Gala Precision Engineering Limited — Q4 FY26

Gala Precision Engineering Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=j8EVrCjS38Q Published: 1d ago

0:00 Ladies and gentlemen, good day and welcome to Gala Precision Engineering Limited. Q4 FY26 earnings conference 0:08 8 seconds call hosted by Arian Capital Markets Limited. As a reminder, all participant lines will be in the listen only mode 0:15 15 seconds and there will be an opportunity for you to ask questions after the presentation concludes. Should you assistance during the conference call, please signal an 0:24 24 seconds operator by pressing start then zero on a touchstone phone. Please note that this conference is being recorded. I now have conference over to Mr. Rohan 0:33 33 seconds Bernaval from Aryan Capital. Thank you and over to to Mr. Rohan. 0:41 41 seconds Hello and good afternoon to everyone on behalf of Capital Markets. I thank you all for joining into the Q4 and fully 0:49 49 seconds year FY26 earnings conference call of Kala Precision Engineering Limited. Today from the 0:56 56 seconds management we have we have Mr. Bala Balakishan Jalan full-time director uh Mr. Satish Kotwani oldtime director Mr. 1:07 1 minute, 7 seconds Shrias Giridhar CFO so without any further delay I will hand over the call 1:14 1 minute, 14 seconds to Mr. Balkan Jalan for the opening remarks over to you sir. Yeah. Uh thank 1:22 1 minute, 22 seconds you. Good evening everyone and welcome to our uglining call to discuss the performance of the fourth quarter and financial year ended 2026. 1:32 1 minute, 32 seconds In the interest of some of the people who are new to the company, let me first give a brief overview of the company. 1:38 1 minute, 38 seconds Galapen is the preferred manufacturer of the high quality precision components. 1:43 1 minute, 43 seconds We serve various sectors like renewable energy, industrial and mobility. 1:48 1 minute, 48 seconds Geographically we are diversified across sale in India, Europe and USA. We supply 1:55 1 minute, 55 seconds to OEM, Taiwan and channel partners. We manufacture customized products of over 800 SQUs to serve almost 175 active global customers across 25 countries. 2:07 2 minutes, 7 seconds Professionalities are fully equipped with advanced technologies and integrated capabilities for design, development and manufacturing of diverse 2:16 2 minutes, 16 seconds product portfolio. To further strengthen our manufacturing footprint and expand our product offering, we establish a new 2:23 2 minutes, 23 seconds fastener manufacturing facility in Chennai with installed capacity of 4,600 metric tons. The plant is focused on manufacturing high tension fasteners 2:32 2 minutes, 32 seconds including B complement our existing product portfolio and enhancing our ability to cater to growing customer 2:40 2 minutes, 40 seconds requirement. During FI26 the plant operated at around 35% utilization and we expect utilization level to improve meaningfully in FI27. 2:50 2 minutes, 50 seconds We also commence phase two capex at Chennai facility to support future growth opportunities. 2:57 2 minutes, 57 seconds From the revenue mix perspective for the year, DSS remained our largest contributor at approximately 49% 3:06 3 minutes, 6 seconds providing a stable base of recurring business. SFS contribute around 34% and continue to be the fastest growing 3:13 3 minutes, 13 seconds segment driven by strong OEM traction and expanding customer programs. During the year, SFS revenue crossed rupees 100 3:22 3 minutes, 22 seconds cr milestone reaching 108 cr and registered a strong growth of 64% year 3:29 3 minutes, 29 seconds on year. CSS contribute approximately 17% supported by the steady demand across industrial and mobility 3:37 3 minutes, 37 seconds application. During the year we successfully successfully entered into offshoot wind turbine segment through 3:44 3 minutes, 44 seconds the development and supply of critical fasteners for global OEMs making an important expansion of our addressable 3:52 3 minutes, 52 seconds market. We also commence supply of the high tensile bolt to a global wind OEM in India from our Chennai facility 4:00 4 minutes during Q4. From an operational perspective, we continue to focus on productivity enhancement and digital 4:07 4 minutes, 7 seconds transformation initiatives including implementation of IoT solution on the shop floor and commencement of SAP S4 4:15 4 minutes, 15 seconds HANA and implementation as part of our broader digitalization journey. On a sustainability front, we align to our 4:23 4 minutes, 23 seconds business objective with long-term ESG global goals by placing an order of 1.8 8 megawatt opens assess solar power plant for capy consumption. 4:34 4 minutes, 34 seconds With that I will now hand over to our chief exe finance officer Mr. G uh Ger who will take you through the financial highlights for the period under review. 4:45 4 minutes, 45 seconds Thank you. Thank you Mr. 4:49 4 minutes, 49 seconds Welcome to the earnings call today. Let me provide a brief overview of the financial performance for the quarter and financial year ended 2026. 4:59 4 minutes, 59 seconds For a quarter review, consolidated revenue from operations stood at around 95 crores reflecting a growth of 26% 5:06 5 minutes, 6 seconds yearonear. AITA for the quarter stood around 17 crores up 31% yearonear with a VA margins at 175%. 5:16 5 minutes, 16 seconds Net profits were at 12 crores representing a growth of 22% yearonear with part margins at 12.9%. 5:23 5 minutes, 23 seconds For the year 526 revenue from operations stood at 348 growth reflecting a healthy growth of 5:30 5 minutes, 30 seconds 32% year on year for the year stood at 52 growth up 27% year on year with aar margins at 61.51%. 5:39 5 minutes, 39 seconds Net profit before exceptional items stood at 320 growth registering a growth of 35% yearon year margins at 11.64 64 and uh rent profit after exemption sell 5:48 5 minutes, 48 seconds items to that 38 36 crust growth of 32% year on the part margin at 11.29%. 5:55 5 minutes, 55 seconds With this we can now open the floor for Q&A session. Thank you. 6:01 6 minutes, 1 second Thank you very much. We will now begin the question answer session. 6:06 6 minutes, 6 seconds Anyone who wishes to ask the question may press star N1 on their desktop telephone. If you wish to remove yourself from the question queue, you 6:14 6 minutes, 14 seconds must start and two. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question assembles. 6:30 6 minutes, 30 seconds We have first question from the line of Lakshmi Naran KG from Tunga Investment. Please go ahead. 6:37 6 minutes, 37 seconds Yeah. Uh thank you. uh just want to understand in terms of uh uh wind energy I think uh we have a strong presence 6:45 6 minutes, 45 seconds there and I understand that the growth has been very strong uh so just want to understand as we look into the uh fourthcoming year what kind of order 6:54 6 minutes, 54 seconds book we have on that and what kind of revenue visibility uh as well as the growth visibility we have on the on the 7:02 7 minutes, 2 seconds wind energy front okay so for wind energy Of course uh the 7:09 7 minutes, 9 seconds market situation is positive and because of Gala's strong base in this sector we are seeing good growth in wind energy 7:17 7 minutes, 17 seconds approximately 60 65% of our sales is coming from India market and about 30 35% is export and as a company we are 7:26 7 minutes, 26 seconds looking to grow 20 25% sector in overall revenue term and in wind also we are 7:33 7 minutes, 33 seconds looking to grow around 25 to 30% in short-term for our partners and spring category. 7:42 7 minutes, 42 seconds Got it. Uh so another question is uh in terms of uh your Chennai ramp up just want to understand uh uh you know what 7:50 7 minutes, 50 seconds what kind of uh revenue uh uh ramp up uh we have done in Chennai facility and 7:56 7 minutes, 56 seconds what what do you expect that uh for the forthcoming year? 8:02 8 minutes, 2 seconds Sure. Yeah. So uh actually we started the uh trial run in last year and customer visits audit all this started 8:11 8 minutes, 11 seconds in the beginning of the last year and July end we uh made a one uh first dispatch to vistas as a prep log and 8:20 8 minutes, 20 seconds from August we started ramp up 1 cr 2 cr 3 cr 3 cr 4 cr and 5 cr. So we reached 8:26 8 minutes, 26 seconds to almost a 5 cr the phase 1 capacity of per month which is approximately 60 cr annually and now we are seeing the 8:34 8 minutes, 34 seconds similar run rate as of now we will going to have in April May June and parally we started the phase 2 capex uh which we 8:42 8 minutes, 42 seconds will be completing by June and July and that again will add another 5 cr per month capacity or annual capacity of 8:49 8 minutes, 49 seconds additional 60 cr and the ramp up of that similar fashion we are planning to do in se August September per month and in 8:56 8 minutes, 56 seconds this current year we are seeing key by 9 or 10 cr we will be reaching in last quarter per month then overall capacity annual capacity is 120 cr perm. 9:07 9 minutes, 7 seconds Okay. And and in Chennai what are the products that we actually manufacture? 9:12 9 minutes, 12 seconds Yeah. So basically fastening division uh studs uh we manufacture and we developed 9:18 9 minutes, 18 seconds the bolt uh uh from M27 M30 to M72 9:25 9 minutes, 25 seconds and that bolt also we got approval from different customer and that product also we started manufacturing there. 9:32 9 minutes, 32 seconds Okay. Uh another question in terms of our growth and uh I think last time when we spoke you you said that there has 9:40 9 minutes, 40 seconds been uh uh additional uh stock we need to keep in Chennai. Therefore our cash flows were little constrained in the first half. Uh I just want to understand 9:48 9 minutes, 48 seconds from a cash flow point of view uh though we generate a a very healthy uh uh growth in top line as well as in terms 9:55 9 minutes, 55 seconds of bottom line. Uh what is your view on um on uh on higher cash flow uh in terms 10:03 10 minutes, 3 seconds of higher cash flow conversion or uh because of higher uh inventory which we need to keep um and in terms of export 10:11 10 minutes, 11 seconds this would this should continue to remain at at this level. 10:15 10 minutes, 15 seconds Okay. So basically in Chennai when we are ramping up from 0 to 5 cr or 5 to 10 cr during this period we are saying we 10:24 10 minutes, 24 seconds will be going to have some additionally inventory in China during this ramp up otherwise overall inventory level are at 10:32 10 minutes, 32 seconds 103 days and we see it should not go above 103 days and we were trying to we can reduce this inventory days by some 10 days or so. 10:44 10 minutes, 44 seconds Okay. and and and in in general what is how you view this uh cash flow s because it's a balance between revenue growth 10:51 10 minutes, 51 seconds and uh uh providing uh inventory as well as uh managing it. So what what how are 10:58 10 minutes, 58 seconds you thinking about uh uh you know I mean increasing the cash flows to uh 11:08 11 minutes, 8 seconds we as of now our guidance is key we will maintain uh or we will try to improve by 10% or 10% or so on year on year 11:18 11 minutes, 18 seconds okay okay uh thank you sir I'll come back yeah thank you 11:25 11 minutes, 25 seconds a reminder to all the parts ments that you may press star to ask a question. 11:30 11 minutes, 30 seconds The next question from the line of Arpit Jan from RR Investment Advisory Private Limited. Please go ahead. 11:38 11 minutes, 38 seconds Hi sir, thank you for the opportunity. Am I audible? Yeah, here. 11:45 11 minutes, 45 seconds Yeah. So my first question is as uh in Q3 call you had mentioned that uh we are 11:52 11 minutes, 52 seconds looking for acquiring 5 to 10 acres of land either at Vada plant or for V and or any other location. So could you 12:01 12 minutes, 1 second please share an update on whether the land has now been finalized and by when the next expansion can start? 12:09 12 minutes, 9 seconds Yeah, good question and nice that you remember and uh this is a good follow-up question. The land is one important 12:17 12 minutes, 17 seconds thing on which we are working very aggressively. Uh we shortlisted few land production in V and we are in advanc 12:23 12 minutes, 23 seconds discussion commercial discussion and uh with the two or three plot rather than three plots and uh it's it may get 12:32 12 minutes, 32 seconds finalized in a month time. Uh parallelly in Chennai uh we are in touch with the SIPCOT authorities and uh we are seeing 12:40 12 minutes, 40 seconds in very near future they will be opening some more land parcel in SIPCO because our preference is to get uh some uh land 12:48 12 minutes, 48 seconds parcel in SIPCO rather than a ownership basically. So we are quite close to in closing this uh land uh but still not close uh that is the fact. 13:00 13 minutes So by we can expect by May and or June. 13:06 13 minutes, 6 seconds Uh at least at least June because land now apart from park closing then we need to do some due diligation and some paper 13:14 13 minutes, 14 seconds notice and closing the deal at least take a 45 days minimum. So maybe June and earliest or maybe July not before June. 13:24 13 minutes, 24 seconds Okay. Okay understood. And my second question is on Chennai plant as uh in Q4 13:32 13 minutes, 32 seconds I think means we have achieved our monthly run rate of 5 kores per month right. 13:38 13 minutes, 38 seconds So uh when we will uh uh means when the phase two will commence means our phase 13:44 13 minutes, 44 seconds two full facility will get commence then after that um after that also you are 13:51 13 minutes, 51 seconds saying that 5 cr per month will be achieved from that also right? So after that uh once everything will be fully 13:58 13 minutes, 58 seconds utilized so we have land in Chennai facility for further expansion or we will look into it afterwards. So what is 14:07 14 minutes, 7 seconds the scenario if current if if capacity utilization will peak out then? Yeah. So 14:14 14 minutes, 14 seconds at uh earlier I mentioned uh the overall the land parcel what we have we will we are utilizing the same and we will be 14:22 14 minutes, 22 seconds having a maximum capacity of 120 cr uh annually and after this expansion we will not left with any land but as a 14:30 14 minutes, 30 seconds backup plan we have option to move out the stud facility to any uh long-term 14:37 14 minutes, 37 seconds leasebased uh facility and do continue expansion of the bold manufacturing in the current safety deals. So that backup 14:45 14 minutes, 45 seconds plan is there and as we see the progress we may go with this option for immediate one or two year requirement. 14:54 14 minutes, 54 seconds Sir sir um I miss you. So please can you please repeat the same thing again. So okay so we don't have any land after 15:03 15 minutes, 3 seconds yeah we don't have any land after we complete the phase 2 expansion that means the 120 cr per number two as a 15:11 15 minutes, 11 seconds backup plan we have to this uh in 2627 we are targeting approximately 80 cr something from the chennai so next to 15:20 15 minutes, 20 seconds next year again we have scope to achieve 80 to 120 cr from chennai this is one second thing for expansion we are 15:29 15 minutes, 29 seconds looking for plan or otherwise a backup plan. We can have a long lease place uh there we can save the third 15:37 15 minutes, 37 seconds manufacturing and we can do in-house capacity expansion for the wool manufacturing. Okay. Okay. 15:46 15 minutes, 46 seconds Understood. Understood. That's it from my all the best. Sure. Thank you. 15:52 15 minutes, 52 seconds Reminder to all the participant that star and one to ask a question. The next question from the line to Jas Gupta from Nitve Trust. Please go ahead. 16:04 16 minutes, 4 seconds Very good evening. Thank you for the opportunity. Uh I wanted to understand sir on the V utilization. Uh I think we 16:11 16 minutes, 11 seconds still have uh some space there uh to be able to utilize that facility better according to the presentation. uh so 16:20 16 minutes, 20 seconds what is the limitation there to be able to achieve uh optimized utilization if I may ask 16:28 16 minutes, 28 seconds okay so basically we don't have additional land there in vada we already constructed what will be FSI available 16:35 16 minutes, 35 seconds number two we have a some capacity uh in terms of plant manufacturing capacity again that capacity vary from product to 16:44 16 minutes, 44 seconds product so we have a some capacity in coil spring division so for sale And uh in the spring we are more or less 16:52 16 minutes, 52 seconds optimum utilized uh which is almost 80% approximately and same in for the fasting division at vada number one 17:01 17 minutes, 1 second number two but in again there is always scope two way one is a productivity improvement and second way is some line 17:09 17 minutes, 9 seconds balancing and adding some machine or adding some outsourcing option we can free up some capacity. So with 17:16 17 minutes, 16 seconds combination of this all we are thinking the current year whatever number we are targeting we should be able to optimize 17:23 17 minutes, 23 seconds our capitalization in var so assuming that you are actually able to grow on a target of 20 25% next year 17:32 17 minutes, 32 seconds even Chennai will get optimally utilized by then is that is that a fair understanding no no Chennai we are think current year 17:41 17 minutes, 41 seconds the for first four five six months we were going to use more capacity of phase one which is five cr per month and the 17:48 17 minutes, 48 seconds second half will be start catching 6 7 8 9 number per month month on month we will be increasing overload and overall 17:56 17 minutes, 56 seconds we are seeing 80 cr something from Chennai and by end of the year we will going to have a capacity of 10 cr per 18:03 18 minutes, 3 seconds month or 120 cr per month then we are going to have a spare capacity for next year which is approximately 40 cr plus 18:10 18 minutes, 10 seconds minus okay so it should be good for us till fi20 28 as well 18:18 18 minutes, 18 seconds may not be complete year yeah no may not be the for the complete whole year uh that's why I mentioned 18:25 18 minutes, 25 seconds that if required we have a backup by the time so if we able to control on some land and yeah so otherwise yeah we can sift the 18:33 18 minutes, 33 seconds fastening on the long lease and we can do expansion of bold manufacturing inhouse so that is some backup plan 18:40 18 minutes, 40 seconds which already there so we'll not miss on any order that is our strategy Mhm. 18:45 18 minutes, 45 seconds Okay. And so this land that we are targeting to get uh is there a certain uh kind of an predetermined capeex 18:52 18 minutes, 52 seconds directionally that we have in mind and also uh you know how early can we get the facility up and running if we are 18:59 18 minutes, 59 seconds able to let's say acquire the land over the next couple of months like you were indicating. 19:04 19 minutes, 4 seconds Correct. So apart from land uh uh normally the time horizon is uh at least 6 months or something for getting the 19:12 19 minutes, 12 seconds initial approval. Pully we can start the land development land land filling and boundary work and all for that you don't 19:19 19 minutes, 19 seconds need any approval and complete construction and taking approval take at least 9 month to 12 month. So you can 19:27 19 minutes, 27 seconds fairly estimate 1 year to one in 15 months something uh you can fairly estimate uh and parally we are ordering 19:34 19 minutes, 34 seconds for the plant and other machinery erection of something happening and taking the final approval the 15 months something plus minus 3 months we have to 19:43 19 minutes, 43 seconds consider safely and as far as the cap is concerned yes we already plan for in our internal budget and considering our 19:51 19 minutes, 51 seconds internal approval and the borrowing capability capacity we'll be uh funding from our internal approval and D from the bank borrowing. 20:00 20 minutes So what's the total sir if you can give me a sense of uh the whole capeex over these 15 to 18 months on the new plan that we are targeting 20:08 20 minutes, 8 seconds uh for the um approximately you can say uh very rough figure that depend upon when we get the land and when we start 20:17 20 minutes, 17 seconds the complete development uh of the building and the uh plant and machinery. 20:23 20 minutes, 23 seconds For the current year we are seeing approximately 50 cr something we may be able to deploy plus minus depend when we finalize the land or uh able to start the construction of the building. 20:34 20 minutes, 34 seconds Okay. Okay. And normally the broadly the ratio of sale to turnover we have to keep 20:40 20 minutes, 40 seconds approximately direct direct machine 30% and the other utilities and all something 5 to 10%. So 40% 35 40% 20:50 20 minutes, 50 seconds something which you have to make investment in the tax. 20:55 20 minutes, 55 seconds Okay. And then on the margin if I may uh we are almost at a 5y year low on aida margins at 16 and a half for this year. 21:03 21 minutes, 3 seconds uh is this a combination of uh the mix is it this underutilization at Chennai still how would you want to uh really 21:11 21 minutes, 11 seconds quantify that or is it the current inflationary pressure on raw materials no basically if you compare that say 21:19 21 minutes, 19 seconds with last year that margins is 17.1% or something the drop is essentially mainly on account of the forex loss which is 21:28 21 minutes, 28 seconds almost 1% which is around 3.23 two three good that has impacted the ina market 21:35 21 minutes, 35 seconds there is not major change in the product mix or in the R&D competition okay and then how are we currently being 21:44 21 minutes, 44 seconds able to deal with the inflation that's happening in uh the underlying commodities because uh we must be reasonably impacted I guess uh from what 21:51 21 minutes, 51 seconds we are seeing uh is there of of where we are uh in terms of impact on margin how much are we absorbing how much are we 21:58 21 minutes, 58 seconds able to pass So basically raw material is 100% pass through. So uh and of course uh 22:06 22 minutes, 6 seconds currently because of gas and some other issues this process costs have also increased. Correct. 22:11 22 minutes, 11 seconds So with the leg effect uh we are confident to get this price increase from our customer and for which we 22:18 22 minutes, 18 seconds already started discussion since beginning of April itself. So there will be some leg effect but whatever costs are increasing particularly commodity 22:27 22 minutes, 27 seconds and some extraordinary impact in gas cost uh we will be passing through the same to our customer and get the price revision. 22:36 22 minutes, 36 seconds Okay. So there could be quarterly volatility in the pass through but we are confident of uh the system accepting it eventually on the annualized basis. We will 22:44 22 minutes, 44 seconds definitely see that whatever is being incurred is recovered. Same situation happened at the time of COVID also with 22:52 22 minutes, 52 seconds the lake effect. We could get all the price increase related to the different cost increases at that time also. Absolutely. Absolutely. Thank you sir. 23:00 23 minutes Thank you. Thank you. Thank you. 23:02 23 minutes, 2 seconds Thank you. Reminder to all the participants that you may press star one to ask a question. The next question 23:09 23 minutes, 9 seconds from the line of Lakm Lakmi Narayan KG from Junga Investment. Please go ahead. 23:14 23 minutes, 14 seconds Yeah. Uh thanks again. Uh sir in terms of um the different product groups uh that you should have uh is it fair to uh 23:24 23 minutes, 24 seconds assume that the SSS has the highest margin uh followed by CSS and followed by the next one. 23:33 23 minutes, 33 seconds I think on margin point broadly all the products are at the similar profit margin in terms of IITA level. uh I 23:40 23 minutes, 40 seconds think uh because uh all the products like particularly SFS and DSS we have exports also domestic customer also in 23:48 23 minutes, 48 seconds coil springs in the past we have done lot of import substitutes so where also the margins are good so in general I 23:55 23 minutes, 55 seconds think broadly margins are at the same 17 to 19% for all the product groups currently okay and uh you know the growth you have 24:04 24 minutes, 4 seconds got is it uh because uh you got it from some other uh competition that you actually got the 24:12 24 minutes, 12 seconds revenue growth from. Can you just explain how you managed to uh you know have a good growth for the last uh uh 24:20 24 minutes, 20 seconds two years and uh uh I mean how the growth has become of course you go deeper into the existing company and 24:27 24 minutes, 27 seconds also you new uh uh new business from the existing as well as new business or new new clients altogether. Can you just explain me the journey? 24:36 24 minutes, 36 seconds Yes. Yes. So I think uh the growth is uh combined effect of all the areas which you mentioned. So definitely every year 24:44 24 minutes, 44 seconds we are seeing at least 10 to 15% growth coming purely from the new customers. Uh so we still have lot of unexplored and 24:53 24 minutes, 53 seconds unpotential sorry potential customers globally and we are seeing addition of new customers happening for the partners 25:01 25 minutes, 1 second and spring commodities. Secondly, particularly in partners and in the spring family, we added new products 25:08 25 minutes, 8 seconds like Galok Wock washers in the spring family and bolts and nuts in the partner family. So we are seeing uh good 25:16 25 minutes, 16 seconds interaction from the existing customer where we were supplying them the springs or studs and there is a keen interest on adding new products like BS and Glock 25:25 25 minutes, 25 seconds waves of washer for this category of products and uh of course the organic growth is happening particularly in 25:32 25 minutes, 32 seconds India which is also helping us to grow the existing customer existing part business. So I think 10% of new customer 25:40 25 minutes, 40 seconds addition about 10% to 12% of new parts from existing customer like bolts or GOF 25:46 25 minutes, 46 seconds or even retractor spring and organic growth of five to 7% happening in the organic business with the existing part 25:54 25 minutes, 54 seconds has resulted is this 30% growth last year and same way we continue to focus on business development and increasing wallet share with existing customer to 26:03 26 minutes, 3 seconds grow 20 25% in coming years as in terms of uh uh CSS business who the 26:12 26 minutes, 12 seconds key competition you have uh either in India or outside for which product group 26:19 26 minutes, 19 seconds uh for the CSS specifically the spring group in CS we have mainly two competitors there are Japanese company NHK spring uh 26:28 26 minutes, 28 seconds which is having manufacturing plant in Orurangabad and Gura and there's an Indian company uh which is having manufacturing plant 26:36 26 minutes, 36 seconds at uh multiple locations uh with major head office in Bangalore and still there are some imports happening which we are 26:44 26 minutes, 44 seconds focusing on import substitute which are mainly happening from European market still in the Indian market 26:52 26 minutes, 52 seconds uh fine and uh in terms of uh you know growth right is there a particular product group you're actually seeing 26:58 26 minutes, 58 seconds higher growth among uh PS and which which affects to grow faster this uh in 27:07 27 minutes, 7 seconds the next you know month to few years I think uh in partners we are seeing comparatively larger growth or faster 27:16 27 minutes, 16 seconds growth compared to DSS and CSS because uh as the partner market size is really very large it's 100 billion market of 27:23 27 minutes, 23 seconds course at the global level and Dala is focusing on increasing the addressable market uh since we started this journey 27:31 27 minutes, 31 seconds so with that we were addressing approximately 1 billion of the global market is1 billion US and now with bolds 27:38 27 minutes, 38 seconds and n we are addressing 2.5 billion of the global market and our partner sales is approximately 100 crores we crossed 27:45 27 minutes, 45 seconds in FY26 so partners is of course much larger application much larger value potential 27:53 27 minutes, 53 seconds for each customer so compared to DSS and CSS we are seeing faster growth in partners but at the same time we are seeing really good opportunities in DSS 28:02 28 minutes, 2 seconds and CSS also to grow in future as well. 28:07 28 minutes, 7 seconds So I think one point which you touched upon is the introduction of new products. Uh just want to understand at the company level do you actually track 28:15 28 minutes, 15 seconds it that you know we need to we need to bring out X new products every year because all the products go through testing etc. So can you do you have a 28:24 28 minutes, 24 seconds number and what does that uh say? 28:29 28 minutes, 29 seconds So I think in terms of new products basically of course uh there are two angles to this. One is whatever existing 28:36 28 minutes, 36 seconds products we have developed uh we still have lot of opportunities to grow but we are more customerdriven. For example, 28:44 28 minutes, 44 seconds when we started this stud manufacturing, uh we understood that most of the ST manufacturer in uh renewable energy 28:51 28 minutes, 51 seconds including wind and hydropower segment, they are using lot of BS and similarly when we were developing our market for 28:59 28 minutes, 59 seconds ST in industrial application, we identified that potential for STS is very less in the industrial application but their requirement is coming more 29:07 29 minutes, 7 seconds from the bold side. So based on the customer situation and our market study uh we are adding new products within the existing family of products and at the 29:16 29 minutes, 16 seconds end of the day we are looking every year or every 2 three years we have to add some product family in our each our product category so that we are increasing the addressable market size. 29:27 29 minutes, 27 seconds For example, this spring is a very n category of market and addressable global market size is only about 2,000 29:34 29 minutes, 34 seconds crores. But 5 years back, we added Glock weight for which has additional 1,500 of the global market and we are competing 29:42 29 minutes, 42 seconds mainly with European producers. So we'll continue this focus of adding new products within the existing product family and see that this growth and 29:50 29 minutes, 50 seconds higher addressable market objectives are categorized. 29:54 29 minutes, 54 seconds Got it. And do you also uh have sorry for sorry for interrupting question sir please come in few for the follow question. 30:07 30 minutes, 7 seconds Reminder to all the participants that you may press star to ask a question. 30:11 30 minutes, 11 seconds The next question from the line of arpit jan from RR investment advisory private team. Please go ahead. 30:19 30 minutes, 19 seconds Yeah. Hi. So thanks for giving me opportunity again. So uh there is one uh suit filed regarding badlog version. So 30:29 30 minutes, 29 seconds could you please give an update regarding that? Can you repeat the question? 30:37 30 minutes, 37 seconds Yeah. So there was suit filed regarding very log washers. 30:42 30 minutes, 42 seconds Yeah. Yeah. This is the regarding the patent mutation though. No the uh the case is still going on still the arguments are not taken place. We have 30:50 30 minutes, 50 seconds been getting only adjudgments. The next hearing itself is stated in June uh June 30:57 30 minutes, 57 seconds only. Not much uh movement has taken place. Only submissions have been going on but no arguments have taken place at all. 31:07 31 minutes, 7 seconds Okay. Okay. Okay. That's it. Thank you. 31:18 31 minutes, 18 seconds Thank you. Reminder to all the participants that you may press star and one to ask a question. The next question from the line of Danisha who is an individual investor. Please go ahead. 31:31 31 minutes, 31 seconds Good evening. So uh congratulations for a good set of numbers. I had few questions to ask. So first is sir this 31:39 31 minutes, 39 seconds SFS which is special fastening uh solutions business has crossed 1,00 uh 31:45 31 minutes, 45 seconds INR million revenue uh in this year with 64% year-on-year growth. So just wanted 31:53 31 minutes, 53 seconds to know sir what are the key growth drivers expected for this segment over the next two to three years. 32:00 32 minutes Sure. So I think uh the there are two three growth drivers uh in FFS uh business. what is being done. So of 32:09 32 minutes, 9 seconds course uh with most of the customers still we have between 10 to 25% market share and uh this share of business can 32:17 32 minutes, 17 seconds be increased to 25 to 30 35% because they will always keep couple of sources to diversify the supply chain risk 32:24 32 minutes, 24 seconds because of very large buying. So there's a still room to grow with the existing customer for existing products. Second 32:32 32 minutes, 32 seconds important point is we just started plant in Chennai where we are manufacturing high tensile bolts which 32:39 32 minutes, 39 seconds are also used in wind turbine sector and uh we started getting approval from the Indian OEM and we started supplying in 32:47 32 minutes, 47 seconds quarter 4. So we just started this journey and we see next two to three years ramp up happening in the bold 32:54 32 minutes, 54 seconds business growth and once we stabilize the supply chain in India we'll also focus on the global OEM for Europe and 33:01 33 minutes, 1 second US market we we are already supplying that third most important is till now our major growth was driven by the 33:09 33 minutes, 9 seconds renewable energy business but because of molds and nuts we are seeing lot of opportunities within industrial sector 33:16 33 minutes, 16 seconds where we are seeing opportunities coming from gas turbine sector. We are seeing opportunities in railways, construction equipment, mining equipment and 33:24 33 minutes, 24 seconds agriculture equipment where we already started the market development and already started getting really interesting inquiries and some orders 33:31 33 minutes, 31 seconds have been frozen recently. So with industrial sector where Gala has very strong track record of uh customers 33:39 33 minutes, 39 seconds because of relationship for over 25 30 years we are seeing this bold addition as a product will really help us to 33:46 33 minutes, 46 seconds grow. So I think growth journey definitely will continue at a good pace because of the three reasons mentioned. 33:56 33 minutes, 56 seconds Okay sir. Thank you sir. It was a really uh good answer from you. Uh sir as you said regarding the wind turbine 34:03 34 minutes, 3 seconds fasteners I can see that uh wind turbine fastener supplies have actually commenced on for global OEMs. So just 34:12 34 minutes, 12 seconds wanted to understand the scale of opportunity which is expected from the offshore wind uh over the medium termed 34:19 34 minutes, 19 seconds medium term for the company. Yes. So we just entered offshore last year which is Apoch 26 with the global OEM in Europe 34:29 34 minutes, 29 seconds and in short term in two to three years we see short offshore wind partner should contribute about 10% of our 34:37 34 minutes, 37 seconds partner sales. So that is the visibility as of now we have but of course we are work working internally to add more 34:44 34 minutes, 44 seconds offshore wind customers and see this business to continue to grow as well. 34:51 34 minutes, 51 seconds Okay sir noted one last question sir uh sir uh like what is the target export 34:57 34 minutes, 57 seconds contribution you are expecting for the company over the next two to three years currently you are having something around 35%. So like 35:06 35 minutes, 6 seconds yeah so I think export will continue to be between 35 to 40% of our sales and uh depending on the new product addition 35:14 35 minutes, 14 seconds new customer addition this may vary on year on year basis but broadly this will remain between 35 to 40% of our total fees. 35:23 35 minutes, 23 seconds Okay. Okay sir. Got it. Thank you so much sir. All the best. Thank you. Thank you. 35:30 35 minutes, 30 seconds We have next question from the line of Lakmi Naran KG from Tunga Investment. Please go ahead. 35:38 35 minutes, 38 seconds Uh thanks again. I just want to understand you know in terms of metallergy do you also do powder metallergy or or you do 35:47 35 minutes, 47 seconds uh the regular one in terms of making or you intend to also bring out 35:55 35 minutes, 55 seconds uh no to basically buy material in a sheet coil or wire form or rod form and from there or all the production 36:04 36 minutes, 4 seconds manufacturing uh process start. We don't use powder methodology. Okay. Okay. Uh that's also Thank you. 36:13 36 minutes, 13 seconds Thank you. Thank you. 36:18 36 minutes, 18 seconds Next question from the line of Kura who is an individual investor. Please go ahead. 36:31 36 minutes, 31 seconds Aurora, your line is unmuted. Please ask your question. 36:34 36 minutes, 34 seconds Hello. Hi. Uh congratulations on your results. Uh just had a few questions. So the first one is on the hedging policy. 36:43 36 minutes, 43 seconds So for our euro and USD exposure. So I just wanted to know what percentage of our expos are naturally held and what is the current hedging policy like? 36:54 36 minutes, 54 seconds Uh basically for as far as heading is concerned uh earlier we used to cover 70% of the total estimated export 37:01 37 minutes, 1 second collection. we used to take undertake power but uh now we have uh there's been a change in the methodology we have 37:09 37 minutes, 9 seconds reduced that to to 40%. So up to 40% of the total estimated collection we are uh undertaking forward cover and there is 37:18 37 minutes, 18 seconds as far as this is as a Euro concern US also we follow the same methodology but we also have which has got a natural net 37:26 37 minutes, 26 seconds so net of the U uh US exports and of import we again uh the policy we allow 37:34 37 minutes, 34 seconds up to 40% of the total estimated collection we undertake forward service which is covering a period of 12 months from now. 37:44 37 minutes, 44 seconds Okay. Got it. And uh so on the recent tariff changes um have they created any opportunities in terms of exports or any additional customer engagements? 37:57 37 minutes, 57 seconds Uh you are talking about EU India FTA or any other terrorist? Yeah. Yeah. Uh EU India. 38:05 38 minutes, 5 seconds Yeah. So I think for Gala products which we are exported to Europe currently 3.7% is the import duty which is paid by our 38:13 38 minutes, 13 seconds customers and I think the FDA amounts which be implemented in early FY27 oh 38:19 38 minutes, 19 seconds sorry in Jan 27 and uh by this implementation the import duty will be zero on our products in Europe but on 38:29 38 minutes, 29 seconds other side there's a impact possible of CBM uh on which European countries are working on. So we see this 38:37 38 minutes, 37 seconds benefit what will come as a FDA will get nullified with this additional cost which our customers have to pay for 38:45 38 minutes, 45 seconds imports from India. But during this process uh I think there's a very positive feeling for European countries 38:52 38 minutes, 52 seconds towards India. So that should definitely help Indian companies including Gala going forward in mid to long term. 39:02 39 minutes, 2 seconds Got it sir. And lastly just on the Chennai plant utilization. So I guess we were at almost 35% for FY26. So do we 39:11 39 minutes, 11 seconds expect this to move forward to let's say 70% in this uh F27? 39:19 39 minutes, 19 seconds Yeah. So as I mentioned our overall capacity is going to be 120 cr by year end and this gradually we will be 39:28 39 minutes, 28 seconds utilizing the our phase 2 capacity and hence we are seeing approximately 80 cr something will be achieving uh the manufacturing or sale value in next year 39:37 39 minutes, 37 seconds which is going to be approximately 67 70% of 120 cr. Perfect sir. Thank you and all the best. 39:45 39 minutes, 45 seconds Thank you. Thank you. Reminder to all the participants that you press star event to ask a question. 39:52 39 minutes, 52 seconds Next question from the line of Rasha who is an individual investor. Please go ahead 40:04 40 minutes, 4 seconds Mr. Mr. Rasha your line is unmuted. Please ask your question. 40:14 40 minutes, 14 seconds So we didn't get any response from Mr. 40:16 40 minutes, 16 seconds from the line of Mr. Raj Rasha we to take the next question from the line of Arpit Jan from RR Investment Advisory Private Limited. Please go ahead. 40:27 40 minutes, 27 seconds Yeah. Hi, one last question from my side. As you have mentioned in starting of the call that uh you are looking for 40:34 40 minutes, 34 seconds two three plants sorry two three plots in V right. So that plots will be on 40:41 40 minutes, 41 seconds lease basis or it will be in the name of sala only means we will own those plots or 40:50 40 minutes, 50 seconds yeah basically evaluating things which are in the final stage these are the two plot which are under evaluation and we will finalize one or two plot depend 40:58 40 minutes, 58 seconds upon the overall size of the plot which we able to finalize and these are going to be on our own plot. thing basically 41:05 41 minutes, 5 seconds uh there's a uh industrial plots are there which you can you can buy from the seller 41:13 41 minutes, 13 seconds got it and in Chennai the backup plan uh we we will leave if we will need the plot right correct yeah correct so in Chennai 41:21 41 minutes, 21 seconds basically the SIPOT is a very good authority and they provide a very good develop plot with the lot of infrastructure and there we have planned 41:29 41 minutes, 29 seconds to take the Sipcot long lease plot or as backup plan we can use a already 41:36 41 minutes, 36 seconds developed uh plant and uh building where we can move the stud manufacturing facility. 41:44 41 minutes, 44 seconds Okay. Okay. And um as our margins saw a bit of dip this year from 17.5 to 16.5 41:52 41 minutes, 52 seconds this year. Right. So when can we expect our margins to get back to 181 19% kind of number? 42:01 42 minutes, 1 second See basically this dip primarily the dip was only because of this for class of one 42:10 42 minutes, 10 seconds person which is around 3.23 cr which has impacted the current days margin but going ahead 42:17 42 minutes, 17 seconds uh considering uh there is no volatility we expect the margins to you know stabilize between 70 to 90 90%. 42:30 42 minutes, 30 seconds by FY 27 and right. Correct. 42:34 42 minutes, 34 seconds Got it. Got it. Thank you. We have next question from the line 42:44 42 minutes, 44 seconds of Suzan from Walford for PMS. Please go ahead. 42:50 42 minutes, 50 seconds Yeah. Uh thank you. So, thank you so for the opportunity. I just had one question. Uh did we get any benefit from currency depreciation or any currency 42:59 42 minutes, 59 seconds impact in our uh numbers for quarter 4? 43:05 43 minutes, 5 seconds uh see as I said we we normally see currency uh where currency depreciation 43:12 43 minutes, 12 seconds is concerned that we got it that the benefit of the top line also uh definitely there is benefit is there but 43:19 43 minutes, 19 seconds at the same time it it also uh because we we undertake power also to result in 43:26 43 minutes, 26 seconds in non-cash laws. So that benefit is definitely there in the top line because of that will be difficult. 43:35 43 minutes, 35 seconds Okay. So any number that you can share in terms of uh like the benefit if you can quantify 43:44 43 minutes, 44 seconds I don't have the exact uh numbers but no I will just answer this in separate 43:52 43 minutes, 52 seconds way. So basically there is a currency depreciation which gives the benefit in the short term but that again uh order 44:00 44 minutes to order we have to in the mid to longterm we to keep reviewing with the customer to other side there is a inflation and cost increase also like 44:09 44 minutes, 9 seconds for example diesel got increased or other cost got increased. So there is always a time lag gap like a quarter to 44:17 44 minutes, 17 seconds quarter is very difficult to say there is a net net profit or loss because of the currency and overall cost. But mid to long-term we see because we keep on 44:26 44 minutes, 26 seconds passing the cost to the customer they also keep on considering the foreign exchange gain or loss also while readjusting the prices. So net net we 44:36 44 minutes, 36 seconds thinking overall we should be able to pass the cost to the customers. 44:41 44 minutes, 41 seconds Okay. Okay sir. Got it. Thank you for your answer and all the best for future. Thank you. 44:52 44 minutes, 52 seconds Thank you. As there are no further questions from the participants, I don't conference over to management for closing comments. 45:01 45 minutes, 1 second Thank you all for uh participating in this earnings call. I hope we have been able to answer your questions satisfactoryily. If you have any further 45:10 45 minutes, 10 seconds questions or would like to know more about the company, please reach out to our manager advisor. Thank you. 45:18 45 minutes, 18 seconds Thank you all of you. Thank you ladies and gentlemen on behalf of Arian Capital Markets Limited that conclude this 45:25 45 minutes, 25 seconds conference. Thank you for joining us and human. Thank you. Thank you.