Good afternoon, ladies and gentlemen, and thank you for participating in our analyst call. I have with me Kedar Dixit, Rajagopal, Subodh Tandale, and Amitabh, and Chinmay.

We're here to answer your questions, and I'll first request Kedar to take you through the commentary of the quarter, and then we can move to Q&A.

Good afternoon everyone. I'll just take you through the highlights for the quarter.

In quarter one, the standalone revenues were at ₹2,347 crore, which was up by 11.5%. EBITDA stood at ₹614 crore, which was up 4.5% YoY, resulting in EBITDA margin of 26.2%.

This 26.2% bore the impact of escalation in energy prices and other input costs and logistics. The overall cost impact of these costs was about 160 basis points on our EBITDA margin, and we continue to work on the recovery of these indirect cost increases with our customers.

Normalized for this impact, our EBITDA margin would have been stood at almost 28% in quarter one. Q1 standalone also included exceptional item of ₹24 crore towards consultancy charges for the BF-CDP restructuring exercise which we have initiated.

The YoY performance saw an all-round improvement in exports and strong execution in defense. Q1 FY27 was the second straight quarter of recovery in export revenue, and this momentum continues.

Q1 27 consolidated revenue stood at ₹4,640 crore, which was up 18.7% on a YoY basis. EBITDA was at ₹752 crore, 10.3% up vis-a-vis last year's same quarter, with EBITDA margins of 16.2%.

Our Indian subsidiaries posted a strong performance during this quarter. Kalyani Strategic Systems, which is our defense arm, recorded a strong operating performance driven by higher realization and better product mix.

JS Auto Cast, which is our casting outfit, has also had a good quarter with revenue and EBITDA growing 20% and 30% respectively on a YoY basis. Consol balance sheet remains strong with net debt-to-equity ratio of 0.45.

During the quarter, company has secured new orders across business, with forging business recording new orders of ₹522 crore, defense ₹681 crore, and ferrous casting of around ₹150 crore during the quarter. The outstanding order book in defense now stands at ₹11,196 crore as of end of the quarter.

Talking about overseas business, despite a difficult quarter, the European business recorded a positive EBITDA. It saw revenue of ₹1,074 crore and EBITDA of ₹30 crore, resulting in a margin of around 3%.

US revenues were at ₹461 crore with an EBITDA loss of ₹4 crore. This was impacted mainly because of the breakdown of a couple of presses in our steel operations.

Now it has been fixed, and recovery is expected in this quarter, this is Q2. On the restructuring process of Bharat Forge CDP, which is the steel business in Germany, is on track, and we estimate to complete the restructuring by end of calendar 2027.

We have taken impact of about 30 million towards the safe restructuring. This is not a cash outflow; the cash outflow will happen post 12 months only, and we are on track as far as our restructuring exercise is concerned.

Now I will hand over to Amit sir for his comments.

Ladies and gentlemen, on the whole, I would say Q1 was a reasonable quarter given the operating environment we were in. There were a lot of challenges, especially the most unexpected and difficult challenge was the one on manpower, which once the Iran war started and the LPG crisis hit, a lot of the contract and let's say migrant labor all traveled back to their home locations, and this is not so much of an indirect impact on us, but a lot of steel companies and other sub-suppliers, etc., faced a lot of issues because of this.

I think despite this and the challenges even on energy, our teams managed the production schedules quite well. We've had a strong business sentiment in North America driven by higher corporate capex, which is boosting demand for construction, mining and data center, and power systems businesses.

This morning, the US government and the president announced a massive plan to restart the mining economy in the US, starting right from setting up programs for training people for these kinds of businesses in community colleges and universities. This should be something that gives a sustained boom to the US if it continues.

On the defense side, I would say that we have been present on land systems and on aerial systems, and now we have made a big breakthrough on the marine systems. We won a large new order for marine gas turbine generators for the Kolkata-class ships with the Ministry of Defence and the naval shipyards.

This is the largest order we have won to date on naval systems, and as our product range in turbines grows, and especially on the complementary naval systems side, we expect the navy to become a very large customer for us, especially with the announcement of the 140 new ships that are going to be built. We expect the defense business to expand its breadth and depth across many more products with many more applications rolling out.

Our new defense Jejuri facility will enter serial production this year, and it will play a major role in the deliveries of ATAGS and the CQB carbine to the Indian armed forces. On the aerospace side, our business saw record wins in '26.

Our team was at the Farnborough Airshow, where we had a lot of positive engagement, and I think once our ring mill in Baramati starts in Q4, it will lead to a further step jump in increase in production. Similarly, when our new forging facility in Baramati comes online, it will also give a big boost to production for our customers in the high horsepower engine and power generation sector, companies that produce engines in the range of 500 to 5,000 horsepower or so.

This is a very important sector for us, and it's a sector where we're paying a lot of attention and making large investments to grow this business. This is a business that is growing because of: A, migration of manufacturing to India from Europe and other locations; and dramatic increase in demand for infrastructure-based assets in the build-out and roll-out of infrastructure in India.

Talking about our castings business, our ferrous casting business continues to perform well. I think we're on track to triple the revenue of the business since the time we bought it.

The run rate should hit that by the end of this year. I think besides the size of the revenue, it's also the quality of the revenue.

We've added a lot more value addition. We've added a lot of new high-volume products as well and doing a lot more machining.

I think this business is also growing very nicely and is going to really add a lot to what we can offer to our customers. For example, the stake that we acquired in company called Fortuna is also going to allow us to service more of the large engine customers because they make conrods for them, it allows us to service them with more products and meet their needs locally through a single point of cover.

You may have seen an announcement about a fundraise. I want to explain that this is a fundraise for growth capex in our hardcore manufacturing areas in sectors that we already are present in plus in some new sectors.

The sectors that we're targeting from this are the large engine sector, the power gen market, the semiconductor components market, and aerospace, and a few other, such as including an investment in an energetics plant in Andhra Pradesh, where we will be able to do filling of shells and other propellants and energetics used in defense applications. I think so this capex is something that we will complete over the next 18 months, and it will give us a high capital output ratio as well as good margins and will allow us to accelerate our growth going forward.

The fundraise of ₹2,500 up to ₹2,500 crore is basically for growth capex, and the instrument, etc., will be finalized in due course. In terms of outlook, I think the outlook remains very strong.

There are some temporary blips, including cost escalations taking place in energy and logistics, which will be negotiated and redeemed from our customers where we have paid them. With the resumption of our plant in the US, I think the margins should also come back to better levels.

Many of our businesses are now starting to hit their stride. If you look at the aerospace business, it is now beginning to make a meaningful impact to our overall business.

As our new manufacturing facilities come online, this business will dramatically increase in size. The same will be said for the semiconductor business, where we have already won double-digit million of business, and we need some new facilities to come online before that can then further go up, especially on the machining side.

I think barring any major new geopolitical upheavals or supply chain shocks, we expect '27 to be a very good year with the second half being driven more robustly with some of these interruptions behind us and both across exports and the commencement of deliveries for the domestic defense orders of ATAGS and carbines. That's really all I had to say, and now we'll be happy to take your questions and answers.

Sorry, hold on one second, please. One of the things is that we are going back to building capacity slightly ahead of demand, but the demand is coming so fast that we need to accelerate our capacity build-up as well.

That's really why we're increasing our capex to build up this capacity in our traditional business as well. Thank you.

Good evening, sir. My first question is on the fundraise that we have announced.

If you could just let us know what kind of asset turns, margins, or return on capital will be there for these new businesses, since these are new businesses, any color on this will help. What is the overall capex plan on a consolidated basis for FY27 or '28 if you have any thoughts?

Hi, Kapil. The overall capex will be in the ₹1,800-odd crore range.

This is the organic capex that we will do in India. This is spread across forging, machining, heat treatment, and quality control and other related assets in the forging and machining space, ring rolling space.

These are assets that are not for any one industry, but can be used in a variety of industries. They will have a significantly, let's say accretive capital output ratio and very good margins.

We have business tied up, and that will give us enough ramp-up, and then we will also tie up more business. Additionally, the energetics plant is a facility we're setting up to fill shells and to produce energetics and solid propellant, etc., in the future in a new facility coming up in Andhra Pradesh.

Thank you, sir. Second question is just on the outlook for some of the key segments, if you could talk about CVs and PVs, both for India and overseas, and also the non-auto segment.

We note that the growth in CVs and PVs this quarter for the domestic business was below the industry growth. Were there any supply challenges if you could just give some color there also?

Thank you.

Honestly, there were supply challenges towards the middle of the quarter when the steel sector all had issues of labor and getting supplies, and also an energy issue when the Iran war had really hit a crescendo in the beginning, and it took us all some time to switch over from one kind of fuel to another. These are the challenges that you face.

In spite of that, I think we've done well. Going ahead, I think we will do even better.

Sure, sir. On the outlook for the different segments?

I would say that all the segments have a strong outlook. India is fairly strong.

US is very strong. Europe, CV strong; PV is not as strong, but I think it's not weak either.

If you saw yesterday, GM has raised their guidance again. Clearly, the economy in the United States is doing well.

India is doing fairly well. I think these two are the key markets for us.

Thanks, sir. I'll come back in the queue.

Thanks.

Hi, team. Thanks for the opportunity.

Fair to assume [unclear]

Hi, team. Apologies for that.

Just to be clear, the entire capex of ₹1,800 crore is all non-auto, right? Could you guide us a little bit about when does it start--

I'll just come back in the queue

then. I'll answer the first question you asked.

It is a combination of auto and non-auto. In the auto there is both forging and machining, and non-auto there's forging, ring rolling, and machining.

Thanks for that, Amit. What sort of asset turnover to assume on this number?

Any guidance?

I think it will be above 1.5.

Secondly, when I look at the quarterly presentation this quarter to last quarter, last quarter we talked about 25% growth in India-linked businesses. This quarter we are saying 20% to 25% growth.

Is there any sort of delay in approvals for ATAGS or something that we're building in to slightly create a range, or am I reading too much?

The ATAGS approval, once it comes, then in 2 to 3 months we will start. There is still testing going on of both the suppliers.

I think we probably are looking at a few weeks of delay, but that's nothing that we can do. It's a procedural issue.

I think order is there, the product is there. I think we just have to get the process completed and then the delivery is started.

Great,

great. Thanks for that.

I'll come back in the queue.

Yes, hi. Thanks for the opportunity.

Firstly, just a clarification. This ₹1,800 crore of capex that you mentioned, the ₹2,500 crore fundraising that you're talking about future growth opportunities, will that investment be over and above this 1,800, or this is all part of the similar investment plans that you have?

See,

this 2,500 is for this current capex, and then it'll also give us a strong base for any additional capex that we may need for further growth.

Okay. Okay.

Then my second question is that given that your balance sheet is still quite strong, and net debt-to-equity, net debt-to-EBITDA is quite strong, just trying to understand why--

Why did we raise the fund? Yeah.

Yeah. Because we're very conservative when it comes to our financials.

We like to have cash on the balance sheet, at least ₹2,000-odd crore of cash on the balance sheet. It's good.

It will help us accelerate our growth going forward. Plus there is some M&A opportunities in India, and we have found that the M&A opportunities that we have undertaken in India so far, whether it is JS Auto or K-Drive, are proving to be very fruitful, and such opportunities are arising, and it's a good time to look at them.

Sure.

Sure. Just secondly on your defense or the KSSL business, I know that it tends to be very volatile on a quarterly basis, but the margin outcome in this quarter seems to be a very strong one.

Anything that you can help us understand how should we think about this margin and how should we think about future-- The

margins are all a result of product mix. As we've mentioned, the margins on a steady state annual basis, we are targeting in the 22% to 23% or so range.

Hello. Sorry, there was some disturbance.

Sorry, I can't hear you.

Can you hear me or no?

I can hear you, but there seems to be a lot of disturbance, maybe I don't know if it's the problem with my line or not.

No, I don't know. Is the moderator having disturbance, or they can hear?

Okay. Maybe there's some issue on my line.

Maybe I'll try and come back in the queue.

Hi. Thanks for taking my question.

Just continuing with the margin guide that you mentioned, this 22% to 23%, is that you mentioned at the consol level, is that how we should read this guidance?

No, that is for the defense business.

That was for the defense business is 22% to 23%. Okay.

That is standalone.

Okay. My first question is again on the similar lines, the newer opportunities that you call out--aerospace, data center, semiconductor--is there some sense that you can give in the next 3 to 4 years, how do you see the build-out of these businesses, maybe a bit more color on these three: aerospace, semiconductors, and data centers, where the scale of--

I can talk about the aerospace and semiconductors, and my colleague Subodh can talk about the data center side. On aerospace, we will double our business in the next 2 2 years or so.

Hello, can you hear me?

Yes. Yes, sir.

Okay. Then on the semiconductor side, I think we are aiming for something in the region of $30 million-$40 million of business in the next 2 years organically.

Then we also have to set up some machining facilities, which will then allow us to grow that business almost double it. That's the kind of business that we're looking at to doing in the semiconductor space.

I will let Subodh answer the question on the semiconductor and related sectors.

Sorry, how big is aerospace at the moment, you said doubling, where would the revenues be right now?

It's about ₹400 crore right now.

Okay.

On the data centers, we actually call it energy business. We expect to double in the next 4 years.

We already have most of the contracts in place, long-term contracts in place. We are in the process of adding capacities and all of that, but we have a very strong global position today on this.

What is the scale again of data centers right now in terms of revenues?

It's difficult to say because a lot of our products are going into multiple sectors, including data. When we say data center growth, a lot of those growth in those sectors is coming because of data center.

See, and one more point I'd add here is we have already been supplying these products for the last 15-18 years. These products take a lot of time to get validated and approved because they are very critical products.

It typically gets 3 to 5 years just to get approved and get going. In our case, all that cycle is already happened.

Now we are already supplying and there will be, of course, growth in what we're doing based on demand.

Got it. My second question is just a comment that I found very interesting in your annual report where you say that we are looking to grow India manufacturing operations at 15% CAGR for the next 5 years.

I'm just trying to get a little bit more color on this. How should we think about the auto and the non-auto piece, is that how you internally assess?

Because auto business is certainly a lot more cyclical, right? Any color that you can give us in terms of what will be the salience of auto versus non-auto and the growth we are looking between the two businesses?

Both sectors will grow. Auto depends on new products, because our current products are going to allow us only to grow at the rate of the market.

Then the castings, the K-Drive, all that come in to provide more growth. In the non-auto side, of course, the sky's the limit because we're starting from a low base as a country itself.

Got it. Last just quick if I can squeeze in on the margin bit, you mentioned 160 basis point impact taken in this quarter.

Is it fair to assume that this reverses immediately or this would take time basis the conversations? How do we think about the more normalized margin for the full fiscal year?

It would be better than quarter one, but also you need to consider one specific point is as we start getting recoveries from the customer, optically it has a impact on EBITDA because there are changes in denominator and numerator also. Optically, you might still look at little better margins, but it will not be fully reflective of back to 28%, because it will add to top line also and it will add to cost also.

It will compensate the full margin per piece.

Yes. Per product sold.

Also per ton, yes.

Got it. That is useful.

Thank you so much.

Thanks for this opportunity. Amit, I just want to get your details on this marine gas turbine generator win.

How do you see this? This is going to be auxiliary equipment, but at the same time pretty challenging in terms of technology.

What is the capability you have in-house to develop it? Do you need to have a joint venture?

How is going to progress and--

We've already developed this product, and it is now going into testing. We have a very strong relationship in delivering this product and a range of turbines for naval applications ranging from 1.25 to above 25 megawatts.

Okay. Will it be predominantly for defense itself, or it can get into commercial?

No, it can get into commercial also. It can even go into power gen.

It can go into a lot of sectors. It's multi-fuel.

Sorry. Go ahead.

It is multi-fuel.

Okay. Within this, if you look at the content per se, how much group can itself supply versus what you need to source in terms of--

I think in the beginning the generator will be sourced from outside, but that's the electrical generator, but the entire turbine will be made by us.

Okay. Does it require further investments, or the existing machinery can support?

It requires some small investments, not large investments.

Okay. The second question is with regard to the AP plant which you are opening up for the substantial investments.

Is it going to be predominantly for new areas, or how are you looking at--

AP is going to be a propellant and explosives facility for filling ammunition and for making explosives. Whereas

this naval one will continue to be at the KSSL Pune site?

Naval one will be actually at a new location where we are already working. It's close to a naval shipyard.

It's actually almost like a part of the naval shipyard.

Can the naval one open up a completely new stream for you, both in--

Absolutely. It's a huge new opportunity.

See, in the naval side, we were originally only on the shafting and propellers. Now we'll be on the power gen also, and then we will also get into the fight side.

We will be on the entire value stream of the naval side. Sure.

Content per ship will go up dramatically. And 140 new ships coming is a lot.

Right. Any rule of thumb in terms of-- Also

I wanted to tell you that we have already tied up the MRO for turbines with the navy for their existing as well as for the future.

Oh, for the existing also. Okay.

Yeah.

That is going to be a much more sustainable--

Exactly.

--rather than just the orders.

Exactly.

Sure. Thanks for detailed explanation.

All the best.

Hello. Good evening, sir.

Thank you for taking my question. Just your views on the CDP Bharat Forge restructuring.

Post the restructuring is done, what would be the form of this entity? Will orders be shifted away?

Will margins improve? How should we see CDP Bharat Forge post the restructuring?

Post the end of the restructuring, that entity will not survive. It will not exist, and part of their orders are going to be transferred to us, and that will be shipped out from India at a good margin.

That's really what's going to happen.

Right. All the current orders would be intact, they would be shifted to India or other entities?

Not all, because they also have certain orders that are getting phased out or products that are getting phased out. The remainder of the orders will move here.

It's a sizable amount.

Got it, sir. Sir, one thing which you have kind of alluded to as well, the ATAGS order, is there any timeline that you would want to share or is it--

I tell you, the day we get the FOPM approval, we can start the clock. Till then, I can't tell you anything.

Got it, sir. Thank you so much, sir.

That's all from my side. Thanks so much.

Because

there are two suppliers and both have to be ready.

Got it, sir. Thank you so much.

Hi, sir. Thank you for the opportunity.

This is, I think, in line with the capex. Just wanted some clarity on sometime in 2024, say maybe around February, I think there were a few news articles and we were talking about having a mega project in Orissa.

Maybe if you can give us any update on that, maybe I think environmental clearance is still not received. It's been about 2.5 years.

If you can give us some idea on the exact status, by when do we expect--

I think on that we are looking at that as our third new mega site. That is something where I hope that by the end of the year, we'll get all our approvals.

After that, we will look at building a large new complex which will do things that are not made in India, large aerospace components, etc. It'll be a multi-modal facility doing multiple things for variety of sectors.

We are still awaiting, it's all in the process. Hopefully, by the end of this year, we should have that.

If you can tell us a little more why the delay, the environmental clearance process? It

just takes time because that's the way it works. You have local environmental clearance, then you have central, and forest clearance.

In our case, there were some unique circumstances which were not there on paper, which happened to be there, which we found out later on. Some infrastructure that needed to be moved and stuff, high-tension lines, etc.

Those take time.

Got it. We are on track, now I think you can see visibility, is that how one should--

I hope so. Yeah.

We're working on it.

All right, sir. Tentative timeline once we get these approvals, when can we--

I think once we get all the approvals, we can have our first plant running in about 2.5 years.

Got it. Sir, and is this the last leg of approval requirement or will there be additional and others-- No,

I think this is the only approval that is now needed.

Got it. Sir, some part of the fundraising also will be used for this, I presume?

Yes. Yes, yes, yes.

Okay. All right, sir.

Thank you so much.

Okay.

Thanks.

Thanks for the opportunity. I think two questions, sir.

One was on the outlook beyond FY27, given all the things what we're doing and the kind of front-loading of capex what is-- Pramod, we can't hear you.

Couldn't hear you very well.

Sorry. Is it better?

Not your voice is coming and going.

Just a second, sir. Now?

Now it's better.

Now it's better. Thank you.

No, I was asking given the kind of capex what we're doing towards new areas and existing business as well, and the nature of the business in terms of the order wins and the execution, is it fair to assume that FY28 also could be a remarkably strong year from you? I'm not trying to get any quantitative estimate here, but generally the way from your vantage point, do you see the momentum what you've seen in the last couple of years in '27 continuing into even '28 when you look at all the segments, all the geographies?

I would say so, yes. I would say based on what we see now, I think '28 should also be a strong year.

Subodh?

Yes.

Absolutely.

Okay. Thanks for that.

Before that, with that kind of a strong growth, the levers on margin should also kick in reasonably, right, in terms of operating, of course, the mix will be what it will be.

Absolutely. You're absolutely right.

Sir, second question is on the defense side, given how India is very quickly becoming a defense hub, even for exports, you kind of put the template with the ATAGS being the lowest-cost producer globally. How do you see this as an opportunity where you can become the go-to partner for a lot of these global defense organizations who are trying to reduce their cost and also accelerate their time to market?

In that scenario, how is that bit of conversation going or how are the inbound inquiries at your end? If you can just help us and get some qualitative color and what could be the opportunity set here?

You're absolutely right that defense is also a very large export opportunity. In defense exports, you need a lot of hand-holding, support from the government.

A lot of countries which have been successful at doing this have their government playing a very key role in enabling this. One classic example is South Korea.

Their government provides soft loans, provides EXIM financing, etc., and that really helps many countries in doing this. The Indian government has also done in the past EXIM financing for infrastructure projects in Africa and other places.

I think this is an industry which has geopolitical ramifications. I think one has to, as a country also look at it that way.

I think our country is beginning to look at it that way. It's very clear that they're serious about it.

Once those steps are put in place, I think it can be a further accelerant for our business. Clearly, that should only be provided to absolutely strategic products and strategic partners.

Thank you for the opportunity. I've joined a little late, not sure if this is already answered.

Just wanted to understand your commentary in a media interview in a little detail. I believe there was some mention about Q2 being strong in the sense that we might take price hikes and there might be some reverse swing in margins in Q2.

If you could just provide some more color here.

Q2 would be better than Q1 considering the discussions with customers on the indirect price increase and the volumes.

The one-time impact that we have had in Q1.

Right. How will the margins trajectory be, will there be a one-time jump in Q2 and we'll be back to the 28% range or will it be gradual throughout the year?

It would be a gradual, because earlier we explained that even though we get recovery, from a arithmetic perspective, you could see a little--

See, the numerator goes up and the denominator goes up. You understand?

It would be a gradual improvement in margin.

The, let's say, margin per ton will come back to its normal levels.

That's very helpful. That's it from my side.

Thank you.

Yeah.

Hello. I want to know that have you got license for your AP plant that is for explosives?

Additionally, the capacity would be same as to fill your existing empty shell manufacturing or it will be bigger than that so that you can buy empty shells from other place and fill that in your plant?

Initially, we are setting up a facility to manufacture and fill a certain amount of shells. This is a modular facility, you keep adding lines, you can fill more and more shells.

We have not yet got the license. We have applied, and the process is on.

Okay. What is your current capacity for empty shell manufacturing?

It's very large.

Okay. In

several lines?

Any numbers?

It depends on product mix,

yeah. Got it.

It's very, very large.

Okay. Thank you.

Hi, good evening, and thank you for taking my questions. First question is just around the European business.

Just want to understand what could be the timeframe for shift of some of the business we look to shift manufacturing from CDP to India? Also just related, on the other two subsidiaries, AT and Kilsta, under the new India-Europe FTA proposals, is there opportunity to shift some of that business as well to manufacturing on Indian shores?

Let's first talk about CDP. Our timeline for the closure is between second to third week third quarter of next year.

Okay? Right.

Of '27. Calendar quarters.

Got it. That's helpful.

Business will perforce have to move at or before that time.

Got it. That's helpful.

Second question is just around the fuel and the manpower situation. You did mention that going forward, we will see an improvement in most of availability and supply.

Just wanted to check on the manpower side, are we sort of back to normalcy now? Also on the fuel switches--

Almost. Not fully.

I would say we're back to about 70% to 75% of normalcy. There are some amount of migrant labor or casual labor that has not come back.

Got it. On the fuel situation?

The fuel situation is under control. Only problem is in Maharashtra, there's energy price hike.

Hi, sir. Thank you for the opportunity.

Just one question. On the M&A opportunity in India, could you give us some color on the key product areas or technologies where you see

strong

potential for collaboration?

No, sorry, I can't. We are evaluating certain opportunities, but I can't give you any details at this point.

We are under an NDA, and once it reaches a certain level, then we will talk about it.

All right, sir. Thanks, and all the best.

Thank you.

Hi, sir. I have a question regarding restructuring of the business, sir.

We have taken a provision of 330 cr. This is a one-time expense, or again we'll make some provision for Q3 or Q4?

This is the cost for the manpower redundancy.

Okay.

This cost has now been finalized. It is not going to be paid out today, but this will be paid out over the next 9 to 12 months or 6 to 12 months as the people get released.

Okay.

Has been finalized, okay?

Right, sir. Thanks for that.

Thank you.

Sir. Thank you for taking my questions again.

Just on the electric vehicle opportunity, if you could just talk about how we are thinking about tapping that opportunity?

That's an area where, honestly, we haven't been very successful. We have some ideas, and you may hear some interesting commentary about that from us.

Give us another 3 to 6 months.

Okay. Sir, on K-Drive--

One area where we are already working on EV is through K-Drive, which is already making EV axles for LCVs and LMCVs.

Sure. I was just going to ask about that.

K-Drive, the margins seem to have come off. Any thought here

like-- No, K-Drive will grow both in scale and margins. We are on track.

K-Drive is going to perform very well. We have a lot of new business coming, and we're also going to build a new plant for K-Drive in the northern part of India for one of our most esteemed customers, and that will provide us significant growth going forward.

Thanks. Sir, lastly on the US manufacturing operations, when the operations normalize, what kind of margins can we expect in this business?

See,

the steel will be at about 12%, and the aluminum EBITDA margins can be in the 15%-16%.

Sir, by when can we get there?

Hopefully next year.

Okay. Great.

Thank you so much.

We'll move directionally in that direction, and we want to get there sooner than later. I want to explain one problem in the US, and that is a tariff on aluminum.

On raw aluminum is 50%, because it all comes from Canada. US does not have any smelters.

Components can come from certain countries at even 10% to 15% margins. The problem is that today.

Unless that corrects, it will be difficult to get--

That happened because of this big spat with Carney. The Prime Minister of Canada.

Right.

Right. Yes, sir.

Yes,

yes. That has to correct for the margins to come to the targeted levels.

Yeah. That would be the ideal thing, because that will also then help volumes and that will really give us a boost.

We're dealing with let's say, unanticipatable tariff situation. You just have to ride it out without making cash losses.

That's all. That is going to be our goal.

Thank you.

Thank you.

Sir, I had a question about your losses in US operations. Can you explain what is the reason although the revenue is up as compared to both the previous--

Mr. Jain, we're not able to hear you clearly.

You said something about North American operations, but I couldn't hear clearly.

The reason for the EBITDA loss.

The reason is that our steel forging business had a major maintenance breakdown, and we had no production for almost 3 months.

Sir. Can you tell me how much was the losses?

Actually can we quantify if it's possible?

It's already in the papers. You can see it.

It's in our update.

Okay.

Thank you.

Ladies and gentlemen, thank you very much for your time and interest. It's always great interacting with you and getting your questions.

It gives us a lot to think about. This quarter was a little challenging on account of certain internal and external uncertainties, but I think as a company, we are strong enough to overcome these.

We see a lot of potential growth coming in our traditional business of engines and crankshafts and those areas, and in new areas where high precision parts are required, including power gen, including semiconductors, aerospace, large engines, marine, defense, naval, etc. I think the future is bright, and we're very confident of being able to continue a strong growth path for your company.

Thank you very much.