Harsha Engineers International Ltd (NSE: HARSHA) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
Maulik Jasani — Vice President Finance, Group Chief Financial Officer
Unidentified Speaker
Analysts:
Jason Soans — Analyst
Harshit Patel — Analyst
Shaket Kapoor — Analyst
Amit Anwani — Analyst
Prathamesh — Analyst
Shaket Kapoor — Analyst
Presentation:
Operator
Ladies and gentlemen, you have been connected for Hersha Engineers International Limited Conference
Ladies and gentlemen, good day and welcome to Hersha Engineers International Limited Q3 and FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Pishal Rangwala, CEO and Whole-Time Director. Thank you, and over to you, sir.
Vishal Rangwala — Vishal Rangwala Chief Executive Officer, Whole time Director
Thank you. Hello, everyone. Good evening. Welcome to our quarter three FY 2025 investor call. On-call with me today are Mr Malik as well as Mr Sanjay. Molik will talk us as we have been doing in the past, will — Molik will take us through the numbers in little bit more detail. I’m sure you would have had a chance to look at the numbers and the deck. Let me begin with, as you’ve seen, you might have seen in the our quarter three performance has remained overall kind of a flattish trajectory.
With the key challenges continuing to remain more or less at the same. Thus our key market of Europe continues to face significant headwinds. Similarly, the US also is not showing any significant sign of revival. However, on the positive side, we are getting a feeling that with the US taking positive proactive steps under the new leadership of Mr Trump, the geopolitical tension should start reducing thereby making the business sentiment positive.
However, this could be partly offset by increased tariff wars, particularly between US and China, which could have a domino effect on overall international trade. So all these may not have any direct impact on Hersha. However, it can create an impact on global commodities and may have some indirect impact, right?
Another fallout of the present scenario is making USD stronger vis-a-vis most of the emerging market currencies, including the Indian rupees. At a macro-level, Hersha may tend to benefit since this will increase the price competitiveness of Hersha’s products in the US and other international markets. Now if I talk of India, while we have grown in higher single-digit in this quarter-over the corresponding previous year quarter.
Bulk of the growth is attributed to strong growth in bronze bushing segment and also a decent growth in stamping segment. The bronze bushing business has continued to be a strongly positive for us. Thus the last — the nine months year-to-date sales for bronze pushing is around INR60 crore-plus, very much in-line with our expectation of crossing INR80 crore annual sales target of bushing this financial year.
So if I talk of cages, this quarter was a bit of — bit soft in India, typically due to year-end inventory reduction pressure felt by our major bearing — MNC bearing companies operating in India. Since their overseas parent follow calendar year as their accounting year, I believe that a normal purchasing will be resumed in-quarter four and we look-forward to a little bit improvement on-demand from their side. Thank you. Also, we have started seeing some better traction in order booking for exports and demand scenario on industrial side also looks to be slightly improving. As informed to stock exchanges Exchanges, we have concluded a major sourcing contract for KS with a large global customer and we should start seeing considerable additional business coming to us in India from the second-half of financial year 2026. Again, we are also a major beneficiary of new facilities commissioned by our customers in India for as part of China Plus One strategy. We also expect the demand for large-size cages to start picking-up gradually in coming quarter, matching with increasing demand from the industry. However, the demand from other geographies like Europe, US is still not showing concrete sign of revival. China has not reported good numbers this quarter, though if you look at year-to-date performance, it’s — it’s still quite improved. So we expect China to sustain these improvements going-forward. From a Romania perspective, our Romania’s prospect continues to remain bleak, though we are working very hard on the strategy for improving the product mix in Romania by pushing more cages and also consciously implementing cost-cutting measures. However, Romania will not be in a position to achieve operating breakeven in the current financial year given the fact that overall demand challenges continue. However, on a combined basis between our two key subsidiaries, I expect these losses to be reduced and kept at a manageable level in this current financial year. If I talk of solar business, quarter three reported norm — reported a normalized performance in-line with our expectations. As indicated earlier, the solar division is operating on its own without any material addition — additional capital contribution or additional management bandwidths and support from the management. So to conclude, I wish to reiterate while the current our financial year top-line will be more or less flat. As indicated in the past, the bottom-line growth would be much higher, more or less in-line with our current run-rate we have achieved till now. I would really like to express my sensored gratitude to for your continued trust and confidence in Hersha engineers and I would like to pass-on to to talk about now a little bit numbers in more detail. Over to you,.
Maulik Jasani — Vice President Finance, Group Chief Financial Officer
Thanks,, and hello, everyone, and good afternoon. For the last quarter ended December ’24, our engineering business at consolidated level has achieved top-line of INR302 crore INR302 crore against the top-line of INR310 crore in the immediate previous quarter and against the INR278 crore top-line in the same quarter last year. While we have achieved the consolidated EBITDA for engineering business of INR48.2 crore in the last quarter or of FY ’24 — quarter three of FY ’25 against INR50.2 crore in the previous quarter and INR48.5 crore in last year same quarter.
In our solar business, we have achieved revenue of INR37 crores and EBITDA of INR1.28 crore in the quarter three of FY ’25. Our solar business continued to have a respectable order level in their pipeline. Our overall working capital cycle has reduced to 144 days against 151 days in the previous quarter. The company has incurred overall capex of INR70.8 crores in the quarter three at a consolidated level and continue to spend on the capex side as committed for the future growth. With this brief on financial numbers, I request operator to take the Q&A from participants. Thank you.
Questions and Answers:
Operator
Thank you. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question.Ladies and gentlemen, we’ll wait for a moment while the question queue assembles.
We have our first question from the line of Jason Soons from IDBI Capital. Please go-ahead.
Jason Soans
Yeah, sir. Thanks for taking my question. Sir, my first question just pertains to the long-term contract which you have won that’s effective December 5, which would put our lease on the exchange. Now this agreement is for an initial bit of six years and you had mentioned that the revenue potential is around INR6 million to INR10 million per annum. So sir, just wanted to know what is the update on that. I mean, when are we starting deliveries on that and how is that you know the preparation for that going on?
Maulik Jasani
Yeah. So in general, we have signed a contract for now long-term supply of product, which we are expecting to start supplying in the second-half of FY ’26. And you know from a — and this is what we have anyway disclosed. And this will be I think EUR6 million to EUR10 million is what we are projecting at the full potential level we could achieve that. So, yeah. I think the preparations are and we are on-track.
Jason Soans
Okay, okay. So revenue potential, sir, you have mentioned 6 million to $10 million per annum, so that gives you a significant revenue potential in terms of that. Okay, sure, sure. Okay.
Unidentified Speaker
But it will not start with 10 million. It will scale-up gradually. It will scale-up. It will scale-up.
Jason Soans
Okay, okay. Sure, sir. Sir, second question is just wanted to know, I mean, of course, you know, in terms of overseas subsidiaries, it’s kind of status quo as compared to the second-quarter as well. Just wanted to know, I understand that the situation overseas with Europe, US is pretty weak, as you mentioned. But are you seeing any green shoots there in those regions now Trump also has come. Just wanted your sense on that.
Do you see any green shoots going into FY ’26 or are we going to look at a kind of a similar performance as come — when you look at FY ’25. Just I’m talking about in terms of the overseas subsidiaries only. When you look at a PAT, it’s around INR11 crores loss which we have entailed for till nine months. So just wanted to know in terms of a progressive thing, how are you looking at any green shoots for FY ’26, how are you looking at it?
Unidentified Speaker
Yeah. So as you mentioned that even though last quarter China was not — you know, was not positive from a PAT point-of-view. However, we think that year-to-date China performance was a respectable improvement over last year and we expect that will continue. We will — we should see a decent projection from China. And if I talk about Romania, I think demand remains very subdued and that has a big impact on us.
We are still working on making changes and things like that. And also working with customer to turn-around, get the right product mix and all that. Having said that, so we are expecting that we don’t — we will not continue with a similar number for FY ’26 or next year. But having said that, right now, we are not in position to really clearly project. There are lot of until a developing situation. So we have a very clear picture right now. Having said that, we are looking from here on in general.
Jason Soans
Okay, sure, sir. So probably you’re looking at a sort of a similar performance in FY ’26 as well. Okay, or a little bit better. Okay. Now just wanted to know,
Unidentified Speaker
We can’t hear. Okay. We are not saying it will be similar. But what we are saying is that of the green shoot shoot. I was hoping that, yeah, we are also very eagerly looking for green shoots.
Jason Soans
Okay. Okay, sir. Sir, just wanted to also understand, sir, of course overseas is fine, but you know, there was a lot of talk about how bearings, the big three in bearings are doing large capex in India in terms of localization as well for increasing localization, big capacities being planned up. And of course, we’ll be a big beneficiary of that . But we are seeing currently some demand softening there also in terms of industrial side and even in terms of domestic demand. So those capexes are coming in now. Just wanted to understand what is the on-ground update on that because we’ve seen some softness domestically as well. So just wanted to know, is it — what do you think it’s just a seasonal kind of thing, probably at the back-end, we’ll look at good demand coming through for bearing cages and everything. So how do you view the domestic outlook?
Unidentified Speaker
Thanks so as you rightly said that we are — we have seen a little bit of softness there. It’s — all the big capex coming in was catering to both India demand as well as global demand. Right. So I hope we hear that our customers are also challenged with a softening local demand and so I would say that some of those projects are a little bit delayed is what we feel on-the-ground, some of the demand which we were supposed to see world are now slightly delayed is how we are seeing on-the-ground.
But having said that, the directional commitment is there from all our customers, we are continuing to say that, hey, don’t worry, this is a — this is a short-term pushback and as soon as their capacity comes online, we will see the demand growth as well
Jason Soans
Sure, thanks. Those were all my questions. Thank you,. Thank you.
Operator
Thank you. A reminder to all participants, you may press star and want to ask a question. We have our next question from the line of Harshit Patel from Equirus Securities. Please go-ahead.
Harshit Patel
Hi, thank you very much for the opportunity, sir. Sir, my first question is on our standalone India business. So how the KGs business has grown in the domestic market in the 3rd-quarter. Also has there been any material change in realizations either on Y-o-Y or Q-o-Q basis here.
Unidentified Speaker
Hi,, this is reference to the pricing change, yes, there is a price change as we discussed in the last quarter also. And as you know that price-through mechanism and hence the price has been reduced because of the metal has reduced on the both front and majorly on the steel front. That is first. Second reference to the India growth that the overall of India has remained bullish because of the booting sales has gone up.
While with reference to the KGs, it is almost flattish.
Harshit Patel
Flattish Y-o-Y. You are seeing flattish with respect to the same quarter previous year, domestic KGs, right?
Unidentified Speaker
Yes. Both. Yeah, more or less both. Yeah. So as Vishal explained, that softness probably is attributable to maybe this year-end destocking. I mean, we generally find the December quarter because most of these companies they get consolidated with their and then they are very conscious about buying or reducing the. We believe in this quarter Q4, we should see India domestic business also again starting to grow, 8%, 10% per annum.
That’s whatever assumption is we don’t see this as a structural issue, it’s more like a cyclical issue. Just to clarify, this is more about — we are talking about stage only.
Harshit Patel
Yes, understood. Understood. Sure. Sir, my second question is on our capex. So could you provide an update on the commissioning of the first phase at the greenfield site? Also, what would be the overall capex number for FY ’25 as well as the next year for — let me start with the second part.
Unidentified Speaker
The capex number we are targeting about for FY ’25, about, about INR1700 crores somewhere in that range for FY ’25 and primarily attributable to the new project — I mean, new plant and building and you know equipment coming in and if I think what was the first question I missed sorry.
Harshit Patel
So on FY ’20 capex in
Unidentified Speaker
Yeah. So correct. So this is going to be in a phase commissioning thing. One — one of the subsection will be starting pretty soon end of this quarter or early next quarter. And when most of the things will come online, all the capacities should come online by end of first-quarter next year.
Harshit Patel
I understood. Sure. And sir, just lastly, could you share an update on what have been our nine-month revenues from the Japan-based customers? Any update in the outlook over there will be helpful
Unidentified Speaker
I think the number for Japan-based customer remains largely flat versus the previous year, about I think about INR50 crore is year-to-date revenue from Japan-based customer or it’s not Japan-based, but Japanese customer Japanese companies across the globe. And we expect that to be versus last year, not much of a growth. However, from a development and all the other point-of-view, we are, I think progressing very well as I mentioned in the last call that some of the projects got delayed due to technical and other issues and they should be coming online again soon.
So that we will probably come back to the growth pace with that. So development continues, transportation to sales should happen. It is happening a little slowly, but development continues.
Harshit Patel
Understood, sir. Perfect. Those were my questions. Thank you very much and I’ll get back-in the question queue.
Unidentified Speaker
Thank you,
Operator
Thank you. We have our next question from the line of Saket Kapoor from Kapoor Co. Please go-ahead.
Shaket Kapoor
Yeah,. I’m audible, sir?
Unidentified Speaker
Yeah.
Shaket Kapoor
Sir, firstly, if you could explain to us the nature of losses in our subsidiary when we go into the consolidation, you reported about they being on a declining trend and it is around, I think INR10 crore number for the nine months. So if you could just explain to us first the nature and what steps are we taking or what — what would be the changes that would lead to first lowering of the same going ahead the major losses are coming from our European subsidiary.
Unidentified Speaker
There are multiple reasons behind it, but the major reasons are, one, demand low, which is the overall struggle at Europe territory per se. And in that also, the Europe subsidiary is serving to the market like windmill market and high-end industrial usage, which is a large-size industrial requirement, which is significantly low overall demand network over there. Hence there is a fixed-cost component which heats us badly over there as you might be aware that our Romania site is a lease site and there are multiple fixed-cost components attached to that site.
So that is one reason. Another reason is obviously Romania site also serves the semi-finished products to one of our customers. And there also we are making some good amount of losses. Reason being some of the inflation cost on our value-add could not be passed-through and that also results into the loss because of the overall efficiency of plant has gone down in result of lower demand?
Shaket Kapoor
Okay. So sir, out of this INR10 crore Nine-Month losses, what would be the contribution from the Romania facility in terms of the revenue contribution and the losses that.
Unidentified Speaker
So China is positive and Romania is negative, so partly positive. So major contribution is Romania only. Another only contribution to loss this year except for the 3rd-quarter minor loss for China is Romania, so, yeah. So as we said, almost 30% degrowth, fixed overheads remaining fixed, demand compression continued. So these are the reasons why you have to maintain the basic infrastructure there.
Shaket Kapoor
And sir, out-of-the total pie of the business, what is the contribution at peak level from the Romania facility, right?
Unidentified Speaker
Peak level was about INR300 crores plus annually. Current run-rate is up to 200, and that too not a good product mix, major being the semi-finished castings.
Shaket Kapoor
Okay.
Unidentified Speaker
We’re trying to push cages as you might be aware, but things are taking a lot of time there.
Shaket Kapoor
So you alluded to some of your clients domestically looking for higher cases requirement. I missed your commentary in the opening remarks. And if you could just outline to us what are we trying to convey and how — what kind of incremental business can — is anticipated going ahead from these customers in terms of the revenue of going up once their facility are commercialized
Unidentified Speaker
And also we are not able to fully quantify that as a revenue number. Having said that, that, what we are trying to say that our customers are putting large capex to cater to domestic demand as well as some demand for outside India as part of their China Plus One derisking strategy for bearings. And we believe that we would be a major beneficiary of that. So our guesstimate is that this could be around INR200 crore at the peak — at the peak opportunity, incremental additional opportunity for supplying cages to them.
But this is an ongoing developing situation. It will take a little bit of time because obviously they have to also — these are very large capex taking a long period of time for them to bring those capacities to India and bring them online., and sir.
Shaket Kapoor
Domestically, what is our utilization level in the — for our Indian operations in the segment?
Unidentified Speaker
About 60% you can say average we have various sub-segments and dedicated lines in some lot of cases. So it varies from those — those lines and products and everything, but you can take an average of around 60%.
Shaket Kapoor
And sir, depending upon the improvement in the business environment and the demand scenario, at optimum level, what can we reach in terms of utilization levels from 60 going up to what number?
Vishal Rangwala
Around 80% is what we could optimally reach, I think at the optimum product mix.
Maulik Jasani
You see we have multiple lines, each line is designed for different sizes. So if I get a complete bouquet of demand from each size, then I can reach 80%. But it never happens.
Unidentified Speaker
Very idealistic.
Maulik Jasani
It’s an ideal situation, but yes, theoretically, we can reach 80%.
Shaket Kapoor
Okay. And last two points, sir, just putting the you have given in your presentation, wherein you have outlined the key strategies going-forward. So if you could just throw some light on — specifically you have mentioned about the focus on developing products to capture the opportunity in the EV segment. And then I think so the branch brushing and specialized component segment, I think so with respect to the wind energy parts.
Just if you could spare some time on the key strategies going-forward, slide like I have very.
Vishal Rangwala
Sure, Zaket. So this is what our long-term — from our long-term point-of-view, how we look at-market opportunity and what we have said within that document or within that presentation what you’re looking at, is we are confident of a bearing industry growth as a minimum level and we believe that we could grow much higher based on various strategies, various additional growth opportunities. And specific two things you mentioned, I will elaborate on those.
One is bushing is a product which is very adjacent for us from a cage point-of-view and we bring in a very technical competency within a non-ferrous casting and machining area. And wind industry right now last few years has been going through this transition from some of the bearings being replaced by bushings. Not all only select some bearings. And in that when they are replaced by bushing, we are — we have become the only supplier or maybe the first supplier in India to produce supply to wind market.
And we see that as a good opportunity of adjacency product point-of-view and we could grow significantly in that. That’s what we are talking about. And if you look at our numbers, where every quarter we talk about that as a number and we have been growing we will probably grow to the tune of almost 70%, 80% year-over-year on that segment last year to this year. And we expect that will continue.
That is not necessarily the market — end-market itself is growing, but our application within end-market is shifting from one-product to another, we come in and we are able to you know that and we think that could is and could be a continued additional growth opportunity for Hersha. And the other stamping component what we are talking about, we are a very strong tooling our tool design with competency tool manufacturing competency.
And what we can do is make very complex toolings. So taking those competencies, we are looking to expand into the stamping area beyond bearing cages, also focus within that on a green the battery-operated vehicle area and select some of those products. And that is what we are talking about. We see a lot of growth within that even if you look at our commentary, we are saying that in-spite of a little bit difficult quarter, we have grown in stamping area and we see a lot of traction within that what we bring to the table for a our complex scamping components.
And that’s what we are talking that could also be a very great long-term opportunity for us to grow in India or for us to grow and that those are the two things you mentioned what we are talking about.
Shaket Kapoor
So just to conclude, sir, if we look at the peer comparison in terms of the packaging segment where we are operating, who are — who is our nearest competitor?
Vishal Rangwala
Are you talking of India? So globally, frankly, we have one number-one player, a company called NKC in Japan, that is our number-one competition. We — we believe we have the second-highest global market-share after them in this outsourcing space. And then there is a company called MPT in Germany. These are our competitors, but we have multiple competencies. So for example, we do steel, we do brass, we do plastics. So we have multiple technologies, multiple competencies.
But NKC does mainly steel, MPT does mainly brass. So that way being in India, we have that advantage of being a little more penetrative capabilities are higher. Within India, we only operate in organized space. So there are just one or two players and we believe we have more than 70%, 80% outsourced cage market-share in India. Most of the Indian bearing companies have — they don’t have any cage facility practically, except for very few. So we have that way a very, very-high market-share in India.
And overseas, our wallet share between the three giant top three players, SKF, Sheffler and Timken, we would be supplying to almost 60, 70 plants worldwide with a 10% to 20% wallet share. That’s where we are.
Shaket Kapoor
And concluding remarks, sir, if you could permit me is regarding the employee cost. Also, sir, in your presentation, you did alluded to increasing operational efficiencies to improve returns . But when we look at employee cost as a percentage of sales or I think through the fixed-cost component you have already explained, but still even when we look at the Indian operation part, these are — these are higher numbers if we look in — and what aspect should we look at the employee benefit expenses as a percentage of sales, if you could give some more color to it?
Unidentified Speaker
So your question is not pretty clear to us. Can you be
Shaket Kapoor
Are you trying to say that in India, the total cost of employees as a percentage of sales is higher, higher according to my understanding, sir, on a — on a top-line of say INR1,034 crores?
Maulik Jasani
Yeah. Yeah. Yeah, okay.
Unidentified Speaker
Sir, at the top-line of INR134 crores going into — yeah. So see, without going into the specifics, I don’t know Abhum cook in case I compare current, but our employee cost is around 11%, 12%, two reasons. One, we have very, very-high level of engineering skill-set that we deploy given the precision-oriented job that we do. So if you’re doing a mass scale production, commodity scale production, employee cost for those kind of companies would be 8%, 9%.
We are 10%, 12% because A, we do our own tooling, B, we employ a large number of engineering graduates. We do a lot of training and this is a very, very-high precision job that we are doing. Overseas, if you compare for a similar kind of operation, the cost would be 25% to 30%. So that way we are quite competitive as compared to the relevant competition. But there is no universal yardstick the customers, yes, sir.
Shaket Kapoor
And lastly, sir, margin improvement on cup sector in, Pundra, Pundra range Challery and ugly with the worst trajectory comps improve OCT or next financial year ’26K in terms of EBITDA margins with respect to this environment.
Maulik Jasani
But now India continues at a decent margin of 20% odd run-rate. The problem is Romania and mainly Romania and a little bit of China also. So in a good scenario, Romania was doing 8% to 10% EBITDA, but today it is in negative territory. We are very working very hard to see, A, reaches back to a profit or a breakeven situation and then it starts generating margins. But long-term, Hamara, a target a key, Joe consolidated manner for the Pandra Takay, target of 17%, 18% of, but it’s very difficult for me to predict anything right now.
Shaket Kapoor
So this is Abhij is after solar, and nine months EBITDA margin. Correct me there, sir. Consolidated may key performance indicators EBITDA margin currently 16.09%.
Vishal Rangwala
So the Romaniac impact later control. Romania the capital employed kitma.
Shaket Kapoor
Sir, sir, Romania, I’m not a capital employed kitmay and I’ll join the queue. I am over done, I think.
Unidentified Speaker
Hello.
Shaket Kapoor
Okay. Sir Romania, I’m not a capital employed kit now, your business I’m.
Maulik Jasani
So Romania has including the capital investment we did initially is around INR180 crore to INR190 crores.
Shaket Kapoor
Okay., sir do you join Kartnam or,. Thank you.
Operator
Thank you. A reminder to all participant, you may press star and one to ask a question. The next question is from the line of Amit Anwani from PL Capital. Please go-ahead.
Amit Anwani
Hi, sir. Thanks for taking my question. My question is on bushing. So I think I remember bushings, we said H1 was about INR44 crore and 9M is INR60 crore, we are targeting INR80 crore. So that gives me the understanding that we are targeting INR35 crore in H2. So why there is a decline there and some more highlights on what is the outlook now in bushings, what is the number you’re targeting for FY ’26?
And just like you highlighted the competition for — or on cages side, if possible for you to highlight competition on bushings for domestic market and global markets.
Vishal Rangwala
Bushing’s run-rate average quarterly was about 20 and we are on-track the tire INR1 or INR2 crores we can order sequence case that. So we are absolutely over INR60 crores in nine months and 100% over INR80 crores. So there is absolutely nothing structural or nothing to read about it in terms of whether there is a softening. On the contrary, we are very excited about it. The new greenfield facility also has a decent increased capacity for bushing.
Our long-term target bushing can take us through easily INR200 crores INR300 crore annual run-rate over a period of time. So nothing really negative to read about it.
Amit Anwani
So what’s the target, sir for FY ’26?
Maulik Jasani
We don’t have a clarity yet on that, but we are expecting to grow from whatever we spend the year. Yeah, at least 20% growth minimum, but lot of questions and answered lot of things developing in that reference.
Amit Anwani
What is the competition there, sir, whom we are competing with on bushings anyone from domestic market or global market?
Unidentified Speaker
Best of our knowledge, domestic competition is not present. Globally there are the competitions out of Europe as well as strong competition out of China. And we don’t have the names.
Amit Anwani
Sure. My question on Romania, you highlighted that, again, we are in a wait-and-watch though we aim that the losses should cover-up and we should be on-track. So wanted to understand strategically how one should think operationally, we understand things have not been well for past several years and the objective was to transit from semi-castings to the large cages and that is not panning out and we don’t have — obviously don’t see too much happening in next three, four, five quarters also. Is there any strategic thought that we want to make a change or a — any thought strategically?
Are we following the same thing with the intent with which we acquired the subsidiary?
Unidentified Speaker
No, so see, Romania had started generating positive profit, then first came COVID, we had a hit again. And then while we thought that we are recovering, then came this geopolitical war and inflation and everything. So in all honesty and to be very, very candid, currently, it’s a — it’s a very tough situation in Romania, because our strategy is to or rather was to increase the share of KGs, maintaining the share of castings.
I mean, Hova Kastings is also down and KGs is not improving. So therefore, residable whaming. Secondly, you know, it’s not possible to just — so we are trying very hard for cost-containment. Can we you know-how do we control the costs if you are not able to get the demand. So I think currently the focus is cost-containment and our teams are pushing very hard on trying to increase the sale of cages out of, but Pura Europe, Halat SEA, see, overall things are very difficult.
So I think, as you very rightly, we don’t see a dramatic improvement happening even next year. The first target is whether we can contain losses or reduce losses to the maximum and that’s and that’s what we are trying. Is there again, in and a.
Amit Anwani
Sure. So what is the annual fixed-cost there?
Vishal Rangwala
You don’t have it. Let me take this offline. We’ll answer.
Amit Anwani
No problem. Okay. Thank you. Thank you so much. Thanks.
Operator
Thank you. A reminder to all participant, you may press star and want to ask a question. We have a next question from the line of Pratamesh from PM Capital. Please go-ahead.
Prathamesh
Hi, sir. Thank you for taking my question. I just wanted to know the revenue for Q3 or nine months for castings as well as bushings. And yeah, basically the bifurcation of India engineering, if you could.
Vishal Rangwala
You know, for some strategic reasons, we don’t give the breakup between castings and other products and We just generally cover the revenue the way we have shown in our presentation.
Prathamesh
Sure, sir. Understandable. Thank you so much. That was all from my side. Thanks.
Vishal Rangwala
Thank you
Operator
Thank you. We have our next question from the line of Saket Kapoor from. Please go-ahead.
Shaket Kapoor
Yes, sir. Sir, yes. Sir, our solar EPC vertical, I think so we were not very keen to it to grow or grow it. So what is the thought process now behind? And Abika outlook ahead, sir, its vertical and the thirst which the government has provided on the solar installation and all of if you could give some color. And also, sir budget Mr railways as per the Avantagen 20,000 lower Kia, I think so last year capex we in any way, say to our outlook especially government capex led say Mari product key demand asset 13
Maulik Jasani
So Saket, on the — on that railway and other things, again, product demand is a little bit subdued right now and we are expecting it to — relative to the peaks, it will remain like that. So what you just mentioned, there is some impact on that. However, on the other end of that same segment, we are expecting to improve revenue from the fact that there is lot of metro implementation and we are — our products are now increasingly going into that those bearings.
So I mean, all-in all, we see that we expect the rail to continue to grow, maybe reference to what you’ve just mentioned may not be as aggressive.
Shaket Kapoor
Asset and what would be? So outlook also the. Solar repeat.
Maulik Jasani
So for the solar EPC, again it is a legacy we had started this business a while back and had — we had to scale it down because it has become a very competitive situation. The strategy here is to again create a sustainable positive business and we have from an earlier point-of-view scaled it down, now it is growing and because there is a policy incentive support in-place from the government. So we are seeing a decent growth. Our focus is on a sustainable growth there.
And we are not trying to grab a very large project to increase our top-line, our focus is to be — remain sustainable and within our capabilities, continue to execute our solar EPC projects. So that’s the in single direction. And then from a long-term point-of-view, we will see to take this upward, but that’s Mr Akkawat, over.
Shaket Kapoor
I could not hear you. Last point
Unidentified Speaker
Not wishful paying, Saket, that Joe’s business of legacy that was number inherited by. Management bandwidth and focus remains absolutely on the engineering side business hardly any capital, but because of current favorable policy regime and lot of investments happening. We are getting projects and we hope the same ecosystem continues to remain profitable. So without too much of a capital allocation, this will be status now. It will keep on growing because,, will become, I would say your normal growth with focus on very large products, but on it typically of of all
Operator
I will open sorry to interrupt, sir. Just can you please wait a second? Yes, sir. Now please go-ahead.
Maulik Jasani
Okay, just to — am I audible now?
Shaket Kapoor
After I’m audible say, but voice may crack, sir. Continuous crack.
Maulik Jasani
What Vishal just concludes that yes, this business will continue at its current level, more or less without increase of concentration increment, we will remain completely focused on engineering part and this will go more than auto the way it is going.
Shaket Kapoor
Correct. So we can also look to hybrid of this — any legacy may have, but how any importance to is that envisage on it to continue under the vertical only, it can be hived out to a different segment altogether or any incentives that is derived in terms of Harsha Engineering brand for going for solar EPC, the rationale of continuing with the same.
Maulik Jasani
Actually it was in a separate company because of some reason become part of. But at this point in time, time will we are not able to hear you.
Operator
No. No, sir. The voice is still breaking.
Shaket Kapoor
But I’ll take it also offline. And last point sir, whenever it is get connected, about the other income component, we car — what are the key elements that contribute to the other income? Is it the cash on the books or if you could just give then the cash — net cash balance we have. Currently.
Maulik Jasani
Other income breakup is available in our. It is similar to our last year financial and nothing significantly changed and cash and bank plans we are around INR200 me approximately.
Shaket Kapoor
Sir, I’ll take offline, sir. I think so we are on a very weak line. So all the best to the team, sir. Thank you for all answering patiently to all the questions. And whenever, sir. Thank you.
Vishal Rangwala
Thank you. So moderator, we may conclude the call, please.
Operator
Yes, sir. As that was the last question for today, I now hand the conference over to the management for closing comments you.
Vishal Rangwala
Thank you. Thank you everyone. Yeah, thank you everyone for joining this call and appreciate your interest and enthusiasm about this. This and we hope you have a good evening. Thanks,.
Operator
Thank you so much. On behalf of Engineers International Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.