Sansera Engineering Ltd (NSE: SANSERA) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
B.R. Preetham — Executive Director and Group Chief Executive Officer
Vikas Goel — Chief Financial Officer
Analysts:
Siddhartha Bera — Analyst
Arjun Khanna — Analyst
Anirudh Shetty — Analyst
Vaibhav Shah — Analyst
Kush Nahar — Analyst
Mukesh Saraf — Analyst
Varun Basrur — Analyst
Shashank Kanodia — Analyst
Presentation:
Operator
Please wait while you are joined to the conference. The conference is now being recorded ladies and gentlemen, good day and welcome to the Q4 FY ’25 Earnings Call of Sancera Engineering 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 then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr B. R., Executive Director and Group CEO. Thank you, and over to you, sir.
B.R. Preetham — Executive Director and Group Chief Executive Officer
Good. Thank you. Good morning, and welcome everyone. Thanks for joining this call. On this call, I’m joined by our CFO, Mr Vikas Goyal. Our CEO of ADS Division, Mr Hari Krishnan Rahul Kale, our CEO; Praveen Chan, our Head of Corporate Strategy Strategy; and also Mr Ravi, Director in MMR FIC and our Investor Relation Advisors SGA. The results and the presentations are uploaded on the stock exchange and the company websites. So I hope everybody has had a chance to look at them. For the fiscal year 2025, Engineering crossed INR3,030,000 million mark in terms of top-line with a 7% revenue growth on a year-on-year basis. This is our highest-ever annual and quarterly performance in terms of top-line and PAT. With this performance, we continue to outperform the industry growth despite multiple headwinds in the Indian as well as global economy. Broadly, the domestic automotive industry registered a single-digit growth across the segments, primarily due to a high base effect and muted demand. That said, the outlook, particularly on the two-wheeler side is looking better for the coming year with a strong rural demand supported by improving consumer sentiment. On international business, things are moving at a slower pace as decision-making from OEMs with the — with respect to production and new order placements and the new projects has been on-hold due to tariff-related uncertainties going on globally. We hope that this — this is a temporary phenomenon and would get addressed in a short period. Hence, we see some impact in our export business in Q4. We saw some impact in our export business in Q4 FY ’25, especially on the auto side. It is expected to continue in the Q1 FY ’26 as well, while our exports from India would be impacted a bit, but our Sweden business is doing better now, primarily due to volume and price improvement with our key customer. Speaking of non-auto business, we now view this segment as ADS and non-ADS. ADS stands for Aerospace, defense and semiconductor, whereas non-ADS would include agriculture, off-road and other industrial applications. We anticipate significant growth in the ADS segment in the years to come. And to drive this business, we have recently appointed Mr Harry Krishnan as the CEO of ADS division. I would like to take this opportunity to introduce you to Mr Harry, who has joined us in this February of this year and he brings in over 30 years of leadership experience in the manufacturing sector. Prior to joining us, he held key leadership roles in the renowned organizations like CE Automotive, our CEO Forging division, Naptun Forgings as COO to name a few. Hari will also oversee the business development activity of the entire group and would be a key member of our leadership team. Speaking about the segment-wise performance for the year, in the non-auto segment, we delivered a stable performance on a year-on-year basis. However, the 4th-quarter saw a 15.6% increase, especially on the ADS side. ADS revenues stood at INR1235 million in FY ’25 and with a 13% growth on a year-on-year basis with the production schedules moving up for our key customers in the Q4. During Q4 FY ’25, ADS segment revenue surged 43% on a year-on-year basis to INR434 million. The outlook for this segment is very bright as we expect this upward trajectory to continue in the coming quarters. This will be aided by the addition of another larger OEM, aerospace OEM and the semicon revenues flowing through. The rest of the non-auto business delivered a top-line of INR2024 million. If you look at XV and Tech agnostics segment, it continued to demonstrate a strong momentum, registering a year-on-year growth of 28.6%, mainly due to healthy growth in our XV piece on the back of the execution of orders for our North American customer. Collectively, both XV and Tech agnostics segment accounted for close to 15% of our total revenue. With our new forging press, we are confident to do stronger business during the year. Turning to our traditional ICE automotive components business. The two-wheeler segment delivered a steady performance, contributing approximately 44% of the overall revenue in the ice bike. The passenger and commercial vehicle segment contributed 18.6% and 10.5% of the total revenues respectively. Thanks to our attempts to diversify our revenue streams, the ICE business share of overall revenue fell to 73.6% in FY ’25 from 75.4% in FY ’24. When considering the massive ever-expanding base of this segment, this accomplishment takes on further significance. As of March 2025, our order book stood at INR18511 million following the annual reset process, wherein we exclude orders that have transitioned into mass production during the year. Notably, over 60% of the order book comprises of international orders, reflecting the continued strength of our global business pipeline. Of the total INR18511 million orders secured during the year, about 28% of the orders came from the ADS segment. During the year, we focused on preparing a playing field for our future growth as we have undertaken multiple strategic investment for the capacity enhancement. We spent about INR100 crore to acquire a 55 acre land in Karnataka for our future expansion. We plan to start construction work-in FY ’27. We have also invested INR about INR35 crores to acquire a facility in Pantanagar and we expect it to operationalize by Q2 of FY ’26. Further, we have done brownfield expansion at our plant by adding new missions and setting up of forging as well as missioning lines, which are in-line with production plans for our new orders. Before my closing comments, I will take a minute to update you on MMRFICs and on MMRSYC and our strategic investment, which made a couple of years, which we made a couple of years ago. It is progressing as our expectations. They have multiple products with qualified technology for aerospace, defense and MMRFIC has also received government orders, grants under development from Itro, DRDO and IDF DIO.We are very optimistic about its prospects, given the high focus on defense sector and continue to support their endeavor with regular investments. Looking ahead, the outlook for our business remains strong with multiple growth levers across the segments, particularly areas where we expect to double the revenue in the year FY ’26. In this dynamic world, we see a lot of opportunities coming towards the Indian companies and is well-positioned to capture these opportunities. I now hand over the presentation to Vikas Goyal, our CFO, to talk about the financial performance. Thank you.
Vikas Goel — Chief Financial Officer
Thank you, Prietam. Good morning, everyone. I will take you through a glance of our consolidated financial performance for the quarter or ended March 2025. Our total revenue from operations increased by 5% on a year-on-year basis, reaching a figure of INR7,817 million as against INR7,458 million last year in the 4th-quarter.
EBITDA for the quarter stood at INR1,271 million with a margin of — at a margin of 16.3%. Other income an increase primarily due to deployment of the residual funds from QIP and resulting in interest income. Depreciation and amortization expenses stood at INR468 million in-line with the investments that we’ve been doing in our facilities.
Finance cost during the quarter decreased from — decrease to INR96 million from INR through INR25 million as we have reduced significant amount of debt from our balance sheet. Profit-after-tax at INR592 million with a growth of 27% year-on-year. PAT margin remained a healthy at 7.6%. Talking about our full-year performance for financial year 2025. Our revenue rose by 7% on a year-on-year basis. The details were already discussed by Prietam earlier.
The total revenue stood at about 30,168 million. Our EBITDA for the year stood at INR5,148 million with a year-on-year Growth of 7% and the margin in-line with the previous year at 17.1%. Profit-after-tax witnessed a growth of 16% from last year and stood at INR2,169 million with a margin of 77.2%. Our operating cash-flow net of taxes continues to be healthy and stood at INR3,766 million, which is 12% of our operating revenue and 73% of our EBITDA for the year. During the year, we have done capex of INR5,000 or I would say we have spent towards capex INR5,911 million. And going ahead, we spend — continue to spend on adding capacities in the current financial year. At the year end, the net cash amounted to INR125 crores as a result of the cash generated or cash received from QIP. Thank you. I would like to close this call and sorry, open the close the address and open the session for Q&A.
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 their 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, let us wait for a moment while the question queue assembles.
The first question comes from the line of Sidhartha Behra from Nomura. Please go-ahead.
Siddhartha Bera
Yeah. Hi, sir. Thanks for the opportunity. Sir, first question is on the PV segment. So we have continued to see a lot of weakness there. So first is if you can sort of break-out the decline of 16% 17% in the quarter into the domestic and exports, how does it look? And for the export markets now, I mean, given the visibility which your customers are giving, how do you see the trends there to sort of pan-out for the year?
Are you seeing some sort of pickup in schedules or the near-term you still maybe it can extend for a bit more time and how does this — how does the tariff is sort of getting impacted either if we are absorbing or passing it on, how is that tariff is playing out for us?
B.R. Preetham
Yeah. Thank you,. See, PV — PV segment for us on a full-year basis last year actually de-grew by almost 7.9%. This was primarily due to a fact that there has been a significant slowdown in the second-half of the year in the export market owing to a lot of uncertainty both in Europe as well as in US and also it was not aided — I mean it did not get too much of a support because of the — finally at the end-of-the last towards the last year, the tariff problems also started.
Now there was — because all the OEMs also were very cautious to reduce all the inventories, pipeline inventories because you know, shipping across the border from Mexico, the whole vehicle also eventually was stopped or was coming at a higher tariff. So there were a lot of cautious approach from the customers. Actually, our order book has been very strong from the PV segment.
In fact, we expect to outgrow our performance in the coming year as well as years to come. Overall, if you really look at our average growth, this industry — this segment will grow faster for us because there are several opportunities where we have already contracted for the new orders from the — both from North-America, Latin-America as well as India OEMs, exports and India and domestic segment.
While we are quite confident on the overall year performance. Of course, there could be certain impact on the first-quarter and towards the half of the second-quarter as well because this needs to be — I mean, as of now, the tariffs — base tariffs are in effect 10% and we are in close discussion with our customers who have taken all the inputs from us.
Very few of our orders currently are — the duty is paid by us, whereas, whereas most of our export orders are currently duties are paid by the customers directly. So wherever we are paying the duty, we are already in discussion with the customers to offset it, you know, but it is still — the times are still uncertain. We are still not clear as to what would be the end result.
But we expect at the end of this whole exercise, there would be more tailwinds for the Indian component manufacturing industry rather than any headwinds. So having said that, we expect that this year we will have a stronger performance both in terms of passenger vehicle, both XV as well as their normalized segment.
Operator
Does that answer your question, Siddharth?
Siddhartha Bera
Yes, sir. Sir, second question is on the tech agnostics side. Here also, we had a good order book in the aluminum forging business where I understand that capacities are largely booked for us, but growth in this segment also been a bit soft in the last couple of quarters. So how do you think about this segment? What are the key orders here and how should we expect the ramp-up here?
B.R. Preetham
See tech agnostic tech agnostics segment, yes, the order book is strong and you know, there have been slight slowdown in this segment because there is one of the customers, the European customers had a issue with you know, insolvency and stuff like that. So there was an impact on that to an extent. But other than that, the business in terms of — and also in tech agnostic component, some of the premium models which were — which were expected to do well, where we had all expected that there could be more traction in the premiumization segment in the domestic market, had some of initial hiccups, but we — we see that the traction momentum has started — has started to happen.
Now we are seeing a lot of, you know, increase in the pull from the customers on these models, but exports continues to be the thing. As I had also commented on the XV, especially on aluminum forage components. We are now in the stabilization phase where we have actually focusing on operational excellence and improvements.
In fact, like last-time I had told that we have had enough order book to focus on consolidation of our operations to improve the margin profile, improve the operational efficiency. That is the phase-in which we are working, especially on aluminum and mission components because we have a very healthy order book totally about — about close to about INR400 crores totally. And this year, our focus will be to execute it in a more efficient manner where most of the learning curve
I’ve already most of the learning curve has already passed us. We have gone through all the learning curves, especially on Class-A components where a lot of product learning and technology learning went through and we are quite confident now that this year, it would be returning a stronger growth.
Siddhartha Bera
Got it, sir. Thanks a lot. I’ll come back-in the queue.
B.R. Preetham
Thank. Thank you,.
Operator
The next question comes from the line of Arjun Khanna from Kotak Mutual Funds Please go-ahead.
Arjun Khanna
Sir, thank you for taking my question and thank you for the presentation. I think it’s very detailed. The first one is on — just back on to the earlier participant’s question of US demand. You did mention that we are seeing uncertainty led demand slowdown. So are the OEMs procuring from someone else? Is there a domestic supplier or how are they fulfilling their demand at this point in time?
Vikas Goel
, good morning. So currently, the entire industry as we see the share of business has not been changed. So what is happening is There is a lot of inventory consolidation and correction that has happened because when there are tariff uncertainties, because very few of the vendor base at least largely is inside in our component categories inside US, either it is in Latin-America or in Europe or in China or in India, where all the — all the countries who are supplying have been affected by the tariffs. So I don’t see that — I mean as per our knowledge and our market feedback, we haven’t lost any share of business, but it is a general correction or the slowdown that is there. Sure. But to your contrary, US customers are talking about a lot of new projects and initiatives, both in terms of upgrades as well as the, which we had actually expected to close-down before the end of Q4. But you know, these things are slightly delayed because of the tariff clarity, but all the technical work around these orders have already been close to completion. So we expect that once this uncertainty is remote, there’s a lot of traction on this — on this segment.
Arjun Khanna
Sir, we were historically planning the overseas plant. So any update on that?
Vikas Goel
Actually, the update is that just that we are on a pause mode because we had selected the site, we were about to sign the contract, but — but for now the thing, see the kind of opportunity sizes that is being discussed and on the verge of finalization do require our presence in North-America. Now the issue here would be that depending on the final tariff from the product and USMCA norms that would come into place, what kind of operations that we would require to be put into that facility is what remains to be seen.
So while we were very certain in our pre-tarif period that we need to put up only final assembly and a couple of final operations along with the inspection and go down operations. That could slightly change depending upon the overall value addition that one needs to be looked at. While the forging definitely would remain in India that it doesn’t make sense, but the extent of operations can only be decided once the final tariffs are there.
Buyers are also keen but are waiting for tariffs to stabilize. So there is a lot of — you know, once India signs-up this thing, I think there is a lot of tailwinds that will be there towards the Indian auto industry. So we may have to do more machining in the US, if I understand correctly what we are. I mean, that depends on final tariffs and how they are going to suppose if this base tariff is also going to continue and then if there is some additional tariff for the thing, so they would prefer that there would be some extended value addition that needs to be done.
But that is why we — we didn’t — we put the whole thing on so that the size of the size and the space requirement could change depending upon the final metrics. So that is why. Yeah.
Arjun Khanna
Sir, my second question is, sir, if you go to Slide 20, in non-auto, we write aerospace. So this aerospace includes defense and semicon or is it just aerospace and semicon and defenses and others.
Vikas Goel
So in the last year’s numbers you say?
Arjun Khanna
So on a slide 20 of the presentation, we have for FY the
Vikas Goel
Yeah, this includes the aerospace, defense and semiconductor. And this is — if you look at meaningfully the semierospace. It is actually — most of it is aerospace. Gradually we are building revenue in defense and semicon also.
B.R. Preetham
Arjun, Going-forward, you will see a bigger number there.
Arjun Khanna
Yeah
B.R. Preetham
Just to add to what Vikas said that while we have renamed it as ADS, the meaningful ADS contribution will happen this year because a lot of qualification on the semicon and defense has happened now and we are — we are now just starting the mass production of the semiconductor piece because these are — I would say these are — for us, at least as Sancera, these were totally different technology altogether, much higher-level of precision and kind of operations that we are doing, especially in semicon area.
And with this added, we expect that as I told in my commentary also that we expect the ADS business to be on a safer side should deliver a double — double their revenue of last year. We expect that it would be more than that, but then you know, given the lot of pieces, puzzles to which needs to be put together, I would still say that doubling the revenue is definitely on-target because that is keeping that in mind, we’ve also done a lot of investment both in terms of machining facility, in terms of level 1,000 clean rooms, quality systems and also special processes.
So in fact, if you really look at our plant and machinery investment, a lot of that last year and also continues to this year would go into this piece given the kind of order inflows and you would see in the coming period, there would be also a more clarity on further order wins from our side.
Arjun Khanna
So just to give context to this, so we did roughly Aerospace, INR130 odd crores, INR130 crores INR33 crores in FY ’25. We are saying this could be around INR265 crores in FY ’26.
Vikas Goel
It would be very close to INR300 crores, between INR280 crore and INR400 crores.
Arjun Khanna
Sure. Thanks a lot and I’ll come back-in the queue. Wishing you all the best, sir. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and want to ask a question next question comes from the line of Anirudh Shetty from Solidarity Advisors. Please go-ahead.
Anirudh Shetty
Hi, thank you for the opportunity. Just needed some data points, sir. In our order book, which is say 60% exports, do we — can you give the split across Europe, US, other markets?
B.R. Preetham
Give me a second, Anirud.
Anirudh Shetty
Yeah.
B.R. Preetham
So you mean in the order book of overall order book, how much is — so 39% is approximately about — sorry, 24% comes from Europe, 27% comes from North-America and about 9% comes from Asia.
Anirudh Shetty
Got it. So my second question is, we are seeing a lot of progress in our Tech XV business, but a lot — a large share of our business in ICE is actually two-wheelers today. Can you just give a sense around the kit value that we’re seeing if you just say a customer, if you are — if you did X amount in ICE, are you seeing the kit value increase when the model shifts to, Tech Agno and if you can just quantify that, be helpful.
Vikas Goel
I think okay. We have spoken about the kit value consistently over the period. So depending upon what kind of model that we work with, if it is see tech agnostic components generally are all aluminum forged and machine components. So in the scooter segment, there are — there are limited number of such components which are there.
It could be suspension, it could be some in braking, some in suspension. So there would be in — if you really look at as ice scooter versus EV scooter, the content per vehicle for us largely remains the same and — but the addressable market could be between INR4,000 to INR5,000 per vehicle.
But whereas if you really look at-once the shift of electric vehicles happens towards motorcycles, then that is where the real game-changer will be, be because that is where the content per vehicle is expected to go up significantly because of the lightweighting requirement on the motorcycles is far higher than the requirement in the — so to be just to put a figure that you know, if we are able to secure all the components that we are doing for similar models, it could go up to a five-digit mark, could go up to almost INR10,000 per Vehicle as the kit content. So this is how contextually you’ll have to see. Vis-a-vis about an average ICE motorcycle content of between 1,800 to 2000. That’s what where we are.
Anirudh Shetty
This is very helpful. Thanks for clarifying that. Just one final question is, in our Europe business, do we have a sense around what is our exposure to the European passenger vehicle OEMs out there?
B.R. Preetham
See, largely today, whatever we export to Europe and bearing our — bearing our Sweden facility, which actually in our international business, that also contributes. That is largely for the commercial vehicle and larger engines. But otherwise, our European — European sales largely is on passenger vehicle only. So I would say that exactly, I don’t have the numbers now, but more than 70% of our expose to Europe is for passenger vehicles.
Anirudh Shetty
Okay. So that you think that 26% which is exports from India of that give or take 70% is for passenger vehicles to Europe.
B.R. Preetham
That’s not that was — that was the question. I thought only Europe, you want in the overall exports, how much is the passenger vehicle? Is that was that the question?
Anirudh Shetty
No, no, sir. No, it was Europe specifically. So then you say 70% of that 18% of 18% of sales.
B.R. Preetham
Yeah, yeah, correct. So you are right. You are right.
Anirudh Shetty
Got it. Got it. No, this is very clear. Thank you, sir.
B.R. Preetham
Yeah.
Operator
Thank you. The next question comes from the line of Vaibhav Shah from DSP Mutual Fund. Please go-ahead.
Vaibhav Shah
Yeah. Hi, thank you for the opportunity.Sir, the first question is on the subsidiaries performance for the quarter. So if I look at our consolidated revenue and profitability numbers minus my standalone numbers, it seems to be a little bit slower in this quarter. Also in performance highlight, you have mentioned that the subsidiaries is having some one-off impact on profitability, which is expected to stabilize in Q3. So can you just talk about what is this impact and how do you see this performance improving over the course of FY ’26.
B.R. Preetham
No,, I think last year we did comparatively better in Sweden because Sweden, we got the price support from the customer in terms of both peace price as well as there was a one-time grant that was also given to enhance the capacity and also support the production because there was another vendor who closed down and then we had to immediately ramp-up the production and support them for that.
So looking at that, you know, our EBITDA margins for last year was definitely much better than compared to the previous year. But going-forward, I would say full-year, I think EBITDA margin of Sweden was about 11.4%, which was way higher than the previous year, which was 6.4%. So going-forward, we expect that this would be stable between 10% and 12%, which is what you know we given the context of Europe and the cost structure there and a limited growth opportunity that is there, while we are growing at about 15% 20% this year, but then 10% to 12% stable margin is what we expect to be delivered from our Swedish subsidiary from next — from second-half of this year.
Vikas Goel
Yeah, basically the comment that you see on the presentation is our referring to the one-off where we got a lump-sum of compensation for a previous cost increase from the customer. So going-forward, this will become a uniform margin as we speak.
Vaibhav Shah
Understood, sir. Thanks for that clarification. So just if I see my consolidated EBITDA margins, which has declined on a Q-o-Q and a Y-o-Y basis to 16.3%, how should we think this EBITDA margin improving with higher contribution from segments like a non-auto, auto tech agnostic growing faster say in FY ’26 or beyond, where do you see this settling as well as subsidiaries you talking about margins stabilizing over here?
B.R. Preetham
Yeah. Definitely. See, as we were speaking a little while before that our ADS segment is supposed to perform really well based on the schedules that we have and the kind of ramp-up we are doing in that space. And this is a much higher-margin business. Plus we also expect improvement in other segments going-forward. Added to that, the improved performance of subsidiary that we spoke about.
We should expect about 50 to 60 basis-points improvement in terms of overall consolidated EBITDA percentage for the full-year. And this may — this will happen this will be a grading — I mean, it will be upward scale as we move through the year. It may not happen at the same level through the year.
Vaibhav Shah
Understood, sir. Thank you. And the last question is on our overall revenue growth. So if I look at for this quarter, the consolidated revenue grew by five-odd percent. Obviously, if you can help us give some context between auto and other segments. And going-forward, how should we think about revenue growth?
If I understand or remember correctly, you talked about outperforming at least auto industry growth by 1 times, 1.5 times. And with these new segments like aerospace doubling in FY ’26, how should our overall revenue growth look like, say, in FY ’26?
B.R. Preetham
Yeah. We should be back to our high-teens kind of growth this year. That is what we expect that we should — because that is — that is what is the overall indications from our customers for both the business as well as the new product launches. So while we remain very optimistic that we should be very, very close to-high teens towards our normal CAGR growth, which we have done FY ’21 to ’25 as CAGR growth is between 18% and 19%.
So that is what we expect that we will go back to this year. And all the order book maturity as well as the new orders starting, everything indicates towards that. And of course, there again, as I said that the first-quarter we still are looking at the impact of tariff on this thing, despite that fact, I’m only saying that all these things have been taken into account while we say that the full-year, we expect a high-teen growth.
Vaibhav Shah
Understood, sir. Thanks. Thank you very much for that clarification. Just one last question. What would be our capex spends for FY ’26? And would we be doing similar asset turns in the new capex that we have given? You have given a very good split in terms of where you are spending your incremental capex. So it would be helpful if you can just also talk about what sort of asset turns we should expect from this new capex that you have done?
B.R. Preetham
So the — see, a lot of focus and this thing is going on in ADS. So ADS post our you know now that facility is also getting full. So we expect that with the full facility being ready, it should — our gross block would be closer to INR300 crores in this facility, including — including our special process. And with this facility, we expect that we should be able to deliver close to about INR600 crores to INR650 crores of revenue, which means that overall there would be an asset turn close to about 2%.
But having said that, we are also looking at additional machining shop to be added into the facility in the coming years, maybe next year or so, which would mean that the additional investments would return a higher asset turns. But overall, what I can say is we will, including Sancera, Automotive and Sting, we will maintain that 1.45 to 1.4 asset turns overall.
So that is what we should look at. And this year, depending upon the speed at which the things get normalized in North-America, we expect anywhere close to INR350 crores of capex to be done. Yeah, this will include the ADS capex that we full group, yeah. Thank
Vaibhav Shah
You, sir. That was — that is — that’s all from my side. Thank you. Thank you very much.
Operator
The next question comes from the line of Kush from Electrum PMS. Please go-ahead.
Kush Nahar
Yeah. Hi, sir. Thank you for the opportunity. I had a couple of questions. First, can you give us a split between the revenue mix of tech agnostic and ex-EV in terms of our total sales? And second, sir, like you mentioned, we are expecting high-teen growth. So can we get more granular data in terms of the growth that you are expecting segment-wise?
And sir, lastly, my question is on MMR FIC. So what percentage stake do we have today and what kind of order book or the total addressable market considering the products and the approvals that we get-in that segment are we expecting?
Vikas Goel
Okay. So I will I — in the first question, in auto Tech agnostic and XV, which contributed to 14.8%, 8.8% came from tech agnostic and 5.9%, almost 6% came from HCV. In terms of what percentage do we hold in MMRFIC, post the CCPS conversion of whatever amount that we have already put in, that’s about, I think INR40 crores.
We should be closer to 30% of this one. While we have already said that we have the right to go up to 51% as and when, as and when the company needs infusion. To be very clear, you know, MMRF I see today, given the context at which we are today currently post the operations, where you have seen a lot of technology that was used.
This company is specifically in the midst of you know, developing technologies for all those things what we saw, be it on seeker radar for a very accurate striking missiles or EW radar system or loitering ammunitions or for that matter, the border surveillance, the company is working very, very closely with various developmental projects, which are — are — some of them are in the testing phases and these would be very, very strategic in terms of you know, the technology that India is trying to indigenite.
Currently, all these technologies, as I had previously mentioned, we’re also being — are also being imported and there is a lot of emphasis on the — from the government side to indigenize this technology. So companies in the very advanced stages of, you know, proving out these technologies. Added to that, you know, MMRFIC is also now engaged with a lot of grant and new development program, which includes IDEX programs and also for ISRO in various communication-related projects.So we are very, very excited with this opportunity that has been there to work along with the promoters of to support them to develop these technologies in India and leverage that technology into the future.
Kush Nahar
Right. So if you could help with the revenue or the PAT that MMRFIC did for FY ’25 and what kind of order book are they sitting on?
Vikas Goel
As you — 1940% Q2. It’s about INR20 crore, approximately about INR20 crores revenue with about 40% EBITDA. This is what was developed. But please understand these are mostly coming from grant and developmental projects, developmental costs that they have received and few of the ramping-up of few of the initial orders. But you know we — when on a full-scale production, the EBITDA level could be much higher when the — when the mass production starts.
And we expect that these things would come into place towards FY ’27 fully. That is where we had told that when we had invested also, it would take about three years time for the company to get into the mass production.
Kush Nahar
Right, sir. Thank you for the detailed answer. This is one last question, if you could give more granular data in terms of growth rate, maybe segment-wise that what will drive this high-teen growth that we’re expecting for the next two, three years?
B.R. Preetham
Thank you. See, as we said that our progress towards achieving 40% on 40% on auto tech agnostic XV and non-auto business. And we are well-placed to go into that and if you really look at how we are looking at Aero, I already told that we are looking at doubling the thing, it is more than 100%. We expect that two-wheelers should grow between 10% and 12%. This is for us. This is for revenue growth.
We expect passenger vehicle segment to grow between 15% to 17% and commercial vehicle will also do a double-digit growth. This is broadly what I can say.
Kush Nahar
All right, sir. Thank you for the detailed answers.
B.R. Preetham
Yeah.
Operator
Thank you. The next question comes from the line of Mukesh Saraf from Avendus Spark. Please go-ahead.
Mukesh Saraf
Yes, sir, good morning and thank you for the opportunity. My first question is on the order book. I noticed that XV and Tech agnostic outstanding order book has come down to, let’s say, closer to INR3 billion while we have seen some business getting commercialized there and hence the order book has come down there. But the new order intake there seems to have kind of come off in the last few months.
Is this just a timing issue and we kind of see this coming back strongly or are you seeing something more structural here on some of these segments that we are getting?
Vikas Goel
So XV, of course, XV and tech agnostic, I answered the tech agnostic part earlier because our total order book, if you really look at our total order book, which is currently 18.511, 20 — almost 17% is and tech agnostic. While what has happened is on at Tech agnostic, especially on aluminum, we have taken a very conscious decision of you know, stabilizing the production because their cost structures needs to be understood from both the sides that otherwise we get into a challenge of — while company also needs to understand more cost structures on these new technology components.
So we would like to actually you know that is where since whatever capacities that we have put in, we have full. In fact, I was corrected that the overall order book on aluminum is — I said that it’s around INR400, it is much, much higher. It is that — it is closer to and in excess of INR500 crores. So we have enough on that. So we have consciously slowed down participating in aluminum forged and machine component things to make sure that we are on the right track.
On the HCV segment, see, we have just commercialized — I mean, last year was the full-year of commercial production for us with the North American supplier. And I had also said that there is several opportunities, but the customer was also very clear because the kind of — this was our first exposure with them and they wanted to see how from the development process, how well that we establish our supply-chain and also perform on develop CDM parameters.
So now that it’s a full-year, there is large — many RFQs are in discussion with that customer and also with the other customers. And to strengthen this — that and also to work more deeper into this segment, we have actually appointed a very focused marketing team for North-America who have been in the leadership role in the auto industry based out of two of them based out of China as well as based out-of-the US to focus on North American-based customers, both on auto and non-auto, not the ADS part of it and that we have done in the — this quarter.
So while the efforts are on to increase our footprint, but you know, this tariff was also a barrier for a lot of decision to be made because obviously, people would not like to decide on the uncertainty. But there is no fundamentally, there is nothing this thing. We look at this segment quite strongly, Mukesh.
Mukesh Saraf
Got it. Got it. And second question is on capex and the plant that you’re going to start constructing in F ’27 for the New land that you have acquired. Could you give some sense on the kind of segments we’ll focus on there? Will there be a lot of ADS there or will there be more of the forging — maybe regular steel forgings over there?
Vikas Goel
No, actually, we, we are also looking at various other opportunities to increase our value-added products in both the auto and non-auto segments. ADS would not be — I don’t think ADS — ADS will not be there in that facility specifically because ADF we are trying to consolidate it — consolidate, we still have some more place where we can construct another 60,000, 70,000 square-foot.
And beyond that, it only makes sense for us to go nearer to the customer where into the new aerospace park that is being Phase-1 and Phase-2 not go towards this because this would be very far off, whereas this specific facility will focus on new technologies, both aluminium and steel, mostly into auto, non-auto, non-ADS segments. Got it. Got it. And just lastly, because the only — this is the one large piece of land that we have for expansion.
Like last-time I said that we have bought up Pantanagar facility and this Pantanagar facility is to largely focus on, you know, low-cost manufacturing segments and focus on mass production or legacy components where we could use the cost base and leverage that. So we are going to consolidate that portion of business in. All other new businesses, which are driven mostly on exports and domestic side on auto and non-auto would get consolidated into the new facility
Mukesh Saraf
Got it. Got it. And just lastly, specific to this quarter, we’ve seen gross margins come off more than 200 bps. Is there any pricing pass-through that’s pending? I mean, if there was some increase in raw-material or because the product mix looks largely similar when I look at it sequentially.
B.R. Preetham
So at a category level, the product mix looks similar, but then at a component level, there have been shifts, which happens at times and we’ve seen this in earlier years also. So this is, as we understand, quite normal.
Mukesh Saraf
Sure. That’s it from my side. Thank you
Operator
Thank you. Participants, please restrict yourselves to two questions so that the management can answer as many participants as possible. If you have any more questions, kindly rejoin the queue. The next question comes from the line of Varun Basrur from Julius Baird. Please go-ahead.
Varun Basrur
Hi, good morning. I hope I’m audible.
B.R. Preetham
Yes, you are. Yes, yes, you are Aarun. Go-ahead.
Varun Basrur
Thanks for giving me this chance. So just looking at the slide 6, looking at the order book buildup, INR500 crores I believe is moved to mass production. So does this mean that INR500 crores is the peak revenue in maybe the second or third year or is it the cumulative revenue?
B.R. Preetham
No, no, no. This is the annual revenue, annual peak revenue which will be realized by third year. Right, right. That’s the general experience we’ve had.
Varun Basrur
Right, right. So what that means is that if I go back one year, that INR600 crores that was moved to mass production barring any deferrals, that should be essentially what will come in FY in ’27.
B.R. Preetham
No, no, no. Portion of it will come in ’26. So a large portion of it will come in ’26 and portion of it will come in ’27. So the maturity should happen by ’27. You are right. Full maturity should happen by.
Varun Basrur
Okay. Okay. Okay, great. Thanks for that. Yeah. My other questions have been answered. Thank you.
B.R. Preetham
Thank you, Varav.
Operator
The next question comes from the line of Shashank Kanodia from ICICI Securities. Please go-ahead.
Shashank Kanodia
Yeah, hi, good morning, team, and thanks for the opportunity. Sir, just wanted to check on the gross debt number. So now given the fact we have a surplus cash on-balance sheet and the capex for next tech and we funded through cash-flow from operations, so do we see the gross debt coming down and probably becoming nil or do we have to maintain — intend to maintain a mix between debt and cash on-balance sheet?
B.R. Preetham
We will continue some mix of debt and cash, mainly to have a better balance sheet support. Broadly, the debt that has remained is the long-term debt which had in the main flagship company, about INR200 crores and about INR100 crores of debt is in the subsidiaries, which we have not touched. So this will get liquidated in normal-course as per the standard repayment schedules.
And you’re right, we are generating a lot of operating cash that should be sufficient for us to invest in the capex and we broadly should not require further debt to raise
Shashank Kanodia
Sure. Thanks. And secondly, sir, in terms of your order book, the view that we have maintained is that it should hit the peak revenues in three years time-frame, right? So from the current base, we should expect us to closs something like INR5,000 crores of revenues in FY ’28, right? Is the understanding correct?
B.R. Preetham
, you are right. Normally, it could not — it may not be FY ’28, it could be FY ’29. No, what do you mean? I mean, additional INR5,000 crores or total yeah, FY ’28 is a very, yeah, very reasonable timeframe to look at crossing INR5,000 crores, yeah.
Shashank Kanodia
And sir, lastly, on the raw-material side, so domestically, we’ve seen a decent price in terms of steel prices. So how are we navigating this and is the entire RM a pass-through to us?
Vikas Goel
Yeah. So both in domestic both increases and decreases are full pass-through. So whatever is the increase all these years which has happened, we have been given by the customer and whenever the reduction happens, we’ll have to pass it back. It’s a — it’s a two-way contract okay.
Shashank Kanodia
So sir, see, consequently, the mid-teens growth guidance that we give for FY ’26, does it factor-in the ASP increase or is just pure like-to-like organic growth that we’re seeing for our product profile?
Vikas Goel
No, there is no raw-material effect that we have taken, raw-material is taken at a neutral way. We have not assumed any inflation here. It’s the volume increase on the running components as well as the starting of new products like the order book that we set. So those two factors are there for this.
Shashank Kanodia
Sure, sure, sir. Thank you so much and wish you all the best.
B.R. Preetham
Thank you.
Operator
Ladies and gentlemen, due to time constraints, we will take that as the last question for today. I would now like to hand the conference over to the management for the closing remarks.
B.R. Preetham
Thank you very much for all of you for taking time-out and participated in this earning call. We would like to emphasize the fact that while there was uncertainties surrounding the export market, we are quite confident that company will be back to the normal high-teens kind of growth profile in this year. And you would also see a strong performance from some our emerging sectors like ADS and others. So thank you very much again.
And any questions that you may have on the follow-up questions, you could address it to our IR partners SGA or directly to us. Thank you again.
Vikas Goel
Thank you.
Operator
Thank you, sir. Ladies and gentlemen, on behalf of Sancera Engineering Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines