Thank you. Good evening, everyone, and thank you for joining.

FY26 has been truly a landmark year for Aequs, defined by a strong execution, meaningful business expansion, and our IPO, a transformational milestone that marks a new chapter in our journey as a company. Today, we stand as a globally scaled precision manufacturer driven by the combined strength of our aerospace and consumer verticals.

FY26 has firmly validated our platform strategy, showcasing our ability to execute tenaciously and capture our growth opportunities across our portfolio. Our focus on execution is clearly reflected in the financials, with our full-year consolidated revenue growing by 33% to ₹12,304 million.

EBITDA grew 43% to ₹1,545 million, with margins expanding to 13%. We capped off the year with the strongest quarter in Aequs' history, with ₹3,671 million in revenue and 47% year-on-year growth.

Crucially, the performance was unified. Both our aerospace and consumer segments delivered strong growth across the board.

While our financial performance reflected our current momentum, our strategic focus remains firmly on the future. This year, we made significant strides in laying foundation for our next phase of growth, with substantial new investments spanning both our aerospace and consumer segments, and firmly anchoring our long-term manufacturing ambitions in India.

In February 2026, we signed an MOU with the Government of Tamil Nadu to invest ₹1,900 crore over 10 years for a new vertically integrated aerospace manufacturing ecosystem within a new aerospace and defense park at Hosur across 450 acres in the SIPCOT Shoolagiri Industrial Park. This will be India's first fully vertically integrated aero-engine and landing gear components manufacturing ecosystem.

In March 2026, we signed a second MOU with the Government of Karnataka, committing investments of ₹2,856 crore over 5 years across our existing clusters in Belagavi and Hubballi. This covers expansion of our aerospace precision engineering operations in Belagavi and significant capacity enhancement for our consumer segment at our Hubballi manufacturing cluster.

Collectively, these investments accelerate our broader objective of making Aequs and India a premier destination for global aerospace and consumer precision manufacturing. To help execute on our large-scale ambition, we are actively deepening our leadership bench.

We are pleased to have Ravi Kumar Asudani join us as Head of Engineering for Consumer Segment, effective Q1 2027. Ravi brings over 16 years of experience at Apple Inc., where he led global tooling and manufacturing design operations across multiple product lines.

Scaling precision component manufacturing for global consumer electronics OEMs requires a unique combination of engineering depth and operational discipline, and we continue to enhance both. In our journey to continued expansion of our capabilities, we established an advanced materials R&D ecosystem at IIT Dharwad campus.

The facility will focus on cutting-edge material characterization, failure analysis, and manufacturing process simulation. This partnership reflects Aequs' long-term commitment to strengthen India's advanced manufacturing ecosystem through sustained investments in research, innovation, and skill development.

The collaboration will enhance IIT Dharwad's applied research capabilities and industry engagements, apart from enabling Aequs to deliver cutting-edge products to its customers. Now I turn to financial outlook.

As we enter FY27, our financial priorities are clear. First, continue to grow aerospace revenues profitably.

We have an order book and the capacity, the customer relationships to deliver 25% to 30% revenue growth, with EBITDA margins maintained at 20% at the segment level. Second, drive consumer utilization, unlocking the operating leverage embedded in our existing asset base.

Third, move our consumer EBITDA to break-even by Q4 FY27, which will be a major inflection point for our consolidated profitability. At a consolidated level, we are expecting approximately 45% to 50% top-line revenue growth.

More importantly, this growth is highly efficient. We project doubling our operational EBITDA, proving the immense operating leverage embedded in our current business model.

FY27 is about translating our expanded capacity into a significant financial returns. I will let Rajeev walk you through the segment-level mechanics of how our aerospace and consumer divisions have performed and will deliver these numbers.

Before I hand over, I want to take a moment to acknowledge Dinesh Iyer, our Chief Financial Officer, who has informed us of his decision to step down at the end of June 2026 for personal reasons. Dinesh has been an exceptional partner to this organization, and we are grateful for his contribution and wish him the very best.

We are in search for a CFO replacement and will communicate as soon as he or she is appointed. Meanwhile, Harish Bang, whom most of will be in charge of and your single point of contact.

With that, over to Rajeev Kaul, Co-founder, Managing Director of Aequs.

Thank you, Aravind. Good evening to all of you.

It is a pleasure to speak with you again as we close out what has been a very significant year for Aequs operationally. Our manufacturing footprint spans 2.22 million square feet across three integrated clusters in India: Belagavi, Hubballi, and Koppal, supported by facilities in Cholet, France, and Paris, Texas, in the United States.

Our installed annual capacity has grown to 4.70 million machining and molding hours on an annualized basis. We scaled our manufacturing operations steadily throughout the year to support the new and existing programs, closing FY26 with a robust footprint of 434 CNC machines and 179 molding machines.

This represents a disciplined expansion of our manufacturing muscle. We evaluate capacity requirements continuously and keep adding based on our requirements.

Turning to our aerospace segment, our operational momentum translated into exceptional financial delivery. The vertical delivered revenue of ₹3,040 million in Q4 and closed the full year at ₹10,464 million, representing a robust 27% growth year-on-year.

Beyond the revenue growth, what is significant is our portfolio expansion. We added 433 new parts in Q4 alone, taking our total aerospace portfolio to 5,654 SKUs, with a 26% increase in the portfolio since last year.

This represents the breadth and complexity of our engagement with global OEMs. Each of these SKUs represents a rigorous qualification cycle, a secured long-term contract, and a deep-rooted relationship with our customers, acting as a high entry barrier to others.

As a result, our order book in aerospace stood at robust $889 million. We are also actively moving up the value chain into landing gear and engine components, where integrated forging, machining, and surface treatment capabilities deliver significant competitive advantage.

These are higher complexity, higher value products that command better margins and deeper customer relationships. Moving to our consumer segment, the business is scaling steadily, which is reflected in its growing contribution to our overall top line.

In Q4, consumer accounted for 17% of our total revenue, up from just 5% a year ago. For the full year, its contribution grew from 11% in FY25 to 15% in full-year basis in FY26.

This growth aligns with our planned transition from pilot production to commercial ramp-up. Based on the increasing requirements from our customer, we are expanding capacity.

This will feed directly into our operational targets for FY27. Our primary focus this year will be driving capacity utilization from 23% today to a target of 40% to 50% by the year-end.

Talking of our consumer business, as you may be aware, Hasbro has informed us that it has revised its manufacturing and sourcing strategy and told us they will stop raising POs to us. While this decision was unexpected, it will not impact the overall growth of the business.

We continue serving others equally large and strategic customers. Looking at the broader consolidated picture, the heavy depreciation load from these strategic consumer investments will keep us—keep our overall PAT negative for much of the year.

However, as our consumer volumes ramp up and our aerospace segment continues its strong performance, we fully expect to see consolidated PAT hit break-even by H1 FY28. With that, I will now hand over the call to Dinesh Iyer, our CFO, for a detailed review of our financials.

Thank you, Rajeev. Good evening, everyone.

I will take you through the key financial highlights for Q4 and the full year FY26. Q4 delivered ₹3,671 million in revenue, INR 3,671 million in revenue, our highest quarterly revenue ever.

This reflects continued ramp-up in aerospace programs and accelerating production in consumer segment. EBITDA was INR 321 million at 9% margin.

The margin compression from Q3 reflects the timing of consumer electronics capacity coming fully online. In Q4, we saw the full run rate of depreciation on consumer capex alongside the full operating costs, while the plant is still operating at low utilization.

This is the expected profile during the manufacturing ramp-up phase. Reported PAT for Q4 was a loss of 541 million.

This includes higher depreciation from consumer capex and increased tax provisions on the profit from aerospace segment. Our underlying operational trajectory continues to improve.

For the full year, consolidated revenue grew 33% to 12,304 million rupees. EBITDA grew 43% to 1,545 million rupees, with margins at 13%, a 100 basis point improvement from 12% in FY25.

Full-year PAT was a loss of 1,133 million rupees. The negative PAT margin reduced from -11% in FY25 to -9% in FY26, a 200 basis point improvement.

Including our proportionate share of the joint ventures, consolidated full-year revenue was 13,466 million rupees, up 34% year-on-year, with EBITDA of 1,830 million rupees, reflecting a growth of 42% year-on-year at a margin of 14%. For Q4, revenue was 3,984 million rupees, with 45% growth year-on-year, with EBITDA of 417 million rupees at a margin of 10%.

Coming to detailed segment performance, the aerospace segment delivered a very strong performance, with full-year revenue of 10,464 million rupees, up 27% year-on-year, and EBITDA was 2,813 million rupees, up 76% year-on-year. For Q4, aerospace segment revenue was 3,040 million rupees, growing 29% year-on-year, and EBITDA was 1,010 million rupees, reflecting a growth of over 100%.

Aerospace segment ROCE for FY26 was 20%, up from 14% in FY25, which is in line with our expectation and demonstrates our ability to scale efficiently. The consumer segment contributed full-year revenue of 1,840 million rupees, up 84% year-on-year.

The consumer segment EBITDA loss was 783 million rupees for the full year, a 173% increase year-on-year, which reflects our planned investment to build capacity at scale. In Q4, the revenue was 631 million rupees, with EBITDA loss of 473 million rupees.

Q4 was the first quarter where all manufacturing costs hit simultaneously with new capacity that was recently commissioned. The consumer electronics team is moving through the learning curve of a new production environment.

This is standard in manufacturing ramp-up phase. As utilization improves from 23% to our 40% to 50% target for FY27, the depreciation and fixed costs will be absorbed across higher volumes, and margins will recover sharply.

Turning to the balance sheet, total assets stood at 26,905 million rupees as of March 31st, 2026, compared to 18,598 million rupees a year ago. This increase reflects the significant capital invested in consumer electronics capacity during the year, increased working capital in line with revenue growth, and retained IPO proceeds.

Our net debt-to-equity ratio was 0.23 as of March 31st, 2026, an improvement from 0.99x at the end of FY25, which shows that we are well-capitalized for the next phase of growth. Fixed asset turnover moderated to 1.18x in FY26 from 1.84x in FY25.

This is expected as we have added significant consumer electronics assets that are not yet generating proportionate revenues. As utilization improves through FY27, this ratio will recover meaningfully.

Net working capital days increased to 151 days in FY26 from 132 days in FY25, which was primarily driven by growth in revenues. Cash and cash equivalents stood at 3,015 million rupees as at March 31st, 2026, compared to 609 million rupees at the end of FY25.

Finally, on a personal note, I announced earlier this year that I will be stepping down as CFO at Aequs at the end of June 2026. It's been a great pleasure to serve Aequs through the IPO and in this wonderful journey of becoming a listed company.

The business is in an excellent position, well-capitalized, growing strongly, and with a management team that is deeply committed to delivering on our promises to shareholders. Thank you.

With that, over to the moderator to open the floor for questions.

My question is regarding capex, segmental capex. What are the planned capex for FY27, '28 on both the segments separately?

On the second question, after discontinuation with Hasbro on the toys business, any roadmap of ramp-up expected with Mattel?

In our aerospace segment, we have planned about ₹160 crore approx, and in our consumer segment, we have planned about ₹500 crore approx for the full year FY27. On Hasbro, I would have—

On the second question, this is Rajeev here. Yes, we have signed a long-term agreement with Mattel, and both sides are fully committed to scaling volumes.

We also expect actually Mattel volumes to absorb the capacity impact from Hasbro. More broadly, we continue to engage with large strategic customers across the consumer segment and remain confident that overall growth of the business will not be materially impacted.

Okay. Sir, any PLI income booked for FY26?

No.

FY27 will be our first year where we will be eligible for the PLI.

Okay. Broadly your guidance across revenue, margins, and capex you have given, on revenue and margins?

On aerospace, as Aravind mentioned earlier, we are expecting a growth of 25% to 30% and maintaining the EBITDA numbers at about 20% level. On consumer, we see a revenue growth of about 125% to 150%, and Q4 is the quarter wherein we will hit the EBITDA break-even.

Okay. Thank you.

That's it from my side.

Thanks for the opportunity for this question. Sir, can you just elaborate because in let's say March and let's say the last week of Feb, for example, probably we may have some impacts from the West Asia crisis, probably due to the closure of airspace and probably also due to the fact that air freights have also significantly increased.

Would that be a right assessment, and if that had happened, what sort of margin impacts we would have seen? What I'm trying to understand is if this one-off events let's say were not there, what would have been our fundamental margins?

To

this last quarter, I would say we are not seeing the significant impact on the margin perspective because our material prices and all are long-term agreements. It's more of a supply constraints we saw, and logistics costs have gone up a bit, but that's not a material in our view for a business.

We have a long-term agreements that takes care of the material. Logistics side, only thing what we are seeing is a expansion of the working capital.

We are bringing inventory almost four to six weeks ahead of the time so that we don't have any problem in delivering to our customer commitments in aerospace predominantly. This is mostly on the aerospace side.

On the consumer side, plastics especially, material prices are shot up, but because we have back-to-back agreement with the customers, that has been a pass-through to customers. Performance-wise it has not been impact, more of a ability to stock material well ahead of the requirement has one of the driver for our inventory.

Number of working capital days also increase in the quarter.

Would it be fair to say that the large build-up of working capital that we saw in fourth quarter, so that is predominantly on aerospace and because of the excess inventory you need to carry because of the crisis at the moment?

Yes. We are taking precaution to do this most probably another two quarters till we see the stabilization because generally the logistics has increased by five to six weeks what we are seeing, sea logistics.

Air has gone up by six days to eight days, somewhere in that range.

Okay. Let's say if we have some sort of a normalization eventually, we should see let's say the working capital let's say moderate.

Would that be a fair sense, like this build-up?

Working capital has impacted, right? We saw some of the numbers.

We went from 130 days to 150-something.

Okay. Just for sake of clarity for everyone, I know you have provided the exports and domestic breakup, but I also understand most of your domestic sales are also sort of deemed exports or let's say USD denominated.

What percentage of your overall sales would be let's say USD linked even that the currency is depreciating so far?

Yes. Including deemed exports, it would be about 93% to 94% overall in US dollar.

Sir. That was all the inputs from my side.

Thank you.

Hello, sir. Sir, can you help understand what is the current gross block in consumer electronics?

At a consumer overall level, we have a gross block about ₹830 crore approx.

You are adding ₹500 crores to that?

That's correct.

Got it. At total consumer electronics, we can expect a 2x asset turn, right, at peak utilization?

Sorry, can you repeat that?

At peak utilization, we can expect a 2x asset turn in the consumer electronics, right?

It should be closer to 1.5 level in the consumer electronics side. Overall consumer side, that's what we should—

Understood. The last question is in FY26 in aerospace we have delivered an EBITDA margin of 27%, and now for next year we are guiding at 20%.

Just can you help understand the re-conciliation? So

27% is the segment EBITDA, which includes other income and it excludes the unallocated corporate costs. Okay.

Like-to-like what would be that?

We continue to drive 20% EBITDA margin, excluding these two elements.

Understood. Okay.

Thank you, sir.

Thank you for the opportunity. Am I audible?

Yes. Yes.

Basically on the aerospace side, I want to understand that we are delivering quite good margins from last two quarters. Also we have added 1,000 approx parts.

Is it because of the high margin products we are getting this margin, and going forward, can we expect the margins be improved with the new products adding in the aerospace segment?

Look, this is a normal course of business of complexity what we do, and we expect this margins to be there as we grow and our ability to execute more number of parts. As we increase our vertical integration into engine component side, we do expect some margin expansion.

Aerostructures predominantly, which is what the number of parts what we have today, are force majorly in line with what we are delivering right now, 20% operating EBITDA level is our focus area.

Understood. On the consumer side, as we see that we have already did a quite good capex and we are also planning to do capex in FY27.

As I look at the current utilization of consumer, it's 23%. Can you make me understand that why we are going with additional capex when we are already underutilized at 23%?

As we are seeing the additional products getting added in the consumer electronics, or if you can give me the clarity on that. Also if you can provide me in terms of what exactly we are doing on the consumer electronics side and what volumes we are making currently and it can go to at what extent?

Look, the customer wants us to have a meaningful share of their requirements, and together we are committed to scale up the operations and absorb more work in India. This additional capital is basically driven by clear customer demand and the opportunity to capture the meaningful share of the customer India manufacturing requirement.

The current asset base, still in the ramp-up phase, we're at 23% utilization, it will go up. We continue to expand that make sure that we are going to be a significant supplier to this customer in the country.

If we don't do it, then customer will see some alternates otherwise, because it's important that we scale and deliver their needs. There is a timeline in which we have to do this, and we will continue to make sure that we are aligned on that.

We are both committed to make sure that utilization goes up, and that's why we guided our EBITDA break-even in the Q4.

What margins we can expect at a optimum utilization from the consumer side? Because as I see— Consumer,

we have guided the similar margins as aerospace. Overall 20% EBITDA is our long-term goal.

Okay. As I see on the Q4 side, there is a increase in the other expenses.

Can you give me understanding why there is a sudden increase in Q4 other expenses? Is there any particular expense which you want to mention?

As Dinesh mentioned earlier, Q4 was the first quarter where all the costs pertaining to the consumer capacity came in since we commissioned the plant and started commercial production in Q3. The increase is across all the expenses what we see in Q4.

Okay. If you can give me the clarity of ROCE which can we expected from the consumer segment going forward at optimum utilization with all the additional capex we are doing?

At a steady-state basis, we expect same ROCEs as we do in our aerospace segment.

Okay. That's all from my side.

Thank you.

Yes, hi. Thanks for the opportunity.

My question was on the consumer electronics segment. In the earlier call, you had referred to the client asking you to expand your capacity.

This time around, you are talking about increasing the utilization and achieving EBITDA break-even. Does this imply that over the next few quarters, your focus will be more on ramping up rather than demanding more from the customer in terms of more product lines, etc.?

No,

obviously the focus always is to maximize our utilization. At the same time, we're also investing this year as Harish gave.

We are investing about ₹500 crore new capital into the consumer business. It's a combination.

We're not changing our objective. Obviously whatever assets we have, we want to maximize the utilization.

Understood. Just to understand this in more detail, if you're putting already ₹500 crore more capex on top of what you've done.

We're looking at your peak utilization of 1.5x, even if I take half of that, just on this ₹500 crore incremental capex, half of that 1.5x should give you closer to ₹350 crores kind of number, right? I'm just trying to understand, is that the kind of top line that you're likely to see from the consumer electronics part in the next year also?

We are guided towards going to 50% utilization. That's what it is in terms of capacity-wise.

We're going at 125% level this year from a consumer business, predominantly driven by the consumer electronics.

Understood. Thank you.

Yeah. Thank you.

My question is related to the aerospace revenue growth potential. While we are targeting a 20 to 25% kind of growth in FY27, looking at your order book position, which is roughly around eight to nine times of last year's revenue, and we are adding more revenues in terms of engine components and other verticals over the coming years.

What kind of growth, CAGR we can expect from a longer-term perspective? I'm talking about 5 to 10% years perspective.

Can we see the similar rate of 25% CAGR for the next 10 years, or it is not the case? If you can give some clarity.

Yeah. Thank you.

Yeah. Look, we have given the guidance based on the customer demand and order book.

There are not many aerospace companies in the world at our size are growing at this rate organically. It's a complex business to grow number of components, adding hundreds of components every month and also adding machines to support that, FAIs and everything.

We feel very strongly this growth rate is achievable because we have achieved and we have visibility. You specifically asked about the engine components and everything, that is not going to be impacting much on this fiscal year.

This is a long term. It's going to be starting FY28, we'll start seeing some of this coming into our revenue.

Far this year, guidance is concerned, pretty much what we have aerostructures focused, the business growth coming in. We will add some engine side, but it is predominantly continue to be our core what has been in Belagavi aerospace cluster.

Opportunities there.

We see a multi-year opportunity to grow this business at this stage.

At this rate, you're saying?

Yeah. We don't see any reason.

20%-plus we have guided in the past in the long term, and we are improved that at this stage.

With a similar rate of EBITDA margin which you're guiding?

That has been our guidance always.

Okay. Thank you so much.

Hi. Good evening, sir.

Thank you for the opportunity. Just I had two questions.

We've been guiding that consumer margins will be probably heading towards the aerospace margins. Just wanted to understand, when we see Chinese precedent for probably the products, we see that probably the margin compression has happened over 8 to 10-year cycle.

Just wanted to understand, will we also have a similar trajectory after we achieve those margins? Second is, wanted to understand that in DRHP, we had probably flagged that critical equipments dependency on China, and lately we've been hearing some feedback that Chinese have been restricting lot of equipments.

Are we facing any issues in getting those equipments? If there's any non-Chinese vendors, have we found any non-Chinese alternate vendors for the same?

Look, from the consumer electronics side, we are in the component manufacturing business, and we feel confident of our capital and value addition what we do in this products. We should be able to sustain our EBITDA margins in a long run once we get maturity in the business.

We don't see that as a concern. There are suppliers in China who continue to do this, and I don't think we have any concerns about that, our ability to sustain those margins because it reflects the value add we do on the products and the components.

It's not like assembly business. That's what I want to bring the differentiation and communicate to you.

It's a highly complex, huge amount of value add on this products what we do in-house. That's a big differentiator.

Coming down to the China geopolitical issues, equipment, look, we have gone through some of these challenges in the past. It's continues to evolve over a period of time.

At the same time, we're working with customer always to find alternate different geographic location, including India. It takes time to get the suppliers developed and qualified for this kind of equipment.

This has happened over decades in China, and it won't happen overnight here. We just need to be going through that process, working with the customer, and it's evolution.

Thank you so much, sir. All the best.

Thank you.

Yes. Yeah.

Sir, I want to understand the split of revenue between the three verticals within the consumer portfolio: consumer electronics, plastic, and durable. Can you throw some light on that?

We essentially track at consumer segment level, and the numbers what we are given is at a overall consumer level. Consumer durables is a joint venture, which doesn't get consolidated in the consumer segment, since it's a 50-50 JV.

Okay. Understood, sir.

Next question, sir, on the plastic, particularly on the toys part of it. Do we own the IP for this product, or we have some sort of a partnership with some other brand who are we share in terms of a design in plastic division?

See,

we are in a contract manufacturing, we only manufacture for brands, we don't own any IPs.

We might have process IPs. We might have developed certain processes to do some things, but we don't really patent them.

That's more of internal processes, IP what you consider.

Understood, sir. Sir, I just one more question on the long-term strategy.

I just want to understand what sort of dependency this consumer whole division has on aerospace part. That is one first part of the question.

Second, are we looking into say 5 year or 10 years down the line this whole consumer portfolio to be spin-off from the core business? Why I'm asking this because, sir, if you have a two separate line of business merging on the same entity, right, we get a holdco holding company discount at overall level, which doesn't let us rerated to the peers that you have in aerospace.

Just want to understand the whole strategy behind making it within the same company.

Look, we are building a precision manufacturing platform here. The verticals are more of a capability, certain specific to products, but we have a common for example, we have CNC machines in both the places: consumer side and aerospace side.

That's like a precision manufacturing piece. Similarly, injection molding will go both the sides.

I think it is not a two business holdco discount. That is not what we're talking here.

We are trying to build capability here, a platform here, so that we can scale this in a right way.

Okay. Sir, if I understood this correctly, just a follow-up question.

The same CNC, let's say, aerospace interior that we builded, the dashboard, plastic molds, that's the same CNC machine we're utilizing for say plastic toys? Is that a fair understanding of the whole process?

No, CNC machine is just machining happens on each of these products. You've got to come and see at some point in time, visit our facilities when next time visit happens, reach out to our investor relationship, then you get to see capabilities, differentiation, and also commonality.

Okay. Product

lines are different— Sorry. Just one more clarification to your comment.

CNC machine is for metal, it's not in toys, just want to clarify. Molding machine is for toys, just to clarify.

Yes, sir. Sorry.

I meant molding machine, sir. Like molding machine that we use for aerospace are different lines, right, all together?

When we talk about toys and it is separate, right? No.

Again, let me clarify. CNC machines is used for metals, which is what we use in aerospace and consumer electronics, which Aravind just mentioned.

For toys, which is plastics, it is molding machines. These are very, very different machines.

I hope that helps. What Aravind was clarifying was the nature of work is precision manufacturing.

That is the common platform we're building. Industries that are served are aerospace, consumer electronics, and so on.

Is that helpful?

Yes. Yes, sir.

Thank you. Thank you for the opportunity.

Sir, I have a question on raw materials. I'll try to break this down in three parts.

Part one, we understand that procurement of raw materials like titanium and superalloys specially typically involves longer lead times. Could you please help us quantify the usual lead time for sourcing such metals, and how far in advance you typically plan and hold inventory?

On the second part, is there a meaningful difference in procurement cycle and inventory planning between aero-engine and aerostructure business? Lastly, given the West Asia crisis, are you seeing any disruption or taking a different approach to sourcing and inventory build-up compared to the normal strategy?

Okay. Okay.

Titanium and superalloys, some of the steels, for example, in fact right now steels have the one of the longest lead times in the industry. Some of specific steels as high as we're talking 65 weeks to 75 weeks lead times.

Titanium typically is a 52 weeks lead time. We have to plan.

We can always buy a spot, but the cost is going to be prohibitive. It's all about planning and executing.

The procurement strategy is all about making sure that customer gives you a right demand, and you plan your procurement based on that. Obviously these what you mentioned your third question of current disruptions, geopolitical West Asia issues, what we are seeing, are all impacting.

That does disrupt. That's why we always have certain amount of material covered before the beginning of the quarter.

In this kind of situations, we proactively cover a little more, maybe 125% of our needs in a quarter, which may spill over to the next quarter demand also. We may have been typically 70% in the past in a beginning of the quarter.

We have to go through some strategy changes to address this, and it costs us working capital. At least we are making sure the customer deliveries are there, and we're protecting our customer needs.

Okay. Sir, on difference between aero-engine and aerostructure raw material usage?

Look,

we are dealing with almost every material today, and most of the time the material is enabled by the customer in terms of where to buy. It's more of driven by that.

It's just a different process.

Okay. Thank you.

Yeah.

Hello. Am I audible, sir?

Yes.

Yes. Yes.

Thank you so much, sir, for this opportunity. Sir, we've seen Q4 the depreciation impact, and given that we're planning for the capex in FY27, how should we look at the overall run rate for depreciation and interest for FY27?

Yeah. Q4 our depreciation was about ₹45 or ₹46 crore approximately.

That'll be the run rate, plus the additions during the year. There'll be some addition on the depreciation for the capacity enhancement what we are doing in both the segments.

On the interest,

yeah. Sorry.

Interest, we will see a reduction in the interest as compared to previous year.

Okay. You mentioned, sir, that the steady-state margins for the consumer business can be 18 to 20%.

Any sort of rough timelines as to when we can reach that, and what sort of margins can we target for this business in FY28? It's

pretty much driven by the utilization. When you get to 50% our expectation is to go to 40 to 50% this year.

When we get to somewhere around 75% level utilization, we start seeing the margin levels at that level. Journey continues.

Okay. This 18 to 20% can be seen at 75 75 to 80% utilization.

Yeah. Okay.

Okay. That is it from my side.

Thank you, sir, and all the best.

Thank you.

Am I audible, sir?

Yes.

Sir, my first question is if we just look at global consumer electronics supply chains, given the quality control hurdles, how Chinese manufacturers have excelled at it over a 15 to 20-year time frame, if you could just share your capabilities or your rejection rates or yields in this segment and how do you plan to scale up? Will we see significant improvement in FY27 and FY28?

That's my first question. My second question is over a 3-year time frame, how should one look at capital?

Will we see, I would assume that you would need probably ₹1,500 crores of capex over 3 years, how do we plan to fund this capex? These are my two questions, sir.

On the capex front, I will answer. Essentially for FY27, we will leverage borrowings and also some bit of internal accruals to fund the planned capex.

See,

with respect to your question on the yield perspective, we cannot comment on the specific yield metrics as these are customer confidential. However, the consumer electronic operations are progressing through the normal learning curve.

Currently, we are going through a normal learning curve of production environment, and our focus is currently improving utilization, process maturity, quality, and operating efficiency as volume increases, volume scales. Were you able to hear us,

Yes, that answers my question. Thank you so much.

Thank you.

Hello. Yeah.

Thanks for the opportunity again. I had a question on the aerospace segment.

In this segment, since you have surface treatment capabilities, which some of your domestic competitors may not have, and which might help you to deliver more integrated and larger products, how do you see that helping you in the next few years in terms of winning more SKUs and expanding this part of the business? Thank you.

Look, this is a very integral part of our business. In fact, we not only support ourselves, our own requirements, we also support rest of the market in India.

Our joint venture with Magellan Aerospace, API, is part of our JVs, and they perform very well as they're in line with our overall core aerospace business. We feel very strongly and this helps us to deliver the new parts at a rate which nobody else does in region, what I would say.

For that matter, globally, I don't know how many suppliers deliver 100-plus, 150 parts per month.

Uh-huh.

That's a definite moat for us as a company. We have invested over the last 15 years to get there.

Where do you see that translating into, see, because you have this capability to deliver probably in a faster turnaround time and maybe to get into more integrated larger product parts, etc. Where do you see that playing out over the next few years?

Do you think your customers are beginning to take notice of that and giving you more orders which reflect this capability?

We are seeing our order book growing faster than what we have done in the past. It's definitely helping us, and also we are adding more parts on a quarterly basis.

That all reflection of our performance to our customers, ability to absorb and also same time deliver.

Understood. Thank you.

Thank you.

Hi. Thank you for the opportunity.

Am I audible?

Is it clear now? Hello?

Is it audible now?

This is much better, sir. Yes, please go ahead.

I have one question on the consumer segment. As we've got to know that consumer revenue share has grown meaningfully from almost 5% to 17% from last year as we see, which is obviously a significant scale-up.

However, we still see that the segment is still EBITDA loss-making. As we understood that Hasbro has exited as a client and recently it has diversified with Mattel.

Given this backdrop and alongside the capex expansion which has been done, how confident the management is on the consumer break-even which it was mentioned today? Is there any path to break-even?

Yeah.

Hi, this is Dinesh here. To your question, I think like we covered in the earlier call, just to reiterate, Q4 was the first quarter where all the manufacturing costs hit us in the consumer electronics business because the full capacity was commissioned towards the end of Q3.

Q4 is the first time where the entire cost, all the operational costs, depreciation, everything has hit us. This is the standard process in any ramp phase.

There's a date on which you start commercial production, all the costs start hitting. As we mentioned earlier, as utilization improves from 23% to 40 to 50%, the absorption of depreciation and fixed costs will be significant through the higher volumes, and margins will recover sharply, which is why we have guided that in Q4 FY27 we should be at EBITDA break-even.

I hope that addresses your question.

Thank you so much.

Good evening, sir. My question is on the consumer segment.

To an earlier participant, you had mentioned that the current gross block is ₹830 crores and we are going to add ₹500 in the subsequent years, that makes it ₹1,330 crores. You had also mentioned that the asset turns will be 1.5.

That gives a turnover of ₹2,000 crores in the future. My question is, when do we envisage to hit that number ballpark, sir?

Most probably we'll see that more in '29. 2029?

Okay.

Okay. That was my only question, sir.

Thank you.

Thank you for the opportunity, sir. Sir, on the aerospace side, I want to understand that as we have our entity in France and even in USA, and can you tell me how this both entities are contributing in our aerospace segment?

Because as per my understanding, it's being quite underutilized the capacities are. Are we expecting this two capacities getting ramped up in coming quarters?

If you can make me understand what exactly are we doing in the France and USA unit?

See, in the North America the US and the US basically is predominantly working for the US ITAR, US defense piece. In the France, we work on engine and landing gear component.

We are not adding any any capacity actually there. Our whole focus of adding capacity is only in India.

These sites are basically to support us bring like France helps us bring our engine and landing gear capability, and North America keeps us doing low like there are a lot of programs where they are low volumes and everything and supporting also the US defense side. These are the one.

That is our predominant focus from the manufacturing perspective in these regions right now.

Do we see any—

On the utilization—yeah, Rajeev.

In the utilization perspective, typically in these regions, it is not driven from the machining hours the way what we see in India. Western region, utilization driven by the number of people hours that actually drives the utilization.

We normally run these utilization, if we see from the capacity, is a single shift basis. That's how we operate.

The right way to look at the utilization is the people hours there.

Because of the system where the way it has been published, it still measures on the machine

hours.

That's why it looks lower.

Got it. Sir, as we say that we are wholly vertically integrated facility in the aerospace side, want to understand that in the aerostructures where majorly we serve, do this vertically integrated having providing us benefit on the margin side, or we are making the same margins as any other player in the same part like aerostructures are making?

Or do we see any improvement in the margin because of our advantage having vertically integrated?

We believe we have right level of margins for this business, and at the rate at which scaling, obviously if we increase our margin, our win rate might come down. Those are all the competitive environment globally we play.

It's a commercial call where we feel we're achieving the right level of ROCEs, right level of growth. That's a combination which we believe it's a right number where we are.

We feel confident to continue to grow at this rate. Also just to add, I think the way you should look at it, and just to highlight, right, when we build an ecosystem, I think the intent is to give a solution to the customer.

Margin is one element, but the ability for the customer to give more and more work, right, in an integrated ecosystem within a single zone, and we mentioned this in earlier calls also, there are increasingly requirements of ESG where the parts should not travel. All these are solutions where within one zone in Belgaum we are able to service, and these are the competitive advantage that we get where our right to win business is higher.

Margin is one element, but our ability to grow and get deeper into the customer. For example, this engine ecosystem that we are building, again the success that we have had here gives the customer confidence to help us build there as well.

What you have to look at it is that this is a very long-term relationship with a very large tail of order book, and our ability to win this and increase our share of customer wallet is what is important.

Thank you. That's all.

Hi, sir. Thank you for giving me this opportunity.

My question is focused on the funding. Firstly, I just wanted to understand this ₹2,800 ₹2,800 crore in Karnataka, that is cumulative, or it's a new capex that we are planning over 5 years?

It's over next 5 years investment.

Okay. As for consumer division, we are planning ₹500 crores this year.

Are there any guidance across next say 5 years what we are planning on investing there?

I think we can't really split that data, which is why directionally ₹2,800 crores-plus is the investment. Like we have mentioned, this is across our Belgaum and Hubli clusters.

Like you said, this year like Harish mentioned earlier also, ₹530 crore roughly, and ₹160 crore in aerospace. If you see over 5 years, you'll see some similar pattern of investment.

Fair enough. My last part would be around funding of this capex.

Can you just throw some light on it? I understand ₹660 crores this year you're planning through internal approvals.

How exactly you are planning for the rest, and how we plan on going about that?

As I mentioned earlier, we'll be leveraging debt to kind of fund this capex along with internal accruals.

Can you just give a break down on that if possible?

Take it offline. Yeah.

Okay.

Thank you. Can take it offline.

Okay.

Okay. Thank you, everyone.

Appreciate your time being part of this call, and please feel free to reach out to our team for any further questions. Thank you.

Thank you.

Thank you.