Tube Investments of India Ltd (NSE: TIINDIA) Q3 2025 Earnings Call dated Feb. 04, 2025
Corporate Participants:
Vellayan Subbiah — Executive Vice Chairman
S Gopalakrishnan — CFO
Analysts:
Anupam Gupta — Analyst
Nirmam Mehta — Analyst
Abhishek Ghosh — Analyst
Jeetu Panjabi — Analyst
Jinesh Gandhi — Analyst
Rushabh Shah — Analyst
Salil Desai — Analyst
Nishit Jalan — Analyst
Prolin Nandu — Analyst
Samyak Jain — Analyst
Vipulkumar Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Tube Investments Q3 FY ’25 Earnings Conference Call hosted by IIFL Capital. 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 a touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Anupam Gupta from IIFL Capital. Thank you, and over to you, sir.
Anupam Gupta — Analyst
Thank you. Yeah. Thanks,, and welcome everyone to the 3Q FY ’25 results conference call for Q Investments. From the management, we have Mr Valyan Subhaya, Executive Vice-Chairman; Mr Mukesh Ahuja, Managing Director; Mr, Chief Financial Officer; Mr Jalaj Gupta, CEO, TIC MPL; Mr Gupala Krishn, CFO, TIC and PL. MR. Shivdi Singh Jammu, Division Head for TPI; Mr Siva Kumar, Division Head for Metal Form Product Business; and Mr Yu Gopal, Division Head for TICI. To start-off with, I’ll hand it over to Mr. And post that we can move over to the Q&A. Over to you, sir.
Vellayan Subbiah — Executive Vice Chairman
Thanks,, and good morning, everybody. I’ll just go through results for the quarter. It’s been a fairly flat quarter. Revenue in Q3 was at INR1,910 crores compared to INR1,898 crores for the same-period last year. The profit before-tax was at INR212 crores as against INR10 crores in the same-period last year. ROIC for the quarter was 43% compared with 54% in the previous same year period and free-cash flow for the quarter was INR70 crores. In terms of each of our businesses, the engineering business had revenue of INR1,212 crores compared to INR1,229 crores in the corresponding quarter. The PVIT was at INR156 crores as against INR153 crores in the corresponding quarter. The Metal Form business had revenue of INR400 crores compared with INR392 in the corresponding quarter last year and PBIT was at INR40 as against INR47 in the corresponding quarter. Our bicycle business had revenue for the quarter of INR142 compared with INR147 in the corresponding quarter and the loss was a negative INR1 crore as against INR8 crores in the corresponding quarter. And others had revenue of INR252 compared to 219 and PBIT was at 11 compared to 14 in the corresponding quarter. At a consolidated level, revenue for the quarter was at 4,812 as against 4,197 in the corresponding quarter and the profit was at 4.27 as against $3.95 in the corresponding quarter of previous year. CG Power, a subsidy in which the company holds a 58% stake had a consolidated revenue of INR2,516 crores as against INR1,979 and the profit before exceptional items and tax was at INR335 as against INR264 crores in the corresponding quarter. Shanti Gears, in which the company holds a 70% fig had revenue of INR158 crores as against INR126 crores in corresponding quarter and profit before-tax was at INR35 crores as against INR24 crores in the corresponding quarter of the previous year. So Anupur, let me stop with those comments like we said, you know, I would be happy to turn it over to everybody for Q&A.
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 RN1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press RN2. Participants are requested to use answers while asking a question. Ladies and gentlemen we’ll wait for a moment while the question queue assembles the first question comes from the line of Nirmam with Unique PMS. Please go-ahead.
Nirmam Mehta
Yeah. Hi, sir. Thank you for the opportunity. So sir, my question is, we have seen that the market-leader in EVs has shifted the entire scooter portfolio in chain. So are we present in this market? And so do any of our OEM customers also plan to shift from a plan to shift the EV scooters to the chain drive.
Vellayan Subbiah
So as of now, let’s say development-stage which maybe let’s say even IC scooter earlier as well as EV scooter is not using the chain board but however there is one OEM which is working for converting the bulk into the chain, but that is an initial stage of development?
Nirmam Mehta
Okay. And so does this also bring back a focus to the — this chains market given that chain might not get obsolete with EV
Vellayan Subbiah
Yes, it will not get because motorcycle growth continues. At the same time, maybe last the replacement cycle maybe even if you can serve about two to three years for chain replacement. There is a huge population of vehicles available in the aftermarket area. So we don’t think at all this chain market is going to get obsolete.
Nirmam Mehta
Okay, sir. Thank you. That’s it from my side.
Operator
Thank you. The next question comes from the line of Anupam Gupta from IIFL Capital. Please go-ahead.
Anupam Gupta
Yeah. Thanks for the opportunity. Sir, the first question is on the clean mobility business. If you look at both the three-wheeler as well as the truck side, the data suggests that the volumes were up Q-on-Q for 3rd-quarter versus second-quarter. But the revenues have seen a decline Q-on-Q, INR146 crore going to INR127 crore. So what explains that difference in the revenue side of it?
Vellayan Subbiah
Yeah. So our volumes for — I’ll talk about the three-wheeler business. Our volume for Q3 were the same as our volume for Q2, whereas that TIV, there was an increase of about 19%. And this increase was primarily on account of festive season like Diwali, etc., where the impact is more in the North and the West States, whereas our stronghold in terms of the market presence is more in the South states. So we held on to our market-share in the South states and that explains as to why our growth was not in-line with the growth of the TIV, which was led primarily by the North and the West states. This is on the three-wheeler business, but our volumes were the same for Q2 versus Q3. As far as the truck business is concerned, against 42 trucks which were commissioned or delivered in-quarter two, we were able to do 36 numbers in Q3. So combination of these two explains the drop-in the top-line for Q3 vis-a-vis Q2.
Anupam Gupta
Understood. Understood. Okay. And what — would this be the main reason why the losses would have also gone up or losses also has a component for the new launches which are coming up?
S Gopalakrishnan
Yeah, this is Gopal. So you know basically in pre-wheeler business, the PME, the incentive benefit got reduced. Earlier in Q2, it was INR50,000 per vehicle as the quantum of the eligible vehicle got — limit got exhausted, you know, industry, let’s say, I’m saying. So there was a reduction in incentive benefit by INR25,000 per vehicle. So it was having some impact. The second one is, you know, we have commissioned China Tech Center in Shenchen. So you know basically there is a technical service fee, which is you know, absorbed as part of the product development expenses. And in case of tractors and smaller commercial vehicles, basically we are in the process of, you know, now commercializing the operations and we are getting to start-up production kind of mode. And since the is being ramped-up in both the businesses, there was an increase in fixed-cost to that extent. And our product development spend also has gone up between 2% to between.
Anupam Gupta
Okay, okay. Understand and just continuing on the small commercial vehicle and I think that you also launched a cargo variant in the Bharat Mobility show. How soon should we see this in — at the dealership level for these two new products?
Vellayan Subbiah
So the plan is that in-quarter four, both small commercial vehicle as well as the cargo — the super cargo, we will be seeding in the market in-quarter four. The full-fledged commercial sale we will begin from April of 2025.
Anupam Gupta
Okay. Okay, okay. Understood. I’m fine, this is — this is helpful. Sir, the second question is on the metal phone product business. What we see there is that the margin trajectory has been pretty weak for this business compared to what we were doing, let’s say, three, four quarters back. So what is driving the correction in margins for the metal phone product business, especially since railways anyways was missing for the last many quarters also. So what’s the trend there?
Vellayan Subbiah
So Antham, like you mentioned, one reason is railway has been because of the pricing coming down. Second reason is the TV growth was little down in the quarter three because of the model change and the year change, which is the business maybe has not done. So we have done good in-line with the market, but maybe that segment was not doing good in the quarter three and that resulted into a little bit drop-in the margin and which will come back.
Anupam Gupta
So — but what should be the, let’s say, normal sustainable margin for metal form business assuming things are on-track, then what should be your margins which one should assume there?
Vellayan Subbiah
At the PBT level, we’ll continue to do around 10% to 11% band and that will be the margin guidance.
Anupam Gupta
Okay. Okay. Fine. I’ll come back-in the queue, sir. Thank you.
Operator
Thank you. Before we take the next question, a reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Abhishek Ghosh from DSP. Please go-ahead.
Abhishek Ghosh
Yeah, hi, sir. Thanks for the opportunity. Sir, just in terms of the Engineering division, you know the top-line has been fairly muted. So is it because of the correction in the metal prices or has the volume also been muted? And also if you can help us understand on the exports piece given the overall challenges that one is seeing in the overseas economy, is that also impacting our exports volumes and revenues?
Vellayan Subbiah
So as on Q3, what is the impact on the exports volume and which will continue to do whatever engineering dividend was doing close to around 19% to 20% of the exports. So that momentum continues. But going-forward, maybe let’s say, we’ve seen the uncertainty and all those things, maybe environment is volatile and we’ll see. But as of now as far as engineering division is concern, we enjoy good relationship with all the OEMs. So we expect that to continue.
Abhishek Ghosh
Okay. So then what’s the reason for this muted performance? Is it more led to lower domestic volumes or is it a function of metal prices? How should we look at the overall —
Anupam Gupta
It is a function of the metal price.
Abhishek Ghosh
Okay. So in volume terms, you would have still seen healthy growth. Is that a right assumption, sir?
Vellayan Subbiah
Yes, we have grown in the volume terms around 7% to 8%.
Abhishek Ghosh
Okay. Okay. Thanks. Sir, just in terms of the EV part of the business, from a three-year roadmap, while you may have some market shares in mind, but in terms of your own assessment, you think is it a combination of both margin improvement and market-share? Or is there a more focus on getting the market shares for the first two, three years and then indigenize and then get to profitable route, if you can just help us articulate from a three to five-year perspective? Thanks.
S Gopalakrishnan
So initially, since all the all the four businesses are in their initial stage of product life-cycle, of course, the focus would be more on improving the market-share and the numbers with a definite eye on the margins as well. But between the two, the focus would be more on improving our presence in the market and penetration because it’s a market which is evolving and there is continuous aggressive work which is going on to improve our realization in the market and also to look at reducing our BOM cost as well. So which is a time-taking process, but initial focus would be to improve our numbers and market-share.
Vellayan Subbiah
Yeah. And just to add, I would say that ideally with the two products that are already in the market, we’d like to at least get to operating breakeven this — in the next financial year. And obviously kind of the other two products will still required as well.
Abhishek Ghosh
Okay. Okay. That’s helpful. That’s helpful. Thanks. Sir, we have also seen a fair amount of increase in the depreciation in the current year. So if you can help us with the capex that’s incurred in nine months and for maybe for FY ’25, how should we look at the capex?
Vellayan Subbiah
So you are talking about CA standalone.
Abhishek Ghosh
I’m talking about the standalone business.
Vellayan Subbiah
Yeah. Standalone, as of December, we have done INR295 crore of capex.
S Gopalakrishnan
The last question is in the increased depreciation
Vellayan Subbiah
And depreciation is because of the higher capex only. We have also invested in Nashik consultant and Nasik has started depreciation right now in this quarter and that’s a major reason for the increase in the depreciation.
Abhishek Ghosh
And Nasik and which product?
Vellayan Subbiah
It’s CRSS product.
S Gopalakrishnan
So obviously kind of a lot of the capex has been in the engineering business and they kind of you know as I mean, and there as demand picks up, we will basically and those businesses start to scale. We will see growth in that business.
Abhishek Ghosh
Got that.
S Gopalakrishnan
Revenue growth and margin growth.
Abhishek Ghosh
Okay. So you have that visibility and that’s why you’re investing now because you are seeing that whenever things pick-up, you want to be ready for that. That’s the way to look at this business.
S Gopalakrishnan
Yes. And the other — and obviously, kind of one of the things we started to do in each of the businesses is regionalize more. So when talks about steel strips, we basically now are the same business that we have. I mean the same manufacturing capability we have in the South. We’ve now moved that to the West and similarly, so basically in tubes now, we have presence in the North, West and South. And so basically, we want to kind of have regional presence to reduce logistics costs and therefore improve margins on each of the products. And also our ability to serve customers quicker, basically because we’re aware of the proximity to that.
Abhishek Ghosh
Got that. Okay, sir. Thank you so much and wish you all the best.
S Gopalakrishnan
Yeah. Thank you.
Vellayan Subbiah
Thank you.
Operator
Thank you. The next question comes from the line of Jitu Punjabi from EM Capital Advisors. Please go-ahead.
Jeetu Panjabi
Hi, thanks for this., I have a question for you, which is a bigger-picture question. You’ve seen a slowdown across the entire segments, all segments of the economy and the business. You’re seeing a lot of pressure across even globally, you’re seeing cyclically things are weaker. How do you read it in terms of what are the things that you would be doing to neutralize it to differently and kind of think through how do you navigate the next 12 months in your mind and what could you do differently?
Vellayan Subbiah
Yeah. So I think, again, we’ve got to — our preference in some of this is to take a slightly longer-term view, right? And I do believe that longer-term, things are still intact. I mean, obviously kind of there are macro uncertainties with what’s happening globally, especially with kind of the changes in the US. But I think as far as we are concerned, you know, we — the thesis remains kind of intact, which is like the core businesses, we need to look at certain — a certain amount of diversification from them because otherwise, we do see challenges in-kind of maintaining the levels of growth that we’re used to. So — but I do think that you know, the broad thesis is continue to invest, diversify a bit, right? And things will continue to kind of support the growth. I especially think in India, things will continue to support the growth. I know there have been some negative reports of late, but I feel that India has enough strength to go into to areas of growth, especially using India as a domestic consumption base and then using that as a way of getting to global markets. So I don’t — I don’t think that thesis is fundamentally — I still think that thesis is intact,.
Jeetu Panjabi
Okay. And is there anything like in this environment, would you do anything differently? Like I mean, is the communication to the operating teams any different or are you looking at newer opportunities where you think there’s going to be more tailwind that is going to be more exciting going-forward because of whatever changes the environment is seeing?
Vellayan Subbiah
Yeah, I’ll tell you, I mean it is separate out kind of the — if you take kind of the TI score businesses, I mean, I mean, I almost put things in three buckets, right, kind of TI score businesses kind of where we started looking at opportunities for growth and what we should be doing from like a prudence perspective, right? TI’s core businesses, obviously, you know what the numbers are reflecting is kind of a level of flatness where we would have expected kind of more growth in the 3rd-quarter, that growth did not come. That growth — so basically the question is when will that growth come back? I don’t think we have the answer to that. But I would just say that when the growth comes back, we’re ready for it. Now so from that perspective, you know kind of — I always think the timings for expansions can never be perfect. But the important thing is that we kind of have expansions in the ground now on the engineering business, which will be able to kind of make use of that growth when it comes back. The second is obviously a level of softness on the export markets, but I just think that just means that we have to intensify our efforts on those markets. Because I definitely think that the export markets have to be a growth sector and will continue to be a growth sector for India. Third, in terms of new opportunities and how we look at them, I think my broader concern is that a lot of the new opportunities, especially we look at inorganic tend to be kind of very, very deeply priced right now, right? So I don’t think it’s a time to kind of get into too much of that at this stage, right, because of kind of the pricing of kind of where most opportunities or assets are today. So I don’t know that covers broadly.
Jeetu Panjabi
No, that does. In fact, the point I was also trying to check is, are there acquisition opportunities in this weaker environment that might be there? And I hear you say that they’re not priced rightly yet.
Vellayan Subbiah
That’s correct.
Jeetu Panjabi
Okay. Thanks so much, William. Good wishes to you and the team.
Vellayan Subbiah
Thank you.
Operator
Thank you. A reminder to all the participants, you may press and one to ask a question. The next question comes from the line of Jinesh Gandhi from Ambit Capital. Please go-ahead.
Jinesh Gandhi
Yeah, hi, sir. Continuing on the export side, so given that there is — there are talks of increased status in the US, can you first talk about what is our exposure of exports to US? And secondly, how do we see this opportunity from the US market perspective given currently, India at least is not part of those tariffs being put on. So how do you see that opportunity?
Vellayan Subbiah
So we particularly as a company, we do about 35% to 40% exports to the US market and — but the relationships are a little longer than half of those relationships are with the OEMs, which require the long product cycle for the approvals and all those things. We don’t see a challenge there. But coming to the balances distributor side, maybe it depends on how the tariff also be going-forward, which none has answered and we are watching for
Jinesh Gandhi
Okay. But currently our exports are largely driven by engineering business. Do you see opportunities in other segments as well like metal foam and industrial chains as well business.
Vellayan Subbiah
Yes, we see opportunity in the other parts of the segments. One is the bicycle business, we see the opportunity for bicycle as well as in the metal form part, we see opportunities. We are doing some product development in the change business or add key bikes, there is opportunity on it.
Jinesh Gandhi
Got it, got it. So would it be fair to say that the 20% export target, which we were talking about has some upside risk as exports get more broad-based across businesses and
S Gopalakrishnan
So like Mr Valen was mentioning, we are ready maybe in terms of the capacity for the domestics as well as this exports market and work is on the product development side and as like said that area of growth opportunity still in the exports and vehicle.
Jinesh Gandhi
Got it. And second question pertains to the ELCV, which we showed at the Expo, we were also taking bulk orders there and so any feedback from your dealer partners and the order booking which would have taken on the ELCV?
Vellayan Subbiah
There were memorandum of understanding which were signed with the logistics provider and those were for the deliveries in the next fiscal. As I said, as answer to the previous question, in-quarter four, we are planning to seed in vehicles with some of these customers and other customers as well. So it is right now premature for any feedback on the product is concerned. But as far as the overall appearance, aesthetics and the looks of the product is concerned, from Auto Expo, we have got a very, very positive response from all the stakeholders from customers, financials, dealers and even the competition as well.
Jinesh Gandhi
Okay. But any quantum of MOU signed in terms of number of deliveries, which are planned for FY ’26 based on the MOUs it is not zero.
Vellayan Subbiah
Yeah, yeah, it will be premature to comment on that. But we have a decent number of MOELs which has been signed.
Jinesh Gandhi
Got it. Got it. Okay. That’s all from my side. Thank you.
Operator
Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question comes from the line of from RBSA Investment Managers. Please go-ahead.
Rushabh Shah
Yeah. The first thing I just want to understand, we are expecting some certifications in the medical devices for the export market. What is the status and what is the expected growth trajectory here? I think it’s slightly below what expecting earlier.
Vellayan Subbiah
Sorry, because of the name change of the company, which has taken a quarter or two extra, we expect that entire to get over by Q4 and after that, we expect a good growth because customer relationship by the substribution is happening, it is already getting built-up value. So we expect that to give us good growth financials going-forward?
Rushabh Shah
And my second query was Mr. I just want to understand from your end, what is the reason for the acquisition of this Uber Group through this private investment term rather than any of the listed entities? And my related query was what is the framework to decide whatever businesses or sectors would be done to the private term versus the listed entities, just a broad thought process there.
Vellayan Subbiah
Yeah. So I think the broader way to look at it is one of business platforms, right, which is if a platform is in a totally new segment, then it will not make sense to kind of doll it in one of the public entities that are basically — I mean, so for example, I would see you know, TI is kind of predominantly — TI was predominantly kind of auto and then we have some industrials in it. But when we look at an area like inks and chemicals, which is totally process-driven and kind of chemistry driven. It obviously, it doesn’t fit-in any of the existing platforms today, neither listed show that. So if it’s a new business platform, we will do it outside of the listed company. But if it’s something that in the existing platforms, then we will do it within the platform.
Rushabh Shah
So would the promoter family of sufficient bandwidth given your full involvement in the digital entities, that is — is that not a concern? Given you might acquire more entities in the private arm as well? So how do you see this?
Vellayan Subbiah
No, absolutely. I mean, I think the bandwidth question has always been asked. I think in all honesty, the bandwidth question was asked, even when we kind of were growing one company at a particular pace then it became two, then it became three, you know, but I think that even if we don’t grow from a leadership perspective, I mean it’s basically the opportunity the country offers today, right, that there is that level of growth. And if you believe that we are growing as leaders, then we have to be able to handle additional bandwidth, right? That’s part of the process of growth.
Rushabh Shah
Yeah. Okay, thank you.
Vellayan Subbiah
And obviously, what we’ve done at that point, I mean if you look at how we started at one point, I was running Chola, I was running TI. Now each of the businesses have their own CEOs and we have a whole structure to basically kind of support the level of growth that we aspire to.
Rushabh Shah
That’s very much helpful.
Vellayan Subbiah
Thank you.
Operator
Thank you. A reminder to all participants, you may press R and one to ask a question. The next question comes from the line of Salil Desai from Marcellus Investment Managers. Please go-ahead.
Salil Desai
Thank you. Hi, gentlemen. My first question is on the three-wheeler volumes, which were impacted by the subsidiary gene going — undergoing some changes in the quarter. Now given where we are in terms of
Operator
To interrupt you, sir. Sir, may I request that you use your handset, sir. Your audio is slightly muffled, sir.
Salil Desai
All right. I hope that’s better now. Yeah. So my question is on the subsidy regime change which kind of impacted three-wheeler volumes. So given where we are today in terms of visibility on availability of some of these subsidies, where do you see volumes, say, the next 12 months or so? And related to that is where would you see profitability if there are production costs going up because of fewer subsidies? So any visibility on these two aspects?
Vellayan Subbiah
The subsidy part, which Gopal mentioned was to the answer on the profitability. But as far as the — as far as the three-wheeler volumes are concerned, the electrification of the three-wheeler market is improving with every quarter is the data that we have. April to December, about 25% of the total three-wheeler passenger market is what it is electrified or what gets sold as electric. So we see a very positive upside in terms of the electric three-wheeler, both passenger as well as the cargo is concerned. And as regards our plants, we have also aggressive plans both in the passenger segment as well as well as also in the cargo segment, which we will see it in-quarter four and scale-up our volumes in starting April.
Salil Desai
Right. And how about — how does the profitability get impacted given whatever changes you would see the subsidiary goes through.
Vellayan Subbiah
Yes. So that would be a challenge industry-wide and not only for us.
S Gopalakrishnan
Broadly what we look at again, right, is what I think what we are targeting in the next financial year is to see if we can get to operational breakeven in that business.
Salil Desai
And this target irrespective of whatever the external — means in the subsidy would be.
S Gopalakrishnan
So we’re already kind of beginning to understand and factor-in what we think we will get off the subsidy because that’s very clear for three-wheelers.
Salil Desai
Right.
S Gopalakrishnan
And then basically make our plans around that, both in terms of volume planning and what we need to do on the cost side to deliver on it?
Salil Desai
Got it. Secondly, on this China tech center, if you could throw some more light on what the plans are and if maybe an example with where this could benefit you in terms of whether it is pricing,
S Gopalakrishnan
Product early investment at this stage. So it’s too early to kind of even figure out. So it’s an early investment at this stage. So I think let it let it develop and then we’ll have with more commentary on that.
Salil Desai
Sure. And lastly, you know, in terms of the funding available at TIC MPL, I’m sure in the numbers, fundraise were pretty large amount, but now we have — I think from a losses point-of-view, almost INR600 crore INR650 crores till-date. And if the current quarter is a run-rate that you could expect in the next couple of quarters, then if you could just give us a sense of where or how much funding is remaining, any plans to maybe look at some more derisking?
Vellayan Subbiah
So we feel fairly comfortable that we have in our runway for at least two more years for at least two more years with the monthly.
Salil Desai
All right. Okay. Thank you. Thank you very much.
Operator
Thank you. The next question comes from the line of Nishit Jalan with Axis Capital. Please go-ahead.
Nishit Jalan
Yeah. Hi, thank you. Thank you for the opportunity., my question is a top-down on the whole electric vehicle space that you are looking to enter. I think we started into this business in the last two years and have made reasonable progress in some segments. So just wanted to hear your thoughts in the last — you would have made certain plans when you started this business. Do you think you are on-track or there have been some disappointments on an overall basis? And still wondering to understand what is the right to win or in this business, right, because have now even in the two-wheelers we have seen that happening now. In three-wheelers also, I think Mahindra Bajaj and all have been fairly well. So just wanted to understand what is the right to win for Cube or why will true Cube succeed — what will make Cube succeed in these in these segments? Yeah. So some thoughts around this one. Thank you.
Vellayan Subbiah
Yeah. So first on overall direction, right, kind of when we started, what we said is we’d like to deliver a $1 billion in revenue by 2029. And I still believe that and profitable, right? So basically what we said is kind of a profitable $1 billion in revenue by 2029. I do believe that thesis is very much intact and I do believe that we’ll be able to deliver that. Second, in terms of your question on kind of you know, how will we be able to compete? Honestly, I think that the market is just beginning to play-out. We’re still in very early days in terms of how the market will play-out. You talked about three-wheelers and so broadly the way I look at it is, if you take the heavy truck, for example, at this stage, there is no other player that basically has that product in the market today. And I believe that we’ll have at least another year of kind of being the only player. So we will have the chance to basically develop and develop a good starting position. But I actually think even what’s happening in three-wheeler is encouraging because of the percentage of the market that’s moving and that starts happening when two or three players get into the segment, right? So basically, you know, there I would say that we are too and we are aspiring to particular kind of market-share that we will get to in that product. And I do think that — because obviously kind of the incumbents have an advantage in terms of the presence and geographic presence in terms of dealerships and distribution. But I do feel that we will be able to overcome that and get to kind of our stated internal market-share target. Though it will still take, I mean, so we’ll get to a certain percentage of that target in the next financial year and then perhaps get to target kind of in the financial year-after that, right? So that’s ’26, ’27. ’27. But we’ve always taken a long-term perspective this. And I do feel that the thesis is totally in that from that perspective as well.
Nishit Jalan
Okay. Okay. Thank you. Just one follow-up here. I think a few quarters back-in the con-call, you did highlight that right now you are doing more of an SMB and over a period of time, the idea is to build R&D capabilities in the battery pack and some of the other components. So just wanted to understand where are we in that journey, how have we increased our R&D team? Any particular components where you think we have started to build in-house capability, especially on the BMS battery pack, any of these components where you are very close to are getting them — getting them in-house?
Vellayan Subbiah
Yeah. So just to give you a sense now, we have over 250 people in R&D and to start — just talk about components and what we’re beginning to do at a component level. So for pretty much for the truck and I would say for the truck, all battery packing is basically going to be done in-house. And for the small commercial vehicle as well, we’re going to do batteries in-house for ourselves, battery packing in-house for ourselves. So that process has started. But I think the more relevant thing is what happens at the component level. And we’ve now taken a two-year path to basically where we believe that a lot of the control units, right, whether the MCUs, the VCUs, the telematics. A lot of that are will be developed — we will have our own capability. So the development process for that has started. And I do believe that that’s going to be a significant advantage because once you get your own capability there, both on the hardware and software front, you know both from a cost perspective because those components are significant in terms of the and from a market advantage perspective, having your own capability, there will be a huge differentiator.
Nishit Jalan
Thank you so much and all the best.
Vellayan Subbiah
Thank you.
Operator
Thank you. The next question comes from the line of Proline with Adelwise Public Alternatives. Please go-ahead.
Prolin Nandu
Yeah. Hi,. Thank you for giving me this opportunity. Few questions from my side. The first is, while you mentioned that on, let’s say, TIC and some of the inorganic growth opportunities, valuations are quite expensive. But when we look at the TI2 part of our business, do you think in, let’s say, next couple of years, you want to focus on scaling up the business where you have already seeded some investment into or we will hear something in some of the new segments as well. And within that investments which you have already seeded, which is the business which you are most optimistic on in terms of the size and profitability part?
Vellayan Subbiah
Yeah. So I mean, so first-off, I think what you stated was correct was a lot of the focus is going to be on growing the existing businesses that are part of — a part of. And but I think in terms of your question on which one are we most optimistic about, I’d like to say that we’re fairly optimistic about all the businesses. Obviously, there are different growth rates, right, and kind of, I would say you have TI Clean Mobility that is further along on that growth journey. And that’s why I said that it becomes quite important for us to look at achieving that operational breakeven on a couple of businesses there. Because then that gives us further impetus to push it into the next level of growth. But obviously, we are fairly optimistic for all the businesses going-in.
Prolin Nandu
Sure, thank you. And on the — again, on the investment side, right, as to how you decide between your public companies and your private arm. And in the past also you have answered this question that you know, let’s say, if we talk about investments or how you will see new businesses in your listed companies, it would be more on a capabilities of those companies and then also on a case-to-case basis. Anything changes, Valanji, on that part or it still remains the same? And is it the case that right now maybe in the segments where you want to probably enter into whether it comes to inorganic part, things are expensive and in, let’s say CG power you know maybe there the visibility of near-term in terms of investments are slightly more than tube. Is that a fair way to look at things or that’s not — that’s not a right assessment.
Vellayan Subbiah
I think you already came back to — you answered it a bit in terms of saying that like right now the focus is more on the TI two-part, right, kind of from TI’s perspective. And we’ve got enough — so I mean, obviously kind of you know, this is one of the challenges where depending on what we did, investors would also ask us the counter question, right? If we got into like seven new verticals within TI, then the question would be why are we getting into seven new verticals, right? So definitely kind of the focus now needs to be to deliver on the current businesses we’ve got, right? What I’ve always said is kind of at best, we can add one more vertical that TI. But otherwise, kind of TI has its hands full with the current businesses and our focus needs to be on how we grow these businesses. Similarly, you can see from CG, we made two big investments there are the semiconductor both on the — on the on the packaging side as well as the design side kind of — and so basically the — once you’ve got in, then I think the focus needs to be on kind of growth within those segments versus adding new verticals, right? Right? And so that is — then — then that comes back to the thesis on why we would not distract some of those companies with new areas versus keeping it in private edities.
Prolin Nandu
Sure. That’s it from my side,. Thanks a lot and all the very best.
Vellayan Subbiah
Thank you.
Operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Anupam Gupta from IIFL Capital. Please go-ahead.
Anupam Gupta
Yeah. Thanks for the opportunity again, sir. Just a couple of questions. Firstly, on the EV business. In one of the calls, I think a few quarters back, you had also mentioned that exports can be an opportunity for EV business as well, given the sort of costing we are able to achieve for trucks here. So how do you look at that exports for all the four categories which you are looking at, let’s say, in the next two, three years? Do you plan to go outside India for these products as well or how would we look at that?
Vellayan Subbiah
Yeah. So I would say that the first thing, Anupam, is you know, so we are going to — we are exploring, but I would actually say that so definitely with a two, three-year horizon, yes, I do believe that we will look at it. But like I said, like first is to establish a good solid position here, but you’re definitely right in a two, three-year horizon, we will look at that as well.
Anupam Gupta
Understood. And the second question, if you can just quickly update on the two things, so it is a small investment. So it’s a motion if there is any change we have been able to achieve so-far, given the tough market? And also secondly on the optical and if there is any update on that?
Vellayan Subbiah
So more time we have not been able to. I mean, we’ve not been able to kind of — and honestly, kind of the whole electronics segment continues to be a segment that I would honestly say that we’ve not been able to have that much success at. And so the Motion business definitely — I mean it is a small investment but we’ve not been able to basically get it to any scale predominantly because we still see a lot of that supply-chain is controlled and managed by China in China. And so I think that’s definitely been a huge learning for us. On the lenses side, I think it is — it continues to be an area we explore, but it’s definitely going much, much, much slower than we thought we could basically kind of scale. And that’s predominantly again I would say around learning curve on some of the new businesses and our ability to get some of these new businesses up to productivities and yields that allow us to get to the cost points of the channel.
Anupam Gupta
So, sir, so, we understand that it’s supply-chain tough to break-in, but optical and is it more of a production issue or what is the issue which is plaguing the scheme up here?
Vellayan Subbiah
So there are limited number of customers, right, that are basically willing to just source at a lens level from India, right?
Anupam Gupta
Okay.
Vellayan Subbiah
So basically, we have two choices. One is to kind of double down and go into the lens modules also ourselves right and then be able to kind of get to lens module, a full camera module and then be able to sell that to a customer. So that is one choice. The second choice obviously is to just sell the len to people who will then assemble into a lens module. And that’s where there are limited customers and that’s the path we’ve been taking now versus basically going up the chain to the camera module, just because we don’t have the comfort again like I said to match Chinese pricing so that — and if we don’t have that comfort, we don’t make feel comfortable yet making that capital investment in order going all the way to camera model. So we want to basically see if we can get to efficiency levels with the limited customers we’ve got, right, that then would give us comfort that we could expand this product. But till then we’re not going to be able to expand on this.
Anupam Gupta
Sure, understood. Yeah, that’s all from my side, sir. Thank you.
Vellayan Subbiah
Thank you.
Operator
Thank you. The next question comes from the line of Samyal Jain with Marcellus Investment Managers. Please go-ahead.
Samyak Jain
Hi, sir. Thanks for taking my question. Just two questions on the EV distribution side. Firstly, can you please update us on the dealer related dealer count, dealership counts? And what is our target to take it for FY ’25 and FY ’26?
Vellayan Subbiah
Okay. So for three-wheeler business, we have 88 operational dealers and we are — we are planning to wrap it up aggressively and maybe look at 100 plus dealer by end of this fiscal. And we have aggressive plans for the next fiscal, which may not be appropriate at this point of time to share. When it comes to our small commercial vehicle business, we have issued about — we have issued about LOIs in about 15 cities and we hope that those dealers will be operational by the end of this financial year. For the tractor business, likewise, we are looking at about 10 dealers by the end of this financial year. So this is about the three businesses where we are going to operate through the channel.
Samyak Jain
Understood. And sir, in terms of your expansion plans of the dealerships. Is it — are you prioritizing any particular geography like the North, East or West or is it we are expanding pan-India level? So how do you think about in terms of expanding the dealerships, prioritizing or throughout India?
Vellayan Subbiah
Yes. Yes. So it is varying from business-to-business. So for example, in factors, we have identified the states where we will be primarily operating in based on various factors. And it is those states that we are focusing in as far as expansion of channel is concerned. Likewise for small commercial vehicle business also, we have identified cities and geographies where we feel that electric small commercial vehicle will have a very natural pull and therefore those are the cities that we will be focusing on. So it will all depend on which are the priority market and states. And accordingly, our network strategy will also get driven by that.
Samyak Jain
Understood, sir. That’s it from my side. Thank you.
Vellayan Subbiah
Thank you.
Operator
Thank you. The next question comes from the line of Vipul Kumar Shah with Sumangal Investment. Please go-ahead.
Vipulkumar Shah
Hi, sir. Thanks for the opportunity. Sir, what will be the capex for electrical vehicles for next year.
Vellayan Subbiah
We are looking at close to INR300 crores kind of a capex across all the — you know four businesses
Vipulkumar Shah
Across all the products.
Vellayan Subbiah
All the yeah, yeah.
Vipulkumar Shah
And sir, would you repeat the sales figures for all the products which you had — at that time my line was disconnected. So would you repeat
S Gopalakrishnan
Completely the sales figure for how you gave sales figure? You indicated a number of products sold for trucks.
Vellayan Subbiah
For trucks, yeah. So the truck, it was 42 and our — for three-wheeler business, it was 1,837.
Vipulkumar Shah
Okay, sir. Thank you very much and all the best.
Vellayan Subbiah
36, my mistake, not 42, truck was 36.
Vipulkumar Shah
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, as there are no further questions from the participants, I’ll now hand the conference over to the management for closing comments.
Vellayan Subbiah
Yeah. No, I think from our perspective, we are nothing specific Anupon from our side, thank you.
Operator
Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us and you may now disconnect your lines.