Synergy Green Industries Ltd (NSE: SGIL) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
Nilesh M. Mankar — Company Secretary and Compliance Officer
Niraj Shishir Shirgaokar — Chairman and Managing Director
Analysts:
Unidentified Participant
Anada Seti — Analyst
Pratik Jain — Analyst
Pushkar Jain — Analyst
Amitabh Watsa — Analyst
Jignesh Vaidya — Analyst
Presentation:
operator
Sa Sam. Sa. It. It’s. Hello everyone and good afternoon. Thank you for joining today’s call. I am Nilesh Mankar, Company secretary of Synergy Green Industries limited And I will be moderating today’s meeting. Today’s session. Before we begin, I would like to inform you that we will be recording this call and in case any participants are not comfortable, you may feel free to drop off before we start the recordings. Thank you for your understanding. This meeting is being recorded.
Nilesh M. Mankar — Company Secretary and Compliance Officer
Shall we move to the disclaimer? This is a disclaimer from company’s point of view. So you may go through the green highlighted portion. Yeah. Next slide. Yeah. Today. This is today. Today’s agenda. First I’ll give brief introduction about the company. Later on Ms. Shreya will give the investors presentation for quarter one. And in the last Mr. VS Reddy will take the question and answer session. These are the guidelines for today’s meeting. All the participants are kept on listen only mode by the host. All the participants are requested not to record the call. Questions from the participants will be addressed in the Q and A session at the end of the investor presentation by the management. During the question and answer when called out by the moderator, we request you to introduce yourself with your name, organization and the question.
Participants having multiple questions can email us on email ID mentioned in the chat box and management will make best possible efforts to revert within seven days. Thank you for your cooperation. So I’ll give the brief introduction about the company. Dear participants, welcome to the quarter 1st of financial year 202526 earning call and investor presentation of Synergy Green Industries Ltd. Synergy Green Industries Ltd. Is one of India’s leading state of art foundries producing azure gray iron and steel casting for wind turbines, wind gearbox and general engineering industries. In weight range of 3 to 30 metric tons.
Synergy Green has an install capacity of 30,000 metric ton per annum and is in process of upgrading to 45,000 metric tons. The company houses best in class equipment, IT infrastructure and quality testing facilities and is a top supplier to major wind OEMs as well as leading gearbox players in the world. SGIM is a part of the Shirgaukan Group which has diversified businesses interests over its 80 plus years history spanning across sugar manufacturing, foundries, hospitality and market research among others. We have with us today Mr. V S Reddy, executive director of a company. Mr. Reddy is a Btech in Mechanical engineer, M Tech in Manufacturing, Executive MBA from IIM Bangalore.
He has over 30 years of experience in manufacturing of large castings. Over his career he has worked for corporates like lnt, ISGEC and Simplex in establishing plants and managing businesses before joining synergy from inception. 2nd Ms. Shreya Shiragar, Management Executive Ms. Shirgaokar has completed her MBA in Finance and has worked with Deloitte as a part of their energy and industrial research team for over four and a half years before joining Synergy in 2023. And myself Nilesh Mankar. I am a Company Secretary and I have also completed my MBA from Indira Gandhi National University Open University.
I have more than 13 years of experience in a secretary department of a company. Now I would request Mr. To give the presentation of quarter first quarter of financial year 202526 over to you sh.
Niraj Shishir Shirgaokar — Chairman and Managing Director
Thank you Nilesh. Today’s presentation will be divided into three major areas which is the industry overview, company profile and business performance. However, for today specifically I’ll be majorly going quickly over the industry overview and company profile and majorly focusing on the business performance for the first quarter. I’ll gloss over the industry outlook and we can maybe address this in the Q and A session. Just a quick glance again at the company Synergy is one of India’s leading manufacturers of flat size critical castings majorly for the wind and general engineering products. The weight range of our castings is 3 to 30 metric tons single piece.
The materials that we produce are SGI and cast iron and a small portion of steel. Our capacity currently stands at 30,000 tons per annum and we’re in the process of upgrading ourselves to to 45,000 tonnes per annum. We have state of the art facilities as well as quality certifications and an NABL certified Quality Testing lab. Our products majorly go into the wind segment. 70% of our products go for wind castings, 15% towards wind gearbox castings and the balance 15% for general engineering applications such as in industries such as mining, plastic injection machines as well as pumps.
We’re trusted by 50% of the world’s top 10 wind OEMs as of 2024. These include Vesta, Siemens, Gamesa, GE, Vernova. Besides these were in the process of onboarding Envision and Nordics. Within the gearbox segment we cater to the world’s gearbox leaders Flender and ZF as well as the tier one companies from the non wind segments such as Terex, Millikron and Willow. I’m jumping directly into the business performance for the quarter. Our annual capacity utilization was at peak levels in the Last year for FY24 25 we were at 88% of our capacity utilization of the 30,000 tons per annum capacity.
Now here is a summary of our audited financial results for the first quarter of FY26. The total income for the quarter as compared to the first quarter of FY25 has risen by 8% and stands at 85.38 crores. The PBDIT has risen by 25% over the corresponding period in the previous year and IT stands at 13.16 crore and the PBDIT margin has risen by 210 basis points and stands at 15.41%. The profit before tax stands at 5.13 crores. This is a 26% increase over the corresponding period of the previous year and the profit after tax has risen by 14.44% and stands at 3.38 crores.
Here’s a quick glance at the balance sheet. The key items in the balance sheet such as inventories, trade receivables as well as trade payables are in line with our expectations. The other current assets have increased majorly because of the CapEx that we’re doing currently as well as the GST credit receivable. Here’s a snapshot on the progress of our order book as well as product development with various key customers. So we’ve received schedules of about 167 crores from Vestas which are to be executed in the calendar year of 2026. We’ve also received a development order for Vestas 4 megawatt platform which will also begin shortly.
Siemens Gamesa, which is sgre, is already in the pipeline to restart production and we’re expecting this to begin in the third quarter of this financial year. We’re proud to announce that we have successfully produced India’s largest wind turbine casting made in India of 29.5 metric tons for Nordics. You can see a snippet of this casting on the right hand side for Envision’s 3.3 megawatt platform. Our prototype castings are complete and so will be ready for serial production. As for Adani’s 3.3 megawatt platform, the products are under development currently. This was a quick view of some of the key developments as well as order book for our key wind customers.
Now I’ll walk over the brief overview of financials. So as mentioned earlier, our revenue for the first quarter of FY26 has risen by 8% over the first quarter of FY25. The key drivers or growth drivers for this revenue are the gearbox segment as well as our direct exports that have gone up. Another trend that We’ve highlighted even in the past and we see it again this time is the wind domestic, which wind domestic segment, which usually is slower on the offtake in the first couple of quarters of the year. We still expect to see around 20% of the revenue growth in FY26 over FY25.
Drawing your attention to the PBDIT of the period. PBDIT has increased by 25% and stands at 13.16 crore in this quarter. PBDIT margins standard 15.41%. We’re expecting an overall increase of about 100 basis points for FY26 over FY25. Here’s a look at the CAPEX plan and status of each activity. So we’re doing a major expansion and capex cycle currently and that is around 187 crores. This is mainly divided into three major areas. The first one is the foundry expansion where we’re expanding our capacity from 30,000 to 45,000 metric tons. We’ve allocated around 60 crores to this area and the equipment erection is in progress.
We’ve also shown the picture of the new factory shed at the bottom. We’re expecting it to be operational by Q3. FY26, our captive renewable power, which is increasing our solar capacity, which is a captive solar from 2 megawatts to 10 megawatts, we’re installing 8 megawatts this year, is under commissioning. It’s at the last stage of its commissioning and is expected to be operational this month. The final area that we are investing in is in house machining, which was so far outsourced entirely. We’re doing this CAPEX in two phases and the target is to establish a total of 20,000 tons approximately per annum of machining activities in house.
So the first phase of this activity is already underway and the machines are under erection as depicted below. These are expected to be operational by the third quarter of this year. And finally, the last leg of the CAPEX will be with the extended capacity for machining which will be operational by the fourth quarter of FY26. Looking at the path ahead, our performance outlook, we’re expecting 20% growth which is expected for the whole year. We have some robust projections for the order book from major OEMs in the country as well as our gearbox customers. The export revenues are projected to remain stable, close or similar to the previous year’s export revenues.
And finally, as mentioned earlier, PBDIT margins are expected to expand by over 100 basis points from the previous year. This was a quick overview of all of Our financials as well as the status of our investments. I would like to open up to the Q A and if anybody would like to. Nilesh, do we have any questions already or should we open it up to the audience?
Questions and Answers:
Nilesh M. Mankar
We can open it up to the audience because we have not received any question.
Unidentified Speaker
Sure.
operator
So I’ll hand it over to. Ready, sir, for the Q A. I already see we have two. Two questions.
operator
Good evening all of you. Once again we welcome to this universal conversation. I see Mr. Anada Seti is going. Please go ahead with your question, please.
Anada Seti
No, thank you for the opportunity, sir. And that was a very good opening presentation. Mick, just two questions to start off with is, you know, we are on a strong expansion plan. You know we want to go from 30 to 45 and I see that this quarter we’re looking to go from 45 to 75, which I think is a bit higher than what we were talking about in the past. So maybe if you could just share some color around what’s changed, you know, what makes us more optimistic about the medium term. And also if you could call out typically our order book, you know, how much visibility of this growth is basis the order book that we have today and how much will be more orders that we expect over time.
Niraj Shishir Shirgaokar
See, till last year our major business was surrounded between two OEMs, that is majorly Vestas and Siemens Gamesa. And during this last 12 months we have added three major OEMs, that is Nordics, Amazon and Adani. Typically each OEM comes with a somewhere around 10 to 15,000 tons kind of demand actually, which were similar numbers we are utilizing to west US actually. So if presently, if you look at the kind of capacity what we have, we are just increasing from 30 to 45,000 tons. But the way I look at the customer demand forecast and all with the agreed share of business anywhere between 25 to 50% depending on the supply chain model.
I always already see my demand is going beyond 60,000 tons. Actually no, apart from this, we are also seeing a good growth in the gearbox segment. I do see a lot of opportunities in the Norman segment as well. So this capacity, what we are adding up, it will be quickly utilized. That’s what we are projecting. In fact, Autob is already fully is there. So considering this, we feel there is a strong requirement for further expansion beyond 45,000 tons.
Anada Seti
Got it. And so you know, at this point in time how much of our exports would be to the US and you know, just with this tariff uncertainty, you know, how are customer discussions evolving at.
Niraj Shishir Shirgaokar
This point in time see last year our export was somewhere around 1820. I remember the number. But current year since it was flat and but the business is growing. We are expecting the export proportion to be around 15% out of which 50% of the dispatches we have done in the first quarter itself because we had a skewed schedules. Now coming back to what is the impact and all. It is slightly difficult to tell what is happening on the other side. The only one thing I can say the parts exports which we are doing. The majority of the parts are single source.
Actually it is not easily possible for them to switch overnight. That’s one. Unless there is a change in demand. Actually no means if the demand in U. S market drop there may be impact in the export. But in total I don’t see just because of the tariff our schedules are going to significantly panic and it will go up. We are not anticipating that kind of thing. Just I will given a quick example about year or two years back the because of the Red Sea problem and all. There was a significant increase in the logistic cost means customer has borne almost 25, 30% extra logistic cost to pull the castings actually know so.
And the second thing is the total the cost structure in the wind turbine ours is around 3 and a 4%. So if there is a 25% impact is there maybe half a percent or 1% will impact. So just because of the casting something I don’t see that kind of challenge. The bigger issue is if the one who is assembling the turbines in US the significant depend on the imports. Then overall cost structure get disturbed. And if they are not able to pass on there may be some impact on the demand. But the way I look at today there is a minimal impact on the projections which we are given which has quoted because today I am sitting with a lot of domestic demand as well that will easily get replaced.
Actually. No, got it, got it.
Anada Seti
And so just one final question before join back in the queue is you know there are three projects, two. Three projects that we’re doing which can actually help us improve our margins. You know, we’ve spoken about 18% margin in parcel. My question here is that, you know we are looking to do machining probably in house for the first time. So what is the learning curve that we kind of should expect over here? And do you think getting talent, you know, for machining could be a problem? And 18% EBITDA margin at say 60, 45,000 metric ton.
Do you think that’s a high probability outcome for you guys.
Niraj Shishir Shirgaokar
First part is as per learning. You are right. It’s a technological thing. It’s a new thing for us. Right. We do have a team. We’re having some around 25, 30 years of expand areas people already with us for last six, seven years. Because this machine shop we wanted to do somewhere prior to Covid. But two years there was a challenge because of the Russia commodity cycle. And rational this got postponed. Actually no missioning investment. Now during this period last 5, 6 years our team has spent lot of time in developing my local supply chain. So we have seen demonstrated our capabilities in EST in the machine.
I don’t see a big challenge in EST in the machine shop. Maybe initial 15 days, one month there can be. That is a part and parcel of the manufacturing activity Actually know. So that is one and sec. Your second question was on to.
Anada Seti
So given. You know with machining, with solar.
Niraj Shishir Shirgaokar
Yeah. You are talking about the margins achieving the margins of 18%. See, typically the machining alone contributes around 12 to 14 of our cost. Actually, you know, but still we want to do only 50 of it. So I expect somewhere around 5, 6% kind of the contribution will happen. And also solar we are spending almost 8% of our balance sheet into the electricity. But the investment what we are doing today 2 megawatt which is already. We are having an 8 megawatt right now. Commissioning is happening total takes us to 10 megawatt. That will take around 40% closer to the kind of the capacity with the electricity this thing, you know.
So that adds another 3, 4%. I don’t see big challenge in 18%. It should be better than 18%. But we have questioned something. If you have to grow a business, something need to be passed on to the customer. I also see a lot of other avenues actually. You know, work is my first part is this is a brownfield project. So my manpower cost is not going to just go up by 50%. A 50% increase in means there must be some kind of a volume leverage should be happening. Actually know then I’m not even spelling out something on the market increase in volumes.
And there are a lot of other opportunities are there to improve as the balance sheet action. Considering this I feel should not be a big issue in achieving the 18% plus kind of the EITA margins. Perfect. Sir.
Anada Seti
Thank you so much. I’ll join my.
operator
You’re most welcome. May I request. Please go ahead with your question. Please.
Unidentified Participant
Good afternoon. Reddy G. Good afternoon. Yeah, so some part of my question is already answered in the first segment. But coming to specific on it after the out of the 15 exports we are going to do this year how much of it is to the US?
Niraj Shishir Shirgaokar
No, the majority is US only Europe is less actually maybe 3, 4, 2, 3% only major is US.
Unidentified Participant
So is there. Let’s say, you know, I mean maybe I think I have seen and spoken to companies and all that like this 25% lot of people have kind of worked around and said okay, I will bear this, I will pass on this, I will. You know, but. But if it goes to 50% or beyond the way things are, how. How difficult it becomes for us at you know like this 50% if it sticks, does it dent us and do we have alternate markets for this?
Niraj Shishir Shirgaokar
We will not be chasing US market for sure. Actually the first thing second thing is like Vestas is operating in India and in US the major business is coming from Westers only the exports. Whatever we’re doing. What I understand from the Vestas is they’re going to divert their assemblies from US to India. So there are. It’s not only for me, for them also they have to figure out even tomorrow for me POS market becomes zero Still I don’t see any problem going ahead with the the plan. What we have mentioned that is apart from 45000 tons going up to 100,000 that’s the kind of demand I see a lot of opportunities actually.
See wind is only one segment. Probably some of the investor discussions when we discuss the total addressable market for us is there is six times market is sitting on the other side apart from wind. Actually no. So something like pumps, mining, machine tool mining. A lot of opportunity. So just for a small business of 50 crores, 100 crores something happens in us. I don’t see our growth will get impacted because of this. Actually. No.
Unidentified Participant
So yeah. So that is heartening to hear that. You know we are looking at other things also because I kind of always thought that you know it is always better to have other streams. So. And you did talk about good demand from the gearbox non from the gearbox segment and non wind segment. The way things are and if we were to expand further maybe you know, four years, five years down the line. How much percentage do you think we will our aspiration will be to be from the non wind segment.
Niraj Shishir Shirgaokar
See, I don’t see any problem in going to 50, 50. See that is one of the reason why we have from the day one we maintain 20, 25% of the composition from the non wind segment. Actually you know, second thing is I’m not too Much concerned about the the demand going down. That is unlikely to happen. The reason I will tell you guys, you know wind is in the early phase. It has not shown its potential performance. If honesty I have to share. Actually you know for example last three years or four years it is barely doing 3,4 gigawatt kind of.
That is not the number what India wants. In fact I feel this Russia whatever is. Sorry US whatever is criticizing on Russia oil import and all. It only pushes more onto the renewables. Actually at the end of the. What is that we’re discussing oil import right from Russia. It’s a energy security. So energy security is coming from the renewable sitting at your home without anybody either US intervention or Russian intervention. That’s the best thing can happen to the country. Actually no. Apart from preventing the foreign exchange outflow actually. So India should put more effort today to reduce the dependency of the energy from outside.
That is what government is going to do. I’m very strong believer of that. That is one second thing. The last two, three, four years if you carefully seen solar has done more than wind. Actually know like 20 gigawatt kind of numbers happening in solar but only 3 or 4 gigawatt happening in a wind. But I always I was wondering how this mismatch can happen. The reason is solar was easy thing to do it because it was in the early phase less complexity in unlike in wind and all ticket size is less and so many other things are there.
Actually no. But the biggest thing happened in the month back that is in the monastery state electricity board. Actually no. Nowadays what is happening a lot of solar project has happened. More power is getting injected in the daytime. Nobody is there to supply in the evening and night time. Actually that is where wind is going to do it. Actually no. So now Maharashtra government has come with a policy wherein they are discounting 2025% of the solar energy and they are incentivizing 2025% of the wind. Means there is a 50% more incentive to go towards the end.
So I believe that going forward there will be more of wind installation than the solar. That is how the typically if I go by economics that should be the future upcoming trend. Actually know second thing is now whatever happens in Maharashtra definitely that is going to repeat in whether it is Rajasthan, Karnataka or Tamil Nadu that is going to fall. Like you know, everybody has got the same problem means solar means solar. It generates electricity in the daytime. So canceling data. I see a one is from the US Russia story. Whatever is happening pushing towards the higher energy.
And that higher Installation should be skewed more towards the wind. This is how I look at actually at the end of the day the capacity water is a too small capacity. I don’t see any problem up to unlike kind of journey actually know we are looking behind 1 lakh means maybe how do you secure up to 200,000 tons kind of thing wherein can we look at 100,000 tons from non wind? For sure we’ll be doing 100,000 for wind actually that much confidence I have.
Unidentified Participant
Perfect, perfect. Great to see that. And my last question would be on the electricity we with the commissioning of this plant 40% of our. You know we can say that we are Captain right? That is on the 30000 right? Is that right?
Niraj Shishir Shirgaokar
It takes care of around 15000 tons of production actually. So okay. I’ve got to worry about the number actually.
Unidentified Participant
Okay so yeah. Okay. So are there any plans to further ramp this up because we still have room and do we have you know space and all this for this thing. Is there any thought that you know and. And what is the cost saving on. On let’s say this 1/3 portion of.
Niraj Shishir Shirgaokar
Capacity and yeah you are rightly mentioned in fact now what we are thinking is go more towards the wind because we need to also need to balance between a. Because consumption factor is running 24 by 7 now today since initial investment we did in a solar but next generation will do wind because it will be covering the evening and night portion of the consumption. Actually you know we are thinking to add another 4 megawatt of wind which is equal to 8 megawatt of solar because the wind PLO factory is more than 2 250%. Like solar.
Like solar may work with the 17% of the PLF as against the wind maybe 38% actually no. So it generates more electricity for the same megawatt of installation. So again there are certain guidelines. We cannot go 100% unless you generate energy for around the clock which is a very challenging thing. Probably 60, 70% energy. Definitely we can go as you know. So again we don’t want to go leverage the balance sheet and go into too much of debt. So because we have also taken a lot of capex and the foundry machining and all 10 megawatt is a sizable thing but we should be able to either this year or next year may not be this year but next year definitely we would like to add another 15,000 tons offset through the renewables.
Actually no. Okay, perfect.
Unidentified Participant
And final question if I may regarding this efficiency or improvements with the Higher wattage turbines and all that with like 3.3 and 4 and 5 is. Is that improving? I mean if you can throw some.
Niraj Shishir Shirgaokar
Light on that, there are two parts into that. If you are typically looking at the casting consumption per megawatt that will go down because that is the optimization process. The ton is consumed for a 2 megawatt turbine. When it goes up to 4 or 5 definitely it will come down by 15, 20% actually. But that is not our concern. The consumption we are looking at more volumes getting executed. Actually no. And as far as the industry is concerned, yes, the. The bigger turbines are more optimal, gives a better efficiency and the more investment happens. That is how the cycle work.
Unidentified Participant
Actually that’s, that’s. That’s what I was. Thanks.
Niraj Shishir Shirgaokar
Thanks.
operator
I think. Thank you. May I request Mr. Pratik Jain to go ahead with your question please.
Pratik Jain
Hi sir. Thanks for the opportunity. So my first question is if I just look at the global lay of land, right. There was China who was dominant. Who is dominating the market in wind castings. Then there is India and then there is Europe, right. Like you mentioned that majority of our supplies are going to US as of now the export supplies. So wanted to understand that how is Europe plus one playing out here? Are Europe European foundries losing their market share and who is catering to that demand as of now?
Niraj Shishir Shirgaokar
See there are two things in that. One is today Europe is still having a reasonable capacity to take care of the European market. And if I look at the cost structure between India and China, China is more competitive than India. Like many times I mentioned it’s around 25, 30% cheaper than the Indian market. Now till Yesterday there was a 25 tariff barrier difference between India and China in the US market. There is no such tariff barrier in Europe. So today important any European OEM has to buy. They typically used to buy from China. Actually no.
But I see a lot of European OEMs. In fact there is a discussion going on to export to Europe. I really don’t know what is it. It can be a strategy because of China plus one. Like because if he’s buying 100 from China it doesn’t impact his cost structure to pull out 10% to India. Actually no, because 10 is also big number to coming to the Indian perspective. But as on date we are not going to the European market significantly there is a small business happening is mainly because of we ourselves were sitting with the capacity constraints.
Actually no, because not able to take care of the either US market or the domestic market. I do see opportunities to exporting we are in discussion with one of the oem. He’s talking about exporting to Europe. We’ll see how it gets unfolded. But prior to that I feel the domestic market like if the 4 gigawatt happens to say 8 or 10 gigawatt the demand it’s is going to get doubled in India itself. Actually. Got it.
Pratik Jain
Yeah. And so apologies firstly to you know, being repetitive on the earlier question. So I understand that you have, you know, you. You have mentioned it multiple times that at some point in time you will like to have a mix of, you know, wind 50% and non wind 50, 50%. Right. You know the world is uncertain. Right. And has a. We have seen that wind has been more lumpy than the non wind segment because just the nature of the industry as of now. So as an entrepreneur, how do you think about taking a conscious call of you know, de risking from wind segment and just filling the capacity from the non wind segment today?
Niraj Shishir Shirgaokar
See I will tell you one thing. We are in this industry for 15 years in synergy my personally I am in 30 years. Actually no, during last 15 years our revenue growth did not happen for only one year. Means out of 15, 14 years we have grown. So from outside it looks very bumpy or volatile actually. But I don’t see that kind of the threat or the problem. The reason is we always built a capacity when enough demand is built in the market like now if we’re moving from 30 to 45,000 tons it is not that we are building capacity then and we’re going for a searching of the market.
Actually no, today if I look at my demand is built up beyond 40,000 I clearly see if I push it I can easily sell 60,000 tons and have customers. So I don’t see any problem in whatever is going on. The second thing is the casting business is so wide it doesn’t take much time for us to pull out some other business section. You know the kind of the credentials what synergy has today if I go and stand I don’t see any challenge in getting the businesses from any other segment action. So overall I never look at the demand side is a concern point for.
For us actually. But only thing we have to manage the economic cycle. Capacities, operations, execution. This is where our focus point is actually know now the regard diversification of the non wind. I do know because the way Chinese one of the reason for their competence is because they’re highly constant on one industry. Wind means wind. Actually no, but you get lot of efficiency when you focus a lot. But today because we always feel would like to have a diversified. So we are managing a lot of non wind customers actually. You know, so we sacrifice some efficiency but we have a good diversity in the organization.
So I don’t see there is any threat on the demand side because of all this volatility and other things. One last point I would like to add. Actually no, if you look at around 10 OEMs are there in the country today making wind. But how many founders are there producing the casting? So whether Xym gets Y ultimately auto is going to split between one or two producers in the country. That is another advantage where we are sitting at. So there may be volatility in the OEM side but not too much volatility on the supply chain side.
Actually no, this is how it works.
Unidentified Participant
Got it, got it. And just a last question. Can you please highlight the amount of CapEx you will be doing in FY26, 27 and 26 and 27.
Niraj Shishir Shirgaokar
See there are two parts which I mentioned as far as the current CapEx of closer to 187 or 200 course what we’re doing it this takes care of the capacity of 45,000 tons and 20,000 machining and 10 megawatt of this thing. You know, solar I do see in the existing infrastructure whatever doing another 20 crores. 25 crores kind of the investment in the solar or renewables, whether wind or whatever is there. That can be one thing. It’s a purely as part of the cost optimization part of it. You know I also missed to answer the previous question.
What is the payback period? Payback period on the renewables is less than four years for sure. Three, three hundred years is what we’re doing. So that is worth investing it. There is no doubt about it. Actually no. The second thing is I also see some kind of opportunities in the machining capacity because we are not invested into 100%. Whatever the capex we are taking it is taking care of only 20,000. But we may still think of putting another 10,000. So that takes care of the the existing the capacity what we have. But if you how to Answer your the second part of the question 26 and 27 we are looking at the second phase of project that is on the increasing from 45,000 to 100,000 tons or 120,000 tons that progressively if I take up like similar way foundry machining and renewables are put together it may go around 400 to 500 crores.
But again we may not be doing everything overnight. We’ll be doing Progressively maybe initially for sh we may go with the 300, 400 kind of capex later we’ll top up with another 150 crores that is how we’ll take step by step. See at the end of the day we have one fundamental principle first is we have to get 20 plus growth second is we have committed to achieve 18 plus kind of. Then doing investment in this kind of business model is not a. The big the challenge actually no. Then third fundamental rule what we are following is we’d like to maintain our debt to equity ratio under control so in no case it should be exceeding 1.5 for sure we’d like to contain below 1.
So then the business is in a manageable situation we are not in a hurry to rush because there is a demand go and do big leverage and go into debt and all we don’t want to get into that kind of hurry actually there is a time we have enough this thing we have planned in advance I think we should be able to manage all this journey actually.
Pratik Jain
Got it. Thank you. Thank you so much sir.
Niraj Shishir Shirgaokar
Yeah, thank you Mr. Pranit can you please. Please. Yes, please. Yeah, yeah.
Pratik Jain
Thank you for the opportunity.
Niraj Shishir Shirgaokar
Yes, please. Yeah, you are not audible Mr. Business.
Pratik Jain
But how’s the margins?
Niraj Shishir Shirgaokar
No, I missed your. I missed your question initially were not audible. Can you repeat the question? Am I audible now? Yeah, please go ahead.
Pratik Jain
So I was asking about the margins and for the non segment the business I understand it’s only part of the business but I was curious what are the margins like and how is it different from the wind part of it and is there a possibility like creating two separate business units let’s say to cater to one is non wind and one is wind. I understand capacity, you’re going on a much more conservative basis while expanding but if the realizations are everything is something marginally better or similar why is the fact that there’s not another business unit just catering to non wind?
Niraj Shishir Shirgaokar
See the non wind. Yes, when we build a capacity of 100,000, 200,000 tons definitely we have a similar kind of thought process process where one organization may be dedicatedly running on a non wind model? Actually no. But you have to understand one thing on the the margin front you fetch a margin when the complexity of the part is very high are the volumes are low. So these kind of scenarios you get now when I specifically speak the whatever the orders we are having in hand it is slightly better than the wind actually know the margins and.
But there are some specific cases I get a very good Margins but at the end of the day it’s a very complex casting and the volume is less actually, you know, so it’s difficult to say one particular statement, non wind is always a higher margin and all those things. But blended wise, yes, you can achieve overall a better margins because wind industry is driven by the Chinese competition and at the high volumes, highly competitive market. Actually no. So that is another reason. We are also looking at taking the sizable, the non wind segment as well.
Pratik Jain
But in terms of working capital, how is it? Isn’t it better in terms of non particular part of it? Like how is the working capital difference between both the segments inventory and receivables.
Niraj Shishir Shirgaokar
Whether it is a wind or nonwind. Today we are following a simple principle maintaining below 45, 60 days kind of working capital cycle. Actually no, that is our organizational principle whether it is a wind or non wind because we are not allowing the receivables to get accumulated in the customer’s book. And of course we have a inventory cycle of say eight weeks kind of the manufacturing cycle. And we also get a credit from our suppliers. So with a net and effect I see what is that? 60, 45 to 60 days kind of working capital. There are cases like where the castings are very complicated and the what you call the volumes are low.
Generally we protect the payment cycle. So we take 50% advance and do it. Yes, that is different. But today it is not visible in our book because we are doing a very small business portion of the business. It may be mix and max, but at the end of the day I don’t see any significant deviation in the working capital cycle. What we’re doing it today.
Pratik Jain
And so one more question regarding the machining side of it. So in terms of per tonnage, what kind of value addition will be able to keep inside synergy as a result of this? Like in terms of percentage, I understand EBITDA margin we might increase by a percentage. But on a ton basis, how is it going to be?
Niraj Shishir Shirgaokar
How can we look at it again? It depends on the intricacy of the machining cycle, time, component weight and the nature of machines used and all. But as a thumb rule somewhere and if I have to vague number, you have to spell out around 30,000 to 40,000 or even 50,000 rupees per ton is the machining validation happens.
Pratik Jain
So but if that’s quite substantial, like I understand we’re ramping up the capacity, but will it be a possibility that we might do let’s say 80, 20 split in terms of machine kind of thing? So can that be something that we can see?
Niraj Shishir Shirgaokar
No, actually we cannot run behind one aspect like marginal. We have to understand one thing. In non wind getting sizable volume big casting is very rare. Means wind is the rare business. You get a sizable big castings and big volumes. Actually no. So we always look at the end value addition. That’s a combination of value and volume actually that is how we derive the business. So we do see wherever the opportunities are, there we go and pull such kind of businesses. But today I see that factor is offered by the wind. That’s where we are operating.
Actually. No.
Pratik Jain
Understood. Just last one question. So when we go to the customer, is it the fact that we give the finished casting or we just give the rough casting and they take it from the machining partner of yours?
Niraj Shishir Shirgaokar
No, no. We give 100% finished casting. So we are a complete end to end solution provided.
Pratik Jain
So. So straight away these castings go to the assembly line. Understood? That’s it from. Thank you.
Niraj Shishir Shirgaokar
Thank you. May I request Mr. Pushkar Jain to go ahead with your question please? Mr. Pushkar. Oh, sorry. My question is answered.
Pushkar Jain
Thanks.
Niraj Shishir Shirgaokar
Yeah, okay. Thank you. Mr. Bal.
Unidentified Participant
Hi sir. Sir. So the question. So we were looking at some of the notifications by MNRE and and on 31st of July there was an ALM notification which essentially looks to include more indigenous wind turbine manufacturers in the Ambit. And now I guess there will be more gearbox manufacturers, nacelle hub manufacturers producing in India. Do you at all see any increased domestic orders because of this notification? That’s one. Because China is 25% more expensive. So a lot of people ended up preferring that. The second also is it seems like China again is picking up in terms of their wind demand.
So maybe a lot of Chinese capacity will also go towards handling their own demand. So again in the light of these two, what is your outlook on domestic demand?
Niraj Shishir Shirgaokar
You’re right. I also heard that in China they’ve given a big target for the MIN installations and there is a capacity shortage in spite of a huge capacity. Actually in China. Actually no. And many foundries they are denying the export orders because they need to take care of the domestic market. I heard there is a lot of incentive and other things are going on. Now coming back to your first part of the question. The domestically I am also very this, you know, ambitious that the domestic market one days in terms of the installation. Second is in terms of the offtake in the casting itself.
Actually no, that should significantly go out. Government and M is putting a lot of effort to push all these guys. I Don’t know MNR even for initially they sent a circular. There is going to be a reaction from the industry. They given a very short time. I think August was the cut off date actually. No, you have to do localization, that kind of thing. That’s not going to happen because to develop a supply chain it takes more than a year for them to capacity. So they’re going to go back and ask for some extension and all I think that is they have done, they’re in the process.
But at the end of the day normal is insisting with a certain value addition from the local suppliers. You know maybe 70, 80% kind of the local content. So that is definitely is going to add to our demand. As you know, that’s where I am very bullish. And the domestic demand is going to pick up One is in terms of installation. Second is this policies government which is coming up. Both should help us in increasing our share actually in India.
Unidentified Participant
So do you expect to be directly included as an ALM or do you expect your customers who would be manufacturing gearboxes or to be included in alm and as part of that they would be then procuring.
Niraj Shishir Shirgaokar
They have come with one policy. There is a special quality requirements for the India which a B certification actually which Synergy is qualified as a BA standards the certification qualified foundry actually. You know, so that generally the outside founders are not qualified indirectly it says then majority of the demand has to be acquired from the local, the BAS certified the vendors actually know. So that is how the demand is going to be directed towards the local content. And apart from that there are also guidelines how much percentage of the local content material should be there in the turbines.
Unidentified Participant
Thank you sir. So just a last question from my side. Is there a seasonality generally in Q1 revenues? Because looking at last four years generally Q1 is lower than Q4.
Niraj Shishir Shirgaokar
Yeah, yeah, you’re right. It’s not just about for this industry generally you pick up any Engineering Balance Sheet Q4 they do the best numbers. Q1 it goes for a sleep mode means it’s a very starts with a very small thing and then gradually it picks up in Q3 and Q4. Now if you come back to wind industry like the first part of Q1 is always low. Q2 is also flat because rainy season wind transition doesn’t happen. Then Q3 and Q4 is peak. Means that’s the kind of takeoff it happens again. Synergy revenues were little oscillative because our demand was protected from the export markets.
So that is how if I have to. If you have seen the Shreya’s presentation earlier. I think wind domestic is near zero. Actually yes, there is nothing has done actually no, it’s mainly because of the domestic players. They do very less installation in the beginning of the year. Actually no, but our demand was protected because of the the gearbox and non wind and also export market. That’s how we could manage a reasonable amount of testing. You know, on the revenue. Understood.
Unidentified Participant
Thank you sir.
operator
Thank you. May I request Mr. Amitabh Watsa to please go ahead with your question please.
Amitabh Watsa
Hi sir, I’m Amitabh. I work with Sadhan. So my question is basically since you have 30 years of experience. So my question is slightly more on the industry side that I’ve seen. You have presented a whole list of the all the makers of the of winter wine. So I I’m curious about two companies. One is Sani and other one is a Goldwyn, the market leader. So there are some rumors that Goldwyn is setting up shop in India for manufacturing and Sany already has a shop. So do you have those on your cards? And do you see that the.
The memorandum which came from government of India MNARI is going to is going to shape up the value chain movement with respect to these two players and generally other any. If you would like to add.
Niraj Shishir Shirgaokar
Yes, I can spell out. See, I’ve also done lot of exercise in comparing the various reasons cost structure. Whether it is a China or Europe or India. Actually of course US is not into the place now about a month back Sanny has visited our facilities. Of course, naturally whenever a Chinese player enters I can get at a 50% cheaper or 35% cheaper. But that is in China, not in India actually. So there are many experts have been done a lot of people coming from outside and putting up a plant in India found is such a place.
It is not that we are doing something seriously wrong. Why our cost structure is higher. That’s not the case actually no. Ultimately when you come to a country there is a certain infrastructure like I want to give a typical. The cost of logistics from China to India is a 3% 4%. For me it is costing 5% because that is the kind of. Because we predominantly do the road transport. Actually no. By C is 1/4 or even 1/6 of that logistical. I’m giving one of the example. The second is what I understand in China China is cheaper is not because of the they have some technical advantages.
In fact, I have good compliments on many of the Chinese good leaders. Actually no coming to our foundation saying where from you got this kind of technology. That’s the kind of compliments what they have given means the infrastructure, whatever the technology you have is a far superior than what the Chinese founders are operating now. Again you can question me then how come Chinese are more competitive than your sectional? The first thing is the Chinese are competitive is because of commodity prices are cheaper by more than 30. This is the rule number one. Means then you lost 30% on the commodity itself.
Second thing, electricity is cheaper. Like if you typically take an Indian contest. The electricity generation is happening from the renewables 3, 300 rupees. But I buy back at a 10 and a half rupees is because of. You can say transmission losses as a freebies. So many things political cost. See you are not going to bring electricity from China, right? You have to buy electricity from India only. That’s the second part. And also you have to buy commodity in India. That’s the second part. The third thing is when you create an infrastructure you get a lot of incentives by the Chinese government.
Like first five years you need not pay or land is smoothly transitioned without much cost and subsidized interest rate. Then exports percent when you ask all 10, 12 things. Actually no. Then the game changes. Now somebody from China he goes 1 km away from China up his own foundry. He cannot compete with his own foundry in China. Means just. I’m giving a theoretical hypothetical comparison now coming back to India. I believe because we spend a good amount of time. It takes time to learn because it is not in a automated thing. There is lot of skill set involved.
You need to build the team people. You cannot bring the Chinese workers to work in India. The cost will go up dramatically. Means you have to train the people in India. Actually that’s going to take five years, 10 years kind of the journey. Actually it’s not an easy task. Any outsider just jumping in and starting. Because you are not going to run it on a simple one printing machine or one this thing and go and keep on producing the caching. That’s not going to happen that way. So that is another reason why we consider this as a very high entry barrier industry.
It’s not an easy job to get in. Actually.
Amitabh Watsa
Sir, I. I have one more question. With respect to you talked about you would go to non main side then automotive being one ZF already there, gearbox and all. But did you consider a railway as a long term market? And what is your strategy going forward if you want to participate?
Niraj Shishir Shirgaokar
Yes, I started my career with railways. I have good expertise in producing railways. We can do it but it is a little crowded space that’s how I say there are already a lot of people and capacitors happening. I see a lot more value added products beyond railways that is how I see actually a lot of components are imported at a very high value means we are looking at a not just enter at a simple ordinary phone. We would like to enter in a high technology oriented high skills where good value added products. I see that kind of big market in the non wind segment actually.
So we’ll see at appropriate time and I’m not ruling out we should not be entering the railways or anything it all based on the opportunities actually because till yesterday this railways, the manufacturing, whatever was happening for the domestic market there is a good opportunity the way globally reset of the whole economics these things are happening. India may become net exporter of the railways that’s a good possibility because the kind of the trains that M B and all they have developed and there can be an. Sorry, what is that? Yeah.
Unidentified Speaker
I have not shared anything who.
Niraj Shishir Shirgaokar
You given a permission for the shares? Somebody has anyway, so sorry. So what I’m trying to say is I’m not ruling out we have expertise and all but if you have a limited cable where you want to put. We would like to put a high reliability good value added area. So today it stands at wind. I do see a lot of other opportunities in that. We’ll take it up step by step, you know.
Amitabh Watsa
So if one final question if I may in terms of competition you mentioned in past that you there are three foundries which are dedicated to wind sector so can you just update us on the status what is their capacity? Because I’ve heard that they were also expanding.
Niraj Shishir Shirgaokar
Yes, I know Suporter they were already invested a lot in the beginning but they had a challenge in capacity utilization probably if you have seen I think they are using around 20, 25% kind of a capacity addition where they are standing actually no, still they have to go long way in converting that into the capacity that is one and we have edge, a little edge over one of our competitor because they’re into ACJ so if you have to cater to the domestic market it will attract tax that’s one. And the second thing is always they will have a tag of OEM subsidiary actually you know, so we are a neutral company always we get slightly differentiation in the this thing.
This is one. The second thing is the other competitor one who is the MNC OEM he is also expanding that what I heard 30 to 45,000 tons is the number what I Heard about it. But I don’t see any problem in all of us expanding and still there is a good demand. We are all three working in a different different models. Like Synergy is the only company where more or less catering to all the OEMs. I’m talking uniqueness of the Synergy. I am more or less a neutral company and we are the only company into Gearbox.
We are also significantly in the non. So we have a much broader market than. Of course we are sacrificing our efficiencies in the journey. Because we are highly diversified. Actually no, because of that when I compare like as I mentioned the focused industry get a better productivity, better this thing. But it comes with a lot of risk if one of the customer demand goes down. Your revenues are highly volatile. So we try to protect that volatility with a diversification.
Amitabh Watsa
Thanks a lot.
operator
You most welcome. Please go ahead your question.
Unidentified Participant
Thank you. Reducer. Thank you for the opportunity today Reducer is on fire to protect the you know, opportunities and citing the opportunity. Thank you very much for all the elaborate answers. My question is about you know the hypothetical case that you talked about that we may have 50, 50% revenue from wind and non wind. So in such a scenario what could be the blended EBITDA level that you could you know anticip wherever it happens and the kind of you know, opportunities that we get. So just based on some assumptions that you might be having in your mind.
Niraj Shishir Shirgaokar
See I have seen the many numbers means I’m not just talking about the wind industry or the foundry general engineering like whether you pick up a forging and all somewhere around 20, 25% is the EBITDA margins what all other guys are doing Actually you know, at a mature level if we do something like more or less everything good infrastructure like machining then solar plus foundry if you do it definitely it should be about 20% kind of the number actually. You know. So I don’t see any problem in this achieving this figures. I’m talking blended actually again see there can be good opportunity.
I see a lot of RFQs wherein the high value added only thing I’m little scared it may take a lot of energy actually no in we need to put up a lot of team. We have to see those numbers. But the margins are very very high. I can say 30, 40% kind of the. The big orders are there but it will not impact my balance sheet because unless I do a big sizable volume of that kind of the margin business into my this thing weighted average. So if you are able to Build the challenge with those kind of businesses.
Volumes are low and the complexity is very high. So because of that then building a big balance sheet of thousand crores or 2000 crores becomes a challenge. So at the end of the day we work on the model. A significant portion come from the volume based business. Second is the value based business. So a blend of both together should be able to push beyond 18, 20% kind of the margins.
Unidentified Participant
And my second question is about India has signed one agreement with UK and since we do not have any significant presence right now in Europe and UK geographies. So is there any possibilities or of you know, exploring the opportunities in that market? I’m not aware about how is the maturity of the wind market in that area especially so if you can elaborate something on that.
Niraj Shishir Shirgaokar
I don’t see UK is a big market for the wind today also we have some small business which in Europe it is going. That is going to UK only Volvo is basically that one customer which but it’s a very small volume actually now really we not explored what kind of opportunity over there we are in just discussion. But today what I see is my table is full today means we are trying to see what is there in the front and we’re trying to take it up. Actually know. Yes, definitely we can look at not just I’m talking about the UK even other countries also at the end of the day whether it is a free trade, taxes and all there are certain segment of casting value has got no meaning means they are ready to pay any price.
It’s a very complicated and needs a skill set. And price is not the matter. It is like what you call pharmaceutical. Actually no, the patient doesn’t look at the price of the the medicines what price he should buy. He’s what is important what is the value of that medicine. The similar way there is a such a segment in the casting component. Always it comes to my one mind know if you typically look at 110 million tons is the total global casting production out of each India does about 11 12%. 11 or 12 millions actually no.
If you look at the value creation by country like India it’s not a big number means 150, 170 rupees per kilogram. But the same thing someone like yours they’re doing at a 400 rupees weighted average price. Actually no means in terms of the value terms US may be doing three folds or four folds than the India. What we are doing for the same capacity production happening in the found industry in India versus USA actually means there are a lot of opportunities we need to explore the high value items the line over there we need to search and dig into the our business actually.
Unidentified Participant
No got it sir, my final question is about the capex. So when are we you know announcing the next cycle of capex? What is the plan on that side?
Niraj Shishir Shirgaokar
If everything goes right we are looking somewhere around Q2. Q3 means we are typically looking at a 2/4 of good performance. That’s what we are first focusing. First complete the capex and get into two quarters like what we have projected then we are good to go.
Unidentified Participant
Sorry I missed your point.
Niraj Shishir Shirgaokar
No point. What I’m trying to say is we are looking at somewhere around Q2 or Q3 of FY27 means the logic is the first we would like to complete the capex and want to see the numbers what we have projected for two quarters then we are good to go.
Unidentified Participant
I got it. Thank you so much and wishing you.
Unidentified Participant
Yes hello sir. Thanks for the opportunity. So I just had one question if I remember it is really for the capacity expansion in the last con call for the foundry expansion that was supposed to be ready by Q2FY26 but there is a delay of 1/4 I believe. So what is the reason for that?
Niraj Shishir Shirgaokar
Yeah, you are right. There is almost two months delays there in the foundry project. One is this what you call the civil work what we are doing it the field what we have had it is a completely rocky foundation. It is taking a lot of time for putting up the foundation that is one. The second part is Q1 always the labor shortage issues actually typically a lot of migrant labor keep moving across the country due to marriage and other things. Around 20, 30% labor shortage in the field not just in this industry generally this is the trend what I send because of that there is a the delay in the project by almost two months But I don’t see any impact because of this two months delay because the capacity what we have aligned the order book schedules and all is with the Q3 and Q4 actually I don’t see any impact on the outcome side.
Yes, there is a delay on the completion of the project side.
Unidentified Participant
Okay. Okay, thank you. That’s all from my side.
operator
May request Mr. Pratik Jain again I see your hand. Yeah.
Pratik Jain
Hi. Thank you. Thank you for the opportunity again. So just two bookkeeping questions. So out of our 150 crores of debt how much of the debt is reco. So sorry. Firstly what’s the cost of debt we pay today?
Niraj Shishir Shirgaokar
Around 8.75%. I think that is the interest rate what we are paying to the banks.
Pratik Jain
Got it. And secondly on the datas, you know we do build discounting on it. So can you please clarify how much of our bill discounting is basically recourse and how much is non recourse?
Niraj Shishir Shirgaokar
Almost all the bills are without recourse. There are two parts domestic with a direct discount with the customers who don’t go to any third party so that we don’t have any hassles with somebody third party coming and claiming. As far as exports is concerned there is a government schema as well available wherein directly we can discount the receipts without any recourse model.
Pratik Jain
Got it? Got it. And so just last question. We had proposed around 187 crores of capex in the last FY25 and FY26 we had already done 83 crores. So is it that this. This year we’ll be doing around 100,104 crores of capex?
Niraj Shishir Shirgaokar
No, it’s ongoing. It’s only payments have not happened as in Q1 because for example now from China already sorry the machines which were manufactured is ready for dispatch then overnight 130 crores invoice will come. Actually no. So we have already ordered all those 187 barring maybe 1015 crore some tooling and other things majority 80, 90% is already ordered. Actually no, it is only accounting is pending. That’s all.
Pratik Jain
Got it? Got it. Thank you. Thank you sir.
operator
I see. Mr. Jignesh Vaidya.
Niraj Shishir Shirgaokar
Yeah.
operator
Please go ahead.
operator
Thanks for the opportunity sir. Wanted to understand since your cap opex will go live by around October or November.
Jignesh Vaidya
So. So from Q4 onwards our utilization will be how much for the new capacity? 40, 50% can be assumed going forward or FY27 only we need to assume. See we are trying to target the full capacity in the Q4. Actually no film is 85 90% kind of the the capacity. We have to see how this progress. It also depends on the customers and development and so many things are happening. But do we see a good sizable capacity relation in the Q4? Okay, so broadly maybe in Q3 and Q4 since our utilization would not be full. So maybe initial expenses of the new. Plant and employees will be higher. So there can be a small hit on the margins for a couple of quarters. Is this fair to understand?
operator
You are right. Even this quarter also see we already started doing a lot of recruitment on our machine shop and other things. Marginally there is increase in a Quarter on quarter basis there is increase in the manpower cost. Actually no. But that will also get offset because the solar is getting commissioned. Some revenue will also happen. So I see not much impact onto the margins. So it will go side by side. Actually you know the project is staggered in such a manner. It’s not going to wait till all the activities get completed. Like as I mentioned the solar if it get commissioned in the next one week or so that will start contributing something to the bottom end.
Second next month we are expecting a first phase of machining get completed. Actually no. That will also contribute something accepting maybe maximum half a percent, 1% here and then for a short period of time maybe a quarter. But I don’t see big impact on the margins because of all this. The. The Sig man forecast and other things.
Jignesh Vaidya
Sir, any major benefit that we’ll have.
Niraj Shishir Shirgaokar
On by any government PLI schemes that they run for our new capacity. So that can also be added because the new facility what we have put there is an incentive from the Maharashtra state government I think. Yeah. We get the. The refund of the capex. But that is a spread across over a period of 10 years. I think 35 or 40 crores incentive amount is already sanctioned for us. Maybe come out around 3,4 crores per year in the during next 10 years based on the GST collection from the Mar state. So that incentive is there with us.
Right. Okay. Thank you. You’re welcome. N Still your hand I see. Do you have any more questions please?
Jignesh Vaidya
No, no sorry sir, I forgot. Lower it.
operator
Yeah. Thank you all once again. Nilesh, can you please conclude. I don’t see any further questions. Yeah. Nish, you are mute.
Nilesh M. Mankar
Yeah, I was saying that a couple of question has been received from Mr. Pran. But due to time constraint I have sent my email ID to him. So we. We can email him or shall I.
Niraj Shishir Shirgaokar
Take it Take right now they are present here. Mr. I think. Yes, I’m present.
Nilesh M. Mankar
Yeah. He has already asked the question I think. Mr. No, no, no no.
Nilesh M. Mankar
I have like two more questions regarding how the supply chain is developing beyond China in terms of wind castings. So if you give some light based on that.
Niraj Shishir Shirgaokar
See the mana supply chain is. There are four reasons which I always speak us, Europe, India and China Manufacturing point of view. Actually no. So today is highly concentrated towards the the China. There are a lot of discussion on Turkey and even Vietnam or even other Mexico. So there are a lot of discussions. But at the end of the day even Brazil also. But I see the India is the best competitor next to the China. Actually that’s the kind of scene I have seen numbers of the Brazil production Also I heard 50, 60 more expensive there even I know the numbers from Mexico as well.
It is closer to US economy. It’s in the dollar economics, you know. So that way, if you see the India should catch up very quick next to the China. That’s my signal.
Nilesh M. Mankar
I understand that. But in terms of capacity, what percentage do they have? Like in terms of sheer capacity and capacity utilization at this point of time. Capacity of what? You’re talking about the global demand capacity. Of their existing supply. So I understand it’s basically concentrated in China right at the moment. And next we come India.
Niraj Shishir Shirgaokar
So I was wondering about little. It’s little this thing what you call a lot of Chinese capacity. What I heard is for the small megawatt turbine and those kind of things are there. There is also a good amount of capacity for the big catal. Because nowadays the turbine class is moving away from say 1 megawatt, 2 mega to 5, 6 or even 8 megawatt kind of the numbers. So many of the founders cannot do such kind of big capacity. The turbine size, you know, that is one. So it’s not about meagerly looking at the capacity.
You should also look at the relevant capacity. That’s one second thing is like it’s already coming from China. So there is nothing to additionally whether capacity gets added or it gets diminished, it will only the now buyer strategy is to pull out something out of China. That is how I see it. You know, of course cost is a criteria. But that is not the only criteria. Because they are trying to de risk and try to develop alternate supply chain. Actually no.
Nilesh M. Mankar
Understood. Got it. And in terms of part of capacity expansion, can we do equity infusion? Because as at this point of time you’re mentioning that you do not want to stay in the balance sheet. So I was wondering, can equity infusion be better faster way to accelerate without stressing the balance sheet?
Niraj Shishir Shirgaokar
Yes, we will do it appropriate time. That is also in our cards. Next time when we do means first we would like to finish our commitment. What we are committed, say from 30 to 40,000 capacity utilization of 85, 90% kind of thing. Plus we also given a guidance on certain margins. Then I see good value in the ordination. There should not be any challenge in funding the upcoming capexes in the combination of both. Because our balance sheet also become bigger. Internal accruals also accelerate plus some equity information and borrowing. That’s why I mentioned one single number.
We don’t want to exceed our DE more than 1.5, preferably closer to 1. So if we keep this goal, whatever the capacity, we’ll manage how much has to be influenced, how much we are able to manage through interlocular. That’s how we’ll be proceeding.
Nilesh M. Mankar
Understood. Thank you.
Niraj Shishir Shirgaokar
You’re most welcome. Yes, Nilesh.
Nilesh M. Mankar
So thank you everyone for joining today’s earning call and making such an interactive call. So on behalf of entire Synergy, I would like to say thank you to every investors and analysts. Thank you.
Niraj Shishir Shirgaokar
Thank you. Thank you all. Thank you. The recording has stopped.