Carraro India Limited — Q3 FY26

Carraro India Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=HFB4dlpJOmc Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Curado India Limited Q3 FY26 earnings call. 0:09 9 seconds This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on the date of this call. 0:20 20 seconds These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 0:28 28 seconds As a reminder, all participant clients will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:35 35 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:43 43 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. 0:51 51 seconds Bala Gopaland for his opening remarks. Thank you and over to you sir. Good. 0:56 56 seconds Thank you very much and uh a very good morning to all of you and thank you for joining us today for Karado India 1:03 1 minute, 3 seconds Limited's Q3 and 9month financial year 2026 earnings call. I am joined by Mr. 1:12 1 minute, 12 seconds Davidid Gorsi our whole time director and CFO our sales director Mr. Ashok Ray 1:19 1 minute, 19 seconds and Mr. Manikar, our chief operating officer and wholetime directors along with other members of our leadership 1:27 1 minute, 27 seconds team and our investor relations partner strategic growth advisors. Let me start by giving you an overview of our 1:35 1 minute, 35 seconds performance and the industry for the 9 months FY26. 1:40 1 minute, 40 seconds The broader agriculture equipment industry has remained resilient in FY26 supported by heavy rural cash flows, 1:49 1 minute, 49 seconds favorable cropping conditions, and policy support. Industry outlook continues to be positive with tractor 1:57 1 minute, 57 seconds and allied equipment volumes expected to grow in the low to mid teens this year. 2:03 2 minutes, 3 seconds OEM commentary across the sector also indicates improving domestic retail traction and sustained demand from rural 2:12 2 minutes, 12 seconds markets particularly in the mid to high horsepower segments driven by better farm economics easier financing and 2:21 2 minutes, 21 seconds rising mechanization for Karo India the performance has been both strong and encouraging revenue from 2:29 2 minutes, 29 seconds operations grew 21% yearonear supported by healthy volume momentum across both domestic and export markets. 2:40 2 minutes, 40 seconds On the domestic front, revenue grew 17% yearonear, driven by strong demand for 2:47 2 minutes, 47 seconds four-wheel drive axles in the agriculture segment. Exports delivered an even stronger growth of 29% 2:56 2 minutes, 56 seconds yearonear, led primarily by increased offtake of teleboom handler axles. While 3:03 3 minutes, 3 seconds indirect exports of agriculture drive lines remained relatively soft, resilient domestic demand helped sustain our overall volume trajectory. 3:15 3 minutes, 15 seconds In line with our past guidance, we continued to deliver strong volumes reinforcing our confidence in the 3:23 3 minutes, 23 seconds sustainability of our operating performance. Profitability improved meaningfully during the period with Eida 3:31 3 minutes, 31 seconds growing 28% yearonear supported by operating leverage disciplined cost 3:38 3 minutes, 38 seconds management and execution efficiencies even as product mix remained dynamic across quarters in the construction equipment segment. 3:50 3 minutes, 50 seconds The ramp up of the new range of Teliboom handler axles for a major international 3:56 3 minutes, 56 seconds OEM continued during the period under review witnessing healthy trans healthy traction and strong visibility for sustained growth in the coming quarters. 4:08 4 minutes, 8 seconds Additionally, new projects with a domestic customer, both global and Indian for the teleoom handler Axel 4:16 4 minutes, 16 seconds family are progressing well and remain on track. In the construction segment, sales of drive lines to the Indian 4:25 4 minutes, 25 seconds construction equipment customers increased by approximately 4% during the first 9 months despite a decline of 4:35 4 minutes, 35 seconds around 5% in the overall construction equipment market over the same period. 4:41 4 minutes, 41 seconds Sales of drive lines tobacco loader customers in the domestic market grew by approximately 5% during the 9-month 4:50 4 minutes, 50 seconds period, significantly outperforming the broader market decline of nearly 12%. 4:58 4 minutes, 58 seconds In the domestic agriculture segment, the GST reduction has accelerated the transition from two-w wheelel drive to 5:06 5 minutes, 6 seconds four-wheel drive tractors by narrowing the price gap between pregwheel drive and postGST four-wheel drive 5:15 5 minutes, 15 seconds models. The domestic four-wheel drive axle market delivered strong revenue growth in the first 9 months prompting 5:23 5 minutes, 23 seconds Karo India Limited to ramp up capacity to meet the anticipated demand ahead. 5:32 5 minutes, 32 seconds For higher horsepower transmissions, the export market is gradually recovering which could positively impact 5:39 5 minutes, 39 seconds transmission oftake for high horsepower tractors in future. The gear business remained subdued during 9 months FY2026. 5:50 5 minutes, 50 seconds Although near-term growth is likely to remain muted, ongoing initiatives to strengthen the business are expected to 5:58 5 minutes, 58 seconds drive gradual improvement in the coming quarters. 6:02 6 minutes, 2 seconds Caro Technologies, our engineering center, leveraging its in-house design capabilities, received multiple 6:10 6 minutes, 10 seconds inquiries from OEMs for engineering support. During the period, the engineering services engagement for the 6:19 6 minutes, 19 seconds industrialization and supply of electric transmissions for electric agriculture tractors is 6:26 6 minutes, 26 seconds progressing well. Engineering services revenue for Karo India stood at INR 50 6:34 6 minutes, 34 seconds million in Q3 FY 2026 and INR 100 million during 9 months FY 2026. 6:44 6 minutes, 44 seconds On the manufacturing front, we strengthened our capabilities through key equipment additions aimed at 6:52 6 minutes, 52 seconds improving throughput, flexibility, and quality. Two sealed quenched furnaces were installed at the gear plant and the 7:01 7 minutes, 1 second 800mm pallet Mazak machining center was commissioned in June improving throughput and flexibility. 7:10 7 minutes, 10 seconds The addition of the TLB bench, the testing bench online in July and the 7:17 7 minutes, 17 seconds robotic washing machine in September further enhances our readiness for future growth. Additionally, the board 7:26 7 minutes, 26 seconds has approved a capex outlay of rupees 623 million to expand our Axel capacity 7:36 7 minutes, 36 seconds from 1 lak 34,000 units to up to 1 lak 54,000 units over the next 18 months to 7:45 7 minutes, 45 seconds be funded through a mix of internal acruals and debt. This expansion is 7:51 7 minutes, 51 seconds aligned with our strong demand outlook with the plant capacity operating nearly at about 90% utilization. 8:01 8 minutes, 1 second During the period, we advanced our efforts to strengthen the aftermarket and after sales ecosystem. In January 8:09 8 minutes, 9 seconds 2026, we inaugurated our first authorized service center in Faridabad. 8:16 8 minutes, 16 seconds Strategically positioned to serve customers across North India with genuine spare parts and OEM quality service support. 8:26 8 minutes, 26 seconds This marks an important milestone in our long-term plan to set up four more authorized service centers across India. 8:35 8 minutes, 35 seconds I correct myself. It is four authorized service centers, not four more. The initiative is expected to improve 8:43 8 minutes, 43 seconds customer experience, minimize downtime, and provide a scalable platform for growing our spares and aftermarket business over the medium term. 8:54 8 minutes, 54 seconds Innovation continued to be a key focus during the 9-month period with 14 prototypes developed, four of which have 9:03 9 minutes, 3 seconds entered production. We also dispatched two T100 EVO prototype units to a leading OEM 9:12 9 minutes, 12 seconds tractor manufacturer and successfully completed the first batch of CVT 9:19 9 minutes, 19 seconds transmission units representing a key milestone towards commercialization. 9:25 9 minutes, 25 seconds Just for information, T 100 are transmissions gearboxes for tractors above 100 horsepower and CVT are 9:34 9 minutes, 34 seconds automatic gearboxes which are primarily used in cars. Continuous variable transmission. 9:40 9 minutes, 40 seconds Coming to Cape of INR 304 million was developed during 9 months FY26 9:49 9 minutes, 49 seconds to support new telescopic handler axle production. a high performance range transmission for agriculture application 9:59 9 minutes, 59 seconds and incremental capacity additions for FY26 sales. These investments are aligned with our strategy to support 10:07 10 minutes, 7 seconds growth in FY26 and the years ahead. Our raw material localization stood at 78% 10:16 10 minutes, 16 seconds and we remain on track to increase this to 86 to 88% in the next 2 to 3 years. 10:23 10 minutes, 23 seconds In the current context, the momentum we have built serves as a strong validation of the strategic choices made over the 10:32 10 minutes, 32 seconds past year. This performance reflects the dedication and alignment of our teams 10:39 10 minutes, 39 seconds across functions and reinforces the strength of our business fundamentals and customer engagement efforts. As we 10:48 10 minutes, 48 seconds look ahead, our journey remains well aligned with the medium-term vision we have collectively set, encouraging 10:56 10 minutes, 56 seconds trends across our engineering capabilities, operational excellence, customer satisfaction, and market 11:03 11 minutes, 3 seconds responsiveness to our technology and design continue to reinforce our confidence in sustaining this trajectory. 11:12 11 minutes, 12 seconds The outlook forward remains promising with Karo India well positioned for accelerated growth. In view of improving 11:22 11 minutes, 22 seconds of highway market sentiment, our strong execution momentum, we are confident of 11:29 11 minutes, 29 seconds possibly reaching but also exceeding the earlier guidance of 3,200 cr and we 11:38 11 minutes, 38 seconds would be moving close to 3,500 cr which will be higher than our earlier target 11:44 11 minutes, 44 seconds of 3,200 cr which we mentioned as 350 million euro at that point in time. We will continue to focus on disciplined 11:53 11 minutes, 53 seconds execution, valueled growth and delivering sustained performance in line with our strategic road map. With that, 12:02 12 minutes, 2 seconds I now hand over the call to Mr. David Graci, our chief financial officer to walk you through the financial details. 12:10 12 minutes, 10 seconds David de Gross. 12:12 12 minutes, 12 seconds Thank you Bajin and good morning everyone. As usual, I will uh quickly take you through the key financial 12:19 12 minutes, 19 seconds allies for Q3 and the nine months of financial year 2026 and then we will leave room for uh your questions. 12:27 12 minutes, 27 seconds Starting with Q3, revenues from operations grew by 27% yearonear to INR 12:34 12 minutes, 34 seconds 5,696 million 569 crores rupees. Our total 12:42 12 minutes, 42 seconds income stood at INR 5,768 million also a growth of 27% yearonear. 12:49 12 minutes, 49 seconds Our eida came at uh rupees 624 million 62 crores with a growth of 71% yearon 12:58 12 minutes, 58 seconds year. Bases the um this is translating to an eida margin on of 10.8% versus a 8.1% margin in Q3 of FY 2025. 13:11 13 minutes, 11 seconds The profit after tax for the quarter was 281 million rupees 28 crores with a 13:18 13 minutes, 18 seconds growth of 91% on year uh year on year with a margin at 4.9% versus a 3.2% margin in Q3 of financial year 2025. 13:29 13 minutes, 29 seconds Agricultural vehicle segment grew 27% yearonear to rupees 2,68 13:37 13 minutes, 37 seconds million 261 crores. While construction vehicles grew 20% yearonear to rupees 13:44 13 minutes, 44 seconds 2386 million approximately 239 crores. When we look at the 9 months revenues from 13:53 13 minutes, 53 seconds operation grew by 21% yearonear to rupee 16,488,1,648 14:01 14 minutes, 1 second crores driven by domestic volume growth and a health recovery in exports. Total income stood at 66 16,698 14:10 14 minutes, 10 seconds million 1,670 crores. Also a growth of 21% yearon year on the total other income about 60 14:19 14 minutes, 19 seconds million uh rupees pertains to the reverse of a provision previously made for vendor payment. 14:25 14 minutes, 25 seconds Aida came at 1,765,176 crores with a growth of 28% yearonear 14:34 14 minutes, 34 seconds translating to an AIDA margin of 10.6% versus the 10% margin in the first 9 months of financial year 2025. Our 14:43 14 minutes, 43 seconds profit after tax for the quarter was at rupees 889 million89 crores with a 14:51 14 minutes, 51 seconds growth of 38% yearonear with a margin at 5.3% versus a four 4.7% margin for the 9 months of financial year 2025. 15:03 15 minutes, 3 seconds Agriculture agricultural vehicle segments grew by 13% yearonear at rupees 15:09 15 minutes, 9 seconds 7,408,740 crores while construction vehicles grew 15:15 15 minutes, 15 seconds 30% yearonear to rupees 7,2247 722 crores. We continue to maintain a 15:24 15 minutes, 24 seconds robust balance balance sheet with a ample liquidity enabling us to efficiently fund operations, support strategic investment and stay agile in responding to market opportunities. 15:36 15 minutes, 36 seconds Looking ahead, we remain optimistic. Our FY 2026 financial outlook is supported 15:43 15 minutes, 43 seconds by growth in high value product line, a rising contribution from engineering services services, increasing exports 15:50 15 minutes, 50 seconds and continued benefits from localization initiative. 15:54 15 minutes, 54 seconds And I will stop here and we now welcome your questions. 16:06 16 minutes, 6 seconds Thank you very much. 16:08 16 minutes, 8 seconds We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their 16:15 16 minutes, 15 seconds touchstone headphone. If you wish to remove yourself from the question cube, you may press star N2. Participants are 16:24 16 minutes, 24 seconds requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 16:46 16 minutes, 46 seconds The first question is from the line of Mahesh Bendra from LIC Mutual Fund. Please go ahead. 16:53 16 minutes, 53 seconds Uh hi, good morning sir. Thank you so much for the opportunity. Uh sir, last two quarters uh the uh export has been doing phenomenal. I mean growing with 17:02 17 minutes, 2 seconds significant uh uh growth rate. Uh I think at the beginning of the year we were not very hopeful about the export 17:09 17 minutes, 9 seconds in the near term but that has done really wonders in last two quarters. 17:15 17 minutes, 15 seconds So uh what is the outlook for uh next uh I mean 12 months for on export side. 17:24 17 minutes, 24 seconds Okay. Uh this is Ashok here. Uh allow me to answer this question. Uh see when we talk about the last two quarters the 17:30 17 minutes, 30 seconds export is mainly uh the uh traction has come from our backloaded drive line which was sold in China as well as uh in 17:40 17 minutes, 40 seconds Latin America and also as we said that we are doing well in our teleboom handler uh segment uh for for the 17:47 17 minutes, 47 seconds international big customers. So those has driven the growth of our last two quarter. So and we are seeing that at least this traction remain in the teloom 17:57 17 minutes, 57 seconds handler we are seeing a good traction in the next year and in case of the China as well as in the Latin America it may 18:05 18 minutes, 5 seconds uh we are expecting that at least next two quarters should be good but we don't have yet visibility for the subsequent two quarters of the next year. 18:15 18 minutes, 15 seconds Sure. Sure. Uh you are expanding our capacity with the 63 crores of capex. So when this uh capacity will be available 18:23 18 minutes, 23 seconds with us because in the press release we have mentioned that we are operating more than 85% utilization. 18:32 18 minutes, 32 seconds Yeah. So this capacity uh as we mentioned in our communication will be deployed over uh 18 months. Uh, of 18:41 18 minutes, 41 seconds course we are uh hoping to to to shorten this time and maybe reducing a little bit hopefully to 12 months but uh it 18:50 18 minutes, 50 seconds will be gradually deployed. It will not be in one go. uh in this expansion uh capital there are 18:59 18 minutes, 59 seconds also of course it's a mix of uh of activities some of them are also on the 19:06 19 minutes, 6 seconds existing line to uh eliminate some bottlenecks and directly quickly in 19:14 19 minutes, 14 seconds introduce some additional capacity on what we have already. So those intervention might be slightly faster and will allow us to bridge the gap 19:22 19 minutes, 22 seconds between our capacity, our current capacity and the demand that we see in the market. But overall uh as we said 18 19:31 19 minutes, 31 seconds months to deploy the investment hopefully a bit faster than that. Sure. Thank you. Thank you so much sir. 19:42 19 minutes, 42 seconds Thank you. Before we take the next question, a reminder to all the participants. If you wish to ask a 19:48 19 minutes, 48 seconds question, please press star N1. The next question is from the line of Ragunan N from Noama Research. Please go ahead. 19:59 19 minutes, 59 seconds Good morning, sir. Uh, congratulations once again on extremely strong numbers. 20:04 20 minutes, 4 seconds Good to see the upgrades on medium-term target to 3,500 cr. Uh so firstly uh uh 20:13 20 minutes, 13 seconds uh uh can you talk about the outlook in the key export markets? Uh firstly how 20:19 20 minutes, 19 seconds do you see the outlook for Europe uh for both tractor and construction equipment 20:26 20 minutes, 26 seconds because Volvo and John Deere in their outlook for CY26 have given a better expectation compared to CY25. 20:36 20 minutes, 36 seconds And secondly, in light of the recent trade deal announcement uh with uh US and Europe, how do you see that benefiting Karo? 20:48 20 minutes, 48 seconds Uh this is Ashok here again. Uh when we talk about the export market, uh we are 20:55 20 minutes, 55 seconds uh as we said in case of the Teleboom handler, we are seeing uh the demand would be consistent. We are not 21:02 21 minutes, 2 seconds expecting any uh different uh than what has been happening and uh in case what we are exporting in China we are seeing 21:11 21 minutes, 11 seconds that at least the next two quarters should be similar level as the previous one and uh Latin America the demand is 21:18 21 minutes, 18 seconds still at the similar level as we are expecting in the next 6 months. Coming to the benefit of this u duty which has 21:27 21 minutes, 27 seconds been uh brought back to 18% by the u US uh government assuming that there is no 21:34 21 minutes, 34 seconds change in the stance we are expecting that there could be a increase in traction from the um second quarter to 21:41 21 minutes, 41 seconds third quarter we should should have the increased demand of agricultural drive line from the Indian customer who are exporting to the US market as we said in 21:50 21 minutes, 50 seconds the past that we have around 7 to 8% exposure in the in the US market of our turnover. So that will uh improve. 22:02 22 minutes, 2 seconds Uh thank you for that sir. Uh very helpful. And you referred to the international big customer uh to whom 22:10 22 minutes, 10 seconds you are supplying PBH and tobacco uh where the revenue was 122 cr in H1. Can 22:17 22 minutes, 17 seconds you indicate whether revenue has uh sustained at a similar level for Q and 22:24 22 minutes, 24 seconds also if you can talk about FI27 whether there will be a higher uh uh uh dispatch to this customer. 22:33 22 minutes, 33 seconds Okay. uh see uh see the the revenue guidance for this customer remain uh 22:40 22 minutes, 40 seconds similar level at uh what we have been doing like for example you said around 1,200 cr what we said in the H1 and in 22:48 22 minutes, 48 seconds the next year also uh of course it will be an increased uh number that could be at least 10 15% more than we are expecting with the previous this year 22:57 22 minutes, 57 seconds end so we can expect like almost 10% increase because the volume of The 23:04 23 minutes, 4 seconds machines are also increasing uh as uh planned. 23:11 23 minutes, 11 seconds Got it. Sir, that is very helpful. And apart from this customer, can you talk about uh uh you know the support to the 23:19 23 minutes, 19 seconds revenue from other order executions? uh because you had orders even on the uh 23:26 23 minutes, 26 seconds Teleboom handler side for some of the Indian customers uh Teleboom handler and backo you had some orders and also in 23:35 23 minutes, 35 seconds the above 100 HP you also had some orders. So so the question was uh how much can it help revenue uh next year in FI27 because of these executions? 23:49 23 minutes, 49 seconds uh see uh as we said that these are recently been supplied as a prototype uh for the Indian customers whether teleoom 23:57 23 minutes, 57 seconds handler u specific to teleoom handler so we are not seeing the revenue stream in FY27 because at least um 12 to 18 month 24:04 24 minutes, 4 seconds is required for testing so those effect we are expecting in the FY28 even also for the higher horsepower uh tractor 24:13 24 minutes, 13 seconds transmission which we have given it to the Indian customer those are under testing and validation 24:20 24 minutes, 20 seconds Got it sir. And uh uh on the domestic uh tractor business uh post the GST cut how 24:29 24 minutes, 29 seconds has been the share of uh four-wheel drive and tractor industry increasing. 24:34 24 minutes, 34 seconds Uh uh what we understand is the demand seems to be outstripping supply. uh what has been your experience there and also 24:44 24 minutes, 44 seconds if you can talk about how do you see the outlook in the near term for Q4 and beyond. 24:52 24 minutes, 52 seconds See uh until last year uh the the the market which has moved was around 22 to 24:58 24 minutes, 58 seconds 23% as a four-wheel drive above 40hp and uh we are already seeing the market is around 25% at the moment and uh the 25:07 25 minutes, 7 seconds demand side is also as you rightly mentioned is a higher side because of the GST uh benefit which has been passed 25:14 25 minutes, 14 seconds in September which has reduced the gap of earlier two-wheel drive prices with the today's four-wheel drive tractor. 25:21 25 minutes, 21 seconds So we are seeing a significant increase in the um four-wheel drive conversion from the two wheel drive tractor and uh 25:28 25 minutes, 28 seconds we see that this demand remain robust for at least two quarter and we have to see the next monsoon how monsoon is 25:35 25 minutes, 35 seconds coming and uh even if the monsoon is normal this fraction will continue at this point of time we will not be able 25:42 25 minutes, 42 seconds to predict how much uh percentage increase will be but uh we are expecting that it will be further higher than the 25:49 25 minutes, 49 seconds this And it should reach if if you ask me in 27 it should reach to 26 27% of the 25:57 25 minutes, 57 seconds market should be four-wheel drive against the 25% today. 26:03 26 minutes, 3 seconds Wonderful sir that's very helpful. Thank you so much. I'll fall back to the queue. 26:12 26 minutes, 12 seconds Thank you. The next question is from the line of Op Gandhi from Siddhi Technology. Please go ahead. 26:19 26 minutes, 19 seconds Yeah, good morning. Good morning sir. 26:22 26 minutes, 22 seconds Good. Excellent number from uh your side. Uh my question is uh tractor industry in January is in India has grown 45%. 26:32 26 minutes, 32 seconds And uh also global guidance from the large player is also good. So do you 26:39 26 minutes, 39 seconds think that uh you will grow quarter 4 uh more than uh 20% from the current quarter? 26:48 26 minutes, 48 seconds and uh Mahendra is also expanding uh tractor industry for Nathpur plant. So 26:55 26 minutes, 55 seconds do you think that uh you will get uh 20% growth from your tractor side? 27:01 27 minutes, 1 second Uh uh thank you for the question. It's a very valid uh point and this is what the industry wants as well. But uh there are 27:10 27 minutes, 10 seconds certain I would say lead times before we can really ramp up. We are not in a manufacturing setup that you know you 27:19 27 minutes, 19 seconds turn the key and then from next day onwards the uh uh production increases. 27:25 27 minutes, 25 seconds We have lead times. It is an engineered product. So there is a lot of uh uh checks and tests to be done before we 27:33 27 minutes, 33 seconds can actually go ahead and assemble. So to answer your question, it takes at least a month, month and a half for Karo 27:40 27 minutes, 40 seconds to significantly ramp up. normal fluctuations which are historical that are already uh considered in our 27:49 27 minutes, 49 seconds production plan. But any spike like this happening requires some time from our supplier base also to gather it, ramp up 27:57 27 minutes, 57 seconds their production and then we have to ramp up internally. So to answer your question, we don't want to significantly change our guidance for the full year. 28:08 28 minutes, 8 seconds Yes, we are now confident that we will surely touch those numbers that we have mentioned and possibly also have some I 28:18 28 minutes, 18 seconds would say uh additional revenue that would come up. But we are not factoring in in terms of a big percentage and uh 28:27 28 minutes, 27 seconds trying to run behind it because we have to ensure quality. We have to ensure that the right products are going the 28:34 28 minutes, 34 seconds right product mix. We have all the inventories with us. So do not expect anything very dramatic. Karo is an 28:42 28 minutes, 42 seconds industry where uh we are in an industry where things don't dramatically go up nor do they dramatically drop. So we 28:50 28 minutes, 50 seconds maintain a kind of an equilibrium with reasonable ups and downs. That is what makes us uh I would say consistent and 28:58 28 minutes, 58 seconds steady in the business that we are doing. Have I answered your question sir? Uh yeah partly yes but uh you have 29:07 29 minutes, 7 seconds achieved 570 cr. Should we expect in our projection uh 600 cr plus in the quarter four? 29:15 29 minutes, 15 seconds Uh we would see we give a guidance of uh initially 215 29:24 29 minutes, 24 seconds 218 uh million euro. I think we are very confident that we will be in the range 29:31 29 minutes, 31 seconds of 215 218 220 221 it'll be around that so don't expect 230 29:39 29 minutes, 39 seconds 240 all I'm trying to say is yes there is a positive direction we are taking we are uh mobilizing our manufacturing 29:48 29 minutes, 48 seconds resources and we are making sure we are meeting as much uh the order book uh 29:55 29 minutes, 55 seconds request is here but I don't think we will be doing anything very dramatic in the next uh 30 days or uh 45 days. So we 30:04 30 minutes, 4 seconds will still look at the ballpark figure 215 218 220 to 21. Yeah. 30:10 30 minutes, 10 seconds And what what about next year sir? Uh is it possible 250 range? 30:16 30 minutes, 16 seconds Uh see we uh always like to be conservative. This has been the caro uh I would say character from the 30:24 30 minutes, 24 seconds beginning. You people must have noticed we don't want to uh give any numbers that are difficult for us to achieve nor 30:32 30 minutes, 32 seconds do we want to go around justifying why we haven't achieved. So we have given a guidance of 8 to 12% and we prefer to 30:42 30 minutes, 42 seconds stick to that 8 to 12 in that 8 probably it may become 10 or 12 now it is not in that 8 wall scenario. So 10 to 12% is 30:51 30 minutes, 51 seconds what we will try to uh uh focus on for the next financial year. Thank you sir. Thank you. 30:59 30 minutes, 59 seconds Yeah. Thank you. 31:04 31 minutes, 4 seconds Thank you. The next question is from the line of Vijay Pande from Noama. Please go ahead. 31:11 31 minutes, 11 seconds Hi sir. Thank you for taking my question and congratulations for an excellent set of numbers. Uh so I joined a bit late so 31:21 31 minutes, 21 seconds wanted to get your view on the export outlook. I think you have mentioned increased the guidance. If you could 31:28 31 minutes, 28 seconds just highlight uh what is the expect export expectation for 26 27 and midterms that will be pretty helpful. 31:41 31 minutes, 41 seconds uh Ashok here again uh see uh in case of the export market as in the previous uh question a couple of minutes back I said 31:49 31 minutes, 49 seconds that in China probably we'll have the variation at this point of time we have a visibility of quart next two quarter 31:56 31 minutes, 56 seconds could be good but beyond that there could be fluctuation and uh similarly also in the Latin America side we are also seeing uh at the moment the the 32:05 32 minutes, 5 seconds traction is still there but knowing these economies in the historically they have always been a quite short-term up short-term down whether China or Latin 32:13 32 minutes, 13 seconds America only greenshoot which we have seen uh in last 15 days or 3 weeks when the duty has been reduced to 18%. And 32:22 32 minutes, 22 seconds assuming that that remain uh uh consistent there is no change in the policy stance from the US probably there 32:29 32 minutes, 29 seconds could be some green shoot we will see in the second half of uh FY27 because the demand will start coming up and that is 32:37 32 minutes, 37 seconds how we will have our turnover coming in the quarter 3 or quarter two of the next year and uh otherwise if you talk about the 32:45 32 minutes, 45 seconds Europe market in Europe market the inventories are low because the demand is low but the demand has not yet increased in the European market for the segment in which we operate. 32:58 32 minutes, 58 seconds Okay. Uh and uh you have also increased your guidance for exports 33:05 33 minutes, 5 seconds or now we have given you the overall guidance uh for uh as a company as a 33:13 33 minutes, 13 seconds whole because that is a combination of domestic and export together and some new projects which we have acquired and which will give us result in next two to 33:20 33 minutes, 20 seconds three years that is a combination of uh many factors not alone export. 33:26 33 minutes, 26 seconds Okay. Okay sir. So sir let me just want to understand about our the new projects 33:34 33 minutes, 34 seconds which we had launched uh last few quarters. So uh especially on the agricultural side 33:42 33 minutes, 42 seconds uh there was an export order in high higher SP uh agricultural order. So how is that 33:51 33 minutes, 51 seconds production and like what do like what is the revenue potential from there and the 33:59 33 minutes, 59 seconds new cex? So what could be the revenue potential coming from that UK tax in 34:06 34 minutes, 6 seconds terms of uh okay uh your voice was little muffled so 34:14 34 minutes, 14 seconds it doesn't matter we'll start with your last point on the capeex and the revenue connected to it David 34:20 34 minutes, 20 seconds yeah so um regarding capex as we uh communicated we are currently investing 34:29 34 minutes, 29 seconds for additional roughly a 20,000 uh axle capacity which uh should sustain the 34:37 34 minutes, 37 seconds growth that we see for the next uh one one and a half years. Of course, this is 34:44 34 minutes, 44 seconds uh this is going to be a first step of um of a larger project because we know that 34:53 34 minutes, 53 seconds uh we are now operating at a 90 plus% uh 34:59 34 minutes, 59 seconds capacities utilization. So capex will uh will be a recurring subject for the next 35:06 35 minutes, 6 seconds uh at least three years and those capex will be instrumental to achieve the level of growth that Mr. 35:16 35 minutes, 16 seconds Balagi has already mentioned. Our northstar remain 3,500 crores revenues in FY30. 35:26 35 minutes, 26 seconds Uh those capex are simply instrumental to to that. 35:32 35 minutes, 32 seconds Okay. Okay. Lastly, sir, just want to check on the margin our margin expectations. So, 35:40 35 minutes, 40 seconds sorry to interrupt. Mr. Pande, your voice is little muffled. Can you use a headset mode please? 35:46 35 minutes, 46 seconds Is it okay now? 35:49 35 minutes, 49 seconds Please speak again. Yeah, proceed please. 35:52 35 minutes, 52 seconds Uh yeah. So, uh also to check on the margin expectation. I think previously we guided for 100 basis point 36:00 36 minutes improvement. So your every year so that to be the case for this year or I think 36:08 36 minutes, 8 seconds we will like that margin won't be increased like what is the expectation for that? 36:16 36 minutes, 16 seconds Yeah uh I I'll answer this question very uh uh specifically. uh we are in a 36:23 36 minutes, 23 seconds growth phase and this phase was being anticipated for quite some time now that 36:30 36 minutes, 30 seconds the technology absorption is happening fast. There is a movement from two wheel drive to four-wheel drive, low 36:37 36 minutes, 37 seconds horsepower to high horsepower plus we were talking of t five which will open up uh the developed markets for exports in agriculture tractors for Indian OEMs. 36:49 36 minutes, 49 seconds These were if you remember some of the uh enablers that we said will help us grow. Now in that most of them as per 36:58 36 minutes, 58 seconds our strategy are falling in place. Now when any ramp up happens there is not going to be a very dramatic 37:06 37 minutes, 6 seconds profitability change that will happen because in my speech I mentioned that the product mix is still very dynamic 37:13 37 minutes, 13 seconds now. Okay. So it has to settle down. It will take 6 to 9 months for us to uh you 37:19 37 minutes, 19 seconds know uh trickle down that effect into our uh AIDA numbers. Having said that we 37:27 37 minutes, 27 seconds have given a commitment of 100 points year on year. I think more or less we will still stand by it and we feel we 37:36 37 minutes, 36 seconds will achieve it. There could be a marginal difference instead of 100 it could be 80 85 but the direction will be 37:44 37 minutes, 44 seconds there. you will find improvements in Eida happening uh over the next quarters 37:50 37 minutes, 50 seconds and we are consistent that we will be improving our Eida uh every year. So uh 37:59 37 minutes, 59 seconds please be uh rest assured that we are not uh going back in any way. We will be 38:06 38 minutes, 6 seconds looking in the north direction and we will move. How much will be the impact? 38:12 38 minutes, 12 seconds We don't want to be overenthusiastic. We don't want to overcome it. So we will still be realistic in our statements and 38:20 38 minutes, 20 seconds we stand by 100 points plus minus 10 15% is something which is part of business cycle. Yeah. 38:28 38 minutes, 28 seconds Okay sir. Thank you. Thank you for uh detailed answers and I'll fall back with you. All the best for upcoming quarters. 38:36 38 minutes, 36 seconds Thank you for your support. 38:40 38 minutes, 40 seconds Thank you. The next question is from the line of Jamin from Arco Asset Management. Please go ahead. 38:49 38 minutes, 49 seconds Uh yeah, hi sir. Thanks for taking my uh question and congrats for the great shot of number for domestic I mean 38:58 38 minutes, 58 seconds construction equipment segment. You have outperformed the underlying C market and specifically the backho segment. So if you can just help us understand the key 39:06 39 minutes, 6 seconds drivers behind this outperformance be it like mini program inflation any market f gain or is it more of a stronger performance with the specific OEMs? 39:17 39 minutes, 17 seconds Okay, in case of domestic market, you know, uh there are uh we supply to the OEMs who who sell in the domestic market 39:24 39 minutes, 24 seconds and also export and as you know u in the export segment uh across the board in the construction segment there is a 39:33 39 minutes, 33 seconds growth and that is where our few customers have got some good uh contract with the export market and uh that has 39:42 39 minutes, 42 seconds helped in increasing the overall export uh indirect export from those OEMs that is one. Second, as we said uh in the in 39:50 39 minutes, 50 seconds the previous uh calls also that we have some specific product launched by some customers like Holl tractor we have mentioned those were not in the 39:59 39 minutes, 59 seconds competition those also got additional order in the last in the last uh 8 9 months that has helped in increasing our 40:06 40 minutes, 6 seconds indirect export uh in the export market from the Indian OEMs. So that is why overall we could grow uh the domestic market sale. 40:17 40 minutes, 17 seconds Got it. And so when you sorry uh let me just add to it like you were talking about any new customer gain or 40:25 40 minutes, 25 seconds something. Uh I want to emphasize that in the back orderer market we are having 40:33 40 minutes, 33 seconds 100% spread on the non-captive OEMs of back loaders. Okay. Which means that 40:39 40 minutes, 39 seconds people who don't manufacture in-house the gearbox and axle which is only one company the balance 10 companies which 40:48 40 minutes, 48 seconds make back loaders are 100% with Karo for axel and transmission. So what we are doing with so we don't have new 40:56 40 minutes, 56 seconds customers that come in. Yes there are some new players startups and others who do come to us but that is not what we consider in any of our business uh 41:04 41 minutes, 4 seconds decisions. But here one important point is we are supporting all the back loaders except one in the technology 41:14 41 minutes, 14 seconds partnership ramp up and the growth which means that now we are in the process there is a prototype going on testing 41:21 41 minutes, 21 seconds going on for a backload order loader in which all the four uh wheels will be steerable. So it'll be four-wheel 41:29 41 minutes, 29 seconds steerable back loader which will be probably the first to be in India with the caro technology. So we are making 41:37 41 minutes, 37 seconds progress. We are feeding the need. We are pushing up the technology spectrum in the Indian market which is what is 41:46 41 minutes, 46 seconds required at this point in time. The government is also pushing for it and because of the concept of uh leasing 41:54 41 minutes, 54 seconds companies coming in they are all looking at modern products efficient products and competitive products in terms of 42:02 42 minutes, 2 seconds value content in those machines. So vehicles even though construction and offhighway are not standard items that 42:10 42 minutes, 10 seconds people just go and pick up like it used to be done 10 years back. Today people compare technologies, they compare 42:17 42 minutes, 17 seconds features, they compare uh ergonomics, they compare efficiency. So everything 42:23 42 minutes, 23 seconds is now driven and built on technology and you'll slowly see that these companies will also start marketing it 42:31 42 minutes, 31 seconds from a technology and featurerich point of view. So answering your questions, not any significant big new customer we 42:39 42 minutes, 39 seconds have acquired because we have already acquired all customers in India in the non-captive segment but we are working 42:46 42 minutes, 46 seconds with them and making them grow and making them export based on the technology that is available with karo 42:55 42 minutes, 55 seconds that's my side. Great son. I mean it's great to hear and uh just one question about David day. I mean we have I mean 43:02 43 minutes, 2 seconds seen 165 to this point of gross margin expansion year on year during the quarter. Is there any element of 43:09 43 minutes, 9 seconds seasonality or a product change or any recovery from the VM during this quarter? 43:17 43 minutes, 17 seconds So when we look at Q3 versus Q3 uh there is one immediate uh difference between 43:24 43 minutes, 24 seconds those two quarters and is represented by the uh engineering services. We got five crores in this Q3 which was not there in 43:33 43 minutes, 33 seconds the uh Q3 of last year. And um then yes we have done some progress in terms of 43:42 43 minutes, 42 seconds uh um cost savings, cost optimization and also on the pricing front with a 43:48 43 minutes, 48 seconds couple of customers. And those are pretty much the the main the main differences 43:57 43 minutes, 57 seconds uh when when we look at the gross margin. And one last point which I forgot to mention, we also got much 44:05 44 minutes, 5 seconds better um turnover discounts from our suppliers during this quarter. If you 44:12 44 minutes, 12 seconds remember when we commented the numbers last year, we one of the reason of the drop of marginality was to the fact that 44:19 44 minutes, 19 seconds uh the season didn't go very well in terms of volumes and we didn't get we didn't get at that time the kind of 44:27 44 minutes, 27 seconds tournamental discount that we were hoping to get. This year it's a completely different story and that helped the performance of the quarter as well. 44:34 44 minutes, 34 seconds Got it. Got it. Yeah, that's it from my side and best of luck for the future. 44:39 44 minutes, 39 seconds Yeah. See this kind of growth and the kind of consistency we have shown in the market, it is giving us a big advantage 44:47 44 minutes, 47 seconds not just with the customers as well but also with our suppliers because they are seeing a company that is consistent, a 44:55 44 minutes, 55 seconds company that is growing, a company that is showing future technologies into the market. So we are having better 45:02 45 minutes, 2 seconds negotiating capabilities with our suppliers as well. So the going is good for us. the ecosystem and the context in 45:10 45 minutes, 10 seconds which we are working is highly favorable. This is what we want uh uh as a support for growing our business and 45:19 45 minutes, 19 seconds the ecosystem in India and the market in India is uh actually enabling us to improve our efficiencies. Whenever you 45:27 45 minutes, 27 seconds grow, you can call the shots. You can work on your efficiencies. You can work on your cost. You can work on your price. And that is what uh is uh 45:37 45 minutes, 37 seconds coming's way. So it's uh possibly good time for us for the next couple of quarters. 45:43 45 minutes, 43 seconds Got it sir. Got it. Yeah. That's it from my side. 45:50 45 minutes, 50 seconds Thank you. The next question is from the line of Lakshmi Narayan from Tunga Investments. Please go ahead. 45:58 45 minutes, 58 seconds Yeah, thank you. Uh and a wonderful set of uh number. Uh one question is that as you scale up um you know from your side 46:07 46 minutes, 7 seconds you are actually adding capacity uh but if you look at two three years down the line what are the two or three things where you where which could be limiting 46:16 46 minutes, 16 seconds for you while the market is there while you are able to you can actually expand your capacity etc. you know any other 46:24 46 minutes, 24 seconds limiting factors you actually feel um and and how are you planning to address that's uh the first question and the second question is that uh if you just 46:34 46 minutes, 34 seconds look at the next three years and look at the revenue pie um how much of that uh you know like maybe 3 years down the line would be coming from new products 46:42 46 minutes, 42 seconds that you have actually launched uh between uh 2026 and 2029. 46:50 46 minutes, 50 seconds Okay, we will have to break your question into two units. Can you reframe your question and ask one by one? 47:01 47 minutes, 1 second Yeah, the first question is that what are the limiting factors you see in that is coming on your way to growth. Uh 47:08 47 minutes, 8 seconds while you can add capacity uh how do you develop your uh inbound uh supply chain as well as any other uh vendor 47:16 47 minutes, 16 seconds capabilities you need to have um or uh the you know what are the limiting factors you think you have if at all you 47:24 47 minutes, 24 seconds have any limiting factors on the ground so um I I'll bring in Ashoke also to 47:31 47 minutes, 31 seconds supplement my uh answer because I'm not sure whether I would be touching the point you're looking at see For our 47:38 47 minutes, 38 seconds growth we are very clear that we have all the resources. Now it is left to us 47:45 47 minutes, 45 seconds when to pull it out and do the execution. In terms of land bank we have a total of 53 acres of land in which we 47:55 47 minutes, 55 seconds have currently used just about 50 55 60% of that land. So we still have a very 48:02 48 minutes, 2 seconds active land bank within the same premises of Karo India. So we are able to uh rationalize standardize some of 48:11 48 minutes, 11 seconds our operations and work around within the same setup that we have. Uh so capacity will not be an issue. We have a 48:20 48 minutes, 20 seconds clear idea of how we will need an evolution of our capacities to reach the 48:26 48 minutes, 26 seconds 3,200 3,500 numbers that we are talking about. Now these these numbers are based 48:34 48 minutes, 34 seconds on projects that we have already started and are in the pipeline and as I mentioned to you this uh in this speech 48:44 48 minutes, 44 seconds we have already converted many of our protos into production this year. Uh I'm not having the number right away but I 48:53 48 minutes, 53 seconds think it was in double digits that we we project so we productionized how many do you 49:02 49 minutes, 2 seconds some it was 14 projects prototype we have done four are project in the series 14 49:08 49 minutes, 8 seconds 14 projects launched and uh uh eight have been productionized exactly so these 14 in the the usual 49:17 49 minutes, 17 seconds span is between 1 and a half to two 2 and 1/2 years and by the time the ramp up happens because initially you just 49:24 49 minutes, 24 seconds feed uh initial numbers but the regular ramp up and production will take roughly about 2 years to 2 and 1/2 years. So the 49:34 49 minutes, 34 seconds protos that we are doing now are the bell weather for our revenue stream in the next 2 to 3 years. So considering 49:42 49 minutes, 42 seconds all these things we have factored in what is going to happen and we are reaching that amount of 3,500. So the 49:51 49 minutes, 51 seconds modular expansion will keep happening even now that we are doing. See when we have capacities you can live with 49:58 49 minutes, 58 seconds bottlenecks because they are not really bottlenecks at that point in time. When you are short of capacities then you start working on bottlenecks. We have 50:07 50 minutes, 7 seconds identified all those bottlenecks and that is the reason what we were thinking of expansion probably 6 months uh before 50:16 50 minutes, 16 seconds because in the road shows and during IPO we were talking of a need for expansion but we changed our strategy we looked at 50:23 50 minutes, 23 seconds debottlenecking some of the processes so with minimum investment we were able to increase our capacities we will continue 50:32 50 minutes, 32 seconds doing the same philosophy step by step we don't want to overinvest just have a huge factory uh and no products inside. 50:40 50 minutes, 40 seconds We want to have a very very dynamic active factory and we are making sure the long lead items in terms of 50:48 50 minutes, 48 seconds construction and others that will be taken up at the appropriate time but the machinery the assembly lines and the 50:55 50 minutes, 55 seconds technological aspects of manufacturing engineering that keeps coming based on the orders we have and what we need to 51:02 51 minutes, 2 seconds do. So this is how we are looking at capacity to be uh integrated with the growth. 51:10 51 minutes, 10 seconds Got it. Got it. Got it. And the second question is that if you look at your revenue build out in the next 3 years um I mean let's look at maybe 3 years down 51:20 51 minutes, 20 seconds the line. Um how how would the revenue pie would look like for you? Um I mean there is an existing business and there are new business that is coming out. Now 51:28 51 minutes, 28 seconds how much would be the new business in your opinion would could be 51:38 51 minutes, 38 seconds right yeah right yeah right yeah right 51:47 51 minutes, 47 seconds should come from the new business now the question is what is the starting point if the starting point is the previous year as a new business then 51:54 51 minutes, 54 seconds probably we are talking about 30% I'm talking about sir And talking about the current base or whichever way you are exiting this year, this calendar 52:01 52 minutes, 1 second year you exited or this year some kind of a sense saying that look you have these base load of products which you are doing and then there are new things 52:09 52 minutes, 9 seconds you are doing in terms of expose in terms of prototypes etc. So in that context how much it would be there there 52:16 52 minutes, 16 seconds will be let's say base is 100 now something will go off something will come right. just kind of in sense of numbers. 52:22 52 minutes, 22 seconds See, I think we can take a kind of a ballpark figure between 18 19 to 25%. Yes. 52:30 52 minutes, 30 seconds Got it. That's very helpful, sir. Yes. Thank you, sir. Yeah. 52:39 52 minutes, 39 seconds Thank you. A reminder to all the participants that you may press star N1 to ask a question. 52:46 52 minutes, 46 seconds The next question is from the line of Ragunan NL from Noama Research. Please go ahead. 52:53 52 minutes, 53 seconds Uh thank you sir again for the opportunity. 52:56 52 minutes, 56 seconds Uh uh to Ashok G. Uh sir if you can indicate for exports what would be the broad geography mix Europe, US, China and Latin America. 53:08 53 minutes, 8 seconds uh it's very difficult to inform uh in terms of geographical mix because we we sell to our parent company and they they 53:17 53 minutes, 17 seconds sell it uh to the OEM but not only that uh what we sell to parent 53:24 53 minutes, 24 seconds and goes that is within our karu group we can always uh get that information that is not a very big issue but the 53:31 53 minutes, 31 seconds second issue is what is not in our circle of control is very often we applied to a particular plant in Europe 53:40 53 minutes, 40 seconds and it doesn't remain in Europe. It is then exported to Latin America or US. So there are many companies that are doing 53:48 53 minutes, 48 seconds it. Some of our products I would say quite a significant amount of our products are going to UK getting 53:55 53 minutes, 55 seconds assembled in the OEM and then exported around the world. So uh to be very honest it'll be just a guess that we 54:04 54 minutes, 4 seconds would be making and uh it keeps changing month on month quarter on quarter. So difficult to monitor and we've never uh 54:12 54 minutes, 12 seconds got into that exercise very honestly to check where the final OEM is dispatching. We only uh restrict 54:20 54 minutes, 20 seconds ourselves to where we need to uh kind of dispatch. 54:26 54 minutes, 26 seconds noted sir thanks for that on engineering services uh 10 cr of revenue has been booked in 9 months and we totally have 54:35 54 minutes, 35 seconds that 17 1/2 crore order from a customer uh just wanted to understand how could 54:42 54 minutes, 42 seconds be the pipeline for next year we are expecting at the similar level 54:50 54 minutes, 50 seconds because 100,000 sorry that is uh 10 cr we have done this year and we'll be expecting in the similar 54:58 54 minutes, 58 seconds range uh including the balance 7.5 in the next year. Got it. 55:05 55 minutes, 5 seconds Engineering see I'll I'll put it this way. It's not that we are not aware. 55:11 55 minutes, 11 seconds This is something which has just started. It is at a nent stage. But surprisingly there is a lot of inquiries 55:18 55 minutes, 18 seconds that have come up for engineering services because our suppliers also because there is a technology upgrade 55:25 55 minutes, 25 seconds that is happening. Many of the component suppliers are trying to do some subasssembly add value and then sell. So 55:33 55 minutes, 33 seconds they don't have proper engineering centers and they don't want to go to these design centers which are generic 55:40 55 minutes, 40 seconds design centers, engineering design centers when they have uh probably a customer like Karu because for our suppliers we've been working with them 55:48 55 minutes, 48 seconds for 25 years and they know our capability. So many of them are coming to us and uh exploring engineering 55:56 55 minutes, 56 seconds services. Not only that lot of big OEMs also are approaching us to support them on some of their projects. So uh 56:05 56 minutes, 5 seconds wherever they feel they need a global uh input for the uh technology they find 56:13 56 minutes, 13 seconds Karo the best fit because we have experience at the local level for last 25 years and we have last 90 years 56:20 56 minutes, 20 seconds global experience in different soil conditions around the world. So considering both they come to us wherein we give service in India through Karo 56:29 56 minutes, 29 seconds technologies but we take help when it is digital and others we take help from our Luxembourg center anything else we take 56:36 56 minutes, 36 seconds help from China Italy and uh we had a plant in uh Argentina we had a center there also so they also help us as 56:45 56 minutes, 45 seconds required so it's very difficult to see what will be the scope of work that will be given to us at what price will it be given to us. So we are working on it. 56:56 56 minutes, 56 seconds Certainly there will be a revenue stream coming from engineering that we are very very confident and if we have said 57:04 57 minutes, 4 seconds around 10 crores to 17 crores this year we will try our effort endeavor is to see that we keep that revenue stream coming in. 57:15 57 minutes, 15 seconds Thank you sir. And on the authorized service centers the first one you have inaugurated and totally you will have 57:22 57 minutes, 22 seconds four of them. Uh so can you speak a bit about uh the rational what is the cost of setting up these centers and what would be the revenue potential? 57:34 57 minutes, 34 seconds Okay. Uh see spare parts and service is a very uh focused vertical that we have 57:40 57 minutes, 40 seconds taken up in our total review that we did two years back. We realized that other than pursuing localization improvements 57:50 57 minutes, 50 seconds and blah blah blah whatever we have said if you see we had also mentioned spare parts as one of the focus areas that we 57:56 57 minutes, 56 seconds have taken to the extent that we structurally made a vertical of spare parts and service in Karo India. We 58:04 58 minutes, 4 seconds dedicated separate shop floor area for them to work and independently do their dispatches as well. Okay. So we are 58:13 58 minutes, 13 seconds focusing on that. Now uh the target is because everybody knows the margins in spares are very significantly very high 58:22 58 minutes, 22 seconds and looking at the numbers that we have sold we feel that at least 10% of the revenue should come from spares in India 58:32 58 minutes, 32 seconds because our products are good we have a disadvantage that our products are so reliable and so well engineered that the 58:41 58 minutes, 41 seconds requirement for spares is very less but Since we have been present for a very long time but the high technology 58:48 58 minutes, 48 seconds products are there in the market only since last 3 to four years. We feel that the spare parts market is increasing and we have tied up with four centers. Okay. 58:58 58 minutes, 58 seconds There is no investment that we have to do. It is done by the service provider himself because he becomes the authorized service center. What we do is 59:08 59 minutes, 8 seconds we provide him the genuine spares. We train him in our factory. his team comes and they are trained in all the products 59:16 59 minutes, 16 seconds over there. These service centers are not roadside service centers for any tractor to just be driven inside. You 59:23 59 minutes, 23 seconds can drive it in but largely they are authorized service centers for big uh 59:29 59 minutes, 29 seconds other uh systems like Bosch uh Rectrox for hydraulics. So they become service 59:37 59 minutes, 37 seconds centers for all these kind of issues that come up in vehicles and we have tied up with them who have the AMC the 59:46 59 minutes, 46 seconds servicing contract with big leasing companies like Singi and Co in Bombay. 59:52 59 minutes, 52 seconds So they don't go to the company service centers. They tie up with these kind of ancillary service centers who in turn 1:00:00 1 hour tie up with the hydraulic specialist, the pump specialist, the Bosch, the fuel pump specialist and then they service 1:00:09 1 hour, 9 seconds it. Not only service it, they also remand it. Reman means you bring a tractor that is 20 years old, 25 years 1:00:16 1 hour, 16 seconds old to these centers and these centers will contact Karo and we will give them spare parts and others to rebuild the 1:00:24 1 hour, 24 seconds tractor with a proper warranty from the service center. So we are remanufacturing remodeling old tractors as well. This is very common abroad. 1:00:34 1 hour, 34 seconds This is going to pick up in India because the leasing companies want to keep their uh fleet uh very healthy and 1:00:41 1 hour, 41 seconds with the latest technology. So this is the model advantage is quick time to market because these people are 1:00:48 1 hour, 48 seconds completely trained. Today when there is a field issue I have to send people from Pune. Now if there is a field issue from 1:00:55 1 hour, 55 seconds Farabad he will reach there in 6 hours and then remotely we will support in solving the problem. So our OEMs will 1:01:04 1 hour, 1 minute, 4 seconds also be taking help from these service centers. They will be the first responders instead of Karo in Punea. 1:01:14 1 hour, 1 minute, 14 seconds Yep. 1:01:15 1 hour, 1 minute, 15 seconds Good sir. Very helpful. And you said 10% of revenue should come from India. What would we see currently approximately? 1:01:24 1 hour, 1 minute, 24 seconds Uh today we are between 3.5 to 4%. Got it sir. 1:01:32 1 hour, 1 minute, 32 seconds And uh uh just my last question on the kek side uh uh to David sir uh on the 1:01:39 1 hour, 1 minute, 39 seconds kek side uh would the annual spend be around 70 80 cr peranom and uh if I uh 1:01:48 1 hour, 1 minute, 48 seconds uh the way you have shown the performance your operating cash flow should be as high as 150 cr peranom over 1:01:56 1 hour, 1 minute, 56 seconds this year and next year. So, so you know like uh there will be positive free cash flow generation and debt reduction. 1:02:04 1 hour, 2 minutes, 4 seconds Would that thought process be correct? 1:02:07 1 hour, 2 minutes, 7 seconds So for this for this year you are uh you're right for coming here it's a bit different uh this 60 c um 60 crores that 1:02:16 1 hour, 2 minutes, 16 seconds we have mentioned are the share of capex which is dedicated dedicated to 1:02:23 1 hour, 2 minutes, 23 seconds pure expansion but uh the share the total capex for the next full year will 1:02:31 1 hour, 2 minutes, 31 seconds be much higher than than 60 crores. So we do not uh see at least at the moment 1:02:41 1 hour, 2 minutes, 41 seconds a farther reduction in FY26 27 of our uh net depth. However, it has 1:02:50 1 hour, 2 minutes, 50 seconds to be mentioned as well that yes, the uh operating cash flow is improving. 1:02:57 1 hour, 2 minutes, 57 seconds uh if uh we manage to pro to move along the way that we have mentioned also in terms of profitability improvement this 1:03:05 1 hour, 3 minutes, 5 seconds will strengthen much farther our operating cash flow generation and there might be uh a bit of reduction of 1:03:14 1 hour, 3 minutes, 14 seconds leverage even after the capex but we will see uh step by step 1:03:22 1 hour, 3 minutes, 22 seconds so would it would the total capex for SI27 be around 130 140 crores Marlin. Yes. 1:03:31 1 hour, 3 minutes, 31 seconds Got it sir. Thank you. Thank you so much. Uh that's all from my end and all the best for future. 1:03:37 1 hour, 3 minutes, 37 seconds Thank you. Thank you very much. 1:03:42 1 hour, 3 minutes, 42 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Dr. Balaji Gopalan for closing. Over to you. 1:03:53 1 hour, 3 minutes, 53 seconds Yeah. Thank you very much. Uh uh we want to thank all our investors, partners and customers for your continued support and 1:04:01 1 hour, 4 minutes, 1 second trust. We deeply value your confidence in us and we're excited about the road ahead. Thank you for your participation today. We hope we have addressed your 1:04:10 1 hour, 4 minutes, 10 seconds questions satisfactory. For any further questions, please feel free to reach out to strategic growth advisors, our investor relations team. Thank you all 1:04:18 1 hour, 4 minutes, 18 seconds very much. Thank you for your support as usual. Thank you. Good day. 1:04:25 1 hour, 4 minutes, 25 seconds Thank you very much on behalf of Karo India Limited. That concludes this conference. Thank you all for joining us today and you may now disconnect your lines. 1:04:36 1 hour, 4 minutes, 36 seconds Thank you. Thank you.