Thank you. Dear friends, welcome to all for our quarter one FY27 earnings post-result update call.

As per the normal practice, CFO Mr. Maulik Jasani will take you at length through our key numbers.

However, I'm assuming that most of you would have had a chance to go through the same. At the outset, I'm happy to inform that our quarter one FY27 performance has remained largely satisfactory, in line with management plan and expectation, except for some minor aberrations which I will talk about shortly.

As you would have seen on a consolidated basis, the group posted a 25% growth in quarter one on year-over-year basis. This growth is largely due to a consistent strong top-line growth on around 21% posted by our India engineering business, which comprises of company HEIL and our wholly owned subsidiary company Harsha Advantek.

It is also noteworthy to mention that in spite of historically established fact that our last quarter performance is generally the strongest, in quarter one, our India engineering business have posted a strong 6% growth even on quarter-over-quarter basis. At the same time, you would have seen that while there is EBITDA and PAT growth in our India engineering business in quarter one on YoY basis, there is some de-growth in margin on quarter-over-quarter basis.

This is attributable to three specific factors. Firstly, in quarter one of this year, our average raw material costs have gone up by around 3% to 8%, and as you are aware, we follow a pass-through mechanism with most of our customers.

However, there will be a lag of one or two quarters. Thus, we should be able to pass through this cost increase in the subsequent quarter.

Another factor which has impacted the margin of India engineering business is foreign exchange loss of around ₹4 crore, which is due to certain technical accounting reasons. To elaborate, as per Ind AS provisions, foreign currency fluctuations relating to FX cash flow hedges are parked in other comprehensive income till they are realized and settled.

The FX loss of around ₹4 crore is due to this accounting effect of realization of cash flow hedges loss in the current quarter. However, going forward, we do not expect the same to have a material adverse impact on the results.

Third specific reason is also an increase in our indirect material costs like oils, chemical, packing materials due to inflationary pressure, as you're aware, after war broke out during first quarter and you all saw that. This has increased our cost in quarter one by approximately ₹3 crore.

However, the most significant impact is raw material cost increase pending pass-through as explained above, which will be normalized going forward. Now, talking about our specific growth components, I'm happy to state that our primary product, which is cages, we are continuing to see good demand traction and offtake both in India and outside India.

In India, this is driven by a good demand for cages from our customers whose offtake has increased, matching with their own growth plans. This includes demand for facilities recently set up by our MNC customers in India.

Over and above this, we are also seeing a good traction from other major Indian bearing players. We believe this reflects a continuous strong growth in the Indian domestic market, aided by good industrial demand as well as demand from automotive sector.

A part of this also is attributable to increased global demand witnessed by our key bearing customers. We have also seen a strong traction in exports from India.

Our exports from India in quarter one FY27 stood at ₹139 crore. We have reported almost 22% growth on YoY basis and 11% growth on quarter-over-quarter basis.

We have also seen a good growth in Europe, US, and all other key markets, backed by continued increase in industrial demand in these geographies. Now talking of our key growth drivers, first and foremost, sales of bushing in quarter one stood at around ₹34 crore, reflecting almost 35% growth year-over-year basis.

We have strong visibility on this order in hand and as well as in pipeline. Fairly confident of achieving a targeted sales growth of bushing around 30% this year against last year's ₹127 crore.

Equally encouraging is the stamping sales, which stood at around ₹19 crore in quarter one, it's showing a year-over-year basis about 31% growth, and we have quite a few products which are either developed or under development, specifically in the category of white goods, like A/C compressor components and so on, as well as railway seal inserts and other automotive stamping products, which we have been developing over the past few months, which gives us confidence that we should achieve about 30% growth this year as well in the stamping against sales of ₹60 crore we achieved last year in FY26. We are also witnessing a strong demand offtake in the segment of large size cages.

Though quarter one sales appear to be lower at around ₹10 crore, we believe that order book on hand and pipeline in this segment, basis of this, we should achieve a good 50% growth in spite of first quarter numbers in current financial year over last year we did about ₹49 crore. Talking of Japanese customer, our quarter one FY27 sales stood at around ₹21 crore, showing about 25% year-over-year growth.

However, on full year basis, we expect only a modest 10% growth in sales of ₹72 crore achieved in this segment, given the fact that entire process of development and conversion is quite slow, but it is reassuringly positive in context. Talking of our wholly owned subsidiary Harsha Advantek, although quarter one sales at around ₹30 crore appears to show only a modest growth of 7% on QoQ basis, we have a good visibility of sales increase progressively coming through every quarter.

Our annual sales target in Advantek would be in the region of about ₹140 crore plus this year against ₹43 crore achieved last year in FY26. As the scale of operations go up, we expect Advantek to be PAT positive by the end of current financial year FY27.

It has reported a loss of about ₹4 crore in first quarter in FY27. As you might be aware, we have already announced the capex plan in Advantek for the second phase of expansion, which is for basically expanding the capacity in bushing as well as stamping and large size cages.

Now coming to our foreign subsidiaries, first now talking about Harsha China, things are looking quite stable and satisfactory. We believe that Harsha China should report an overall growth of around 10% in current financial year as against the sales of about ₹120 crore achieved in FY26, with EBITDA margin in the range of about 12% to 14% and a decent PAT range of around 6%.

We have already commenced the implementation of brownfield expansion project in China after securing required debt funding at a very attractive rate. This expansion is focused on creating capabilities for our steel cages as well as to expand the product portfolio as well as market reach in China.

This project should be commissioned by quarter three of next financial year, and we should see a full impact from FY29 onwards. Lastly, talking about our aberration which I hinted earlier, Harsha Romania continues to be negative territory, though it has reported a slight growth in top line.

However, quarter one FY27, there was a one-time foreign exchange loss of around ₹2 crore because of adverse currency movement between the local currency and euro. Still the operating losses continue, but we are putting strong efforts in improving the product mix by pushing more cages, trying to get new customer moving, and also reducing the cost.

We have also made a strategic change in the top management by bringing in COO for our Romanian subsidiary. While our endeavor will be to try and see that Harsha Romania achieves break-even, we still feel there could be some losses in the current financial year.

However, the combined loss between the two foreign subsidiaries should reduce to much lower single digit figure if not become fully positive. I will end my presentation with a reaffirmation that we are confident of continuing to grow strongly in India in the range of higher teens and also achieving a consolidated sales growth of low to medium teens, and we expect the bottom line to grow more strongly because of the combined impact of all the positive factors we have noted above.

I would like to thank you for your continued confidence and support in Harsha, and I think I'll ask Maulik to take us through his presentation and the numbers before we take some questions.

Thank you. Thank you, Vishal Bhai.

Hello everyone, and good afternoon. For the quarter ended June 26, our engineering business at consolidated level has achieved a top line of ₹421 crore against ₹382 crore in the immediately previous quarter and ₹349 crore in the same quarter last year.

We have achieved consolidated EBITDA for engineering business of ₹69.8 crore in the current quarter against ₹77 crore in the immediately previous quarter and ₹65.3 crore in the last year same quarter. We have witnessed a good demand across all revenue segments, while EBITDA margin having an impact on account of the material price pass-through as well as exchange rate impact as discussed.

In solar business, we have achieved revenue of ₹36.3 crore and positive EBITDA of ₹2.82 crore for the current quarter. Overall working capital cycle at consolidated level is around 116 days against 130 days in the previous quarter.

The company has incurred a capex of ₹37 crore in quarter one at consolidated level. For the quarter one FY27, our revenue from bushing was around ₹34 crore, stamping ₹19 crore, LSC ₹10 crore, and Japanese customers ₹21 crore as already discussed.

With this brief on the financial numbers, I request operator to take the Q&A from the participants one by one. Thank you.

Good evening, sir. Congratulations on a very strong growth numbers.

Just on this, sir, I wanted to understand how this growth came. Which segments performed so well?

Where did we see a broad-based demand recovery in Europe or was it India? How did such great numbers come?

It was more broad-based, as I mentioned earlier. We see industrial demand overall strengthening, and as well as European demand also recovering.

Combination of both those, and actually the growth we are seeing across. It is very encouraging in that sense.

Sir. For FY27, what kind of overall growth rate do we see?

Will 20% be a possible with this momentum?

I think 20% is a very tough stretch. We definitely expect mid to high-teen numbers in India, and then low teens for FY27 overall is our general expectation.

Sir. Year on year, gross margins have fallen by 150 bps.

This RM increase is happening in which material? Is it in steel, brass, polyamide or is it mostly overheads?

The raw material for specifically last quarter, it happened across material, meaning brass, copper, zinc, steel, as well as polymer. We are seeing that impact visible across all the materials.

Last year, the major focus was on the higher metal prices on the brass front, which is combination of copper and zinc. This year starting, we have witnessed that across the board, mainly part of the impact of the global conditions and scenarios.

It should be passed through as we said earlier. Period of cost increase.

Got it. Sir, on the foreign front, we grew well this quarter also, but still the EBITDA margin for the foreign business fell from 1.5% to 0.3% year on year, even though we grew revenues 20%.

Why is the operating leverage not coming? Are we able to move from casting to cage, especially in Romania?

We are working to do that, increasing more additional cage share revenue. At the same time, there was a big impact of raw material prices continuing to increase and actually negating some of the improving situation on the revenue side.

As Vishal mentioned in the initial speech, there is an impact in Romania also exchange rate fluctuations between the Romanian local currency, leu, versus the borrowing which is in euro. It's more of an accounting impact considering that majority operation in Romania is also backed by euro.

Sir. Thank you.

I'll come back in the queue.

Thanks, Varun.

Hi, sir. Thank you and congratulations for the good set of numbers.

First question, sir, again a follow-up on Romania. You said probably collectively the two subsidiaries will have lower losses.

What kind of loss we are building in for Romania? That is one.

Second, you said there was a forex impact also this quarter. Even keeping aside the forex, how was the performance there in terms of volumes?

Are we able to move with our objective from moving from semi-finished to the large cages? Are we really on track to improve this subsidiary or it remains still the status quo?

On the overall operation, if we ignore the forex, I think we did not significantly improve. We did have a little bit of improvement.

Again, I mentioned in the earlier answer, we also saw an adverse effect of increasing copper prices and that had some impact on the result. On moving towards more cages, we are working towards it.

Right now we don't have a significant numbers to show for it. However, we are seeing a pipeline in Romania improving towards cages.

That's what it means. Here say that the lower single digit, maybe ₹2, ₹3, ₹4 crore, that range, combined losses could be there as against ₹10 crore we did last year.

Okay. Is it like the China will improve further and Romania will deteriorate further, is it?

Both will improve. That means Romania's run rate will reduce.

China is continuously profitable. Offset, let us see.

We have to wait for a couple of quarters. If things improve much better, we may say that they will turn into positive, at least break-even.

Wait for one, maybe two quarters, and we should be able to give you a much better picture.

Yeah. Now sir, on the other businesses like bushing, stamped components, you talked about 30% plus growth.

Is it the wallet share, new customer, and will this momentum is something which should continue? You have done a capex in the past in bushings and stamped components also.

Just wanted to have a color whether this is something which will continue at this rate, and is it a wallet share increase, new business? That's what I

have. On the bushing side, it's a conversion which is supporting the growth, and we are not sure how long this will continue, but we expect at least a couple of years for this conversion effect to continue.

Part of it always will be wallet share as well. Then on the stamping side, we are adding a lot of new products, which is one of the reason we are seeing a growth there, and we have a very strong pipeline of new products coming in or have started, but will be matured over next one year or so.

Right. Lastly on the large cages, the revenue was about ₹10 crore and kind of flat.

Still, we are talking about 30% growth, and I recollect you have been focusing to have a very strong growth from the large cages in the past as well. Just wanted to understand is it a particular customer where there has been a delays in offtake?

What is the reason for Q1 coming so low and still you're confident of 30%? What is happening in the large cages business?

In the large size, Q1 was aberration, partially driven by the large-size capacity at our new facility still struggling to ramp up and response to the demand. We see that demand is there, and that's why the optimism in spite of tough numbers for first quarter.

That we are fairly confident of even 30% plus. There's a good visibility.

We have a nice order book pipeline that we can see. That's why.

In the large cages?

Of course. Right, sir.

In the large cages, I understand it's a value-add business also. We are probably not a very high base.

Is it that we're trying to add more customers in the large cages or trying to leverage, as we probably were trying in Romania also earlier with the same customer. What exactly can drive your large cages business in the coming quarters?

It's primarily we are trying to grab a bigger wallet share as we do have a very low wallet share when it comes to larger-size cages with our customer, and we are trying to grab more of that. That is what in principle is happening, and I think that's the driver and makes us feel confident that we can really achieve that.

Understood, sir. Thank you and all the best.

Congratulations on a good set of numbers. I have only one question.

Could you, sir, update on how ongoing brownfield capex in China and recently announced HEIL Phase 2 capex is progressing, and what would be our capex guidance for FY27 and FY28?

On the China front, our Phase 2 capex we already mentioned in our presentation, it is on the track, and we expect it to go live in the next year Q3 around. That's where we are on the track, and building construction has already been started, and it's ongoing.

While on our Bhayla plant expansion, in the current season, we just hold up building construction, but we expect it to start in this month. That is also on the track, and we expect our third building construction also to be completed by end of this year or maybe the last quarter of this year.

We already started procuring the incremental machineries, the orders for the new building size also. Civil construction is on hold because of heavy rains, Vaibhav.

Because Ahmedabad, Gujarat witnessed very, very heavy raining, where it's difficult to do construction. I think now things are normalizing, should start very soon.

Sure, sir. What would be our capex guidance for FY27 and FY28?

We keep on adding the capex. As of now, our focus is to complete these two major expansions, but we at least expect in the range of ₹60 to ₹80 crore as a year-over-year capex, but we will give a better guidelines in the coming quarter.

Yeah. Thank you, sir.

Thank you for answering my question. I'll get back in the queue.

Thanks, Vaibhav.

Thank you so much, sir. Congratulations on very good set of numbers, sir.

Sir, on the guidance for India engineering where we are referring to high teens growth, just would like to know how much would be driven by volume growth and price increase, and related question as to what kind of price increase we have taken or we will take due to this commodity increase? That was the first question.

Second question, within India engineering business, if we were to exclude the bushing, stamping, and large cages, and Japanese customer, the conventional cages business can it still grow double digit or probably the numbers what I calculate it shows that it's probably 6%, 7% growth only? If you can also give that perspective.

Sir, there was a lot of echo in the call, I could not get the Japanese-based customer revenue for the current quarter and the comparative quarter. If you can clarify on that as well.

I'll come back on the couple of more questions. Thank you, sir.

Yeah. Manish, first take last question.

The Japanese customer in the current quarter was ₹21 crore against the last year same quarter ₹16.5 crore. Okay.

Okay.

On your question about the raw material pass-through and the impact of that raw material on our top line, usually, as we know, we have a pass-through with around 4 months lag. Here I would say, as we discussed in the call, the last year was major pass-through happens in the brass, while steel was a range-bound, calm impact there.

As we have mentioned in our commentary, this quarter raw material price increased, maybe around 40% to 50% would be the impact on the sales price of that.

Okay. That is basically 3% to 4% roughly we can expect price increase.

The guidance of high teens growth is factoring this price increase as well, that is what I wanted to clarify, right?

It accounts for it in a little bit way, but we are actually trying to focus on

volume growth, yeah.

Right now we're not trying to predict the value impact, but there could be some impact of that, as you rightly mentioned, Manish.

Okay. On the cages growth, sir, probably the traditional business what we have, how should we look at the growth for that piece of the business?

We see that cage growth in India continues to sustain on variety of factors. Those factors include our natural growth of Indian economy as well as outsourcing opportunities we are seeing for supply from India to other countries and so on.

Plus, I've talked about our customers are already setting up plants to export outside India. All those factors combined, we are expecting good growth in cage business in India as well.

At least it should match the growth of the bearing industry in India, plus whatever extra we take on the outsourcing. At least 10% and thereabouts and more actually.

Okay. Sir, what is the capex plan for FY27 entire year, sir?

The

current year FY27, we already announced in the last investor call, our major expansion is coming into the Bhayla, and also in China Phase 2. Put together, we expect both the major expansion and our regular capex would be in the range of around ₹180 to ₹200 crore.

Two years. In over two one and a half year.

One and a half to two years. Sorry,

₹180 to ₹200 crore over two years?

This year and next year. Maybe around 70 ₹50 to ₹80 this year, remaining next year.

Sure, sir. Sir, in the annual report, we have mentioned about basically that we continue to strengthen capabilities in areas such as wind energy gearbox, specialized railway applications, aerospace, and electric mobility solutions.

Maybe if you can bit elaborate and provide us perspective, what are we referring to on this? Second point also within annual report that we see very strong long-term growth by stronger strategic collaborations and carefully evaluating inorganic growth opportunities.

Maybe if you can just provide us perspective as to in what context we are seeing this.

Let me start with your first point about wind, rail, and aerospace

defense, yeah.

India, of course,

yeah.

Within wind, we are approaching it with multiple perspectives. One, we are present in bushing and we are working to I think there is a lot of typing noise.

Is it possible to kind of mute that?

Sir, is it lot of echo from your side. Very difficult to hear you, sir.

Looks like some challenge is at our end today.

I will mute myself also.

Sure. Thank you.

Appreciate that. Right.

I was talking about on the wind side, we are working on bushing, and actually next step of bushing. Within bushing, we're trying to move to a different set of technology and working closely with our customers on variety of upgrades to that.

Also on the cage side, we are getting ready to cater to that segment and whatever it pertains in terms of size capability, in terms of geometrical dimensional capability, we are working towards that. That's what is happening in wind.

Similarly, on the rail side, we are working with primarily either bearing companies or directly few other companies where we are supplying stamping components for the rail industry, in addition to the cages where also we are working to develop more products which can cater to the railway market. Those are the things going on in wind and rail.

Similarly, in aerospace defense, we are doing a lot of stamping components which cater to that industry, and we are working with Tier 1, Tier 2 defense companies in India for those product developments. They are in a very developmental stage where we are making those and that's the portfolio, once they start, they could bring in a decent set of revenue.

Jumping to the inorganic topic you had requested or what you looked at in our annual report, basically we are looking at any opportunity which comes our way which can really enhance our capability while remaining in that specific space of precision engineering. We are looking at those as an opportunity if something comes across, but that's not really a mandate.

That's not something we are saying that we will go towards that. If right opportunity comes by, we may evaluate and look at it, and that's what we are trying to say.

Sure. One more thing was mentioned about EV-related products I think on mobility.

We are trying to service that through stamping,

sir? A little bit of stamping, but also a whole lot through bearing cages, working with our customers on improving the performance of bearing, whatever can be contributed through cages in terms of clean product, dirt-free product, or high-performance product, and so on.

Thank you so much, sir. Thanks a lot.

Thank you.

Yeah. Thank you for the opportunity and congratulations for the great set of numbers.

My question is on the Advantek side. If you could just share what kind of EBITDA margins Advantek did this quarter and because we are planning to close Advantek on PAT positive, what would be the EBITDA figure for the whole year for Advantek?

Advantek will be little lower EBITDA than our blended EBITDA for India business in this year, considering it is in the ramp-up phase, but we expect it to match our India EBITDA margin from next year onwards. Currently the last quarter, obviously because of the major impact we already discussed on the material pass-through and other, it has a 9% EBITDA.

Great. If I look at our standalone engineering business, it did quite well even after all the pressures from metals and everything.

If you could just share, I think it did a margin of around 24%. If we looking at the price hikes we are going to do, can we look at a better margin going forward?

I think that 24 is a little high number and we have shared over past also that because of the lag cycle, some quarters it may appear to be higher and some quarter it may appear to be too low. That's what is going on.

In general, we expect the margin in the range of 20%

to 22%. As a normal sustainable.

Normal sustainable.

Great. Thank you.

That's all from my side.

Thanks, Uttam.

Yes. Sir, coming to the solar EPC business, sir, why is there so much volatility?

Year on year, the business is up 120%, but quarter on quarter, it is down 65%. So ₹36 CR.

What is the FY27 outlook of revenue and margins, and what is the nature of this business quarter

on quarter? Solar is a very project-based business with fourth quarter usually it's linked to the financial benefit and so on, depreciation benefits.

We tend to see a very high fourth quarter, and usually post that, first quarter is lower. Having said that, we did have a pretty decent first quarter relative to last year.

On the revenue side, again we are looking at ₹200-odd crore revenue in this segment, and depending on opportunity develops, it can change a little bit. A margin sustenance on similar about, I believe...

7% to 8% EBITDA.

EBITDA, yeah. That's the general idea in the solar EPC.

It's again EPC business, what we do there is primarily build solar installation or solar projects, and as I mentioned, it's very project-driven business. We don't manufacture anything.

We design and install those solar plants.

Got it, sir. Sir, on the China bit, China plant was earlier stated to start by FY28, right?

Now if we are planning Q3 FY28, then the revenue will really flow in from FY29. FY28 also China growth will be very low, right?

What was the China revenue and EBITDA and Romania bit revenue and EBITDA for this quarter?

I think we continue to remain given the consolidated numbers for subsidiaries as of now. We already given the total losses for that.

Sir, on the capex part, was it earlier FY28 and now it was delayed?

It's Q3 FY28.

Our intention when we mentioned commissioning of Phase 2 FY28 is about operationalizing of our new building, revenue starting from that period.

Okay. Sir, on the Japan-based customer, I think this quarter we have seen high growth from 16 to close to 21.

Then why are we guiding just 10% for FY27? Do we see a downtick in the upcoming quarters and why so?

Question of downtick, if you see last year from Japan-based customers we did about ₹72 crore. We believe that the same run rate can continue, it will go up to in the range of about ₹80 crore or thereabouts.

There is no down. See, Japan they are very slow.

A lot of projects are under discussion, but we really don't want to because all other three fronts are growing very aggressively. Japan is a laggard in terms of growth, but it is still a growth, and it will continue to be positive.

Sir. Got it.

Sir, for Harsha, can you give us some sense of what is the pecking order in terms of your customers like SKF, Schaeffler, Timken, NBC? Who are the largest?

Who are lower? What is the customer concentration like top 5, top 10?

This is only for the India standalone business, of course.

India standalone, okay. I think for us, all this name you mentioned are our top customers.

They have a significant share of business with Timken, Schaeffler, SKF, NBC, ZF, Flender. These are our major customers, including, I think I forgot to mention the compressor component customer, Highly, and few others.

Again, we are supplying to these customers from India, since you asked about India, to multiple of their facilities. Even though you can say that my top 10 customer remains almost 80% of our revenue...

Spread over more than 80 plants.

Spread over more than 80 plants worldwide, yeah. Varun, actually in India, I would say not being very modest, we have almost 80%, 90% wallet share with almost all major customers.

Yes.

Yes, sir, I know. I have kind of visited a couple of plants, and they told me that close to 95%, 97% was actually from Harsha's cages.

That's very good. Just to kind of double-click on this, the top customer will be 15%, 20% of revenue for you, and will that be Timken?

That's range-bound, depend on their growth and their seasonality. More or less, you can say my top four customers keep changing their rank.

Got it. Just a last question, sir.

I think MD sir mentioned that you're working on something which you call the next step of technology in the bushings. Bushings we thought for wind gearboxes were the next step of technology from bearings.

Then what is next to bushings?

More precise and more accurate for the next generation of gearboxes. As we have explained, the bushings are getting replaced or maybe used for the different size of the gearboxes.

They keep on improvising, improving the method and accuracy both.

Sir. Thank you and all the best.

Thank you.

Yeah. Namaskar, Vishal ji.

Namaskar to the team. Thank you for this opportunity.

Sir, I was late to join the call, if you could just repeat for the sake of repetition also, what is our path for profitability for the Romanian unit first of all? Second point was we did EBITDA margin closer to 16% for the first quarter, with the capacity augmentation and the improvement in volume that we envisage, what should the likelihood in the band EBITDA we should be for the year as a whole, if any number you can share?

Saket ji, we already given in our investor presentation the net loss of China and Romania put together as ₹3 crore, and that's what we have disclosed. We have not disclosed individual numbers for Romania and China so far.

On the EBITDA margin, as we have explained in commentary also, current margin has some impact on the material pass-through. If we expect that metal price will be settled down or remain stable, then we expect even this EBITDA margin to be improved and to match the last year EBITDA margin percentage, which was 18.7%.

Last point, you are not audible.

Okay. EBITDA is about 18 that is expected against 16 that we have reported.

Provided the metal price will be stabilized.

Okay. Sir, for the Romanian unit and the Chinese part turning profitable or break-even, the path which we are going to glide, how long will it take?

I think so a lot of course correction was in the process especially for the Romanian unit, which you elaborated I think so one year ago also. Where are we, sir, firstly in the restructuring of the Romanian part?

The product part also, there were some very strong set of changes you are envisaging earlier. Correct me there, where are we there?

The part especially how will this unit start sweating and add to the top line and bottom line, especially the bottom line?

Saket ji, our target is to diminish their losses, so as Vishal explained in his speech, we have already now revamped the top team. We have put a new COO.

There is a strategy to increase the sale of cages from around 20%, 25% to maybe 30%, 35%. Here the problem is fixed overheads are high, and unless the key customer who is buying semi-finished castings reaches the previous level, break-even becomes difficult.

That is my challenge in Romania. China is continuously profitable.

For last few quarters we have seen a steady growth, profitability will range from 12% to 14% EBITDA, even little more. What we are guiding is that the combined loss at the end of the year, assuming that Romania will gradually taper, it could be maybe in the range of maybe ₹2, ₹3 crore.

Let us see.

As we progress, as we see the new team becoming more effective, maybe we can guide you for a better number, but at this point in time, let us take it as this year minor loss, hopefully next year some profit.

Okay. A point on the capex that we are doing, brownfield one and especially for Advantek, how is the order pipeline looking and how are we going to ramp up the facility going ahead?

Some more color if you could share, sir.

Saket ji, in our ongoing businesses, we are building up the capacity and we are confident to win the new customer orders. On the bushings and everything, we just responded in the last question in the last speaker that we are working on the next level of advance bushings also, and that's why we are building up the capacity.

Last but not least, on the stamping front, we are exploring the new products which meet our precision requirement.

Right, sir. Sir, when we read our invite for the call, we also have Mr.

Sanjay Majmudar as a strategic advisor. If you could be explain sir what is the role as a strategic advisor in the business aspect or what has been incepted to him, and just a basic understanding if that could be shared?

Sanjay Bhai is a practicing Chartered Accountant and he has supported and continue to support Harsha in all major strategic decisions, including he was part of our all the greenfield expansion as well as brownfield expansion, and he participates and supports the management and other team members on the various strategic decisions.

Okay. He would also be the one who would be guiding you people, mana, for shareholder value creation also.

That has been lacking also for a very long time, we hope that this should be the term, I think so, the inflection point for the company going ahead. I hope Mr.

Sanjay would also throw some light on what steps he would be taking or advising the senior management here, sir, for value creation for us also. That was small point, sir, just thought of sharing with you.

I've been involved with Harsha for last 20 years and will continue to do so, don't worry. Always there.

Sir. All the best to the team, sir.

Thank you.

Sir. Thank you so much for taking my question.

Sir, just wanted to know, in terms of the West Asia crisis and everything, if I just look at your India standalone margin for only engineering, that was 24.4% in FY26. Now you did mention a band of 22% to 24%, which is probably lower from the last year.

Is it probably you're assuming that the RM prices, etc., it's volatile? Is that the reason probably you have lowered the margin?

Just some clarification on that. Also

we continue to spend on our ramp-up cost at Bhayla.

Sure.

Thank you. Thanks.

We expect the margin percentage to remain similar, but there is a metal price increase, which will reduce the percentage. We expect that absolute value increase will continue, but definitely percentage will reduce because the material pass-through will enhance the sales price recovery, as we have discussed in one of the previous question from one of the participants.

That's why we have given that little lower guideline. At the same time, additionally we will also continue to spend on our Bhayla site expansion and the ramp-up cost.

These two factors will impact that.

Sure. Thanks, sir.

So 22% to 24% stays the guidance for the India engineering business. Sure.

One more thing, I just wanted to ask you, in terms of West Asia crisis also, of course it is still not over, but it's kind of again a very hanging kind of situation. Do you see RM prices getting normalized going ahead?

What is the outlook on that?

As of now, no idea. We expect it to be settled down soon.

Sure. Sir, again for revenue growth, just wanted your expectations for the Romanian and Chinese subsidiaries.

What kind of revenue growth are you expecting for FY27?

I think Vishal has already answered for the subsidiaries, we expecting double digit to around low teens.

No. I clarify here.

Romania, China together will be less than 10%. Harsha India will be more than 15%.

On an average between 12%

to 15%. Sure.

Sir, just finally wanted to ask you, of course Bhayla capex is being done, and then the China capex also will come on stream in Q3 FY28. Sir, just what is the visibility for the demand from both these entities?

We spoke in the last call that you need to have a local entity in China for manufacturing and that is very helpful. Just also wanted to know what is the visibility of demand for the Bhayla capex and the China capex separately if you could throw some color on it?

We feel fairly confident on all our investment done in Bhayla and we are seeing traction on all the product lines we are working on in Bhayla. Specifically if you talk about large-size cages, or stamping components, as well as bushing.

We see a good visibility and demand coming up for our customer for those products. That's why we are continuing to invest since we announced last quarter second phase of expansion in Bhayla.

On China, again there is good expectation and traction by being local. China being a very good market or very large market for bearings and we see an opportunity for our quality of cages to get traction, and so we have a good outlook on both those fronts.

Bhayla we started much earlier, so that we are expecting that to ramp up in next couple of years, whereas China will take at least till towards second third quarter FY28 to start production and ramp up in '29 onwards.

Sure. Just a final clarification, sir.

For Bhayla, you said that the revenue target is ₹140 crore for '27, is that right?

Yes.

Yeah. Okay.

Thank you so much for answering my questions. Thank you.

Hi. Good evening.

Congratulations on good set of numbers. I have two specific questions.

One is on Bhayla ramp-up. Given that you have also launched your Phase 2 capex before ramping up Phase 1, I presume that it is backed by some demand potential.

From a ramp-up perspective, how do you see ramp-up for Phase 1 and Phase 2?

I think you rightly mentioned that we started Phase 2 because some of the products in Phase 2 are a little different, even though they are stamping. Phase 2 is also in terms of we are seeing what we invested will get filled up in next one year or less than one year, and then we need to anyway expand further.

That's what it is catering to. I don't have a specific number vis-a-vis Phase 1 and Phase 2, but in past we have shared that Bhayla we are expecting that it should give revenue by third year roughly about ₹300 to ₹400 crore, so that's what we are targeting coming out of Bhayla combined Phase 1, Phase 2.

Okay. Understood.

The other related question is, given that most of the incremental growth is either coming from India and specifically Bhayla where you have higher value-added products, and China which is more brownfield, and Romania where your loss-to-profit is going to happen, is it fair to assume that your EBITDA growth will be much higher than revenue, and also your PAT will be much higher than EBITDA because the Advantek is a lower-tax entity? Is this a fair assumption, PAT growth higher than EBITDA, EBITDA growth higher than revenue for next 2, 3 years?

I think you are right, at least for this year it will be very, very remarkable because quarter-over-quarter Advantek losses will dramatically reduce. Hopefully, if Romania also start turning around, it can definitely be higher.

Let's confine ourselves to this year.

Okay. Understood, sir.

Thank you so much and all the best.

Thank you, Resham.

Great. After a long call, thank you very very much, everyone, for attending this call and hope you have a very good evening.

We are always available for any clarification. Thank you.

Thank you.

Thank you.