ZF Commercial Vehicle Control Systems India Limited (NSE: ZFCVINDIA) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Periakaruppa Kaniappan — Managing Director
Sweta Agarwal — Chief Financial Officer
Analysts:
Annamalai Jayaraj — Analyst
Mumuksh Mandlesha — Analyst
Lakshminarayanan — Analyst
Shravan Iyyappan — Analyst
Shubham Bhatra — Analyst
Rakeshkumar Jain — Analyst
Preet Pitani — Analyst
Arihant Baid — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q4 and FY ’25 Earnings Conference Call of ZF Commercial Vehicles Control Systems India Limited hosted by Batlivala and Kirani Securities India Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Anamelay Jairaj from B&K Securities. Thank you and thank you, and over to you, sir.
Annamalai Jayaraj — Analyst
Thanks, Pujar. Good afternoon. Thank you for joining us today, and I welcome to Commercial Vehicle Control System India Limited’s call to brief you on the Q4 FY 2024-’25 quarterly earnings and the earnings for FY 2024-’25. Today, the 4th-quarter earnings and annual results for FY 2024-’25 will be presented by the management team of Head of Commercial Vehicle Control Systems India Limited.
You are host today from the Head of Commercial Vehicle Federal Systems India Limited are Mr P. Kany, Managing Director; Ms Agarwal, CFO; and Mr I am Muttal Xmi, Company Secretary. I will now hand over the call to Mr P., who will provide further insight into the results. Over to you, sir.
Periakaruppa Kaniappan — Managing Director
Thank you, Mr. Good afternoon to all of you. I welcome warmly all to Commercial Vehicle Control System India Limited’s 4th-quarter results and full-year performance for FY 2024-’25 . Certain forward-looking statements that we will make today are based on the management’s good faith and expectations concerning future developments. As you know, the actual results may differ materially from these expectations because of multiple factors. Are Commercial Vehicle Control Systems India Limited’s results for the quarter-ending March 31, 2025 and the annual performance for FY 2024-’25 were published on May 15, 2025. They are available on the website under the Investor Relations section. We hope that you have had an opportunity to go through them. A transcript and recorded audio of this call will also be made available on the website www.sev.com under the India Investor Relations section. I’m happy to connect with all of you today as we give you an update about our business performance. Industry and economic update. I would like to start with both a few key macroeconomic aspects relevant to our industry. The global economic landscape remains in a state of flex amidst heightened trade and policy uncertainties with attendant implications for economies across the world, forcing complex challenges and trade-offs in policymaking. The channels through which these global shocks could impact economies, particularly emerging market economies include spillover from global growth slowdown, elevated financial markets volatility and dented consumer and investor confidence. The Indian economy remains relatively less exposed and better placed to withstand such spillovers with its growth driven largely by domestic demand. Nevertheless, we are not immune to the and effects associated with global disturbances. There may also be some positive spin-offs to the Indian economy from the likely softening of crude — crude oil and the commodity prices and relative tariff advantage. The National Statistics Organization office and NSO has estimated real GDP growth at 6.5% for FY ’24-’25. Going-forward, sustained demand from rural areas and anticipated revival in urban consumption, expected recovery of fixed capital formation supported by increased government capital expenditure, higher capacity utilization and healthy balance sheets of corporates and banks are expected to support growth. Merchandise exports would be weighed down by the evolving global economic landscape, which appears to be uncertain at the current juncture, while services export are expected to sustain the resilience. On the supply-side, while agricultural — oil agricultural prospects appear bright, industrial activity continues to recover and the services sector is expected to be resilient. Headwinds from global trader disruption continued to pose downward risk. Taking all relevant factors into account, the GDP growth for the financial year 2025-’26 is projected to remain steady at 6.5%, consistent with the growth recorded in the previous financial year. Source, Reserve Bank of India press releases Indian commercial vehicle industry. When the overall automotive sector mirrored the growth pace of the GDP at 6.3%, the commercial vehicle segment a marginal dip of 0.2% as per FADA Fada with a degrowth of 5.4% in-vehicle production, greater than category of vehicles. This was primarily due to disruptions from elections, weather conditions and delayed capex deployment by the government. Despite this, we remain confident about the — about a rebound. We see clear signs of recovery driven by infrastructure investment, fleet renewal needs and supportive government initiatives like the Prime Minister program. The medium and heavy commercial vehicle segment is especially well-positioned to benefit from continued focus on-road construction, metro expansion and carbon mobility. Key structural trends such as e-commerce growth, digital fleet solutions, new logistics model and trailer market formalization are all expanding. Demand and demand are also reshaping the industry. Trade transport undertakings are leaning towards public-private partnership model, while sustainability regulations and vehicle scrappage initiatives are accelerating the shift to cleaner technologies. Looking ahead, with strong economic fundamentals, a forward-looking policy environment and rapid digital transformation, India’s commercial vehicle industry is poised for a strong comeback. We expect growing demand in the MHCV segment fueled by structural reforms and the government continue to push on infrastructure. Now I would like to share some insights on the specific initiatives undertaken by the company during FY ’24, ’25. OE sales, following a period of subdued demand in the first 3/4 of FY, the commercial vehicle sector staged a recovery in Q4, recording a growth of 7.7% compared to the corresponding quarter in the previous year. This momentum was fueled by continued infrastructure development and stable rural demand, which supported growth in medium-duty truck and sustained the performance in the bus segment. However, a slowdown in the industrial activity during the quarter impacted demand in the heavy-duty segment despite the rebound in Q4, the overall commercial vehicle industry posted a year-on-year decline of 5.4% in FY 2024-’25. The company’s OE sales were further impacted, declining by 9.8%, primarily due to an unfavorable model mix going to a shift away from heavy-duty vehicles towards intermediate and light commercial vehicles. Allan said a year-on-year 12% drop-in trailer production. Additionally, the company took a strategic decision to exit low-margin blade of parts to improve our profitability. As we look-ahead to FY ’25 — ’25-’26, we are entering the year with strong momentum underpinned by a recovery in Q4 FY 2024, ’25 and strengthening of fundamentals across key business segments. The outlook for the commercial vehicle industry is optimistic with the multiple indicators pointing towards a sustained rebound. In anticipation of the upswing, we are focusing on strategic initiatives designed to enhance our competitiveness and unlock long-term value. The priority will be to increase penetration of advanced trailer technologies, including trailer ABS, Trailer EBS and EVO pulp. In alignment with the AIS 113 regulations and rising demand for safety and operational efficiencies and fleet. The company is ramping-up new project launches such as the exhaust brake wall, automatic traction control and increased penetration of drive that is empty and ride that is electronic controlled — controlled air suspension. The upcoming ESG regulations for buses effective September 2025 represents a major growth opportunity and we are fully prepared for volume scale-up to meet this demand. Additionally, we are expanding the penetration of our EV portfolio with a targeted focus on three key compressor and EBS systems to independent bus manufacturers. Beyond the anticipated near-term rebound, we see a long-term growth drivers emerging from the evolving regulatory environment and the rapid adoption of electric mobility. The recent draft notification from the Government of India mandating advanced driver assistance us including critical safety features such as advanced emergency braking, lane departure warning system, moving off information systems, blind-spot information system and driversenal attention warning. A transformative shift for the CV industry. We are actively collaborating with all major OEMs to ensure that readiness and timely compliance with this upcoming regulations. In parallel, the accelerating production of electric buses presents a significant opportunity for advanced e-mobility portfolio, including e-compressors, electronic braking systems, electronic stability control and electronically controlled air suspension positions us as a key technology partner and enabler in this space. These developments undercore — underscore our long-term growth trajectory and strategic alignment with the future of commercial mobility. Aftermarket. FY, our aftermarket business delivered a steady year-on-year overall growth of 5.5%. However, in Q4 FY 2024-’25, we experienced a decline of 4.6% , primarily due to supply-chain disruption that affected product availability and fulfillment timelines. Despite this short-term challenge, the underlying momentum of our aftermarket segment remains strong and is supported by several key drivers including launches of range of new products, including 11 variants of door control systems, of idolic ABS systems for major OEM on their export models. We continue to key bus OEMs through our sales and service networks to maximize uptime of public fleets. Additionally, we have begun applying diagnostic software and tools for electronic braking systems and electronically controlled air suspension systems, enhancing our role as a competitive comprehensive solution provider. In recent development, petroleum companies have floated tenders for LPG transportation contracts, mandating the use of trailer electronic braking systems in Karnataka, Gujarat, Assam and and trailer braking systems, trailer ABS in other states. This regulatory shift has opened a significant opportunity for retrofitting existing vehicles through the aftermarket channel and we anticipate strong trailer EBS and trailer EBS adoption via this route in FY ’26, ’24. Digital business updates. I’m happy to share that the company has secured a large order, 800 numbers of Scalar EO bus from leading Indian trailer manufacturers as India’s first advanced trailer telematic solution, EO pulse delivers real-time diagnostics, predictive maintenance and critical event alerts, enhancing uptime, safety and operational efficiency. This orders marks a pivotal step-in smart trailer adoption and reinforces our leadership in digital fleet solutions. We also received a repeat order for video management solution from a leading OEM. Video management solution is an artificial intelligence-driven — AI driven video telematics platform that improves fleet safety, efficiency and compliance through intelligent monitoring, automated and secure cloud storage. This repeat order reflects the strong value that our solution delivers and highlights growing market confidence in our safety technology. Export — export of goods. In FY 2024, ’25, the company achieved a year-on-year growth of 8.4% over FY in goods exports. Despite the drop-in volumes from a leading OE customer for air compressor due to a decline in EV sales, this is for the ECAS, per one of the passenger car global customer. A decline in EV sales, the company undertook strong strategy — strong initiatives to focus on driving growth and aligning priorities, including the start of production of actuator 4.0 and year compressors for other global OEMs, among other measures. The export performance registered a growth of 3.2% in Q4 FY ’24-’25 when compared to the same-period last year. Looking ahead, we anticipate some headwinds in our export outlook, primarily due to emerging tariff impacts from the US market. While this presents a short-term challenge, we remain committed to proactively navigating these challenges. Export of services. Export of services recorded a growth of 15% in Q4 FY 2024-’25 compared to the same quarter last year. In FY 2024-’25, export of services grew by 17.4%, driven by a sustained increase in engineering activities delivered from India to our global centers. This reflects the growing demand for our expertise and India’s strengthening role as a global engineering. ESG, as part of the company’s sustainability initiatives and energy efficiency program was implemented across various stakeholder groups, including operations, maintenance and R&D at multiple company’s type. The initiative led to the successful execution of one or three projects resulting in a 12% reduction in overall energy consumption. To improve energy efficiency, we also collaborated with industrial and energy assessment cell and performed audits at our Ambatur and city plant identifying energy savings potential of more than 20%. To promote the use of renewable energy, we install on-site proof solar panels of 500 kilowatt power to support 25% of the plant’s energy consumption at our plant and 60 kilowatt power to support 40% of the plants energy consumption in our plant. Additionally, in a conscious drive-to phase-out fossil fuels in operations, the electrification of the canteen was completed at saving approximately 66,000 liters of diesel per annum and eliminating 151 tonnes of CO2 equivalent. As an initiative to eliminate landfill, hazardous waste from the city plant is sent to the cement industry for coal processing. Engineering update. The engineering team has played a pivotal role in further advancing the domestic value addition of the compressor to 62%, 62%, an important milestone in our localization strategy, focusing on enhancing cost-efficiency and delivering greater value to our customers. Manufacturing update, the company continued to launch advanced technology products from its newly-launched inaugurated setup multi catering to both Indian and global customers. New manufacturing lines for next-generation new e-mobility products have been commissioned at this plant to produce decompressors ASP cartridges, for Indian OEMs and products such as actuators, brake chambers and automatic flag adjustors for both domestic and export markets. New products including compressors and actual customers as well as actuators, AMTs, air processing units, charging walls and electronic control units for Indian OEMs have been successfully launched. Manufacturing capacities have been scaled-up across all plants for braking system products to capitalize on growth opportunities. New assembly lines have been established at the and Laknow plants, enhancing agility and customer responsiveness. Over 25 parts have been transferred to these plants, improving delivery performance, enhancing flexibility through proximity-based operations and supporting our sustained — sustainability objectives by reducing transportation. Significant gains in productivity and quality have been realized through the implementation of smart automation, robotic technology, testing automation and leveraging digitalization in assembly and missioning cells. These closures continue to be — continue to be filed within the Group for indigenously developed process innovation, invention, leveraging lean and frugal engineering capabilities. During the year, machinery purbishment was performed in four machining cells in crankshaft and at minor well, which is adopting the technology. Additionally, condition monitoring powered by the digital manufacturing platform was implemented in 40 critical missions, six critical CMC missions and 20 critical CMC missions, my university to monitor mission behavior and weak conditions, thereby preventing unplanned downtime. There has been considerable reduction in maintenance cost and energy consumption through the adoption of digital manufacturing platform, BMP. We continue to nurture citizen development, driving efficiency and better decision-making through adoption of Microsoft Power BIE platform and automate repetitive task using robotic plus automation. These tools enable quick analysis and improved responsiveness in areas such as customer update and inventory management at plant and distribution centers. Separate social responsibility in Q4 FY 2024-’25, we actively pursued several impactful initiatives on — as part of our commitment to community development and sustainability. We continue to strengthen grassroots education. We’re renovating and equipping science and computer labs at Goman Polytechnic near and by building key infrastructure including a multi-purpose hall library and computer lab at the Residential School at. The company also contributed an X-ray mission to the primary health center at. Our focus on with the installation of solar-powered traffic signals and high moss lights in key cities. Relaying on relaying of the road in, Tamil Nadu and road safety training campaigns for technicians and drivers across 37 locations and India. Additionally, we trained 1,000 youth in basic manufacturing through the National apprenticeship promotion labs to enhance their impliability. These initiatives reflect our long-term commitment to social responsibility and our belief in creating tangible, sustainable value for the communities in which we We operate. Awards and recognitions. During the financial year FY, I’m proud to share that Commercial Vehicle Control System India Limited was honored with several prestigious customer awards, recognizing our commitment to technology, innovation and service excellence. These include technology and innovation award from Tata Motors, impactful innovation award from Ashok Leyland, outstanding contribution in-field support from Volvo commercial vehicles, quick development partner and strategic supplier recognition from Supplier Award from JDM. These accolades are a testament to our deep customer partnerships, innovation-driven approach and consistent operational excellence. That’s a testament to our commitment to sustainable manufacturing, the plant was awarded the lead gold certification by the United States Green Building Council. This prestigious recognition highlights the company’s efforts in implementing global green standards in the design and construction of the plant with the practical and measurable strategies in areas such as energy efficiency, water consumption, for water conservation and the sustainable material selection. Our employees continue to demonstrate high levels of engagement and participated in various external total employee involvement competitions, winning numerous awards across several categories in the last fiscal year. I’m happy to share that in FY ’24-’25, the teams won 16 national awards and 19 regional awards in competition organized by the, Akma and QCFA along with many more awards at regional level. This included five awards, including four regional awards and one international award in Q4 FY ’24, ’25. And now moving on to our financial performance for the quarter and the financial year. What you already referenced, the results were made public at 5:41 p.m. On 15 May 2025. I hope you have had a chance to go through that. I’m pleased to share that we delivered a strong performance in Q4 FY 2024 — sorry, ’24 ’25 with the revenues reaching INR1,039 crores. This is a significant milestone for us, the first time we have crossed INR1,000 crore mark in a single quarter. Our full-year profit before-tax for FY 2024, ’25 stood at an all-time high of INR6003.3 crores, reflecting the continued strength of our business fundamentals. The profit before-tax for Q4 FY 2024 ’25 was INR168.68.8 crores. Our PBT stood at 18.2% of product sales in FY 2024-’25 and we maintained a healthy EBITDA margin of 22.8% for Q4 FY 2024 ’25 and 21.1% for the full-year. Our engineering and other services continue to create value for our group customers. Service income grew by 16% at INR112.3 crores in Q4 FY 2024-’25 compared to the same quarter last year and 17.4% at INR443.4 crores year-on-year in FY, ’25. On the exports, we recorded a 3.5% increase in Q4 FY 2024-’25 over the corresponding — corresponding quarter of the previous year totaling 297 crores. Exports grew 8.4%, reaching INR1,164.6 crore in FY 2024-’25. These results position us well for sustained growth and we remain focused on delivering differentiated value to our customers, driving innovation and continuing our journey of growth. Thank you. We now welcome your questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press. Participants are requested to use handsets while asking a question.
Ladies and gentlemen we will wait for a moment while the question queue assemble thank you. The first question is from the line of Mumuk from Anand Rathi Institutional Equities. Please go-ahead.
Mumuksh Mandlesha
Yeah. Thank you, sir, for the opportunity. Sir, first for the Q4, just can you can reshare the absolute amount of the revenues for the OEM aftermarket and export and also the brake production number for the quarter?.
Periakaruppa Kaniappan
Thank you. Yeah. I would request our CFO to take this question.
Sweta Agarwal
Yeah. Much for the quarter for ’24, ’25, we have done INR466 crores in the OEM segment. Aftermarket INR124 crores and exports of two export of products of INR297 crores. Apart from that, we also have export of services of INR124 crores. What was the last question?
Mumuksh Mandlesha
And the production number for the Q4?
Periakaruppa Kaniappan
Production? Yeah, weaker production.
Sweta Agarwal
Production is 100 — 1,19,000, but
Mumuksh Mandlesha
Thank you. Sir, secondly, on the timeline of the regulation, sir, in the draft, how are you seeing the OEM preparedness for the October date, sir or do you see any chance of being delayed in the final implementation, sir?
Periakaruppa Kaniappan
Yeah, yeah. So the government has indicated the October timeline, I think 2026 October, but we expect push-back some certain stakeholders. So we need to really wait for the final date. Our own internal estimation is that maybe sometime it will be in 2027.
Mumuksh Mandlesha
Got it. Got it, sir. And sir, on this on the can you reiterate what would be the content of this new regulation, which I understand it include or Adas function and also, sir, ESC, ESC, right, sir?
Periakaruppa Kaniappan
Okay. Yeah, yeah, that’s right. So it doesn’t include EBS, basically the regulation calls for the M2, M3 vehicles that are buses and then M3, M2 and Yan3 category of vehicles which are essentially trucks which means covers actually all the vehicles there related to our segment by and large because if you know the M2 buses are buses that are more than eight seats in addition to the driver.
So then if you go to M3, it is the four remaining you buses. So most of the buses above eight seats and five tonne, five ton you know covered. But also anything above 3.5 tonne tractor covered, which means a large category, N2 and 3 covers everything about 3.5 tonnes. Same case for the buses. So then if you come to the — what is included in the regulation is the stability control. Electronic stability control is a part of this regulation.
You know, now the buses certain category of buses are already covered, but we expect that those categories which are actually not factory fitted, which got excluded in the first notification or regulation. Now it gets included from September in any case. Then you — we have a truck segment which is completely excluded, but that will come in the — as part of the regulation. With the regulations, again, most of the vehicles are covered.
So in the regulation, first thing is vehicle stability function, ESE, that is ESE included. Then we have an advanced emergency braking system, essentially the forward collection of items that is included. Lane departure warning system. Lane departure warning system is included. Driver cloutiness and attention warning systems is included. Blind-spot information system is essentially that covers those parts around the vehicle which are blind to the driver now that is also covered.
So then moving of information systems covered. So victually it covers the ESC plus about five regulations. It’s a major chunk of the regulation is fully largely covered. So in terms of the actual impact, you see, I have earlier also communicated in the case of ESE, typically this will — when it is in a full volume and people localized, the prices should be in the range of maybe around INR25,000 delta. On the, I’m not in a position to really indicate Any number, but the market is evolving, but it could be quite substantial. And all this put together, in my view, it should be in the range of at least above 40,000, but we have to — we have to see because it also depends on the type of solutions that is offered and the localization content etc, but these two put together substantial volume growth for us there’s a great opportunity available in front of us.
Mumuksh Mandlesha
So rightly, I understand, sir, 25,000 for the ESC and the ADAS function 40,000 — about INR40,000. And sir, ABS also will be separate addition on about this amount or this include the power?
Periakaruppa Kaniappan
ABS is already mandated that most of these vehicles are already fitted with ABS. Except either climate ABH, AABS, solution. ABS. AEBS is also included, included. Normally what happens the basic hardware and those things are by and large common. Against hardware, you try to provide various functionalities with add-on hardware features and software solutions. So actually we have released ADAS in India with 11 functionalities already, functionalities already to some customers which is not through a regulatory route.
But then out-of-the five functionalities are coming through the regulation rules. When it comes to the regulation route because of the huge volume opportunity, the prices, etc., when it is too early to really make a judgment. So whatever and I’m giving is very indicative depends on the kind of solution that it will come to the market because it will be a very large cost-driven solution because the commodity position also should be, you know, evaluated, etc. But roughly you can take these numbers as an indicative number
Mumuksh Mandlesha
25,000 plus 40,000 broadly, sir. Right, sir?
Periakaruppa Kaniappan
Yeah, yeah.
Mumuksh Mandlesha
Got it, sir. And sir,
Operator
Sir, you can also — sorry to interrupt you, sir, but we request you to rejoin the queue for follow-up.
Mumuksh Mandlesha
Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investment. Please go-ahead,
Lakshminarayanan
Hi. Thank you. Couple of questions. Just want to understand your product sales for the full-year FY ’25 and how do you — when you the product sales into exports and domestic, what is what is. Second question is that we have been talking about getting into the LCV business. Just want to understand what will be our hedge in the LWE business and then how long it will — and what will we provide and how long it will take for us to reach a steady-state?
And if and when we reach a steady-state, what would be the revenue potential in that LTE business.
Periakaruppa Kaniappan
See the Mr, the second part of your question was not that clear. Can you say it again? This is led to.
Lakshminarayanan
Yeah. So on the LCV side, I understand that we are getting into LTV over a period of time. Want to understand the business potential exists, what will be our hedge and then at a steady-state, what is the revenue potential it can actually offer?
Sweta Agarwal
Just for the first question, I would request our CFO to answer those numbers. For the full-year sales, we have — we have sold about INR2,175 crores in the domestic market. This is 1,670 in the OE customers and about 500 to the aftermarket customers. We have exported products worth INR1,164 crores and service exports and other income is adding up to INR592 crores.
Periakaruppa Kaniappan
Yeah. Now coming to the — your question on the LCV, you know braking system. Actually the — we will be able to supply the entire braking systems for the LCV segment. It’s from a hydraulic technology-based from the for the commercial heavy and medium and we have lined-up quite a few projects products in that space because the — okay, the customers are also more or less the same. Already we have launched one-product there, which is a hydraulic electronic stability control.
Volumes are low, but it’s a global — it’s from that global portfolio. We have already localized in our site because it was needed and the regulation — ESC regulation was coming into India. We are currently selling about 400 numbers a month roughly, but this volume will increase from September 2025 when the coverage extends to all the buses, right? So right now it is only factory fitted buses are using so it will increase.
That is number-one. Number two, when the new regulation comes along with ADAS, with this ESC, electronic stability control is applicable to the all vehicles. So the vehicles which are is essentially 3.5 tonne to probably tons seven tons you can take. So that’s a lot of quantum of vehicles and those vehicles will need hydraulic ASE, so we are already ready with the product, which is largely localized in India.
This will be one of the first products. Then of course, the — there are many other portfolios that are available, which are very differentiating in nature where there are not many customers who have that — those products. So we are one-by-one, we are going to localize. To your question, roughly our estimate right now maybe in a matter of five years from now, it should be in the range of EUR90 million. Very, very rough estimate.
Lakshminarayanan
And who are you displacing here? Are you — I mean, is there another compliment because in heavy commercial vehicle, we do have — we have a pure majority in terms of market-share. In LCVs, how does it pan-out there?
Periakaruppa Kaniappan
Actually, in this particular segment where we are supplying the hydraulic EAC, there is no player in India right now. So because this is light commercial vehicle, not a pass car segment, light commercial vehicle segment. The product well, there are players who are supporting the market with certain products but the one that we are offering right now, there’s no one. So it all depends on the technology-wise, the hydraulic ESE to those customers, for example like customers like Force Motor Mahindra and Suraj Mazda type of customers where there that it’s a particular segment.
That’s volume today is less, as I said, but it will increase. We are not displacing anyone. We came to the market because there was nobody available with the product at the time three years ago. Customers, I think competition will emerge, but still we would like — we will be playing a major role there.
Lakshminarayanan
Got it. Thank you. I’ll come back-in queue. Thank you.
Periakaruppa Kaniappan
Yeah, please. Thank you.
Operator
Thank you. We will take our next question from the line of Sharavan Yappa from Avendus Spark. Please go-ahead.
Shravan Iyyappan
Good morning. Thank you for the opportunity. Just one question on how is the company thinking about localization of these new advanced products that have been highlighted in the recent notification. And any updates on timelines and guidance on margins that can be provided, sir? Thank you.
Periakaruppa Kaniappan
Yeah, yeah. So see, basically in India, without localization, it is difficult to sustain and grow. So our model is we generally do a phased localization in the normal timeframe, the volume is not very clear. But in this type of you know time regulatory-driven requirement, the volume is clear. Volume is generally very viable to do localization.
At least in many of the parts. So we are already having clear plans to localize many of the systems except some, for example, a camera or a radar, it may still be economical to source from a global locations where the huge global volume, so you get across the scale advantage. We other parts we will, you know we have, we will have a yes, Phase-2 localization of All other parts. Mechanical parts definitely will be completing. And even some electronic parts we — based on the scale, we will the volume we will have plans to localize things like radar and camera, we are still exploring because advantage of setup is that we have a put business with pass car segments also and at least in future there is some plants happening in India and other legal entities. But then we are exploring if there is a possibility to initiate localization. But irrespective of our hospital business, we have clear plans at the — except that cameras, most other items will look like.
Shravan Iyyappan
Okay, sir. Understood. Just one more question on how is the competitive landscape around this segment like these products that we’re entering and what can our market-share be in this segment?
Periakaruppa Kaniappan
No, it’s very difficult to say now because the regulation timeline has been already announced now, but there are few players globally have the products. Our advantage always is our footprint, our competency, our connect with customers. So we would like to remain as a strong lead player.
I can’t — I’m not numbers because it’s an evolving situation, but then we have definitely having a lot of competitive advantage in terms of local engineering strength, local manufacturing capability, very strong footprint and national footprint. Also excellent connect with the customers and service function people so that any issue that comes in the field will be able to support and multiple differentiation we have created over the years. So we believe we will maintain our lead position.
Shravan Iyyappan
Okay, sir. Got it. Thank you. I’ll come back.
Periakaruppa Kaniappan
Thank you.
Operator
Thank you. The next question is from the line of Shubham from Ambit AMC. Please go-ahead.
Shubham Bhatra
Thanks, sir for taking my question. I have two questions. First is in the last two quarters, we have shown significant improvement in the margins. And going ahead, could we get some kind of a guidance on what kind of margins are we headed in? Can we further see some improvement? And secondly, on the side that the product that we have launched, what would be the approximate content per vehicle for this product?
Periakaruppa Kaniappan
What is the second question? Which product you are referring to? Yeah. Okay. So the first question, you know you have totally evaluate us based on our past performance, but generally, we don’t give guidance on this matter. While our key focus is to continue to improve our margin, but okay, we can say we will try to at least protect the current position. LCV, it’s — again, it’s an evolving thing. There are few products already we have lined-up maybe too early to commit but if you look at the product that I indicated, it’s typically about INR20,000 rupees.
If you add some more products, maybe we can talk about INR25,000 value per vehicle could be a target we can start with. Again, most of the sales will start coming from the up once the regulation has started kicks-in.
Shubham Bhatra
Got it. Got it, sir. Okay. Thank you.
Operator
Thank you. We’ll take our next question from the line of Rakesh Jain from Axis AMC. Please go-ahead.
Rakeshkumar Jain
Yeah, hi, sir. Sir, can you just a bit explain us on your gross margin change quarter-on-quarter and how should one look at it, let’s say, from your product mix perspective.
Periakaruppa Kaniappan
Okay. Yeah. I would request our CFO to answer you.
Sweta Agarwal
Our gross profit change has been in the range of about 7% to 10% quarter-on-quarter with the last quarter being a 4.5%. On an average, you can say that we’ve been improving our profitability by about 4% to 7% overall. This is driven by, of course, our product mix. Our highest margins are on our aftermarket segment. And whenever we improve the share of aftermarket, we see an improvement in our — in our margins. But our largest driver rather than the product mix is our focus on cost management, improvement our material productivity and focus on our production costs.
Rakeshkumar Jain
Okay. And just to reconfirm, what has been our overall export number, including the product and service business this quarter?
Periakaruppa Kaniappan
This quarter, our export for products has been INR297 crores and export of services has been INR124 crores.
Rakeshkumar Jain
Okay. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of who from InCred AMC. Please go-ahead, sir.
Preet Pitani
Thank you for the questions. I would like to ask on the working capital. Although revenue were down in FY ’21, I can say that there must still increase in the working capital and majority of the increase pertains to the increase in data days. So if you can just brief about is there any is this one-time or we have changed the terms?
Sweta Agarwal
So in the last year, we did change our terms for some of the customers from 45 days to 50 days and some even to 90 days, it works on both sides. So it’s always a commercial negotiation in terms of balancing the payment terms with other commercials that we are seeing.
Preet Pitani
So how do we expect it in coming through now and should we take FY ’25 base or how much should we expect in the coming years?
Sweta Agarwal
You can take FY ’25 as a base, we would not provide a guidance on how this is going to develop.
Preet Pitani
Okay. And what would be our capex guidance for FY ’26 and FY ’27?
Sweta Agarwal
We are expecting to have a capex spend of about INR190 crores for FY ’25, ’26. This would be more towards the expansion of our plant and introduction of some lines at some of the other plants for export support as well.
Preet Pitani
Okay. And one last question from my side. How much would be one-time impact in the quarter-four in the margin like we had in-quarter three? Is there any onetime impact?
Sweta Agarwal
There are no one-time effects in the quarterly results this time. So all routine and repeatable.
Preet Pitani
Thank you. I will try. Thank you.
Periakaruppa Kaniappan
Thank you.
Operator
Thank you. The next question is from the line of Arihant from Bohead Capital Advisory. Please go-ahead.
Arihant Baid
Yeah, hi, sir. Sir, please can you just say once again what were your expectation regarding ADAS regulation? When are they expected to come?
Periakaruppa Kaniappan
Yeah. So see, the government has already notified notification, I think, calls for implementation October 2026 there is a lot of negoti discussions happening and of course you know the there are many stakeholders. OEMs have forward their proposal because these things need time to implement. And so our assumption, yes, at least it will be from October 2027 before that. But then you can, for your planning roughly that could be a timeline
Arihant Baid
And sir, will this be implemented like for all vehicles at the same time or will it be in phases like for some category of vehicles, it will be earlier and then later for some other categories.
Periakaruppa Kaniappan
But again, this is a decision India. So we can only read from our past experience ABS was mandated 100% all the M3 vehicles M3 and M3 vehicles full one-time. There are few technologies they adopted for select vehicles but drop regulation calls for implementation almost all the applicable vehicles but we have to wait-and-watch how the discussions happen now the government is going to finally decide. Okay. Even if it comes in a split Manner, again, maybe next within a year, the rest of the vehicles will be covered. For example, in the buses, the — I think April 2024, the ESG was mandated for certain applications. And now by September 2025, the government covers other processes. So it’s — we have to — we can just wait and understand how this is going to come, but this time most likely it may come for all applicable vehicles also.
Arihant Baid
Yeah. Okay. Sir, and my next question was like for export, can you give some color on how like the compressor, our twin compressor sales have been — have been — have we onboarded any new customer? And also can you give some color on how the actuators and brake chamber sales are proceeding to Volvo and have we onboarded any new customer in that space?
Periakaruppa Kaniappan
Okay. So one new customer we have onboarded for actuators, that’s what I said it is actuator 4.0, this is for Volvo Global and of course we expect the actuators and brake chambers will keep expanding because these products are doing very well and these are in terms of competitive positioning, we are in a much better shape. And compressors the same compresses, you know the last year we have onboarded two new customers and Daimler AG, probably that heavy heavy-duty compresses and so we started now almost one last year — one year-plus three months we have started supplying.
So we expect the volume to keep increasing because again, our experience — our understanding is these products are doing well. Customer may expand this to certain new, new regions, new locations. So these are all the possibilities. Similarly, we have — we started with the compressor supplate played DAF, 1 version 440cc then it got expanded to 563. So again these products in terms of performance and in terms of competitive positioning, we are in good shape.
The electronic control for air suspension that which we were supplying it to BMW. And there are some challenges, maybe the challenges related to all these global EV transition and all those things. So some drop-in the numbers today. But then the technology is there, we will look at possibilities to sell — of course, this year, we are not directly in touch with the customer. We are depending on depending on our product-line colleagues to expand these products to markets where we can add value.
So right now, beyond this, we don’t — we have not added any new customers with certain global challenges now with all the, you know the geopolitical issues if India emerges as a certain new opportunities emerge then volume could further increase. But we are waiting and watching the evolving situation.
But as such, we are well-positioned to and support from our — not only Mahindra City now we have expanded this to site and the actuators we have already shifted to actuatan direction we have already shifted partly the new business to. So getting ready to support any whatever increase that can happen in near-term.
Arihant Baid
Thank you, sir.
Periakaruppa Kaniappan
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, we will take this as our last question. I now hand the conference over to the management for closing comments.
Periakaruppa Kaniappan
I would like to thank all of you. You all are very, very interesting and very good question. So I hope our answers were able to give very help you to understand the evolving situation. But we see huge opportunity in front of us in terms of new regulations. We also see some positive numbers in-vehicle production in the past two months and we are getting ready to concast the new opportunities that are evolving in front of us. Thank you.
Operator
Thank you. On behalf of Batliwala and Kirani Securities India Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Periakaruppa Kaniappan
Thank you