picked up on by the customers. But we do not envisage a huge shift happening in a short period of time. Surely electric is growing in the portfolio, although it keeps moving up and down and has volatility. But we believe that the market will never be so that it will only be electric or something like that.
This whole horses for courses. Different markets will have ICE dominated, different markets will have will move towards hybrids. Different markets, for example, China are already dominating electric. So there’s no generalization to be had. It will all depend on how the market pulls and what the government support is and again what the customer’s preferences are.
Siddhartha Bera
Thank you sir for all the detailed answers and best wishes.
Laksh Vaaman
Thank you.
Operator
Thank you. Next question is from the line of Amin Perani from JP Morgan. Please go ahead.
Unidentified Participant
Yes, hi, good evening and thanks for the opportunity. Just a few clarifications in your breakup of emerging businesses. If I look at lighting and electronics and I’m assuming that consumer electronics is part of that. Despite the very sharp uptick in consumer electronics, the revenue growth in lighting and electronics is just about say 30%. So is it fair to say that the lighting business has had a fairly tepid year or am I overestimating the impact of consumer electronics here?
Laksh Vaaman
I think lighting electronics definitely had a very strong year. I think again you’re not seeing that meaningful rise because GF3 is still to come up as soon as GF3 comes up. You have to understand that GF1, GF2 are minute size compared to what we are building at GF3. GF3 is the largest facility that we will have in motherson. It’s the size of 33 football fields that is going to come into commission. So I think you should really look at this number next year and then you will see the real impact of the electronics business that comes on steam.
On top of that, I think we are doing, doing numerous more initiatives. You’ve seen some releases also about motherson electronics where we’re looking to do our own PCBA RSMT lines. We are building a lot of strength on that. Even on the wiring harness side. A lot of focus is going into electronics with the new technology that is coming over there in the EVs and things like that. And I think again with the Nexon’s integration, you know, a lot of stuff will more happen towards electronics field. I think it’s a, it’s a wait and watch.
Please see what happens in a year or two. You know, we are driving extremely strong in semiconductors in consumer electronics and all of these will become really meaningful in a couple of years to come. Please just be patient and understand that, you know, in a very short period of time we are already supplying to some of the world’s biggest names and scaling quite fast. Although the automotive business continues to scale itself. So this growth becomes a bit minute because you know, you’re comparing to what has already been in automotive for the last 50 years.
So. And all of this has just come up in the last couple of years. So just be patient. I think we’ll be having very different discussion next year.
Unidentified Participant
Sure, look forward to that. And just for context, GF1 and GF2, you know, you mentioned that in Q4 you’re hitting the annualized run rate of 14, 16 million units. So GF3 will be a multiple of this. Or like any broad indication are you giving right now that GF1 and GF2 is 14 to 16 so GF3 will be like 2 to 3x, 5x of this, something like that
Laksh Vaaman
I can’t give you. But yes, it will be a multiple of it because that’s how it’s designed to be. It was for us to prove to the customers that we are capable. And now we are building the big plant to come in. So wait for a couple of quarters to really see that number. Because like I said, I think the most exceptional part of this business is that the order book only runs for that one year, right? There is no the next year you get the next order. It’s not like automotive where it’s a, you know, a gradual increase, then moves into high, then the thing starts to decline.
It goes straight 0 to 100 because you have to produce as much as you can as soon as you win the order for the selling season and then you move a little bit lower into spares and all that and you already start working on the next program. So it’s a very different sort of industry, a difficult one because we are obviously more used to the automotive side. But I think the team has done a wonderful job to adapt and challenge this new industry. And the work you will see in a couple of quarters time and see how the team has wonderfully adapted and taken on this challenge.
And you’ll see that reflecting in the numbers in a very sharp way. So I’m quite excited to report that to you in coming quarters.
Unidentified Participant
And just on the aerospace business, would it be fair to say that out of the 2,400 crores odd revenue, a large part of this would still be a business which is still being done in Europe, but your expansion is mainly India. So there should be a large scope for expanding margins here as these revenues go up.
Laksh Vaaman
I mean, you always hit the nail on the head. Actually. We were looking at the order books and the Indian order book is perhaps even larger than what we have in the European side. So the growth is coming in a tremendous fashion. I think you all saw on our investor day that we had the customers there and how they’re looking at Mother sun to partner and grow their order book share in India. So it’s extremely exciting what’s happening on the aerospace side. Not only are we looking at that, we’re also looking meaningfully to penetrate the semiconductor business through the capabilities in aerospace because they are complementary.
And that is also some seeds which you have started, although extremely small right now, but hopefully in coming years that will also scale up in a meaningful size. But we are extremely pleased with the growth that’s come in the aerospace and this is just the first, you know this is really the first step. More meaningful acquisitions, more global growth. And of course India being the center of growth and aviation with what’s happening with the infrastructure development around it and the Indian consumers growing rapidly preferring to take more and more airplane routes and more airports being built in India with that infrastructure we believe it’s going to be many years of growth to come and we are in great shape to take advantage of that growth.
Unidentified Participant
Great. Thanks for answering the questions and I’ll come back in the queue. Thank you.
Operator
Thank you. Next question is from the line of Vinay Singh from Morgan Stanley. Please go ahead.
Unidentified Participant
Hi team. Thanks for the opportunity. Just starting with the consumer electronics earlier we had talked about 2,600 crore capex in that business. Where are we on that number and in this capex guidance of next year is that are we, have we increased it or is it just that is already included in this?
Gulshan Pahuja
Thanks Vinay. You’re right, that was the guidance which we gave last year for the current year we are in the process of finalizing the numbers. It should be broadly in the range what we guided in the last year. But allow us a quarter to come back to you with the formed up numbers.
Unidentified Participant
Okay. And secondly the 16 million exit number that we talked about that is unit number. Any guidance on what, what is the revenue per unit?
Laksh Vaaman
Look we, we can’t guide on that yet. I think again let it become meaningful by GF3 and I think that’s the time where we will start to talk more about the exact numbers once it’s a meaningful size. Right now again just GF1, GF2 are too small to be able to disclose those numbers in a meaningful way. Let GF3 come out and you will see a much clearer picture and that will have the meaningful impact for you as well.
Unidentified Participant
So even then the lighting and electronics that we see. So currently the contribution of this business will be fairly small in that. Right? That’s a, that’s a fair way to understand, right? That’s
Laksh Vaaman
Right. That’s right.
Siddhartha Bera
That’s
Laksh Vaaman
Right.
Unidentified Participant
And then just moving to aerospace, you know we have two facilities coming up in the first quarter of FY27 both in India. We had a very strong FY26. What kind of a growth do you see in the coming year?
Laksh Vaaman
Look, the order book for the aerospace is at record number for us I think. Are we allowed to disclose the order book? One point I think yes. So that is some number that we have already disclosed. 1.6 billion is the order book. So with these two facilities will cater to that additional demand. I think it doesn’t stop there. I think this year again we are hungry for more growth and perhaps if we are able to secure some big orders and also look at some acquisitions, that number will continue to continue to grow.
But these two plants are for the new capacity and the order book that we already have in hand, which is about 1.6 billion
Unidentified Participant
And what year, because your current revenue is $250 million or so in aerospace. So 1.6 billion is over how many years.
Laksh Vaaman
So usually in aerospace it’s about five to eight years around that depending again how much the customer pulls. But usually we have seen that that gets front ended because I said I think the, the, the demand in India is extremely strong at the moment and this will not stop there. I think we, we are aiming to grow even further from here and have bigger wins this year. And hopefully we’ll come back to you in subsequent quarters to tell you how that order book is growing. It’s, it’s consistently grown.
It was at 1.2 billion I think the last time we reported it. So 1.6 is a meaningful jump on that just in a few quarters. So as you can see, there is, you know, the exponential growth is happening now and hopefully these numbers will only continue to go in that direction.
Unidentified Participant
Thanks. And just last going back to the auto business, we have this one comment on slide number two where we are saying that European OEM launches in FY27 expected to support growth. And we know that Europe, it seems like Europe is having a weak summer for auto production. These launches that you talk about, are they the usual course of business or this year you have an exceptional number of new launches coming through which can help you offset the industry weakness?
Laksh Vaaman
Yeah, it’s a very good point, I think. Yes. One, our restructured footprint is going to help us because you know, we are definitely leaner in these, in these locations and definitely the new order wins and they are coming with exciting new attributes in the car. All of them are content heavy, value increasing. As you can see, a lot of the new EVs are coming with a lot of feature rich content. So a lot of the new cars are coming with exciting new technologies, exciting new materials and the way that we are going after these with the content heavy kind of stuff.
So we definitely believe that these launches will help both meaningfully in top line and bottom line for us.
Vivek Chaand Sehgal
Also, I think it’s important for people to understand that the customers in Europe are not always the same. You know, even the new customers in Europe are coming in from outside Europe and they’re producing in Europe and the customers have realized, our customers have realized that they thought they could get the mirrors from the normal source in XYZ country, but in Europe they are doing local manufacturing and then that’s where our opportunity is huge and that’s what is there. So it’s a huge mix of new customers, old customers, old models, new models.
Everything is happening at this time and we’re always at the edge of our capacity. What should I say?
Unidentified Participant
Thanks team. Thanks for the detailed response.
Operator
Thank you. Next question is from the line of Raghun and then Anil from Nuama Research. Please go ahead.
Raghunandhan NL
Thank you sir for the opportunity again. In wiring harness division there is a extremely strong margin expansion of 170bps QoQ. And this is despite the copper price increase and also some contraction in margin in Mother sun wiring India. So what is the driving factor for this margin expansion? Is it mainly operating leverage across the global entities like PKC Stone rates?
Pankaj Mital
Okay. Yes, it’s mainly because of the operational improvements and you know it’s since it’s a global business. So there were some entities in some parts of the world which had not performed well earlier which have done better in in this quarter. And you’re right, there is an impact of copper which is lag which we should be recovering in the coming quarters.
Raghunandhan NL
Thank you, thank you for that. And
Pankaj Mital
As we move forward we see also that markets recovery in the North American side will also come in which should also help us become even much better.
Raghunandhan NL
Well noted on that point. One clarification. Input cost inflation like commodity, there is a automatic pass through with some lag on energy, gas price, freight costs. There has been some increase in the recent months. Would these higher costs reflect in Q1? Is there an automatic pass through here with customers or would that happen through negotiation?
Gulshan Pahuja
So all these cost in the quarter gone by. The impact was there only for a few weeks which was not necessarily very significant. But you are right. In the current quarter most of the industries have incurred these additional costs. In our businesses generally these are matter of negotiations. We have very strong relationship with our OEM customers and over the period, albeit with a with a leg, we should be able to recover most of these increases. The cost from the customers.
Raghunandhan NL
Noted. Sir, just a last question. Leverage position is very strong at 0.8x and there was one comment where you indicated that debt will continue to reduce. Given the uncertainty, wouldn’t you be looking at more inorganic opportunities or Would there be debt reduction? How do you, how should we look at that?
Gulshan Pahuja
We continue to evaluate inorganic opportunities whenever we come across any inorganic opportunity in line with our philosophy generally at the bs. So the customer will certainly exclude. But as Bhavan mentioned as a response to earlier question, we’ll continue to generate healthy cash flows and we will use these cash flows for supporting our organic growth in the form of capex and wherever required, if possible, we will also retire at debt to ensure that we utilize these cash flows in the in meaningful manner.
Laksh Vaaman
Thanks Kandar. It’s Kandar’s job to return the debt and my job to spend more money. So look, I think you all know our targets. For one, I think Gandharv and the team are doing a superb job to keep tight control on the finances and keep that operating leverage very much favorable. But we definitely have to keep headroom if we want to go after that 108 target. And we definitely, whenever we are speaking to the customers, we know that there are a lot of issues still out there, a lot of suppliers that are still in trouble and a lot of factors that are still very much creating chaos in the, in the supply chains and will require investment, will require CapEx, will require upgradation and we are keeping headroom for that.
So I think that’s something that’s around the corner. Of course we will be disciplined as we always have been. We will wait for the customer to approach us, but our thinking is that that is around the corner and that’s why keeping this healthy headroom where our operations can continue to grow. As already said, we’re looking to spend consideration considerable amount of Capex this year as well to meaningfully grow our top line. But we want to keep money for the acquisitions that will become a game changer for us both in terms of products and the customers and the product segments that we serve.
On top of that, the new businesses all are doing extremely well. The customers confidence is growing on us and we know that those acquisitions also around the corner because once you solve a customer customer’s problem and then they’re happy with you and the trust goes up, you’re the first person they think of when they have the next problem. So you know, we’re inundated by that honestly. Our pipeline for possible acquisitions is probably also at quite a high in those terms and we are patiently waiting and you know, all we have to do is continue to deliver to these high levels of quality that the customer expects, be extremely cost conscious and be high in their ratings and the opportunity will present themselves and customers are definitely calling us.
And as we talk we’re looking at opportunities. Of course we can’t disclose. We will only do that once they are meaningful and all the things are sorted out with the customer. But as we speak we are looking at meaningful opportunities to again change the trajectory of Mother sun and get closer to our vision 2030.
Raghunandhan NL
Thank you sir for sharing that thought process and looking forward to the announcements. Thank you.
Operator
Thank you. Next question is from the line of Aditya Ladha from Stelli and Assad. Please go ahead.
Unidentified Participant
Good evening sir. Firstly, congratulations on a great set of numbers. So we’re doing a capex of 2600 cr in a consumer electronic business that’s probably larger than most of the EMS companies in India. And the kind of growth that we’ve done 7.5x this year, Yui is also incredible. It’s like we found a new tan to deploy our DMAL capabilities. So going forward this year also can we expect maybe if not 7.5, at least a 5x growth yui for the consumer electronic business,
Vivek Chaand Sehgal
Why not 7.5?
Unidentified Participant
That would be great, sir. That would be great.
Laksh Vaaman
Look, look, this is a very key point for Mother Son. We have realized that electronics is core to a lot of the products, not only touching the automotive side, but of course as an independent segment as well. And that’s why we are deploying more and more capital to it, building more competency, adding onto the team. You also hear about potential new joint ventures that we are forming, of course, acquisition opportunities that are strategic and inorganic growth. So all of this will definitely lead to meaningful multiples of growth in the electronics division.
Of course a lot depends on again our ability to execute and the customer’s confidence in us. But we are completely committed to having a lot of growth in this division.
Unidentified Participant
And secondly, so during the Q2 PPT, you had mentioned that our order book for the consumer electronic and aerospace business was close to $3 billion. And today you mentioned that aerospace business is close to $1.6 billion order book. So is it fair to assume that the rest of it is consumer electronics and to be executed in 6 to 12 months?
Laksh Vaaman
Safe to assume that next time I have to be more careful with my words because you are. But yeah, look, I think overall, and it’s not just that one plant that we’re looking at, it’s the complete electronics. Like we are buying a lot of our own PCBAs and from our SMTs and things like that as well. Right. So all of that will meaningfully contribute in this coming Year because our own electronics company which is going to be doing with a lot of SMT lines that we are setting up that will contribute and we’re going to bring a lot of that purchasing in house.
So that along with the consumer electronics, along with our increasing focus on electronics on the other segments, that’s something that we are targeting now. It may come plus minus 10% to that number. But yeah, we are hopeful that so on the positive side and continues to go from here.
Unidentified Participant
And so broadly this consumer electronic business, jv, even though it’s a jv, it will be consolidated. Right. And what margins are we looking at it? Close to 20% margins for this business.
Laksh Vaaman
Look, I would want even more, but you know, look, all I can say right now is let GF3 scale. I think it’s definitely better than what our group is doing at the moment. Of course, course I cannot give you an exact because we don’t guide on margins. But this should be helping to increase our roast because the investments have been done and the returns will start to come. And like I said, give us some time. I think we are very excited about the business. This is our first step into a business like this.
Will we ever hit the number that you’re talking about goes to see how things pan out and how much we can build our strength internally. None of these businesses ever start out at that door. Those kind of margins, you have to build up the capability to reach those kind of margins. But like I said, I think the first fundamental step has been made and it will be in the positive direction. And hitting EBITDA positive already at this stage is a wonderful sign. Where it reaches, I think you’ll have to wait and see.
And like I said, we are more focused on the roast rather than just the EBITDA number because that’s what’s more meaningful to us.
Unidentified Participant
And so last question is. So you mentioned that order book also. You know, we get orders when the facilities are live or something. So the order book that we have right now, taking on the aerospace, do we expect it to increase by Q3, FY27? And would the entire execution come in FY28 for the order book given the order cycles are 6 months to 12 months, as you mentioned.
Laksh Vaaman
No, no. So for consumer electronics is that much. For the automotive, it’s more two to two to three years depending on how we have won it. And that will go go on for the next five years. So aerospace is even longer than that. It’ll come within again two years or a little bit less than that. But that will go on for maybe 10 years, maybe even longer than that, because as you know, the airplane platforms last for sometimes 20 years, even longer than that. But the order books are generally around that level where there’s of course upgrade changes.
A lot of those things kind of happen. So now you see that the complete strength of MOTHER and the demand, you know, you have the fast moving consumer electronics space where everything is already decided in one year. The new product, the order win, the order execution is all within one year to move towards the medical devices, which is perhaps a little bit longer, towards more automotive, which is even longer, towards aerospace, which is the longest and goes all the way up to, you know, execution of 10 years time.
So again, the whole idea is to diversify the business to be able to, you know, reduce the, the dependency on any one industry and be able to grow even times of high volatility. And I think that’s what’s playing out. As you can see, we are in severe microeconomic turmoil. But the diversification in our business is what’s helping us to grow
Unidentified Participant
So broadly. I would say it’s safe to say $1.4 billion of consumer electronics to be executed in FY28. And so there’s a new CEO that’s come at Apple, quite a big change. So first of all, they may be our customers and does that have any impact on our business?
Laksh Vaaman
So that’s your assumptions. Again. We’re not here to talk about our customers or, you know, any customers out there. I think that is again your assumption of what’s going to happen. I think the best person to answer those questions is the customer that you’re talking about. We are here to answer of questions about our business.
Unidentified Participant
Got it. So 1.4 billion for FY28 consumer electronics.
Laksh Vaaman
With God’s grace, it will be. Will do more than that. I hope so. But again, it all depends on what the customer pulls and what happens
Vivek Chaand Sehgal
One quarter ago or something like that. That’s all that will happen.
Laksh Vaaman
Yeah, let’s see what happens.
Unidentified Participant
Okay, thank you, sir. Thank you.
Operator
Thank you. Next question is from the line of Neil Shah from Karnata Investment Advisors. Please go ahead.
Neel Shah
Hello. Yeah, I just wanted to understand that in terms of net revenue, what would you say your 2030 vision would be?
Laksh Vaaman
Net revenue.
Neel Shah
Yeah,
Laksh Vaaman
Gross revenues. It’s a gross target because it’s a vision for the entire group. And that’s 108 billion gross revenue target, not net.
Neel Shah
Okay. So that would imply a CAGR of 47% over the four years. Am I understanding that Right,
Laksh Vaaman
Yes. And I think that is something that we have done over the last 50 years as well.
Neel Shah
All good, thank you.
Vivek Chaand Sehgal
This is the seventh five year plan, Bob.
Laksh Vaaman
We have very high ambition. Right. So the idea is to think big, to think out of the box, to get ourselves out of the comfort zone and to live our purpose which we have defined for the company. So in fact you might be holding onto that 108 and thinking that that’s the only thing that’s driving us. That’s not for us. Top line is vanity, bottom line is sanity. Cash in the bank is reality. That’s our dream, that’s our ambition. But we will be opportunistic at the same time. We will be financially disciplined and we will only go after opportunities where the customer wants us to be.
So we are Preparing ourselves for 108 and we will be ready for 108. The opportunities have to present themselves.
Raghunandhan NL
All right, that’s helpful,
Operator
Thank you. Next question is from the line of Jai Kale from Alara Capital. Please go ahead.
Unidentified Participant
Yeah, thanks for taking my question and congrats on a great set of numbers. My first question is regarding our global OEMs. Our customers, they have recently kind of given write downs on their EV investments and also in recent quarters they’ve mentioned of supplier compensation. Regarding that
Vivek Chaand Sehgal
I tell you so I’ve been seeing that for the past 20 years. But you guys were not listening,
Unidentified Participant
Right, right, absolutely. But just that they were, they were also, they’ve also mentioned of supplier compensations in the current quarter that they’ve given which has hit their margin. So have we received some of that in this quarter as per, you know, some compensations on that side.
Vivek Chaand Sehgal
We don’t know what you’re talking about. I don’t know which guy has given compensation to this in the pastry for the investments and all that. We were never on that. We were always on the right side of the thinking that everything think is not going to become ev. So we were obnoxious at the end, right from the beginning. Yeah. And
Laksh Vaaman
Again, like my father saying, you know, we, we contractually are bound to a contract to supply something. So out of that contract things happen. That’s within the competition, not because EV didn’t really pan out. So that is the customer’s prerogative on who they want to give to who they want to make sure that they survive or not. That’s up to them. Madhasar is a financially strong company. We have. That’s why we are winning business from our customers and have a deep relationship with them. On our products, whatever our contracts were, that is what we have rightfully taken from our customers and given them what they, what they expected from us, the product and the quality that they, that they expected.
Unidentified Participant
Great. Great. And second question is on the emerging business. So if you see the precision metal and modules, the segment that has seen a stellar growth of 2.7x if you just talk a little bit about, you know, what is driving that and what is the outlook going forward for that segment.
Laksh Vaaman
Great question. I think that’s another key area for us to grow. I think machining is a, is a core focus for us. You’ve also seen the growth happen meaningfully there because of Atsumitech acquisition will reflect over there. So last part is the growth over there. And I think again the team has done a wonderful job to integrate these acquisitions that we have said add meaningfully to the top line and bottom line while maintaining all the other ratios and improving them for the rest of the group. So that’s what you’re seeing.
The business itself is also growing. We’ve done a couple more acquisitions in this also in the past like Rollon, et cetera that we had announced and all of them are fighting really well. And machining continues to be an area that has growth, has meaningful contribution and something that we are extremely focused on because that does not even just stand on the, on the automotive side but also on the aerospace and you know, potentially consumer electronics in the future when we win those kind of businesses.
So we’re looking at machining and precision machining as real core focus moving forward for all our, for all our segments.
Operator
Thank you ladies and gentlemen. We will take that as the last question for today. I would now like to hand over the call to Mr. V.C. Sehgal for closing comments. Over to you sir.
Vivek Chaand Sehgal
I think all of you have been advised a lot about what we are doing and how we are performing. But important for you all to understand that we are a fast moving company onto where we want to be. And thank you for your support and thank you for your questions. Thank you very much and have a great week and months ahead till the next time. Take care. Bye.
Operator
Thank you on behalf of Samvard Dhana Madhasar International limited That concludes this conference. Thank you all for joining us today and you may now disconnect your lines.