SJS Enterprises Ltd (NSE: SJS) Q4 2025 Earnings Call dated May. 09, 2025
Corporate Participants:
Unidentified Speaker
Mahendra Kumar Naredi — Group Chief Financial Officer
Kannampadathil A. Joseph — Executive Director and Managing Director
Sanjay Thapar — Group Chief Executive Officer and Executive Director
Devanshi Dhruva — Investor Relations Contact
Amit Hiranandani — Vice President
Analysts:
Unidentified Participant
Ganeshram Rajagopalan — Analyst
Basant Patil — Analyst
Suraj Malu — Analyst
Hitesh Goel — Analyst
Abhishek Kumar Jain — Analyst
Pradyumna Choudhary — Analyst
Himanshu Singh — Analyst
Romil Jain — Analyst
Smit Shah — Analyst
Shrinjana Mittal — Analyst
Prateek Giri — Analyst
Khush Nahar — Analyst
Rajesh Kothari — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to the SJS Enterprises Limited Earnings call hosted by Philip Capital India Private 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 this conference call, please signal an operator by pressing Star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Amit Hiranandani from Philips Capital India Private Limited. Thank you. And over to you, sir.
Amit Hiranandani — Vice President
Thank you. Good morning to everyone. On behalf of Philips Capital Limited, I welcome you all to Q4FY25 conference call of SJS Enterprises Limited. We are pleased to host the senior management of the company. Today we have with us Mr. Joseph, Promoter and Managing Director, Mr. Sanjay Thapar Group CEO and Executive Director, Mr. Mahendra Naray, Group CFO and Ms. Devanshi, Head of Investor Relations from SGS. Before I hand over the call to the management, I would like to congratulate the team for continued strong set of performance. Now I hand over the call to Devanshi. Over to you.
Devanshi Dhruva — Investor Relations Contact
Thank you, Amit. Good morning ladies and gentlemen and thank you for being with us over the call today. We appreciate it. Moving on, this is how we intend to take today’s conference call forward. I will pass on the dais to Mr. K.A. joseph, our MD, who will make his opening remarks and then hand it over to Mr. Sanjay Thapar, our Group CEO and Executive Director who will take you all through some of the slides of our presentation that has been uploaded on the stock exchanges as well as on our website. Mr. Sanjay will take you all through the industry, view our business performance and then give a strategic outlook for the future growth of the company at the end.
And Mr. Mahindra Naredi, our group CFO will update you all on our financial highlights post which we will open it up for Q and A. The duration of this call is around 60 minutes and we will try to wrap up our comments in about 20 minutes so that we leave enough time for you all to ask questions. If the time is not enough, please feel free to reach out to us through email or write to us and I will try and answer all the questions to the best of my ability. Thank you once again. And I will now hand it over to Mr.
Joseph to make his opening comment. Over to you, Joseph.
Kannampadathil A. Joseph — Executive Director and Managing Director
Yeah. Thank you Devanshi for the introduction. Hello and good morning everyone. I trust you all had a chance to look at our investor presentation and the results published yesterday. Before we start, I would like to inform you all that the exotic plastic Private Limited has now been renamed as SJS Deco Plus Private Ltd. India’s automotive sector sustained its upward trajectory in FY 2025, reaffirming its role as a key pillar of economic growth. The industry contributed to 7.1% to India’s GDP and is now the fourth largest global vehicle producer supported by strong consumer demand, infrastructure advancements and progressive government policies.
In line with this momentum, SGA has continued to set new benchmarks delivering its 22nd consecutive quarter of outperformance with a notable Y o y growth of 9% in the automotive sector, exceeding by over 1.5 times the industry’s production volume growth of 5.7%. SGIs surpassed the 2000 million rupee milestone in quarterly revenue for the first time. Consolidated Q4 revenue stood at 2005.1 million rupees and maintained strong profitability despite market challenges. Top line performance was driven by strong growth in the passenger vehicle segment and prudent financial management and operational excellence. Assured robust cash flow generation and a strong net cash position at year end.
Aligned with our vision for growth, capacity expansion initiatives are progressing well with SJS Decoplast facility at Pune on track for commissioning in H1 of FY26. This milestone will enhance manufacturing capabilities and meet growing demand for premium chrome plated and painted products. With sustained financial strength, SJS remains committed to driving long term shareholder value. The company’s strong cash flow supports strategic expansion including capex investments in the COVID glass and chrome plating business. Our strong balance sheet and cash flows have enabled us to reward our shareholders for their unwavering support and I’m happy to inform that SJS has declared a final dividend of 25% of the face value.
Moving ahead, we remain committed to innovation and leveraging our advanced in house design and R and D capabilities to develop cutting edge solutions for our customers. With that said, I would now like to hand over the call to Sanjay to take you through some of the business and industry highlights for the quarter. Thank you. And over to you Sanjay.
Sanjay Thapar — Group Chief Executive Officer and Executive Director
Thank you Joe hello and good morning everyone. We are pleased to announce yet another quarter of strong performance across operational and financial parameters for the company. The strategic initiatives we implemented at the start of the fiscal year have delivered impactful results and will continue to build momentum in the coming quarters. Coming to some key updates in Q4FY25 the quarter was marked by yet another better than industry performance by SES with a consolidated revenue growth of 7.3% year on year to 2005.1 million rupees. This growth was led by a strong performance in the passenger vehicle segment.
SGS Automotive business both two wheeler four wheeler combined grew 9% year on year compared to 5.7% year on year growth in the industry production volumes. The company delivered a robust margin performance as Consolidated EBITDA grew 6.6% y o y to 528 million with an EBITDA margins at 26.1%. BAT grew 24.1% year on year to rupees 337.3 million with margins at 16.8%. I am extremely happy to share that we have had a breakthrough with Hero Motocorp business and in the end of in April 25th we’ve been awarded businesses across multiple models that should significantly add to our trajectory of growth.
This win positions SJS as a trusted supplier to now all leading two wheeler OEMs and reinforces our market leadership. Growing export business remains a strategic priority for SGS with an impressive 17.6% year on year growth in FY25 due to the robust growth in our overseas passenger vehicle business. Successful new business awards in export markets have opened large global opportunities for ses. Due to significant new business opportunities, we plan to invest an additional capex of around 40 to 45 crores during FY26 to increase production capacity at our SES plant in Bangalore. Now, much as we have focused on our business, we are equally committed to embedding ESG principles into every aspect of our operations.
Our efforts have yielded significant progress with crystal upgrading SDS ESG Score One of our key initiatives in FY25 for ESG includes a partnership with Amplus to secure a 4.65 megawatt of solar power for SGS, Nepoplast and Water Pack India. With this, around 60% of our overall energy needs across all our plants will come from renewable sources. India ESG for us is not just a moral responsibility but a commitment that will create value for stakeholders and ensure sustainable growth. A dedicated ESG committee oversees our alignment with these goals at sgs. Our commitment to community well being drives meaningful change through targeted initiatives.
This year we enhanced education infrastructure and facilities for about 775 children by renovating the Karnataka Public Schools at Kadalipura and Solohunasi and distributed school supplies across five schools. Prioritizing health we conducted medical checkups for more than 500 villagers in Pune. This is in addition to our ongoing efforts in education, sanitation, sports and vocational training to EMPOWER underprivileged women and other communities. In March 2005 we received three ACMA awards for excellence in Manufacturing, excellence in New Product Development and also excellence in esg. I would now like to hand over the call to Mahendra, our CFO to update you on all SGS financial performance parameters before I talk about the future growth outlook.
Over to you mahendra.
Mahendra Kumar Naredi — Group Chief Financial Officer
Thank you Mr. Pabur. Good morning everyone. Let’s del into The Financial Factor Slide 13 to 16 provide a concise overview focusing on the consolidated picture of IJS. In quarter four our consolidated revenue reached Rs. 2005.1 million showcasing growth of 7.3% YY. This performance is attributed primarily on the back of strong business growth in passenger vehicle. Moving to EBITDA we achieved rupees 528 million representing a y wide growth of 6.6% with a robust margin of 26.1%. Our consolidated PAT for the quarter stood at rupees 337.3 million demonstrating a y wide growth of 24.1% with PAT margin standing at 16.8 primarily due to lower finance cost and the lower tax expenses.
On full year basis, SGS delivered 21.1% y wide growth in revenue to rupees 7604.9 million on the back of strong performance in passenger vehicle and consumer segment. EBITDA grew 27.1% to rupees 2032 million with a margin of 26.4% and and margin expansions by 129bps. PAT stood at Rs.1188.3 million witnessing a YY growth of 39.2% and margin improved by 203bps to 15.6%. The company had strong cash flow generation which has positively impacted our consolidated ROCE which stands at 25.7% and and ROE at 17.2%. In FY25 we generated strong operational cash flows amounted to Rupees 1,630 million with free cash flow reaching Rupees 1,232.9 million.
Additionally, cash and cash equivalent stood at Rupees 1,150.1 million positioning the company with a net cash balance of Rupees 991.7 million. Strong free cash flow strengthen our ability to pursue future growth and strategic investments. As you are aware, with the addition of voltepec India products in our portfolio, we have penetrated deeper with our new generation product that contribute around 28% of our consolidated revenue during FY25 WBI acquisition has effectively helped to us to balance our portfolio across two wheeler, passenger vehicle and the consumer segment in the right manner. During FY25, exports grew 17.6% YUI to rupees 567.9 million constituting 7.5% of our total revenue.
Both SJ’s depot Plus and water packs are primarily domestic business and hence export. As a percentage of consolidated sales are at 7.3% in the quarter. 4 Driven by strong financial performance, ASJS is paving a path for sustained expansion capitalizing on cash flow generation to drive strategic growth. Capacity expansion and strategic initiative reinforce the company industry leadership while demonstrating a steadfast commitment to the long term value creation of and sustainable growth. I would now like to hand back the call to Mr. Thapar to discuss about our future plans and growth outlook.
Sanjay Thapar — Group Chief Executive Officer and Executive Director
Thank you Maenaran Moving to our outlook for future growth at ses we are extremely well positioned for sustained growth driven by strong financial performance and a clear vision for the future. Cash flow generation supports our ongoing capacity expansion plans. These initiatives are designed to meet the growing needs of our business and deliver optimum returns reinforcing a position in the market. With our current order book at around 85% of the forecasted FY26 revenues, we are well equipped to capitalize on these emerging opportunities. A key focus of our strategy is the expansion of our global footprint with a target to increase our share of exports in our consolidated revenue to 14 to 15% by FY28.
We are actively working towards this goal by expanding into new geographies, deepening our presence in existing markets and introducing new products tailored to the needs of global customers. This will not only broaden our growth prospects but also enable us to diversify our customer base paving the way for new cross selling opportunities. Our commitment to innovation and advanced technologies remains at the core of our strategy. We continue to build capabilities to develop next generation products that meet the evolving needs of various industries. Contribution from new generation products in FY21 was 13% of our total revenue and now it has more than doubled to close to about 28% of our total revenue in FY25.
This focus on product aesthetic and performance coupled with our expanding product portfolio and ensure that we remain at the forefront of the market delivering high quality and cutting edge solutions to our customers. We continue to build relationships with mega customers and industry leaders like Hero, Motocorp and Stellantis and premiumization remains a key pillar for our growth strategy. Entering the COVID Glass business opens up a new vertical for growth for the company. By focusing on high end value added offerings, we target to outperform the underlying industry growth yet again by about two times this year. With a diversified customer base and a robust order book, SDS is well positioned to drive sustained growth and continue to create long term value for our stakeholders.
With that said, I come to the end of my quarterly updates. Thank you. We are now open to answer 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 and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press 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. The first question is from the line of . Please go ahead.
Ganeshram Rajagopalan
Thank you for taking my question and congratulations on excellent set of results. My first I have three questions. The first one is is there any impact from the tariffs on our product portfolio and on our export side? Do we have any communications from Stellantis or Whirlpool regarding the same.
Sanjay Thapar
As I once said earlier, so far we do not have any notification from any customer. And as I’ve said earlier, these tariffs, I think India is at the lower end of the tariff spectrum. So most of the competitors that we have are going to be equally if not more taxed in terms of these tariffs. So clarity from the President Trump still has to emerge. But overall I think it is not going to have any negative impact for us because India is not worse off than so many other countries that export to the US Market.
Ganeshram Rajagopalan
Understood. Thank you. So nothing from Stellantis and Whirlpool regarding this. So they’re okay?
Sanjay Thapar
Nothing for the moment.
Ganeshram Rajagopalan
Okay, Understood sir. And then the second question is just if you could give us some granularity on the order from hero. Right? I understand they would have probably had another supplier. So how exactly did we position our product? What products are we supplying to them? How did we displace the existing supplier and any details around the quantity and duration and the expected ramp up of this order please.
Sanjay Thapar
So HERO has been the leader in the two wheeler auto industry Wheeler industry in India. It was on our radar for many years. We were knocking patiently on the doors. They had audited us in the past, they liked us. But for certain reasons unknown to us, we did not supply for so many years this time around. HERO came to us in April last month and requested us to quickly ramp up for Supplies. So we have been awarded businesses, we’ve got purchase orders and we have started supplies to Hero. So this as you can understand opens up big doors for opportunity for us.
So the product that we will supply to them to start with are going to be decals and logos. But of course as you know at SGS we have multiple products. So there are ample opportunities for cross selling as well.
Ganeshram Rajagopalan
Understood sir. Any quantification of the opportunity that Hero has presented us with?
Sanjay Thapar
Look, we map the entire market not only in India but with all the customers. So Hero currently buys about 250 odd crores of decals and logos. So we hope to win a significant share of that business. In addition we’ll pursue some cross selling opportunities as this ramp up supplies to zero. So the outlook is very promising.
Ganeshram Rajagopalan
Understood sir. And my last question is just if you could give us an update on where we are at capacity utilization across the plants. And for the new Capex that’s being putting up one for the Hourglass and the other one if I’m not wrong at Exotech, what’s the revenue visibility we have for the new capex?
Sanjay Thapar
So Mahindra maybe you could answer this Ganesh.
Mahendra Kumar Naredi
Regarding the capitulation in SGS we are close to around 70% in the SDS Deco plus which was earlier Exotect we have our plant which is running 95% kind of a capacity. We are working with outsourced model at this moment and that is why we are expanding our capacity. We allocated 100 crore rupees for the expansion and this expansion are into progress at this moment. And we are hopeful that in H1 it will get completed water pack somewhere 75% kind of utilizing. We are currently doing it. Your question was regarding the turnover out of the exotect.
So when we make a plan to set up the Exotech expansion we thought that we will able to achieve the double the turnover. What we currently achieved in so close to 300, 320 crore rupees kind of a turnover we can able to generate with the new expansion.
Ganeshram Rajagopalan
Understood sir. And on Power Glass do we have any visibility in terms of customers on the new Capex and how it would ramp up?
Mahendra Kumar Naredi
On the Coverglass we have allocated the capex for 40 crore rupees which is going to be happen during this year and the next year. Regarding the order, I will request Mr. Tharber to give the color.
Sanjay Thapar
Yeah. So as you are aware Cover Glass is a subset of a larger product called called a display. The center stack displaying cars. So at the moment there is only one company, Visteon, which assembles cover glasses. Rest of the displays are imported. And in the Visteon cover glass we have a relationship with Strion for many, many years. So the first target for us is Visteon. They are currently importing the COVID glass. But as you can imagine, this is a new category of component for Visteon global teams to source out of India. So there are multiple checks and tests that they do.
But essentially we will target Visteon for the first businesses. But then once we localize, I’m sure all as and when assemblies of displays in India grows. So SGS will be at the forefront to be a leading supplier of fiberglass and not just to Visteon but other assemblies as well. So that’s a long Runway to growth because displays as a category is a sun wide area in India and it’ll be an import substitution effort which of course you can all understand is supported by the government.
Ganeshram Rajagopalan
Right. So my understanding from what you’re saying is that. I know, I completely understand on the product side, I mean just on the specifics with Visteon is that we’re expecting to get orders from them, but nothing is still firm at the moment. But we’re well placed.
Kannampadathil A. Joseph
Yeah, there are development that happened. We have given sample, they are evaluating all that. So it’s a process that continues but we are on track.
Ganeshram Rajagopalan
Okay. Okay. That’s it from me. Thank you sir.
Kannampadathil A. Joseph
Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Next question is from the line of Basant Patil from TCG Asset Management. Please go ahead.
Basant Patil
Yeah, thanks for the opportunity sir and congratulations on the very good set of numbers. Just wanted to clarify, how do you see the passenger vehicle growth? Actually all the OEMs are bit skeptical on the volume growth this year. So how do you see which will not affect our revenues especially on the passenger vehicle contribution.
Sanjay Thapar
So you guys are of course more tuned onto the industry data largely. Let me summarize. It depends on customer to customer, but overall we expect the two wheeler growth this year to be in high single digits and the passenger vehicle grow to be mid single digits. So that having been said, a key theme that we drive at SGS is premiumization. So what is very interesting to know is that within this mid teen or high teen number, the premium products outsell the plain vanilla products. So at SGS we target at premium products because those are beneficial for the OEM in terms of Margins, they earn more margins there.
And at SES also we earn. Our business is primarily attached to that segment. So I think we are fairly well poised. Industry is something that is cyclical. It goes up and down depending on the economic sentiment in the country, the monsoons, blah, blah. But overall I think we. That’s what I just said earlier in my remarks earlier. We expect 2x growth B2B industry volumes for the current year as well.
Basant Patil
Okay. Okay. And you on the while talking you commented we would be expecting to launch couple of new products. So can you throw some elaboration on these what would be the new products we would be getting into?
Sanjay Thapar
So I’d like to distinguish between new technologies and new products. So at SES we have a very strong development capability and new products are launched every month. So in terms of new technologies, what was said earlier, cover glass in the domain of displays, iml, IMD products. So those technologies we’ve already started supplying, so they are not new new but a product for a new application is new. So that is the overall context to it.
Basant Patil
So just one last question sir. So as we are close to now. Net cash of almost close to 99 crores, 100 crores. So would be is there any thought of going acquisition to grow aggressively? Any thought from the management in that?
Sanjay Thapar
So what we envisage is that we generate a lot of free cash. So close to about 80% of EBITDA gets converted to cash flow from operations. And at the end of FY26 we see ourselves still despite these capexes that we’re doing still to have a good financial position. So at that point, so at the end of this year we are of course on an ongoing basis looking at opportunities to acquire companies. There is some we are waiting for the dust to settle around tariff investments announced by the U.S. so as I mentioned earlier, U.S. is a big market in our radar for a while now.
So by the by next year is when we think that we will actively work on an acquisition. At the moment we are collecting gunpowder.
Basant Patil
Thank you sir. Thank you and wish you all the best.
Sanjay Thapar
Thank you.
operator
Thank you. We take the next question from the line of Suraj Malu from Catamaran. Please go ahead.
Suraj Malu
Good morning sir. Thank you for taking my question. My question is around the 2x volume growth guidance which you’ve given. Given that the kit value as per. Presentation is going legacy value as 1200, 300 and it’s going to 4 to 6x of that. So why is that growth only 2. To only 2x the volume? Because and you Also selling to premium vehicles which are also faster than the industry volume. So given all these growth levers, why is the growth only 2x industry volume?
Sanjay Thapar
So while we are doing work at our end and we are ready with these products, ultimately when a customer launches these products and vehicles it is in a phased manner. So as I said in my previous calls, so. So OEMs want to introduce the most premium models with some high end features and then they want to distinguish between model to model. So they want a menu card of options of a little less feature in the mid segment. And the lowest segment has bare bone structures or just the minimal aesthetic or high value aesthetic parts. So that is a trend that is existing in the industry for a long, long time.
And as I said, our forecast of growth, especially performance for this year, depends on when those models come into series production. So while we are winning businesses, very strong business acquisition, very good interest in customers to acquire these, they happen step by step and as I said in the high end models first and then they circulate down the portfolio of the vm. So our best guess at this moment is that given the order intake that we have and given the new model launch dues from our customers, we expect growth to be 2x of the industry growth.
Suraj Malu
Thank you.
Sanjay Thapar
Potentially it can be much more if OEMs introduce high end models earlier. Theoretically, you are right. Our kit value has expanded very significantly. So I think we will come to a day where all those efforts will bear fruit.
Suraj Malu
All right, so if I may ask one more question. What would be the market size of or the addressable market for the IML IMD business in India, which we did, let’s say 166 crores roughly in FY25.
Sanjay Thapar
So IML IMD is relatively new to the Indian market. So there are customers or loyal customers like Tatakers which have introduced a new generation of products and they start using it. So I would not, I mean it’s still a developing market, so it would be unfair on my part to say what would be the content. But let me give you an idea. We supply products varying from five hundred rupees a vehicle to close to about five thousand rupees a vehicle depending on what is the specification of the vehicle finalized by the oem. So theoretically all vehicles could have something if I take a mean value of about let’s say 1500 odd rupees for a vehicle.
So multiply BY that by 4 million vehicles and you can do your math. But this is a simplistic map of the aircraft calculation. The right Way to go about it is to for the oem as I said they distinguish between models so they don’t introduce this technology or will not introduce this technology immediately across models. But I would imagine that over the next two, three years this will perpetuate down to the mid segment and even the entry level vehicles. So the potential is huge. And that’s the reason why we invested in Waterbank.
Suraj Malu
Thank you sir. That’s also my thank you.
operator
Thank you. We take the next question from the line of Hitesh Goyal from Reddish Advisors. Please go ahead.
Hitesh Goel
Thanks. Sir, particular question sir, my question is on this export business. Right. On Atlantis you won three programs you had said in the con call. So can you tell us are these. How are these programs ramping up this year? All three are, you know, at what. Timelines are they ramping up?
Sanjay Thapar
So what we’ve answered this question earlier. So it’s about a 300 crore business over the next seven to eight years. And supplies for the first models will start from Q2 of this year and they gradually ramp up. So I would imagine there’ll be a year before full volume start coming in. So that’s the answer to your question.
Hitesh Goel
So basically at by FY27 we’ll see. The you know, 1540 crores kind of. Run rate which we are talking about.
Sanjay Thapar
Yeah, that is fair. That’s a fair assumption.
Hitesh Goel
And on Whirlpool also can you give us the same timeline Whirlpool we talked about 50 crores order which is coming in five years. Right. So that is also wrapping up next year.
Sanjay Thapar
No, that should again start from this year. So we will start supplies again by about Q2. And so that. Yeah, we start this year and continue over the next four, five years.
Hitesh Goel
Okay. And sir, on basically when I see. Walter Pack revenue growth this quarter, it’s only 7%. Right. Because I’m in your biggest customer Tata Motors did not grow much. But you know you’ve also won significant orders on M and M and Maruti in Volta Pac. Right. So has the M and M Bev orders, you know come through in this quarter because you would have supplied beforehand for the launch or that will ramp up in the next quarter? No, no.
Sanjay Thapar
So we have developed, we have started supplies to the Mahindra Vendra born electric range of vehicles. So that is true. But again coming back to the overall numbers of water pack, I said this in my call earlier and I would repeat it here. You know, think of SEIS as an integrated company with multiple technologies at multiple plants. So we take strategic decisions. What Product to offer to which customer. So I would encourage you to look at us as a whole rather than some of the parts. So don’t look at individual performances because there are a lot of activity that we do to generate operational leverage at multiple plants.
So there are some processes done at one plant. Billing could be done from some other plant. So that’s a business decision that we take. So again manifest is to look at us holistically rather than look at individual businesses.
Hitesh Goel
Okay. And my final question on zero, sir, you said that they take around 250 crores. Is there bill of materials and decals and logos. So are you supplying to every model of a hero now or it will be a in the face manner.
Sanjay Thapar
This is confidential information but many many models. So you can guess.
Hitesh Goel
Okay. Okay sir. Thank you. Thank you.
operator
Thank you. We take the next question from the line of Abhishek Kumar Jain from Alpha Accurate. Please go ahead.
Abhishek Kumar Jain
Thanks for opportunity and congratulations for adding zero motor copy in standalone margin. In this quarter we have seen a correction 200bps on a quarter and quarter basis and employee expenses have gone up. So is there any one offs in employee expenses and how would be the margin structure in the.
Mahendra Kumar Naredi
Yes, Abhishek, the margins has gone up. You are comparing quarter on quarter basis. We have all operational efficiency that driven the increase into margins into the employee expenses. Largely you are seeing the. We have issued new ESOP grant and that impacted around 3.5 roads for the quarter. So that was. You are seeing a higher amount into the employee expenses.
Abhishek Kumar Jain
So from next quarter it will be normalized.
Mahendra Kumar Naredi
Yeah, it is a normal expenditure. But yes, this quarter would be a higher number. In the next year or next quarter you will see a lower number.
Abhishek Kumar Jain
Okay, and the next question on the business which has strong growth of around 27% is not very clear.
Sanjay Thapar
Maybe you need to be a little bit away from me.
Abhishek Kumar Jain
Mike, are you able to hear me?
Sanjay Thapar
Yeah, better.
Abhishek Kumar Jain
So in a business we have seen a growth of 27% y and y. So what is the reason? And we are expecting to generate around 3,20 crores from the exotic. Will it be achieved by FY27?
Sanjay Thapar
So our target as I said earlier, so one reason is why are we growing? So we are growing because we work very hard here. So we approach all customers and that’s why business grows for us. Their customers are happy with us. So that’s the underlying reason for growth. The second reason is when will we reach this target? So we are building capacity. Typically our investment thesis is that we should for all the new Investments that we do, our ROCE should be upwards of 20%. So we are very mindful of that. In terms of balance days, what are the forecasts for growth for the business vis a vis the investment that we do? So typically we let’s say increase sales by close to about 2 1/2 x over the last 3 years in Walter in HCS Ecoplast.
And moving forward we again hope to double sales in the next three years.
Abhishek Kumar Jain
Okay, and my last question on the amortization side that every quarter there is a change 70 million impact on the tax level because of the intangible asset on WPI. So will it go down from FY26 onwards or if it will have a positive impact on FY20.
Mahendra Kumar Naredi
Abhishek, this amortization on the intangible. Yes, it is going on. It will, it will get reduced after the period of three years. So what you said is right.
Abhishek Kumar Jain
So we can get the benefit in FY27. It will start to go down in FY27 or FY20.
Mahendra Kumar Naredi
Yeah, FY27 the last year. I mean it will continue for a period of 10 years but there are some amount will go down in FY28.
Abhishek Kumar Jain
Okay, thanks all.
operator
Thank you. Next question is from the line of Pradyumna Chaudhary from JM Financials. Please go ahead.
Pradyumna Choudhary
Yeah, hi. Congratulations on a good set of numbers. My first question is in Q4. If you look at consumer segment that seems to have been weak compared to our overall growth. So is it in line with the industry or is there any specific headwinds we are witnessing? Especially given that in recent times we’ve added a few big customers on this site. So could you give some data and have the supplies to these customers started already?
Sanjay Thapar
So I would say that you know, quarter by quarter there are quarters where demand is a little soft. But overall if you see our consumer business grew strongly for the full year. If I compare FY24 to 25, we’ve demonstrated strong growth. There are pockets where demand has been soft. For example Europe consumer demand has been a little soft. We hope this will come back. There are ongoing challenges in the European European market. But overall we are still quite bullish because again our focus really is to add the provide products to high volume segments and consumer businesses still continue to be strong.
We have of course water pack which supplies to the consumer electrical space and that is a space that’s also growing. So we are overall I’m fairly confident that there’s a long term growth story in consumer. There could be a quarter, two quarter variation. Of course, in terms of the demand from these customers, nothing major has gone away or it’s just business as usual. We continue to knock on the doors of large customers in Latin America, in North America as well and we, we’ve had some notable wins so we hope to continue that momentum.
Pradyumna Choudhary
Understood. And my second question is any particular reason why like you spoke about how Hero we’ve been knocking on the doors since a long while and they’d actually been in an exclusive contract with their traditional supplier for supply of these parts until now. So are you aware of any particular reason why Hero has decided to give business outside their traditional supplier? And did I hear it right previously that Zero’s bill of materials for decals and logo is around 250 crores? That’s my second question.
Sanjay Thapar
Yeah. So I would not like to comment on competition. They may be having their own challenges. I don’t know wish to comment on that. So it’s a decision by Hero. They have realigned the supply chain and they recognize that we are a dominant player in the industry supplying to everybody. So yes, we’ve been knocking on their doors and we’ve been successful. So I think there are virtues of being patient and being focused on what you continue to do. So we, so we market our capabilities rather than worry about competition. So that has been validated by Hero.
And yes, you heard right. So approximately they’re buying for decals and logos is around 250 crores. That’s my best guess. And so that’s the answer to the question.
Pradyumna Choudhary
All right. And last question is, so in terms of two wheelers we are largely matching the industry growth. Right. And even within two weeks, if one looks at the data 125 cc and above segments seem to be growing faster. And despite that we are not really outperforming the industry growth. So would it be right to say that within two wheelers the premium bikes do not really have that big of a delta in terms of kit value like what we see in case of cars?
Sanjay Thapar
No, you can’t generalize. So there are some premium bikes that are content is as high as about 1000 rupees per bike. So that is not universally true. So you can’t draw that conclusion. It depends on the market positioning that specific OEMs have. So you have competitor to Harley Davidson, Bajaj has some high CC bikes, TVS has high CC bikes and of course Royal Enfield exists there in that space. So they have quite a large content on those. Overall their volumes will be Lower than the lower CC segment, but high value segment. Ticket size is large per bike.
Now coming back specifically to your questions that. Where are we? What are the second question? I lost the. Sorry. So the content, there’s not a generalization that you can make.
Pradyumna Choudhary
Okay. Okay, understood. Thank you. I’ll rejoin the queue.
Sanjay Thapar
Yeah.
operator
Thank you. We take the next question from the line of Himanshu Singh from Baroda BNP Paribas mutual fund. Please go ahead.
Himanshu Singh
Hello. Hi sir. So again coming back to the two wheeler industry, two wheeler segment of ours. So do we like supply to the school scooter segment as well?
Sanjay Thapar
Yes, we do. We supply to conventional IC scooters as well as the EV scooters. But the major amount of decals are used by the motorcycle segment. So the earlier caller also had wanted to know our performance. So I’ve been maintaining all along that two wheelers our growth will be organic. Now of course with this hero business, we have an opportunity to outperform the market in that segment because there’ll be a new customer and a very large customer that we are adding. But essentially we do supply to two wheelers though decal content in four wheelers is higher.
So we are more aligned to four wheeler. Sorry, motorcycles, my mistake. So motorcycles is the large market at Erskine. So benchmarking our growth, bended two wheeler, four wheeler. We said that we will grow at the industry rate of growth.
Himanshu Singh
Okay, sure. And coming to the export side, we want to double it in the next two years. Right. By FY26.
Sanjay Thapar
I’m not saying we’ll double it. So what I’ve guided is 14 to 15% of our sales in FY28 will come from exports. So that is the statement I made. Yeah.
Himanshu Singh
So double in terms of the mix which we are doing currently. Right. So around 7% we do. So first is the realization much higher on the export side and also on the profitability. If you can just comment a bit.
Sanjay Thapar
Yes, export business is more profitable. As I said, the competition landscape there is with the foreign companies and I mentioned earlier, you know, we have some skill sets at SES. We are doing printing for the last close to 35, 40 years. So we are more efficient. It is a labor intensive product apart from a very complicated product line because you have to have a batch mode of manufacturing process. We handle a large amount of SKUs. So these overseas customers are. What we’ve observed over the years is that they don’t have that skill set to manage that complex product mix.
So yes, we are at an advantage globally and we Hope to grow that business. So all printed jetted businesses which are fairly manpower intensive in terms of inspection and in terms of the manufacturing process, India has an advantage vis a vis export foreign competitors and yes my margins are better because I have to compete with those and their margin profiles because of manufacturing cost tends to be lower than ours. Manufacturing cost tends to be higher than ours. My mistake.
Himanshu Singh
Okay, sure sir. Thank you so much.
Sanjay Thapar
Thank you.
operator
Thank you. We take the next question from the line of Romal Jain from Electrum pms. Please go ahead.
Romil Jain
Question on how much. Hello.
Sanjay Thapar
Your voice is cracking up, we can’t hear you.
Devanshi Dhruva
Operator, can we move to the next question? Probably you can join in Romul again in Q once he joins back probably we can’t hear him.
operator
Okay ma’ am we take the next question from the line of Smit Shah from Monarch Network Capital Ltd. Please go ahead.
Smit Shah
Congratulations on a good set of numbers. My question is on the capex front what is the capex guidance for this year and the next year along with that if you can just mention how. Much of the COVID glass capex amount. Has been spent and when are we. Expecting the 40 to 50 crore capex. In the standalone business to get over completed. Okay.
Mahendra Kumar Naredi
Regarding capex in the previous also we explained that the capex we largely capex allocated for the exotech which is now SJ Deco plus we allocated 100 crore rupees kind of a fund around 30 crore we have incurred out of that remaining 70 crore will going to happen during this financial year. Apart from that glass business. So far. We have taken on a lease a building and there was some modifications currently going on. We allocated 40 crore rupees for this expansion. We incurred very nominal amount so far. But yes this 40 crore will going to happen between this year and the next year. Third is we just now have announced about this new capex into the SJS for creating the more capacity. So we have allocated around 40 to 45 crore rupees that is going to happen during the FY26. This is all the special capex apart from that we have the maintenance capex which closely 15 to 20 crore rupees per annum we are going to do it.
So that is kind of a capex we are thinking we are planning if I say in a number point of view 150 odd crore rupees for FY26 and if I talk about for the three year scenario close to 220 crore rupees capex allocations we are going to do.
Smit Shah
Okay. Okay. And the COVID glass Capex we were. Earlier planning the commissioning by this year and FY26 end by. When are you expecting that to happen?
Mahendra Kumar Naredi
So like I said, we have already taken a building on lease. The these modifications is already going on. But yes, we are into the plan, we are on the track. We will commissioning by end of this year.
Sanjay Thapar
So the question was. Okay, just to get that question. So you know, the COVID glass is a part of a display. So we are at this moment looking at opportunities not just for the COVID glass but also the possibility of does it make sense for us to play a larger role in the disclosure display market. So this facility of course is common whether it is a display completely or it is cover glass. So cover glass is a part of a display. We are actually reworking our plans to decide the optimal mix of equipment that we need as these opportunities unfold.
So, so it is. So as Mehender said, we’ve taken our share close to about 90,000, 97,000 square feet. So instead of investing in a building on our own, we said let’s conserve cash and basically use that for productive purposes in terms of equipment. So this is what the current plan. Our negotiations with customers are ongoing and so we will tweak our investment plan basis. This and coming to a question, when do we start supplies out of this plant? Would depend on how this is. So there are some very promising discussions that we have. But at the moment we don’t want to.
We want to address what the market really needs. So we are at that phase in our display or cover glass. Okay.
Smit Shah
Okay. Thank you for answering.
Sanjay Thapar
Thank you.
operator
Thank you. We take the next question from the line of Kushnahar. Sorry. We take the next question from the line of Srijana Mittal from Rathmat Raya Capital. Please go ahead.
Shrinjana Mittal
Hi. Thank you for the opportunity. I have a couple of bookkeeping questions. So in this year there is some. Assets held for sale in the. In the other current assets, other non current assets. What, what is that with respect to? Can you, can you just give some color on that?
Sanjay Thapar
Yeah. So this is the old plant that we had. So, so when SES started we had a plant which is about 5, 6 km for our current factory. So we built this modern state of the Apart plant in 20002018 and we relocated equipment there. We were holding that plant to see if we could put that to some productive use over the last so many years. But we’ve taken a decision that given the new business horizon that we have, it may be worthwhile to go in for a green Field plant in a new location. So that is why.
So the. The what you see in the books is the old factory that we have which we are looking to dispose of.
Shrinjana Mittal
Understood. Thank you. Thank you. Just one, one more question on the ESOP plan. So in this year then probably around 8 odd crore is the ESOP charge. To the PNN, right? Is that correct? And so going forward what. What are the expectations? What. What are the ESOP charge going to be?
Mahendra Kumar Naredi
Yeah, so you are right. For the entire year around 8 crore rupees and it would be remain for the future also.
Shrinjana Mittal
Okay. Okay, perfect. Thanks. Thanks for taking the questions and all the best.
Sanjay Thapar
Thank you.
operator
Thank you. Next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead. The participant has disconnected. We move to the next participant. The question is from the line of Pratik Giri from Shubhab Research. Please go ahead.
Prateek Giri
Hi everybody. Thank you for the opportunity and congratulations on this set of members. Mr. Garibi, I just wanted some more clarification on the CAPEX of exodef. I believe we are aspiring to start it within next two, three months probably by July or August or September this year. But if you look at the financial progress of the capex we have yet to utilize 70 crores so machines have been installed if you can help us understand.
Mahendra Kumar Naredi
Okay, so you rightly said we have allocated 100 crore rupees for this expansion 30 crore rupees so hardly have any incurred out of this close to 1617 crore for the land and the mining is for the civil and the PEB constructions are going on. So there are couple of advances has gone there. This erection process and the construction process was ongoing and we hopeful that somewhere July, August it will get set up and during this period this amount will get incurred and the larger point will be machinery part. So machinery part of the building are established, constructed and simultaneously these machines are machinery are under development at the vendor’s place and they will get installed.
So you will see that by H1 we will be ready with all this setup and the expensive is going to happen during this current financial year.
Prateek Giri
Given that we are already manufacturing in one of the latex plants so is it fair to assume that a ramp up of the new capacity will be functioned or should we assume that it will take some time before you know the commercial portion starts in? No, no.
Sanjay Thapar
So yeah there will be trials that will happen. So there’s a PPAP process or production part of the rule process that goes through. So we hope to start Those trials by H1 as Mehender just said so. But this is an existing business. We know the plants are validated, the processes are the same. So it will be fairly quick ramp up so we don’t expect much challenges. Our business development team is already working on procuring new orders so that we can boost our sales from this new plant and yes, so it will supplement our existing offers and we need to, we hope to see sales from that plant in the current year itself.
Prateek Giri
Understood. Mr. I hope, I’m sure it will start on time. My second question, Mr. Sorry I’m repeating this point, has already asked this but if I look at WPI Group, you know the first product division after acquisition probably.
Sanjay Thapar
Echoing a little bit. So could you maybe move away from the mic, we can’t hear you so well.
Prateek Giri
Is it better now, Mr. Thakur?
Sanjay Thapar
Yes, much better.
Prateek Giri
Yeah. Thank you. Thank you. Mr. I just wanted to understand on WPI, you know last six, seven quarters if we see the top line has been living in the range of 40, 45 crore. So how should we read into this because when the acquisition was made the hope was high from the, from this particular division. So should we assume that the cross selling opportunity for WPI is now peaked and you know there will be volume led growth only for the segment if you can help us understand on that point.
Sanjay Thapar
So two points to this question. IML IMD technology is cutting edge technology which is extreme expensive. So it depends on the product mix of the customer where he wants this premium technology. We are betting that premiumization is a trend. The end consumer will want better than better products. So we are pitching to customers and there are takes or there are customers where we are winning those orders. But as I said earlier to the earlier question, this introduction or visibility of sales in the current year depends on the ramp up schedule of the oem. So we’ve started for example supplying IML parts to Mahindra Electric range of vehicles which is the first.
Now Mahindra will of course ramp up that production gradually and we will benefit from that. The large part really is that it comes from when you have vehicles in the market there’s a comparison that happens in terms of better aesthetics that leads to buying behavior and this is what encourages OEMs to introduce this technology because it is demanded by the consumer. This is a better looking product more appealing to the end consumer. So this is a process that will happen. I think it takes time. But in terms of technology, wherever we present this people are very excited.
These are high cost products. So in terms of introduction in models It’s a OEM decision to say that which model will carry what content of IML parts. But strategically there’s a very bright outlook for IML in terms of cross selling. As I said earlier, it again is a high cost alternative. So there are the largest segment is the passenger vehicle segment. So we are supplying to Maruti Suzuki, we are supplying to Tata, we are supplying to Mahindra, we are supplying to some appliance companies also. And we are also wanting now to take this global. So we have some customers and we are making efforts towards that as well.
So on the whole I think it will may take a little bit of time but I think directionally we are back on target.
Prateek Giri
Understood. So it’s fair to conclude that time as far as the product acceptance and costing and fitment is concerned but it will definitely go from here also.
Sanjay Thapar
Absolutely.
Prateek Giri
This last question from my side Mr. Thapar. Now we have been mentioning about Meda accounts in our presentation for the last few quarters. I just wanted some numerical sense, you know, without taking the names of the account you can help us understand in the current top line of you know, 750 crore, you know what qualifies as a mega account and where it can reach from here and how many potential accounts are there which can, you know, become mega accounts for us in some directional sense without naming the customer.
Sanjay Thapar
So our definition of a mega ground is that if the opportunity with that customer, maybe not the current sales but if the opportunity for that customer across all markets in India and overseas markets is close to about 5% of our overall revenue, that qualifies as a mega account. So we make baby steps to enter one market, prove our financial the customer test us. But our pedigree is very good because we supply to all the marquee names. So we inherently address customers where the potential is to be higher than 5% of our consolidated state at any particular year.
So Hero Motor Corp. For example is a classic example of a mega account that we’ve added and we will grow this. So that is the definition. I hope that answers the question.
Prateek Giri
Yes, very clear. Always pleasure Talking to you Mr. Thapar. Thank you for the opportunity and congratulations ahead.
Sanjay Thapar
Thank you so much.
operator
Thank you. Thank you. Next question is from the line of Khush Nahar from Electrum pms. Please go ahead.
Khush Nahar
Yeah, thank you for the opportunity. My first question was as a percentage. Of revenue how much are we supplying to the email EV models and is. The realization better in EV compared to. The ICE vehicles and the some color. On the export side, how do we. See Exports standing up considering the tariffs. So are we continuously adding new big customers? How is it playing out?
Sanjay Thapar
Okay, so two parts to the question. What is the percentage of sales to EVs? So essentially EVs is a very, very small proportion at the moment for the in the overall scheme of things. So just about 3 to 5% of the market. And while we supply to many customers, it is a very, very small part of the current business. Hopefully it will grow. As I said earlier, the display for EVs, the instrument cluster, is changing shape and becoming a digital cluster when the EV volumes ramp up where if anybody guessed by 2030 it could be anywhere between 25 to 40% of the overall two wheeler production in India.
So that time I think by, I think the time for that to grow. But we are positioning ourselves in terms of product capabilities both in terms of COVID glass and in terms of displays and are banking on the EV growth to drive sales. So those as and when the market picks up, we will be ready. That is what I can assure you. But at the moment it is small. The second part of the question was tariffs, which I think I have answered earlier. So we are in a very strong position globally or if I were to moderate that statement a little bit, we are no worse than other countries which target export businesses.
So famously, as you heard, Chinese companies do a lot of exports to the US market and they are much badly hit compared to India. So there are of course challenges that the OEMs have and they are de risking by looking at sourcing more and more content out of other countries. And India could be a beneficiary irrespective of what happens to the tariffs. So I am not unduly bothered about tariffs because it is a relative position in terms of competitiveness. And India, especially in the printing industry, I am not talking of all the components across auto components, but printed parts where we naturally have a national advantage over the rest of the world.
I think we should fare well.
Khush Nahar
Realizations are better in terms of EV. Model products compared to ice.
Sanjay Thapar
I mean, I don’t comment on realization per product line, but overall you can see our numbers. We’ve been sustaining a good set of numbers in terms of our margins and that margin has remained consistent even when we entered from the two wheeler to the four wheeler or we entered other products. So our benchmark is that we should earn that sort of margin to allow us to invest in upgrading ourselves and getting into new technologies and we’ll continue to do that. So the margins are pretty stable across different product segments that we supply.
Khush Nahar
Right. Sir, this is the last question on the standalone business I think.
operator
Sorry to interrupt. Sir, may we request that you return to the queue as there are several participants waiting for their turn.
Khush Nahar
Thank you.
operator
Thank you. Due to time constraints we take the last question from the line of Rajesh Kothari from Alpha Advisors. Please go ahead.
Rajesh Kothari
Hello. Hi. Thanks for this opportunity. Good afternoon sir. And the great news of Hero entering as your customer. I just have two questions. The first question is while of course the tariff credited. You have made some clarifications but just trying to understand if the same product is, let’s assume gets manufactured in US then of course the tariffs are not applicable. So do you see any, for example, Whirlpool Global is one of the largest players in US with I would say 85 to 90% manufacturing inside US. So do you see any impact from the Whirlpool as your key customer? If they, I mean I’m just saying hypothetically, you know, is there an incentive for them to do even this in us? That’s question number one and question number two is in terms of there are a lot of new opportunities at the same time which are coming up on the various component side and considering your domain in a few segments, do you see any new opportunity, you know, across your different verticals to cater to the global requirements?
Sanjay Thapar
Okay, so first part regarding Whirlpool and US tariffs. So it is important to understand that even in the US market these supply chains are spread across Mexico and Canada. Okay. So it’s not that US manufacturers in US because those costs are prohibitive. So we don’t see see any full bread US company operating completely out of US So they are dependent on, they have some labor intensive operations that happen across the border. But you know, we are targeting acquisition of a company in the US so typically we see that their margins are far lower than US and those companies are not able to sustain or be competitive.
So I don’t think the tariffs are going to change that. Manufacturing in US is not going to come back anytime soon. So even if assume things go as per their president’s plan, it could be still four, five years before us gets into that sort of manufacturing. But printing is a very, very complicated process. So manufacturing may happen in other areas but I don’t think we have a threat from local US manufacturing at all. So I am, I will go out on a limb and say that we don’t think or I don’t think in my humble opinion that tariffs are going to negatively impact us in any manner.
This is My view on the US market. Sorry, you had one more question. Part of your question.
Rajesh Kothari
Yeah, that question was, you know, new opportunities, new opportunities.
Sanjay Thapar
So we drive new opportunities all the while. So we have close to about 70 people in our company working only on new product development, new technologies. So the COVID glass business or the display business, now we are enlarging our emission. So that could be one opportunity. And if we start doing it, why not do it for a larger set of customers across the world? So this is how our business has grown. So we start with one location, introduce a product there, prove our credentials, quality, cost, delivery, and then the customers take us global. So this is typically what has happened with Whirlpool, with Visteon, globally and even Continental for that matter.
So we concentrate on doing whatever we do to the best of our ability. And then in variable it has happened that the customer takes us overseas rather than our target overseas markets.
Rajesh Kothari
Great. Thank you sir. Wish you all the best.
Sanjay Thapar
Thank you.
operator
Thank you. Ladies and gentlemen, in the interest of time. That was the last question. I would now like to hand the conference over to Ms. Devanshi Dhruva for closing comments.
Devanshi Dhruva
Thank you. I would like to thank everyone for joining on the call. I hope we have been able to respond to all your questions adequately. For any further information, we request you to please do get in touch with us. Stay safe, stay healthy and thank you once again for joining with us. Have a good weekend.
operator
On behalf of Philip Capital India Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.