Bharat Forge Ltd — Q4 FY26

Bharat Forge Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=OwwZ07nfNXI Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Q4 and FI26 earning conference call hosted by Bharat Forge Limited. This conference call may 0:10 10 seconds contain forward-looking statement about the company which are based on beliefs, opinion and expectation of the company as on date of this call. These statement 0:18 18 seconds are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. As a reminder, all participant 0:26 26 seconds line will be in the listen only mode and there will be an opportunity for you to ask question after the presentation conclude. Should you need assistant 0:34 34 seconds during the conference call, please signal an operator by pressing star 10 on your touchstone phone. Please note that this conference is being recorded. 0:43 43 seconds I now hand the conference over to Mr. 0:44 44 seconds Amit Kalyani, vice chairman and joint managing director, Barat Forge Limited. 0:49 49 seconds Thank you and over to you sir. Yeah, good good afternoon ladies and gentlemen and thank you for joining our conference 0:56 56 seconds call today. Um as is standard I will uh first introduce the people with me and 1:02 1 minute, 2 seconds then uh our group our CFO Karal Digshit will take you through the numbers. So I have with me uh my fellow board member 1:12 1 minute, 12 seconds and head of the components business to work dandelited our CFO. I have Ral Gopal our head of 1:19 1 minute, 19 seconds investor relations and M&A and Chinmai and Samir. So over to you Ga. 1:26 1 minute, 26 seconds Thank you. Uh good afternoon everybody. 1:29 1 minute, 29 seconds Uh I'll just take you through the highlights for the quarter and for the year ended 31st March 2026. 1:37 1 minute, 37 seconds Uh we'll start with the performance preview of consolidated results. uh given that number of initiatives and investments we have made in new 1:45 1 minute, 45 seconds verticals as well as uh in the Indian manufacturing space uh we ended the year with revenues of uh 16 1:54 1 minute, 54 seconds 12 812 crores and in 16,812 crores and IDIA of 2,921 cr which has a growth of 2:04 2 minutes, 4 seconds 11% uh in revenues and about 6% in IBIDA consolidated net debt equities stood at 41 as of March 2026. 2:14 2 minutes, 14 seconds Uh during the year, the company also secured new businesses worth 4,814 crores across all key businesses which 2:22 2 minutes, 22 seconds includes the uh traditional business of uh 1,210 crores, defense 2,816 crores, 2:31 2 minutes, 31 seconds JSA which is our casting unit 292 crores and K drive which is the recent acquisition about 500 crores. 2:39 2 minutes, 39 seconds Uh talking about the standalone performance uh uh the standalone business reported a revenue of 8,396 2:47 2 minutes, 47 seconds cr which was uh lower by about 5% year-over-year. This was mainly on account of regulatory uncertainties in 2:55 2 minutes, 55 seconds North America and demand challenges in US CV market which has impacted the performance but as we speak we are 3:02 3 minutes, 2 seconds looking at good growth in in this sector. Standalone EIDA for FY26 was at 2312 crores. Translating EIDA margin of 27.5%. 3:14 3 minutes, 14 seconds PBT for exceptional items was 1,826 cr which was about 8% lower YI. 3:23 3 minutes, 23 seconds Uh talking about the quarterly uh performance standalone revenues for the quarter was up by 8 and a half% 3:30 3 minutes, 30 seconds uh quarter quarter at 2260 crores. The quarteronquarter improve uh improvement in performance was driven by allaround 3:39 3 minutes, 39 seconds recovery in exports and strong performance in domestic automotive segment. Uh Q4 was up at 7.2% 3:48 3 minutes, 48 seconds sequentially at 610 K translating inhibida margin of 27%. 3:54 3 minutes, 54 seconds uh this also includes one time cost retrospective cost by uh by MSBL which 4:01 4 minutes, 1 second had charges retrospectively uh success on the uh captain power which is about 11 cr without that the margins would have been closer to 28%. 4:12 4 minutes, 12 seconds PBT before exceptional item was about 486 crores. Uh during the quarter company has absorbed tariff impact of 4:20 4 minutes, 20 seconds about 12 cr. balance sheet continues to remain robust with net debt uh to equity 4:26 4 minutes, 26 seconds at 18 for the year. Talking about the overseas business, we have initiated the restructuring of our German steel 4:34 4 minutes, 34 seconds business which is CDP Barge. We expect to complete the process by end of next calendar. Uh for other businesses in 4:43 4 minutes, 43 seconds Europe, we are simultaneously pursuing various business opportunities to leverage the scaledown manufacturing footprint. 4:50 4 minutes, 50 seconds uh performance-wise EU operations registered revenue of 3,865 crores and EBID of 151 cr resulting in IBIDA margin 4:59 4 minutes, 59 seconds of around 4%. While US operation operations recorded a revenue of 1,534 5:07 5 minutes, 7 seconds crores uh of 54 crores translating into a margin of 3 and a half%. Now I will 5:13 5 minutes, 13 seconds hand over to his comments. So good afternoon ladies and gentlemen. 5:20 5 minutes, 20 seconds You know 2026 was a very interesting year. It had its own set of challenges yet I think our team rose up to the 5:28 5 minutes, 28 seconds challenges and really performed uh exceptionally well. U it also was a year with lot of uncertainty especially to do 5:37 5 minutes, 37 seconds with tariffs which to some extent persists and then we ended up towards the end of the year with a full-blown 5:45 5 minutes, 45 seconds war taking place in the Middle East. uh which luckily enough seems to have uh 5:52 5 minutes, 52 seconds you know subsided right now and if if everything goes well it should uh you know really settle down and uh get 5:59 5 minutes, 59 seconds resolved. I think uh this has had impacts and uncertainties on markets inputs transportation and many factors 6:08 6 minutes, 8 seconds of that affect our business. Given that background I think we have weathered the storm well and ended on a stronger note with very good momentum going into the 6:16 6 minutes, 16 seconds new year. I want to especially commend our sales and marketing customerf facing teams, our supply chain teams, our 6:24 6 minutes, 24 seconds operating teams and all the people in our company for really giving it their all and making this year uh let's say 6:31 6 minutes, 31 seconds painless for our customers. Driven by a combination of new business initiatives and M&A over the past 3 years, BFL is now an engineering conglomerate 6:40 6 minutes, 40 seconds entrenched across processes, customers and segments. This is an example of how we transform every five six years. A 6:48 6 minutes, 48 seconds balance sheet continues to remain one of our key strengths with a net cash position um a strong net cash position 6:54 6 minutes, 54 seconds at a standalone level. Uh the aerospace business which we have been talking about for quite some time. I'm very 7:01 7 minutes, 1 second happy to report is now a meaningful part of our uh industrial exports uh and is now almost 26% of the last quarter's 7:10 7 minutes, 10 seconds exports. and is the second largest contributor to our industrial exports. 7:14 7 minutes, 14 seconds Now this segment has seen multiple new business wins both across jet engine structure landing systems 7:23 7 minutes, 23 seconds uh from global OEMs. We were recently selected by an aerospace OEM as their first supplier from India for any 7:30 7 minutes, 30 seconds critical uh components. Our acquisition of uh K drive is making significant progress and has also won a lot of new 7:38 7 minutes, 38 seconds business from OEMs which will uh start panning out from this year. On the defense front, our business has spread 7:46 7 minutes, 46 seconds well beyond artillery and vehicles to include small arm naval solutions and a wide variety of unmanned uh platforms 7:54 7 minutes, 54 seconds both uh sea and air. The recent order wins are a testament to the progress made here. With an order book of close to 11,000 crores, the next 3 four years, 8:03 8 minutes, 3 seconds we'll see stable revenue accretion in these sectors. In parallel, we are also focusing on expanding our product portfolio and participating in new 8:11 8 minutes, 11 seconds programs to build a robust and scalable revenue pipeline over the medium to long term. I particularly see new opportunities in Europe for our defense 8:20 8 minutes, 20 seconds business. uh castings despite the challenges in the export market especially in the wind sector because of 8:26 8 minutes, 26 seconds the slowdown in uh wind u uh infrastructure buildup uh we have seen 8:33 8 minutes, 33 seconds uh JSA continue to grow and increase both revenue and profitability going forward and we are now expanding our 8:41 8 minutes, 41 seconds customer base to cross fertilize and to cross-ell these products into our existing customer base in the automotive 8:49 8 minutes, 49 seconds and commercial vehicle sector The recent capital raise from PremG Invest will help us drive capacity expansion and make this business an 8:57 8 minutes, 57 seconds independent growth uh driver for Barat Forge and the Kalyani group. Uh this week we acquired a 30% stake in uh 9:05 9 minutes, 5 seconds Fortuna Engineering which is a company based in Nasi. This has a strong and experienced uh management team led by 9:12 9 minutes, 12 seconds the promoters in uh machining and it strategically is a very complimentary fit to us because they make they do 9:20 9 minutes, 20 seconds machining of connecting rods and some other high-v value components which are all uh complimentary to what Bharat 9:28 9 minutes, 28 seconds forge does and in fact also allows us to supply into them u u uh you know the 9:35 9 minutes, 35 seconds comp the forge components that they can sheet. The company has a strong balance sheet and a net cash position. 9:42 9 minutes, 42 seconds Uh in e-mobility, as I mentioned in the investor uh in the um television interview earlier, we have decided to 9:51 9 minutes, 51 seconds take a right off of those investments where we don't see any immediate revenue and business ramp up because it doesn't 9:59 9 minutes, 59 seconds make sense to spend time and effort on uh those areas which are not going to give us returns immediately. As you are aware globally the electric vehicle 10:08 10 minutes, 8 seconds adoption has taken a different uh trajectory as compared to what was originally undressed. Additionally our 10:17 10 minutes, 17 seconds overseas business we'll also see a restructuring with our steel ping business uh undergoing a restructuring 10:25 10 minutes, 25 seconds as we have explained earlier. Uh we also intend to evaluate additional business opportunities in the automotive sector 10:33 10 minutes, 33 seconds to uh leverage our market position, our customers and our footprint globally. 10:40 10 minutes, 40 seconds If you look at 2027 as a whole, I think it's going to be a strong year for India manufacturing operations as the growth 10:47 10 minutes, 47 seconds impetus across sectors and the kind of strategies we have put in place will bring in higher execution and growth 10:54 10 minutes, 54 seconds barring any further uh geopolitical crisis and their impact on demand. We should see a close to 25% 11:02 11 minutes, 2 seconds plus growth in our India business. Our ongoing capex programs across forging casting and products platform will 11:08 11 minutes, 8 seconds translate into uh 800 to 850 cr capex in a 15 to 18 month period. 11:16 11 minutes, 16 seconds We continue to evaluate potential M&A opportunities in India to address opportunities in high growth sector which may be complimentary and uh a good fit to our existing business. Thank you. 11:28 11 minutes, 28 seconds I will now be happy to uh we my team and I and so both will be happy to take your questions. 11:35 11 minutes, 35 seconds 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 11:44 11 minutes, 44 seconds N1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. 11:50 11 minutes, 50 seconds Participants are requested to use handsets while asking a question. 11:55 11 minutes, 55 seconds Ladies and gentlemen, we'll wait for a moment while the question queumbles. 12:06 12 minutes, 6 seconds Our first question come from the line of Capel Singh from Namura. Please go ahead. 12:12 12 minutes, 12 seconds Uh good afternoon sir. Congratulations on a good performance for the quarter. Uh firstly I had question uh on your uh target growth for FI27. 12:23 12 minutes, 23 seconds uh could you give some more color and break it down between different segments broadly what kind of growth you expect 12:30 12 minutes, 30 seconds in defense uh uh US exports for CVS non-auto and domestic 12:38 12 minutes, 38 seconds yeah I'm not going to break it up into that much uh detail let me just tell you we will see the highest growth coming 12:46 12 minutes, 46 seconds from our aerospace business and then defense business and the automotive 12:53 12 minutes, 53 seconds When I say automotive, I mean the components business which includes both automotive and industrial. 13:01 13 minutes, 1 second Okay. And sir, what is the outlook for uh domestic and global CVs? Outlook is strong for both. 13:11 13 minutes, 11 seconds US is very strong and so is India. Okay. 13:17 13 minutes, 17 seconds Uh sir you also mentioned that uh we have acquired Fortuna. Could you give us 13:24 13 minutes, 24 seconds some color in terms of revenues where does it stand and uh uh what is the potential here? 13:31 13 minutes, 31 seconds Yeah so we have acquired 30% for 130 crores. The company has a revenue of about 360 380 crores and they have a net 13:40 13 minutes, 40 seconds cash position of about 20 odd crores and they are on a growth path uh to increase 13:48 13 minutes, 48 seconds u you know multiple X uh by setting up new machining lines and also we will 13:56 13 minutes, 56 seconds open doors to them for our customers because they don't make the very large parts that we make. So um large 14:04 14 minutes, 4 seconds connecting rods is a big opportunity to supply globally. 14:09 14 minutes, 9 seconds Okay. And will it be safe to say that uh the growth target also includes inorganic opportunities like these? 14:18 14 minutes, 18 seconds So we don't currently have any other inorganic which is ongoing but as we have mentioned we will look at 14:26 14 minutes, 26 seconds opportunities within India that makes sense for us okay in the auto industry. Yeah 14:35 14 minutes, 35 seconds sorry just last just one last question you mentioned that uh the electrification has taken a different path from what we were originally 14:43 14 minutes, 43 seconds anticipating. Could you uh elaborate a little bit? Yeah, you know, uh about 5 years ago, there was a very strong focus 14:52 14 minutes, 52 seconds on electrification across the board, including commercial vehicles, uh including heavy commercial vehicles. 14:58 14 minutes, 58 seconds However, it is definitely not seeing the same kind of uh let's say trajectory as 15:05 15 minutes, 5 seconds what was uh anticipated. Uh secondly, the uh even the large European OEMs are 15:14 15 minutes, 14 seconds not as successful in the uh passenger car sector on electrification. 15:22 15 minutes, 22 seconds uh as you have seen both uh the you know uh Porsche, Ford many companies have had 15:30 15 minutes, 30 seconds massive hits and write offs because they have not been able to build a platform that has been as competitive as those 15:38 15 minutes, 38 seconds that the Chinese offer. So there has definitely been a recalibration of 15:45 15 minutes, 45 seconds everybody's EV strategy uh globally except the Chinese of course. 15:51 15 minutes, 51 seconds Okay, thank you sir. That's all from my side. That's Rishi. Thanks. 15:57 15 minutes, 57 seconds Thank you. An question come from the line of bin Singh from Morgan Stanley. Please go ahead. 16:05 16 minutes, 5 seconds Uh hi team congratulations on sorry we can't hear you. Can you speak a little louder please? 16:11 16 minutes, 11 seconds Uh hi team congratulations on good set of numbers. Uh my first question is on your uh restructuring. you know you uh 16:18 16 minutes, 18 seconds highlighted that it'll conclude by end of cy27 uh so could you share your thoughts on that and in the intermittent phase which 16:27 16 minutes, 27 seconds is uh this year and next year will the losses be at similar level like this year you had almost a 300 cr loss or so 16:34 16 minutes, 34 seconds on the Europe and US operations u so that uh happy to hear your comments on that so the restructuring of CDP has started 16:42 16 minutes, 42 seconds this is a 15 to 18 month process where we have to meet the customer requirements and uh also do a solvent 16:52 16 minutes, 52 seconds liquidation of the uh company. Uh this we anticipate the losses will uh reduce 17:01 17 minutes, 1 second because the CDP losses are not going to be there. Whatever is there will be part of the restructuring. 17:07 17 minutes, 7 seconds So hopefully the for the year that goes by we will have a better performance from our overseas subsidiaries. 17:15 17 minutes, 15 seconds Uh thanks thanks for that. Uh just on aerospace what exactly was the number for FY26 for you? 17:23 17 minutes, 23 seconds It was about uh 400 crores. 17:27 17 minutes, 27 seconds And uh lastly just on defense you know in the last call we talked about a revenue guidance on defense of 30 to 40%. But just looking at the order book 17:35 17 minutes, 35 seconds what are the key sort of milestones to watch out for? you've talked about opportunity in Europe and all but any key things that we should uh expect uh or milestones to see this year. 17:45 17 minutes, 45 seconds So the first thing that we should look at is the fact that the A tags uh FAT will happen and then the A tags 17:53 17 minutes, 53 seconds production will start and ramp up. The second is the CQB carbine also production uh will happen. So those are 18:01 18 minutes, 1 second the two big milestones that will move the needle uh starting this year and then it will continue next year and year after next as well. 18:10 18 minutes, 10 seconds Now anything on the order backlog any large project that you are bidding? 18:14 18 minutes, 14 seconds This will start in the second half of uh this year please remember. 18:20 18 minutes, 20 seconds Yeah. Yeah. Yeah. And anything on the order wins any incremental order book. Mhm. 18:25 18 minutes, 25 seconds So we have as as Kedar mentioned in his initial uh talk, we have won new orders 18:32 18 minutes, 32 seconds in uh defense as well in uh uh the space of naval and drone systems. And uh we 18:40 18 minutes, 40 seconds have lots of other new products that we are both developed, developing and fielding that go into a variety of 18:48 18 minutes, 48 seconds platforms including Navy and hopefully those should all now start uh you know the order the I mean the the bid should 18:57 18 minutes, 57 seconds open and then we should know where we stand. Great. Great. Thanks team. 19:05 19 minutes, 5 seconds Thank you. Our next question come from the line of Gjan uh Prityani from Bank of America. Please go ahead. 19:15 19 minutes, 15 seconds Yeah. Hi, thanks for taking my question. 19:17 19 minutes, 17 seconds Just a couple of clarifications on this aerospace and defense. In aerospace uh you mentioned 400 crores for full year. 19:25 19 minutes, 25 seconds Uh and you also mentioned 26% of exports in quarter 4 which essentially means exit gran rate of almost 300 crores. So is that the number we sort of work 19:33 19 minutes, 33 seconds through for the next year that it can be a 1,200 cr uh aerospace? 19:39 19 minutes, 39 seconds What I said is that uh industrial exports for Q4 19:47 19 minutes, 47 seconds uh aerospace was about 26% of the overall export from industrial. 19:57 19 minutes, 57 seconds Okay. Can you uh Okay. 20:00 20 minutes So in any case we are you know if I if we look at uh 400 crores as the business 20:07 20 minutes, 7 seconds we did for the whole year we will see a strong doubledigit growth higher than the overall growth that we are anticipating as a company 20:16 20 minutes, 16 seconds significantly higher okay got it which is similar like what we're saying for Japan as well that 30 20:23 20 minutes, 23 seconds 40% sort of growth so these businesses sort of clock that number as I mentioned earlier the higher growth 20:30 20 minutes, 30 seconds will be aerospace then defense and then the components business and in components I include you know all the components that we make. 20:41 20 minutes, 41 seconds Okay, got it. And um uh again the clarification on the sub piece that you mentioned the restructuring restructuring as initiated 20:50 20 minutes, 50 seconds uh do the losses from this German subsidiary completely uh go away from the operating number because restructuring is bigger? 20:59 20 minutes, 59 seconds Sorry. What what will go away? No, it'll go away get warmed up 21:06 21 minutes, 6 seconds which is basically end of next year next calendar. Yeah. 21:11 21 minutes, 11 seconds Okay. Got it. Uh now just moving to the uh data centers bit which was mentioned in the U media. Is there something that 21:18 21 minutes, 18 seconds you just want to give us a sense on what are we doing there? Then no I don't want to talk more about it but let suffice to say that you know a 21:26 21 minutes, 26 seconds data center has a large amount of manufactured input that goes into it uh in the auxiliaries in you know every 21:35 21 minutes, 35 seconds element of managing powering and supporting a data center and those are all areas where we supply product into 21:45 21 minutes, 45 seconds okay got it and last question on the you know this TV business both in class 8 as as well as in in India. I think just 21:53 21 minutes, 53 seconds generally there is a concern that you know as energy prices particularly we've already seen them move up in US. Uh how 22:01 22 minutes, 1 second do we think about you know how confident are we of the growth outlook both class 8 as well as the India CV. 22:08 22 minutes, 8 seconds Yeah. Uh my colleague both will answer. 22:11 22 minutes, 11 seconds Currently uh that is a common problem everywhere in the world. the energy price is going up but uh you have to 22:18 22 minutes, 18 seconds also take into consideration that there is a 18 fleet in the US and uh they have a certain calculation for that in terms 22:26 22 minutes, 26 seconds of what you know what they have to replace and when and from that perspective uh you know the the demand 22:33 22 minutes, 33 seconds is expected to remain strong uh for the rest of the year for sure. There is also an uh emission change coming in early 22:42 22 minutes, 42 seconds next year. As a combination of all this, there is a strong hope that the demand in the US will remain strong and as far 22:49 22 minutes, 49 seconds as India is concerned uh yes there is a there is a increase but there is also overall increase of economic activity. 22:56 22 minutes, 56 seconds So from that perspective you know the energy shock is there but it is going to get absorbed in the system by you know passing it along the whole value chain. 23:04 23 minutes, 4 seconds So we expect that there should be uh reasonably stable demand. 23:09 23 minutes, 9 seconds the existing like pipeline that you I'm sorry to interrupt you but you may please rejoin the queue for more question. All right. Thank you so much. 23:18 23 minutes, 18 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address all the question from the 23:25 23 minutes, 25 seconds participant. We request you to kindly limit your question to two question per participant. If you have a follow-up question, please rejoin the queue. 23:36 23 minutes, 36 seconds Our next question come from the line of Arvin Sharma from City Bank. Please go ahead. 23:41 23 minutes, 41 seconds Yeah. Hi, good afternoon sir. Thank you for taking my question. Uh on the 25% growth target for the India operations, 23:48 23 minutes, 48 seconds will it be possible to share how much would be in the standalone business? How much do you expect in the Indian subsidiaries? 24:04 24 minutes, 4 seconds No, you know, I'm I'm not going to break it down into all that. I that it gives too much information. Let's just limit to say that it's going to be at a overall India level. 24:14 24 minutes, 14 seconds Got it. So it will manufacture in India. 24:17 24 minutes, 17 seconds Great. It will be between the standalone and Indian subs. That's understanding correct. Sorry. 24:24 24 minutes, 24 seconds It will be it will be the combined standalone as well as the Indian subsidiaries. That understanding is correct. Yeah. Correct. Correct. 24:31 24 minutes, 31 seconds Sure sir. Uh sir also on the um on the orders that you alluded to um almost 4,800 crores uh including expense orders 24:40 24 minutes, 40 seconds of 2,800 crores. Uh what would be the typical gestation period of these new orders? One uh just from our perspective 24:48 24 minutes, 48 seconds u you know when should we uh expect the revenue start occurring? Is this something that you can share? 24:55 24 minutes, 55 seconds Yeah, actually we talked about this a little while earlier that if you look at the ATAX order that will start uh revenue in the next half of the year. 25:03 25 minutes, 3 seconds Same with the carbines and some of the data center orders will also start slowly from the end towards the third 25:11 25 minutes, 11 seconds quarter, fourth quarter and then really ramp up next year. But uh everything will start ramping up from this year. I mean product development will start from this year and ramp up next year. 25:24 25 minutes, 24 seconds Thank you sans and sir if you just um comment on the commodity costs uh anything that you would like to stress upon. So right now the biggest issue on 25:33 25 minutes, 33 seconds cost is energy cost which has gone up quite substantially and uh elements that 25:40 25 minutes, 40 seconds depend very heavily on energy those have gone up but that we are negotiating with our customers to get uh compensation 25:49 25 minutes, 49 seconds correct that's all from my side thank you so much for taking my question thank you 25:58 25 minutes, 58 seconds thank Our next question comes from the line of 26:05 26 minutes, 5 seconds promote a from incred capital. Please go ahead. 26:09 26 minutes, 9 seconds Yeah. Hi uh thanks for taking my question. So continuing on the previous question in terms of cost do you see worst is behind or it's still a very 26:17 26 minutes, 17 seconds volatile environment and also similarly in terms of supply chain challenges uh how are you uh seeing it through? 26:25 26 minutes, 25 seconds you know every you got to take it a day at a time because you you know we're living in a time where uh what's happening in the world depends on which 26:33 26 minutes, 33 seconds news channel you watch. So uh you know it's not really the old rules of the game anymore. Every hour every minute 26:42 26 minutes, 42 seconds things are changing but you know we're doing the best we can. So as a country also and as an organization also. Okay. 26:49 26 minutes, 49 seconds So I don't know if I can say the worst is behind us. 26:54 26 minutes, 54 seconds Okay. And the second one is with regard to the recent acquisition for machining facility. Uh you already have a machining facility in house and this 27:02 27 minutes, 2 seconds seems to be like your captive facility which you acquired. How do you see what's the reason to do it and how do 27:08 27 minutes, 8 seconds you see make versus buy uh in such form uh decisions? Is there any worthwhile uh time saving you are doing here or capability addition? 27:21 27 minutes, 21 seconds Sorry. Sorry. Say that again. No, I said you have bought this entity. Yeah, go ahead. 27:27 27 minutes, 27 seconds So, pram the reason of acquiring this entity is it is very synergistic to what 27:33 27 minutes, 33 seconds we do today and uh you know we also cannot do everything ourselves. We need the bandwidth to be able to grow in a 27:42 27 minutes, 42 seconds quantum manner. We will also be addressing many segments that we have not addressed in India so far as a part of this uh uh you know this resource 27:51 27 minutes, 51 seconds that we have not just in India for that matter even outside India and uh we have actually already started getting a lot 28:00 28 minutes of positive interest from our existing customers to be able to do that. So uh the whole idea is growth related more 28:07 28 minutes, 7 seconds than anything else and fast and you mentioned topline and one thing so both said it's not just growth it is 28:16 28 minutes, 16 seconds fast growth okay and what type of margins does it operate in AITA margins or EB margins 28:24 28 minutes, 24 seconds that business you know it's uh mid teens 28:31 28 minutes, 31 seconds okay sure thanks and all the Thank you. 28:40 28 minutes, 40 seconds Our next question come from the line of Nitin Aurora from Access Mutual Fund. 28:45 28 minutes, 45 seconds Please go ahead. I said just um on the expensive side on the depends um how we are thinking about this business uh 28:52 28 minutes, 52 seconds because there is uh you know lot of demand globally as well. So when do we see this capex happening and when do you 28:59 28 minutes, 59 seconds see scale starts becoming bigger for you just on the direction side. 29:03 29 minutes, 3 seconds So first of all we don't have an explosive business right now right but as we have mentioned uh Mr. that we 29:10 29 minutes, 10 seconds are uh you know planning to set up a facility and the facility we are planning is going to come up in Andhra 29:18 29 minutes, 18 seconds Pradesh and uh we are going to do the groundbreaking of this this this month. 29:25 29 minutes, 25 seconds So FI27 is where we see sorry FI28 where we see um um you know pretty heavy and 29:34 29 minutes, 34 seconds how much so let me just caveat that by saying that you need a hell of a lot of approvals before setting up such a facility and 29:43 29 minutes, 43 seconds after setting up a facility like before you can start production. So our goal is to break ground uh this month 29:52 29 minutes, 52 seconds and start the preparatory work and then once we get our approval start construction by the end of this year and 29:59 29 minutes, 59 seconds that should be ready in less than 15 months and then you know another 6 to 8 months from then we should be able to start pilot production. You're talking 30:08 30 minutes, 8 seconds about roughly 24 months total. Got it. Yeah. Thank you. Thanks a lot. 30:17 30 minutes, 17 seconds Thank you. 30:19 30 minutes, 19 seconds Our next question come from the line of Sonel Gupta from HSBC AMC. Please go ahead. 30:24 30 minutes, 24 seconds Yeah. Hi, good afternoon and thanks for taking my question. Uh uh Amit very heartening to see we aggressively moving and we've done a lot of acquisitions 30:32 30 minutes, 32 seconds this year in India. I mean like with the K drive as well as uh Fortuna. So in that context I just just wanted to 30:40 30 minutes, 40 seconds understand the the capital raise external capital raise in cream uh in JSA why are we doing that right like I mean that's something that we can 30:48 30 minutes, 48 seconds internally fund you know that was a minor thing actually and honestly we see a large opportunity 30:54 30 minutes, 54 seconds in JSA but it's uh we wanted to make it an independent business and grow it because we see that that business could 31:02 31 minutes, 2 seconds become you know multi,000 cr business per year because if you See uh the 31:08 31 minutes, 8 seconds biggest ingredient of u uh you know in in that industry is energy and raw material and both those factors are not 31:17 31 minutes, 17 seconds available in uh required quantity or price in Europe. So we see a large 31:24 31 minutes, 24 seconds opportunity to move uh that manufacturing into India. So we want to expand that fast and we want to do it 31:31 31 minutes, 31 seconds with its own momentum and steam. Uh so that was the reason to do it. 31:37 31 minutes, 37 seconds And you know I think there are other synergies that could come out of that relationship as well. 31:44 31 minutes, 44 seconds So you're saying that by doing this external they can grow faster than what they would have done which we done internally. 31:51 31 minutes, 51 seconds Yeah. I want to I I also want to build a new model where companies that we buy which are like that uh you know become 32:01 32 minutes, 1 second more focused on their own growth and become self-sufficient. Yes, we will support them on you know whatever 32:09 32 minutes, 9 seconds customer connect etc that we can do but I think they need to drive their growth 32:15 32 minutes, 15 seconds more aggressively and not get limited by you know just what we can provide them. 32:23 32 minutes, 23 seconds Okay. And sorry, the second question I had was on the ATAGS. Uh I mean what sort of capacity have we now ramped up to and when do we see this uh really? 32:33 32 minutes, 33 seconds So we talked about this that second quart second half of this year we will see uh that uh uh FAT getting completed 32:42 32 minutes, 42 seconds and then hopefully production and supplies to start. 32:46 32 minutes, 46 seconds So I I I think the earlier you mentioned that we were initial capacity is like five guns a month. Is that what we're looking at or Yeah, that's that's what we can do. Yes. 32:56 32 minutes, 56 seconds Okay. Great. Thank you so much. Thank you. 33:02 33 minutes, 2 seconds Our next question come from the line of Ron Singh from NF asset managers. Please go ahead. 33:09 33 minutes, 9 seconds Hello. Thank you for taking my questions. Am I audible? Yes. Yes. 33:14 33 minutes, 14 seconds So, uh I want to get specific about the 155 mm artillery shells. 33:21 33 minutes, 21 seconds uh sorry 155 mm artillery shells. So what is the current capacity? 33:27 33 minutes, 27 seconds I'm not going to discuss that. Uh you know let's just say that we have adequate capacity and we are producing a large number of them. 33:36 33 minutes, 36 seconds Okay. So like can you just say uh further you are going to go into explosives or Christian guidance or just empty shells? 33:47 33 minutes, 47 seconds Again, I've already answered this just before when Mr. uh uh Mea I think asked 33:54 33 minutes, 54 seconds a question. Aurora, Mr. Aurora as a question. Uh we are definitely going to get into explosives. 34:02 34 minutes, 2 seconds Okay. Thank you. 34:05 34 minutes, 5 seconds Thank you. Our next question come from the line of Nitin Jen from Fair Value Equity Advisory. Please go ahead. 34:13 34 minutes, 13 seconds Yeah, good afternoon [clears throat] and congratulations on a good quarter. Uh so uh my first question is on the aerospace business. Uh if you could provide some 34:22 34 minutes, 22 seconds outlook on the business, where do we see it in the next three years and what are uh what are the kind of margins we have here? Like are they above company 34:30 34 minutes, 30 seconds average or in line with the company margin? 34:33 34 minutes, 33 seconds So I would say the margins are above the company average and uh if you remember Mr. Jen that over the last 3 years we 34:41 34 minutes, 41 seconds had said the first goal is to get to 5 6 700 crores and then you know get to a,000 crores. I think I think that's we 34:49 34 minutes, 49 seconds are on that trajectory and sooner than later we should cross that and then be on a very fast growth path after that. 34:57 34 minutes, 57 seconds You know getting to the first,000 crores is hard. After that it becomes you know you create lines of business you create product strategies and then multiple 35:06 35 minutes, 6 seconds products can become 4 500 crores each maybe even more. 35:12 35 minutes, 12 seconds So we're on that path okay so safe to assume that we are targeting around 1,000 crores in the next 3 years or so 35:20 35 minutes, 20 seconds easily. Easily okay great I would say even more than that. 35:26 35 minutes, 26 seconds Okay, great. Uh, also can you provide some color on the kind of revenue opportunity we are targeting in the server manufacturing business in the next two years? 35:35 35 minutes, 35 seconds No, no, no. The we are not looking at that business aggressively. You know, we were trying to look at that business to understand the data center market and I 35:44 35 minutes, 44 seconds think we've understood what we want to do and what we don't want to do. There are some specialty 35:51 35 minutes, 51 seconds opportunities where there are certain critical clients who want domestic made servers made by an Indian company. Those 36:00 36 minutes we will look at but those are not very large opportunities at this point in time. They are more a strategic opportunity and it's an opportunity to 36:07 36 minutes, 7 seconds get into the whole value chain of the data center. So that's what we're looking at it as. I wouldn't look at it 36:14 36 minutes, 14 seconds as a you know getting into electronics uh in a big way kind of thing. 36:21 36 minutes, 21 seconds Okay, that's quite helpful. Uh thank you and congratulations. 36:25 36 minutes, 25 seconds [clears throat] 36:26 36 minutes, 26 seconds Thanks. Thank you. 36:30 36 minutes, 30 seconds Next question come from the line of Mites from Adita. Please go ahead. 36:37 36 minutes, 37 seconds Yeah, I have a question regarding the Orisa project. Sorry, which company are you with? 36:42 36 minutes, 42 seconds Adita Equity Investment. Sorry, I forgot to write the full name. Uh hello. 36:49 36 minutes, 49 seconds Yeah. Yeah. Go ahead. Go ahead. Please go ahead. 36:51 36 minutes, 51 seconds Yeah. I had a question regarding the Orisa project. So when is the environmental clearance expected for the project and when do you expect to break ground for the project? 37:02 37 minutes, 2 seconds We're waiting still. So I don't know maybe another 2 3 4 months. Okay. Thank you. Thank you. 37:10 37 minutes, 10 seconds Thank you. Thank you. 37:15 37 minutes, 15 seconds Our next question come from the line of Hit Raura from Anenna Research. Please go ahead. 37:22 37 minutes, 22 seconds Hello sir. Good afternoon. I just wanted to understand the grass block. 37:28 37 minutes, 28 seconds I'm sorry sir but your voice is not audible. 37:31 37 minutes, 31 seconds Yes sir. So I just want to understand the gross block trajectory and the targets for the next 3 five years 37:38 37 minutes, 38 seconds particular news. You can take this offline. We're not able to hear you. I think you should call team separately and talk to them. They're not able to hear you at all. 37:50 37 minutes, 50 seconds Hello. Thank you. 37:54 37 minutes, 54 seconds Thank you. An question come from the line of Rakkesh Roy from Boring AMC. Please go ahead. 37:59 37 minutes, 59 seconds Yeah. Hi sir. My first question says can you give me the full year difference revenue for 26 38:06 38 minutes, 6 seconds 1300 crores 1300 and uh sorry full year revenue for defense 38:15 38 minutes, 15 seconds sorry 1562 cr right sir right sir and sir my next 38:22 38 minutes, 22 seconds question sir uh recently army army issue one rfi for bulletproof troop carrier are we waiting for this one. 38:33 38 minutes, 33 seconds Yeah, we're bidding for lots of new program with the army. 38:37 38 minutes, 37 seconds Okay. And uh can you highlight on this recently one product is launched? One product is launched in defense 38:43 38 minutes, 43 seconds especially Vicram VT21 with DRD1 Tata how the markets are where we are currently. 38:50 38 minutes, 50 seconds Sorry VR Vicram VT Tata. 38:56 38 minutes, 56 seconds Yeah, we we launched our wheel platform and they 39:01 39 minutes, 1 second we also had our track platform there right and how the market understand the question. My my question 39:10 39 minutes, 10 seconds is how is the market size for this product especially for army and replacing replacing the old BMPs that Indian army has huge numbers of. 39:22 39 minutes, 22 seconds Okay. Any idea how much number for domestic market and for export market your point of view? 39:27 39 minutes, 27 seconds Globally the market is in tens of thousands. Oh great sir. Great. Thank you sir. Thank you. 39:34 39 minutes, 34 seconds Thank you. Our next question comes from the line of Mahesh Bendre from LIC mutual fund. Please go ahead. 39:43 39 minutes, 43 seconds Uh hi sir, thank you so much for the opportunity. Sir, what kind of capital expenditure we looking for next 3 years? 39:51 39 minutes, 51 seconds I'm telling you right now what we have ongoing between last year, this year and uh between last year and this year will be about 800 coursees. 40:01 40 minutes, 1 second Okay. Sure. And sir uh since the defense business is bigger [clears throat] uh defense business is becoming bigger and 40:08 40 minutes, 8 seconds you know uh with various dimensions any plans of hiring of this business um 40:14 40 minutes, 14 seconds maybe uh creating is new entity or uh bringing any I mean we haven't thought about as you 40:22 40 minutes, 22 seconds know we've already spun it off into KSSL right right but in terms of creating value for investors are there any plans 40:29 40 minutes, 29 seconds I hope you're creating tell you in terms of listing uh this that we will look at separately. Okay, sure. 40:37 40 minutes, 37 seconds Thank you. Thank you so much. Thank you. Thank you. 40:42 40 minutes, 42 seconds Next question comes from the line of Nitin Jen from Farewell Equity Advisory. Please go ahead. 40:47 40 minutes, 47 seconds Yeah, thank you for the follow-up opportunity. Uh my uh question is uh given the importance of uh drones in modern warfare like we have seen in 40:56 40 minutes, 56 seconds operations indur and other operations what kind of presence do we have in drone manufacturing? 41:04 41 minutes, 4 seconds We are already making drones for land sea and air. I would say that under sea and uh uh the sea part we are very 41:12 41 minutes, 12 seconds strong in the air part we are getting stronger the land we need to do more work 41:19 41 minutes, 19 seconds we have already one order in both the land air and the sea domain 41:27 41 minutes, 27 seconds right would it be possible to provide any percentage in terms of a defense business no not right now 41:34 41 minutes, 34 seconds okay thank you thank Thank you ladies and gentlemen. That was the last 41:43 41 minutes, 43 seconds question for today. I now hand the conference over to Mr. Amit Kalyani for closing comments. Thank you and over to you sir. 41:50 41 minutes, 50 seconds If there I think if there are any last questions you know one or two let's finish them 41:57 41 minutes, 57 seconds and then we can close. I just saw that there are two names. Sure sir. Let's just do these last two. 42:06 42 minutes, 6 seconds Sure. Sure. Sure. Our next question comes from the line of Akshai Carva from Abiva India. Please go ahead. 42:12 42 minutes, 12 seconds Hi Amed. Good afternoon. Question pertaining to India. Um 42:19 42 minutes, 19 seconds sorry now. Go ahead. 42:24 42 minutes, 24 seconds My question pertains to manufacturing of jet engines. So with the recent companies coming with private companies 42:32 42 minutes, 32 seconds coming into for this um how long would you do you think would um would we be ready to create our own um localized jet engine in the near term? 42:43 42 minutes, 43 seconds So are you talking about an engine for a manned or unmanned platform? 42:48 42 minutes, 48 seconds Man platform sorry man platform will take quite some time I would say not less than 5 to 10 years 42:56 42 minutes, 56 seconds but unmanned can happen very very fast already we are supplying small jet engines for uh number of drones and we 43:05 43 minutes, 5 seconds are now going to be making bigger ones also for unmanned systems and these are completely made in India inhouse 43:14 43 minutes, 14 seconds they designed engineered and manufactured range of 40 kilo kilos to 150 kilos. 43:23 43 minutes, 23 seconds Um my question is revolved around the recent AMA the AMA engines. So um 43:31 43 minutes, 31 seconds regarding that um as you said 5 to 10 years so which of the companies do you think would be able to um get get this ordered up? 43:43 43 minutes, 43 seconds So for AMSA loop the whole program is going to be a down selection first of the consortium and then first prototype 43:52 43 minutes, 52 seconds in 32. Okay. So it's still a long ways away and initially AMTA will be powered by uh imported engine. 44:03 44 minutes, 3 seconds Thank you sir. That's all from my friend and wish you all the best. Thanks. 44:09 44 minutes, 9 seconds Thank you. Last question come from the line of Radha from Modila Rossul. Please go ahead. 44:16 44 minutes, 16 seconds Hi sir, thank you for the opportunity. 44:18 44 minutes, 18 seconds Um, so my question was on K operator business. Uh, can you give us some insights on how the growth will be driven in this business beyond the 44:26 44 minutes, 26 seconds normal CV industry growth? Will it be exports and or gaining new customers or will it be from hybrid? 44:33 44 minutes, 33 seconds So it's a good question rather. We're looking at the specialty axles business and the LCV and SUV axle business including EV for those both ICE and EV. 44:44 44 minutes, 44 seconds So that is what's going to drive the growth there. 44:48 44 minutes, 48 seconds So can this take the business two to 3x uh in the medium term? Is there this kind of scalability opportunity? Yes, 44:56 44 minutes, 56 seconds there is in at 2x in you know next 3 to four years is definitely possible 45:03 45 minutes, 3 seconds and you know if we have if we are a little more lucky and we get into some you know speciality assets it could be even better 45:12 45 minutes, 12 seconds and what is the peak margins that can be made in this business I think it's too early to say but you know our goal is a good teen mid- teens margin in this Yes. 45:25 45 minutes, 25 seconds All right. The second and last question is uh how is the demand scenario in North America and Europe passenger car 45:33 45 minutes, 33 seconds uh segment and what is driving the demand here if US is strong. Yeah. 45:39 45 minutes, 39 seconds So both is going to ask demand in the US is stable. When I say stable, you know, last year's total the 45:46 45 minutes, 46 seconds market size was about 16 million. We put 16.1. It's more or less going to be the same for us for this year. Uh demand is 45:55 45 minutes, 55 seconds reasonably okay. Uh they don't expect any changes in in Europe. uh we have to 46:02 46 minutes, 2 seconds see because Europe will obviously face a little more challenges given the given how how long the war is protracted so we 46:09 46 minutes, 9 seconds have to watch what happens in Europe but by and large it is stable as compared to last year that's 46:20 46 minutes, 20 seconds all sir thanks and all the best thank you thank you ladies and thank you very much for your 46:28 46 minutes, 28 seconds time and interest uh and your support to our company really appreciate it and uh we will remain in touch and our teams 46:36 46 minutes, 36 seconds are available if you need any further input. Thank you and have a nice day. 46:41 46 minutes, 41 seconds Thank you sir. Ladies and gentlemen on behalf of Bhat Forge Limited that conclude this conference. Thank you for joining us and you may now disconnect your lines.