Operator: Ladies and gentlemen, good day and welcome to the Dixon Technologies Q2 FY 2027 Earnings Conference Call hosted by DAM Capital Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this call is being recorded. I now hand the conference over to Mr. Tanay Shah from DAM Capital Advisors. Thank you, and over to you.
Tanay Shah: Thank you. Good evening, everyone, and welcome to Dixon's Q2 FY 2027 earnings call. Today, we have with us the management being represented by Mr. Atul Lall, Vice Chairman and Managing Director, and Mr. Saurabh Gupta, Director and Group CFO. At this point, I will hand over the floor to Atul sir for his opening remarks, post which we will open up the floor for Q&A. Thank you, and over to you, sir.
Atul Lall: Thanks, Tanay. Thank you so much. Good evening, everyone. This is Atul Lall, and joining me today is our Director and Group CFO, Saurabh Gupta.
Saurabh Gupta: Good evening, everybody.
Atul Lall: I would like to warmly welcome all our stakeholders to discuss our Q2 performance for financial year 2026-2027. Key highlights for the quarter are as below. Revenues for the quarter ended 30 September 2026 was INR 21,806 crores. EBITDA, excluding fair value gain on the stake held by Dixon and Aditya Infotech Limited for the quarter, was INR 609 crores. PAT, after minority interest and excluding fair value gain on the stake held by Dixon and Aditya Infotech Limited for the quarter, was INR 293 crores.
Atul Lall: Margins during the quarter were impacted on expiration of Mobile PLI-1 scheme, along with elevated global memory prices due to rapid expansion of AI infrastructure. The pass-through of higher input cost through corresponding increasing in selling prices resulted in a lower reported margin percentage, particularly in mobile and IT hardware business, despite the recovery of increased cost through pricing adjustments.
Atul Lall: Our mobile business has remained resilient, sustaining volumes at broadly stable year-on-year levels, despite the challenging operating environment. Exports volumes for our anchor customer are expected to ramp up meaningfully from Q4 with further growth anticipated along with exports of feature phones and smartphones, exports of Transsion Group brands from the next fiscal. Profitability in washing machine and refrigerator was temporarily affected by fluctuations in polymer prices, rising freight costs and transit time, unfavorable foreign exchange movement, and higher cost of other key inputs. These pressures are expected to ease as cost pass-through initiatives gain traction and operational efficiencies progressively strengthen. During the quarter, we also undertook calibrated pricing actions in response to the sharp rise in input cost. However, with the continued increase in prices, there is always a lag in passing off the same.
Atul Lall: Near-term external headwinds do not alter our medium to long-term growth story, and we continue to see strong opportunities for increasing localization, deepening of manufacturing, new customer additions, and India's growing position in the global electronics manufacturing ecosystem. Our strategic foray into display modules, camera modules, mechanicals, and other critical components represent a significant step in Dixon's evolution from a scaled electronics manufacturing services player to more deeply integrated electronics manufacturing ecosystem.
Atul Lall: By building capabilities across critical components, we aim to enhance domestic value addition, strengthen supply chain resilience, improve cost competitiveness, and deepen customer engagement, and progressively unlock opportunities for margin expansion, thereby strengthening Dixon's competitive moat of sustainable growth. Beyond our established business and component integration initiatives, we are actively evaluating opportunities to build a high-end specialized EMS business with focus on higher-margin, low-volume product categories with strong economics and superior margins.
Atul Lall: One of the strategic areas which is being actively pursued is manufacturing of silicon photonics, optical transceivers, and advanced packaging capabilities to capture rapidly growing AI infrastructure, hyperscale data centers, telecom centers, and high-speed computing technologies that can transmit increasingly large volumes of data with greater bandwidth. As India builds its advanced technology manufacturing ecosystem, Dixon aims to be among the first of the Indian companies to establish capabilities in these segments through strategic acquisitions or partnerships.
Atul Lall: The initiative would accelerate moving up the technology value chain, expand our presence in high manufacturing, and position us to capture emerging opportunities in next-generation electronics. This is also aligned with the government policy framework of ISM 2.0. Now I will share with you the business performance and insights in each of the segments. Mobile and other EMS businesses. Revenue for the quarter was INR 20,093 crores with an operating profit of INR 509 crores.
Atul Lall: Our mobile manufacturing business continues to be a key pillar of Dixon's growth strategy, and we remain focused on scaling volumes, strengthening operational efficiencies, and deepening our relationship with leading global and Indian customers. Despite a challenging industry environment with India's smartphone market declining by 26% year-on-year in Q2 FY2026-2027, according to industry reports, Dixon has demonstrated resilience by sustaining its smartphone manufacturing volume at broadly stable year-on-year levels. This reflects the strength of our customer relationships, execution capabilities, and ability to navigate a volatile demand environment. Exports are poised to become an important incremental growth driver for our mobile business. Export volume for our anchor customer expected to ramp up meaningfully from Q4, with further growth anticipated along with exports of feature phones and smartphones for Transsion Group brands from the next fiscal.
Atul Lall: Together, these opportunities will drive significant incremental volumes for the next fiscal, improving capacity utilization, operating leverage, and strengthen Dixon's growth trajectory. MPMS, that is Mobile Phone Manufacturing Scheme of the Government of India, presents a significant opportunity for Dixon to accelerate growth by scaling volumes and actively engaging with the existing Indian brands to build long-term manufacturing partnerships to drive incremental volumes, strengthen market position, and capture a large share of India's mobile manufacturing opportunities. Consolidation of Vivo operations is expected to commence from Q4, with significant volumes anticipated for the next financial year. Construction of a 1 million square feet facility in Noida with higher capacities has almost been completed, and we expect the operations to commence from Q3 of this fiscal. Long-term JV is expected to commence operation with Q3 of the current financial year.
Atul Lall: We are also exploring opportunities to expand the partnership beyond mobile phones into adjacent product categories, creating avenues for business diversification and incremental growth. Q Tech, our 51% subsidiary and EMS/ECMS beneficiary, operates the largest camera manufacturing plant in India. We have already expanded our capacities from 80 million to 120 million annually, along with deepened manufacturing, which is a margin accretive, and will further expand its capacity to 180 to 190 million units annually by next fiscal.
Atul Lall: The first phase covering automotive and notebook displays is expected to commence trials in Q3, followed by mobile display trials in Q4, with mass production targeted to begin from the next fiscal year. Telecom and networking products. Revenues for the quarter was INR 1,837 crore. This segment has been scaled meaningfully, supported by expanded customer relationships, healthy order book, increasing localization, and sustained investments in telecom infrastructure.
Atul Lall: While our established portfolio of customer premises equipment, including fixed wireless access devices, broadband equipment, and other networking products, continues to provide a strong foundation, we are strategically expanding into more complex, technology-intensive product categories. Production of complex microwave backhaul radios for large global brands has scaled up successfully, and we also expect to export the same during the current fiscal.
Atul Lall: Additionally, we will be adding complex optical platforms and industrial radio products to our portfolio starting next fiscal years. We are pursuing a large opportunity to expand our services to an anchor customer and to serve global markets from our facilities in India, with products such as optical network terminals, that is ONTs, and optical line terminals, that is OLTs, and actively working on IP acquisition for IPTV set-top boxes, in line with our efforts to increase value addition and deepen our role in serving end customers.
Atul Lall: We are in advanced discussions with tier 1 network equipment OEMs to manufacture aggregation routers for India. These are critical 4G to 5G networks connecting cell sites and mobile towers to the core network. Successful execution would not only add high-value telecom products to our portfolio, but also create a pathway to serve global markets. Our joint venture with Gemtek, a Taiwanese ODM, will manufacture optical transceivers as small form-factor pluggable SFPs and bidirectional optical sub-assembly, that is BOSA, with our approved ECMS application. This JV positions us to capture a share of the growing demand in telecom and data center segments, and is expected to commence operations in Q4 of this fiscal.
Atul Lall: Our anchor role in upcoming telecom manufacturing zone at Gwalior will position us at the center of an end-to-end design manufacturing component ecosystem, capitalizing on significant CapEx and OpEx incentives to deliver scalable and globally cost-competitive manufacturing. IT hardware products. Revenues for the quarter was INR 2,160 crores. Dixon's IT hardware vertical is witnessing a very significant growth, driven by increasing volumes, deepening customer engagement, leading to a strong order pipeline, with further expanding the product portfolio into high-end gaming laptops for a global brand. Beyond laptops in our Chennai facility, we have installed capacities for desktops, with production starting in Q3 of this fiscal. We have received a large order for tablets from one of our existing customers under the UP government scheme in our Noida facility.
Atul Lall: A new manufacturing facility adjacent to our current facility in Chennai for our 60/40 joint venture with Inventec, a corporation from Taiwan, which is one of the world's top 5 PC ODMs, is expected to start the trials in Q3 of the current fiscal. The order book in this category from all our customers looks very healthy, and as a result, we are now transitioning from hybrid category with INR 250 crores of CapEx commitment to global category with INR 500 crores CapEx requirement under IT PLI-II, with correspondingly increasing revenue thresholds and higher incentives payout. Our focus is now moving beyond assembly towards increasing value addition, with manufacturing of SSD, for which the line has been set up, and exploring opportunities in mechanicals and power supply, which will deepen localization and lead to margin improvement.
Atul Lall: With the scale and broader product portfolio, deeper component localization, and access to global technology partners, Dixon is well-positioned to build IT hardware into a major growth vertical and progressively develop India as a competitive manufacturing hub. Home appliances. Revenue for the quarter was INR 586 crores, with an operating profit of INR 48 crores. For semi-automatic washing machines, the volume grew by 27% to 6.3 lakh units during the quarter, and by 16% year-on-year to 10.9 lakhs for the H1 ended September 2026. For FATL, that is fully automatic top-loading, the volumes grew by 24% year-on-year to 1.3 lakh units during the quarter, and 23% year-on-year to 2.2 lakh units for the H1 ended September 2026. This segment continues to deliver a very strong growth, supported by capacity expansion, broader product portfolio, in-house molding and tooling capabilities.
Atul Lall: Investments in backward integration will enhance operating leverage and drive sustained profitability. Having established a strong foothold in semi-automatic washing machines and fully automatic top-loading washing machines, the company is progressing towards the launch of fully automatic front-loading washing machines in Q3 of the current fiscal in Tirupati. We are entering into adjacent categories such as dishwashers and microwave ovens, which will be launched in Q4 of the current fiscal, creating opportunity to address a wider consumer base. In washing machines, we have established the largest manufacturing capacity in India, with an annual capacity of 3 million units for semi-automatic washing machines, 0.6 million units for fully automatic top-loading washing machines, and 0.3 million units for fully automatic front-loading machines. This takes our total capacity to 3.9 million units against an estimated annual Indian requirement of 12 million units.
Atul Lall: With capacity equivalent to approximately 33% of the total market, we are well-positioned to capitalize on the growing outsourcing opportunity, onboarding new customers and scale volumes across product categories, driving improved capacity utilization and long-term revenue and earning growth. Lighting. The lighting industry has experienced a challenging operating environment with subdued demand and pricing pressures.
Atul Lall: Despite these headwinds, Dixon Lighting business has demonstrated resilience and continue to pursue growth opportunities through portfolio expansion and customer additions. We are strengthening our presence in the indoor lighting segment by expanding product portfolio and offering a wide range of design-led solutions. We continue to premiumize our product portfolios with multiple launches in COB downlighter categories. In the coming quarters, we will also be focusing on expanding the range of outdoor lighting portfolio. We are further ramping up our SMT capacity with the new BEE guidelines for self-ballasted lamps and increased customer requirements.
Atul Lall: We have commenced exports of strip lights to a large US retail chain and expect to secure additional orders across the broad lighting portfolio, and are also in discussion with a large German retail chain. Going forward, the company will focus more on premiumization, design, and higher value-added lighting solutions while broadening its product offering and customer reach, which will strengthen Dixon's comparative position in the market. Consumer electronics, that is LED TVs and refrigerators. Revenues for the quarter was INR 1,115 crores with an operating profit of INR 40 crores. Our LED TV and refrigerator business are operating in a challenging environment characterized by overall softness in consumer demand and inflationary pressures across key input costs. However, we remain focused on expanding our customer base, increasing OEM participation, and strengthening our product portfolio.
Atul Lall: We believe the current demand is cyclical rather than structural, and Dixon remains well-positioned to benefit as industry volumes normalize. LED TVs, demand in value and mid-range remains soft, impacted by sharp input cost inflation driven primarily by global memory supply tightness. However, demand for large-screen televisions, that is 55 inches and above, and premium QLED and OLED models remained relatively healthy. We have initiated local mini-LED production and plan to transition fully to an ODM model by Q3 of the current fiscal.
Atul Lall: Based on the customer demand and market feedback, we have also integrated low-cost mainboard support for lightweight operating systems, that is Coolita, EOS, and ThunderCloud, into our Q3 product portfolio. Refrigerators. Q2 also saw an uptick in commodity prices and elevated sea freight costs, which necessitated corresponding increase in selling prices, which further weighed on consumer demand and impacted near-term volume growth.
Atul Lall: Despite an industry-wide decline in direct cool segment, we sustained our volumes with portfolio enhancement and onboarding new brands. For a large brand now, we have started manufacturing side-by-side refrigerators, and will start manufacturing multi-door French door refrigerators from next month. To support future growth, we are expanding our current facility by almost 375,000 square feet, creating capacities for deep freezers, visi coolers, and two-door refrigerators. This expansion will enhance our value mix and establish a broader, more robust appliance platform over time. Despite the near-term softness, we remain positive on medium to long-term growth prospects category, supported by low household penetration, premiumization, and increasing customer demand. Rexxam Dixon Electronics, our 40:60 AC-PCB-based joint venture with Rexxam, continues its strong growth trajectory, characterized by robust cash flow generation and an industry-leading ROCE profile.
Atul Lall: Our new facility in Chennai started commercial production 26 August, with expanded capacities to meet increased demand for our anchor customers. We are in active discussions to onboard couple of large brands. Hearables and Wearables, our 50:50 joint venture with Imagine Marketing, continues to deliver strong financial performance supported by broad-based revenue growth, healthy cash flow generation, and lean balance sheet. Building on this momentum, the JV has also started manufacturing dash cams, smartwatches, power banks, headphones, and exploring other electronic categories. This diversification will improve our capacity utilization and unlock operating leverage. With that, I will conclude my remarks, and we are both happy to take any questions. Thank you.
Operator: Thank you very much. We will now begin 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. We will take our first question from the line of Siddhartha Bera from Nomura. Please go ahead.
Siddhartha Bera: Yeah. Hi, sir. Thanks for the opportunity, and congrats on the good set of numbers. Sir, first question is on the mobile side. So, if you can share the volume for the current quarter and how to think about the outlook for the H2, given the weakness in the consumer demand. Would you still maintain, or if you can give some color for the H2? And second is on the export side. I mean, if you also can break it up into what is the exports in Q2, and where do you see the outlook for maybe next year?
Atul Lall: Yeah. In Q2, we have done approximately 9.7 million. So total in H1, that is Q1 and Q2 combined up to September, we have done approximately 17.2 million. With the outlook for H2, we feel they should be somewhere around 33, 34 million.
Siddhartha Bera: Sure.
Atul Lall: In this, I am not including the Vivo quantities. That is how it looks. So, our anchor customer, that is Motorola, through the MPMS scheme, they are going to be expanding our exporting of this fiscal. As I mentioned in the opening remarks, for Transsion, we will start exporting the feature phones from next fiscal. So, the market has shrunk, but our volumes are going to be in the range of around 34 million in the current fiscal. That is how it looks.
Siddhartha Bera: Got it, sir.
Operator: Siddhartha?
Siddhartha Bera: And-
Operator: Yeah.
Siddhartha Bera: Yeah.
Operator: Go ahead.
Siddhartha Bera: I mean, on the Vivo side, with the plant starting now in Q4, what do you think we should aspire for the next year, and how should the volumes ramp up there?
Atul Lall: The integration process is on. We target to start production from Q4 of the current fiscal. Vivo has almost 20%, 22% share, so their total volume is around 3 million. We feel that in the JV, we should be doing, sorry, 30%.
Siddhartha Bera: 30 million.
Atul Lall: We feel that in the JV, we should be doing around 20, 21 million. That is what the number looks like.
Siddhartha Bera: Understood, sir. Lastly, sir, on the customers addition side, do you see with this MPMS scheme now in place, will there be more potential to add more customers in the coming years? Where do you see the total exports for us sort of trending in the next few years?
Atul Lall: One can see a traction from our anchor customer. The outlook given is that we should be doing approximately 3.5 million units per quarter, so that is almost 14 million. Out of that, almost 6 to 7 million is going to be exports, if not more. We have also acquired one Indian brand as our customer, which is doing extremely well. We feel that from that customer, for that, the production has already started. We feel that for that customer next year, we should be doing almost 8 to 10 million. These are new customer acquisitions which have already come on board. There is a pressure in the market, but I think because of acquisition of our new customers and exports coming into play, and our deep stickiness with our existing customers, we are going to grow significantly.
Atul Lall: All the more with the integration of Vivo into the system, the numbers are going to be very good.
Siddhartha Bera: Great, sir. Thanks a lot. I will come back in the call.
Operator: Thank you. Next question is from the line of Santhosh Seshadri from Avendus Spark. Please go ahead.
Santhosh Seshadri: Hi, ma'am. Very good evening. Congratulations.
Operator: Sorry to interrupt. Can you use your handset mode, please? Your audio is not clear.
Santhosh Seshadri: Yeah. Is it now?
Operator: Go ahead, please.
Santhosh Seshadri: Yeah. Good evening, and congratulations for good set of numbers. My first question is on some of the new projects that you mentioned that you are working on. In your opening remarks, you mentioned that there are some projects that you are working beyond mobile phones. Also, in the previous calls, you spoke about investments into precision manufacturing and entry into industrial manufacturing and server opportunities. Can you put in perspective which of these segments will see major capital allocation, and where do you see the management spending most of the bandwidth internally?
Santhosh Seshadri: Also, on the revenue front, how should we think about the revenue contribution from these segments? I actually don't want a number here, but directionally, like 5 years down the line, do you think any of these opportunities are large enough to overshadow the mobile segment? What are the steps that we have to take?
Atul Lall: So, certain sectors, certain domains that we are pursuing very actively. The first one is the IT products category. If you see the numbers, from practically minuscule numbers, in the current quarter, we have grown to almost INR 2,100 crores. We already have 4 out of top 5 global brands as our customers. We are migrating from the present hybrid category, wherein we had committed a CapEx of INR 250 crores under IT PLI-II, to the global category, wherein we are upping our CapEx plans to INR 500 crores.
Atul Lall: This is because of the order book, and also what we have foreseen. So, we feel, and this year itself, we feel confident that we are going to be somewhere around INR 6,000 crores in this business. We feel that in next couple of years, this is going to be almost INR 15,000 to 20,000 crore business for us.
Atul Lall: Further, as I mentioned in my opening remarks, that our joint venture with Inventec is going to get operationalized by Q3 end or Q4 of the current fiscal. That is further going to add volumes, and we are attempting a foray both into general and AI servers. So, this is IT products, IT devices category. In IT devices itself, we have diversified and expanded our product portfolio. We have got into tablets, where the business is already happening. We are already doing AIOs, and the line for desktops has been established, and the production is going to start from Q3.
Atul Lall: Further in this, we are deepening manufacturing. So, the lines for SSD has already been set up. The trials by the customers of our SSD solutions have been operationalized. Display line in our new factory is set up, and the trials are going to happen by Q3.
Atul Lall: Further, the team is evaluating setting up a footprint for mechanical enclosures. Also, we are exploring power supply. Here, we feel that it is going to be a large growth opportunity for us. The second large growth opportunity that we are pursuing is one, in the precision engineering side, and second, in the deepened technology of optical solutions, wherein we are looking at transceivers, and we are looking at other optical solutions with advanced packaging. In transceivers, we have already got into a JV with Gemtek of Taiwan. Initially, it is going to be lower gigahertz, but finally, that is going to be for telecom network. Finally, in this JV, we are going to be upping the game for higher gigahertz for data centers. Optical transceivers, transducers, is going to be another very high-growth area in the company.
Atul Lall: The huge focus is going to be on optical side, advanced packaging side, silicon photonics side. This is a growth area we are actively pursuing. These two are very tangible things we are looking at. The team is working, and as I had mentioned in my opening remarks, also on high-margin, low-volume business, but that, to be very candid, is still at an early stage. We are pursuing that. These are the three areas. Otherwise, there are expansion plans across all the categories. I shared about mobile. I shared about expanding capacities and expanding product portfolio in our washing machine business. I shared about expanding our capacity from 1.4 million units to almost 3 million units in refrigerators, expanding the product portfolio from just direct cools. We have already launched mini bars. We have started manufacturing side-by-side.
Atul Lall: The infrastructure is getting in place for visi coolers, deep freezers, and frost-free. This is all the growth path for Dixon. Please be rest assured the numbers will be good, will be very good.
Santhosh Seshadri: Thank you, sir. Just as a follow-up, can you elaborate on the precision manufacturing side? What is the capability that we are trying to build here? Is it something to drive a new vertical, or does it augment the existing capability that we have in the mobile space?
Atul Lall: It is in two tangents. One, definitely, we will be pursuing the acquisition of precision engineering capability in the existing verticals, wherein I am referring to the mechanical enclosures for laptops, and possibly, we are also going to be looking at the business case for the mechanical, and it is a deep precision engineering for the smartphones. Further, we are looking at also some opportunities in the precision engineering space beyond the consumer space.
Santhosh Seshadri: Thank you very much, sir. All the very best.
Atul Lall: Thank you.
Operator: Thank you. Next question is from the line of Sameet Sinha from Macquarie. Please go ahead.
Sameet Sinha: Yes, thank you. Couple of questions from my side. Mr. Lall, you were talking about Motorola ramping up under the MPMS scheme, looking to do more exports, especially next year. Can you talk about some of your other smartphone partners, how the conversation is going with them now that this additional incentive is available? Does the cost disability help promote the conversation of using India as an export base? Secondly, when you mentioned cost pass-through, you mentioned the word initiatives along with that, so that made it a little more formal, in my opinion. I would have assumed that cost pass-throughs are part of the business and probably part of the contract that you have with your customers. Can you talk about what you meant by initiatives, and how should we see the progression of this pass-through? Thank you.
Atul Lall: Responding to the second part of your question first. In our EMS business, when I am talking about mobiles, when I am talking about laptops, IT products, when I am talking about hearable wearables, when I am talking about telecom equipment, it is an automatic pass-through. There is no time lag, nothing of that kind. It is an absolute EMS business. But when we are looking at our appliances business, when I am looking at a refrigerator business, when we are looking at a washing machine business, there is some kind of a time lag. That is the nature of the contract. I hope I am making it clear. I reiterate that in a complete EMS business, it is an automatic pass. Whatever is the cost, whatever is the volatility in the prices, that is an automatic pass-through.
Atul Lall: But in our ODM solutions, specifically when you are talking about lighting, refrigerators, and washing machines, and a bit of our television business, in this, there is some lag. Over a period of time, it takes some time for passing through that cost increase. That is the way it is. As far as the export volumes are concerned, the contracts with Motorola have been finalized, and the ramp-up has started. The ramp-up is significant. They are committed to meet the requirements. Please appreciate the incremental requirement over baseline in NDMS is INR 5,000 crores every year. Second are business modalities and business model of starting the feature phone exports from Transsion Group to start with will happen from next fiscal. That has been finalized. Later, we are going to start doing the smartphone as well.
Atul Lall: Presently, these are the two customers for which. Apart from that, in the new customer acquisition, we have acquired a large Indian brand which is doing really well. That is where we are.
Sameet Sinha: Okay. One quick follow-up on the cost pass-through. I mean, these are smaller revenue contribution businesses. Can you tell us how much the margin impact was because of cost pass-through not going through?
Atul Lall: In our washing machine business, which is traditionally 11% EBITDA margin, between 10.5% to 11%, the margins compressed to 8.6%.
Saurabh Gupta: 8.3.
Atul Lall: 8.3.
Saurabh Gupta: Yeah, so basically, Sanjay, there is a If you look at the first six months numbers, probably 3% for washing machine business, and a similar number would be also there in the lighting business as well. So that is the kind of impact because of the increase in commodity prices, especially the polymer prices in washing machine. Then also the higher freight cost and also the foreign exchange movement, because it is a rupee business for us. So that is the kind of impact that we have seen. Yeah, but there are We have been passing on that increase, but of course, the cost has also been increasing. So there is always a lag in that sense.
Sameet Sinha: Correct. Okay, thank you very much.
Operator: Thank you. Ladies and gentlemen, kindly restrict yourself to two questions at a time. You may join back the queue for follow-up questions. Next question is from the line of Sonali from Jefferies. Please go ahead.
Sonali Salgaonkar: Thank you for the opportunity, and congratulations on a very strong sales number. My question is firstly on the sales number itself. As compared to the run rate of the last few quarters, there has been a significant year-on-year growth. Could you articulate exactly from which segment, whether it is mobile, in mobile, which customer, or any other segment that this growth is coming on?
Saurabh Gupta: Yeah, Sonali, basically, if you look at the volume growth, year-on-year, the volume has been slightly marginally lower. The reason the growth in mobile revenues are there or IT hardware revenues is there is basically because the selling prices have gone up. Selling prices also largely has gone up because of the component prices and especially the memory prices. Memory prices have gone up significantly. And memory, which used to be like a 12%, 13% bill of material of any smartphone, is now significantly increased because the prices of memory have significantly gone up. So our year-on-year increase in selling prices is almost closer to 35%, 40%.
Sonali Salgaonkar: Got it. Very clear, Saurabh. The second question is with respect to the balance sheet. If I look at the September balance sheet numbers, the receivables and payables have surged as compared to March 2026. Any particular reasons for the same?
Saurabh Gupta: Yeah, we are basically beneficiary of two PLIs now. One is the IT hardware, which has also shown good numbers in this quarter. That number is also the PLI receivable for this particular year, for the first six months, and also the PLI is pending for last year. That is on the receivable side for IT hardware, and then also the telecom side. Then we have some bit of PLI left for the mobile side as well. Yeah, there is a receivable number, and there is a correspondingly payable number also there.
Sonali Salgaonkar: Got it. My third question is again on the memory situation. Probably this is more of a strategic or a global question. I understand that the key customers or the OEMs will help you source the memory chips in most of the situations. But how are you looking at the supply chain? I mean, are there any constraints in terms of procuring, or are they being able to comfortably procure the memory chips and also some other components like PCB, et cetera?
Atul Lall: Sonali, on the supply chain side, I think we are in a good position. I am not seeing any impact on the production as such. Cost undoubtedly have significantly increased, and we feel that they are going to be on a higher plane for time to come. But as far as the production and supply is concerned, we are fine.
Saurabh Gupta: Yeah, Sonali, there is absolutely no problem on the supply chain side. We are getting the memories. There is absolutely no issue on that. The question is about the pricing of the memories. Yes, if you look at the latest results of SK hynix and their commentary and all, what they have mentioned with Samsung and all, they mentioned that this might continue for some more time.
Sonali Salgaonkar: Understand. Very clear. Just a last question-
Operator: Sonali, I request you to join back the queue, please, as we have participants waiting for their turn. Thank you.
Sonali Salgaonkar: Sure.
Operator: Next question is from the line of Renu from IIFL. Please go ahead.
Renu Baid Pugalia: Yeah. Hi, good evening, and congratulations, team, for strong results. My first question is, we did highlight IT hardware as the next growth pillar after mobile and targeting nearly INR 15,000 crore to INR 20,000 crore of revenues in two years. If you can help us understand this INR 20,000 crore target, does it include a revenue contribution from the data center or conventional servers? What kind of investments are we targeting to do under the global category within the PLI scheme for the IT hardware products here? That is the first question.
Saurabh Gupta: Renu, one, as mentioned in sir's opening remarks, one, we are looking now, we are upping our game on IT hardware because the order book looks very good. We are upping, we are increasing the investment commitment from INR 250 crore, which was under the hybrid category, to now a global category, which is now INR 500 crore. We are seeing significant traction from all our customers.
Saurabh Gupta: This INR 80,000 crore to INR 20,000 crore kind of a number that we feel confident about in the next couple of years would only come from the laptop and the tablet business, and then something from the desktops and other kind of thing. As of now, not incorporating or not including any business which can happen from the servers. Once our JV with Inventec gets operationalized by Q4, then we will sit together on the server strategy. As of now, this is where we see that this kind of potential can come only from our existing business of laptops and tablets.
Atul Lall: Renu.
Renu Baid Pugalia: Got it. Yes.
Atul Lall: Actually, we feel confident that we should be touching a number of almost 1.8 to 2 million units next year. The final plan is that we need to hit a number of 4 million in this category. Four million at today's run rate of INR 50 to 55K per unit is almost INR 20,000 to 22,000 crores, plus tablets, plus AIOs, plus desktops. Server is separate.
Saurabh Gupta: Yeah. Just to add, Renu, this year we are looking at a volume of closer to 1.3, 1.4 million, which will translate into revenues of closer to INR 6,000 to 6,500 crores. Assuming we are looking at a number of which is 3.5 to 4 million, you can just multiply, and that is the kind of growth we are expecting there.
Renu Baid Pugalia: Sure, which is pretty interesting. The second part of the portfolio is, while similar, the telecom exports, we have strong ambitions from Gemtek. In your view, by when should we start commence the export part of the business under Gemtek JV? As an update, if you can share, what has been after the HKC JV? Should it be commercialized by Q4, or there could be further delays? Any change in the numbers or growth expectations in fiscal 2028 from the mobile components JV, both Q Tech and HKC, if you can share that. Thank you.
Atul Lall: Renu, as far as the exports is concerned, that is from our telecom venture. To start with, already the order book is there for the microwave radios. It will be focusing on the markets of US. Also, as I had mentioned in my opening remarks, we are upping our game on the optical network side, on the optical transceiver side. A lot of work is happening there.
Atul Lall: To start with, the Gemtek JV, which we are trying to start the trials by Q4 of the current fiscal and commercial production next year. Initially, it is going to be focused on the mobile telecom networks, then we are going to be getting into the higher speeds category for the data centers. But to start with, it is going to be focused on domestic markets. That is the way it is.
Renu Baid Pugalia: Got it. Exports will still take about a couple of years.
Atul Lall: Some time. But from the telecom venture, the exports is going to start. As far as the HKC JV is concerned, the installation of the line for notebook and auto module is in process, and it is going to get over by November end. The trial is going to happen by December, and the commercial production will start by Q4. As far as the mobile is concerned, there was some delay, but now the equipment has been shipped out, and we feel that the line installation will happen, and initially it is going to be for 20, 25 million capacity. It is going to happen by February of 2027, and the trial should happen by March, and the commercial production should start early next year. That is the way it looks. What else was your question?
Renu Baid Pugalia: On Q Tech.
Atul Lall: On Q Tech, we have already expanded our capacity from 80 million to 120 million. Also, the capital investment has happened in deepening the manufacturing, which is going to be margin accretive. Now we have to ramp up the sales volume. That is the way we are. Finally, the ramp-up of capacity over two years has to be taken up to 180 to 190 million, which is as per the original plan.
Renu Baid Pugalia: Got it. Got it. Thank you.
Operator: Thank you.
Renu Baid Pugalia: All the best for this year.
Operator: Next question is from the line of Vibhor Srivastava from PhillipCapital. Please go ahead.
Vipraw Srivastava: Hi, sir. Good evening. Firstly on the Q Tech side, on the subsidiary financials, Q Tech's margin has declined by almost 450 bps in FY2026 compared to FY2025. Secondly, if you look at H1 FY2027 numbers for Q Tech, our revenue has been flat year-on-year mostly. What gives the management conviction first that margins will revert back to 7% in FY2028, and secondly, there will be a volume ramp-up in FY2028? Thank you.
Saurabh Gupta: Yeah, so basically, there are a couple of things. One, on this current year numbers, we feel that we are now in a significant expansion mode, where we expanded the capacity from 80 million to 120 million. Of course, the overall smartphone market, as you know, it's kind of seeing a slowdown overall. As a result, this is a component which goes into a smartphone, which automatically gets impacted. Last year, the margins got impacted mainly because of the foreign exchange, where, as part of their negotiated contracts or understandings, they didn't add a forex pass-through, which we have now been able to get it done from the customers. So one, we see that one, the volumes will keep picking up for that. So, there's a lot of volumes we feel that will keep getting better. Secondly, we are expanding.
Saurabh Gupta: We're putting up CapExes for deepening of manufacturing, which will help us capture more manufacturing process here, more deepening of manufacturing here, which will help us in margin expansion. On account of this capacity expansion also, we'll start having that operating leverage. Please be rest assured on that. It is only a temporary kind of a blip. Ultimately, this business will generate a 6%, 6.5%, 7% kind of margins. As the operating leverage happens, and we're also an ECMS PLI beneficiary, we feel the margins will see an uptrend from there onwards.
Vipraw Srivastava: Sandeep, second question's on the working capital side. In H1, we have seen a cash burn of INR 280 crores. I think it's primarily because of memory, but what are your views on that? Is it because of memory? If the cycle extends beyond CY28, will this be a trend, or we expect some reversal in coming years?
Saurabh Gupta: We expect a significant reversal. Of course, you're absolutely right. We had kept certain strategic inventories of memory. This is also peak season for us. The working capital generally peaks up before Q2, because a lot of money gets blocked under debtors and inventory. One is strategic inventory. We had certain advances from our customers in March, which subsequently got paid. Also, the PLI money, which is there for our IT hardware and the telecom business, which is there, which ultimately will come in, get catalyzed. We feel that out of this large part of money, which is blocked in the money working capital, we feel that almost 80%, 85% of that will get released before March.
Vipraw Srivastava: Got you.
Operator: Thank you.
Vipraw Srivastava: Thanks, Sandeep.
Operator: Next question is from the line of Keyur Pandya from ICICI Prudential Life Insurance. Please go ahead.
Keyur Pandya: Thank you, and congratulations for good numbers. Sir, first question on the mobile side. In overall scheme of things, you mentioned some customers, one Indian customer, some addition from Motorola. Is there any ramp down from any customers? Net-net, if we look at overall numbers, what should we pencil in for FY28 organically and plus Vivo? That is first question. Second, with changing dynamics in Q Tech and HKC, as you highlighted just some time back, how should we think of revenue as well as profitability in first year of those two businesses? Thank you.
Atul Lall: So, as far as the volumes are concerned, as we mentioned that in this year, we should close somewhere between 33 to 34 million without Vivo. We feel that although the market is going to be under pressure, there is going to be a decent growth in these numbers itself because of acquisition of new customer that is an Indian brand, and also the export ramping up for our anchor customer. So, that is the way it looks. And with Vivo, I think it should be a decent number of somewhere between total number of 55 or 60 odd million. That is the way the numbers look. On the display and the camera module side, Saurabh, can you just
Saurabh Gupta: Yeah, so display, as you mentioned, our automotive and our IT hardware lines have already been installed. Mobile lines will be installed by Q4. So, as guided earlier also, we feel that these are high double-digit team margin businesses for us, which, of course, we expect the same to start generating those kind of numbers in next financial year. Camera modules, I have already spoken on my previous question. So, clearly, both display and camera put together, we feel that over a period of next 2 years, we should be able to expand our margins by 80 to 100 bps. So, that is what we are targeting for.
Keyur Pandya: Sir, just one follow-up. So, you highlighted FY28 volume organically in 50s, or so what total volume and ex-Vivo? Just if you can just clarify that. And I was just checking for Q Tech and HKC revenue next year, or per unit economics, or ASP, volume, whatever you can share. So, that would be helpful.
Saurabh Gupta: Yeah, so on mobile volume, again, there are three levers. One is, of course, this year volumes, we are broadly saying 33, 34 million, which we feel that the export ramp-up will happen for two of our anchor customers. Of course, one anchor customer, it will start happening from Q4, but again, there will be a significant upside which will happen from next financial year.
Saurabh Gupta: So, we feel that the export numbers this year, we are targeting somewhere between 3.5 to 4 million. We feel there will be a significant growth in those export numbers for next year, so that gets added to the 34 million. Second is the Indian brand that we have just got added, so that can add another 6 to 8 million kind of numbers for us. And on top of it, Vivo can add another 18 to 20 million.
Saurabh Gupta: That is the potential of the kind of organic growth that we are looking, or the growth that we are looking in mobile phone business. As far as Q Tech is concerned, of course, you have to make budgets for next year, but broadly, we should be in kind of a number of almost somewhere between 2,500 to 3,000 odd crores. That is what we should be targeting for. As far as display is concerned, we will be putting up a CapEx of almost closer to INR 1,000 odd crores. The real potential for display business, once it is completely ramped up in next couple of years, it can generate revenues of closer to INR 6,000 to INR 7,000 crores. A large part of it, of course, will be captive. Assuming that next financial year, we will target to get at least 25% to 30% of that INR 7,000 crores.
Keyur Pandya: Understood, sir. Thanks a lot.
Saurabh Gupta: Thank you.
Operator: Thank you. Next question is from the line of Rahul Agarwal from IIFL Securities. Please go ahead.
Rahul Agarwal: Yeah. Hi, good evening, Mr. Lall and Saurabh. A lot of questions got answered. Just one question on IT. Overall, the margin profile for this year, next year, once you scale up to INR 20,000 crores, how should that pan out? Similar question on telecom. How should the EBITDA margins pan out for telecom over the current year and next 2 years? If you just comment on that, please. Thank you.
Saurabh Gupta: Rahul, the IT margins, of course, here also we have seen the increase in selling prices on account of memory, and we get a per-piece conversion charge. So the margin may not reflect the right picture right now, but I will give you the margins. The margins will be closer to 2%, 2.2%, 2.3% kind of numbers in IT hardware, which we feel that as we backward integrated more and more components. As we backward integrate display, we plan to do SSDs, we plan to do mechanicals there, and at some point of time, we will also look at power supplies. If you look at the whole IT hardware PLI, the way it is structured is that the more you localize, the more incentive you get. So there can be a very big margin expansion game.
Saurabh Gupta: One, of course, on account of higher volumes every year, and second, on account of this backward integration. So we feel that from here onwards, as you keep doing more backward integration and operating leverage on volumes, the margin expansion should keep happening. What was your second question, Rahul? Sorry.
Atul Lall: Telecom.
Saurabh Gupta: Telecom.
Atul Lall: Telecom also, Rahul, in telecom, the margins are going to be slightly higher. They are going to be in the range of around 3% to 3.2%. That is the way it looks.
Rahul Agarwal: Yeah. Just to clarify on this IT thing, so 2% to 2.5% is the current situation because of per-unit margin. But if you do more backward integration, like a base case, assuming these components come through, what could be your peak margin here, like, say, two, three year out?
Saurabh Gupta: Here also, Rahul, the idea is to backward integrate 25% to 30% of the bill of material. Yeah, that can improve the margins by 80 to 200 bps there.
Operator: Thank you. We will take our next question from the line of Mehul Panchal from Kotak Securities. Please go ahead.
Mehul Panjwani: Hello, sir. Thank you so much for the opportunity. I am new to this organization. My basic question is, when I look at the expenses, they have shot up by 53% in this quarter. Can you please throw some light on what has led to this significant rise in the consumables, cost of materials?
Atul Lall: Please appreciate the revenue that also expanded to almost 47%.
Mehul Panjwani: Right. If you see the Q1 versus Q2, I would say, by the looks of it, Q2, the prices of cost of materials are shot up in a significant way compared to Q1.
Saurabh Gupta: No. For both mobile and IT hardware, the selling prices, because of the memory cost increase, those prices have also gone up. Both, if you look at the expenses and income levels, it has actually broadly gone in the same direction.
Atul Lall: It's a linear kind of an equation. There's nothing untoward there.
Operator: Thank you. We'll take our next question from the line of Nirransh Jain from BNP Paribas. Please go ahead.
Nirransh Jain: Yeah. Hi, sir. Thank you for the opportunity and festive greetings. Sir, just wanted to get your sense mostly on the MPMS incentives. Given that the eligibility criteria that eventually came in was a little bit stricter than earlier expectation, and there is a baseline expectation of about 15% growth every year on the brand. How are we looking at the margin uptake from the MPMS, or what kind of incentives that we believe we can incur over the years under this?
Atul Lall: MPMS, we feel that we are the front-runner who are an eligible EMS player for becoming the beneficiary under that scheme. Please appreciate that the MPMS is focused on the brand's performance, and our anchor relationships are confirming to us of their commitment to achieve the incremental sale to become eligible. This incremental sale is going to be generated from export largely, and also the anchor customers are committed to localize more and more on the camera module, display, and mechanical side to leverage the benefits of the MPMS scheme. That's the way it looks.
Nirransh Jain: Sir, any quantifiable estimate of margin uptake we can expect from these MPMS incentives?
Atul Lall: That is slightly difficult at this stage. Let's see how it pans out. It is the start.
Saurabh Gupta: Yeah, basically, the largest driver is, one is that your operating leverage will kick in account of higher volumes and also the benefit of localization, whereby if you are able to localize 25% of your components, in our case, it is camera modules and display, then yeah, there can be upside. But yeah, so it will lead to more incremental volumes and operating leverage for us.
Nirransh Jain: Sure, sir. Sir, and secondly, I just wanted to-
Operator: I request you to rejoin the queue, please, as we have participants waiting for their turn. Thank you. Next question is from the line of Akshay Gattani from UBS. Please go ahead.
Akshay Gattani: Hi, sir. Congratulations on good result despite the headwinds. My question is on Vivo JV. Can you help us understand the potential gross block capital investment required? If you can also highlight the EBITDA per smartphone in this JV. On ex-PLI basis, will it be similar to Dixon, and will this JV also source components from Dixon's own manufactured components?
Atul Lall: The commercials for Vivo JV is still being finalized, but we estimate that the expected CapEx is going to be somewhere around 300 to 350 odd crores.
Akshay Gattani: Okay.
Atul Lall: That's the way it looks. As far as the commercials are concerned, please wait for some time.
Akshay Gattani: Got it. Very helpful, sir. How would you expect Q3 volumes panning out while you maintain your full year guidance, Q3 FY27 volume guidance? Any color on that one?
Atul Lall: So Q3 being post-Diwali time, I think it is going to be somewhere in the range of around 7 to 7.5 million.
Saurabh Gupta: Yes, Q3 broadly will go back to the Q1 levels and Q4, Q2 levels. That is how you should look at it. So we did 17 million, and we are expecting broadly a similar number in next 6 months. Yeah, 7.5 million in Q3, and then it goes back to say 9.5, closer to similar volumes to what we did in Q2. That is how we look at it.
Akshay Gattani: Got it. Thank you, sir.
Operator: Thank you. We will take our next question from Tanay Shah from DAM Capital. Please go ahead.
Tanay Shah: Sir, thank you so much for the opportunity, and most of my questions have been answered, but I just want to understand a little better on what we spoke about earlier in terms of optical transceivers, in terms of advanced packaging and silicon photonics. Sir, are we saying we are actually going to build the packaging piece of the optical transceiver along with the assembly of it, or what are we thinking about in this area? Maybe if you can just spend a couple of minutes on what we are thinking about this as a segment.
Atul Lall: Please appreciate the biggest buoyancy today globally in electronics manufacturing is on AI side, is on the data center side. The whole technology is shifting towards the optical domain. If you look at the performance of our various global peers, their margin profile, their growth is coming mainly from this domain. What we are attempting to do is bring this technology into India for servicing the global markets. One initiative of ours has already fructified into a joint venture with Gemtek of Taiwan. More alternatives we are pursuing to bring it into India. This is going to be, of course, the optical transceivers of higher frequency. You see 800G, 1.6, 1.8, 2.4, to get into that category and further take it forward onto advanced packaging of ATMP.
Atul Lall: With deeper focus, because into the data center today, into the network today, the technology on silicon photonics side, that is what we are pursuing. Tanay, please appreciate, without being boastful, in Dixon, we have been nimble enough to identify the opportunities in which there is a deep buoyancy, and there is an alignment with the policy framework, and this is an extension of the core that we are into. It is an extension of our electronics manufacturing capability, but much deeper technology. That is what we are pursuing.
Tanay Shah: Absolutely, sir. Absolutely got that. Thank you so much for answering that. I will join back in a few. Thanks.
Operator: Thank you. Next question is from the line of Indrajit Agarwal from CLSA. Please go ahead.
Indrajit Agarwal: Hi, thank you for the opportunity. I have a few questions. First, what would be the ASP of the Indian brand versus our current of, let's say, INR 14,000, INR 15,000 currently? Second, what kind of CapEx should we pencil in for FY27 and FY28? And thirdly, would the advanced packaging or the transceiver business be a similar ROCE as we have at the group level right now?
Atul Lall: Responding to the question on CapEx, we have entered a CapEx of INR 700 odd crore.
Saurabh Gupta: INR 700 odd crores is what we have done in first 6 months, and we are likely to do closer to INR 500 crores. We should close the year with INR 1,200 crores. Of course, one has to do the numbers for next year, but broadly, that should be the run rate for next financial year as well, somewhere between INR 1,200, INR 1,300 odd crores.
Atul Lall: Responding to the first part of question on difference in the ASP, the difference is between 25% to 30%. That's the difference.
Saurabh Gupta: Yeah
Atul Lall: in the USP. Right? The third is, yeah, we feel that the ROCEs are going to be very high in what we are talking about in AI side.
Saurabh Gupta: Indrajit, some of the advanced packaging silicon photonics side, the margins are very high, and the investments are also in such a way that the ROCE profile will be closer to what we do currently.
Indrajit Agarwal: Sure. This is very helpful. Thank you so much. Happy Diwali.
Operator: Thank you. Next question is from the line of Aryan Bandi from Bajaj Alts. Please go ahead.
[Analyst]: Hello, sir. Am I audible?
Operator: Yes, please go ahead.
[Analyst]: Yes. Thank you so much for taking my questions, and congratulations on your excellent performance. I think most of my questions you answered, but I have three questions on the-
Operator: Sir, your volume is very low. Can you speak a bit louder, please? Can you repeat the question?
[Analyst]: Hello, am I audible now?
Operator: Yes, please go ahead.
[Analyst]: Yes. One question on the component strategy and capital allocation. You have guided a significant CapEx of INR 1,000 crore for the display segment next year and targeting a potential INR 7,000 crore revenue from that. My question is on the working capital. From the blocked working capital, which is expected to release in March as the PLI subsidies clear, will this internal cash generation be entirely sufficient to fund the display CapEx, or do we need to take a temporary debt? Secondly, what is the exact commercialization timeline for the display facility next fiscal? Thank you.
Atul Lall: Sure. Please appreciate in the current fiscal, we will be investing almost INR 300 crore to INR 350 crore into the display project. It is all happening through the internal accruals. Next year is going to be in the range of another INR 350 crore to INR 400 crore.
Saurabh Gupta: Yeah, so basically INR 1,000 crore, what I mentioned INR 1,000 crore is total number. I did not say last, next year. Basically, between this year, next year, and next to next year, that is the kind of investments we are looking at for displays. This year also, we are meeting our CapEx requirements from our internal accruals, and we feel confident that as the earnings visibility improve, even next year, we should be completely meeting our CapEx requirements from internal accruals and yet generating some free cash flows.
[Analyst]: Thank you for clearing all this. Thank you.
Operator: Thank you. We will take our next question from the line of Santhosh Seshadri from Ambit. Please go ahead.
Santhosh Seshadri: Hi, sir. Thanks for the opportunity again. Just wanted to touch base on the BOM cost increases. Given that memory prices have increased, we are seeing a product price pass-through, and it is contributing to top-line growth. Maybe down the line when there is a reversal in the memory prices, do we see any headwinds in the top line, or is there any other factor that can support a higher pricing?
Atul Lall: Please appreciate, I mean, let us see how it pans out because final revenue is going to be a mix of product portfolio.
Saurabh Gupta: Yeah, it's a
Atul Lall: It's going to be what growth in volume you are getting. So, that's the way
Saurabh Gupta: Revenue is a function of volume and revenue or the pricing. Yes, if tomorrow the pricing gets corrected and becomes normalized, your volume will continue to grow, which we have guided in our remarks some time back. What is the kind of growth we are looking in mobiles? What is the kind of growth we look in IT hardware, telecom? All of that is. I do not think so we will ever have a situation where there is a revenue degrowth.
Operator: Thank you. We will take our last question from the line of Nirransh Jain from BNP Paribas. Please go ahead.
Nirransh Jain: Ma'am, hi, sir. Thanks for the follow-up. Sir, just wanted a clarification on the Gemtek JV, as in like what kind of CapEx and revenue we are looking at this. Also, will this be largely the business will be eligible for the ISM 2.0 that sir also briefly mentioned, in which we are looking for advanced packaging for the silicon photonics? Just want some clarification on what kind of revenue and CapEx targets we are looking at at this JV.
Atul Lall: So, this is not a very CapEx-intensive business. Initial investment is going to be somewhere between INR 50 to 60 crores. That's the first level of investment. This is not a part of ISM. This is a part of ECMS, in which we are already a beneficiary. Our application has been approved. Yeah, as far as advanced packaging is concerned, it's eligible for ISM 2.0.
Nirransh Jain: Okay. So sir, this will be largely done under Gemtek, or will it be a separate partnership?
Atul Lall: No, this is going to be separate.
Saurabh Gupta: Separate. Gemtek is separate, and this will be what we had just mentioned will be separate.
Nirransh Jain: Okay, perfect. Thank you so much, sir. All the best.
Operator: Thank you. Ladies and gentlemen, I now hand the call over to management for closing comments. Over to you.
Atul Lall: Thank you so much for being with us and for this interface, and thanks always for all your suggestions. Thank you so much.
Saurabh Gupta: Thank you so much, and happy Diwali to all of you.
Atul Lall: Happy Diwali to all of you.
Saurabh Gupta: your family as well.
Operator: Thank you, members of the management. On behalf of DAM Capital Advisors, that concludes this conference. Thank you all for joining us today. You may now disconnect your lines.
