Suprajit Engineering Limited (NSE: SUPRAJIT) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Unidentified Speaker
Ajith Kumar Rai — Founder And Chairman
Medappa Gowda J — Chief Financial Officer And Company Secretary
N.s. Mohan — Managing Director And Group Chief Executive Officer
Akhilesh Rai — Director And Chief Strategy Officer
Analysts:
Unidentified Participant
Mumuksh Mandlesha — Analyst
Amit Hiranandani — Analyst
Resham Jain — Analyst
Shubham Sehgal — Analyst
Senthil Manikandan — Analyst
Darshan M. Bhandarkar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to The Suprajeet Engineering Q4FY25 earnings conference call hosted by Anand Rati Share and Store Brokers limited. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your Touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Mumuksh Manlesha. Thank you. And over to you sir.
Mumuksh Mandlesha — Analyst
Yeah. Thanks Anushka. On behalf of Anunathi Shared I welcome you all to the Superjit Engineering Q4FY25 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 MDN Group CEO Mr. Akhilesh Rai, director and chief strategy officer and Mr. Medapak Govra J CFO 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 — Founder And Chairman
Thank you. Good morning everybody. Thank you Anandra for hosting us on this call host. I think I will give a very quick brief. It will be followed then by Naratva Mohan and Akhilesh. As usual I’ll also give you probably in the end a quick brief. As you all know, auto industry in India has grown by about 89%. Globally probably it is just zero. Against this background Supraj’s performance has been pretty satisfactory. We had a strong export growth from India, nearly 35% I think. And only change this time is that the press release. You might notice that we have made certain changes based on certain feedback.
Made it more visual. And these results are of course mostly operational. Is operational. Whereas the regular one has been already uploaded to both BSE and NSE exchanges as per the requirement of sebi. So with this quick background I will give it to Mehrapart to go through some of the basically brief top line numbers and end part of it.
Medappa Gowda J — Chief Financial Officer And Company Secretary
Yeah. Thank you sir. The Consolidated revenue excluding FCX for the year 31st March 2025 was 3106 crores against 2896 crores for the corresponding previous year recording a growth of 7%. The consolidated operational EBITDA for the year March 2025 was 401 crore as a unit to 326 crores for the corresponding previous year Recording a growth of 23%. The standalone revenue for the year ended 31st March 2025 was 1718 crores as against 1537 crores for the corresponding previous year recording a growth of 12%. The tender rule EBITDA Operation EBITDA for The year ended 31st March 2025 was 298 crores against 276 crores for the corresponding previous year recording a growth of 8%.
The Board has recommended a final dividend of 175% for the financial year 2425 in addition to an interim dividend of 125%. Aggregate into 300% for the financial year FY 2425 as against 250% for the previous year. The total debt level was 657 crores as on 31st March 2025. The surplus cash balance was 251 crores as on 31st March 2020 5. Invested in mutual funds and bonds. For further studies if any, we may connect again directly also. Thank you sir. Over to you, sir.
Ajith Kumar Rai — Founder And Chairman
Mohan.
N.s. Mohan — Managing Director And Group Chief Executive Officer
Yeah, thank you very much. Good morning and as usual I’ll give you some updates on all our operating divisions. So let me start with the Superjit Controls division. That means our global operations. The revenues were pretty stable I would say and we saw a very good improvement in FY25 EBITDA. And very specifically if you look at the YoY margins went up by 65% to around 9.7%. Q4 EBITDA again jumped up by 52%. I think it’s a very good momentum. We have had very strong wins in Lone Star and also at Supridit Automotive Limited Very specifically calling out, I would say at Lone Star we added a major Chinese passenger car vehicles ev oem, our global footprint.
That means India, us, eu, Morocco, Mexico. I think this is the story is coming together to our customers and we bring some, I would say strategic strengths and brings home these wins. 2 strong consistent quarters at std or controls division has been pretty encouraging and now our focus remains on streamlining at Morocco and Germany and bring in some synergies there and also work on the tariff issues with the customers in us. Moving over to the domestic cable division, the revenue went up by 13% but you would have seen some margin compressions that have happened. That’s primarily not due to the operational reason but basically because of the staffing increases at the corporate and also technology center.
As we are becoming a larger organization with multinational footprint, we need to set a strong corporate function so that we ensure governance in this expanded business and to good governance, checks, controls, we are increasing our strength. Infinite accounts control it, legal and all these areas and also the centralized purchasing for key commodities. Further to this investment into building an in house technology through STC has been a stated objective. Therefore we are going down that path and that is costing us some money. Aftermarket for both cable and beyond cables has been pretty strong and it has grown strongly.
The Combi brake system or CBS has been launched for four OEMs out of which one is ICE and three for EVs and we continue to focus on diversification beyond cables and that’s getting moving over to Phoenix Lamps division. While we recorded a flat revenue but the EBITDA very smartly moved up to 22.7% primarily driven by both mix and also the efficiencies. However, Q4 EBITDA declined to a certain extent primarily because of some customer write offs. Very important is the prefab brand growth has been strong despite the weak EU market. And very importantly I would say first led drop in solution or an ICE OEM has been launched.
Going to the last of the divisions I.e. electronics division our revenue went up by around 27%. But having said that, in Q4 it was weaker than expected primarily because one of the large customers sales dropped and we all know who that customer is. We ended up with a lower than planned utilization of the plant and there were also certain provisioning that we did reflecting that to the ebitda. Having said that, our throttle sensors actuators have started gaining good acceptance in the marketplace and we have been winning businesses there. Very importantly we replaced a global supplier at our own SED controls division both at Mata Maros and in Hungary.
We had outsourced it. When LDC happened we decided to insource that product. Therefore, this PCBA is now being supplied by SED to Matamoros plant and our Hungary plant. We also through this are seeing good export potential with new contracts in. So with this I would like to hand it over to Akhilesh. Akhileesh, over to you.
Akhilesh Rai — Director And Chief Strategy Officer
Thank you Mohan and good morning everyone. I will take over from slide 12 on our press release that was released yesterday on STC. Our Suprajit tech center. The new building is going as planned and should be ready in this financial year. Development support of STC has been excellent As a back office to all our global entities and is gaining a lot of traction to improve the kind of bandwidth that we have to support our global projects. STC has also been introducing a lot of good new products that has been bringing a lot of great acceptance with our customers.
We also this quarter announced the technical tie up with Blue Break Italy for an innovative ABS product. This ABS product, we are working very closely with them to fit it for the Indian market. And progress is going well at the moment. Coming to ses, I think Morocco, the Morocco operations are on focus right now. We have a team, operational Excellence team, that is on the ground in Morocco. We are very closely monitoring the turnaround and I’m happy to say that the projects that we’re working on have been progressing well and on time as expected. Morocco, we see the operation stabilizing.
We have shifted almost 90% of the warehouse to Hungary and we will be closing the German warehouse. We are close to the finish line, but of course certain costs will continue for a few more months. Operational Excellence team from India is now stationed at Morocco and they are delivering these synergies. Canada and China are expected to close shortly. The delay is mainly because of certain seller issues which we have overcome and we’re expecting close in the next. In the very short future. Our plan is to consolidate both Canada and Canada, China and the Moroccan and German entities.
This will be shown separately for this coming financial year and Canada and China operations should add positively to the results of. Now, to the next very complicated topic, the topic of tariffs. We have tried as simply as possible to just explain the tariff situation for all of you over the past year. This is obviously further complicated by different types of HSN codes that we supply. So, you know, it doesn’t really give the full picture until you go into the details, which will be very complicated. Liberation Day, as Trump puts it, caused extreme turmoil on duties on supply chains, making everyone’s life in the automotive industry very difficult, especially the global automotive industry that we’re exposed to.
However, India, Morocco, Hungary seem to be well positioned in negotiation. Morocco, in fact, was at the minimum 10% duty from the start. And India also seems to be doing progress and Hungary also seems to be expected to be at 10%. So we expect almost all the countries to reset to 10%, whereas China will probably range from 30% and above. SED’s. Mexico plants in Juarez and Matamoros are for the most part MCA compliant, which seals a lot of these, seals them from all of the duties. The main issue was the motor issue, which is, you know, the CBP compliance issue that we had been fighting earlier.
But as of this month we are actually supplying a new motor from, from India which should reduce a lot of those tariffs and we’ve also got our customer to accept paying those duties. So a significant part of Mexico’s, let’s say duty concern is also being relieved for non MCA productions in Mexico. All of those price increases due to duties are passed on to the customer. And in Westcon where there is a quite a bit of imports from outside the US, about 3 to 4 million in imports, these have also been whatever, whatever duty extra that they have are already passed through to the customers.
So in summary, most of the duties have been passed on or solutions have been found with our oem. Of course, timing effects are always unpredictable in terms of the kind of complexity we’re dealing with in terms of number of part numbers, number of contracts that need to be edited. So otherwise I think we’ve passed on everything successfully and we’re pretty confident that our team has managed the duty situation well in the midterm and the long term. Superjit is an excellent position. We acquired assets at the right time when things are moving offshore. But now with a lot of these trumps, and let’s say not just Trump, but also in Europe, a lot of move towards pushing local and nearshore supplies.
I think we’re perfectly positioned with a footprint both onshore and nearshore in US and Europe. So that comes to my outlook and our outlook for the coming year. We expect that the group will have double digit revenue growth. This is even exclude, even ses. We still expect to have double digit ebitda. I mean double digit revenue growth. And we expect EBITDA margin to be 12 to 14%. We see a robust order book at SCD. We’re getting traction in all the locations. So it is not just SEL and Unit 9, which is exporting from India, but we’re also seeing a lot of traction in Hungary, in Mexico, in China for our global footprint and supplying at a nearshore or onshore location.
There will be some North American restructuring that we have planned and we are also focusing on ensuring that all tariffs are passed through as soon as possible. When it comes to dcd, we’ve seen a good cable growth and we expect that to continue especially in the aftermarket. We’re seeing a lot of good traction in our braking systems. A few of these have already been productionized, but a majority will be productionized this year. So we see that DCD will also have a strong growth this year. When it comes to pld I think we probably will expect revenue to be at similar levels and we’ll be focusing more on margin growth.
We see a lot of good aftermarket strength and a key change factor here which could be impact us positively is a lot of traction with global customers, especially possible customers in the US which could add positively coming to sed. Although the EV fluctuation has impact, the new wins in ICE and also an export will ensure that we have a strong future growth ahead of us. Finally coming to ses. Of course integration will be the focus this year. We’re also focusing a lot more on reducing the purchasing costs because now that operations are stabilized we can focus on the supply chain and improving costs there.
We see a lot of good opportunities and along with the Canada and China acquisition which is already supposed to be EBITDA positive, we think the SES as a group will certainly reach EBITDA positive by Q4 and we will then consolidate completely in FY27 under SCD. So the remaining presentation that you have is just a matter of general updates and references for you to go through at your leisure. We won’t be going through this in our review of the presentation, but you can certainly ask questions from it. Over to you Chairman for closing them out.
Ajith Kumar Rai — Founder And Chairman
Yes, thank you all. All I would say in summary is that despite the global turmoil we had a stable performance. What’s really heartening is the last two quarters of performance of Controls Division where we had double digit EBITDA and that is also likely to grow robustly in this year. The other divisions like DCT will grow with their usual strong margin along with Phoenix Lands Division as well. I think the focus for the year, as Satyle said, is integration. That would take this year for us to do it, but it’s going broadly as per the plan with the order wins that we have.
Despite all these tariff and global uncertainties, we expect to have a another robust solid year with a good double digit growth and hopefully a better margin than what we had for the last year. So with that I will pass it back to the moderator to gather the questions and we are happy to answer your questions. Thank you very much. Back to you moderator.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star n1 on their touchtone 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. Gentlemen, we will wait for a moment while the question queue assembles. The first question is from the Line of Amit Hiranandani from Philip Capital. Please proceed.
Amit Hiranandani
Thank you so much for the opportunity, sir. On SCS business so broadly, 70 revenue comes from Europe which is a slow moving economy from the China tomorrow. And FY24 revenue was approximately 450 crores. And then FY25 was 9 and was without China and Canada business. I expected this.
Ajith Kumar Rai
Sorry, you’re breaking.
Amit Hiranandani
So my question is considering the poor export situation, where do you see the top line moving for SCS in the next three years and how soon and confident team is in taking EBITDA positive?
Ajith Kumar Rai
Ah, okay. You are talking about. I think the important point here Amit is that although European market is not growing, we still continue to have a decent year for the European part of the business. Whereas the China Canada basically supplies to North America. Let us face it, I think both, whether it is US or Europe, general market scenario is tough. As we have very clearly said in our press releases as well as during this call, our order wins are strong. So from the SES point of view the year will be a year of stabilization and consolidation and assimilation of the acquisition.
So yes, another one or two quarters there would be some losses particularly at the European level. But as we clearly said by Q4 we should be turning EBITDA positive. I think that is the target for FCS for the current year. The business of that SCS to be generally given idea will be around US$40 million for the full year.
Amit Hiranandani
Can you repeat this? What Exactly. Okay, can you just repeat this? 14 million USD.
Ajith Kumar Rai
I mean the 40 million BST is what I’m saying is a full year expected revenue out of the. Yes. CS business. Yes.
Amit Hiranandani
This is for FY26 you’re targeting.
Ajith Kumar Rai
That is for the current year. Yes. Yes.
Amit Hiranandani
So my question was broadly on the three years prospect.
Ajith Kumar Rai
Okay, three year prospect. I think what eventually when you know FCS will eventually be merged with the controls division in terms of reportability, what you must understand is what are we offering to the world? What are we offering World is not necessarily ses. We are offering the world the controls division where we have now option to manufacture in Hungary for Europe. Somebody wants onshore. We’ll be able to manufacture for them in Morocco if they want it within one or two days of delivery or we come to the low cost destination like India or China. I think that is the story from controls division.
It will not be just the SES story. Having said that, we have already won some additional business on ses. SES was blacklisted before we acquired for even give A quote in the last six months we have quoted from Morocco and we have even one new contract for Morocco. So I think that is the whole color is changing once it is under suprajit’s management.
Amit Hiranandani
Right, right, right, right. And secondly wanted to understand what was the one off expenses and restructuring charges booked for Q4 and FY25. Also please help us understand more about this Customer write offs and quantum of.
Ajith Kumar Rai
The same place customer write offs have been happening but this year has been little more than normal. For example, at Phoenix Lands one of our European customers went insolvent. So we had to write that amount off and we also had to write off certain amounts at Electronics Division. Some of the EV guys had some troubles. So those some of those things have to be written off in terms one house. We have not been giving it, you know, differently or specifically. So I won’t be able to do specifically. I tell you the areas we have done one of is for example SCS transaction.
All the costs related to SCS transaction, legal diligence, cost, travel cost, doing all those work for the last one year. I think that is one of the one off. We’ve also been doing some restructuring rather people reduction in metamorphosis for example. That is one off. Also in Europe you must understand we have now moved our warehouse from Germany to Hungary. Germany there is some people who are on the road doing this warehousing work. Now we have moved to Hungary. Hungary has been scaled up but Germany will be scaled down in the next two, three, four months.
So you know there’s like an overlap of cost. That’s also one off. I’m talking about generally what are all the areas that we are talking about. So that is the overall thing. But the one offs which are in a total amount, if you look at all of that, maybe around 25, 30 crores would be there for the year. For the last year.
Amit Hiranandani
The intensity will come down in FY26.
Ajith Kumar Rai
Yes, it will come down. Come down means. Okay, let me also say this. The FCS part of the one offs will be there because you know what we are doing is that we are further doing a restructuring in Germany to further reduce the number of people because they are all high cost. It has been announced recently. So there will be one off on that count. And I think once the relocation is complete in the next two, three months, which is what is expected to go fully operational from our Hungary. I think in that part of that there will be no other one offs.
The SES and Canada China interaction, I mean acquisition which is not closed yet but I am hoping that it will happen in the next few days or couple of weeks. I think there could be, you know once you get in we will know whether there is any one out that we will come in the first quarter. I think beyond that I don’t see anything really major unless we announce something major.
Amit Hiranandani
Lastly sir, on the capex and accident outlook if you can give for next fiscal. That’s it. Thank you.
Ajith Kumar Rai
Capex and what? Sorry I didn’t get the last part.
Amit Hiranandani
You’re breaking again effective tax rate for next fiscal year.
Ajith Kumar Rai
Tax rate. Okay, I’ll ask. In terms of the capex I think we have. I think we didn’t. I think we missed mentioning it in our. I think the capex for the entire group is about 160 crores. What I would also like to do, I think last year we talked about 180 crores or 170 crores of which we actually didn’t spend at all because we were in very tight fit state considering the global uncertainty I think we spent only about 80 or 90 crores. So this year I think with all these new things planned including SPC etc.
I think the total capex budget for the current year is 160. On tax rate metaphor will you comment?
Medappa Gowda J
Yeah, it’s generally 25.6% in the group.
Ajith Kumar Rai
Okay, thank you.
Amit Hiranandani
Okay sir, all the best. Thank you so much.
Ajith Kumar Rai
Thank you.
operator
Thank you. Before I take the next question I would like to remind participants that you may press Star in one to ask a question. The next question is from Nilanipresham Jain from DSP Asset managers. Please proceed.
Resham Jain
Hi. Hi. Good morning team. First of all sir, very good presentation and clarity. Even so much of uncertainty, uncertainty around so thanks for that sir I have two questions. One is with respect to the braking business which is. Which seems to be now scaling up so I just wanted to understand that are we supplying for newer models or are we supplying for the existing products replacing some of the other peers? How should one look at this business and how are you seeing the scale up of this business? Is there any inflection point? What could be those inflection point to scale this business to the next level.
Ajith Kumar Rai
I will ask Akhilesh to answer the braking division’s plans and you know things for this Akhilesh.
Akhilesh Rai
Sure. Thanks. So I think the braking division you know in terms of you know we see a very good trend. You know we were always a braking cable supplier and you know we were definitely the leader in India for braking cables by far this Then just has become the next step of providing the levers and the CDS mechanisms. And for many years we were only a cable supplier but because of our deep understanding of braking which has come from a lot of R and D that we have done, a lot of customers have trusted us to take their complete braking system from lever to cable to the mechanism as well.
And this is not just ICE OEMs, not just DD OEMs but also ICE OEMs. So you know two of the largest ICE OEMs in India are now picking up these CDS mechanisms and you know it will be in production this year and you know that’s obviously showing a very good traction for these kind of customers to give us such safety critical products. So this is being productionized across all our plants and of course it also works on ev. So coming to your question, we are very much working on the news platform. So these customers are selecting us to take up these mechanisms in the newer platforms.
Not as a, you know, as a second source or a replacement on old platforms. So I hope that answers your question. But you know from in terms of what is inflection point, I think this is a long story. You know, just like our electronics division, it was actually a long story that started, you know, maybe in 2015 and then we got enough traction to actually spin off, spin it off as a division here also it is going to be a bit of a long story. We are starting off with CBS but we’re also focused on, you know, different other types of braking system, more complex braking systems, innovative braking systems, abs.
So that entire portfolio will each have a different kind of growth trajectory and different inflection points. But I think at least on CBS and on these lever businesses, we’ve definitely reached a good inflection point this year and we’ll have a good business from it this year.
Ajith Kumar Rai
And to add, I think Resham, what is the vision for the division is to be a one stop shop for all braking solutions. Particularly of course for the two wheelers. To start with today, different pieces of the entire braking system is done by different people. We want to be a one stop place. Of course that’s a long term strategy. The starting as Akhile said, we have got into some of those pieces. The other pieces are in development. As we have also announced the Blue Break agreement is also in that direction. So that we will be a complete comprehensive solution.
Resham Jain
Sir, just one related question. When we speak to some of the experts in the space they say that some of the MNC is because it’s a safety Critical product. The margins and the pricing seems to be extremely high. And with our indigenous kind of technology and production and all from pricing perspective, how competitive we are and will that be a big kind of consideration for OEMs to shift to us?
Ajith Kumar Rai
Certainly, I think Resham, I think you without mentioning you mentioned MNC to continue the same point. The current level of prices for these products are I think pretty high. And I think that also gives us a good window of opportunity to approach customers. But beyond that I think we. The idea is to predict is to have at least this idea is let’s say we must have four or five verticals of as we grow our business under our philosophy of de risk can go profitably. The breaking division becomes a very important division. So we expect it to be of course it has to have some scale to be quite interestingly profitable.
Actually that’s the reason why we are entering the field as well.
Resham Jain
Understood sir. So the second question is with respect to the overall new business wins over last three years, four years. We did commentate about multiple wins with newer customers, especially on the global side. And when we look at the overall growth, it seems that there might be certain roll offs also of the old orders and hence possibly the growth may not be as expected. Obviously the market itself is quite weak, which we understand. But are the roll offs of the previous contracts also happening at a relatively higher pace? How should we understand the overall order wins versus the growth?
Ajith Kumar Rai
Yes, very, very valid point. I think what is happening in the industry is that first is the launches are getting delayed. Yes, from last two years we have been talking about good robust order wins which have gone into production for sure. Some of them have. Some of them have been postponed and those who have also launched the original volume on which we based some of our comments has come off a lot significantly and also some of the existing the way it works automotive component industry works is that a contract is won for five or seven years and there are also some of the contracts are coming off the production line.
So when you say net to net, if you look at our Suprajit automotive and Suprajit Europe business, it has grown by a significant number, much more than what the controls division has grown. That means to say that the overall business has grown in some areas because of these pockets of very weak markets. There has been certain degrowths as well. So you have to look from the overall point of view. But having said this, I think while the global business is expected to grow at 0% the current year, our controls division is expecting to go in double digit this year.
Akhilesh Rai
I would just add there that I would just add also even in our disclosure we explained that Exports grew almost 30%. This is on back of obviously a lot of those contracts going into production. And the second point here is global contracts especially the ones you’ve announced take some time to to actually go into production and all of them are expected to go into production this year. So a significant part of that will also hit this year. So it is maybe also a bit of timing effect But I think 30 to 40% growth in the exports is also extremely commendable in this kind of environment.
Resham Jain
Okay, thank you so much and all the best.
Ajith Kumar Rai
Thank you.
operator
Thank you. The next question is from the line of Shubham Sehgar from SIM Pl. Please proceed.
Shubham Sehgal
Hello, I’m audible.
Ajith Kumar Rai
Yes.
Shubham Sehgal
Yeah my first question was I just wanted more clarity on SES. So we incurred around 49 crore in operational laws the nine months of operation for just our phase one. So could you provide some breakup of you know how much of this is more due to this restructuring and one offs and us having incorrect expenses related to running operations at the multiple locations that we are. And also with the merger of phase two which is expected to close as we said in the following months should we expect further escalation in losses or write offs in Q1?
Ajith Kumar Rai
Okay, I don’t see a further escalation in write offs. In fact our losses in fact we expect starting from this quarter certainly from Q2 you would easily. That’s why we have said we also you know being a very open in all these matters we said we’ll separately disclose so that everybody is aware what is happening in ses. We expect these numbers actually to start improving if not from Q1 actually from Q2 in terms of percentages for EBITDA and turn EBITDA positive on the complete as a full FCS package by last quarter of this year. I think that is our stated plan for the year.
The work has been done significantly. Now we don’t want to give different different pieces of that. Why the losses are. The losses are obviously because of one we had bad pricing to start with that has been corrected quite a bit and there has been bad buying purchasing happening that has been corrected to a large extent. Loss of quality related one off cost like customer segregation, customer rejecting the products. All those things have been happening as we took over the business. All those have been started plugging as I think Mohan or Akhilesh mentioned. We have our excellence team sitting here because we know how these businesses are run.
We are plugging each one of those holes. So we are seeing a continuous improvement. In fact we expect Q1 would be better than the past. And Q2 onwards we will see a clear improvement in the whole number. So there are multiple reasons for these losses. And then there is also, for example, we have so much of backlog. We have to be literally airlifting every day material for customers so that we don’t stop the airline. All that have slowly have now come to a stop. So there are multiple points. I don’t think we’ll be able to break up of that.
But as the operations improve, which has been what has been happening now, we will see the positive change as we go forward from Q1 onwards.
Shubham Sehgal
Okay, got it. My next question was on STD. So like this year, for the full year we did around 1400 crore in annual sales and roughly I think 30% accrues from the India operation where we earn margins around 18 to 20%. So if we, if my understanding is correct, if we adjust this for the rest of the global operations we currently on around high single digit margins. And this is also despite the weak. Hello.
Akhilesh Rai
Hi.
Ajith Kumar Rai
What. Sorry. Hi.
Shubham Sehgal
What in the. So apart from the India operations in SCD we might be running around high single digit margins.
Ajith Kumar Rai
Yes.
Shubham Sehgal
Yeah. Yeah. And that is also despite the weak auto market that we are facing and also the other restructuring that we have been doing and also the US duty hit. So if we adjust for all of this and assuming normal environment then on blended basis can we expect SCD margins to normalize around 14 to 15% levels? And if not then what limitations do you see in achieving this?
Ajith Kumar Rai
I think you seem to have analyzed the numbers pretty well. You are right in the first part of the statement. And you know I’ve also made this clear that the global auto component business is anywhere between 6 to 10% of the controls division is already now in the last two quarters have hit 10%. Now will it go 14%? That is your basic question, which is fair. I think it is the kind of targets we have. But whether we will achieve in one year is a different point. But we have clearly said there will be further improvement in controls division margin for the year.
I think you will start seeing that from Q1 onwards. Since we don’t give specific outlook for each in terms of margins. But you will certainly see those changes happening from Q1 Q2 onwards and monthly.
Shubham Sehgal
So going forward in this year do we see any challenges which might limit this?
Ajith Kumar Rai
Challenges? Of course. You know when somebody can tweet a change of tariff, we don’t know what’s happening. So that’s the major, most major uncertainty in this while we will take, you know, it takes some time to pass on these things. I’m not saying that we’ll not be able to pass on but there is an intervening period where it, you know, it gets absorbed. There are pipeline stocks, whether it’s the old tariff, new tariff, you know, there’s so much of argument with customers. So this is where the challenges lie. But if there is a stability of it, whatever that tariff is, we are fine with it, we’ll deal with it.
But when there is an uncertainty, there is a problem. So is there going to be major things? Our assessment is that the global automotive business will not go of course ex India. I mean, I mean India will grow I guess. But since we 50% of our business is dependent on it, we are still saying that we will grow our business in double digit. I think that’s all the best statement we can make at this moment.
Shubham Sehgal
So as you mentioned, so what is the kind of communication that we are hearing from our major customers and like are we sure that we would be able to pass on all of the tariffs and do we expect any like this affecting our market position?
Ajith Kumar Rai
Market position? Certainly not. But since you’ve been asking on tariff, I’ll ask Mohan also to give another angle, if any for the tariffs and what he thinks of how it will affect the controls division. Mohan?
N.s. Mohan
Yeah. When we are talking about tariffs, basically there are two issues that we need to talk about. One is our legacy issue. When we got the company as LDC from Kongsberg, there were certain legacy issues on tariffs which we have been trying to resolve. And that is where we have taken against the customs department of US Customs department and it has gone legal. So like any other legal cases, be it in India or US it is going to take time. But we stand a very good chance because there is a precedence there. Having said that, I come to the next portion.
That is the tariff that has been slapped recently, additional tariffs. In fact this came handy for us because that escalated the issue to a boiling point. And with that we have been able to get a very clear resolution with one of the major tier ones. And that tier one has committed, yes, they are going to bear the burden. And this is also back to back, I would say probably an agreement with the OEM also because we also had highlighted it to the oem. So to that extent there is a certain amount of burden that we are taking which is a very minuscule amount.
But the rest it has been agreed to be passed on to the customer. Therefore that is the second part. The third part is the issue here is there are some parts coming from China. Therefore it is best thing is to move away from the Chinese source and to move it into India and supply it out of India. Therefore avoid the entire situation itself and that we had been working even otherwise and that is rectifying in this quarter. Therefore I would say we had a multi pronged approach. One is fight with the government customs and take them legal try to recover and claw back.
Number two, work with the customers and try to pass on this tariffs to the customer and number three, resolve the issue by changing the source itself. So I would say on all the three things that we started working it has started yielding results. So I’m pretty much confident from that angle.
Ajith Kumar Rai
In addition I would like to add what Mohan has said. Some of our customers are already in conversation with us to see how whether we can help them to mitigate the risk of these tariffs. Morocco and India stands out because I think we are much better off than let’s say China for example. So we are offering them options so that if ultimately it did not come to the stage ultimately if there’s going to be significant tax on China or some other places. So we are standing by them and saying that look this is our footprint.
Of course it will take some time to resource completely but we will be with you to do that if needed. And that is what has been well appreciated by customers also.
Shubham Sehgal
Okay, thanks a lot for that answer. I joined back with you.
operator
Thank you. The next question is from the line of Mumuksh Manlesha from Anandrati Share and Stock Brokers Ltd. Please proceed.
Mumuksh Mandlesha
Yeah, thanks Mohan. Sir, just continue on the previous question with the now the customer has given the price hike and now also change the source to India is possible to share any what kind of a margin impact we can see going ahead on the shift happening?
N.s. Mohan
Well specifically in terms of margin impact we should be able to give it to you offline. You can talk to Metafa, he’ll give that.
Mumuksh Mandlesha
Sure sir, thank you. Just to clarify, you mentioned about the double digit growth excluding the SCS business for this year and for DCD it’s a positive single digit growth and for Lamps it would be some growth. I just want to understand so for the SCD we expect almost like a mid teens kind of growth, right?
Ajith Kumar Rai
Sir, I think again we are not given division wise number but we expect both the domestic cable division and super controls division to grow in double digits for the year this Phoenix lands would be although the aim is to get back double digit in knowing the business, I think it will be somewhere in single digits. And electronics division of course will have a double digit growth but you know it’s a small base still for making a big impact on the top line. So with all these we expect the overall on a consolidated without FCs to do in double digits.
And that’s how that number comes.
Mumuksh Mandlesha
Got it. And one of the main few areas would be the SuperJ Automotive. The India exports part doing well and the Lone Star exit.
Ajith Kumar Rai
Those two are doing well. I think suprajit automotive from India will apply to both Europe of course and us through some of our own group companies. So that would be growing strongly. Lone Star has one significant new contract so they will start putting into this year. But you know how automotive works is that if I get an order today it actually go into production in two years down the line. So some of the Lone Star will come this year but I think most of it will come to the next year. So that’s how it is.
And of course we have started now getting some contracts even at time I just mentioned earlier at places like Morocco which was actually blacklisted even to quote European market because of the insolvency. All those positions have been changed with the good work of our marketing and business development. So we are starting to quote again. So that also will add to the momentum and that’s the basis we are also winning some. I wouldn’t say very, very significant but some businesses both at Matamoros, I mean Mexican plants as well as in Hungary.
Mumuksh Mandlesha
Got it sir. On the ses, the China part. So I want to understand we do also do allow exports to US from China. The second part of the SES just like to check there also is the beauty impact been passed on and how’s that revenue impacted there if any.
Ajith Kumar Rai
That’s. That’s a good question. Because there is a more interesting understanding you know FCS had with the customers. The customers was picking up from Canada, not FCS was not delivering to. So the question of tariff does not sit with the ses it sits with the customer. So they have been actually, you know avoided that big stick being wielded in terms of tariffs. So they, they are better off with that. So the same understanding, you know when we are, when the orders get switched to us it will be in a similar situation. But China content there would be some duty.
So that is what is being worked out. But I think you know currently we are very clearly getting the new contracts with the understanding that if there is any in between tariffs that come into picture that will be to the customer’s account. But most of the time customer picks up so tariff is on their account at this moment at ses.
Mumuksh Mandlesha
Got it. And so this I think you should be that there is transition impact. We work out the contracts and then Q2 onwards we should be back to the normal margin.
Ajith Kumar Rai
Right. So, so sorry, can you Repeat so.
Mumuksh Mandlesha
In Q1 because timing of the contract for the parcel of the duty. So in Q1 we should have some impact. Then Q2 onwards we should be back to normal.
Ajith Kumar Rai
Yes, I would say that Q2 onwards we will probably have a more normalized in terms of the tariff related issues. So but then you know it is not still finished now we don’t know when this will erupt again. So if the current scenario goes and everybody comes into some kind of a tariff agreement with the US and the final agreement, final tariffs are notified, then I think we’ll know the correct picture. But till then you know it’s still an uncertain market. But our assessment is what you said.
Mumuksh Mandlesha
Got it. So in the Q4 quarter the SCD saw Q&Q margin drop despite the Q4 seasonally been strong quarter. Just want to understand what could have led to drop in the margin. Is there any US electronics smart division you’re talking about the SCD where Q and Q had a good growth while the margins came down about 100 pips. Just want to understand what led to the drop.
Ajith Kumar Rai
I think they’re all, you know, we have been talking about one offs here and there. I think that’s probably because of that. But generally, you know we have just got into that double digit margin and that, you know, whether it’s 11 or 10 for the time being we are just, you know, with the process of a lot of things happening within that group in terms of restructuring. So I think, you know we are safe to say that, you know we have crossed that magical number now. So we will continue to grow from there.
Mumuksh Mandlesha
Right sir, thank you so much for the answers.
Ajith Kumar Rai
Thank you.
operator
Thank you. The next question is from the line of Senthil Manikandan from I thought PMS. Please proceed.
Senthil Manikandan
Good morning sir. Thanks for the opportunity Mr. Senthil.
operator
Yeah. I would request all the participants to please limit their questions to two per participant.
Ajith Kumar Rai
Yeah, go ahead Sandhil.
Senthil Manikandan
Good morning sir. A couple of questions from the FCB side. First congratulate your own order from a Chinese evo. So since it seemed that Chinese ebois are globally expanding. So how do you see this Opportunity not only for Lone Star but European operators also. So that’s my first question.
Ajith Kumar Rai
I have mentioned this. But anyway Mohan, will you take that question?
N.s. Mohan
Yes, sure. This is a very marquee customer who has really grown very big in the recent past and giving run for money in terms of the models and the technology that they have got. So it was very important for us to break into from our Chinese company into a Chinese company. So Lone Star that way did a great job in breaking through and getting this. This is going to have a rub off effect because the same company, OEM is opening up a plant in Europe also. Therefore what happens is if we are getting into platforms you can just go and say that well I’m a part of the same company and we can start getting those orders there.
Therefore it opens up many, I would say opportunities for us in. So that’s what we are doing. We have already approached the same customer in Europe and we hope that we should be able to get some good orders out there too.
Senthil Manikandan
And on the brake side in terms of technology and R and D spending and also the capex side, how are we planning from the capital allocation point.
Ajith Kumar Rai
Of view for what?
Mumuksh Mandlesha
Which division.
Ajith Kumar Rai
Bricks division is it? Mohan, again will you take that question? I think at least you an explanation. You can give an angle of our capex and whatever plans.
N.s. Mohan
See what we are doing is we, there are two ways of doing it. We are into a product where you know, the market doesn’t know us. Therefore the only way that we can do is to prove ourselves by putting some investment, putting some line but do it in a conservative way. So that’s exactly what we are doing. And incidentally some of these products are also, I would say the first of its kind. Therefore we had to go in with the poc, that means proof of concept level, then go with working model, then go with the prototype.
Therefore from an R and D perspective there has been some amount of investments going on and we are so committed to it that we are also going ahead with certain capex like a dynamometer which is a very expensive equipment but that is needed to prove the product and in a compatible way with the OEMs. Having said that, I now come over to the scaling up portion or the manufacturing and production portion There we have been pretty conservative. Therefore we have been, I would say putting up lines as and when we start getting specific orders to cater to those orders.
Therefore we are playing this game on two fronts. We have been pretty defensive when it comes to scaling up and putting up lines because that should be linked to a specific customer order. Whereas in terms of R and D investment we are going full scale because we need to build a complete stack up in the entire, you know, environment braking system for two wheelers.
operator
Thank you. The next question is from the line of Shubham Sagan from sipn.
Ajith Kumar Rai
Please proceed after this question. We’ll take one more question, madam, and then we’ll stop because it’s getting to be 12 o’ clock. But we’ll take one more after. Shubham, go ahead.
Shubham Sehgal
Yeah, my question was on our PID division. So we talked about the LED drop in. But my question was if we were to look over the next five years, what will drive growth for this business?
Ajith Kumar Rai
For the pld. Okay, for the pld, I think the. Akhilesh, will you answer that question? We got some plans also. Yes.
Akhilesh Rai
Yeah. So you know, if you look at the PLD division there are mainly highly automated plants with now focus on the aftermarket. Therefore at the PLD we’re generally looking at two things. One is expanding their product portfolio for the aftermarket. There they are making certain small investments to develop new products and manufacture them in our for the aftermarket where they have a very good brand. And two is in terms of the actuators, they are supporting our global division on specific actuator related products which also will need high automated lines and automated expertise. And of course, as you know, 59A, which is one of the key plants is also an export oriented plant which means that we can get certain benefits from exporting and supporting our global plan.
So I would say these three areas is where we’re going to focus on growth for pld. And finally, you know, I think there is a lot of good scope to grow especially in the US for its traditional product and we are seeing some breakthrough there. And you know, that’s also something that we have some optimism on going forward.
Ajith Kumar Rai
Just to add to what Akhilesh has said, I think the focus is continue to expand our aftermarket presence beyond India. I think in that spirit, you know, the Trifa brand is gathering significant momentum because you know, you know, globally, you know, the Osram is a great brand. Phoenix used to be the great brand. Of course now it is owned by somebody else. But the point here is that there is no other alternative. So the Trifa brand is slowly gathering strength. So the aftermarket attempt to go is gathering more, more and more strength as we go.
So yeah, that’s in addition.
Shubham Sehgal
Okay, got it. My next question was on our electronic division. So a couple of quarters back we had shared our order book across the EV majors and also our cloth profile. So given now the slowdown and changes in the leadership position in the ev, can you give more color on the growth profile? The mix which we have with PV OE versus local and which products you are seeing traction and how does this change the overall audible position and if there are any write offs we expect.
Ajith Kumar Rai
Mohan, will you answer that question?
N.s. Mohan
Sure. I think there are multiple questions there embedded. So let me take one at a time. So let me talk about first the write offs. So whatever write offs we had to take for certain gimmicks we have already taken. Therefore there are no more of them coming and hitting our books. So I think I have answered that portion. Second portion is with this slowdown, is it going to. Has it affected our business? The answer is definitely yes. Now where are we replacing it with? We are replacing it with some of the other EV customers with whom we are gaining some orders and also very importantly with one of the ICE customers on their ICE platform.
Also we are launching that product for them. Therefore this is going to kind of fill up the order book for us. Another last portion of this jigsaw puzzle is like what I said, being an internal supplier, that means to our own Matamaros and Hungary plant. That itself is to an extent of around 25 crores per annum. So that is another big number which has come and you know, helping out the capacity utilization at acd. Have I answered all your questions?
Shubham Sehgal
Could you just mention what in like, you know, what kind of products are we seeing more traction? Yeah, as you mentioned, even for the ICE customers.
N.s. Mohan
Yes, definitely the. One of the. There are two major areas if I can classify them. One is the driver information system or the instrument clusters as we call them. Yeah, combi meters as the Japanese call them. That is one area that we are gaining, I would say orders. Second area is the actuators and sensor. Sensor and actuators. In sensors and actuators there is what is called a throttle position sensor. So that is specific product that we are looking at. And another in the actuators there are multiple actuators which are going into a two wheeler. Like let us say for example toolbox opening or the lid opening, you know these kind of.
Or seat opening. These are some of the actuators that we are getting some orders.
Shubham Sehgal
Okay, thanks a lot for the last answer.
N.s. Mohan
Thank you.
operator
Thank you. The next question is from the line of Darshan M. Bandarkar from Banyan. Three advices please.
Darshan M. Bhandarkar
Hello.
Ajith Kumar Rai
Yeah, hi, we can hear you. Yeah.
Darshan M. Bhandarkar
So for my first question is with respect to the tax expenses for FY25 we had a tax expenses of 98 crores. So what would the reason for such increase in tax expense?
Ajith Kumar Rai
Sir, will you answer the for the reason for higher tax?
Medappa Gowda J
Yeah, we redeemed the mutual fund and the tax on account of gain is included in the current tax.
Darshan M. Bhandarkar
Okay and just. Can you. Can you give us the breakup geographical revenue breakup in the form of India, Americas and Europe.
Ajith Kumar Rai
See with the way we are announcing basically our results are division wise within the division there are multi geography. We are not going to that much of granular. It’s difficult.
Darshan M. Bhandarkar
Oh sure. Thank you.
Ajith Kumar Rai
Thank you.
operator
Thank you. I think time constraints. Yeah. Question for the day. I would now like to hand the conference over to the management for closing comments.
Ajith Kumar Rai
First of all, thank you all for your continued interest. We had interesting interactions with them, with you all. We appreciate your interest in suprajit. If there’s any further requirements or interest please contact Mehapa for any of the updates. And we’re happy to provide whatever we could in the public domain. So thank you once again and have a good day.
operator
On behalf of Anandrathi share and Stockbrokers Ltd. That concludes this conference. Thank you for joining us. You may now disconnect your lines.
Ajith Kumar Rai
Thank you.