Talbros Automotive Components Ltd (TALBROAUTO) Q1 FY23 Earnings Concall Transcript

Talbros Automotive Components Ltd (NSE: TALBROAUTO) Q1 FY23 Earnings Concall dated Aug. 10, 2022

Corporate Participants:

Anuj Talwar — Joint Managing Director

Navin Juneja — Group Chief Financial Officer

Analysts:

Shalini Gupta — East India Securities — Analyst

Dipen Shah — — Analyst

Shikha Mehta — Equitree Capital — Analyst

Hiten Boricha — Joindre Capital — Analyst

Jyoti Singh — Arihant Capital Markets — Analyst

Manikanda Prabu — MKP Securities — Analyst

Deepak — — Analyst

Akshay Jain — Jain Capital — Analyst

Priyanka Shah — KK Advisors — Analyst

Nagesh Rajanna — NR Family Office — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Talbros Automotive Components Limited Q1 FY ’23 Earnings Conference Call. This conference call may contain forward-looking statements about the Company which are based on the belief, opinions and expectations of the Company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]

I now hand the conference over to Mr. Anuj Talwar, Joint Managing Director of Talbros Automotive Components Limited. Thank you, and over to you, Mr. Talwar.

Anuj Talwar — Joint Managing Director

Yes, thank you so much. Good afternoon, everyone and [Technical Issues] to our quarter one FY ’23 earnings call. I hope you all are staying safe and healthy. On the call today, I’m joined by Mr. Navin Juneja, our Director of the Board and our Group CFO; SGA, our Investor Relations advisors. The results and the presentation are uploaded on the stock exchange and the company website. I hope everyone had a chance to look at it.

Let me begin with the industrial economy overview. The auto comp industry have been doing better in the last few months, thanks to rising demand, consumer confidence in the rural areas, the easing of the semiconductor supply issues and the declining commodity prices. As the data published by CM during period April to June 2022, auto sales shocked across the border. Recent auto sale figures supported by auto OEMs factored to show and of trend and as anticipated that this trend will continue in the second quarter as well as we approach the festive season and having a great monsoon.

In fact, our key customers have indicated a positive growth for this year and I’m sure that you will be reading on the media probably end of the day we get a very strong picture by the auto industry. For the quarter gone by, our revenues increased by 11% Y-o-Y to INR154 crores, our EBITDA which is up 9% and to INR21 crores and our PAT increased by 20% Y-o-Y to INR12 crores. We’re keeping pace with the ever-evolving technology to be the forefront of all resolutions.

Our core company, Gasket and Forgings have done extremely well. Forging has had a slight issue due to the euro, Mr. Juneja will explain in the question-answer session and also lot of its customers had the semiconductor issue in Europe as we export about 40% from our forging business line. Gaskets transitioned very strong, we dominate the Indian market. Our market share is over 50% in the gasket business. We just added a new product line called HUs, which we’ll also talk in the question-answer session, adding new customers and new geographies.

Our joint ventures are doing extremely, extremely well, whether it is the Marelli joint venture, which has given a lot of work for Tata Motors and especially lots of EV vehicles is doing extremely well and even our other joint venture with Marugo is looking at ramping up its revenue due to a big demand with Maruti. As a group with 100% of revenues of our standalone businesses, gasket and forging and our joint ventures, we achieved a turnover of INR238 crores for quarter one, INR154 crores in Indian accounting standards, but as a company as a whole, we achieved a highest of INR238 crores. We continue to remain a very hedged auto comp company, with no customer being more than about 10% to 11% of our revenue and being hedged in our domestic sales about 23% of revenue comes from two and three wheelers, 27% comes from passenger vehicle segment, 32% come by commercial vehicles and 13% agri product.

Our exports are doing well as I mentioned earlier, with forging almost about 40% of revenue come by exports. Our export portfolio is around 25%. We just announced very recently that we won an order of about INR400 crores, which will be — will commercialize next four to six years. These orders are across all our divisions, gaskets, forging, chassis and rubber. We’re proud to say we’ve also entered into a new segment, which is agri on off-highway in the overseas market and office particular order book about 18%, 18% will come from electric vehicles.

We are investing in technologies, which will take us — will make us stronger both in the domestic market and the global market as well. I request Mr. Juneja now to take you through all the numbers.

Navin Juneja — Group Chief Financial Officer

Thank you, Anuj. Yes, good afternoon and a warm welcome to all the participants. Let me begin with the financial overview. The gasket division including Nippon Leakless Talbros for Q1 of FY ’23, our standalone gasket sale was INR106 crores as against INR88 crores in Q1 of FY ’22, a growth of 20%. Total revenue of Nippon Leakless was INR22 crores in FY ’22, as compared to INR13 crores in Q1 of FY ’22, a growth of 69%. This segment saw a combined EBITDA of INR18.6 crores in Q1 FY ’23 versus INR14.2 crores in Q1 of FY ’22, a growth of 31%.

Now coming to the forging division, revenue in Q1 of FY ’23 did grew by 4% to INR49 crores as against INR51 crores in Q1 FY ’22. This was primarily because of the new power trucks in the month of April and May in Bawal, Rewari, so the forging plant could not achieve the optimum level of capacity utilization, which led to a production and sales loss in Q1 FY ’23. The value of that was around INR3 crores approximately.

For Marelli Chassis System Private Limited, revenue for Q1 FY ’23 stood at INR45 crores versus INR32 crores in Q1 of FY ’22, resting a growth of 40%. For Talbros Marugo, the revenues stood at INR17 crores in Q1 FY ’23 versus INR12 crores in Q1 of FY ’22, a growth of 36%. For FY ’23, we are working on multiple orders across exports and domestic market and across various segments of OEMs. We remain confident of achieving growth over FY ’22 in revenue terms. However, we are facing medium-term challenges on raw materials, inflation, logistic, etc. We will refrain to in guiding margins for FY ’23, revisit post the second quarter, especially and long-term basis we believe that we are a substantial margin improvement.

This is all from our side and I would like to open the floor to question and answer.

Questions and Answers:

 

Operator

Thank you very much sir. Ladies and gentlemen we will now begin the question-and-answer session [Operator Instructions] Our first question is from the line of Shalini Gupta from East India Securities. Please go ahead.

Shalini Gupta — East India Securities — Analyst

Yeah. Good afternoon, Sir. Sir I have two questions one is that the order book that you are saying I just wanted to understand what is sanctity of that order book, why I am asking you this question because couple of weeks back, we saw another auto ancillary company and their orders were cancelled by the company they were going to be supplying to. So if you could just comment on this?

Navin Juneja — Group Chief Financial Officer

Yes, I would like to answer your question. First of all, these are the confirm orders and there is no question of canceling them. In some cases, we have received the tool advances also, number one. And these are the new products, new customers, some are new customers, some are — we have entered into some agreements with them in some cases. And these orders are just I can tell you, in gasket INR39 crore per annum, in forging division, it’s INR24 crores, at present but we expect this INR24 crore to become INR40 crore in the next 45 days I think so, in Marelli it’s around INR23 crores, out of which INR18 crores is around if we divide by down INR4 crores to INR5 crores is approximately in EV vehicles. So combined total INR85 crores is per annum business, 4 to 6 years, it will be around INR400 crores. That confirm orders, these are not going to cancel, in some cases, we are receiving advances also. This is what I can say.

Shalini Gupta — East India Securities — Analyst

Okay. Sir, at my end like as an investor, what should I look out for to make sure that the order book that a company is seeing is actually not open to being canceled. I just wanted to check at my end, as an investor, what should I look for?

Anuj Talwar — Joint Managing Director

Carry on, Navin, no, no, please carry on.

Navin Juneja — Group Chief Financial Officer

First of all, you need to see the [Technical Issues] company. We have got customers, we are working with them for so many years. And these are the customers which are renowned customers, these are customers which are working in the group with the group for so many years. These are customers which are not small companies, we are not replacement market companies. These are the big OEMs of the world. So in that case, when they enter with you, they enter with a long-term perspective, we have long-term contacts with them in some cases.

Shalini Gupta — East India Securities — Analyst

Sure. And sir also…

Anuj Talwar — Joint Managing Director

I like to add also one point out here, a lot of our relationship with our customers go back many, many years, number one, is built on trust and delivery. The other thing I’d like to also answer is that, a lot of our customers today in India and we are pretty much single sourced with them. So that’s the kind of faith and belief that they have on the brand. And getting a customer today in a global scenario, in a Indian scenario is getting tougher, takes a lot of validation, takes a lot of efforts. All I can say is that we received some advances, some prototype tooling from them, so it should be okay. There’s no problem at all. It’s all trust and delivery, which we have built over the last many, many years.

Shalini Gupta — East India Securities — Analyst

Yes, and sir, my second and last question, like everybody is talking about the chip shortage easing. So I just wanted to check what in your opinion is the reason for the chip shortage, is it because new capacities have come up? Or is it that China lockdown is no longer that, I mean, China, the lockdown has been withdrawn. So what in your opinion is the reason for the chip shortage…

Anuj Talwar — Joint Managing Director

Even our own country today, India is looking to generate chip manufacturing. So lot of new capacities have come on board, that’s what’s happened and that is a reason for it.

Shalini Gupta — East India Securities — Analyst

Okay thank you Sir.

Operator

Thank you. [Operator Instructions] The next question is from the line of Dipen Shah an individual investor. Please go ahead.

Dipen Shah — — Analyst

Good afternoon and thank you for taking my question. I had a question on the margins. Mr. Juneja, you alluded to the fact that there have been some issues in the raw material pricing because of which you are not able to guide on the margins. Could you just elaborate a bit more on that? And maybe by when do you should be able to get a clear view?

Navin Juneja — Group Chief Financial Officer

Thank you, Mr. Shah. Yes, there are some pressures on the margins. One is because of the import dollar price, we are importing in cash a lot of stuff, which is — I think the cost of which has gone up because of the dollar appreciating. And number 2 and some typical raw materials of rubber, we are facing problem on prices, but these prices are recoverable. 90% plus are recoverable from the customers. Of course, it takes one or 2 quarters to recover, we had launched the price increases and by the end of the year, you can see that our margins which are originally there will be there. We’re not worried about that, but it’s a time lag only. That is the only thing.

Sometimes it impact the delivery also, we need to take some typical raw materials by air, it add to some costs, except that everything is fine.

Dipen Shah — — Analyst

But in the first quarter, was there any impact of this raw material price rise?

Navin Juneja — Group Chief Financial Officer

Yes, of course, of course, also there, the dollar went from 75, 76 to 80 in the first quarter itself. So as some material prices also increased in this quarter, we have all launched the price increase and you will see the effect of that in the coming quarters. It will be — expect a positive result. We’ll be able to recover the price increase.

Dipen Shah — — Analyst

Okay. Sorry to just stress it a bit, so…

Navin Juneja — Group Chief Financial Officer

Quarter-by-quarter, at end of year, you will see everything will be recovered.

Dipen Shah — — Analyst

So I just wanted to ask whether second quarter could be worse off than first quarter or maybe…

Navin Juneja — Group Chief Financial Officer

No, not at all. It should not be worse it should be better.

Dipen Shah — — Analyst

And overall from the OEM side, sir, we are seeing some positive comments coming across, except for the lower…

Navin Juneja — Group Chief Financial Officer

Yes and Anuj has just told you, yes, positive commercial going across and we are looking for a healthy order book going forward. And really, as you know, PV are going very well, Maruti has given very good numbers for this quarter. It will add — Tata Motors, PV is for passenger vehicle very good numbers, both Marelli and Marugo are banking on these orders and they are doing very well. They did perform very well in the month of July. And on the gasket side, we are also doing very well. And but — and forging the export division rooted in the month of August because of the holidays in the month of August in the whole Europe, but it will be recovered off time, I mean it happens, nothing new.

Dipen Shah — — Analyst

Yes, in terms of new model launches, sir, could you just guide us a bit on which all new models have you been selected for that is the new model?

Anuj Talwar — Joint Managing Director

Yes, we’ll be selected, we added some new customers in India. We’ve added Hyundai as a new customer, so the new SUVs, we are a part of their journey. Maruti, the new variants that have been launched, we are a part of that as well. Tata Motors, we’re very, very aggressive with our Marelli joint venture. So all their new models, the EV, the Punch, the Hornbill share a part of that also. We’re also part of Jaguar Land Rover vehicles globally, the Discovery Sport, The Range Rover Sport and the Range Rover. So we are in a healthy situation. So it looks good. It looks very, very good actually. I mean there is slum of August is there a little bit, but I think the comment is so positive from OEMs, even 2-wheelers, if you look at like our 2-wheeler growth also pretty strong. All that commentary was coming earlier, TV whatever, even 2 wheeler looking very, very strong.

Dipen Shah — — Analyst

Thank you so much Anuj and Mr. Juneja all the very best.

Operator

Thank you very much. Our next question is from the line of Shikha Mehta from Equitree Capital. Please go ahead.

Shikha Mehta — Equitree Capital — Analyst

Good afternoon, sir. I just have a couple of questions. Could you give me your capacity utilization across all segments?

Anuj Talwar — Joint Managing Director

Yes, I will give you that. The capacity utilization, if we just a second for me. Yes, it’s approximately — in case of gasket, it’s around 87% to 88%. In forging division, it’s 78%, in Nippon Leakless is around 80%, in minority Marelli around 75%. In Marugo — in the case of antivibration is 90%, in the case of — is 35% in the first quarter.

Shikha Mehta — Equitree Capital — Analyst

Okay. This is clear. And sir, currently, are we outsourcing anything?

Navin Juneja — Group Chief Financial Officer

Outsourcing in the sense, we are doing some OSP work, some machining, in forging some low-end machining is being outsourced. And similarly some gaskets, some low end processes are being outsourced, that’s all.

Shikha Mehta — Equitree Capital — Analyst

Okay. And sir, could you also throw some light on how our products are doing in Europe currently given the demand for them?

Navin Juneja — Group Chief Financial Officer

Pardon, can you repeat the question again, sorry about that?

Shikha Mehta — Equitree Capital — Analyst

How we’re doing in Europe broadly within the slowdown?

Navin Juneja — Group Chief Financial Officer

Europe, not bad, of course, it’s little slow, the BMW sale is little down, I can say. But — and even in case of GCM the sales are little down. And — but not in the case of JLR, we are doing okay there. And rest of gasket is okay. In forging it’d little down because of — first of all chip shortages. Second, in the month of August, especially their holidays. So — but the PLD positions are good. There’s no doubt on that.

Shikha Mehta — Equitree Capital — Analyst

Sir we don’t expect to degrowing…

Navin Juneja — Group Chief Financial Officer

Nothing major, nothing major, maybe 2% here and there, that’s all 2%, 3% here. Nothing major, but we are adding some new customers also which will start reverting into the commercial business in the third quarter and fourth quarter of this year.

Shikha Mehta — Equitree Capital — Analyst

Okay. And also, the semiconductor shortage issue seems to be — it seems to be easing out, are we witnessing that in our product changes as well? Are we seeing demand improve?

Navin Juneja — Group Chief Financial Officer

I think it’s not 100% over, in the low end car, I think it’s over in the low end car like Maruti and Tata Motors, in the case of high-end car BMW, Volvo and those stuff is still there, it’s not 100% over. Now in India, I think Kia has also increased the production, it means some relief they have got from China or from somewhere.

Shikha Mehta — Equitree Capital — Analyst

Okay Sir. I will come back in the queue. Thank you.

Operator

Thank you. Our next question is from the line of Hiten Boricha from Joindre Capital. Please go ahead.

Hiten Boricha — Joindre Capital — Analyst

Thank you for the opportunity Sir. Sir I have two questions. The first one is on the revenue growth. So you mentioned the commentary from the OEM was very good, and we are seeing a very good traction here. So, what kind of revenue visibility we have in this year, like double-digit growth or anything? Any color on that? And the second question is on the order book, sir. So, after receiving the INR400 crores order book — order now, so what is our current order book?

Navin Juneja — Group Chief Financial Officer

First of all I want to tell you regarding the outlook now topline outlook. Of course we are very optimistic of it, we are working and if the things remain what I am hearing from the OEMs we should be able to minimum double digit growth we are looking in the topline for this financial year number one and how double digit we cannot say that it is 11% plus how much it depends on how the thing is moving in the future also because of daily you are listening sometime China, Taiwan, etc., etc., I do not know what will happen there.

Secondly your question was on the order book. The order book is we get the orders from OEMs and the export customers versus annual order we get from the export customers and then is the three months rotating order we get and in the case of OEM also we get the order but the order indicative order but at the beginning of the month the order sometimes goes up and sometimes come down also depending on their demand and it not depends on our product. There are other products in India are in the vehicle which has to be there. Sometimes we lose business because some other components are not available with them. It happened in the past but still the order book is okay, healthy and we are working for a double digit topline.

Hiten Boricha — Joindre Capital — Analyst

Sir, can you quantify the order book?

Navin Juneja — Group Chief Financial Officer

So we can’t quantify, nobody can quantify. You can’t — this is not a guarantee order — Maruti will give you — I will take this with vehicle — for different vehicles. They give indicative for 3 months, which is confirmed at the beginning of the month only.

Hiten Boricha — Joindre Capital — Analyst

Okay, understood. And sir, on the margin…

Navin Juneja — Group Chief Financial Officer

For this quarter, Maruti is healthy, Tata Motors is very healthy.

Hiten Boricha — Joindre Capital — Analyst

Understood. Understood. Understood. Sir, and on the margin point, just a clarification, you mentioned we are going to at least maintain this 13% kind of margin, right?

Anuj Talwar — Joint Managing Director

Maruti, it will grow. It will further grow, don’t worry.

Hiten Boricha — Joindre Capital — Analyst

Okay, okay. So we are not seeing any negative impact because of higher commodity prices?

Anuj Talwar — Joint Managing Director

No, no, no. No negative.

Navin Juneja — Group Chief Financial Officer

We should better it.

Anuj Talwar — Joint Managing Director

I told it would better it, don’t worry.

Hiten Boricha — Joindre Capital — Analyst

Okay Sir. I will come back in the queue Sir. Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Jyoti Singh from Arihant Capital Markets. Please go ahead.

Jyoti Singh — Arihant Capital Markets — Analyst

Thank you for the opportunity. My question is on a heat shield side it is being in a traction so how much revenue we have in Q1 FY2023 and what is your outlook on the heat shield side as we also got the order so how much growth we are going ahead we are expecting and also we are facing any issues on the Europe side?

Navin Juneja — Group Chief Financial Officer

Now coming to the heat shield in Q1 I think we have done a business around INR8 Crores but I want to tell you the commercial business of Hyundai is yet to start in the next three weeks. The samples have gone, they are separate, they want to visit the plant, they will visit any time now and the commercial product will start I think from next month it will start Hyundai pie. Maruti launches are there in September and October when the Maruti business will start. At present if I have the order book which is under implementation or under development, etc., is to the extent of INR40 Crores plus I have got at present for the heat shield and we are negotiating new businesses of heat shield also with other customers and we are hopeful that in the next three to four years the business can touch up to INR60 Crores to INR70 Crores easily. Now coming to the export orders I want to repeat it. There is no doom in export order it is just a temporary phase and others you always know but it is not that bad JLR is doing very well we are getting Dana is okay and other customers of gaskets are fine there is no problem.

Jyoti Singh — Arihant Capital Markets — Analyst

Okay. And sir, also my question is on the other side. I mean, as we have almost whole month holiday. So because of that, we will see any impact?

Anuj Talwar — Joint Managing Director

No, no, no, not major, nothing major. No impact. Every year, it happens. Every year, it happens. There’s no major impact, please. I want to say, please don’t worry, there’s no major impact.

Jyoti Singh — Arihant Capital Markets — Analyst

Yes, I know this is…

Anuj Talwar — Joint Managing Director

We have a lot of seasonal holidays that happen in India in August. It happen in the U.S. It happen in Europe, but this is a part already factored into the schedule for the customers. The good thing is that there’s a big pent-up demand in the auto industry. That is what we should look at. Big pent-up demand.

Jyoti Singh — Arihant Capital Markets — Analyst

Yes. On the Europe side, we are facing any issue because of the energy price hike?

Anuj Talwar — Joint Managing Director

No. We are not facing. At present, no.

Jyoti Singh — Arihant Capital Markets — Analyst

Okay. Any expectation for future?

Anuj Talwar — Joint Managing Director

Energy?

Jyoti Singh — Arihant Capital Markets — Analyst

Yes. On the energy front, mostly…

Anuj Talwar — Joint Managing Director

That I can’t comment, but the schedule we are getting from the customer is perfectly fine. They’re showing good growth.

Jyoti Singh — Arihant Capital Markets — Analyst

Okay thank you Sir.

Operator

Thank you. Our next question is from the line of Manikanda Prabu from MKP Securities. Please go ahead.

Manikanda Prabu — MKP Securities — Analyst

Actually I have a question on domestic and exports while comparing from the last year so the export contribution is coming down so is it any plan to expand the export direction or how is it going to be in the future that is my first question and my second question is like we got an order INR400 Crores of new orders in that how much contribution from exports?

Anuj Talwar — Joint Managing Director

Yes, I will answer that question. So, your share is — my export is coming down. Okay, firstly on that. If I see in Q1, if I total stand-alone business, last year, my export was in Q1, my export was INR42.77 crores on standalone business. This year is INR41 crores, #1. One of the reasons of lower export was, we’ll see a container. In forging division — sorry, gasket division, INR2.2 crores of export equivalent we should — because of non-availability of container, and it went on July 10. The material is lying in my MGS. So, if the containers are available, I would have grown this order — this export first year — first quarter. Please, I want to say, my export will grow this year as compared to last year. I want to repeat that question first. You will see good collection coming in the next 3 quarters. My overall export for this financial year will be more than last financial year, #1, on a combined basis.

Now coming to MMT. MMT export in the first quarter was around INR6 crores to INR7 crores. Last year, total export was around INR20 crores. This year, MMT export will cross INR40 crore-plus, this I’m telling you, because they’ve got very good orders and supplies are starting in the month of September onwards, okay? So on the export front, there is no problem. We will — as a group, I will have a very positive growth in the export book, #1. #2, query was regarding — can you repeat, sorry, I forgot.

Manikanda Prabu — MKP Securities — Analyst

In the upcoming order, like we had an order of…

Anuj Talwar — Joint Managing Director

Yes. Out of this INR400 crores by export order book is around, if I take INR400 crores into — it’s around 30%. 30% is my export orders out of this. They are big OEMs in Europe, U.K., out of which INR80 crores to INR100 crores is on a very, very big off-highway customers — new customers we evaluate in U.K.

Navin Juneja — Group Chief Financial Officer

Our endeavor is that we will try and go up to about 20% to 30% exports. It’s a healthy product mix for our group. And at the same time, now because the COVID restrictions are over, our teams are now going ahead and participating in shows in Hanover, in Las Vegas, in Frankfurt, going back to the trade shows, going back to meet the customers. So that is a very positive sign also. For the last 2 or 3 years, everything was done only on reputation and on Zoom. But at the end of the day, now they’re meeting the customers yet again. So, you see a lot of traction in exports.

Anuj Talwar — Joint Managing Director

But it is much more than last year, that I can guarantee you.

Navin Juneja — Group Chief Financial Officer

Yes. We are very, very confident about exports, because if you look at it in the gasket market today, we’re already 50% in India. We may become 51% or 52% or 53%, 54%. But globally, there’s a huge potential for gaskets and heat shields, and for forging, and for chassis.

Manikanda Prabu — MKP Securities — Analyst

Okay. So, can we have a vision like next 5 years, the more contribution will be 30% to 40% more or it will be a domestic dominating player like that.

Anuj Talwar — Joint Managing Director

Like I mentioned to you, we would try and target between 20% to 30% on a higher turnover, also going very aggressively. Please understand that. The Indian market in the next 3 to 5 years is going to go very, very aggressively, commercial vehicles, passenger vehicles, tractors, then 2, 3-wheelers. So, on a higher base, we should be at 20% to 30% — 28% to 30%.

Manikanda Prabu — MKP Securities — Analyst

Okay. Okay. Sir, the last question, like how much the margin — in margin front, how much we can get from export orders like — compared to domestic, how much difference you can get from the quarter?

Anuj Talwar — Joint Managing Director

Yes, it’s generally 2% to 3% higher than the adversary market.

Manikanda Prabu — MKP Securities — Analyst

Thank you so much.

Operator

Thank you. Our next question is from the line of Deepak [Phonetic] an individual investor. Please go ahead.

Deepak — — Analyst

Thanks for the opportunity. My question has already been answered.

Operator

Thank you. Our next question is from the line of Akshay Jain from Jain Capital. Please go ahead.

Akshay Jain — Jain Capital — Analyst

Sir I have a couple of questions. Firstly, sir, have you taken any hit on account of currency depreciation in our export segment?

Anuj Talwar — Joint Managing Director

Yes. On the export segment, we are hedging our currency, but on the import side, we are not doing that. Generally 30% to 40%, we are hedging on our export front.

Akshay Jain — Jain Capital — Analyst

Okay. Can you throw some light on the customer mix for the quarter?

Anuj Talwar — Joint Managing Director

Pardon me, Pardon me?

Akshay Jain — Jain Capital — Analyst

Can you throw some light on the customer mix for the quarter?

Anuj Talwar — Joint Managing Director

Yes we can throw. I will tell you the customer mix. I will give you division wise. The gasket front in Q1 Tata Cummins did a sale of INR16.17 Crores, Bajaj did INR14.5 Crores, Tata Motors did INR7.22 Crores, VCV did INR5.25 Crores, Hero MotoCorp INR4.25 Crores, John Deere INR3.5 Crores, Tata Cummins India INR3 Crores these are the major customers. Cummins USA did INR2.5 Crores. On the forging front BMW INR11 Crores, Dana Italy INR9 Crores, JLR again INR6 Crores, GTL Italy INR5 Crores, Carraro export INR4 Crores, then comes the Dana Spicer India INR4 Crores, Nippon Leakless Hero MotoCorp around INR11.5 Crores, Honda INR6 Crores these are two major customers there. In the Marelli Maruti India did a business of INR19.5 Crores, Tata Motors around INR8.5 Crores, Jaguar INR7 Crores. On the Marugo front Maruti did a business of INR5 Crores and Suzuki Gujarat did a business of INR2 Crores if we add it is INR7 Crores.

Akshay Jain — Jain Capital — Analyst

Okay Sir thank you. That is all from my side.

Operator

Thank you. Our next question is from the line of Priyanka Shah from KK Advisors. Please go ahead.

Priyanka Shah — KK Advisors — Analyst

Thank you Sir for the opportunity. Sir what is the capex guidance for FY2023?

Anuj Talwar — Joint Managing Director

Yes. In the capex on the gasket front, we are doing capex of around INR18 crores to INR20 crores, which will include the 3 line, already 90% done, and IBH gasket, which is INR7 crores to INR8 crores, plus some — I think some machine for laser welding, we are putting which is around INR3.5 crores, a total of about INR15 crores to INR20 crores in between. In the forging front, we’ll do in capex around INR12 crores to INR15 crores in forging business. And rest are maybe around INR5 crores to INR7 crores, Margo will do INR5 crores, Nippon around INR1.5 crores.

Priyanka Shah — KK Advisors — Analyst

Okay, sir. And any plans on the debt reduction? And can you mention the gross and net debt figure?

Navin Juneja — Group Chief Financial Officer

We are working towards that but with the increase in turnover you require some more materials my money blocked in debtors also into that extent we are trying to squeeze that we are not trying to increase that and term loan front we are trying to maintain the same amount because for the capex we need to borrow money from the banks also to some extent we cannot do 100% of our own so at present by June 30, 2022 my total is around INR92 Crores to INR93 Crores is my total borrowing which include term loan of around INR15 Crores balance is working capital.

Priyanka Shah — KK Advisors — Analyst

Can you share them what we have — what is now our debt-to-equity ratio, it’s come down?

Anuj Talwar — Joint Managing Director

We will share in the month of September. And with the balance sheet, we will discuss the balance sheet also. It will come down further. It was 0.31 as on March 31, it will come down by September.

Priyanka Shah — KK Advisors — Analyst

Okay Sir thank you.

Operator

Thank you very much. Our next question is from the line of Nagesh Rajanna from NR Family Office. Please go ahead.

Nagesh Rajanna — NR Family Office — Analyst

Congratulations to the team on another outstanding performance. Just one quick question because I think there seems to be lot of euphoria around the growth because the industry seems to be doing well, you seems to have got large orders and you have some great export plans, is there a kind of a compounded annual growth rate estimation for the next three to five years which you have both on the revenue and the margin side?

Navin Juneja — Group Chief Financial Officer

On the revenue side we are working on double digit growth every year number one and double digit growth we are looking.

Nagesh Rajanna — NR Family Office — Analyst

But you have to help us with some kind of clarity because when you say double digit it could actually range from 10% to 99%?

Navin Juneja — Group Chief Financial Officer

I know what we are talking about.

Nagesh Rajanna — NR Family Office — Analyst

I think you probably will have to be a little more fairer and little more transparent to the investors community?

Navin Juneja — Group Chief Financial Officer

The market is such you know that how the things are moving. We keep in mind something but at the end of the day something else happens so one has to be little careful. Of course we can discuss with you when we will meet you and we have some plans but it is not I cannot announce this plan. I have some long term plans. I have very much long term plans double digit growth plans and bottomline decent EBITDA improvement plans in mind.

Nagesh Rajanna — NR Family Office — Analyst

With due respect to you Mr. Juneja I think you will also have to appreciate because either you can actually give a broad range saying let us say 15% to 20% or a 20% to 25%, if you can actually give us some broad range because at the end of the day you are in the industry, you have an industry picture, you have so much of experience, I think all that knowledge and wisdom of yours should help us to get some specific range, double digit is a two ways and a too broad range I hope you respect it?

Navin Juneja — Group Chief Financial Officer

Yes, I respect that. But let me give some time to come back on this, please?

Nagesh Rajanna — NR Family Office — Analyst

And what — okay, let me change the question. What’s your vision in terms of your top line, let’s say, from a 3- to 5-year perspective? Would you be targeting an ex revenue?

Navin Juneja — Group Chief Financial Officer

From 3-year vision, of course, first by vision in the gasket business is INR600 crore business, top line, and forging t = in 4 to INR400 crores. And mentally, we have vision around INR350 crores to INR400 crores.

Nagesh Rajanna — NR Family Office — Analyst

At a consolidated level, Mr. Juneja, if we have to look at it, at 2025.

Navin Juneja — Group Chief Financial Officer

Nobody can confirm 2025. We have a vision and we are working towards that. Nobody has business for 2025 today. We have to set a goal and we have to work towards that. It goes up and down as the year ends also.

Nagesh Rajanna — NR Family Office — Analyst

No with due respect to you 2025 what could be your topline vision?

Navin Juneja — Group Chief Financial Officer

I think we need to talk on that separately. We will talk on that separately along with SGA. We will work on that.

Nagesh Rajanna — NR Family Office — Analyst

Would appreciate if you could just work on that and let us know yes. Thank you.

Operator

Thank you very much. Ladies and gentlemen that was the last question. I now hand the conference over to the management for closing comments.

Anuj Talwar — Joint Managing Director

Yes. Thank you so much for participating in the call. I hope we’re able to answer all your questions. Any further questions, you can contact SGA, and we remain confident about the auto sector and our own performance. Thank you so much.

Operator

[Operator Closing Remarks]