Q1 2027 Olectra Greentech Ltd Earnings Call

August 17, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to the Olectra Greentech Limited Q1 FY27 earnings conference call, hosted by Nomura. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Operator: Ladies and gentlemen, good day and welcome to the Olectra Greentech Limited Q1 FY27 earning conference call hosted by Nomura. As a reminder, all participants' 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 touchtone phone. I now hand the conference over to Mr. Kapil Singh from Nomura. Thank you, and over to you, sir.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchscreen phone. I now hand the conference over to Mr. Kapil Singh from Nomura.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Hi, good evening, everyone, and thanks for joining this call. We are pleased to host Olectra Greentech's management: Mr. Mahesh Babu, Managing Director; Mr. Sharad Chandra, CFO; and members of the finance team.

Kapil Singh: Hi. Good evening, everyone, and thanks for joining this call. We are pleased to host Olectra Greentech management, Mr. Mahesh Babu, Managing Director, Mr. B. Sharat Chandra, CFO, along with the members from the finance team. We will now pass on the call to management for their initial opening remarks, and after that, we can open the floor for Q&A.

Speaker #2: We will now hand over the call to management for their initial opening remarks. After that, we will open the floor for Q&A.

Speaker #3: Hi, good morning. This is Mahesh Babu speaking, MD of Olectra. I'm very, very pleased to meet on the call today after our Q1 results.

Mahesh Babu: Hi. Good morning. This is Mahesh Babu speaking, MD of Olectra. I am very pleased to meet on the call today after our Q1 results. First, I will give you a brief of the industry. You all know that after the GST cut, auto industry has been growing at a very healthy rate due to the demand. Today, most of them, there is no demand issue, I think more of a supply issue across the auto industry. If you look at the EV penetration in Q1, I think it has grown from about 5% to 7%, which is a very healthy sign that EV adoption and e-bus segment is still at a healthy rate of adoption. Overall, there is a clear new tenders and adoption on EV coming up in a very. You all know that the PM-eBus Sewa tender is live on pipeline, and that tender is getting delayed.

Speaker #3: First, I'll give you a brief of the industry. You all know that after the GST cut, the auto industry has been growing at a very healthy rate.

Speaker #3: Due to the demand today, for most of them there is no demand issue. I think it is more of a supply issue across the auto industry. If you look at the EV penetration in Q1, I think it has grown from about 5% to 7%, which is a very healthy sign that EV adoption and the e-bus segment are still at a healthy rate of adoption.

Speaker #3: Overall, there is a clear new tenders and adoption on EV coming up. As you all know, the PME SEVA tender is live and in the pipeline, and that tender is getting delayed.

Speaker #3: But, however, there are about 4,000 to 6,000 tenders right now by the central government, and there are about another 3,000 to 4,000 tenders from respective state governments, which are under discussion.

Mahesh Babu: However, there are about 4,000 to 6,000 tenders right now by the central government, and there are about another 3,000 to 4,000 tenders from respective state governments, which are under discussion. So it clearly indicates the e-bus segment is growing, and in which we are operating at. During this period, I am also happy to say that we have delivered the 4,000 electric bus in the recent past, and we are the first company in India to deliver 4,000 electric buses to our customers, surpassing our competition and become an all-time high on deliveries in the country. We have also consistently been delivering 350-plus buses in the last four quarters now. That clearly says that the new plant with the rhythm of manufacturing and supply chain has been set up.

Speaker #3: So it's clearly indicates the E-bus segment is growing and in which we are operating at. During this period, I'm also happy to say that we have delivered the 4,000 electric bus during this in the recent past, and this happened and we are the first company in India to deliver 4,000 electric buses to our customers.

Speaker #3: Surpassing our competition and reaching an all-time high in deliveries in the country. We have also consistently delivered 350-plus buses in each of the last four quarters.

Speaker #3: And that clearly says that the new plant, with the rhythm of manufacturing and supply chain, has been set up. However, I would like to highlight to you, in this quarter, we had a huge turbulence in terms of material cost hikes as well as supply chain disruptions due to shipping lines getting canceled, diverted, and delayed— all that due to the Middle East war was taken into consideration. Hence, it was more to do with very specific geopolitical disruptions which happened. That has slowly mellowed down now, it is opening up, and now the disruptions are going away.

Mahesh Babu: However, I would like to highlight to you in this quarter, we had a huge turbulence in terms of material cost hikes as well as supply chain disruptions due to shipping lines getting canceled and diverted and delayed. All that due to the Middle East war into consideration, and hence more to do with a very specific geopolitical disruptions which has happened. That has slowly mellowed down now, and it is opening up and now the disruptions are going away. Hopefully this will continue so that we will be able to continue our business without any issues. In the insulator segment, Q1 always have been a challenge because of the year starting respective orders.

Speaker #3: Hopefully, this will continue so that we'll be able to continue our business without any issues. In the insulator segment, Q1 has always been a challenge because of the year-starting respective orders.

Mahesh Babu: Also, due to the high raw material increase, some of our customers have slightly delayed their delivery, because while the insulator plays an important role in the power line, the other aluminum prices have gone up and hence they were slightly delaying that. However, the orders will continue to get delivered in the coming quarters. With this multiple challenges with our strong background, I would say we had a very strong start in FY27. We had a revenue growth of 66% and an EBITDA growth of 30%. As you know that we have increased our CapEx, both in bus division as well as insulator division. The bus division, as you know, we are investing in the new bus next generation platform as well as new generation truck. Both the products developments are going good.

Speaker #3: Also, due to the high raw material increase, some of our customers have slightly delayed their deliveries because, while the insulator plays an important role in the power line, the aluminum prices have gone up, and hence they were slightly delaying it.

Speaker #3: But, however, the orders will continue to get delivered in the coming quarters. So, with these multiple challenges and our strong background, I would say we have a very strong start in FY27.

Speaker #3: We had a revenue growth of 66% and a EBITDA growth of 30%. And as you know, we have increased our capex both in the bus division as well as the insulator division.

Speaker #3: The bus division, as you know, we are investing in the new bus next-generation platform, as well as the new-generation truck. Both the product developments are going well.

Speaker #3: And similarly, in the insulator or the power module on the energy division, we are expanding into new products, and that work has already started.

Mahesh Babu: Similarly in the insulator or the energy division, we are expanding into new products and that work has already started. We are evaluating hollow insulator, solid core insulator and many other allied products which we are in, and hence to support the energy and power sector in the country. These CapEx investments are going in. Similarly, our term loan on the CapEx of our plant have started, and hence we have an impact on both profit as well as PAT and the PBT. I would say still it is a very good start. Looking at the turmoil, our growth rate is still protected. Both the divisions, the bus divisions have achieved the 4,000, only first company in India to deliver 4,000 buses. Similarly, the energy division, we are still number one with significant market share.

Speaker #3: We are evaluating hollow insulators, solid core insulators, and many other allied products which we are in, and hence, to support the energy and power sector in the country.

Speaker #3: These capex investments are going in. Similarly, our term loan on the capex of our plant has started, and hence we have an impact on both profit as well as partly on the P&L.

Speaker #3: I would say, still, it is a very good start, looking at the turmoil. Our growth rate is still protected. Both the divisions—the bus divisions—have achieved the 4,000 mark. We are the first company in India to deliver 4,000 buses.

Speaker #3: Similarly, in the energy division, we are still number one with significant market share. Both the divisions continue to grow due to geopolitical factors, raw material, and supply chain disruptions.

Mahesh Babu: Both the divisions continue to grow due to geopolitical and raw material and supply chain disruptions. There is a minor challenges in our Q1, but I strongly believe going forward Q2 and this financial will be a growth as we delivered in the past. In fact, we will do much higher than the growth what we have done in the past as well.

Speaker #3: There are minor challenges in our Q1, but I strongly believe that, going forward, Q2 and this financial year will see growth as we have delivered in the past.

Speaker #3: In fact, we will achieve much higher growth than what we have done in the past as well. Thank you. Now I am handing over to Mr. Sharath Chandra, CFO of the company.

Operator: Thank you. Now I am handing over to Mr. B. Sharat Chandra, CFO of the company.

Mahesh Babu: Thank you. Now I am handing over to Mr. B. Sharat Chandra, CFO of the company.

Speaker #2: Yeah, good evening, everyone, and thank you for joining us. So, as our NDS has given the initial remarks, we are pleased to report strong operating and financial performance for Q1.

B. Sharat Chandra: Good evening, everyone, and thank you for joining us. As our MD has given the initial remarks, we are pleased to report strong operating and financial performance for Q1 FY27. We continued momentum, particularly in our Mobility division. The Mobility segment maintained healthy operating margins, despite some changes in the product mix. The vehicle deliveries vis-a-vis the previous year Q1, year-on-year, have gone up from 161 units to 358 units, which are representing a 122% growth on volume. The Energy segment has faced some headwinds during the quarter, primarily due to higher raw material costs arising from geopolitical issues and relatively lower contributions from exports. At a consolidated level, the revenue stood at INR 575.5 crore, up by 66% year-on-year. EBITDA increased to INR 72.9 crore, a growth of 30%.

Speaker #2: Financial year '26–'27. We continued our momentum, particularly in our mobility division. The mobility segment maintained healthy operating margins despite some changes in the product mix.

Speaker #2: The vehicle deliveries vis-à-vis the previous year Q1 year-on-year has gone up from 161 units to 358 units, representing a 122% growth in volume.

Speaker #2: The energy segment, ours has faced some advances during the quarter, primarily due to higher raw material costs arising from geopolitical issues and relatively lower contribution from exports.

Speaker #2: At a consolidated level, the revenue stood at ₹575.5 crore, up by 66% year on year. EBITDA increased to ₹72.9 crore, a growth of 30%.

Speaker #2: PBT at Rs. 34.7 crores was up by 3%, while PAT at Rs. 23.2 crores represented 4% growth. On a sequential basis, revenue was lower by about 11% compared to Q4, mainly due to lower energy segment revenue and product mix.

B. Sharat Chandra: PBT at INR 34.7 crore, went up by 3%, while the PAT at INR 23.2 crore represented 4% growth. On a sequential basis, revenue was lower by about 11% compared to Q4, mainly due to lower Energy segment revenue and product mix in Mobility. Nevertheless, the year-on-year growth reflects the underlying strength and continued momentum on our business. With that, I will hand over the call to the Nomura team for the Q&A session.

Speaker #2: In mobility, nevertheless, the year-on-year growth reflects the underlying strength and continued momentum of our business. So with that, I will hand over the call to the Nomura team for the Q&A session.

Speaker #1: Thank you so much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone.

Operator: Thank you so much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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 Bala Murali Krishna with Oman Investment Advisors. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while a question queue assembles. The first question comes from the line of Bala Murali Krishna with Oman Investment Advisors.

Speaker #1: Please go ahead.

Speaker #3: Hi, good evening. So, first of all, on the overall category plan for this year—so, for the last few years, we have been targeting toward it, but we could not achieve it.

Bala Murali Krishna: Hi. Good evening. First of all, on the overall delivery plan for this year. In the last few years, we are targeting about 900, but we could not able to achieve that. This year, how do the trend, whether we can able to achieve that target or not?

Speaker #3: So, this year, how is the trend? Whether we will be able to achieve that target or not?

Speaker #2: Okay, thank you for your question. This year, as you said, our budget is to deliver 2,500 vehicles. We have full confidence now that we'll be able to deliver on what is in the pipeline.

B. Sharat Chandra: Okay, thank you for your question. This year, as you said, our budget is to deliver 2,500 vehicles. We have full confidence now that we will be able to deliver on what is in the pipeline. As you know, we are number one from inception of 4,000 vehicles, not only from inception. If you look at India's e-bus registration as of today, we are still number one, with around 490 vehicles registered as of 12 August. We continue to deliver to the market. I strongly believe this year the market will be able to absorb more than the last year. If you look at the rate, I told you already, there is Q1, about 2% increase in adoption in Q1 itself.

Mahesh Babu: Okay, thank you for your question. This year, as you said, our budget is to deliver 2,500 vehicles. We have full confidence now that we will be able to deliver on what is in the pipeline. As you know, we are number one from inception of 4,000 vehicles, not only from inception. If you look at India's e-bus registration as of today, we are still number one, with around 490 vehicles registered as of 12 August. We continue to deliver to the market. I strongly believe this year the market will be able to absorb more than the last year. If you look at the rate, I told you already, there is Q1, about 2% increase in adoption in Q1 itself.

Speaker #2: As you know, we have been number one since the inception of the 4,000 vehicles. Not only from inception—if you look at India's e-bus registrations as of today, we are still number one.

Speaker #2: With around 490 vehicles registered as of 12th August, we continue to deliver to the market. But I strongly believe this year, the market will be able to absorb more than last year.

Speaker #2: If you look at the rate, I told you already, there is a Q1 about 2% increase in adoption in Q1 itself. So this clearly says this year the market will be able to absorb much higher, and we'll be able to deliver 2,000 plus, 2,500 vehicles in this financial year.

B. Sharat Chandra: This clearly says this year the market will be able to absorb much higher and we will be able to deliver 2,000 plus, 2,500 vehicles in this financial year.

Mahesh Babu: This clearly says this year the market will be able to absorb much higher and we will be able to deliver 2,000 plus, 2,500 vehicles in this financial year.

Speaker #3: Okay, sir. So that's okay. So on the pipeline tenders, do you anticipate any order intake in this financial year from the tenders we participated in recently?

Bala Murali Krishna: Okay. That's it then. On the pipeline tenders too, do you anticipate any order intake in this financial year from the tenders you participated in recently?

Speaker #2: So we have about 8,000 order book already. Last, last, we had one tender of 1,085 vehicles in Telangana as part of the CESL tender last time.

B. Sharat Chandra: We have about 8,000 order book already. Last time, we won a tender of 1,085 vehicles in Telangana as part of a CESL tender last time. Recently, we have become L1 in Rajasthan. Today only we have got the letter to call us for a discussion. It is outright 155 buses. There were about four to five participants. I am happy to say that we have become L1. This clearly demonstrates Olectra's both product quality as well as competitive cost in the market on the outright sale. This will be our new 9-meter platform, which we are developing for the next generation, which I have told will be ready by the last quarter of this financial year. As I said, we already have 1,085 plus 155 under discussion, both of them for the new platform.

Mahesh Babu: We have about 8,000 order book already. Last time, we won a tender of 1,085 vehicles in Telangana as part of a CESL tender last time. Recently, we have become L1 in Rajasthan. Today only we have got the letter to call us for a discussion. It is outright 155 buses. There were about four to five participants. I am happy to say that we have become L1. This clearly demonstrates Olectra's both product quality as well as competitive cost in the market on the outright sale. This will be our new 9-meter platform, which we are developing for the next generation, which I have told will be ready by the last quarter of this financial year. As I said, we already have 1,085 plus 155 under discussion, both of them for the new platform.

Speaker #2: Recently, we have become L1 in Rajasthan. Today only, we have got the letter to call us for discussions. It is outright 155 buses. There were about four to five participants.

Speaker #2: I'm happy to say that we have become L1. This clearly demonstrates Olectra's product quality as well as our competitive cost in the market. On the outright sale, this will be our new 9-meter platform, which we are developing for the next generation. As I mentioned, this will be ready in the last quarter of this financial year.

Speaker #2: So as I said, we already have 1,085 plus 155 under discussion, both of them for the new platform, and for the existing platform, we have about 8,000, which we'll deliver in the next two years.

B. Sharat Chandra: And for the existing platform, we have about 8,000, which we will deliver in next two years.

Mahesh Babu: And for the existing platform, we have about 8,000, which we will deliver in next two years.

Speaker #3: Okay, okay. So, later reason I think—you covered some media interaction that you are going to have in the coming years for about four to five weeks.

Bala Murali Krishna: Okay. So in later division, I think you told some media interaction that you are going to scale up by some 4 to 5x in the coming years. So the product will be only we are enhancing the capacity, or we are planning some new products to scale up that division?

Speaker #3: So, for the product, are we only enhancing the capacity, or are we planning some new products to scale up that?

Speaker #2: In the energy division, we have strategy discussions held both at the leadership level as well as at the board. Today, we are number one in polymer insulators.

B. Sharat Chandra: In the energy division, we have strategy discussions held both at leadership level as well as at the board. Today we are number one in polymer insulator. If you look at the products around the same energy division, we are already approved a product for which is hollow core insulator and solid insulator. These two as addressable TIV market close to INR 500 to 1,000 crore. That product we are bringing in. We are also evaluating multiple other products in this category. Our intention is to, next three years

Mahesh Babu: In the energy division, we have strategy discussions held both at leadership level as well as at the board. Today we are number one in polymer insulator. If you look at the products around the same energy division, we are already approved a product for which is hollow core insulator and solid insulator. These two as addressable TIV market close to INR 500 to 1,000 crore. That product we are bringing in. We are also evaluating multiple other products in this category. Our intention is to, next three years

Speaker #2: If you look at the products around the same energy division, we are already approved a product for which is hollow core insulator and solid insulator.

Speaker #2: These two, as addressable TIV markets, are close to ₹500 to ₹1,000 crore. That product we are bringing in. We are also evaluating multiple other products in this category.

Speaker #2: Our intention is, in the next three years, to make this energy division achieve 5x growth. That's the plan, and that's what the team is working towards—to make that happen. It will involve both new products as well as capacity enhancement put together.

Mahesh Babu: To make this energy division a 5x growth. That's the plan, and the team is working towards making that happen. It will be both new products as well as capacity enhancement put together. Capacity enhancement expansion in the plant has already started. We will have another similar size of shed to what we are having today, with all equipment in the pipeline, which will enhance the capacity to this vision in next three years.

Speaker #2: Capacity enhancement and expansion in the plant has already started. We will have another shed of a similar size to what we are having today, with all equipment in the pipeline.

Speaker #2: Which will enhance the capacity to this vision in the next three years.

Speaker #3: Okay, sir. Great. On the margin front in this energy division, I think this quarter had some higher O&M cost. So how do you see this in Q2 and Q3? Will we be able to regain the margins?

Bala Murali Krishna: Okay, sir. Thanks. On the margin front, in this energy division, I think this quarter will have some higher raw material costs. How do you see this Q4, Q3, whether we can able to regain the margins performance or price escalation?

Speaker #2: Yes, we had a challenge of raw material increase. Many raw materials have seen a 40% to 70% increase in prices in polymer insulators, and hence we had a challenge in the margins this quarter due to the war and petroleum prices, which have gone up, but also supply constraints.

Mahesh Babu: Yes, we had a challenge of raw material increase. Many raw materials have gone between 40% to 70% increase in raw material prices in polymer insulator, and hence we had a challenge in the margins this quarter due to the war and petroleum prices which have gone up, but also supply constraints during this period. I think that has now mellowed down. Already that price has fallen close to 40%, out of 70%, 40% has fallen down. We are expecting the average price from now on, if there is no disruptions, to come back closer to the levels before pre-war, and hence improvements are expected to be seen in the coming quarters.

Speaker #2: During this period, I think that has now mellowed down. Already, the price has fallen close to 40%. Just out of 70, 40 has fallen down.

Speaker #2: So, we are expecting the average price from now on, if there are no disruptions, to come back closer to the levels before the pre-war period. Hence, improvements are expected to be seen in the coming quarters.

Speaker #3: Okay. Lastly, on this bus order question I have. So we have an ₹8,000 crore order book, plus ₹1,000 crore for the new platform. So when do you think we can complete this? Because if we get some new orders, then they will also fall under the delivery.

Bala Murali Krishna: Okay. Lastly, on this bus, sir, one question I have. We have an 8,000-crore order book and plus 1,000 plus new platform. When do you think that we can able to complete it? Because if we get some new order, they will also follow up on delivery. If we can deliver quickly, maybe that would be good for a company also. But having this much backlog of 8,000 buses, it restricts us to take some new orders or it may restrict some other agencies to give new orders because we have backlog of orders.

Speaker #3: If we can deliver quickly, maybe that would be good for the company also. But having this much backlog of 8,000 buses, it may restrict us from taking new orders, or it may restrict some other agencies from giving new orders because we have this backlog of orders.

Speaker #2: See, if you look at the auto industry, the top three guys have order books between 5,000 and 8,000 vehicles. All of them, because these orders are all to be delivered in two years.

Mahesh Babu: See, if you look at auto industry, the top three guys have order book between 5,000 and 8,000 vehicles. All of them, because these orders are all to be delivered in two years. Even the 1,085 order for Telangana is to be delivered in two years timeline. Hence, all the order, whatever we are getting today is for FY28 and FY29. The start of delivery itself will happen by March of next calendar year. Hence, whatever pipeline we have, we need to fill up this pipeline with respect to competition. All these deliveries are depending on ecosystem availability like power, availability of depot infrastructure and so on. Hence, if we have to consistently achieve 2,500 delivery this year and higher deliveries next year, we need to keep getting orders as well as improve our delivery, which is our plan.

Speaker #2: Even the 1,085 order for Telangana is to be delivered in a two-year timeline. And hence, all the orders, whatever we are getting today, are for FY28 and FY29.

Speaker #2: The start of delivery itself will happen by March of next next calendar year. So, and hence, whatever pipeline we have, we need to fill up this pipeline with respect to competition.

Speaker #2: And all these deliveries are depending on ecosystem availability, like power, availability of depot infrastructure, and so on. And hence, if we have to consistently achieve 2,500 deliveries this year and even higher deliveries next year, we need to keep getting orders as well as improve our delivery, which is our plan.

Speaker #3: So, if there is any—I mean, the infrastructure is already there so we can deliver these 8,000 in FY27 and FY28. Is this the right understanding?

Bala Murali Krishna: If there is any infrastructure availability, they can deliver this 8,000 even in FY27 and FY28. Is it the right understanding?

Speaker #2: See, the market has to observe. If you see, last full year, I think around 5,400 vehicles were the registered vehicles. If the market is 5,400 vehicles, delivering 8,000 vehicles by us will not be prudent, or it will not be right for us to manufacture and keep it.

Mahesh Babu: See, the market has to observe. If you see last full year, I think around 5,400 vehicles were registered. If the market is 5,400 vehicles, delivering 8,000 vehicles by us will not be prudent, or it will not be right for us to manufacture and keep it. Our working capital will get locked. We will have to time the production and supply chain in such a way that the market will be able to absorb whatever we are producing. Similarly, if you look at Q1, there are about 1,400 vehicles which got registered. Right. So we will have to see how we will have to deliver based on market readiness, not just aggressively produce, because it will not give any revenue. It will lie in our stock if the depots are not ready, which I have heard from many of the competition.

Speaker #2: Our working capital will get locked. So we'll have to time the production and supply chain in such a way that the market will be able to absorb whatever we are producing.

Speaker #2: Similarly, if you look at the first quarter, there are about 1,400 vehicles which got registered, right? So we will have to see how we deliver based on market readiness, not just aggressively produce, because it will not give any revenue.

Speaker #2: It will lie in our stock. If the depots are not ready, which I have heard from many of the competition, I would say we as Olectra Company are one of the most optimum in working capital maintenance, because as soon as we produce the vehicle, the vehicle is deployed within 30 days or maximum.

Mahesh Babu: I would say we as an Olectra company are one of the most optimum in working capital maintenance because as soon as we produce the vehicle, the vehicle is deployed within 30 days or maximum, let's say between 30 to 60 days, the vehicle is into the customer's operations. Now, there are competitors who are holding the vehicle for 3 months for flag-off, for the depot readiness, who can afford to do the working capital lock. So I would say, rest assured, we are number one since inception. We are number one as of today in terms of registration. So we are delivering, in this segment, the most vehicles into the market. As you rightly said, our intention is to strive to drive the market to higher adoption, which we will continue to do.

Speaker #2: Let's say, between 30 to 60 days, the vehicle is into the customer's operations. Now, there are competitors who are holding the vehicle for three months for flag-off for depot readiness, who can afford to do the working capital lock.

Speaker #2: So I would say, rest assured, we are number one since inception. We are number one in this as of today, in terms of registration.

Speaker #2: So, we are delivering in the segment the most vehicles into the market, and as you rightly said, our intention is to strive to drive the market to higher adoption, which we will continue to do.

Speaker #1: Oh, hi Balan. Have you finished with the question? As there is no response from Balan, we'll move forward to the next participant. Before that, ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participants, we request you to kindly limit your questions to two per participant.

Operator: Hi, Bala. Are you done with the question? There is no response from Bala. We will move forward to the next participant. Before that, ladies and gentlemen, in order to ensure that the management will be able to address all the questions from the participant, we request you to kindly limit your question to 2 questions only per participant. If you have a follow-up question, please rejoin the queue. Our next question comes from the line of CA Jinesh Chopra with Chopra Capital Partners. Please go ahead.

Speaker #1: If you have a follow-up question, please rejoin the queue. Our next question comes from the line of C.H. Inish Chopra with Chopra Capital Partners.

Speaker #1: Please go ahead.

Jinesh Chopra: Sir, thank you for the opportunity. Sir, I just wanted to know about Insulator Division. What is the industry outlook for the next 3 to 5 years? Out of that industry growth, how much will we be able to capture the industry growth? Plus, how will the EBITDA margins look over the next 3 to 5 years, specifically for Insulator Division?

Speaker #4: So, thank you for the opportunity. Sir, I just wanted to know about the insulator division. What is the industry outlook for the next three to five years?

Speaker #4: And out of that industry growth, how much will we be able to capture? Plus, how will the EBITDA margins look over the next three to five years?

Speaker #4: What specifically for insulator division?

Speaker #2: Okay. Okay. See, while there are many predictions, our internal study says there is strong growth in the energy or insulator division because, if you know, India is upgrading the power lines. Many of them are getting upgraded to 800 kV lines.

Mahesh Babu: Okay. See, while there are many predictions, our internal study says there is a strong growth in energy or Insulator Division, because if you know India is upgrading the power lines, many of them are getting upgraded to 800 kV lines. Hence, there is a potential that most of the lines today, as of now, we have close to INR 300 crore worth of orders in the hand, and we are continuing to get inquiries and the deployment over a period of time. I strongly believe that the growth rate with the new products, what we are doing, we have already said in 3 years, we are trying to do a 5x revenue in Insulator Division. That is the intention we are going to work. I strongly believe we will be around 30% plus market share in this segment, continue to be 30% plus market share in this segment.

Speaker #2: And hence, there is a potential that most of the lines today, as of now, we have close to ₹300 crore worth of orders in hand, and we are continuing to get inquiries and deployments over a period of time.

Speaker #2: I strongly believe that the growth rate with the new products we are working on—what we are doing—we have already said that, in three years, we are trying to achieve 5x revenue in the insulator division.

Speaker #2: So that is the intention we are going to work with. I strongly believe we'll be around 30% plus market share in this segment and continue to be at 30% plus market share in this segment.

Speaker #2: And hence the we are taking as equally as mobility division the insulator division also. On terms of growth, in terms of investment, in terms of new product, and and I believe the margins will depend on raw material as well as the product mix.

Mahesh Babu: Hence, we are taking as equally as Mobility Division, the Insulator Division also, on terms of growth, in terms of investment, in terms of new product. I believe the margins will depend on raw material as well as the product mix. But there is no reason to believe that we will drastically drop into what we are telling, what we have seen in Q1 to Q2, just a raw material price increase situation.

Speaker #2: But there is no reason to believe that it will drastically drop into what we are telling, what we have seen in Q1, Q2. Just raw material price increase situation.

Speaker #4: Okay, sir. I just wanted to know what amount of new capex we are planning for the next three to five years, and what ROC we can expect on this new capex?

Jinesh Chopra: Okay. I just wanted to know what amount of new CapEx are we doing for the next 3 to 5 years, and what ROC can we expect on this new CapEx?

Mahesh Babu: See, it is very difficult to tell three to five years CapEx. All that I can tell you is this financial year, we are planning a new building worth INR 30, 35 crore and equipment worth between INR 15 crore we are investing for the capacity expansion as well as in the new product, what we are getting into it. These have been approved by the board, and we have already started this expansion to get into it. This will give us a path for 5x growth, which will give 2x plus for the next financial year readiness.

Speaker #2: See, it is very difficult to tell three to five years' capex. All that I can tell is, this financial year we are planning a new building worth 30 to 35 crore.

Speaker #2: ...and equipment worth between ₹15 crore. We are investing for capacity expansion, as well as in the new product that we are getting into.

Speaker #2: These have been approved by the board, and we have already started this expansion to get into it. This will give us a path for a 5x growth, which will give 2x plus for the next financial year.

Speaker #2: Readiness.

Speaker #4: Okay. And sir, one more question. I just wanted to ask, what is our split for the energy division between export and domestic? Or is it entirely domestic?

Jinesh Chopra: Okay. Sir, one more question. I just wanted to ask you, what is our split for energy division for export and domestic? Or it is entirely domestic?

Speaker #2: Sir, if you want to talk about it.

Mahesh Babu: Parath, you want to talk about it?

Mahesh Babu: Sharat, you want to talk about it?

Speaker #3: Yeah. See, basically last year exports were about 40%.

B. Sharat Chandra: Yeah. See, basically last year, exports was about 40%.

Speaker #4: Okay.

Jinesh Chopra: Okay.

Speaker #3: So, about 36%, to be precise. Actually, this quarter, the export percentage has come down. That is also one of the changes in the product mix.

B. Sharat Chandra: About 36%, to be precise. This quarter, the export percentage has come down. That is also one of the changes in the product mix. We expect the overall exports to be about 35% to 40% of the top line.

Speaker #3: We expect the overall exports to be about 35 to 40% of the top line.

Speaker #4: Okay. And sir, what are the top five customers for export and domestic divisions?

Jinesh Chopra: Okay. Sir, what are the top five customers for export and domestic division?

Speaker #3: In terms of export, we have—in terms of export, we have a very large customer known as Nitin Power Systems in the US.

B. Sharat Chandra: In terms of export, we have a very large customer known as Clean Power Systems in US. This is a major customer where we have direct exports. Apart from that, there has been export through L&T and Tata Projects to the African region through their subsidiaries. We are actually having discussions with various customers, and we hope the export customer profile will increase in this current year. This is as far as the export is concerned. In terms of domestic, we have Tata Projects, we have Kalpataru, we have Transrail, we have Sterlite, Adani, L&T, and of course, Power Grid. These are the main customers.

Speaker #3: This is a major customer where we have direct exports. Apart from that, there have been exports through L&T and Tata Projects to the African region through their subsidiaries.

Speaker #3: So we are actually having discussions with various customers, and so we hope the export customer profile will increase in this current year.

Speaker #3: So, as far as exports are concerned, in terms of domestic, we have Tata Projects, we have Kalpataru, we have Transrail, we have Sterlite, Atani, and L&T.

Speaker #3: And of course, Power Grid. See, these are the major customers.

Speaker #4: Okay, okay. Thank you so much.

Jinesh Chopra: Okay. Thank you so much.

Speaker #1: Thank you. Next question comes from the line of Shivam Kabra with Kernelion. Please go ahead.

Operator: Thank you. The next question comes from the line of Shivam Kabra with Carnelian. Please go ahead.

Speaker #4: Good afternoon, sir, and thank you for taking my question. Starting with the order book, out of the total order book, how much is attributable to MSRTC and BEST separately?

Shivam Kabra: Good afternoon, sir, and thank you for taking my question. Starting with the order book, out of the total order book, how much is attributable to MSRTC and BEST separately?

Speaker #2: Can you repeat the question? Your voice was cracking.

Mahesh Babu: Can you repeat the question? Your voice was cracking.

Speaker #4: Hello. I'm audible now. Hello.

Shivam Kabra: Hello, I am audible now? Hello.

Speaker #2: Yeah, yeah. Go ahead. Go ahead. Go ahead.

Mahesh Babu: Yeah. Go ahead.

Shivam Kabra: So, starting with the order book, out of the total order book, how much would be attributable to MSRTC and BEST separately?

Speaker #4: Yeah. So, starting with the order book, out of the total order book, how much would be attributable to MSRTC and BEST, separately?

Speaker #2: Of the 4,000 vehicles, around 4,000 will be for MSRTC and about 2,000-odd will be for the BEST.

Mahesh Babu: The 4,000 vehicles will be around for MSRTC and about 2,000 ordered to be for the BEST.

Speaker #4: And could you please provide some color on the aging of the order books, specifically out of the roughly 8,000 units of orders?

Shivam Kabra: Could you please provide some color on the aging of the order book, specifically out of roughly 8,000 units of the orders, how much would be older than two years, and what are the challenges that we are facing in executing this order?

Speaker #4: How much would be older than two years, and what are the challenges that we are facing in executing this order?

Speaker #2: I don't have exact details, but all that I can tell you is both MSRTC and BST are old orders. The challenge is, as you know, sometimes between the signed agreement and the actual reality, there are some gaps which we have to engage.

Mahesh Babu: I do not have exact details, but all that I can tell you is both MSRTC and BEST is an old order. The challenge is, as you know, sometimes between the signed agreement and the actual reality, there are some gaps which we have to engage. If you want to really be loss-making, then we can go aggressive on such products without resolving this and then make losses, which the management would not like to do. Management would like to resolve the issues, go only when there is a clear understanding between the STUs and us. The benefits are on both sides, and then we will take this forward. That is by and large the approach we have been following. That is why we are the only profitable EV company in the country.

Speaker #2: If you really want to be loss-making, then we can go aggressive on such products without resolving this, and then make losses, which the management would not like to do.

Speaker #2: Management would like to resolve the issues only when there is a clear understanding between the STUs and us, and the benefits are on both sides. Then we will take this forward.

Speaker #2: So that is, by and large, the approach we have been following. That's why we are the only profitable EV company in the country.

Speaker #2: And hence, we will continue to work with and engage all stakeholders by resolving issues and moving forward, rather than just for the sake of moving forward.

Mahesh Babu: We will continue to work on, engage with all stakeholders by resolving issues and moving forward rather than just for the sake of moving forward.

Speaker #4: Okay. Earlier, we had also planned to localize our battery pack assemblies at system at our new facility. What is the current status on this initiative, and once completed, what will be the overall localization level for the company in the OEM division?

Shivam Kabra: Okay. Earlier we had also planned to localize our battery pack assembly system at our new facility. What is the current status on this initiative? Once completed, what will be overall localization level for the company in OEM division?

Speaker #2: So if you look at our next generation buses, earlier we were planning to localize the battery alone. We evaluated that project, and then we decided instead of just localizing the battery, we will create a next generation product with the localized battery itself.

Mahesh Babu: If you look at our next generation buses, earlier we were planning to localize the battery alone. We evaluated that project and then we decided instead of just localizing the battery, we will create a next generation product with the localized battery itself. That is why I said that we are investing on a next generation buses and trucks, in which we will have a localized battery already being integrated. Because just by localizing battery, we will have the existing product running without improvements because we have a rich knowledge of more than 700 million kilometers of running in the country, and we will have to use this knowledge to our next generation product. So management decided instead of just localizing battery, we will generate a new generation bus and truck platform with local battery into it.

Speaker #2: And that's why I said we are investing in next generation buses and trucks, in which we will have a localized battery already being integrated. Because, just by localizing the battery, we will have the existing products running without improvements, since we have a rich knowledge of more than 700 million kilometers of running in the country.

Speaker #2: And we'll have to use this knowledge for a next generation product. So, management decided that instead of just localizing the battery, we will develop a new generation bus and truck platform with a local battery integrated into it.

Speaker #2: That is how we are going, and that's what I said: by Q4 of this financial year, the next-generation electric bus, followed by the electric truck, will be launched starting from the last quarter.

Mahesh Babu: That is how we are going, and that is what I said by Q4 of this financial year. The next generation electric bus, followed by electric truck will be launched starting from the last quarter. I said every quarter we will launch one or two products for the next four quarters starting from Q4 of this financial year. Our team is working closely into getting these products. I strongly believe these products are really next generation, and it will bring in value, cost reduction, and hence, contribution. It will bring in new features and hence, customer meeting new regulations. There are a lot of new regulations coming. Market is moving towards many new adoption of regulations. In the bus as well as truck, it will meet all the new regulations going forward.

Speaker #2: I said every quarter we will launch one or two products for the next four quarters, starting from Q4 of this financial year. Our team is working closely to get these products ready.

Speaker #2: I strongly believe these products are really next generation, and they will bring in value, cost reduction, and hence contribution. They will bring in new features and help customers meet new regulations. There are a lot of new regulations coming; the market is moving towards many new adoptions of regulations in the bus as well as truck segments. These products will meet all the new regulations going forward. Also, there are a lot of customer requirements and durability and reliability improvements which we have learned in the market, and we are also improving these products accordingly. Hence, instead of just battery localization, we decided to develop the next generation of products.

Mahesh Babu: As well as there are a lot of customer requirements and durability and reliability improvements, which we have learned in the market, which we are also improving in these products. Hence, instead of just the battery localization, we decided to get the next generation products.

Speaker #4: Oh, okay. What is our current localization level?

Shivam Kabra: Okay, sir. What is our current localization level?

Speaker #2: The new generation products will meet PME drive and E Seva requirements, which means all the aggregates will be local, and the remaining parts—except for the cell—will all be local as well.

Mahesh Babu: The new generation products will meet PM E-DRIVE and eBus Sewa requirements, which is all the aggregates will be local, and the remaining parts except the cell will be all local. In the current level, you all know that there is a transition going on between old generation and new generation. The current level, I don't have the exact number, except the aggregates, I think many of them are locally made.

Speaker #2: At the current level, you all know that there is a transition going on between the old generation and new generation. At the current level, I don't have the exact number except the aggregates—I think many of them are local.

Speaker #4: Okay. Okay. And what are the capex plans for the company in the OEM division, and when are we expected to reach the 5,000 units capacity that we were planning in a single shift?

Shivam Kabra: Okay, sir. What are the CapEx plan for the company in OEM division, and when we are expected to reach 5,000 units capacity that we were planning in Seetharampur?

Speaker #2: So, the capex plan is—we have said that we are investing about ₹450 crore in the new programs, for both tangible and intangible assets in the new platforms.

Mahesh Babu: The CapEx plan is, we have said that we are investing about INR 450 crore in the new programs for both tangible and intangible in the new platforms. That is for prototyping, design, testing, validation, and productionizing these products, and that will get into market by Q4. That is about INR 450 crore. We are also investing about INR 100 crore in terms of building and other equipment to get to the new products, both truck and bus into the one. Insulator, I have already told we are investing about close to INR 50 crore in terms of building and equipment. This is over a period of next 18 months.

Speaker #2: That is for prototyping, design testing, validation, and productionizing these products. And that will get into market by Q4. That's about ₹450 crore. We are also investing about ₹100 crore in terms of building and other equipment to get the new products, both truck and bus, into the market.

Speaker #2: Insulator I've already told we are investing about close to 50 crore in terms of building and equipments. Which will this is over a period of next 18 months.

Speaker #4: So, ₹450 crore is for an 18-month period. Am I right?

Shivam Kabra: INR 450 crore is for 18 months period. Am I right?

Speaker #2: Yes. Yes. Yes.

Mahesh Babu: Yes.

Speaker #4: Okay. And sir, what is the rate at which we borrow our term loans, and what is the rate of interest that we pay for the working capital requirement?

Shivam Kabra: Okay. Sir, what is the rate at which we borrow our term loans, and what is the rate of the interest that we pay for the working capital requirements?

Speaker #2: The term loan rate is about 9%. And we actually do a lot of mix of MSME and non-MSME platforms. So, our cost of working actually is about 7%.

Mahesh Babu: The term loan rate is about 9%. We actually do a lot of mix of MSME, non-MSME platform. So our cost for working capital is about 7% for both of the major portion of working capital. We incur a lot of finance cost towards LCs, which is a major cost, which will come down going forward in next year. Q1 of next year will see definitely lower LC cost.

Speaker #2: For about the major portion of working, actually. And we incur a lot of finance cost towards LCs, which is a major cost that will come down going forward, in the coming next year.

Speaker #2: So, one of next year, we will definitely lower LC cost.

Speaker #4: Okay, that is from my side. I will join you for the further questions.

Shivam Kabra: Okay, sir. That's it from my end. Will join the queue for the further question.

Speaker #1: Thank you. Reminder to all the participants: please restrict your questions to two per participant. Thank you. Our next question comes from the line of Nishita with Sapphire Capital.

Operator: Thank you. A reminder to all the participants, please restrict your question to two question only per participant. Thank you. Our next question comes on the line of Nishita with Sapphire Capital. Please go ahead.

Speaker #1: Please go ahead.

[Analyst] (Sapphire Capital): Yes. Am I audible?

Nishita Shanklesha: Yes. Am I audible?

Speaker #3: Yes. Am I audible?

Speaker #1: Yes Nishita. Please go ahead.

[Analyst] (Sapphire Capital): Yes, Nishita.

Nishita Shanklesha: Yes, Nishita.

[Analyst] (Sapphire Capital): Hello.

Nishita Shanklesha: Hello.

[Analyst] (Sapphire Capital): Please go ahead.

Nishita Shanklesha: Please go ahead.

[Analyst] (Sapphire Capital): I just wanted to understand, our margins have dropped, and you have explained that they have dropped because of the product mix change and the raw material price hike. Since the situation has now subdued, can we expect the EBITDA margins to go back to the previous 15% from Q2 onwards, Rama?

Speaker #3: Yeah. So, I just wanted to understand—our margins have dropped, and you've explained that they've dropped because of the product mix change and the raw material price hike.

Nishita Shanklesha: I just wanted to understand, our margins have dropped, and you have explained that they have dropped because of the product mix change and the raw material price hike. Since the situation has now subdued, can we expect the EBITDA margins to go back to the previous 15% from Q2 onwards, Rama?

Speaker #3: So, since the situation has now subdued, can we expect the raw EBITDA margins to go back to the previous 15% from Q2 onwards?

B. Sharat Chandra: Basically, the moderations and all the raw material prices coming back to old levels is happening now. We will see gradual improvement in the energy segment. As far as the mobility segment is concerned, we have earned healthy margins. It again all depends on the product mix, and hopefully with all supply constraints not there now, we hope the operating margins to remain. I think we have spoken about this in the past. Around 12% is what we are looking at to stabilize.

Speaker #2: So basically the the moderations and all the the raw material price is coming back to all levels is happening now. We will see gradual improvement in the in the energy segment as well as the mobility segment is concerned we have earned the LD margins it again all depends on the product mix and hopefully with all supply constraints not not there now we hope the LD the operating margins to remain I I think we have spoken about this in in the past around 12% is what we are looking at to stabilize.

[Analyst] (Sapphire Capital): Okay. Previously, we have had the margins at around 14% to 15%. Why the 12% change? Are we being conservative when we say that we will have 12% margins? Our insulator segment also has really good margins, and that is also going to grow 5x in next three years.

Nishita Shanklesha: Okay. Previously, we have had the margins at around 14% to 15%. Why the 12% change? Are we being conservative when we say that we will have 12% margins? Our insulator segment also has really good margins, and that is also going to grow 5x in next three years.

Speaker #3: Okay. But previously, we've had the margins at around 14–15%. So why the 12% range? Are we being conservative when we say that we'll have 12% margins?

Speaker #3: Because our insulator segment also has really good margins, and that is also going to grow five weeks in the next three years.

Speaker #2: So, there are two reasons. One is that insulators used to have high exports, and exports used to have healthy margins. So, insulator margins are higher.

Mahesh Babu: There are two reasons. One, what is up. Insulator used to have high export. Export used to have healthy margins, so insulator margins were higher. Due to geopolitics and all the shipping challenges and what is happening today, Trump tariffs and all that has really made export a little difficult, and we need to really understand one. Hence, expected to go back to the earlier margins is really we wish, like you, that it happens. However, it is not expected that this Q1 impact will continue. It will definitely improve. Our wish along with you is that we will get back. Our intention is to get back to the same margin, but it will be over a period of time because we will have to do a risk mitigation other than exports, how to get, what is the market, and we will have to play that one.

Speaker #2: But due to geopolitics and all the shipping challenges, and what's happening today—Trump tariffs and all that—it has really made export a little difficult. We need to really understand that, and hence expecting to go back to the earlier margins is really—we wish, like you, that it happens.

Speaker #2: However, it is not expected that this Q1 impact will continue. It will definitely improve. Our wish, along with yours, is that we'll get back.

Speaker #2: Our intention is to get back to the same margins, but it will be over a period of time because we'll have to do a risk mitigation. Other than exports, how to do it.

Speaker #2: What is the market, and we'll have to play that one. So, what we are saying is, it will lie between 12% to 15% on a given day, and that's what market is.

Mahesh Babu: What we are saying is it will lie between 12% to 15% on a given day, and that is what a market is. In fact, if you look at the auto industry, most of them are much lower than around 10% to 12%, and while we continue to enjoy the higher percentage, we need to really see how we will maintain it, and that is the intention of the management.

Speaker #2: In fact, if you look at the auto industry, most of them are much lower, around 10 to 12%. And while we continue to enjoy the higher percentage, we need to really see how we will maintain it, and that's the intention of the management.

Speaker #3: Okay. Okay, understood. My next question is on our truck sales. I just wanted to understand, have we already started with the truck sales?

[Analyst] (Sapphire Capital): Okay. Understood. My next question is on our truck sales. I just wanted to understand, have we already started with the truck sales?

Nishita Shanklesha: Okay. Understood. My next question is on our truck sales. I just wanted to understand, have we already started with the truck sales?

Speaker #2: See, in the previous quarters, we have deployed about 115 trucks, and we'll continue to deploy maybe another 40 to 50 trucks.

Mahesh Babu: See, in the previous quarters, we have deployed about 115 trucks.

[Analyst] (Sapphire Capital): Okay.

Nishita Shanklesha: Okay.

Mahesh Babu: About 115 trucks. We will continue to deploy maybe another 40, 50 trucks. This is mainly to learn as a pilot, to learn the market for our next generation truck. The intention of these trucks are not to get revenue, but to more of a pilot to ensure that our next generation platform. It is like a seeding of trucks in the various applications to learn to develop our products. We will continue to, but our own truck will come at the end of Q4. So you will see the truck sale impact in our financials in the next financial year.

Speaker #2: This is mainly to learn as a pilot, to learn the market for our next-generation truck. The intention of these trucks is not to get revenue, but to serve more as a pilot to ensure that our next-generation platform...

Speaker #2: It's like a seeding of trucks in the various applications to learn to develop our products. So we will continue to, but our own truck will come at the end of Q4.

Speaker #2: So, you will see the truck sale impact in our financials in the next financial year.

Speaker #3: Okay, okay, understood. That is it from my end. Thank you so much.

[Analyst] (Sapphire Capital): Okay. Understood. That is it from me. Thank you so much.

Nishita Shanklesha: Okay. Understood. That is it from me. Thank you so much.

Speaker #1: Thank you. Our next question comes from the line of Preet with Incred AMC. Please go ahead.

Operator: Thank you. Our next question comes from the line of Preet with Investec AMC. Please go ahead.

Operator: Thank you. Our next question comes from the line of Preet with InCred AMC. Please go ahead.

Speaker #4: Thank you for the opportunity, sir. My first question would be along the lines of the EV industry. How do you expect the EV bus industry to grow over the next three to five years, and what kind of deliveries do we expect in FY27 and FY28?

[Analyst] (Incert AMC): Thank you for the opportunity, sir. My first question will be on the line of EV industry. How do you expect for next three to five years EV bus industry to grow? What kind of deliveries do we expect in FY27 and FY28?

Preet Pitani: Thank you for the opportunity, sir. My first question will be on the line of EV industry. How do you expect for next three to five years EV bus industry to grow? What kind of deliveries do we expect in FY27 and FY28?

Speaker #2: So if you look at the overall EV industry, I think substantially, if you look at two-wheelers, that adoption is close to 9% in the first quarter.

Mahesh Babu: If you look at the overall EV industry, I think, substantially, if you look at two-wheelers, its adoption is close to 9% in the first quarter, while it was about 6.8% last full financial year. Three-wheeler is about 60%. Four-wheeler cars is close to 5%. Four-wheeler goods are around 2%, 3%, and trucks is a meager 0.3%. Bus is at around 7% in the first quarter. It is expected, last year it was about 4.7%. Basically, we are seeing adoption happening in all the segment between two-wheeler till buses. We are in the bus and truck segment. Truck segment is very nascent. As I told, we are doing a pilot to learn it. Major volumes will come in next three to five financial years, and hence we are ready and getting ourself prepared for a journey for next five years in the truck segment.

Speaker #2: While it was about 6 6.8% last full financial year. Three wheeler is about 60%. Four wheeler cars is close to 5%. Four wheeler goods are around 2 3%.

Speaker #2: And trucks, you know, is a meager 0.3%. Buses are at around 7% in the first quarter. It is expected—last year it was about 4.7%.

Speaker #2: So basically, we are seeing adoption happening in all the segments, from two-wheelers to buses. We are in the bus and truck segments. The truck segment is very nascent, as I mentioned. We are doing a pilot to learn from it.

Speaker #2: Major volumes will come in the next three to five financial years, and hence, we are ready and getting ourselves prepared for a journey over the next five years in the truck segment.

Mahesh Babu: Bus segment has reached a reasonable point, which is 7% is very critical. Even if you look at the overall 7%, this is overall bus market. But if you look at nine and 12 meter, out of 7,800 buses, almost 1,500 buses is the adoption. If you look at it's almost 30% in this segment. If you look at STU, out of 2,000 buses which STUs have ordered or registered in the first quarter, 1,400 is electric. That is substantially close to 70%, right? STUs EV adoption in bus is about 70%. If you look at nine and 12 meter, it is about 19%. Overall, it is about 6%. This growth is happening, particularly after the war, I think a lot of private inquiries have come in bus and trucks for adapting to EVs. We believe that this segment will grow substantially.

Speaker #2: Bus segment has reached a reasonable point, which is 7%. Seventy percent is very critical. Even if you look at the overall 7%—this is overall bus—out of 7,800 buses, almost 1,400 or 1,500 buses is the adoption.

Speaker #2: So, if you look at it, it's almost 20% in the segment. And if you look at STU, out of 2,000 buses which STUs have ordered or registered in the first quarter, 1,400 are electric.

Speaker #2: That is substantially close to 70%, right? So, STU's EV adoption in buses is about 70%. If you look at 9- and 12-meter, it is about 19, 19%.

Speaker #2: Overall, it is about 6%. So, this growth is happening particularly after the war. I think a lot of private enquiries have come in regarding buses and trucks for adapting to EVs.

Speaker #2: So, we believe that this segment will grow substantially. We are expecting the total FY27 TIV would be about 8,000 buses, out of which we are expecting to deliver about 2,000 to 2,500 buses in this financial year.

Mahesh Babu: We are expecting the total FY27 TIV would be about 8,000 buses, out of which we are expecting to deliver about 2,000 to 2,500 buses in this financial year. Next year, this growth rate, at least a CAGR of 30% to 50% is expected depending upon what's happening in the market, and that's our prediction in terms of bus adoption.

Speaker #2: Next year, this growth rate—at least a CAGR of 32% to 50%—is expected, depending upon what's happening in the market. And that's our prediction in terms of bus adoption.

Speaker #4: So, we have done around 250, yeah, I'm still continuing. We have done around 350 bus deliveries in Q1. So, we expect around a 700 per quarter run rate for bus delivery.

[Analyst] (Incert AMC): We have done around 350.

Preet Pitani: We have done around 350.

Mahesh Babu: Thank you.

[Analyst] (Incert AMC): Yeah, I am still continuing. We have done around 350 buses delivery in Q1. So we expect around 700 per quarter run rate of the bus delivery. Am I understanding it right?

Preet Pitani: Yeah, I am still continuing. We have done around 350 buses delivery in Q1. So we expect around 700 per quarter run rate of the bus delivery. Am I understanding it right?

Speaker #4: Am I understanding it right?

Speaker #2: See, even if you take between 2,000 as the run rate in the coming quarter, what are we talking about? We are talking about 500 to 600 vehicles.

Mahesh Babu: Well, even if you take between the run rate in the coming quarter, what we are talking about, we are talking about 500 to 600 vehicles. While the exit quarter, when we ramp up and we will have our own buses in the last quarter, that will add up to it. So let's say we are producing the current generation buses and for current orders at the rate of about, consistently, we made 350 in the last four quarters. We are expecting close to 500 this quarter and improving up to 600 and 700 in the last quarter. That's what we are looking at.

Speaker #2: While the exit quarter, when we ramp up and we have our own buses in the last quarter, that will add up to new.

Speaker #2: So let's say we are producing the current generation buses, and for current orders, we are consistently making about 350 in the last four quarters.

Speaker #2: We are expecting close to 500 this quarter, and any improvement up to 600 and 700 in the last quarter. That's what we are looking at.

Speaker #4: Got it, sir. And my second question is along the lines of the incubator business. If we bifurcate, what are our domestic incubator margins and what are the export incubator margins?

[Analyst] (Incert AMC): Got it, sir. My second question is on the line of insulator business. If you could just break again, what are our domestic insulator margin and what are the export insulator margin? The growth we have told you in next five years, or five, six in next two years, we are expecting it to be how much from the domestic and how much from export?

Preet Pitani: Got it, sir. My second question is on the line of insulator business. If you could just break again, what are our domestic insulator margin and what are the export insulator margin? The growth we have told you in next five years, or five, six in next two years, we are expecting it to be how much from the domestic and how much from export?

Speaker #4: And the growth, we have told 3X in the next five years. Do 5X in the next three years? We are expecting it to grow how much from the domestic and how much from export?

Speaker #2: Yeah, as I told you, the mix of exports will remain around 35% to 40% of the total top line. And, see, overall, in terms of—we cannot actually specify what is the margin in domestic and exports.

Mahesh Babu: As I told you, the mix of exports will remain around 35% to 40% of the total top line. Overall, in terms of, we cannot actually specify what is the margin in domestic and exports. Overall, we have seen the margins the last two years. At gross margin level, it was about 45%. Now gross margin is about 40%. So we expect the gross margin levels to stabilize around 40% to 45% in the midterm, in near-term basis. Overall, we will have to again factor what is going to be the. If there are no other external factors like geopolitical issues and raw material prices increases, we hope the margins will stabilize around 40% to 45%.

Speaker #2: Overall, we have seen that for the last two years, the gross margin level was about 45%. Now, gross margin is about 40%. So, we expect the gross margin levels to stabilize around 40 to 45% in the midterm.

Speaker #2: On a near-term basis, overall, we'll have to again factor in what is going to be, if there are no other external factors like geopolitical issues and raw material price increases, we hope the margins will stabilize around 40% to 45%.

Speaker #4: Got it, sir. I understand that we cannot give the top line for domestic and export, but can we just know what the margin differential would be? Would it be around 500 basis points or 700 basis points between domestic and export?

[Analyst] (Incert AMC): Got it, sir. I understand that you cannot give breakup of domestic and export, but can we just know what would be the margin differential? It would be around 500 basis point or 700 basis point between domestic and export? That is my last question. Thank you.

Preet Pitani: Got it, sir. I understand that you cannot give breakup of domestic and export, but can we just know what would be the margin differential? It would be around 500 basis point or 700 basis point between domestic and export? That is my last question. Thank you.

Speaker #4: That's my last question. Thank you.

Speaker #2: Basically, again, it's a mix. It's not really an apples-to-apples comparison. So, we have a lot of products, right from 25 kV to 800 kV.

Mahesh Babu: Basically, again, it is a mix. It is not really an apple to apple comparison. So we have lot of products, right from 25 kV to 800 kV. So that kind of split is very difficult to actually predict. Definitely, export margins are better. As you said, about 5%.

Speaker #2: So, that kind of split is very difficult to actually predict. Definitely, export margins are better, as you said—about five, yeah. About 5%.

Speaker #4: Thank you. Thank you so much, sir.

[Analyst] (Incert AMC): Thank you. Thank you so much, sir.

Preet Pitani: Thank you. Thank you so much, sir.

Speaker #1: Thank you. Our next question comes from the line of Goreng. With that, please go ahead.

Operator: Thank you. Next question comes from the line of Gaurang with Utility Unified. Please go ahead.

Operator: Thank you. Next question comes from the line of Gaurav with Utility Unified. Please go ahead.

Speaker #4: Good evening, team. Congratulations on the 4,000 bus orders. My question is with respect to the first BST order, which was 1,400, plus a 50% variation.

[Analyst] (Utility Unified): Good evening team. Congratulations for the 4,000 bus orders. My question is with respect to the first BEST order, which was 1,400 plus 50% variation, so that made it 2,100. Sir, just wanted to know whether this order is canceled or are we still in discussion? Because why I am asking is, Switch similarly had this issue with BEST, but their 150 pending bus order is now reinstated. Are we also expecting that this particular order might be reinstated back if it is canceled?

Speaker #4: So that made it 2,100. Sir, I just wanted to know whether this order is cancelled or are we still in discussion? Because why I'm asking is, Switch similarly had this issue with BST, but their 150 pending bus order is now reinstated.

Speaker #4: So, are we also expecting that this particular order might be reinstated if it's cancelled?

Speaker #2: So, right now, this order is under discussion, which is, I would say, neither cancelled nor accepted. It is under discussion with the authorities for the way forward.

Mahesh Babu: This order is under discussion, which is, I would say, neither canceled nor accepted. It is under discussion with the authorities for the way forward. It is under discussion, and hence we are not delivering any more buses for that tender. Hence, only the dispute resolution happens, then we will be able to take it forward, whichever way it is.

Speaker #2: So it is it is it is under discussion and hence we are not delivering any more buses for that tender. And hence we will only the dispute resolution happen then we'll be able to take it forward whichever way it is.

Speaker #4: Okay, sir. And my second question is with respect to the second order. So, the second order was 2,400 plus 25% variation, so that made it 3,000 buses.

[Analyst] (Utility Unified): Okay, sir. My second question is with respect to the second order. The second order was 2,400 plus 25% variation. That made it 3,000 buses. Is it that we are going to deliver the pending 2,900 buses or is it 2,000 buses?

Speaker #4: So, is it that we are going to deliver the pending 2,900 buses or is it 2,000 buses?

Mahesh Babu: The pending order is only 2,000. The variation is only at the end of the order, if the authorities want, if both of us agree, then only that 25% variation is allowed. Right now we have 2,000 more for the second order, and that we will continue to deliver.

Speaker #2: The pending order is only 2,000. The variation is only at the end of the order if the authorities want, then only if both of us agree, then only up to 25% variation is allowed.

Speaker #2: So, right now we have 2,000 more for the second order and we will continue to deliver.

Speaker #4: Okay, so there is scope to extend that by 600 buses if they are interested.

[Analyst] (Utility Unified): Okay. There is scope of extending that by 600 buses, if they are interested.

Speaker #2: At the end of the contract, yes. After we deliver everything at the end of the contract, if both sides agree, then only there is a scope for one.

Mahesh Babu: At the end of the contract, yes. After we deliver everything, at the end of the contract, if both sides agree, then only there is a scope for one. Right now, we should not take that as order. It is only we have got LOI and the delivery for only the quantity which was in the tender without increase.

Speaker #2: Right now, we should not take that as an order. We have only received the LOI, and the delivery is for only the quantity that was in the tender, without any increase.

Speaker #4: Fair enough, sir. So, my last question, sir—so I was just going through the numbers of medium to heavy-duty electric, sorry, normal trucks sold in India, and that's around 3 lakh to 4 lakh is the number.

[Analyst] (Utility Unified): Fair enough, sir. My last question, sir. I was just going through the numbers of medium to heavy duty normal trucks sold in India, and that is around 3 lakh to 4 lakh, is the number. Once our new platform is ready, what could be the numbers that we are targeting for, especially for the next financial year?

Speaker #4: So, once our new platform is ready, what could be the numbers that we are targeting for, especially for the next financial year?

Speaker #2: Our truck, if you look at 330,000, is the diesel truck, what you are saying. And if you look at the EV trucks, EV truck last year—one second, give me a second—last year is about 20,800 vehicles.

Mahesh Babu: Our truck, if you look at 3.30 lakh is the diesel truck, what you are saying.

[Analyst] (Utility Unified): Yes, sir.

Mahesh Babu: EV trucks. One second. Give me a second. Last year it is about 800 vehicles. So EV truck is about 800 vehicles. In FY27 Q1, EV truck registration is about 270 vehicles. So there is a good amount of that. It will reach close to 1,000 plus vehicles, 1,200 plus vehicles this financial year. So we expect about 1,500 to 2,000 is the addressable market in next financial year, out of which at least we will target in the first year to get about 20% to 25% market share, and then we will start growing from there.

Speaker #2: So, EV truck is about 800 vehicles. In Q1 FY27, EV truck registration is about 270 vehicles. So, there is a good amount of chance that it will reach close to 1,000-plus vehicles, maybe 1,200-plus vehicles this financial year.

Speaker #2: So, we expect about 1,500 to 2,000 as the addressable market in the next financial year, out of which at least we will target in the first year to get about 20 to 25% market share, and then we'll start growing from there.

Speaker #4: Fair enough, sir. Thank you so much for answering all the questions. Thank you.

[Analyst] (Utility Unified): Clear, Madhu. Thank you so much for answering all the questions. Thank you. I am done.

Speaker #1: Thank you. Our next question comes from the line of Durgesh, an individual investor. Please go ahead.

Operator: Thank you. Our next question comes from the line of Durgesh, an individual investor. Please go ahead.

Durgesh Annamudi: Hi. This is Durgesh Annamudi. Am I audible?

Speaker #3: Hi, this is Durgesh. Am I audible?

Speaker #1: Yes, sir, you are. Please go ahead.

Operator: Yes, sir, you are. Please go ahead.

Speaker #3: Yeah. This is Durgesh Annamani, individual investor. My first question I already asked. My second question is, can you share the mobility margin percentage?

Durgesh Annamudi: Yeah. This is Durgesh Annamudi, individual investor. My first question already answered. My second question is, can you share that mobility margin percentage?

Mahesh Babu: Mobility margin percentage, overall PBIT margin is about 8.2%. About 14.7%.

Speaker #2: It is held, mobility margin percentage overall PBIT margin is about 8.2%. About 14.7%.

Speaker #3: Oh. Thank you. Thank you.

Durgesh Annamudi: Okay, thank you.

Speaker #1: Thank you. Our next question comes from the line of Ritvik, an individual investor. Please go ahead.

Operator: Thank you. Our next question comes from the line of Rithvik, an individual investor. Please go ahead.

Speaker #4: Hello, good evening sir. Many congratulations for the Q1, sir.

[Company Representative]: Hello, good evening, sir. Many congratulations for the Q1, sir.

Rithvik Ram: Hello, good evening, sir. Many congratulations for the Q1, sir.

Mahesh Babu: Thank you.

Speaker #2: Thank you.

Speaker #4: My first two questions are: my first question is, what is the plan for the GFRB RP rebar business? And my second question is, what is the impact of the wage code and labor code on your company's financials?

[Company Representative]: My first two questions are, my first question is, what is the plan for the GFRP rebar business? My second question is, what is the impact of wage code, labor code on your company's financials? These are my two questions.

Rithvik Ram: My first two questions are, my first question is, what is the plan for the GFRP rebar business? My second question is, what is the impact of wage code, labor code on your company's financials? These are my two questions.

Speaker #4: These are my two questions.

Mahesh Babu: I think the rebar thing, it is quite competitive and not much of real margins we are expecting. So we have actually slowed down. In fact, we are not pursuing it now for rebar. As far as the wage bill is concerned, we have already factored it is not significantly material for us. It is about INR 50 to 70 lakhs, which has been absorbed in the financials.

Speaker #2: I think the rebar thing is quite competitive, and then not much in terms of real margins we are expecting. So we have actually slowed down. In fact, we are not pursuing it now for rebar.

Speaker #2: As far as the wage bill is concerned, we already factored it in. It's not significantly material for us. It's about 50 to 70 lakhs, which we have absorbed in the financials.

Speaker #4: Pleasure, sir. I've been an investor in Olectra since September 2017, and by next year I'll complete 10 years investing in Olectra. Thank you very much.

[Company Representative]: Pleasure, sir. I have been an investor of Olectra since September 2017, and by next year I will complete 10 years investing in Olectra. Thank you very much.

Rithvik Ram: Pleasure, sir. I have been an investor of Olectra since September 2017, and by next year I will complete 10 years investing in Olectra. Thank you very much.

Speaker #2: Thank you for that continued trust in the company and the management.

Mahesh Babu: Thank you for the continued trust in all the company and the management.

Speaker #4: Welcome.

[Company Representative]: Thank you.

Rithvik Ram: Thank you.

Speaker #3: Thanks. Thank you so much, sir.

Operator: Thank you so much, sir. Our next question comes from the line of Pankaj from Affin Assets. Please go ahead.

Operator: Thank you so much, sir. Our next question comes from the line of Pankaj from Affluent Assets. Please go ahead.

Speaker #1: Our next question comes from the line of Pankaj from Offwind Assets. Please go ahead.

[Analyst] (Affin Assets): Thanks for taking my question. Sir, just wanted to understand, when can we see meaningful increase in the numbers delivered? We have a capacity increase from January quarter, and it has been almost 8 months, but we have not seen any impact of the increased capacity on our numbers delivered.

[Analyst] (Affluent Assets): Thanks for taking my question. Sir, just wanted to understand, when can we see meaningful increase in the numbers delivered? We have a capacity increase from January quarter, and it has been almost 8 months, but we have not seen any impact of the increased capacity on our numbers delivered.

Speaker #4: Thanks for taking my question. Sir, I just wanted to understand: when can we see a meaningful increase in the numbers delivered? As we have had a capacity increase from the January to June quarter, and it's been almost eight months but we have not seen any impact of the increased capacity on our numbers delivered.

Speaker #2: Okay. So, as I have mentioned already, in the last four quarters, after the plant was installed, we have been consistently delivering 350-plus vehicles.

Mahesh Babu: Well, I have told already that in the last four quarters, after the plant has been installed, we have been consistently delivering 350 plus vehicles. There were multiple challenges. I told you there were supply chain issues, there are issues related to front-end readiness and hence deployment and so on. We are expecting from this quarter the numbers to go up. I already covered this. We are looking at exiting around 600, 700 vehicles per quarter and around about 500 in the coming quarter. That's the impact we are doing. We have done a lot of work in terms of streamlining the capacity. Capacity is not just the capacity at the plant. We need to streamline the supply chain. We need to prepare the depots to ensure that we are able to deploy them without capital lock.

Speaker #2: There are multiple challenges. I told you there were supply chain issues. There are issues related to front-end readiness and hence deployment, and so on.

Speaker #2: We are expecting the numbers to go up this quarter. I already covered this. We are looking at exiting around 600 to 700 vehicles per quarter, and about 500 in the coming quarter.

Speaker #2: That's the impact we are making. We have done a lot of work in terms of streamlining the capacity. Capacity is not just the capacity at the plant.

Speaker #2: We need to streamline the supply chain. We need to prepare the depots to ensure that we are able to deploy them without capital lock.

Speaker #2: So, all this, I strongly believe, has been done, and then you will see a ramp up in this financial year, quarter on quarter from now on.

Mahesh Babu: All this, I strongly believe, has been done, and then you will see a ramp-up in this financial year, quarter on quarter from now on.

Speaker #4: Okay. Secondly, sir, is there any scope for us to go overseas like our competitors or peers in India? For example, Tata Motors—they are looking and scouting for opportunities, especially in EV, outside, across the borders.

[Analyst] (Affin Assets): Okay. Secondly, sir, is there any scope for us to go overseas like our competitors or peers in India, Switch, Tata Motors, they are scouting for opportunities, especially in EV outside, across the borders. Is there any scope for us to go beyond borders, given that we have been tying up with BYD for batteries?

[Analyst] (Affluent Assets): Okay. Secondly, sir, is there any scope for us to go overseas like our competitors or peers in India, Switch, Tata Motors, they are scouting for opportunities, especially in EV outside, across the borders. Is there any scope for us to go beyond borders, given that we have been tying up with BYD for batteries?

Speaker #4: So, is there any scope for us to go beyond borders, given that we have been tying up with BYD for batteries?

Speaker #2: See, our new generation platform vehicles, both bus and truck, we are projecting to export market as well. That is one of the reasons we are not just localizing, but went into new generation products.

Mahesh Babu: See, our new generation platform vehicles, both bus and truck, we are projecting to export market as well. That is one of the reasons we are not just not localizing, but went into new generation products. We will have a potential to export, and we have already started configuring the vehicles to meet the export requirements when it comes out in Q4 of this financial year. Next financial year would be our exploration to participate and take our vehicle to export market. So to your question is yes, with our new generation products, and we will be ready by end of this financial year.

Speaker #2: We will have a potential to export, and we have already started configuring the vehicles to meet the export requirements when it comes out in Q4 of this financial year.

Speaker #2: Next financial year would be our exploration to participate and take our vehicle to the export market. So yes, to your question, the answer is yes, with our new generation products, and we'll be ready by end of this financial year.

[Analyst] (Affin Assets): Sure. And finally, sir, would there be any increase in our margins with the increase in indigenization level?

[Analyst] (Affluent Assets): Sure. And finally, sir, would there be any increase in our margins with the increase in indigenization level?

Speaker #4: Sure. Sure. And finally, sir, would there be any increase in our margins with the increase in the level of indigenization or indigenization money?

Speaker #2: Yes, in our new generation products, when everything is local, we will have better margins than what it is today. That is expected.

Mahesh Babu: Yes. In our new generation products, when everything is local, we will have better margins than what it is today. That is expected. Now, how much we will realize? Definitely, it will be better. I cannot tell how much it is. We will see it from Q4 of this financial year onwards.

Speaker #2: Now, how much we'll realize—definitely, it will be better. I can't tell how much it is. You will see it from Q4 of this financial year onwards.

Speaker #4: Sure. Thank you. Thanks a lot, sir.

[Analyst] (Affin Assets): Sure. Thank you.

[Analyst] (Affluent Assets): Sure. Thank you.

Mahesh Babu: Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you. Anyone who wishes to ask a question, please press star and one. As I don’t see any further questions from the participants, I now hand the conference over to the management for the closing remarks.

Operator: Thank you. Anyone who wishes to ask a question may press star and one. As there are no further questions from the participants, I now hand the conference over to the management for the closing remarks. Thank you, and over to you, team.

Speaker #1: Thank you, and over to you, team.

Speaker #2: Okay. Thank you all, investors, for the trust and continued support to Olectra GreenTech as well as the management. As I have said, I strongly believe that we are in the right position now.

Mahesh Babu: Okay. Thank you, all investors, for the trust and continued support to Olectra Greentech, as well as the management. As I have said, I strongly believe that we are in a right position now. We are getting into new products. We are getting into expansion. We are preparing ourselves for new regulations and potential export, and so on. These are all taking time. While there were multiple challenges due to geopolitics and war, I think our team has managed well to curtail and ensure that profitability is still maintained. Going forward, we will continue to work.

Speaker #2: We are getting into new products. We are getting into expansion. We are preparing ourselves for new regulations and potential export, and so on. These are all exciting times, while there were multiple challenges due to geopolitics and war.

Speaker #2: I think our team has managed well to curtail costs and ensure that profitability is still maintained. Going forward, we'll continue to work.

Speaker #1: Thank you so much sir. Ladies and gentlemen on behalf of Olectra Green Tech Limited that concludes today's call. Thank you for joining us and you may now disconnect your lines.

Operator: Thank you so much, sir. Ladies and gentlemen, on behalf of Olectra Greentech Limited, that concludes today's call. Thank you for joining us. You may now disconnect your lines.

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Q1 2027 Olectra Greentech Ltd Earnings Call

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