Good afternoon, everyone, and thank you for joining the Q2 and H1 FY27 earnings conference call of Pitti Engineering Limited. Along with me are members of the senior management team and our investor relations partner from SGA.

Our financial results and investor presentation and related disclosures are available on the stock exchanges and on the company's website. I hope you have had the opportunity to go through the same.

The global economy continued to face inflationary pressures and supply chain disruptions amid the ongoing conflict in the Middle East. With geopolitical uncertainties likely to persist, we are also witnessing price increases across our raw materials.

Despite these challenges, demand remained robust. India's investment-led growth and rising demand for value-added engineering solutions continue to provide a favorable long-term outlook for our business.

At Pitti Engineering, we have evolved from a manufacturer of electrical laminations into a broader engineering solutions company with capabilities across laminations, castings, machining, and other value-added components. This evolution has been driven by our focus on understanding customer needs, expanding our manufacturing capabilities, and building long-term relations with leading global OEMs.

Looking ahead, we believe three structural forces are shaping the demand for engineering industry and creating opportunities for us. First, the sustained investment in infrastructure and manufacturing.

Ongoing public and private investment in railway, power, and manufacturing is expanding the installed base of rotating electrical equipment. As infrastructure and industrial activity grow, does the need for motors, generators, and precision-engineered components that go into them.

This creates opportunities for us to support customer across wider range of applications. Second, the growing electrification and digitalization of economy driven by AI data centers and infrastructure.

The shift towards a more electrified and digital economy is increasing the need for efficient motors, generators, and reliable engineering components. As these applications evolve and customers are looking for products that deliver greater efficiency, precision, and performance, our expanding capabilities across lamination, casting, and machining positions us to address this broad range of requirements.

Third, the consolidation of global sourcing. International OEMs are increasingly looking to work with manufacturing partners that can offer scale, consistent quality, reliable execution, and wide range of capabilities.

This creates an opportunity for integrated companies like us to deepen existing customer relationships and increase our share of business and participate in new platforms. Together, these trends provide a favorable long-term demand for our business.

Our focus on converting these opportunities into sustainable growth by expanding capacity in a phased manner, strengthening our engineering capabilities, and continuing to deliver on customer expectation. A few months ago, we had announced the first of our major capacity expansion for a greenfield facility in Hyderabad covering the casting and machining.

The project was to be commissioned in a phased manner through FY30. This investment was backed by strong order visibility for marquee customers across high-growth sectors such as data centers, mining, off-highway vehicles, and railways.

Building on this, now we have announcing a new capacity expansion in lamination and machining. The objective is to consolidate our lamination operations in Bangalore and progressively increase our sheet metal capacity to 160,000 metric tons per annum and machining capacity to 1.31 million hours by financial year '31.

This expansion will strengthen our ability to serve existing customers, pursue new opportunities, and support long-term growth. The total planned capex for this project is ₹450 crores, comprising approximately ₹125 crores towards land procurement and the remaining ₹325 crores towards infrastructure, plant, and equipment.

The new greenfield facility will provide a platform for consolidating the Bangalore operations and creating capacity for the next phase of growth. The entire investment will be incurred in a phased manner till FY31, with capital deployment linked to project milestones and capacity requirements.

This approach will allow us to align investment with business needs while ensuring that capacity comes on-stream in a timely manner. The project will be funded through a combination of internal accruals and debt.

Coming to the operational and financial performance. In terms of segment-wise revenue, Q2 FY27 traction motor and railway components continued to contribute the highest share of the revenue at 27%.

Power generation accounted for 16%, followed by industrial and commercial applications at 12%, mining, oil and gas at 10%, special purpose motors at 8%, and data centers at 7%. This diversified mix reflects the range of applications we serve and multiple demand drivers supporting our business.

Among these segments, data centers have emerged as a strong near-term growth opportunity. As we have highlighted on multiple occasions before, the demand remains robust driven by significant power requirements of AI-led data center infrastructure.

The need for reliable primary and backup power generation. We are seeing strong demand from customers such as Cummins, Marathon, and Nidec in this segment.

We are also developing new opportunities with few additional marquee customers in the same segment. Beyond data centers, we continue to see strong demand visibility across railways, metros, mining, off-highway equipment, and specialized industrial application.

In railways, the modernization of North American infrastructure along with investments in rail networks and mobility solutions is supporting demand for our products. Similarly, increasing mining activity and demand for off-highway equipment are creating opportunities for our machine components segment.

Overall, our diversified end-market presence allows us to participate in multiple growth opportunities. On the volumes front, total lamination and assembly volumes for the quarter stood at 21,600 tons, a growth of 26% Y-o-Y.

H1 lamination volumes increased to 41,000 tons, up by 22% compared to H1 FY26. Total raw casting and machined components volume for Q2 FY27 was 3,086 tons, growing by 6%, and 6,054 tons for H1 with a growth of 1.6%.

Coming to our financial performance. Before discussing the numbers, I would like to highlight that in September 2026, the company merged its two subsidiaries, Pitti Industries Private Limited and Dakshin Foundries Private Limited, with the parent entity, Pitti Engineering.

Accordingly, the financial results for Q2 and H1 have been reported on standalone basis with previous numbers restated to ensure comparability. For Q2 FY27, our total income stood at ₹581 crores, compared to ₹499 crores in Q2 FY26, registering a growth of 16.3%.

For the half year, revenue grew by approximately 15% to ₹1,110 crores, compared to ₹963 crores in H1 FY26. Adjusted EBITDA for the quarter stood at ₹91 crores, compared to ₹80 crores in Q2 FY26, a growth of 13%.

The EBITDA margins stood at 15.8%, impacted by a increase in forex loss, increase in consumable and packing cost, and along with increase in fuel and power costs. Adjusted PAT for the quarter stood at ₹36 crores, compared to ₹43 crores in Q2 FY26.

It's important to note that in Q2 FY26, we had ₹21 crores of other income from Maharashtra government for the package scheme of incentives that we enjoy for our Aurangabad facility's investment. We have decided to defer this claim of incentive in the current year to the next financial year with the objective of maximizing its cash flow.

To conclude, we remain focused on strengthening our market positioning and building capacities to support long-term growth. Our diversified end-market presence and strong customer relations provide a solid foundation for future opportunities.

We continue to remain focused on operational efficiency, cost management, and disciplined capital allocation with our ongoing expansion plans. We remain confident in our ability to deliver sustainable growth over the coming years.

Thank you, and now we can open the floor for the Q&A session.

Hello, good afternoon, sir. Am I audible?

you're audible. Yes, you are audible.

Yeah. My first question was obviously on the margins.

You mentioned three things, FX, packing and consumable inflation, and fuel and power cost inflation. Will you be able to quantify how much was the FX loss portion?

How much was the same loss or gain recorded in the previous quarters?

Yes, one second on that. Apart from these, also the raw material prices have gone up.

That would have anyways reflected in a lower EBITDA margin as a percentage. They are actually also on the RM front.

The forex loss in the quarter, 4.61 crores.

What was it in the last quarter, Q1 FY27?

Q1 FY27, just hold on. I don't have that number over here.

I think our partners can get that across to you from SGA.

Sure. Just to be sure, this is recorded in other expenses, which is above EBITDA?

Yes.

Got it. Fine.

This is something I would expect would be sort of one-off in nature. Coming to the other costs, right, how do you see those evolving?

Obviously, crude has not come down at all. On fuel, packing and consumables, and also the raw material inflation, any sense on if you're able to pass on, and hence, would margins recover to the 16%, 17% range or we should expect similar levels for the rest of the year?

See,

I would say that the fuel and power cost is going to be passed on from January onwards. Typically during the year, we don't go into the consumable level because it's a very small percentage of overall cost.

This is a unique situation where due to global supply chain issues and the oil prices due to Middle East have remained consistently high. I would say that by quarter four, you should see that coming back because those are annually readjusted.

The steel price inflation is a quarterly pass-through, those we are able to pass through as per normal contract terms.

Understood. My last question is on the casting volumes actually dropped quarter-on-quarter.

This quarter, I think your capacities also came in around August. We had a guidance of about, if I recall, around 16,000, 17,000 tons for the year.

Are we still on track to meet that guidance? Because that will mean substantial pickup in the second half.

See,

the line that you see as 6,054 tons for the half year, these are casting and machined components going as pure vanilla machined components. If you do the comparison vis-a-vis the overall sales, you also have to add the other machined components going into the lamination assemblies.

Okay.

Which is just above the total lamination and assembly quantity, which is 2,185 tons. Sorry, 2,024 tons.

Got it. Your 17,000 number is after you add both of this, the target for FY27.

Yes.

Okay. If you could just confirm one number for me.

What is the incentive per year you will realize from Maharashtra, because I think I was slightly confused, there was two different terms, 9-year and 7-year. Basis whatever term is agreed or finalized, what would be the incentive per year you will actually be able to book from next year, not the cap?

We are eligible to receive up to 400 crores of the incentives. If you take it over 7 years, the eligibility would come to 57 crores.

If we take it over 9 years, it would come to 44 crores. However, having said that, based on the local Maharashtra sales, we don't estimate that we will be able to recover more than 40 crores per annum irrespective of the eligibility, at least in the near term.

Okay. That's still bulk of the cap, right?

It's a reasonable part of the cap.

It's a good chunk of the capital, which is why we are trying to work and increase the recovery period to 9 years instead of 7 years, so that we can maximize the recovery. Obviously, as time will progress, we'll be able to recover more than 40 per year also.

Got it, sir. Thanks a lot, and all the best.

Thank you.

Hi, sir. Good afternoon.

Thank you for giving me this opportunity. Sir, on the EBITDA margin,

mostly

the first participant asked the question, but my question is more of a follow-up. You said this 100 bps decrease was mainly due to fuel and power cost, consumable, and raw material.

I'm seeing gross margin was impacted 60 bps. I'm taking that raw material impact would be 60 bps, and other fuel, power would be around 40 bps.

You also mentioned that for Forex.

fuel, power, and forex also.

Forex, yeah, is right. You also mentioned that so probably you're saying that this 40 bps improvement can be seen from January onwards, but this 60 bps raw material inflation can be seen from this quarter itself?

Can you just clarify? See,

the raw material inflation is not actually impacting in that way. The gross margin reduction is not a factor of the increase in raw material cost alone.

Okay.

It's the inflation. Even if we pass it on to the customer, the margin as a percentage would go down.

See, my selling price would adjust from 110 to, say, 100 to 110, if the cost increases by ₹10. The cost also would go up by ₹10, the percentage margin would look lower.

Even if you are passing it on, there would be a possibility to recover it.

If the inflation is here to stay, let's say, for the next 3, 4, 6 months, it is very hard for us to get the margin levels to 17% or you are confident to reach there?

See, if the steel price increased by another, say, ₹10,000, I'm just giving as an illustration, we will pass that on to the customer. With the increase in selling price, the customer won't give you a margin on the inflation.

Yeah. The margin would look lower.

The absolute margin will not go down.

Okay. Got it.

My second question is on the working capital. Can you just clarify, this trade payables increase to 470 crores from 236.

This has positively impacted our cash flow this semi-annual. Is it here to sustain?

Can you just clarify on this?

It is here to sustain. We would be looking to work more on the trade payables side rather than leverage our cash positions to buy materials going forward, as we are going into a capex cycle over the next 4 years.

All right. Akshay, sir, lastly, on the capex side, this newly announced 450 crore capex, which you bifurcated between 125 and 325, land 125 and infrastructure 325, can you just give the split between how will it be funded?

I'm pretty sure it must be from internal and debt. Can you just touch on this?

See,

this capex is going to be a very long-term implementation. Apart from the 125 crores, which will be spent for the land acquisition and the building, the remaining is going to be linked to the increase in requirement from the customers, and therefore quarter on quarter, we'll be adding capacity.

This 450 will be spent approximately in a split, something like 150 crores in the first year, which would be FY28, and then towards FY29, '30, and '31, the remaining amounts. Again, linked to what the requirement and demand from the market is coming.

I believe that over those years, we should be able to fund it entirely with internal accruals. However, we have put a point out there that we are going to fund it through a mix of both.

All right. Thank you.

Principal, it will be funded entirely from internal accruals, if that clarifies.

Till FY31.

Yeah.

Yeah. Okay.

Thank you very much, Akshay, sir. All the best.

Thank you.

Yeah. Hi, Akshay.

Thanks for the opportunity. On the capex side, the integration for the lamination manufacturing that you're doing in Bangalore so would that entail the entire Aurangabad facility to be integrated into Bangalore, right?

No. Aurangabad will continue to have lamination going forward.

I think even when the full capex is implemented, I believe Aurangabad will be our largest lamination facility overall. The idea to integrate is that in Bangalore, when we acquired Bagadia Chaitra Industries, they were operating two units encompassing around 80,000 square feet of factory built-up areas.

Subsequent to that, we had expanded into two additional leased facilities owing to the increase in demand from our customers in that region. What we are seeing going forward is that there's additional growth coming in Bangalore, and we would have to again go and lease more facilities.

The idea is that now that we have significant lamination manufacturing presence in Bangalore, to consolidate not only the existing leased facilities, but also what we will grow into future into a single location. If I were to give a background, I think between now and when the Bangalore facility will come up, we will actually have to go to a fifth and a sixth leased facility before we can move into our own facility.

The idea is that we don't want to have this manufacturing distributed across six, seven sites. It's quite inefficient, economies of scale don't come in, and your overhead costs go up.

Because I was wondering if that is to be done, then for Aurangabad to be shifted to Bangalore, then there will be a disruption in operations for some time on the lamination side of it. That's not going to happen.

No. The increase in capacity is not only in Bangalore.

From 108,000 to 160,000, we are not saying that 52,000 will be the increase in Bangalore. This will be an increase including Aurangabad.

Okay.

The 325 crores is going towards the capacity increase, and the 125 crores is going towards consolidating the Bangalore factories into a single location.

Got it. Another piece on capex is there any plan to add copper winding to all of this?

No,

we have not discussed it to bring it in-house, but we are exploring to get it outsourced to start with and get into that segment slowly.

Okay.

If we see enough demand coming and margin profile being strong enough, then we could consider bringing it in-house.

All right. On this Maharashtra incentive that we're deferring to next year, can you provide some context to it, why we would not want it this year?

See,

right now, our sales support a recovery of roughly about 35 to 36 crores per annum. When we had initially applied for this scheme, we were expecting to receive a 9-year recovery period.

The investment that was eligible for incentive claim was 400 crores, so that worked out to about 44 crores per year. Now, typically, as you ramp up your capacity and sales, this 36 recovery potential per annum would have increased.

We were quite comfortable claiming this. However, the approval and sanction that we got was for 7 years.

That meant that we had to recover 57 crores a year. We are trying to work with the government to get this back to 9 years so that we can recover a larger portion of the investment.

Anyways, by deferring it by a year, I'm pretty confident, like I said, by next year, we should be running at a rate of about 40 crores recovery per year. That increased sales would help us recover more, even if we don't end up getting the 9-year claim period from the government.

Okay. You won't be able to recover any in FY27, but to recover the whole amount, you have to defer it, and then you'll start recovering again from FY28.

Yes.

Got it. Any capex incentive, state incentive for the new facility, new capex that you're putting up?

In Bangalore?

Yeah.

No, in Bangalore, there won't be any incentive available.

All right. Okay.

All right, yeah. That's all from my side.

The only thing you would get is land at a concessional rate. I think that would be the only support that you would get.

Sure. All right.

Thank you so much.

Thanks.

Hey, Akshay. Thanks for the opportunity.

Akshay, I have three questions. First is looking at the next 3 years with the visibility you have today, what kind of growth do you think is achievable?

If it's possible, can you break it down a little granularly? See,

if you talk of by FY30, '31, when this full capex is done, and obviously, this capex is extremely modular in nature, assuming that it's at full utilization by FY31, we should be having a revenue potential of approximately 3,800 crores as a company. Hm.

Of which around 850-odd crores would come from machined components, plain vanilla machined components, and the remaining would come from the lamination part of the business.

Hm. What will be the levers for Pitti to sweat this capacity out?

See,

apart from the land and building of 125 crores in Bangalore, we are not committing to expend anything today. As we keep getting orders, see, we have got strong visibility and forecast from customers.

We are developing the products for them, but obviously, these things take time to pick up in the end-markets. Our idea is to announce this capex, get the approvals in place, and only expend the money as we see the demand coming in from the customer.

The lead time on the equipment is barely 6 to 8 months, we can be very tactical in deployment of this capacity.

Got it. This was one of my questions also, given you mentioned that it is modular, are we confident that if we get the demand, given lot of these new capex will be coming on stream by FY30, if there is a pre-demand jump before FY30, the capex wouldn't be a bottleneck here for growth.

Then we'll have to dip into probably debt. See, like I said, when someone asked me about the funding structure, the reason that we have put debt and internal accruals is that we don't want to get tied down.

If, like you rightly said, the demand comes ahead of our expectation, then that flexibility is available to us. Similarly, we are not going to restrict ourselves just because our facility in Bangalore is not available.

We are already operating in three leased premises apart from the one fully owned facility for lamination in Bangalore. Till our facility comes up, we are not averse to taking more facilities on lease, implementing the capex, securing the business, and then re-shifting it back to a single location within Bangalore.

Got it. Lastly, on margins, if I take a slightly longer-term view, right, you guys are doing more of a machining, value-added products, right?

Margins should structurally improve here. Can you give me some sense around if you sweat this 3,800 crores capacity, right, by FY31, what would be the steady-state margins of the business?

See,

on a blended basis, you should be looking, and I'm again talking of current raw material prices. When I say current, quarter two raw material price levels.

Steel prices are obviously increasing and decreasing every quarter. If you take a Q2 price level, your sustainable blended margins should be in the vicinity of 17% plus EBITDA.

As you move to FY31 with more value-added mix, shouldn't be it to the range of 18% plus? I don't want to get involved in this quarterly fluctuations cuz it will eventually get passed on to the customers.

If a longer-term view, on a steady-state basis, can it be 18% plus?

See, again, it depends on the mix of the machine component to lamination. Obviously, we are penciling in a higher growth in lamination as well.

We are suggesting that lamination would do closer to 2,000-plus crore revenue on a, sorry, 3,000 crores revenue on a standalone basis. That would bring the overall blended margin profile lower.

Hm. Got it.

You have to see both combined, right? If you talk of just the machined components, you should have an EBITDA margin in excess of 25%.

If you talk of a lamination, it then depends on how much is going as loose laminations and how much is going as value-added assemblies. There are already multiple drivers for the overall lamination within itself.

Got it.

Potentially, 18% is available. 17 would be pretty much a very comfortable number to hit with this mix.

Very much clear. Thanks, Akshay.

Thank you.

Thank you. My first question is on the capex.

The planned capex that you'll have announced is over and above the earlier capex that you'll have announced? Or is this inclusive of that?

No, over and above. The capex announced earlier was 290 crores.

The current capex announced is 450, and the cumulative capex for the two announcements is 740.

740. Of this, about 350 is which is going to be much more modular depending on how the orders come through.

If you want to look at it in that manner, I would say out of the 740, 250 to 260 would be kind of a committed capex, because in Hyderabad also we're doing the land and building, which is of a similar scale and value. The remaining is modular.

Right. Got it.

Approximately, then you'll end up if this entire thing goes through as planned, about 150-odd crores every year.

See, with the 290 crores, the Hyderabad land and building in current year is also going to be there. The first year would be something like 300, or 250 to 300.

Right.

Thereafter, it would be 100, 125, 150, it's all going to depend on what demand comes in and how quickly it comes in.

Right. Got it.

Right. This 250 to 300 for land and building, what is the schedule for this?

By how much of that will be incurred this year and how much the next year?

I think if you take the start date as 1st of July, I would say that in 18 months, you should see more than 90% of it being expended.

Okay. Got it.

18 months. Okay.

Right. That's all from my.

I'll again come back into the queue.

Yeah.

Good afternoon, sir. Thank you so much for the opportunity.

Sir, the volume of byproducts and scrap, it's almost increased to more than 60% in this quarter. Is the result of increased production activity or are we seeing higher scrap generation due to new manufacturing process or lower yields in the initial ramp up phases?

How do we understand, sir?

See, there are a couple of things. There's a higher production.

Obviously being a half year end, we were not able to dispatch many of the products. There is a little bit of a overhang from last quarter in terms of inventory of finished goods, which will get liquidated in this quarter.

Apart from that, if you see, the high value-added assemblies volume has significantly jumped in this quarter, and that also yields into a lower utilization of the side slits. If we are not able to use those side slits, we prefer to liquidate them.

Sir. Sir, I see in that presentation, we are going to a strong [order visibility?]

from marquee customers like Caterpillar, Siemens Mobility, etc. If you look at 3, 4 years back, our 50%, 60% of business came from top five customers.

How that mix

change

currently?

I would say that even if you look forward, I would say the major revenue will still come from the top five, top seven customers, because when we do the grouping, we would take the beneficial ownership level. For example, if you're going to do business with Progress Rail, we would still consider it as a Caterpillar-owned entity and, therefore, quantify it there in terms of customer concentration risk.

Similarly, if you talk of Siemens Mobility, we would say that Siemens Gamesa and all of these companies are also Siemens-owned, and therefore, we would regroup it there.

Sir. Sir, my last question.

Data center side, we have seen doubled increase in contribution in this quarter. How do you look at those emerging sectors, and what kind of mix we can expect over the next 3 to 5 years?

I would say we are looking at it cautiously optimistic on data center. The good part is that, I would say, not all of our data center business is linked to AI.

There's also linked to regular data centers. We see sustained growth coming from that segment.

However, I would not look at it increasing more than probably 9-odd percent of the overall revenue as a segment. We see that other segments like mining and special purpose motors, power gen in general will also grow, and overall mix should remain similar.

Got it, sir. Thank you.

Hi. Congratulations on a strong quarter.

In light of the strong volumes in this quarter and in the previous quarter as well, do you want to revise the FY27 volume numbers and FY28? FY27,

I think we'll still hold on to the upgraded guidance given last quarter.

Okay.

Execution will be a challenge. Quarter three is always a little bit of a challenge considering the holiday season in India and Europe.

We have Dussehra, Diwali, then Christmas for our European and American clients. However, quarter four, I think we should see a strong volume growth.

For FY28, yes, definitely with this capex coming in and modularly expanding our capacity, from quarter two of FY28, you should see again a stronger volume growth.

Okay. The second question, I think earlier used to give the split of the machine components and the raw castings.

Can you give the same for this quarter as well?

Just give me a minute. Can you just pull that out if that's there, yeah?

Machine components about 1,600, 1,700 tons, and raw casting is about 1,000 tons.

Okay. The reason why I was asking was, if I look percentage wise, obviously gets deflated because of the steel prices, but if you look at the consol EBITDA per ton figure as well, I think that's seen a 10% decline over the Q1 quarter.

Not sure it's 100% explained by the cost increase. Is there anything else in terms of product mix or something which has led to this?

Consol EBITDA per ton?

Yeah. The denominator is the lamination volumes, obviously.

You see, that would not be the right way to look at the company, so that's why we had stopped giving that metric. If you see the volume in quarter two, the loose lamination and low value-added assemblies are almost 14,500 tons.

Therefore, that business is obviously a lower EBITDA margin.

Right.

That change between the segments and the percentage of machining revenue will not actually give you a right metric. EBITDA per ton, you cannot take lamination as a tonnage.

Okay. Actually, if you just see the value-added products share as well, that share also is sort of flat.

It hasn't deteriorated. The machine component percentage also has actually increased.

Right?

Yeah. How should I put it?

When we say high value-added assemblies and low value-added assemblies, within the high value-added assemblies, like I mentioned in the past, there's no metric to say that one ton of high value-added assembly will give you X EBITDA. It is a very wide brand, because it's a very wide band on the amount of value add you do and therefore the margin that you earn.

Okay. Okay.

Okay.

Secondly, also if you see, while we discussed the EBITDA is down because of the inflationary pressures, you'd also see that the manpower cost is significantly higher on a Q-o-Q basis. That is mainly because the new capacity that has come in, we have geared up our manpower side to take care of the increase in capacity while it is not giving its full effect yet.

From quarter four, you should see that margin further gaining.

Understood. Perfect.

Thank you.

Thank you.

Hi. Thank you for the opportunity.

Firstly, I wanted to ask are we still on track to our previous quarter guidance of 370 crores for the full year?

Yes, I think we are pretty much on track. If you look at current quarter and simply extrapolate this, we should be getting there.

My second question was on the exports front. If I see from FY23 to FY26, there is a bit reduction as a percentage of our total revenue.

Now, this may be more because we are more on the domestic front in recent years, but how do you see this panning out in next, let's say, 3 to 4 years?

See, I think overall exports will remain stable or slightly downward as a percentage of overall sales. As a standalone number, exports will grow, and they will grow significantly, but the domestic business is going to grow faster than the direct export business.

Okay. Can you provide some color like what's the various reasons for the same?

See, the direct export opportunity would be limited to the business that we can do to sell the product as components to the customer. What is a trend that we are seeing is that most of our customers also have a manufacturing presence in India, and rather than importing components and doing the manufacturing in, say, Europe or US, they would be happier to make the product in India.

We cannot actually, how to put it? quantify what are our deemed exports or what portion of the revenue that we supply to our domestic clients eventually gets exported.

Okay.

that actually misrepresents the overall potential of our products, which are eventually getting exported, if that makes sense.

That's it from my side. Thank you.

Yeah.

Hello, am I audible?

Thanks for the opportunity, sir. My first question is, in first quarter, you outlined an ongoing 290 crore Hyderabad expansion and also mentioned a potential 400 crore Bangalore capex for FY28 and '29, right?

In quarter two, the board has already approved a new 450 crore capex phase through the FY31 to expand the sheet metal capacity, right? How does this 450 crore project fit into your earlier capex timeline?

How will it be funded given the total borrowings currently stand at 640 crores?

If you look at it, what I had given in a conversation in the last investor call, 400, the board has just approved 450 instead of 400. It's just, again, in an estimate which I had given that time.

It is exactly what we discussed in the last call. In terms of timeline, it's going to be done by FY31.

Like I already mentioned in the previous query, about if I take this entire 740, 290 plus 450, roughly about 250, 260 crores would be the committed capex in terms of land, building, infrastructure. Apart from that, everything else is modular.

If the business materializes faster than our expectation, we would have to dip into debt. Otherwise, we believe that we should be able to support this capex from internal accruals through this period.

Sir. Understood.

Sir, my second question is related to the previous on-call. Like you revised the FY27 lamination volume target from 78,000 tons to 82,000 tons, implying approximately around 17%, 18% growth for the year, right?

Given that quarter one lamination and assembly volumes were around 19,200 tons, could you update us on the volume achieved in quarter two and the cumulative first half performance? What quarterly run rate will be required in H2 to achieve the 82,000 tons target?

Are you still confident about meeting that target?

Yeah. If you see, H1 numbers is about 40,889 tons.

If I just double this, you're at 82,000 tons. If you take quarter four, it's going to be similar to quarter two, maybe slightly stronger than quarter two.

Quarter three volumes might dip a little bit on lamination owing to the festivals.

Okay. The target can still be met, sir, this year during this

FY27? It's 82,000 82 plus thousand tons for the year.

Sir. Okay.

Thank you.

Hi. Am I audible?

Yeah. Hi.

Thanks for taking my question. Just to sort of get my understanding right, see, your volumes for total castings and machine component is around 3,000 tons.

Now, if I look at the capacity for casting, it's around 24,600 tons, and the utilization is 52%, right?

Yeah.

Castings volume for the quarter. Out of this 3,198, 1,059 would have gone into other machine components, which is essentially going into lamination and assemblies.

Rest would be a mix of pure raw castings and your machine components. Is this the breakdown broadly?

Yeah. About 1,000-odd tons, like I said, is raw castings, and the remaining would be machine castings and 300 tons of machine castings going into assemblies.

Right? Now, when we talk of capacity utilization, historically, in the past, the foundry used to give its own utilization, we need to probably work a little bit on that metric.

Because we are taking the sales and defining the utilization. If you see the casting that is going into machining, there would be a input-output ratio.

In machining, we are basically shaving off the metal to get the finished dimensions. Typically, about 30% to 40% of the weight is reduced in the machining from the raw casting level.

If you kind of equate it to a production of casting, that would be closer to 4,900 tons of casting produced. The utilization is calculated on sale basis historically, we didn't want to change that metric for comparative purposes.

Understood.

Okay. The other thing is also the machining hours are also given.

If we see the utilization and divide it by total castings and that there's been average

That is just the average machine hours that ran to get the output required.

Yeah. For example, in this quarter, you would have run it for 170,000 hours probably, or 173,000 hours.

Yes.

Against that, whatever would have gone into your machine casting Yes. and machine components put together, machine casting is going to be lamination assemblies, because that's the figure what we are getting.

Actually, like machine components, you have to divide by that to get the hours of machining that's happening. For this kind of figure, it's been the value added.

Yes. One can say that about six hours per ton of machined output is utilized.

Because the 1,000 tons of other machined components going into assembly plus 2,000 tons of machined components in total, 3,000 tons of machining was done, and 172,000 hours were utilized to get that machining done.

Understood. Useful.

You think the value add is for the quarter is around we get around 54 hours per ton, that's correct. It is full quarter

6 hours per ton roughly.

Understood. Understood.

Got it, great, great. Thanks for this.

Thank you.

Yeah.

Good afternoon, sir. Thank you for the opportunity.

Two questions. One is, this traction sales, particularly the traction motor sales, it is one of the largest business contributor, it is declining.

What is the outlook there? That is one question.

The second question regarding the realization, our overall realization has almost reached around ₹2 lakh per ton, but in a consolidate basis, but if you see the EBITDA per ton, it is one of the lowest in the last six to seven quarters, EBITDA per ton. I understand it is not a right measure, but how to look at this in coming periods.

Second, you mentioned about this crap, there is a significant increase in scraps, which previous participants had asked this question. If we see the realization with scrap is also one of the lowest.

How to see this things in a total basis? Can you please guide us on this, the second question and the first question regarding the traction motor sales?

Thank you. See,

on the traction motor share of overall revenue, I would say that earlier, the overall reliance on traction motor as a segment was very high and our focus was very high there. Obviously, we are seeing good demand coming from other segments like data center and mining, off-highway, special purpose, wind power, etc.

If you look at it on a absolute number, the traction motor has not really degrown at a alarming rate. Out of 580 crores of revenue, about 27% is about 156 crores for traction motor and railway-related components.

If you see last year, it's about 32%. On an absolute number, it is still, I would say, solid segment for us.

The other segments are growing faster. Now, coming to the EBITDA per ton, like you rightly said, that is not the right way to look at it, but if I can provide some guidance and color, unfortunately, I cannot, because if you look at the lamination business, and if you are only doing lamination, an EBITDA per ton could have been a metric where you can blend everything and measure the business.

The minute you get into machining, it becomes slightly different. On the EBITDA being lower for the overall output in this quarter, definitely, there are two contributing factors.

One is your forex loss, which I have mentioned, which is booked in the other expense, and the second is your employee cost. It is significantly higher because we are gearing up for the higher level of operations and the capacities that we are commissioning.

Those will get spread over a larger base going forward. That's just the way it is going to be in the initial period as we set ourselves up to grow.

Okay. Okay.

Okay. Regarding this other income, this around 70 crores of the approval for the Maharashtra incentive is already done or it is still in the process?

Sorry, 70 crores? No,

no, the receivables from the Maharashtra government, is it already received or it is in the process?

No, it's in the process for disbursement. Okay.

Okay. That will up to some extent help off with the capex going ahead.

Is it correct?

It will help us, definitely, but we are not linking that to our capex plans per se. It will help in managing the overall debt levels.

Sir. Thank you and all the best,

sir. Thank you.

Thank you.

Hello. Thank you for giving the opportunity.

My only question was which sector in the next 2 to 3 years do you see growing the fastest in your business model?

In terms of fastest growth over 3 years, it's very difficult to predict. Given the current outlook, I would say mining, off-highway for the next 2 years looks very, very robust.

Power gen overall should also, from its current level, grow the fastest.

Okay. What about data centers?

Data centers, again, if you talk of a longer-term view, like I said, we are cautiously optimistic. Potentially, it can grow very, very fast, even faster than the others in the short term.

Longer-term, again, like I said, it's better to wait and watch. Potential to grow is there.

Thank you so much.

Hello, sir. Am I audible?

Yes. Yeah.

My question is, I'm actually slightly confused how to tie the two guidance numbers you gave, which is 17,000 tons of castings and 82,000 tons of laminations, with slide six, which gives the detailed sales break up by volume. Q2 FY27, I see total laminations is 20612, 20,612, and then you have other machine components going in of about 1,059, and you get 21671.

The 82,000 ton number is as against which one of this, 20612 or 21671?

82 is against the 21671.

Okay. Then you are Total.

See, in the past,

just to give you some context, sorry to interrupt you, in the past, we never gave the breakup of other machine components going to lamination assemblies, there was a disconnect among people as to what was the lamination and what are the other stuff that is going into the weight of the product. That's why we start giving this line as a separate thing so that people can clearly understand the quantum of lamination going for sale.

Perfect. Understood.

Now, So,

we broke it up into this.

Got it. Understood.

Now, when you say 17,000 tons of castings, you are not referring to just the 3,086 castings and machine components, right? You're also adding in the 1,059, which is going into lamination, total would be around 4,100 in Q2?

No. What we are doing is, the 3,086, the number like I said, right, about 1,000 was the raw casting.

Hm. Now, the remaining is machine casting, which is getting sold not related to lamination.

Right?

Okay.

Now, when we machine these castings, you have a scrap that is generated from those castings. The raw casting obviously goes as the full finished product when we are selling it as raw.

Hm. The remaining gets machined, 2,000 tons.

That portion, if I equate it to a casting output, someone had asked a question as to how do you tie this to your capacity. I was explaining over there that 17,000 tons of casting was produced or the casting will be produced and then sold either as machined or as raw.

I hope I'm able to clarify, or if you're following.

I'll probably go back and read the transcript again, but in case it is easy to answer, when you say you will sell 17,000 tons of casting in the year, is there a number on this table against which it is comparable?

No, you'll have to actually put a utilization factor. Like I said, when in the past, we have just given the raw casting sold and the machined casting sold.

17,000 tons will be the casting produced to make those sales. If you take the 1,050 If you take the 1,059, some part of those machine components are castings which are produced in our own company.

The remaining 2,000 tons of machine components are produced in our company. If I take those machined castings either going into the lamination assembly or as machine components and add the raw casting, that gives the utilization of about 17,000 tons of castings.

Got it. Let me then ask this question in a more simplified manner.

At today's prices, in Q2 prices, if you were to achieve these volume targets, what would be your revenue for FY27?

For which number? For 82,000 and the sales of machine components and casting?

Yeah.

You do 82,000 and you sell 17,000 tons of castings, you do

It would be about 2350 to 24- 2350 to 2,400 crores.

Got it. Understood.

At Q2 FY prices, sorry, at Q2 FY27 prices, right?

Hm. Correct.

That would be closer to 23, not 2350, 2400. That would be based on Q3 pricing.

Basis Q3 pricing, 2350 to 2400 crores is what you're saying.

Yes.

Got it. How much capex do you foresee for the rest of the year, H2 FY27, across all the programs?

I think we did 250 crores in H1.

We didn't do 250 crores in H1. We capitalized 100 crores in F1 H1, but that was already pre-spent, a large chunk of it.

In terms of expenditure, I think about 90-odd crores is expended in H1 in terms of cash flow. If you see the other non-current assets, that is predominantly the capital advances given in the balance sheet.

In addition to that, maybe about 40 or 50 crores of land would have been purchased.

Got it.

Got it. If I can About 140 crores would have been the cash outflow on capex.

Understood. If I can slip in one last question.

Again, I'm coming back to the same casting thing. Against the 17,000 ton number, which I will figure out what it is, how much was the number in H1 against the 17,000 target for FY27?

I need to pull that out. Like I said, it's not there on this table here,

I'll

have to get that number out. I think for the next call, we'll try to simplify this and give the production numbers.

Earlier what used to happen is if you gave the production number, people would not be able to understand that if that much is produced, why so little is sold.

Hm. Hm.

Hm. In

trying to simplify it, I think it's oversimplified in one way to put it, we'll probably try to get the production numbers in place. Sure.

Sure.

Like I said, the capacity utilization, unfortunately, in the past before the foundry was merged in, we never gave the utilization of foundry, we only gave the utilization of our machining. There are some issues in that as well.

We'll try and clean this one up.

Got it, sir. Sir.

Thanks a lot, again. Thank you.

Yeah. Thank you.

Thank you everyone for your time and joining us today. We appreciate your continued interest and support.

As we move into FY27, our focus remains on disciplined execution, improving working capital, completing ongoing capex, and scaling machine components, strengthening our position as an integrated engineering partner for our customers across India and global markets. Thank you once again, and goodbye.