Subros Limited (NSE: SUBROS) Q3 2025 Earnings Call dated Jan. 31, 2025
Corporate Participants:
Parmod Kumar Duggal — Chief Executive Officer
Unidentified Speaker
Analysts:
Annamalai Jayaraj — Analyst
Mayur Parkeria — Analyst
Mitul Shah — Analyst
Arjun Khanna — Analyst
Aditya Shroff — Analyst
Mayur Parkeria — Analyst
Mihir Vora — Analyst
Avinash Nahata — Analyst
Nishant Chauhan — Analyst
Unidentified Participant
Vignesh Iyer — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Subaros Limited Q3 and FY ’25 Earnings Conference Call hosted by B&K Securities.
This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on-date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 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 than zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Annamalai Jeraj from B&K Securities. Thank you, and over to you, Mr. Jayaraj.
Annamalai Jayaraj — Analyst
Thanks. Welcome to Subrus Limited 3Q FY ’25 Post-Results conference Call. From Suburos Limited management, we have with us today Mr Mar Gugal, Chief Executive Officer; Mr Heman Kumar Agarwal, Chief Financial Officer and Senior Vice-President, Finance; and Mr Singhil, Vice-President of Finance.
I’ll now hand over the call to Mr for the opening remarks to be followed by the question-and-answer session. Over to you, sir.
Parmod Kumar Duggal — Chief Executive Officer
Thank you, Jaraj. Good morning, ladies and gentlemen. Since we are meeting first time in this year, so first of all, I wish you all a very happy and prosperous new year 2025 and welcome to all of you for investor call for quarter three FY ’24 ’25.
Just brief about the industry. The auto sector has had a very busy quarter three. On the global front, we have seen a steady recovery despite our changing economic environment. EVs are continued to be dominating in conversation, not just as a trend, but as a future of mobility. In India, the story has been one of the resilience and growth. The festive season gave a solid push to the passenger vehicle sale, while rural market bounced back driven by the better agriculture income.
Overall, automotive sector has grown by 6.5% during quarter three and approx 10% in nine-month period. Our passenger vehicle segment has grown by 3.56% in nine months and PV industry has posted a moderate growth in calendar year ’24 and is expected to touch around 4.3 million units. This is based on the strong growth in SUV segment and sustained traction of emission friendly powertrains. PV segment including truck and bus is also facing a major disruption during this quarter and it has grown around 1.8% as compared to previous year.
However, the industry overall is showing a mixed trend including domestic and export market. Sugros has stayed committed to drive innovation and growth, which was crucial and challenging given these industry shifts Sub growth has registered a growth of 12.11% in-quarter three and 9.8% in YTD nine months. In this growth journey, CV segment has again played an important role with a growth of 26% due to new emerging sector and also introduction of in last mile connectivity plus. There is around 35% improvement in-quarter three profitability and 48.46% profitability improvement in nine-month period and this is a result of our aggressive push on improved internal efficiency and localization.
The results for quarter three ’24, ’25 has been shared with the stock exchange and posted on our website also. Let me elaborate the summary of the results. Has performed better than the industry in-quarter three with a growth of over 12% with a significant improvement in the margins as a result of our aggressive push on localization and internal efficiency improvement. We have achieved a revenue of INR821 crores during the quarter and in nine months INR2,459 crores. Our share of business in passenger vehicle air-conditioning market has been steady 42% during the quarter. And in truck and blow segment — AC and segment, it is around 53% and in bus AC, it is 16% during the quarter.
The company has realized EBITDA of INR80.64 crores in-quarter three, which is 9.85% of the net sales as against EBITDA of INR66.15 crores, which was 9.06% of the net sale-in the corresponding period of last quarter. There is an improvement of EBITDA by 21.91% as compared to the last year same-period. Profit before-tax in the quarter is INR45.80 crores, which is 5.60% of the net sales. PBT margin has also improved by around 35%. During quarter three is INR32.84 crores, which is 4.01% of the net sales and this has also shown a significant improvement.
Now on the business update, over the past few quarters, we have seen a consistent improvement in our key financial KPIs, including EBITDA, PBT, PAT, supported by the growth in sales, we are committed to maintain this momentum and targeting better growth than the industry going-forward. Our focus on aggressive cost-cutting both in fixed and variable costs has been strengthened quarter-on-quarter and we are making all our efforts to maximize our efficiency during the forthcoming quarters as well. We are expanding our product range, advancing into technologies to meet our — meet the customer needs, especially in electric and hybrid vehicle, our ongoing developments in alternative-fuel such as CNG, hybrid, electric components is expected to contribute more than 20% of our revenue in next one to two years.
Further in the line of a new notification announced by Ministry of Road and Transport, Heavy Industries, mandate of AC cabins in category from October ’25. We have blocked all the businesses now and we are now in a development phase and we see a substantial improvement in our truck segment growth going-forward.
Looking ahead, we are also now working on capacity expansion in our Karkoda project which is a major milestone for our journey on sustainable manufacturing. A new facility has already been planned and the construction work at the Karkoda site is going to start soon. Last quarter of the Board meeting, we have already taken approval of approx INR150 crores for Phase-1 investment in Karpura and we are as per plan as of now. Now just to conclude our financial results, revenue from operations INR821 crores with a growth of 12%, EBITDA of INR81 crores with a growth of 22%, PBT of INR46 crores with a growth of 35%, PAT of INR33 crores with a growth of around 22%.
Thank you very much. And now we are ready to take questions.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Mitul Shah with DAM Capital. Please go-ahead now, Mr Shah, please go-ahead with your question.
All right. We have lost the line of Mr Shah and we have the next in-line. That is Mayul with Wealth Managers Private Limited. Please go-ahead.
Mayur Parkeria
Good morning, sir, and thank you for taking my questions. I hope I’m audible. If there is some disturbance, please allow me that — since I’m traveling one-way, so please allow — sorry for the disturbance if any.
Parmod Kumar Duggal
No question.
Mayur Parkeria
Okay. Sir, two questions I had, sir. Firstly, a little broader side, when we started the year, we had our broad intent you know that over the next three years, we wanted to get our EBITDA levels to around 12% kind of range. So where are we in that journey in terms of — and when you highlight that in terms of product mix as well as in terms of localization benefit, which is expected — which was expected to accrue. Where are we in that journey? And do you believe that over the last two quarters, we have slowed down on that journey by some aspect because the relative improvement is much — is not coming as much as I thought. So can you just throw some light on that firstly?
Parmod Kumar Duggal
Okay. So we have two questions. One is on the EBITDA level growth journey and second is the progress on last two quarters. So yes, yes, we did mention about the EBITDA improvement. And if you follow our result for last four to six quarters, there has been steady growth in EBITDA improvement and due to the supply-chain disruption in last eight quarters, there was a huge impact on commodities, foreign-exchange and all other sourcing strategies, which has impacted and EBITDA dropped to 8% level — around 8% level.
We have recovered — we have reached to almost 9.75% to 10% level. And going-forward, it is going to improve because now all the corrective action for sourcing, localization and also for the neutral impact on foreign-exchange. To some extent with the negotiation with our customer has already been done. So we are very hopeful that this 12% level will be realizable, but it will take few quarters, so we need to work on that.
Second part is last two quarters, the steady performance. So if you see quarter one, quarter two, quarter three, there is improvement. Between quarter two to quarter three, there is slight segment performance in terms of profitability because of the financial impact of the foreign-exchange because if you understand last quarter, the impact of foreign-exchange was very steep although the impact is not significant on our financials, but still there is some part of that. Going-forward, it may stabilize if there is no further disruption and you will see slightly better improvement from going-forward.
Mayur Parkeria
Thank you.
Operator
Thank you. Before we take the next participants, a reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Mitul Shah with DAM Capital. Please go-ahead.
Mitul Shah
Yeah. Thank you for the opportunity, sir, and congratulations for a reasonably strong performance on the margin side, reaching close to 10%. Sir, my question is on this new EVTARA launch. So how are we placed in terms of the production schedule and what is the expected timeline to start the commercial production? And secondly, in terms of if at all, you can highlight broader number in terms of kit value per vehicle compared to existing average greet value per vehicle.
Parmod Kumar Duggal
I could not understood your second question. Can you just repeat, please?
Mitul Shah
And sir, second question is existing vehicles kit value for ICE vehicles or like this Vitara compared to that, what would be the change in this EV in terms of the maybe 2x, 3x of the value of our kit whatever we are supplying.
Parmod Kumar Duggal
So Mitini is trying to understand average realization of EV vehicle vis-a-vis ice right.
Mitul Shah
Whatever parts we are supplying that value growth.
Parmod Kumar Duggal
So first question is on EBITARA launch. So in EBITARA we have HVAC business, we have a pipe business and also some part of the assembly in addition to so the kit consent as against to EBITA are normal to this there would be almost 1.8x which will be coming in. The timing of launch customer has not still officially announced, but we are expecting that this would be in the first-quarter of FY ’25, ’26. So-far, I think some volume has already been produced, that is only for export. So maybe domestic market, they will be launching during that time. So we have to wait for the final confirmation of customers.
On second question, as I mentioned, other than compressure, the content per vehicle minus compressure ICE engine versus EV engine would be between 1.8x to 2x because of the scope increase of frozen pipe going up to the battery cooling, also because of the brushless motors and some technology upgradation for EV. Our compressor is a separate subject because we are not supplying compressor for EV as of now, but once it will come, it would be almost 3x from the existing compressor value. So overall between ICE to EV would be around — 2, 3x of content per vehicle.
Mitul Shah
Yes. Thanks. Just a follow-up on that. In this, would that be a meaningful import content or it is produced mainly through the localized material commodities and localized IRC?
Parmod Kumar Duggal
There would be slightly increase in the import content minus compressor because all other components are more or less expansion of the scope, not on the component side. So it will be mostly localized. But of course, in compressor, right now it is all imported, but gradually when we localize maybe near-future, that would be to start with some higher import content and then subsequent localization. We have not yet concluded that subject.
Mitul Shah
With this higher import content, would there be any material change in the margin profile of this or would be similar to what we are doing more or less in that range?
Parmod Kumar Duggal
No, there will not be any impact on the margins because these are high-technology items and we don’t want to sacrifice on the margin on that.
Mitul Shah
Thanks and all the best. Thank you. Thank you.
Parmod Kumar Duggal
Thank you, Mitul.
Operator
Thank you. Next question comes from the line of Arjun Kanda with Kotak Mahindra Asset Management. Please go-ahead.
Arjun Khanna
Sir, thank you for taking my question. Sir, just on the previous question itself, so on the margin profile, so not looking at the near-term maybe one or two years, but say FY ’28 onwards, when possibly we do look at localization of all parts, when you look at the EV piece, we are currently hearing that possibly margins are lower for ancillary providers. But given that we have expertise here, so on an even case basis, when you look out, do you see margins for this possibly being higher than the current margins that we are enjoying over a steady-state?
Parmod Kumar Duggal
So first, I appreciate your understanding on this subject because EV definitely will struggle in next two to three years in terms of the pricing competitiveness by most of the OEMs. So there would be some pressure on localization, there would be some pressure on the volume, scales. Definitely, we need to counter that. But based on our experience so-far, pushing aggressively on localization, improving our operational efficiencies, we don’t see — it will stress our margin. It would be comparable, it would be relevant. Whatever we are doing now, there would be slightly improvement, but I don’t see any detribution from there.
Arjun Khanna
So let me ask it a different way, sir. So I get-in terms of margins, you may not be higher, but for us more relevant is return on capital employed. Given that the components are a lot more costly, you mentioned content increase maybe 2.5 to 3 times on an even state once we indigenize the compressor. So in terms of return on the capex we put, would that be considerably higher?
Parmod Kumar Duggal
I’ll say that if I talk about, there is no major technology change, all the existing capacities or production technologies can be utilized for production of EV compression — EV kit also. Only the bottout parts cost will be different, not on the manufacturing part. So I don’t see a major investment other than compression. Again, every time I’m just discounting compression because separate manufacturing technology. Other than that, there will not be any extraordinary investments, which will impact the return on capital.
Arjun Khanna
Sure. Very helpful, sir. Sir, the next question is on our other businesses such as railway, etc., and EV buses. If you could just talk about these two in terms of order wins tendering, any other color you could shed on this?
Parmod Kumar Duggal
Yeah. So railway, we’ve been talking on this for last two quarters. We are very aggressively pushing there. And now we had secured a large of railway, which is around INR40 crores of business. Out of that, we have already serviced around INR7 crores and balance will be in-quarter four and quarter one of the next year. This is the first major tender in, which was under development for few quarters before. That is one. We are now going very aggressive on railway to secure the forthcoming tenders, maybe in-quarter two, quarter three of the next year.
On the EV bus side, the bus business is steady for us for ICE. EV bus is a lot of hydration is happening in terms of technology adoption. So we already started our EV bus with Ashok Layland. We supplied a few kits for their hydrogen bus. That business is going on. Now for EV adoption by other OEMs, products are almost concluded for adoption. Application engineering is all done. Now we are waiting for official SOP of these products. So maybe next financial year, you will see much traction on bus EV as well as railway purchase.
Arjun Khanna
Sure. Sir, in terms of names, apart from Ashok, is there any other name you could disclose for bus OEMs?
Parmod Kumar Duggal
Wherever we have started business office, wherever we have started business officially, I did mention the name of the OEM, but others are still under the PO stage, so it would not be appropriate to mention the name.
Arjun Khanna
Thank you very much. Just the last question. In terms of the — you mentioned INR40 crores for railways order. Just to understand per unit, what is the content, say, per coach? And secondly, for an EV bus, what would be the content per vehicle? Thank you.
Parmod Kumar Duggal
So normally per coach there are two units required to be supplied, which is roughly INR1.5 million rupee to INR1.7 million rupee. This is in this range. So this is very-high value products. So that’s how the realization per ports is very-high. So what was your second part of the question?
Arjun Khanna
Sir, for EV buses, what would be the content per vehicle?
Parmod Kumar Duggal
So EV buses are not substantially different other than few elements which are added for the battery cooling. So if normal ICE is around, say, 4 lakhs, it would be around 4.5 lakhs. So impact will be next 10% on the base.
Arjun Khanna
Sure. Thank you very much and wishing you all the best. Thank you.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Next question comes from the line of Adity Shah with Arrowhead Capital. Please go-ahead.
Aditya Shroff
Hello, am I audible?
Parmod Kumar Duggal
Yes, please.
Aditya Shroff
Yeah. So I just had one question regarding the refrigeration trucks that is mentioned in your investor presentation. Is there any update on this? Because as — and please correct me if I’m wrong, because as far as I understand these in these refrigeration trucks, the refrigeration part is installed after the truck is built, correct? And it is not done by the truck manufacturer, it is installed afterwards. So do we — how do we go about this business if we have anything going there?
Parmod Kumar Duggal
So this is really a concern point for us because we had this reprisation kits validated rolled-out to the market. But this market, as you said, is not OE fitted kits or the cabin. So it is actually done on bodybuilder shop. So that has become an unorganized market. So we are still very hopeful that this market in near-future will grow where a lot of will come through organized players or even body builders will also have some level of quality requirement or the standard for body cold. So we are hopeful, but from a development perspective, our all product lines are complete and they are ready to rollover. We are just waiting for the market opportunity to grow.
Aditya Shroff
Okay. Okay. Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Mayur Parkedia with Wealth Managers India Private Limited. Please go-ahead.
Mayur Parkeria
Sir, thank you for taking my question again. I’m sorry I got dropped out and just to repeat on that margin question, just a little more color. Sorry to harp that on that again. Sir, on the margin when we look at the journey upward, should we — just two things I wanted to understand more was, should we look at it more as a function of operating leverage where because of higher scale will we get more fixed-cost benefit or we should also look at the function of operating leverage along with gross margin improvement.
And within gross margins, again, function of three things, whether it is a product mix, whether it is localization benefit or whether it is improvement in the raw-material and supply-chain, the supply-chain and raw-material benefits, I believe would have been largely already done with because it’s been there for some time now couple of quarters. So how do we look at all the three components and if there is anything? So is it a function of gross margin we should look at or even the operating leverage, how do we look at that, sir? Some understanding and color would help us. Thank you.
Parmod Kumar Duggal
So your question has your answers. So it is a cumulative impact of all because as organization, when we are scaling up, we are growing, definitely there would be impact of product mix. That is one. Two, when we are increasing our scale and the benefit of fixed-cost absorption and variable-cost — variable-cost optimization will also be as part of the operational efficiency, which will contribute to the higher-margin. But importantly, our focus is to improve gross margin through localization as well as sourcing optimization because this is where we need to derisk ourselves also.
Sourcing optimization will come when localization will be more, our impact — our dependency on imports will be minimum, the fluctuation on foreign-exchange on or on the duties, custom duties will be less, then we’ll be more competitive and that will add to certain margin and also that would be a growth opportunity for us because we will be more price-competitive. So it is all cumulative impact of all the parameters. As growth, we are driving all these as long-term strategy. So that’s where we are confident that we will succeed in achieving the margin targets.
Mayur Parkeria
So sir, big lever — big lever will come from localization and all others will follow with that smaller component sizes. So we need to watch main will come from the gross margin and within that the localization will be the big lever, right?
Parmod Kumar Duggal
So in nutshell, in nutshell, all the initiative for cost-reduction is at place, all the effort for manpower optimization alignment is there and the modernized investment in the machines, in the new plant, those all initiatives will definitely drag on the higher operating margins.
Mayur Parkeria
And okay. Sir, I missed whether have we given any understanding of the kind of capex for the next FY ’26 also if I missed that?
Parmod Kumar Duggal
No, we have not. So FY ’26 will be consistent in our regular capex is that would be in the range of INR100 crore to INR125 crores. That would be a regular maintenance capex as well as for the product development, technology development. And this would be other than the new plant setup capex, which is already separately approved, that is INR150 crores, that would be for the greenfield project. So there will be true set of investments.
Mayur Parkeria
Right. And sir, out of that 120 normal — sorry, sir, please. Yes, sir.
Parmod Kumar Duggal
Please go-ahead. Yeah, please ask this question please.
Mayur Parkeria
No, no, I was trying to understand that apart from that INR150 crores, the INR120 odd crores, which is our normal capex, how much of that will actually go into capacity expansion and how much of that would be going to product development and normal maintenance capex?
Parmod Kumar Duggal
Yes. So again, I’m clarifying 150 is a separate that is for greenfield project, 120 is additional capex which will go into the regular capexes of maintenance, product development and technology development. So normally 60% goes into new product development capex is also for localization and 40% goes for maintenance and bottleneck capacity improvement in the existing plant.
Mayur Parkeria
So normal INR120 crore will not have a large component of capacity expansion kind of capex. That is not there largely.
Parmod Kumar Duggal
So only from — as I mentioned, 40% because all our existing plants are almost are tied-up with all the existing capacities. Some improvement will happen through the bottle machines where we can increase 10% to 12% capacities in the existing plant. But that’s why for bigger capacity expansion, we are going for the greenfield project.
Unidentified Speaker
So basically what happens when — what is trying to say, whenever there is a limitation on some machines, those machines get replaced or new machines are purchased, that is part of our regular capex. So that capacity alignment always takes place on the regular basis. Secondly, on margin improvement, you must appreciate that what company has committed is already our operating margin has gone up by 1.2% as compared to the financial year ’23, ’24. And we have an endeavor — whatever we have committed to improve to 12% is at place for which we are regularly on the same.
Mayur Parkeria
Okay, sir. Okay, sir. Thank you, sir.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Next question comes from the line of Mihir Vora with Equirus. Please go-ahead.
Mihir Vora
Hello, sir. Am I audible?
Operator
Yes, please.
Mihir Vora
Yeah. So sir, my question was on the e-compressor side, like compressor for the EV aircons. So currently, you would be importing them. So would there be a pass-through kind of a product where we don’t earn anything and just pass-through or how is it placed?
Parmod Kumar Duggal
So right now, we are not importing this compressure. It is directly procured by Maduti or any other customer. But whenever we will decide to localize this project, it will have some phase level localization, which we have not yet concluded. We are just watchful for the volume which are more relevant for our capacity setup. So we will decide based on that.
Mihir Vora
And secondly, sir, you mentioned that the content value increase in terms of EV counts to a normalized vehicle would be around 2.5 to 3x overall content. What would be that in case of a hybrid vehicle?
Parmod Kumar Duggal
So hybrid will — vehicle also require electric compressor. So more or less EV thermal system and hybrid thermal system, there is not much change. So it would be more or less in the same range.
Mihir Vora
All right, sir. And finally, in 4th-quarter, there was a mention that Maruti may start a hybrid production in-plant. So whether does that thing currently also stand, whether we are looking at that only right now or is the plant how will it comes.
Parmod Kumar Duggal
So that business is already tied-up for the new models, which will be launched in. So that is as per our development plan.
Mihir Vora
Okay. Okay, sir. That’s all from my side. Thank you.
Operator
Thank you. Next question comes from the line of Avinash Nahata with Parami Financial Services. Please go-ahead.
Avinash Nahata
Yeah, am I audible?
Parmod Kumar Duggal
Yes.
Avinash Nahata
Yeah. So in response to the previous participants’ question on the kit value of Coach, you had mentioned that two units are required per coach and you had mentioned 15 lakhs to 17 lakhs, 1.5 million to 1.7 million per coach. So just a clarification, whether it is 1.5 into two or 7.5 lakhs into two units per coal.
Parmod Kumar Duggal
This is for the course, 1.5 million is for the coal, that means for two units, for two units.
Avinash Nahata
Okay. And secondly, can you give a range for the commercial vehicle, the entire kit size for a commercial vehicle for I mean typical size commercial vehicle.
Parmod Kumar Duggal
For truck application yes so normally truck application is driven by the capacity of the truck, whether it is vehicle, LCV, LCV, MCV, SCV. So it is 4 kilowatt kit, 5 kilowatt kit or 3 kilowatt kit based on the size and cabin size of the truck. So it ranged between around 10,000 to 12,000 for a smaller truck between 12,000 to 14,000 for the middle-range truck and between 14,000 to 16,000 for high range truck.
Avinash Nahata
So when we are saying 14,000 to 10 to, 12, 14 to say this is you’re talking about the entire kit value if we are doing the entire kit.
Parmod Kumar Duggal
That’s true.
Avinash Nahata
Thanks. Thanks a lot. That’s all from my side.
Operator
Thank you. Next question comes from the line of Nishant Chauhan with Geojit. Please go-ahead.
Nishant Chauhan
Hi, I’m audible?
Parmod Kumar Duggal
Yes, please.
Nishant Chauhan
Yeah. Thank you for taking the question. Sir, my question is regarding your revenue mix currently. So could you just broadly tell us what is your revenue mix on this current juncture?
Parmod Kumar Duggal
So our revenue sorry, go-ahead. So revenue mix as of now in total turnover of INR821 crores, roughly INR640 crore is coming from passenger vehicle. The in-quarter three, that is relevant for quarter three, around INR125 crores from that is business. Our trucks are doing around INR30 crores, buses are doing around INR10 crores and the rest is all other segments.
Nishant Chauhan
Okay. And a follow-up to that would be, since we’ve been talking a lot on the railways or e-buses and also the truck segment. So how do you see this mix tilting towards the other segment apart from PVs maybe say 2-3 years down the line?
Parmod Kumar Duggal
So we have been talking on this subject that we need to have more derisking mo moving away from the more dependency on PV segments. So that’s why we are growing our business in railway buses, trucks, tractors, all these segments. So our next three to five years, we want more than 10% to 15% business coming from these segments so that the dependency on passenger vehicle segment should be lesser from the current level because these all segments are very destructively moving year-on-year. So some years commercial vehicle segment is growing larger than other segments, sometime passenger vehicle is growing larger than other segments. So we want to have a balanced approach. That’s why we want to grow these businesses much aggressively yeah.
Nishant Chauhan
Understood. Thank you. And sir, just one clarification. Sir, the INR1.5 billion that you spoke about for the new greenfield project. Is this going to be spread across maybe coming years or it’s just the amount earmarked for FY ’26?
Parmod Kumar Duggal
That is for new investment you are talking of?
Nishant Chauhan
Yeah, the INR150 crore new investment.
Parmod Kumar Duggal
That would be for commercialization of production from that plant. So that plant would be operational in somewhere middle of FY ’26, ’27. So this investment is for that project greenfield project.
Nishant Chauhan
Okay, so INR150 crores for that in FY ’26.
Parmod Kumar Duggal
Yeah.
Nishant Chauhan
Okay. Thank you. Thank you for taking my question.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Next question comes from the line of Mayur with Wealth Managers India Private Limited. Please go-ahead.
Mayur Parkeria
Sir, there is a lot of expectation that the FY ’26 automobile growth is also going to be in low-single digits given the consumption trends which are weaker. So in that light, what do you think would be a reasonable way to look at our growth in FY ’26 on the top-line, given the fact that we have also — there can be a mix in SUVs and other things which we are gaining a little bit more. So can we grow higher than industry on the OEM side along with that the efforts and the initiatives which we have taken for railways and trucks and other things. So how should we look at the top-line growth for FY ’26, sir?
Parmod Kumar Duggal
So it would be very difficult to give a very precise number, but one thing which I’m maintaining for last three years in all the investor call and I still maintain that, that whatever will be the industry growth, I’ll do better than that. So Sublo’s growth in even FY ’26 also will be better than the industry growth. So whatever assumption you want to take on PV or commercial or for buses or for railway, please count on better performance from.
Mayur Parkeria
Sir, on the Chata Motors call, sorry to name that, but just they were indicating that CVs might see some tailwind because the freight rates have started to improve and utilization. So is there a chance that we’ll see a little more tailwind along with the regulatory — other aspects of CV aspects positives, which we are going to see. But in general, are we seeing any better outlook for the CV according to your — what talking or discussions with OEMs.
Parmod Kumar Duggal
So basically in CV market truck, particularly, our growth is not dependent on the growth of number of vehicles because the major change which is happening from October, the, the second-half of the year would be that truck will have an AC cabin. So that means AC sale will start from the glower, which right now we are supplying. So there would be a delta between INR8,000 to INR12,000 even with the same truck. So kit value per truck will increase from second-half of the year. So that would be a growth for, but may not be a growth for the industry.
Mayur Parkeria
Right, right, that okay, I got it. Thank you so you so much.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Next question comes from the line of. Please go-ahead.
Unidentified Participant
Yeah, thank you, sir for the opportunity and congratulations on a set of numbers. I had a few questions on the EV segment and the hybrid. So we’re seeing some demand trends shifting towards SUVs and hybrid vehicles. So how are we transitioning that for our business?
Parmod Kumar Duggal
So hybrid business is already planned and whatever hybrid vehicles are there by the OEMs, our key development and our product development is already ongoing. So because we are supplying already two, two or three hybrid programs. So there is no different thing which we have to do. It’s only the question of scale and OEMs plan to expand SUV sales — hybrid sales. On EV side, as I mentioned that we already now will be starting our business with Naruti. Mahindra EV, we already started our business. SOP has already started and that is mainly for pipe for going to cabin cooling as well as for battery cooling. So from product development side, there is no challenge for us. It is only the scale we are looking at now.
Unidentified Participant
Okay. All right, sir. Thank you. Thank you for that. And coming to the commercial vehicle and construction equipment segment, how are we positioning ourselves in this segment?
Parmod Kumar Duggal
And so in commercial vehicle trucks, we are already supplying our as well as lower. Now as I mentioned in my previous question, will start now. So we are also positioning for that. Off-roader truck is gone. We already started with Mahindra Oja that has been exported to US as well as to Japan. Tractor radiator also we started in Mahindra. So now for off-roader also, for truck application also, the product is also in the market.
Unidentified Participant
Sorry about that. And last quarter, we had seen some yen impact. So will we see any more impact in the coming quarters?
Parmod Kumar Duggal
Can you reply please?
Unidentified Speaker
Yeah, can you repeat please?
Unidentified Participant
Yeah. So in the last quarter, we saw a yen impact. Will we — will we be seeing the same for the coming quarters or is there a pass-through for that?
Unidentified Speaker
No. So this quarter, we had a currency impact in the quarter three. And because of the adverse movement of the currency and the depreciation of the dollar, both currencies. Since we have a prudent hedging policy, we have our foreign currency exposure, there will be an MTM impact at the quarter-end. So which is around 0.2% of the turnover. And if you recast quarter-four, there will be no impact in the quarter-four, rather it will be positive impact in the quarter-four. All right on that. It is a one-quarter lag from the customer side also. So now we’ll get a higher-rate from the customer and cost is more or less in the same range. There is no change. So from the MTM perspective, from the customer perspective, both reasons will gain. That will offset the impact of the quarter three.
Unidentified Participant
Understood, sir. Thanks for that explanation. And one last question on the localization. Would you be putting a number to the localization rate or how much of the components are locally sourced?
Parmod Kumar Duggal
So right now our import content is roughly in the range of 16% to 18% of the total revenue. So that’s where we are right now. And our target is to bring it to around 10% in next two to three years’ time. We are consistent on our actions.
Unidentified Participant
All right. All right. Thank you so much.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.
Parmod Kumar Duggal
So as closing remarks, I will say that thank you very much for having confidence on. We have been interacting with each other with lot of anxiety, lot of questions, lot of assumptions. So-far, we are very consistent in terms of whatever we are saying to the stock exchange or to the investors. All our plans are intact. Growth is happening over the last period, eight quarters. We are consistent in terms of top-line growth also on a margin side and we want to be sustaining this journey going-forward, improving from here onwards. Those who have visited us during the Bharat Mobility show must-have seen the capability of in terms of launching new technologies, the products which are in pipeline. So we see a very bright future for the organization and also for the investors. Thank you.
Operator
Management, we have a question. Do you want to take it?
Parmod Kumar Duggal
Of course.
Operator
All right. It’s from the line of Vignesh Iyer with Sequent Investment. Please go-ahead.
Vignesh Iyer
Thank you for the opportunity, sir. And yeah. So I just wanted to understand who may be part of the segment, how much revenue did we do in this quarter? And also the fact that a lot of, I mean, the industry leaders as well as the second and third in-line, they all are still projecting for a good growth for this year as well as the coming year. And so just wanted to understand on that part.
Parmod Kumar Duggal
So Home AC business so-far we have done around INR6 crore. And as I did mention before that we are going slow on Home AC business because there is lot of stress on the margins because of a very-high competitive market as well as the impact of commodities is extraordinary high, which is not reimbursed by the OEMs there. So we are going slow. We are only addressing those business which has good reasonable margin for us. That is point one of your question.
Second, you said that OEMs are showing a very-high assumption of growth in next, which is contrary to the previous question which I hear that most OEMs are saying the next year is not going to be a very-high growth. It would be in the early single-digit growth. So we need to watch because industry is going to be destructive. We don’t know-how the trade war or the tariff war will be there, so we need to be watchful. Maybe in another one month or so after post-budget, there will be much more clarity about how the next year is going to be shaping up.
Vignesh Iyer
Yes, got it, sir. That’s all from my side. Thank you.
Parmod Kumar Duggal
Thank you.
Operator
Thank you. On behalf of B&K Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines.