Talbros Automotive Components Ltd (TALBROAUTO) Q3 FY23 Earnings Concall Transcript

Talbros Automotive Components Ltd (NSE:TALBROAUTO) Q3 FY23 Earnings Concall dated Feb. 09, 2023.

Corporate Participants:

Anuj Talwar — Joint Managing Director

Navin Juneja — Group Chief Financial Officer

Analysts:

Dhiral Shah — PhillipCapital PCG — Analyst

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Jyoti Singh — Arihant Capital Markets Limited — Analyst

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Anup Shah — Shrinath Securities — Analyst

Abhishek Agarwal — Naredi Investments — Analyst

Karan Mehra — Mehta Investments — Analyst

Sameer Chadha — Chadha Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Talbros Automotive Components Limited Q3 and 9M FY ’23 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions, and expectations of the company as on the 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] Please note that this conference is being recorded.

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

Anuj Talwar — Joint Managing Director

Thank you so much. A very warm afternoon — good afternoon everybody. A very warm welcome to our Q3 and a nine monthly 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 on our Board of Talbros as well as our Group CFO. Also, we have SGA, our Investor Relations Advisors from Mumbai. The results and the presentation are uploaded on the stock exchange and the company website. I hope everyone has had a chance to look at it.

The Company performed strongly in Q3 and nine months of FY ’23. The Company registered a top line growth of 6% in Q3 at INR160 crores. There was a slight slowdown in our OE spares business domestically as well as a slowdown in Europe — with OEMs in Europe due to the inflationary costs that have happened due to unfortunate circumstances like the war. EBITDA and PAT have also grown by 14% and 24% to INR24 crores and INR14 crores, respectively. For the nine months, the company delivered a top line growth of 10% to INR477 crores, EBITDA stood at INR67 crores at a growth of 11%, and company achieved its highest PAT ever of nine months at about INR39 crores, a growth of 20% Y-o-Y.

We announced several times in the last financial year, which is the current financial year actually, that we’ve — we received orders worth about INR1,000 crores from both domestic and overseas OEM customers. These products — these product orders are across our various segments like gaskets, heat shields for passenger vehicles, forgings for Agri and offloader vehicles and chassis for again PV vehicles/electric vehicles as well. We continue to work on our export strategy. We continue to try and add new customers, which we have just recently done in the U.S. as well on the lawn mower segment. That’s a new territory, new product line, new customer and as I mentioned to you, even Agri and offloaders in the U.K. Also, we’re quite dominant in the PV space in Europe as well as India.

We’d also like to tell you that the orders we have received are from a very established domestic OEM for electric vehicles for over about INR160 crores for five years. Another very interesting order we recently received is in our joint venture, Talbros Marugo. This order is worth about INR150 crores over the next five years for rubber hoses. This — if you see the government has been talking a lot about biofuels and E20 fuels, and Mr. Modi had made a statement just a couple of days back that we should try and work on this blending of fuel with ethanol to reduce the import of crude oil. So we’re very happy to announce that with the leading carmaker in the country, we are already supplying these products to them. It’s about INR150 crores revenue for the next five years.

Coming to the industry and the economy overview. In the union budget as I mentioned right now, the industry has got major boost towards electric vehicle manufacturing, hydrogen fuel adoption, and changing technology mix. The budget should drive sustainable yet inclusive growth at a rapid pace as it focuses on increasing taxpayers’ disposable income to increase consumption. In addition, focus on exports and a rise in infrastructure capex is expected to increase demand for commercial vehicles. Further, the announcement by the government to scrap all their government vehicles will be an immense boost to the CV industry.

The domestic automotive industry has seen a healthy environment in the current fiscal aided by recovery in the economic activities across segments. Commercial vehicles are expected to drive past pre-pandemic levels next fiscal driven by growth in replacement demand. At the same time, PV vehicles have also done extremely well in the last year due to pent demand. We’re very happy to announce and say that your company Talbros is supplying components to all segments whether it is in the PV space, whether it’s the agri space, whether it’s in the commercial vehicle space, two-wheeler space, we are everywhere. And that’s one of the [Technical Issues] for us.

During the nine months of FY ’23 of our domestic sales, 25% came from two and three wheelers, 21% came through the PV segment, 36% came through the commercial vehicles, and 9% came through tractors and [Technical Issues] in nine months of ’23, exports contributed to almost 17% of the gaskets revenue, which was earlier only about 10%, 51% exports came in the forging business line, 16% came from Marelli Talbros Chassis Systems Limited, and 11% through Talbros Marugo. Overall, as a consolidated revenue about 23% to 24% of the nine months revenue came from exports.

We are buoyant and bullish on the automotive sector. We’re also happy to say that, yes, we may have had a slightly muted growth in quarter 3. We were not that buoyant given the fact for the nine months, we’ve still performed steadily and quarter 4 looks to be buoyant. Having said that, I would like to definitely emphasize that even though we had a slightly muted growth in Q3 due to reasons already explained, we have maintained our costs extremely tight in the way we run our ship and we’ve given good EBITDA margins to — as a result.

Now, I’ll let Mr. Juneja take us through the financials. Please, Navin.

Navin Juneja — Group Chief Financial Officer

Yeah. Thank you, Anuj, and good afternoon, and a warm welcome to all the participants. Let me begin with the financial overview.

Our total revenue for Q3 of FY ’23 stood at INR160 crores as against INR151 crores, a growth of 6% year-on-year basis that is in the standalone business. For nine months of FY ’23, our revenue stood at INR477 crores as against INR435 crores, a growth of 10% on Y-o-Y basis. EBITDA for Q3 of FY ’23 stood at INR24 crores as against INR21 crores, a growth of 14% on Y-o-Y basis, and for nine months of FY ’23, EBITDA stood at INR67 crores as against INR60 crores, a growth of 11% on a Y-o-Y basis. EBITDA margins for Q3 of FY ’23 stood at 14.9% and for nine months of FY ’23 stood at 14%. There is a recovery where we are falling short of 14% in the previous quarter, now we have recovered in this quarter. PAT for Q3 of FY ’23 stood at INR14 crores as against INR11 crores, a growth of 24% on Y-o-Y basis, and for nine months of FY ’23, PAT now stood at INR39 crores as against INR32 crores, a growth of 20% on a Y-o-Y basis.

In the gasket division including Nippon Leakless Talbros, for Q3 of FY ’23, our standalone gasket sales were INR102 crores as against INR101 crore in Q3 FY ’22. Total revenue of Nippon was INR21 crores in Q3 of FY ’23 as compared to INR20 crores in Q3 of FY ’22, a growth of 7%. For nine months of FY ’23, our standalone gasket sales were INR316 crores as against INR280 crores in nine months of FY ’22, a growth of 13%. Total revenue of Nippon Leakless was INR69 crores in nine months of FY ’23 as compared to INR56 crores in nine months of FY ’22, a growth of 23%. This segment saw a combined EBITDA of INR19.1 crore in Q3 of FY ’23 versus INR18.6 crores in Q3 of FY ’22, a growth of 3%, and for nine months FY ’23, this segment saw a combined EBITDA of INR57.9 crores as against INR50.9 crores, a growth of 14%.

Now, coming to our Forgings division. Revenue in Q3 FY ’23 grew by 15% to INR57 crores as against INR49 crores in Q3 FY ’22. In nine months FY ’23 revenue grew by 3% to INR160 crores as against INR156 crores for nine months of FY ’22. EBITDA in Q3 of FY ’23 stood — grown up — sorry, it has gone up by 56% to INR10 crores as against INR6 crores in Q3 of FY ’22. In nine months of FY ’23 EBITDA has grown-up by 9% to INR24 crores as against INR22 crores in nine months of FY ’22.

For Marelli Talbros Chassis Systems, revenue for Q3 of FY ’23 stood at INR55 crores versus INR43 crores in Q3 FY ’22, which has this steady growth of 29% on Y-o-Y basis. For nine months of FY ’23, revenue stood at INR155 crores versus INR115 crores, a growth of 35% on Y-o-Y basis. For Q3 of FY ’23 EBITDA stood at INR6 crores as against INR4 crores in Q3 of FY ’22, a growth of 49% on Y-o-Y basis. For nine months of FY ’23 EBITDA stood at INR16 crores as against INR11 crores in nine months FY ’22, a growth of 37% on Y-o-Y basis.

Now, coming to our large joint venture, Talbros Marugo Rubber Private Limited. The revenues stood at INR20 crores in Q3 of FY ’23 versus INR13 crores in Q3 FY ’22, which has registered a growth of 52% on Y-o-Y basis. For nine months of FY ’23, revenue stood at INR56 crores as against INR38 crores registering a growth of 49% on Y-o-Y basis. As regard EBITDA is concerned, for Q3 of FY ’23, EBITDA stood at INR1 crore at against a loss of INR0.3 crores in Q3 FY ’22. For nine months of FY ’23, EBITDA stood at INR3 crores as against INR1 crores in nine months of FY ’22.

We are confident toward achieving the growth and believe that the margins are sustainable. Maybe little improvement will be there in future also if the revenue stream goes up. This is all from our side and I would like to open the floor for the questions and answers. Thank you.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Dhiral from PhillipCapital PCG. Please go ahead.

Dhiral Shah — PhillipCapital PCG — Analyst

Yeah. Good afternoon, sir. Thanks for the opportunity.

Operator

So to interrupt, Mr. Dhiral. There seems to be a lot of disturbance from your line.

Dhiral Shah — PhillipCapital PCG — Analyst

Am I audible now?

Operator

You’re audible but there’s a lot of background disturbance.

Dhiral Shah — PhillipCapital PCG — Analyst

Yeah. So my first question is, sir, if I look at your gasket revenue on a Y-o-Y basis, there is only 1% growth. So wanted to know, sir, why there is a sluggish growth in gasket since we are guiding for almost 15% kind of a growth in this segment?

Navin Juneja — Group Chief Financial Officer

Pardon me, what you are saying? Gasket, what you have said? Can you repeat the question?

Dhiral Shah — PhillipCapital PCG — Analyst

Sir, our revenue growth on the gasket business is almost only 1% on a Y-o-Y basis and if I remember, sir, previously, we were guiding to grow almost 12% to 15%.

Navin Juneja — Group Chief Financial Officer

That you are talking about top line or EBITDA level?

Dhiral Shah — PhillipCapital PCG — Analyst

Sir, top line. Top line.

Anuj Talwar — Joint Managing Director

Quarter 3 only, right?

Dhiral Shah — PhillipCapital PCG — Analyst

Yes, sir. Yes, yes.

Navin Juneja — Group Chief Financial Officer

Okay.

Anuj Talwar — Joint Managing Director

Only quarter 3 you’re talking about.

Navin Juneja — Group Chief Financial Officer

Quarter 3 is — I’m just telling you why there is less growth in quarter 3. First obvious reason, after festive season, the demand is always less. You know that very well plus there’s a huge drop in the — in this quarter in the spares market of OEM. Spare market came down very heavily from the OEM side and that is one of the major reasons plus aftermarket also came down in this quarter. These are two major reasons. But now in the current quarter, everything is back to normal. That is a one-off only.

Dhiral Shah — PhillipCapital PCG — Analyst

So when you say spare market of OEM, sir, if you can explain what is that exactly?

Navin Juneja — Group Chief Financial Officer

OEM takes — two type of billing it goes through OEMs, one is for equipment in the vehicle, one is for selling in the aftermarket. All OEMs have their own aftermarket channel like Tata Motors has a aftermarket channel, Hero has a aftermarket channel, Volvo has a aftermarket channel. Channel is there, their billing came down very heavily.

Dhiral Shah — PhillipCapital PCG — Analyst

Okay. And sir, any particular reason for low volume?

Navin Juneja — Group Chief Financial Officer

What I understood from the aftermarket, we are selling to aftermarket, there is less opening of engines [Technical Issues] plus they were having inventories in the past, they want to dilute that inventory. That is the particular reason.

Dhiral Shah — PhillipCapital PCG — Analyst

And, sir, how is this current quarter going on at least for the gasket segment?

Navin Juneja — Group Chief Financial Officer

Current quarter, it has come back. Again, no issues in the current quarter.

Anuj Talwar — Joint Managing Director

Like he mentioned to you, it’s one off. If you look at nine months, we’ve grown at 13%. It’ll be okay.

Navin Juneja — Group Chief Financial Officer

No, no. For nine months, it’s more than 15%. I think by the year-end, it will be 15% growth will be there in this business.

Anuj Talwar — Joint Managing Director

Yeah. No worries.

Dhiral Shah — PhillipCapital PCG — Analyst

Okay. Okay. And sir, when I look at the forgings side, particularly the margins in the forgings business has almost touched 16% versus 12% last year, so what has led to the substantial improvement in the margin on the forging side?

Navin Juneja — Group Chief Financial Officer

Yeah. There are two reasons. One is export has gone up, one thing plus — the export out of I think, 70% or 60% export in euro. The euro has recovered a little bit. There are two reasons.

Dhiral Shah — PhillipCapital PCG — Analyst

So this is a currency benefit that we are getting or is this from the operational performance?

Navin Juneja — Group Chief Financial Officer

If the — I’m telling you, if the euro remains in the INR86, INR87, INR88 range, this benefit will continue.

Dhiral Shah — PhillipCapital PCG — Analyst

Okay. So are these margins sustainable, sir, moving ahead?

Navin Juneja — Group Chief Financial Officer

Yeah, yeah, it’s sustainable. Unless the euro comes down to INR80, INR78, then there is a little pressure on that.

Dhiral Shah — PhillipCapital PCG — Analyst

Okay, and sir, lastly, on the Marugo Rubber JV side, so this quarter, we have seen very strong improvement, sir.

Navin Juneja — Group Chief Financial Officer

Yeah, yeah.

Dhiral Shah — PhillipCapital PCG — Analyst

So what is the outlook for the next quarter, sir, or maybe for the next two years?

Navin Juneja — Group Chief Financial Officer

The quarter I think it will be further better than this quarter, little better than this quarter.

Dhiral Shah — PhillipCapital PCG — Analyst

And sir, for the FY ’24?

Navin Juneja — Group Chief Financial Officer

It will be much, much better but we are expecting Magneti Marelli maybe will grow by 30% minimum and Marugo will also grow by 30% next year.

Dhiral Shah — PhillipCapital PCG — Analyst

Okay. Okay. Thank you so much, sir.

Navin Juneja — Group Chief Financial Officer

Thank you.

Operator

Thank you. We’ll move on to the next question that is from the line of Shikha Mehta from Equitree Capital. Please go ahead.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Hello, sir. Good evening. I have a couple of questions.

Navin Juneja — Group Chief Financial Officer

Yes.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

So we have INR160 crore order book on the EV front from one of the domestic OEMs.

Navin Juneja — Group Chief Financial Officer

Yes.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Can you explain what kind of product we’re supplying to them?

Navin Juneja — Group Chief Financial Officer

Ma’am, this is a product called cradle. It’s a product. This is for the OEM based in Pune and that is the — cradle is a structure on which the motor sits, and that is a — I think the revenue of that one piece is INR4,100, INR4,200 per piece and the supply will start from August, September. The — I think some initial supply will start. I think the major supply will start from the third quarter or maybe October, November.

Anuj Talwar — Joint Managing Director

Yes, Shikha, this is a product, which is sheet metal, welded, assembled, and it’s directly where the e-motor sits, so direct product around the electronic periphery.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Okay, sir. Got it. Thank you. And sir, in our opening remarks, you spoke about some pressures in your Europe. Are we seeing that ease in Q4 or is it expected to remain the same?

Navin Juneja — Group Chief Financial Officer

Pardon me…

Anuj Talwar — Joint Managing Director

Europe is okay. I mean, for example, Q4 better domestically I feel, but Europe I still feel even can be little bit soft at the moment. But let’s wait and watch. But domestic market — but don’t worry, our company will come out strong in growth because domestic will pickup. And historically, in India, it’s only been a 45%, 55% H1, H2. But yeah, Europe is still little bit slow.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Sir, last quarter, we spoke about adding some other countries in Europe, so do you think that’s possible given the pressure currently or…

Anuj Talwar — Joint Managing Director

Yes. We’ve added U.K. in a big way and luckily for us, U.K. — the customer that we added in U.K. is not really concerned much about chip shortages because it’s purely an Agri off-highway, off-construction product. So that will give a lot of buoyancy to the Forgings division starting next year. And that will only continue to grow because here, it’s a very interesting story. Here, the customer is moving from castings to forgings. So it’s basically changing the product technology. So it’s not schedules of, let’s say, 100 vehicles or 200 vehicles slow down. No. It’s a complete overall ramp change in technology. So that will add a lot of buoyancy to the Forgings business, number one.

Number two, in addition to Europe, U.K., we’re right now also getting some very encouraging movements coming from the Agri sector in Italy. That’s also very, very buoyant. And U.S. still remains to be very strong for our gasket business, still remains very, very strong. And here also added a new customer, which is in the lawn mower segment. So exports will continue to grow.

Navin Juneja — Group Chief Financial Officer

Sir, I want to add here in the gasket business, we also — we are also in the process of getting — already received plus we’re getting fresh order from Russian customer. Huge — that will also add to the export.

Anuj Talwar — Joint Managing Director

Yes.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Correct, and sir, could you also comment on the freight and the power cost. Last quarter, the power cost was little higher. Has that normalized?

Navin Juneja — Group Chief Financial Officer

It is maybe one-off, but it’s one-off. It’s normalized. But I think my freight has come down, okay.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Okay.

Navin Juneja — Group Chief Financial Officer

Freight has come down. If you can see in the last quarter also, freight is — has come down, and I can just give you the freight cost things and it should not be much, much higher, I think so. One-off only, maybe. From where you have seen that freight cost stuff?

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Sir, we mentioned this on our call last quarter.

Navin Juneja — Group Chief Financial Officer

No, last quarter, freight was — it has come down. It has now been normalized. No issue now.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

And sir, last question from my end. Can you elaborate what we’re doing on the aftermarket segment because I understand we have some kind of coolants and stuff as well? So if you could just explain what products we’re selling on the aftermarket, sir?

Navin Juneja — Group Chief Financial Officer

In the aftermarket…

Anuj Talwar — Joint Managing Director

From Talbros?

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

From Talbros. Right.

Navin Juneja — Group Chief Financial Officer

Yeah. From gasket division, we are selling the gaskets of all the commercial vehicle, etc. Two-wheeler, we added. We have added passenger vehicles also and we have added product, coolant only. We’re not adding more.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Okay. We are not looking to add now.

Navin Juneja — Group Chief Financial Officer

No, no, no.

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

All right, sir. I’ll join back.

Navin Juneja — Group Chief Financial Officer

But coolant is a Indian product, that’s why we…

Shikha Mehta — Equitree Capital Advisors Private Limited — Analyst

Okay, okay. Thank you.

Navin Juneja — Group Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Jyoti Singh from Arihant Capital Markets Limited. Please go ahead.

Jyoti Singh — Arihant Capital Markets Limited — Analyst

Yeah. Thank you for the opportunity. Sir, my first question is on the Magneti Marelli. As you mentioned that it will grow 20% this year, so if you can throw some light in detail.

Navin Juneja — Group Chief Financial Officer

Ma’am, first of all, like is — the current business will also grow by 8% to 10%, you know that. This year, we are expecting to close at about INR210 crores in that business plus, I told you the cradle thing will start from September, October. It is a INR30 crore — INR80,000 — INR32 crore business per annum. If you take INR10 crore, INR12 crore from this year, it will add plus the top line will grow plus we are expecting some good export orders coming up in this business — already ordered in the process of commercialization. So we are quite hopeful to achieve this number by this — adding all this stuff.

Jyoti Singh — Arihant Capital Markets Limited — Analyst

Okay. Thank you, sir. Sir, in this quarter we have seen that the forging business has done decent, so in the upcoming quarter, which segments we are seeing a good demand and deal that we will see good growth?

Navin Juneja — Group Chief Financial Officer

Gasket will do good. I’m telling you, which will do good. In — forging will also little better than this quarter. And Marelli will be doing — All the businesses will be doing better than this quarter that I can forsee at this moment. All the businesses. Some business will better by 10%, some business by 15%, maybe 6%, depends on the business, but it’ll be better than quarter 3, all businesses.

Jyoti Singh — Arihant Capital Markets Limited — Analyst

Okay. Thank you, sir. Sir, on the top line front, how much growth we are targeting and on the margin side if you can throw some light? And how — have we already passed through the raw material prices or still we have to…

Navin Juneja — Group Chief Financial Officer

Even — Raw material, I think there is no further pressure on the raw material pricing. But, currently, we have still to recover in the forgings — in the gasket business, particularly, we are still to recover the price increases from some customers. We are only on that — in the process. I think by last quarter, we will recover everything. And on the top line, you can see we have grown on the top line of approximately — total income has grown up by about 10%. I think it should be better than — I think by next quarter, it’ll be 12% growth should be there. On the bottom line, you can calculate whatever it’ll be there. Of course, we’ve crossed over what we have promised to our shareholders of half century, which we’ll be able to cross easily now.

Jyoti Singh — Arihant Capital Markets Limited — Analyst

And, sir, on the margin front if you can guide.

Navin Juneja — Group Chief Financial Officer

Margin would be — we at nine months margin, 14%, it will not be less than that. It will be maintained 14%, maybe a little bit here and there. It should be — not be 13.6%, 13.7%, it should not be. It can be 14.1%. It cannot be below that. Around that 14%.

Jyoti Singh — Arihant Capital Markets Limited — Analyst

Okay. Thank you, sir.

Operator

Thank you. The next question is from the line of Nidhi Babaria from Envision Capital. Please go ahead.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Thank you, sir, for taking my questions. Sir, I just want to know what was the industry growth where our growth was roughly around 1% Y-o-Y for the quarter?

Navin Juneja — Group Chief Financial Officer

Ma’am, I’m sorry. Your voice is not audible to me. Please, please, sorry for that.

Anuj Talwar — Joint Managing Director

The 1%, ma’am, growth is only for the gasket business line. Overall, the growth has been about 6% for the quarter and 10% for the nine months has been the overall growth. But if you look at our joint ventures, which don’t come into the top line growth because of the Indian accounting standards, the JVs have grown at 30% and 53% and 10%.

Overall, as an industry, I think we’re looking at a buoyant growth in quarter 4 and next year as well. As I mentioned in my opening remarks, a lot of work is happening on this biofuel, a lot of work is happening on the capex policy, there is still pent-up demand for passenger vehicles, so the industry looks positive, and we will continue to grow for next year as well.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Okay. Sir, still, like our minimum 15% growth guidance, we are a bit — even on gasket side, it’s just 13%. So what gives us the confidence whenever the industry would go in headwinds and we will be able to achieve these kind of growth numbers?

Anuj Talwar — Joint Managing Director

No, we should be able to achieve these kind of numbers. We’ve had multiple issues this year. No one perceived that the war will keep — will continue. No one perceived the shortages of chips will continue. No one perceived inflation in Europe. But yes, I think north of 12% to 14% should be a good number even for next year growth-wise. But let’s…

Navin Juneja — Group Chief Financial Officer

I think it will — we will be able to achieve the growth of 15% approximately definitely because some businesses awards we are getting, which will commercialize next year. Of all INR1,000 crores, I think maybe 20%, 30% will be commercialized, already in the process of commercialization. It will be there next year. That is new businesses, which are not there at present.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Okay.

Navin Juneja — Group Chief Financial Officer

Like heat shield. Just started of Hyundai. It will be probably the — some good supply will go. Then, the heat shield of Maruti Jimny is yet to start. So we are — and the new business of Marelli, new business on Marugo, so we are hopeful, 15%, around 15% it should be there overall business. All businesses together.

Anuj Talwar — Joint Managing Director

You don’t see it because the joint ventures don’t really — you see it on the presentation, so you — it won’t come on the accounting standards. So you’ll see it division-wise.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Correct.

Anuj Talwar — Joint Managing Director

But yes, as Navin is saying, yeah, we are pretty much in the same thought process.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

And sir, of this 14.3% margin which we achieved in this quarter, how much portion of this will be achievable because I’m able to see that we have reduced other expense by almost 8% to 10% on a Q-on-Q basis? And how — like how does this convert — do we expect to grow where we have also started heat shield production in this quarter?

Navin Juneja — Group Chief Financial Officer

Yeah. Ma’am, the margin — as regards the EBITDA margin, it should be — I think the base should be 14%. It should be 14% for — next year, it should be a little better than 14% because the top line will go up and the fixed costs will not be there — not be grow at that ratio. So we are hoping that 14%-plus should be the — little bit 2%, 5% here and there should be our gross — EBITDA margin should be there. We’ll be able to sustain this margin easily.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Okay. Sir, any commentary on capex? What type of capex are we planning for ’24 and ’25?

Navin Juneja — Group Chief Financial Officer

Yeah, ma’am. I can give you up to next financial year. Capex for this year is under progress plus next year we have to do. Capex in the gasket business, including heat shields, we are targeting capex of around INR18 crores. In the forging, it should be around INR20 crores. Marelli, it should be around INR30 crores, INR35 crores and INR8 crores is in the Marugo, and this is a broad capex we are targeting.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Okay.

Navin Juneja — Group Chief Financial Officer

Some is in progress, advances are given, it’s total of today until next March.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

OKay. But any order book guidance on heat shield?

Navin Juneja — Group Chief Financial Officer

Pardon me. Order book as in — we have an order book of around INR45 crores already and next year, I might say it should be around INR35 crores in heat shield and by — I think by the end of next quarter, the order book should grow — be there by up to INR60 crores, it should be there. We are closing one or two orders very soon on that.

Nidhi Babaria — Envision Capital Services Private Limited — Analyst

Okay. Okay, sir, I’ll jump back in the queue. Thank you.

Navin Juneja — Group Chief Financial Officer

Thank you.

Operator

[Operator Instructions] The next question is from the line of Anup Shah from Shrinath Securities. Please go ahead.

Anup Shah — Shrinath Securities — Analyst

Thank you. Sir, I just had one question. Out of the INR1,000 crore order book that you mentioned, how much of this amount is going to be recognized in FY ’24 and FY ’25?

Navin Juneja — Group Chief Financial Officer

By FY ’25, these are — INR1,000 crores is for a period of five years, number one. It’s not one year — it’s around INR200 crore per annum. So next year, it should be around — around INR100 crores should materialize next financial year, and another INR100 crore in the next — ’23, ’24 and another INR100 crore by ’24, ’25.

Anup Shah — Shrinath Securities — Analyst

Okay. All right, sir. Thank you.

Navin Juneja — Group Chief Financial Officer

Thank you.

Operator

Thank you. The next question is from the line of Abhishek Agarwal from Naredi Investments. Please go ahead.

Abhishek Agarwal — Naredi Investments — Analyst

Thank you so much, sir. Sir, out of order work of INR1,030 crores received, how many amounts are for standalone and how many are for joint ventures? And can you also tell how many orders for gasket and forging?

Navin Juneja — Group Chief Financial Officer

Just a minute. Sir, just a minute. I will give you the answer. I have the figures. I can just give broad figures and in the — let’s talk about Magneti Marelli. The order book will be there to extent of around [Foreign Speech] order is there. Let’s start. Say, INR200 crores is in the Marelli business and 40 into 5, 200 — and INR300 crores to INR350 crores in the standalone business of gasket and forgings. INR400 for their own forging. INR160 crores — yeah. And I think these are our broad breakup.

Anuj Talwar — Joint Managing Director

I think 35% is on joint venture, 65% is standalone, approximately. We can’t give you the detailed breakup right now, but that’s what the number looks like.

Abhishek Agarwal — Naredi Investments — Analyst

Okay. Thank you so much.

Navin Juneja — Group Chief Financial Officer

Yeah.

Operator

Thank you. The next question is from the line of Karan Mehra from Mehta Investments. Please go ahead.

Karan Mehra — Mehta Investments — Analyst

Hello, sir. Thank you for the opportunity and congratulations for great set of numbers. Sir, just two questions. Could you shed some light on the kind of demand and order book that we are currently seeing for the heat shields?

Navin Juneja — Group Chief Financial Officer

Anuj, you were saying…

Anuj Talwar — Joint Managing Director

Yeah. I think I’ll answer the first part, then you can — so heat shield basically is a new product line that we have offered in Talbros and it is through our gasket division. And as you know, our gasket was predominantly for CVs, two-wheelers, three-wheelers and Agri and off-loaders, they’re first direct engine to PV. So we’re covering pretty much the biggest OEM in our country, carmakers, this product goes to them. So very, very buoyant and a very bullish demand is going to come our way in the next three to five years.

We also give this product to a European car maker already for last few years in Europe. We’ve started winning orders from big OEMs in Sweden, in France, and capturing a lot of your — all your car models in the country today, almost 70% of them will have this kind of product called a heat shield with all your new engine. So very, very bullish on it. Numbers have been bullish for sure.

Navin Juneja — Group Chief Financial Officer

Yeah, you are right absolutely. We are in the — we are already saw order about INR40 crores to INR45 crores in — with us, and with the next couple of months — I think by the end of next — first quarter of next financial year, the order book should be around INR60 crores to INR70 crores. And I think within — by the end of next financial year, we will be able to score a INR100 crore order in that. Plus the existing businesses which we have got orders, the volume will grow — more will grow.

I think by the next three to four years, this business should give minimum INR150 crore to INR200 crore of revenue to our top line. We are — I think we are entering into all the major OEMS be it Suzuki, Hyundai, Kia, I think — Tata Motors, so we’ll be covering 70% of the market to this segment of the passenger vehicle. Plus export is already there. We’re supplying to Europe. We are supplying to Europe and to the U.K. also, and plus, we are getting good traction from the U.S.A. also in this field. Let’s see how it goes further.

Karan Mehra — Mehta Investments — Analyst

Sure, sir. That was helpful. Sir, my second question, any guidance on growth for the full year of FY ’23 and for next year in case you can help me with that and also what range…

Navin Juneja — Group Chief Financial Officer

You can expect our growth around 13% to 15% minimum on the top line of the company. Subsequently, bottom line will also grow. Let’s say, by 15%, 20%, it should grow.

Karan Mehra — Mehta Investments — Analyst

And sir, what would be the sustainable margin that you can expect?

Navin Juneja — Group Chief Financial Officer

You can expect between 14% to 14.25%. You can take that.

Karan Mehra — Mehta Investments — Analyst

Okay. Okay, sir. That was helpful, sir. Congratulations and all the very best.

Navin Juneja — Group Chief Financial Officer

Thank you.

Operator

The next question is from the line of Sameer Chadha from Chadha Securities.

Sameer Chadha — Chadha Securities — Analyst

Hi, sir. Thank you for the opportunity. My first question is that what will be capacity utilization across all the segments that you have? Are there any capacity expansion plans for the next year?

Navin Juneja — Group Chief Financial Officer

Yeah. If you talk about the capacity, we are around 85% to 88% in the gasket business. We are — I will talk business wise, we are adding more presses on our business. My capex is around INR18 crores, which take care — in the heat shield, which take care of eat shield plus other businesses of wire harness, etc., and with — for which we are getting orders, which will be around INR18 crores starting from today till March ’24.

And in the forgings business, they’ll be around 85% in the forging side and 90% machining side. And keeping new orders, we are expanding our capacity in the

Machining side in a big way. And plus forgings, we are adding more presses and hammer also in the next financial year to take care of our — the total capex, we are expecting to around INR20 crores in this business.

And coming to Magneti Marelli and — which is around 80% at present, keeping with the demand of export demand plus local OEM demand, we are adding a capex of around INR30 crores in this business, which will take care of — I think, good amount of — till ’24, ’25 unless we get new orders in that, then we’ll look for the fresh capex.

In Marugo, we are getting — I just told you we have got some good businesses for the E20 fuel — biofuel engine hoses plus anti-vibration side we are getting good traction. We’re getting new orders for that. So we are looking at a capex of about INR8 crores to INR10 crores in this business. Our present capacity is around 80%.

Sameer Chadha — Chadha Securities — Analyst

All right, sir. Thank you for that.

Navin Juneja — Group Chief Financial Officer

It’ll be more than that because the anti-vibration is 19% and on the hose side is around 60%. Okay.

Sameer Chadha — Chadha Securities — Analyst

Okay, sir. I have another question. So was the growth in EBITDA and PAT on account of better efficiency this quarter?

Navin Juneja — Group Chief Financial Officer

Yeah. It’s mostly the new products with a good margin. Some export products have good margins as compared to local OEMs, one of the reason plus efficiencies also with that all because when the top line goes up, doesn’t go in the same ratio as us. Recovery of price increases for earlier quarters we have also in the process of oozing more price increases. All these things added to the better margin.

Sameer Chadha — Chadha Securities — Analyst

All right, sir. Thank you.

Operator

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

Anuj Talwar — Joint Managing Director

Yeah. Thank you, all, for being a part in the call. I hope we’ve been able to answer your questions. In case of any other questions you may have, you can contact SGA, our IR firm and we continue to remain bullish and buoyant of the Indian automotive industry. Thank you so much.

Navin Juneja — Group Chief Financial Officer

Thank you, everybody.

Operator

[Operator Closing Remarks]