Suprajit Engineering Limited (NSE: SUPRAJIT) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Ajith Kumar Rai — Chairman, Managing Director
Medappa Gowda — Chief Financial Officer and Company Secretary
N.S. Mohan — Managing Director & Group Chief Executive Officer
Akhilesh Rai — Chief Strategy Officer & Director
Analysts:
Unidentified Participant
Jay Prakash Toshnival — Analyst
Viraj — Analyst
Gokul Maheshwari — Analyst
Amit Hiranandanini — Analyst
Chirag Shah — Analyst
Saurav Shroff — Analyst
Jinl Seth — Analyst
Nandan Pradhan — Analyst
Presentation:
operator
Ladies and gentlemen, Good day and welcome to the suprajeet Q3FY26 earnings conference call. As a reminder, all participant lines will be in a listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Mumukh Mandlesa from Anandrati. Thank you. And over to you sir.
Unidentified Participant
Yeah, thanks Steve. On VR Anirati shares and stockbrokers I welcome you all to the supposit engineering Q3FY26 conference call. I thank the management for taking time out for this call. From the management side we have Mr. Ajit Kumar Rai, the founder and chairman. Mr. N.S. mohan, MD and Group CEO Mr. Akhilesh Rai, director and chief strategy officer. And Mr. Medapak Gauravara J CFO and company secretary. Request Ajit sir and team to give an introduction review about the results and then we can follow up with the Q and A session. Over to you sir.
Ajith Kumar Rai — Chairman, Managing Director
Thank you Mumuksh. Good morning everybody and welcome to you all for the Q3 conference call of Suprajit. First of all apologies I think we have been few minutes delayed. There has been some technical hitch to connect the chorus with our system. So apologies for the delay. I welcome you all. I just want to give a short brief and then hand over to our team one by one to cover areas as we always do. Overall the turnaround globally continues particularly at scs. There has been certain of course both expected and unexpected costs at Controls division which has led to certain one time costs which has outweighed the performance.
However, the underlying performance has been pretty solid. The latest announcement of India Trade Framework is an added positive for all of us and we are awaiting further details. With this background you know the board has declared an interim dividend of 150%. That is rupees 1.5 per share. Up from the 125% last year. That in a sense reflecting our confidence in the turnaround and the global trade. As usual we’ll start with Medapa followed by Mohan and then Akhilej to give certain updates. So I’ll hand over to Medapa.
Medappa Gowda — Chief Financial Officer and Company Secretary
Yeah. Thank you sir. Good morning everyone. The Consolidated revenue excluding SCS for the nine months ended 31st December 2025 was 2464 crores as against 2290 crores for the corresponding previous year recording a growth of 8%. The consolidated operational EBITDA for the nine months ended 31st Dec 2025 was 327 crores against 295 crores for the corresponding previous year Recording a growth of 11%. The standalone revenue for the nine months ended 31st dec 2025 was crores as against 1283 crores for the corresponding previous year, recording a growth of 7%. The standalone operational EBITDA for the 9 months ended 31st Dec 2025 was 234 crores against 226 crores for the corresponding previous year and a growth of 4%.
The total debt level was 723 crores as on 31st Dec 2025. The surplus cash balance invested in the mutual funds was 206 crores as on 31st December 2025. Thank you. You can approach me for any further queries later after the call, even after the investor call. Thank you very much. Mohan.
N.S. Mohan — Managing Director & Group Chief Executive Officer
Yeah, thank you very much. Very good morning everybody. I’ll as usual take you first through the Indian automotive industry. Presume that you already know about what’s happening. We have got a general growth of around 9% out of which passenger car vehicles and two wheelers are in a ballpark of around 8.7 8.8%. However, the global auto volumes have remained lasting flat. In terms of company, our consolidated revenue went up by 7.6% and EBITDA grew by 11%. Of course this is excluding SES and which has outperformed the global industry. Moving. On to the global platform. I would say the conditions remain challenging. Still the geopolitical risks are there. Trade uncertainties are there. Yes, of course the US India Tariff Agreement has provided a kind of a directional comfort. But of course we need to wait for the implementation details because always the devil is in the details. Starting with the Supervisit Controls division. And I’m talking about excluding SES because SES will be covered by at least later. Our operational revenue grew well by 13.7% with new program launches, etc. And operational EBITDA declined by 10.5%. Primarily there are a couple of reasons.
One is we shut down and we relocated from Juarez to Matamoros. We consolidated. So that was one primary reason. And the second one is at Matamoros we are changing the overall labor structure and we are moving from 40 hours to 48 hours structure. So in the process we are making redundant the 40 hour structure of people. Therefore there are certain, I would say redundancy costs coming in there. So overall because of that we had certain issues in realizing the sales, the severance cost and there were overtime because who are else moving over to Matamoros and we had to do some expedited shipments.
Moving on to the tariff which has been popular baby of recent months. It is largely a pass through but what happens is the cash recovery is delayed by a few months. Therefore it is a strain on the working capital. But to that extent that we are covered in terms of tariffs but what happens is in terms of accounting we will have to record the impact in the current quarter but we expect that positive impact upon recovery from the customer later. But good news is with the tariff uncertainty easing in US, I think the new business wins will start accelerating.
Now very important to highlight that our Mata Morrows plant received the Ford Q1 Award. This indicates our operational stability and particularly post transition after we have taken over. There is a supply which has begun with a large Chinese EV OEM and they have also given additional RFQs that we have on hand which we are responding to, which is very good news for us. Moving over to the domestic cable division, the revenue grew by 9%. That was in line with the domestic industry. EBITDA margins remain strong. The beyond cable initiatives including braking has gained traction. The highlight of course was the aftermarket performance which was very very strong.
And another thing that is a moment of pride for us is that both our Chathan and Pantanagar plants won the JIPM TPM Excellence Award from Japan JIPM and I think there have been some images which have been posted. So this reinforces our kind of world class operational discipline at our plants. Moving on to the Phoenix Lamps division quarter remained very muted. This is driven by a sharp reduction in the exports to Middle East. So this happened both in terms of our Tripa brand exports and also the direct export sales. Indian aftermarket also took some amount of hit and we had seen a lot of counterfeit products and also low cost Chinese imports.
So we are working aggressively to overcome these things. The silver lining of course is the special purpose machines and automation projects that are progressing well which is being manufactured at our Phoenix Clamps division but it is being used for our cables division. So with this I’m going to hand it over to Akhilesh for SCD STS and STC updates. Over to you.
Akhilesh Rai — Chief Strategy Officer & Director
Thank you Mohansh and good morning everyone. I’ll start with Superjit Electronics division which had a good robust growth of nearly 20%. It reflects our strong traction in our electronics programs, especially our clusters and throttles. EBITDA also had a positive increase of almost 160% with margins now in strong double digit territory of 11.2%. And I’m also quite happy with the kind of order pipeline that we are seeing at the electronics division. Memory chip shortages remain a risk. I think you know about the Xperia challenges also. We’re also facing them, but we mitigation actions are underway including sourcing, diversification, etc.
Over to Stahlsmith, the Cable Systems SCS, the latest acquisition of assets from the insolvent SES Germany. As you know, this is complete and now this is where we’re seeing a full quarter of their of the earnings of the complete SES business. Key structurings have been restructuring actions have already been completed, especially in this quarter. We completed a tool room relocation from Germany to Morocco. We have ramped up the new Hungary warehouse completely to support the SES operations and we have done the final headcount reduction or rightsizing in Germany which was scheduled for December. So all of these are now complete.
As we continue to integrate SES into SCD in the future, we are also consolidating the leadership. So Friedman Farber, who has done good work for us for the last few years, is now exiting as MD of SGG or supreme Germany. And our current European operations head, Mr. Neal Collis, he will start to lead all European operations including SES from April onwards. New business wins have also started at ses. This is very positive because of the kind of issues we are facing now. Customers are seeing that all those issues are resolved and they see SCS as the strategic location we thought it would be.
And we’re seeing a lot of good renewed customer confidence in the Morocco facility. Coming to Suprjit Technology Center. STC continues to support our new program. Launches across multiple divisions. There’s a lot of focus on homegrown products and right now there’s a lot of collaboration happening with our ABS partner in Italy and for sunroof cables with our partner in Germany. Initial prototypes of ABS are already under testing and progressing as planned. Some updates are in the presentation in terms of some pictures that you can have a look at. There’s a strong development pipeline in clusters, throttle grips and actuators.
In fact some throttle grips are even going to China from India and we’ve seen multiple OEM visits getting a lot of positive feedback from the market. Other general updates. We completed the 1 million euro strategic investment in Blue Break Italy, which is our ABS partner with a very new and innovative ABS technology. This is alongside our licensing agreement that we had already concluded earlier. We participated in multiple global trade shows and customer tech shows and this has supported a lot of good customer engagement. In the coming quarter, 16 DCD plants will be going on to SAP in April and this will improve our global integration.
In terms of the JV with the Chuatsu, I’m happy to inform everyone that we have got multiple RFQs from our key Japanese OEMs in India. We’re also getting multiple RFQs for exports. So the RFQ pipeline at the JV is also strong. It will take some time to commercialize, but the pipeline is very good. So over to Chairman for closing remarks.
Ajith Kumar Rai — Chairman, Managing Director
Yeah, thank you all. I would like to conclude by saying that majority of the restructuring post the SCS acquisition is substantially complete by end of December. SCS is progressing pretty well towards the positive EBITDA that we had committed by end of this quarter, the current quarter. That is as has been projected by us in the beginning of this acquisition. With the tariff clarity improving, we need to still see the fine print as to exactly what is the tariff for the various tariff codes. The customers are expected now to at least resume strategic purchasing globally and I think with our kind of footprint and strategic positioning we should be.
It should be all very positive for us for newer business requirements. With this I will hand it back to the to the moderator and we are happy to answer questions over to the moderator please.
Questions and Answers:
operator
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue please press star then two participants are requested to use handset while asking a question. Ladies and gentlemen we will wait for a moment while the question queue assembles. The first question comes from the line of Jay Prakash Toshnival with LIC mutual funds. Please go ahead.
Jay Prakash Toshnival
Hi, good morning sir. Just few questions on STD side. What is the normalized EBITDA margin you. Have reported this quarter sir and it’s possible to quantify the one time hit with.
Ajith Kumar Rai
Yeah, I think in our press release we have mentioned that is more or less. I would say you know normalized EBITDA for the quarter which is at about nine and a half percent. The one offs for the quarter is about. I would say. I mean you know these are up number at this moment is about 2 million USD. That’s about. Let’s say 15. 18. 18 million or so. 18 crores or so is
Jay Prakash Toshnival
it this. This is only for.
Ajith Kumar Rai
Sorry, I can’t hear you. Please.
Jay Prakash Toshnival
Is this only for this quarter or Below.
Ajith Kumar Rai
Yes. What I mentioned is only for this quarter earlier quarters in the respective quarters all the restructuring costs have been booked in respective quarters. It is reflected in the EY signed off document as a full cost. Whereas in our press release we have normalized as operating expenses by adjusting these extra one off back into the system.
Jay Prakash Toshnival
Okay, okay, okay. And on the SED side if you. Can talk about more because the growth is reasonably good this time also. So what are the kind of new. Customers we got in? If you can just highlight more than that.
Ajith Kumar Rai
I think we have been as we have been telling in all our earlier press releases as well as our investor calls, we have been winning significant new contracts. This is now, those contracts are now slowly and steadily coming into sop. That is startup production. Typically the cycle in automotive industry that every five or seven years the existing projects drop off the table and the new projects have come keep coming on. We have been winning more new contracts than the orders that is getting, you know coming to end of life. So I think this is a, you know clear indication that the customers are placing larger and more significant and strategic businesses with us which is getting into production. That’s why for the quarter controls division had a 13% growth where the global business has not grown. I think that’s what we have always been saying that will outperform the automotive world’s growth.
Jay Prakash Toshnival
Okay, interesting last question on SES side. Is it fair to say Q4 would. Be the break even quarter for us. In terms of EBITDA margin?
Ajith Kumar Rai
I think we have said in the beginning of the year when we did the acquisition that by end of this financial year will turn the corner and will be EBITDA positive. And as you’ve seen. I know we have, in fact we have declared all our last I think seven quarter numbers in this press release. So the direction is pretty clear. And I you know we are still standing by that. Yes.
Jay Prakash Toshnival
And there is no one time cost. Which can come in queue.
Ajith Kumar Rai
You know there is, you know this is a process of consolidation. There will be some cost. But having said that I think we are still standing by those statements.
Jay Prakash Toshnival
I’ll come back. Thank you sir. Thank you for this.
operator
Thank you. The next question comes from the line of Viraj with Simpl. Please go ahead.
Viraj
Yeah, hi. Thanks for the opportunity. A couple of questions. First is on this one off. So if I have to look at nine months would it be right to think that you know we would have incurred more than 35, 40 crores in terms of one off restructuring expenses and for related question is if I have to look at next one year for SCD and SCS. Then what will drive the normalized margins you know for the business.
Ajith Kumar Rai
For the SCS and SCD you mean?
Viraj
Yeah. What will drive the path to the normalized margin? Because in SCS I think earlier quarters you talked about.
Ajith Kumar Rai
Okay Viraj, let me put this way. I think I just mentioned just in this quarter we have booked nearly 2 million one offs. Okay so you’re talking about nine months. It’s actually more than the number that I think you mentioned actually between. I’m talking about complete restructuring between SCS and scd. It’s probably more than that but you know we normally don’t give those numbers. But in this quarter itself on controls division for various issues that we just mentioned and Also in the PR we have booked about 2 million one offs. That’s the first answer. Now in terms of standardized, I mean next year onwards as you have said earlier once we expect the SES to turn around the end of this quarter there is so much of integration is happening amongst Westcon, ldc, scs, scl, scu.
So the entire operations will be reported as superset Controls division. That is our international business. And I have always said this that globally the auto component industry operated between 6 to 10%. Right now SCD is at the 10%. But with the SCS adding on for next year there will be know it will take little more time to stabilize but I think it will be in that range and the aspiration is certainly reached 10% over a period of time.
Viraj
Second question is if I look at the DCD business, you know we talked about a very strong growth in aftermarket and there is a good scale above beyond cables also. But if you adjust for these two elements growth in DCD seems to be much lower than what we’ve seen for the N industry two wheeler of PV industry in India. So I’m just trying to understand why is that the case. You know, have you lost any market share?
Ajith Kumar Rai
No, I think in DCD if you are looking at it the growth is close to double digit whereas industry growth is at about 8%. It is in line with that. But you must also understand that the other than beyond cables the base is pretty small. Although the percentage looks interesting but the base is still very small. So I think you need to keep that in mind. Beyond that I don’t see any other issues there actually. Of course having said that let me also qualify that some of the EV products the number of cables have come down which we have already set to in the Earlier PR and earlier calls as well.
Viraj
Okay. Because if I look at the reported.
Ajith Kumar Rai
Market share with each customer, we are absolutely at the same levels. As I said, the number of cables in certain segments, particularly in the EV has come down in some cases. I think that’s probably the answer for your question.
Viraj
Okay, just two more questions. One is on the JV for transmission cables. Can you give some color? What is the opportunity landscape both in India and even for exports, you know, how big is the market and for export, is it more driven by the captive business of JV partner or it’s more of, you know, us directly approaching. So any color we can give on the landscape and how we approaching this over next three, five years.
Ajith Kumar Rai
I think you’re talking about Chuat. So jv. Yeah, I think I will let Takhilesh to answer the basic question but I’ll also add on few points. Akhilesh.
Akhilesh Rai
Yeah, so I mean I think you know, the way the Japanese work are generally very slow and this is also, well, I wouldn’t say slow, but let’s say cautious and careful. This is a very technical product, you know, and this is why Suprajit had never got into shifter cables for even being world leaders in cables. Shifter cables for automotive was not an area that we had got into because of the high technical nature of it. So it has taken almost a year and a half of close work to develop a product here which is matching the OEM’s expectations.
We work very closely with the two largest Japanese OEMs here in India. And right now they have reached a point where they’re very happy with the technical capability of our team. And so that’s why they’ve given the rfu. But it will take time before it, you know, I would say at least a year before it commercializes into any business. But at the same time the Chur Group, you know, we have a clear policy that we now are focusing on the east and the Chuor team and the Chuor group in Japan are very comfortable to work with us.
And that’s why even before any businesses started they are already working on multiple export orders to support us in India through the JV chairman. You wanted to add something?
Ajith Kumar Rai
Yeah, I think, as I think correctly at least said, you know, Japanese are very cautious and you know, they are really long term. So it has taken some time to come to the current stage. And we must also keep in mind the two Japanese, the leading Japanese customers, OEMs, passenger vehicle in India have already have got multiple suppliers for these products. So they have also Been little cautious but I think we have broken that ice. I think we have now starting to receive RFQs. And the interesting part of that is of course it will take some time again to, you know, it will be probably the future platform of these OEMs.
So that means the launch times will be later. But what is interesting is the confidence of Chua. So I think they are asking us to quote for their global requirements because they obviously have seen that we have got some cost competitiveness here. So I think those are the things. But I would suggest that don’t pencil in any numbers for this for the next year. I think even if it is, it will be very small. But it’s really a long term association that we are looking at as Joachu is also a part of Toyota Group. So that’s what is more important for us.
Viraj
Okay, this last question, I’ll come back in queue. What is the thinking behind not utilizing deferred tax from losses and such, you know, to drive down the effective tax rate?
Ajith Kumar Rai
It’s more a conservative approach, Viraj, because you know, we have always been very conservative in such matters. So we are very confident of. Confident of what, how it will pan out, when it pans out. But at this moment we have taken a prudent and conservative view on this. I think in a year or so these things will completely change.
Viraj
I’m assuming you’re talking about subsidiaries reverting to a normal.
Ajith Kumar Rai
Yes, yes,
Viraj
profit margin. But the kind of tax offset opportunity you have, you know, you’re kind of letting that go. That is what?
Ajith Kumar Rai
There isn’t any. No, I don’t think so. You can talk offline with the meripa. There is no tax opportunities that is let go. No, it’s ultimately individual units taxation because individually they are independent units and they flow into the consolidation. Whereas the deferred tax matter on those loss making units are taken on a conservative basis. That’s all.
Viraj
Okay, I’ll come back. Thank you. Thank you.
operator
Thank you. The next question comes from the line of Gokul Maheshwari with Auriga Capital. Please go ahead.
Gokul Maheshwari
Yeah, thank you for my. Thank you for the opportunity. So just on the gross margins front, sequentially they have come down in the Q3, sorry, Q2 versus Q3 by around 200 basis points. What is the particular reason why the gross margins has come down?
Ajith Kumar Rai
Gross margin in standalone or in consolidated you’re saying?
Gokul Maheshwari
I’m talking consolidated.
Ajith Kumar Rai
I think that’s basically on the controls division numbers. Right? It’s because of that.
Gokul Maheshwari
Okay, so is I mean is this because that the raw material cost has gone up or is it because of some tariff issue which is a more.
Ajith Kumar Rai
Yeah, I think, yeah, okay. Yeah, I think you’re right. I, I the one of those points we talked about, one of you also mentioned about the timing of the tariff a significantly what is happening, the way the tariffs work in the US is that, you know, we invoice as per the, there’s some, we invoice as per the customer prices. The tariff part of it is separately invoiced with all the supporting documents. The import duty paid the invoices of the, you know, freight forwarder. The, you know, the importer is paid proof it gets uploaded into the system of the customers and then we get into the queue for the payment.
So once the duties changed from 25 to 50% in the last quarter, suddenly this amount became significant. So as far as the auditor is concerned, he is going to charge, you know, until the money is received, they are not going to recognize it. So in the number as announced, there has been a significant hit of that tariff amount, although we have a return confirmation from customers that they will pay. But it is a timing issue.
Gokul Maheshwari
Which means that sir, the next quarter or whenever the tariff amount is come, it will hit the your sales without any corresponding cost for it.
Ajith Kumar Rai
Yes, yes.
Gokul Maheshwari
Which is resulting in normalization of cross margin.
Ajith Kumar Rai
Yeah, I think it will normalize the gross margin. Then when you look at for the period whatever, then I think they will look fair. Correct.
Gokul Maheshwari
Okay. Okay, great. Just from the braking business, sir, any for you, the braking systems. Have we started this business for any of the OEMs?
Ajith Kumar Rai
No, but I’ll, I’ll ask a place to give a status update.
Akhilesh Rai
Yeah, so you know, in terms of braking, I think we do multiple braking products in production. You know, in terms of we supply lever and combi brake Systems to multiple ice OEMs and EVOEMS that started only in the last year where we displaced multiple current vendors. We’re showing the kind of confidence customers have with us. We also do a lot of braking products for you know, let’s say parking brake for JCB or parking brake release systems for Metro. So we do multiple braking systems which are in production, but we are constantly working on, let’s say the next braking technology that we want to bring in.
And that specific technology is hydraulic brake systems and ABS. And that is now under testing at multiple OEMs. And we’re hoping that we can commercialize those in this year, in the coming financial year.
Gokul Maheshwari
But nothing on the mechanical brakes where we’ve got any business from any of the OEMs?
Akhilesh Rai
No, on that. That mechanical brake system that you’ve seen in your. In our, in our, let’s say our tech shows and experience and that mechanical brake system was actually meant to substitute hydraulic brake, but because of the ABS mandate, unfortunately the ABS can only work on hydraulics. So this option has become something that they’re not looking for. But we are actually converting that into a new product which is now in discussion with oem. But I think it’s little bit far from commercialization to discuss right now.
Gokul Maheshwari
And just last clarification on the tax rate once the subsidiaries were to turn profitable. In that case, the deferred tax assets will be again, as you are not prudently using, that will be used. And hence our tax rates were to normalize in the mid-20s level.
Ajith Kumar Rai
Yes, I think so. You are correct, that will be over a period of time. Yes.
Gokul Maheshwari
Okay. Okay. But is this something which would happen in FY27 or this normalization of tax rate will take more time?
Ajith Kumar Rai
I think it will take probably more than a year. I would say next year may not be the year itself, but it all depends if the question of how the numbers look for us and for us to present to, you know, our own auditors to see that whether they are fine to make those reversals. So we are at this moment taking a very prudent course.
Gokul Maheshwari
Okay, just one more question on scs. So you’ve done very well in terms of sales and the quarterly run rate is clocking well along with now this division is going to be reported under SCD from next financial year onwards. So would this division be able to grow double digits for FY27 based on the the order book and the demand scenario which you are receiving from your OEM customer?
Ajith Kumar Rai
All I would say is that, you know, SES is shaping up pretty well and despite being in insolvency within the year after we taken over, now customer visits have started happening to assess us from these facilities, whether it is from Morocco or from China and from of course even via Canada as a optimal route for their supply chain. So that has been happening and in fact we have been also awarded recently some business at Morocco as well additionally, in addition to what we have. So all I would say is that with this complete restructuring done, SCD Superset Controls Division will present a united front for all these entities.
So where the business will be placed, whether a European business will be placed in Hungary, Morocco or China or India, which are all different parts of our Acquisitions it is it, you know, it’s up to the customer. So it is difficult to say whether SCS will go grow. The point is will controls division will grow. The answer is certainly yes.
Gokul Maheshwari
Okay. Okay, great. Thank you. And all the best.
Ajith Kumar Rai
Thank you.
operator
Thank you. The next question comes on the line of Amit Hiranandani with Philip Capital. Please go ahead.
Amit Hiranandanini
Thanks for the opportunity. Sir, one strategy question. From the four to five years view. So how much percentage of console revenue comes from the mechanical cables and beyond. Cables and how do you see this. Mix by FY30 and which products you see as a star in the next five years?
Ajith Kumar Rai
You know Amit, knowing us for so many years, we don’t give a five year outlook. All I would like to say is that we will have a. Of course, you know, once electronics division came to certain level we made it as a separate division. Similarly, when we get some reasonable milestones within the braking division in terms of our existing current products, what Akhilesh just spoke or with the hydraulic or abs we will segregate it into a separate division. So obviously and then of course actuator is another area where we are having a very strong belief and the significant progress in terms of developments in STC at China is happening.
And I think once they are also in the pipeline, I would say that with these divisions that means with these two additional divisions of you know, of course STC is working with the electronics division on multiple other electronic products. So all of them put together we will have a basket of highly de risked businesses from the point of view of cables. So how much of that cable per percentage will be there for five years into the future? We don’t really, you know, forecast suffice to say that each one of our divisions will have a reasonable size and a very good profitability.
Amit Hiranandanini
Understood sir. Secondly, on the ABS side if you can, you know, help us understand, you know, as this is a more of a safety component. Hence you know getting the new orders is looking little tough due to the competitive reasons. So any edge we have. And further if you can also help us when we can see an SOP and revenue target for the next five years for this.
Ajith Kumar Rai
Since Akhilesh has already spoken to ABS for a little bit. I’ll let Mohan to answer this question.
N.S. Mohan
Thank you. See, let me just give you an overall strategy what we are trying to do as against the competition because that’s what basically what your question is, what is our usp? Right. So if I look at it today. I. Am a biker myself so I understand this better when you are braking, it’s a very hectic feedback that you get. And person to person, it varies. And there are multiple things that you are looking for. The bites in the brake, the noise levels, the stopping distance, obviously the performance parameter. Therefore there are multiple things that you look at now today, if you look at in the industry, somebody supplying the lever, somebody is supplying the hydraulic portion, somebody is supplying the caliper, somebody is supplying the hose, somebody is supplying the brake shoes, somebody is supplying the rotor.
Therefore, the integration of this whole thing as a system braking system falls in the domain of the oem. Therefore, let us say I get a squeal noise, just to give you an example, or I’m, I’m getting a very mushy feeling when I apply brake. Then whom do I go to? Do I go to the lever guy? Do I go to the hydraulic guy? Do I go to the caliper guy? Do I go to the big shoes guy? So this is where the issue, what we feel is a sweet spot, therefore what we want to position ourselves is that we are going to be systems provider. If you look at automotive industry, particularly. In the passenger car industry, you have module providers or systems provider. Therefore if you can move in the direction of becoming a module provider or you can move in the direction of becoming a system provider. For us the sweet spot that we look at is that we are a system provider and that’s how we are projecting ourselves to the oem. Tell you that we take the complete responsibility, be it in terms of field haptics, feedback, be it in terms of the performance of stopping distance or the wear outs or other areas like squeal and noise.
So we take the complete responsibility. I think that is the usp.
Ajith Kumar Rai
Thank you, Mohan. Nathilesh, you want to add anything?
Akhilesh Rai
Yeah, I mean just on the specific ABS component, like Mohan said, it forms a part of a larger portfolio which we have complete experience from the lever to the friction material, all in house. But on the ABS product itself, it is a new patented product. In terms of the type of platform that it gives us, it is fully localized. So we won’t have any import restrictions, we won’t have any imports. Whereas the current ABS products have some imported components, mechanical components. So I think these are the sort of the other USPs. I think we also have a different type of keel that we will be bringing which we hope will be an advantage.
But like Mohan said, I think it forms part of a full brake system package that we are giving the OEMs.
Amit Hiranandanini
All right, this is helpful. Thank you so much. Just last one quick question on the PLD division sir. Here since many quarters the quarterly run rate is averaging around 96, 98 crores. So have you like started receiving any order especially from the Europe where you know you have a competitor bankruptcy reported and any aspirations also to you know improve the PLT’s margin or this number looks sustainable?
Ajith Kumar Rai
Mohan, will you answer that?
N.S. Mohan
Sure. Yes. The answer is what you said is right. When some of the people are going bust in some areas, obviously those customers whom where we had I would say loss in between are coming back to us. Therefore we are gaining traction there. And another big ticket item that has happened is in not Europe but in Americas one of the big boxers has tested us out and we have passed all the audits. We have already started supplying it to them and we have started realizing revenues out of this big boxer in US also. Therefore as the consolidation happens and the big players just move out of this, we will stand to gain.
Therefore with our strategy of being a last man standing. I think we stand to gain here.
Ajith Kumar Rai
I think to add to what Mohan rightly said, last man standing. I would also like to add here very clearly that this year has been sort of an exceptional year in that sense because Middle east, one of our big markets had significant setbacks. So some of our big, big distributors didn’t buy from us. So and in the last couple of quarters there have been some issues relating to the Indian aftermarket. But having said that what you mentioned yourself with the insolvency is happening, consolidation is the key. And I think you know we are actually getting so many new inquiries in the last quarter onwards.
I mean I think the outlook for actually Phoenix lands for the next year looks far more brighter than what it is today.
Amit Hiranandanini
Perfect sir. Thank you so much. All the best.
Ajith Kumar Rai
Thank you.
operator
The next question comes from the line of Chirag Shah with White Pine Investment. Please go ahead.
Chirag Shah
Yeah, thanks for the opportunity. Hope crime audible. Yes sir. First question is with respect to this India US FDA and also India USPA if you can elaborate. How does an auto compound industry benefit in general and more specific? Super. Because different products would have different supplier base in terms of different countries would be supplying. So how if there are no major caveats that depth and they will live in detail. Live in the devil is in detail kind of thing. Assuming there is no major.
Akhilesh Rai
Yes.
Chirag Shah
Surprise. So if you look at how Superjit benefits from this given that you are present in multiple ways today.
Ajith Kumar Rai
Yeah, it’s a. It’s a very interesting question but I don’t have Full answers to you Chirag because we are still awaiting a lot of details but I can, I can give some, some clarity. Particularly you know India, eu, European Union, you know we have I think something like a 3% duty now from my understanding is it when it’s actually implemented, you know it has to go through the legislation, I think that would likely to be probably more towards zero. So to that extent I think that is positive. The US tariff, you know it all depends upon the classification and the HSN code.
There are multiple codes on which we do the deliveries in US and there are multiple tariff structures. Although the headline says 18 there is some of them which are at zero, some of them at the higher, some of them are in between. There is also to add the twist to the tail as they say there is also what they call it a tariff related quota TRQ I think so certain, you know what they considered as I don’t know, national security or whatever certain parts comes under this and comes into a much lower tariff all the way up to zero percent.
So when I see, you know it’s too early to talk but I think our, our importing agents in US are yet to give us a full clarity because they themselves have not received the notifications from the government yet. The 25% is gone, effectively the other 25% we don’t know when is the date and what are the fine print. So I think we will wait for another couple of weeks and if you get any clarification we will probably send a press update once we are clear about this.
Chirag Shah
No, so let me rephrase the question. I fairly understand this point is that let’s assume is it at 18% so is China our key competitor or which region is our key competitor where OEM is? If our peer set is also around 20% then the incentive for US customers to ship may not be there.
Ajith Kumar Rai
Yeah, from that point of view I think seeing by what the number is at 18% in Asia or Southeast Asia, including China, we become the cheapest. I’m assuming that it is 18%. So yeah but then you know these 2% 5% variations doesn’t matter why have some cost advantages or disadvantages. Customer also looks on the strategic point, I think. Yeah, so for example Morocco has only 10% so doesn’t mean that customer has come running and lined up to buy from Morocco. I mean it’s all a strategy of the customer. So all I am saying is that we have footprint in all the places where tariff regimen is favorable.
Also like Morocco now India is becoming probably Little more favorable. So we will utilize based on the customer. That’s why we made a comment also in our press release saying that some amount of this tariff confusion is going behind us. And once this clarity comes in a month or so, I think the supply chain managers will start working on new projects. I think that’s when we will get certain advantages to position ourselves.
Chirag Shah
Is China keyer country for us or not really? Is China key competitive country for us in US and Europe or not really.
Ajith Kumar Rai
Not really. Not necessarily. Of course there is a China competition. There are a couple of suppliers from China and I think they probably have a slight disadvantage. But then you know, it’s. It’s. We’ll have to wait and see.
Chirag Shah
The second question was if I heard it correctly, you said that there was a 2 million charge in SCD division. Right. Because of those.
Ajith Kumar Rai
In this quarter. Yes, you’re correct.
Chirag Shah
So that basically means around four and a half percent of margins for the quarter.
Ajith Kumar Rai
Maybe for the quarter. You must also understand some of them would have been charged in the Q3 which is partly was actually incurred in Q2. Right. So you have to actually look at the total period. This one offs may not be one off of the quarter. It may be a result of the previous quarter also. I’m just giving a general explanation.
Chirag Shah
Yes.
Ajith Kumar Rai
For the period then I think it is a fair point. Whatever the difference. Yes.
Chirag Shah
What would be for nine months if I remember the recollect broadly and how should we look at how till the next year there would be any more startup cost because some of these assets will get ranked up. There could be some similar one time cost of different nature that would come next year.
Ajith Kumar Rai
There will be. What I’m saying is that the kind of restructuring cost that we have incurred this year is only for this year. Will there be some cost next year? There is always going to be an organization which will keep on optimizing our operations in the process. Some costs will be incurred but there will be nowhere near what you have been incurring in this year. That is the point.
Chirag Shah
If you could, if possible you can. Call out what was done in nine months. Your point is valid. We should look at a whole period. It would be helpful. Or at least when you Give the next Q4 results for the full year. What is the amount? If you could call out, it would be helpful.
Ajith Kumar Rai
We will keep that in mind. Chirag, let’s see whether we could sort of give a rough outline on the overall one off that we talked about.
Chirag Shah
Yeah. And one question, if I can squeeze in the last question. From my side see for the jutsu JV that you spoke about, the Japanese JV that you. So what is our equity in that? That’s question one. And how should we look at the ramp up of that? You, you have very well articulated. But 27 will we see or it’s what about 28, 29 where we can see some revenue flowing over there?
Ajith Kumar Rai
I think Chiran, you know how the, how the time taken with the Japanese customers particularly they already having existing customers. They want us to be there. But then it will be all for probably the new projects that will be launched not necessarily in 27, maybe even in 28. We are in discussion so it is difficult to say which project will be awarded. So we don’t want to make a comment at this moment. So I don’t want you know again to us it is a wonderful joint venture. It’s a Toyota supplier, Toyota owned supplier. So you know, it’s a relationship we will really look forward to capitalizing over a longer period.
Not for an immediate return as such.
Chirag Shah
Can you summarize new programs that you’re likely to start in 27? Because there were somewhere in you.
Ajith Kumar Rai
Somewhere in. As Akhile said earlier, we are at the RFQ stage. Unless we win, we cannot comment.
Chirag Shah
No, not for this JV as a company as a whole. As a company as a whole in 27 any new programs that are likely to start.
Ajith Kumar Rai
You mean, you mean for suprajit there are so many new contracts, you know, I mean I don’t know from where to start. I think some of the interesting ones that we just started delivering to us is on certain seat and door cables where the underlying condition that even our tier one, tier two should not be Chinese. So that means to say how the mindset of, you know, I’m just talking about one customer placing an order of let’s say 50cr a month, 50cr a year kind of a thing. So you know there are quite a few significant businesses.
But you must also understand once in 5, 7 years existing programs also go off the table. So if you see the quarter number at 13% growth for the project controls division, not just in India, everywhere there is a surge in the business volume. I think that is very important to understand. I think.
Chirag Shah
Thank you very much.
operator
Thank you. The next question comes from the line of Saurav Shroff with QRC Investments. Please go ahead.
Saurav Shroff
Yes. Hi, good afternoon and thank you for giving me the opportunity sir, actually to sort of continue on pretty much what has been the tone of the call? I think we would greatly appreciate some more sort of clarity on the restructuring and the one offs because the last 12 months have been absolutely transformative for the business and we appreciate that with Sesame consolidation of ldc, I mean some smaller things like SAP implementation and things and all of these are very cost heavy activities but with long term benefits. So I think we would greatly appreciate sort of further details on where we start next year in terms of our cost base and where the sort of growth in earnings comes from.
So just one question from my side.
Ajith Kumar Rai
I understand that Sourabh. I think it’s a well, well said point. I think this year end, I think we’ll be complete. I mean there’ll be some ongoing stuff in this quarter but by end of the year I think when we come out with our final number I will, I will ask our finance team to put together some kind of a data. I don’t know how, how much we can actually disclose or not disclose but we’ll certainly make an effort to give some kind of a color to this concern that you have.
I appreciate that and understand it.
Saurav Shroff
That will be great sir. And one final question from my side. So we are now employing about 150 engineers at STC. They are obviously working across multiple lines and product divisions. If perhaps we could sort of understand that they are obviously today maybe not contributing to revenue in a very big way. Maybe in the actuators they’ve had some sort of progress where products have moved ahead. But BRICS is essentially still in a developmental phase or approval stage if maybe even that could be called out. Because in essence, at least the way we view it as investors, as this is an R and D expense for the company.
If you perhaps also just call that out. Again it helps us to understand where the business is going two, three years down the road when some of these activities fructify and the products come to market. Right. Just in terms of the return on investment over the last five, six years that we have been seeding STC and building the team out.
Ajith Kumar Rai
Yeah. We will see how we can elaborate more on the STC activities and in terms of maybe the team sizes and what they’re up to and where they are contributing. So that you know, for example there is an electronics division which is responsible for the electronics division of our.
Similarly there is a braking team which is responsible for the braking division. There is an actuator team which is responsible to the actuator team. Some kind of a color we could possibly give in the next, next pr. Yeah,
Saurav Shroff
that will be greatly appreciated. Thank you sir.
Ajith Kumar Rai
Thank You.
operator
Thank you. The next question comes from the line of Jinl Seth with Auriga Capital Advisors. Please go ahead.
Ajith Kumar Rai
And after this, I think we’ll take. After this question, we’ll take one more from anybody else in the queue. It’s already 12:05. We have started seven minutes late. So it’ll take from two more persons. So Jinal, you can start please. Thank you.
Jinl Seth
Good afternoon. Ajit sir and Sapraji team. So just touching days from Sourabh’s point of the employee cost. So if you were to see, from. 2018 until 2022, our employee cost as a percentage of sales has averaged roughly around 18 and a half percent, which is currently around 22 plus. So obviously this includes investments that we’ve done as we’ve already spoken about that. So just trying to understand that as. Businesses start to fructify, as our investments start to pay out, could we see that alpha coming from this employee cost which can go back to that around 18% or so because of a lot of that is already that is in. Into investment. So just trying to understand that point.
Ajith Kumar Rai
You are talking on the consolidated basis?
Jinl Seth
Yes, yes, yes.
Ajith Kumar Rai
In the consolidated base. Let us also understand, five years ago our international exposure was less. It is a lot more now. And the employee cost, as we all very well know overseas or internationally at a much higher level. And I think that will remain the same. The point here is that then and now the size of our STC has increased to that extent. The employee cost also has gone up. So from the point of view of this coming down, I think our aim will always be to come down. But ultimately in business, what we see is that how do we benchmark with our direct competition? Are we better off? If they are 30 and we are at 22.5, then we are great.
If they are at 18 and we are at 22, then we are in trouble. So I think we do these benchmarking exercises internally and try to understand whether we stand ourselves as a competitive supplier in the market. I think our benchmarking exercises so far have clearly led to us to believe that we are very competitive now whether 22% can come to 22 or 21, I think that is possible because we continue to grow our business. As the top line grows, these numbers on an average as a percentage will come down. And also we have done this restructuring exercises.
Once that is done, there would be some tailwind of that into the employee cost. So will there be some positivity? But then, you know, five years ago, seven years ago, we are only 35% international business today, as you see in our press Release, we are 58%. So those businesses are run at a much higher employee cost, which is the norm of the day. Whether you run an operation in North America or in Europe or even in China today, they are at a different level. So I think to some extent these costs are going to be sticky to change, but some improvement is possible.
Jinl Seth
Yeah, I get what you’re saying. Just that the point is that we’ve had obviously we’ve gone up on R and D costs. We’ve had a lot of other operating costs related to the acquisition. So just trying to see that and especially also when the global auto industry kind of turns around, which has really not grown and some possible operating leverage there. So I’m just, I, I mean you kind of think about it at overall length point of view that there is possible operating leverage somewhere or the other, which kind of helps you on that margin front.
Right?
Ajith Kumar Rai
Yes, yeah, true. Let me give a little larger answer to that. I think the operating lever improvement is certainly there in employee cost number one. That is also there in the material cost because as we become global scale, our ability to purchase more competitively also becomes an issue. And I think that is also giving us some advantages. The reason today, if you look at any global player in cables, if you’re able to squeeze out some numbers, nobody has the kind of margins that we are generating that becomes our operating performances have been pretty good. Certainly there will be some improvements, even other expenses.
For example, I mean once this year is done with all the kind of air fleets and special fleets and things like that that we have done is coming down, even that there is an opportunity to tighten our belt. So it is a continuing process. In suprajit, I think each division heads are given annual targets to improve such costs. It’s not just employee cost on multiple levels. So I think that is where we monitor this. Our divisions to further improve their operating efficiencies and improve their margins. I think it an ongoing effort. I think there would be some improvements.
As we go forward.
Jinl Seth
Perfect, thanks on that. And lastly, I mean everybody’s touched upon this. I’ll just, I’ll keep it short that on the restructuring costs, I mean obviously there was some negative surprise there, but should we expect any other negative surprises in the coming quarter or going forward?
Ajith Kumar Rai
I think as we said, by end of this that means I’m Talking about the Q4, we would be all done with it. I don’t really see anything significant that in the quarter, at least at this moment or so far in this quarter. And I think most of our restructuring is complete, some ongoing and some of the let’s say work done last quarter might be coming for an invoice may come. That is possible. But I don’t see the kind of hits we have in Q. I mean it was known hits, it’s nothing, you know, new because the large reduction in Europe and in Mexico and all that stuff apart from the movement of Whoares to Metamoras and SAP related issues and all that, they all happen sort of, you know, sometimes it’s Murphy’s law, it happens in one place at one time.
So. So I don’t really see that in this quarter actually.
Jinl Seth
Okay, thank you and good luck to the team. Anjeet. Sir.
Ajith Kumar Rai
Thank you. We’ll take one last question if there is.
operator
Yes sir, it comes from the line of Nandan Pradhan with MK Global Financial Services. Please go ahead.
Nandan Pradhan
Yes, hi sir, am I, am I audible? Yes, yes. Hi. Congratulations on the date set of numbers. So just one small question. So on the SCD division that is the global division X of SES we’ve seen an acceleration in the revenue growth. Now would it be possible to quantify if there is any benefit from the rupee depreciation or bulk of this is due to the underlying organic growth that we are seeing?
Ajith Kumar Rai
There will be some, yes, there will be some rupee group, you know, rupee advantage. I think maybe 2, 3% may be there but I think that’s about it. Rest is actually very good quarter and the consolidation you must realize when the insolvency happened of the SCS entities there has been some customers we lost because they thought that this company will go bust. So some of those things have also come back. That’s why if you look at the SCS there has been a strong momentum too. So overall if you look at the two together I think the growth has been much ahead of the global industry.
That’s all I would like to say.
Nandan Pradhan
And so just one small question I can squeeze in. In the last quarter I think we called out about 12 to 14% EBITDA margins for the SED division I think X of SCS. So would we still stand by that. Given you would have some benefit from the tariff also coming in in Q4 without any documental cost.
Ajith Kumar Rai
The 12 to 14% that I’ve said was the consolidated total business excluding SCS which has been even now in the same range, It’s I think 13 point something. So we are still in that range of 12 to 14 with the consolidated excluding SCS on controls division we have always said that the international business operates between 6 to 10% our aim is to be at the top end of it which is 10% I think we are we are there and in fact for the period we are just about 10% so I think we are very much there actually.
Nandan Pradhan
That’S it sir thank you so much thank you I think.
Ajith Kumar Rai
With that moderator I would like to thank Anrati and Koras call guys to organize this call I would like to all of you thank all of you for participating in this call if there’s any more clarification you can connect with Medapa or in normal channel and I would like to continue to thank you for your continued interest in superjet so thank you very much I hand over to the moderator please.
operator
Thank you sir on behalf of Anandrati share and Stockbrokers Ltd. That concludes this conference thank you for joining us and you may now disconnect your lines thank you.