PITTI ENGINEERING LIMITED (NSE: PITTIENG) Q4 2025 Earnings Call dated Apr. 23, 2025
Corporate Participants:
Akshay Pitti — Vice-Chairman & Managing Director and Interim Chief Financial Officer
Analysts:
Balasubramanian — Analyst
Unidentified Participant
Sani Vishe — Axis Securities
Harsh Vora — Analyst
Sanjeev Zarbade — Analyst
Deepesh Agarwal — Analyst
Abhijit Mitra — Analyst
Shyam Maheshwari — Analyst
Darshan Jhaveri — Analyst
Pulkit Singhal — Analyst
Mahesh Patil — Analyst
Parikshit Gupta — Analyst
Akash Singhania — Analyst
Dharmil Shah — Analyst
Naysar Parikh — Analyst
Presentation:
Operator
Hello. Ladies and gentlemen, good day, and welcome to the Pity Engineering’s Q4 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. Before we begin, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties. For a list of such considerations, please refer to the earnings presentation.
I would now like to hand the conference over to Ms Mr Akshay. Thank you, and over to you, sir.
Akshay Pitti — Vice-Chairman & Managing Director and Interim Chief Financial Officer
Thank you. Good evening, everyone, and a warm welcome to our Q4 and full-year FY ’25 earnings call. I’ll begin with a brief overview of our performance and a few updates, followed by the Q&A session. FY ’25 was a landmark year for the company with a successful completion of two acquisitions and a merger. We closed the year-on a high note, delivering robust growth across all performance indicators. Consolidated revenue grew by 34.87% to INR1,743.36 crores. Consolidated EBITDA grew by 49.77% to INR271.12 crores. Consolidated PAT was INR122.28 crores, higher by 36.32%. Consolidated sales volumes for lamination was up by 49.43% at 63,215 metric tons. So for the quarter Q4 on a consolidated basis, revenue was INR472.30 crores, a growth of 28%. EBITDA grew by 54% to INR80.08 crores.
PAT, however, declined by 21.43%, coming in at INR36.14 crores. This is mainly on account of the incentive being booked in Q4 of last year, which is not the case in the current year. Sales volumes in the quarter was 17,185 tonnes, a robust growth of 50.28%. On the operational updates, our major capex cycle is now complete. We have commissioned our new capacity in-plant, taking the consolidated sheet metal capacity to 90,000 metric tons. Our machining capacity now stands at 648,000 machinars and the combined capacity of our casting facilities is now 18,600 metric tons. On the business outlook, looking ahead, we continue to see demand across key product segments, including railways and both domestic and international. In green energy, wind and hydro continue to remain strong.
Pumps is showing the revival in its offtake and power generation continues to show strong demand. Our machine components business is on-track to achieve a revenue of INR750 crores in the next 18 to 24 months. As we integrate our recent operation — acquisitions into our operations and consolidate our business, we are focused on reducing our cost and increasing our efficiency. This will help us in improving the overall margin performance., in the backdrop of ongoing geopolitical and international trade uncertainties, we remain cautiously optimistic and are targeting a revenue growth of 15% for FY ’26.
Questions and Answers:
Akshay Pitti
With this, I would like to go to the Q&A session of the call.
Operator
Thank you. Thank you, sir. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Bala from Arihant Capital. Please go-ahead.
Balasubramanian
Hi, good evening, sir. Congratulations for a good set of numbers. Sir, first question regarding this Bakadia Industries and Dakshin Foundry. So what are the sales and EBITDA numbers and on volumes for these two or Bagadia and from FY ’25.
Akshay Pitti
The sales volume is given in the investor PPT for Bagadia. The sales volume for the full-year is 14,075 tonnes. And induction, the sales volume is INR3,224 crores, so 224 tonnes. In terms of revenue, I believe Bagadia did a revenue of INR240 crores and did a revenue of INR72 crores.
Balasubramanian
And EBITDA number?
Akshay Pitti
See in EBITDA, what happens is that we make certain sales to this subsidiary and vice-versa. So in elimination of profit, each individual subsidiary, you cannot look at it. You have to always look at it on a consolidated basis.
Balasubramanian
Okay, sir. See, any approximately margins are like 5%, 6% any approximate margins. But at index margin earlier it’s 5.6%. Is there in the same range or an improvement
Akshay Pitti
On a standalone basis, there might be an increase in its profitability. But again, like I said, you have to look at it consolidated because we sell some of our raw materials to that company. So when we consolidate it, it gives you the right perspective on the overall operating performance of the business.
Balasubramanian
Okay. Got it, sir. And sir, I’m looking at India and like exports, almost INR500 crores for FY ’25. And like out of INR500 crores, which are the countries like you could share some of the breakouts over US, North-America or Europe, and how the market dynamics are there?
Akshay Pitti
What are the total exports, about 30% to 35% goes to USA about 60% 55% to 60% goes to Mexico and the remaining goes to various other countries
Balasubramanian
Sorry, sir, I’ll come back-in queue for further questions. Thank you.
Operator
Thank you. The next question comes from the line of Deo from. Please go-ahead.
Unidentified Participant
Yeah, hi. I’m new to the company, sorry if I’m asking any rudimentary question.
Unidentified Participant
But I understand that the INR450 crores of estimate was slightly missed this quarter. Was it again regarding the RM cost variation that you mentioned in the last quarter as well. That’s why you missed just a little bit.
Akshay Pitti
So I think that is par for the course. I mean, you can’t really predict perfectly where you’re going to land.
Unidentified Participant
Okay. So that
Akshay Pitti
5% of opex going to be there in the revenue.
Unidentified Participant
So that is fine. What I want to understand is the trend because that has been going on for a couple of quarters now. So are you still seeing the volatility even in this quarter and going-forward?
Akshay Pitti
See it depends on the product mix that you see in terms of volume, we’ve done exceedingly well. In terms of revenue, it might be slightly lower than what we have expected, but that will always be the case given the product mix. It also depends on how much job work we did where the customer supplies the material to us and we only do the conversion. At the end-of-the day, the EBITDA and the absolute sales volume is what matters. Revenue is notional in our company. For example, now the raw-material prices are going to rise. We are already seeing a rising trend. So you will see revenue growth even when volume and EBITDA remains flat.
Unidentified Participant
Right. Okay. So are you witnessing the electrical steel disruption as you anticipated that would happen in April onwards?
Akshay Pitti
Yes, it’s already happening. The raw-material prices are up by about 7 odd percent in April vis-a-vis January and the supply constraints are going to start or I would say, already started as of this day. The BIS approvals for the Chinese will expire in this week and after this week, there will be no more imports from the Chinese mills. Additionally, the government will also put safeguard duty of 12.5% on the input of the CRMO producers in India such as Posco and China steel.
Unidentified Participant
Okay.
Akshay Pitti
So not only that the imports of finished product will not be available, there will be also cost pressures on the local producers as their raw materials also have been impacted by this.
Unidentified Participant
Okay. Are you expecting a little bit more supply-constrained in the industry, so that would be a little more beneficial for the company. Would there be most part domestic sales that may happen in the next six to,
Akshay Pitti
That is the — that is the expectation. However, the current inventories at our competitors will take time to deplete maybe around the end of May. So any improvements in sales volume we should start seeing post May, right? But that is the expectation of the current policies are maintained?
Unidentified Participant
Okay. Okay. But you mentioned that at least six to nine months, it would take for a new supply-chain to be established domestically as well.
Akshay Pitti
Even if domestically your new supply-chain is established, the input material for that supply-chain is not there and electrical steel cannot be gotten six to eight months, it will take even longer than that. So you have to start from a steel mill. The only viable option is JSW and they have a finite capacity. They can’t service the entire requirement of the country. So they have two mills in their pipeline. One is expected to go online by middle of — calendar year ’26 and the second one by middle of calendar year ’27.
Unidentified Participant
Okay.
Akshay Pitti
So the cost be there, which the customers will have to bear.
Unidentified Participant
Right. This will not — the GSW chain will not go outside, it will be self-consumed.
Akshay Pitti
Yes, that is end-to-end manufacturing in India. Fosco and China still import their hot toll from their parent companies in their home territories and do the final processing here and that has been subjected to these safeguard duties?
Unidentified Participant
Okay. Okay, okay. Okay. And sir, you mentioned a margin increase that is anticipated from when Foundry is up to capacity. So on a consolidated level, what would be the margin increase that we can expect post once a year is completed?
Akshay Pitti
So I think see today we are somewhere around 16.2% EBITDA margin in-quarter four. For the full-year, obviously, we are not at that level as the integrations were taking place and we had one-time cost-related to these acquisitions.
Unidentified Participant
Right.
Akshay Pitti
I would say that over the next 12 to 18 months, you can see another 75 bps to a whole percentage point increase in EBITDA margins. That’s not only from the enhanced utilization and reduction capacities, but also on the efficiency side, like we’ll be working on reducing cost, rationalizing our manpower and overhead costs. So we expect that to give us a good boost to our EBITDA margins. And obviously, the volumes are going to go up. Like I said, we are targeting a 10% to 15% revenue growth, maybe about a 10% volume growth. So as the volume grows, our overheads will be spread over a larger base?
Unidentified Participant
Okay. Okay. So, sir, once you’re done with the capex and WIP and everything comes live, so post FY ’27 when things are better utilized, what is the revenue potential that this would give. You can give me a range because I understand pricing is very, but a ballpark
Akshay Pitti
On a constant raw-material basis for FY ’26, we are targeting INR2,000 crores. And in terms of volume, our target would be somewhere around 68,000 tons on a consolidated basis. For FY ’27, we have a peak capacity of 72,000 tonnes in terms of a salable capacity and at that we should be at about INR21 to INR2,200 crores.
Unidentified Participant
Okay. Okay. Okay.
Akshay Pitti
Obviously, looking at-the-market scenario, how everything pans out, we shall be looking at doing capex in the second-half of the current year or the first-half of FY ’27.
Unidentified Participant
Okay, sir.
Akshay Pitti
We don’t want to — we to 72,000 tonnes if the market will support us..
Unidentified Participant
Okay. And sir, can you just tell me for the sales number that you mentioned in the opening statement? I was not able to pick that the INR170 crores of sales that you mentioned, I was not able to —
Akshay Pitti
1,743, 1743 is our consolidated revenue for the current year.
Unidentified Participant
Yes, sir, anticipated from one of your acquisitions, I think is what you mentioned.
Akshay Pitti
No, I didn’t mention anything from the acquisition. I said that as we look to integrate the two acquisitions and derive efficiency, we look at a margin growth.
Unidentified Participant
Okay. Okay. Okay. Okay. Thank you so much, sir. I’ll get back-in line. And all the best.
Akshay Pitti
Thank you.
Operator
The next question comes from the line of Vishay from Axis Securities. Please go-ahead.
Sani Vishe
Yeah. Congrats on another set of good results. So continuing on the question from the earlier participant, as you said, EBITDA and volumes are more relevant for us. So if the sales increase in coming period is due to increase in raw-material prices, wouldn’t that impact the margin? So do you still think that you will be able to improve the margins?
Akshay Pitti
So see, what you’re looking at is about a 5% inflation due to the raw-material increases. However, there’ll be a 10% volume growth in lamination, plus in addition to that, there is a significant growth in machine components as well as the efficiency that we are deriving. So what we estimate is that other INR2,000 crore level of sales and taking the current quarter’s raw-material prices as my baseline, we should be looking at a 16.5% to 17% EBITDA margin for the current fiscal and that should improve again next year, provided the raw-material prices again at current quarter prices. Obviously, if this raw-material hardens further, our sales number is going to go up and EBITDA will go down.
Sani Vishe
Okay. Understood. Basically. And do we expect that this will somehow impact our volumes because if there is a shortage, how do you plan to manage that?,
Akshay Pitti
It’s not going to be a question about shortage. There will be a slight shortage, what 100,000 tons used come from China, 150,000. That will have to be bought from again POSCO China Steel or JSW within India. The point over here is on the cost. Not only has the material from China stopped, a safeguard duty has been applied on our two suppliers, POSCO and China have seen Indi who bring their input materials from their home countries, Faiwan and Korea. So the cost pressures will be there in the market. It all depends on how easily the motor manufacturers are able to pass this on to their clients?
Sani Vishe
Understood. Understood. Okay. And the other point we had mentioned in the last quarter that there was some disruption due to the Bharash norms. So should we think those are settling down in this quarter or do you think there will be some pain this quarter as well?
Akshay Pitti
So if you see last quarter, quarter-four itself, the volumes in 50 industries, the subsidiary have picked-up vis-a-vis quarter three. And we see that trend continuing in-quarter two — quarter one of the current fiscal. So not only the Bharat six launch, but also the pump industry Industry, which was slightly depressed due to unseasonal rains in the South is again back. So we see a strong volume growth in PIPL.
Sani Vishe
Okay. Okay. Finally, a bookkeeping question. So what are our expectations of target on debt level? And would the current quarter its finance cost fair run-rate to assume going there?
Akshay Pitti
See, as we go through the year, obviously, we’ll have accumulated profits and those will go towards reducing our net-debt. There are no major capex commitments. So I think this is the peak finance cost that you can factored in after this, you should be seeing gradual reduction.
Sani Vishe
So sir, thank you, sir.
Operator
Thank you. Thank you. The next question comes from the line of Harsh Vora from DR Choxi Fins of Private Limited. Please go-ahead.
Harsh Vora
Yes, sir, am I audible?
Operator
Yes.
Harsh Vora
Yeah. Hi, sir, good afternoon. I would just like to know the current total capacity of castings and where does the components business stand today in terms of price?
Akshay Pitti
So if you look at the total capacity on castings, the game trade capacity is actually higher. The currently usable capacity is 18,600 tons. It is restricted by the amount of power that we connect to our factory. The molding side — in foundry business, there are two capacities, right? One is on the melting of material and second on the molding. From a molding side, we have capacity roughly up till 28,200 tonnes. However, due to the electrical cost, we have restricted to 18,600 crores. In terms of revenue, I would say last year, our components business was about INR250 crores to INR275 crores. And if you add the component that we consume internally as part of our SMBs, it would be closer to what INR375 crores.
Harsh Vora
Okay. Okay, sir. And where do you see it going-in the next two years?
Akshay Pitti
Like I said, INR750 crores is our target and we are on-track to getting there.
Harsh Vora
Right, sir. And sir, can you throw some light on the IC and EV business as it is the consumer durable segment?
Akshay Pitti
So I see — I would say entirely automotive is a very small portion of our business. It’s a portion of our business we are excited for over the next five to 10 year horizon as that market matures for us and the sourcing of these products which go into automobile starts locally. So currently, it’s about 0.7% of revenue. It has tremendous potential, but it will take time. Consumer durables, I would say the same thing. It’s a very low-margin business for us. So we do it, I would say, say selectively, we only do it plants such as Adamberg today where the margins are better because their product is a premium product.
So as again the localization of these consumer goods, especially in the premium sector starts in India, I would say that our business volumes in those two segments will rise.
Harsh Vora
Right, sir. And I hope the wind energy continues to do well. Any progress on the pump hydro project?
Akshay Pitti
Yeah. So pump hydro is a product that we’ve been doing out, if I remember correctly for the last 2.5 years. And yes, it’s going on well, both for domestic as well as export requirements, it’s doing quite well. On the wind energy side, the export market on wind is slightly slow over the last few quarters. However, it has been more than compensated by the buoyancy in the Indian market for wind products.
Harsh Vora
Right, sir. Thank you, sir. That’s it from my side.
Operator
Thank you. The next question comes from the line of Sanjeev Zarpade from Antique Stock. Please go-ahead. Please go-ahead, Sandeep, with your question.
Sanjeev Zarbade
So audible now, sir?
Operator
Yes, now you are.
Sanjeev Zarbade
Yeah. I just wanted to understand what are the new clients that we have onboarded over the last three months?
Akshay Pitti
So I don’t think we have onboarded any client in the last three months.
Sanjeev Zarbade
Okay. And if you could tell something about the European market as well and any new segments that we have kind of for our company in terms of revenue,
Akshay Pitti
In terms of renewables, I would
Sanjeev Zarbade
— in terms of revenue in revenue.
Akshay Pitti
So see the European market on a consolidated basis should be a INR40 crores to INR50 crores worth of revenue business for us today. We see this rising over the next two years. If you see in our customer list, we have Siemens Energy, Siemens Gamesa, Indar, these are very marquee names, especially in clean-energy as well as marine proportions. So we supply products to them across all those segments, locomotives, marine products, compact hydro, green hydrogen and based on the outlook given by them, we are told that the business should go to about INR150 crores INR200 crores of topline in the next two years.
Sanjeev Zarbade
Okay. Okay, sir. That’s it from my side and all the best.
Operator
Thank you. Thank you. The next question comes from the line of Deepesh Agarwal from UTI AMC. Please go-ahead.
Deepesh Agarwal
Yeah. Hi,. My question is more on the tariff side. What you’re selling to Mexico is also indirect export to US or this is for the Mexico only?
Akshay Pitti
Okay. So of what we sell to Mexico, I would estimate based on our discussion with customers, 70% would eventually lined-up in US and 30% would be for rest of the world.
Deepesh Agarwal
Okay. Okay. So effectively that is also exposed to US. So US exposure would be more like a 60% 65% product of the total export.
Akshay Pitti
See again what lands into US eventually is not a US consumption. So makes locomotives which they export to rest of the world on the US facilities also. So there’s no way of actually pinpointing what is the eventual export and consumption of US
Deepesh Agarwal
Okay, okay. And the other thing is want to know your thoughts whenever the tariff resume after this 90 days pause, would you be in a position to completely pass-on the — in tariff increase to the customer or there is a possibility we may be asked to take some of it on the profitability.
Akshay Pitti
So I think there’s a lot of noise around tariff. We have luckily another, I think 80 odd days to get to a trade agreement. And if we do then the scenario changes completely. However, if we don’t, but from a manufacturing standpoint, you see our margins. There is no way for us to absorb anything on tax. Tariff is always neutral and the customer has to pay. That is our view and we have communicated the same to our clients, whether it is in Mexico or US or any other country.
See, today if you are supplying directly to US, you may say that you should partake in the tariffs. What about Mexico? Like you rightly noted some of it boosts to the US. So the global economy is interconnected and no one can expect the supplier to take the cost. Eventually the consumer will have to pay the cost of these tariffs. Currently the tariff will be the what 4% I think currently the tariff is 10% based on the reset.
Deepesh Agarwal
Okay, we — I mean pre tariff announcement, it was 4% or 5%.
Akshay Pitti
I’m not quite sure, but I would think it was around 5% going into US and I’m not very clear as to what was the Mexico tariffs there.
Deepesh Agarwal
Sure, sure. The other thing is on the volume front. I think you have been highlighting that our focus is to increase the high-value added assemblies and machine components for the year did very well, high-value. Added assembly volume was up just 3%, whereas loose lamination volume was up almost like 26% 27% for the year. Anything to read into this?
Akshay Pitti
So I would say this is because of the acquisition of 50 industries. If you see most of their sales volume is in the lose and low value-added parts. And if you then go down, the high value-added is one part. Further from the high-value added, the integrated of straight-of-frame and rotor sharp assemblies are up by about 12%. So if you see there is a good amount of growth even in the higher-value on the higher side.
Deepesh Agarwal
Understood. Understood. Thank you and all the best.
Akshay Pitti
Thank you. Yeah.
Operator
Thank you. The next question comes from the line of Hit Choxi from Davind Choxy. Please go-ahead.
Unidentified Participant
Yeah, hi, Akshay. Congratulations for a very good Q4 and FY ’25 and the performance in this testing time. So keep up the good work and best wishes for FY ’26.
Akshay Pitti
Thank you.
Unidentified Participant
Yeah. My first question was on the End-User industry, looking at the last three years, how the — how your End-User applications have shaped up, there has been the segment in which you are operating, but with the new operate — new acquisitions which you have done, how would you industry as a percentage of the total shape up in the next year and maybe in the next two years or three years?
Akshay Pitti
So with the acquisition, I would say pumps and power generation have kind of grown. Pumps has got added as a new segment. Automotive has grown, I would say from 0.37% of revenue to almost a percentage, so like 3 times from where it was. Standalone legacy PT segments such as data centers and traction motor railway continue to perform well. Industrial and commercial motors are declining, which are our low-margin business as-is due to the competitive intensity.
However, we are looking at some revival in growth or I would not say revival in growth, recovery of lost volumes there on account of the shortage of materials and the cost pressures on the material side. So renewable energy will continue to outperform. We have a good line-of-sight on that green hydrogen business from European Union-based customers. A lot of that depends on the subsidies that the state has to give them. This being a nascent industry. Other than that, wind continues to perform well. So special-purpose motors, I think will be slightly depressed in the near-term, but I think in the long-term, they should be also doing quite well.
Unidentified Participant
Okay. Okay. So basically railway — the traction mode and the railway components will see like a contribution of close to between 30% 35% and the power generation will be around 14%. And industrial and commercial, which is a low-hanging or low-margin business is probably something where you will see more of a volume growth rather than any margin expansion. But as a percentage of the total, this should remain close to around 11%, 12%. Am I correct?
Akshay Pitti
Yes. I would say overall at percentage level, that would be a correct assumption. You should see automotive inch closer to a percent 25% or something like that and data centers maybe 2% or 3%.
Unidentified Participant
The entire profile of data center and automotive, can it be — can we assume that in the next three years, this should be around 5% to 7% of your business?
Akshay Pitti
I think, yes, if you look at below the pump line, like pump is about 3.15%, data center is 2.4%, automotive is rounded up to 1% and appliance is 0.6%. So this should go towards 10%, 10.2% — 10% to 12% over the next two years.
Unidentified Participant
And accordingly, these are higher-margin businesses. So I’m assuming that the margin profile should also change mid-time, right?
Akshay Pitti
No, in this, I would say data center is a relatively profitable business. Pump and automotive are traditionally low-margin business,
Unidentified Participant
Okay? Okay.
Akshay Pitti
So you will see volume — volume — volume and revenue growth coming from here. However, as the revenue grows, the component business also will grow and that is where the margin growth will come from.
Unidentified Participant
Correct. Okay. Okay. So let’s assume that today you supply a particular component in the automotive industry and with the growing EV applications, you eventually go towards more of a kit value-based approach from your perspective. So probably that should like bring better margins going-forward in automotive space.
Akshay Pitti
Yeah. See, in the automotive space, there are two-parts to it. One is the IC and one is the EV. The IC business is the one which is dominant today. EV business is something you know an expected business. And unfortunately, off-rate, I think EVs are not doing so well globally. So it remains to be seen how much EV will contribute to the growth in this segment. What we feel is that the IC business is going to be the one which will drive volume growth as the ancillary of these companies start localizing their procurements rather than subsystems and just doing some kind of a screwdriver assembly in India, they start buying the whole thing and making the assemblies in India. So that part of the business should grow first, followed by the EV.
Unidentified Participant
Okay, okay. And looking at the other segment, now look in 2023, it was around 13.7 and in two years, it’s around 15.2. So what is the — what is exactly the other component like what are the industry End-User applications in the other industries?
Akshay Pitti
So the others can — see this has to tally with our overall revenue. So this includes our other income — income from asset sale as well as scrap sales and certain other smaller user industries such as medical and aerospace. So it is basically what is not categorized above everything else.
Unidentified Participant
Okay. So this my out of my inquisitiveness, why is the others — others increasing like at a — like at least a percentage every year and why would it not be stable? That’s what I would rather understand from you.
Akshay Pitti
So if you take FY ’23 to FY ’25, the other income on account of incentive in FY ’23 was mere INR14 crores and this year it’s about INR30 crores. So that is one reason why it jumped significantly. And the second is, when we consolidate our revenues, our Foundry, which is a subsidiary has a significant amount of interest income as it is sitting on a lot of cash. So that also kind of goes in there.
Unidentified Participant
Okay. So
Akshay Pitti
Exports — and as exports are higher vis-a-vis ’23 to ’25 significantly higher. So the export incentive that we get-in terms of duty drawback and licenses we take. So that also kind of put in here.
Unidentified Participant
Okay. Okay. And my second question is mainly on the — see, you saw election year last year. So I understand a lot of capex oriented businesses phase delays on account of contracts and renewals and allocation towards the appropriate allocation. So we see a lot of industries like governments are not utilizing their budgetary allocation towards the capex infrastructure on account of elections and state elections. What’s the picture for FY ’26? What is your sense of allocation this year?,
Akshay Pitti
Luckily, we are not very dependent on government capex per se. A lot of this is basically private capex, what we do. The only place where we are kind of dependent on government is the Indian content of our railway business and that is very small and that’s continuing at the same rate as last year. We don’t see huge growth there,
Unidentified Participant
Okay? Okay. But as I understand the Vande Bhara train sets getting manufactured in India and you being supplying to NEIL and DHEL, what are your — what is your sense on that? I mean, that should increase with time, right?
Akshay Pitti
I think if you see the overall order book at those customers, it’s not grown. I don’t think there are new tendering that is taking place on Bharat. And whatever order backlogs they have, they have to complete those. So if and when a new tender does come, it will mean again volume growth for us. As of now, we don’t have any line-of-sight on any of those. Other than that, if you look at the locomotives that Indian Railways makes in Bhara — Bhanaras or, I mean they are — they are more or less flat. And the private companies which make locomotives in India such as Siemens as some are vap, they have a fixed yearly contract over multiple years. So I actually not able to see significant volume growth. Stable volumes, yes, significant volume growth to be seen.
Unidentified Participant
Okay. It’s a significant volume growth to the same is the power corporate business, but we’ve definitely seen in industries like power generation and renewable energy and data. Correct?
Akshay Pitti
Yeah. So data center, power generation, renewable, we are seeing significant volume growth in the.
Unidentified Participant
Okay. Okay. And just a last question. What would be the percentage of Indian business to have overall in End-User industry? Like if your traction motor and railway components is 33.9%, what is the percentage of the Indian business out of that, I can rightly understand.
Akshay Pitti
So total traction motor and railway components business was roughly about INR600 crores. Out of that, about INR200 crores was domestic and INR400 crores was export.
Unidentified Participant
Okay, okay. Great. Great, great clarity, Akshay. Keep up the good work and best wishes for FY ’26.
Akshay Pitti
Thank you.
Operator
The next question comes from the line of Abhijit Mitra from Alpha Investment Management. Please go-ahead.
Abhijit Mitra
Yes, thanks for taking my question. Actually, I hope I am audible.
Akshay Pitti
Yes, you’re audible. Please go-ahead.
Abhijit Mitra
Yeah so firstly, just to understand the margin Guidance, the 16.5% to 17% is ex of other income, right? You don’t include other income into
Akshay Pitti
That that’s ex of other income.
Abhijit Mitra
Yeah, understood. Understood. Second is on the volume growth guidance of 10%, just to understand a bit better. So this 10% is essentially on the — on the laminations volume that you’re guiding, right?
Akshay Pitti
Yes, that’s correct. And this is — this is like standalone plus PIPM or standalone as-is
Abhijit Mitra
No, it’s consolidated. So to be more specific, we are looking at a target of between 68,000 to 70,000 tonnes in terms of volume.
Okay, understood. Understood. Okay. And this year it was around 64,000, right?
Akshay Pitti
So yeah, about 63,200.
Abhijit Mitra
Understood. Got it. Got it. And on the on the casting side, I think initially you mentioned INR750 — sorry, on the machine component side, you mentioned the revenue of INR750 crores in 18 to 24 months. I missed the current year’s revenue, what is the current year’s revenue, sorry.
Akshay Pitti
So the total machine components business yielded about INR375 crores of revenue, of which about INR250 was plain-vanilla machine components and remaining were parts which are used in our SMBs of lamination, right? Such as the child part that we give as a separate line-item.
Abhijit Mitra
Okay. Okay. Okay, understood. Understood. So this INR250 — INR375 crores will go to INR750 crores?
Akshay Pitti
Yeah, that would be correct.
Abhijit Mitra
Okay, got it. Got it. And lastly, you know, regarding your discussions with I mean, what are the themes that you are picking-up in terms of their understanding of the continuity of the capex or there is a huge North American fleet upgrade, which is ongoing. So there are two-parts, right? One is, of course, the North American CapEx plus there are capex happening worldwide which they are also suppliers. So any sort of things that you have picked-up in your discussions or anything that you might want to share?
Akshay Pitti
So it’s a very a two-sided discussion, right? On one-hand, you have the huge capex going on in North-America in terms of fleet upgradation. On the other hand, you have these tariffs. So one day you have a conversation which talks of volume growth, second day you have conversation which talks of tariffs, how China is having very-high tariffs and India will — is currently having both tariffs and that will continue. China may not have a 250% tariff, but definitely the tariff in China eventually will be higher than India, right? So how do you move supply chains to India? Those are the discussion. So there is a — there’s a lot of flux there, I would say. It will take time that macro needs to clean-up, there needs to be trade deals taking place, tariffs need to stabilize to yield any fruitful discussion.
While the business is there, how long that business remain is very unclear. See the point is if this tariff war continues, are we looking at a recession in the US and if we are then all of those fleet upgradations go away. So the biggest thing is the macro when it comes to US recession or not US recession.
Abhijit Mitra
Understood. Understood. Thanks. That’s all from my side.
Operator
Thank you. The next question comes from the line of Shyam Mahesh — Maheshwari from Aditya Birla Mutual Fund. Please go-ahead.
Shyam Maheshwari
Yeah, thanks. Hi, Akshay. Congrats on a good set of numbers. A couple of questions from my side. Firstly, on the machine component side, obviously, we have been continuously adding capacity here as can be seen from the presentations over the last three or four quarters. Where do we want to eventually take-up this capacity to? I think it’s about 6 lakh, 30,000 machine hours. But is there a plan to — as to how much capacity you want to add over the next couple of years?.
Akshay Pitti
Yeah, this is a variable thing, Shyam. It honestly depends on the kind of machine that we’ll have to do. We have the spare casting capacity. So as we develop the component, we had complementary machining capacity. There is no one is to one when it comes to machine hour is to a casting tonnage. For example, a one-ton casting will require a four hours of machining and some other casting may require about 10 hours. So this is something we do on a flexible basis. These machines, they don’t have a long-lead time. So as we back the business and bring it to maturity, we invest in these capacities. If you ask my gut feel, it’s just a gut feel, I would say if we have to meet our target of INR750 crores of machine components business, the machining capacity will eventually end-up somewhere around 7.5 lakh to 8 lakh machine loss.
Shyam Maheshwari
So interesting. And how much capex would that entail to increase it by another 1 lakh, 1.5 lakhs?
Akshay Pitti
It all again depends on the type of machine if machine — see on a basis, when we say we add a machine, it equals to about 7,200 machine hours. So technically to add about lakh and half machine hours, we need to buy about 22 machines. A given machine cost maybe INR4 crores on a given machine also cost us INR10 crores. So it is again, like I said, variable on the kind of product that we develop.
Shyam Maheshwari
Okay. Interesting. Got it. And secondly, from a more medium-term perspective, obviously, in the near-term, there are these challenges on the geopolitical side and probably we focus more on integrating some of the acquisitions that we have made in a more seamless manner. But from a more medium-term perspective, what are the some of the key KPIs that you guys are kind of looking towards from a strategy point-of-view?
Akshay Pitti
At our company-level, so we would be looking at capacity utilization, we want to maintain it somewhere around 80%. Don’t go in for bulk capex is like we have done in the past, but time is now to be cautiously optimistic and add capacity a reactionary basis rather than the expectation basis. So you should look at net-debt going down. That would be a key KPI for us. The second one will be how we optimize our ROCE. Third one would be how we optimize our overhead costs and how we integrate our multiple businesses into one seamless entity on a non-financial parameter side.
Shyam Maheshwari
Got it. Got it. Thanks for answering it. Best of luck.
Operator
Thank you. The next question comes from the line of Darshan from Crowd Capital. Please go-ahead.
Darshan Jhaveri
Hello.
Operator
Please go-ahead,.
Darshan Jhaveri
Yeah, hi, hi. Firstly, congratulations on a great set of results, sir. So just wanted to ask a bit of a small clarification. We are saying around INR2,000 crores of revenue that we can do maybe this year-on a constant raw-material basis. So that would be for a standalone or consolidated business we are speaking about the
Akshay Pitti
Consolidated. Consolidated revenue on quarter one raw-material cost.
Darshan Jhaveri
Okay. Okay, okay. Fair enough, sir. And sir, then sir, for FY ’27, because we are thinking our capacity would be near-full utilization, so the growth will not be that much because we are saying about INR2,200 crores. So higher. So the capex plan, have we finalized anything, sir, right now like you are H2 if you want to be your capex and some plans — any plans what much — what expansion we want to get into or what are the areas that we are looking at, sir?
Akshay Pitti
So see, there won’t be any major capex cycles anymore. We have enough facilities in terms of land and building infrastructure in and Hyderabad and Bangalore. What we will be doing is adding just equipment. So this will have a very short lead-time four to six months-to bring in machines and commission them. So looking at how the current year is shaping up, maybe by quarter two — sorry, H2 or looking at ’27, we shall do in H1 of ’27 some capexes.
We’ll be doing it practically to meet our customer requirements rather than commit capital upfront today, given the overall uncertainties in the world okay, that’s a very fast approach, sir. That’s helpful. And sir, the component business that we are speaking about, so we want to essentially kind of double it. So what’s the timeline for that, sir that you are speaking about? In two years from now.
Darshan Jhaveri
Okay. Okay. Okay, okay. Fair enough, sir. Yeah. And sir, just margin sir. So just get some understanding of someone is odd in the industry. So how much does the RM price increase impact our margins like in terms of percentage, I understand because a higher amount of the raw-material price will increase the sales number, but what’s the corresponding EBITDA increase that happens or how will it impact our margins, sir?
Akshay Pitti
So our margins are unaffected in absolute terms. On a percentage term, it’s just that inflation causes your margins to look lesser or deflation causes your margin to look better? We were fixed conversion price with the customer and we have a price relation formula for raw materials, scrap and other metals such as copper, aluminum, etc.
Darshan Jhaveri
So EBITDA is essentially just a function of our volume only raw-material just will imply deflate the revenue Fair enough, sir. And just last question on my end, sir. The depreciation is what will be the number that will go-ahead, right, in the next two years, so
Akshay Pitti
Yeah. I think the Q4 number is the number for the whole of next year.
Darshan Jhaveri
Okay, okay. Fair enough.
Akshay Pitti
Again, we do some capex in H2, obviously.
Darshan Jhaveri
Yeah, sir. And sir, is this — sorry for that, just one last question. The capex would be a rough range you only in terms of it would be around INR50 crores INR100 crores, what kind of paper come on we would like to see, sir?
Akshay Pitti
See if again it’s very — on a very non-committent basis, I can tell you if the machining capacity does go up, I think that will cost us another INR50 crore INR60 crores in H2 maybe potentially if everything is working out. In terms of lamination capacity, I really don’t see anything more than INR15 crores in the current year and maybe another INR15 odd crores in the next year. And for next year in terms of machining capacity, I think we’ll be closer to about INR60 crores to INR70 crores if again everything is panning out past the plan.
Darshan Jhaveri
No, okay.
Akshay Pitti
And in the best-case-based business scenario where you are talking of lamination volume growth beyond 72,000 and machining going to say 8 lakh, cumulatively over 24 months, months should be something like INR130 crores, INR140 crores.
Darshan Jhaveri
Oh, yeah, yeah. Fair enough, sir. And what kind of asset turn we have on this sir?
Akshay Pitti
See over here asset turn-in machining will be closer to 0.7.8 because you’re already doing the casting induction and utilizing the revenue. So the incremental revenue will be not so much. It’s just the value-add that will come in. In terms of the lamination investment, your asset turn will be closer to 5 because this is again mostly towards the pump appliance of LV motor industry where your margins are lower and your asset turns are higher.
Darshan Jhaveri
Okay, okay. Thanks so much. Yeah, that’s it from my side, sir. Thank you so much for all the best for.
Akshay Pitti
Thank you.
Operator
The next question comes from the line of Pratam Rawat from Asset. Please go-ahead.
Unidentified Participant
Yeah. Thank you, sir. Sir, just one question from my end. I wanted to understand our company’s exposure to wind sector and if you can have a breakup of the domestic and export segment.
Akshay Pitti
So in terms of wind, out-of-the 4.65% of the renewable energy which contributed to our total revenue, wind would take about 3% in total. And out of that, I would say 75% to 80% for the whole year was domestic and remaining was export, more pointedly in-quarter four, there was no export was entirely domestic.
Unidentified Participant
Okay. Okay. So do you see this trend increasing because there was a talks of this new MNRE norms where they are indicating more domestic usage of the raw materials.
Akshay Pitti
So the — the wind power generators, that is where our components go in the wind power business of our customers. And as far as I know, none of the wind turbine generators are currently imported to India unless there is a full wind turbine coming to India from China. So whether that will spur some growth for us, it is little early for us to estimate that. However, what we are waiting to see is how the European market in renewables bounces back. If that does, I think that should yield some growth in the export market towards H2
Unidentified Participant
Thank you.
Operator
Thank you. The next question comes from the line of Pulkit Singhal from Capital Management. Please go-ahead.
Pulkit Singhal
Thank you for the opportunity. The first question is largely around the whole macro scenario, geopolitical. I mean, you have — you’ve had marquee customers for the last 10, 15 years and these guys have huge manufacturing needs. But do you not see an opportunity in all this uncertainty to kind of further into their manufacturing chain either for your current products or any new set of products?
Akshay Pitti
So that’s already happening. As I said, we are in one of the answers, one day the discussion is on tariff and the discussion gets spun around saying, what can you do from China to India? So definitely those opportunities are there. Right now, our teams are handing RFQs at a rate that they can’t even respond to for moving products from different geographies to India because overall, the view is that India will be a net benefit — beneficiary of this tariff war. So however, to say that this will mean immediate gains for us would be a little premature because just like us where we take about two to three years to develop a product and get it approved in the customer, the same apply to us, right, when they want to move stuff here.
So I would say there’s a lot of uncertainty as to whether the customer wants to move something, there’s going to be term of Trump. So what happens after Trump goes to tariffs? So we are also cautious, in seeing to take only those businesses that without the tariffs being a factor, we’ll be competitive eventually globally. We don’t want to take on business today only on account of tariff arbitrage.
Pulkit Singhal
Right. I mean, there would be certain business just purely because of diversifying the supply-chain as well, right? I mean, irrespective of tariffs, people realizing they cannot rely on one country either ways to a large extent. So I’m thinking how does — is that really — because when you’re saying that RSQs have increased, I’m presuming that means people are taking a decision in some ways or is that a wrong decision.
Akshay Pitti
They are taking a decision and we are excited only about those RFQs where we feel that fundamentally we are a better cost and quality supply than our nearest competitor in a different geography, right? Now when it comes to diversification, yes, if someone wants to bring us as a second source where pre-tariffs, we are slightly expensive, we are happy to get into that supply-chain without great expectations going-forward. So we are trying to focus ourselves on where we are as-is where-is more competitive and address those and thereafter move to something where we’ll be say L2 by L1, 3 tariffs.
Pulkit Singhal
Yeah. So in terms of any quantification with these RFQs like earlier, let’s say, a year-ago or six months ago, I mean, how many would there be per month or quarter and where-is it running now? And to get a sense of what is the level of intensity out there.
Akshay Pitti
So if you talk of customers, right, so they are — normally the RFQs would come mostly from existing clients once in a while, sir, in couple of months, you’ll get RSV from a new customer and then that process would take two to three years for maturity. Today, I would say we are getting more than 10 RFQs in a month from new customers and clients, which we have never heard of. These are like medium enterprisized enterprises in Europe and US. They are not global names, but relatively good businesses. So that gives you an idea as to the chain and profile of the buyers. In terms of absolute RFQs, I would say there is like more than a 200% increase in RFQs. While that sounds exciting, I’ll give you a word of caution, half — more than half of these will fail.
It is just like reactional — reaction to the uncertainty geopolitical globally.
Pulkit Singhal
So fair enough. I mean these may eventually go whichever direction they do. But typically, what is the size of orders for such as business, like what is the range of outlook right from $500,000 annual business to a $50 million annual business you know,
Akshay Pitti
Yeah, right from 0.5 million to a 50 million.
Pulkit Singhal
Okay. Okay. So it definitely those for conversation.
Akshay Pitti
Yeah, it opens the door not — doesn’t open. It’s already opened a lot of doors for the conversations it’s already yielding additional business to us. My concern is it has to be sustainable post tariff world because I don’t see the tariffs continuing the way they do
Pulkit Singhal
Right, I mean, and you may have to probably shape a contract in such a way so that there is a, you know, I mean petite tends to. I mean they do not go back on their commitments, I think otherwise there’s a point of contract
Akshay Pitti
See, you might write to — you put it in a contract, but eventually trying to enforce it is not going to give you business. That is why I said that we are focusing on business, looking at the fundamentals. So for example, I’ll just give you a small illustration. So like a sharp business, know, the nearest competitor was in China and before the new grounds of tariffs were announced, we were — as it is more competitive. So we are more comfortable growing those businesses and developing new products in that segment. So we will not be looking at doing something where we are not competitive. So say, for example, someone wants us to supply a washing machine lamination for a US-based customer, that’s something we’ll never Be competitive against China, ex of tariffs. So that’s something even if it means a $50 million business not interested in. We will entertain the customer, let’s keep our relationship going, but not excited about that.
Pulkit Singhal
Understood. And how is your order?
Akshay Pitti
I hope you get the intent of how we are — I am addressing the.
Pulkit Singhal
Yeah, I mean it’s ultimately you have to decide where you want to go, I mean, and what is, but I’m also thinking that it probably opens up on new products for you to enter into newer areas that you may not have thought of earlier, because you are such customers who would have needs in multiple areas, I would presume so. So I’m just wondering whether that also allows you to enter into some areas in some ways.
Akshay Pitti
So see, there are discussions with clients where they bound — they want bound straighter cores. So that brings in additional element of value-add gets in the element of copper. But again, looking at the tariffs on copper or not more tariffs on copper, how does that eventually play-out? For us, it’s a new industry, so it’s little confusing to us. So we will not want to get into something we are not familiar with in such uncertain ground times?
Pulkit Singhal
Understood. Understood. Lastly, just order book, any sense of what it has been, how it has grown Q-on-Q Y-o-Y adjusted for the raw-material price? I mean, just to get some sense of direction?
Akshay Pitti
Yeah. Adjusted for raw-material price, I wouldn’t have that, but you can probably subtract 5% adjustment for raw-material. So I would say about 8% to 10% growth in order book from Q3 to Q4. And Q4 to-Q1, I would say for real deliveries, it’s flat in terms of expected delivery, we have grown about 10% again.
Pulkit Singhal
Q4 to-Q1 as Q — you’re talking about the current ongoing quarter?
Akshay Pitti
Yeah, yeah, ongoing quarters.
Pulkit Singhal
Okay, understood. But on a Y-o-Y basis also, I mean, so Q-on-Q it’s 10% growth Q4 to Q3.
Akshay Pitti
Okay. But why did we only track it on a — we track it on a Q-on-Q basis. On a Y-on-Y basis, it is not really relevant because Y-o-Y basis, your raw-material price has by about 10%
Pulkit Singhal
The product number. So this is great. Thank you for this and all the best.
Akshay Pitti
Thank you. Thanks,.
Operator
Thank you. The next question comes from the line of Mahesh Patil from ICICI Securities. Please go-ahead.
Mahesh Patil
Yeah. Hi, thanks for the opportunity. Sorry, I have joined in late. So if I’ve answered this earlier, I wanted to understand the volume growth in terms of for FY ’26, FY ’27. So just wanted to understand the outlook. I think you mentioned a stable business from railways and good growth expected in data centers and power.
Akshay Pitti
In terms of — yeah, in terms of lamination volume, we are targeting about 68,000 to 70,000 tonnes in the current year. And for FY ’27, we are setting a target of 72,000, which we may upward revise going-forward looking at how the market is, because to go beyond 72,000 we require capex. That’s our peak utilizable capacity.
Mahesh Patil
Okay. And just to get a sense on overall not segment-wise, just for India market, how do you see the volume growth, let’s say, this year depend based on the enquiries that you would have received overall.
Akshay Pitti
So net-net, I would say little bit of growth. There is a lot of cost pressure when it comes to material cost, which I explained in detail. So probably in the transcript, you can read that. So based on the material cost impact, there is a small amount of growth that the customers are projecting. But once everything settles down in India regarding the price of raw-material, we are expecting again a 10% volume growth in the domestic market,
Mahesh Patil
10% volume growth. Okay, sure. Thank you. Thank you so much.
Operator
Thank you. And the next question comes from the line of Parikshit Gupta from Fairvalue Capital. Please go-ahead.
Parikshit Gupta
Hi, thank you very much for the opportunity. Most of my questions have been answered and thank you for such detailed explanations. Just one thing from me. I understand the exposure to different industries as illustrated in the presentation. But if we look at competition, there are many players who are increasing their share of business to new sectors, I mean growth sectors such as defense and aerospace. These sectors also enjoy very-high margins along with a good visibility for the next couple of years. I just wanted to ask if there are any plans for you to increase? Because you mentioned some aerospace in the other segment. Along with that, you mentioned that they are not so much dependent on government capex. So I just wanted to understand your thought process behind it, if you can please spend a few minutes on this.
Akshay Pitti
So if you take defense industry, first and foremost, the core product of the company, which is lamination, which are required. The defense industry really doesn’t require much lamination, maybe a few things in aeroplanes. Apart from that, might be anything. So the only place where we can probably serve the defense industry is from our machine components and more so machining, not even the castings that we make will be usable in defense industry. We have the capability in our machine shop to address that market, but doing long gestation and a non-focus area for us because eventually the revenue potential is very small from that business as far as we are concerned. So we really don’t focus on that. So we’d rather stick to our core.
The other consideration is that we require certain advanced equipments which we require to do our processes, which will not be available to us as we are — we give a deparation that we will not use this equipment for nuclear and defense industry.
Parikshit Gupta
Understand understood. But you know if you’ve been working with really big clients, Bab tech, Siemens of the World before you know, getting into finance, I used — I spent a couple of years with GE across businesses. So have you not also considered being a Tier-2 supplier to any of their core vendors just in order to surpass the long gestation cycle because I think approval days and the stringent quality norms are different across Tier-1 and Tier-2, not saying that you won’t be able to fulfill them, but just considering the time required.
Akshay Pitti
See, if you have to put in that effort, we would do it sometime down the road and that would not be for defense. I think civilian aviation would be far more profitable and in terms of revenue potential higher than the defense play.
Parikshit Gupta
Yeah.
Akshay Pitti
So this turbines — aviation turbines are being localized in India increasingly. So there will be potential for getting into those — that side of the business.
Parikshit Gupta
Okay. Understood. Do you have any such plan on the — on the whiteboard or is it something still?
Akshay Pitti
Still it’s a very rough plan and our idea on that would be to get an entry through our acquisition. And as you guys know better than I do, the valuations for aerospace and defense are sky high today. So I would wait for those valuations to normalize before I look at that because honestly, to do it ground-up is something you would not want to do and to be a Tier-2, the profitability then goes away and the Tier-1 is going to keep all profitability and you’re going to do the hard work
Parikshit Gupta
Sure. Understood. This was very helpful. Thank you again and good luck for the current quarter.
Operator
Thank you. The next question comes from the line of Akash Singhania from Ray Global Investments. Please go-ahead.
Akash Singhania
Yeah, hi, thanks for the opportunity. So hi, Akshay, how much has the net-debt increased in this quarter and what it is now?
Akshay Pitti
Our net-debt is about INR435 crores as of the year end and if I remember correctly the quarter before, I think was somewhere around 300 and something one second, just hold-on for a second it’s 435 for the current quarter. I can’t find the last quarter number. I think it’s there in the previous PPT,
Akash Singhania
Right. So I guess what I remember speaking with you last quarter was that we were intending to reduce it by around to sub INR300 crores. I think it could be INR330 INR40 last-time, even I’m not sure, but the intention was to reduce it to below 300, eventually move towards INR200 crore INR250 crores. But seeing this increase, like just wanted to understand what has led to it
Akshay Pitti
Now if you look at last quarter actually I got the number is about INR435 and this time also it’s about INR437, so It’s more or less flattish. The reduction will come in the current year as we stop our capex cycle and take a pause. So whatever is the cash accruals, we should be looking to retain the company towards net-debt reduction in the current year?
Akash Singhania
Okay. So by the end-of-the year, can we look-forward to something like a 20% reduction or is it too much?
Akshay Pitti
Plan which I just mentioned sometime earlier about this INR50 odd crores for machines about INR15 crores to INR20 crores for lamination. Despite that, I think you should look at INR100 crores to INR120 crore reduction in net-debt at the various minimum.
Akash Singhania
Okay. Okay. I think that that’s nice. That’s all from my side. Thank you.
Akshay Pitti
Thank you. Yeah.
Operator
The next question comes from the line of Dharmil Shah from Dalmus Capital Management. Please go-ahead.
Dharmil Shah
Hi, congratulations on the numbers. I would like to continue on the one on the participants line of questioning on the and Motor segment. Looked at electric’s commentary in the last quarter, they were not — I mean, the guidance was quite low on the component business for locomotives. Is there any disconnect in — because for traction motor segment has been growing at 25%, 30% for us for last three years. So do you see this
Akshay Pitti
Am I able to understand your saying that tech guidance was lower or you’re saying my guidance was lower.
Dharmil Shah
Guidance was lower and in general, locomotive delivery in the US is expected to be lower than what it was in last two to three years.
Akshay Pitti
Yeah. See, Vaptech is not a US-only based company. They have business which is supply in Brazil, they supply in Kazakistan. So it’s again going to their own press releases, we have won a significant amount of business in Brazil and Kabakistan and those are more than offsetting those potential losses in terms of deliveries in the North American market.
Dharmil Shah
So you expect to save 25% to 30%?
Akshay Pitti
And in addition to that, just one more further clarification. When Waptech talks of locomotive delivery, that’s a new locomotive delivery. They also have a program for doing modifications and upgradations where they bring in the current locomotive and completely overhaul it, putting new motors, components, etc. So the MOS business continues to be very strong at their end.
Dharmil Shah
Okay, I’ll check, but I think what I recollect is they mentioned lower-single digit for both newer deliveries as well as for mod requirements
Akshay Pitti
Yeah, you can say that, but I’m quite clear on what I’m saying.
Dharmil Shah
Sure, sure. And secondly, with these new BSH norms, I mean, do you see any improvement in volumes? And secondly, it’s the new merchants coming in. Is there any change in motor design or motor content or is it the same for us?
Akshay Pitti
See, the alternator design has not changed. What has changed for the BS6 is the engine side and the engine outlet side where the gases and the polluting gases come out. So that adoption at one of our customers was slow. The other customer was fast. So the customer which was slow has now caught up and we have seen those volumes return to normal.
Dharmil Shah
Okay. So volumes have come back to normal for this segment. Is this what you are saying?
Akshay Pitti
Yeah.
Dharmil Shah
Okay. Understood. Lastly, what would be the operating profits for and in the standalone businesses? Just wanted to check whether, I mean, there are synergy benefits playing out without or not.
Akshay Pitti
In terms of account, I’ll give you the number. I think my team just pull it out while that happens. Like I was saying to the other gentleman before in the call, the synergy benefit is also derived at the parent company-level because we supply these off-cut materials to our wholly-owned subsidiaries at a lower-cost.
Dharmil Shah
Yeah,
Akshay Pitti
Who then. So for us, it is in the higher revenue than what we have sold-in the market. So the way to understand the synergy benefit is to look at the consolidated EBITDA and not a standalone. However, in terms of standalone EBITDA in, it is about INR17.34 crores for the full-year and in it is. Dakshin is INR12.50 crores.
Dharmil Shah
Got it. And the components business, you mentioned INR70 crores INR50 crores of target in next two years. If you could break it up, how much of would it be for motor real-estate and how much of non-motor and within non-motor, what are the end industry applications?
Akshay Pitti
I’m not going to go into that level of breaking up at this stage. Let’s use, there are more discussions than the guidance has given you. And as you know, there’ll be a fallout in the overall business that we are developing. So we factor that in when we give our guidance.
Dharmil Shah
Yeah, that’s it from my side. And yeah. Thank you.
Operator
Thank you. The next question comes from the line of Nesar Parik from Native Capital. Please go-ahead.
Naysar Parikh
Yeah, hi. Thanks for taking my question. Most of my questions have been answered. I just wanted to understand that you know as the growth that we have seen, obviously till now last two years has obviously been very strong. And now as we look to not do more capex and pay-down debt and the guidance you’ve given for 10% volume growth. So should we expect the next two years the growth to moderate and so even profits to grow maybe in that 10%, 12% range only, how should we think about it?
Akshay Pitti
Be the thing that we are looking at internally is not to chase just volume growth, but to bring in efficiency and pivot our product mix to a more profitable eventual product mix between machining, casting, lamination assemblies. So the volume growth will be slow, but your margin growth will be higher. Like I’ve said before, we should be looking at a percentage point increase in EBITDA margin over the next 18 months. So for the FY ’26, we are looking between 16.5% to 17% EBITDA margin. And as we don’t do capex and conserve cash, our net debts go down. So your flow-through to your PAT should be much higher going-forward. So while the revenue may grow 10%, 12%, maybe around that level, your net margin should grow at maybe 15% to 20%.
Naysar Parikh
Right,
Akshay Pitti
If not slightly higher.
Naysar Parikh
This year.
Akshay Pitti
So see again I’ll give you the number, but again it will have more relevance because as you understand there’s, there’s PP casting merch, there’s a significant amount of machine components, you can quite easily arrive the EBITDA per ton, INR271 crores divided by 63,200 tonnes. That’s about 42,800 tons, INR42,800 per tonne on a consol basis.
Naysar Parikh
No, no, that I computed. What I meant was if you look at the — your earlier is just standalone lamination business exploring your subsidiaries machine, what
Akshay Pitti
Earlier also in the standalone business, we bought the castings from Pitti castings and we machine and sold it, right? Not all of it, but a significant portion of it, roughly half of those
Naysar Parikh
Right. Okay, understood. And I needed one — sorry, but just one data keeping kind of a question on Page 15 of your presentation, where you give the sales breakup by volume, right, and you’ve done some 62,000 tons of volume this year. So what elements of those you actually consider when you are giving us that number of 64,000
Akshay Pitti
So you take the first five line items, lose laminations all the way through trial parts. So this is all the lamination and the SMB breakup. And then you just add the PIPL sales volume.
Naysar Parikh
Okay. So you are —
Akshay Pitti
So that will give you the — that will give you the overall lamination breakup. As for the casting breakup, you add the machine components, raw castings and stata frames as well as the DFPL volume, right? So that is a total machining or casting sales.
Naysar Parikh
Right. And do you in your revenue is possible to kind of break-up what percentage is lamination versus machine and?
Akshay Pitti
It is slightly complicated. As you can see, these data frame core drops, these are machine component which is going into a lamination assembly And so are shaft. So it gets very pretty when you try to do that. We have to then do it at a some internal cost movement from one location to the other. So we actually don’t look at it in that way yet.
Naysar Parikh
Okay. Because if you do that you have because one, it helps to compare versus earlier also. And secondly, it just gives a better understanding because your capacities and volumes, et-cetera, are obviously different for — so that —
Akshay Pitti
So if you take the revenue for machine components, it’s about INR375 like I mentioned.
Naysar Parikh
Yeah,
Akshay Pitti
Including the SMBs that go into the laminations. But we don’t split it and then look at it differently within our financials. For us, it’s an integrated reporting.
Naysar Parikh
Okay, got it. And
Akshay Pitti
It is just by — it is just by end-use. One-product is going into, say, motors and generators and one is not.
Naysar Parikh
Understood.
Akshay Pitti
When it comes to machining.
Naysar Parikh
Last question, I think there was an you answered to some earlier participant, but your idea was that you wanted to do more of high-value ad assemblies and things like that. The growth for that, we’ve not really grown that if we look at versus FY ’23 is actually down, and you know earlier the target was that we wanted to actually grow high-value add assemblies because that is a high-margin. So what is the reason why we are not able to grow there and is there something that we can do to kind of — because that will also help improve margins?
Akshay Pitti
We’ve grown across that board, if you see, we’ve, we’ve grown in every one of them. Maybe the growth in the specific high-value added SMBs is only looking at 2.94%. If you look at this straight-of-frame rotor shaft, if you look at child part shafts, etc., the volume growth is significant there
Naysar Parikh
Okay. Thank you so much. All the.
Akshay Pitti
Yeah.
Operator
Thank you. The next question comes from the line of Bala Subramaniyam from Arihant Capital. Please go-ahead.
Balasubramanian
Thank you so much for the opportunity, sir. Sir, my first question is regarding like you mentioned about PIS license expiry in this April only. And it’s basically increasing the raw-material over next six to nine months. And you are mentioning about 75 basis-point margin improvement. Sir, how do we understand whether like how much impact is from integration of appreciations and increase in machining capacities? How you tackle these raw-material price increases because we cannot always cannot pass 100% to the customers. There is always some
Akshay Pitti
Firstly, our industry is 100% pass-through or we don’t do business. It’s as simple as that. And that is something which doesn’t change. It’s a core tenant of the business. So there is no question of the RM price not being passed-through.
Balasubramanian
So I think the quarterly mechanism is there right, sir, like —
Akshay Pitti
Yes, it’s a quarterly mechanism and our procurements also on a quarterly basis. Therefore, there is no question of it not getting passed on.
Balasubramanian
Okay. Okay, okay. And sir, how out of 70 basis a margin improvement like how do we understand how much it’s from integration of appreciations and how much it is from like commissioning or like increase in missioning us?
Akshay Pitti
Yeah. See, I think that is something you better leave to management to figure out. Obviously, if you’re saying 75 bps will be our target to achieve, we will not target 75, that we something will target more. Some things will work, some things will not. So you better lead back to us to deliver wrong.
Balasubramanian
Got sir. Sir, what is the status of supply directly to the Indian railways.
Akshay Pitti
It’s ongoing. We have already become Tier-1 suppliers to the LW menu products and it’s ongoing.
Balasubramanian
So are the products we are supplying, sir right now?
Akshay Pitti
It’s a wide variety of products that go into the locomotive from casting, machining, laminations shafts.
Operator
Thank thank you. Ladies and gentlemen, we — the last question comes from the line of from Nevasha. Please go-ahead.
Unidentified Participant
Sir, the non-committal expansion that you mentioned, INR50 crore INR60 crores in machining and INR15 crores in lamination tentatively. What would the capacity increase look like and a tentative number on that would be great.
Akshay Pitti
And on the lamination side, the tonnage capacity probably will increase by about 3,000 to 4,000 tons. The SMB capacity will increase significantly in that, which we obviously don’t give us upgrade line-item. In terms of machining capacity, again on a non-committal basis, I’m just giving you a midpoint that should increase by about 70,000 tons, 70,000 hours, 72,000 hours.
Unidentified Participant
Okay. Okay, sir. And this will like
Akshay Pitti
I had mentioned.
Unidentified Participant
Right. So we should add incrementally roughly INR250 odd crores to the business?
Akshay Pitti
Not clearly. The INR15 crores of nomination revenue, capacity addition will add about INR200 crores of top-line. However, in terms of not 200 crores, sorry, what am I saying? It will add about INR50 crores to INR60 crores of top-line. And the machining capacity will add only about INR40 crores. There the expectation is 0.7 to 0.8 asset tons.
Unidentified Participant
Okay. It’s not
Akshay Pitti
See what we are doing as raw castings in PEL and the Foundies, which is roughly about 7,000, 5,700 tonnes, that will move into machine components.
Unidentified Participant
Yeah. Okay.
Akshay Pitti
So the — the revenue for the base is already there. It’s only the incremental value-add that will move to revenue.
Unidentified Participant
Okay. So we can expect just another INR100 crores or so of incremental revenue probably if
Akshay Pitti
Incremental revenue potential for the INR60 crored INR65 crores of capex, yes.
Unidentified Participant
Yeah, yeah. Okay. Okay. Thank you so much.
Operator
Thank you. Thank you. And as there are no further questions, on behalf of BT Engineering, that concludes this conference. For further queries of visiting the plant, please be in touch with Mr Raman Aidu from Intellect PR on 9920-20-9623. Thank you for joining us, ladies and gentlemen, and have a wonderful day-ahead