Thank you. Good afternoon, everybody, and thanks for joining the earnings call.

We have uploaded the presentation. I hope all of you had a chance to have a look at it.

Straightaway, we can start with the Q&A, please.

Hi, sir. Good afternoon.

Just one question when I look at

Hello, am I audible? Hello, am I audible?

Hello?

Am I audible this time?

I think he's not able to join, looks like. Then

Sir, can you talk about a little bit on the alloy wheels project on the expansion side that we had?

Yes. The exit rate of the alloy wheel approximately it is around volume-wise annualized when you look at it on the March.

It is equal to around 3 million alloy wheels is the exit rate for the month of March. We cannot say that we have been ramping up in steps at Bhiwadi as well as in Shoolagiri.

We have done at a volume which is at a run rate equal to close to 3 million wheels for the month of March for the annualized, I would say.

The project would have started in quarter 4, right?

Quarter 4 or quarter 3 for Shoolagiri,

but

Bhiwadi is operational the Phase 1 is operational for the full year.

Okay. How about the Hosur one?

Hosur one we started in Q3, and we are still ramping up. Both plants we are still ramping up.

The exit run rate has been to the tune of annualized March number when we annualize it is equal to around 3 million.

Okay. In the aluminium die casting side of the business, the acquisition of the Sunbeam, where are we in terms of the capturing of margins via the shift, and what is the progress there?

We are lacking behind on the margin-wise with the Sunbeam still at single digit for various reasons, but we are on the right track that we are exiting customers where it's not profitable, existing subsegments of the business with the same customers where it's not profitable totally, or even selling one portion of the low-value business, which is around ₹30 crore per year. We have sold that line of equipment and business, which we had disclosed to the stock exchange.

The customers who are exiting also need some time to find other suppliers. These are non-profitable businesses and unviable going forward.

The restructuring is on. We are on the right track.

From Q2 onwards on the current year, we will see some traction. The reduction of manpower, the reduction of products, reduction of customers, and revisiting everything, and also resetting the prices, which are legacy prices, legacy products.

Also, on the aluminium price reset or the aluminium price pass-through, we have been very clear with the customers. Where aluminium price pass-through is not there, then we are declining to supply.

All these are in action as far as Sunbeam is concerned. Not only in Sunbeam, across the other aluminium plants also, it is slightly common.

We will see the results coming into Q2 from Sunbeam.

Okay. My last question is on the growth rate overall.

How should we see FY '27 to be looking like on the revenue growth side?

As I mentioned last time itself, for the first time, we had given some guidance because of so many changes in the business, so many plants coming in, and also subsidiaries. I will just give you a rough indication.

It is surely double digit, most probably in the mid-teens, I would say. That is what is the expectation for the growth.

When you say mid-teens, we also have to assume that the aluminium prices are around the level what it is currently. If there's any change in the aluminium prices, there can be some commodity price impact, which will either inflate or deflate the top line.

I say that we are still on the growth path. That is very clear.

New projects are kicking in across all the divisions, I would say, whether it's powertrain or aluminium or also industrial engineering segment. We are well placed, I would say.

Okay. Thank you, sir.

Thank you.

Hi, sir. Am I audible?

Yeah. Sir, just want to understand are you having any plans to scale up any particular segment over a medium term for the next 3 to 4 years, apart from the powertrain segment?

Powertrain is scaling up. Also, the order book for the first 100 million is finalized and is with us.

As stated earlier, I would say, we will be able to reach that 100 million sort of revenue in '29-'30. It is on track.

The second phase, the order intake of the inquiry momentum is pretty strong, we may go for Phase 2 expansion there also for beyond that 100 million revenue. You are aware that the data center market or AI is booming all over the world, and post the Iran crisis, there is more focus on the Pacific region for installing data centers.

This is giving some more advantage to manufacturing in India, in some sense, for them. Capacity-wise, almost everybody is full.

That is another positive point. Coming to the general powertrain, the other projects of multinational companies setting up plants here and ramping up, that is also work in progress.

We're seeing that. The domestic business, farm sector has been doing better.

Truck segment is somewhat muted, I would say, in general. The other business about the export of some truck engine blocks to outside India, which we said will be discontinued, but that is going to continue.

That's a good news. On the powertrain, we are stable, and we are growing.

I think we can expect a double-digit growth. On the aluminium side, we are present from two-wheeler to four-wheeler to also industrial aluminium, some portion is there.

Frankly speaking, we are focusing on value-added products like casting and machining. We are not interested really to do only the casting portion.

Wherever we're doing a little, I think we are in negotiation with customer. Either we convert it with machining, or we have to find new customers with higher value addition.

Because aluminium per se, the commodity price are going up, energy price are going up, labor cost is going up, and also all consumables are going up. The margins on basic raw castings is not going to be viable, and at Craftsman, we don't have that business model.

95% is machined. In DRA, yes, it is critical castings, it is still okay for some basic machining.

For Sunbeam, it is not okay because it is not so complicated parts, but at the same time, at least the domestic portion machining is not there. There will be some tough decisions to take in the coming quarters on the improvement in value addition.

To answer your question, we don't really worry about which is the customer. We are getting inquiries for four-wheelers for export market, both Europe and North America.

There is more increasing inquiry trend, at least. This means the potential for growth in export segment is quite high.

We are picky and choosing the business, which is viable and sustainable over a longer period of time. Our stated ambition on the aluminium business in the last year, I think I've mentioned a couple of times, at least, during the earnings call, that the first leg or first phase will be to touch $1 billion in the aluminium business.

For that, we're also increasing the focus by merging the entities of the business model, which we have also put up disclosures in the stock exchange. The aluminium business is on a growth track.

On the industrial engineering, yes, it is a smaller portion of the business, but that is also the backbone for our powertrain and aluminium business. There also, we see good traction going forward.

That was helpful, sir. Thanks for detailed answer.

Just one question, sir, on the second phase of the powertrain segment. When are we planning to start and commission, and the revenues we can foresee here for the second phase?

I think we should take a decision by September based on the order import. Now the orders what we have already agreed to take or taken or order received, I would say, is completing the capacity for Phase 1 both at the foundry side as well as at the machining side.

At the foundry side, it is modular and it is only incremental investments required to go to the next phase. On the machining side, it might not be just incremental, it's slightly more than incremental.

We're preparing for that today. The lead times are quite high, and one good thing is we had our investment done starting from '21 onwards itself in small, small steps.

In '23, '24, we had made disclosures, and in '24, even a public disclosure regarding this business. I think this gestation period is quite long.

That is the reason our foundation in this business is pretty strong, and we are able to capture the orders or the growth, which is coming in a hurry now. Even the next set of orders, we'll be able to have a step-up incremental investment where all the building blocks are there to go up.

All the decisions will be taken basically after reconsidering or looking at the order position in September.

Sir. That was helpful, sir.

Thank you. That's it from my side.

Okay.

Thanks for the opportunity. Am I audible, sir?

Yes, you're audible. Yes, please.

I just want to know is there any new business opening for our industrial engineering, racks in data center business?

Data center per se, yes, there is possibility, but it'll be more going into aluminium side for certain reasons. I understand that requirement is also using some extrusions and things like that.

Far, we have given racks for the manufacturing sector, for the automotive, where they are storing the batteries because it has to be very safe for fireproof and things like that. We have supplied ASRS systems and vertical lift modules for this divisions.

The scale which our Asian neighboring country has done, I think there they're using a lot of storage. There's a lot of discussion happening for two of the projects coming in for battery manufacturing.

Yes, something may come up. It may be awarded to multinationals, but I think there is an opportunity, but it not be in the scale of what has happened in our neighboring country China.

Sir. Thank you.

That's it from my side.

Thank you. Am I audible now?

Perfect. Sir, I have two questions, sir.

One is in relation to the powertrain segment margins. We saw a good spike this quarter.

Is it attributable to scale benefits and will it sustain? One.

In relation to that, you mentioned that overheads, labor, et cetera, are going up. This question pertains to all the segments.

How easy will it be to pass on all these overheads, energy cost, maybe labor, et cetera, to the customers in the given context?

On the powertrain segment, I think we have grown only a small portion last year. It's not the scale benefit which is really played out in the last year.

I would say that the repair and maintenance which went on for almost 4-5 quarters, which was depressing the EBITDA margins where the main reason for that change. Some of the manpower reduction by some automation or better methods, that has also paid off in general.

I would say the new products at the newer prices, which some of them have come into production, has helped also to average the legacy prices. The scale has still not built up on the powertrain as we expected.

It is likely to have a meaningful advantage in the coming years, I would say. I would draw one attention here.

The amount of capex which has gone into powertrain and subsequently also in aluminium. The capex powertrain is very difficult to replicate because of the today's cost scenario.

You had mentioned the operating cost. I will now talk about capital costs.

Capital costs, some of it is real estate like land and building, which everybody knows how much it has gone up. I also say the equipment which was costing, say, $100,000, may have gone up to 110 or $115 over the last 20 years with better features.

Maybe the better features or better productivity might have offset the increased cost of the then in dollar terms, maybe from 110 $100,000 to maybe $110,000 or $120,000. What is the most challenging is the dollar, when we look at a period of almost 15-20 years, it is almost doubled.

20 years, it's almost doubled, right? Totally on this.

Capex cost for anybody entering this business is very, very, very large totally. Here, we are using a mixture of our own equipment manufacturing for the special-purpose machines and very, very prudently we are adjusting the requirements to still be competitive and get more orders.

The new orders are coming at new prices. There are legacy issues which we need to address on all the consumables like power, the cutting oil, which is petroleum based, the tools, which are carbide based, which is imported from China, which has increased multiple-fold in the last and of course, the labor, labor cost is the beginning of the journey, I would say.

We are less than a dollar on the contract labor. Of course, we don't employ a lot of contract labor, but it is less than a dollar per hour.

This is going to significantly improve to double or triple in the coming years. What we have done is in the last many years, we never cut back on capex.

That is shown in our depreciation being very, very high. That is helping us to mitigate some of the labor cost increases.

The labor code really is not affecting us in a meaningful way in total. More so, whatever equipment we have invested in the last 2 years require less and less labor going forward.

We can afford to retain the quality labor, I would say, in some sense. Coming to the aluminium commodity price for the aluminium business and also across all plants regarding the power and fuel, mainly power and fuel is more specific for the aluminium business.

The legacy products from at least one of the acquisitions we made in the last is suffering very badly because of the 15-year-old, 10-year-old legacy products and some of the minuscule customers. The minuscule customers, we are exiting, and the legacy products, we are resetting the prices or we're exiting or we're reallocating that capacity to other profitable customers.

That is on already, and that is the way we need to look at it because what costed something 10 years ago, the component price on the gross margin cannot remain the same today in today's context of prices. Yes, there should be not a price increase, but a reset of the prices, I would say.

Because price increase means it is a small percentage, but now on value addition portion, it has to be a reset.

Understood, sir. Sir, the second aspect I wanted to discuss was on cash flows.

When I look at your cash flow statement, in FY '25, there was a negative working capital impact of about ₹400 crore, and FY '26, there's another ₹600 crore. I want to understand how to think about this.

Is it because of one-time reduction in payables, which will reverse in coming years, or is this the level at which the working capital days will stay from here on?

I think the aluminium business was ramping up in the last 2 years. Earlier, it was mainly powertrain driven.

That means suddenly there was a spike in the working capital requirement, and now rationalization is happened. I think the payment cycles are also set in, I think it is the same way going forward.

I don't think there's any big change.

Okay. Sir, last thing was on capex.

What is your expectation of capex for say FY '27-'28 and, as a result, how will the debt reduction, et cetera, move?

On FY '27 itself, we're not very clear about the capex as today because we have taken some interim requirements, but September we have to decide on the capex even for FY '27. FY '28 depends on the performance of FY '27.

We are continuously monitoring the net debt to EBITDA as the monitor to bring it down. That is how we look at it.

Today, we are more concerned about the absolute payout on the cash flow for the manpower-related costs. It may be workers, it may be staff, it may be anything related to services outside also.

Because this is the inflationary manner, we don't mind some investment to offset that increased cost.

Okay. Should we think of capex similar to say last year, ₹1,000-₹1,100 crore for this year?

I know you mentioned that you have to reset it in September, but as of now, is that a good number to work with?

See, here when you speak the dollar has become 95, we do not know whether the dollar is going to go somewhere else. We do not know whether we are going to get medium-gestation projects or quick projects, I would say.

When there is a quick project, then the capex hits us immediately, otherwise it may be postponed by a year or two. We will take it in steps going forward.

As I mentioned that net debt to EBITDA will continuously start falling down because the heavy weight lifting has been done. Proportionate to the gross block today, if you look at it, and the gross block is also a little deceptive because the bulk of the investment has been done many years ago, and that has done at a lower capex cost.

Today, when DRA-Axion wanted to go for another plant, just for the greenfield land acquisition itself on public disclosure, it is in the region of around ₹150 crore. Around ₹150 crore just the land, which is adjacent to the SIPCOT area.

We paid less than the SIPCOT area, but it is the capex which is required. The current civil construction when you are looking at it, it's high.

The cost of doing business or cost of expansion is disproportionately high on this matter. In spite of that, our ROCE on a consolidated basis has been 16%.

We can track net debt to EBITDA and ROCE more rather than the debt portion. As Craftsman, we look at more the outflow towards manpower cost, which is, I think, for us which is causing sleepless nights, not the debt portion.

Understood, sir. Thank you.

Thanks for all the responses.

Thank you.

Thank you for the opportunity. Just wanted to know a couple of things.

One is on the capacity utilization. If you can just throw some light on powertrain and then aluminium all the three different units, at what capacity are they being utilized?

Powertrain, we are still at around 65%-70% because there are some pockets and segments where the customers are not doing well. I think 85% will be the upper limit, so that means we have around 20%-25% headroom if the market does well.

There also, we are slightly adding capacity on the conventional powertrain. On the new powertrain business of the large engines, it is still not seeing any revenue.

Only samples are going and some pilot lots are getting invoiced, but it is not even 0.5% of our powertrain revenue as of now. Even in the current year, we don't expect that we'll be anywhere a meaningful single digit.

It'll be very low single-digit number. Next year, it may be reaching high single-digit number, I think, part of the powertrain of the large engine projects.

'29, FY '29, FY '30 will be seeing a good traction on that segment. There, the capacity utilization is practically in 10% level because still all the lines and samples and prototypes are going on.

There's no revenue per se. Overall, if you take that new powertrain business also into consideration, our capacity utilization is around 60%.

On aluminium?

Aluminium on the alloy wheel, I think I had just mentioned that our exit rate is around close to 3 million on the annualized basis as of March, and our capacity is around 5.5 million. I think we should touch around close to 4 million in the next year.

That means around 75%-80% capacity utilization within the plants. The next level of expansion there, which we had said Phase 2, we are not really pushed hard on that.

We want to wait and watch on this matter. We are looking at the commodity prices pass-through on the aluminium pricing.

It has to happen that we need a lot of support from the customer to do that. That should not be lead lag there, which will hurt us badly.

Second thing is imports of this alloy wheel. What is the way going forward?

Is there going to be some competition coming there back after the BIS norms has been more or less settled down now? We have to wait and watch, but the current capacity is more or less sold.

We don't have any major issue on that matter. Whether to expand further, which will give better operating leverage, is a matter of question.

We'll take a decision after this financial year. I don't think we'll take a decision in this financial year to further stretch the alloy wheel capacity.

What about Sunbeam and DRA-Axion? Are they included in this?

No, Sunbeam and DRA-Axion does not do alloy wheel.

What are their capacities?

Sunbeam is a new acquisition where we are downsizing the capacity, downsizing the customer base, downsizing the product lines. I think that was my first statement that we're exiting customers, we're selling some of the lines, there have been a public disclosure, and even with the same customers subproducts we are exiting.

The capacity utilization, which is around 70%, will come down to around 45%-50% for the Sunbeam because some of them are legacy products, unviable to continue manufacturing. That is one thing.

Subsequently also the cost will come down, the operating cost will come down, and actually margins will improve when we do that activity. That capacity will be utilized for new customers and new products in that way.

That is a new acquisition, which is work in progress. On DRA-Axion, I think we are operating at a reasonable capacity, which is beyond this capacity we cannot really extend ourselves because we are a very critical component supplier to the four-wheeler manufacturing customers of ours.

We have received more orders with the same customer base, and also more Indian OEMs also have given orders to us recently. We are expanding that capacity.

Their capacity utilization is to the tune of around 80%-85%, I would say. Beyond that, it's again seasonal, we cannot go beyond that.

There is investments going on in DRA. In Craftsman side, also the capacity utilization is a reasonable 75%-80% level, but our incremental orders are quite strong, we're increasing capacity.

Sunbeam, as I mentioned, we are decreasing capacity. The capacity will be reallocated among that.

That is one of the reasons for our restructuring if you have seen. That we can with one vendor code or with the same customer base we can operate the capacities.

The other thing which I wanted to check out was what is this deal that we have done with Sukritha Buildcon developers and Ksheera Technologies for your Sriperumbudur project?

That is DRA-Axion. We couldn't get the land on time from SIPCOT, which is equivalent to the MIDC in Maharashtra.

The land parcel what we wanted is 50 acres, and we couldn't get that. We got bits and piece of 5-10 acres, and new sites which were still not allocated, there should have been a delay of 2 years in the project.

Customer was giving an order, time-bound order. Adjacent to the SIPCOT land at a lower price, which I had mentioned now in the same earnings call, we had taken at 15%-20% lesser land parcel, which has been accumulated by some property developers by buying maybe from 150 individual land users.

We have taken over as a vehicle the investment in those two companies. We have taken around 50 acres of land at around ₹150 crore cost.

We have taken over those companies. Those are the subsidiaries.

When would that be commissioned, because it's a greenfield project, right?

The greenfield project is already on. The civil construction is on, and the plant will be commissioned by December.

Next year it'll be in operation, and all this will get merged when we're doing the scheme of things whatever we have filed. There will be no subsidiary once that is,

yeah. One one last question, if you don't mind.

Any development on the Sunbeam land sale?

We have put it up for sale. Now the prices have gone up.

The government has taken some action for widening the road and we are road facing. We have seen that the property prices are shooting up.

Still, I think the sale is little elusive because whoever is looking for buying it is asking a discount from the current market price. Current market price has got reset by at least 15% in the last 1 year on the matter.

It should get sold. It's only a matter of time.

Initial price whatever we wanted to sell, at that price there are too many buyers, I would say, but we are not willing to sell at that price.

Yeah. Thank you, and wish you all the best.

A very good set of numbers.

Thank you very much.

Thanks for the opportunity again, sir. Sir, just wanted to check on the manpower thing, which we are focusing on rationalization or cutting cost.

Could you throw some light on it, how are we planning to do it?

This is by better operations in general. Better operations means also better equipment, better layouts, better processes, and some amount of ergonomics in the handling of the production.

On top of it, some semi-automation and some automation where there is some volumes. This means that reinventing the production to a very high manpower productivity.

Any approximate cost or benefits we would be estimating from this move, sir?

I'm sure that still it will be inflationary even after doing all that. See, even inflation of manpower cost is going to go up by 20% year on year instead of the 5%-10% that we'll be good enough to have a manpower savings or without additional manpower growing.

We'll be mostly be able to offset the incremental manpower cost, but surely there will be incremental manpower costs. If not, otherwise we will see huge amount of incremental cost, which will not be for Craftsman or Craftsman Group alone, it's across the industry.

You can see that happening all over the place. Now everybody is talking about labor shortage and it's not really labor shortage, it is the cost of labor going up and labor not willing to work at that particular prices.

We have seen protests in the NCR region overall across three states various reasons. When I don't want to comment on that because it's very sensitive, I would say that there is going to be a reset in the labor cost and all the governments are working towards also increasing the minimum wages, which has been done on some states very recently in the last few months.

Now the new labor code also is coming to picture, and this minimum wages will be getting reset. This is on the bottom of the pyramid.

We don't employ too many people at the bottom of the pyramid except for the acquired company like Sunbeam. Otherwise, also the cost of manpower is going to go up in general.

What is worrying us more is not the debt, as I mentioned. What is worrying us is the inflationary manpower cost, which is very difficult to pass on to customers.

That's where we are working on.

Sir. Thanks, that was helpful.

Any timeline for the aluminium segment of reaching $1 billion, sir?

I think it'll be 2 to 3 years' time. It is also little sensitive towards aluminium prices, but I would say that at current aluminium prices, I think 2 to 3 years we should be there.

Okay. Thank you.

Thanks.

Hi, good evening, sir. Thanks for the opportunity.

My questions primarily on the decision to consolidate the aluminium entities, Sunbeam, DRA-Axion. Could you walk us through your strategy behind this, what are the steps that you'll practically be taking to extract more value from this consolidated entity?

That's what I wanted to know.

We look at our public disclosure, we also mentioned that not only Sunbeam and DRA, we also looked at our aluminium business of Craftsman also, how we can have better leverage or better synergy between all the aluminium businesses. That is our target.

The easy one was how to do it with DRA and Sunbeam, but is also related to Craftsman aluminium business. The way to look at is that, for example, we will be around ₹6,500 crore in the aluminium business in the FY '27 or so, just an approximation.

I don't want to give any guidance, please. I will negate that if it is taken as a guidance.

What I'm trying to say is that some equipment, some people, some processes may be redundant there, redundant here. We may have customer base.

Is difficult to do marketing with these small, small subsegments in the business, and our competitors across the world are $3 billion to $6 billion in revenue. These are the customers, some of them are already present in India wanting to expand their footprint.

When we go with each of the businesses at ₹200 million, ₹100 million revenue, or ₹300 million revenue, and try to take an order for $100 million, $200 million, it is to share the resources and to grow the business it is becoming unwieldy. It's very expensive.

That is the reason for looking at the synergy and trying to merge these businesses.

Understood. This will not just put us in good stead to win more businesses, but will also make the operations more efficient, it'll be a benefit on both ends.

Yes. See, Craftsman doesn't have a plant in Chennai for the aluminium business, but all our peers from the North and West have aluminium component manufacturing like Craftsman.

There are quite a few, some of them are also listed. All of them have got a presence in the Chennai region, but Craftsman per se doesn't have a presence in the Chennai region.

We are in Coimbatore and we are in Bangalore and Hosur as of now. We want to create a separate campus for that and add aluminium business of Craftsman, which is high-pressure die casting mainly.

Then DRA's plant is full, we have to expand DRA-Axion. When we're going to put a plant there for DRA-Axion, then again one more plant for Craftsman doesn't make sense.

It is better if we look at it in the future to share. That is the idea behind it.

The first step is about very clearly sharing the DRA and Sunbeam subsidiaries.

Sure, sir. Thanks for your time.

sir. Good afternoon.

I hope I am audible.

Yes,

Yes. Sir, just on the leverage point, I understand philosophically you're thinking about leverage, but just from the outside, ₹3,300 crore seems a bit on the higher side.

Two questions. One is are you looking at the consolidation of the aluminium business as a way to deleveraging or do you believe that there are other ways to reduce debt?

Some concrete guidance on that would be helpful.

It will be more to fund our future investments maybe, but I think this debt to EBITDA-wise if you look at it the forward-looking EBITDA, I think we are already at 2.43 net debt to EBITDA. We are looking at going forward, it'll be less than 2, I would say, in the current year itself, totally.

Then it'll go down further to 1.5. That is a natural progression of the debt to EBITDA.

The way to look at is if we don't grow the business at the current level, I think the debt may be lower, but I think the EBITDA margins will start looking downward, I would say, without the new products. The land sale of Gurgaon, if you take away the land sale of Gurgaon, then look at the debt, we should look at the debt at, say, 2,700 on the consolidated basis, not at 3,100.

Right.

Sure, that helps, sir. Thank you so much.

Hi, sir. Thanks for taking my question.

Sorry if it is a repetitive question. Could you broadly tell me what margins did we clock in DRA-Axion and Sunbeam in FY '26 for the whole year?

I think that will come in the segment-wise results. Independently, I think we're around the same range, I would say.

It is a slightly different business. On the aluminium side, we have given the segment-wise results.

There is absolutely no profitability if you look at it, at EBITDA level, it may be there at Sunbeam, but profitability is not there. You can just look at that number between DRA

and

Bulk of the EBITDA comes from these two companies, Craftsman and DRA.

Got it, sir. Secondly, sir, how is our alloy wheel business ramping up?

What kind of revenues are we clocking there?

Sir, I answered that already, I think, on the alloy wheel because the current run rate is around 3 million exiting out of that. The revenue-wise, if you look at it, last year it's not that much.

Around ₹240 crore, I think so? Or ₹280 crore, is it?

Around ₹280 crore is the revenue in the last financial year for the alloy wheel.

Got it, sir. Margins would be somewhere in the low single-digit EBIT margins?

For the Bhiwadi plant, it will be at the highest single digit or maybe even double digit, but at the Hosur plant, it will be single digit because still it's ramping up. The plant utilization level is not high, that's the reason.

Got it, sir. Understood, sir.

That's all. Thank you.

Thanks for the opportunity again. If I look at the aluminium business EBIT level, we are at around 10.3%, which was same as last year.

This year, with the corrections that we are trying to make and value addition, etcetera, would you look at at least a couple of percentage points growth there? See,

the aluminium business significant capex has been done last year. If we had stopped capex in the second half of the year, I think the margins would have improved.

Those capex has not been put to use at all. What is distorting the margin expansion is the new capex, which is under commissioning or just started production, which has not yielded to the full-quarter revenue, surely not the full-year revenue on the matter.

When the base becomes higher on the installed capacity and then marginal investments are being made, that might not affect the depreciation and margins. I think that is one of the reasons you see that it is not an apple-to-apple comparison.

Should we look at around 100-200 bps increase in the next year on this margin?

If we're growing at this rate, no.

Okay. Because

the future capex in this year will again spoil the margins, whatever gains we are making on the installed capacity.

Maybe another 2-3 years down the line, it could be a much better

If our base is 100 and we are expanding by 5%, then the margins will improve. If our base is 100 and we're expanding at 30, and the result is shown as 110 on the practical results because still the other things are not utilized, it's something like 20% growth in capacity, but a 5% growth in revenue.

It is disproportionate.

Understandable. The coming years will be much, much better.

I think when we reach across $1 billion and then we slow down the capex and then it is a smaller portion of the installed capacity, then the margin should improve, provided we get the right products at the right prices. Yes.

Okay. Thank you.

Thank you very much.

Thank you.

Thank you for all joining, and thank you for the confidence of the investments done. I think investments done a little earlier and the borrowing done earlier is a better choice because in the coming few years the same capex which has been done in this financial year, it will be 1.5 times more because of the capex cost increase.

This is one of the factors which we have taken into account that to put up capex a little earlier so that we will become more competitive in the future. Thank you very much, and we'll sign off.