Happy Forgings Limited — Q2 FY26

Happy Forgings Ltd Q2 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=vvhZTD19SfA Published: 6 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to Q2 and H1 FY26 earnings conference call of Happy Forgings 0:08 8 seconds Limited. This conference call may contain forward-looking statements about the company which are based on beliefs, opinions and expectations of company as 0:16 16 seconds on the date of this call. These statements are not guarantees of future performance and involve risk and uncertaintities that are difficult to 0:24 24 seconds predict. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:32 32 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded. 0:42 42 seconds I now hand the conference over to Mr. 0:44 44 seconds Ashish Gar, managing director, Happy Forings Limited. Thank you and over to you sir. 0:51 51 seconds Uh good morning everyone. Am I audible? Yes sir, you're loud and clear. 0:57 57 seconds Yes, thank you. Good morning everyone and thank you for joining us today for the quarter 2 FI26 earnings call of 1:05 1 minute, 5 seconds Happy Forgings Limited. With me I have Mr. Pankut Kumar Goyel our CFO and strategic growth advisers our investor 1:13 1 minute, 13 seconds relations team. I trust everyone has had the chance to review our financial statements and investor presentations 1:20 1 minute, 20 seconds for Q2 and H1 FI26 which we have filed with the exchanges. 1:25 1 minute, 25 seconds I am delighted to share that happy forgings limited sustained its positive growth momentum through the second quarter and first half of fiscal year 1:33 1 minute, 33 seconds 2026 delivering a robust and highly encouraging performance. Our performance in Q2 and H126 was defined by 1:42 1 minute, 42 seconds industryleading profitability and strong cash generations achieved even as we navigated through softening steel prices 1:49 1 minute, 49 seconds and a mixed of global demand environment. For the second quarter, we achieved our highest ever quarterly gross margin of around 60% and an IVITA 1:58 1 minute, 58 seconds margin of approximately 31%. This clearly demonstrates the quality of our business and resilience of our operation. 2:05 2 minutes, 5 seconds Let me walk you through some of the key financial highlights for quarter 2 FY26. 2:10 2 minutes, 10 seconds Revenue for operations stood at 377 crores reflecting 4.5% year-on-year 2:16 2 minutes, 16 seconds growth. Gross profit grew by 7% yearon-year to 228 crores. AITA came at 2:23 2 minutes, 23 seconds 116 crores marking a 10% increase. Y profit profit after tax per 10% on an adjusted basis to 73 crores. 2:33 2 minutes, 33 seconds Importantly, our profit growth outpaced the revenue growth supported by margin expansion of about 150 basis points each in gross margin as well as the beta 2:42 2 minutes, 42 seconds margins as our product m mix continues to have a higher share of value added machining of around 88%. 2:49 2 minutes, 49 seconds For the first half, revenue stood at 731 crores and PAT at 139 crores reflecting persistent performance across periods. 2:57 2 minutes, 57 seconds Our quarter 2 revenue was boosted by a 5.2% 2% operational growth in volumes which offset stable pricing. Notably, 3:05 3 minutes, 5 seconds realizations for the quarter were held stable at 251 rupees per kg despite falling raw material costs demonstrating the strength of our precision 3:13 3 minutes, 13 seconds engineering and premium product mix. The domestic market was the growth engine driven by a healthy demand across all 3:20 3 minutes, 20 seconds major sectors including commercial vehicle, farm, industrial and passenger vehicles. The primary challenge was the export market where volumes remained low due to global market weaknesses. 3:31 3 minutes, 31 seconds Customer side restocking in the commercial vehicle of fiber farm equipment sectors due to ongoing uncertainty because of the US tariffs. 3:40 3 minutes, 40 seconds Now coming to segmental highlights for photo 26. I diversified segment portfolio continues to be a key strength 3:46 3 minutes, 46 seconds helping us navigate global volatility while leveraging domestic growth opportunities. Commercial vehicles. Our commercial vehicle segment contributed 3:54 3 minutes, 54 seconds 37% of our total revenues in H126 supported by steady domestic demand. 4:00 4 minutes However, export segment witnessed challenges. The domestic CV industry witnessed marginal growth in MSV segment on account of domestic infrastructure, 4:08 4 minutes, 8 seconds high f activity and strong demand from steel, cement and construction sector. 4:13 4 minutes, 13 seconds While international markets continue to face subdue demand particularly across North America and Europe, our limited exposure partially offset the impact. 4:22 4 minutes, 22 seconds Farm equipment. The Indian tractor industry posted solid growth in quarter 2. FI26 supported by favorable rural conditions with FI26 volumes projected 4:30 4 minutes, 30 seconds to rise 4 to 7% which also supported similar growth in our operating revenues and share of farm equipment increases slightly to 34% of our revenues. 4:40 4 minutes, 40 seconds However, the US European US and European tractor market remains soft showing only modest recovery late in the quart. Our 4:48 4 minutes, 48 seconds farm equipment segment maintained its healthy trajectory in line with industry trends registering a high single digit y 4:55 4 minutes, 55 seconds growth for the quarter. Passenger vehicle segment contributed 5% of the total operating revenue for H126. The 5:04 5 minutes, 4 seconds passenger vehicle industry was supported by strong domestic and export demand and festive season demand. Our PV business achieved mid double-digit Y growth 5:13 5 minutes, 13 seconds supported by the successful ramp up of the key SUV platform production line. We expect this segment to contribute 8 to 10% of our total revenues within two 5:21 5 minutes, 21 seconds years driven by a robust domestic and export demand. To fuel this growth, we have budgeted 80 crores capital outlay 5:28 5 minutes, 28 seconds for FY26 for capacity expansion of highway contributed 10% of total operating revenue in H126. Both domestic 5:37 5 minutes, 37 seconds and global market degree in quarter 2 and H1 26. Reflecting this, we saw a decline in both of our domestic and 5:44 5 minutes, 44 seconds export subsegments. domestic market and developed markets such as Europe, Japan, North America contribute to witness software. Sustained investment in 5:52 5 minutes, 52 seconds critical minerals, renewable energy and infrastructure and data centerdriven power projects is likely to support equipment often in select categories going forward. 6:02 6 minutes, 2 seconds Industrial segment accounted for 13% of a total operating revenue in H126. 6:07 6 minutes, 7 seconds Domestic demand remained healthy cross sectors in X12 with strong correction in wind energy and new installations and 6:16 6 minutes, 16 seconds steady demand in power generation and oil and gas despite mon related shock. 6:20 6 minutes, 20 seconds This was reflected in strong growth in our domestic industrial equipment demand. Globally renewable investments continue to drive growth. 6:28 6 minutes, 28 seconds Our balance sheet remains one of the strongest in the industry. We achieved nearly 100% operating cash flow conversion in H1 FI26 reflecting 6:37 6 minutes, 37 seconds consistent operating performance and improved working capital efficiency through prudent data and inventory management. Cash liquidity stood at 6:45 6 minutes, 45 seconds approximately 315 crores providing ample financial flexibility to pursue long-term growth opportunities. Looking 6:52 6 minutes, 52 seconds ahead, we remain steadfast on executing our 650 cr strategic capex program which is progressing well on schedule. This 6:59 6 minutes, 59 seconds investment is creating state-of-the-art forging infrastructure to cater to heavy segment precision components and support future growth. The company is driving 7:08 7 minutes, 8 seconds strong new business growth supported by a healthy order book. We are expanding partnerships with leading domestic OEMs and building and working to build 7:16 7 minutes, 16 seconds partnerships with new larger European OEMs and advancing diversification into higher value add industrial applications. With a balanced mix across 7:25 7 minutes, 25 seconds businesses, we are best positioned to sustain growth momentum and build on it in the coming quarters. I will now request our CFO Mr. Pankage Pumar to 7:33 7 minutes, 33 seconds walk me through our financial slides in more detailed manner. 7:39 7 minutes, 39 seconds Thank you. I hope I am audible. I am well audible. 7:45 7 minutes, 45 seconds Yes sir. Loud and clear you are. Please go ahead. Thank you. So good morning everyone. Myself. 7:52 7 minutes, 52 seconds Let me take you through the key financial metrics for Q2 FY26 and H H1 FY26. 7:59 7 minutes, 59 seconds Revenue from operations stood at INR 377 cr for Q2 FY26 and INR 731 cr for H1 FY26. 8:08 8 minutes, 8 seconds This represents YUI growth of 4.5% and 4.1% for Q2 and H1 respectively. Gross 8:14 8 minutes, 14 seconds profit stood at 220 228 cr in Q2 FY26 and 433 cr in H1 FY26 reflecting 8:23 8 minutes, 23 seconds year-on-year growth of 7.1% and 6.7% respectively. This performance translated to healthy gross margins of 8:31 8 minutes, 31 seconds 60 60% for the quarter and 59% for the half year. A beta was 116 cr and 217 cr 8:39 8 minutes, 39 seconds for Q2 FY26 and H1 FY26 reflecting YUI growth of 9.9% and 6.9%. respectively 8:48 8 minutes, 48 seconds translating to an aida margin of 30.7 and 29.7%. 8:53 8 minutes, 53 seconds Profit after tax grew to 73 cr and 139 cr for Q2 FY26 and H1 FY26 respectively 9:02 9 minutes, 2 seconds reflecting a YI growth of 10.2% 2% for Q2 and 6.7% for HF1 on an adjusted basis. This Y PA growth is computed 9:11 9 minutes, 11 seconds after excluding insurance income of 6.4 cr uh which is 4.8 8 cr post tax in Q2 9:18 9 minutes, 18 seconds FY25 and H1 FY25 of previous year margins for Q2 FY25 and H1 FYI 25 are 9:26 9 minutes, 26 seconds 19.5% and 19% respectively as highlighted by our MD I reiterate that our balance sheet continues to rank 9:34 9 minutes, 34 seconds among the strongest in the industry supported by improved working capital efficiency and robust operating cash flow generations our total network stand 9:43 9 minutes, 43 seconds at 1,900 approximately and our debt equity ratio as on 30th September continues to be 9:50 9 minutes, 50 seconds below 0.1. We hold a cash liquidity of approximately 300 cr plus as on 30th September and remain positive about our 9:58 9 minutes, 58 seconds cash approval capabilities that position us strongly to capitalize on any organic or inorganic growth opportunities in 10:05 10 minutes, 5 seconds future. Rosie was 18.1% and ROE stood at 14.6% 6% for S1 every 26 and we expect 10:12 10 minutes, 12 seconds this return ratio to improve going forward. That's all from my side. Now I open the floor for question and answer. 10:19 10 minutes, 19 seconds Thank you. 10:28 10 minutes, 28 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If 10:36 10 minutes, 36 seconds you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies 10:44 10 minutes, 44 seconds and gentlemen, we will wait for a moment while the question assembles. 10:57 10 minutes, 57 seconds The first question is from the line of Pankachal from Ikigai Asset Manager. Please go ahead. 11:04 11 minutes, 4 seconds Yeah, good morning. U Ashish can you hear me? 11:08 11 minutes, 8 seconds Yes sir. Please yes. Um congratulations. I would not say that in these difficult uh times uh the 11:16 11 minutes, 16 seconds cash conversion is very very good and that's the hallmark of a good company. So compliment on that. Hello. Sorry to interrupt. Excuse me. 11:24 11 minutes, 24 seconds Panka. Can you hear me? 11:26 11 minutes, 26 seconds Uh no. Your sound is muffled. Could you speak a little louder? No. Uh can you hear me now? Yes it is. Yes. 11:34 11 minutes, 34 seconds Please go ahead. Okay. Now I must compliment the company on the cash generation that in these difficult times 11:41 11 minutes, 41 seconds uh the cash generation has been very very good. So compliment on that. Uh what I wanted to understand Ashi G is slightly from a medium-term perspective. 11:51 11 minutes, 51 seconds Uh always the company has been a 20% keer growth company for uh last 5 years 11:58 11 minutes, 58 seconds last decade. Uh however the last 12 18 months have been a little challenging because of the industry. Uh from a 12:06 12 minutes, 6 seconds growth perspective what is the company doing over the next couple of years which brings us back to that uh 15 20% 12:14 12 minutes, 14 seconds keer growth again if you can just elaborate different pieces and industrials today is about 13% of our 12:20 12 minutes, 20 seconds overall revenue how big it can be as you move ahead with the new capex coming in. 12:26 12 minutes, 26 seconds So if you can give a color on how growth can be revived back what are the projects you are doing and also some update on inorganic if you have pursued 12:35 12 minutes, 35 seconds anything cash is there on the balance sheet so how is the company looking from that so all will combine into a growth number so how should we look at growth 12:44 12 minutes, 44 seconds going forward thank you thank you pank so 12:51 12 minutes, 51 seconds uh thanks uh first of all for your compliment on cash origin uh regarding the growth outlook uh you know we have 12:59 12 minutes, 59 seconds generated close to you know 80 crores of uh uh new orders new businesses in H1 of 13:07 13 minutes, 7 seconds this financial year with even at better realizations uh uh the growth is not being witnessed 13:13 13 minutes, 13 seconds because of the fall in our old existing businesses because of the challenging 13:19 13 minutes, 19 seconds environment uh globally. So also we have around 10% direct or indirect business 13:26 13 minutes, 26 seconds to US which was which fell almost 35 40% in second quarter which also impacted the growth. In order to come up with a 13:35 13 minutes, 35 seconds strong growth you know we have taken up capex projects which are in different verticals which company is currently not 13:44 13 minutes, 44 seconds doing which is passenger vehicle which is a new sector for us where we have parade. uh again at the same time of 13:51 13 minutes, 51 seconds fiveway within off fiveway we are working with certain German companies where we are working on very large axles programs and also the new lines which 14:00 14 minutes are starting in the coming year uh uh which is for the wind sector and heavy tractor sector which is also an additional line which currently is not 14:08 14 minutes, 8 seconds catering to such sizes. Plus the industrial business and the heavy programs of 650 crores cap tax which 14:16 14 minutes, 16 seconds will probably start from third quarter of next year will diversify the complete business for happy forges. We are very bullish on the overall scenario going 14:25 14 minutes, 25 seconds forward with these capex in place uh the growth momentum will continue. At the same time, if we are seeing a better uh 14:35 14 minutes, 35 seconds uh GST, you know, uh uh incentive push in the domestic industry, we should be seeing some positive traction in the coming quarters. As well as far as 14:44 14 minutes, 44 seconds inorganic side is concerned, we are working very effectively. It's been almost one and a half years that we've 14:51 14 minutes, 51 seconds been seeing uh uh opportunities. It's just that the opportunity should be a right fit for our company and should be strategically aligned. We are very 15:00 15 minutes hopeful that in next 6 to 8 months probably we should be able to close something on the inorganic side as well. 15:07 15 minutes, 7 seconds So on the growth side we expect that you know from next year onwards the growth trajectory should be better and we should be back on our whole trend. 15:17 15 minutes, 17 seconds Okay that's great. Uh and if you crystal ball gaze uh ICG for the next few years today one/ird roughly equally is between 15:26 15 minutes, 26 seconds commercial vehicles and farm. uh four 5% is passenger vehicles and uh 13% is 15:34 15 minutes, 34 seconds industrial. In your view, the way the business is shaping up, how will the mix look like 3 years? Hence, uh when all 15:42 15 minutes, 42 seconds the capexes are done, the new uh presses come on stream, how will the mix look like from the current mix today? If you 15:49 15 minutes, 49 seconds can give us some texture, it will be great. 15:52 15 minutes, 52 seconds Yes. uh CV and palm put together will be 50% uh what we see what we estimate and balance 50% will come from industrial 16:00 16 minutes passenger vehicle of highway and also other sectors uh you know which we are working on so uh you can roughly say 16:08 16 minutes, 8 seconds it'll be 50% for from farm and CVS and 50% from TV industrial or five and other areas 16:16 16 minutes, 16 seconds okay great and the inorganic which you are pursuing will be in your area or any wide spaces which you think uh which we 16:24 16 minutes, 24 seconds are targeting into either defense, aerospace, em some of our peers are also doing. So uh just if you can give us 16:32 16 minutes, 32 seconds some flavor where is the inorganic likely to be uh any white spaces you like to cover. 16:38 16 minutes, 38 seconds Sir uh we are actually evaluating uh two or three options right now. It'll be little early to comment on this. 16:47 16 minutes, 47 seconds probably in next uh uh quarter or so we'll be uh in a better position to answer on this. 16:54 16 minutes, 54 seconds So great. Thank you and wish you all the best and uh please continue the basic financial hygiene which you guys have been doing. Thank you. 17:03 17 minutes, 3 seconds Thank you sir. Thank you. 17:05 17 minutes, 5 seconds Thank you. The next question is from the line of Mula from Dam Capital. Please go ahead. 17:12 17 minutes, 12 seconds Thank you for the opportunity and congratulations on a very strong performance particularly one of the highest margins in industry 30% plus and 17:21 17 minutes, 21 seconds highest also in last 10 quarters. So my first question is on this new project this uh new cap 650 cr capex which you 17:30 17 minutes, 30 seconds told that on track and probably in next one year by Q3 will be operational. 17:37 17 minutes, 37 seconds So any further detail in terms of the uh any visibility of the any orders we procured on initial pilot orders or 17:46 17 minutes, 46 seconds something like that and which are the segments uh where we want to start with. 17:55 17 minutes, 55 seconds Uh so thanks ML. Uh uh ML out of the 650 cr scapex first of all this capex is planned in two phases where the 18:03 18 minutes, 3 seconds machining lines out of this 650 crores around 250 crores is into machining which will be planned in two phases depending on the utilization levels. So 18:10 18 minutes, 10 seconds you can say that 550 crores will be coming up in the first phase. Out of 550 crores 150 crores is towards wind and farm and balance 400 crores is towards 18:19 18 minutes, 19 seconds the heavy hammer line. Out of this 550 crores uh of the total gas tax for the you know farm wind and the heavy hammer 18:27 18 minutes, 27 seconds side almost 350 crores of uh you know orders are annual orders are already there in hand now on which company is 18:35 18 minutes, 35 seconds have started working on and we are very hopeful once the infrastructure is on stream and is visible to some of the 18:42 18 minutes, 42 seconds OEMs we will be in a position to uh take more orders as well. It is just a timing that this is a very critical project and 18:51 18 minutes, 51 seconds uh uh our customers are waiting for us to actually execute uh and display. So it's very important for us and uh uh 18:59 18 minutes, 59 seconds next two or three quarters once the infrastructure is in place I think uh it'll the the order conversion will be much faster. 19:08 19 minutes, 8 seconds This 350 K is non autoindustrial right? 19:13 19 minutes, 13 seconds Yes. Yes. It's completely non-industrial. 19:17 19 minutes, 17 seconds Some part of it some 50 uh 50 crores out of it is also on account of very high 19:24 19 minutes, 24 seconds heavy you know 500 HP tractors which are for you know European region in North America. 19:32 19 minutes, 32 seconds So out of this 350 how much would be export? How much domestic or majorly export only? 19:39 19 minutes, 39 seconds uh you can say that uh you know around 15 20% is domestic and balance is all expl 19:52 19 minutes, 52 seconds highlighted that we are always uh very ambitious to grow on the US because it's one of the biggest market for forking 19:59 19 minutes, 59 seconds industry and from the export from India also but because of this tariff thing almost in last two three quarters nothing much has happened but Now it 20:08 20 minutes, 8 seconds seems that uh things are in fa favoring slowly and negotiation is probably in favor. So what are our plans for next 20:17 20 minutes, 17 seconds one to two years in terms of US expansion of the revenue? 20:22 20 minutes, 22 seconds So sir yes you are right that uh passenger vehicle is under 25% but besides passenger vehicle uh uh the 20:30 20 minutes, 30 seconds genet business or oil and gas and other farm equipment comes under 50% category for which uh you know uh uh under 50% 20:39 20 minutes, 39 seconds things have been you know on uh on hold right now uh but on the passenger vehicle we are going ahead and we are 20:46 20 minutes, 46 seconds also putting new projects to the same customer on the PV side and uh uh it It is expected that you know things will 20:54 20 minutes, 54 seconds ease out uh uh uh you know next coming months. It's not a sustained number of 50%, once things eases out you know to 21:02 21 minutes, 2 seconds the level of 20%, I think uh uh things will be back on track. So it's not that that we are not working on we are 21:09 21 minutes, 9 seconds working on but certainly at 50% rate uh uh it will not make sense. So you know it's kind of a wait and watch situation 21:17 21 minutes, 17 seconds but the order books that we have in hand uh right now are largely from the European region for the bigger ones. The PV orders that we have from North 21:25 21 minutes, 25 seconds America uh is ongoing uh uh and uh the one of the genet portable genet orders 21:32 21 minutes, 32 seconds for North America uh is in testing phase is expected to start uh soon but it currently uh is having around 50% 21:41 21 minutes, 41 seconds tariff. So over c over there customer is also waiting for the further clarification on it uh because that business is kind of shifted from China 21:50 21 minutes, 50 seconds and if it eases to around 20% 25% I think uh it'll be a win-win situation uh you know for the customer as well as for 21:57 21 minutes, 57 seconds us so at this point of time it's kind of on hold but yes uh you know things are going on in terms of working because 22:04 22 minutes, 4 seconds everyone is aware that it'll settle you know very soon but lastly on no We are working on 22:12 22 minutes, 12 seconds various segments and of course like wind or defense and all defense seems to be uh would be taking a more time maybe 22:20 22 minutes, 20 seconds about 3 four years but on a near-term basis from next one one and a half years point of view within all these non-auto 22:27 22 minutes, 27 seconds segment which segment you believe will provide much better traction and uh rapid growth is possible in there 22:36 22 minutes, 36 seconds wind as a sector you know as you have invested on an internet technology for the wind will grow for us uh uh heavy 22:43 22 minutes, 43 seconds engines for mining, defense, data center will grow for us for which machining lines we are investing on uh within heavy axles uh which are for material 22:52 22 minutes, 52 seconds handling systems and military axles we are working on which is which will be a part of it and oil and gas as well as uh 23:00 23 minutes you know uh some of the other areas you know with regards to mining application will part of it. 23:07 23 minutes, 7 seconds So these all we are talking from FI27 point of view right I'm saying one one and a half year yes one and a half years perspective 23:16 23 minutes, 16 seconds some projects on wind side will start little early and balance probably will start from one and a half years 23:24 23 minutes, 24 seconds sir thanks and all the best thank you m thank you the next question is from the 23:32 23 minutes, 32 seconds line of mahir vora from aquarius capital private limited please go ahead Uh yeah thank you for taking my 23:38 23 minutes, 38 seconds question. So my question was basically on the agree and CV uh division we saw a decent growth relative to the industry. 23:47 23 minutes, 47 seconds So just some more color into it whether it was purely driven by the domestic business and new product addition or was there some element of you know exports 23:55 23 minutes, 55 seconds also improving like new customer addition into the exports part also. 24:03 24 minutes, 3 seconds Yeah, that was close to us. Yes. 24:06 24 minutes, 6 seconds See uh uh on the uh you know CV side uh basically we have gained new orders for 24:14 24 minutes, 14 seconds which we are working on but that has not executed in revenue so far in this quarter. So the growth that you have seen is largely on the uh on the 24:22 24 minutes, 22 seconds domestic side whereas on the export side we have seen a dip because some of the orders for Brazil as well as Europe we 24:30 24 minutes, 30 seconds have seen a substantial dip in this quarter but uh on the domestic side uh yes as our projects are moving ahead uh 24:38 24 minutes, 38 seconds you know on with with the large OEMs in the domestic side it's you know going well we expect you know the domestic CV 24:46 24 minutes, 46 seconds business will further improve as you know we were working on some of these orders for the last couple of years 24:54 24 minutes, 54 seconds right so then on the agree side are we seeing some traction maybe from Europe or other regions as such on the agree side we are very positive 25:02 25 minutes, 2 seconds on the medium-term and we are working on very large projects with the two large OEMs uh based you know have their plan 25:10 25 minutes, 10 seconds having their plants in North America in Europe and Brazil these large plates because of the slowdown in the European and US markets they're working on cost 25:18 25 minutes, 18 seconds cutting programs and we've been we have recently we have got the approvals in the last six months with both these clients and we are kind of working on we 25:26 25 minutes, 26 seconds already developed some programs for for European plants and uh we'll be working in next six months very closely with these clients so these are on high 25:34 25 minutes, 34 seconds horsepower tractors this is a new range which currently company was not doing and the parts are very heavy so we expect good growth coming from these 25:42 25 minutes, 42 seconds sectors going forward also the expansion on the axel business which company is doing on the Nearet technology is one of the heaviest lines you know in Asia 25:51 25 minutes, 51 seconds Pacific which will also help us in increasing our market share for the heavy tractors right so basically going ahead we may 26:00 26 minutes see our crankshaft uh share in the revenue going down basically the new product which you add we also have the industrial crankshafts 26:09 26 minutes, 9 seconds which is which are very high in value so once that will kick off I think that will happen so crankshaft business is doing well for us I think we'll keep on 26:17 26 minutes, 17 seconds performing well. We also have certain programs on PB side on that lines that will continue to do well. 26:25 26 minutes, 25 seconds Sure. So then lastly in terms of the inorganic part which you had mentioned so basically we are a good return generating and a decent margin company. 26:33 26 minutes, 33 seconds So going ahead in the inorganic space are we okay to you know say yeah acquire something like a lower margin or a lower 26:40 26 minutes, 40 seconds return ratio company and then improve on it or how are we looking at the dilution in terms of financial ratios point of view in an organic part. 26:50 26 minutes, 50 seconds Uh as pankage already said that you know we have one of the strongest balance sheets it'll be very difficult to 26:57 26 minutes, 57 seconds actually find a similar company or you know a company with very similar numbers. So definitely the idea is to 27:05 27 minutes, 5 seconds you know see the strategic benefit and how company can improve on it but definitely it will not be in a basic 27:12 27 minutes, 12 seconds commodity as you know our working is into specialized businesses. So we are very clear that whatever acquisitions 27:18 27 minutes, 18 seconds will be done will be you know uh centric to you know the benefit to HFL as well and also you know the benefit that you 27:26 27 minutes, 26 seconds know company can actually provide in that business. So uh uh as of now I think I can comment that much but yes 27:34 27 minutes, 34 seconds definitely it will be very difficult to have a company with similar margin right okay all right sir that's all from 27:41 27 minutes, 41 seconds my side thank you thank you the next question is from the line of Joseph George from IFL Capital 27:50 27 minutes, 50 seconds Services Limited please go ahead thank you um so I had a question in relation to exports so the direct export 27:58 27 minutes, 58 seconds reports that we see is approximately 20% of revenue but in the past we had mentioned that including deemed and 28:04 28 minutes, 4 seconds index the number is slightly higher if you can just refresh that number for us that is one and second question in relation to exports is you mentioned 28:13 28 minutes, 13 seconds that some of your customers overseas are destocking so if you can just give a sense of where the stock levels are now 28:20 28 minutes, 20 seconds and whether it's reached a level where further detoization of volumes from here. 28:30 28 minutes, 30 seconds Yeah, thanks John. Uh so yes, our direct exports are in the range of 18 to 20%. 28:36 28 minutes, 36 seconds And our deemed exports uh which are like done from the port uh are in the range of uh 10 to 12%. But you know we also 28:45 28 minutes, 45 seconds have supplies in the domestic to our domestic customers which are further converted into complete transmission or axle or engine and are being exported. 28:55 28 minutes, 55 seconds So if you take that percentage it comes close to 40%. So yes in terms of uh uh uh you know the 29:03 29 minutes, 3 seconds stock inventory correction for us uh you know as the US exports are not very large uh yes the inventory correction is 29:11 29 minutes, 11 seconds more or less uh done for the European customers and uh should be seeing revival from these levels. Secondly, you 29:19 29 minutes, 19 seconds know, but you know, uh, one of our customers, especially in UK, has seen a sharp fall in the last almost 24 months. 29:28 29 minutes, 28 seconds The last two years, you know, we have seen numbers declining from almost 48,000 units to almost 24,000 units in this year where we have seen a major 29:37 29 minutes, 37 seconds effect. So, we have been discussing with the customer and we are seeing close to, you know, 50% improvement in next year, close to 36,000 units. So if that 29:46 29 minutes, 46 seconds happens probably we'll be able to you know have a better growth you know in terms of our export share. So as far as 29:54 29 minutes, 54 seconds North America is concerned as already explained we have two large projects where we are working on and one of the projects on the PV side is starting uh 30:03 30 minutes, 3 seconds uh uh you know from uh Q4 and Q1 of next financial year and these projects in terms of tariffs you know uh are will be 30:12 30 minutes, 12 seconds continuing as it is and we have done almost 80 cr of capex in this financial year. The second program for exports is 30:19 30 minutes, 19 seconds for which is going to start very soon is for the portal agencies for which we have done the capex which comes under a category of 50% for which testing is 30:27 30 minutes, 27 seconds going on. At the same time we are waiting for some tariff relief. So that's on the export side but at the 30:35 30 minutes, 35 seconds same time we are working on wind and other farm large farm equipment you know businesses for Europe. 30:43 30 minutes, 43 seconds Understood sir. So that's quite elaborate. Thank you. Uh the second uh question that I had was in relation to the US piece. So you mentioned that uh 30:52 30 minutes, 52 seconds the US exposure total that is indirect plus direct is about 10% of your revenue where you have seen a 35 40% yearon-year 31:00 31 minutes decline. So wanted to understand when this did impact I mean when did this uh impact really start was it in the month of September or so you know when you 31:08 31 minutes, 8 seconds think about from a 2Q perspective did we see that impact for 1 month or 2 month how is it and secondly when you think about 3Q will the impact be much more 31:17 31 minutes, 17 seconds because for 3Q we'll see the full quarter impact so just some thoughts there thank you yes sir so category the commodities 31:26 31 minutes, 26 seconds which are falling under 50% you know over their customer is very cautious and are taking deliveries 31:35 31 minutes, 35 seconds uh uh uh wherever when they when they're seeing that the stock is to the min levels otherwise they're not as a position to actually take the deliveries 31:44 31 minutes, 44 seconds because 50% is a big number. So but they certainly have to run the lines and there are no alternatives. So they'll be 31:52 31 minutes, 52 seconds continuing with this. But at the same time there is a dip in the production uh uh uh in US as well which is kind of uh 32:00 32 minutes uh you know uh uh reflecting in terms of the inventory the pipeline inventories for which you know the inventory was 32:07 32 minutes, 7 seconds good enough for them to actually serve them till December that is what we have been hearing. So we have seen the impact 32:15 32 minutes, 15 seconds uh in the last uh uh 2 3 months where with some of the customers it was a complete blackout. 32:21 32 minutes, 21 seconds And for which you know some discussions are ongoing because on the indirect business further our customer is in 32:28 32 minutes, 28 seconds discussion and we tier two in some areas where you know we have been discussing and we've been told that some 32:35 32 minutes, 35 seconds discussions are ongoing and hopefully from Q3 onwards that you know some businesses will improve. So we cannot 32:43 32 minutes, 43 seconds say that because different customers have different stock levels at their point at their plants. So it will affect 32:50 32 minutes, 50 seconds but yes certainly some improvement can happen in this third quarter. Understood. Thank you. 33:03 33 minutes, 3 seconds Thank you. The next question is from the line of Sahil Sangi from Monach Network Capital. Please go ahead. Yeah. Am I audible? 33:12 33 minutes, 12 seconds Yes, you're audible. Please go ahead. 33:14 33 minutes, 14 seconds Yes. Uh first of all congratulations for maintaining a very strong profitability uh even in difficult times. I have two questions. First uh if you can split the 33:23 33 minutes, 23 seconds uh volume growth number uh for domestic and export uh uh for Q2 uh that will be 33:31 33 minutes, 31 seconds it will be really helpful to understand uh how we are doing on both the geographies. And second I wanted to understand with respect to margins. Um 33:40 33 minutes, 40 seconds now do we have a pass on clause with respect to uh the the low RM cost and uh do we expect u the margins to kind of 33:48 33 minutes, 48 seconds normalize going ahead or uh we largely retain the this number until uh the raw material cost starts going up again. 33:58 33 minutes, 58 seconds Thank you. 34:01 34 minutes, 1 second Yes. Thank you. for volume split uh uh Vikas will will just check volume volume 34:08 34 minutes, 8 seconds volume for quarter 3 for domestic and export. So in the meantime uh punkage and vikas is checking this I will just 34:16 34 minutes, 16 seconds talk on the margin front. Uh yes it's the the steel and uh steel is a pass through for us 34:24 34 minutes, 24 seconds and uh the way it is but definitely steel is passed through uh in some cases with a lag of 1 month and in some cases 34:32 34 minutes, 32 seconds with a lag of one quarter. So in exports majorly it is passed through with a lag of one quarter. In some cases for our 34:39 34 minutes, 39 seconds export customers it is also uh that uh uh uh raw material is settled after 6 months. So you can save that. Uh but in 34:49 34 minutes, 49 seconds terms of our uh currencies, we do a long-term hedge. So we have seen some losses in that as well because euro was 34:56 34 minutes, 56 seconds booked at a currency level of 95 96. So we have some losses over there. But in terms of our you know uh uh steel 35:05 35 minutes, 5 seconds pricing is concerned, it's a passive. As far as you know margins are concerned, I can say that you know realizations 35:12 35 minutes, 12 seconds improved uh in this quarter despite of fall in raw material prices. It has improved from almost 245 to 251 rupees 35:21 35 minutes, 21 seconds despite of raw material falling from almost uh you know 10 rupees per kg in this quarter pushing gross margin to 60.3%. 35:31 35 minutes, 31 seconds Uh uh which is increase of approximately 150 basis points. So it's it's kind of improvement in product mix which was 35:39 35 minutes, 39 seconds there in this quarter and uh some 80 crores of new businesses added in H1 also supported better realizations 35:47 35 minutes, 47 seconds and uh uh so that's you know we can say that you know on a long-term basis we have to see one or two more quarters to 35:56 35 minutes, 56 seconds say what you know numbers can we sustain. 35:59 35 minutes, 59 seconds Okay. Okay. Thank you. Um do we have the data on volume growth or should I take it offline? 36:04 36 minutes, 4 seconds Yes. On the volume growth you asking volume split or volume growth. 36:13 36 minutes, 13 seconds Yeah, volume growth will also do. Uh that is uh yeah volume growth is what I uh want to understand the demand dynamics in uh both the markets. 36:29 36 minutes, 29 seconds So y growth on domestic is 10%. And on export it is there is a dip right there is a dip marginally there is a marginal value. 36:40 36 minutes, 40 seconds Okay. 36:42 36 minutes, 42 seconds So on the export side it is similar and export side it is on domestic side it is 10%. 36:48 36 minutes, 48 seconds Export is how much you said dip almost similar. 36:53 36 minutes, 53 seconds Okay. Okay. Thank you so much and all the best. Thank you. 37:01 37 minutes, 1 second Thank you. The next question is from the line of Akash from Dalal and Brocha Stock Broking Private Limited. Please go ahead. 37:11 37 minutes, 11 seconds Yeah, thanks for the opportunity. Uh and uh once again congrats Afi sir on uh posting such a good set of numbers and strong margins. 37:19 37 minutes, 19 seconds Uh sir uh my questions I'd like to bifurcate uh into two. Firstly, from a short-term uh perspective, I'd like to 37:26 37 minutes, 26 seconds understand that uh going forward uh due to the GST cut and uh the traction in the domestic economy, do you expect the 37:35 37 minutes, 35 seconds this 375 cr plus rate that we have picked up to hold in the next two three uh in the next couple of quarters and uh 37:43 37 minutes, 43 seconds uh will our margins especially a bit margins hold up uh to current levels of 30%. 37:52 37 minutes, 52 seconds Oh, hi Akash. Thank you. So Kash uh uh uh we expect revenues to grow in the 37:59 37 minutes, 59 seconds coming quarter and uh uh companies working in different projects and different rampups are planned. Uh so 38:08 38 minutes, 8 seconds going forward quarter 4 should definitely be better because we have some projects starting you know from Q3 onwards on so we expect better run rate 38:17 38 minutes, 17 seconds from Q4 onwards. As far as uh margins are concerned as we have already discussed that you know we have to see 38:24 38 minutes, 24 seconds one or two more quarters to say this can be sustained but it should be too early to say that you know we can permanently sustain on these margins because it 38:32 38 minutes, 32 seconds depends on various sectors product mix bomb cost and other stuff. So uh the realizations surely improved which 38:40 38 minutes, 40 seconds probably helped us you you can see from the gross margins and that happened that has happened uh largely in H1 because of 38:48 38 minutes, 48 seconds the product mix. The product mix keeps on changing depending on the product orders. We also executed some railway tenders for which we are import 38:55 38 minutes, 55 seconds substitute and which comes at a very high realization in Q2. So that has also helped us. So going forward we have to 39:03 39 minutes, 3 seconds see how the product mix will be and then only we can say that you know these margins can be sustained out. 39:11 39 minutes, 11 seconds Uh understood sir and uh I think we had two programs uh lined up uh especially on the PV front uh for North American 39:19 39 minutes, 19 seconds exports. I think we had one to be lined up on Q3 and one was going to start in Q4. And also we had uh also wanted to 39:27 39 minutes, 27 seconds understand on the large gen set crankshaft uh uh business uh that we are going to start in the new plant. So uh 39:35 39 minutes, 35 seconds considering the tariff scenario these programs hold up well right I mean they are on track. 39:41 39 minutes, 41 seconds uh considering this there is only one program for the portable genet uh uh for which we have already done the investment for which which which comes 39:49 39 minutes, 49 seconds under the 50% category for North America for which you know testing is ongoing and uh customer is kind of waiting for 39:57 39 minutes, 57 seconds things to settle down in terms of tariff because at 50% you know they might not be able to kick off the program but it's 40:04 40 minutes, 4 seconds a shift from China so China is also under a high tariff category so we eventually have to see uh you know things going forward on this probably a 40:13 40 minutes, 13 seconds month or so we'll have a better clarity on this program the PV program is going ahead you know as it is there will be 40:20 40 minutes, 20 seconds some drop in terms of the volumes in North America but it's not going to affect the overall situation so we are going ahead with the you know the machining lines and all capacities 40:29 40 minutes, 29 seconds ongoing for this which is expected to start from Q4 of this financial year for largely for Europe for the large 40:38 40 minutes, 38 seconds genet business that you're talking about we have orders is largely from Europe. 40:42 40 minutes, 42 seconds So that's uh completely uh you know uh free from the terrorists. 40:47 40 minutes, 47 seconds Understood. So last question from my side sir uh on the 350 cr I think you said that for the new plant we have we already have 350 cr peranom business of 40:56 40 minutes, 56 seconds orders that we have done. So out of that sir how much would be plain manila machining plane manila forging business 41:04 41 minutes, 4 seconds and forging and machining business. If you can just give some color there. 41:10 41 minutes, 10 seconds Out of this 350 crores uh you can say that uh 250 crores is highly machined and the other 100 crores is you can say 41:19 41 minutes, 19 seconds it's a semi-achined business but everything is machined. 41:24 41 minutes, 24 seconds As for business okay sir. Thank you. I line back in the queue. 41:33 41 minutes, 33 seconds Thank you. The next question is from the line of Aniket Matri from Motila Los. Please go ahead. 41:41 41 minutes, 41 seconds Hi sir. Uh thank you for the opportunity. Uh so just uh quickly on the outlook on exports uh both CVs and 41:48 41 minutes, 48 seconds tractors could you just uh comment what are you hearing from your clients? Uh how can we expect exports to shape up from here? 41:57 41 minutes, 57 seconds uh for domestic or for export any export sir both factors and CVS we have seen exports uh because of weakness in 42:05 42 minutes, 5 seconds exports your uh your revenue has not ramped up uh to the expectation uh so how are you seeing that I mean uh while 42:12 42 minutes, 12 seconds you alluded uh you know uh in your comments that inventory is sort of uh normalizing now but I mean in terms of ramp up how should we look at uh ramp up 42:21 42 minutes, 21 seconds from here in terms of outlook both for second up and for the next year for CVS and practice Yes. So, so besides 42:29 42 minutes, 29 seconds uh you know we we don't have much of exports direct exports for palm products nikit. So we have taken a hit of CV as 42:38 42 minutes, 38 seconds well as the off highway business from exports. As already explained one of the customers we have seen almost a 50% dip in the last two years and uh from almost 42:47 42 minutes, 47 seconds 45 48,000 numbers we we'll be reporting around 24,000 numbers in this calendar year for that customer. It is expected around 36,000 units for next year which 42:56 42 minutes, 56 seconds is kind of 50% and this is substantial business for one of our clients. So there is the demand decrease uh because 43:03 43 minutes, 3 seconds some of these machineries were being exported to Russia and also to US where they have taken a hit in the last two years because of the war situation. Uh 43:12 43 minutes, 12 seconds uh next year probably the numbers are looking better uh because the resultant is both the detocking and on levels. So 43:20 43 minutes, 20 seconds you should be seeing better levels on off highway side in uh uh next financial year. And on the CV side uh the European 43:28 43 minutes, 28 seconds market we have some programs on the European market as of now where and also in Brazil. So and Turkey as well. So 43:36 43 minutes, 36 seconds Brazil and Turkey market uh we have seen uh major dip uh and over there it should be things should be back in track from 43:45 43 minutes, 45 seconds Jan onwards on the CV side in these markets. But overall situation is that 8 to 10% there is a dip and uh uh uh in the European market as well. 43:56 43 minutes, 56 seconds No and on on farm while while we know it's just just about 1% but you do have deemed exports right. Uh so from that 44:04 44 minutes, 4 seconds perspective we got farms. Yeah. Farm revenue gets impacted which is where I was asking from a farm perspective also. 44:13 44 minutes, 13 seconds So yes you're right. We have on the dean export side we have farm revenues where which are done through some of our 44:20 44 minutes, 20 seconds clients where we supply India over there the dip is substantial and the dip is close to 45 or 45% and the revival is 44:28 44 minutes, 28 seconds not yet seen even if we have seen some of the results for some of the large players you know in North America and 44:35 44 minutes, 35 seconds Europe. So as of now the you know for next two quarters you know the the projections that we have are similar to you know what we have seen in the past. 44:45 44 minutes, 45 seconds So no improvement that we are seeing right now from the European farm equipment as well as the North American clients, North American tractor clients 44:53 44 minutes, 53 seconds right now. We should be seeing further but at this point of time it is fairly at a low level. 45:00 45 minutes Sure. And and any expectations that these OEMs are giving out for next year? 45:04 45 minutes, 4 seconds anything that we're hearing from them for the tractor side. Yes. 45:11 45 minutes, 11 seconds So on the commentaries that we have seen from CN Shako and John Deere so they are not too bullish right now for next year 45:18 45 minutes, 18 seconds but you know next two quarters you know they are saying that you know uh it's kind of a rangebound number. So uh you 45:25 45 minutes, 25 seconds know it's kind of a wait and watch uh till March. 45:29 45 minutes, 29 seconds So we have been seeing because ultimately these are the customers where directly or indirectly these parts are being consumed and we have seen the 45:38 45 minutes, 38 seconds number. So you know uh there is uh uh still a decline that we are seeing. 45:46 45 minutes, 46 seconds Understood. And sir uh just one clarification in the last con call in Q1 you had mentioned about a 300 crores uh 45:53 45 minutes, 53 seconds order on the wind side uh uh and and another 184 crews on the data center side. So both these orders are for the 46:02 46 minutes, 2 seconds large 650 cr or these are from existing uh capeex. 46:09 46 minutes, 9 seconds Uh so basically out of the 650 crores there are two lines as I've explained. 46:13 46 minutes, 13 seconds So these all orders are for those lines right. So so this is from those as well. 46:20 46 minutes, 20 seconds Understood. Uh and and just just under clarification you had mention you had mentioned the capex for machining separately right for the 650 crores line 46:28 46 minutes, 28 seconds I missed that part. Uh could you please repeat that? 46:33 46 minutes, 33 seconds Yeah out of the 650 crores some 200 crores of capexes into machining and that 200 crores will come in two phases. 46:41 46 minutes, 41 seconds Once the utilization levels are achieved 70 80% on the line one and uh so basically it's like 550 crores is going 46:48 46 minutes, 48 seconds in first phase out of 550 crores 150 crores is on the capex for the wind and heavy tractor program for the large 46:55 46 minutes, 55 seconds axles and pinions and uh balance 400 cr just towards the large hammer and large hammer and machining line. 47:03 47 minutes, 3 seconds Understood. And just one final clarification sir. Uh this neonet technology that you've talked about uh that is only for wind pinions or that's also for farm equipment. 47:14 47 minutes, 14 seconds Also for the form equipment large actually understood. So so it it works for both. 47:20 47 minutes, 20 seconds Got it sir. Thank you so capacity. Thank you. 47:26 47 minutes, 26 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address questions from all the participants in all in the conference, 47:34 47 minutes, 34 seconds kindly limit the questions to two per participants. Should you have a follow-up question, please rejoin the queue. 47:41 47 minutes, 41 seconds The next question is from the line of Lakshmi Narayan Gpati from Tonga Investments. 47:47 47 minutes, 47 seconds Yeah. Uh thank you. Uh couple of questions. Uh first uh in terms of your uh exports uh mix just want to 47:55 47 minutes, 55 seconds understand what is the mix of u various categories of uh uh vehicles/industrial 48:02 48 minutes, 2 seconds things you actually apply to. Second uh want to understand uh what is the percentage of crankshaft uh in your 48:10 48 minutes, 10 seconds overall revenues for the first uh 6 months and when compared to the previous uh years 6 months and the third want to 48:19 48 minutes, 19 seconds understand u uh from the you know industry point of view uh how are you thinking u uh is it is it there's a 48:27 48 minutes, 27 seconds consolidation in the industry that is taking place or uh it is uh uh you know it is 48:35 48 minutes, 35 seconds it is clear that India would actually win uh uh in the in the entire global scenario when uh we see a lot of 48:43 48 minutes, 43 seconds coaching capacities are actually getting closed in uh some of the developed markets. So I just want to understand how the industry is progressing uh uh 48:51 48 minutes, 51 seconds conceptually um as well as uh practically when you look at in the next uh 6 months to one year. These are my three questions. 49:02 49 minutes, 2 seconds Yes. Thank you. 49:04 49 minutes, 4 seconds So uh I think the first question was the share of sectors within industrials. So 49:11 49 minutes, 11 seconds within industrial the largest within exports. 49:26 49 minutes, 26 seconds Thank you. 49:27 49 minutes, 27 seconds Yeah. In sports we have uh roughly 50% exports for industries and 50% for CV. 49:37 49 minutes, 37 seconds So I hope I'm able to this is what you want this partic 49:48 49 minutes, 48 seconds so the the share for crankshaft for H1 uh last year was 40%. and uh it's almost 49:57 49 minutes, 57 seconds 41% now and on the consolidation side uh yes 50:08 50 minutes, 8 seconds we've been hearing a lot uh that you know we expect that the European industry will consolidate there are a lot of uh plants uh which are on sale 50:18 50 minutes, 18 seconds right now and with very high energy costs and manpower costs the simpler projects uh for which are related to CV 50:26 50 minutes, 26 seconds and PV programs will not sustain in a long-term scenario. That is what our view is and uh the businesses will come 50:33 50 minutes, 33 seconds out and OEMs are now working on reducing their cost advice as well. So that's that's something that you know probably 50:41 50 minutes, 41 seconds will happen on a medium term because projects like this you know move very slowly but that's definitely we will be seeing consolidation happening but 50:50 50 minutes, 50 seconds there'll be some quality businesses that will you know still sustain and work in Europe. So we we are seeing that some of the businesses are doing well as well. 50:59 50 minutes, 59 seconds It's not a con account of all the forging companies but yes uh a lot of companies we are seeing a trend where 51:05 51 minutes, 5 seconds the cost is very high right sorry to interrupt sir actually his line 51:13 51 minutes, 13 seconds got disconnected so can we move on to the next yes okay so the next question is from the 51:20 51 minutes, 20 seconds line of Jesh Gandhi from Oakland cap please go ahead uh hi Ashish congrats on a great set of 51:27 51 minutes, 27 seconds numbers Just cl one clarification first. Uh when we talk of the large gener business from 51:34 51 minutes, 34 seconds EU, uh this was supposed to be catered from 14,000 ton press, right? Uh 51:42 51 minutes, 42 seconds uh no Jes horsepower business. This is not from the 14K line. 51:49 51 minutes, 49 seconds Okay. We have another genet business for one of the clients uh which is uh for the domestic and North America which is 51:57 51 minutes, 57 seconds which is from the 14k line but this is a large order which is on the high horsepower sector. 52:02 52 minutes, 2 seconds Okay. Okay. And I want to state from the earlier business which was from 14,000 per because that also was supposed to be 52:09 52 minutes, 9 seconds that is that has already that has already picked up those projects was already picked up and the 80 crores of business which we have done in H1 that business is also part of it. 52:20 52 minutes, 20 seconds Oh okay that's including so railway and that are part of that 80 crores. Yes. 52:26 52 minutes, 26 seconds Got it. And the second question is on when you're talking of uh uh M&A while 52:33 52 minutes, 33 seconds it may take its time and what we do will only specify uh later but what is our 52:40 52 minutes, 40 seconds basic approach for M&A uh from year on are we looking for addition of customers addition of capacities 52:49 52 minutes, 49 seconds the market entry what what what is uh the basic objective which we are looking at? 52:56 52 minutes, 56 seconds So certainly we are not looking at similar capacities because we are building in capacities and and are going 53:04 53 minutes, 4 seconds into different verticals now. So idea is to enter into a different business within forging space which we are not 53:12 53 minutes, 12 seconds catering. So uh that is the idea which is a niche business. Again we work on niche side and uh will be related with a 53:20 53 minutes, 20 seconds high machining content where the customers are new and can where HL can add value in terms of sourcing of raw material or you know execution in terms 53:28 53 minutes, 28 seconds of machining or and also you know acquiring the technology which currently we don't have. That's all the ideas. 53:38 53 minutes, 38 seconds Okay. And given uh that objective wouldn't we try to say this would be outside India given that uh similar 53:46 53 minutes, 46 seconds businesses in India uh uh either not available or not there. Uh so would be largely outside India. 53:54 53 minutes, 54 seconds Uh at this point of time it'll be too early to say Ganesh but I think uh a quarter or so probably we'll be in a better position to answer. 54:03 54 minutes, 3 seconds Got it. Uh and lastly with respect to uh the 14,000 ton press so u how where are 54:10 54 minutes, 10 seconds we in terms of uh the utilization considering that uh the genet business has started to ramp up. I believe railway business also probably would be 54:19 54 minutes, 19 seconds from 14,000 ton. So where are we in terms of utilization? 54:22 54 minutes, 22 seconds We are doing close to you know around 55 60 55% uh you know levels right now. we can go up to 75% 54:31 54 minutes, 31 seconds uh levels but because of industrial businesses and also the front axle beam business has picked it up for us we have started doing around 2 and a half 54:38 54 minutes, 38 seconds thousand beams a month the expectation was to do around 35,000 units in this year uh we expect that yes you know next year probably we should be doing close 54:46 54 minutes, 46 seconds to 40 45,000 units for a tax axle beams also so the developments are ongoing so I think it's on track 54:54 54 minutes, 54 seconds got great thanks and all the Thank you Janesh. 55:02 55 minutes, 2 seconds Thank you. 55:06 55 minutes, 6 seconds Due to time constant that was the last question. I would now like I would now like to hand the conference over to management for closing comments. Over to you sir. 55:16 55 minutes, 16 seconds Thank you. Thank you everyone for joining the to conclude our quarter 2 and H1 performance underscores the strength of our business fundamentals. 55:25 55 minutes, 25 seconds the effectiveness of our growth strategy and the dedication of our teams in navigating a dynamic environment. We remain confident that our ongoing 55:33 55 minutes, 33 seconds investments in capacity expansion technology and customer relationships will drive sustainable growth and sustained long-term value creation. 55:40 55 minutes, 40 seconds Thank you for your continued support and confidence in Happy Forings Limited. I would like to thank everyone for joining the call. I hope we have been able to 55:48 55 minutes, 48 seconds address all your queries. So for any further information, kindly get in touch with SGA, our investor relation advisers. Thank you once again. 55:57 55 minutes, 57 seconds On behalf of Happy Forings Limited, that concludes this conference. Thank you for joining us and you may not disconnect your lines.