Frontier Springs Ltd (BSE: 522195) Q4 2025 Earnings Call dated May. 29, 2025
Corporate Participants:
Abhishek Mehra — Moderator
Kapil Bhatia — Managing Director
Dhruv Bhasin — Secretary & Compliance Officer
Neeraj Bhatia — Chief Financial Officer & Whole-Time Director
Analysts:
Analyst
Garvit Goyal — Analyst
Harsh Mulchandani — Analyst
Ajit Sethi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Frontier Springs Limited Q4 FY ’25 Earnings Conference Call, hosted by TIL Advisors. [Operator Instructions] Please note that this conference is being recorded.
I would now like to hand the call over to Mr. Abhishek Mehra from TIL Advisors for opening remarks. Thank you, and over to you.
Abhishek Mehra — Moderator
Thank you, Ryan. Good afternoon, and welcome, everyone. Thanks for joining this Q4 and FY ’25 earnings conference call of Frontier Springs Limited. The investor updates have already been uploaded on the stock exchanges and the company website. In case you do not have a copy of the same, please feel free to reach out to us.
To take us through the discussion we have today with us Mr. Kapil Bhatia, Director; Mr. Neeraj Bhatia, Whole-Time Director and Chief Financial Officer; and Mr. Dhruv Bhasin, Company Secretary. We’ll be starting the call with a brief overview of the business and the financial performance, which will then be followed by the Q&A session.
I’d like to remind you all that everything said in this call, reflecting any outlook for the future, which can be construed as a forward-looking statement must be viewed in conjunction with the risks and uncertainties that the company faces. These risks and uncertainties have been mentioned in our annual report.
With that said, I would now like to hand over the call to Mr. Kapil Bhatia. Over to you, sir.
Kapil Bhatia — Managing Director
Good afternoon, ladies and gentlemen. I extend a very warm welcome to all participants joining us for our quarter 4 and full year FY ’25 earnings call. I am Kapil Bhatia, and it is my privilege to present you the highlights of our financial and operational performance for the quarter and the year ended 31st March ’25, as well as our outlook for the year ahead.
Let me begin with the financial performance for the quarter and the year as reflected in our audited results. For quarter 4 ’25, we delivered our highest ever quarterly performance. Revenue from operations stood at INR70.08 crores, marking a robust growth of 20.27% over quarter 3 FY ’25 and 58.75% over quarter 4, year ’24. EBITDA for the quarter was INR16.75 crores, up 34.26% quarter-on-quarter and 125.71% year-on-year. The EBITDA margin improved to 23.90% in quarter 4 F ’25 compared to 21.41% in quarter 3 FY ’25 and 16.81% in quarter 4 FY ’24.
Profit after tax was INR11.66 crores, a strong increase of 33.57% over the previous quarter and 130.89% over the same period last year. For the full year, FY ’25 revenue from operations reached INR231.34 crore, a 70.84% increase over FY ’24. EBITDA for the year was INR49.66 crores, up 139.10% year-on-year with EBITDA margin of 21.47%, an improvement of 613 basis points over FY ’24. Profit after tax stood at INR34.66 crore, up 166.93% from INR12.99 crores in FY ’24.
Moving to the operational front. Quarter 4 ’25 was a period of strong execution across our core businesses, divisions, Coil Springs, Forging and Air Springs. Coil Springs division, our mainstay business for over 3 decades, the Spring division continued to see healthy demand from Indian Railways, the surge in production of LHB coaches and locomotives has led to notable uptick in orders for the hot coil compression springs.
Our manufacturing capabilities and stringent quality standards have enable us to remain a preferred supplier. Forging division, we have successfully commercialized our new state-of-art 6-tonne hammer, enhancing our forging capabilities, while the ramp-up of utilization of progressing slightly slower than initial in this, this is a deliberate strategy as we are sharply focused on high value, high-margin forces to ensure optimal profitability.
We already have order demand for this new capacity and expected subsequently improvements in performance in the coming quarters. Air spring division, our air spring segment, which began commercial production in 2022, experienced a significant flip during FY ’25 driven by ongoing modernization with Indian Railways. We hold firm orders in this segment and increasing adoption of air suspension system and LHB coaches is providing clear visibility of sustained growth.
Throughout the year, our focus on operational excellence, capacity expansion and value-added products has enabled us to deliver record performance. Our customer base remains robust with long-standing relationships with all our clients. The Indian Railway sector continues to offer significant growth opportunities supported by historic government initiatives. The Union Budget 2026 allocated a record capital outlay of INR2.65 lakh crores for Indian Railways. Major procurement plan include record placement for wagons with more anticipated and large scale expansion of Vande Bharat and Metro projects. The government focus on trade corridor development, private wagon ownership and replacement aging fleet provides a strong demand pipeline for our products.
Looking ahead, we are extremely optimistic about our growth prospects. The positive momentum witnessed in FY ’25 has continued into the start of FY ’26 with exceptionally strong demand visibility across all 3 of our core segments. We plan to invest additional INR15 crores in client and machinery over the coming year to further enhance our capacities and fully capitalize on an opportunity presented by the ongoing modernization of Indian Railway. We have set ambitious target of achieving INR375 crores in gross revenue for FY ’26 and INR500 crores for FY ’27.
Our focus will remain on ramping up high-margin value-added products, especially in the Air Springs and Forging segments and on sustaining our leadership in the Coil Springs business. With our robust order book, expanding capacities and clear focus on operational excellence and value creation, Frontier Springs is very position to benefit from the significant railway modernization initiative with undertaken by the government of India.
With that said, I will now open the floor for any questions for you might have. Thank you.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question comes from the line of Priyanshu Jain, an investor. Please go ahead.
Analyst
Hello. Am I audible? Yes. Hi sir. Congratulations on the exceptional numbers. I have one question, like recently got our credit rating through CRISIL that the management is not cooperative with the thing. So like can you just put some light on it? [Technical Issues]
Kapil Bhatia
Operator, please put me on the unmute mode. I like to answer the question.
Operator
Hello sir, you are unmute. We have lost the line of Mr. Bhatia. Please stay connected while I rejoin him. Sorry Mr. Jain. Thank you. Sorry Mr. Jain, please ask the question once again.
Analyst
I’m sorry call got discriminated.
Operator
No problem, sir. Sir, recently, there has been report by CRISIL the management is not cooperative with the things, so like they’re not able to give the credit rating report. So can you just put some light on it?
Dhruv Bhasin
Kapil sir, I’ll take this question.
Kapil Bhatia
Please, our Secretary, Mr. Dhruv Bhasin will call you on this.
Dhruv Bhasin
Good afternoon, Mr. Jain. Yes, there are 2 aspects. Point number one, in case the limit that we are using are beyond INR50 crores, then we are required to take the bank ratings. In our case, the exposure is far less off, so we are not required to take the rating. Secondly, it’s like you haven’t read the like top heading [Foreign Speech].
Analyst
Okay, thank you. And my second question is on the EBITDA margins. Are you going to be sustainable, like 21%, 22% EBITDA margins for the next year?
Kapil Bhatia
Yes. I’m 100% sure, this is Kapil, that we’ll be able to achieve this, and we are trying to improve on this also.
Analyst
And is there any chance from now onwards, there has been more significant margin improvement from this side as well?
Kapil Bhatia
Which side?
Analyst
Upwards, like 22%, so like upward 23%.
Kapil Bhatia
Yes. I’m saying that we will definitely maintain 21%, but we are trying to get more value-added items and more value-added this thing for forging also and for some other product, and we are trying to go up on 21% to 22%, 23%.
Analyst
Thank you. And my last question is on the capacity utilization side. What is the current capacity utilization?
Kapil Bhatia
In some areas, we are doing almost 100% capacity utilization. That’s why we have kept another INR15 crores for capacity expansion as the demand is there. So where we have a bottleneck, we are increasing our capacity, which order has already been placed and things are already on pipeline. So overall, I think we are using around 60% of capacity in some areas. In some areas, it’s 100%. So we are just increasing our capacity where we have already utilized 100% capacity in some machines. So we are buying some more machines and some modernized machine to improve upon the production capacity as well as quality.
Analyst
Thank you. That’s it from my side. All the best for your future. Thank you.
Operator
Thank you. We take the next question from the line of Garvit Goyal from Nvest Analytics Advisory. Please go ahead.
Garvit Goyal
Yeah, good afternoon sir. And congrats for the decent execution once again. So we are guiding for a decent number of INR375 crores gross revenues for FY ’26. I want to understand 2 things here. One, I am hearing in the industry that there is ongoing issues of wheel set supply due to which production of wagons is getting impacted. But we are saying that everything is positive. So kindly help me to understand how is it possible? Because springs as a product will ultimately go into the wagons and locos. So that is my first question.
Secondly, on the margin front, we are currently at 21% this year. And this particular year, steel prices were also down. But now we are seeing some recovery happening in the steel prices on a relative basis. So can you guide us on that thing also how you are still forcing to sustain these kind of margins rather improving it in FY ’26?
Kapil Bhatia
As far as the railway wheel sets are concerned, railway has also increased their capacity to manufacture. They have started a new plant in Raebareli for making more wheels for railways other than we have an old factory in Bangalore, railway factory. And they are importing. And I think now India is almost sustainable as far as wheels are concerned. So I don’t see any problem, and we have never come across with the thing that we don’t have wheels and to stop production or something like that.
So I think railways are doing well and being starting their new plant in Raebareli, near coach factory for the wheel. So I don’t think there is any shortage as far as wheels are concerned. As far as margins are concerned, we are trying our best to hold 21%, but we are confident that because of the demand and other things, we will be able to improve on the margin at least 1% to 2% more.
And as our order book is good on 1st of April this year, we are already having orders of INR150 crores in hand and almost INR100 crore order were in pipeline, which is also materialized now almost INR50 crores, INR60 crores are already materialized and other will be under pipeline. So we are quite sure and we know those order values and think we’ll be able to maintain the margin at 21% and more. So we are quite comfortable with that.
Garvit Goyal
You are saying we are having an order book of INR150 crores in hand, right?
Kapil Bhatia
On 1st of April, it was there yes.
Garvit Goyal
And INR100 crores is in pipeline. So it is cumulatively INR250 crores only. And we are looking to have INR375 crores, so can you put some color on that?
Kapil Bhatia
This was — actually railway tenders are keep on going on every year. It takes 2 to 3 months to finalize the tender. So these are the present position. But there are other almost INR100 crores, INR150 crores tenders are in pipeline, which are going to open this year and by end of the year, we’ll be able to do that. So we are quite comfortable that we are able to achieve INR375 crores, and we are very comfortable on that because we know what we are doing this quarter. And after this quarter, you get results, so you’ll be able to understand that what we are saying is right.
Garvit Goyal
Understood. And just INR150 crores you mentioned in the beginning of the year you are having. So how much of it is going to be executed in Q1 only?
Kapil Bhatia
It is almost INR100 crores approximately, yes.
Garvit Goyal
And that means the execution period is pretty short for this kind of, what I’m understanding, right?
Kapil Bhatia
Yes.
Garvit Goyal
Understood. So what is happening is you keep on getting the orders and the order time line itself very short, you have to deliver it.
Kapil Bhatia
Yes.
Garvit Goyal
Understood. So out of INR150 crores, INR100 crores is going to be utilized in Q1 only.
Kapil Bhatia
Around INR80 crores to INR90 crores to INR100 crores around every quarter we are trying this year. So that’s why we are able to achieve INR375 crores.
Garvit Goyal
Got it. And so just to get an idea of the pipeline, you mentioned — can you tell us like how big is the size of pipeline on a continuous basis on a quarterly run-rate basis? And how much — how many players are bidding for it? And what is our success rate in that pipeline?
Kapil Bhatia
So these are a little bit confidential thing because there are people who are our competitor, in coil spring, air spring, there are 2, 3. So in a lot of tenders, we are L1, somewhere we are L2. So there is a procedure of railway to give order to approve sources, L1 will get 60% orders, L2 will get 20%, 30% order like this. So it is like — it is ongoing process. So — and we know what we have quoted and what is our position, and we are quite comfortable that we are able to achieve almost INR90 crores a quarter every — this year and we’re able to achieve that, and we’ll be able to get that much of orders, which are already there in pipeline, and it is coming also, there are more tenders which is coming also in the pipeline.
Garvit Goyal
Got it, sir. And lastly, on the — again, on the margin front, if I talk about quarterly basis, this quarter was one of the highest, I would say, in last 12, 15 quarters, the margins are around 24%. So what happened in this particular quarter like we achieved this 24% kind of number. So it is really a big number, right? So how confident are we to achieve this kind of number, to sustain this kind of number for me?
Kapil Bhatia
Sir, as we — I have already told in my opening remark that we are concentrating on good value-added items only. We are not using our capacity for the low value-added item. And we have good number of orders with the high value addition. So we are capitalizing on those costs. And then with that, we know that what we are going to achieve. So the average will be 22%, 23% this year also.
Dhruv Bhasin
Operator, I request you to please unmute Mr. Neeraj Bhatia, our CFO, who would like to throw some light on the questions that have been raised by Mr. Goyal, please?
Operator
His line is unmuted from my end, sir.
Neeraj Bhatia
Just I’m answering one question regarding order. Just now, during conversation, I’ve got the order from RCF and MCF around INR100 crores, just 1 minute back.
Garvit Goyal
Okay. Okay. That is really good. And lastly, we’re tracking this company since last 2.5 years, and I really appreciate the kind of execution you are doing. So it really matter to us.
Neeraj Bhatia
And one more thing I would like to add on 1st of April, our order book was around INR150 crores. And after 2 months of this financial year, today, my order acquisition is around INR200 crores, INR250 crores right now.
Garvit Goyal
Including this INR100 crores order that we got just now? Got it? Got it. Thank you very much. Then all the best for the. Thank you. Thank you.
Operator
Thank you. We take the next question from the line of Akshay from AK Investment. Please go ahead.
Analyst
Hello sir. Am I audible? Thanks for giving me the opportunity and congratulations for the great set of Q4 numbers. And my first question is, sir, talking about INR350 crores in the last con call, half yearly con call, but now we are very much confident of INR375 crores. So what has been changing now in the Indian Railways?and are we looking for the starting for the faster execution for the next 2 to 3 years for the newer Vande Bharat sleeper train and Vande Bharat metro train, something like this?
Kapil Bhatia
Yes, as I already mentioned that we are going to achieve INR375 crores this year. And as you know, railway — and the Union Budget has already allocated a very huge amount of INR2.65 lakh crore to Indian Railways, and they are going ahead with the increasing capacity of LHB coaches as general coaches demands are already there because Indian Railways are not able to give more general coaches to the trains, so they are increasing the capacity of LHB coaches, as well as locomotives. Till last year, railways was making around 900 locomotives this year, they have a target of 1,600 locomotives.
So everywhere our spring has being used and as far as Vande Bharat is concerned, we are the first approved source of Vande Bharat from India. Earlier, they were — earlier the Vande Bharat train were using imported this spring, now we are approved source, and we have already got huge order from ICF and from the private manufacturing of Vande Bharat coaches whether it is sleeper or chair car. So we are quite sure that the future is good and we’ll able to achieve the committed turnovers and the margins.
Analyst
Thank you. Okay, sir. And sir, my second question is about the export revenue. So currently, do we have any contribution from the export? And if not, then are we planning to penetrate in the export market?
Kapil Bhatia
At the moment, we are not exporting anything as India is the only and the largest market in the entire world, where everybody wants to come and supply component, whether it is rail, road, shipping, any infrastructure things, India is growing all around. So we don’t want to go outside and do things and other people from outside come and supply in our place. So we are at the moment concentrating only on Indian market as there is a huge demand, and we are one of the few lucky manufacturers that we are into the infrastructure, railway business and the approved source in the last 40 years. So we wanted to capitalize on that first. And then if the opportunity comes, we’ll definitely go for exports.
Analyst
And sir, what is the revenue split of coil spring and air spring if you can specify for FY ’25?
Kapil Bhatia
FY ’25 will be around INR150 crores, INR170 crores of coil spring, INR125 crores of air spring and the balance will be the forging division.
Analyst
And sir, what is the difference of EBITDA margin between coil spring and air spring, if you can highlight some color on that?
Kapil Bhatia
This is a little bit tricky. I have to see the numbers. But overall, we are sure we’ll able to maintain 22% and then maybe improve on that. Exactly, it is a tricky — we have to calculate and see.
Analyst
Thank you so much sir. And all the best for the future.
Neeraj Bhatia
We request all the investors to focus on the turnover and the profitability. In terms of the various provisions and regulations it would not be right for us to give the breakup of the various segments that we are into. So you can raise your questions accordingly. Thank you.
Operator
Thank you. We take the next question from the line of Aastha Agarwal from Agility Advisors. Please go ahead.
Analyst
Hi. Am I audible? Thanks for the opportunity. So my first question is what is the installed capacity of coil springs and air springs in terms of the number of railway coaches the company can cater to annually? And what is the current and expecting demand for air springs? And how fast do we think it is expected to grow going.
Kapil Bhatia
Our coil spring capacity is in our — both the plant. One is in Kanpur and another is in Paonta Sahib. Our installed capacity is around 750 tonnes per month. And at the moment, we are using around 450 tonnes per month. So we have our capacity. In some areas, we are a little bit tight. So we are buying some machines. So that is there. Air spring, we are already doing almost 200 [Indecipherable] we are increasing our capacity from 200 coaches to 300, 350 coaches in coming time.
Analyst
So the 200 coaches are for air spring, right?
Kapil Bhatia
Yes.
Analyst
Okay. And so what is the current expected demand for air spring?
Kapil Bhatia
These LHB coaches where air springs are used, Indian Railways are planning to produce around 6,000 coaches this year. So every coach is required 4 air springs. So you can calculate around 24,000 springs is required by the Indian Railway for the new coaches. But — and then there will be another demand of the coaches, which are running for the replacement demand from the zonal railway, which will also be there, which will be around 2,000 to 3,000 numbers every year, which is after warranty, they wanted to change the air spring. So there’s a huge demand and our capacity at the moment there’s 200 coaches, that is 2,400 coaches, we are able to do it, but we are increasing to 3,000 coaches very soon.
Analyst
Okay so thank you for the answer. And my another question is after the installation of 6-tonne hammer, what key products does the company plan to manufacture? And apart from the defense sector, which other industries is the company targeting for this product?
Kapil Bhatia
At the moment, we are concentrating in railways only, and we have already got orders worth almost INR7 crores to INR10 crores for the 6-tonne hammer. And yes, there is an opportunity to go into the defense and mining industry, where we are already exploring the high value-added forging because forgings demand is always there, but there is a big competition also. So we are concentrating only on high-margin forging. So we are already seeing in defense as well as in mining industry. And other heavy industries also like JCB, L&T where they are using forgings. So we are already exploring the market, and very soon we’ll be able to do that also.
Analyst
Okay. And so my last question is — okay, my question got answered. Thank you. Thank you.
Operator
Thank you. The next question comes from the line of Ashish Soni from Family Office. Please go ahead.
Analyst
Sir, regarding this FY ’26 — ’27 guidance, are we conservative because we increased for FY ’26. So can you throw some light on the FY ’27 guidance?
Kapil Bhatia
Yes, we’re a little bit conservative, but let’s see what happens, although we are quite sure that we may cross INR500 crores in ’27, but we are a little conservative giving numbers because we don’t want to fail. We want to improve on those numbers. So we are giving a little bit conservative numbers, that is all.
Analyst
And regarding air springs, what’s our market share compared to competition, if you can throw some light? And do you think we can maintain that or can increase that in like FY ’26 to ’27?
Kapil Bhatia
We are already having almost 25% of market share. So we are trying to go up to 30% this year and maybe next year. So that is there.
Analyst
Okay. And last question on this forging. You said you are trying for high-value things. So is there some approval required or what’s the situation because you said mining and I think I heard some other industry also, so is there any approval process required for that or what’s the deal? And you said I think you’re working with some customers.
Kapil Bhatia
Yes. As far as mining and other heavy industry, we don’t see we required any approval for that. But yes, defense sector, we definitely require the approval. So we are already talking to a consultant and things are already in pipeline where we are already working on that.
Analyst
But how long does it take for this defense approval process?
Kapil Bhatia
It will take at least 3 to 4 months, maybe 5 months to get the item where we — what we are planning to go into it.
Analyst
And the market size or potential you are seeing in the defense area?
Kapil Bhatia
I think that the item which we are concentrating is the market size will be around INR60 crores to INR70 crores per year, the item which we are concentrating on that.
Analyst
That is per year or it’s overall you are saying?
Kapil Bhatia
Yeah. Per year.
Analyst
Per year. Thanks and all the best. Thank you.
Operator
Thank you. The next question comes from the line of Mahesh Atal from Atal Investment Advisors. Please go ahead.
Analyst
Sir, what was the directors’ remuneration last year?
Kapil Bhatia
Dhruv, can you please tell them because I don’t remember exactly what is the numbers.
Analyst
I can take it offline, that’s okay.
Dhruv Bhasin
You can take it offline, and I’ll update you regarding the exact number.
Analyst
Sure. And sir, one thing I wanted to know the cash that we have INR25 crores to INR30 crores on books as on 31st March ’25. What I understand that we have been putting this money into equity and all, if I’m not right. So any conservative management would be looking at fixed income product? Any — anything that you would like to add on that why are we taking our calls on the equity with the cash that we are having in books because you see the capex coming up, the railways having so much big market? So it’s better to keep that money into fixed income product. What’s your view on that?
Kapil Bhatia
We are definitely putting on additional money to some mutual fund and some equity market. But after that, we are already — but it’s not that the 100% money goes there. We are already planned to another INR15 crores capex this year, which we are going to flow back to the company. So what is required, we never stop doing that and flowing back to the company. But if we go there are additional funds. So why to keep in the bank account if it is additional over and above the limit. So we’ll keep on investing, which is good for the company also because we get the profit on that.
Analyst
Yes. And the INR15 crore capex would be going to which division, sir, it would be towards forging, air spring or coil spring?
Kapil Bhatia
All 3 divisions.
Analyst
All 3 of them equally?
Kapil Bhatia
Not equally, whatever required, coil spring may require another INR5 crores, INR6 crores, air spring require another INR4 crores to INR5 crores and forging require another INR2 crores, INR3 crores. So it’s like that, some testing machines, some production machines like this.
Analyst
And where are we on the defense side, sir? Have you got any — I mean, what about after ’27 sir? I was more worried on the things that we’ll be doing after ’27? Because ’27, these 3 things will be sufficient to get you there to your given guidance. What are we doing because the railway has a lag time of any security item would be tested for 2 years. So what are we doing there to get into new product line or maybe.
Kapil Bhatia
We are already working on some items for the air springs, additional items of air spring because at the moment, we are just supplying the air spring, but there is a complete line under the coach, which requires at the moment, railways buying from somebody else. We are going into that also, which will add to our air spring margins.
And we are also working on forgings. As you have seen that forging is an industry where we can forge anything which is required because coil spring is a dedicated facility where we can only produce coil spring. But forging is an industry where we can go with the same plant and machinery, we can go to defense mining sector or export. So we are quite sure and railways will continue like that.
As far as Indian population are there, they will never able to produce that much required coaches because railways to also increase their capacity to make coaches and locomotives which they are already doing. So I think the demand will never go die as far as Indian Railways are concerned. So that is always there to increase 10% to 15% turnover year-to-year in a very normal circumstances.
Analyst
And I have one question on the execution also sir, because what I understand that you were supposed to do 250 coaches per year by this year, we were supposed to reach by ’25 itself. But you have come to 200 as per your guidance as per your commentary and the commercialization of 6-tonne hammer also has been delayed by 6 months. So anything that you would like to tell that going ahead, we will be — execution will be on time and all?
Kapil Bhatia
There is always — because when you are setting up a new plant, there is always a teething trouble and the new hammer, which has been installed has got delayed not 6 months but almost 9 to 10 months because of the Ukraine war because we have to bought a hammer from the other country, the shipping was there and it was 200 tonnes weight hammer and the shipping was not able to do that because of the Ukraine-Russia war because it was coming from that end.
So like this, these are some teething trouble where things happen and it got delayed. But now we are in a full swing to get orders, and we are already quoting huge tenders to Indian Railways, railway board and other components, which we were not doing it, we already got approval, which is a good thing that we are able to get that approval very fast, and now we have regular source for those items which we are going to produce in 6-tonne hammer. So we are quite sure that now these delays will not be there as far as the present capacities are concerned to the Indian Railways and we’re able to execute things in time.
And Frontier is basically, if you talk to somebody in the railway, they will say that Frontier is the only company which they have their delivery schedule, and they are having a lot of confidence in us. And because of that, we are — sometimes we get orders, even we are not L1 because their supply, they required delivery and they accept our offer and they give us orders because of the timely execution of orders.
Analyst
Great. Sir, any dividend policy that we are having sir, because I would expect that you retain this dividend with you and maybe increase the value of the company. So any dividend policy that we are having?
Kapil Bhatia
We are continuously distributing dividend. And last 3 years, and we are still — this year also, we are going to give you dividends.
Analyst
Any policy on that, that any percentage of — I mean, PAT that we are going to give as dividend or maybe something like that?
Kapil Bhatia
Dhruv, can you tell this thing? Hello?
Analyst
It’s all right, sir. I’ll take it off-line.
Kapil Bhatia
You can talk offline. Yes.
Operator
[Operator Instructions] The next question comes from the line of Ankur Kumar from Alpha Capital.
Analyst
Sir, congrats for a very good set of numbers. Sir, most of my questions have been answered. Just one question, sir. On this PPT investing high-value, high-margin forging business. So can you comment what is our share — revenue share in forging right now? And on this estimate of INR375 crores and INR500 crores, what is our expectation forging will become? And how much high margin is forging actually versus the rest of the business?
Kapil Bhatia
Can you take this question offline, to Mr. Dhruv? He will give you the exact numbers because I don’t have exact numbers at the moment. But definitely, at the moment, the margins in the forgings are less and coil springs and air springs are having a more margin. And that’s why we are concentrating only on the high value-added item in forgings which has been already pointed out and selected by us from the Indian Railways where the suppliers are less and the demand is good, as well as the new market which we are already exploring, defense and heavy engineering industry. So we are trying to improve upon the margin of forging and trying to go near to the coil spring and the air spring business margin.
Analyst
And wish you, sir, you continue this on con call every quarter, so that would be really nice, sir.
Kapil Bhatia
We are already doing it, so we’ll keep on continuing this.
Operator
We take the next question from Ankur an Investor.
Analyst
Yes. Sir, I just want to ask if management is considering any corporate actions such as stock split, bonus or this thing?
Kapil Bhatia
At the moment, no, we are not doing any split or something like that. We have not planned anything.
Analyst
Okay. Okay. And sir, second question, this LHB platform conversion. Can you give me any estimate in total demand of air spring especially and how many air spring are expected to require, how many years?
Kapil Bhatia
Already replied that Indian Railways are producing almost 6,000 coaches of LHB string every year, new coaches. So 6,000 coaches require almost 24,000 number air springs and we are having around 25% of market share, which we are trying to increase to 30%.
Analyst
Okay. Okay. Sir, just last question. Any planning of NSE listing?
Kapil Bhatia
Yes. We are already working on that. What is their minimum requirement, we are able to adhere all the requirement of NSE, we’ll definitely list our company to NSE.
Operator
The next question comes from the line of Harsh from Toro Wealth Managers.
Harsh Mulchandani
Congratulations on a great set of numbers. I had one question. Where are we on the defense initiatives? In the previous con call, we had mentioned that it takes a few months to get those approvals. So have we got those approvals? Have we started production and supply for the defense segment?
Kapil Bhatia
No, still because our hammer got delayed the production. So we are not able to because without reducing item, we cannot go ahead with the defense approval. So now the hammer is already installed and we have already started doing production. So now those items are under production and now we are going to apply for the approval of defense very soon, and it will take 3 to 4 months to get the approval and then we’ll be able to quote the tenders and get orders.
Harsh Mulchandani
Okay. Got it. And just one more question. Apart from railways and defense, there’s no other sector where you are currently focusing, right?
Kapil Bhatia
Yes. We have been — forging, we are definitely focusing on some in mining as well as heavy engineering industries where these JCB and L&T where they are using heavy machines and they require a lot of forgings. So we are concentrating on those also.
Operator
The next question comes from the line of Majid from Pinpoint X Capital.
Analyst
I have only one question. Sir, how do you see this Vande Bharat going on? And how do you see that capitalizing going forward?
Kapil Bhatia
Vande Bharat is doing all right, but thing is that since last 5, 6 months, railway is more concentrating on LHB coaches being required by Indian Railways for the general public. So they have a little bit slowed down the production of Vande Bharat, but definitely, the contracts are already given. And — but railways at the moment, more concentrating on LHB coaches. And the Vande Bharat is coming, but a little slow because they wanted general coaches to become first and finishing is done by the our RCF, ICF, and MCF, railway coaching plants. So they are doing more concentration on LHB coaches rather than Vande Bharat. But definitely, those things are in pipeline, and it will definitely come whatever is committed by our railway minister.
Operator
The next question comes from the line of Ajit from Eiko Quantum Solutions.
Ajit Sethi
What is the realization of air springs and coil springs?
Kapil Bhatia
Realization means, what do you want to know?
Ajit Sethi
Price per air spring and coil spring?
Kapil Bhatia
We are producing almost 100 type of coil spring, every coil spring has a different this thing and air spring has a different type of pricing. So margin as overall, as you have seen that margin is around 22%, 23% in both air spring as well in coil spring, the final margin ratio.
Ajit Sethi
Okay. Can you provide any average selling price or something?
Kapil Bhatia
Sir, I don’t want to reveal all these things because it’s a little confidential. You see the final numbers.
Operator
The next question comes from the line of Shadri from Ksema Icon Limited.
Analyst
Congratulations, sir, for good set of numbers. My first would be, if you can throw some color on the [Technical Issues]
Kapil Bhatia
Your voice is.
Analyst
Can you throw some color on the breakup of your order book between coil spring and air spring?
Kapil Bhatia
As already as CFO [Technical Issues].
Analyst
Yes, can you throw some color on breakup of your order book between coil spring and air spring?
Kapil Bhatia
As we have already told earlier that this year, we are planning to do around INR170 crores of coil spring, around INR125 crores to INR130 crores of air spring business this year and balance will be the forging. So this is the breakup of INR370 crores gross revenue.
Analyst
Also my second question would be, like you mentioned that you are supplying air spring to 200 coaches every month. This is new coaches as I understand, right?
Kapil Bhatia
Yes.
Analyst
Also in the replacement market, are you also in talks with the railways to supply air spring to replacement market?
Kapil Bhatia
We are already doing it. We are getting replacement business from the zonal railway also every month. And we are also.
Analyst
That would be how many coaches every month?
Kapil Bhatia
Like I think it will be around 1,000 numbers like overall in a year. That will be around 300 to 400 coaches springs will be required because that will not — that is not required as far as the coach is concerned. They buy a single piece, 2 piece, 5 piece. So it will be — if I convert into the coaches, it will be around 300 to 400 coaches set of air spring.
Analyst
My third question would be, as I understand, there are 3 or 4 players in air spring manufacturing?
Kapil Bhatia
Yes.
Analyst
Okay. And do you think the margins would be sustainable going forward in air spring market?
Kapil Bhatia
Yes, being only 3 main player at the moment. So — and everybody is importing something and doing something in India and then assembling it and testing is being done in India. So I don’t think anybody is going to reduce prices on these. So the margin will be sustainable, I think.
Operator
The next question comes from the line of Shatwad, an investor.
Analyst
So I just had 2 questions. The first one is that the company has a partnership with Contitech Germany, right? So what is the specific component or technology that the company will be importing from there for the air spring product line?
Kapil Bhatia
Actually, air spring is required some rubber items and as well as the metal items. So metal item is produced by our company and the rubber bellow, which is the air suspension system and their technical know-hows we are importing from Contitech Germany. So — and assembling it and testing it at our factory and supplying to railways. So it is like that. So rubber items are coming from Contitech Germany with the technical know-how.
Analyst
Okay. And another one is, so do we have any tie-ups or discussions with the metros OEMs like Siemens or any other for the supply of air springs? And what is the current status on that?
Kapil Bhatia
Yes, we are already into the discussion with Siemens, Bombardier, Alstom being Contitech is their original supplier in Europe. So we are talking through Contitech to all these parties that Contitech should supply the springs from our unit to those companies so they will also get better margin being a less cost of production in India. So things are already under discussion and very soon, it will be materialized. So we’ll be able to supply springs to Siemens, Bombardier, Alstom and other companies.
Analyst
Congrats for a great set of numbers.
Operator
The next question comes from the line of Pushminder Singh from [Indecipherable].
Analyst
So I have 2 questions. First one is how much total capacity are you targeting to end with FY ’26? And secondly, like on a conservative basis, how much capacity utilization for the new and the existing capacity you’re looking after the expansion?
Kapil Bhatia
As I already told earlier that we are using around 70% of our capacity. And in some areas, we are using 100% to avoid those bottleneck of 100%. We have already placed order to come to the 70% on those parts also. So we’ll be using after installing and after this capex, which we are going to invest will be around 80% of our capacity will be utilized as far as the orders are concerned at the moment with us.
Analyst
Okay. And like how much total capacity are you looking to end with like — the end of FY ’26, sir?
Kapil Bhatia
It was around 89% of the capacity will be utilized.
Operator
We take the next question from the line of Soham from RV Investments.
Analyst
Sir, post this INR15 crores capex, like from our current capacity, what will be our revenue position? Like for the INR500 crores we are aiming in FY ’27, would we need any further capex or do we need anything to like debt raise?
Kapil Bhatia
I don’t think that after doing this INR15 crores capex this year and giving INR500 crore for the FY ’27 is much of the investment, maybe INR2 crores, INR3 crores in a general thing, but not much is required until we reach a revenue of INR500 crores.
Operator
Ladies and gentlemen, due to time constraint, that was the last question. I now hand the conference over to the management for their closing comments.
Kapil Bhatia
Thank you very much. Before we conclude, I would like to once again express my sincere appreciation to all our shareholders, our customers, partners, employees and shareholders for your continued trust and support. FY ’25 has truly been a record year for the Frontier Springs marked by record revenues, robust profitability and significant operational achievements. Thank you for joining us today and wishing you all a pleasant day. Thank you so much.
Operator
[Operator Closing Remarks]