Syrma SGS Technology (NSE:SYRMA) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Syrma SGS Technology q one FY twenty seven Investors Con Call hosted by AXIS Capital 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. Please note that this conference is being recorded. I now hand the conference over to mister Nikhil Kandoy from Access Capital. Thank you, and over to you, sir. Nikolay, please go ahead.

0:52 Thank you, everyone, for joining the call. We we are we are hosting SYRMA SGS Q1 FY 'twenty seven conference call. We'll now I'll hand over the floor to Nitin Gupta for their opening remarks. Thank you for the opportunity, Syrma management. Thank you, Nikhil. A very good morning to all of you. On behalf of SYRMA SGS family, we welcome you all to the SYRMA SGS Quarter one and Fiscal Year twenty twenty seven Earnings Call. We have with us today Mr. Jayesh Gujral, Managing Director Mr. Jayesh Doshi, Whole Time Director Mr. Jayarit Singh Brahat, Chief Executive Officer and Mr. Vijay Agrawal, Chief Financial Officer, Syrma SGS to discuss the performance of the company during the first quarter and fiscal year twenty twenty seven, followed by detailed question and answer session.

1:42 Kindly note, during the call, certain statements that will be made are forward looking, which involve several risks, uncertainties, assumptions and other factors that can cause results to differ materially from those in such forward looking statements. All forward looking statements made herein are based on the information presently available to the management and to the company, and the company does not undertake to update any forward looking statements that may be made during this call. In this regard, kindly review the statements in the earnings release and all other factors that can cause a difference. With this, I will now hand over the call to Mr. Jayesh Gujarat, Managing Director, Syrma SGS. Thank you. Good morning, ladies and gentlemen. A very warm welcome to the twenty seventh earnings call of Syrma SGS Technology Limited.

2:32 Always a pleasure to interact with all of you. Before I start the summary of what has happened has happened and what's going to happen, I would request to our new CEO, Jayjit Braat, to just say hello to the all the analysts and the participants and introduce himself before I take up on the detailed presentation. Jayarjit? Thank you, Mr. Gujal. Good morning, all analysts, and I'm delighted to be here. I joined Syrma SGS on June 29. I have spent twenty four years at McKinsey and then I've spent two years after that in various roles in the automotive and the energy industry.

3:19 I'm very excited about the opportunities and the potential of SYRMA SGS, and I'm looking forward to my journey here. Thank you. Okay. Now I think we have had a lovely strong first quarter, which lays the foundation for us to grow as a plan for the current year. This quarter, despite the turbulation of the geopolitical sort of problems that we're having in The Middle East, which translated into supply chain constraints, we were able to register a very robust growth on all parameters, whether it was the top line, EBITDA, PBT, PAT, which grew by more than 100%.

4:08 Those figures are available with everyone. I'll not delve on that in detail. I'll highlight two qualitative factors in this quarter. The first one is the continued buoyancy in the exports. Exports last year grew by 40%. This first quarter, they have grown by 61%. Now this positions us well to further integrate to the global supply chain market. And as I've all the time being saying, for a long term sustained profitable growth, integration of the Indian EMS companies with the global clients is a must.

4:58 And I think the efforts which our teams have put in the past two years have shown results last year and are showing even superior results this year. So going forward, I believe exports would continue to be one of the mainstays for our growth and profitability. The second factor is that my ODM sales, which is our own design manufacture sales, have gone up by almost 100%. Last year, they have gone up by about 82% to INR $8.25 crores. And this year, in first quarter, they have gone up they have been INR $2.70 crores versus INR 125 crores last year. So these two sort of pillars for the growth when they are registering a very high sort of growth trajectory, all goes well for us to deliver superior performances in the coming quarters.

6:02 There has been a secular growth in almost all the verticals. I personally don't foresee demand side to be a constraint in the coming quarters. I think demand from across verticals is robust. Our medical vertical, medtech vertical is doing very well and has started picking up. Defense vertical early, but going forward in the coming quarters, it will scale up. What is worrying not from a micro level SYRMA SGS perspective, but from an industry level is the supply chain constraint. While demand remains bullish, supply chain is a cause of concern because of the geopolitical situation, supply of some specialty chemicals, which go into the PCB making, lead time of component going up.

7:05 So what we are focused on in SYRMA SGS is to ensure that our customers don't suffer because of the supply chain constraints. We have formed a ballroom in the company to look at this. And every customer, every component shortage is being sort of minutely monitored at the senior most level. We have also taken a cautious call that we will not treat inventory as a working capital at least for the next quarter or two. Inventory will be treated as a strategic asset, strategic investment. So I personally believe across the industry, we will see a tad increase in the inventory levels in terms of number of days till the situation normalizes.

8:04 I expect maybe six months down the line when we talk to the manufacturers and distributors, let's say, by end of calendar twenty six, situation should be back to normal. So in the next six, eight months, five months, we should all be aware that the inventory levels across our industry would be going up. Our projects which we have undertaken, the PCB project is on track. Building is almost 65%, 70% complete. Equipment will be received from October onwards. And we are on schedule to power all the equipments in the quarter of January, March, take out samples under the process of approval from the client starts.

8:51 Overall, I think we are well on track of not only achieving what we have guided, but exceeding that achievement. With this, I hand over to Vijay Agarwal to tell on the final detailed financial numbers. Thank you, Mr. Girard. Good morning, everyone, and thank you for joining us for this quarterly earnings call. I hope you have a good chance to review our quarterly results and investor presentation. I briefly walk you through our operating and the financial performance, and thereafter, we can move to the Q and A session. We have started this year FY 'twenty seven with a very strong quarter of execution, continuing the momentum built over the last several quarters.

9:38 Starting with the revenue numbers, our consolidated total revenue for the quarter stood at INR1604 crores, registering a 67% year on year growth. And more importantly, this growth has been accompanied by continued improvement in profitability across including our EBITDA numbers in the past numbers. Our operating EBITDA increased by 69% year on year to INR162 crores, while total EBITDA including other income grew by 72% to INR177 crores for the quarter. PBT increased approximately 110%, reaching to INR141 crores for the quarter and PAT for the quarter is INR106 crores with a 112% of growth for the quarter. Over the last few years, we are consciously focused on improving our product mix, expanding into higher value programs, strengthening our operational efficiency, investing into technology led manufacturing capabilities and some bit of automations.

10:37 The benefits of these initiatives are now reflecting our overall profitability. Coming to our overall business performance. Groups during the quarter were broad based. The consumer business remained our largest vertical with 34% of our business mix and delivered healthy growth supported by faster customer ramp ups and some bit upfront loaded schedules from key customers. Similarly, automotive business continued its strong momentum and now produced about onefour of our overall total revenue with 24% of our business mix. We continue to benefit from our increasing penetration of EV across all vehicle platforms and deeper engagement with our new customers. Healthcare maintained healthy performance, while IT and Railways business continued to scale well from a relatively lower base.

11:29 The Industrial segment specifically witnessed some moderation on a sequential basis, primarily due to rearrange schedules of our maritime business, wherein the majority of the volume is loaded in second half of the year and also some bit of lower pickup on the smart metering business. However, we remain confident about the medium term opportunity on this business, seeing the overall order book visibility also. Coming to the export number Mr. Ghisral has also highlighted, this has performed very well and continued contributed approximately 24% of our operating revenue, reflecting our growing participation into global supply chain. Overall export number for the quarter is around INR387 crores. Similarly, Oreo number for the quarter is approximately 17% with INR270 crores of Oreo business for the quarter.

12:21 On the customer concentration for the quarter, my top five customers contributed around 38%, while top 10 customers contributed around 51% and top 20 around 66% of our total revenue for the quarter. Quarter. Coming to our order book visibility. As of June end, we have approximately INR6770 crores, INR6770 crores of overall total order book visibility, of which if we give the breakup by each vertical, automotive is around 29%, consumer is around 30%, industrial segment is approximately 24%, Healthcare is around 7%, which includes MedTech business also. And IT and LVS together about 9% of our total overall order book visibility.

13:11 Some bit of update on the new customer additions. During the quarter, we onboarded 18 new clients, of which five on the auto side, three on the industrial segment side, two on the health care side and balance on the telecom and IT and delivery side here. But again, this shows a very strong business addition pipeline for the future years. We remain confident that as volume grows and continue to scale and newer programs mature, our overall operational efficiencies will continue to improve overall over the medium term. Coming to our balance sheet performance. During the quarter, our net working capital base increased from sixty three to seventy one days and mainly due to higher inventory days. As Mr. Gujral was also explaining, we are keeping higher inventory levels as a strategic assets, And this something like we will be continuing for a quarter or so.

14:02 And this is primarily a conscious decision to support our speedy ramp up of the new customer programs to ensure uninterrupted availability of critical electronic components. This decision will help us at least in the short term, ensuring no disruptions related to our customer supplies and delivery. This strategic decision resulted into higher working capital requirements for the quarter and an increase in the overall short term borrowings by about INR340 crores during the quarter. However, it is important to note that we continue to maintain a net cash position of INR122 crores, supported by healthy treasury balance, cash and investment balance of INR800 crores plus as on June 9.

14:48 We believe this inventory will give us a larger strategic assurance, supply assurance from the customers, strengthening our overall long term relationship on both sides. Overall, on the financial ratio side, return ratios continues to improve. Our adjusted annualized ROCE for the quarter is 20.1%, reflecting improving capital productivity. Going forward, our capital allocation philosophy remains unchanged. We will continue to invest prudently in capacity expansions, technology, design capabilities, strategic growth initiatives while maintaining financial discipline. Beyond this quarterly financial performance, our strategic priorities remain intact.

15:36 During the quarter, we had tied up with our Japanese MNC player, Kaga, to manufacture all their EMS requirements through a jointly held subsidiary in India, wherein Syrma holds 60% and balance will be held by Kaga India. Initial investment into the JV would be approximately INR 24 crores INR 25 crores by both the partners together. Coming to our PCB project update, the project is completely on track. We had invested around INR 50 crores during the quarter for this particular strategic project, while overall CapEx investment during the quarter is about INR90 crores. We expect this PCB project to start at least commercial production by April 2027. Our priority continues to be consistent and profitable growth, supported by operational excellence, disciplined capital allocation and long term customer relationship.

16:30 With that, I would now request the operator to open the floor for questions, and we can take up the questions and answers. Thank you. Thank you. We will now begin with the question and answer session. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of with ICICI Securities.

17:16 Please go ahead. Yeah. Thanks. Thanks for the opportunity. So congrats to entire team for a solid set of numbers. So two questions. Is there any onetime revenue booking done in Q1? The numbers look extraordinarily strong. So any postponement of revenue booking or order booking or like that? That is question number one. If not, how should we look at the next three quarters in terms of the revenues, especially the consumer segment revenues? And second question is the... There is a board resolution for raising funds via TIP of almost thousand crores. So any particular developments that can be shared here? Or it will be just a normal resolution passed and depending on the opportunity, the fund raising decision will be done? So any color on that as well?

18:13 Okay. I'll answer the first question in an affirmative that there has been no onetime transaction which has been booked into the quarter. These are the normal run of the mill numbers. The performance has been better because of our high margin profit business, exports and ODM have gone up, while consumer also has gone up by about from 30% or 34%. But the effect has been sort of greatly absorbed by the increase in my exposure to ODM numbers. So these are normal accounting sort of these are numbers which are based on the standard accounting policies and no onetime expense has been charged or onetime income has been bought.

18:58 So I should be making that very clear on that. Vijay, would you like to add something on that? Yes. So there is no abnormal onetime kind of a revenue there. Now coming to your question on QIP, very clearly, this is a every year, we take this QIP resolution for the AGM. This is something as an enabling resolution we take up so that in future, if we get a good opportunity, we should be ready with the funding kind of a pipeline available with us. And that's how this is a type of regulation we are taking by there is no immediate need for going down kind of a. Just to add on to the two points, Vijay has said, on the QIP, I think it's enabling resolution. The sector is seeing such positive tailwinds that you have to be so called you have to watch us ready for any emerging opportunity, which may come.

19:49 And the opportunities are immense, whether it's in the semicon business, whether it's in the normal thing. So it's just an enabling resolution. On the second part of your first question, going forward, we believe that we are on track to not only achieve what we have guided, but we exceed that. By how much percentage? I think let one quarter more go by and we can all have more clarity. And this is because of the supply side constraints, not from the demand side sort of issues. End of the year, I think we would broadly be within the parameters of the industry wide verticals what we have been guiding. We are monetizing, maintaining that we don't view numbers from a quarterly lens.

20:36 In fact, when we are building an institution, the numbers have to be viewed from a multiyear sort of trajectory thing and not even annual. But for the sort of analysts and all that, we do believe in annual numbers. But for institutional building, I think we have to see where we started from, where we have reached and where we want to go. And is that trajectory being achieved or not? And I'm very happy to say that whatever we have set out and whatever we have been sharing with the screen, we have gone in a very structured, measured way to achieve the numbers and the objectives. Sir, just one clarification.

21:27 Now memory prices are so we are doing current inventory. But generally, the memory prices will be a pass through. So it will not have any impact on even the percentage margin. I mean, absolute margin per unit, it may not have any impact, but it will not have impact on absolute percentages also. It will be a complete pass through. That correct? Yes. Even if it's a complete pass through, as an example, if my chip is INR 60 and I'm selling it at 100, because I'm just taking one example. So it's a 60% gross material margin 40% gross material margin. The chip goes from INR 60 to INR 100. I sell it at 140 to the customer. 140 is not 40%.

22:14 So while the absolute figures will remain intact, broadly, the percentage margin would undergo a change because you don't get a markup, you don't get a value add on the increased cost of a chip or a memory. Okay. Okay. So the percentage margin may see a slight correction? Yes. Again, don't get a value add on the price increase. I would love to have it, but I could get it. No one gives a value add just because your price has gone up. Your other costs have not gone up. Okay. Okay. Sure, sir. Sure, sir. This is well understood. No impact on the absolute number. No impact on the absolute number.

23:03 Okay. Sure, sure, sir. Understood. Understood, sir. Many, many thanks. Many thanks. Participants in the interest of time and fairness to others, please restrict yourselves to one question. For any more questions, you may rejoin the queue. The next question comes on from the line of Mayank Pandey with MK Global Financial Services. I have two questions. Question number one is on the consumer business. Could you just help us understand how because in the past quarters, you've guided that this business will try to keep at, let's say, 30% of total revenues. Could you just help us understand what how we should look at it going forward in terms of what businesses or what product lines sort of we are targeting and how the growth can come or how we will limit the growth in that sense, in that segment?

24:00 That is question one. And my second question is on the PCBN project, the manufacturing project for PCB. Do we expect to have to raise funds for any part of our PCBN project, phase one, phase two, both combined, whether now or in the future? Or do we expect it to be fully funded through internal accruals? Those are my two questions. Okay. On the composition of the sales, I think we are very confident that we'll be maintaining the trajectory of consumer being at about 30% of my total sales. As we have all the time being reiterating quarter on quarter, there would be aberration. There's never a secular growth in every vertical every quarter. Each industry has its own profile. But on an annualized basis, we still think that our consumer business would be around 30 odd percent of the total revenue.

24:52 That's question number one. On the PCB project, I firstly don't see any constraint in terms of requiring additional funds. Our first phase of the project is on track. We should be powering on the equipment in January to March. And once we start the production, we'll be filing the claim with the government for the subsidy. And the second phase and the third phase of the equipment will or the project will only start towards the end of 'twenty seven, early 'twenty eight. So I think the project is well funded. And I'll request Vijay to throw more detailed light on this. So just to add on here, the first initial phase like we are incurring around INR 400 crores, which is also about INR 100 crores and INR 130 crores is already funded so far and the balance will be funding during this particular year.

25:39 And again, a 50 debt is what we will be taking for this thing, percent to 60%. But most importantly, when we grow further, next year, when we try to fund another INR 400 crore, a majority of that can also come through the government incentives also. So there is a government CapEx incentive, which is also available as a funding source here, 50% CapEx incentive is available for this project. So we will be funding through internal accruals, CapEx subsidies from the government and from the debt. We already have INR800 crore plus kind of a treasury balance, which will be sufficient for all the phases of this particular project. But yes, obviously, going forward, the internal growth will keep on adding for this time. Thank you. The next question comes from the line of Bhavik Mehta with JPMorgan. Just one question on this multi year PCB.

26:31 What kind of asset turns we can expect in the first year of operations when it starts in April next year? And what kind of EBITDA margins we can expect in the first year ex of ECMS benefit? And also, if there is some color in terms of how much ECMS benefit we can get on the margins? Normally, asset on varies around 1.5x. But initially, in the very first year, as you are checking, the capacity utilizations can be lower around 40% to 50%. So it can be lower in the year one and thereafter, it can gradually move towards maybe 80% plus kind of a capacity utilization, which will be around 1.5x of asset turns. Normally, with the full complete ramp up volume, one can expect, except any PLA incentive, the EBITDA is in the range of 15% to 18%.

27:17 But initially, when the capacity utilizations are lower, EBITDA can also be lower around 10% or maybe less than 10% also. And just to add what Vijay said of 1x to 1.5x assets are lower, that is on the gross basis. That's not accounting for the subsidies. Thank you. The next question comes from the line of Keur Pandya with ICICI Prudential Life Insurance. Please go ahead. Thank you. Sir, just one question on the revenue side. So for last two or three last since quarter three, our order book is around INR 60. So it was INR 6,400 crore, today it is around INR 6,700 crore. So this similar sequential order book, should we assume current revenue run rate to continue or we should expect acceleration from here as well?

28:11 First question on that. And second, on the profitability side, so this quarter, your share of consumer is lower versus last year. Sorry, just on the composition side, so consumer segment share is much higher versus last quarter. And despite that, our margin is around 10% plus. So should we assume that this is the bottom range of the margin we should assume even with this kind of mix where consumer is more than 33%, 34%? Look, on the margin front, I think what we have guided 10.5 to 11%, we maintained that we'll be delivering that margin profile for the full year.

29:00 So I have no sort of concerns on that. On the order intake, what you have suggested, you are saying, I think it's a logical thing, and we have seen an uptick in the order book from quarter on quarter. For example, I think in Q1 of last year, our order book was around INR 5,400 crores. And today, it is INR 6,700 crores plus INR 6,770 crores. So it obviously means that quarterly intake of orders is increasing. I think my quarter order book as of the end of March was INR 6,000. INR 6,400. I have executed INR 1,600. And I've got an order book of INR 6,770. So it means order intake in one year, a quarter of about INR 1,800 crores, $17.81 crores.

29:49 So I think as we scale up, obviously, if we have to do higher revenues in the coming years and quarters and years, the quarterly intake of orders should also show a rise. Just to add in here, considering order book and the visibility here, that's how we are guiding that 35% plus kind of our revenue growth for the full year is what we are guiding. Just quarter on quarter, there is a higher intake is what we are seeing here right now. And coming to the EBITDA percentage, when we compare the business mix versus last quarter, last quarter consumer segment was lower and that is where we have seen 11% to 11.3% kind of operating EBITDA margin for the last quarter. But this quarter, it is 10.1%. That's primarily because there is a higher consumer mix into this business. But again, having said that this consumer is not evenly distributed across four quarters, so we may see some kind of a seasonality here. So that overall full year number can be in the range of 30% to 32%.

30:46 But this quarter, was 34%, some other quarter, it can be lower also that. Understood. Just one clarification on this. So earlier you mentioned that this guidance of 35% growth on the revenue side and around at least 30%, 35% growth on the EBITDA side. You mentioned that you would upgrade it later, but do you think you will need to upgrade the guidance? That is what you mentioned earlier? So what we said was that, one, we are very confident of achieving the guide, not only achieving the guidance numbers both on revenues EBITDA, but based on the strong performance of the first quarter, we should exceed that guidance.

31:36 So that's the statement we should exceed that guidance based on the first year first quarter performance. Understood. Sir, thanks a lot and all the best. Thank you. The next question comes from the line of Sumant Kumar with Motilal Oswal Financial Services. Please go ahead. Yeah. Hi, sir. So can you talk about this health care segment? Last two quarters, we have seen a momentum of $1.30 crore, $1.35 crore. And from here, what what kind of order book we are receiving and how the growth is going to improve in this segment? So maybe I can just add in here. Yes, the current order book is giving you almost INR 500 crores of orders from this Healthcare segment, which includes Healthcare RFID solutions also in the MedTech business. But most importantly, we have onboarded in this quarter also, we have onboarded two new clients on the Healthcare side, again, on the for the CDMO manufacturing business and the design business also for one of the clients here.

32:39 So this business is picking up good. If I talk about specifically the Mecteq business, we did about INR $2.10 crore last year through our subsidiary, Syrma, Johari, Mecteq. And this year, we are expecting the business should be growing almost 50% because the base is lower there. So So this business is showing good potential now to grow. And that is how we have been guiding that this will be approximately 7%, 8% of our total overall business for this year. And for the PLI 2.0 and ISM 2.0, what kind of business segment we are exploring? And what are our thought process for this? Okay. So the PLI part, there are two. One is the mobile PLI part, which, well, we are currently not seriously evaluating that, we're not there.

33:24 On the ISM2, which has just been announced, and I think the notifications, the detailed guidelines are yet to be out, we still maintain our earlier stand that we are interested in this. We are interested not only in the packing, but also the back end and the feed part, the components is going to the making of a semicon. But for us, one of the key qualifying criteria is to have a credible partner. And that's the stand we have been maintaining right from ISM1. We didn't participate in ISM1 because no credible partner had come to India. And if you see only Micron and Granisel, the two big names are present in India, rest are yet to take a call. And we are very much in discussions with the potential partners.

34:16 But till we sign off, I really can't commit anything. But as far as the interest of the management is concerned, yes, we are definitely very much interested in the business opportunities emerging out of ISM2. The next question comes from the line of Bhavya Gandhi with Bajaj Alternate Investment Management. Sir, I just wanted to understand what is the average order execution period for the existing order book? And how big could this CAGR opportunity be over the next couple of years? So on the order book, I can answer and then Gujiraaj, you can add on for the CAGR JV. Out of the INR6770 crores, approximately INR5400 crores is what we need to execute in the next twelve months and the balance is like beyond twelve months like in the quarter subsequent to that thing. That's how the current order book is there. If we calculate the overall average period, it comes around ten, ten point five months there on the order book side.

35:17 Coming to your question on Praga JV. This is a JV primarily to meet their requirement here in India on exclusive basis. That's how they are primarily very strong in India on the automotive side and also some bit of a AC business, which is on the whiteboard side also. That's the two kind of a business verticals we are initially targeting through this JV. Gradually, we are very strong on the Japanese market side. There are big global component to having multiple business in Japan. So going forward, in future, we will also target supplying or exporting to the Japanese need also. Yes. Just to add on to what Vijay said, I think this is a strategic tie up with long term positive implication. It gives us a foot into the Japanese business ecosystem.

36:05 And Japanese business ecosystem, everyone knows, is a very conservative ecosystem. It's not flamboyant. So having a partner in Kaga gives us that entry level point into the Japanese market. Short term will be catering to the domestic requirements of Kada, and we should not forget that Kada has a very strong distribution network of components. Going forward, I think we'll have a positive rub off effect in my purchasing because of the Kaga leverage. So it has two, three dimensions. This joint venture has two, three dimensions: domestic supply to Japanese customer are put into the door of the Japanese ecosystem and the distribution of components taking benefit of that in our material procurements.

37:05 Got it. Sir, is it possible to quantify in terms of opportunity how big would it be over next three, four, five years? So we are just starting setting up this JV right now. So in this current year, may this not be much. But over the three, four, five years, we can see somewhere around INR300 crores to INR500 crores kind of our business on a long term basis. The next question comes from the line of Vishal Goel with HSBC Securities and Capital Markets. Congratulations for a good number of sorry to questions. Interrupt. Vishal is not quite audible. Please be a little louder. Am Hello? I audible? Yes.

37:51 Yes. Okay. So my first question is on like the last quarter, you mentioned that you have very solid intent of entering the renewables energy space market, especially in the inverter business. So any update on that front? And second question is just a clarity on the ODM revenue number, which was shared earlier. So I heard you said it was INR $2.70 crore or 17% of the revenue. If that is the case, then that is the decline. So just want a clarity on that. No, no. It's not a decline on the ODM number. My Q1 FY 'twenty six ODM number was about 125. It has gone up to two sixty nine. Sequential, yes, it could be a decline. I have not seen from Q4 of last year to this year, the decline may or may not be there. That Vijay will share the numbers. Q4 of last year, it was $345,000,000 Sequentially, it is a decline, but a year on year basis, there is a more than 100% decline. Because overall, all the maritime, defense, communication business and metech business are rear end loaded.

38:50 So we are very confident of scaling up this business and have a positive growth in the current year. So there's no doubt on that. Now as far as the renewable energy businesses can post our sort of decoupling of the K Solar deal, we are in touch and in negotiation with potential partners. And these things take time, but it is still in the sort of focus of the management to enter this space.

39:35 Once we have a firm tie up and all those things, we'll definitely come back to the Street with the details. But the business is a focus area for growth for us. Understood. And thank you for clarifying the ODM number as well. Thank you, team. The next question comes from the line of Achal Lohade with NuvaMa Institutional Equities. Congratulations for a great execution. Sir, if you could talk a little bit about the capacity utilization. Currently, what kind of CapEx are we looking at in the current year as well as next year ex of PCB?

40:21 So ex of PCB, CapEx is what we are seeing around INR 100 crores to INR 150 crores for the full year, of which near about INR 40 crores is what we have incurred in the current quarter so far on the CapEx side. Capacity utilizations, current capacity utilizations are in the range of 65% to 70% as of now. And we are still building up certain more capacity at our Bangalore location also we are expanding to one more facility at the parallel to our current digestion plant. And similar way, in our Pune also, we are expanding the capacities also. So this is a continuous process depending about the business additions. We will be keep on doing those business or maybe capacity enhancements or maybe staffing of the current facilities using incremental lines. Got it. And just to add on, we are setting up one additional capacities for our MedTech business, specifically in Jodhpur.

41:12 So there also, we are expanding the capacity with additional plastic injection molding capacity and the assembly lines over there, keeping in mind the additional incremental new medtech businesses, which we are getting now. Yes. So in the medtech business in Jodhpur, we are expanding more capacity and capability. We are entering into medical grade plastics and new sort of lines into the medtech business. Hence, the expenditure is being incurred. So I think this will give us a good growth opportunity in the coming years, twenty seven, twenty twenty eight onwards. Got it. Just a clarification on your earlier comment in terms of the percentage margin. Can you help us understand in terms of the price inflation of your components, how large would that be on a blended basis, so just a ballpark? And what kind of bps impact we have already seen in 1Q because of that?

42:07 See, what is the impact, I think, an annualized basis, I can't comment because the situation, the dynamics of the global economy supply chains keep changing. I was only referring to a principle that if I get a 100 pass through of my cost increase, my absolute margin is not affected, but my percentage margin gets affected. That was the only thing which I was referring to. Yes, yes. I understand. And that's why this question, sir. The reason I'm But it's tough to say that what it would be for the full year as my economy is that the supply chains are still evolving. Where does the dollar go, I don't know. What will be the semiconductor shortage, I don't know. But I know there will be a shortage.

42:57 So what will impact it will have on the supply chain because all the demand of semiconductors is being consumed by the AI center. Now off late, there has been a sort of slowdown, sort of a general perception that the AI may not be that good or bad. So if that happens, the supply chain constraints ease. So I really cannot comment today. But generally, we believe that the pressure of supply chain will continue. And whenever there is a pressure, it has a direct implication on the cost. But just to add on there, whatever guidance we are giving, 10.5% to 11% of our margin, that factors all these number of initiatives together. And that's where we are guiding this to be 10.5 to 11% kind of a margin segment for the full year. Got it. I'll take it offline. Thank you so much, sir.

43:47 The next question comes from the line of Neel Mehta with Equirious Securities. Please go ahead. Yes. Hi, sir. Sir, congratulations on the sales setup numbers. Sir, just wanted to know that, you know, sir, you mentioned that we have onboarded 18 new customers. So, like, from where we can expect this to grow in our financials, you know, sooner? And the second question is that, sir, we have a seen sharp, Y o Y growth in auto. So just wanted to know that it is largely a wallet share driven growth or a new customer driven growth, if you can highlight that? So on the new customers, think whatever we are onboarding the new customers in this quarter, in this year, it will not have a significant impact on our revenue.

44:32 These are all work in progress, which will give us a growth in the coming years. The breakup of the customer onboarded, Vijay will share in what vertical. But typically, they are in line with the market sort of breakup of the vertical sales. So just to add in here, on the auto side, we have onboarded five new clients. Industrial also three clients. Healthcare also two clients and the balance on the telecom, IT and delivery. But as Mr. Bugyala said, actually, the volume may start up from the next year and full ramp up may take year after that also, actually. But this new customer additions may have a potential to give me additionally INR1000 crores plus kind of a revenue on a full ramp up basis. And sir, what would be the margin profile of these new customers versus the current margin profile?

45:21 So there is segmental margin will follow. So if somebody is there in the auto segment, auto segment related margin will come into that. They will not be completely off the vertical kind of a margin. So depending upon this business, if clients is coming into this vertical, the margins of that vertical would generally fall. And sir, just last question from my side. If you could share, what would be the geographic mix of the current quarter's export revenue? Okay. The export revenue, what we have got is if I was to take it as a only percentage of the exports, only percentage of as a as my exports are, say, INR $3.87 crores this quarter. If I was to take the breakup, U.

46:07 S. A. Would account for about INR 22 crores, Europe around INR 40 crores and the balance is other countries. But if I was to include NAND, then the figure of 22%. NAND means Mexico, Canada and America, then this 22% would go up by another 15 odd percent. This is breakup of the export sales, not as a percentage of total sales. Got it, sir. Thank you so much, sir. The next question comes from the line of Praveen Sahai with PL Capital. Please go ahead. Yes. Thank you for opportunity. And my question is related to the ODM and export, which you had highlighted. These are the two growth pillars for your business.

46:53 And also, we can see the other contribution is rising 1724% from now. So how you are going to see the contribution of these two segments to be in the near term? And how has been the margin profile for these businesses as compared of the domestic ones? So I'll take one by one exports. Exports last year, we grew by 40%. And that only shows that none of the economies where we were exporting has grown by that, that we are migrating customers from other geographies into India. The Q1 has been very good. We have grown by almost like 60%. So I expect that this year, we should grow our exports by around 30% to 40%.

47:43 Last year, we did an export of about INR 1,200 crores. So we should be able to grow the business to INR 1,500 crores to INR 1,600 crores for the current year. Again, as I've always been saying, let the geopolitical situation settle down, it will give us more clarity. But despite all the turbulence, we are still confident of growing the exports. On the ODM, again, it gives us a big satisfaction that ODM, which grew by 82% last year, has grown by almost 100% in this quarter. So going forward, I expect this momentum to be maintained as my med tech and the defense business scale up, the ODM content would go up further.

48:34 Currently, we are at about 17% of our sales are ODM sales. The target is to take it up the long term target is to take it up to a quarter. It's not a sort of a sprint, it's a marathon, and it will take time for us to take it up to that. And this problem or this sort of task becomes even more difficult because my non ODM revenue is also growing at a very healthy pace. So if the pie size is increasing and I want to increase from 17% to 25%, that is almost like a 50% growth from yes, a little less than 50% growth. My ODM has to grow at 50%, 60% level to be able to reach that 25% target in the next several years.

49:23 Short term, 17% to 18% to 19% will be the target. And on the margin front, sir? Or you can Both these segments have superior margin profile. Or you can give some color on the ODM contribution of the segments, which like health care or industrial more contribution? Only family would be health care, it would be defense, it would be consumer and little bit of industrial. Thank you, sir, and all the best. Participants, in the interest of time and fairness to others, please restrict yourselves to one question. For any more questions, you may rejoin the queue.

50:10 The next question comes from the line of Bharat Shah with BCS Capital IDS. Please go ahead. Good job, sir. Namaste. I did not really have a question to ask, but I just wanted to state my observation. Yeah. Over many years that I've seen SYRMA and through many different phases of challenge And when chips were down, I think the firm has displayed remarkable strategic restraint, strategic intent, and its execution without wavering for... By the short term considerations.

51:03 I remember the period of about two years back when things were materially confused as far as the externalities were concerned. And there were a lot of challenges. Quarterly numbers look like lot of margins were going haywire, and and top line was fluctuating quarter to quarter, but with little clarity as to what it is. But in... Throughout this period, I've observed our strategic intent has remained firm. We have remained steadfast and not second to the temptation of any loose picture being given. We have remained scrupulously transparent.

51:51 So I I just wanted to put on record my deep appreciation of the way the firm is evolved. And I also must thank and appreciate Vijay Agarwal who must have gone through a lot of challenges in managing on a much smaller balance sheet, financial constraints and working capital challenges and very low ROCE with the business faced to contend with the high growth and managing finances. But even he, I think, through this period has remained truly, truly focused on guiding the destiny of the firm. So a deep note of congratulations and appreciation.

52:37 Thank sir. I would just like to just a follow-up to your comments. I would just like to reiterate that what we are in Syrma focused on is in building an institution. And we have to balance the short term and the long term, but never ever would we compromise the long term for the short term. I think that focus is very, very clear. We'll rather absorb the pain, the short term pain, but we'll never ever compromise or sacrifice the long term objectives of the management and the Board, which is to build our institution, which is truly global in nature, engineering led and focused on very sort of tight execution and generating free operating cash flows, tight capital allocation policy.

53:35 Thank you, Bharat. No, no, absolutely. Just one point, if I can check with you. While opportunities abound, our capacity and capability both are rising at a greater pace, actually. What, in your opinion, could be emergent traits or challenges, may not be today, but over the period of time? Or any areas which you think are strategically very vital, but which are not visible today? Well, I can only say that I think we in SYRMA and I think the industry for the benefit of the country, taking on a sort of a philosophical level, I think we have to be very cognizant of the fact that long term sustainment does not come in from plain manila manufacturing, whatever be the vertical.

54:41 It has to come from design. It has to come from engineering. So earlier the companies invest in that, they are securing the future, and we are very, very focused on that. We know this business of manufacturing would continue for the next ten years. I'm not having any doubt on that. But what we have to learn from China is that while we are harvesting the sort of produce from manufacturing, we should not sacrifice the long term vision of investing in technology, in engineering, in design. And end of the day, India has to become a product nation. Now the product may be on the brand owner.

55:27 The back end technology has to build companies like us, which develop products, develop technologies. And that is where I think everyone should be focused. On what are the areas which may become future, I really can't say as of now. Data sensors is a big buzzword globally. Let's see how it stands out. It is opening up big opportunities on manufacturing currently. Long run, I really can't say on that. Semicon is another business where we in India, I think majority of the companies will be focusing on the assembly and the whatever part. Design part is where the cake is, where the cream is and then the fab. So we have to see how we get into the high margin profile within the semicon ecosystem.

56:25 Very correct. Thank you, good job, sir. My pleasure. The next question comes from the line of Rahul Maheshwari with Ambit Investment Advisors. Please go ahead. Hello. Good morning, sir. Congratulations on a good set of numbers. Two questions. First, while deciding or coming on board with any JV or any partner, what are the top three criteria you look at? What are the top three criteria criteria with the partner who send you? And second question is, can you give some customer Sorry to interrupt, Rahul. Your voice is breaking. Could you please Crack it. Yeah. I love the last part of your sentence. Can you hear me now better?

57:10 Yes. Better. Yeah. So first question was while deciding any partner or going with any JV, what are the top three criteria you look into the partner? And the vice versa with the partner looks in you. And second question is, why onboarding any customer? What is the gestation period? And can you give some kind of wallet share gain that is happening in a long period from the last of three to five years? These are my two questions. Okay. On the first part, I think we have always been very clear and sort of communicating with all the people that we enter into joint ventures or we acquire companies in areas where we are not present to fill in the gap of technology, regulatory approval or maybe market access.

58:01 So if the joint venture cannot bring any of the three things, then what's the point of entering into a joint venture? So a joint venture will be entered if the partner brings in something, which I don't have, which could be technology, which could be access to a particular ecosystem, as we have said, the Japanese ecosystem or access to some regulatory approvals or areas where we are not present, that's why we acquired Alcom. We were not present over there and rather than reinventing the wheel, we thought it better that it would be better to acquire and sort of scale up that business. So those are the technology market access is what our regulatory tools is what we look at in forming any joint venture or acquiring any company.

58:53 Normally, we'll not acquire a company, which gives me additional revenues, but not one of these three strategic sort of entry points. On your point of the scaling up of the customer, there are two sort of cases at this. One is where a matured product is being transferred to us. There, the scaling up time could be twelve months to eighteen months. Closer to twelve months, but outside eighteen months. But if it's a new product, which is yet to be validated in the market, this twelve to eighteen could stretch from eighteen to twenty four or even 30. So there are two different case studies. So we have seen that where customers are migrating mature products to us, but the ramp up is about twelve to eighteen months because he has to phase out from his existing line or ramp up with me.

59:47 Right. I hope that answers your question. Yes. Just an addition to it, what kind of market share particular customer you have increased up to? Because he also would be diversifying his entire chain. So can you give some idea on that part of that during the year, what kind of gain you have done in his entire ecosystem? Again, the global customers and the domestic customers. In global customers, when we enter where their supply chain, I think we are a very small insignificant player when we enter. Because if our company, as I say, has spent $1,000,000,000 on electronics and its supply INR 120 crores or INR 150 crores, it's not even 2%, 1%.

1:00:39 So there, it could slowly and steadily go up to 4%, 56%. But I don't expect with global companies, it could go up to 40% in the five to seven years because they are very in trend line, the supply chain. But the volume being so large, even if you have a 2%, 34% share, it could be $100,000,000 worth of business or $50,000,000 worth of business. On domestic customers, typically, we are either the one or two vendor. Very rarely, we will be the third vendor with my customer. And there, the endeavor is always to keep increasing the wallet share, and we have increased the wallet share with the existing domestic customers. If we are one, we have sort of increased the gap between the one and two.

1:01:29 And if we are number two, we have reduced the gap between us and the number one. And sir, how much would be domestic customer and global customer mix? See, exports is about 25%, 2425%. So 75% is my domestic customer. The next question comes from the line of Dinesh Shah with DAM Capital. Yeah. Hi. Good morning. Thank you for the opportunity, and congratulations on a great set of numbers. Sir, I have two questions. First, obviously, you highlighted in detail about the supply chain disruptions, which, you know, the industry is facing. But given that, Ian, we focused on inventories as a strategic asset, let's say, for the next couple of quarters, do you see that...

1:02:23 Do you see any risk to achieving the current guidance which we have? You know, while you said that we will exceed the guidance what we're doing, is there any risk to the current estimates which we at least are projecting for ourselves for FY 2027? See, I would answer this question with a caveat. On a micro level basis on my demand side and my execution strategy, I don't see any risk. It's a tough choice. I'm not saying it's a cakewalk. It will be a tough walk, but we would achieve what we have guided or exceed what we have guided. The only imponderable is the geopolitical situation in West Asia. And it is beyond my control or beyond control of anyone.

1:03:09 If tomorrow, it was to again escalate further and cause some significant damage to the supply chain capacities, well, then not only me, but all the competitors, all the industry, everyone will have to be at the point. So that's the only improbable factor on which I believe I'm not competent to comment what will happen. Sure, sir. But it was just more from a perspective of, you know, the particular bare PCB shortage that we're seeing across the industry. And, you know, what we understand is that even single layer boards are something which are going into shortage. So do we feel like we're covered for the year wherein we, you know, see no risk from a delivery perspective. I understand that demand is Yes. But when you say cover, it is not that for the next eight months, I have the inventory stocked in my factory.

1:04:04 We have the orders. We are in constant touch with the vendors. We are in constant touch with the suppliers or whatever to ensure that whatever has been committed is given to us. But again, it's a hypothetical question. If one supply of chemical was to come down to zero, Then the entire industry, global industry will come to a grinding halt. I don't foresee that situation. But it's a constant tug of war. And I think, as I said, we have set up a separate war room in our company to only tackle all these shortages and ensuring that the supply chains are maintained. So it has been carved out of a material sort of supply chain team. So they have 100% focus only on the critical items, which we believe could sort of have an impact on us.

1:05:00 Sir, just one last, if I can squeeze in. So the core industrial portfolio, right? I mean, obviously, in industrial, we also have the defense contribution. I'm not sure what the number would be. But if we were to exclude that, you know, the growth would surely have not moderated. So how do we see that industrial portfolio going into FY twenty seven, the growth? And I mean, we know that they're going slower on smart meters, but any other outlets of growth, if you can sort of highlight out there? I think you have hit the nail on the head on the smart meters. I'll ask Vijay request Vijay to tell on that and today. Right here, last quarter, the Defense Maritime business contributed approximately INR140 crores into the industrial business of about INR460 crores. So excluding that, it was about INR320 crores. And this quarter also excluding that, this is about INR325 crores near about.

1:05:48 So there is actually this entire the sequential year lesson which you are seeing, this is primarily because of the Defense Maritime business, which is much more seasonal or maybe you can see it is much more rear ended loaded in a way. So that's one. And but again, in totality, industrial business is growing with a very decent pace, lot of new businesses like we have been adding into this particular vertical, specifically this fuel indexing system and maybe the other UDV metering business that is also growing. Only the Indian smart metering business, which is also the uptake there is slightly lower in last two quarters. And we are also deliberately keeping a watch on it to keep our working capital under control there. So that's how this particular vertical is going. Okay, sir. Got that. Thank you so much for answering my questions and wishing you all the best.

1:06:37 Thank you. The next question comes from the line of Santosh Seshadri with Aventis Park. Congratulations for solid numbers. So my first question is on the divisional growth outlook over the next couple of years. You have been mentioning that the company as a whole could grow at 30, 35%, you're already exceeding that. Could you help us break down how the different business segments are likely to grow? And which divisions do you expect to outgrow the company average? And also, is there any possibility of any new segments or sub segments emerging given the opportunities that you mentioned within the semiconductor and data centers value chain?

1:07:29 Okay. So I'll take this question. First on the growth part, we've already said that this year we should be not only achieving but exceeding what we have guided. So it is 35% plus growth rate for the current year. And we maintain that for the coming years, that is 27%, 28%, 2829%, at least for the next two to three years, we would be able to grow at this percentage going forward on a higher base. So the business, the clients which we are onboarding, I think they have a tremendous potential of maintaining this momentum of the growth, if not increasing it further. I think you must appreciate, everyone must appreciate that the global clients when we onboard, they take two years to sort of start giving decent figures, and it's only the third year that the real growth happens.

1:08:25 So whatever export growth you are we are witnessing today is the effort of the clients which we had onboarded in 'twenty three, 'twenty four, 'twenty four, 'twenty five and 'twenty five, 'twenty six. The clients which have onboarded in 'twenty five, 'twenty six, they may contribute something in this year, but the real contribution will come in 'twenty seven, 'twenty eight. And we have onboarded several global clients, which have a big potential of giving revenues. And these are spread across automotive, industrial, medtech. Export. Domestically, automotive remains to be the cornerstone for growth, led by the EV. EV is seeing a surge because of the fuel price increase, all the figures are in public domain.

1:09:16 The way the TV industry, vehicle industry is growing. And we are well integrated into that system with the electronics on the vehicle and the charging infrastructure. We have also sort of growing significantly in the coming years. This year, it may not be very big into the ecosystem of the data centers, which would be the power management and the cooling systems for the data center. We are beefing up our Bangalore facility and dedicating certain sort of areas to cater to this business. Early days, but we are very confident that this will scale up significantly in the coming years. Vijay, if you would like to add anything.

1:10:02 So broadly, we are there. Thank you very much, sir. And just to clarify, so just to double check here, we are expecting the growth rate to continue at about 30% or did you mention that there is a high base effect where the growth could moderate? No, no. What I said was that current year, we are achieving what we have guided rather exceeding what we have guided. Going forward, we are very confident that at least for the next three to five years, five years is a very far away figure. But for 'twenty seven, 'twenty eight, 'twenty eight, 'twenty nine and many years thereafter, we are on track to achieve 30% to 35% growth rate.

1:10:50 So what I said was the global customers which we have onboarded have a potential of further giving a bit or sort of a uptick to this growth rate. Early days, so I can't commit a figure to it, but they're giants. They buy billions worth of electronics. So they have the potential for us to grow at even a faster clip. But I can't comment and commit today because we are yet to start series supply to them and all those things and the geopolitical situation, how they pan out in the coming years. But the trend today is that people are looking at diversifying the electronic supply chain, and India is one of the preferred destinations.

1:11:40 Thank you very much, sir. Just a follow-up on that on the exports. You mentioned that the momentum is very strong. So is it concentrated in any few verticals like industrials or medtech? Or are you seeing a broad based traction here? And what is beyond the supply chain shift away from China, what is driving specifically this for Syrma? Is it largely existing global customers giving wallet share gains? Or is it like a significant new addition on the export front? See, on the export front, currently, the composition is broadly between industrial and medtech, broadly a little bit in RFID, which goes into different applications and a little bit in auto. We crossed INR 120 crore mark in auto exports last year.

1:12:32 Some of the new clients which we have onboarded belong to the automotive sector. So going forward, I believe automotive sector, alphabetically, industrial and medtech. IT also. Would be the driver for the export growth. That's very clear. Thank you very much, sir, and all the best for your future execution. Thank you. The next question comes from the line of with three sixty one Capital. Please go ahead. Thank you for the opportunity, and congratulations on a good set of numbers. So my first question was that your presentation mentioned that your net working capital and your capital... Working capital loan increased because you have some ramp up early ramp up in some customers.

1:13:26 So is that built in, in our growth, like the confidence that you are seeing increasing your growth from 35%? Does that also include that? Or is it just first quarter performance that gives you confidence so that can be more growth achievable on early ramp up? Borrowing increased primarily because of a higher working capital investments and mainly led by higher inventory carrying right now in this quarter. There was a certain supply chain constraints and also faster ramp up of the customers. On the faster ramp up side, this is primarily on the consumer segment. That's why we have seen a higher consumer segment mix in this quarter and higher volume mix for that particular vertical year. So here, generally, like we instead of full year even distribution, we have seen a faster ramp up from fewer customers here. And also on the auto segment side, the customers whom we have onboarded last year, this quarter, some bit of a faster ramp up we are expecting from those clients seeing their order book visibility now. That's where we are preparing for this I hope that answers your question.

1:14:37 Yes. Sorry, just a second question, sir. Where are we on different segment right now? What could it be of overall contribution in this year and next two years? Like how can the ramp up look like? Are we also getting new customers on our own onboard? Or we are only relying on customers that Elcom has? So on the defense vertical, I think it's early days. It has been six months since we have acquired that company, majority stake. We are very confident that going forward, this sector defense portfolio would continue to give 30%, 35%, 30%, 25%, 35% growth rate. We are as I said, we had acquired a platform for the defense setting.

1:15:23 We are in sort of dialogue or search for beefing up the portfolio in this company. So we would not, in the coming three to five years, will not rely on the existing only on the existing offerings of Alcom. We would definitely be adding more sort of technologies or offerings to the MELO and so that we can cater to a broader spectrum of customers. Early days today, I think, let's say, for six to nine months to have a better grip over what all we'll be doing in the defense. Short term, we'll be growing on the portfolio of LCOP, but we'll be definitely adding more products and services of Leenal offerings to this Leenal.

1:16:12 Okay. And sir, just one last question. On our this current quarter's growth in auto and also 100% in health care and fixed rate consumer. Within that, is there any particular customer that we have increased wallet share? Or is it just a ramp up of early ramp up in consumer? And also, which product might have seen a larger growth, like, say, Is it at EV, we are making more inroads within consumer? Is it BLDC motors or anything that we are making more inroads any such thing? So I'll just broadly answer and let Vijay can take the details. I think we are seeing a big traction in the EV and the growth has come from expansion of business from the existing customers plus adding a few customers, which will significantly grow in the coming quarters. They may not have added too much to this. One major growth area in the automotive is charging, classified as automotive.

1:17:11 Yes, automotive charging, that business has seen an uptick compared to the last year. So very bullish on the automotive sector. And with the addition of a global customer, not in this year, but in the next year, we expect that this sector would continue to see this strong traction. On the consumer, Vijay, I think you have the details. So automotive, yes, EV is growing faster. So that's where we see a lot of new customer onboarding also and the business growth also together. Consumer, again, our telecom business is growing in this quarter. This has shown up maybe faster or early kind of our schedules here in this quarter. Apart from that consumer business, our Odium business also has grown into the customer consumer segment here, which is more of a water purification business.

1:18:02 That has also shown a good traction into this quarter. Similarly, on the Mectech side, apart from that on the health care side, apart from that Mectech business, this quarter, our RFID solution business going for Mectech end user, health care end user has also grown significantly. And on the industrial segment side, I have updated that smart meeting business is slightly lower in this quarter, but power supplies are good. And defense is also maybe subdued in this quarter. Most importantly, IT sector business is also growing at a very faster pace. There are a lot of IT assembly businesses, what we are currently doing. We are also targeting to do the domestic motherboard manufacturing also there will be there. We also have a CDAC approval in our favor, which helps us or maybe which allow this is if we are eligible to design and manufacture server motherboards also, which we are already in process of working with few select clients on it.

1:19:00 Thank you. Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to Mr. JS Gujral, Managing Director, Syrma SGS for the closing remarks. Thank you. And I think Q1 has laid the foundation for a sustained growth in the coming quarters and the coming year. And as we have all the time been saying that we are very focused on execution. And I think that has started paying results, and we should be reaping even better benefits in the coming quarters and the years. As I said, the management is very, very focused on building our institution and having a long term objective. We have our internal plan for the next five years where we want to be, what we want to be.

1:19:54 And we are going in that way in a very structured and strategic fashion. The geopolitical situation continues to be an area of concern, not for us, but it's a global thing. And I think if the industry, despite these turbulations, is able to demonstrate a healthy growth with margin, I think full credit to the industry as a whole. I'm speaking from the industry point of view, not from the company's point of view. Apart from that, I think we have focused greatly on ESG and though not mandated. We have been awarded the gold medal by EcoVadis, which rates us among the top five percentile companies in terms of ESG.

1:20:45 So we're very sort of mindful of our responsibility to the society and environment. Again, not mandated by any regulation, we have signed up with SBTI, its initiative based out of England to set our target for emission and carbon footprint for the next ten years. So our team is in dialogue with them to set the targets. And I think one point would highlight the whole thing. We have a senior executive, present level executive looking after ESG. So that, I think, shows the intent and the sort of focus, which the senior management team led by the Board has on ESG.

1:21:41 Going forward, I think we are well entrenched to integrate ourselves with the global supply chain. The work in progress is to further beef up the ODM business. Now I'm only talking of the existing EMS business, a beef up the ODM business, and we are strengthening our capabilities in that sector with Jayjit Baral joining us, and he brings with him a very sort of three sixty view of the business coming in from a consulting background. He is not sort of myopic view of production led manufacturing. So I think that will place us in good state in the coming years.

1:22:28 Semicon continues to be an area of focus, but we are in no hurry to jump into the bandwagon till we are sure about the credibility of the partner because it's an industry which is sort of notorious for its requirement of deep pockets and fast changing technologies. So we don't want to burn cash and our fingers or whatever until as we are sure about the credibility of the partner. We are currently in dialogue with several of them. But since nothing is concrete, I'm not in a position to commit anything. But I can only commit the management is focused that we should be a part of the Semicon supply chain, but within the sort of red lines drawn by us.

1:23:20 And I think our team has done a phenomenally good job. And I would like to just medium thanks the entire team of Syrma SGS and all the value partners, whether they are all channel partners for supply, for technology, the bankers and everyone. And last but not least, the investors who have reported confidence, we had a tough couple of years in the beginning. But I think the worst is behind us, and we are well on track to be one of the recognized Indian global EMS companies. Thank you very much. Thank you, sir. Ladies and gentlemen, on behalf of Axis Capital, that concludes this conference call.

1:24:07 Thank you for joining us, and you may now disconnect your lines.